Debra Dillinger, Inc. was incorporated in Connecticut in 1992. Debra Dillinger owns 82% of the stock of Debra Dillinger, Inc. Unrelated individuals hold the remaining stock. In 1993 Debra formed Connecticut Motors and in 1995 Debra formed Long Island Sound Motors. Debra owned 85% of the stock of Connecticut Motors and 85% of the stock of Long Island Sound Motors. Unrelated individuals own the remaining stock of these two corporations. All three corporations are involved in the business of buying, selling and repairing foreign-made sports cars. Each corporation owns a different franchise for selling and servicing different makes of foreign-made cars. In 2018, Connecticut Motors sold all of its shop equipment and vacated its business address. It did not purchase any new automobiles. Long Island Sound Motors had two locations in Connecticut. It closed one location in early 2018 and then closed the other location in mid-2018. All previously sold cars for Connecticut Motors and Long Island Sound Motors were serviced through Debra Dillinger, Inc. On November 1, 2018, Connecticut Motors and Long Island Sound Motors merged into Debra Dillinger, Inc. Connecticut Motors and Long Island Sound Motors were both insolvent at the time of the merger. Debra Dillinger, Inc. issued its stock to the shareholders of Connecticut Motors and Long Island Sound Motors. On the date of the merger Connecticut Motors was indebted to Debra Dillinger, Inc. in the amount of $32,450 and Long Island Sound Motors was indebted to Debra Dillinger, Inc. for $14,300. Both corporations were insolvent. What issues may the IRS raise concerning this merger? Assume that the merger meets all Connecticut statutes.