Temporary regulations expire after three years. That means that sometimes there may be a gap in authority between the current regs and the regulation that is expected to be finalized, more or less in the same form as temporary and proposed regulations. Corproations planning reorganization transactions are up against that temporary reg deadline in terms of the continuity of shareholder interest (often abbreviated COSI or COI) requirement. So what should they do? The government has come to the rescue.
The IRS issued Notice 2010-25 permitting parties to a reorganization under section 368 to satisfy continuity of shareholder interest requirements so long as they comply with temporary regulations that expire on March 19, 2010. The only hitch--all corporate parties to the reorganization have to consent.
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