Bar Group Urges Withdrawal of Regulations on Corporate Spinoffs

The Treasury Department and the IRS should withdraw their proposed regulations on tax-free corporate spinoffs and instead allow the law on spinoffs to continue to develop through administrative practice, a bar group said.

The proposed rules are too broad, and create “counter-productive barriers” to legitimate business transactions, the New York State Bar Association said in a report sent to Treasury and the IRS March 17 and released by Treasury on Tuesday.

Instead of the proposed rules, targeted guidance should be issued only with respect to specific aspects of spinoffs that warrant clarification, the NYSBA said. In some respects, even ...