Rev. Proc. 77-27

Rev. Proc. 74-26, 1974-2 C.B. 478, as amplified by Rev. Proc. 76-22, 1976-1 C.B. 562, and Rev. Proc. 76-26, 1976-2 C.B. 643, sets forth operating rules pertaining to issuing ruling letters in certain transactions handled by the Reorganization Branch of the Corporation Tax Division of the Internal Revenue Service.

In addition to the transactions set forth in section 2 of Rev. Proc. 74-26, the Reorganization Branch also considers ruling requests under section 341 of the Internal Revenue Code of 1954 concerning collapsible corporations.

The Reorganization Branch will consider all of the facts and circumstances in a request for a ruling that a corporation has not been "formed or availed of" with a view to the action described in section 341(b), and, therefore, is not a "collapsible corporation" as defined in section 341(b), when the enterprise (1) has been in existence for at least 20 years, (2) has had substantially the same owners during that period, and (3) has conducted substantially the same trade or business during that period.

Section 4.016 of Rev. Proc. 72-9, 1972-1 C.B. 718, which states that rulings or determination letters will not ordinarily be issued under section 341 as to whether a corporation was "formed or availed of" with a view to certain tax consequences and, therefore, is a "collapsible corporation," is modified to the extent that ruling requests will be considered when an enterprise meets the three criteria set forth above.

Rev. Proc. 72-9 is modified and Rev. Proc. 74-26 is amplified.