On May 1st, an IRS employee noted during a panel discussion that the IRS will continue to issue PLRs for “down the middle” oil and gas businesses, which we interpret to mean pipeline and storage companies. The pause remains for the businesses that support hydraulic fracturing and others “outside the fairway” until the IRS can develop a standardized method of consideration. While the original review was expected to be complete in two to three months, there is now no estimate on timing.
This makes sense, given that six of the 14 PLRs issued this year have come after the pause was announced. All of the ones issued this year were submitted during the spring and summer of 2013, so the IRS has continued to work through their backlog. The last PLR was issued on May 16th.
On August 26th, the Treasury Department and the IRS issued their 2014-2015 Priority Guidance Plan. On page 22, the eighteenth and final item under partnerships is “Guidance under §7704(d)(1)(E) regarding qualifying income for publicly traded partnerships.” We do expect formal guidance to be issued eventually, but so far, no indication has been given as to what that guidance is (or when to expect it).