Master Limited Partnerships are subject to a pause at the IRS.

The IRS has temporarily stopped issuing private letter rulings about whether income that sponsors propose to put in MLPs is “good” income. The pause started in March. There are rumors that it may lift in May, but a similar pause last year affecting rulings about real estate investment trusts lasted roughly six months.

Master limited partnerships are partnerships whose units are traded on a stock exchange or an over-the-counter market. Partnerships that are publicly traded are normally taxed like corporations. However, Congress made an exception in 1987 for partnerships whose gross income each year is at least 90% from passive sources like interest, dividends and rents from real property or from the exploration, processing, transportation or marketing of minerals or natural resources. A master limited partnership can raise equity more cheaply than a corporation because its earnings are subject to only one level of tax at the shareholder level. Investors also pay a premium for liquidity.

The IRS has issued a series of private letter rulings in recent years that stretch what it had previously ruled is income from minerals and natural resources. Nearly 70 MLPs have gone public in the last five years. Of those, 20 were formed in 2013. The IRS released 30 MLP rulings in 2013.

Clifford Warren, an adviser to the IRS associate chief counsel who handles partnership issues, acknowledged the pause on further rulings at a conference in late March. “We’re regrouping,” he said. “We’re speaking with our counterparts at Treasury. We’re trying to decide what the rules should be.”

SandRidge Energy Inc. said in April that an MLP it is considering setting up for its salt water disposal business has been affected by the IRS action.