IRS: Consolidated Group Agents Can Now Be Replaced When Necessary

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March 31 — The Internal Revenue Service issued final rules allowing agents in consolidated groups to resign for the first time and letting group members ask for a new agent in cases where the current one isn't fulfilling its obligations.

In the new rules (T.D. 9715, RIN 1545-BH31), the IRS made the two changes, along with a host of others, in finalizing proposed rules (REG-142561-07) issued in 2012 (103 DTR G-3, 5/30/12).

In the preamble to the rules, the IRS said it decided to let agents quit, in limited situations, because there are circumstances where it wouldn't be in the best interest of anyone concerned for the agent to remain in that capacity. One situation might be a restructuring transaction in which a common parent of the group, acting as the agent, gets acquired by a corporation outside the group, the IRS said.