Daily Tax Update - July 15, 2016: IRS Issues Final Regulations on Tax-Exempt Bond Arbitrage Restrictions

IRS Issues Final Regulations on Tax-Exempt Bond Arbitrage Restrictions:  Today, the IRS issued final regulations on the section 148 arbitrage investment restrictions applicable to tax-exempt bonds and other tax-advantaged municipal bonds that amend the current rules to address market developments, simplify provisions, and improve ease of administration.

IRS Creates Safe Harbors on Control for Section 355:  Today, the IRS issued Revenue Procedure 2016-40 that provides two safe harbors under which the IRS will not assert that a corporation lacks the control required under section 355(a) when a corporation acquires control of another corporation through the target’s issuance of stock followed by certain transactions that reverse the effect of the stock issuance.