[Federal Register Volume 70, Number 155 (Friday, August 12, 2005)]
[Rules and Regulations]
[Pages 47108-47109]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-15827]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9205]
RIN 1545-BE17


Credit for Increasing Research Activities; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

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SUMMARY: This document corrects temporary regulations (TD 9205) that 
were published in the Federal Register on Tuesday, May 24, 2005 (70 FR 
29596). The document contains temporary regulations relating to the 
computation and allocation of the credit for increasing research 
activities for members of a controlled group of corporations or a group 
of trades or businesses under common control.

DATES: This correction is effective on May 24, 2005.

FOR FURTHER INFORMATION CONTACT: Nicole R. Cimino, (202) 622-3120 (not 
a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    The temporary regulations (TD 9205) that is the subject of this 
correction are under section 41(f).

Need for Correction

    As published, the temporary regulations (TD 9205) contain errors 
that may prove to be misleading and are in need of clarification.

List of Subjects in 26 CFR Part 1

    Income Tax, Reporting and recordkeeping requirements.

Correction of Publication

0
Accordingly, 26 CFR part 1 is corrected by making the following 
correcting amendment:

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.  1.41-6T  [Corrected]

0
1. Section 1.41-6T(e) Example 2 (i), the first line in the table is 
revised to read as follows:

----------------------------------------------------------------------------------------------------------------
                                                                                                         Group
                                                               D          E          F          G      Aggregate
----------------------------------------------------------------------------------------------------------------
Credit Year QREs.........................................      $580x       $10x       $70x       $15x      $675x
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------


0
2. Section 1.41-6T(e) Example 2 (i), second line in the table is 
revised to read as follows:

----------------------------------------------------------------------------------------------------------------
                                                                                                         Group
                                                               D          E          F          G      Aggregate
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
                                                               $500x       $25x      $100x       $25x      $650x
----------------------------------------------------------------------------------------------------------------


0
3. Section 1.41-6T(e) Example 2 (ii)(B)(1), the first sentence is 
revised to read as follows: ``The group's base amount equals the 
greater of: the group's fixed-base percentage (3.10 percent) multiplied 
by the group's aggregate average annual gross receipts for the 4 
taxable years preceding the credit year ($17,000x), or the group's 
minimum base amount ($337.50x).''

0
4. Section 1.41-6T(e) Example 2 (iii), the eighth sentence is revised 
to read as follows: ``Because the group credit of $29.76x is greater 
than the sum of the stand-alone entity credits of all the members of 
the group ($21.67x), each member of the group is allocated an amount of 
the group credit equal to that member's stand-alone equity credit.''

0
5. Section 1.41-6T(e) Example 2 (iii), the ninth sentence is revised to 
read as follows: ``The excess of the group credit over the sum of the 
members' stand alone entity credits ($8.09x) is allocated among

[[Page 47109]]

the members of the group based on the ratio that each member's QREs 
bear to the sum of the QREs of all the members of the group.''

0
6. Section 1.41-6T(e) Example 2 (iii), the fourth line in the table is 
revised to read as follows:

----------------------------------------------------------------------------------------------------------------
                                                               D          E          F          G        Total
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
Excess Group Credit......................................     $8.09x     $8.09x     $8.09x     $8.09x  .........
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------


0
7. Section 1.41-6T(e) Example 3 (ii)(C), the second sentence is revised 
to read as follows: ``The excess of the group credit over the sum of 
the members' stand-alone entity credits ($10.00x) is allocated among 
the members of the group based on the ratio that each member's QREs 
bear to the sum of the QREs of all the members of the group.''

0
8. Section 1.41-6T(e) Example 3 (ii)(C), the fourth line in the table 
is revised to read as follows:

------------------------------------------------------------------------
                                  DE         F          G        Total
------------------------------------------------------------------------
 
                              * * * * * * *
Excess Group Credit.........    $10.00x    $10.00x    $10.00x  .........
 
                              * * * * * * *
------------------------------------------------------------------------


0
9. Section 1.41-6T(e) Example 3 (iii)(C), the fourth line in the table 
is revised to read as follows:

------------------------------------------------------------------------
                                             D          E        Total
------------------------------------------------------------------------
 
                              * * * * * * *
Excess Group Credit....................     $6.83x     $6.83x  .........
 
                              * * * * * * *
------------------------------------------------------------------------


0
10. Section 1.41-6T(e) Example 5 (iii), the first sentence is revised 
to read as follows: ``Under paragraph (c)(2) of this section, the 
stand-alone entity credit for each member of the group must be computed 
using the method that results in the greater stand-alone entity credit 
for that member.''

0
11. Section 1.41-6T(j), the second sentence is revised to read as 
follows: ``Generally, a taxpayer may use any reasonable method of 
computing and allocating the credit for taxable years ending before May 
24, 2005.''


Guy Traynor,
Acting Chief, Publications and Regulations Branch, Legal Processing 
Division, Associate Chief Counsel, (Procedures and Administration).
[FR Doc. 05-15827 Filed 8-11-05; 8:45 am]
BILLING CODE 4830-01-P