June 25 (Bloomberg) -- The Internal Revenue Service will no longer issue routine rulings on corporate transactions such as spinoffs.
The IRS, in a notice issued today, cited a desire to conserve resources. The agency said it will “rule only on significant issues” raised by proposed transactions.
Companies pursuing spinoffs, reorganizations and other maneuvers often submit the structure of their transactions to the IRS, which then clears the deals as tax-free.
“Just about any ruling anyone would ask for would be a comfort ruling” that provides an extra layer of certainty for companies, said Robert Willens, a New York-based corporate tax adviser. “They feel like anyone should be able to consult the law in the area and make that determination themselves.”
The new rules apply to transactions submitted after Aug. 23. They will affect spinoffs, reorganizations, liquidation of subsidiaries and certain transfers of property.
The IRS had previously limited the types of letters it would issue on spinoff transactions.
“This is just sort of the next logical step,” Willens said.
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