[Federal Register Volume 70, Number 99 (Tuesday, May 24, 2005)]
[Proposed Rules]
[Pages 29662-29663]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-10236]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-134030-04 and REG-133791-02]
RIN 1545-BD60 and RIN 1545-BA88


Credit for Increasing Research Activities

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations; notice of public hearing; and withdrawal of previously 
proposed regulations.

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SUMMARY: In the Rules and Regulations section of this issue of the 
Federal Register, the IRS is issuing temporary regulations relating to 
the computation and allocation of the credit for increasing research 
activities for members of a controlled group of corporations, including 
consolidated groups, or a group of trades or businesses under common 
control. The text of those regulations also serves as the text of these 
proposed regulations. This document also provides notice of a public 
hearing on these proposed regulations and withdraws the proposed 
regulations published in the Federal Register on July 29, 2003 (68 FR 
44499).

DATES: Written or electronic comments must be received by September 28, 
2005. Requests to speak and outlines of the topics to be discussed at 
the public hearing scheduled for October 19, 2005, at 10 a.m. must be 
received by September 28, 2005.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-134030-04), room 
5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand delivered Monday through 
Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-
134030-04), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue NW., Washington, DC 20224. 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 http://www.regulations.gov (IRS and REG-134030-04). The public hearing will be 
held in the Auditorium, 7th Floor, Internal Revenue Building, 1111 
Constitution Avenue, NW., Washington, DC 20224.

FOR FURTHER INFORMATION CONTACT: Concerning these proposed regulations, 
Nicole R. Cimino at (202) 622-3120; concerning submissions of comments, 
the hearing, and/or to be placed on the building access list to attend 
the hearing, Robin R. Jones at (202) 622-7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

    This document withdraws the notice of proposed rulemaking (REG-
133791-02) published on July 29, 2003 and amends the Income Tax 
Regulations (26 CFR 1) relating to section 41. The temporary 
regulations set forth the rules relating to the computation and 
allocation of the credit for increasing research activities for members 
of a controlled group of corporations, including consolidated groups, 
or a group of trades or businesses under common control under section 
41(f) for taxable years ending on or after December 31, 2004. The text 
of those 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. It also has 
been determined that section 553(b) of the Administrative Procedure Act 
(5 U.S.C. chapter 5) does not apply to these regulations and, because 
these regulations do not impose on small entities a collection of 
information requirement, the Regulatory Flexibility Act (5 U.S.C. 
chapter 6) does not apply. Therefore, a Regulatory Flexibility Analysis 
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 Requests for a 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) or electronic comments that are submitted timely 
to the IRS. All comments will be available for public inspection and 
copying.
    A public hearing has been scheduled for October 19, 2005, beginning 
at 10 a.m. in the Auditorium, 7th Floor, of the Internal Revenue 
Building, 1111 Constitution Avenue, NW., Washington, DC. Due to 
building security procedures, visitors must enter at the Constitution 
Avenue entrance. In

[[Page 29663]]

addition, all visitors must present photo identification to enter the 
building. Because of access restrictions, visitors will not be admitted 
beyond the immediate entrance area more than 30 minutes before the 
hearing starts. For information about having your name placed on the 
building access list to attend the hearing, see the FOR FURTHER 
INFORMATION CONTACT section of this preamble.
    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 to be discussed and the time to 
be devoted to each topic (signed original and eight (8) copies) by 
September 28, 2005. 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 Nicole R. Cimino, 
Office of the Associate Chief Counsel (Passthroughs and Special 
Industries). 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.

Withdrawal of Proposed Amendments to the Regulations

    Accordingly, under the authority of 26 U.S.C. 7805, the notice of 
proposed rulemaking (REG-133791-02) published in the Federal Register 
on July 29, 2003, (68 FR 44499) is withdrawn.

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 * * *
    Section 1.41-6 also issued under 26 U.S.C. 41(f).* * *

    Par. 2. In Sec.  1.41-0, the table of contents is amended as 
follows:


Sec.  1.41-0  Table of contents.

    [The text of proposed Sec.  1.41-0 is the same as the text of Sec.  
1.41-0 published elsewhere in this issue of the Federal Register].
    Par. 3. Section 1.41-6 is revised to read as follows:


Sec.  1.41-6  Aggregation of expenditures.

    [The text of proposed Sec.  1.41-6 is the same as the text of Sec.  
1.41-6T published elsewhere in this issue of the Federal Register].
    Par. 4. Section 1.41-8 is revised to read as follows:


Sec.  1.41-8.  Special rules for taxable years ending on or after 
January 3, 2001.

    [The text of proposed Sec.  1.41-8 is the same as the text of Sec.  
1.41-8T published elsewhere in this issue of the Federal Register].

Mark E. Matthews,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 05-10236 Filed 5-23-05; 8:45 am]
BILLING CODE 4830-01-P