IRS Issues Final Regulations On F Reorganizations

In September 2015, the Treasury Department and the IRS issued final regulations (T.D. 9739) that provide guidance with respect to the qualification of a transaction as a reorganization under Section 368(a)(1)(F) (an "F" reorganizations). The final regulations generally retain the four requirements set forth in the proposed regulations on F reorganizations from 2004, and contain two additional requirements that are intended to address overlap scenarios where all or a portion of a transaction could potentially qualify as an F reorganization and also satisfy the requirements of another non-recognition provision. Further, the final regulations reaffirm that the qualification of a transaction as an F reorganization generally should be tested in isolation to other transactions. In addition, final regulations under Section 367(a) regarding outbound F reorganizations were issued, which generally adopt 1990 temporary regulations (T.D. 8280) including their effective dates.