A possibility discussed in our May 6, 2016 Meadows Collier Talks Tax Blog post, “Master Limited Partnerships and Cancellation of Indebtedness Income,” has come to pass. Atlas Resources is the last in a series of Master Limited Partnerships which are renegotiating their debts to third parties and vendors. This renegotiation has the potential for producing large amounts of “Cancellation of Indebtedness Income”. Tax professionals should be aware that “Cancellation of Indebtedness Income” can apply to private companies as well. In such a case, the taxpayer may be getting rid of indebtedness on which the tax-payer is not liable and substituting a tax debt on which the taxpayer is liable. All restructurings should be approached carefully and with due regard for the tax consequences which might apply. Click here to read the article, “Atlas Resources Inks Ch. 11 Prepack to Nix $900M In Debt,” published on July 25, 2016 in LAW360.