80 FR 12097 - Guidance Regarding Reporting Income and Deductions of a Corporation That Becomes or Ceases To Be a Member of a Consolidated Group
DEPARTMENT OF THE TREASURY
Internal Revenue Service Federal Register Volume 80, Issue 44 (March 6, 2015)
Internal Revenue Service
Federal Register Volume 80, Issue 44 (March 6, 2015)
| Page Range | 12097-12104 | |
| FR Document | 2015-05123 |
[Federal Register Volume 80, Number 44 (Friday, March 6, 2015)] [Proposed Rules] [Pages 12097-12104] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-05123] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [REG-100400-14] RIN 1545-BM14 Guidance Regarding Reporting Income and Deductions of a Corporation That Becomes or Ceases To Be a Member of a Consolidated Group AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking. ----------------------------------------------------------------------- SUMMARY: This document contains proposed amendments to the consolidated return regulations. These proposed regulations would revise the rules for reporting certain items of income and deduction that are reportable on the day a corporation joins or leaves a consolidated group. The proposed regulations would affect such corporations and the consolidated groups that they join or leave. DATES: Written or electronic comments and requests for a public hearing must be received by June 4, 2015. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-100400-14), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG- 100400-14), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, DC, or sent electronically via the Federal eRulemaking Portal at http://www.regulations.gov/ (IRS REG-100400-14). FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Russell G. Jones, (202) 317-6847; concerning the submission of comments or to request a public hearing, Oluwafunmilayo (Funmi) P. Taylor, (202) 317-6901 (not toll-free numbers). SUPPLEMENTARY INFORMATION: Background and Explanation of Provisions 1. Introduction This notice of proposed rulemaking contains proposed regulations that amend 26 CFR part 1 under section 1502 of the Internal Revenue Code (Code). Section 1502 authorizes the Secretary to prescribe regulations for corporations that join in filing a consolidated return, and it expressly provides that those rules may be different from the provisions of chapter 1 of subtitle A of the Code that would apply if those corporations filed separate returns. Terms used in the consolidated return regulations generally are defined in Sec. 1.1502- 1. These proposed regulations provide guidance under Sec. 1.1502-76, which prescribes rules for determining the taxable period in which items of income, gain, deduction, loss, and credit (tax items) of a corporation that joins in filing a consolidated return are included. Section 1.1502-76(b) provides, in part, that if a corporation (S) becomes or ceases to be a member of a consolidated group during a consolidated return year, S must include in the consolidated return its tax items for the period during which it is a member. S also must file a separate return (including a consolidated return of another group) that includes its items for the period during which it is not a member. 2. Prior and Current Regulations On September 8, 1966, the IRS and the Treasury Department promulgated regulations under Sec. 1.1502-76 in TD 6894, 31 FR 11794 (1966 regulations). Section 1.1502-76(b) of the 1966 regulations was silent regarding the treatment of S's tax items that accrued on the day S became or ceased to be a member of a consolidated group (S's change in status). Thus, whether S's tax items for the day of S's change in status should have been reflected on S's tax return for the short period ending with S's change in status, or whether these tax items should have been reflected instead on S's tax return for the short period beginning after S's change in status, was unclear under the 1966 regulations. On August 15, 1994, the IRS and the Treasury Department published final regulations (TD 8560; 59 FR 41666) under Sec. 1.1502-76(b) (current regulations) that revised the 1966 regulations to eliminate uncertainty regarding the treatment of tax items recognized by S on the day of S's change in status. Under the general rule of Sec. 1.1502- 76(b)(1)(ii)(A)(1) of the current regulations (current end of the day rule), S is treated for all federal income tax purposes as becoming or ceasing to be a member of a consolidated group at the end of the day of S's change in status, and S's tax items that are reportable on [[Page 12098]] that day generally are included in the tax return for the taxable year that ends as a result of S's change in status. The notice of proposed rulemaking that proposed the current end of the day rule (57 FR 53634, Nov. 12, 1992) (1992 NPRM) indicated that the current end of the day rule was intended to provide certainty and prevent inconsistent reporting of S's items between the consolidated and separate returns. Prior to the 1992 NPRM, some taxpayers had inferred (based upon the administrative practice of the IRS) that the inclusion in a particular return of a tax item of S incurred on the day of S's change in status depended on a factual determination of whether the transaction occurred before or after noon on the day of S's change in status (the so-called ``lunch rule''). There are two exceptions to the current end of the day rule. The first exception (in Sec. 1.1502-76(b)(1)(ii)(A)(2)) provides that if a corporation is an S corporation (within the meaning of section 1361(a)(1)) immediately before becoming a member of a consolidated group, the corporation becomes a member of the group at the beginning of the day the termination of its S corporation election is effective (termination date), and its taxable year ends for all federal income tax purposes at the end of the preceding day (S corporation exception). The S corporation exception was added by TD 8842 (64 FR 61205; Nov. 10, 1999) to eliminate the need to file a one-day C corporation return for the day an S corporation is acquired by a consolidated group. No additional rule was necessary with respect to a qualified S corporation subsidiary (QSub) of an S corporation that joins a consolidated group. See Sec. 1.1361-5(a)(3). Added at the same time as the current end of the day rule, the second exception (in Sec. 1.1502-76(b)(1)(ii)(B)) provides that if a transaction occurs on the day of S's change in status that is properly allocable to the portion of S's day after the event resulting in S's change in status, S and certain related persons must treat the transaction as occurring at the beginning of the following day for all federal income tax purposes (current next day rule). The current next day rule was added in response to comments to the 1992 NPRM suggesting that the current end of the day rule created a ``seller beware'' problem with respect to S's tax items arising on the day of S's change in status but after the event causing S's change in status. Commenters suggested that, for example, if consolidated group A sold the stock of S to consolidated group B, and group B caused S to sell one of its divisions on the same day it was acquired by group B, the gain from the sale of the division would be inappropriately allocable to group A's consolidated return. Commenters recommended that final regulations adopt rules substantially similar to the current next day rule to protect the reasonable expectations of sellers and buyers of S's stock. Commenters suggested that a rule providing this type of protection was most appropriate with respect to extraordinary items, and some commenters suggested that a rule similar to the current next day rule should operate unless the seller and buyer of S agreed otherwise. 3. Proposed Regulations A. Overview The IRS and the Treasury Department have determined that changes should be made to the regulations under Sec. 1.1502-76(b) due to uncertainty regarding the appropriate application of the current next day rule. These proposed regulations address this concern as well as additional concerns with the current regulations, as summarized in this section 3.A. and discussed in greater detail in sections 3.B. through 3.K. of this preamble. To provide certainty, the proposed regulations generally clarify the period in which S must report certain tax items by replacing the current next day rule with a new exception to the end of the day rule (proposed next day rule) that is more narrowly tailored to clearly reflect taxable income and prevent certain post-closing actions from adversely impacting S's tax return for the period ending on the day of S's change in status. The proposed next day rule applies only to ``extraordinary items'' (as defined in Sec. 1.1502-76(b)(2)(ii)(C) of the proposed regulations) that result from transactions that occur on the day of S's change in status, but after the event causing the change, and that would be taken into account by S on that day. This rule requires those extraordinary items to be allocated to S's tax return for the period beginning the next day. The proposed next day rule is expressly inapplicable to any extraordinary item that arises simultaneously with the event that causes S's change in status. The proposed regulations further clarify that fees for services rendered in connection with S's change in status constitute a ``compensation-related deduction'' for purposes of Sec. 1.1502- 76(b)(2)(ii)(C)(9) (if payment of the fees would give rise to a deduction), and therefore an extraordinary item. The proposed regulations also clarify that the anti-avoidance rule in Sec. 1.1502- 76(b)(3) may apply to situations in which a person modifies an existing contract or other agreement in anticipation of S's change in status. The proposed regulations also add a rule (previous day rule, described in section 3.C. of this preamble) to clarify the application of the S corporation exception. In addition, the proposed regulations limit the scope of the end of the day rule, the next day rule, the S corporation exception, and the previous day rule to determining the period in which S must report certain tax items and determining the treatment of an asset or a tax item for purposes of sections 382(h) and 1374 (as opposed to applying for all federal income tax purposes). Additionally, the proposed regulations provide that short taxable years resulting from intercompany transactions to which section 381(a) applies (intercompany section 381 transactions) are not taken into account in determining the carryover period for a tax item of the distributor or transferor member in the intercompany section 381 transaction or for purposes of section 481(a). Furthermore, the proposed regulations provide that the due date for filing S's separate return for the taxable year that ends as a result of S becoming a member is not accelerated if S ceases to exist in the same consolidated return year. The proposed regulations make several other conforming and non- substantive changes to the current regulations as well. Finally, the proposed regulations add several examples to illustrate the proposed rules. The IRS and the Treasury Department note that neither the current regulations nor the proposed regulations are intended to supersede general rules in the Code and regulations concerning whether an item is otherwise includible or deductible. B. Proposed Next Day Rule The current next day rule provides that S and certain related persons must treat a transaction as occurring at the beginning of the day following S's change in status if the transaction occurs on the day of S's change in status and is ``properly allocable'' to the portion of that day following S's change in status. The IRS and the Treasury Department believe, however, that the standards provided in the current next day rule for determining whether a transaction is ``properly allocable'' to the portion of S's day after the event resulting in S's change in status have [[Page 12099]] been inappropriately interpreted by taxpayers. The current next day rule provides that a determination of whether a transaction is ``properly allocable'' to the portion of S's day after the event resulting in S's change in status is respected if it is ``reasonable and consistently applied by all affected persons.'' In determining whether an allocation is ``reasonable,'' certain factors enumerated in the current regulations are to be considered, including whether tax items arising from the same transaction are allocated inconsistently. Some taxpayers have interpreted these rules as providing flexibility in reporting tax items that result from transactions occurring on the day of S's change in status so that those items can be allocated by agreement to the day of, or to the day following, S's change in status. The IRS and the Treasury Department view this interpretation of the current next day rule as inappropriate because it effectively would permit taxpayers to elect the income tax return on which these tax items are reported and therefore may not result in an allocation that clearly reflects taxable income. This electivity is inconsistent with the purpose of Sec. 1.1502-76(b) to clearly reflect the income of S and the consolidated group. Further, the IRS and the Treasury Department have observed that the current regulations create controversy between taxpayers and the IRS as to whether certain of S's tax items that become reportable on the day of S's change in status are properly allocated to S's tax return for the period ending that day rather than to S's tax return for the period beginning the next day. The proposed next day rule is intended to eliminate the perceived electivity and the source of these controversies. Under the proposed regulations, the application of the proposed next day rule is mandatory rather than elective--if an extraordinary item results from a transaction that occurs on the day of S's change in status, but after the event resulting in the change, and if the item would be taken into account by S on that day, the transaction resulting in the extraordinary item is treated as occurring at the beginning of the following day for purposes of determining the period in which S must report the item. The proposed regulations also provide that the proposed next day rule is inapplicable to items that arise simultaneously with the event that causes S's change in status. Under the end of the day rule (as revised by these proposed regulations), those items are reported on S's tax return for the short period ending on the day of S's change in status. The proposed regulations are expected to afford taxpayers and the IRS greater certainty regarding the period to which S's tax items resulting from such a transaction are allocated. C. Previous Day Rule As noted in section 2 of this preamble, the special rule for S corporations provides an exception to the end of the day rule if an S corporation joins a consolidated group. To avoid creating a one-day C corporation tax return for the termination date, the S corporation exception provides that S becomes a member of the group at the beginning of the termination date, and that S's taxable year ends for all federal income tax purposes at the end of the preceding day. Although these proposed regulations retain the S corporation exception, the proposed regulations add a previous day rule that mirrors the principles of the proposed next day rule. Whereas the proposed next day rule requires extraordinary items resulting from transactions that occur on the day of S's change in status (but after the event causing the change) to be allocated to S's tax return for the short period that begins the following day, the previous day rule requires extraordinary items resulting from transactions that occur on the termination date (but before or simultaneously with the event causing S's status as an S corporation to terminate) to be allocated to S's tax return for the short period that ends on the previous day (that is, the day preceding the termination date). D. Revised Scope of the End of the Day Rule and Related Rules Under the current end of the day rule, S becomes or ceases to be a member at the end of the day on which its status as a member changes, and its tax year ends ``for all federal income tax purposes'' at the end of that day. However, applying the end of the day rule for purposes other than the reporting of S's tax items could yield results inconsistent with other consolidated return rules. For example, under Sec. Sec. 1.1502-13 and 1.1502-80(d)(1), if a member contributes property subject to a liability in excess of the property's basis to a nonmember in exchange for the nonmember's stock, and if the transferee becomes a member of the transferor's consolidated group as a result of the exchange, the transaction is treated as an intercompany transaction and section 357(c) does not apply. However, if the end of the day rule applies ``for all federal income tax purposes,'' it may be unclear whether the transferee becomes a member ``immediately after the transaction,'' whether the transaction is an intercompany transaction, and whether section 357(c) could apply to the transaction. To eliminate possible confusion arising from application of the current end of the day rule and related rules, these proposed regulations provide that the end of the day rule, the proposed next day rule, the S corporation exception, and the previous day rule apply for purposes of determining the period in which S must report its tax items, as well as for purposes of sections 382(h) and 1374 (discussed in section 3.I. of this preamble). E. Extraordinary Items The proposed next day rule mandatorily applies to extraordinary items that result from a transaction that occurs on the day of S's change in status but after the event that causes the change. In contrast, the previous day rule mandatorily applies to extraordinary items that result from a transaction that occurs on the day of S's change in status but before or simultaneously with the event that causes S's status as an S corporation to terminate. One category of extraordinary items, set forth in Sec. 1.1502- 76(b)(2)(ii)(C)(9) of the current regulations, applies to any ``compensation-related deduction in connection with S's change in status.'' The proposed regulations clarify that this category of extraordinary items includes (among other items) a deduction for fees for services rendered in connection with S's change in status. For example, if payment of a fee for the services of a financial adviser is contingent upon a successful acquisition of S's stock, to the extent the fee gives rise to a deduction, the deduction for the accrual of that expense is an extraordinary item, and the deduction is allowable only in S's taxable year that ends at the close of the day of the change. The IRS and the Treasury Department request comments as to whether the list of extraordinary items set forth in Sec. 1.1502- 76(b)(2)(ii)(C) should be modified to include any item not currently listed or whether any item currently included should be deleted or modified. Specifically, the IRS and the Treasury Department are considering whether the item in Sec. 1.1502-76(b)(2)(ii)(C)(5) (``[a]ny item carried to or from any portion of the original year (e.g., a net operating loss carried under section 172), and any section 481(a) [[Page 12100]] adjustment'') should be modified to include ``any section 481(a) adjustment or the acceleration thereof,'' and whether the item in Sec. 1.1502-76(b)(2)(ii)(C)(6) (``[t]he effects of any change in accounting method initiated by the filing of the appropriate form after S's change in status'') should continue to be included in the list of extraordinary items. The IRS and the Treasury Department also request comments as to whether any extraordinary item should be excluded, in whole or in part, from application of the next day rule and the previous day rule. In particular, the IRS and the Treasury Department request comments as to whether the extraordinary items set forth in Sec. 1.1502- 76(b)(2)(ii)(C)(5) and (6) of the current regulations should be excluded, in whole or in part, from application of these rules. F. Ratable Allocation Rather than require S to perform a closing of the books on the day of its change in status, the current regulations under Sec. 1.1502- 76(b)(2)(ii) permit S's tax items, other than the extraordinary items, to be ratably allocated between S's two short taxable years if certain conditions are met. The IRS and the Treasury Department request comments as to whether S no longer should be permitted to elect to ratably allocate its tax items between the periods ending and beginning with S's change in status. G. Certain Foreign Entities Solely for purposes of determining the short taxable year of S to which the items of a passthrough entity in which S owns an interest are allocated, Sec. 1.1502-76(b)(2)(vi)(A) of the current regulations generally provides that S is treated as selling or exchanging its entire interest in the entity immediately before S's change in status. This rule does not apply to certain foreign corporations the ownership of which may give rise to deemed income inclusions under the Code. In addition, a deemed income inclusion from a foreign corporation and a deferred tax amount from a passive foreign investment company under section 1291 are treated as extraordinary items under Sec. 1.1502- 76(b)(2)(ii)(C)(11). The IRS and the Treasury Department request comments as to whether such deemed income inclusions or deferred tax amounts should continue to be treated as extraordinary items, whether rules having similar effects to the rule in Sec. 1.1502- 76(b)(2)(vi)(A) relating to passthrough entities should be adopted for controlled foreign corporations and passive foreign investment companies in which S owns an interest, and whether any other changes should be made to Sec. 1.1502-76(b)(2)(vi) of the current regulations. H. Anti-Avoidance Rule Under Sec. 1.1502-76(b)(3) of the current regulations, if any person acts with a principal purpose contrary to the purposes of Sec. 1.1502-76(b) to substantially reduce the federal income tax liability of any person (prohibited purpose), adjustments must be made as necessary to carry out the purposes of Sec. 1.1502-76 of the current regulations (anti-avoidance rule). The proposed regulations clarify that the anti-avoidance rule may apply to situations in which a person modifies an existing contract or other agreement in anticipation of S's change in status in order to shift an item between the taxable years that end and begin as a result of S's change in status if such actions are undertaken with a prohibited purpose. The IRS and the Treasury Department request comments regarding this proposed amendment to the anti-avoidance rule. I. Coordination With Sections 382(h) and 1374 1. Section 382 For purposes of section 382, the term recognized built-in loss (RBIL) means any loss recognized during the recognition period on the disposition of any asset held by the loss corporation immediately before the date of the section 382 ownership change (change date), to the extent the loss reflects a built-in loss on the change date. Section 382(h)(2)(B). The term recognition period means the five-year period beginning on the change date. Section 382(h)(7)(A). Section 382(h)(1)(B) generally provides that if a loss corporation has a net unrealized built-in loss (NUBIL), then any RBIL taken into account in a taxable year any portion of which falls in the recognition period (recognition period taxable year) is treated as a deduction subject to the loss corporation's section 382 limitation as if the RBIL were a pre-change loss. The amount of RBILs subject to the section 382 limitation in any recognition period taxable year is limited, however, to the excess of the NUBIL over total RBILs in prior taxable years ending in the recognition period. (The amount of such excess is referred to in this preamble as the outstanding NUBIL balance.) In other words, the amount of the NUBIL limits the amount of RBILs that are treated as pre-change losses, and any built-in loss treated as an RBIL further reduces the outstanding NUBIL balance. In many cases, the event that causes S's change in status for purposes of Sec. 1.1502-76(b)(1)(ii) also causes S to undergo an ownership change for purposes of section 382. Thus, an item of deduction or loss that becomes reportable on the day of S's change in status falls within the recognition period beginning that day, even if the item is allocated to S's short period ending that day under the end of the day rule. As a consequence, an item that should be a pre-change loss is treated as an RBIL that reduces the outstanding NUBIL balance. For example, assume consolidated group A sells all of S's stock to consolidated group B. If on the day of S's change in status (but before the event causing the change), S recognizes a loss on the sale of an asset, under the end of the day rule the loss is reported on group A's consolidated return. However, notwithstanding that the loss may not be claimed by group B, the loss may be treated as an RBIL and reduce the outstanding NUBIL balance. To prevent such an outcome, these proposed regulations provide that, for purposes of section 382(h), items includible in the short taxable year that ends as a result of S's change in status (including items allocated to that taxable year under the end of the day rule) are not treated as occurring in the recognition period. Rather, only items includible in S's short taxable year that begins as a result of S's change in status (including items allocated to that taxable year under the proposed next day rule) are treated as occurring in the recognition period. Therefore, the beginning of the recognition period for purposes of section 382(h) would correspond with the beginning of S's short taxable year that begins on the day after S's change in status. 2. Section 1374 Section 1374 generally imposes a corporate-level tax (section 1374 tax) on the recognition of gain by an S corporation that formerly was a C corporation (or that acquired assets from a C corporation in a transferred basis transaction) during a recognition period specified in section 1374(d)(7) (section 1374 recognition period), but only to the extent of the corporation's net recognized built-in gain (as defined in section 1374(d)(2)) for a given taxable year. The section 1374 tax also applies to certain tax items attributable to the corporation's C corporation taxable years. In addition, regulations under section 337(d) extend section 1374 treatment to (1) a C corporation's conversion to a real estate investment [[Page 12101]] trust (REIT), regulated investment company (RIC), and certain tax- exempt entities, or (2) certain cases in which a REIT, RIC, or tax- exempt entity acquires assets in a transferred basis transaction from a C corporation. As with the application of section 382(h), the event that causes S's change in status for purposes of Sec. 1.1502-76(b)(1)(ii) may be the event that results in S being a corporation that is subject to the section 1374 tax. Therefore, it is necessary to determine in which return (the group's consolidated return or S's separate return beginning the day after S's change in status) S's tax items for the day of S's change in status are included. Similarly, if the event that causes S's change in status for purposes of Sec. 1.1502-76(b)(1)(ii) is the event that results in S ceasing to be a corporation subject to the section 1374 tax, it is necessary to determine in which return (the group's consolidated return or S's separate return for the period ending the day before S's change in status) S's tax items for the day of S's change in status are included. The proposed regulations thus provide that if S ceases to be a corporation subject to the section 1374 tax upon becoming a member, or if S elects to be a corporation that is subject to the section 1374 tax for its first separate return year after ceasing to be a member, S's items of recognized built-in gain or loss for purposes of section 1374 will include only the amounts reported on S's separate return (including items reported on that return under the previous day rule or the next day rule). J. Intercompany Section 381 Transactions Under the current consolidated return regulations, if a member distributes or transfers its assets to another corporation that is a member immediately after the distribution or transfer in an intercompany section 381 transaction, and if the distributor or transferor member has a net operating loss carryover or a net capital loss carryover, the distributor or transferor member will not be treated as having a short taxable year for purposes of determining the years to which the loss may be carried. Sections 1.1502-21(b)(3)(iii) and 1.1502-22(b)(4). These proposed regulations would amend current law by moving these rules to Sec. 1.1502-76(b)(2)(i) and making conforming changes to Sec. Sec. 1.1502-21(b)(3)(iii) and 1.1502-22(b)(4). In addition, these proposed regulations would expand these rules by providing that a short taxable year of the distributor or transferor member by reason of an intercompany section 381 transaction is not counted as a separate taxable year for purposes of determining either the taxable years to which any tax attribute of the distributor or transferor member may be carried or the taxable years in which an adjustment under section 481(a) is taken into account. No inference should be drawn from the proposed changes to these rules as to whether a short taxable year of a member resulting from an intercompany section 381 transaction is counted under current law for purposes of determining the years to which a tax credit may be carried or in which a section 481 adjustment is taken into account. K. Due Date for Filing Tax Returns The proposed regulations also eliminate a provision that could cause taxpayers to inadvertently miss a return filing deadline. Under Sec. 1.1502-76(b)(4) of the current regulations, if S joins a consolidated group, the due date for filing S's separate return is the earlier of the due date (with extensions) of the group's return or the due date (with extensions) of S's return if S had not joined the group. If S goes out of existence during the consolidated return year in which S joins a group, its taxable year would end. Under section 6072, the due date for S's short period return would be the 15th day of the third month (ninth month, with extensions) following the date on which S ceases to exist. Accordingly, if S ceases to exist during the same consolidated return year in which it becomes a member, the due date for S's tax return for the short period that ended as a result of S becoming a member could be accelerated. To prevent a taxpayer from inadvertently missing a filing date and being subject to potential penalties for filing a late return, the proposed regulations provide that if S goes out of existence in the same consolidated return year in which it becomes a member, the due date for filing S's separate return is determined without regard to S's ceasing to exist. L. Non-Substantive Changes In addition to the changes described in this preamble, the proposed regulations make several non-substantive changes to the current regulations, including moving an example concerning Sec. 1.1502-80(d) from the text of Sec. 1.1502-76(b)(1)(ii)(B)(2) of the current regulations to Sec. 1.1502-13(c)(7)(ii), Example 3(e). Effective/Applicability Date The amendments to Sec. Sec. 1.1502-21(b)(3)(iii), 1.1502- 22(b)(4)(i), 1.1502-76(b)(2)(i), and 1.1502-76(b)(4) will apply to consolidated return years beginning on or after the date these regulations are published as final regulations in the Federal Register. The other amendments to Sec. 1.1502-76(b) will apply to corporations becoming or ceasing to be members of consolidated groups on or after the date these regulations are published as final regulations in the Federal Register. Special Analyses It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. It is hereby certified that these regulations will not have a significant impact on a substantial number of small entities. This certification is based on the fact that the regulations apply only to transactions involving corporations that file consolidated federal income tax returns, and that such corporations tend to be larger businesses. Accordingly, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the Code, these regulations will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business. Comments and Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any comments that are submitted timely to the IRS as prescribed in this preamble under the ``Addresses'' heading. The IRS and the Treasury Department request comments on all aspects of the proposed rules. All comments will be available for public inspection and copying. A public hearing may be scheduled if requested in writing by any person who timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place of the hearing will be published in the Federal Register. Drafting Information The principal author of these proposed regulations is Russell G. Jones of the Office of Associate Chief Counsel (Corporate). However, other personnel from the IRS and the Treasury Department participated in their development. List of Subjects in 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. [[Page 12102]] Proposed Amendments to the Regulations Accordingly, 26 CFR part 1 is proposed to be amended as follows: PART 1--INCOME TAXES 0 Paragraph 1. The authority citation for part 1 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * Section 1.1361-5 also issued under 26 U.S.C. 1361. * * * Section 1.1362-3 also issued under 26 U.S.C. 1362. * * * Section 1.1502-13 also issued under 26 U.S.C. 1502. * * * Section 1.1502-21 also issued under 26 U.S.C. 1502. * * * Section 1.1502-22 also issued under 26 U.S.C. 1502. * * * Section 1.1502-28 also issued under 26 U.S.C. 1502. * * * Section 1.1502-76 also issued under 26 U.S.C. 382(m) and 26 U.S.C. 1502. * * * Sec. 1.1361-5 [Amended] 0 Par. 2. Section 1.1361-5 is amended: 0 1. In paragraph (a)(3), by removing ``Sec. 1.1502-76(b)(1)(ii)(A)(2) (relating to a special rule'' and adding ``Sec. 1.1502-76(b)(1)(ii)(B) (relating to special rules'' in its place. 0 2. In paragraph (a)(4), Example 4, by removing ``Sec. 1.1502- 76(b)(1)(ii)(A)(2)'' and adding ``Sec. 1.1502-76(b)(1)(ii)(B)(1)'' in its place. Sec. 1.1362-3 [Amended] 0 Par. 3. Section 1.1362-3 is amended in paragraph (a) by removing ``Sec. 1.1502-76(b)(1)(ii)(A)(2)'' and adding ``Sec. 1.1502- 76(b)(1)(ii)(B)'' in its place. 0 Par. 4. Section 1.1502-13 is amended by adding Example 3(e) to paragraph (c)(7)(ii) to read as follows: Sec. 1.1502-13 Intercompany transactions. * * * * * (c) * * * (7) * * * (ii) * * * Example 3. * * * (e) Liability in excess of basis. The facts are the same as in paragraph (a) of this Example 3, except that S and B are not members of the same consolidated group immediately before S's transfer of the land to B, and the land is encumbered with an $80 liability. Immediately after the transfer, S and B are members of the same consolidated group. Thus, the transfer is an intercompany transaction to which section 357(c) does not apply pursuant to Sec. 1.1502-80(d). * * * * * 0 Par. 5. Section 1.1502-21 is amended by revising paragraph (b)(3)(iii) and adding paragraph (h)(1)(iv) to read as follows: Sec. 1.1502-21 Net operating losses. * * * * * (b) * * * (3) * * * (iii) Short years in connection with intercompany transactions to which section 381(a) applies. If a member distributes or transfers assets in an intercompany transaction to which section 381(a) applies, see Sec. 1.1502-76(b)(2)(i). * * * * * (h) * * * (1) * * * (iv) Paragraph (b)(3)(iii) of this section applies to consolidated return years beginning on or after the date these regulations are published as final regulations in the Federal Register. For transactions occurring before the date these regulations are published as final regulations in the Federal Register, see Sec. 1.1502-21(b) as contained in 26 CFR part 1, revised as of April 1 preceding the date these regulations are published as final regulations in the Federal Register. * * * * * 0 Par. 6. Section 1.1502-22 is amended by: 0 1. Revising paragraph (b)(4)(i). 0 2. Revising the heading of paragraph (h). 0 3. Adding paragraph (h)(1)(iii). The revisions and addition read as follows: Sec. 1.1502-22 Consolidated capital gain and loss. * * * * * (b) * * * (4) Special rules--(i) Short years in connection with intercompany transactions to which section 381(a) applies. If a member distributes or transfers assets in an intercompany transaction to which section 381(a) applies, see Sec. 1.1502-76(b)(2)(i). * * * * * (h) Effective/applicability date-- (1) * * * (iii) Paragraph (b)(4)(i) of this section applies to consolidated return years beginning on or after the date these regulations are published as final regulations in the Federal Register. For transactions occurring before the date these regulations are published as final regulations in the Federal Register, see Sec. 1.1502-22(b) as contained in 26 CFR part 1, revised as of April 1 preceding the date these regulations are published as final regulations in the Federal Register. * * * * * Sec. 1.1502-28 [Amended] 0 Par. 7. Section 1.1502-28 is amended in paragraph (b)(11) by removing ``Sec. 1.1502-76(b)(1)(ii)(B)'' and adding ``Sec. 1.1502- 76(b)(1)(ii)(A)(2)'' in its place. 0 Par. 8. Section 1.1502-76 is amended: 0 1. By adding a sentence at the end of paragraph (b)(1)(i). 0 2. By revising paragraphs (b)(1)(ii)(A) and (B). 0 3. By adding paragraph (b)(1)(ii)(D). 0 4. By adding a sentence at the end of paragraph (b)(2)(i). 0 5. By revising paragraph (b)(2)(ii)(C)(9). 0 6. By removing the last sentence of paragraph (b)(2)(iii). 0 7. By removing the last sentence of paragraph (b)(2)(v). 0 8. In paragraph (b)(2)(vi)(C) by removing ``paragraph (b)(2)(v)'' and adding ``paragraph (b)(2)(vi)'' in its place. 0 9. By revising paragraph (b)(3). 0 10. By adding a sentence at the end of paragraph (b)(4). 0 11. By adding Examples 8, 9, and 10 to paragraph (b)(5). 0 12. By revising paragraph (b)(6). The revisions and additions read as follows: Sec. 1.1502-76 Taxable year of members of group. * * * * * (b) * * * (1) * * * (i) * * * If a corporation (S) becomes or ceases to be a member in a stock disposition or purchase for which an election under section 336(e) or section 338 is made, paragraphs (b)(1)(ii), (b)(2)(ii), and (b)(2)(iii) of this section do not apply to the transaction. (ii) * * * (A) In general--(1) End of the day rule. If S becomes or ceases to be a member during a consolidated return year, S's tax year ends, and (except as provided in paragraph (b)(1)(ii)(A)(2) or paragraph (b)(1)(ii)(B) of this section) for purposes of determining the period in which S must report an item of income, gain, deduction, loss, or credit, S is treated as becoming or ceasing to be a member at the end of the day on which its status as a member changes (end of the day rule). (2) Next day rule. If an extraordinary item (as defined in paragraph (b)(2)(ii)(C) of this section) results from a transaction that occurs on the day of S's change in status as a member, but after the event resulting in the change, and the item would be taken into account by S on that day, the transaction resulting in the extraordinary item is treated as occurring at the beginning of the following day for purposes of determining the period in which S must report the item (next day rule). The next day rule does not apply to any extraordinary item that becomes [[Page 12103]] includible or deductible simultaneously with the event that causes the change in S's status. (B) Special rules for former S corporations--(1) Beginning of the day rule. If an election under section 1362(a) is in effect for S immediately before S becomes a member, S is treated as becoming a member at the beginning of the day the termination of its election under section 1362(a) is effective (termination date), and S's taxable year ends at the end of the day preceding the termination date. See Sec. 1.1361-5(a)(3) for the treatment of certain qualified S corporation subsidiaries. (2) Previous day rule. If an extraordinary item (as defined in paragraph (b)(2)(ii)(C) of this section) results from a transaction that occurs on the termination date, but before or simultaneously with the event resulting in the termination of S's election under section 1362(a), and the item would be taken into account by S on that day, the transaction resulting in the extraordinary item is treated as occurring at the end of the previous day for purposes of determining the period in which S must report the item (previous day rule). See Sec. 1.1361- 5(a)(3) for the treatment of certain qualified S corporation subsidiaries. * * * * * (D) Coordination with sections 382 and 1374. If the day of S's change in status is also the date of an ownership change for purposes of section 382, the rules and principles of this section apply in determining the treatment of any item or asset for purposes of section 382(h). Accordingly, if the day of S's change in status is also a change date, the determination of net unrealized built-in gain or loss will reflect the application of both the end of the day rule and the next day rule, to the extent each applies. Moreover, items includible in the taxable year that ends as a result of S's change in status are not treated as occurring in the recognition period described in section 382(h)(7)(A), and items includible in the taxable year that begins as a result of S's change in status are treated as occurring in the recognition period. If S ceases to be a corporation subject to the tax imposed by section 1374 upon becoming a member of a consolidated group, or if S elects to be a corporation that is subject to such tax for its first separate return year after ceasing to be a member, S's items of recognized built-in gain or loss for purposes of section 1374 will include only the amounts reported on S's separate return (including items reported on that return under the previous day rule or the next day rule). * * * * * (2) * * * (i) * * * If a member distributes or transfers assets in an intercompany transaction to which section 381(a) applies, a short taxable year of the distributor or transferor corporation is not taken into account either for purposes of determining the taxable years to which any tax attribute of the distributor or transferor corporation may be carried or for purposes of determining the taxable years in which an adjustment under section 481(a) is taken into account. (ii) * * * (C) * * * (9) Any compensation-related deduction in connection with S's change in status (including, for example, a deduction for fees for services rendered in connection with S's change in status and for bonus, severance, and option cancellation payments made in connection with S's change in status); * * * * * (3) Anti-avoidance rule. If any person acts with a principal purpose contrary to the purposes of this paragraph (b) to substantially reduce the federal income tax liability of any person (including by modifying an existing contract or other agreement in anticipation of a change in S's status to shift an item between the taxable years that end and begin as a result of S's change in status), adjustments must be made as necessary to carry out the purposes of this section. (4) * * * In addition, if S ceases to exist in the same consolidated return year in which S becomes a member, the due date for filing S's separate return shall be determined without regard to S's ceasing to exist in that year. (5) * * * Example 8. Allocation of certain amounts that become deductible on the day of S's change in status--(a) Facts. P purchases all of the stock of S, an accrual-basis, stand-alone C corporation, on June 30 pursuant to a stock purchase agreement. At the time of the stock purchase, S has outstanding nonqualified stock options issued to certain employees. The options did not have a readily ascertainable fair market value when granted, and the options do not provide for a deferral of compensation (as defined in Sec. 1.409A-1(b)). Under the option agreements, S is obligated to pay its employees certain amounts in cancellation of their stock options upon a change in control of S. P's purchase of S's stock causes a change in control of S, and S's obligation to make option cancellation payments to its employees becomes fixed and determinable upon the closing of the stock purchase. Several days after the closing of the stock purchase, S pays its employees the amounts required under the option agreements. (b) Analysis. P's purchase of S's stock causes S to become a member of the P group at the end of the day on June 30. Under paragraph (b)(2)(ii)(C)(9) of this section, a deduction arising from S's liability to pay its employees in cancellation of their stock options in connection with S's change in status is an extraordinary item that cannot be prorated and must be allocated to June 30. The next day rule is inapplicable to this deduction because S's liability to pay its employees becomes deductible on the day of S's change in status simultaneously with the event that causes S's change in status. Consequently, a deduction for the option cancellation payments must be reported under the end of the day rule on S's tax return for the period ending June 30. (c) Success-based fees. The facts are the same as in paragraph (a) of this Example 8, except that S also engages a consulting firm to provide services in connection with P's purchase of S's stock. Under the terms of the engagement letter, S's obligation to pay for these services is contingent upon the successful closing of the stock purchase. The stock purchase closes successfully, and S's obligation to pay its consultants becomes fixed and determinable at closing. To the extent S's payment of a success-based fee to its consultants is otherwise deductible, this item is an extraordinary item that cannot be prorated and must be reported under the end of the day rule on S's return for the period ending June 30. (See paragraph (b)(2)(ii)(C)(9) of this section.) The next day rule is inapplicable to the deduction because S's liability to pay its consultants becomes deductible on the day of S's change in status simultaneously with the event that causes S's change in status. (d) Unwanted assets. The facts are the same as in paragraph (a) of this Example 8, except that, after closing on June 30, S sells to an unrelated party certain assets used in S's trade or business that are not wanted by the P group. Gain or loss on the sale of these assets is an extraordinary item that results from a transaction that occurs on the day of S's change in status, but after the event resulting in the change. Consequently, under the next day rule, the gain or loss must be reported on S's tax return for the period beginning July 1. Example 9. Redemption that causes a change in status--(a) Facts. P owns 80 shares of S's only class of outstanding stock, and a person whose ownership of S stock is not attributed to P under section 302(c) owns the remaining 20 shares. On June 30, S distributes land with a basis of $100 and a fair market value of $140 to P in redemption of all of P's stock in S. (b) Analysis. As a result of the redemption, S ceases to be a member of P's consolidated group on June 30. S will recognize $40 of gain under section 311(b) on the distribution of the land to P. The next day rule is inapplicable because S's gain becomes includible on the day of S's change in status simultaneously with the event that causes S's change in status. Consequently, S's gain must be reported under the end of the day rule in its taxable year ending June 30, during which [[Page 12104]] S was a member of the P group. Under Sec. 1.1502-32(b)(2)(i), P's basis in its S stock is increased to reflect S's $40 gain immediately before the redemption of S's stock. (c) Partial redemption. The facts are the same as in paragraph (a) of this Example 9, except that S distributes the land to P in redemption of 20 shares of P's stock in S. Thus, immediately after the redemption, P owns 75% (60 shares/80 shares) of S's outstanding stock, and S's minority shareholder owns 25% (20 shares/80 shares). The redemption does not satisfy the requirements of section 302(b) and is treated under section 302(d) as a distribution to which section 301 applies. The end of the day rule does not apply for purposes of determining whether P and S are members of the same consolidated group immediately after the redemption. Because P owns only 75% of S's stock immediately after the redemption, the distribution is not an intercompany distribution described in Sec. 1.1502-13(f)(2)(i). Thus, P may not exclude any amount of the distribution that is a dividend, and P's basis in S's stock is not reduced under Sec. 1.1502-32(b)(2)(iv). P may be entitled to a dividends received deduction under section 243(c) (but see section 1059(e)). For the reasons discussed in paragraph (b) of this Example 9, S's gain under section 311(b) must be reported under the end of the day rule in S's taxable year ending June 30, during which S was a member of the P group. (d) Distribution of loss property. The facts are the same as in paragraph (a) of this Example 9, except that the land distributed by S to P has a fair market value of $60 rather than $140. The end of the day rule applies for purposes of determining the taxable year in which S must take into account its realized loss on the distribution of the land. Thus, under the end of the day rule, S's loss on the distribution of the land, which occurs simultaneously with S's ceasing to be a member, is taken into account in S's taxable year that ends as a result of the redemption. However, the end of the day rule does not apply for other purposes; for example, the rule does not apply in determining whether the transaction is an intercompany distribution or in determining the attributes (as defined in Sec. 1.1502-13(b)(6)) of the loss. Therefore, because S is not a member immediately after the distribution, S's loss on the distribution is not recognized under section 311(a). Under the end of the day rule, the loss is taken into account as a noncapital, nondeductible expense on the P group's consolidated return, and under Sec. 1.1502-32(b)(1)(i), P's basis in its S stock is decreased by $40 immediately before S leaves the group. Example 10. Extraordinary item of S corporation--(a) Facts. On July 1, P purchases all the stock of S, an accrual-basis corporation with an election in effect under section 1362(a). Prior to the sale, S had engaged a consulting firm to find a buyer for S's stock, and the consulting firm's fee was contingent upon the successful closing of the sale of S's stock. (b) Analysis. To the extent S's payment of the success-based fee to its consultants is otherwise deductible, this item is an extraordinary item (see paragraph (b)(2)(ii)(C)(9) of this section) that becomes deductible on July 1 simultaneously with the event that terminates S's election as an S corporation. Under paragraph (b)(1)(ii)(B)(2) of this section, S's obligation to pay the fee is treated as becoming deductible on June 30 under the previous day rule. (6) Effective/applicability date. Paragraphs (b)(2)(i) and (b)(4) of this section apply to consolidated return years beginning on or after the date these regulations are published as final regulations in the Federal Register. Otherwise, this paragraph (b) applies to corporations becoming or ceasing to be members of consolidated groups on or after the date these regulations are published as final regulations in the Federal Register. * * * * * John Dalrymple, Deputy Commissioner for Services and Enforcement. [FR Doc. 2015-05123 Filed 3-5-15; 8:45 am] BILLING CODE 4830-01-P
![Federal Register / Vol. 80, No. 44 / Friday, March 6, 2015 / Proposed Rules 12097
(i) For airplanes with a Thales pitot probe Issued in Renton, Washington, on February amend 26 CFR part 1 under section
having P/N C16195AA or P/N C16195BA 19, 2015. 1502 of the Internal Revenue Code
installed: After accomplishing the John P. Piccola, Jr., (Code). Section 1502 authorizes the
replacement required by paragraph (g) of this Acting Manager, Transport Airplane Secretary to prescribe regulations for
AD. Directorate, Aircraft Certification Service. corporations that join in filing a
(ii) For airplanes without a Thales pitot [FR Doc. 2015–04495 Filed 3–5–15; 8:45 am] consolidated return, and it expressly
probe having P/N C16195AA or P/N
BILLING CODE 4910–13–P provides that those rules may be
C16195BA installed: As of the effective date
of this AD.
different from the provisions of chapter
(2) As of the effective date of this AD, no 1 of subtitle A of the Code that would
person may install on any airplane a Thales DEPARTMENT OF THE TREASURY apply if those corporations filed
pitot probe having part number P/N 50620– separate returns. Terms used in the
10. Internal Revenue Service consolidated return regulations
generally are defined in § 1.1502–1.
(k) Other FAA AD Provisions 26 CFR Part 1 These proposed regulations provide
The following provisions also apply to this guidance under § 1.1502–76, which
AD: [REG–100400–14]
prescribes rules for determining the
(1) Alternative Methods of Compliance RIN 1545–BM14 taxable period in which items of
(AMOCs): The Manager, International income, gain, deduction, loss, and credit
Branch, ANM–116, Transport Airplane Guidance Regarding Reporting Income (tax items) of a corporation that joins in
Directorate, FAA, has the authority to and Deductions of a Corporation That filing a consolidated return are
approve AMOCs for this AD, if requested Becomes or Ceases To Be a Member included. Section 1.1502–76(b)
using the procedures found in 14 CFR 39.19. of a Consolidated Group provides, in part, that if a corporation
In accordance with 14 CFR 39.19, send your
request to your principal inspector or local AGENCY: Internal Revenue Service (IRS), (S) becomes or ceases to be a member
Flight Standards District Office, as Treasury. of a consolidated group during a
appropriate. If sending information directly ACTION: Notice of proposed rulemaking.
consolidated return year, S must
to the International Branch, send it to ATTN: include in the consolidated return its
Sanjay Ralhan, Aerospace Engineer, SUMMARY: This document contains tax items for the period during which it
International Branch, ANM–116, Transport proposed amendments to the is a member. S also must file a separate
Airplane Directorate, FAA, 1601 Lind consolidated return regulations. These return (including a consolidated return
Avenue SW., Renton, WA 98057–3356; proposed regulations would revise the of another group) that includes its items
telephone 425–227–1405; fax 425–227–1149. rules for reporting certain items of for the period during which it is not a
Information may be emailed to: 9-ANM-116- income and deduction that are member.
AMOC-REQUESTS@faa.gov. Before using reportable on the day a corporation joins
any approved AMOC, notify your appropriate 2. Prior and Current Regulations
or leaves a consolidated group. The
principal inspector, or lacking a principal proposed regulations would affect such On September 8, 1966, the IRS and
inspector, the manager of the local flight the Treasury Department promulgated
corporations and the consolidated
standards district office/certificate holding regulations under § 1.1502–76 in TD
district office. The AMOC approval letter
groups that they join or leave.
DATES: Written or electronic comments 6894, 31 FR 11794 (1966 regulations).
must specifically reference this AD.
and requests for a public hearing must Section 1.1502–76(b) of the 1966
(2) Contacting the Manufacturer: For any
requirement in this AD to obtain corrective be received by June 4, 2015. regulations was silent regarding the
actions from a manufacturer, the action must treatment of S’s tax items that accrued
ADDRESSES: Send submissions to:
be accomplished using a method approved on the day S became or ceased to be a
CC:PA:LPD:PR (REG–100400–14), Room
by the Manager, International Branch, ANM– member of a consolidated group (S’s
5203, Internal Revenue Service, P.O.
116, Transport Airplane Directorate, FAA; or change in status). Thus, whether S’s tax
Box 7604, Ben Franklin Station,
the European Aviation Safety Agency items for the day of S’s change in status
Washington, DC 20044. Submissions
(EASA); or Airbus’s EASA Design should have been reflected on S’s tax
may be hand-delivered Monday through
Organization Approval (DOA). If approved by return for the short period ending with
the DOA, the approval must include the Friday between the hours of 8 a.m. and
S’s change in status, or whether these
DOA-authorized signature. 4 p.m. to CC:PA:LPD:PR (REG–100400–
tax items should have been reflected
14), Courier’s Desk, Internal Revenue
(l) Related Information instead on S’s tax return for the short
Service, 1111 Constitution Avenue NW.,
period beginning after S’s change in
(1) Refer to Mandatory Continuing Washington, DC, or sent electronically
Airworthiness Information (MCAI) EASA status, was unclear under the 1966
via the Federal eRulemaking Portal at
Airworthiness Directive 2014–0237R1, dated regulations.
http://www.regulations.gov/ (IRS REG–
December 5, 2014, for related information. On August 15, 1994, the IRS and the
100400–14).
This MCAI may be found in the AD docket Treasury Department published final
FOR FURTHER INFORMATION CONTACT: regulations (TD 8560; 59 FR 41666)
on the Internet at http://www.regulations.gov
by searching for and locating Docket No.
Concerning the proposed regulations, under § 1.1502–76(b) (current
FAA–2015–0250. Russell G. Jones, (202) 317–6847; regulations) that revised the 1966
(2) For service information identified in concerning the submission of comments regulations to eliminate uncertainty
this AD, contact Airbus, Airworthiness or to request a public hearing, regarding the treatment of tax items
Office—EIAS, 1 Rond Point Maurice Oluwafunmilayo (Funmi) P. Taylor, recognized by S on the day of S’s change
(202) 317–6901 (not toll-free numbers).
rmajette on DSK2TPTVN1PROD with PROPOSALS
Bellonte, 31707 Blagnac Cedex, France; in status. Under the general rule of
telephone +33 5 61 93 36 96; fax +33 5 61 SUPPLEMENTARY INFORMATION: § 1.1502–76(b)(1)(ii)(A)(1) of the current
93 44 51; email account.airworth-eas@
airbus.com; Internet http://www.airbus.com. Background and Explanation of regulations (current end of the day rule),
You may view this service information at the Provisions S is treated for all federal income tax
FAA, Transport Airplane Directorate, 1601 purposes as becoming or ceasing to be
1. Introduction a member of a consolidated group at the
Lind Avenue SW., Renton, WA. For
information on the availability of this This notice of proposed rulemaking end of the day of S’s change in status,
material at the FAA, call 425–227–1221. contains proposed regulations that and S’s tax items that are reportable on
VerDate Sep<11>2014 15:27 Mar 05, 2015 Jkt 235001 PO 00000 Frm 00006 Fmt 4702 Sfmt 4702 E:\FR\FM\06MRP1.SGM 06MRP1](https://thefederalregister.org/doc/80_FR_12141/page/1.svg)
![Federal Register / Vol. 80, No. 44 / Friday, March 6, 2015 / Proposed Rules 12099
been inappropriately interpreted by reported on S’s tax return for the short rule applies ‘‘for all federal income tax
taxpayers. The current next day rule period ending on the day of S’s change purposes,’’ it may be unclear whether
provides that a determination of in status. The proposed regulations are the transferee becomes a member
whether a transaction is ‘‘properly expected to afford taxpayers and the IRS ‘‘immediately after the transaction,’’
allocable’’ to the portion of S’s day after greater certainty regarding the period to whether the transaction is an
the event resulting in S’s change in which S’s tax items resulting from such intercompany transaction, and whether
status is respected if it is ‘‘reasonable a transaction are allocated. section 357(c) could apply to the
and consistently applied by all affected transaction.
C. Previous Day Rule To eliminate possible confusion
persons.’’ In determining whether an
allocation is ‘‘reasonable,’’ certain As noted in section 2 of this arising from application of the current
factors enumerated in the current preamble, the special rule for S end of the day rule and related rules,
regulations are to be considered, corporations provides an exception to these proposed regulations provide that
including whether tax items arising the end of the day rule if an S the end of the day rule, the proposed
from the same transaction are allocated corporation joins a consolidated group. next day rule, the S corporation
inconsistently. Some taxpayers have To avoid creating a one-day C exception, and the previous day rule
interpreted these rules as providing corporation tax return for the apply for purposes of determining the
flexibility in reporting tax items that termination date, the S corporation period in which S must report its tax
result from transactions occurring on exception provides that S becomes a items, as well as for purposes of sections
the day of S’s change in status so that member of the group at the beginning of 382(h) and 1374 (discussed in section
those items can be allocated by the termination date, and that S’s 3.I. of this preamble).
agreement to the day of, or to the day taxable year ends for all federal income
tax purposes at the end of the preceding E. Extraordinary Items
following, S’s change in status. The IRS
and the Treasury Department view this day. The proposed next day rule
interpretation of the current next day Although these proposed regulations mandatorily applies to extraordinary
rule as inappropriate because it retain the S corporation exception, the items that result from a transaction that
effectively would permit taxpayers to proposed regulations add a previous day occurs on the day of S’s change in status
elect the income tax return on which rule that mirrors the principles of the but after the event that causes the
these tax items are reported and proposed next day rule. Whereas the change. In contrast, the previous day
therefore may not result in an allocation proposed next day rule requires rule mandatorily applies to
that clearly reflects taxable income. This extraordinary items resulting from extraordinary items that result from a
electivity is inconsistent with the transactions that occur on the day of S’s transaction that occurs on the day of S’s
purpose of § 1.1502–76(b) to clearly change in status (but after the event change in status but before or
reflect the income of S and the causing the change) to be allocated to simultaneously with the event that
consolidated group. Further, the IRS S’s tax return for the short period that causes S’s status as an S corporation to
and the Treasury Department have begins the following day, the previous terminate.
observed that the current regulations day rule requires extraordinary items One category of extraordinary items,
create controversy between taxpayers resulting from transactions that occur on set forth in § 1.1502–76(b)(2)(ii)(C)(9) of
and the IRS as to whether certain of S’s the termination date (but before or the current regulations, applies to any
tax items that become reportable on the simultaneously with the event causing ‘‘compensation-related deduction in
day of S’s change in status are properly S’s status as an S corporation to connection with S’s change in status.’’
allocated to S’s tax return for the period terminate) to be allocated to S’s tax The proposed regulations clarify that
ending that day rather than to S’s tax return for the short period that ends on this category of extraordinary items
return for the period beginning the next the previous day (that is, the day includes (among other items) a
day. preceding the termination date). deduction for fees for services rendered
The proposed next day rule is in connection with S’s change in status.
D. Revised Scope of the End of the Day For example, if payment of a fee for the
intended to eliminate the perceived Rule and Related Rules
electivity and the source of these services of a financial adviser is
controversies. Under the proposed Under the current end of the day rule, contingent upon a successful
regulations, the application of the S becomes or ceases to be a member at acquisition of S’s stock, to the extent the
proposed next day rule is mandatory the end of the day on which its status fee gives rise to a deduction, the
rather than elective—if an extraordinary as a member changes, and its tax year deduction for the accrual of that
item results from a transaction that ends ‘‘for all federal income tax expense is an extraordinary item, and
occurs on the day of S’s change in purposes’’ at the end of that day. the deduction is allowable only in S’s
status, but after the event resulting in However, applying the end of the day taxable year that ends at the close of the
the change, and if the item would be rule for purposes other than the day of the change.
taken into account by S on that day, the reporting of S’s tax items could yield The IRS and the Treasury Department
transaction resulting in the results inconsistent with other request comments as to whether the list
extraordinary item is treated as consolidated return rules. For example, of extraordinary items set forth in
occurring at the beginning of the under §§ 1.1502–13 and 1.1502– § 1.1502–76(b)(2)(ii)(C) should be
following day for purposes of 80(d)(1), if a member contributes modified to include any item not
determining the period in which S must property subject to a liability in excess currently listed or whether any item
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report the item. of the property’s basis to a nonmember currently included should be deleted or
The proposed regulations also provide in exchange for the nonmember’s stock, modified. Specifically, the IRS and the
that the proposed next day rule is and if the transferee becomes a member Treasury Department are considering
inapplicable to items that arise of the transferor’s consolidated group as whether the item in § 1.1502–
simultaneously with the event that a result of the exchange, the transaction 76(b)(2)(ii)(C)(5) (‘‘[a]ny item carried to
causes S’s change in status. Under the is treated as an intercompany or from any portion of the original year
end of the day rule (as revised by these transaction and section 357(c) does not (e.g., a net operating loss carried under
proposed regulations), those items are apply. However, if the end of the day section 172), and any section 481(a)
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![12100 Federal Register / Vol. 80, No. 44 / Friday, March 6, 2015 / Proposed Rules
adjustment’’) should be modified to in which S owns an interest, and built-in loss treated as an RBIL further
include ‘‘any section 481(a) adjustment whether any other changes should be reduces the outstanding NUBIL balance.
or the acceleration thereof,’’ and made to § 1.1502–76(b)(2)(vi) of the In many cases, the event that causes
whether the item in § 1.1502– current regulations. S’s change in status for purposes of
76(b)(2)(ii)(C)(6) (‘‘[t]he effects of any § 1.1502–76(b)(1)(ii) also causes S to
change in accounting method initiated H. Anti-Avoidance Rule undergo an ownership change for
by the filing of the appropriate form Under § 1.1502–76(b)(3) of the current purposes of section 382. Thus, an item
after S’s change in status’’) should regulations, if any person acts with a of deduction or loss that becomes
continue to be included in the list of principal purpose contrary to the reportable on the day of S’s change in
extraordinary items. purposes of § 1.1502–76(b) to status falls within the recognition
The IRS and the Treasury Department substantially reduce the federal income period beginning that day, even if the
also request comments as to whether tax liability of any person (prohibited item is allocated to S’s short period
any extraordinary item should be purpose), adjustments must be made as ending that day under the end of the
excluded, in whole or in part, from necessary to carry out the purposes of day rule. As a consequence, an item that
application of the next day rule and the should be a pre-change loss is treated as
§ 1.1502–76 of the current regulations
previous day rule. In particular, the IRS an RBIL that reduces the outstanding
(anti-avoidance rule). The proposed
and the Treasury Department request NUBIL balance. For example, assume
regulations clarify that the anti-
comments as to whether the consolidated group A sells all of S’s
avoidance rule may apply to situations
extraordinary items set forth in stock to consolidated group B. If on the
in which a person modifies an existing
§ 1.1502–76(b)(2)(ii)(C)(5) and (6) of the day of S’s change in status (but before
contract or other agreement in
current regulations should be excluded, the event causing the change), S
anticipation of S’s change in status in
in whole or in part, from application of recognizes a loss on the sale of an asset,
order to shift an item between the
these rules. under the end of the day rule the loss
taxable years that end and begin as a
is reported on group A’s consolidated
F. Ratable Allocation result of S’s change in status if such return. However, notwithstanding that
Rather than require S to perform a actions are undertaken with a the loss may not be claimed by group B,
closing of the books on the day of its prohibited purpose. The IRS and the the loss may be treated as an RBIL and
change in status, the current regulations Treasury Department request comments reduce the outstanding NUBIL balance.
under § 1.1502–76(b)(2)(ii) permit S’s regarding this proposed amendment to To prevent such an outcome, these
tax items, other than the extraordinary the anti-avoidance rule. proposed regulations provide that, for
items, to be ratably allocated between I. Coordination With Sections 382(h) purposes of section 382(h), items
S’s two short taxable years if certain and 1374 includible in the short taxable year that
conditions are met. The IRS and the ends as a result of S’s change in status
Treasury Department request comments 1. Section 382 (including items allocated to that
as to whether S no longer should be taxable year under the end of the day
For purposes of section 382, the term
permitted to elect to ratably allocate its rule) are not treated as occurring in the
recognized built-in loss (RBIL) means
tax items between the periods ending recognition period. Rather, only items
any loss recognized during the
and beginning with S’s change in status. includible in S’s short taxable year that
recognition period on the disposition of
G. Certain Foreign Entities any asset held by the loss corporation begins as a result of S’s change in status
immediately before the date of the (including items allocated to that
Solely for purposes of determining the taxable year under the proposed next
short taxable year of S to which the section 382 ownership change (change
date), to the extent the loss reflects a day rule) are treated as occurring in the
items of a passthrough entity in which recognition period. Therefore, the
S owns an interest are allocated, built-in loss on the change date. Section
beginning of the recognition period for
§ 1.1502–76(b)(2)(vi)(A) of the current 382(h)(2)(B). The term recognition
purposes of section 382(h) would
regulations generally provides that S is period means the five-year period
correspond with the beginning of S’s
treated as selling or exchanging its beginning on the change date. Section
short taxable year that begins on the day
entire interest in the entity immediately 382(h)(7)(A).
after S’s change in status.
before S’s change in status. This rule Section 382(h)(1)(B) generally
does not apply to certain foreign provides that if a loss corporation has a 2. Section 1374
corporations the ownership of which net unrealized built-in loss (NUBIL), Section 1374 generally imposes a
may give rise to deemed income then any RBIL taken into account in a corporate-level tax (section 1374 tax) on
inclusions under the Code. In addition, taxable year any portion of which falls the recognition of gain by an S
a deemed income inclusion from a in the recognition period (recognition corporation that formerly was a C
foreign corporation and a deferred tax period taxable year) is treated as a corporation (or that acquired assets from
amount from a passive foreign deduction subject to the loss a C corporation in a transferred basis
investment company under section 1291 corporation’s section 382 limitation as if transaction) during a recognition period
are treated as extraordinary items under the RBIL were a pre-change loss. The specified in section 1374(d)(7) (section
§ 1.1502–76(b)(2)(ii)(C)(11). The IRS and amount of RBILs subject to the section 1374 recognition period), but only to the
the Treasury Department request 382 limitation in any recognition period extent of the corporation’s net
comments as to whether such deemed taxable year is limited, however, to the recognized built-in gain (as defined in
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income inclusions or deferred tax excess of the NUBIL over total RBILs in section 1374(d)(2)) for a given taxable
amounts should continue to be treated prior taxable years ending in the year. The section 1374 tax also applies
as extraordinary items, whether rules recognition period. (The amount of such to certain tax items attributable to the
having similar effects to the rule in excess is referred to in this preamble as corporation’s C corporation taxable
§ 1.1502–76(b)(2)(vi)(A) relating to the outstanding NUBIL balance.) In years. In addition, regulations under
passthrough entities should be adopted other words, the amount of the NUBIL section 337(d) extend section 1374
for controlled foreign corporations and limits the amount of RBILs that are treatment to (1) a C corporation’s
passive foreign investment companies treated as pre-change losses, and any conversion to a real estate investment
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![12102 Federal Register / Vol. 80, No. 44 / Friday, March 6, 2015 / Proposed Rules
Proposed Amendments to the (b) * * * ■ Par. 8. Section 1.1502–76 is amended:
Regulations (3) * * * ■ 1. By adding a sentence at the end of
(iii) Short years in connection with paragraph (b)(1)(i).
Accordingly, 26 CFR part 1 is
intercompany transactions to which ■ 2. By revising paragraphs (b)(1)(ii)(A)
proposed to be amended as follows:
section 381(a) applies. If a member and (B).
PART 1—INCOME TAXES distributes or transfers assets in an ■ 3. By adding paragraph (b)(1)(ii)(D).
intercompany transaction to which ■ 4. By adding a sentence at the end of
■ Paragraph 1. The authority citation section 381(a) applies, see § 1.1502– paragraph (b)(2)(i).
for part 1 continues to read in part as 76(b)(2)(i). ■ 5. By revising paragraph
follows: * * * * * (b)(2)(ii)(C)(9).
Authority: 26 U.S.C. 7805 * * * (h) * * * ■ 6. By removing the last sentence of
(1) * * * paragraph (b)(2)(iii).
Section 1.1361–5 also issued under 26
(iv) Paragraph (b)(3)(iii) of this section ■ 7. By removing the last sentence of
U.S.C. 1361. * * *
Section 1.1362–3 also issued under 26 applies to consolidated return years paragraph (b)(2)(v).
U.S.C. 1362. * * * beginning on or after the date these ■ 8. In paragraph (b)(2)(vi)(C) by
Section 1.1502–13 also issued under 26 regulations are published as final removing ‘‘paragraph (b)(2)(v)’’ and
U.S.C. 1502. * * * regulations in the Federal Register. For adding ‘‘paragraph (b)(2)(vi)’’ in its
Section 1.1502–21 also issued under 26 transactions occurring before the date place.
U.S.C. 1502. * * * these regulations are published as final ■ 9. By revising paragraph (b)(3).
Section 1.1502–22 also issued under 26 regulations in the Federal Register, see ■ 10. By adding a sentence at the end of
U.S.C. 1502. * * * paragraph (b)(4).
Section 1.1502–28 also issued under 26 § 1.1502–21(b) as contained in 26 CFR
part 1, revised as of April 1 preceding ■ 11. By adding Examples 8, 9, and 10
U.S.C. 1502. * * *
Section 1.1502–76 also issued under 26 the date these regulations are published to paragraph (b)(5).
U.S.C. 382(m) and 26 U.S.C. 1502. * * * as final regulations in the Federal ■ 12. By revising paragraph (b)(6).
Register. The revisions and additions read as
§ 1.1361–5 [Amended] follows:
* * * * *
■ Par. 2. Section 1.1361–5 is amended: ■ Par. 6. Section 1.1502–22 is amended
■ 1. In paragraph (a)(3), by removing § 1.1502–76 Taxable year of members of
by: group.
‘‘§ 1.1502–76(b)(1)(ii)(A)(2) (relating to a ■ 1. Revising paragraph (b)(4)(i).
special rule’’ and adding ‘‘§ 1.1502– * * * * *
■ 2. Revising the heading of paragraph
76(b)(1)(ii)(B) (relating to special rules’’ (b) * * *
(h). (1) * * *
in its place. ■ 3. Adding paragraph (h)(1)(iii).
■ 2. In paragraph (a)(4), Example 4, by The revisions and addition read as (i) * * * If a corporation (S) becomes
removing ‘‘§ 1.1502–76(b)(1)(ii)(A)(2)’’ follows: or ceases to be a member in a stock
and adding ‘‘§ 1.1502–76(b)(1)(ii)(B)(1)’’ disposition or purchase for which an
in its place. § 1.1502–22 Consolidated capital gain and election under section 336(e) or section
loss. 338 is made, paragraphs (b)(1)(ii),
§ 1.1362–3 [Amended] * * * * * (b)(2)(ii), and (b)(2)(iii) of this section do
■ Par. 3. Section 1.1362–3 is amended (b) * * * not apply to the transaction.
in paragraph (a) by removing ‘‘§ 1.1502– (4) Special rules—(i) Short years in (ii) * * *
76(b)(1)(ii)(A)(2)’’ and adding connection with intercompany (A) In general—(1) End of the day
‘‘§ 1.1502–76(b)(1)(ii)(B)’’ in its place. transactions to which section 381(a) rule. If S becomes or ceases to be a
■ Par. 4. Section 1.1502–13 is amended applies. If a member distributes or member during a consolidated return
by adding Example 3(e) to paragraph transfers assets in an intercompany year, S’s tax year ends, and (except as
(c)(7)(ii) to read as follows: transaction to which section 381(a) provided in paragraph (b)(1)(ii)(A)(2) or
applies, see § 1.1502–76(b)(2)(i). paragraph (b)(1)(ii)(B) of this section) for
§ 1.1502–13 Intercompany transactions.
* * * * * purposes of determining the period in
* * * * * which S must report an item of income,
(c) * * * (h) Effective/applicability date—
(1) * * * gain, deduction, loss, or credit, S is
(7) * * *
(ii) * * * (iii) Paragraph (b)(4)(i) of this section treated as becoming or ceasing to be a
Example 3. * * * applies to consolidated return years member at the end of the day on which
(e) Liability in excess of basis. The facts are beginning on or after the date these its status as a member changes (end of
the same as in paragraph (a) of this Example regulations are published as final the day rule).
3, except that S and B are not members of the regulations in the Federal Register. For (2) Next day rule. If an extraordinary
same consolidated group immediately before transactions occurring before the date item (as defined in paragraph
S’s transfer of the land to B, and the land is these regulations are published as final (b)(2)(ii)(C) of this section) results from
encumbered with an $80 liability. regulations in the Federal Register, see a transaction that occurs on the day of
Immediately after the transfer, S and B are
members of the same consolidated group. § 1.1502–22(b) as contained in 26 CFR S’s change in status as a member, but
Thus, the transfer is an intercompany part 1, revised as of April 1 preceding after the event resulting in the change,
transaction to which section 357(c) does not the date these regulations are published and the item would be taken into
apply pursuant to § 1.1502–80(d). as final regulations in the Federal account by S on that day, the
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* * * * * Register. transaction resulting in the
■ Par. 5. Section 1.1502–21 is amended * * * * * extraordinary item is treated as
by revising paragraph (b)(3)(iii) and occurring at the beginning of the
adding paragraph (h)(1)(iv) to read as § 1.1502–28 [Amended] following day for purposes of
follows: ■ Par. 7. Section 1.1502–28 is amended determining the period in which S must
in paragraph (b)(11) by removing report the item (next day rule). The next
§ 1.1502–21 Net operating losses. ‘‘§ 1.1502–76(b)(1)(ii)(B)’’ and adding day rule does not apply to any
* * * * * ‘‘§ 1.1502–76(b)(1)(ii)(A)(2)’’ in its place. extraordinary item that becomes
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![12104 Federal Register / Vol. 80, No. 44 / Friday, March 6, 2015 / Proposed Rules
S was a member of the P group. Under extraordinary item (see paragraph electronic comment form provided on
§ 1.1502–32(b)(2)(i), P’s basis in its S stock is (b)(2)(ii)(C)(9) of this section) that becomes that site. An electronic copy of this
increased to reflect S’s $40 gain immediately deductible on July 1 simultaneously with the document is also available at the
before the redemption of S’s stock. event that terminates S’s election as an S
http://www.regulations.gov Web site.
(c) Partial redemption. The facts are the corporation. Under paragraph (b)(1)(ii)(B)(2)
same as in paragraph (a) of this Example 9, of this section, S’s obligation to pay the fee The Department will accept attachments
except that S distributes the land to P in is treated as becoming deductible on June 30 to electronic comments in Microsoft
redemption of 20 shares of P’s stock in S. under the previous day rule. Word, WordPerfect, Adobe PDF, or
Thus, immediately after the redemption, P Excel file formats only. The Department
owns 75% (60 shares/80 shares) of S’s (6) Effective/applicability date. will not accept any file formats other
outstanding stock, and S’s minority Paragraphs (b)(2)(i) and (b)(4) of this than those specifically listed here.
shareholder owns 25% (20 shares/80 shares). section apply to consolidated return Please note that the Department is
The redemption does not satisfy the years beginning on or after the date requesting that electronic comments be
requirements of section 302(b) and is treated these regulations are published as final
under section 302(d) as a distribution to submitted before midnight Eastern Time
regulations in the Federal Register. on the day the comment period closes
which section 301 applies. The end of the Otherwise, this paragraph (b) applies to
day rule does not apply for purposes of because http://www.regulations.gov
determining whether P and S are members of
corporations becoming or ceasing to be terminates the public’s ability to submit
the same consolidated group immediately members of consolidated groups on or comments at midnight Eastern Time on
after the redemption. Because P owns only after the date these regulations are the day the comment period closes.
75% of S’s stock immediately after the published as final regulations in the Commenters in time zones other than
redemption, the distribution is not an Federal Register. Eastern Time may want to consider this
intercompany distribution described in * * * * *
§ 1.1502–13(f)(2)(i). Thus, P may not exclude
so that their electronic comments are
any amount of the distribution that is a John Dalrymple, received. All comments sent via regular
dividend, and P’s basis in S’s stock is not Deputy Commissioner for Services and
or express mail will be considered
reduced under § 1.1502–32(b)(2)(iv). P may Enforcement. timely if postmarked on the day the
be entitled to a dividends received deduction
[FR Doc. 2015–05123 Filed 3–5–15; 8:45 am]
comment period closes.
under section 243(c) (but see section FOR FURTHER INFORMATION CONTACT:
1059(e)). For the reasons discussed in BILLING CODE 4830–01–P
James G. Touhey, Jr., Director, Torts
paragraph (b) of this Example 9, S’s gain
Branch, Civil Division, Department of
under section 311(b) must be reported under
the end of the day rule in S’s taxable year Justice, Washington, DC 20530, (202)
DEPARTMENT OF JUSTICE 616–4400.
ending June 30, during which S was a
member of the P group. 28 CFR Part 15 SUPPLEMENTARY INFORMATION:
(d) Distribution of loss property. The facts Posting of Public Comments. Please
are the same as in paragraph (a) of this [Docket No. CIV 150; AG Order No. 3504– note that all comments received are
Example 9, except that the land distributed 2015] considered part of the public record and
by S to P has a fair market value of $60 rather made available for public inspection
than $140. The end of the day rule applies RIN 1105–AB37
for purposes of determining the taxable year
online at http://www.regulations.gov
in which S must take into account its Determination That an Individual Shall and in the Department’s public docket.
realized loss on the distribution of the land. Not Be Deemed an Employee of the Such information includes personal
Thus, under the end of the day rule, S’s loss Public Health Service identifying information (such as your
on the distribution of the land, which occurs name, address, etc.) voluntarily
simultaneously with S’s ceasing to be a AGENCY: Department of Justice. submitted by the commenter.
member, is taken into account in S’s taxable ACTION: Proposed rule. You are not required to submit
year that ends as a result of the redemption. personal identifying information in
However, the end of the day rule does not SUMMARY: The proposed rule proposes order to comment on this rule.
apply for other purposes; for example, the criteria and a process by which the Nevertheless, if you want to submit
rule does not apply in determining whether Attorney General or designee may
the transaction is an intercompany personal identifying information (such
determine that an individual shall not as your name, address, etc.) as part of
distribution or in determining the attributes be deemed an employee of the Public
(as defined in § 1.1502–13(b)(6)) of the loss. your comment, but do not want it to be
Health Service for purposes of coverage posted online or made available in the
Therefore, because S is not a member
immediately after the distribution, S’s loss on under the Federal Tort Claims Act. public docket, you must include the
the distribution is not recognized under DATES: Written comments must be phrase ‘‘PERSONAL IDENTIFYING
section 311(a). Under the end of the day rule, postmarked on or before May 5, 2015, INFORMATION’’ in the first paragraph
the loss is taken into account as a noncapital, and electronic comments must be sent of your comment. You must also place
nondeductible expense on the P group’s on or before midnight Eastern time May all the personal identifying information
consolidated return, and under § 1.1502– 5, 2015.
32(b)(1)(i), P’s basis in its S stock is you do not want posted online or made
decreased by $40 immediately before S ADDRESSES: To ensure proper handling available in the public docket in the first
leaves the group. of comments, please reference ‘‘Docket paragraph of your comment and identify
Example 10. Extraordinary item of S No. CIV 150’’ on all written and what information you want redacted.
corporation—(a) Facts. On July 1, P electronic correspondence. Written If you want to submit confidential
purchases all the stock of S, an accrual-basis comments being sent via regular or business information as part of your
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corporation with an election in effect under express mail should be sent to James G. comment, but do not want it to be
section 1362(a). Prior to the sale, S had Touhey, Jr., Director, Torts Branch, Civil posted online or made available in the
engaged a consulting firm to find a buyer for
Division, Department of Justice, Room public docket, you must include the
S’s stock, and the consulting firm’s fee was
contingent upon the successful closing of the 8098N National Place Building, 1331 phrase ‘‘CONFIDENTIAL BUSINESS
sale of S’s stock. Pennsylvania Avenue NW., Washington, INFORMATION’’ in the first paragraph
(b) Analysis. To the extent S’s payment of DC 20530. Comments may also be sent of your comment. You must also
the success-based fee to its consultants is electronically through http:// prominently identify confidential
otherwise deductible, this item is an www.regulations.gov using the business information to be redacted
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Document Created: 2018-02-21 09:33:15
Document Modified: 2018-02-21 09:33:15
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Proposed Rules | |
| Action | Notice of proposed rulemaking. | |
| Dates | Written or electronic comments and requests for a public hearing must be received by June 4, 2015. | |
| Contact | Concerning the proposed regulations, Russell G. Jones, (202) 317-6847; concerning the submission of comments or to request a public hearing, Oluwafunmilayo (Funmi) P. Taylor, (202) 317-6901 (not toll-free numbers). | |
| FR Citation | 80 FR 12097 | |
| RIN Number | 1545-BM14 | |
| CFR Associated | Income Taxes and Reporting and Recordkeeping Requirements |
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