# Federal Register #REG-134016-15

Treasury and IRS Partially Withdraw Proposed Section 355 Regulations

**Buyer:** Treasury Department, Internal Revenue Service
**Posted:** October 21, 2026
**Identifier:** REG-134016-15

The Department of the Treasury and the Internal Revenue Service (IRS) partially withdraw proposed regulations under Section 355.
- **Government entities:** Department of the Treasury and IRS; no sub-agency or office is specified.
- **Action:** Withdraws the proposed per se device test and related anti-abuse rules concerning the device prohibition and active trade or business requirement for certain tax-free distributions of controlled corporation stock, or stock and securities.
- **Affected parties:** Corporations, shareholders, and security holders.
- **Procurement:** This is a regulatory action, not a procurement opportunity. No products, services, quantities, part numbers, OEMs, or vendors are identified.

### Description

The document partially withdraws proposed regulations concerning the device prohibition and active trade or business requirement for tax-free distributions of controlled corporation stock or stock and securities. It withdraws proposed rules for a per se device test and related anti-abuse rules. The regulations affect corporations and their shareholders and security holders. The withdrawal is effective October 21, 2026; the remaining rules and judicial doctrines are not affected.

[View original listing](https://www.federalregister.gov/documents/2026/10/21/2026-21568/guidance-under-section-355-concerning-device-and-active-trade-or-business-partial-withdrawal)