Companies To Lose IRS Blessing On Spinoffs

Law360, New York (July 1, 2013, 7:48 PM EDT) -- Public companies weighing tax-free spinoffs or reorganizations have long relied on the comfort of Internal Revenue Service rulings to bless the deals, but a government tweak will soon remove that safety blanket.

The IRS said last week it will no longer issue broad rulings about whether such deals qualify for tax-free treatment. It will still offer rulings on “significant issues” that aren’t a matter of settled law, but for by-the-book transactions that don’t raise red flags, companies will have to rely on their lawyers.

The change,...
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