While activist investors are gung-ho about retail REITs, the IRS (shown: the IRS's DC HQ) may not be so keen on the idea. This week, the IRS called out these corporate real estate spinoffs, saying these transactions may violate the rules to prevent companies from disguising transactions as spinoffs to avoid paying taxes. The IRS says it will pretty much stop pre-approving deals while it examines the issue.

And considering that many of these deals are tax-free and subject to few IRS restrictions, the IRS’s concerns may be justified. Starboard Value’s Darden Restaurants’ move to spin off its restaurant properties (currently, six LongHorn Steakhouses in San Antonio) will most likely be the first to feel the strain of the IRS’s microscopic review. McDonald’s and Macy’s—which have been pressured by shareholders to set up a REIT—will now be more hesitant. [WSJ]