IRS No-Rule Policy Tanks Spinoffs, Ups Malpractice Risk

Law360, New York (February 4, 2014, 6:30 PM EST) -- The Internal Revenue Service's likely expansion of the so-called no-rule policy will have a chilling effect on large corporate spinoffs and will hold tax practitioners' feet to the fire when it comes to malpractice risk, tax experts say.

The IRS said in June that, because of budget constraints, it would no longer give preemptive rulings — so called private letter rulings — on whether spinoff transactions would be recognized as tax free. Many corporations rely on such rulings before deciding to spin off a unit ....
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