Lawyers who specialize in corporate spinoffs are crying foul over an IRS clampdown on how businesses execute the deals tax-free, saying a recent IRS notice has upended the way it’s been done for years.
A May revenue procedure from the IRS drastically curbed companies’ ability to get private letter rulings for spinoffs, which means that until official guidance comes out, companies effectively are prohibited from using certain preferred transactions to pay down debt.
The restrictions could make deals more expensive to execute, less efficient, and hurt US businesses’ ability to compete in the market, attorneys said.
Before the guidance, “it …
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