IRS ‘Significant-Issue’ Move Hailed as Boost for Letter Rulings

The IRS plan to resume providing individual private letter rulings to taxpayers on “significant issues” within corporate transactions will be a shot in the arm for the agency’s entire letter-ruling process, practitioners said.

The move, which the IRS announced in guidance May 5, will encourage more companies to seek rulings approving tax-free status for their spin-offs and reorganizations, the practitioners said. It also should help reassure companies after the IRS’s back-and-forth moves in the area in recent years led to uncertainty.

It’s “a welcome development for taxpayers planning spin-offs and other corporate transactions,” said Rachel Reisberg, a partner at Wachtel ...