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An Introduction to the Tax-Free Corporate Reorganization Rules

An Introduction to the Tax-Free Corporate Reorganization Rules

By Anthony Diosdi
The term “reorganization” is used in the Internal Revenue Code to describe a variety of transactions that result in a fundamental change in the ownership or structure of one or more corporations. Transactions that qualify as reorganizations under Section 368 are wholly or partially tax-free to the corporations and their shareholders. This article provides an introduction to the various types of tax-free reorganizations.

Types of Corporate Reorganizations

Corporate reorganizations fall into three broad categories:

Acquisitive Reorganizations

In an acquisitive reorganization, the purchasing or acquiring corporation acquires control over or combines with another corporation, usually referred to as the target corporation. In other words, acquisitive reorganizations are transactions where one corporation (the “acquired corporation,” hereafter referred to as “P”) acquires the assets or stock of another corporation (“the target corporation,” hereafter “T”). Included in this category are statutory mergers or consolidations (Type A), stock-for-stock acquisitions (Type B), stock-for assets acquisitions (Type C), and variations, known as “triangular reorganizations,” which involve the use of a subsidiary.

Nonacquisition, Nondivisive Reorganization

Nonacquisitive, non divisive are adjustments to the corporate structure of a single, continuing corporate enterprise. This category includes recapitalizations (Type E) and changes in the identity, form or place of incorporation (Type F).

Divisive Reorganization

In contrast to the acquisitive reorganization in which two or more corporations are combined, the third category of reorganizations defined by Internal Revenue Code Section 368(a)(1) is the divisive reorganization in which one corporation is divided into two or more corporate enterprises in a spin-off, split-up or some form of division.

Judicial Requirements

Simply fitting within one of the categories discussed above is not enough to classify a corporate transaction as a tax-free reorganization. The Treasury Regulations confirm additional requirements necessary to achieve a tax-free reorganization. Treasury Regulation Section 1.368-1(b) provides in relevant part as follows:

The purpose of the reorganization provisions of the Code is to except from the general rule certain specifically described exchanges incident to such readjustments of corporate structures made in one of the particular ways specified in the Code, as are required by business exigencies and which affect only a readjustment of continuing interest in property under modified corporate forms. Required to a reorganization under the Code are a continuity of the business enterprise under the modified corporate form, and . . . a continuity of interest therein on the part of those persons who, directly or indirectly, were the owners of the enterprise prior to the reorganization.

Treasury Regulation Section 1.368-1(b) incorporates three requirements governing all of the Section 368(a)(1) corporate reorganizations definitions that are not otherwise explicitly included in the statutory language: 1) continuity of proprietary or investment; 2) continuity of the business enterprise; and 3) business purpose.

Continuity of Shareholder Proprietary Interest

In general, the continuity of proprietary interest doctrine requires the shareholders of the target corporation to continue their investment, albeit in another form, by exchanging their target stock for a sufficient amount of stock of the acquiring corporation.
This means that the purchasing corporation (P) must provide consideration to target corporation (T) shareholders that represents a proprietary interest in P’s affairs-i.e., stock and the stock must be a substantial part of the value of the consideration received in the reorganization.

Continuity of Business Enterprise

The continuity of business enterprise doctrine, as its name implies, focuses on the continuing business operations of the target. This means that P either must continue T’s historic business or continue to use a “significant portion” of T’s “historic business assets” in a business. See Treas. Reg. Section 1.368-1(d)(2). The fact that P and T are in the same line of business tends to establish the requisite continuity. If T has more than one business, P only must continue a “significant” line of T’s business. See Treas. Reg. Section 1.368-1(d)(3). T’s “historic business assets” are the assets used in its historic business; the portion of those assets that are considered “significant” is based on their relative importance to the operation of the business. See Treas. Reg. Section 1.368-1(d)(4). 

Business Purpose

A transaction will not qualify as a reorganization unless it is motivated by a business purpose apart from tax avoidance.

Acquisitive Reorganizations

There are three major types of tax-free acquisitive reorganizations. They are known as Type A, Type B, and Type C reorganizations. We will discuss each of these tax-free acquisitive reorganizations in detail below.

Type A Reorganizations (Statutory Merger or Consolidation)

The Type A reorganization is defined in the Internal Revenue Code as a statutory merger or consolidation. For this purpose, “statutory” refers to a merger or consolidation pursuant to local corporate law. See Treas. Reg. Section 1.368-2(b)(1). In the typical merger transaction, one corporation is absorbed into another corporation, with only one of the two corporations surviving. In a typical consolidation, two corporations are combined into a new entity, and both of the old corporate entities disappear.

Internal Revenue Code Section 368(a)(1)(A) does not expressly limit the permissible consideration in a merger or consolidation. However, a transaction will not qualify as a Type A reorganization unless the continuity of shareholder proprietary interest requirement is satisfied. See Southwest Natural Gas Co. v. Commissioner, 189 F.2d 332 (5th Cir. 1951).

The continuity of interest doctrine requires the shareholders of the target corporation to receive a sufficient proprietary interest in the acquiring corporation to justify treating the transaction as a wholly or partially tax-free reorganization rather than a taxable sale. In evaluating continuity of interest, it is the overall continuity of the target shareholders that controls, not the continuity of any individual shareholder. All classes of stock, whether voting or nonvoting, provide the requisite continuity while any other consideration will fail to meet the test. The Internal Revenue Service (“IRS”) requires that at least 50% of the consideration paid by P to T shareholders must consist of P stock, which may be common or preferred, and need not be voting stock. See Rev.Proc. 77-37, 1977-2 C.B. 568; Prop. Reg. Section 1.368-2(e)(3) Example 1.

Type B Reorganizations (Stock-For-Stock Acquisition)

In a Type B reorganization, P acquires a controlling interest in T stock from the T shareholders solely in exchange for all or part of P’s voting stock. Two significant elements of the Type B reorganization should be noted. First, and most importantly, the purchasing corporation must have control over the target corporation immediately after the stock acquisition from the target shareholders. The concept of “control” is defined in Section 368(c) as “the ownership of stock possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote and at least 80 percent of the total number of shares of all other classes of stock of the corporation.” Subsection (B) thus establishes two basic requirements for a valid, tax-free stock-for-stock reorganization. First, “the acquisition” of another’s stock must be “solely for * * * voting stock.” Second, the acquiring corporation must have control over the other corporation immediately after the acquisition.

For example, P transfers its voting stock to all of T’s shareholders in exchange for their T stock. The acquisition qualifies as a Type B reorganization.

The Type B reorganization provides explicit rules regarding the type of consideration that may be used to compensate target shareholders for their stock. The target shareholders must exchange T stock solely for all or part of the acquiring corporation’s parent. Thus, the only consideration that may be used in a Type B reorganization is voting stock of the acquiring corporation or its parent.

Type C Reorganization (Stock-For-Assets Acquisition)

In a Type C reorganization, the purchasing corporation acquires “substantially all of the properties” of another corporation. See IRC Section 368(a)(1)(D). If the target transfers less than substantially all of its assets, the transaction is not “acquisitive” in nature. The IRS’s long standing ruling policy requires a transfer of “assets representing at least 90 percent of the fair market value of the net assets and at least 70 percent of the fair market value of the gross assets held by the target corporation immediately preceding the transfer.” See Rev.Proc. 77-37, 1977-2 C.B. 568. These guidelines further provide that “all payments to dissenters and all redemptions and distributions (except for regular, normal distributions) made by the corporation immediately preceding the transfer and which are part of the plan of reorganization will be considered as assets held by the corporation immediately prior to the transfer.” See Rev.Proc. 77-37, 1977-2 C.B. 568. For this purpose, assets distributed by T to redeem stock held by dissenting and other minority shareholders and unwanted assets sold by T to other buyers are considered as assets held by T if the distributions are part of the reorganization plan. 

The ruling policy is merely a safe harbor, not operative law. Some authorities are not as stringent in defining “substantially all,” and state that it is possible that a complete transfer of operating assets may qualify even if the IRS’s percentage tests are not satisfied. See Rev.Rul. 57-518, Commissioner v. First National Bank of Altoona, 104 F. 2d 865 (3d Cir.1939).For example, it may be permissible for T to retain nonoperative liquid assets to pay liabilities. See Rev.Rul. 57-518, 1957-2 C.B. 253. If T sells 50% of its historic assets to unrelated parties for cash and then transfers all of its assets (including the sales proceeds) to P, the “substantially all” requirement is met because T transfers all of its assets and the effect of the transaction is not divisive. See Rev. Rul. 88-48, 1988-1 C.B. 117.

Triangular Reorganizations

The three types of reorganizations offer limited flexibility if the acquiring corporation desires to operate the target as a wholly owned subsidiary. For example, a purchasing corporation might not wish to own T assets or stock directly, but might prefer to have the T stock or assets owned by a subsidiary. Similarly, T might not wish to sell P directly. In these types of cases, a triangular reorganization may be advantageous. To maneuver around these types of problems, other acquisition methods involving the use of a subsidiary were developed. One approach is for P to acquire T’s assets in a qualifying Type A or C reorganization and immediately drop down the acquired assets to a newly created subsidiary.

Forward Triangular Mergers

Special rules in Section 368(a)(2)(D) provide authority for a forward Type A triangular merger. In this transaction, T merges directly into a P subsidiary (S). If P wishes to acquire T’s assets in a tax-free acquisition reorganization, it may be unwilling to incur the risk of T’s unknown or contingent liabilities. This risk might continue even if P drops down T’s assets and liabilities to a P subsidiary  after a merger of T into P. P also may not wish to incur the expense and delay of securing formal approval of its shareholders to a merger or direct asset acquisition. The “forward triangular merger” solves many of these non tax problems. In its simplest form, a forward triangular merger consists of the following:

1) P forms a new subsidiary, S by transferring P stock for S stock in an exchange that is tax free under Section 351.

2) T is merged into S under state law. T shareholders receive P stock any other consideration provided by the merger agreement. P ordinary does not need to secure approval from its shareholders because S is the party to the merger and P is the only shareholder of S. All of T’s assets and liabilities are automatically transferred to S, which remains a subsidiary of P.

A forward triangular merger qualifies as a tax-free reorganization under Section 368(a)(2)(D) if the following requirements are met:

1) S must acquire substantially all of the properties of T. This is the same requirement imposed on Type C reorganizations, and similar standards are applied.

2) No stock of S may be used as consideration in the merger. Use of S debt securities is not permitted.

3) The transaction must have qualified as a Type A reorganization if T had merged directly into P. This means that the transaction must satisfy the judicial continuity of interest requirement.

Reverse Triangular Mergers

Special rules in Section 368(a)(2)(E) of the Internal Revenue Code also permit a “reverse triangular merger” to qualify as a Type A reorganization. P may wish to acquire the stock of T in a tax-free reorganization and keep T alive as a subsidiary in order to preserve certain rights under state law or valuable assets that might be lost if T liquidated. A Type B reorganization may not be feasible, however, if P wishes to use consideration other than voting stock. The “reverse triangular merger” was developed to accommodate these objectives.

Section 368(a)(2)(E) provides that this type of reverse merger will qualify as a tax-free reorganization if: 1) the surviving corporation T holds substantially all of the properties formerly held by both corporations (T and S), and 2) the former T shareholder exchanges stock consisting “control” (measured by the 80 percent tests in Section 368(c)(1) for P voting stock. A reverse triangular merger consists of the following steps:

1) P forms a new subsidiary, S, by transferring P voting stock, and other consideration for S stock in an exchange that is tax free under Section 351.

2) S merges into T under state law. T shareholders receive P voting stock and any other consideration provided by the merger agreement. P exchanges S stock for T stock. S disappears and T survives as a wholly owned subsidiary of P.

A reverse triangular merger qualifies as a tax-free reorganization under Section 368(a)(2)(E) if the following requirements are satisfied:
1) After the merger, T must hold substantially all of its properties and the properties of S (other than the stock of P distributed in the transaction and any boot used by S to acquire shares of minority shareholders).

2) In the merger transaction, P must acquire 80% “control” of T in exchange for P voting stock. The remaining 20% of T may be acquired for cash or other boot. 

For purposes of the “control” requirement, T stock that is redeemed for cash or T property prior to a reverse merger is not treated as outstanding prior to the reorganization even if the redemption is related to the merger. 

Recapitalization and Corporate Restructuring

The reorganization definition in Internal Revenue Code Section 368(a)(1) includes two types of transactions involving the restructuring of only one corporation, as opposed to an acquisition joining or more corporations or a division resulting in two or more corporations. In each of these restructuring transactions, the shareholders will not report gain or loss upon the receipt of stock in the reorganization transaction. Various factors might encourage a corporation to adopt and implement a recapitalization plan. The corporation might recapitalize to create stock that will be more attractive in a public offering or to restructure debt obligations. The most common restructuring reorganization is a Type E reorganization, which is discussed below.

The Type E Reorganization

When a corporation acquires old stock and issues new stock in return, the exchange will be treated as a recapitalization under Internal Revenue Code Section 368(a)(1)(E). One might imagine that a recapitalization requires an actual exchange or transfer of stock or other financial instruments. However, a simple amendment to the articles of incorporation may be a “deemed recapitalization” even if no shares actually are exchanged if “the change in the outstanding stock is so substantial as to constitute, in substance, an exchange . . . in a recapitalization of the corporation.” See Rev. Rul. 56-654, 1956-2 C.B. 216.

A Type E reorganization is a recapitalization, a term that is not defined in the Internal Revenue Code but has been described by the Supreme Court as a “reshuffling of a capital structure within the framework of an existing corporation.” See Helvering v. Southwest Consolidated Corp., 315 U.S. 194, 202, 62 S.Ct. 546, 551 (1942). In a recapitalization, a corporation’s shareholders or creditors exchange their interests for other equity or debt interests. The assets of the corporation generally remain unchanged. Because a recapitalization involves only a single corporation, generally neither continuity of proprietary interest not continuity of business enterprise is required for a recapitalization to qualify as a Type E tax-free reorganization.

Type F Reorganizations

The simplest of internal restructuring is a Type F reorganization. A Type F reorganization involves “a mere change in identity, form, or place of organization of one corporation, however effected.” See IRC Section 368(a)(1)(F). For example, a corporation might choose to change its incorporation from New Jersey to Delaware. See Marr v. United States, 268 U.S. 536 (1925). The major tax advantage to classification as a Type F reorganization is the preferential set of rules that will apply after the transaction regarding the carryover tax attributes. For example, net operating losses can be more freely used to offset income from the old corporation prior to the reorganization. 
Corporate Divisions

Corporate divisions are transactions in which a single corporate enterprise is divided into two or more separate corporations that remain under the same ownership. A division is accomplished when a parent corporation-known as “the distributing corporation”- distributes to its shareholders stock or securities of one or more controlled subsidiaries. If various requirements are met, the transaction is tax free to the distributing corporation and its shareholders. Internal Revenue Code Section 355 discusses tax-free divisions.

Corporate divisions can be classified as a spin-off, split-off, or split-up. In a spin-off, the distributing corporation distributes stock of a controlled corporation (a subsidiary) to its shareholders. This subsidiary may be either a recently created subsidiary “spun off” through the parent corporation’s transfer of assets in return for stock or an existing subsidiary. The shareholders in a spin-off generally receive a pro rata share of the controlled corporation’s stock and do not transfer anything in return for this stock.

A split-off is very much like a spin-off except that the parent’s shareholders receive stock in the subsidiary in return for some of their stock in the parent corporation. In a split-up, the corporation transfers all of its shares to two or more new corporations in return for stock, which is then distributed to the shareholders of the parent corporation in return for all of the parent stock.

Section 355 Requirements

Tax-free spinoffs or demergers under Section 355 allows certain distributions by one corporation (the “distributing corporation”) to its shareholders of stock or securities in another corporation (the “controlled corporation”) to be tax-free to the shareholders, and also to be tax-free to the distributing corporation. In order for a corporate division to be accomplished on a tax free basis, it must meet the requirements of Section 355 and 368. The distributing corporation must distribute to its shareholders the stock or securities of a “controlled corporation” – a corporation that the distributing corporation “controls” immediately before the distribution. See IRC Section 355(a)(1)(A). For this purpose, “control” is defined by Section 368(c), which requires ownership of 80 percent of the total combined voting power and 80 percent of the total number of shares of all classes of stock, including nonvoting preferred stock.

The distributing corporation must distribute all the stock or securities of the controlled corporation that the distributing corporation holds or, alternatively, an amount of stock sufficient to constitute “control” within the meaning of Section 368(c). See IRC Section 355(a)(1)(D). If any stock or securities of the controlled corporation are retained, the distributing corporation must establish to the satisfaction of the IRS that the retention is not pursuant to a plan having tax avoidance as one of its principal purposes.

Both the distributing corporation and the controlled corporation – or in a split up, both controlled corporations- must be engaged immediately after the distribution in an actively conducted trade or business which has been so conducted throughout the five-year period ending on the date of the distribution. See IRC Section 355(a)(1)(C); (b). That business must not have been acquired within the five-year predistribution period in a taxable transaction. Moreover, the distributing corporation must not have purchased a controlling stock interest in a corporation conducting the business in a taxable transaction during the five-year predistribution period.

A Section 355 transaction must also satisfy the “active conduct” of trade or business test. “Active conduct” of a trade or business requires the corporation to perform “active and substantial management and operational functions.” See Treas. Reg. Section 1.355-3(b)(2)(iii). Activities performed by outsiders, such as independent contractors, are not considered as performed by the corporation. “Active conduct” does not include the holding of stock, securities, raw land or other purely passive investments, or the ownership of real or personal property used in a trade or business unless the owner performs significant services with respect to the operation and management of the property.

In addition, to qualify for tax-free treatment under Section 355(a)(1)(B) of the Internal Revenue Code, a spin-off transaction must not be used principally as a device for the distribution of earnings and profits of the distributing or controlled corporation. Whether a transaction is a “device” is determined based upon all the facts and circumstances, including, but not limited to, the existence or absence of specified “device factors” and “non-device factors” set in the regulations. Specifically, Section 355 explicitly demands that “the transaction was not used principally as a device for the distribution of the earnings and profits of the distributing corporation or the controlled corporation or both.” Frequently described as the “device requirement,” this condition is a nutshell statement of the general concern of Section 355. In fact, it is in the regulations pursuant to the “device” requirement that one finds perhaps the best statement of the underlying concern. The regulation states that “Section 355 recognizes that a tax-free distribution of the stock of a controlled corporation presents a potential for tax avoidance by facilitating the avoidance of the dividend provisions of the Internal Revenue Code through the subsequent sale or exchange of stock of one corporation and the retention of the stock of another corporation.” See Treas. Reg. Section 1.355-2(d)(1).

Finally, the corporate separation must satisfy the continuity of interest rules. As applied in the tax-free separation context, continuity requires that one or more prior owners own, in the aggregate, “an amount of stock establishing a continuity of interest in each of the modified corporate forms in which the enterprise is conducted after the separation.” See Treas. Reg. Section 1.355-2(c)(1). In other words, if one corporate enterprise is separated into three distinct corporations, the continuity of interest requirement must be met with regard to each of the three entities resulting from the separation.

The Interplay Between Section 368(a)(1)(D) and Section 355

Many, but not all, distributions of stock in a controlled corporation will simultaneously be “reorganized” under Section 368(a)(1)(D) and also be distributions under Section 355. A Type D reorganization involves transfer of “all or a part of [a corporation’s] assets to another corporation if immediately after the transfer, the transferor, or one or more of its shareholder…., or any combination thereof, is in control of the corporation to which the assets are transferred.” A Type D reorganization includes both acquisitive and divisive reorganizations. In general, acquisitive Type D reorganizations involve a transfer of all of the assets and a subsequent distribution of stock or securities pursuant to the requirements for nonrecognition purposes. On the other hand, a divisive reorganization involves a transfer of part of the assets and a subsequent distribution of stock or securities pursuant to the requirements for nonrecognition under Section 355.

The IRS has provided guidance on the distribution requirements for Section 368(a)(1)(D) reorganizations when no stock of the controlled corporation is transferred by the distributing corporation to its shareholders. Under a literal reading of Section 368(a)(1)(D), such a distribution would be required. However, as indicated above, the IRS takes a substance over form approach to the distribution requirement and instead deems the transaction to have followed the literal steps found in the statute. The IRS has provided guidance on transactions where cash is contributed by the shareholders to the controlled corporation, which is used to purchase assets from the distributing corporation and finally distributed back to the shareholders. As discussed below, the circular flow of cash generally is disregarded when analyzing whether the transaction qualifies as a Section 368(a)(1)(D) transaction.

In determining whether a transaction meets the requirements of Section 355 and 368(a)(1)(D), the IRS has ruled that the substance of the overall transaction, and not the particular form of any one aspect of the transaction or order of the steps, will control the treatment of the exchange as a spin-off entitled to nonrecognition treatment. For example, in Rev. Rul. 77-191, 1977-1 C.B. 94, the taxpayer corporation had been engaged in two active businesses. In order to remove restrictions imposed on one business by certain federal laws, the taxpayer distributed all of the assets of that business to its shareholders,in redemption of part of their stock of the taxpayer. Immediately following the distribution and pursuant to an integrated plan, the taxpayer’s shareholders transferred all of the assets received to a newly-organized corporation. Thereafter, the newly-formed recipient corporation conducted the business formerly conducted by the taxpayer.

The form of the taxpayer corporation’s distribution of business assets to its shareholders in Rev. Rul. 77-191 did not technically satisfy the requirement under Section 355(a)(1)(D) that the distributing corporation distribute all of the outstanding stock of the controlled corporation, as the purported “controlled corporation” did not yet exist at the time of the distribution. The distribution would, rather, meet the technical definition of a taxable liquidation under Section 311. The IRS held that, while the distributing corporation did not actually distribute stock of a controlled corporation, the transaction when viewed together with the immediate contribution of those assets to a newly formed controlled corporation should be treated as a Section 355 spinoff. The IRS observed:

“The tax consequences of a business transaction are properly determined by the substance of the transaction and not by the form in which it is cast. A transaction must be viewed as a whole. The true nature of a transaction cannot be disguised by mere formalisms that exist solely to alter tax liabilities.” See Commissioner v. Court Holding., 324 U.S. 331 (1945).

Additionally, the IRS noted that the statutory intent of the Internal Code would be frustrated by such a formalistic interpretation of the facts under review, as Section 331 was not intended was not intended to apply to a divisive transaction that ultimately resulted in splitting a single corporation into two or more corporations owned by the shareholders of the original corporation. “Under these circumstances,” the IRS held, “Section 355 is the governing provision.” The IRS determined that the new corporation as a wholly-owned subsidiary, transferred the assets of the business to the new corporation, and then distributed the stock of the new corporation pro rata to the taxpayer’s shareholders in exchange for part of their stock in the taxpayer, and that this series of steps “is a typical corporate split-off described in Section 368(a)(1)(D) and 355 of the Internal Revenue Code. See Tax-Free Spinoffs in the International Context, Baker & McKenzie, Miami (2016).

The IRS has applied Rev. Rul. 77-191 in private letter rulings to determine that the overall substance of a transaction, as evidenced by the final result of the step and not the particular steps undertaken to effect the transaction, should determine whether a transaction is treated as a Section 355 spinoff entitled to nonrecognition treatment. In Priv. Ltr. Rul. 200703030, the taxpayer, the common parent of a consolidated group, owned a disregarded limited liability company (LLC 1) and all of the stock of the distributing corporation. The distributing corporation owned three disregarded limited liability companies (LLCs 2, 3, and 4), which, in turn, owned a number of controlled corporations. The taxpayer proposed to achieve the ultimate effect of a Section 355 spinoff by merging LLCs 2, 3 and 4 with and into LLC 1, with LLC 1 surviving. These mergers resulted in the parent corporation owning, for U.S. federal income tax purposes, all of the stock of the controlled corporations. The IRS held that Rev. Rul. 77-191 applied and that the transaction would be treated as though the distributing corporation distributing corporation distributed all of the stock of the controlled corporations to its parent, notwithstanding the fact that no actual distribution of the controlled corporations’ stock to the parent occurred.


The foregoing discussion is intended to provide the reader with a basic understanding of the basic considerations of the tax-free corporate reorganization rules. It should be evident from this article, however, that this is a relatively complex subject. It is important to understand that this area is constantly subject to new developments and changes. As a result, it is crucial that anyone considering a corporate reorganization consult with a qualified tax attorney.

Anthony Diosdi is one of several tax attorneys and international tax attorneys at Diosdi Ching & Liu, LLP. Anthony focuses his practice on providing tax planning domestic and international tax planning for multinational companies, closely held businesses, and individuals. In addition to providing tax planning advice, Anthony Diosdi frequently represents taxpayers nationally in controversies before the Internal Revenue Service, United States Tax Court, United States Court of Federal Claims, Federal District Courts, and the Circuit Courts of Appeal. In addition, Anthony Diosdi has written numerous articles on international tax planning and frequently provides continuing educational programs to tax professionals. Anthony Diosdi is a member of the California and Florida bars. He can be reached at 415-318-3990 or adiosdi@sftaxcounsel.com