SECTION 2. BACKGROUND

Section 5 of Rev. Proc. 96–3 sets forth those areas under extensive study in which rulings or determination letters will not be issued until the Service resolves the issue through publication of a revenue ruling, revenue procedure, regulations or otherwise. Section 355(a) of the Internal Revenue Code applies to distributions to a shareholder with respect to stock, or to a security holder in exchange for securities, of stock or securities of a corporation controlled by the distributing corporation immediately

before the distribution. In cases in which there have been negotiations, agreements or arrangements with respect to transactions or events which, if consummated before the distribution, would result in the distribution of stock or securities of a corporation which is not controlled by the distributing corporation, the Service intends to study further the proper evaluation of the facts and circumstances to determine whether the requirements of § 355 are satisfied.