Search Results for keywords:"corporate separations"

The Internal Revenue Service (IRS) and Treasury Department issued a notice that corrects errors found in an earlier proposed rule for corporate separations, incorporations, and reorganizations. These corrections were originally published in the Federal Register on January 16, 2025, and they relate to specifics in the Internal Revenue Code like sections 355 and 361. The changes adjust language in multiple sections of the proposal to clarify terms such as "two taxable years" to "two consecutive taxable years" and correct various typographical errors. These corrections aim to ensure the accuracy and clarity of the proposed regulations.

The Treasury Department and the Internal Revenue Service (IRS) have proposed new regulations that require corporations engaging in specific tax-free separations to report their transactions annually to ensure compliance with tax laws. These rules focus on Section 355 transactions, which involve the tax-free distribution of a corporation’s stock. The new regulations mandate detailed reporting to prevent tax evasion, and this must be done via a new form attached to the corporation's annual tax return over a multi-year period. The proposed changes are intended to help narrow the federal tax gap by improving the IRS's ability to track and address potential noncompliance.