ATB Guidance Leaves Spinoff Lawyers Confounded

Overview


Michael Wilder, commenting on new Section 355 active trade or business (ATB) guidance from the IRS, suggested that it “may now be a bigger policy concern of the government’s” for such guidance to focus on possible corporate tax avoidance if appreciated property is distributed in the guise of a spinoff. The guidance is “not necessarily a good fit for dealing with the corporate-level tax issues people debate with respect to these modern transactions,” Mr. Wilder said, adding “the IRS is wrestling with” how to apply Section 355’s “amorphous” requirements to them.