David Zimmerman was quoted on the potential creation of a new regime for Section 355 tax-free spinoffs by the Internal Revenue Service (IRS) and U.S. Department of the Treasury. The IRS may decide that companies that are not immediately earning income, such as startups and pharmaceutical companies, can take part in Section 355 transactions, Zimmerman said. "It's definitely true over the years that there are very, very active businesses that just don't produce income for long, long periods of time. I think they'll look very closely at what are the activities being performed, how many employees there are, what do they do, what are the reasons you haven't produced income, like regulatory hurdles." The IRS may have delayed changing the "active trade or business" requirement to not requiring the generation of revenue simply because the current income requirement is easy to administer and is objective, which may be making it harder to come up with an equally easily managed new regime, Zimmerman added. "I think [right now] the IRS is struggling to come up with a ruling program that will allow them to issue rulings, based on meaningful criteria, that will be administrable."