[Federal Register Volume 71, Number 49 (Tuesday, March 14, 2006)]
[Proposed Rules]
[Pages 13062-13063]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-2437]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-164247-05]
RIN 1545-BF30


Agent for a Consolidated Group With Foreign Common Parent

AGENCY: Internal Revenue Service (IRS), Treasury.

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

-----------------------------------------------------------------------

SUMMARY: In the Rules and Regulations section of this issue of the 
Federal Register, the IRS is issuing regulations that provide the IRS 
with the authority to designate a domestic member of the consolidated 
group as a substitute agent to act as the sole agent for the group 
where a foreign entity is the common parent. These regulations affect 
corporations that join in the filing of a consolidated Federal income 
tax return where the common parent of the consolidated group is treated 
as a domestic corporation pursuant to section 7874(b) of the Internal 
Revenue Code (Code) or as a result of a section 953(d) election. The 
text of the temporary 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 June 12, 2006.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-164247-05), 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-
164247-05), 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-REG-164247-05).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Stephen R. Cleary, (202) 622-7750, concerning submissions of comments, 
Kelly Banks, (202) 622-7180 (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 amends 26 CFR part 1 relating to section 
1502. The temporary regulations add Sec.  1.1502-77T. The text of those 
temporary regulations also serves as the text of these proposed 
regulations. The preamble to the temporary regulations explains the 
amendments.

Special Analysis

    It has been determined that this proposed regulation is not a 
significant regulatory action as defined in Executive Order 12866. 
Therefore, a regulatory assessment is not required. It is hereby 
certified that this proposed regulation will not have a significant 
economic impact on a substantial number of small entities. This 
certification is based on the fact that the regulation merely grants 
authority to the IRS to change the agent for the consolidated group, 
that members of consolidated groups are generally large corporations 
rather than small businesses, and few small businesses are likely to be 
members of a consolidated group with a foreign common parent as a 
result of a transaction subject to section 7874 or a section 953(d) 
election. Therefore, a regulatory flexibility analysis is not required. 
Pursuant to section 7805(f) of the Code, these proposed regulations 
have been submitted to the Chief Counsel for Advocacy of the Small 
Business Administration for comment on their 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. The IRS and Treasury Department specifically request 
comments on the clarity of the proposed rules and how they may 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 that timely submits written comments. If a 
public hearing is scheduled, notice of the date, time, and place for 
the public hearing will be published in the Federal Register.

Drafting Information

    The principal author of these regulations is Stephen R. Cleary of 
the Office of Associate Chief Counsel (Corporate). Other personnel from 
the Treasury Department 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:

PART 1--INCOME TAXES

    Paragraph 1. The authority citation for part 1 continues to read, 
in part, as follows:


[[Page 13063]]


    Authority: 26 U.S.C. 7805 * * *

    Par. 2. Section 1.1502-77 is amended by adding paragraph (j) to 
read as follows:


Sec.  1.1502-77  Agent for the group.

* * * * *
    (j) [The text of the proposed amendment to Sec.  1.1502-77(j) is 
the same as the text of Sec.  1.1502-77T(j) published elsewhere in this 
issue of the Federal Register.]

Mark E. Matthews,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 06-2437 Filed 3-9-06; 4:15 pm]
BILLING CODE 4830-01-P