In March 2019, the IRS announced that the ruling program for section 355 distributions created under Rev. Proc. 2017-52 has been extended indefinitely. The ruling program expands the scope of letter rulings and offers taxpayers the opportunity to obtain a transactional ruling for corporate distributions intended to qualify as tax-free under section 355.

Due to section 355’s numerous statutory requirements and the inherent high stakes in
securing tax-free treatment for a section 355 distribution, taxpayers and practitioners were often hesitant to implement a section 355 distribution in the absence of a favorable IRS ruling. The ruling program allows taxpayers to obtain a transactional ruling and confidently implement a section 355 distribution.

For more information on the ruling process please read our article linked below. 

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