David Zimmerman was quoted on the IRS's first letter ruling involving the spinoff of a research-intensive business that has yet to generate income. The taxpayer seems to have substantially satisfied the six potential guideposts that the IRS, while it was reviewing the ruling request, revealed in 2019 to extend tax-free spinoffs to research-intensive industries, according to Zimmerman. It appears that the taxpayer's ruling request prompted the factors outlined by the IRS, making it difficult to tell the extent to which they all must be satisfied for R&D businesses that haven't generated income, he said, adding that as the IRS issues more rulings, he hopes more guidance will surface on when entrepreneurial activities constitute an active trade or business (ATB).