[Federal Register Volume 69, Number 136 (Friday, July 16, 2004)]
[Rules and Regulations]
[Pages 42559-42560]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-16090]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9138]
RIN 1545-BD12


Transitional Rule for Vested Accrued Vacation Pay

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Removal of temporary regulation.

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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.

DATE: This Treasury decision is effective on July 15, 2004.

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

SUPPLEMENTARY INFORMATION:

Background

    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 
98-369 (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.  1.463-1T (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 100-203 
(101 Stat. 1330-382, 1330-387), has rendered temporary regulation Sec.  
1.463-1T 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

0
Accordingly, 26 CFR Part 1 is 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 * * *


Sec.  1.463-1T  [Removed]

0
Par. 2. Section 1.463-1T 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. 04-16090 Filed 7-15-04; 8:45 am]
BILLING CODE 4830-01-P