Business Services Industry
Taxpayer successful in establishing no successor.
Tax Adviser, The, June, 2006 by Hering, David
Although IRS Letter Ruling 200604017 sheds some light on the definition of "successor" found in Sec. 1504(a)(3), it also raises additional questions about the definition that may defer reconsolidations by successor corporations for 60 months. This prohibition against reconsolidating may unexpectedly affect groups during commonplace fact patterns, such as spinoffs.
The precise scope of the term "successor" has been a source of disagreement among taxpayers and tax practitioners. In addition to providing direction on this subject, the letter ruling surprisingly reveals a gem of numerical information, indicating where the Service may have "drawn a line in the sand"
Facts
The ruling's facts are simple: Old Parent wholly owned Sub, Sub wholly...
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