On June 25, the IRS expanded its “no-rule” policy with respect to spin-offs and other tax-free corporate separations, liquidations, contributions, and reorganizations. Effective for letter ruling requests received by the IRS after August 23, 2013, Rev. Proc. 2013-32, 2013-28 I.R.B. 1, provides that the IRS will no longer rule on an entire transaction under §332, §351, §355, §368, or §1036. Instead, the IRS will rule only on one or more “significant issues” arising in the context of such a transaction. Accordingly, taxpayers have a short window of time to send spin-off letter ruling requests to the IRS Office of Associate Chief Counsel (Corporate) if they would like to receive a letter ruling providing that no gain or loss will be recognized by the parties to such a transaction.

In brief, Rev. Proc. 2013-32 also:

- Potentially broadens the range of issues that may qualify as “significant” for letter ruling purposes.

- Discontinues the IRS’s single-issue letter ruling pilot program under §355 (Rev. Proc. 2009-25, 2009-24 I.R.B. 1088), thereby eliminating the expedited treatment offered by the pilot program.

- Continues in effect all pertinent no-rule policies described in Rev. Proc. 2013-3, 2013-1 I.R.B.113, governing the IRS’s letter ruling practice.

These and other notable aspects of Rev. Proc. 2013-32 are discussed in greater detail below.