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Yahoo’s Alibaba Spinoff Remains Cloudy After IRS Notice

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Yahoo! Inc.’s plans to spin off its stake in Alibaba Group Holding Ltd. without incurring a multibillion-dollar tax bill were left in doubt after U.S. officials outlined new concerns over transactions that mostly are intended to cut tax obligations.

The Internal Revenue Service said Monday that it has misgivings about deals like the one Yahoo is contemplating. The new notice shows that the IRS is stepping up scrutiny of transactions in which the business being spun off contains mainly investment assets or when the active business is small. Shares of the Web company rose 2.4 percent to $31.04 at the close in New York on Tuesday, leaving them down 39 percent this year.