Rev. Proc. 2013-32, issued on June 25, 2013, will restrict the scope of letter rulings the IRS will issue under sections 332, 351, 355, 368, and 1036 (the Covered Transactions). The IRS no longer will rule on whether any of the Covered Transactions qualify for nonrecognition treatment. Rather, the IRS will rule only on significant issues raised by Covered Transactions or significant issues under related Code sections that address the tax consequences that result from the application of the above provisions.
Rev. Proc. 2013-32 also defines what a significant issue is for these purposes and provides guidance on what taxpayers need to include in letter ruling requests. The changes discussed in Rev. Proc. 2013-32 apply to all letter ruling requests postmarked or, if not mailed, received after August 23, 2013.