Yahoo Inc. said in a filing on Monday, Sept. 28, that it will move ahead with its planned spinoff worth over $20 billion of shares in Alibaba Holding Group Ltd. even without the ruling of U.S. tax regulators, the Wall Street Journal reported.
Earlier this month, the Internal Revenue Service (IRS) had denied Yahoo's request for a favorable ruling of the plan, the report said.
Despite that, Yahoo plans to complete the spinoff of 384 million Alibaba shares in the fourth quarter as its tax advisers are confident that the plan would pass legal barriers and be tax-free, the report said.
But the spinoff may be challenged by the IRS in a future audit and put shareholders liable for billions of dollars in taxes.
The IRS challenge, however, could take years, the report added.
Yahoo Chief Executive Marissa Mayer has to accomplish the Alibaba spinoff to appease investors, who are concerned about the lack of progress for more than three years.
The investors' enthusiasm on Yahoo's stock gains grew under Mayer and her commitment to return billions of dollars to shareholders through a spinoff.
This year, shares in both Yahoo and Alibaba have dropped by about 45 percent. Before Yahoo unveiled its spinoff plan in January, Alibaba stake was worth nearly $40 billion. Now it is valued at about $22 billion.
Yahoo said on Sept. 28 that it will continue to seek a favorable ruling through its lawyers at Skadden, Arps, Slate, Meagher & Flom LLP so that the spinoff would not result in taxes.