While the IRS is back in business following the recent government shutdown, it may not receive your requests for private letter rulings with open arms. Before requesting a private letter ruling, tax practitioners need to review the Service’s recent no-ruling revenue procedures, namely Revenue Procedure 2013-32 and Revenue Procedure 2013-3.
While the new no-ruling revenue procedures are broad in scope, it is possible the Service may still issue rulings in areas that otherwise appear to be no-ruling topics. So, you should consider a pre-submission meeting or conversation with the IRS to determine whether a ruling may be available and/or to discuss how you should tailor a ruling request in light of these new revenue procedures.
Revenue Procedure 2013-32
Revenue Procedure 2013-32, issued on June 26, 2013, provides that the Service will no longer issue rulings on whether transactions qualify for nonrecognition treatment under Code Sections 332, 351, 355 or 1036, or constitute a tax-free reorganization under Code Section 368. The revenue procedure indicates, however, that the IRS will rule on “significant issues” arising under these code sections that address tax consequences resulting from their application. What constitutes a “significant issue” is yet to be clarified by the Service.
Revenue Procedure 2013-3
Revenue Procedure 2013-3, issued on January 3, 2013, added recapitalizations, leveraged spin-offs, and so-called “north-south” transactions under Code Section 355 to its no-ruling list. Each of these topics is subject to pending IRS guidance projects.
If you have questions about the application of these no-ruling revenue procedures, contact Gerald B. Fleming, IRS Senior Technician Reviewer, Corporate, Branch #2, (202) 622?-7770 (Room 5138).
Larry J. Brant is a Shareholder in Garvey Schubert Barer, a law firm based out of the Pacific Northwest, with offices in Seattle, Washington; Portland, Oregon; New York, New York; Washington, D.C.; and Beijing, China. Mr. Brant practices in the Portland office. His practice focuses on tax, tax controversy and transactions. Mr. Brant is a past Chair of the Oregon State Bar Taxation Section. He was the long term Chair of the Oregon Tax Institute, and is currently a member of the Board of Directors of the Portland Tax Forum. Mr. Brant has served as an adjunct professor, teaching corporate taxation, at Northwestern School of Law, Lewis and Clark College. He is an Expert Contributor to Thomson Reuters Checkpoint Catalyst. Mr. Brant is a Fellow in the American College of Tax Counsel. He publishes articles on numerous income tax issues, including Taxation of S Corporations, Reasonable Compensation, Circular 230, Worker Classification, IRC § 1031 Exchanges, Choice of Entity, Entity Tax Classification, and State and Local Taxation. Mr. Brant is a frequent lecturer at local, regional and national tax and business conferences for CPAs and attorneys. He was the 2015 Recipient of the Oregon State Bar Tax Section Award of Merit.
Upcoming Speaking Engagements
- "Planning Using IRC Section 1031 Exchanges," Oregon Society of Certified Public Accountants (OSCPA) Forest Products ConferenceEugene, OR, 6.22.18
- "Evaluating the Built-in Gains Tax for C to S Conversions After TCJA," New York University Summer Institute in Taxation – Advanced Conference on Subchapter SNew York, NY, 7.26.18-7.27.18
- "S Corporation Distributions – The Ins and Outs," New York University 77th Institute on Federal TaxationNew York, NY, 10.21.18-10.26.18
- Portland, OR, 11.7.18
- "S Corporation Distributions – The Ins and Outs," New York University 77th Institute on Federal TaxationSan Diego, CA, 11.11.18-11.16.18