rp-09-25.pdf

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Part III

Administrative, Procedural, and Miscellaneous

26 CFR 601.201: Rulings and determination letters.
(Also: Part 1, § 355)

Rev. Proc. 2009-25

SECTION 1. PURPOSE

This revenue procedure describes a new pilot program for letter rulings for
certain transactions under the jurisdiction of the Associate Chief Counsel (Corporate).
The new program does not diminish the availability of letter rulings under existing
programs.
SECTION 2. CHANGES

This revenue procedure amplifies Rev. Proc. 2009-1, 2009-1 I.R.B. 1, which
explains how the Internal Revenue Service (Service) provides advice to taxpayers on
issues under the jurisdiction of the Associate Chief Counsel (Corporate). This revenue
procedure also amplifies Rev. Proc. 2009-3, 2009-1 I.R.B. 107, which sets forth the
areas of the Internal Revenue Code (Code) under the jurisdiction of the Associate Chief
Counsel (Corporate) relating to issues on which the Service will not issue letter rulings.
SECTION 3. BACKGROUND
.01 Current Procedures

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Ordinarily, the Service will not issue a letter ruling on only part of an integrated
transaction. Section 6.03 of Rev. Proc. 2009-1; Section 4.02(2) of Rev. Proc. 2009-3.
If, however, a part of a transaction falls under a no-rule area, a letter ruling on other
parts of the transaction may be issued. Where it is impossible for the Service to
determine the tax consequences of a larger transaction without knowing the resolution
of an issue on which the Service will not issue rulings under Rev. Proc. 2009-3, and the
Service nevertheless rules on the larger transaction, then the taxpayer must state in the
request to the best of the taxpayer's knowledge and belief the tax consequences of the
no-rule issue. Section 2.03 of Rev. Proc. 2009-3. The Service's ruling letter will state
that the Service did not consider, and no opinion is expressed upon, the no-rule issue.
In appropriate cases, the Service may decline to issue rulings on such larger
transactions due to the relevance of the no-rule issue, despite the taxpayer's
representation.
In addition, the Service generally does not issue letter rulings with respect to an
issue that is clearly and adequately addressed by statute, regulations, decisions of a
court, or authorities published in the Internal Revenue Bulletin. Section 6.11 of Rev.
Proc. 2009-1 and section 4.02(9) of Rev. Proc. 2009-3. Similarly, unless the Service
determines that there is a significant issue (as defined in section 3.01(38) of Rev. Proc.
2009-3), the Service will not issue a ruling on whether a transaction qualifies for
nonrecognition treatment under § 332, § 351 (except for certain transfers undertaken
before § 355 distributions) or § 1036. Likewise, absent a significant issue, the Service
will not issue a ruling as to whether a transaction constitutes a corporate reorganization
within the meaning of § 368(a)(1)(A) (including a transaction that qualifies under §

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368(a)(1)(A) by reason of § 368(a)(2)(D) or § 368(a)(2)(E)), § 368(a)(1)(B), §
368(a)(1)(C), § 368(a)(1)(E) or § 368(a)(1)(F), or as to the various consequences (such
as nonrecognition and basis adjustments) that arise as a result of a transaction
constituting a corporate reorganization. If the Service determines that there is a
significant issue, and to the extent the transaction is not described in another no-rule
section, the Service will rule on the entire transaction, and not just the significant issue.
Section 3.01(38) of Rev. Proc. 2009-3.
.02 New Procedures
In order to use Service resources more efficiently and to increase the availability
of private letter rulings, this revenue procedure allows taxpayers to request rulings on
one or more issues that: (1) are solely under the jurisdiction of the Associate Chief
Counsel (Corporate), (2) are significant (as defined in section 3.01(38) of Rev. Proc.
2009-3), and (3) involve the tax consequences or characterization of a transaction (or
part of a transaction) that occurs in the context of a § 355 distribution. Under this
program, taxpayers may request and the Service may issue a ruling on part of a
transaction rather than on the larger transaction. In addition, taxpayers may request
and the Service may issue a ruling on a particular legal issue under a Code section or a
section of the Income Tax Regulations (Regulations) rather than a ruling that addresses
all aspects of that Code or Regulations section (or any other section). For example, the
Service may rule on whether the acquisition of the assets of one corporation by another
corporation meets the continuity of business enterprise requirement of § 1.368-1(d) or is
described in § 355(b)(2)(C) even though the ruling does not address overall qualification
of the transaction under § 368 or § 355, respectively, as long as the acquisition occurs

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in the context of a § 355 distribution. Accordingly, section 6.03 of Rev. Proc. 2009-1
and sections 3.01(38) and 4.02(2) of Rev. Proc. 2009-3 are amplified to provide that the
Service will issue letter rulings regarding such significant issues under the conditions
specified herein.
Ruling requests under this revenue procedure must comply with the relevant
requirements of any other applicable revenue procedures. See, e.g., Appendix E of
Rev. Proc. 2009-1. For example, a request for a § 351 ruling on a transaction that
occurs in the context of a § 355 distribution must provide all of the information required
by Rev. Proc. 83-59, 1983-2 C.B. 575. However, if the request is solely for a ruling on a
significant issue under § 351, the request must provide the information and
representations required by Rev. Proc. 83-59 that pertain only to that significant issue.
Further, where a taxpayer is requesting a ruling regarding a significant issue under a
Code or Regulations section (e.g.
, § 368(a)(2)(C)), the taxpayer must provide a
representation regarding qualification or characterization of the transaction under such
Code or Regulations section (e.g.
, § 368(a)(1)(A)) assuming that the Service rules as
requested. The Service reserves the right to rule on any other issue in, or part of, the
transaction (including ruling adversely) if the Service believes it is in the best interests of
tax administration. Cf
. section 2.01 of Rev. Proc 2009-3.
All pertinent no-rule policies governing the Service’s ruling practice will govern
requests for rulings made pursuant to this revenue procedure. See
, for example, Rev.
Proc. 2003-48, 2003-2 C.B. 86 (no-rule policy regarding business purpose and device
issues under § 355, and § 355(e) plan issues). In addition, the Service will not grant a
ruling on a significant non-plan issue or issues under § 355(e) unless an adverse ruling

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on such non-plan issue or issues would result in there being a direct or indirect
acquisition by one or more persons of stock representing a 50-percent or greater
interest in the distributing corporation or the controlled corporation that is part of a plan
under § 355(e). With respect to ruling requests regarding the effect of a redemption
under section 355(e), the Service will entertain such requests under the conditions
described in sections 5.09 and 5.10 of this revenue procedure. Rev. Proc. 2009-3 is
amplified to reflect these policies.
The Service will, if requested, endeavor to issue letter rulings requested pursuant
to this revenue procedure within ten weeks from receipt of the request, provided that the
request meets the requirements of sections 7.02(4) and 8.05(1) of Rev. Proc. 2009-1 as
amplified by this revenue procedure.
The ruling program under this revenue procedure is a pilot program that applies
to ruling requests postmarked or, if not mailed, received after May 4, 2009. This pilot
program will be evaluated by the Service periodically.
SECTION 4. REQUEST FOR COMMENTS
The Service requests comments regarding the pilot program. Comments should
refer to Rev. Proc. 2009-25, and should be submitted to:
Internal Revenue Service
P. O. Box 7604
Ben Franklin Station
Washington, DC 20044
Attn: CC:PA:RU
Room 5226

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or electronically via the Service internet site at:
Notice.Comments@irscounsel.treas.gov
(the Service comments e-mail address). All
comments will be available for public inspection and copying.
SECTION 5. PROCEDURE
.01 Rev. Proc. 2009-1 is amplified by adding the following paragraphs to section
6.03:
In addition, the Office of the Associate Chief Counsel (Corporate) may issue a
letter ruling on part of an integrated transaction without ruling on the larger transaction if
the requested ruling addresses one or more issues that: (1) are under the jurisdiction of
the Associate Chief Counsel (Corporate), (2) are significant (as defined in section
3.01(38) of Rev. Proc. 2009-3, this Bulletin), and (3) involve the tax consequences or
characterization of a transaction (or part of a transaction) that occurs in the context of a
§ 355 distribution. The Service may also rule on a particular legal issue under a Code
or Regulations section without ruling on all aspects of such Code or Regulations section
if the issue meets the three conditions of the preceding sentence.
Before preparing the letter ruling request under this section 6.03, a taxpayer
should call the Office of the Associate Chief Counsel (Corporate) at the telephone
number provided in section 10.07(1)(a) of this revenue procedure for pre-submission
conferences to discuss with one of the branches whether the Office of the Associate
Chief Counsel (Corporate) will issue a letter ruling under this section 6.03. The Service
reserves the right to rule on any other aspect of the transaction (including ruling
adversely) if the Service believes it is in the best interests of tax administration. Cf
.
section 2.01 of Rev. Proc. 2009-3.

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All requests for a ruling under this section 6.03 must contain the following:
(1) A narrative description of the transaction that puts the issue in context;
(2) An explanation concerning why the issue is significant within the
meaning of section 3.01(38) of Rev. Proc. 2009-3;
(3) Applicable information from relevant revenue procedures with respect
to the significant issue. See Appendix E of this revenue procedure (referring to,
inter alia, Rev. Proc. 96-30, 1996-1 C.B. 696, as modified and amplified by Rev.
Proc. 2003-48, 2003-2 C.B. 86);
(4) The precise ruling being requested;
(5) Where the taxpayer is requesting a ruling on the tax treatment of part
of an integrated transaction, a representation regarding the relevant tax
consequences of the larger transaction (to the best knowledge and belief of the
taxpayer), assuming that the Service issues the requested ruling; additionally,
where the taxpayer is requesting a ruling on a particular legal issue under a Code
section or section of the Regulations (e.g.
, § 1.368-2(k)), a representation (to the
best knowledge and belief of the taxpayer) regarding qualification or
characterization of the transaction under such Code or Regulations section (e.g
.,
§ 368(a)(1)(A)), assuming that the Service issues the requested ruling; and
(6) A statement that no rulings outside the jurisdiction of the Associate
Chief Counsel (Corporate) are requested.
If the Service issues a ruling on a significant issue under this procedure, then the
letter ruling will state that no opinion is expressed as to the overall tax consequences of
the transactions described in the letter ruling or as to any issue or step not specifically

8
addressed by the letter. In addition, letter rulings under this procedure will contain the
following (or similar) language at the beginning of the letter:
This Office expresses no opinion as to the overall tax consequences of the
transaction(s) described in this letter. Rather, the ruling(s) contained in this letter
only address one or more discrete legal issues involved in the transaction.
.02 Rev. Proc. 2009-1 is amplified by replacing the last sentence of the first
paragraph of section 7.02(4) with the following:
Notwithstanding the previous sentence, expedited handling may be available for
certain issues under the jurisdiction of the Associate Chief Counsel (Corporate), as
provided below.
.03 Rev. Proc. 2009-1 is amplified by replacing the heading and the first
sentence of the seventh paragraph of section 7.02(4) with the following:
EXPEDITED LETTER RULING PROCESS FOR CERTAIN REQUESTS UNDER
THE JURISDICTION OF THE ASSOCIATE CHIEF COUNSEL (CORPORATE): If a
taxpayer requests a letter ruling on whether a transaction constitutes a reorganization
under § 368 or a distribution under § 355, or a letter ruling involving certain significant
issues under the jurisdiction of the Associate Chief Counsel (Corporate) as described in
section 6.03 of this revenue procedure, and the taxpayer asks for expedited handling
pursuant to this provision, the Service will grant expedited handling.
.04 Rev. Proc. 2009-1 is amplified by replacing the last sentence of section
7.02(4) with the following:
For further information regarding this EXPEDITED LETTER RULING
PROCESS FOR CERTAIN REQUESTS UNDER THE JURISDICTION OF THE

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ASSOCIATE CHIEF COUNSEL (CORPORATE), call the telephone number
provided in section 10.07(1)(a) of this revenue procedure for pre-submission
conferences with the Office of Associate Chief Counsel (Corporate).
.05 Rev. Proc. 2009-1 is amplified by replacing the first sentence of the last
paragraph of section 8.05(1) with the following:
The Service will not endeavor to process on an expedited basis a ruling request
regarding reorganizations under § 368, distributions under § 355, or certain significant
issues under the jurisdiction of the Associate Chief Counsel (Corporate) as described in
section 6.03 of this revenue procedure unless the branch representative in the Office of
Associate Chief Counsel (Corporate) receives all requested additional information within
10 calendar days from the date of the request for such additional information, unless an
extension of time is granted.
.06 Rev. Proc. 2009-1 is amplified by replacing the first sentence of the third
paragraph of section 19 with the following:
The collections of information in this revenue procedure are in sections 5.06,
6.03, 7.01, 7.02, 7.03, 7.04, 7.05, 7.07, 8.02, 8.05, 10.01, 10.06, 10.07, 11.11, 13.02,
15.02, 15.07, 15.08, 15.09, 15.11, paragraph (B)(1) of Appendix A, Appendix C, and
Appendix E (subject matter—rate orders; regulatory agency; normalization).
.07 Rev. Proc. 2009-1 is amplified by replacing the second sentence of
Appendix C, Item 35 with the following sentence:
Note that certain requests under the jurisdiction of the Associate Chief Counsel
(Corporate) may receive expedited treatment without stating a compelling need.
.08 Rev. Proc. 2009-3 is amplified by starting a new paragraph immediately

10
before the last sentence of the first paragraph of section 3.01(38) and by adding the
following sentences at the end of the revised first paragraph in section 3.01(38):
However, the Service may rule on a significant issue in a transaction that occurs
in the context of a § 355 distribution without ruling on the entire transaction. See
section 6.03 of Rev. Proc. 2009-1. Before preparing the letter ruling request, a taxpayer
should call the Office of the Associate Chief Counsel (Corporate) at (202) 622-7700 to
discuss with one of the branches whether the Office of the Associate Chief Counsel
(Corporate) will issue a letter ruling only involving that significant issue. The Service
reserves the right to rule on any other issue in the transaction (including ruling
adversely) if the Service believes it is in the best interests of tax administration. Cf
.
section 2.01 of this revenue procedure.
.09 Rev. Proc. 2009-3 is amplified by adding the following paragraph to section
3.01:
Section 355.—Distribution of Stock and Securities of a Controlled Corporation.—
Whether the distribution of the stock of a controlled corporation is being carried out for
one or more corporate business purposes, whether the transaction is used principally as
a device, and whether the distribution and an acquisition are part of a plan under §
355(e). See
Rev. Proc. 2003-48, 2003-2 C.B. 86. Notwithstanding the preceding
sentence, the Service may issue a ruling regarding the effect of redemptions under §
355(e) pending the issuance of temporary or final regulations regarding redemptions
under § 355(e) if an adverse ruling on such question would result in there being a direct
or indirect acquisition by one or more persons of stock representing a 50-percent or
greater interest in the distributing corporation or the controlled corporation that is part of

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a plan under § 355(e).
.10 Rev. Proc. 2009-3 is amplified by adding the following paragraph to section
4.01:
Section 355.—Distribution of Stock and Securities of a Controlled Corporation.—
Any issue under § 355(e) other than whether a distribution and an acquisition are part of
a plan (i.e., any non-plan issue). Notwithstanding the preceding sentence, the Service
generally will rule on a non-plan issue or issues (e.g., whether a corporation constitutes
a predecessor of distributing) if an adverse ruling on such non-plan issue or issues
would result in there being a direct or indirect acquisition by one or more persons of
stock representing a 50-percent or greater interest in the distributing corporation or the
controlled corporation that is part of a plan under § 355(e).
.11 Rev. Proc. 2009-3 is amplified by adding the following paragraph to section
4.02(2):
Notwithstanding the previous paragraph, the Office of the Associate Chief
Counsel (Corporate) may issue a letter ruling on part of an integrated transaction
without ruling on the larger transaction if such transaction occurs in the context of a §
355 distribution. See
section 6.03 of Rev. Proc. 2009-1. Before preparing the letter
ruling request, a taxpayer should call the Office of the Associate Chief Counsel
(Corporate) at (202) 622-7700 to discuss with one of the branches whether the Office of
the Associate Chief Counsel (Corporate) will issue a letter ruling only involving part of
the transaction. The Service reserves the right to rule on any other part of the
transaction (including ruling adversely) if the Service believes it is in the best interests of
tax administration. Cf
. section 2.01 of this revenue procedure.

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SECTION 6. EFFECT ON OTHER REVENUE PROCEDURES
Rev. Proc. 2009-1, 2009-1 I.R.B. 1, and Rev. Proc. 2009-3, 2009-1 I.R.B. 107,
are amplified.
SECTION 7. EFFECTIVE DATE
This revenue procedure is effective May 4, 2009.
SECTION 8. PAPERWORK REDUCTION ACT
The collections of information contained in this revenue procedure have been
reviewed and approved by the Office of Management and Budget (OMB) in accordance
with the Paperwork Reduction Act (44 U.S.C. 3507) under control number 1545-1522.
An agency may not conduct or sponsor, and a person is not required to respond
to, a collection of information unless the collection of information displays a valid OMB
control number.
The collections of information in this revenue procedure are in section 5. This
information is required and will be used to determine whether a taxpayer would qualify
for a letter ruling on part of an integrated transaction without the Service ruling on the
larger transaction. The collections of information are required to obtain a benefit. The
likely respondents are business or other for-profit institutions.
The estimated total annual reporting burden under Rev. Proc. 2009-1 is 513,150
hours.

The estimated annual burden per respondent varies from 1 hour to 200 hours,
depending on individual circumstances, with an estimated average of 90.1054 hours.
The estimated number of respondents is 5,695.
The estimated annual frequency of responses is on occasion.
Books or records relating to a collection of information must be retained as long

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as their contents may become material in the administration of any internal revenue tax
law. Generally tax returns and tax return information are confidential, as required by 26
U.S.C. 6103.
SECTION 9. DRAFTING INFORMATION
The principal author of this revenue procedure is Russell P. Subin of the Office of
Associate Chief Counsel (Corporate) For further information regarding this revenue
procedure contact Russell P. Subin on (202)-622-7790 (not a toll free call).