[Federal Register Volume 71, Number 17 (Thursday, January 26, 2006)]
[Proposed Rules]
[Pages 4319-4320]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-586]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-138879-05]
RIN 1545-BE87


Treatment of Excess Loss Accounts

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 IRS is issuing temporary regulations that provide 
guidance under section 1502 that governs certain basis determinations 
and adjustments of subsidiary stock in certain transactions involving 
members of a consolidated group. The text of those regulations also 
serves as the text of these proposed regulations.

DATES: Written or electronic comments, and a request for a public 
hearing, must be received by April 26, 2006.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-138879-05), room 
5203, Internal Revenue Service, P.O. 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-
138879-05), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue, NW., Washington, DC, or sent electronically, via the IRS 
internet site at http://www.irs.gov/regs or via the Federal eRulemaking 
Portal at http://www.regulations.gov (IRS and REG-138879-05).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Theresa M. Kolish, (202) 622-7530, concerning submissions of comments, 
Sonya Cruse, (202) 622-4693 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

    Temporary Regulations in the Rules and Regulations section of this 
issue of the Federal Register amend 26 CFR part 1 relating to section 
1502. The temporary regulations add Sec.  1.1502-19T. The text of those 
regulations also serves as the text of these proposed regulations. The 
preamble to the temporary regulations explains the amendments included 
in these proposed regulations.

Special Analysis

    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 proposed 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 business. 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 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 copies) that are submitted timely to the IRS. Alternatively, 
taxpayers may submit comments electronically via the IRS Internet site 
at http://www.irs.gov/regs or via the Federal eRulemaking Portal at 
http://www.regulations.gov. 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 any person who timely submits written comments. If a 
public hearing is scheduled, notice of the date, time, and place of the 
hearing will be published in the Federal Register.

Drafting Information

    The principal authors of these regulations are Emidio J. Forlini, 
Jr. and Theresa M. Kolish of the Office of Associate Chief Counsel 
(Corporate). Other personnel from Treasury and the IRS 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:

[[Page 4320]]

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 1.1502-19 also issued under 26 U.S.C. 1502. * * *

    Par. 2. Section 1.1502-19 is amended by:
    1. Revising paragraph (d).
    2. Revising paragraph (g) Example 2.
    3. Revising the paragraph heading for paragraph (h).
    4. Adding paragraph (h)(2)(iv).
    5. Adding new paragraph (h)(3).
    The revisions and additions read as follows:


Sec.  1.1502-19  Excess Loss Accounts.

    [The text of the proposed Sec.  1.1502-19 is the same as the text 
for Sec.  1502-19T published elsewhere in this issue of the Federal 
Register].

Mark E. Matthews,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 06-586 Filed 1-23-06; 11:43 am]
BILLING CODE 4820-01-P