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CFR Citation: 26 CFR Part 1

RIN ID: RIN 1545-BD57

REG ID: [REG-129274-04]

NOTICE: PROPOSED RULES

ACTION: Income taxes:

DOCUMENT ACTION: Notice of proposed rulemaking by cross reference to temporary regulations.

SUBJECT CATEGORY: Guidance Under Section 1502; Treatment of Loss Carryovers From Separate Return Limitation Years

DATES: Written and electronic comments and requests for a public hearing must be received by November 16, 2004.

DOCUMENT SUMMARY: In the Rules and Regulations section of this issue of the Federal Register, the Treasury Department and the IRS are issuing temporary regulations providing guidance regarding the treatment of certain losses available to acquired subsidiaries as a result of an election made under the section 1502 regulations. The text of these proposed regulations also serves as the text of the temporary regulations set forth in this issue of the Federal Register. These regulations apply to corporations filing consolidated returns.

SUMMARY: Investment adjustments; treatment of loss carryovers from separate return limitation years; section 1502 guidance; cross-reference,

SUPPLEMENTAL INFORMATION

Temporary regulations in the Rules and Regulations section of this issue of the Federal Register amend the Income Tax Regulations (26 CFR part 1) relating to section 1502 of the Internal Revenue Code (Code). The text of the temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the amendments.

Special Analyses

It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. Further, it is hereby certified that these regulations will not have a significant economic impact on a substantial number of small entities. This certification is based on the fact that these regulations will primarily affect affiliated groups of corporations that have elected to file consolidated returns, which tend to be larger businesses. Moreover, the number of taxpayers affected and the average burden are minimal. 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 Internal Revenue Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.
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Comments and Request for a Public Hearing

Before these proposed regulations are adopted as final regulations, the IRS will consider any electronic or written comments (a signed original and eight (8) copies) that the IRS timely receives. The IRS and Treasury Department request comments on the clarity of the proposed rules and how they can be made easier to understand. All comments will be available for public inspection and copying. A public hearing may be scheduled if requested in writing by a person who timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the hearing will be published in the Federal Register.

Drafting Information

The principal author of these regulations is Sean McKeever, Office of Associate Chief Counsel (Corporate). However, other personnel from the IRS and Treasury Department participated in their development. List of Subjects in 26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements. Proposed Amendments to the Regulations

Accordingly, 26 CFR part 1 is proposed to be 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 * * *
Par. 2. Section 1.150232 is amended by revising paragraph (b)(4)(v)(A) and (C).
Sec. 1.150232 Investment adjustments.
* * * * *
(b) * * *
(4) * * *
(v) [The text of this proposed paragraph is the same as the text of Sec. 1.150232T(b)(4)(v)(A) and (C) published elsewhere in this issue of the Federal Register].
* * * * *
Mark E. Matthews,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 0418834 Filed 81704; 8:45 am]
BILLING CODE 483001P

FOR FURTHER INFORMATION CONTACT Concerning submission of comments or requesting a hearing, Treena Garrett, (202) 6227180; concerning the proposed regulations, Sean McKeever, (202) 6227750 (not a tollfree number).