The IRS Restructuring Act of 1998: Technical Corrections to Section 304

By Giovanna T. Sparagna and Edward M. Brooks

In August, 1997, Congress passed the Taxpayer Relief Act of 1997 ("TRA 1997") (see endnote 1). which included numerous technical amendments to s304 of the Internal Revenue Code of 1986 (the "Code") (see endnote 2) in the international context. The application of certain TRA 1997 s304 amendments was unclear including the interplay of such amendments with the then current authority set forth in Rev. Ruls. 91-5 and 92-86. (see endnote 3) The issues raised were discussed at length in a previous article. (see endnote 4)

Section 6010(d) of the Internal Revenue Service Restructuring and Reform Act of 1998 (the "1998 Act") (see endnote 5) makes several important technical corrections which clarify the TRA 1997 amendments. The provisions of the 1998 Act are effective as if enacted in TRA 1997 thereby, retroactively eliminating any uncertainty created by such provisions. Thus, the 1998 Act provisions are effective for distributions or