[Federal Register Volume 69, Number 159 (Wednesday, August 18, 2004)]
[Proposed Rules]
[Pages 51208-51209]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-18834]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-129274-04]
RIN 1545-BD57


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

AGENCY: Internal Revenue Service (IRS), Treasury.

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

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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.

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

ADDRESSES: Send submissions to CC:PA:LPD:PR (REG-129274-04), Room 5203, 
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, 
DC 20044. Submissions may be delivered Monday through Friday between 
the hours of 8 a.m. and 5 p.m. to CC:PA:LPD:PR (REG-129274-04), 
Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, 
NW., Washington, DC. Alternatively, taxpayers may submit electronic 
comments directly to the IRS Internet site at: http://www.irs.gov/regs 
or via the Federal eRulemaking Portal at www.regulations.gov (indicate 
IRS and REG-129274-04 or RIN 1545-BD57).

FOR FURTHER INFORMATION CONTACT: Concerning submission of comments or 
requesting a hearing, Treena Garrett, (202) 622-7180; concerning the 
proposed regulations, Sean McKeever, (202) 622-7750 (not a toll-free 
number).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

    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.

[[Page 51209]]

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 1--INCOME 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 1.1502-32 is amended by revising paragraph 
(b)(4)(v)(A) and (C).


Sec.  1.1502-32  Investment adjustments.

* * * * *
    (b) * * *
    (4) * * *
    (v) [The text of this proposed paragraph is the same as the text of 
Sec.  1.1502-32T(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. 04-18834 Filed 8-17-04; 8:45 am]
BILLING CODE 4830-01-P