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Abstract
In Rev. Rul. 2004-83, the IRS decided to step in finding that the sale by a parent corporation of the stock of a wholly owned subsidiary (T) for cash to another wholly owned subsidiary (S), followed by a complete liquidation of T into S, pursuant to an integrated plan, constitutes a reorganization under Section 368(a)(1)(D). Notwithstanding the IRS' success in applying the D reorganization provisions to attack asset sales between related corporations, there has long been substantial uncertainty as to whether 2-step acquisitions, like those described in Rev. Rul. 2004-83, should be stepped together into a D reorganization when the first-step stock acquisition, viewed separately, is a transaction described in Section 304. The IRS' current position is that Section 304 does not prevent application of the step transaction doctrine, if the transaction as recast qualifies as a D reorganization.