Perkins Coie's Federal Tax practice serves a diverse client base, including Fortune 500 corporations, private equity funds, real estate investment trusts, emerging technology companies and family-owned businesses. For these clients, we focus on tax issues arising from business or corporate transactions, such as reorganizations, mergers, acquisitions, joint ventures, spinoffs and other dispositions, leveraged buyouts and financings.
Publications
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09.12.2023IRS Issues Proposed Regulations Relating to Digital Asset TransactionsUpdatesThe U.S. Department of the Treasury and the Internal Revenue Service recently released proposed regulations (REG-122793-19) pertaining to information reporting and backup withholding, as well as basis and amount realized determinations for certain transactions involving digital assets.
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04.27.2021IRS Temporarily Permits E-signature of 83(b) ElectionsUpdatesOn April 15, 2021, in response to the ongoing COVID-19 situation, the U.S. Internal Revenue Service issued a temporary deviation from the handwritten signature requirement for a limited list of tax forms. This issue includes elections under Section 83(b) of the Internal Revenue Code, allowing taxpayers and representatives to use electronic or digital signatures when signing such forms. The IRS memorandum was issued about a month after Perkins Coie LLP, Carta.com, and other coalition partners sent a letter to the IRS specifically requesting such temporary relief.
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12.24.2020Summary of Certain Business Tax Provisions in the Consolidated Appropriations Act, 2021UpdatesAfter much political gridlock, Congress passed an omnibus government-spending bill (Appropriations Act), which includes another COVID-19 relief package.
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09.04.2020Summary of Notice 2020-65: Deferral of Employee’s Portion of Social Security TaxesUpdatesIn response to the ongoing coronavirus (COVID-19) pandemic, the U.S. Congress, the executive branch, and the Internal Revenue Service (IRS) have taken several actions intended to provide immediate relief to taxpayers.
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08.05.2020IRS Publishes Proposed Regulations Applicable to Three-Year Carried Interest Holding Period RequirementUpdatesOn Friday, July 31, 2020, the Internal Revenue Service (IRS) issued proposed regulations under Section 1061 of the Internal Revenue Code.
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06.16.2020Proposed Regulations Increase Incentives for Carbon Capture TechnologyUpdatesThe Internal Revenue Service on May 28, 2020, introduced proposed regulations detailing how companies can qualify for carbon capture tax credits under Section 45Q of the Internal Revenue Code.
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03.31.2020Summary of Tax Provisions of the CARES ActUpdatesIn response to the ongoing coronavirus (COVID-19) pandemic, U.S. Congress, the executive branch, and the Internal Revenue Service (IRS) have taken several actions intended to provide immediate relief to taxpayers.
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03.25.2020Summary of Tax Provision of the Families First Coronavirus Response Act and Certain Tax Filing ChangesUpdatesIn response to the ongoing coronavirus (COVID-19) pandemic, the U.S. Congress, the Executive Branch, and the Internal Revenue Service have taken several actions intended to provide immediate relief to taxpayers, including by postponing federal income tax return and tax payment deadlines, providing businesses with tax credits to the extent that such businesses are subject to new paid sick and paid family and medical leave requirements, and declaring COVID-19 a national emergency.
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02.12.2020IRS Issues Guidance on Prior Year Parking Tax Refunds or Credits for Tax-Exempt OrganizationsUpdates
On January 21, 2020, the Internal Revenue Service (IRS) released guidance for tax-exempt organizations on how tax-exempt organizations may obtain a refund or credit for prior year unrelated business income tax (UBIT) incurred for qualified transportation fringe benefits.
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03.28.2018IRS Announces End to Offshore Amnesty ProgramUpdatesThe IRS recently announced that it would end the Offshore Voluntary Disclosure Program (OVDP).
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03.07.2018New Three-Year Hold Requirement for Carried Interests, Updated Notice for S CorpsUpdatesThe 2017 Tax Cuts and Jobs Act, signed by President Trump last month, significantly affects the ability of the managers of investment funds to receive long-term capital gains with respect to their carried interest.
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02.09.2018Private Company Tax Planning Opportunities for 2018UpdatesThe Tax Cuts and Jobs Act of 2017 and the recent taxpayer victory in the U.S. Tax Court’s Lender Management, LLC decision have created important planning opportunities for both our closely held and family-controlled entities in 2018.
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01.17.20182018 Key Trust & Estate Planning and Corporate Ownership Implications of the New Tax LawUpdates
With the passage of the Tax Cuts and Jobs Act of 2017, attorneys in Perkins Coie’s Trust & Estate Planning practice, along with our clients running closely held businesses, have already begun reviewing and implementing tax-efficient strategies.
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01.09.2018Impact of Tax Reform on Some Private Company Equity Awards: Limited Income Tax Deferral Opportunities for EmployeesUpdatesThe recent tax reform bill, commonly referred to as the Tax Cuts and Jobs Act of 2017 (the Act), was signed into law on December 22, 2017. The Act includes a new income tax deferral regime for certain employee stock options and restricted stock units (RSUs) granted by eligible private corporations under broad-based programs that are exercised or settled after December 31, 2017.
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12.26.2017Tax Cuts and Jobs Act of 2017: Year-End Planning for BusinessesUpdatesCertain aspects of the tax reform bill signed by President Trump last Friday create significant year-end planning opportunities for businesses that are able to act quickly.
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12.26.2017Tax Cuts and Jobs Act of 2017: Year-End Planning for IndividualsUpdatesLast week, the Tax Cut and Jobs Act was signed into law and generally takes effect on January 1, 2018. In this update, we summarize some of the most significant tax law changes and suggest steps you might consider taking before the end of 2017 to reduce your income tax liability.
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12.29.2015Capital Gains Tax Exclusion for Certain New Investments in Small Businesses Made PermanentUpdates
President Obama signed into law the Protecting Americans from Tax Hikes Act of 2015 (the PATH Act) on December 18, 2015. Among other provisions, the PATH Act provides that the 100 percent exclusion from gross income of certain capital gains from sales of qualified small business stock will apply to all investments made after September 27, 2010, including investments made in 2015 that were not eligible for the exclusion prior to the passage of the PATH Act.
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10.05.2015Don’t Burst My Bubble! IRS Provides Clarity for F ReorganizationsUpdatesRecently, the Internal Revenue Service issued final regulations addressing reorganizations, commonly referred to as “F reorganizations,” under Section 368(a)(1)(F) of the Internal Revenue Code (the Code).
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06.27.2014IRS Broadens Offshore Amnesty ProgramUpdatesOver the last several years, the Internal Revenue Service (IRS) has focused its efforts on enforcement of U.S. laws with respect to offshore assets held by U.S. citizens and residents, including their tax payment and reporting obligations.
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05.17.2013In re LIBOR-Based Financial Instruments Antitrust Litigation: A Long Road AheadUpdatesIn a self-described “unexpected” ruling for the defendants in the consolidated LIBOR proceedings, Judge Naomi Reice Buchwald has dismissed the private plaintiffs’ antitrust and Racketeer Influenced and Corrupt Organizations Act (RICO) claims and significantly narrowed the scope of the Commodity and Exchange Act (CEA) claim.
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01.14.2013Investment Window for Capital Gains Tax Exclusion for Certain New Investments in Small Businesses Extended to December 31, 2013UpdatesOn January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012 (the Act). Among other provisions, the Act provides that the 100% exclusion from gross income of certain capital gains from sales of qualified small business stock will apply to investments made after September 27, 2010 and before January 1, 2014, including investments made in 2012 that were not eligible for the exclusion prior to the passage of the Act.
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12.12.2012New Rules Will Be “Taxing” on Medical Device ManufacturersUpdatesThe U.S. Department of the Treasury and the Internal Revenue Service (IRS) recently issued much-anticipated final regulations under Section 4191 of the Internal Revenue Code (Code), which imposes a 2.3% tax on sales of any “taxable medical device” by a manufacturer, producer or importer (collectively referred to as “manufacturers”). The IRS simultaneously issued Notice 2012-77, providing interim guidance to manufacturers while it continues to study certain issues that are not addressed by the final regulations.
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11.13.2012Preparing for the 3.8% Medicare Surtax on Net Investment IncomeUpdatesThe Patient Protection and Affordable Care Act of 2010 (Affordable Care Act) institutes a new 3.8 percent Medicare surtax on net investment income effective January 1, 2013.
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07.17.2012LIBOR Rate-Fixing Scandal Deepens as Potential Plaintiffs Consider Legal OptionsUpdatesIn the wake of the recent admissions by Barclays Bank PLC that its traders sought to manipulate the London Interbank Offered Rate ("LIBOR"), corporations and other investors are only now beginning to appreciate the magnitude of the scandal and to consider how it might impact their own investments.
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05.25.2012AOL Gets Its Day in Court (Finally) and Is Awarded Washington Sales Tax RefundUpdatesOn May 9, 2012, the Washington State Board of Tax Appeals granted summary judgment to AOL, Inc., holding that AOL's purchases of services permitting its customers to connect with AOL's data center and the Internet were not subject to retail sales tax. AOL Inc. v. Wash. Dep't of Revenue, No. 11-076 (Wash. B.T.A. May 9, 2012). The procedural lessons of this case may be as important in Washington tax practice as the substantive case.
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07.29.2011The 2011 Offshore Voluntary Disclosure Initiative Offers Taxpayers a Way to Substantially Reduce Potential PenaltiesUpdatesThe 2011 Offshore Voluntary Disclosure Initiative, which ends August 31, 2011 offers taxpayers who either maintain undisclosed foreign bank accounts or use foreign entities to conceal offshore investments a way to substantially reduce their potential penalties as opposed to those who do not come forward.
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12.22.2010Investment Window for Capital Gains Tax Exclusion for Certain New Investments in Small Businesses Extended to December 31, 2011UpdatesOn December 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the “Act”). Among other provisions, the Act extends for one additional year the exclusion from gross income of 100% of future capital gains of non-corporate taxpayers from certain investments in qualified small business stock.
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12.20.2010President Obama Signs Legislation Extending Tax CutsUpdates
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ("2010 Tax Relief Act"), signed into law on December 17, 2010, provides individual and business tax relief that includes a two-year extension of capital gains and dividend income rate reductions, a two-year extension of individual income tax rate reductions and certain other individual and business tax relief. Additionally, the legislation increases the estate and gift tax exemption level to $5 million and reduces the tax rate to 35 percent through 2012.
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10.05.2010New Legislation Eliminates Capital Gains Tax for Certain New Investments in Small Businesses Made Before January 1, 2011UpdatesOn September 27, 2010, President Obama signed into law the Creating Small Business Jobs Act of 2010 (the “Act”). Among other provisions, the Act excludes from gross income for regular income and alternative minimum tax purposes 100% of the capital gains (subject to a per issuer limitation described below) of non-corporate taxpayers from investments in qualified small business stock made after September 27, 2010 and before January 1, 2011. For investments in qualified small business stock made after December 31, 2010, only 50% of the capital gains generally will be excluded from gross income.
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09.29.2010IRS Releases Final Schedule and Instructions for Reporting Uncertain Tax PositionsUpdatesOn September 24, 2010, the IRS released final Schedule UTP and its corresponding instructions that require certain corporations with audited financial statements to report uncertain tax positions. Earlier this month, on September 9, 2010, a notice of proposed rulemaking was issued setting forth a proposed regulation that specifically authorizes the IRS to require the filing of Schedule UTP.
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08.18.2010New Legislation Adopts Additional Limitations on the Use of Foreign Tax CreditsUpdatesOn August 10, 2010, President Obama signed into law the Education Jobs and Medicaid Assistance Act of 2010 (the “Act”).
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05.28.2010Treasury Releases New Guidance for Tax Credit in Affordable Care Act to Support Groundbreaking Biomedical ResearchUpdatesThe Patient Protection and Affordable Care Act, signed into law on March 23, 2010, provides an opportunity for biotech and biopharma companies to recover certified investments in qualifying therapeutic discovery projects as a cash grant or a tax credit.
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04.02.2010April 15 Deadline Approaching: Employers Should Consider Filing Protective FICA Refund Claims Related to Certain 2006 Severance PaymentsUpdatesA federal district court in Michigan has held that certain supplemental unemployment compensation benefits (SUB pay) are not "wages" subject to Federal Insurance Contributions Act (FICA) taxation.
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03.25.2010IRS Provides New Safe Harbor for Section 1031 Exchanges Using Qualified IntermediariesUpdatesThe IRS recently issued Revenue Procedure 2010-14, which provides long-awaited guidance for taxpayers whose deferred like-kind exchange of relinquished property would be non-taxable under Section 1031 of the Internal Revenue Code but for the failure of the qualified intermediary ("QI") to acquire and transfer identified replacement property due to the QI's insolvency proceedings.
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03.23.2010SGIGs Will Be Treated as Nonshareholder ContributionsUpdatesUntil recently, the taxability of Smart Grid Investment Grants (SGIGs) was an undecided issue. Effective March 10, 2010, the Internal Revenue Service (IRS) has announced that these grants will be treated as nonshareholder contributions to the capital of grant recipients and thus not included in their taxable gross income.
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12.30.2009New Requirements No Longer "Option"-al! February 1, 2010 Deadline and Final Regulations on Return and Information Statement Requirements for ISOs and ESPPsUpdatesThe Internal Revenue Service recently issued new final regulations addressing the return and information statement requirements applicable to exercises of incentive stock options, or ISOs, and transfers of shares purchased under an employee stock purchase plan, or ESPP. The IRS has waived the requirements under the new regulations for ISO exercises and transfers of ESPP shares that occur during 2009.
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12.02.2009End-of-the-Year Actions May Be Needed for Compliance With Code Sections 162(m) and 409AUpdatesPublic companies should take steps to determine whether any amendments may be required to new and outstanding compensatory arrangements in light of Section 162(m) of the Internal Revenue Code and certain transition relief under Revenue Ruling 2008-13.
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08.25.2009First Circuit Denies Work Product Protection to Tax Accrual WorkpapersUpdatesA recent full court First Circuit decision held that the taxpayer's tax accrual workpapers are not protected under the work product privilege and must therefore be released to the Internal Revenue Service.
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03.02.2009Economic Stimulus Bill Provides First-Time Homebuyers With Expanded Tax CreditUpdatesThe American Recovery and Reinvestment Act of 2009, commonly referred to as the Stimulus Bill, was signed into law on February 17, 2009 and contains an expanded tax credit for first-time homebuyers who make qualifying purchases prior to December 1, 2009.
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02.23.2009Economic Stimulus Bill Provides Energy Tax Incentives and Relaxes Tax Rules for BusinessesUpdatesThe American Recovery and Reinvestment Act of 2009, commonly referred to as the Stimulus Bill, signed into law on February 17, 2009, contains renewable energy tax incentives, defers realization of certain cancellation of debt income, suspends certain restrictions on the deductibility of original issue discount, and limits S corporation built-in gain recognition.
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03.21.2008IRS Clarifies New Adverse Position on Section 162(m) Performance-Based Compensation Exception and Provides Transition ReliefUpdatesThe IRS recently issued Revenue Ruling 2008-13, which clarifies the IRS's new position with
respect to the applicability of the performance-based compensation exception for purposes of Section 162(m) of the Internal Revenue Code and grants transition relief to provide public companies an opportunity to review outstanding compensation plans, agreements and other arrangements in light of the IRS's new position. -
09.12.2007Limited Deferred Compensation Relief: IRS Partially Extends Section 409A Documentation Deadline and Provides Guidance — but Employers Must Still Take Some Actions by December 31, 2007UpdatesOn September 10, 2007, the IRS issued Notice 2007-78 providing limited relief and guidance for the deferred compensation tax rules of Internal Revenue Code Section 409A, including a limited extension until December 31, 2008 of the deadline to adopt documents that comply with Section 409A. This update summarizes the key aspects of the notice and offers practical tips for employers and other service recipients.
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07.23.2007IRS Confirms Tax Consequences of New Vesting Restrictions on Fully Vested StockUpdates
The IRS recently issued Revenue Ruling 2007-49, which provides guidance on the tax consequences of certain transactions involving new vesting restrictions on fully vested stock. This update provides a brief background on Section 83 of the Internal Revenue Code, summarizes the key highlights from the revenue ruling and offers practical tips.
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12.04.2006Financial Reporting Reminder for 2007: Accounting for Uncertain Income Tax Positions Under FIN 48UpdatesPublic companies, and other companies that need audited financial statements, must begin accounting for uncertain income tax positions under a new rule: Financial Accounting Standards Board Interpretation No. 48, which was released in July, and is effective for fiscal years beginning after December 15, 2006. Most reporting companies will implement the new rule for their first quarter 2007 financial statements.
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12.28.2005Valuing Private Company Stock for Compensation Purposes - Practical GuidanceUpdatesInternal Revenue Code Section 409A, along with recent changes in financial accounting rules, has significantly increased the focus of private companies on accurately valuing their common stock for purposes of granting options and other equity incentive awards. Section 409A has upped the ante by imposing severe tax consequences on individuals for certain stock-based compensation that does not comply with the new deferred compensation tax rules, including stock options granted with an exercise price that is less than the fair market value of the company's common stock on the grant date.
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10.05.2005IRS Issues Section 409A Proposed Regulations - One-Year Extension for Many, but Not All, Deferred Compensation Compliance RequirementsUpdatesThe IRS has issued proposed regulations that expand the guidance available for complying with the deferred compensation tax rules of Section 409A of the Internal Revenue Code. Section 409A generally provides that amounts deferred under a nonqualified deferred compensation plan are currently includible in income if not subject to a substantial risk of forfeiture, unless the plan meets specified design and operational requirements. Failure to comply can result in significant federal income tax consequences, including a 20% additional tax.
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10.25.2004Congress Restores Deductibility of State and Local Sales and Use TaxesUpdatesOn October 22, 2004, President Bush signed into law the American Jobs Creation Act of 2004 (the "Act"). The Act partially restores the federal income tax deduction for state and local sales and use taxes that was eliminated by Congress in 1986.
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10.22.2004President Bush Signs Bill Providing Tax Relief to U.S. Manufacturers and Temporary Tax Incentive to Reinvest Foreign Earnings in the United StatesUpdatesToday, President Bush signed the American Jobs Creation Act of 2004 (H.R. 4520) into law. The $145 billion corporate tax package contains a range of international tax reforms, corporate tax breaks and tax incentives that are intended to make United States manufacturing, service and high-technology businesses and workers more competitive and productive both in the United States and abroad.
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02.14.2003IRS Issues Proposed Regulations Providing Guidance on the Treatment of Noncompensatory Partnership OptionsUpdatesThe IRS has issued proposed regulations under Sections 721 and 704(b) of the Internal Revenue Code regarding the federal income tax treatment of noncompensatory options or warrants issued by a partnership. The proposed regulations generally provide that no gain or loss will be recognized by either the issuing partnership or the option holder on issuance or exercise of the option. This treatment is also applicable to convertible debt and convertible preferred equity of a partnership. The proposed regulations do not address the treatment of compensatory options issued by a partnership.
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02.14.2003Update on President Bush's Dividend Exclusion ProposalUpdatesOn January 7, 2003, President Bush, as part of his overall economic stimulus package, announced a proposal that would, among other things, exclude dividends from taxable income, (the "Proposal"). Following this announcement, on January 14, the Treasury Department published a summary fact sheet explaining the Proposal and highlighting how it would stimulate economic growth.
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01.29.2003IRS Issues Temporary Regulations Permitting Mergers Into Limited Liability Company Subsidiaries to Qualify as Tax-Free Statutory MergersUpdatesThe IRS has issued temporary regulations that treat the merger of a target corporation into a wholly owned limited liability company (an "LLC") of an acquiring corporation as a tax-free reorganization described under Internal Revenue Code Section 368(a)(1)(A) (a "direct merger"), provided the shareholders of the target corporation receive stock in the acquiring corporation sufficient to satisfy the judicially created "continuity of interest" requirement. The new rules treat the transaction as if the target corporation merged directly into the acquiring corporation. In the past, there was considerable uncertainty as to whether this transaction would qualify as a tax-free reorganization, except in narrow circumstances.