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CFR Citation: 26 CFR Part 1

RIN ID: RIN 1545-BD12

TD ID: [TD 9138]

NOTICE: RULES

ACTION: Income taxes:

DOCUMENT ACTION: Removal of temporary regulation.

SUBJECT CATEGORY: Transitional Rule for Vested Accrued Vacation Pay

DOCUMENT SUMMARY: This document removes a temporary regulation that provides a rule for an election to deduct vested accrued vacation pay for the first taxable year ending after July 18, 1984. The repeal of the underlying code section in 1987 has rendered the temporary regulation obsolete. The removal of this regulation will not affect taxpayers.

SUMMARY: Vested accrued vacation pay; transitional rule; temporary regulation removed,

SUPPLEMENTAL INFORMATION

Prior to repeal in 1987, section 463 of the Internal Revenue Code (Code) permitted taxpayers to elect to deduct reasonable additions to a reserve account for vacation pay, including amounts earned by employees before the close of the taxable year that, because of contingencies, would not be deductible under section 162(a) as an accrued expense. In connection with the enactment of the economic performance rules under section 461(h), section 91(i) of the Tax Reform Act of 1984, Public Law 98369 (98 Stat. 494, 609), provided a transitional rule under which certain taxpayers could make an election under section 463 for the first taxable year ending after July 18, 1984. On February 4, 1986, the IRS and Treasury published temporary regulation Sec. 1.4631T (TD 8073) in the Federal Register (51 FR 4312), as amended on April 2, 1986, (51 FR 11302), to provide guidance on making the election under section 463 pursuant to the transitional rule. The repeal of section 463 by section 10201(a) of the Revenue Act of 1987, Public Law 100203 (101 Stat. 1330382, 1330387), has rendered temporary regulation Sec. 1.4631T obsolete.

Special Analyses

It has been determined that the removal of this regulation is not a [[Page 42560]]
significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. Because this rule merely removes regulatory provisions made obsolete by statute, prior notice and comment and a delayed effective date are unnecessary and contrary to the public interest. 5 U.S.C. 553(b)(B) and (d)(3). Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply.

Drafting Information

The principal author of this Treasury decision is Jamie J. Kim of the Office of Associate Chief Counsel (Income Tax and Accounting), IRS. List of Subjects in 26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements. Removal of Temporary Regulation
Accordingly, 26 CFR Part 1 is amended as follows:
PART 1INCOME TAXES
Paragraph 1. The authority citation for part 1 continues to read, in part, as follows:

Authority: 26 U.S.C. 7805 * * *
Sec. 1.4631T [Removed]
Par. 2. Section 1.4631T is removed.

Approved: July 7, 2004.
Mark E. Matthews,
Deputy Commissioner for Services and Enforcement.
Gregory F. Jenner,
Acting Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 0416090 Filed 71504; 8:45 am]
BILLING CODE 483001P

FOR FURTHER INFORMATION CONTACT Jamie J. Kim at (202) 622-4950 (not a tollfree number).