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The Internal Revenue Service (“IRS”) is withdrawing proposed regulations which would have refined and clarified the rules governing corporate distributions and related transactions under §357, §361, and §368 and required multi-year tax reporting for corporate separations and related transactions (spinoffs). On January 16, 2025, the IRS proposed rulemaking and requested public comment. The comments were predominantly negative with most commenters focused on increased bureaucracy, a lack of clarity and “bright line rules,” and a lack of necessity in an area of tax law that is generally understood by taxpayers and the government alike. Given the negative feedback, the IRS has decided to withdraw the proposed regulations and leave the status quo in place. For further questions regarding this update, contact Liskow attorneys Leon Rittenberg III, Caroline Lafourcade, John Rouchell, and Kevin Naccari and visit our Tax practice page.