Looking at whether QSLOB status can be met. I have some question as to whether client can pass the administrative scrutiny test. Under the Treasury regulations, a separate line of business satisfies the safe harbor if it is in a different industry from every other separate line of business of the employer. In Revenue Procedure 91-64, the IRS sets forth the industry categories referenced by the Treasury regulations.

One company in controlled group is in Group 51 while the other company falls into Group 30. Under the Revenue Procedure, Groups 13, 28, 29, 30, 46 and 55 are grouped together into one industry category. However, Group 51 is not listed in the Revenue Procedure at all. It is unclear how this Group would be categorized.

It appears that if Rev. Proc 91-64 does not require industry code 30 and 51 to be combined, then they should be treated as different industries. I think it would be hard for the IRS to argue some implied rule that those separate industry codes are combined without a formal ruling to that effect.

Anyone else dealt with this issue of industry codes not being named in this Rev Proc?