[Federal Register Volume 72, Number 231 (Monday, December 3, 2007)]
[Proposed Rules]
[Page 67878]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-23277]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-151884-03]
RIN 1545-BD81


Update and Revision of Sections 1.381(c)(4)-1 and 1.381(c)(5)-1; 
Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correction to notice of proposed rulemaking.

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SUMMARY: This document contains corrections to a notice of proposed 
rulemaking (REG-151884-03) that was published in the Federal Register 
on Friday, November 16, 2007, (72 FR 64545) providing guidance under 
sections 381(c)(4) and (c)(5) of the Internal Revenue Code relating to 
the accounting method or combination of methods, including the 
inventory method, to use after certain corporate reorganizations and 
tax-free liquidations.
    These proposed regulations clarify and simplify the existing 
regulations under sections 381(c)(4) and (c)(5). The regulations affect 
corporations that acquire the assets of other corporations in 
transactions described in section 381(a).

FOR FURTHER INFORMATION CONTACT: Cheryl Oseekey at (202) 622-4970 (not 
a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    The correction notice that is the subject of this document is under 
sections 381 and 446 of the Internal Revenue Code.

Need for Correction

    As published, the notice of proposed rulemaking (REG-151884-03) 
contains errors that may prove to be misleading and are in need of 
clarification.

Correction of Publication

    Accordingly, the publication of proposed rulemaking (REG-151884-
03), which was the subject of FR Doc. E7-22411, is corrected as 
follows:

Sec.  1.381(c)(5)-1 [Corrected]

    1. On page 64553, column 3, Sec.  1.381(c)(5)-1(a)(2)(i), lines 
three through thirteen, the language ``section 381(a) applies, if the 
acquiring corporation operates the trades or businesses of the parties 
to the section 381(a) transaction as separate and distinct trades or 
businesses after the date of the distribution or transfer, then the 
acquiring corporation generally must use the same accounting method(s) 
for inventory used by the distributor or transferor corporation(s) on 
the date of the section 381(a) transaction (carryover'' is corrected to 
read ``section 381(a) applies, if an acquiring corporation operates the 
trades or businesses of the parties to the section 381(a) transaction 
as separate and distinct trades or businesses after the date of 
distribution or transfer, then the acquiring corporation generally must 
use the same accounting method(s) for inventory used by the distributor 
or transferor corporation(s) on the date of distribution or transfer 
for the acquired trade or business (carryover''.
    2. On page 64556, column 1, Sec.  1.381(c)(5)-1(c)(2), Example 
4.(ii), fourteenth line from the top of the column, the language 
``method on a cut-off basis as provided in'' is corrected to read 
``method on a cut-off basis and will take into account the change in 
the inventory amount resulting from the valuing of the inventory at 
cost as required under section 472(d) as provided in''.
    3. On page 64557, column 2, Sec.  1.381(c)(5)-1(e)(6)(ii)(B), 
fourteenth line of the paragraph, the language ``having been acquired 
at average unit'' is corrected to read ``having been acquired at their 
average unit''.

Cynthia Grigsby,
Acting Chief, Publications and Regulations Branch, Legal Processing 
Division, Associate Chief Counsel, (Procedure and Administration).
[FR Doc. E7-23277 Filed 11-30-07; 8:45 am]
BILLING CODE 4830-01-P