IRS WILL NOW RULE ON WHETHER CONVERSION OF A FINANCIAL INSTITUTION FROM MUTUAL TO STOCK WILL QUALIFY AS A TAX-FREE BANKRUPTCY REORGANIZATION

Rev. Proc. 85-34

SECTION 1. BACKGROUND

Rev. Proc. 85-22, 1985-12 I.R.B. 13, sets forth areas in which advance rulings or determination letters will not be issued by the Internal Revenue Service. Section 5 of Rev. Proc. 85-22 is entitled, Areas Under Extensive Study in Which Rulings or Determination Letters Will Not be Issued Until the Service Resolves the Issue Through Publication of a Revenue Ruling, Revenue Procedure, Regulations or Otherwise.

Section 5.19 provides:

Section 368. -- Definitions relating to Corporate Reorganization. -- Whether the conversion of a financial institution from mutual to stock will qualify under section 368(a)(1)(G) and section 368(a)(3)(D) of the Code, unless the stock of the converted financial institution to which either section 585 or section 593 of the Code applies.

SEC. 2. PROCEDURE

Rev. Proc. 85-22 is hereby modified by deleting section 5.19.

SEC. 3. EFFECTIVE DATE

This revenue procedure is effective July 22, 1985, the date of publication of this revenue procedure in the Internal Revenue Bulletin.

SEC. 4. EFFECT ON OTHER REVENUE PROCEDURES

Rev. Proc. 85-22 is modified.