Rev. Proc. 76-24

Rev. Proc. 68-23, 1968-1 C.B. 821, establishes guidelines in connection with requests for advance rulings required under section 367 of the Internal Revenue Code of 1954. Section 3.03(1)(c) of Rev. Proc. 68-23 provides that a favorable ruling will generally be issued pursuant to section 367 in situations where assets of a controlled foreign corporation are acquired by another foreign corporation if the shareholders of the acquired corporation agree to include in their gross income, as a dividend deemed paid in money for their taxable year in which the exchange of stock occurs, the portion of the earnings and profits, if any, of the acquired foreign corporation properly attributable under section 1248 to such shareholders' stock in such corporation, which would have been included in their gross income under section 1248 if at the time of such acquisition the stock of such corporation was exchanged in a taxable exchange.

When the acquiring corporation is a controlled foreign corporation the shareholders of the acquired corporation have the alternative of entering into a closing agreement specified in Rev. Proc. 75-29, 1975-1 C.B. 754, as modified by Rev. Proc. 76-4, page 543, this Bulletin, in lieu of currently including in income the amount required by section 3.03(1)(c) of Rev. Proc. 68-23.

The effective date of the ruling under section 367 of the Code that the exchanges described in section 361 and section 354, 355, or 356 are not in pursuance of a plan having as one of its principal purposes the avoidance of Federal income taxes will be the date on which the ruling letter is issued provided the closing agreement is signed by the taxpayer and by the Commissioner or his delegate not later than 180 days from the date the ruling letter is issued.

Rev. Proc. 75-29 is amplified.