By: Amanda Wilson

The IRS announced earlier this week that it may temporarily stop reviewing private letter ruling requests on the issue of whether a spin-off qualifies as tax-free under Section 355. More specifically, the IRS may hit pause on these rulings while it considers how much trade or business is sufficient to satisfy the active trade or business requirement of Section 355.

The IRS stated that any ruling requests that have previously been submitted will be reviewed and considered, although this may change. I have to wonder how the current staffing crisis at the IRS is impacting this process.