The Internal Revenue Service has released a revenue procedure providing two safe harbors for corporate acquisitions.
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However, the IRS cautioned the safe harbors apply only to transactions described in the revenue procedure, and no inference should be drawn regarding the application of any federal tax principles outside the scope of the revenue procedure.
The revenue procedure also eliminates a prohibition against issuing letter rulings on transactions involving such an acquisition of “control.” However, the IRS said it may decline to issue a letter ruling addressing an acquisition of control when appropriate in the interest of sound tax administration or on other grounds when they are warranted by the facts or circumstances of a particular case.
The revenue procedure is effective for distributions occurring on or after Aug. 1, 2016, though taxpayers may also apply the revenue procedure for a distribution occurring before Aug. 1, 2016.