New IRS policy on tax-free corporate divisions.

• Position: IRS News - Brief Article

Stuart R. Josephs, CPA, of the San Diego-based Tax Assistance Practice, reports that: Rev. Proc. 2003-48 (IRB 2003-29, 7/21/03) announced a plan to provide more published guidance and fewer private letter rulings (PLRs) under Sec. 355. regarding spin-offs, split-ups and split-offs.

PLRs will not be issued on these requirements for tax treatment of distributions of stock or securities of controlled corporations:

* Whether the distribution has a substantial corporate business purpose;

* Whether the distribution is a device for distributing earnings and profits of the distributing or controlled corporation; and

* Whether, under Sec. 355(e), the distribution is part of a plan (or series of related transactions) in which one or more persons will acquire a 50 percent or greater interest in the distributing or controlled corporation.

This is a pilot program that is effective for ruling requests...