The U.S. Treasury and IRS have withdrawn the 30 September 2025 proposed regulations on corporate separations, incorporations, reorganisations, and multi-year tax reporting for related transactions.

The U.S. Department of the Treasury and the Internal Revenue Service (IRS) have withdrawn the proposed regulations concerning corporate separations, incorporations, and reorganisations (RIN 1545-BR32), “Guidance Regarding Certain Matters Relating to Nonrecognition of Gain or Loss in Corporate Separations, Incorporations, and Reorganisation”, which were issued on 30 September 2025.

In addition, they have rescinded the proposed rules (Multi-Year Reporting Requirements for Corporate Separations and Related Transactions) that would have required multi-year tax reporting for corporate separation transactions and related activities.

In January 2025, the Treasury Department and the IRS issued a notice of proposed rulemaking for both sets of regulations, but later withdrew them following feedback from the public.

Guidance Regarding Certain Matters Relating to Nonrecognition of Gain or Loss in Corporate Separations, Incorporations, and Reorganisation

Summary

This document contains proposed regulations regarding certain matters relating to corporate separations, incorporations, and reorganisations qualifying, in whole or in part, for nonrecognition of gain or loss. These matters include distributions and retentions of controlled corporation stock, assumptions of liabilities by controlled corporations, exchanges of property between distributing corporations and controlled corporations, and distributions and transfers of consideration to distributing corporation shareholders and creditors. The proposed regulations would affect corporations and their shareholders and security holders. Proposed regulations modifying the reporting requirements for corporate separations are published elsewhere in the Proposed Rules section of this issue of the Federal Register.

Multi-Year Reporting Requirements for Corporate Separations and Related Transactions

Summary

This document contains proposed regulations that would require multi-year tax reporting for corporate separations and related transactions. The information to be reported under these proposed regulations would establish the taxpayer’s position that the corporate separation and related transactions qualify for nonrecognition treatment under subchapter C of the Internal Revenue Code. The proposed regulations would affect corporations and their shareholders and security holders. Proposed regulations regarding certain matters relating to corporate separations, incorporations, and reorganisations qualifying for nonrecognition of gain or loss are published elsewhere in the Proposed Rules section of this issue of the Federal Register.