IRS overhauls spin-off ruling guidelines

Article Abstract:

The IRS has issued Revenue Procedure 96-30 to clarify the steps that need to be taken to receive private letter rulings approving corporate spin-offs as tax-free reorganizations under IRC section 355. The new procedures require taxpayers to provide greater documentation, but increased information should reduce delays caused by supplemental filings. Demonstrating business purpose has become more important, and the IRS release details how to prove a number of different business purposes. The continuity of interest, control and active trade or business requirements are also detailed.

United States, Taxation, Corporate divestiture, Divestiture, Corporate distributions

---

Plan termination guidelines

Article Abstract:

Employers must comply with certain guidelines when planning to terminate a retirement plan and should request a determination letter to ensure that they avoid adverse tax consequences. Unless an employer can prove it falls into one of three categories, it will be charged a 50% excise tax on all excess assets and if it does belong to the categories, the tax is still 20%. Employers must terminate a plan under a standard or distress termination based on the employers' economic status and all terminations require a 60-day notice to affected parties.

Laws, regulations and rules, Pension funds, Employee benefits, Pension fund termination

---

The new hospital audit hit list: an analysis of the revised tax-exempt hospital audit guidelines

Article Abstract:

The IRS revised guidelines for tax-exempt hospital audits, issued on Apr 1, 1992, are more specific and extensive so hospitals should evaluate their compliance to prevent losing tax-exempt status and being liable for taxes and penalties from the moment a violation occurred. The standards being measured during the audit are: the community benefit standard, political activity prohibition, abuse law, private inurement or benefit prohibition and patient dumping or fraud.

Standards, Accounting and auditing, Tax auditing, Tax audits, Hospitals, Voluntary, Voluntary hospitals

Similar abstracts:

• Abstracts: Use of accounting product-costing systems in making production decisions. Accounting for changing prices: the value relevance of historical cost, price level, and replacement cost accounting in Mexico
• Abstracts: Debt financing under asymmetric information. Strategic debt service
• Abstracts: Security: getting tough in tough times. How to improve presentations. Crises provide insights on image: preparations necessary to protect goodwill when times turn bad
• Abstracts: The future for financial reporting in New Zealand. Pan-European groups
• Abstracts: Wide limits on reinvesting disaster insurance proceeds. IRS explains limits on educational assistance. Exempt religous organizations have strict limits

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.