# 2025-00312: IRS Creates New Corporate Divorce Paperwork, Shareholders Pay

2025-00312, Multi-Year Reporting Requirements for Corporate Separations and Related Transactions, is a Federal Register proposed rule from an unnamed agency published 2025-01-16, effective 2025-01-16; PRIA reads it as touching household money (as of 2026-06-11).

- Canonical: https://policyrisk.com/federal-register/2025-00312
- As of: 2026-06-11
- Plain-text twin of the page above; the HTML and this file carry the same facts.

## Facts
- Document number: 2025-00312
- Title: Multi-Year Reporting Requirements for Corporate Separations and Related Transactions
- Type: Proposed Rule
- Agencies: unknown
- Citation: unknown
- Published: 2025-01-16
- Effective: 2025-01-16
- Comments close: not stated
- Significant: no
- Touches household money: yes
- Regulation identifier numbers: none
- Last updated: 2026-06-11

## In one line

IRS Creates New Corporate Divorce Paperwork, Shareholders Pay

## Summary

The IRS is proposing new rules that make corporations and their shareholders report details about corporate splits and related deals over several years. These changes help show that these transactions don’t trigger immediate taxes. If you’re involved, get ready to share more info starting soon, and don’t miss the March 17, 2025 deadline to comment!

## Abstract

This document contains proposed regulations that would require multi-year tax reporting for corporate separations and related transactions. The information to be reported under these proposed regulations would establish the taxpayer's position that the corporate separation and related transactions qualify for nonrecognition treatment under subchapter C of the Internal Revenue Code. The proposed regulations would affect corporations and their shareholders and security holders. Proposed regulations regarding certain matters relating to corporate separations, incorporations, and reorganizations qualifying for nonrecognition of gain or loss are published elsewhere in the Proposed Rules section of this issue of the Federal Register.

## Effects PRIA read

- Five-Year Annual Form 7216 Reports: cost, medium. If you are a corporation, shareholder, or other covered filer involved in a corporate split under section 355, you must attach a Form 7216 each year for a five-year reporting period. The form must be filed with one of the specified Federal income tax returns (for example, Forms 1120, 1065, 1120-S,…
- Higher 'Significant Distributee' Ownership Cutoff: benefit, low. The rule raises the ownership threshold that defines a 'significant distributee' for non-publicly traded stock from 1% to 5% by vote or value. That change alters which shareholders of a distributing corporation meet the threshold for specific reporting obligations under Sec. 1.355-5.
- Million-Dollar Securities Basis Reporting Trigger: cost, medium. A holder of securities who receives stock or securities in a section 355 transaction is a 'significant distributee' if they owned securities in the distributing corporation with a basis of at least $1,000,000 immediately before the first distribution. Such holders will be subject to the reporting a…
- Small Business Coverage Estimate: cost, low. The IRS estimates about 110 small businesses with gross receipts under $25 million would be subject to the information collection in these proposed regulations each year. The IRS certified that the proposed regulations would not have a significant economic impact on a substantial number of small en…
- Certain Entities Explicitly Exempted: benefit, low. Taxpayers that are not required to file one of the specified Federal income tax returns (for example, an estate, a trust, or a regulated investment company as defined in section 851(a)) are not required to file Form 7216 under these proposed regulations. The Treasury and IRS may request comments on…

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## Sources
- [2025-00312 on federalregister.gov](https://www.federalregister.gov/documents/2025/01/16/2025-00312/multi-year-reporting-requirements-for-corporate-separations-and-related-transactions)
- [2025-00312 as published (PDF)](https://www.govinfo.gov/content/pkg/FR-2025-01-16/pdf/2025-00312.pdf)

## Related
- [Previous: 2025-00113, Modification & Establishment of Class E Airspace; Cortez Municipal Airport, Cor…](https://policyrisk.com/federal-register/2025-00113)
- [Next: 2025-00321, Guidance Regarding Certain Matters Relating to Nonrecognition of Gain or Loss i…](https://policyrisk.com/federal-register/2025-00321)
- [All Federal Register documents](https://policyrisk.com/federal-register)

Source: PRIA, https://policyrisk.com/federal-register/2025-00312 (as of 2026-06-11).