Roger A. McEowen (Iowa State) has posted IRS Ruling on the Application of the Passive Loss Rules to Trusts on Iowa State’s Center for Agricultural Law and Taxation web site.  Here is part of the abstract:

While IRS regulations set forth several tests for material participation, IRS has never issued regulations addressing the material participation requirement for trusts (as well as estates). After losing in federal court on the matter (and getting chastised by the court for its litigating position) [Mattie K. Carter Trust v. United States, 256 F.Supp.2d 536 (N.D. Tex. 2003)], the IRS apparently has not learned its lesson. Instead of issuing regulations, IRS has recently issued a ruling [Tech. Adv. Mem. 2007-33-023 (released 8/17/07)] again voicing its opposition to the court’s reasoning.

(Hat Tip:  Joe Kristan.]