[Federal Register Volume 63, Number 7 (Monday, January 12, 1998)]
[Proposed Rules]
[Pages 1803-1804]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-44]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG-104062-97]
RIN 1545-AV88
Consolidated Returns--Limitations on the Use of Certain Losses
and Credits
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking by cross-reference to temporary
regulations and notice of public hearing.
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SUMMARY: In the Rules and Regulations section of this issue of the
Federal Register, the IRS is issuing temporary regulations that will
govern the use of certain tax credits and losses of a consolidated
group and its members. The text of those temporary regulations also
serves as the text of these proposed regulations. This document also
provides notice of a public hearing on these proposed regulations.
DATES: Written comments and outlines of topics to be discussed at the
public hearing scheduled for May 7, 1998, must be received by April 13,
1998.
ADDRESSES: Send submissions to: CC:DOM:CORP:R [REG-104062-97], room
5226, Internal Revenue Service, POB 7604, Ben Franklin Station,
Washington, DC 20044. Submissions may be hand delivered between the
hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R [REG-104062-97], Courier's
Desk, Internal Revenue Service, 1111 Constitution Avenue, NW.,
Washington, DC. Alternatively, taxpayers may submit comments
electronically via the Internet by selecting the ``Tax Regs'' option on
the Home Page or by submitting comments directly to the IRS Internet
site at: http://www.irs.ustreas.gov/prod/tax__regs/comments.html. The
public hearing has been scheduled for May 7, 1998, at 10 a.m., in room
2615, Internal Revenue Building, 1111 Constitution Avenue, NW.,
Washington DC.
FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations,
in general, Roy Hirschhorn (202) 622-7770; concerning amendments
related to foreign tax credits and foreign losses, Seth Goldstein (202)
622-3850; concerning submissions and the hearing, Mike Slaughter (202)
622-7190 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
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. The temporary regulations provide
rules that will govern the use of certain tax credits and losses of a
consolidated group and its members. The text of those temporary
regulations also serves as the text of these proposed regulations. The
preamble to the temporary regulations explains the temporary
regulations.
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in EO 12866. Therefore,
a regulatory assessment is not required. It is hereby certified that
these regulations do not have a significant economic impact on a
substantial number of small entities. This certification is based on
the fact that these regulations principally affect persons filing
consolidated federal income tax returns that have carryover or
carryback of credits from separate return limitation years. Available
data indicates that many consolidated return filers are large companies
(not small businesses). In addition, the data indicates that an
insubstantial number of consolidated return filers that are smaller
companies have credit carryovers or carrybacks, and thus even fewer of
these filers have credit carryovers or carrybacks that are subject to
the separate return limitation year rules. Therefore, 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.
Comments and Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments (a signed original
and eight (8) copies) that are submitted timely to the IRS. All
comments will be made available for public inspection and copying.
A public hearing has been scheduled for May 7, 1998, at 10 a.m., in
room 2615. Because of access restrictions, visitors will not be
admitted beyond the Internal Revenue Building lobby more than 15
minutes before the hearing starts.
The rules of 26 CFR 601.601(a)(3) apply to the hearing.
Persons who wish to present oral comments at the hearing must
submit written comments and an outline of the topics (signed original
and eight (8) copies) to be discussed by April 13, 1998.
A period of 10 minutes will be allotted to each person for making
comments.
An agenda showing the scheduling of the speakers will be prepared
after the deadline for receiving outlines has passed. Copies of the
agenda will be available free of charge at the hearing.
Drafting Information
The principal author of these regulations is Roy A. Hirschhorn of
the Office of Assistant Chief Counsel (Corporate). Other personnel from
the IRS and Treasury participated in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
[[Page 1804]]
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for 26 CFR part 1 is amended by
adding entries in numerical order to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.1502-3 also issued under 26 U.S.C. 1502.
Section 1.1502-4 also issued under 26 U.S.C. 1502.
Section 1.1502-9 also issued under 26 U.S.C. 1502. * * *
Section 1.1502-23 also issued under 26 U.S.C. 1502. * * *
Section 1.1502-55 also issued under 26 U.S.C. 1502. * * *
Par. 2. In Sec. 1.1502-3, paragraph (c) is revised to read as
follows:
Sec. 1.1502-3 Consolidated investment credit.
* * * * *
(c) [The text of the proposed paragraph (c) of this section is the
same as the text of Sec. 1.1502-3T(c) published elsewhere in this issue
of the Federal Register.]
* * * * *
Par. 3. In Sec. 1.1502-4, paragraphs (f)(3) and (g)(3) are added to
read as follows:
Sec. 1.1502-4 Consolidated foreign tax credit.
* * * * *
(f) * * *
(3) [The text of the proposed paragraph (f)(3) of this section is
the same as the text of Sec. 1.1502-4T(f)(3) published elsewhere in
this issue of the Federal Register.]
(g) * * *
(3) [The text of the proposed paragraph (g)(3) of this section is
the same as the text of Sec. 1.1502-4T(g)(3) published elsewhere in
this issue of the Federal Register.]
* * * * *
Par. 4. In Sec. 1.1502-9, paragraph (b)(1)(v) is added to read as
follows:
Sec. 1.1502-9 Application of overall foreign losses recapture rules to
corporations filing consolidated returns.
* * * * *
(b) * * *
(1) * * *
(v) [The text of the proposed paragraph (b)(1)(v) of this section
is the same as the text of Sec. 1.1502-9T(b)(1)(v) published elsewhere
in this issue of the Federal Register.]
* * * * *
Par. 5. Section 1.1502-21, as proposed to be added at 61 FR 33394,
June 27, 1996, is amended in paragraph (c)(1)(iii) by adding Example 5.
to read as follows:
Sec. 1.1502-21 Net operating losses.
* * * * *
(c) * * *
(1) * * *
(iii) [The text of the proposed paragraph (c)(1)(iii) Example 5 of
this section is the same as the text of Sec. 1.1502-21T(c)(1)(iii)
Example 5 published elsewhere in this issue of the Federal Register].
* * * * *
Par. 6. Section 1.1502-23, as proposed to be added at 61 FR 33395,
June 27, 1996, is amended by redesignating paragraphs (b) and (c) as
paragraphs (c) and (d) and adding a new paragraph (b) to read as
follows:
Sec. 1.1502-23 Consolidated net section 1231 gain or loss.
* * * * *
(b) [The text of the proposed paragraph (b) of this section is the
same as the text of Sec. 1.1502-23T(b) published elsewhere in this
issue of the Federal Register.]
* * * * *
Par. 7. Section 1.1502-55, as proposed to be added at 57 FR 62257,
December 30, 1992, is amended by adding paragraph (h)(4)(iii) to read
as follows:
Sec. 1.1502-55 Computation of alternative minimum tax of consolidated
groups.
* * * * *
(h) * * *
(4) * * *
(iii) [The text of the proposed paragraph (h)(4)(iii) of this
section is the same as the text of Sec. 1.1502-55T(h)(4)(iii) published
elsewhere in this issue of the Federal Register.]
* * * * *
Michael P. Dolan,
Deputy Commissioner of Internal Revenue.
[FR Doc. 98-44 Filed 1-9-98; 8:45 am]
BILLING CODE 4830-01-P