Yahoo's Potential New Regulations Aren't Retroactive (And That's A Good Thing)

• The share price of Yahoo! Inc. (NASDAQ: YHOO) has declined almost 39 percent, year to date, from the high of $51.22 to $30.74 at market close on September 18.
• FBR’s William Bird has maintained an Outperform rating on the company.
• Bird believes that the potential new IRS rules not having any retroactive impact would be a positive for Yahoo.

Associate Chief Counsel of the IRS, Robert H. Wellen, noted that the recent notice from the IRS “is not a description of future guidance,” while adding that “nothing in this notice affects an immediate retroactive date.”

Mr. Wellen also stated that the IRS had not yet decided on the type or content of guidance that the company could issue, and that no timeline had been provided for how long the IRS intended to “study the spinoff questions under tax code Section 355,” Bird reported.

The IRS did not want to make pass any judgement while it was still reviewing the rules, and Bird believes that the “IRS’ statements take one risk off the table.”