ABA Section of Taxation suggests issues for upcoming Treasury-IRS guidance list

In a recent letter [PDF] to the Internal Revenue Service and the Department of Treasury, the ABA Section of Taxation made recommendations to the 2006-2007 Treasury-IRS Guidance Priority List. The recommendations are the views of the ABA Section of Taxation and have not been approved by the Board of Governors or the House of Delegates of the ABA and, thus, should not be construed as ABA policy.

The Department of the Treasury and IRS solicit suggestions from interested parties such as taxpayers, tax practitioners and industry groups to be considered for inclusion in their issuance of published guidance in the coming year. The Section of Taxation solicits recommendations from its various committees and compiles a list of tax issues that it believes should be addressed through regulations, rulings or other published guidance, and submits that list to the federal agencies.

Among other issues, the section is seeking guidance in corporate treatment of distributions made prior to reorganizations; reorganizations involving contingent consideration, that includes guidance on "(i) the treatment of restricted stock and compensatory stock options and their effect on the continuity of interest and solely for voting stock requirements; and (ii) reorganizations involving escrowed or contingent stock or other variable consideration, particularly the impact of such arrangements on continuity of interest"; and guidance on application of Section 368(a)(1)(D) to transactions in which the target and acquiring corporations do not have 100 percent common ownership and stock of the acquiring corporation is not issued.

Clarifications relating to exempt organizations on which the section is seeking guidance is extensive, and include international grantmaking and international activities of Section 501(c)(3) organizations as well as the simplification of the public support test relating to Sections 509(a)(1), 170(b)(1)(A)(vi) and 509(a(2) to achieve greater consistency in application of the alternative public support tests for organizations seeking classification as public charities.

The complete list of areas on which the section is seeking guidance is available online [PDF].

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