Back to the Future with Rescission Decisions : Impact of IRS Decision to Issue No New Guidance

The rescission doctrine, governing when parties can unwind a transaction with retroactive tax effect, has more than its share of ambiguities. When the Internal Revenue Service announced in 2012 that it was contemplating providing further guidance on rescission, the reaction of tax practitioners was positive. The Service has now announced, however, that no new guidance will be forthcoming and that it will not issue private letter rulings on rescission. This article considers where that announcement leaves the doctrine, with a 1980 revenue ruling now apparently representing the Service's only real guidance on rescission