New York State Bar Urges IRS to Walk Back Spinoff Guidance

The New York State Bar Association’s tax section is calling on the IRS and Treasury Department to revise guidance issued in May making it harder for companies to execute tax-free spinoffs, as the government works on writing new regulations policing the space.

In a comment letter Tuesday, NYSBA said the new restrictions on private letter rulings, or PLRs, established in Revenue Procedure 2024-24 damage companies’ abilities to close successful deals. Companies request private letter rulings to get the IRS’s opinion on how specific deals would be treated for tax purposes.

“In light of the confusion and complexity created by the ...