The Internal Revenue Service continues to contemplate the contents of a possible guidance project to assist taxpayers when applying the rescission doctrine after the Service ruled in January that it will no longer offer additional interpretations of the doctrine, IRS Associate Chief Counsel (Corporate) William D. Alexander said.
Currently taxpayers have only a 32- year-old revenue ruling and a 1940 federal case, Penn v. Robertson, to rely on for guidance when interpreting the doctrine, which aims to allow counterparties essentially to undo contractual stipulations under certain circumstances.
In January, IRS issued Rev. Proc. 2012-3, which stated the agency would no longer issue private letter rulings or determination rulings regarding the issue.
“For the moment, you're on your own but you do have the revenue ruling,” Alexander said April 19 at a mergers and acquisitions tax conference sponsored by the New York City Bar and the Penn State Dickinson School of Law.
“What I can tell you for the moment is that revenue ruling is our published position.”
When asked how long taxpayers will have to wait until guidance on the doctrine is issued, Alexander said, “I don't think it will be too long.”