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Since January 2, 2013, the Internal Revenue Service (the “IRS”) would not issue private rulings on tax-free spinoffs in which a parent corporation (the “distributing corporation”) acquires the requisite control of a subsidiary corporation (the “controlled corporation”) through a recapitalization of the controlled corporation’s stock prior to and in anticipation of the spinoff (generally to provide for high vote stock of the controlled corporation to be held by the distributing corporation). On July 15, 2016, the IRS and Treasury Department released Revenue Procedure 2016-40, which removed the issue from the no-rule list, allowing taxpayers to seek a ruling on spinoffs involving such a recapitalization. In addition, the Revenue Procedure provided two safe harbors under which the IRS will respect a tax-free spinoff where the distributing corporation acquires control of the controlled corporation through a recapitalization of the controlled corporation’s stock, so long as (i) there is no plan or action taken to unwind the recapitalization within the 24-month period following the spinoff or (ii) the recapitalization is unwound in connection with an unanticipated third party transaction (such as a merger).