IRS’s “no rule” list updated to allow private tax rulings on distributions of stock of controlled corporations

The US IRS today updated its “no rule” list of topics that the agency will not ordinarily address in private letter rulings or determination letters, taking two issues off the list that relate to distributions of stock of controlled corporations under section 355.

The IRS said, in Rev. Proc. 2016-45, that it will now provide taxpayers with private letter rulings on:

(1) the requirement under regulations section 1.355-2(b) that a distribution be carried out for a corporate business purpose, and

(2) The requirement under sections 355(a)(1)(B) and 1.355-2(d) that a transaction not be used principally as a device for the distribution of earnings and profits of the distributing corporation, the controlled corporation, or both.

The Service said there are a number of unresolved legal issues in both of these areas that can be germane to determining the tax consequences of a distribution.

New Rev. Proc. 2016-45, modifies Rev. Proc. 2016-3, 2016-1 I.R.B. 126, the IRS’s annual no-rule list.

See:

• Rev. Proc. 2016-45

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