Tax News

CCH (cch.taxgroup.com) reports:

  The IRS has provided additional guidance on the issuance of letter rulings in response to requests for rulings on portions of integrated transactions relating to corporate divisions under Code Sec. 355. Under prior guidance contained in Rev. Proc. 2009-1, I.R.B. 2009-1, 1, and Rev. Proc. 2009-3, I.R.B. 2009-1, 87, the IRS would not issue a letter ruling on part of an integrated transaction unless part of the transaction fell under a no-rule area, as described in Rev. Proc. 2009-3. However, under a pilot program applicable to ruling requests postmarked or received by the IRS after May 4, 2009, the IRS may issue a ruling on a single part of an integrated transaction relating to corporate divisions.

  Under the new guidance, taxpayers may request rulings on one or more issues that are solely under the jurisdiction of the Associate Chief Counsel (Corporate), are significant and involve the tax consequences or characterization of a transaction in the context of a Code Sec. 355 distribution. The IRS may issue a letter ruling on such an issue without ruling on the larger transaction.

  Whether an issue is significant will continue to be controlled by §3.01(38) of Rev. Proc. 2009-3, except that, prior to preparing the ruling request, taxpayers should call the Office of the Associate Chief Counsel (Corporate) to discuss whether a letter ruling will be issued that only involves that specific significant issue.

  Also, taxpayers may request and the IRS may issue rulings on a particular issue under a code or regulation section rather than a ruling that addresses all aspects under a code or regulation section.

  All prior policies regarding the nonissuance of letter rulings, in particular, no-rule issues, will continue to apply. Additionally, the IRS will not issue a ruling on a significant issue where there is no reorganization plan (nonplan issue) unless an adverse ruling on the nonplan issue would result in a direct or indirect acquisition by one or more persons of stock representing a 50-percent or greater interest in either the distributing or controlled corporation under a Code Sec. 355(e) reorganization plan. Subject to certain conditions, the IRS will issue rulings regarding the effect of a redemption under Code Sec. 355(e).

 
Rev. Procs. 2009-1 and 2009-3 are amplified.

Rev. Proc. 2009-25, 2009FED ¶46,360

Other References:

 
Code Sec. 355

  CCH Reference - 2009FED ¶16,466.27

  CCH Reference - 2009FED ¶16,466.923

 
Code Sec. 367

  CCH Reference - 2009FED ¶16,667.25

 
Code Sec. 368

  CCH Reference - 2009FED ¶16,753.53

  Tax Research Consultant

  CCH Reference - TRC CCORP: 39,400