The IRS announced that it has made significant progress on its publicly traded partnership (“PTP”) guidance and is lifting its moratorium on private letter rulings that started in 2014. It is reported that the IRS plans to release guidance in the near future to cover what is qualifying income from the exploration, development, mining and production, processing, refining, transportation, and marketing of minerals and natural resources. This item had been on the IRS business plan.
Although Section 7704 generally requires a separate corporate-level tax to apply to PTPs, a significant exception exists for “qualifying income”, largely including the natural resources industry. The growth of this PTP industry and its frequent request for IRS rulings prompted the IRS to explore a more streamlined guidance process, similar to what has happened in the REIT industry.
