[Federal Register Volume 73, Number 67 (Monday, April 7, 2008)]
[Rules and Regulations]
[Page 18708]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-7226]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9387]
RIN 1545--AY75


Application of Normalization Accounting Rules to Balances of 
Excess Deferred Income Taxes and Accumulated Deferred Investment Tax 
Credits of Public Utilities Whose Assets Cease To Be Public Utility 
Property; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

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SUMMARY: This document contains a correction to final regulations (TD 
9387) that were published in the Federal Register on Thursday, March 
20, 2008 (73 FR 14934), providing guidance on the normalization 
requirements applicable to public utilities that benefit (or have 
benefited) from accelerated depreciation methods or from the investment 
tax credit permitted under pre-1991 law. These regulations permit a 
utility whose assets cease, whether by disposition, deregulation, or 
otherwise, to be public utility property with respect to the utility 
(deregulated public utility property) to return to its ratepayers the 
normalization reserve for excess deferred income taxes (EDFIT) with 
respect to those assets and, in certain circumstances, also permit the 
return of part or all of the reserve for accumulated deferred 
investment tax credits (ADITC) with respect to those assets.

DATES: This correction is effective April 7, 2008.

FOR FURTHER INFORMATION CONTACT: Patrick Kirwan, (202) 622-3040 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    The final regulations that are the subject of this document are 
under sections 46 and 168 of the Internal Revenue Code.

Need for Correction

    As published, final regulations (TD 9387) contain an error that may 
prove to be misleading and is in need of clarification.

List of Subjects in 26 CFR Part 1

    Income taxes, 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 * * *


0
Par. 2. Section 1.46-6 is amended by revising paragraph (k)(2)(i) to 
read as follows:


Sec.  1.46-6  Limitation in case of certain regulated companies.

* * * * *
    (k) * * *
    (2) * * *
    (i) Restoration of rate base reduction. A reduction in the 
taxpayer's rate base on account of the credit with respect to public 
utility property that becomes deregulated public utility property is 
restored ratably during the period after the property becomes 
deregulated public utility property if the amount of the reduction 
remaining to be restored does not, at any time during the period, 
exceed the restoration percentage of the recoverable stranded cost of 
the property at such time.
    For this purpose --
* * * * *

LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel (Procedure and Administration).
[FR Doc. E8-7226 Filed 4-4-08; 8:45 am]
BILLING CODE 4830-01-P