The Internal Revenue Service ("IRS") recently issued important guidance identifying new positions the IRS is considering on critical aspects of tax-free spin-offs, and significantly expanding the information that taxpayers...more
Brief commentary on the past week’s cases, rulings, notices, and related federal tax guidance. Corporations Permitted to Rely on Public Shareholder Data to Confirm Qualification for Tax-Free Spin-off and Subsequent Merger...more
On February 28, 2020, the Internal Revenue Service (IRS) released private letter ruling 202009002 (the PLR), which concluded that an absence of income does not, under the facts of the PLR, prevent a line of business from...more
A couple of months back, a local business reporter asked whether I could identify one kind of corporate transaction that was occupying more of my time than any other. When I asked whether they were referring to any specific...more
The Break-Up- After a tense period of disagreement and stalemate, the threaten of litigation, the ensuing economic and emotional stress, Client and their former fellow-shareholder (“Departing”) – and onetime friend, before...more
In our recent article on spin-offs (click here), we discussed an announcement made by the Internal Revenue Service (IRS) signaling a change in the application of the active trade or business (ATB) requirement under Section...more
The “five-year active trade or business” or “ATB” requirement of section 355 is notorious for defeating many otherwise promising tax-free spin-off transactions. Consider the following common scenarios... Originally...more
In a new 18-month pilot program, the IRS is temporarily opening up a previous no-rule policy with respect to certain issues arising in a distribution by a corporation to its shareholders under Section 355....more
On September 21, 2017, the Internal Revenue Service (the “IRS”) issued Revenue Procedure 2017-52 (the “Rev. Proc.”), introducing an 18-month “pilot program” in respect of corporate “spin-off,” “split-up” and “split-off”...more
Section 385 Proposed Regulations — Impact on Related-Party Financing - Section 385 has been in the Internal Revenue Code since 1969. It was enacted to provide guidance for whether to classify an interest in a corporation...more