Rev. Proc. 80-34

Section 1. Background

Section 4.01 of Rev. Proc. 80-22, 1980-1 C.B. 654, provides a list of those areas of the Internal Revenue Code under the jurisdiction of the Assistant Commissioner (Technical) in which the Internal Revenue Service will not ordinarily issue advance ruling or determination letters. A list of these areas is set forth in section 4.01 of the revenue procedure.

Sec. 2. Procedure

Rev. Proc. 80-22 is amplified to include the following under section 4.01:

Sections 304 and 357. -- Redemption Through Use of Related Corporation; Assumption of Liability. -- A transaction similar to that described in Rev. Rul. 80-240, at page 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 on hand in the National Office on September 8, 1980, the date of publication of this revenue procedure in the Internal Revenue Bulletin, as well as to requests received thereafter.

Sec. 4. Effect on Other Revenue Procedures

Rev. Proc. 80-22 is amplified.