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Federal Register / Vol. 72, No.

249 / Monday, December 31, 2007 / Rules and Regulations 74175

■Accordingly, 22 CFR part 41 is temporary basis under control number of decommissioning a plant through a
amended as follows: 1545–2091 and pending receipt and qualified nuclear decommissioning
review of comments, may be approved fund.
PART 41—[AMENDED] for a period of three years. Responses to A plant’s pre-1984 nuclear
■ 1. The authority citation for Part 41 these collections of information are decommissioning costs can be funded
continues to read as follows: required to obtain a tax benefit. by increasing the annual deductible
An agency may not conduct or
Authority: 8 U.S.C. 1104; Pub. L. 105–277, contributions over the remaining useful
sponsor, and a person is not required to
112 Stat. 2681–795 through 2681–801; 8 life of the plant. In addition, however,
respond to, a collection of information
U.S.C. 1185 note (section 7209 of Pub. L. the Energy Policy Act amendments to
108–458).
unless the collection of information
displays a valid OMB control number. section 468A permit more rapid funding
■ 2. Section 41.105 is amended by For further information concerning of the pre-1984 costs. A taxpayer may
removing paragraph (b). this collection of information, and contribute, in a single taxable year, all
Dated: December 21, 2007. where to submit comments on the or any portion of the amount needed to
Maura Harty, collection of information and the fund pre-1984 nuclear decommissioning
Assistant Secretary for Consular Affairs, accuracy of the estimated burden, and costs that have not been previously
Department of State. suggestions for reducing this burden, funded (a ‘‘special transfer’’). A special
[FR Doc. E7–25417 Filed 12–28–07; 8:45 am] please refer to the preamble of the cross- transfer is not deductible in full in the
BILLING CODE 4710–06–P
referencing notice of proposed year the contribution is made. Instead,
rulemaking published in the Proposed the deduction is allowed ratably over
Rules section in this issue of the Federal the remaining useful life of the nuclear
DEPARTMENT OF THE TREASURY Register. plant. Gain or loss is not recognized on
Books or records relating to a any special transfer, and the transferred
Internal Revenue Service collection of information must be assets have a carryover basis.
retained as long as their contents may Section 468A allows a deduction only
26 CFR Parts 1 and 602 become material in the administration if the Internal Revenue Service has
of any internal revenue law. Generally, given the taxpayer a schedule of ruling
[TD 9374]
tax returns and tax return information amounts (that is, a schedule specifying
RIN 1545–BF09 are confidential, as required by 26
the maximum deductible contribution
U.S.C. 6103.
Nuclear Decommissioning Funds that can be made in each taxable year).
Background The Energy Policy Act amendments
AGENCY: Internal Revenue Service (IRS), provide that the taxpayer must obtain a
This document contains amendments
Treasury. new schedule of ruling amounts when
to 26 CFR part 1 providing temporary
ACTION: Final and Temporary regulation. the Nuclear Regulatory Commission
regulations under section 468A of the
SUMMARY: This document contains final Internal Revenue Code of 1986 (Code). (NRC) extends the operating license of
and temporary regulations under section Section 468A was amended by section the plant.
468A of the Internal Revenue Code 1310 of the Energy Policy Act of 2005 Useful Life
relating to deductions for contributions (the Energy Policy Act), Public Law
to trusts maintained for 109–58 (119 Stat. 594). The schedule of ruling amounts may
decommissioning nuclear power plants. Explanation of Provisions not provide for more rapid than level
The temporary regulations affect most funding over the estimated useful life of
Section 468A provides a deduction the nuclear power plant. Also, as noted
taxpayers that own an interest in a
for amounts contributed to a qualified above, deductions for special transfers
nuclear power plant and reflect recent
nuclear decommissioning reserve fund. are allowed ratably over the plant’s
statutory changes. The text of these
Under prior law, the deduction was
temporary regulations also serves as the remaining useful life. Under the current
limited to the lesser of the amount
text of the proposed regulations set forth regulations, the useful life of the plant
included in the utility’s cost of service
in the notice of proposed rulemaking on begins on the first day of the taxable
for ratemaking purposes or the ruling
this subject in the Proposed Rules year that includes the date that the
amount. As a result, only regulated
section in this issue of the Federal nuclear power plant begins commercial
utilities could take advantage of section
Register. operations, and ends on the last day of
468A. The Energy Policy Act
DATES: Effective Date: These regulations amendment of section 468A eliminated the taxable year that includes the
are effective on December 31, 2007. the cost-of-service limitation. estimated date on which the nuclear
Applicability Dates: For dates of Accordingly, decommissioning costs of power plant will no longer be included
applicability, see § 1.468A–9T. an unregulated nuclear power plant may in the taxpayer’s rate base for
FOR FURTHER INFORMATION CONTACT: now be funded by deductible ratemaking purposes. The proposed and
Patrick S. Kirwan, (202) 622–3110 (not contributions to a qualified nuclear temporary regulations retain this general
a toll-free number). decommissioning fund. framework for plants that were
SUPPLEMENTARY INFORMATION: Under prior law, deductible regulated by a public utility commission
contributions were also limited to the (PUC) before January 1, 2006, and
Paperwork Reduction Act amount necessary to fund the plant’s permit the use of any reasonable method
These temporary regulations are being post-1983 nuclear decommissioning to determine the end of the estimated
issued without prior notice and public costs (determined as if useful life for all other plants. The
procedure pursuant to the decommissioning costs accrued ratably current regulations require adjustments
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Administrative Procedure Act (5 U.S.C. over the estimated useful life of the to the estimated useful life to reflect
553). For this reason, the collections of plant). The Energy Policy Act changes in PUC assumptions regarding
information contained in these amendment of section 468A also useful life. The proposed and temporary
regulations have been approved by the eliminated this limitation. Accordingly, regulations eliminate this requirement.
Office of Management and Budget on a taxpayers may now fund the entire cost Taxpayers will, however, be permitted

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74176 Federal Register / Vol. 72, No. 249 / Monday, December 31, 2007 / Rules and Regulations

to establish that a change in the plant’s rather than the fair market value of such description of the assumptions,
useful life is appropriate and may use property. estimates, and other factors that were
the assumptions used in the most recent Although the deduction for contributed used’’ by ‘‘each public utility
ratemaking proceeding as support for property is limited to the adjusted basis commission that has determined the
such a change. of the property, the regulations provide amount of decommissioning costs to be
that the limitation on the amount of the included in the taxpayer’s cost of
Previously Excluded Amount service for ratemaking purposes.’’
special transfer is applied using the fair
Section 468A(f) provides that the market value of the contributed property Under current law, any taxpayer with
amount of the special transfer with rather than its basis. This rule is an interest in a nuclear power plant may
respect to a nuclear power plant may necessary to prevent overfunding of the maintain a qualified nuclear
not exceed ‘‘the present value of the qualified fund. decommissioning fund with respect to
portion of the total nuclear that interest, without regard to whether
decommissioning costs with respect to Transfers to Related Persons the taxpayer is, or ever has been,
such nuclear power plant previously Although deductions for special regulated by a PUC. The temporary and
excluded for such nuclear power plant transfers are generally allowed ratably proposed regulations provide that, in
under section 468A(d)(2)(A) as in effect over the plant’s remaining useful life, a the case of a plant that is currently
immediately before the date of the special rule applies if the fund is subject to PUC regulation, the
enactment of [the Energy Policy Act].’’ transferred before the end of the assumptions used by the PUC in
The legislative history (footnote 15 of H. remaining useful life. In that case, the determining decommissioning costs for
Rep. 109–45) provides the following entire remaining deduction for the the plant must be provided in the
explanation of this rule: special transfer is allowed in the year submission of the proposed schedule of
the fund is transferred. This acceleration ruling amounts. The taxpayer
For example, if $100 is the present value
of the total decommissioning costs of a
allows the taxpayer to close its books on submitting the proposed schedule is not
nuclear powerplant, and if under present law the asset. We have been asked to required to use the PUC’s assumptions
the qualified fund is only permitted to provide guidance on whether this in calculating the proposed schedule,
accumulate $75 of decommissioning costs acceleration would apply in the case of but is required to base the schedule
over such plant’s estimated life (because the a transaction that qualifies for upon reasonable assumptions.
qualified fund was not in existence during 25 nonrecognition treatment (for example, Under the temporary and proposed
percent of the useful life of the nuclear under section 351). The IRS and regulations, the electing taxpayer bears
powerplant), a taxpayer could contribute $25 Treasury believe that the acceleration the burden of demonstrating that the
to the qualified fund under this component applies but provides an inappropriate requested schedule is based upon
of the provision. reasonable assumptions and is
benefit to a taxpayer that directly or
The proposed and temporary indirectly retains an interest in the consistent with the principles and
regulations permit taxpayers to compute plant. Consequently, in the case of a provisions of the applicable regulatory
the maximum special transfer amount transfer of a qualified nuclear provisions. A taxpayer that remains
by (i) calculating the present value of decommissioning fund to a related subject to the ratemaking jurisdiction of
the future decommissioning liability person, the regulations provide that the a PUC and that calculates its schedule
and (ii) reducing that present value by transferee’s ruling amounts will be of ruling amounts using the
the amount of decommissioning costs adjusted to the extent necessary to offset assumptions described by the PUC in its
that, under the law in effect before the the inappropriate benefit provided by most recent rate order will generally
enactment of the Energy Policy Act, the acceleration of deductions. satisfy this burden of proof. In addition,
could have been funded through a a taxpayer that owns an interest in a
Special Transfers in Multiple Taxable deregulated nuclear plant may submit
qualified fund. For this purpose, the Years
amount of decommissioning costs that assumptions used by a PUC that
could have been funded through a It may be necessary (for example, if formerly had regulatory jurisdiction
qualified fund is determined by assets are held in funds with penalties over the plant as support for the
multiplying the present value of the for early withdrawal) for taxpayers to assumptions used in calculating the
future decommissioning liability by the spread the special transfer across more taxpayer’s proposed schedule of ruling
qualifying percentage that, under the than one taxable year. The regulations amounts, with the understanding that
law in effect before the enactment of the provide that contributions in multiple the PUC assumptions may be given less
Energy Policy Act, was used to years are permissible and include an weight if they are out of date or were
determine the amount of example describing a special transfer developed in a proceeding for a
decommissioning costs that could be spread across multiple years. different taxpayer. The use of other
funded through a qualified fund. industry standards, such as the
New Schedules of Ruling Amounts
assumptions underlying the taxpayer’s
Special Transfers of Property Under prior law, only regulated most recent financial assurance filing
Taxpayers may make special transfers utilities could take advantage of section with the NRC, is an alternative means of
of property other than cash. The 468A and the IRS could rely upon the demonstrating that the taxpayer has
legislative history (footnote 16 of H. PUC with regulatory jurisdiction over calculated its proposed schedule of
Rep. 109–45) includes the following the taxpayer to ensure that accurate and ruling amounts on a reasonable basis.
discussion relating to such transfers: reasonable assumptions were used in On the other hand, consistency with
calculating decommissioning cost of financial accounting statements is not
A taxpayer recognizes no gain or loss on service for purposes of rate orders.
the contribution of property to a qualified
sufficient, in the absence of other
Accordingly, the existing regulations supporting evidence, to meet the
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fund under this special rule. The qualified


fund will take a transferred (carryover) basis
require the taxpayer to use the PUC’s taxpayer’s burden of proof.
in such property. Correspondingly, a assumptions in calculating the
taxpayer’s schedule of ruling amounts Additional Provisions and Changes
taxpayer’s deduction (over the estimated life
of the powerplant) is to be based on the and to submit as part of the request for The regulations follow the statute in
adjusted tax basis of the property contributed a schedule of ruling amounts ‘‘a requiring taxpayers to request a new

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Federal Register / Vol. 72, No. 249 / Monday, December 31, 2007 / Rules and Regulations 74177

schedule of ruling amounts in any List of Subjects (d) Decommissioning costs allocable
taxable year that the NRC extends the to a fund.
26 CFR Part 1
operating license for the plant. In (1) General rule.
addition, the regulations provide that a Income taxes, Reporting and (2) Total estimated cost of
separate schedule of ruling amounts (a recordkeeping requirements decommissioning.
‘‘schedule of deduction amounts’’) must 26 CFR Part 602 (3) Taxpayer’s share.
be obtained from the Secretary before (e) Manner of requesting schedule of
deductions may be claimed with respect Reporting and recordkeeping ruling amounts.
to a special transfer. requirements. (1) In general.
Finally, many conforming Amendments to the Regulations (2) Information required.
amendments have been made to the (3) Administrative procedures.
existing regulations reflecting the ■ Accordingly, 26 CFR parts 1 and 602 (f) Review and revision of schedule of
elimination of the cost-of-service are amended as follows: ruling amounts.
limitation and the post-1983 (1) Mandatory review.
decommissioning cost limitation, and to PART 1—INCOME TAXES (2) Elective review.
eliminate obsolete provisions. ■ Paragraph 1. The authority citation (3) Determination of revised schedule
Effective/Applicability Date for part 1 is amended by adding an entry of ruling amounts.
in numerical order to read in part as (g) Special rule permitting payments
The temporary regulations are to a nuclear decommissioning fund
applicable on December 31, 2007, and follows:
before receipt of an initial or revised
apply with respect to taxable years Authority: 26 U.S.C. 7805 * * *
ruling amount applicable to a taxable
ending on or after such date. During the Section 1.468A–5T also issued under 26 year.
period between January 1, 2006, and U.S.C. 468A(e)(5). * * *
December 31, 2007. a taxpayer may use § 1.468A–4T Treatment of nuclear
any reasonable method consistent with §§ 1.468A–0 through 1.468A–8 [Removed] decommissioning fund (temporary).
the principles and provisions of section ■ Par. 2. Sections 1.468A–0 through (a) In general.
468A to determine the schedule of 1.468A–8 are removed. (b) Modified gross income.
ruling amounts or the schedule of ■ Par. 3. Sections 1.468A–0T through (c) Special rules.
deduction amounts. A taxpayer may 1.468A–9T are added to read as follows: (1) Period for computation of
apply the provisions of §§ 1.468A–1T modified gross income.
through 1.468A–8T to taxable years § 1.468A–0T Nuclear decommissioning (2) Gain or loss upon distribution of
ending on or after January 1, 2006, and costs; table of contents. property by a fund.
before December 31, 2007, provided that This section lists the paragraphs (3) Denial of credits against tax.
the taxpayer applies all provisions in contained in §§ 1.468A–1T through (4) Other corporate taxes inapplicable.
§§ 1.468A–1T through 1.468A–8T to the 1.468A–9T. (d) Treatment as corporation for
taxable year. purposes of subtitle F.
§ 1.468A–1T Nuclear decommissioning
Special Analyses costs; general rules (temporary). § 1.468A–5T Nuclear decommissioning
It has been determined that this (a) Introduction. fund—miscellaneous provisions
Treasury decision is not a significant (b) Definitions. (temporary).
regulatory action as defined in (c) Special rules applicable to certain (a) Qualification requirements.
Executive Order 12866. Therefore, a experimental nuclear facilities. (1) In general.
regulatory assessment is not required. It (2) Limitation on contributions.
§ 1.468A–2T Treatment of electing
also has been determined that section taxpayer (temporary).
(3) Limitation on use of fund.
553(b) and (d) of the Administrative (i) In general.
(a) In general. (ii) Definition of administrative costs
Procedure Act (5 U.S.C. chapter 5) does (b) Limitation on payments to a
not apply to these regulations. For and expenses.
nuclear decommissioning fund.
applicability of the Regulatory (4) Trust provisions.
(1) In general.
Flexibility Act (5 U.S.C. chapter 6), (b) Prohibitions against self-dealing.
(2) Excess contributions not
please refer to the Special Analyses (1) In general.
deductible.
section of the preamble to the cross- (2) Self-dealing defined.
(c) Deemed payment rules.
reference notice of proposed rulemaking (d) Treatment of distributions. (3) Disqualified person defined.
published in the Proposed Rules section (1) In general. (c) Disqualification of nuclear
in this issue of the Federal Register. (2) Exceptions to inclusion in gross decommissioning fund.
Pursuant to section 7805(f) of the Code, income. (1) In general.
these regulations have been submitted (i) Payment of administrative costs (2) Exception to disqualification.
to the Chief Counsel for Advocacy of the and incidental expenses. (i) In general.
Small Business Administration for (ii) Withdrawals of excess (ii) Excess contribution defined.
comment on their impact on small contributions. (iii) Taxation of income attributable to
business. (iii) Actual distributions of amounts an excess contribution.
included in gross income as deemed (3) Effect of disqualification.
Drafting Information (4) Further effects of disqualification.
distributions.
The principal author of these (e) Deduction when economic (d) Termination of nuclear
regulations is Patrick S. Kirwan, Office decommissioning fund upon substantial
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performance occurs.
of Associate Chief Counsel completion of decommissioning.
(Passthroughs and Special Industries). § 1.468A–3T Ruling amount (temporary). (1) In general.
However, other personnel from the IRS (a) In general. (2) Additional rules.
and Treasury Department participated (b) Level funding limitation. (3) Substantial completion of
in their development. (c) Funding period. decommissioning defined.

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74178 Federal Register / Vol. 72, No. 249 / Monday, December 31, 2007 / Rules and Regulations

§ 1.468A–6T Disposition of an interest in a into account nuclear decommissioning site is a separate nuclear power plant.
nuclear power plant (temporary). costs for Federal income tax purposes. The term nuclear power plant also
(a) In general. In general, an eligible taxpayer that includes the portion of the common
(b) Requirements. elects the application of section 468A facilities of a multi-unit site allocable to
(c) Tax consequences. pursuant to the rules contained in a unit on that site.
(1) The transferor and its Fund. § 1.468A–7T is allowed a deduction (as (6) The term nuclear
(2) The transferee and its Fund. determined under § 1.468A–2T) for the decommissioning costs or
(3) Basis. taxable year in which the taxpayer decommissioning costs means all
(d) Determination of proportionate makes a cash payment to a nuclear otherwise deductible expenses to be
amount. decommissioning fund. Taxpayers using incurred in connection with the
(e) Calculation of schedule of ruling
an accrual method of accounting that do entombment, decontamination,
amounts and schedule of deduction
not elect the application of section 468A dismantlement, removal and disposal of
amounts for dispositions described in
are not allowed a deduction for nuclear the structures, systems and components
this section.
decommissioning costs prior to the of a nuclear power plant that has
(1) Transferor.
(i) Taxable year of disposition. taxable year in which economic permanently ceased the production of
(ii) Taxable years after the disposition. performance occurs with respect to such electric energy. Such term includes all
(2) Transferee. costs (see section 461(h)). otherwise deductible expenses to be
(i) Taxable year of disposition. (b) Definitions. The following terms incurred in connection with the
(ii) Taxable years after the disposition. are defined for purposes of section 468A preparation for decommissioning, such
(3) Example. and the regulations: as engineering and other planning
(f) Anti-abuse provision. (1) The term eligible taxpayer means expenses, and all otherwise deductible
any taxpayer that possesses a qualifying expenses to be incurred with respect to
§ 1.468A–7T Manner of and time for interest in a nuclear power plant the plant after the actual
making election (temporary). (including a nuclear power plant that is decommissioning occurs, such as
(a) In general. under construction). physical security and radiation
(b) Required information. (2) The term qualifying interest monitoring expenses. Such term does
means— not include otherwise deductible
§ 1.468A–8T Special transfers to qualified
funds pursuant to section 468A(f)
(i) A direct ownership interest; and expenses to be incurred in connection
(temporary).
(ii) A leasehold interest in any portion with the disposal of spent nuclear fuel
of a nuclear power plant if— under the Nuclear Waste Policy Act of
(a) General rule. (A) The holder of the leasehold
(1) In general. 1982 (Pub. L. 97–425). An expense is
interest is primarily liable under Federal
(2) Previously excluded amount. otherwise deductible for purposes of
or State law for decommissioning such
(3) Transfers in multiple years. this paragraph (b)(6) if it would be
(4) Contributions of property. portion of the nuclear power plant; and
(B) No other person establishes a deductible under chapter 1 of the
(b) Deduction for amounts transferred. Internal Revenue Code without regard to
(1) In general. nuclear decommissioning fund with
respect to such portion of the nuclear section 280B.
(2) Denial of deduction for previously (7) The term public utility commission
deducted amounts. power plant.
(3) A direct ownership interest means any State or political subdivision
(3) Transfers of qualified nuclear thereof, any agency, instrumentality or
decommissioning funds. includes an interest held as a tenant in
common or joint tenant, but does not judicial body of the United States, or
(4) Special rules.
include stock in a corporation that owns any judicial body, commission or other
(i) Gain or loss not recognized on
a nuclear power plant or an interest in similar body of the District of Columbia
transfers to fund.
(ii) Transfers of appreciated property a partnership that owns a nuclear power or of any State or any political
to fund. plant. Thus, in the case of a partnership subdivision thereof that establishes or
(c) New ruling amount required. that owns a nuclear power plant, the approves rates for the furnishing or sale
(1) In general. election under section 468A must be of electric energy.
(2) Transfers in multiple taxable made by the partnership and not by the (8) The term ratemaking proceeding
years. partners. In the case of an means any proceeding before a public
(d) Manner of requesting schedule of unincorporated organization described utility commission in which rates for
deduction amounts. in § 1.761–2(a)(3) that elects under the furnishing or sale of electric energy
(1) In general. section 761(a) to be excluded from the are established or approved. Such term
(2) Information required. application of subchapter K, each includes a generic proceeding that
(3) Statement required. taxpayer that is a co-owner of the applies to two or more taxpayers that
(4) Administrative procedures. nuclear power plant is eligible to make are subject to the jurisdiction of a single
a separate election under section 468A. public utility commission.
§ 1.468A–9T Effective/applicability date
and transitional rules (temporary). (4) The terms nuclear (9) The term special transfer means
decommissioning fund and qualified any transfer of funds to a qualified
(a) Effective date. nuclear decommissioning fund pursuant
(b) Transitional rules. nuclear decommissioning fund mean a
fund that satisfies the requirements of to § 1.468A–8T.
(1) Schedules of ruling amounts based
§ 1.468A–5T. The term nonqualified (c) Special rules applicable to certain
on prior regulations.
(2) Nuclear decommissioning fund fund means a fund that does not satisfy experimental nuclear facilities. (1) The
qualification requirements. those requirements. owner of a qualifying interest in an
(5) The term nuclear power plant experimental nuclear facility possesses
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(3) Use of formula method.


means any nuclear power reactor that is a qualifying interest in a nuclear power
§ 1.468A–1T Nuclear decommissioning used predominantly in the trade or plant for purposes of paragraph (b) of
costs; general rules (temporary). business of the furnishing or sale of this section if such person is engaged in
(a) Introduction. Section 468A electric energy. Each unit (that is, the trade or business of the furnishing
provides an elective method for taking nuclear reactor) located on a multi-unit or sale of electric energy.

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(2) An owner of stock in a corporation under paragraph (a) of this section shall include an expenditure from the
that owns an experimental nuclear during any taxable year shall not exceed fund or the use of the fund’s assets—
facility possesses a qualifying interest in the ruling amount applicable to the (i) To satisfy, in whole or in part, the
a nuclear power plant for purposes of nuclear decommissioning fund for such liability of the electing taxpayer for
paragraph (b)(1) of this section if— taxable year (as determined under decommissioning costs of the nuclear
(i) Such stockholder satisfies the § 1.468A–3T). power plant to which the fund relates;
conditions of paragraph (c)(1) of this (2) Excess contributions not and
section; and deductible. If the amount of cash (ii) To pay administrative costs and
(ii) The corporation that directly owns payments made (or deemed made) to a other incidental expenses of the fund.
the facility is not engaged in the trade nuclear decommissioning fund during (2) Exceptions to inclusion in gross
or business of the furnishing or sale of any taxable year exceeds the limitation income—(i) Payment of administrative
electric energy. of paragraph (b)(1) of this section, the costs and incidental expenses. The
(3) For purposes of this paragraph (c), excess is not deductible by the electing amount of any payment by a nuclear
an experimental nuclear facility is a taxpayer. In addition, see § 1.468A– decommissioning fund for
nuclear power reactor that is used 5T(c) for rules which provide that the administrative costs or other incidental
predominantly for the purpose of Internal Revenue Service may disqualify expenses of such fund (as defined in
conducting experimentation and a nuclear decommissioning fund if the § 1.468A–5T(a)(3)(ii)) shall not be
research. amount of cash payments made (or included in the gross income of the
deemed made) to a nuclear electing taxpayer unless such amount is
§ 1.468A–2T Treatment of electing paid to the electing taxpayer (in which
taxpayer (temporary). decommissioning fund during any
case the amount of the payment is
(a) In general. An eligible taxpayer taxable year exceeds the limitation of
included in the gross income of the
that elects the application of section paragraph (b)(1) of this section.
electing taxpayer under section 61).
468A pursuant to the rules contained in (3) Special transfer disregarded. The (ii) Withdrawals of excess
§ 1.468A–7T (an electing taxpayer) is amount of a special transfer permitted contributions. The amount of a
allowed a deduction for the taxable year under § 1.468A–8T is not treated as a withdrawal of an excess contribution (as
in which the taxpayer makes a cash cash payment for purposes of this defined in § 1.468A–5T(c)(2)(ii)) by an
payment (or is deemed to make a cash paragraph (b). electing taxpayer pursuant to the rules
payment as provided in paragraph (c) of (c) Deemed payment rules. (1) The of § 1.468A–5T(c)(2) shall not be
this section) to a nuclear amount of any cash payment made by included in the gross income of the
decommissioning fund and for any an electing taxpayer to a nuclear electing taxpayer. See paragraph (b)(2)
taxable year in which a deduction is decommissioning fund on or before the of this section, which provides that the
allowed for a special transfer described 15th day of the third calendar month payment of such amount to the nuclear
in § 1.468A–8T. The amount of the after the close of any taxable year (the decommissioning fund is not deductible
deduction for any taxable year equals deemed payment deadline date) shall be by the electing taxpayer.
the total amount of cash payments made deemed made during such taxable year (iii) Actual distributions of amounts
(or deemed made) by the electing if the electing taxpayer irrevocably included in gross income as deemed
taxpayer to a nuclear decommissioning designates the amount as relating to distributions. If the amount of a deemed
fund (or nuclear decommissioning such taxable year on its timely filed distribution is included in the gross
funds) during such taxable year under Federal income tax return for such income of the electing taxpayer for the
this section, plus any amount allowable taxable year (see § 1.468A–7T(b)(4)(iv) taxable year in which the deemed
as a deduction in that taxable year for for rules relating to such designation). distribution occurs, no further amount
a special transfer described in § 1.468A– (2) The amount of any cash payment is required to be included in gross
8T. The amount of a special transfer made by a customer of an electing income when the amount of the deemed
permitted under § 1.468A–8T is not taxpayer to a nuclear decommissioning distribution is actually distributed by
treated as a cash payment for purposes fund of such electing taxpayer shall be the nuclear decommissioning fund. The
of this paragraph (a), and a taxpayer deemed made by the electing taxpayer amount of a deemed distribution is
making a special transfer is allowed a if the amount is included in the gross actually distributed by a nuclear
ratable deduction in each taxable year income of the electing taxpayer in the decommissioning fund as the first actual
during the remaining useful life of the manner prescribed by section 88 and distributions are made by the nuclear
nuclear power plant for the special § 1.88–1. decommissioning fund on or after the
transfer. A payment may not be made (d) Treatment of distributions—(1) In date of the deemed distribution.
(or deemed made) to a nuclear general. Except as otherwise provided (e) Deduction when economic
decommissioning fund before the first in paragraph (d)(2) of this section, the performance occurs. An electing
taxable year in which all of the amount of any actual or deemed taxpayer using an accrual method of
following conditions are satisfied: distribution from a nuclear accounting is allowed a deduction for
(1) The construction of the nuclear decommissioning fund shall be nuclear decommissioning costs no
power plant to which the nuclear included in the gross income of the earlier than the taxable year in which
decommissioning fund relates has electing taxpayer for the taxable year in economic performance occurs with
commenced. which the distribution occurs. The respect to such costs (see section
(2) A ruling amount is applicable to amount of any distribution of property 461(h)(2)). The amount of nuclear
the nuclear decommissioning fund (see equals the fair market value of the decommissioning costs that is
§ 1.468A–3T). property on the date of the distribution. deductible under this paragraph (e) is
(b) Limitation on payments to a See § 1.468A–5T(c) and (d) for rules determined without regard to section
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nuclear decommissioning fund—(1) In relating to the deemed distribution of 280B (see § 1.468A–1T(b)(6)). A
general. For purposes of paragraph (a) of the assets of a nuclear decommissioning deduction is allowed under this
this section, the maximum amount of fund in the case of a disqualification or paragraph (e) whether or not a
cash payments made (or deemed made) termination of the fund. A distribution deduction was allowed with respect to
to a nuclear decommissioning fund from a nuclear decommissioning fund such costs under section 468A(a) and

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74180 Federal Register / Vol. 72, No. 249 / Monday, December 31, 2007 / Rules and Regulations

paragraph (a) of this section for an taxable year (for example, monthly, ruling amounts (rather than providing a
earlier taxable year. quarterly, semi-annual or annual schedule specifying a dollar amount for
contributions). each taxable year) if the formula or
§ 1.468A–3T Ruling amount (temporary). (3) The Internal Revenue Service (IRS) method is consistent with the principles
(a) In general. (1) Except as otherwise shall provide a schedule of ruling and provisions of this section and is
provided in paragraph (g) of this section amounts that is identical to the schedule based on reasonable assumptions. See
or in § 1.468A–8T (relating to of ruling amounts proposed by the paragraph (f)(1)(ii) of this section for a
deductions for special transfers into a taxpayer in connection with the special rule relating to the mandatory
nuclear decommissioning fund), an taxpayer’s request for a schedule of review of ruling amounts that are
electing taxpayer is allowed a deduction ruling amounts (see paragraph determined pursuant to a formula or
under section 468A(a) for the taxable (e)(2)(viii) of this section), but no method.
year in which the taxpayer makes a cash schedule of ruling amounts shall be (6) The IRS may, in its discretion,
payment (or is deemed to make a cash provided unless the taxpayer’s proposed provide a schedule of ruling amounts
payment) to a nuclear decommissioning schedule of ruling amounts is consistent that is determined on a basis other than
fund only if the taxpayer has received with the principles and provisions of the rules of paragraphs (a) through (d)
a schedule of ruling amounts for the this section and is based on reasonable of this section if—
nuclear decommissioning fund that assumptions. If a proposed schedule of (i) In connection with its request for
includes a ruling amount for such ruling amounts is not consistent with a schedule of ruling amounts, the
taxable year. Except as provided in the principles and provisions of this taxpayer explains the need for special
paragraph (a)(4) or (5) of this section, a section or is not based on reasonable treatment and sets forth an alternative
schedule of ruling amounts for a nuclear assumptions, the taxpayer may propose basis for determining the schedule of
decommissioning fund (schedule of an amended schedule of ruling amounts ruling amounts; and
ruling amounts) is a ruling (within the that is consistent with such principles (ii) The IRS determines that special
meaning of § 601.201(a)(2) of this and provisions and is based on treatment is consistent with the purpose
chapter) specifying the annual payments reasonable assumptions. of section 468A.
(ruling amounts) that, over the taxable (4) The taxpayer bears the burden of (b) Level funding limitation. (1)
years remaining in the funding period as demonstrating that the proposed Except as otherwise provided in
of the date the schedule first applies, schedule of ruling amounts is consistent paragraph (b)(3) of this section, the
will result in a projected balance of the with the principles and provisions of ruling amount specified in a schedule of
nuclear decommissioning fund as of the this section and is based on reasonable ruling amounts for any taxable year in
last day of the funding period equal to assumptions. If a public utility the funding period (as defined in
(and in no event greater than) the commission established or approved the paragraph (c) of this section) shall not
amount of decommissioning costs currently applicable rates for the be less than the ruling amount specified
allocable to the fund. The projected furnishing or sale by the taxpayer of in such schedule for any earlier taxable
balance of a nuclear decommissioning electricity from the plant, the taxpayer year.
fund as of the last day of the funding can generally satisfy this burden of (2) The ruling amount specified in a
period shall be calculated by taking into proof by demonstrating that the schedule of ruling amounts for a taxable
account the fair market value of the schedule of ruling amounts is calculated year after the end of the funding period
assets of the fund as of the first day of using the assumptions used by the may be less than the ruling amount
the first taxable year to which the public utility commission in its most specified in such schedule for an earlier
schedule of ruling amounts applies and recent order. In addition, a taxpayer that taxable year.
the estimated rate of return to be earned owns an interest in a deregulated (3) The ruling amount specified in a
by the assets of the fund after payment nuclear plant may submit assumptions schedule of ruling amounts for the last
of the estimated administrative costs used by a public utility commission that taxable year in the funding period may
and incidental expenses to be incurred formerly had regulatory jurisdiction be less than the ruling amount specified
by the fund (as defined in § 1.468A– over the plant as support for the in such schedule for an earlier taxable
5T(a)(3)(ii)), including all Federal, State assumptions used in calculating the year if, when annualized, the amount
and local income taxes to be incurred by taxpayer’s proposed schedule of ruling specified for the last taxable year is not
the fund (the after-tax rate of return). amounts, with the understanding that less than the amount specified for such
See paragraph (c) of this section for a the assumptions used by the public earlier taxable year. The amount
definition of funding period and utility commission may be given less specified for the last taxable year is
paragraph (d) of this section for weight if they are out of date or were annualized by—
guidance with respect to the amount of developed in a proceeding for a (i) Determining the number of days
decommissioning costs allocable to a different taxpayer. The use of other between the beginning of the taxable
fund. industry standards, such as the year and the end of the plant’s estimated
(2) Each schedule of ruling amounts assumptions underlying the taxpayer’s useful life;
must be consistent with the principles most recent financial assurance filing (ii) Dividing the amount specified for
and provisions of this section and must with the NRC, are an alternative means the last taxable year by such number of
be based on reasonable assumptions of demonstrating that the taxpayer has days; and
concerning— calculated its proposed schedule of (iii) Multiplying the result by the
(i) The after-tax rate of return to be ruling amounts on a reasonable basis. number of days in the last taxable year
earned by the amounts collected for Consistency with financial accounting (generally 365).
decommissioning; statements is not sufficient, in the (c) Funding period—(1) In general.
(ii) The total estimated cost of absence of other supporting evidence, to For purposes of this section, the funding
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decommissioning the nuclear power meet the taxpayer’s burden of proof period for a nuclear decommissioning
plant (see paragraph (d)(2) of this under this paragraph (a)(4). fund is the period that—
section); and (5) The IRS will approve, at the (i) Begins on the first day of the first
(iii) The frequency of contributions to request of the taxpayer, a formula or taxable year for which a deductible
a nuclear decommissioning fund for a method for determining a schedule of payment is made (or deemed made) to

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such nuclear decommissioning fund decommissioning costs allocable to a (v) The IRS shall not provide or revise
(see § 1.468A–2T(a) for rules relating to nuclear decommissioning fund is a ruling amount applicable to a taxable
the first taxable year for which a determined for purposes of this section year in response to a request for a
payment may be made (or deemed by applying the following rules and schedule of ruling amounts that is filed
made) to a nuclear decommissioning definitions: after the deemed payment deadline date
fund); and (1) General rule. The amount of (as defined in § 1.468A–2T(c)(1)) for
(ii) Ends on the last day of the taxable decommissioning costs allocable to a such taxable year. In determining the
year that includes the last day of the nuclear decommissioning fund is the date when a request is filed, the
estimated useful life of the nuclear taxpayer’s share of the total estimated principles of sections 7502 and 7503
power plant to which the nuclear cost of decommissioning the nuclear shall apply.
decommissioning fund relates. power plant to which the fund relates. (vi) Except as provided in paragraph
(2) Estimated useful life. The last day (2) Total estimated cost of (e)(1)(vii) of this section, a request for a
of the estimated useful life of a nuclear decommissioning. Under paragraph schedule of ruling amounts shall be
power plant is determined under the (a)(2) of this section, the taxpayer must considered filed only if such request
following rules: demonstrate the reasonableness of the complies substantially with the
(i) Except as provided in paragraph assumptions concerning the total requirements of this paragraph (e).
(c)(2)(ii) of this section— estimated cost of decommissioning the (vii) If a request does not comply
(A) The last day of the estimated nuclear power plant. substantially with the requirements of
useful life of a nuclear power plant that (3) Taxpayer’s share. The taxpayer’s this paragraph (e), the IRS will notify
has been included in rate base for share of the total estimated cost of
the taxpayer of that fact. If the
ratemaking purposes in any ratemaking decommissioning a nuclear power plant
information or materials necessary to
proceeding that established rates for a equals the total estimated cost of
comply substantially with the
period before January 1, 2006, is the decommissioning such nuclear power
requirements of this paragraph (e) are
date used in the first such ratemaking plant multiplied by the percentage of
provided to the IRS within 30 days after
proceeding as the estimated date on such nuclear power plant that the
this notification, the request will be
which the nuclear power plant will no qualifying interest of the taxpayer
considered filed on the date of the
longer be included in the taxpayer’s rate represents (see § 1.468A–1T(b)(2) for
original submission. In addition, the
base for ratemaking purposes; circumstances in which a taxpayer
request will be considered filed on the
(B) The last day of the estimated possesses a qualifying interest in a
date of the original submission in a case
useful life of a nuclear power plant that nuclear power plant).
(e) Manner of requesting schedule of in which the information and materials
is not described in paragraph (c)(2)(i)(A)
ruling amounts—(1) In general. (i) In are provided more than 30 days after the
of this section is the last day of the
order to receive a ruling amount for any notification if the IRS determines that
estimated useful life of the plant
taxable year, a taxpayer must file a the electing taxpayer made a good faith
determined as of the date it is placed in
request for a schedule of ruling amounts effort to provide the applicable
service;
(C) A taxpayer with an interest in the that complies with the requirements of information or materials within 30 days
plant that is not described in paragraph this paragraph (e), the applicable after notification and also determines
(c)(2)(i)(A) of this section may use any procedural rules set forth in § 601.201(e) that treating the request as filed on the
reasonable method for determining the of this chapter (Statement of Procedural date of the original submission is
last day of such estimated useful life; Rules) and the requirements of any consistent with the purposes of section
and applicable revenue procedure that is in 468A. In any other case in which the
(D) A reasonable method for purposes effect on the date the request is filed. information or materials necessary to
of paragraph (c)(2)(i)(C) of this section (ii) A separate request for a schedule comply substantially with the
may include use of the period for which of ruling amounts is required for each requirements of this paragraph (e) are
a public utility commission has nuclear decommissioning fund not provided within 30 days after the
included a comparable nuclear power established by a taxpayer (see paragraph notification, the request will be
plant in rate base for ratemaking (a) of § 1.468A–5T for rules relating to considered filed on the date that all
purposes. the number of nuclear decommissioning information or materials necessary to
(ii) If it can be established that the funds that a taxpayer can establish). comply with the requirements of this
estimated useful life of the nuclear (iii) Except as provided by §§ 1.468A– paragraph (e) are provided.
power plant will end on a date other 5T(a)(1)(iv) (relating to certain (2) Information required. A request for
than the date determined under unincorporated organizations that may a schedule of ruling amounts must
paragraph (c)(2)(i) of this section, the be taxable as corporations) and 1.468A– contain the following information:
taxpayer may use such other date as the 8T (relating to a special transfer under (i) The taxpayer’s name, address, and
last day of the estimated useful life but section 468A(f)(1)), a request for a taxpayer identification number.
is not required to do so. If the last day schedule of ruling amounts must not (ii) Whether the request is for an
of the estimated useful life was contain a request for a ruling on any initial schedule of ruling amounts, a
determined under paragraph (c)(2)(i)(A) other issue, whether the issue involves mandatory review of the schedule of
of this section and the most recent section 468A or another section of the ruling amounts (see paragraph (f)(1) of
ratemaking proceeding used an Internal Revenue Code. this section), or an elective review of the
alternative date as the estimated date on (iv) In the case of an affiliated group schedule of ruling amounts (see
which the nuclear power plant will no of corporations that join in the filing of paragraph (f)(2) of this section).
longer be included rate base, the most a consolidated return, the common (iii) The name and location of the
recent ratemaking proceeding will parent of the group may request a nuclear power plant with respect to
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generally be treated as establishing such schedule of ruling amounts for each which a schedule of ruling amounts is
alternative date as the last day of the member of the group that possesses a requested.
estimated useful life. qualifying interest in the same nuclear (iv) A description of the taxpayer’s
(d) Decommissioning costs allocable power plant by filing a single qualifying interest in the nuclear power
to a fund. The amount of submission with the IRS. plant and the percentage of such nuclear

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74182 Federal Register / Vol. 72, No. 249 / Monday, December 31, 2007 / Rules and Regulations

power plant that the qualifying interest (E) The total estimated cost of (G) The taxpayer’s share of the total
of the taxpayer represents. decommissioning expressed in future estimated cost of decommissioning (as
(v) Where applicable, an dollars (that is, based on anticipated such term is defined in paragraph (d)(3)
identification of each public utility price levels when expenses are expected of this section).
commission that establishes or approves to be paid). (ix) If the request is for a revised
rates for the furnishing or sale by the (F) For each taxable year in the period schedule of ruling amounts, the after-tax
taxpayer of electric energy generated by that begins with the year specified in rate of return earned by the assets of the
the nuclear power plant, and, for each paragraph (e)(2)(vi)(B) of this section nuclear decommissioning fund for each
public utility commission identified— (the estimated year in which substantial taxable year in the period that begins
(A) Whether the public utility decommissioning costs will first be with the date of the initial contribution
commission has determined the amount incurred) and ends with the year to the fund and ends with the first day
of decommissioning costs to be specified in paragraph (e)(2)(vi)(C) of of the first taxable year to which the
included in the taxpayer’s cost of this section (the estimated year in which revised schedule of ruling amounts
service for ratemaking purposes; the decommissioning of the nuclear applies.
(B) The amount of decommissioning power plant will be substantially (x) If applicable, an explanation of the
costs that are to be included in the complete), the estimated cost of need for a schedule of ruling amounts
taxpayer’s cost of service for each decommissioning expressed in future determined on a basis other than the
taxable year under the current dollars. rules of paragraphs (a) through (d) of
determination and amounts that (G) A description of the methodology this section and a description of an
otherwise are required to be included in used in converting the estimated cost of alternative basis for determining a
the taxpayer’s income under section 88 decommissioning expressed in current schedule of ruling amounts (see
and the regulations; dollars to the estimated cost of paragraph (a)(5) of this section).
decommissioning expressed in future (xi) A chart or table, based upon the
(C) A description of the assumptions,
dollars. assumed after-tax rate of return to be
estimates and other factors used by the
(H) The assumed after-tax rate of earned by the assets of the nuclear
public utility commission to determine
return to be earned by the amounts decommissioning fund, setting forth the
the amount of decommissioning costs;
collected for decommissioning. years the fund will be in existence, the
(D) A copy of such portions of any
(I) A copy of each engineering or cost annual contribution to the fund, the
order or opinion of the public utility
study that was relied on or used by the estimated annual earnings of the fund
commission as pertaining to the public
taxpayer in determining the amount of and the cumulative total balance in the
utility commission’s most recent
decommissioning costs. fund.
determination of the amount of (xii) If the request is for a revised
(vii) A proposed schedule of ruling
decommissioning costs to be included schedule of ruling amounts, a copy of
amounts for each taxable year remaining
in cost of service; and the schedule of ruling amounts that the
in the funding period as of the date the
(E) A copy of each engineering or cost revised schedule would replace.
schedule of ruling amounts will first
study that was relied on or used by the (xiii) If the request for a schedule of
apply.
public utility commission in ruling amounts contains a request,
(viii) A description of the
determining the amount of pursuant to § 1.468A–5T(a)(1)(iv), that
assumptions, estimates and other factors
decommissioning costs to be included the IRS rule whether an unincorporated
that were used in determining the
in the taxpayer’s cost of service under organization through which the assets of
proposed schedule of ruling amounts,
the current determination. the fund are invested is an association
including each of the following if
(vi) A description of the assumptions, applicable— taxable as a corporation for Federal tax
estimates and other factors that were (A) The funding period (as such term purposes, a copy of the legal documents
used by the taxpayer to determine the is defined in paragraph (c) of this establishing or otherwise governing the
amount of decommissioning costs, section); organization.
including each of the following if (B) The assumed after-tax rate of (xiv) Any other information required
applicable: return to be earned by the assets of the by the IRS that may be necessary or
(A) A description of the proposed nuclear decommissioning fund; useful in determining the schedule of
method of decommissioning the nuclear (C) The fair market value of the assets ruling amounts.
power plant (for example, prompt (if any) of the nuclear decommissioning (3) Administrative procedures. The
removal/dismantlement, safe storage fund as of the first day of the first IRS may prescribe administrative
entombment with delayed taxable year to which the schedule of procedures that supplement the
dismantlement, or safe storage ruling amounts will apply; provisions of paragraph (e)(1) and (2) of
mothballing with delayed (D) The amount expected to be earned this section. In addition, the IRS may, in
dismantlement). by the assets of the nuclear its discretion, waive the requirements of
(B) The estimated year in which decommissioning fund (based on the paragraph (e)(1) and (2) of this section
substantial decommissioning costs will after-tax rate of return applicable to the under appropriate circumstances.
first be incurred. fund) over the period that begins on the (f) Review and revision of schedule of
(C) The estimated year in which the first day of the first taxable year to ruling amounts—(1) Mandatory review.
decommissioning of the nuclear power which the schedule of ruling amounts (i) Any taxpayer that has obtained a
plant will be substantially complete (see will apply and ends on the last day of schedule of ruling amounts pursuant to
§ 1.468A–5T(d)(3) for a definition of the funding period; paragraph (e) of this section must file a
substantial completion of (E) The amount of decommissioning request for a revised schedule of ruling
decommissioning). costs allocable to the nuclear amounts on or before the deemed
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(D) The total estimated cost of decommissioning fund (as determined payment deadline date for the 10th
decommissioning expressed in current under paragraph (d) of this section); taxable year that begins after the taxable
dollars (that is, based on price levels in (F) The total estimated cost of year in which the most recent schedule
effect at the time of the current decommissioning (as determined under of ruling amounts was received. If the
determination). paragraph (d)(2) of this section); and taxpayer calculated its most recent

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schedule of ruling amounts on any basis If a taxpayer does not properly file a decommissioning fund for such taxable
other than an order issued by a public request for a revised schedule of ruling year that does not exceed the ruling
utility commission, the taxpayer must amounts by the date provided in amount proposed by the taxpayer for
file a request for a revised schedule of paragraph (f)(1) (i), (ii) or (iv) of this such taxable year in a timely filed
ruling amounts on or before the deemed section (whichever is applicable), the request for a schedule of ruling
payment deadline date for the 5th taxpayer’s ruling amount for the first amounts.
taxable year that begins after the taxable taxable year to which the revised (2) If an electing taxpayer makes a
year in which the most recent schedule schedule of ruling amounts would have payment to a nuclear decommissioning
of ruling amounts was received. applied and for all succeeding taxable fund for any taxable year pursuant to
(ii)(A) Any taxpayer that has obtained years until a new schedule is obtained paragraph (g)(1) of this section and the
a formula or method for determining a shall be zero dollars, unless, in its ruling amount that is provided by the
schedule of ruling amounts for any discretion, the IRS provides otherwise IRS is greater than the ruling amount
taxable year under paragraph (a)(4) of in such new schedule of ruling proposed by the taxpayer for such
this section must file a request for a amounts. Thus, if a taxpayer is required taxable year, the taxpayer is not allowed
revised schedule on or before the earlier to request a revised schedule of ruling to make an additional payment to the
of the deemed payment deadline for the amounts under any provision of this fund for such taxable year after the
5th taxable year that begins after its section, and each ruling amount in the deemed payment deadline date for such
taxable year in which the most recent revised schedule would equal zero taxable year.
formula or method was approved or the dollars, the taxpayer may, instead of (3) If the payment that an electing
deemed payment deadline for the first requesting a new schedule of ruling taxpayer makes to a nuclear
taxable year that begins after a taxable amounts, begin treating the ruling decommissioning fund for any taxable
year in which there is a substantial amounts under its most recent schedule year pursuant to paragraph (g)(1) of this
variation in the ruling amount as equal to zero dollars. section exceeds the ruling amount that
determined under the most recent (2) Elective review. Any taxpayer that is provided by the IRS for such taxable
formula or method. There is a has obtained a schedule of ruling year, the following rules apply:
substantial variation in the ruling amounts pursuant to paragraph (e) of (i) The amount of the excess is an
amount determined under the formula this section can request a revised excess contribution (as defined in
or method in effect for a taxable year if schedule of ruling amounts. Such a § 1.468A–5T(c)(2)(ii)) for such taxable
the ruling amount for the year and the request must be made in accordance year.
ruling amount for any earlier year since with the rules of paragraph (e) of this (ii) The amount of the excess
the most recent formula or method was section; thus, the IRS will not provide contribution is not deductible (see
approved differ by more than 50 percent a revised ruling amount applicable to a § 1.468A–2T(b)(2)) and must be
of the smaller amount. taxable year in response to a request for withdrawn by the taxpayer pursuant to
(B) Any taxpayer that has determined a schedule of ruling amounts that is the rules of § 1.468A–5T(c)(2)(i).
its ruling amount for any taxable year filed after the deemed payment deadline (iii) The taxpayer must withdraw the
under a formula prescribed by date for such taxable year (see paragraph after-tax earnings on the excess
§ 1.468A–6T (which prescribes ruling (e)(1)(vi) of this section). contribution.
amounts for the taxable year in which (3) Determination of revised schedule (iv) If the taxpayer claimed a
there is a disposition of a qualifying of ruling amounts. A revised schedule of deduction for the excess contribution,
interest in a nuclear power plant) must ruling amounts for a nuclear the taxpayer should file an amended
file a request for a revised schedule of decommissioning fund shall be return for the taxable year.
ruling amounts on or before the deemed determined under this section without
payment deadline for its first taxable regard to any schedule of ruling § 1.468A–4T Treatment of nuclear
year that begins after the disposition. amounts for such nuclear decommissioning fund (temporary).
(iii) A taxpayer requesting a schedule decommissioning fund that was issued (a) In general. A nuclear
of deduction amounts for a nuclear prior to such revised schedule. Thus, a decommissioning fund is subject to tax
decommissioning fund under § 1.468A– ruling amount specified in a revised on all of its modified gross income (as
8T must also request a revised schedule schedule of ruling amounts for any defined in paragraph (b) of this section).
of ruling amounts for the fund. The taxable year in the funding period can The rate of tax is 20 percent for taxable
revised schedule of ruling amounts be less than one or more ruling amounts years beginning after December 31,
must apply beginning with the first specified in a prior schedule of ruling 1995. This tax is in lieu of any other tax
taxable year for which a deduction is amounts for a prior taxable year. that may be imposed under subtitle A of
allowed under the schedule of (g) Special rule permitting payments the Internal Revenue Code (Code) on the
deduction amounts. to a nuclear decommissioning fund income earned by the assets of the
(iv) If the operating license of the before receipt of an initial or revised nuclear decommissioning fund.
nuclear power plant to which a nuclear ruling amount applicable to a taxable (b) Modified gross income. For
decommissioning fund relates is year. (1) If an electing taxpayer has filed purposes of this section, the term
renewed, the taxpayer maintaining the a timely request for an initial or revised modified gross income means gross
fund must request a revised schedule of ruling amount for a taxable year income as defined under section 61
ruling amounts. The request for the beginning on or after January 1, 2006, computed with the following
revised schedule must be submitted on and does not receive the ruling amount modifications:
or before the deemed payment deadline on or before the deemed payment (1) The amount of any payment or
for the taxable year that includes the deadline date for such taxable year, the special transfer to the nuclear
date on which the operating license is taxpayer may make a payment to a decommissioning fund with respect to
mstockstill on PROD1PC66 with RULES

renewed. nuclear decommissioning fund on the which a deduction is allowed under


(v) A request for a schedule of ruling basis of the ruling amount proposed in section 468A(a) or section 468A(f) is
amounts required by this paragraph the taxpayer’s request. Thus, under the excluded from gross income.
(f)(1) must be made in accordance with preceding sentence, an electing taxpayer (2) A deduction is allowed for the
the rules of paragraph (e) of this section. may make a payment to a nuclear amount of administrative costs and

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74184 Federal Register / Vol. 72, No. 249 / Monday, December 31, 2007 / Rules and Regulations

other incidental expenses of the nuclear rules relating to the change to a new (i) Begins on the date that the first
decommissioning fund (including taxes, taxable year. deductible payment is actually made to
legal expenses, accounting expenses, (2) Gain or loss upon distribution of such nuclear decommissioning fund;
actuarial expenses and trustee expenses, property by a fund. A distribution of and
but not including decommissioning property by a nuclear decommissioning
fund (whether an actual distribution or (ii) Ends on the date of termination
costs) that are otherwise deductible and
a deemed distribution) shall be (see § 1.468A–5T(d)), the date that the
that are paid by the nuclear
decommissioning fund to any person considered a disposition of property by entire fund is disqualified (see
other than the electing taxpayer. An the nuclear decommissioning fund for § 1.468A–5T(c)), or the date that the
expense is otherwise deductible for purposes of section 1001. In electing taxpayer disposes of its entire
purposes of this paragraph (b)(2) if it determining the amount of gain or loss qualifying interest in the nuclear power
would be deductible under chapter 1 of from such disposition, the amount plant to which the nuclear
the Code in determining the taxable realized by the nuclear decommissioning fund relates (other
income of a corporation. For example, decommissioning fund shall be the fair than in connection with the transfer of
because Federal income taxes are not market value of the property on the date the entire fund to the person acquiring
deductible under chapter 1 of the Code of disposition. such interest), whichever is applicable.
in determining the taxable income of a (3) Denial of credits against tax. The
(2) For each taxable year of the
corporation, the tax imposed by section tax imposed on the modified gross
nuclear decommissioning fund, the
468A(e)(2) and paragraph (a) of this income of a nuclear decommissioning
fund under paragraph (a) of this section return described in paragraph (d)(1) of
section is not deductible in determining
is not to be reduced or offset by any this section must be filed on or before
the modified gross income of a nuclear
credits against tax provided by part IV the 15th day of the third month
decommissioning fund. Similarly,
because certain expenses allocable to of subchapter A of chapter 1 of the Code following the close of such taxable year
tax-exempt interest income are not other than the credit provided by unless the nuclear decommissioning
deductible under section 265 in section 31(c) for amounts withheld fund is granted an extension of time for
determining the taxable income of a under section 3406 (back-up filing under section 6081. If such an
corporation, such expenses are not withholding). extension is granted for any taxable
deductible in determining the modified (4) Other corporate taxes year, the return for such taxable year
gross income of a nuclear inapplicable. Although the modified must be filed on or before the extended
decommissioning fund. gross income of a nuclear due date for such taxable year.
(3) A deduction is allowed for the decommissioning fund is subject to tax
(3) A nuclear decommissioning fund
amount of an otherwise deductible loss at the rate specified by section
must provide its employer identification
that is sustained by the nuclear 468A(e)(2) and paragraph (a) of this
section, a nuclear decommissioning number on returns, statements and other
decommissioning fund in connection
fund is not subject to the other taxes documents as required by the forms and
with the sale, exchange or worthlessness
imposed on corporations under subtitle instructions relating thereto. The
of any investment. A loss is otherwise
deductible for purposes of this A of the Code. For example, a nuclear employer identification number is
paragraph (b)(3) if such loss would be decommissioning fund is not subject to obtained by filing a Form SS–4,
deductible by a corporation under the alternative minimum tax imposed Application for Employer Identification
section 165(f) or (g) and sections 1211(a) by section 55, the accumulated earnings Number, in accordance with the
and 1212(a). tax imposed by section 531, the instructions relating thereto.
(4) A deduction is allowed for the personal holding company tax imposed (4) A nuclear decommissioning fund
amount of an otherwise deductible net by section 541, and the alternative tax must deposit all payments of tax
operating loss of the nuclear imposed on a corporation under section imposed by section 468A(e)(2) and
decommissioning fund. For purposes of 1201(a). paragraph (a) of this section (including
this paragraph (b), the net operating loss (d) Treatment as corporation for
any payments of estimated tax) with an
of a nuclear decommissioning fund for purposes of subtitle F. For purposes of
subtitle F of the Code and the authorized government depositary in
a taxable year is the amount by which
regulations, a nuclear decommissioning accordance with § 1.6302–1.
the deductions allowable under
paragraphs (b)(2) and (3) of this section fund is to be treated as if it were a (5) A nuclear decommissioning fund
exceed the gross income of the nuclear corporation and the tax imposed by is subject to the addition to tax imposed
decommissioning fund computed with section 468A(e)(2) and paragraph (a) of by section 6655 in case of a failure to
the modification described in paragraph this section is to be treated as a tax pay estimated income tax. For purposes
(b)(1) of this section. A net operating imposed by section 11. Thus, for of section 6655 and this section—
loss is otherwise deductible for example, the following rules apply: (i) The tax with respect to which the
purposes of this paragraph (b)(4) if such (1) A nuclear decommissioning fund
amount of the underpayment is
a net operating loss would be deductible must file a return with respect to the tax
imposed by section 468A(e)(2) and computed in the case of a nuclear
by a corporation under section 172(a).
(c) Special rules—(1) Period for paragraph (a) of this section for each decommissioning fund is the tax
computation of modified gross income. taxable year (or portion thereof) that the imposed by section 468A(e)(2) and
The modified gross income of a nuclear fund is in existence even though no paragraph (a) of this section; and
decommissioning fund must be amount is included in the gross income (ii) The taxable income with respect
computed on the basis of the taxable of the fund for such taxable year. The to which the nuclear decommissioning
year of the electing taxpayer. If an return is to be made on Form 1120–ND fund’s status as a large corporation is
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electing taxpayer changes its taxable in accordance with the instructions measured is modified gross income (as
year, each nuclear decommissioning relating to such form. For purposes of defined by paragraph (b) of this section).
fund of the electing taxpayer must this paragraph (d)(1), a nuclear
change to the new taxable year. See decommissioning fund is in existence
section 442 and section 1.442–1 for for the period that—

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§ 1.468A–5T Nuclear decommissioning section 468A and §§ 1.468A–1T through ordinary and necessary expenses
fund qualification requirements; 1.468A–4T, this section and §§ 1.468A– incurred in connection with the
prohibitions against self-dealing; 7T through 1.468A–9T. Thus, for operation of the nuclear
disqualification of nuclear example, the IRS will issue one decommissioning fund. Such term
decommissioning fund; termination of fund
upon substantial completion of
schedule of ruling amounts with respect includes the tax imposed by section
decommissioning (temporary). to such nuclear power plant, the nuclear 468A(e)(2) and § 1.468A–4T(a), any
decommissioning fund must file a single State or local tax imposed on the
(a) Qualification requirements—(1) In
income tax return (see § 1.468A– income or the assets of the fund, legal
general. (i) A nuclear decommissioning
4T(d)(1)), and, if the IRS disqualifies the expenses, accounting expenses,
fund must be established and
nuclear decommissioning fund, the actuarial expenses and trustee expenses.
maintained at all times in the United
assets of each separate fund are treated Such term does not include
States pursuant to an arrangement that as distributed on the date of decommissioning costs or the payment
qualifies as a trust under State law. disqualification (see paragraph (c)(3) of of insurance premiums on a policy to
Such trust must be established for the this section). pay for the nuclear decommissioning
exclusive purpose of providing funds (iv) If assets of a nuclear costs of a nuclear power plant. Such
for the decommissioning of one or more decommissioning fund are (or will be) term also does not include the excise tax
nuclear power plants, but a single trust invested through an unincorporated imposed on the trustee or other
agreement may establish multiple funds organization, within the meaning of disqualified person under section 4951
for such purpose. Thus— § 301.7701–2 of this chapter, the IRS or the reimbursement of any expenses
(A) Two or more nuclear will rule, if requested, whether the incurred in connection with the
decommissioning funds can be organization is an association taxable as assertion of such tax unless such
established and maintained pursuant to a corporation for Federal tax purposes. expenses are considered reasonable and
a single trust agreement; and A request for this ruling may be made
(B) One or more funds that are to be necessary under section 4951(d)(2)(C)
by the electing taxpayer as part of its and it is determined that the trustee or
used for the decommissioning of a request for a schedule of ruling amounts
nuclear power plant and that do not other disqualified person is not liable
or as part of a request under § 1.468A– for the excise tax.
qualify as nuclear decommissioning 8T for a schedule of deduction amounts. (4) Trust provisions. Each qualified
funds under this paragraph (a) can be (2) Limitation on contributions. nuclear decommissioning fund trust
established and maintained pursuant to Except as otherwise provided in agreement must provide that assets in
a trust agreement that governs one or § 1.468A–8T (relating to special the fund must be used as authorized by
more nuclear decommissioning funds. transfers under section 468A(f)), a
(ii) A separate nuclear section 468A and the regulations and
nuclear decommissioning fund is not that the agreement may not be amended
decommissioning fund is required for permitted to accept any contributions in
each electing taxpayer and for each so as to violate section 468A or the
cash or property other than cash regulations.
nuclear power plant with respect to payments with respect to which a (b) Prohibitions against self-dealing—
which an electing taxpayer possesses a deduction is allowed under section (1) In general. Except as otherwise
qualifying interest. The Internal 468A(a) and § 1.468A–2T(a). Thus, for provided in this paragraph (b), the
Revenue Service (IRS) will issue a example, except in the case of a special excise taxes imposed by section 4951
separate schedule of ruling amounts transfer pursuant to § 1.468A–8T, shall apply to each act of self-dealing
with respect to each nuclear securities may not be contributed to a between a disqualified person and a
decommissioning fund and each nuclear nuclear decommissioning fund even if nuclear decommissioning fund.
decommissioning fund must file a the taxpayer or a fund established by the (2) Self-dealing defined. For purposes
separate income tax return even if other taxpayer previously held such securities of this paragraph (b), the term ‘‘self-
nuclear decommissioning funds or for the purpose of providing funds for dealing’’ means any act described in
nonqualified funds are established and the decommissioning of a nuclear power section 4951(d), except—
maintained pursuant to the trust plant. (i) A payment by a nuclear
agreement governing such fund or the (3) Limitation on use of fund—(i) In decommissioning fund for the purpose
assets of other nuclear decommissioning general. The assets of a nuclear of satisfying, in whole or in part, the
funds or nonqualified funds are pooled decommissioning fund are to be used liability of the electing taxpayer for
with the assets of such fund. exclusively— decommissioning costs of the nuclear
(iii) An electing taxpayer can (A) To satisfy, in whole or in part, the power plant to which the nuclear
maintain only one nuclear liability of the electing taxpayer for decommissioning fund relates;
decommissioning fund for each nuclear decommissioning costs of the nuclear (ii) A withdrawal of an excess
power plant with respect to which the power plant to which the nuclear contribution by the electing taxpayer
taxpayer elects the application of decommissioning fund relates; pursuant to the rules of paragraph (c)(2)
section 468A. If a nuclear power plant (B) To pay administrative costs and of this section;
is subject to the ratemaking jurisdiction other incidental expenses of the nuclear (iii) A withdrawal by the electing
of two or more public utility decommissioning fund; and taxpayer of amounts that have been
commissions and any such public (C) To the extent that the assets of the treated as distributed under paragraph
utility commission requires a separate nuclear decommissioning fund are not (c)(3) of this section;
fund to be maintained for the benefit of currently required for the purposes (iv) A payment of amounts remaining
ratepayers whose rates are established described in paragraph (a)(3)(i)(A) or (B) in a nuclear decommissioning fund to
or approved by the public utility of this section, to make investments. the electing taxpayer after the
commission, the separate funds (ii) Definition of administrative costs termination of such fund (as determined
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maintained for such plant (whether or and expenses. For purposes of under paragraph (d) of this section);
not established and maintained paragraph (a)(3)(i) of this section, the (v) Any act described in section
pursuant to a single trust agreement) term administrative costs and other 4951(d)(2)(B) or (C);
shall be considered a single nuclear incidental expenses of a nuclear (vi) Any act that is described in
decommissioning fund for purposes of decommissioning fund means all § 53.4951–1(c) of this chapter and is

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74186 Federal Register / Vol. 72, No. 249 / Monday, December 31, 2007 / Rules and Regulations

undertaken to facilitate the temporary (iii) Notice of disqualification. The 1001 as a disposition of property held
investment of assets or the payment of IRS will notify the electing taxpayer of by the nuclear decommissioning fund
reasonable administrative expenses of the disqualification of a nuclear (see § 1.468A–4T(c)(2)). In addition, the
the nuclear decommissioning fund; or decommissioning fund and the date of electing taxpayer must include in gross
(vii) A payment by a nuclear disqualification by registered or income for the taxable year that
decommissioning fund for the certified mail to the last known address includes the date of disqualification an
performance of trust functions and of the electing taxpayer (the notice of amount equal to the fair market value of
certain general banking services by a disqualification). For further guidance the distributable assets of the nuclear
bank or trust company that is a regarding the definition of last known decommissioning fund multiplied by
disqualified person if the banking address, see § 301.6212–2 of this the fraction of the nuclear
services are reasonable and necessary to chapter. decommissioning fund that was
carry out the purposes of the fund and (2) Exception to disqualification—(i) disqualified under paragraph (c)(1) of
the compensation paid to the bank or In general. A nuclear decommissioning this section. For this purpose, the fair
trust company for such services, taking fund will not be disqualified under market value of the distributable assets
into account the fair interest rate for the paragraph (c)(1) of this section by reason of the nuclear decommissioning fund is
use of the funds by the bank or trust of an excess contribution or the equal to the fair market value of the
company, is not excessive. withdrawal of such excess contribution assets of the fund determined as of the
(3) Disqualified person defined. For by an electing taxpayer if the amount of date of disqualification, reduced by—
purposes of this paragraph (b), the term the excess contribution is withdrawn by (i) The amount of any excess
‘‘disqualified person’’ includes each the electing taxpayer on or before the contribution that was not withdrawn
person described in section 4951(e)(4) date prescribed by law (including before the date of disqualification if no
and § 53.4951–1(d). extensions) for filing the return of the deduction was allowed with respect to
(4) General banking services. The nuclear decommissioning fund for the such excess contribution;
general banking services allowed by taxable year to which the excess (ii) The amount of any deemed
paragraph (b)(2)(vii) of this section are— contribution relates. In the case of an distribution that was not actually
(i) Checking accounts, as long as the excess contribution that is the result of distributed before the date of
bank does not charge interest on any a payment made pursuant to § 1.468A– disqualification (as determined under
overwithdrawals; 3T(g)(1), a nuclear decommissioning § 1.468A–2T(d)(2)(iii)) if the amount of
(ii) Savings accounts, as long as the fund will not be disqualified under the deemed distribution was included
fund may withdraw its funds on no paragraph (c)(1) of this section if the in the gross income of the electing
more than 30 days’ notice without amount of the excess contribution is taxpayer for the taxable year in which
subjecting itself to a loss of interest on withdrawn by the electing taxpayer on the deemed distribution occurred; and
its money for the time during which the or before the later of— (iii) The amount of any tax that—
money was on deposit; and (A) The date prescribed by law (A) Is imposed on the income of the
(iii) Safekeeping activities (see (including extensions) for filing the fund;
§ 53.4941(d)-3(c)(2), Example 3, of this return of the nuclear decommissioning (B) Is attributable to income taken into
chapter). fund for the taxable year to which the account before the date of
(c) Disqualification of nuclear excess contribution relates; or disqualification or as a result of the
decommissioning fund—(1) In general— (B) The date that is 30 days after the disqualification; and
(i) Disqualification events. Except as date that the taxpayer receives the (C) Has not been paid as of the date
otherwise provided in paragraph (c)(2) ruling amount for such taxable year. of disqualification.
of this section, the IRS may, in its (ii) Excess contribution defined. For (4) Further effects of disqualification.
discretion, disqualify all or any portion purposes of this section, an excess Contributions made to a disqualified
of a nuclear decommissioning fund if at contribution is the amount by which fund after the date of disqualification
any time during a taxable year of the cash payments made (or deemed made) are not deductible under section
fund— to a nuclear decommissioning fund 468A(a) and § 1.468A–2T(a), or, if the
(A) The fund does not satisfy the during any taxable year exceed the fund is disqualified only in part, are
requirements of paragraph (a) of this payment limitation contained in section deductible only to the extent provided
section; or 468A(b) and § 1.468A–2T(b). The in the notice of disqualification. In
(B) The fund and a disqualified amount of a special transfer permitted addition, if any assets of the fund that
person engage in an act of self-dealing under § 1.468A–8T is not treated as a are deemed distributed under paragraph
(as defined in paragraph (b)(2) of this cash payment for this purpose. (c)(3) of this section are held by the fund
section). (iii) Taxation of income attributable after the date of disqualification (or if
(ii) Date of disqualification. (A) to an excess contribution. The income of additional assets are acquired with
Except as otherwise provided in this a nuclear decommissioning fund nondeductible contributions made to
paragraph (c)(1)(ii), the date on which a attributable to an excess contribution is the fund after the date of
disqualification under this paragraph (c) required to be included in the gross disqualification), the income earned by
will take effect (date of disqualification) income of the nuclear decommissioning such assets after the date of
is the date that the fund does not satisfy fund under § 1.468A–4T(b). disqualification must be included in the
the requirements of paragraph (a) of this (3) Disqualification treated as gross income of the electing taxpayer
section or the date on which the act of distribution. If all or any portion of a (see section 671) to the extent that such
self-dealing occurs, whichever is nuclear decommissioning fund is income is otherwise includible under
applicable. disqualified under paragraph (c)(1) of chapter 1 of the Internal Revenue Code
(B) If the IRS determines, in its this section, the portion of the nuclear (Code). An electing taxpayer can
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discretion, that the disqualification decommissioning fund that is establish a nuclear decommissioning
should take effect on a date subsequent disqualified is treated as distributed to fund to replace a fund that has been
to the date specified in paragraph the electing taxpayer on the date of disqualified in its entirety only if the
(C)(1)(ii)(A) of this section, the date of disqualification. Such a distribution IRS specifically consents to the
disqualification is such subsequent date. shall be treated for purposes of section establishment of a replacement fund in

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Federal Register / Vol. 72, No. 249 / Monday, December 31, 2007 / Rules and Regulations 74187

connection with the issuance of an levels mandated by the Nuclear the plant) is transferred to a Fund of the
initial schedule of ruling amounts for Regulatory Commission with respect to transferee; or
such replacement fund. a decommissioned nuclear power plant (ii) The transferee acquires the
(d) Termination of nuclear are satisfied (the substantial completion transferor’s entire qualifying interest in
decommissioning fund upon substantial date). Except as otherwise provided in the plant and the transferor’s entire
completion of decommissioning—(1) In paragraph (d)(3)(ii) of this section, the Fund is transferred to the transferee;
general. Upon substantial completion of substantial completion date is also the and
the decommissioning of a nuclear power termination date. (4) The transferee continues to satisfy
plant to which a nuclear (ii) If a significant portion of the total the requirements of § 1.468A–
decommissioning fund relates, such estimated decommissioning costs with 5T(a)(1)(iii), which permits an electing
nuclear decommissioning fund shall be respect to a nuclear power plant are not taxpayer to maintain only one Fund for
considered terminated and treated as incurred on or before the substantial each plant.
having distributed all of its assets on the completion date, an electing taxpayer (c) Tax consequences. A disposition
date the termination occurs (the may request, and the IRS will issue, a that satisfies the requirements of
termination date). Such a distribution ruling that designates a date subsequent paragraph (b) of this section will have
shall be treated for purposes of section to the substantial completion date as the the following tax consequences at the
1001 as a disposition of property held termination date. The termination date time it occurs:
by the nuclear decommissioning fund designated in the ruling will not be later (1) The transferor and its Fund. (i)
(see § 1.468A–4T(c)(2)). In addition, the than the last day of the third taxable Except as provided in paragraph
electing taxpayer shall include in gross year after the taxable year that includes (c)(1)(ii) of this section, neither the
income for the taxable year in which the the substantial completion date. The transferor nor the transferor’s Fund will
termination occurs an amount equal to request for a ruling under this paragraph recognize gain or loss or otherwise take
the fair market value of the assets of the (d)(3)(ii) must be filed during the any income or deduction into account
fund determined as of the termination taxable year that includes the by reason of the transfer of a
date, reduced by— substantial completion date and must proportionate amount of the assets of
(i) The amount of any deemed comply with the procedural rules in the transferor’s Fund to the transferee’s
distribution that was not actually effect at the time of the request. Fund (or by reason of the transfer of the
distributed before the termination date
§ 1.468A–6T Disposition of an interest in a
transferor’s entire Fund to the
if the amount of the deemed distribution
nuclear power plant (temporary). transferee). For purposes of the
was included in the gross income of the
(a) In general. This section describes regulations under section 468A, this
electing taxpayer for the taxable year in
the Federal income tax consequences of transfer (or the transfer of the
which the deemed distribution
a transfer of the assets of a nuclear transferor’s Fund) will not be
occurred; and
decommissioning fund (Fund) within considered a distribution of assets by
(ii) The amount of any tax that—
(A) Is imposed on the income of the the meaning of § 1.468A–1T(b)(4) in the transferor’s Fund.
fund; connection with a sale, exchange, or (ii) Notwithstanding paragraph
(B) Is attributable to income taken into other disposition by a taxpayer (c)(1)(i) of this section, if the transferor
account before the termination date or (transferor) of all or a portion of its has made a special transfer under
as a result of the termination; and qualifying interest in a nuclear power § 1.468A–8T prior to the transfer of the
(C) Has not been paid as of the plant to another taxpayer (transferee). Fund or Fund assets, any deduction
termination date. This section also explains how a with respect to that special transfer
(2) Additional rules. Contributions schedule of ruling amounts will be allowable under section 468A(f)(2) for a
made to a nuclear decommissioning determined for the transferor and taxable year ending after the date of the
fund after the termination date are not transferee. For purposes of this section, transfer of the Fund or Fund assets (the
deductible under section 468A(a) and a nuclear power plant includes a plant unamortized special transfer deduction)
§ 1.468A–2T(a). In addition, if any that previously qualified as a nuclear is allowed under section 468A(f)(2)(C)
assets are held by the fund after the power plant and that has permanently for the taxable year that includes the
termination date, the income earned by ceased to produce electricity. date of the transfer of the Fund or Fund
such assets after the termination date (b) Requirements. This section applies assets. If the taxpayer transfers only a
must be included in the gross income of if— portion of its interest in a nuclear power
the electing taxpayer (see section 671) to (1) Immediately before the plant, only the corresponding portion of
the extent that such income is otherwise disposition, the transferor maintained a the unamortized special transfer
includible under chapter 1 of the Code. Fund with respect to the interest deduction qualifies for the acceleration
Finally, an electing taxpayer using an disposed of; and under section 468A(f)(2)(C).
accrual method of accounting is allowed (2) Immediately after the (2) The transferee and its Fund.
a deduction for nuclear disposition— Neither the transferee nor the
decommissioning costs that are incurred (i) The transferee maintains a Fund transferee’s Fund will recognize gain or
during any taxable year (see § 1.468A– with respect to the interest acquired; loss or otherwise take any income or
2T(e)) even if such costs are incurred (ii) The interest acquired is a deduction into account by reason of the
after substantial completion of qualifying interest of the transferee in transfer of a proportionate amount of the
decommissioning (for example, the nuclear power plant; assets of the transferor’s Fund to the
expenses incurred to monitor or (3) In connection with the disposition, transferee’s Fund (or by reason of the
safeguard the plant site). either— transfer of the transferor’s Fund to the
(3) Substantial completion of (i) The transferee acquires part or all transferee). For purposes of the
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decommissioning and termination date. of the transferor’s qualifying interest in regulations under section 468A, this
(i) The substantial completion of the the plant and a proportionate amount of transfer (or the transfer of the
decommissioning of a nuclear power the assets of the transferor’s Fund (all transferor’s Fund) will not constitute a
plant occurs on the date that the such assets if the transferee acquires the payment or a contribution of assets by
maximum acceptable radioactivity transferor’s entire qualifying interest in the transferee to its Fund.

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(3) Basis. Transfers of assets of a Fund transferor has elected to make a special interest in a nuclear power plant must
to which this section applies do not transfer under section 468A(f), the file a request for a revised schedule of
affect basis. Thus, the transferee’s Fund amount allowable as a deduction under ruling amounts with respect to that
will have a basis in the assets received § 1.468A–8T for the taxable year in interest on or before the deemed
from the transferor’s Fund that is the which it transfers a portion of its payment deadline for the first taxable
same as the basis of those assets in the interest in the nuclear plant is equal to year of the transferee beginning after the
transferor’s Fund immediately before the deduction amount for that taxable disposition. See § 1.468A–3T(f)(1)(ii)(B).
the disposition. year from its existing schedule of If the transferee does not timely file
(d) Determination of proportionate deduction amounts multiplied by the such a request, the transferee’s ruling
amount. For purposes of this section, a percentage of its interest that it retains. amount with respect to that interest for
transferor of a qualifying interest in a This deduction is in addition to the the affected year or years will be zero,
nuclear power plant is considered to deduction described in paragraph unless the IRS waives the application of
transfer a proportionate amount of the (c)(1)(ii) of this section. this paragraph (e)(2)(ii) upon a showing
assets of its Fund to a Fund of a (iii) Taxable years after the year of of good cause for the delay.
transferee of the interest if, on the date disposition. A transferor that retains a (3) Examples. The following examples
of the transfer of the interest, the qualifying interest in a nuclear power illustrate the provisions of this
percentage of the fair market value of plant must file a request for a revised paragraph (e):
the Fund’s assets attributable to the schedule of ruling amounts (and, if
Example 1. (i) X Corporation is a calendar
assets transferred equals the percentage applicable, a revised schedule of year taxpayer engaged in the sale of electric
of the transferor’s qualifying interest deduction amounts) with respect to that energy generated by a nuclear power plant.
that is transferred. interest on or before the deemed The plant is owned entirely by X. On May
(e) Calculation of schedule of ruling payment deadline for the first taxable 27, 2007, X transfers a 60-percent qualifying
amounts and schedule of deduction year of the transferor beginning after the interest in the plant to Y Corporation, a
amounts for dispositions described in disposition. See § 1.468A–3T(f)(1)(ii)(B) calendar year taxpayer. Before the transfer, X
this section—(1) Transferor. If a and § 1.468A–8T(c)(3). If the transferor had received a schedule of ruling amounts
transferor disposes of all or a portion of does not timely file such a request, the containing an annual ruling amount of $10
million for the taxable years 2005 through
its qualifying interest in a nuclear power transferor’s ruling amount and the 2025. For 2007, neither X nor Y files a
plant in a transaction to which this transferor’s deduction amount under request for a revised schedule of ruling
section applies, the transferor’s § 1.468A–8T with respect to that interest amounts.
schedule of ruling amounts with respect for the affected year or years will be (ii) Under paragraph (e)(1)(i) of this
to the interests disposed of and retained zero, unless the Internal Revenue section, X’s ruling amount for 2007 is
(if any) and, if applicable, the amount Service (IRS) waives the application of calculated as follows: ($10,000,000 × .40) +
allowable as a deduction for a special this paragraph (e)(1)(iii) upon a showing ($10,000,000 × .60 × 146/365)=$6,400,000.
transfer under § 1.468A–8T will be of good cause for the delay. Under paragraph (e)(2)(i) of this section, Y’s
(2) Transferee. If a transferee acquires ruling amount for 2007 is calculated as
determined under the following rules: follows: $10,000,000 × .60 × 219/
(i) Taxable year of disposition; ruling all or a portion of a transferor’s
365=$3,600,000. Under paragraphs (e)(1)(iii)
amount. If the transferor does not file a qualifying interest in a nuclear power and (e)(2)(ii) of this section, X and Y must
request for a revised schedule of ruling plant in a transaction to which this file requests for revised schedules of ruling
amounts on or before the deemed section applies, the transferee’s amounts by March 15, 2009.
payment deadline for the taxable year of schedule of ruling amounts with respect Example 2. Y Corporation, the sole owner
the transferor in which the disposition to the interest acquired will be of a nuclear power plant, is a calendar year
of its interest in the nuclear power plant determined under the following rules: taxpayer. In year 1, Y elects to make a special
occurs (that is, the date that is two and (i) Taxable year of disposition. If the transfer under section 468A(f)(1) to the
transferee does not file a request for a nuclear decommissioning fund Y maintains
one-half months after the close of that
schedule of ruling amounts on or before with respect to the plant. The amount of the
year), the transferor’s ruling amount special transfer is $100×, and the remaining
with respect to that plant for that year the deemed payment deadline for the useful life of Plant is 20 years. Y obtains a
will equal the sum of— taxable year of the transferee in which schedule of deduction amounts under
(A) The ruling amount contained in the disposition occurs (that is, the date § 1.468A–8T(c) permitting a $5× deduction
the transferor’s current schedule of that is two and one-half months after the each year over the 20-year remaining useful
ruling amounts with respect to that close of that year), the transferee’s ruling life, and deducts $5× of the special transfer
plant for that taxable year multiplied by amount with respect to the interest amount in year 1, year 2, year 3, and year 4.
the portion of the qualifying interest acquired in the nuclear power plant for On the first day of year 5, Y transfers a 25%
that is retained (if any); and that year is equal to the amount interest in Plant to an unrelated party. Under
(B) The ruling amount contained in contained in the transferor’s current paragraph (c)(1)(ii) of this section, Y may
deduct in year 5 the unamortized special
the transferor’s current schedule of schedule of ruling amounts for that transfer deduction corresponding to the
ruling amounts with respect to that plant for the taxable year of the portion of the plant transferred (25 percent of
plant for that taxable year multiplied by transferor in which the disposition $80× or $20×). In addition, under paragraph
the product of— occurred, multiplied by the product of— (e)(1)(ii) of this section, Y may deduct the
(1) The portion of the transferor’s (A) The portion of the transferor’s portion of the deduction amount for year 5
qualifying interest that is disposed of; qualifying interest that is transferred; from the schedule of deduction amounts
and and corresponding to its retained interest in the
(2) A fraction, the numerator of which (B) A fraction, the numerator of which plant (75 percent of $5× or $3.75×). Pursuant
is the number of days in that taxable is the number of days in the taxable year to paragraph (e)(1)(iii) of this section, Y must
year that precede the date of of the transferor including and file a request for a revised schedule of ruling
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disposition, and the denominator of following the date of disposition, and amounts by March 15 of year 6.
which is the number of days in that the denominator of which is the number (f) Anti-abuse provision. The IRS may
taxable year. of days in that taxable year. treat a disposition as satisfying the
(ii) Taxable year of disposition; (ii) Taxable years after the year of requirements of this section if the IRS
deduction under § 1.468A–8T. If the disposition. A transferee of a qualifying determines that this treatment is

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necessary or appropriate to carry out the (iii) The total amount of actual cash effect before the enactment of the
purposes of section 468A and the payments made to the nuclear Energy Policy Act of 2005 (that is, the
regulations. decommissioning fund during the percentage of the plant’s total nuclear
taxable year that were not treated as decommissioning costs that were
§ 1.468A–7T Manner of and time for deemed cash payments under § 1.468A– permitted to be funded through the fund
making election (temporary).
2T(c)(1) for a prior taxable year; under the law in effect before the
(a) In general. An eligible taxpayer is (iv) The total amount of cash enactment of the Energy Policy Act of
allowed a deduction for the taxable year payments deemed made to the nuclear 2005); and
in which the taxpayer makes a cash decommissioning fund under § 1.468A– (ii) The percentage of
payment (or is deemed to make a cash 2T(c)(1) for the taxable year; and decommissioning costs transferred in
payment) to a nuclear decommissioning (v) The total amount of any special any previous special transfer (that is, the
fund only if the taxpayer elects the transfers made under § 1.468A–8T amount transferred as a percentage of
application of section 468A. A separate during the taxable year. the present value of the estimated future
election is required for each nuclear costs of decommissioning as of the first
decommissioning fund and for each § 1.468A–8T Special transfers to qualified day of the taxable year in which such
taxable year with respect to which funds pursuant to section 468A(f)
previous transfer was made).
payments are to be deducted under (temporary).
(3) Transfers in multiple years. A
section 468A. In the case of an affiliated (a) General rule—(1) In general. Under taxpayer making a special transfer is not
group of corporations that join in the section 468A(f), a taxpayer maintaining required to transfer the entire eligible
filing of a consolidated return for a a qualified nuclear decommissioning amount in a single year. The
taxable year, the common parent must fund with respect to a nuclear power requirements of paragraph (c) of this
make a separate election on behalf of plant may transfer cash or property into section apply separately to each year in
each member whose payments to a the fund (a special transfer). The special which a special transfer is made. In
nuclear decommissioning fund during transfer is not subject to the ruling calculating the amount of any
such taxable year are to be deducted amount limitation in section 468A(b) subsequent transfer, the taxpayer must
under section 468A. The election under and is not treated as a cash payment for reduce the pre-2005 nonqualifying
section 468A for any taxable year is purposes of that limitation. Thus, a percentage under paragraph (a)(2) of this
irrevocable and must be made by taxpayer may, in the same taxable year, section to take into account all previous
attaching a statement (Election pay the ruling amount and make a transfers. For example, if a taxpayer has
Statement) and a copy of the schedule special transfer into the fund. A special a pre-2005 nonqualifying percentage of
of ruling amounts provided pursuant to transfer may be made in cash, property, 40 percent, and transfers half of the
the rules of § 1.468A–3T to the or both cash and property. The amount eligible amount in a special transfer, any
taxpayer’s Federal income tax return (or, of a special transfer (that is, the amount subsequent transfer must be calculated
in the case of an affiliated group of of cash and the fair market value of on the basis of a pre-2005 nonqualifying
corporations that join in the filing of a property transferred) may not exceed percentage of 20 percent.
consolidated return, the consolidated the present value of the pre-2005 (b) Deduction for amounts
return) for such taxable year. The return nonqualifying amount of nuclear transferred—(1) In general. (i) Except as
to which the Election Statement and a decommissioning costs with respect to provided in this paragraph (b), the
copy of the schedule of ruling amounts the nuclear power plant. The taxpayer is deduction for any special transfer is
is attached must be filed on or before entitled to a deduction against income allowed ratably over the remaining
the time prescribed by law (including for a special transfer, as described in useful life of the nuclear power plant.
extensions) for filing the return for the paragraph (b) of this section. A special (ii) For purposes of this paragraph (b),
taxable year with respect to which transfer may not be made to a nuclear the remaining useful life of the nuclear
payments are to be deducted under decommissioning fund before the first power plant is the period beginning on
section 468A. taxable year in which a deduction the first day of the taxable year during
(b) Required information. The amount is applicable to the nuclear which the transfer is made and ending
Election Statement must include the decommissioning fund (see paragraph on the last day of the taxable year that
following information: (c) of this section). includes the last day of the estimated
(1) The legend ‘‘Election Under (2) Pre-2005 nonqualifying amount. useful life of the nuclear power plant.
Section 468A’’ typed or legibly printed The present value of the pre-2005 The last day of the estimated useful life
at the top of the first page. nonqualifying amount of nuclear of the nuclear power plant is
(2) The electing taxpayer’s name, decommissioning costs with respect to a determined for this purpose under the
address and taxpayer identification nuclear power plant is the amount equal rules of § 1.468A–3T(c)(2).
number (or, in the case of an affiliated to the pre-2005 nonqualifying (iii) The deduction for property
group of corporations that join in the percentage of the present value of the contributed in a special transfer is
filing of a consolidated return, the estimated future decommissioning costs limited to the lesser of the fair market
name, address and taxpayer (as defined in § 1.468A–1T(b)(6)) with value of the property contributed or the
identification number of each electing respect to the nuclear power plant as of taxpayer’s basis in that property.
taxpayer). the first day of the taxable year of the (2) Denial of deduction for previously
(3) The taxable year for which the taxpayer in which the special transfer is deducted amounts. If a deduction (other
election is made. made. For this purpose, the pre-2005 than a deduction under section 468A)
(4) For each nuclear decommissioning nonqualifying percentage for the plant is has been allowed to the taxpayer (or a
fund for which an election is made— 100 percent reduced by the sum of— predecessor) on account of expected
(i) The name and location of the (i) The qualifying percentage (within decommissioning costs for a nuclear
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nuclear power plant to which the fund the meaning of § 1.468A–3(d)(4) as in power plant (a nonconforming
relates; effect on December 31, 2005) used in deduction) or an amount otherwise
(ii) The name and employer determining the taxpayer’s last schedule includible in income has been excluded
identification number of the nuclear of ruling amounts for the nuclear from the gross income of the taxpayer
decommissioning fund; decommissioning fund under the law in (or a predecessor) on account of such

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expected decommissioning costs (a after the date of the transfer until the a fund’s assets and is allowed a
nonconforming exclusion), the end of the plant’s remaining useful life; deduction under paragraph (b)(3) of this
deduction allowed for a special transfer (D) Present values will be determined section, the taxpayer must request a new
to the nuclear decommissioning fund using the assumptions that are used in schedule of deduction amounts in
maintained with respect to the plant is determining the transferee’s first connection with the transfer.
reduced. In the case of a single special schedule of ruling amounts; and (d) Manner of requesting schedule of
transfer of the full eligible amount, the (E) A transferor and a transferee are deduction amounts—(1) In general. (i)
reduction is equal to the aggregate related if their relationship is specified In order to receive a deduction amount
amount of all nonconforming in section 267(b) or section 707(b)(1) or for any taxable year, a taxpayer must file
deductions and nonconforming they are treated as a single taxpayer a request for a schedule of deduction
exclusions. In the case of a transfer of under section 41(f)(1)(A) or (B). amounts that complies with the
less than the full eligible amount, the (4) Special rules—(i) Gain or loss not requirements of this paragraph (d), the
reduction is a ratable portion of such recognized on transfers to fund. No gain applicable procedural rules set forth in
aggregate amount. or loss will be recognized on any special § 601.201(e) of this chapter (Statement
(3) Transfers of qualified nuclear transfer. of Procedural Rules) and the
decommissioning funds. (i) If a special (ii) Taxpayer basis in fund. requirements of any applicable revenue
transfer is made to any qualified nuclear Notwithstanding any other provision of procedure that is in effect on the date
decommissioning fund, there is a the Internal Revenue Code (Code) and the request is filed.
subsequent transfer of the fund or the regulations, the taxpayer’s basis in the (ii) A separate request for a schedule
assets of the fund (a fund transfer), and fund is not increased by reason of the of deduction amounts is required for
§ 1.468–6T applies to the fund transfer, special transfer. each nuclear decommissioning fund
any amount of the deduction under (iii) Fund basis in transferred established by a taxpayer (see § 1.468A–
paragraph (b) of this section allocable to property. The fund’s basis in any 5T(a) for rules relating to the number of
taxable years ending after the date of the property transferred in a special transfer nuclear decommissioning funds that a
fund transfer will be allowed as a is the same as the transferor’s basis in taxpayer can establish).
current deduction to the transferor for the property immediately before the (iii) Except as provided by § 1.468A–
the taxable year that includes the date transfer. 5T(a)(1)(iv) (relating to certain
of the fund transfer. See § 468A–6T(c) (c) Schedule of deductions required— unincorporated organizations that may
for additional rules concerning transfers (1) In general. A taxpayer may not make be taxable as corporations) and
of decommissioning funds, including a special transfer to a qualified nuclear § 1.468A–3T (relating to a request for a
the transfer of a portion of the taxpayer’s decommissioning fund unless the schedule of ruling amounts), a request
interest in a nuclear power plant. If a taxpayer requests from the IRS a for a schedule of deduction amounts
taxpayer transfers of only part of the schedule of deduction amounts in must not contain a request for a ruling
fund or the fund’s assets, the rules in connection with such transfer. A on any other issue, whether the issue
this paragraph (b)(3) apply only to the schedule of deduction amounts for a involves section 468A or another
corresponding portion of the deduction nuclear decommissioning fund section of the Code.
under paragraph (b) of this section. (schedule of deduction amounts) is a (iv) In the case of an affiliated group
(ii) If a deduction is allowed to the ruling (within the meaning of of corporations that join in the filing of
transferor under paragraph (b)(3)(i) of § 601.201(a)(2) of this chapter) a consolidated return, the common
this section and the transferee is related specifying the annual deductions parent of the group may request a
to the transferor, the Internal Revenue (deduction amounts) that, over the schedule of deduction amounts for each
Service (IRS) will not approve the taxable years in the remaining useful member of the group that possesses a
transferee’s schedule of ruling amounts life of the nuclear power plant, will qualifying interest in the same nuclear
for taxable years beginning after the date result in the deduction of the entire power plant by filing a single
of the transfer unless the ruling amounts amount of the special transfer. Such a submission with the IRS.
are deferred in a manner that results in request may be combined with a request (v) The IRS shall not provide or revise
recapture of the acceleration amount. for a schedule of ruling amounts under a deduction amount applicable to a
For this purpose— § 1.468A–3T(a). In the case of a taxable year in response to a request for
(A) The acceleration amount is the combined request, the schedule of a schedule of deduction amounts that is
difference between the deduction deduction amounts requested under this filed after the deemed payment deadline
allowed under this paragraph (b)(3) and paragraph (c)(1) must be stated date (as defined in § 1.468A–2T(c)(1))
the present value as of the beginning of separately from the schedule of ruling for such taxable year. In determining the
the acceleration period of the amounts requested under § 1.468A– date when a request is filed, the
deductions that, but for the transfer, 3T(a) and approval of the schedule of principles of sections 7502 and 7503
would have been allowed under this deduction amounts under this section shall apply.
paragraph (b) for taxable years during will constitute a separate ruling. A (vi) Except as provided in paragraph
the acceleration period; request for a schedule of deduction (d)(1)(vii) of this section, a request for a
(B) The acceleration amount is amounts must comply with all schedule of deduction amounts shall be
recaptured if the aggregate present value provisions of paragraph (d) of this considered filed only if such request
of the ruling amounts at the beginning section. complies substantially with the
of the acceleration period is equal to the (2) Transfers in multiple taxable requirements of this paragraph (d).
amount by which the aggregate present years. A taxpayer making a special (vii) If a request does not comply
value of the ruling amounts that would transfer in more than one taxable year substantially with the requirements of
have been approved but for this pursuant to paragraph (a)(3) of this this paragraph (d), the IRS will notify
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paragraph (b)(3)(ii) exceeds the section must request a new schedule of the taxpayer of that fact. If the
acceleration amount; deduction amounts in connection with information or materials necessary to
(C) The acceleration period is the each special transfer. comply substantially with the
period from the first day of the (3) Transfer of partial interest in fund. requirements of this paragraph (d) are
transferor’s first taxable year beginning If a taxpayer transfers part of a fund or provided to the IRS within 30 days after

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this notification, the request will be (C) The estimated year in which the pursuant to § 1.468A–5T(a)(1)(iv), that
considered filed on the date of the decommissioning of the nuclear power the IRS rule whether an unincorporated
original submission. In addition, the plant will be substantially complete (see organization through which the assets of
request will be considered filed on the § 1.468A–5T(d)(3) for a definition of the fund are invested is an association
date of the original submission in a case substantial completion of taxable as a corporation for federal tax
in which the information and materials decommissioning). purposes, a copy of the legal documents
are provided more than 30 days after the (D) The total estimated cost of establishing or otherwise governing the
notification if the IRS determines that decommissioning expressed in current organization.
the electing taxpayer made a good faith dollars (that is, based on price levels in (xii) Any other information required
effort to provide the applicable effect at the time of the current by the IRS that may be necessary or
information or materials within 30 days determination). useful in determining the schedule of
after notification and also determines (E) The total estimated cost of deduction amounts.
that treating the request as filed on the decommissioning expressed in future (3) Statement required. A taxpayer
date of the original submission is dollars (that is, based on anticipated requesting a schedule of deduction
consistent with the purposes of section price levels when expenses are expected amounts under this paragraph (d) must
468A. In any other case in which the to be paid). submit a statement that any
information or materials necessary to (F) For each taxable year in the period nonconforming deductions and
comply substantially with the that begins with the year specified in nonconforming exclusions have reduced
requirements of this paragraph (d) are paragraph (d)(2)(vi)(B) of this section the deduction allowed for the special
not provided within 30 days after the (the estimated year in which substantial transfer in accordance with paragraph
notification, the request will be decommissioning costs will first be (b)(2) of this section.
considered filed on the date that all incurred) and ends with the year (4) Administrative procedures. The
information or materials necessary to specified in paragraph (d)(2)(vi)(C) of IRS may prescribe administrative
comply with the requirements of this this section (the estimated year in which procedures that supplement the
paragraph (d) are provided. the decommissioning of the nuclear provisions of paragraphs (d)(1) and (2)
(2) Information required. A request for power plant will be substantially of this section. In addition, the IRS may,
a schedule of deduction amounts must complete), the estimated cost of in its discretion, waive the requirements
contain the following information: decommissioning expressed in future of paragraphs (d)(1) and (2) of this
(i) The taxpayer’s name, address and dollars. section under appropriate
taxpayer identification number. (G) A description of the methodology circumstances.
(ii) Whether the request is for an used in converting the estimated cost of
decommissioning expressed in current § 1.468A–9T Effective/applicability date
initial schedule of deduction amounts and transitional rules (temporary).
or a schedule of deduction amounts for dollars to the estimated cost of
decommissioning expressed in future (a) Effective date. Sections 1.468A–1T
a subsequent special transfer. through 1.468A–8T are effective
(iii) The name and location of the dollars.
(H) The assumed after-tax rate of December 31, 2007, and apply with
nuclear power plant with respect to respect to taxable years ending on or
return to be earned by the amounts
which a schedule of deduction amounts after such date.
collected for decommissioning.
is requested. (I) A copy of each engineering or cost (b) Transitional rule. For a taxable
(iv) A description of the taxpayer’s study that was relied on or used by the year ending on or after January 1, 2006,
qualifying interest in the nuclear power taxpayer in determining the amount of and before December 31, 2007—
plant and the percentage of such nuclear decommissioning costs. (1) A taxpayer may use any reasonable
power plant that the qualifying interest (vii) The taxpayer’s pre-2005 method consistent with the principles
of the taxpayer represents. nonqualifying percentage (as defined in and provisions of section 468A to
(v) The present value of the estimated paragraph (a)(2) of this section). determine the schedule of ruling
future decommissioning costs (as (viii) The estimated useful life of the amounts or the schedule of deduction
defined in § 1.468A–1T(b)(6)) with nuclear power plant (as such term is amounts;
respect to the taxpayer’s qualifying defined in paragraph (b)(1)(ii) or (iii) of (2) Application of the provisions of
interest in the nuclear power plant as of this section). §§ 1.468A–1T through 1.468A–8T will
the first day of the taxable year of the (ix) If the request is for a subsequent be treated as a reasonable method if,
taxpayer in which a transfer is made schedule of deduction amounts, the except as otherwise permitted by
under this section. amount of the previous special transfer paragraph (b)(4) of this section, the
(vi) A description of the assumptions, and the present value of the estimated taxpayer applies all provisions in
estimates and other factors that were future decommissioning costs (as §§ 1.468A–1T through 1.468A–8T to the
used by the taxpayer to determine the defined in § 1.468A–1T(b)(6)) with taxable year;
amount of decommissioning costs, respect to the taxpayer’s qualifying (3) The Internal Revenue Service will
including each of the following if interest in the nuclear power plant as of issue schedules of ruling amounts based
applicable: the first day of the taxable year of the on the regulations in effect prior to
(A) A description of the proposed taxpayer in which the previous special January 1, 2006, if a taxpayer so requests
method of decommissioning the nuclear transfer was made. and if the Internal Revenue Service
power plant (for example, prompt (x) If the request is for a subsequent finds the request to be consistent with
removal/dismantlement, safe storage schedule of deduction amounts, a copy the principles and purposes of section
entombment with delayed of all schedules of deduction amounts 468A; and
dismantlement, or safe storage that relate to the nuclear power plant to (4) The taxpayer’s request for a
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mothballing with delayed which the request relates and that were schedule of ruling amounts or a
dismantlement). previously issued to the taxpayer schedule of deduction amounts
(B) The estimated year in which making the request. applicable to the taxable year will be
substantial decommissioning costs will (xi) If the request for a schedule of treated as timely if the request is filed
first be incurred. deduction amounts contains a request, before January 1, 2008.

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74192 Federal Register / Vol. 72, No. 249 / Monday, December 31, 2007 / Rules and Regulations

PART 602—OMB CONTROL NUMBERS additional item of return information an additional item of return information
UNDER THE PAPERWORK that may be disclosed to the Bureau of be disclosed to the Bureau for purposes
REDUCTION ACT the Census (Bureau). The regulation related to the Bureau’s annual Survey of
adds one item of return information for Industrial Research and Development.
■ Par. 4. The authority citation for part use in the Bureau’s annual Survey of Specifically, the Secretary of Commerce
602 continues to read as follows: Industrial Research and Development. requested categorical information on
Authority: 26 U.S.C. 7805. The temporary regulation provides total qualified research expenses in
guidance to IRS personnel responsible three ranges: Greater than zero, but less
■ Par. 5. In § 602.101, paragraph (b) is
for disclosing the information. This than $1 million; greater than or equal to
amended by adding the following
regulation facilitates the assistance of $1 million, but less than $3 million;
entries in numerical order to the table
the IRS to the Bureau in its statistics and, greater than or equal to $3 million.
to read as follows:
programs and requires no action by The request indicates that because of the
§ 602.101 OMB control numbers. taxpayers and has no effect on their tax small number of companies with
* * * * * liabilities. The text of the temporary research and development expenses it is
(b) * * * regulation also serves as the text of the difficult to design an efficient sample
proposed regulation (REG–147832–07) that produces reliable estimates. Data on
CFR part or section where Current OMB set forth in the Proposed Rules section total qualified research expenses from
identified and described Control No. in this issue of the Federal Register. the Form 6765, Credit for Increasing
DATES: Effective Date: This regulation is Research Activities, will assist the
* * * * *
effective on December 31, 2007. Bureau in identifying companies that
Applicability Date: For dates of are actively engaged in research and
1.468A–3T ............................ 1545–1269 applicability, see § 301.6103(j)(1)–1T(e). development activities for the annual
1545–1378 FOR FURTHER INFORMATION CONTACT: Survey of Industrial Research and
1545–1511 Glenn Melcher, (202) 622–4570 (not a Development.
toll-free number).
* * * * * Special Analyses
SUPPLEMENTARY INFORMATION:
It has been determined that this
1.468A–4T ............................ Background
1545–0954 Treasury decision is not a significant
* * * * * Under section 6103(j)(1)(A), upon regulatory action as defined in
written request from the Secretary of Executive Order 12866. Therefore, a
1.468A–7T ............................ 1545–0954 Commerce, the Treasury Secretary is to regulatory assessment is not required. It
1545–1511 furnish to the Bureau of the Census also has been determined that section
(Bureau) return information as may be 553(b) of the Administrative Procedure
* * * * * prescribed by Treasury regulations for Act (5 U.S.C. chapter 5) does not apply
the purpose of, but only to the extent to this regulation. For applicability of
1.468A–3T(h), 1.468A–7T, necessary in, structuring censuses and the Regulatory Flexibility Act (5 U.S.C.
and 1.468A–8T(d) ............. 1545–2091
conducting related statistical activities chapter 6), please refer to the cross-
* * * * * authorized by law. Section referenced notice of proposed
301.6103(j)(1)–1 of the regulations rulemaking published elsewhere in this
further defines such purposes by issue of the Federal Register. Pursuant
reference to 13 U.S.C. chapter 5 and to section 7805(f) of the Code, this
Approved: November 27, 2007.
provides an itemized description of the regulation has been submitted to the
Kevin M. Brown, return information authorized to be Chief Counsel for Advocacy of the Small
Deputy Commissioner for Services and disclosed for such purposes. Business Administration for comment
Enforcement. This document adopts a temporary on its impact on small business.
Eric Solomon, regulation that authorizes the IRS to
Assistant Secretary of the Treasury (Tax disclose an additional item of return Drafting Information
Policy). information, which has been requested The principal author of this
[FR Doc. E7–25223 Filed 12–28–07; 8:45 am] by the Secretary of Commerce, that is temporary regulation is Glenn Melcher,
BILLING CODE 4830–01–P necessary for the Bureau’s annual Office of the Associate Chief Counsel
Survey of Industrial Research and (Procedure & Administration).
Development.
DEPARTMENT OF THE TREASURY The temporary regulation in this issue List of Subjects in 26 CFR Part 301
of the Federal Register amends the Employment taxes, Estate taxes,
Internal Revenue Service Procedure and Administration Excise taxes, Gift taxes, Income taxes,
Regulations (26 CFR part 301) relating to Penalties, Reporting and recordkeeping
26 CFR Part 301 Internal Revenue Code (Code) section requirements.
[TD 9373] 6103(j)(1)(A). This amendment to the
regulation contains rules relating to the Amendments to the Regulations
RIN 1545–BH30 disclosure of return information ■Accordingly, 26 CFR part 301 is
reflected on returns to officers and amended as follows:
Disclosure of Return Information to the
employees of the Department of
Bureau of the Census
Commerce for structuring censuses and PART 301—PROCEDURE AND
AGENCY: Internal Revenue Service (IRS), conducting related statistical activities ADMINISTRATION
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Treasury. authorized by law.


■ Paragraph 1. The authority citation
ACTION: Temporary regulation. Explanation of Provisions for part 301 continues to read in part as
SUMMARY: This document contains a By letter dated February 6, 2006, the follows:
temporary regulation that adds an Secretary of Commerce requested that Authority: 26 U.S.C. 7805 * * *

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