Rev. Proc. 84-52

SECTION 1. BACKGROUND

Rev. Proc. 84-22, 1984-13 I.R.B. 18, contains in section 4 a list of those areas of the Internal Revenue Code under the jurisdiction of the Associate Chief Counsel (Technical) in which rulings or determination letters will not ordinarily be issued.

SEC. 2. PROCEDURE

Rev. Proc. 84-22 is modified by deleting from section 4.01 the following subsection:

12 Sections 304 and 357.-Redemption Through Use of Related Corporations; Assumption of Liability.-A transaction similar to that described in Rev. Rul. 80-240, 1980-2 C.B. 116, holding that sections 304(a)(1) and 357(a) of the Code are inapplicable because there was no assumption of liability, unless the taxpayer can satisfy the Internal Revenue Service that the liability was incurred by the taxpayer as a mere intermediary agent for the newly created corporate transferee. To establish this, the taxpayer must submit to the Internal Revenue Service documented evidence, composed at the time the liability was incurred, which indicates that the unrelated lender had agreed to release the transferor-borrower from any and all obligation on the liability in favor of the corporate transferee. Further, the taxpayer must show, or represent to the Internal Revenue Service that the transfer and assumption actually occurred, or will actually occur within 12 months of the date the debt was incurred.

SEC. 3. EFFECTIVE DATE

This revenue procedure will apply to all ruling requests dealing with transactions governed by section 304(b)(3) of the Code as enacted by the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) (i.e., in general it will apply to transfers occurring after August 31, 1982, in taxable years ending after such date). The Service, will continue its present ruling policy on transactions described in section 4.0112 of Rev. Proc. 84-22 that are not governed by section 304(b)(3) as enacted by TEFRA.

SEC. 4. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 84-22 is modified.