diff --git a/t/compiler-inline.lisp b/t/compiler-inline.lisp
new file mode 100644
index 000000000..ce81a821d
--- /dev/null
+++ b/t/compiler-inline.lisp
@@ -0,0 +1,14 @@
+;;;; <https://github.com/armedbear/abcl/issues/591> 
+(unless (ignore-errors (asdf:load-system :fset))
+  (ql:quickload :fset))
+
+(load 
+ (compile-file
+  (asdf:system-relative-pathname :abcl "t/eg/inline-labels.lisp")))
+
+(prove:plan 1)
+(prove:is
+    (fset-user::foo '(a &rest b))
+    '(a fset-user::local-tail b))
+(prove:finalize)
+
diff --git a/t/eg/inline-labels.lisp b/t/eg/inline-labels.lisp
new file mode 100644
index 000000000..55b3a21e9
--- /dev/null
+++ b/t/eg/inline-labels.lisp
@@ -0,0 +1,9 @@
+(in-package :fset-user)
+(defun foo (x)
+  (labels ((bar (x)
+             (cond ((null x) nil)
+                   ((eq (car x) '&rest) (tail (cadr x)))
+                   (t (cons (car x) (bar (cdr x))))))
+           (tail (x)
+             (list 'local-tail x)))
+    (bar x)))