Tax-free spinoffs have long been one of the most efficient tax methods to separate two “active businesses” that are owned by a single corporate group.  Issued in the 1950s, Revenue Rulings 57-464 and 57-492 required that each business generate revenue to qualify as an “active business.”  This interpretation has made it difficult for businesses operating in modern research-intensive industries, such as pharmaceuticals and biotechnology, to satisfy the “active business” requirement during their research and development phase before they generate revenue.  Recently, on March 21, 2019, the IRS issued Revenue Ruling 2019-9 suspending Revenue Rulings 57-464 and 57-492 pending a completion of an IRS study to determine whether a business can qualify as an “active business” while entrepreneurial activities take place with the purpose of earning revenue in the future before any revenue is collected.  Taxpayers are awaiting definitive guidance with cautious optimism that the parameters of tax-free spinoffs may be expanded in the future for the benefit of research-intensive industries.