You are on page 1of 16

32794 Federal Register / Vol. 72, No.

114 / Thursday, June 14, 2007 / Rules and Regulations

which incorporates the principles of Availability of IRS Documents DEPARTMENT OF THE TREASURY
section 1001, gain or loss on the
disposition of an asset is taken into IRS revenue rulings, procedures, and Internal Revenue Service
account net of the taxpayer’s basis, or notices cited in this preamble are made
investment, in the assets. In contrast, available by the Superintendent of 26 CFR Parts 1, 301, and 602
under section 382(h)(6), an item of Documents, U.S. Government Printing
Office, Washington, DC 20402. [TD 9329]
income is generally a gross amount that
is not netted and therefore not RIN 1545–BF26
List of Subjects in 26 CFR Part 1
necessarily matched with the item of
deduction incurred to earn the item of Income taxes, Reporting and Guidance Necessary To Facilitate
income. recordkeeping requirements. Business Electronic Filing and Burden
Therefore, the IRS and Treasury Reduction
Department request comments on the Amendments to the Regulations
AGENCY: Internal Revenue Service (IRS),
proposed regulations about identifying Treasury.
cases where taking into account items of ■Accordingly, 26 CFR part 1 is
income and deduction separately may amended as follows: ACTION: Final regulations and removal of
cause the 338 approach to not properly temporary regulations.
PART 1—INCOME TAXES
identify whether or not an item of SUMMARY: This document contains final
income or deduction is treated as RBIG ■ Paragraph 1. The authority citation regulations that affect taxpayers filing
or RBIL, and how the 338 approach Federal income tax returns. They
for part 1 is amended by adding an entry
might be adapted so that in such cases simplify, clarify, or eliminate reporting
in numerical order to read as follows:
it properly identifies whether or not an burdens and also eliminate regulatory
item of income or deduction is treated Authority: 26 U.S.C. 7805. * * *
impediments to the electronic filing of
as RBIG or RBIL. Section 1.382–7T also issued under 26
certain statements that taxpayers are
U.S.C. 382(m).* * *
Special Analyses required to include on or with their
■ Par. 2. Section 1.382–7T is added to Federal income tax returns. This
It has been determined that this read as follows: document also makes conforming
Treasury decision is not a significant changes to certain current regulations.
regulatory action as defined in § 1.382–7T Built-in gains and losses
DATES: Effective Date: These regulations
Executive Order 12666. Therefore, a (temporary).
are effective on June 14, 2007.
regulatory assessment is not required.
(a) Treatment of prepaid income. For Applicability Date: For dates of
These temporary regulations address
purposes of section 382(h), prepaid applicability, see §§ 1.302–2(d), 1.302–
situations in which taxpayers
income is not recognized built-in gain. 4(h), 1.331–1(f), 1.332–6(e), 1.338–10(c),
inappropriately attempt to treat deferred
The term prepaid income means any 1.351–3(f), 1.355–5(e), 1.368–3(e),
prepaid income as net unrealized built-
amount received prior to the change 1.381(b)–1(e), 1.382–8(j)(4), 1.382–11(b),
in gain for purposes of increasing the
date that is attributable to performance 1.1081–11(f), 1.1221–2(j), 1.1502–13(m),
amount of post-ownership change
occurring on or after the change date. 1.1502–31(j), 1.1502–32(j), 1.1502–33(k),
income that may be offset by pre-
Examples to which this paragraph (a) 1.1502–95(g), 1.1563–3(e) and 1.6012–
ownership change losses. For this
will apply include, but are not limited 2(k).
reason, it has been determined pursuant
to 5 U.S.C. 553(b)(B) that prior notice to, income received prior to the change FOR FURTHER INFORMATION CONTACT: For
and public procedure are impracticable date that is deferred under section 455, all sections except § 1.6012–2, Grid
and contrary to the public interest. For § 1.451–5, or Rev. Proc. 2004–34 (2004– Glyer, (202) 622–7930; for § 1.6012–2,
the same reason, it has been determined 1 CB 991) (or any successor revenue William T. Sullivan (202) 622–7052 (not
pursuant to 5 U.S.C. 553(d)(3) that good procedure) (see § 601.601(d)(2) of this toll-free numbers).
cause exists to make these temporary chapter). SUPPLEMENTARY INFORMATON:
regulations effective upon the date of (b) Effective/applicability date. (1)
publication. For applicability of the Paperwork Reduction Act
This section applies to loss corporations
Regulatory Flexibility Act (5 U.S.C. The collection of information
that have undergone an ownership
chapter 6) refer to the Special Analyses contained in these final regulations has
change on or after June 14, 2007.
section of the preamble to the cross- been reviewed and approved by the
reference notice of the proposed (2) The applicability of this section Office of Management and Budget in
rulemaking published in the Proposed expires on or before June 14, 2010. accordance with the Paperwork
Rules section in this issue of the Federal Reduction Act of 1995 (44 U.S.C.
Kevin M. Brown,
Register. Pursuant to section 7805(f) of 3507(d)) under control number 1545–
the Code, these temporary regulations Deputy Commissioner for Services and
2019.
Enforcement.
will be submitted to the Chief Counsel The collection of information in these
for Advocacy of the Small Business Eric Solomon, final regulations is in §§ 1.302–2, 1.302–
Administration for comment on their Assistant Secretary of the Treasury. 4, 1.331–1, 1.332–6, 1.338–10, 1.351–3,
impact on small business. [FR Doc. E7–11438 Filed 6–13–07; 8:45 am] 1.355–5, 1.368–3, 1.381(b)–1, 1.382–8,
BILLING CODE 4830–01–P 1.382–11, 1.1081–11, 1.1221–2, 1.1502–
Drafting Information
13, 1.1502–31, 1.1502–32, 1.1502–33,
The principal author of these 1.1502–95, 1.1563–3 and 1.6012–2. This
pwalker on PROD1PC71 with RULES

regulations is Sean McKeever, Office of information is required to enable the


Associate Chief Counsel (Corporate). IRS to verify that a taxpayer is reporting
However, other personnel from the IRS the correct amount of the fair market
and Treasury Department participated value of any property (including stock)
in their development. received and the basis of any property

VerDate Aug<31>2005 17:11 Jun 13, 2007 Jkt 211001 PO 00000 Frm 00022 Fmt 4700 Sfmt 4700 E:\FR\FM\14JNR1.SGM 14JNR1
Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Rules and Regulations 32795

(including stock) surrendered in the and no public hearing was requested or of the family attribution rules of section
transaction described in such section. held. However, three questions were 318(a)(1). Prior to the promulgation of
An agency may not conduct or raised informally and are addressed in § 1.302–4T(a), § 1.302–4(a)(1) provided
sponsor, and a person is not required to this preamble. that taxpayers were required to file
respond to, a collection of information family attribution waiver agreements
Section 1.302–2
unless the collection of information and § 1.302–4(a)(2) prescribed
displays a valid control number by the The first question involves a reporting conditions under which a taxpayer that
Office of Management and Budget. requirement under § 1.302–2 had failed to timely file the agreement
Books or records relating to a (redemptions not taxable as dividends). could obtain an extension of time to file
collection of information must be Specifically, the question involved from the appropriate district director.
retained as long as their contents might proposed § 1.302–2(b)(2), which Section 1.302–4T(a) removed the
become material in the administration requires all ‘‘significant holders’’ requirement that an agreement be filed
of any internal revenue law. Generally, receiving property from a corporation in as well as the instructions regarding late
tax returns and tax return information exchange for the corporation’s stock filing. Instead, that regulation provided
are confidential, as required by 26 (‘‘redemption exchanges’’) to include a that a statement must be filed and set
U.S.C. 6103. brief information statement on their forth the information that must be
return. The statement sets forth certain included. Section 1.302–4T(a) did not
Background information necessary to determine the include instructions for late filers.
On May 30, 2006, the IRS and proper treatment of the redemption The specific question raised was
Treasury Department published exchange. Under proposed § 1.302– whether the change affected taxpayers’
temporary regulations (TD 9264) under 2(b)(3)(i), a significant holder is any ability to remedy late filing. The IRS
26 CFR part 1 and 26 CFR part 602. See stockholder owning 5 percent or more of and Treasury Department did not intend
71 FR 30591, 2006–26 IRB 1150. The the stock of a publicly traded company any change to taxpayers’ ability to
IRS and Treasury Department issued a and any stockholder owning 1 percent remedy late filing. However, the final
notice of proposed rulemaking (REG– or more of the stock of a company that regulations do not incorporate
134317–05) cross-referencing those is not publicly traded. instructions for late filing because the
temporary regulations on the same day. The specific question raised was statement required is a regulatory
See 71 FR 30640, 2006–26 IRB 1184. whether the statement is necessary in all election and the late filing of all
In general, the regulations simplify, redemption exchanges, whether the regulatory elections is addressed by
clarify, or eliminate reporting burdens exchange is treated as a distribution that § 301.9100–1. Accordingly, such
for corporations and shareholders for is essentially equivalent to a dividend or instructions are not necessary and could
certain transactions, including not. Under the proposed regulations, all inadvertently imply that the general
distributions, exchanges and redemption exchanges are subject to this rules would not otherwise apply.
reorganizations. They also eliminate reporting requirement. The IRS and
Treasury Department determined that Section 1.6012–2
impediments to the electronic filing of
statements that taxpayers, primarily the simplified information to be Finally, a question was also raised
large corporations that are members of provided in the statement is necessary concerning the reporting requirements
consolidated or controlled groups, are for the identification and evaluation of applicable to foreign insurance
required to include on their Federal redemptions that are essentially corporations electing under section
income tax returns. equivalent to dividends. Furthermore, 953(d) to be treated as domestic
These regulations were part of a series the required information is information insurance corporations. Specifically, the
of regulations published by the IRS and that taxpayers should already have or be question raised was whether such
Treasury Department that are designed prepared to produce. Finally, as noted corporations have a reporting
to eliminate impediments to the in this preamble, the regulations limit requirement.
electronic filing of forms and statements any remaining burden by imposing the Section 1.6012–2(c)(1)(i) requires that
that taxpayers are required to include on reporting requirement only on a domestic life insurance company file
their Federal income tax returns. See, significant holders. For all these with its return a copy of its annual
for example, TD 9300, 71 FR 71040, reasons, the IRS and Treasury statement which shows the reserves
2007–2 IRB 246, and TD 9243, 71 FR Department have concluded that the used by the company in computing the
4276, 2006–8 IRB 475. requirement does not impose an taxable income reported on its return,
unnecessary or inappropriate burden on and a copy of Schedule A (real estate)
Explanation of Provisions taxpayers. Accordingly, the final and of Schedule D (bonds and stocks),
Except as provided in the following regulations adopt the rule proposed in or any successor thereto, of such annual
paragraph, this Treasury decision § 1.302–2(b)(2) and do not limit the statement. Section 1.6012–2(c)(2)
adopts the proposed regulations with no application of the reporting similarly requires that a domestic
substantive changes. In addition, this requirement. nonlife insurance company file with its
Treasury decision removes the return a copy of its annual statement,
Section 1.302–4 including the underwriting and
corresponding temporary regulations.
This Treasury decision does not adopt The second question involves a investment exhibit (or any successor
the following proposed regulations: reporting requirement under § 1.302–4 thereto), for the year covered by such
§ 1.1502–35(c)(4)(i), § 1.1502– (termination of shareholder’s interest). return. Section 953(d) provides that a
76(b)(2)(ii)(D) and § 1.1563–1(c)(2)(i) Specifically, the question involved the foreign insurance company that satisfies
through (iii). These proposed statement in proposed § 1.302–4(a) the requirements of section 953(d),
regulations will be addressed as part of regarding the waiver of family including the making of an election
pwalker on PROD1PC71 with RULES

other guidance projects. attribution. Under this section and under section 953(d)(1)(D), shall be
The IRS and Treasury Department section 302(c)(2), a redeeming treated as a domestic corporation for
received no written or electronic shareholder can avoid being treated as purposes of the Internal Revenue Code.
comments from the public in response receiving a dividend equivalent Thus, a foreign insurance company that
to the notice of proposed rulemaking distribution by waiving the application elects under section 953(d) to be treated

VerDate Aug<31>2005 17:11 Jun 13, 2007 Jkt 211001 PO 00000 Frm 00023 Fmt 4700 Sfmt 4700 E:\FR\FM\14JNR1.SGM 14JNR1
32796 Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Rules and Regulations

as a domestic corporation generally is 26 CFR Part 301 (ii) A description of the property
required under § 1.6012–2(c)(1) or (2), as received by the significant holder from
Administrative practice and
appropriate, to file with its return a the issuing corporation.
procedure, Bankruptcy, Income taxes.
copy of its annual statement. Under (3) Definitions. For purposes of this
§ 1.6012–2(c)(5), the term ‘‘annual 26 CFR Part 602 section:
statement’’ includes a pro forma annual Reporting and recordkeeping (i) Significant holder means any
statement if the insurance company is requirements. person that, immediately before the
not required to file the NAIC annual exchange—
statement. Adoption of Amendments to the (A) Owned at least five percent (by
Because the reporting requirements of Regulations vote or value) of the total outstanding
electing corporations are addressed in ■ Accordingly, 26 CFR parts 1 and 602 stock of the issuing corporation if the
the current regulations, the IRS and are amended as follows: stock owned by such person is publicly
Treasury Department are not modifying traded; or
the regulations to address this point PART 1—INCOME TAXES (B) Owned at least one percent (by
further. vote or value) of the total outstanding
■ Paragraph 1. The authority citation stock of the issuing corporation if the
Special Analysis for part 1 is amended by removing the stock owned by such person is not
entries for §§ 1.302–2T, 1.302–4T, publicly traded.
It has been determined that this 1.331–1T, 1.332–6T, 1.338–10T, 1.351–
Treasury Decision is not a significant (ii) Publicly traded stock means stock
3T, 1.355–5T, 1.368–3T, 1.381(b)–1T,
regulatory action as defined in that is listed on—
1.382–8T, 1.382–11T, 1.1081–11T,
Executive Order 12866. Therefore, a 1.1221–2T, 1.1502–13T, 1.1502–31T, (A) A national securities exchange
regulatory assessment is not required. It 1.1502–33T, 1.1502–95T, 1.1563–3T registered under section 6 of the
has also been determined that section and 1.6012–2T to read, in part, as Securities Exchange Act of 1934 (15
553(b) of the Administrative Procedure follows: U.S.C. 78f); or
Act (5 U.S.C. chapter 5) does not apply (B) An interdealer quotation system
to §§ 1.302–2, 1.302–4, 1.331–1, 1.332– Authority: 26 U.S.C. 7805. * * *
sponsored by a national securities
6, 1.351–3, 1.355–5, 1.368–3, 1.381(b)– ■ Par. 2. Section 1.302–2 is amended association registered under section 15A
1, 1.1081–11, 1.1563–3, and 1.6012–2. by: of the Securities Exchange Act of 1934
With respect to the collections of ■ 1. Adding headings to paragraphs (a), (15 U.S.C. 78o–3).
information in such sections, and with (b), (b)(1) and (c). (iii) Issuing corporation means the
respect to §§ 1.338–10, 1.382–8, 1.382– ■ 2. Revising paragraphs (b)(2) and (d). corporation that issued the shares of
11, 1.1221–2, 1.1502–13, 1.1502–31, ■ 3. Adding paragraphs (b)(3) and (b)(4). stock, some or all of which were
1.1502–32, 1.1502–33 and 1.1502–95, it The additions and revisions read as transferred by a significant holder to
is hereby certified that these regulations follows: such corporation in the exchange
will not have a significant economic described in paragraph (b)(2) of this
impact on a substantial number of small § 1.302–2 Redemptions not taxable as section.
entities. This certification is based on dividends.
(4) Cross reference. See section 6043
the fact that these regulations primarily (a) In general. * * * of the Internal Revenue Code for
affect large corporations (which are (b) Redemption not essentially requirements relating to a return by a
members of either controlled or equivalent to a dividend—(1) In general. liquidating corporation.
consolidated groups) and in the case of * * * (c) Basis adjustments. * * *
all corporations will substantially (2) Statement. Unless § 1.331–1(d) (d) Effective/applicability date.
reduce or eliminate the existing applies, every significant holder that Paragraphs (b)(2), (b)(3) and (b)(4) of this
reporting burden. Therefore, a transfers stock to the issuing corporation section apply to any taxable year
regulatory flexibility analysis under the in exchange for property from such beginning on or after May 30, 2006.
Regulatory Flexibility Act (5 U.S.C. corporation must include on or with However, taxpayers may apply
chapter 6) is not required. Pursuant to such holder’s return for the taxable year paragraphs (b)(2), (b)(3) and (b)(4) of this
section 7805(f) of the Internal Revenue of such exchange a statement entitled, section to any original Federal income
Code, these regulations were submitted ‘‘STATEMENT PURSUANT TO § 1.302– tax return (including any amended
to the Chief Counsel for Advocacy of the 2(b)(2) BY [INSERT NAME AND return filed on or before the due date
Small Business Administration for TAXPAYER IDENTIFICATION (including extensions) of such original
comment on their impact on small NUMBER (IF ANY) OF TAXPAYER], A return) timely filed on or after May 30,
business. SIGNIFICANT HOLDER OF THE 2006. For taxable years beginning before
STOCK OF [INSERT NAME AND May 30, 2006, see § 1.302–2 as
Drafting Information
EMPLOYER IDENTIFICATION contained in 26 CFR part 1 in effect on
The principal author of these NUMBER (IF ANY) OF ISSUING April 1, 2006.
regulations is Grid Glyer, Office of CORPORATION].’’ If a significant
Associate Chief Counsel (Corporate). holder is a controlled foreign § 1.302–2T [Removed]
However, other personnel from the IRS corporation (within the meaning of ■ Par. 3. Section 1.302–2T is removed.
and Treasury Department participated section 957), each United States
shareholder (within the meaning of ■ Par. 4. Section 1.302–4 is amended
in their development.
section 951(b)) with respect thereto by:
List of Subjects ■ 1. Revising paragraphs (a) and (h).
pwalker on PROD1PC71 with RULES

must include this statement on or with


its return. The statement must include— ■ 2. Adding headings to paragraphs (b),
26 CFR Part 1
(i) The fair market value and basis of (c), (d), (e), (f), and (g) introductory text.
Income taxes, Reporting and the stock transferred by the significant The additions and revisions read as
recordkeeping requirements. holder to the issuing corporation; and follows:

VerDate Aug<31>2005 17:11 Jun 13, 2007 Jkt 211001 PO 00000 Frm 00024 Fmt 4700 Sfmt 4700 E:\FR\FM\14JNR1.SGM 14JNR1
Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Rules and Regulations 32797

§ 1.302–4 Termination of shareholder’s § 1.302–4T [Removed] stock of the issuing corporation if the
interest. ■ Par. 5. Section 1.302–4T is removed. stock owned by such person is not
(a) Statement. The agreement ■ Par. 6. Section 1.331–1 is amended publicly traded.
specified in section 302(c)(2)(A)(iii) by: (ii) Publicly traded stock means stock
shall be in the form of a statement ■ 1. Adding headings to paragraphs (a), that is listed on—
entitled, ‘‘STATEMENT PURSUANT TO (b), (c) and (e). (A) A national securities exchange
SECTION 302(c)(2)(A)(iii) BY [INSERT ■ 2. Revising paragraphs (d) and (f). registered under section 6 of the
NAME AND TAXPAYER The additions and revisions read as Securities Exchange Act of 1934 (15
IDENTIFICATION NUMBER (IF ANY) follows: U.S.C. 78f); or
OF TAXPAYER OR RELATED PERSON, (B) An interdealer quotation system
AS THE CASE MAY BE], A § 1.331–1 Corporate liquidations. sponsored by a national securities
DISTRIBUTEE (OR RELATED PERSON) (a) In general. * * * association registered under section 15A
OF [INSERT NAME AND EMPLOYER (b) Gain or loss. * * * of the Securities Exchange Act of 1934
IDENTIFICATION NUMBER (IF ANY) (c) Recharacterization.* * * (15 U.S.C. 78o–3).
OF DISTRIBUTING CORPORATION].’’ (d) Reporting requirement—(1) (iii) Issuing corporation means the
The distributee must include such General rule. Every significant holder corporation that issued the shares of
statement on or with the distributee’s that transfers stock to the issuing stock, some or all of which were
first return for the taxable year in which corporation in exchange for property transferred by a significant holder to
the distribution described in section from such corporation must include on such corporation in the exchange
302(b)(3) occurs. If the distributee is a or with such holder’s return for the year described in paragraph (d)(1) of this
controlled foreign corporation (within of such exchange the statement section.
the meaning of section 957), each described in paragraph (d)(2) of this (4) Cross reference. See section 6043
United States shareholder (within the section unless— of the Code for requirements relating to
meaning of section 951(b)) with respect (i) The property is part of a a return by a liquidating corporation.
thereto must include this statement on distribution made pursuant to a (e) Example. * * *
or with its return. The distributee must corporate resolution reciting that the (f) Effective/applicability date.
represent in the statement— distribution is made in complete Paragraph (d) of this section applies to
(1) THE DISTRIBUTEE (OR RELATED liquidation of the corporation; and any taxable year beginning on or after
PERSON) HAS NOT ACQUIRED, (ii) The issuing corporation is May 30, 2006. However, taxpayers may
OTHER THAN BY BEQUEST OR completely liquidated and dissolved apply paragraph (d) of this section to
INHERITANCE, ANY INTEREST IN within one year after the distribution. any original Federal income tax return
THE CORPORATION (AS DESCRIBED (2) Statement. If required by (including any amended return filed on
IN SECTION 302(c)(2)(A)(i)) SINCE THE paragraph (d)(1) of this section, a or before the due date (including
DISTRIBUTION; and significant holder must include on or extensions) of such original return)
(2) THE DISTRIBUTEE (OR RELATED with such holder’s return a statement timely filed on or after May 30, 2006.
PERSON) WILL NOTIFY THE entitled, ‘‘STATEMENT PURSUANT TO For taxable years beginning before May
INTERNAL REVENUE SERVICE OF § 1.331–1(d) BY [INSERT NAME AND 30, 2006, see § 1.331–1 as contained in
ANY ACQUISITION, OTHER THAN BY TAXPAYER IDENTIFICATION 26 CFR part 1 in effect on April 1, 2006.
BEQUEST OR INHERITANCE, OF NUMBER (IF ANY) OF TAXPAYER], A
SIGNIFICANT HOLDER OF THE § 1.331–1T [Removed]
SUCH AN INTEREST IN THE
CORPORATION WITHIN 30 DAYS STOCK OF [INSERT NAME AND ■ Par. 7. Section 1.331–1T is removed.
AFTER THE ACQUISITION, IF THE EMPLOYER IDENTIFICATION ■ Par. 8. Section 1.332–6 is added to
ACQUISITION OCCURS WITHIN 10 NUMBER (IF ANY) OF ISSUING read as follows:
YEARS FROM THE DATE OF THE CORPORATION].’’ If a significant
holder is a controlled foreign § 1.332–6 Records to be kept and
DISTRIBUTION. information to be filed with return.
(b) Substantiation information. * * * corporation (within the meaning of
(c) Stock of parent, subsidiary or section 957), each United States (a) Statement filed by recipient
successor corporation redeemed. * * * shareholder (within the meaning of corporation. If any recipient corporation
(d) Redeemed shareholder as creditor. section 951(b)) with respect thereto received a liquidating distribution from
* * * must include this statement on or with the liquidating corporation pursuant to
(e) Acquisition of assets pursuant to its return. The statement must include— a plan (whether or not that recipient
creditor’s rights. * * * (i) The fair market value and basis of corporation has received or will receive
(f) Constructive ownership rules the stock transferred by the significant other such distributions from the
applicable. * * * holder to the issuing corporation; and liquidating corporation in other tax
(g) Avoidance of Federal income tax. (ii) A description of the property years as part of the same plan) during
* * * received by the significant holder from the current tax year, such recipient
(h) Effective/applicability date. the issuing corporation. corporation must include a statement
Paragraph (a) of this section applies to (3) Definitions. For purposes of this entitled, ‘‘STATEMENT PURSUANT TO
any taxable year beginning on or after section: SECTION 332 BY [INSERT NAME AND
May 30, 2006. However, taxpayers may (i) Significant holder means any EMPLOYER IDENTIFICATION
apply paragraph (a) of this section to person that, immediately before the NUMBER (IF ANY) OF TAXPAYER], A
any original Federal income tax return exchange— CORPORATION RECEIVING A
(including any amended return filed on (A) Owned at least five percent (by LIQUIDATING DISTRIBUTION,’’ on or
or before the due date (including vote or value) of the total outstanding with its return for such year. If any
pwalker on PROD1PC71 with RULES

extensions) of such original return) stock of the issuing corporation if the recipient corporation is a controlled
timely filed on or after May 30, 2006. stock owned by such person is publicly foreign corporation (within the meaning
For taxable years beginning before May traded; or of section 957), each United States
30, 2006, see § 1.302–4 as contained in (B) Owned at least one percent (by shareholder (within the meaning of
26 CFR part 1 in effect on April 1, 2006. vote or value) of the total outstanding section 951(b)) with respect thereto

VerDate Aug<31>2005 17:11 Jun 13, 2007 Jkt 211001 PO 00000 Frm 00025 Fmt 4700 Sfmt 4700 E:\FR\FM\14JNR1.SGM 14JNR1
32798 Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Rules and Regulations

must include this statement on or with and relevant facts regarding any required to be included in the combined
its return. The statement must include— liabilities assumed or extinguished as return; and
(1) The name and employer part of such liquidation. (B) The following declaration: EACH
identification number (if any) of the (e) Effective/applicability date. This TARGET IDENTIFIED IN THIS
liquidating corporation; section applies to any taxable year ELECTION TO FILE A COMBINED
(2) The date(s) of all distribution(s) beginning on or after May 30, 2006. RETURN CONSENTS TO THE FILING
(whether or not pursuant to the plan) by However, taxpayers may apply this OF A COMBINED RETURN.
the liquidating corporation during the section to any original Federal income * * * * *
current tax year; tax return (including any amended (c) Effective/applicability date.
(3) The aggregate fair market value return filed on or before the due date Paragraph (a)(4)(iii) of this section
and basis, determined immediately (including extensions) of such original applies to any taxable year beginning on
before the liquidation, of all of the assets return) timely filed on or after May 30, or after May 30, 2006. However,
of the liquidating corporation that have 2006. For taxable years beginning before taxpayers may apply paragraph
been or will be transferred to any May 30, 2006, see § 1.332–6 as (a)(4)(iii) of this section to any original
recipient corporation; contained in 26 CFR part 1 in effect on Federal income tax return (including
(4) The date and control number of April 1, 2006. any amended return filed on or before
any private letter ruling(s) issued by the the due date (including extensions) of
Internal Revenue Service in connection § 1.332–6T [Removed] such original return) timely filed on or
with the liquidation; ■ Par. 9. Section 1.332–6T is removed. after May 30, 2006. For taxable years
(5) The following representation: THE beginning before May 30, 2006, see
■ Par. 10. Section 1.338–0 is amended
PLAN OF COMPLETE LIQUIDATION § 1.338–10 as contained in 26 CFR part
WAS ADOPTED ON [INSERT DATE by revising the entries for §§ 1.338–
10(a)(4)(iii) and 1.338–10(c) and 1 in effect on April 1, 2006.
(mm/dd/yyyy)]; and
(6) A representation by such recipient removing the entry for § 1.338–10T to § 1.338–10T [Removed]
corporation either that— read as follows:
■ Par. 12. Section 1.338–10T is
(i) THE LIQUIDATION WAS § 1.338–0 Outline of topics. removed.
COMPLETED ON [INSERT DATE (mm/ ■ Par. 13. Section 1.351–3 is added to
* * * * *
dd/yyyy)]; or read as follows:
(ii) THE LIQUIDATION IS NOT § 1.338–10 Filing of returns.
COMPLETE AND THE TAXPAYER HAS (a) * * * § 1.351–3 Records to be kept and
TIMELY FILED [INSERT EITHER FORM (4) * * * information to be filed.
952, ‘‘Consent To Extend the Time to (iii) Procedure for filing a combined return. (a) Significant transferor. Every
Assess Tax Under Section 332(b),’’ OR * * * * * significant transferor must include a
NUMBER AND NAME OF THE (c) Effective/applicability date. statement entitled, ‘‘STATEMENT
SUCCESSOR FORM]. PURSUANT TO § 1.351–3(a) BY
* * * * *
(b) Filings by the liquidating [INSERT NAME AND TAXPAYER
corporation. The liquidating corporation ■ Par. 11. Section 1.338–10 is amended IDENTIFICATION NUMBER (IF ANY)
must timely file Form 966, ‘‘Corporate by revising paragraphs (a)(4)(iii) and (c) OF TAXPAYER], A SIGNIFICANT
Dissolution or Liquidation,’’ (or its to read as follows: TRANSFEROR,’’ on or with such
successor form) and its final Federal § 1.338–10 Filing of returns. transferor’s income tax return for the
corporate income tax return. See also taxable year of the section 351
section 6043 of the Code. (a) * * *
exchange. If a significant transferor is a
(c) Definitions. For purposes of this (4) * * *
controlled foreign corporation (within
section: (iii) Procedure for filing a combined the meaning of section 957), each
(1) Plan means the plan of complete return. A combined return is made by United States shareholder (within the
liquidation within the meaning of filing a single corporation income tax meaning of section 951(b)) with respect
section 332. return in lieu of separate deemed sale thereto must include this statement on
(2) Recipient corporation means the returns for all targets required to be or with its return. The statement must
corporation described in section included in the combined return. The include—
332(b)(1). combined return reflects the deemed (1) The name and employer
(3) Liquidating corporation means the asset sales of all targets required to be identification number (if any) of the
corporation that makes a distribution of included in the combined return. If the transferee corporation;
property to a recipient corporation targets included in the combined return (2) The date(s) of the transfer(s) of
pursuant to the plan. constitute a single affiliated group assets;
(4) Liquidating distribution means a within the meaning of section 1504(a), (3) The aggregate fair market value
distribution of property made by the the income tax return is signed by an and basis, determined immediately
liquidating corporation to a recipient officer of the common parent of that before the exchange, of the property
corporation pursuant to the plan. group. Otherwise, the return must be transferred by such transferor in the
(d) Substantiation information. Under signed by an officer of each target exchange; and
§ 1.6001–1(e), taxpayers are required to included in the combined return. Rules (4) The date and control number of
retain their permanent records and similar to the rules in § 1.1502–75(j) any private letter ruling(s) issued by the
make such records available to any apply for purposes of preparing the Internal Revenue Service in connection
authorized Internal Revenue Service combined return. The combined return with the section 351 exchange.
officers and employees. In connection must include a statement entitled, (b) Transferee corporation. Except as
pwalker on PROD1PC71 with RULES

with a liquidation described in this ‘‘ELECTION TO FILE A COMBINED provided in paragraph (c) of this
section, these records should RETURN UNDER SECTION 338(h)(15).’’ section, every transferee corporation
specifically include information The statement must include— must include a statement entitled,
regarding the amount, basis, and fair (A) The name, address, and employer ‘‘STATEMENT PURSUANT TO § 1.351–
market value of all distributed property, identification number of each target 3(b) BY [INSERT NAME AND

VerDate Aug<31>2005 17:11 Jun 13, 2007 Jkt 211001 PO 00000 Frm 00026 Fmt 4700 Sfmt 4700 E:\FR\FM\14JNR1.SGM 14JNR1
Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Rules and Regulations 32799

EMPLOYER IDENTIFICATION authorized Internal Revenue Service shareholder (within the meaning of
NUMBER (IF ANY) OF TAXPAYER], A officers and employees. In connection section 951(b)) with respect thereto
TRANSFEREE CORPORATION,’’ on or with the exchange described in this must include this statement on or with
with its income tax return for the section, these records should its return. The statement must include—
taxable year of the exchange. If the specifically include information (i) The name and employer
transferee corporation is a controlled regarding the amount, basis, and fair identification number (if any) of the
foreign corporation (within the meaning market value of all transferred property, controlled corporation;
of section 957), each United States and relevant facts regarding any (ii) The name and taxpayer
shareholder (within the meaning of liabilities assumed or extinguished as identification number (if any) of every
section 951(b)) with respect thereto part of such exchange. significant distributee;
must include this statement on or with (f) Effective/applicability date. This (iii) The date of the distribution of the
its return. The statement must include— section applies to any taxable year stock or securities of the controlled
(1) The name and taxpayer beginning on or after May 30, 2006. corporation;
identification number (if any) of every However, taxpayers may apply this (iv) The aggregate fair market value
significant transferor; section to any original Federal income and basis, determined immediately
(2) The date(s) of the transfer(s) of tax return (including any amended before the distribution or exchange, of
assets; return filed on or before the due date the stock, securities, or other property
(3) The aggregate fair market value (including extensions) of such original (including money) distributed by the
and basis, determined immediately return) timely filed on or after May 30, distributing corporation in the
before the exchange, of all of the 2006. For taxable years beginning before transaction; and
property received in the exchange; and (v) The date and control number of
May 30, 2006, see § 1.351–3 as
(4) The date and control number of any private letter ruling(s) issued by the
contained in 26 CFR part 1 in effect on
any private letter ruling(s) issued by the Internal Revenue Service in connection
April 1, 2006.
Internal Revenue Service in connection with the transaction.
with the section 351 exchange. § 1.351–3T [Removed] (2) Special rule when an asset transfer
(c) Exception for certain transferee precedes a stock distribution. If the
■ Par. 14. Section 1.351–3T is removed.
corporations. The transferee corporation distributing corporation transferred
■ Par. 15. Section 1.355–0 is amended
is not required to file a statement under property to the controlled corporation in
by removing the entry for § 1.355–5T a transaction described in section 351 or
paragraph (b) of this section if all of the and adding an entry for § 1.355–5.
information that would be included in 368, as part of a plan to then distribute
The revision and addition read as
the statement described in paragraph (b) the stock or securities of the controlled
follows:
of this section is included in any corporation in a transaction described in
statement(s) described in paragraph (a) § 1.355–0 Outline of sections. section 355 (or so much of section 356
of this section that is attached to the * * * * * as relates to section 355), then, unless
same return for the same section 351 paragraph (a)(1)(v) of this section
§ 1.355–5 Records to be kept and applies, the distributing corporation
exchange. information to be filed.
(d) Definitions. For purposes of this must also include on or with its return
section: (a) Distributing corporation. for the year of the distribution the
(1) Significant transferor means a (1) In general. statement required by § 1.351–3(a) or
(2) Special rule when an asset transfer 1.368–3(a). If the distributing
person that transferred property to a precedes a stock distribution.
corporation and received stock of the corporation is a controlled foreign
(b) Significant distributee.
transferee corporation in an exchange (c) Definitions. corporation (within the meaning of
described in section 351 if, immediately (1) Significant distributee. section 957), each United States
after the exchange, such person— (2) Publicly traded stock. shareholder (within the meaning of
(i) Owned at least five percent (by (d) Substantiation information. section 951(b)) with respect thereto
vote or value) of the total outstanding (e) Effective/applicability date. must include the statement required by
stock of the transferee corporation if the * * * * * § 1.351–3(a) or 1.368–3(a) on or with its
stock owned by such person is publicly ■ Par. 16. Section 1.355–5 is added to return.
traded, or read as follows: (b) Significant distributee. Every
(ii) Owned at least one percent (by significant distributee must include a
vote or value) of the total outstanding § 1.355–5 Records to be kept and statement entitled, ‘‘STATEMENT
stock of the transferee corporation if the information to be filed. PURSUANT TO § 1.355–5(b) BY
stock owned by such person is not (a) Distributing corporation—(1) In [INSERT NAME AND TAXPAYER
publicly traded. general. Every corporation that makes a IDENTIFICATION NUMBER (IF ANY)
(2) Publicly traded stock means stock distribution (the distributing OF TAXPAYER], A SIGNIFICANT
that is listed on— corporation) of stock or securities of a DISTRIBUTEE,’’ on or with such
(i) A national securities exchange controlled corporation, as described in distributee’s return for the year in which
registered under section 6 of the section 355 (or so much of section 356 such distribution is received. If a
Securities Exchange Act of 1934 (15 as relates to section 355), must include significant distributee is a controlled
U.S.C. 78f); or a statement entitled, ‘‘STATEMENT foreign corporation (within the meaning
(ii) An interdealer quotation system PURSUANT TO § 1.355–5(a) BY of section 957), each United States
sponsored by a national securities [INSERT NAME AND EMPLOYER shareholder (within the meaning of
association registered under section 15A IDENTIFICATION NUMBER (IF ANY) section 951(b)) with respect thereto
of the Securities Exchange Act of 1934 OF TAXPAYER], A DISTRIBUTING must include this statement on or with
pwalker on PROD1PC71 with RULES

(15 U.S.C. 78o–3). CORPORATION,’’ on or with its return its return. The statement must include—
(e) Substantiation information. Under for the year of the distribution. If the (1) The names and employer
§ 1.6001–1(e), taxpayers are required to distributing corporation is a controlled identification numbers (if any) of the
retain their permanent records and foreign corporation (within the meaning distributing and controlled
make such records available to any of section 957), each United States corporations;

VerDate Aug<31>2005 17:11 Jun 13, 2007 Jkt 211001 PO 00000 Frm 00027 Fmt 4700 Sfmt 4700 E:\FR\FM\14JNR1.SGM 14JNR1
32800 Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Rules and Regulations

(2) The date of the distribution of the regarding any liabilities assumed or OF TAXPAYER], A SIGNIFICANT
stock or securities of the controlled extinguished as part of such distribution HOLDER,’’ on or with such holder’s
corporation; and or exchange. return for the taxable year of the
(3) The aggregate basis, determined (e) Effective/applicability date. This exchange. If a significant holder is a
immediately before the exchange, of any section applies to any taxable year controlled foreign corporation (within
stock or securities transferred by the beginning on or after May 30, 2006. the meaning of section 957), each
significant distributee in the exchange, However, taxpayers may apply this United States shareholder (within the
and the aggregate fair market value, section to any original Federal income meaning of section 951(b)) with respect
determined immediately before the tax return (including any amended thereto must include this statement on
distribution or exchange, of the stock, return filed on or before the due date or with its return. The statement must
securities or other property (including (including extensions) of such original include—
money) received by the significant return) timely filed on or after May 30, (1) The names and employer
distributee in the distribution or 2006. For taxable years beginning before identification numbers (if any) of all of
exchange. May 30, 2006, see § 1.355–5 as the parties to the reorganization;
(c) Definitions. For purposes of this contained in 26 CFR part 1 in effect on (2) The date of the reorganization; and
section: April 1, 2006. (3) The fair market value, determined
(1) Significant distributee means— immediately before the exchange, of all
(i) A holder of stock of a distributing § 1.355–5T [Removed] the stock or securities of the target
corporation that receives, in a ■ Par. 17. Section 1.355–5T is removed. corporation held by the significant
transaction described in section 355 (or ■ Par. 18. Section 1.368–3 is added to holder that is transferred in the
so much of section 356 as relates to read as follows: transaction and such holder’s basis,
section 355), stock of a corporation determined immediately before the
controlled by the distributing § 1.368–3 Records to be kept and exchange, in the stock or securities of
corporation if, immediately before the information to be filed with returns. such target corporation.
distribution or exchange, such holder— (a) Parties to the reorganization. The (c) Definitions. For purposes of this
(A) Owned at least five percent (by plan of reorganization must be adopted section:
vote or value) of the total outstanding by each of the corporations that are (1) Significant holder means—
stock of the distributing corporation if parties thereto. Each such corporation (i) A holder of stock of the target
the stock owned by such holder is must include a statement entitled, corporation that receives stock or
publicly traded; or ‘‘STATEMENT PURSUANT TO § 1.368– securities in an exchange described in
(B) Owned at least one percent (by 3(a) BY [INSERT NAME AND section 354 (or so much of section 356
vote or value) of the stock of the EMPLOYER IDENTIFICATION as relates to section 354) if, immediately
distributing corporation if the stock NUMBER (IF ANY) OF TAXPAYER], A before the exchange, such holder—
owned by such holder is not publicly CORPORATION A PARTY TO A (A) Owned at least five percent (by
traded; or REORGANIZATION,’’ on or with its vote or value) of the total outstanding
(ii) A holder of securities of a return for the taxable year of the stock of the target corporation if the
distributing corporation that receives, in exchange. If any such corporation is a stock owned by such holder is publicly
a transaction described in section 355 controlled foreign corporation (within traded; or
(or so much of section 356 as relates to the meaning of section 957), each (B) Owned at least one percent (by
section 355), stock or securities of a United States shareholder (within the vote or value) of the total outstanding
corporation controlled by the meaning of section 951(b)) with respect stock of the target corporation if the
distributing corporation if, immediately thereto must include this statement on stock owned by such holder is not
before the distribution or exchange, or with its return. However, it is not publicly traded; or
such holder owned securities in such necessary for any taxpayer to include (ii) A holder of securities of the target
distributing corporation with a basis of more than one such statement on or corporation that receives stock or
$1,000,000 or more. with the same return for the same securities in an exchange described in
(2) Publicly traded stock means stock reorganization. The statement must section 354 (or so much of section 356
that is listed on— include— as relates to section 354) if, immediately
(i) A national securities exchange (1) The names and employer before the exchange, such holder owned
registered under section 6 of the identification numbers (if any) of all securities in such target corporation
Securities Exchange Act of 1934 (15 such parties; with a basis of $1,000,000 or more.
U.S.C. 78f); or (2) The date of the reorganization; (2) Publicly traded stock means stock
(ii) An interdealer quotation system (3) The aggregate fair market value that is listed on—
sponsored by a national securities and basis, determined immediately (i) A national securities exchange
association registered under section 15A before the exchange, of the assets, stock registered under section 6 of the
of the Securities Exchange Act of 1934 or securities of the target corporation Securities Exchange Act of 1934 (15
(15 U.S.C. 78o–3). transferred in the transaction; and U.S.C. 78f); or
(d) Substantiation information. Under (4) The date and control number of (ii) An interdealer quotation system
§ 1.6001–1(e), taxpayers are required to any private letter ruling(s) issued by the sponsored by a national securities
retain their permanent records and Internal Revenue Service in connection association registered under section 15A
make such records available to any with this reorganization. of the Securities Exchange Act of 1934
authorized Internal Revenue Service (b) Significant holders. Every (15 U.S.C. 78o–3).
officers and employees. In connection significant holder, other than a (d) Substantiation information. Under
with the distribution or exchange corporation a party to the § 1.6001–1(e), taxpayers are required to
pwalker on PROD1PC71 with RULES

described in this section, these records reorganization, must include a retain their permanent records and
should specifically include information statement entitled, ‘‘STATEMENT make such records available to any
regarding the amount, basis, and fair PURSUANT TO § 1.368–3(b) BY authorized Internal Revenue Service
market value of all property distributed [INSERT NAME AND TAXPAYER officers and employees. In connection
or exchanged, and relevant facts IDENTIFICATION NUMBER (IF ANY) with the reorganization described in this

VerDate Aug<31>2005 17:11 Jun 13, 2007 Jkt 211001 PO 00000 Frm 00028 Fmt 4700 Sfmt 4700 E:\FR\FM\14JNR1.SGM 14JNR1
Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Rules and Regulations 32801

section, these records should (e) Effective/applicability date. § 1.382–8 Controlled groups.
specifically include information Paragraph (b)(3) of this section applies * * * * *
regarding the amount, basis, and fair to any taxable year beginning on or after (c) * * *
market value of all transferred property, May 30, 2006. However, taxpayers may (2) Restoration of value. After the
and relevant facts regarding any apply paragraph (b)(3) of this section to value of the stock of each component
liabilities assumed or extinguished as any original Federal income tax return member is reduced pursuant to
part of such reorganization. (including any amended return filed on paragraph (c)(1) of this section, the
(e) Effective/applicability date. This or before the due date (including value of the stock of each component
section applies to any taxable year extensions) of such original return) member is increased by the amount of
beginning on or after May 30, 2006. timely filed on or after May 30, 2006. value, if any, restored to the component
However, taxpayers may apply this For taxable years beginning before May member by another component member
section to any original Federal income 30, 2006, see § 1.381(b)–1 as contained (the electing member) pursuant to this
tax return (including any amended in 26 CFR part 1 in effect on April 1, paragraph (c)(2). The electing member
return filed on or before the due date 2006. may elect (or may be deemed to elect
(including extensions) of such original under paragraph (h)(2)(i) of this section
return) timely filed on or after May 30, § 1.381(b)–1T [Removed]
in the case of a foreign component
2006. For taxable years beginning before ■ Par. 21. Section 1.381(b)–1T is member) to restore value to another
May 30, 2006, see § 1.368–3 as removed. component member in an amount that
contained in 26 CFR part 1 in effect on ■ Par. 22. Section 1.382–1 is amended does not exceed the lesser of—
April 1, 2006. by: (i) The sum of—
§ 1.368–3T [Removed] ■ 1. Revising the entry for § 1.382– (A) The value, determined
8(c)(2). immediately before the ownership
■ Par. 19. Section 1.368–3T is removed. ■ 2. Revising the entry for § 1.382– change, of the electing member’s stock
■ Par. 20. Section 1.381(b)–1 is 8(e)(4). (after adjustment under paragraph (c)(1)
amended by revising paragraphs (b)(3) ■ 3. Revising the entry for § 1.382–8(h). of this section and before any
and (e) to read as follows: ■ 4. Revising the entry for § 1.382– restoration of value under this
§ 1.381(b)–1 Operating rules applicable to 8(j)(4). paragraph (c)(2)); plus
carryovers in certain corporate ■ 5. Removing the entry for § 1.382–8T. (B) Any amount of value restored to
acquisitions. ■ 6. Adding the entry for § 1.382–11. the electing member by another
* * * * * ■ 7. Removing the entry for § 1.382– component member under this
(b) * * * 11T. paragraph (c)(2); or
(3) Election—(i) Content of The additions and revisions read as (ii) The value, determined
statements. The statements referred to follows: immediately before any ownership
in paragraph (b)(2) of this section must change, of the electing member’s stock
§ 1.382–1 Table of contents. (without regard to any adjustment under
be entitled, ‘‘ELECTION OF DATE OF
DISTRIBUTION OR TRANSFER * * * * * this section) that is directly owned by
PURSUANT TO § 1.381(b)–1(b)(2),’’ and § 1.382–8 Controlled groups.
the other component member
must include: [INSERT NAME AND immediately after the ownership
* * * * * change.
EMPLOYER IDENTIFICATION (c) * * *
NUMBER (IF ANY) OF DISTRIBUTOR (2) Restoration of value. * * * * *
OR TRANSFEROR CORPORATION] * * * * * (e) * * *
AND [INSERT NAME AND EMPLOYER (e) * * * (4) Foreign component member—(i) In
IDENTIFICATION NUMBER (IF ANY) (4) Foreign component member. general. Except as provided in
OF ACQUIRING CORPORATION] (i) In general. paragraph (e)(4)(ii) of this section,
ELECT TO DETERMINE THE DATE OF (ii) Exception. foreign component member means a
DISTRIBUTION OR TRANSFER UNDER * * * * * component member that is a foreign
§ 1.381(b)–1(b)(2). SUCH DATE IS (h) Time and manner of filing election to corporation.
[INSERT DATE (mm/dd/yyyy)]. restore. (ii) Exception. A foreign component
(ii) Filing of statements. One (1) Statements required. member shall not include a foreign
statement must be included on or with (i) Filing by loss corporation. corporation that has items treated as
the timely filed Federal income tax (ii) Filing by electing member. connected with the conduct of a trade
return of the distributor or transferor (iii) Agreement. or business in the United States that it
corporation for its taxable year ending (2) Special rule for foreign component
takes into account in determining its
members.
with the date of distribution or transfer. (i) Deemed election to restore full value. value pursuant to section 382(e)(3).
An identical statement must be (ii) Election not to restore full value. * * * * *
included on or with the timely filed (iii) Agreement. (h) Time and manner of filing election
Federal income tax return of the (3) Revocation of election. to restore—(1) Statements required—(i)
acquiring corporation for its first taxable * * * * * Filing by loss corporation. The election
year ending after that date. If the (j) * * * to restore value described in paragraph
distributor or transferor corporation, or (4) Effective/applicability date. (c)(2) of this section must be in the form
the acquiring corporation, is a * * * * * set forth in this paragraph (h)(1)(i). It
controlled foreign corporation (within must be filed by the loss corporation by
the meaning of section 957), each § 1.382–11 Reporting requirements. including a statement on or with its
pwalker on PROD1PC71 with RULES

United States shareholder (within the (a) Information statement required. income tax return for the taxable year in
meaning of section 951(b)) with respect (b) Effective/applicability date. which the ownership change occurs (or
thereto must include this statement on ■ Par. 23. Section 1.382–8 is amended with an amended return for that year
or with its return. by revising paragraphs (c)(2), (e)(4), (h) filed on or before the due date
* * * * * and (j)(4) to read as follows: (including extensions) of the income tax

VerDate Aug<31>2005 17:11 Jun 13, 2007 Jkt 211001 PO 00000 Frm 00029 Fmt 4700 Sfmt 4700 E:\FR\FM\14JNR1.SGM 14JNR1
32802 Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Rules and Regulations

return of any component member with electing member that is owned directly amended return for that year filed on or
respect to the taxable year in which the or indirectly by the corporation to before the due date (including
ownership change occurs). The common which value is restored; extensions) of the income tax return of
parent of a consolidated group must (D) State the amount of value that the any component member with respect to
make the election on behalf of the electing member elects to restore to the the taxable year in which the ownership
group. The election is made in the form corporation; and change occurs) (if any) for the taxable
of a statement entitled, ‘‘STATEMENT (E) State whether the value of either year which includes the change date in
PURSUANT TO § 1.382–8(h)(1) TO component member’s stock was connection with which the election
ELECT TO RESTORE ALL OR PART OF adjusted pursuant to paragraph (c)(4) of described in paragraph (h)(2)(ii)(A) of
THE VALUE OF [INSERT NAME AND this section. this section is made. If the electing
EMPLOYER IDENTIFICATION (2) Special rule for foreign component foreign component member is a
NUMBER (IF ANY) OF THE ELECTING members—(i) Deemed election to restore controlled foreign corporation (within
MEMBER] TO [INSERT NAME AND full value. Unless the election described the meaning of section 957), each
EMPLOYER IDENTIFICATION in paragraph (h)(2)(ii) of this section is United States shareholder (within the
NUMBER (IF ANY) OF THE made for a foreign component member, meaning of section 951(b)) with respect
CORPORATION TO WHICH VALUE IS each foreign component member of the thereto must include this statement on
RESTORED].’’ The statement must controlled group is deemed to have or with its return. It is not necessary for
include the amount of the value being elected to restore to each other the electing foreign component member
restored and must also indicate that an component member the maximum value (or United States shareholder, as the
agreement signed and dated by both allowable under paragraph (c)(2) of this case may be) to include this statement
parties, as described in paragraph section, taking into account the on or with its return if the loss
(h)(1)(iii) of this section, has been limitations of this section. corporation includes an identical
entered into. Each such party must (ii) Election not to restore full value.
statement on or with the same return for
retain either the original or a copy of (A) A loss corporation may elect to
the same election.
this agreement as part of its records. See reduce the amount of value restored
(iii) Agreement. Both the electing
§ 1.6001–1(e). from a foreign component member (the
foreign component member and the
(ii) Filing by electing member. An electing foreign component member) to
corporation to which full value is not
electing member must include a another component member under
paragraph (h)(2)(i) of this section in the restored must sign and date an
statement identical to the one described agreement. The agreement must—
in paragraph (h)(1)(i) of this section on form set forth in this paragraph
(h)(2)(ii). It must be filed by the loss (A) Identify the change date for the
or with its income tax return (or with an loss corporation in connection with
amended return for that year filed on or corporation by including a statement on
or with its income tax return for the which the election is made;
before the due date (including (B) State the value of the electing
extensions) of the income tax return of taxable year in which the ownership
change occurs (or with an amended foreign component member’s stock
any component member with respect to (without regard to any adjustment under
the taxable year in which the ownership return for that year filed on or before the
due date (including extensions) of the paragraph (c) of this section)
change occurs) (if any) for the taxable immediately before the ownership
year which includes the change date in income tax return of any component
member with respect to the taxable year change;
connection with which the election (C) State the amount of any reduction
described in paragraph (c)(2) of this in which the ownership change occurs).
The common parent of a consolidated required under paragraph (c)(1) of this
section is made. If the electing member
group must make the election on behalf section with respect to stock of the
is a controlled foreign corporation
of the group. The election is made in the electing foreign component member that
(within the meaning of section 957),
form of a statement entitled, is owned directly or indirectly by the
each United States shareholder (within
‘‘STATEMENT PURSUANT TO § 1.382– corporation to which value is not
the meaning of section 951(b)) with
8(h)(2)(ii) TO ELECT NOT TO RESTORE restored;
respect thereto must include this
FULL VALUE OF [INSERT NAME AND (D) State the amount of value that the
statement on or with its return. It is not
EMPLOYER IDENTIFICATION electing foreign component member
necessary for the electing member (or
NUMBER (IF ANY) OF ELECTING elects not to restore to the corporation;
the United States shareholder, as the
FOREIGN COMPONENT MEMBER] TO and
case may be) to include this statement
[INSERT NAME AND EMPLOYER (E) State whether the value of either
on or with its return if the loss
IDENTIFICATION NUMBER (IF ANY) component member’s stock was
corporation includes an identical
OF THE CORPORATION TO WHICH adjusted pursuant to paragraph (c)(4) of
statement on or with the same return for
SUCH VALUE IS NOT TO BE this section.
the same election.
(iii) Agreement. Both the electing RESTORED].’’ The statement must (3) Revocation of election. An election
member and the corporation to which include the amount of the value not (other than the deemed election
value is restored must sign and date an being restored and must also indicate described in paragraph (h)(2)(i) of this
agreement. The agreement must— that an agreement signed and dated by section) made under this section is
(A) Identify the change date for the both parties, as described in paragraph revocable only with the consent of the
loss corporation in connection with (h)(2)(iii) of this section, has been Commissioner.
which the election is made; entered into. Each such party must * * * * *
(B) State the value of the electing retain either the original or a copy of the (j) * * *
member’s stock (without regard to any agreement as part of its records. See (4) Effective/applicability date.
adjustment under paragraph (c) of this § 1.6001–1(e). Paragraphs (c)(2), (e)(4) and (h) of this
pwalker on PROD1PC71 with RULES

section) immediately before the (B) An electing foreign component section apply to any taxable year
ownership change; member must include a statement beginning on or after May 30, 2006.
(C) State the amount of any reduction identical to the one described in However, taxpayers may apply
required under paragraph (c)(1) of this paragraph (h)(2)(ii)(A) of this section on paragraphs (c)(2), (e)(4) and (h) of this
section with respect to stock of the or with its income tax return (or with an section to any original Federal income

VerDate Aug<31>2005 17:11 Jun 13, 2007 Jkt 211001 PO 00000 Frm 00030 Fmt 4700 Sfmt 4700 E:\FR\FM\14JNR1.SGM 14JNR1
Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Rules and Regulations 32803

tax return (including any amended § 1.1081–11 Records to be kept and (3) The aggregate fair market value
return filed on or before the due date information to be filed with returns. and basis, determined immediately
(including extensions) of such original (a) Distributions and exchanges; before the distribution or exchange, of
return) timely filed on or after May 30, significant holders of stock or securities. the stock, securities, or other property
2006. For taxable years beginning before Every significant holder must include a (including money) transferred in the
May 30, 2006, see § 1.382–8 as statement entitled, ‘‘STATEMENT distribution or exchange; and
contained in 26 CFR part 1 in effect on PURSUANT TO § 1.1081–11(a) BY (4) The date of the distribution or
April 1, 2006. [INSERT NAME AND TAXPAYER exchange.
IDENTIFICATION NUMBER (IF ANY) (c) Sales by members of system
§ 1.382–8T [Removed] OF TAXPAYER], A SIGNIFICANT groups. Each system group member
■ Par. 24. Section 1.382–8T is removed. HOLDER,’’ on or with such holder’s must include a statement entitled,
■ Par. 25. Section 1.382–11 is added to income tax return for the taxable year in ‘‘STATEMENT PURSUANT TO
read as follows: which the distribution or exchange § 1.1081–11(c) BY [INSERT NAME AND
occurs. If a significant holder is a EMPLOYER IDENTIFICATION
§ 1.382–11 Reporting requirements. controlled foreign corporation (within NUMBER (IF ANY) OF TAXPAYER], A
(a) Information statement required. A the meaning of section 957), each SYSTEM GROUP MEMBER,’’ on or with
loss corporation must include a United States shareholder (within the
statement entitled, ‘‘STATEMENT its income tax return for the taxable year
meaning of section 951(b)) with respect in which the sale is made. If any system
PURSUANT TO § 1.382–11(a) BY thereto must include this statement on
[INSERT NAME AND EMPLOYER group member is a controlled foreign
or with its return. The statement must corporation (within the meaning of
IDENTIFICATION NUMBER OF include—
TAXPAYER], A LOSS section 957), each United States
(1) The name and employer
CORPORATION,’’ on or with its income shareholder (within the meaning of
identification number (if any) of the
tax return for each taxable year that it section 951(b)) with respect thereto
corporation from which the stock,
is a loss corporation in which an owner securities, or other property (including must include this statement on or with
shift, equity structure shift or other money) was received by such significant its return. The statement must include—
transaction described in § 1.382– holder; (1) The dates and control numbers of
2T(a)(2)(i) occurs. The statement must (2) The aggregate basis, determined all relevant Commission orders;
include the date(s) of any owner shifts, immediately before the exchange, of any (2) The aggregate fair market value
equity structure shifts, or other stock or securities transferred by the and basis, determined immediately
transactions described in § 1.382– significant holder in the exchange, and before the sale, of all stock or securities
2T(a)(2)(i), the date(s) on which any the aggregate fair market value, sold; and
ownership change(s) occurred, and the determined immediately before the (3) The date of the sale.
amount of any attributes described in distribution or exchange, of the stock, (d) Definitions. (1) For purposes of
§ 1.382–2(a)(1)(i) that caused the securities or other property (including this section, Commission means the
corporation to be a loss corporation. A money) received by the significant Securities and Exchange Commission.
loss corporation may also be required to holder in the distribution or exchange; (2) For purposes of this section,
include certain elections on this and significant holder means a person that
statement, including— (3) The date of the distribution or receives stock or securities from a
(1) An election made under § 1.382– exchange. corporation (the distributing
2T(h)(4)(vi)(B) to disregard the deemed (b) Distributions and exchanges; corporation) pursuant to an order of the
exercise of an option if the actual corporations subject to Commission Commission, if, immediately before the
exercise of that option occurred within orders. Each corporation which is a transaction, such person—
120 days of the ownership change; and party to a distribution or exchange made (i) In the case of stock—
(2) An election made under § 1.382– pursuant to an order of the Commission (A) Owned at least five percent (by
6(b)(2) to close the books of the loss must include on or with its income tax vote or value) of the total outstanding
corporation for purposes of allocating return for its taxable year in which the stock of the distributing corporation if
income and loss to periods before and distribution or exchange takes place a the stock owned by such person is
after the change date for purposes of statement entitled, ‘‘STATEMENT publicly traded, or
section 382. PURSUANT TO § 1.1081–11(b) BY
(b) Effective/applicability date. This (B) Owned at least one percent (by
[INSERT NAME AND EMPLOYER
section applies to any taxable year vote or value) of the total outstanding
IDENTIFICATION NUMBER (IF ANY)
beginning on or after May 30, 2006. stock of the distributing corporation if
OF TAXPAYER], A DISTRIBUTING OR
However, taxpayers may apply this the stock owned by such person is not
EXCHANGING CORPORATION.’’ If the
section to any original Federal income publicly traded; or
distributing or exchanging corporation
tax return (including any amended is a controlled foreign corporation (ii) In the case of securities, owned
return filed on or before the due date (within the meaning of section 957), securities of the distributing corporation
(including extensions) of such original each United States shareholder (within with a basis of $1,000,000 or more.
return) timely filed on or after May 30, the meaning of section 951(b)) with (3) Publicly traded stock means stock
2006. For taxable years beginning before respect thereto must include this that is listed on—
May 30, 2006, see § 1.382–2T as statement on or with its return. The (i) A national securities exchange
contained in 26 CFR part 1 in effect on statement must include— registered under section 6 of the
April 1, 2006. (1) The date and control number of Securities Exchange Act of 1934 (15
the Commission order, pursuant to U.S.C. 78f); or
§ 1.382–11T [Removed]
pwalker on PROD1PC71 with RULES

which the distribution or exchange was (ii) An interdealer quotation system


■ Par. 26. Section 1.382–11T is made; sponsored by a national securities
removed. (2) The names and taxpayer association registered under section 15A
■ Par. 27. Section 1.1081–11 is added to identification numbers (if any) of the of the Securities Exchange Act of 1934
read as follows: significant holders; (15 U.S.C. 78o–3).

VerDate Aug<31>2005 17:11 Jun 13, 2007 Jkt 211001 PO 00000 Frm 00031 Fmt 4700 Sfmt 4700 E:\FR\FM\14JNR1.SGM 14JNR1
32804 Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Rules and Regulations

(4) For purposes of paragraph (b) of group’s income tax return for the taxable applicable results under this section
this section, exchange means exchange, year that includes the first date for (including, for example, the amount of
expenditure, or investment. which the election is to apply. The S’s intercompany items and the amount
(5) For purposes of paragraph (c) of election applies to all transactions deferred or offset as a result of
this section, system group member entered into on or after the date so paragraph (f)(5)(ii) of this section).
means each corporation which is a indicated. The election may only be (6) * * *
member of a system group and which, revoked with the consent of the (i) * * *
pursuant to an order of the Commission, Commissioner. (C) * * *
sells stock or securities received upon * * * * * (2) Election. The election described in
an exchange (pursuant to an order of the (j) Effective/applicability date. paragraph (f)(6)(i)(C)(1) of this section
Commission) and applies the proceeds Paragraph (e)(2)(iv) of this section must be made in a separate statement
derived therefrom in retirement or applies to any original consolidated entitled, ‘‘ELECTION TO REDUCE
cancellation of its own stock or Federal income tax return due (without BASIS OF P STOCK UNDER § 1.1502–
securities. extensions) after June 14, 2007. For 13(f)(6) HELD BY [INSERT NAME AND
(e) Substantiation information. Under EMPLOYER IDENTIFICATION
original consolidated Federal income
§ 1.6001–1(e), taxpayers are required to NUMBER OF MEMBER WHOSE BASIS
tax returns due (without extensions)
retain their permanent records and IN P STOCK IS REDUCED].’’ The
after May 30, 2006, and on or before
make such records available to any election must be filed by including the
June 14, 2007, see § 1.1221–2T as
authorized Internal Revenue Service statement on or with the consolidated
contained in 26 CFR part 1 in effect on
officers and employees. In connection group’s income tax return for the year in
April 1, 2007. For original consolidated
with the distribution or exchange which the nonmember becomes a
Federal income tax returns due (without
described in this section, these records member. The statement must identify
extensions) on or before May 30, 2006,
should specifically include information the member’s basis in the P stock (taking
see § 1.1221–2 as contained in 26 CFR
regarding the amount, basis, and fair into account the effect of this election)
part 1 in effect on April 1, 2006.
market value of all property distributed and the number of shares of P stock held
or exchanged, and relevant facts § 1.1221–2T [Removed] by the member.
regarding any liabilities assumed or
■ Par. 30. Section 1.1221–2T is * * * * *
extinguished as part of such distribution
removed. (m) Effective/applicability date.
or exchange.
(f) Effective/applicability date. This ■ Par. 31. Section 1.1502–13 is Paragraphs (f)(5)(ii)(E) and (f)(6)(i)(C)(2)
section applies to any taxable year amended by revising paragraphs of this section apply to any original
beginning on or after May 30, 2006. (f)(5)(ii)(E), (f)(6)(i)(C)(2) and (m) to read consolidated Federal income tax return
However, taxpayers may apply this as follows: due (without extensions) after June 14,
section to any original Federal income 2007. For original consolidated Federal
§ 1.1502–13 Intercompany transactions. income tax returns due (without
tax return (including any amended
* * * * * extensions) after May 30, 2006, and on
return filed on or before the due date
(f) * * * or before June 14, 2007, see § 1.1502–
(including extensions) of such original
(5) * * * 13T as contained in 26 CFR part 1 in
return) timely filed on or after May 30,
(ii) * * * effect on April 1, 2007. For original
2006. For taxable years beginning before
(E) Election. An election to apply consolidated Federal income tax returns
May 30, 2006, see § 1.1081–11 as
paragraph (f)(5)(ii) of this section is due (without extensions) on or before
contained in 26 CFR part 1 in effect on
made in a separate statement entitled, May 30, 2006, see § 1.1502–13 as
April 1, 2006.
‘‘[INSERT NAME AND EMPLOYER contained in 26 CFR part 1 in effect on
§ 1.1081–11T [Removed] IDENTIFICATION NUMBER OF April 1, 2006.
■ Par. 28. Section 1.1081–11T is COMMON PARENT] HEREBY ELECTS
THE APPLICATION OF § 1.1502– § 1.1502–13T [Removed]
removed.
13(f)(5)(ii) FOR AN INTERCOMPANY ■ Par. 32. Section 1.1502–13T is
■ Par. 29. Section 1.1221–2 is amended
TRANSACTION INVOLVING [INSERT removed.
by revising paragraphs (e)(2)(iv) and (j)
NAME AND EMPLOYER ■ Par. 33. Section 1.1502–31 is
to read as follows:
IDENTIFICATION NUMBER OF S] AND amended by revising paragraphs (e)(2)
§ 1.1221–2 Hedging transactions. [INSERT NAME AND EMPLOYER and (j) to read as follows:
* * * * * IDENTIFICATION NUMBER OF T].’’ A
(e) * * * separate election must be made for each § 1.1502–31 Stock basis after a group
(2) * * * such application. The election must be structure change.
(iv) Making and revoking the election. filed by including the statement on or * * * * *
Unless the Commissioner otherwise with the consolidated group’s income (e) * * *
prescribes, the election described in tax return for the year of T’s liquidation (2) Election. The election described in
paragraph (e)(2) of this section must be (or other transaction). The paragraph (e)(1) of this section must be
made in a separate statement that Commissioner may impose reasonable made in a separate statement entitled,
provides, ‘‘[INSERT NAME AND terms and conditions to the application ‘‘ELECTION TO TREAT LOSS
EMPLOYER IDENTIFICATION of paragraph (f)(5)(ii) of this section that CARRYOVER AS EXPIRING UNDER
NUMBER OF COMMON PARENT] are consistent with the purposes of such § 1.1502–31(e).’’ The election must be
HEREBY ELECTS THE APPLICATION section. The statement must— filed by including the statement on or
OF § 1.1221–2(e)(2) (THE SEPARATE- (1) Identify S’s intercompany with the consolidated group’s income
pwalker on PROD1PC71 with RULES

ENTITY APPROACH).’’ The statement transaction and T’s liquidation (or other tax return for the year that includes the
must also indicate the date as of which transaction); and group structure change. The statement
the election is to be effective. The (2) Specify which provision of must identify the amount of each loss
election must be filed by including the paragraph (f)(5)(ii) of this section carryover deemed to expire (or the
statement on or with the consolidated applies and how it alters the otherwise amount of each loss carryover deemed

VerDate Aug<31>2005 17:11 Jun 13, 2007 Jkt 211001 PO 00000 Frm 00032 Fmt 4700 Sfmt 4700 E:\FR\FM\14JNR1.SGM 14JNR1
Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Rules and Regulations 32805

not to expire, with any balance of any § 1.1502–32T [Amended] (3) Filing the election.
loss carryovers being deemed to expire). (i) Filing by the common parent.
■ Par. 36. Section 1.1502–32T is (ii) Filing by the former member.
* * * * * amended by removing and reserving (4) Revocation of election.
(j) Effective/applicability date. paragraphs (b)(4)(iv) and (j). (g) Effective/applicability date.
Paragraph (e)(2) of this section applies ■ Par. 37. Section 1.1502–33 is * * * * *
to any original consolidated Federal amended by revising paragraphs
income tax return due (without ■ Par. 40. Section 1.1502–95 is
(d)(5)(i)(D) and (k) to read as follows:
extensions) after June 14, 2007. For amended by revising paragraphs (e)(8),
original consolidated Federal income § 1.1502–33 Earnings and profits. (f) and (g) to read as follows:
tax returns due (without extensions) * * * * * § 1.1502–95 Rules on ceasing to be a
after May 30, 2006, and on or before (d) * * * member of a consolidated group (or loss
June 14, 2007, see § 1.1502–31T as (5) * * * subgroup).
contained in 26 CFR part 1 in effect on (i) * * * * * * * *
April 1, 2007. For original consolidated (D) If a method is permitted under (e) * * *
Federal income tax returns due (without paragraph (d)(4) of this section, provide (8) Reporting requirements—(i)
extensions) on or before May 30, 2006, the date and control number of the Common Parent. Except as provided in
see § 1.1502–31 as contained in 26 CFR private letter ruling issued by the paragraph (e)(8)(iii) of this section, if a
part 1 in effect on April 1, 2006. Internal Revenue Service approving net unrealized built-in loss is allocated
such method. under paragraph (e) of this section, the
§ 1.1502–31T [Removed]
* * * * * common parent must include a
■ Par. 34. Section 1.1502–31T is (k) Effective/applicability date. statement entitled, ‘‘STATEMENT OF
removed. Paragraph (d)(5)(i)(D) of this section NET UNREALIZED BUILT-IN LOSS
■ Par. 35. Section 1.1502–32 is applies to any original consolidated ALLOCATION PURSUANT TO
amended by revising paragraphs Federal income tax return due (without § 1.1502–95(e),’’ on or with its income
(b)(4)(iv) and (j) to read as follows: extensions) after June 14, 2007. For tax return for the taxable year in which
original consolidated Federal income the former member(s) (or a new loss
§ 1.1502–32 Investment adjustments. tax returns due (without extensions) subgroup that includes that member)
* * * * * after May 30, 2006, and on or before ceases to be a member. The statement
(b) * * * June 14, 2007, see § 1.1502–33T as must include—
(4) * * * contained in 26 CFR part 1 in effect on (A) The name and employer
(iv) Election. The election described April 1, 2007. For original consolidated identification number of the departing
in paragraph (b)(4) of this section must Federal income tax returns due (without member;
be made in a separate statement extensions) on or before May 30, 2006, (B) The amount of the remaining
entitled, ‘‘ELECTION TO TREAT LOSS see § 1.1502–33 as contained in 26 CFR NUBIL balance for the taxable year in
CARRYOVER OF [INSERT NAME AND part 1 in effect on April 1, 2006. which the member departs;
EMPLOYER IDENTIFICATION (C) The amount of the net unrealized
NUMBER OF S] AS EXPIRING UNDER § 1.1502–33T [Removed]
built-in loss allocated to the departing
§ 1.1502–32(b)(4).’’ The election must be ■ Par. 38. Section 1.1502–33T is member; and
filed by including a statement on or removed. (D) A representation that the common
with the consolidated group’s income ■ Par. 39. Section 1.1502–90 is parent has delivered a copy of the
tax return for the year S becomes a amended by: statement to the former member (or the
member. A separate statement must be ■ 1. Revising the entry for § 1.1502– common parent of the group of which
made for each member whose loss 95(e)(8). the former member is a member) on or
carryover is deemed to expire. The ■ 2. Revising the entry for § 1.1502– before the day the group files its income
statement must identify the amount of 95(f). tax return for the consolidated return
each loss carryover deemed to expire (or ■ 3. Revising the entry for § 1.1502– year that the former member ceases to
the amount of each loss carryover 95(g). be a member.
deemed not to expire, with any balance ■ 4. Removing the entry for § 1.1502– (ii) Former member. Except as
of any loss carryovers being deemed to 95T. provided in paragraph (e)(8)(iii) of this
expire) and the basis of any stock The revisions read as follows: section, the former member must
reduced as a result of the deemed include a statement on or with its first
§ 1.1502–90 Table of contents.
expiration. income tax return (or the first return in
* * * * * * * * * * which the former member joins) that is
(j) Effective/applicability date. § 1.1502–95 Rules on ceasing to be a filed after the close of the consolidated
Paragraph (b)(4)(iv) of this section member of a consolidated group (or loss return year of the group of which the
applies to any original consolidated subgroup). former member (or a new loss subgroup
Federal income tax return due (without * * * * * that includes that member) ceases to be
extensions) after June 14, 2007. For (e) * * * a member. The statement will be
original consolidated Federal income (8) Reporting requirements. identical to the statement filed by the
tax returns due (without extensions) (i) Common parent. common parent under paragraph
after May 30, 2006, and on or before (ii) Former member. (e)(8)(i) of this section except that
June 14, 2007, see § 1.1502–32T as (iii) Exception. instead of including the information
contained in 26 CFR part 1 in effect on (f) Filing the election to apportion the described in paragraph (e)(8)(i)(A) of
section 382 limitation and net unrealized
pwalker on PROD1PC71 with RULES

April 1, 2007. For original consolidated built-in gain.


this section the former member must
Federal income tax returns due (without (1) Form of the election to apportion. provide the name, employer
extensions) on or before May 30, 2006, (i) Statement. identification number and tax year of
see § 1.1502–32 as contained in 26 CFR (ii) Agreement. the former common parent, and instead
part 1 in effect on April 1, 2006. (2) Signing the agreement. of the representation described in

VerDate Aug<31>2005 17:11 Jun 13, 2007 Jkt 211001 PO 00000 Frm 00033 Fmt 4700 Sfmt 4700 E:\FR\FM\14JNR1.SGM 14JNR1
32806 Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Rules and Regulations

paragraph (e)(8)(i)(D) of this section the recognized, can be a pre-change consolidated section 382 limitation (or
former member must represent that it attribute subject to the limitation that is the subgroup section 382 limitation) or
has received and retained the copy of being apportioned; the loss group’s net unrealized built-in
the statement delivered by the common (D) If a consolidated section 382 gain (or loss subgroup’s net unrealized
parent as part of its records. See limitation (or subgroup section 382 built-in gain) by including the statement
§ 1.6001–1(e). limitation) is being apportioned, the on or with its income tax return for the
(iii) Exception. This paragraph (e)(8) amount of the consolidated section 382 taxable year in which the former
does not apply if the required limitation (or subgroup section 382 member (or new loss subgroup) ceases
information (other than the amount of limitation) for the taxable year during to be a member.
the remaining NUBIL balance) is which the former member (or new loss (ii) Filing by the former member. An
included in a statement of election subgroup) ceases to be a member of the identical statement must be included on
under paragraph (f) of this section consolidated group (determined without or with the first return of the former
(relating to apportioning a section 382 regard to any apportionment under this member (or the first return in which the
limitation). section); former member, or the members of a
(f) Filing the election to apportion the (E) If any net unrealized built-in gain new loss subgroup, join) that is filed
section 382 limitation and net is being apportioned, the amount of the after the close of the consolidated return
unrealized built-in gain—(1) Form of the loss group’s (or loss subgroup’s) net year of the group of which the former
election to apportion—(i) Statement. An unrealized built-in gain (as determined member (or the members of a new loss
election under paragraph (c) of this under paragraph (c)(2)(ii) of this section) subgroup) ceases to be a member.
section must be made in the form set that may be apportioned to members (4) Revocation of election. An election
forth in this paragraph (f)(1)(i). The that ceased to be members during the statement made under paragraph (c) of
election must be made by the common consolidated return year; this section is revocable only with the
parent and the party described in (F) The amount of the value element consent of the Commissioner.
paragraph (f)(2) of this section. It must and adjustment element of the (g) Effective/applicability date.
be filed in accordance with paragraph consolidated section 382 limitation (or Paragraphs (e)(8) and (f) of this section
(f)(3) of this section and be entitled, subgroup section 382 limitation) that is apply to any original consolidated
‘‘THIS IS AN ELECTION UNDER apportioned to the former member (or Federal income tax return due (without
§ 1.1502–95 TO APPORTION ALL OR new loss subgroup) pursuant to extensions) after June 14, 2007. For
PART OF THE [INSERT THE paragraph (c) of this section; original consolidated Federal income
CONSOLIDATED SECTION 382 (G) The amount of the loss group’s (or tax returns due (without extensions)
LIMITATION, THE SUBGROUP loss subgroup’s) net unrealized built-in after May 30, 2006, and on or before
SECTION 382 LIMITATION, THE LOSS gain that is apportioned to the former June 14, 2007, see § 1.1502–95T as
GROUP’S NET UNREALIZED BUILT-IN member (or new loss subgroup) contained in 26 CFR part 1 in effect on
GAIN, OR THE LOSS SUBGROUP’S pursuant to paragraph (c) of this section; April 1, 2007. For original consolidated
NET UNREALIZED BUILT-IN GAIN, AS (H) If the former member is allocated Federal income tax returns due (without
APPROPRIATE] IN THE AMOUNT OF any net unrealized built-in loss under extensions) on or before May 30, 2006,
[INSERT THE AMOUNT OF THE LOSS paragraph (e) of this section, the amount see § 1.1502–95 as contained in 26 CFR
LIMITATION OR NET UNREALIZED of any adjustment element apportioned part 1 in effect on April 1, 2006.
BUILT-IN GAIN] TO [INSERT NAME(S) to the former member that is attributable
AND EMPLOYER IDENTIFICATION to recognized built-in gains (determined § 1.1502–95T [Removed]
NUMBER(S) OF THE CORPORATION in a manner that will enable both the ■ Par. 41. Section 1.1502–95T is
(OR THE CORPORATIONS THAT group and the former member to apply removed.
COMPOSE A NEW LOSS SUBGROUP) the principles of § 1.1502–93(c)); and ■ Par. 42. Section 1.1563–3 is amended
TO WHICH ALLOCATION IS MADE].’’ (1) The name and employer by revising paragraph (d)(2)(iv), adding
The statement must also indicate that an identification number of the common paragraph (d)(2)(v) and revising (e) to
agreement, as described in paragraph parent making the apportionment. read as follows:
(f)(1)(ii) of this section, has been entered (2) Signing the agreement. The
into. agreement must be signed by both the § 1.1563–3 Rules for determining stock
(ii) Agreement. Both the common common parent and the former member ownership.
parent and the party described in (or, in the case of a loss subgroup, the * * * * *
paragraph (f)(2) of this section must sign common parent and the loss subgroup (d) * * *
and date the agreement. The agreement parent) by persons authorized to sign (2) * * *
must include, as appropriate— their respective income tax returns. If (iv) Statement. If the application of
(A) The date of the ownership change the allocation is made to a loss subgroup paragraph (d)(2)(ii) or (iii) of this section
that resulted in the consolidated section for which an election under § 1.1502– does not result in a corporation being
382 limitation (or subgroup section 382 91(d)(4) is made, and not separately to treated as a component member of only
limitation) or the loss group’s (or loss its members, the agreement under this one controlled group of corporations on
subgroup’s) net unrealized built-in gain; paragraph (f) must be signed by the a December 31, then such corporation
(B) The amount of the departing common parent and any member of the will be treated as a component member
member’s (or loss subgroup’s) pre- new loss subgroup by persons of only one such group on such date.
change net operating loss carryovers and authorized to sign their respective Such corporation may elect the group in
the taxable years in which they arose income tax returns. Each party signing which it is to be included by including
that will be subject to the limitation that the agreement must retain either the on or with its income tax return a
is being apportioned to that member (or original or a copy of the agreement as statement entitled, ‘‘STATEMENT TO
pwalker on PROD1PC71 with RULES

loss subgroup); part of its records. See § 1.6001–1(e). ELECT CONTROLLED GROUP
(C) The amount of any net unrealized (3) Filing of the election—(i) Filing by PURSUANT TO § 1.1563–3(d)(2)(iv).’’
built-in loss allocated to the departing the common parent. The election must The statement must include—
member (or loss subgroup) under be filed by the common parent of the (A) A description of each of the
paragraph (e) of this section, which, if group that is apportioning the controlled groups in which the

VerDate Aug<31>2005 17:11 Jun 13, 2007 Jkt 211001 PO 00000 Frm 00034 Fmt 4700 Sfmt 4700 E:\FR\FM\14JNR1.SGM 14JNR1
Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Rules and Regulations 32807

corporation could be included. The § 1.6012–2 Corporations required to make annual statement relating to the United
description must include the name and returns of income. States business of such company.
employer identification number of each * * * * * (4) Exception for insurance
component member of each such group (c) Insurance companies—(1) companies filing their Federal income
and the stock ownership of the Domestic life insurance companies—(i) tax returns electronically. If an
component members of each such In general. A life insurance company insurance company described in
group; and subject to tax under section 801 shall paragraph (c)(1), (c)(2), or (c)(3) of this
(B) The following representation: make a return on Form 1120–L, ‘‘U.S. section files its Federal income tax
[INSERT NAME AND EMPLOYER Life Insurance Company Income Tax return electronically, it should not
IDENTIFICATION NUMBER OF Return.’’ Except as provided in include on or with such return its
CORPORATION] ELECTS TO BE paragraph (c)(4) of this section, such annual statement (or pro forma annual
TREATED AS A COMPONENT company shall file with its return— statement), or any portion thereof. Such
MEMBER OF THE [INSERT (A) A copy of its annual statement statement must be available at all times
DESIGNATION OF GROUP]. which shows the reserves used by the
(v) Election—(A) Election filed. An for inspection by authorized Internal
company in computing the taxable Revenue Service officers or employees
election filed under paragraph (d)(2)(iv) income reported on its return; and
of this section is irrevocable and and retained for so long as such
(B) A copy of Schedule A (real estate)
effective until paragraph (d)(2)(ii) or (iii) statements may be material in the
and of Schedule D (bonds and stocks),
of this section applies or until a change administration of any internal revenue
or any successor thereto, of such annual
in the stock ownership of the law. See § 1.6001–1(e).
statement.
corporation results in termination of (ii) Mutual savings banks. Mutual (5) Definition. For purposes of this
membership in the controlled group in savings banks conducting life insurance section, the term annual statement
which such corporation has been business and meeting the requirements means the annual statement, the form of
included. of section 594 are subject to partial tax which is approved by the National
(B) Election not filed. In the event no computed on Form 1120, ‘‘U.S. Association of Insurance Commissioners
election is filed in accordance with the Corporation Income Tax Return,’’ and (NAIC), which is filed by an insurance
provisions of paragraph (d)(2)(iv) of this partial tax computed on Form 1120–L. company for the year with the insurance
section, then the Internal Revenue The Form 1120–L is attached as a departments of States, Territories, and
Service will determine the group in schedule to Form 1120, together with the District of Columbia. The term
which such corporation is to be the annual statement and schedules annual statement also includes a pro
included. Such determination will be required to be filed with Form 1120–L. forma annual statement if the insurance
binding for all subsequent years unless (2) Domestic nonlife insurance company is not required to file the
the corporation files a valid election companies. Every domestic insurance NAIC annual statement.
with respect to any such subsequent company other than a life insurance * * * * *
year or until a change in the stock company shall make a return on Form
ownership of the corporation results in (k) Effective/applicability date.
1120–PC, ‘‘U.S. Property and Casualty
termination of membership in the Paragraph (c) of this section applies to
Insurance Company Income Tax
controlled group in which such any taxable year beginning on or after
Return.’’ This includes organizations
corporation has been included. May 30, 2006. However, taxpayers may
described in section 501(m)(1) that
apply paragraph (c) of this section to
* * * * * provide commercial-type insurance and
(e) Effective/applicability date. any original Federal income tax return
organizations described in section 833.
Paragraph (d)(2)(iv) and (v) of this (including any amended return filed on
Except as provided in paragraph (c)(4)
section apply to any taxable year or before the due date (including
of this section, such company shall file
beginning on or after May 30, 2006. extensions) of such original return)
with its return a copy of its annual
However, taxpayers may apply timely filed on or after May 30, 2006.
statement (or a pro forma annual
paragraph (d)(2)(iv) and (v) of this For taxable years beginning before May
statement), including the underwriting
section to any original Federal income 30, 2006, see § 1.6012–2 as contained in
and investment exhibit (or any
tax return (including any amended 26 CFR part 1 in effect on April 1, 2006.
successor thereto) for the year covered
return filed on or before the due date by such return. § 1.6012–2T [Removed]
(including extensions) of such original (3) Foreign insurance companies. The
return) timely filed on or after May 30, provisions of paragraphs (c)(1) and (c)(2) ■ Par. 45. Section 1.6012–2T is
2006. For taxable years beginning before of this section concerning the returns removed.
May 30, 2006, see § 1.1563–3 as and statements of insurance companies
contained in 26 CFR part 1 in effect on §§ 1.338(h)(10)–1, 1.382–2T, 1.382–8,
subject to tax under section 801 or
1.1502–13, 1.1502–32, 1.502–92, 1.502–94,
April 1, 2006. section 831 also apply to foreign 1.502–95, 1.563–3, and 1.6043–2
insurance companies subject to tax [Amended]
§ 1.1563–3T [Removed]
under those sections, except that the
■ Par. 43. Section 1.1563–3T is copy of the annual statement required to ■ Par. 46. For each entry in the
removed. be submitted with the return shall, in ‘‘Location’’ column of the following
■ Par. 44. Section 1.6012–2 is amended the case of a foreign insurance company table, remove the language in the
by revising paragraphs (c) and (k) to that is not required to file an annual ‘‘Remove’’ column and add the language
read as follows: statement, be a copy of the pro forma in the ‘‘Add’’ column in its place:
pwalker on PROD1PC71 with RULES

VerDate Aug<31>2005 17:11 Jun 13, 2007 Jkt 211001 PO 00000 Frm 00035 Fmt 4700 Sfmt 4700 E:\FR\FM\14JNR1.SGM 14JNR1
32808 Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Rules and Regulations

Location Remove Add

The last sentence of the introductory text to The rules described in paragraph (a) of The following rules shall be applicable in de-
§ 1.302–4. § 1.302–4T and in paragraphs (b) through termining whether the specific requirements
(g) of this section apply in determining of section 302(c)(2) are met:
whether the specific requirements of section
302(c)(2) are met.
§ 1.338(h)(10)–1(f) .............................................. § 1.331–1T(d) and § 1.332–6T ......................... § 1.331–1(d) and § 1.332–6.
§ 1.382–2T(a)(2)(ii) ............................................. § 1.382–11T ..................................................... § 1.382–11.
The last sentence of § 1.382–2T(h)(4)(vi)(B) ..... paragraph (a) of § 1.382–11T .......................... § 1.382–11(a).
The first sentence of § 1.382–6(b)(2)(i) .............. § 1.382–11T(a) ................................................. § 1.382–11(a).
The second sentence of § 1.382–8(a) ............... paragraphs (c)(1), (c)(3), (c)(4) and (c)(5) of paragraph (c) of this section.
this section and paragraph (c)(2) of
§ 1.382–8T.
The third sentence of § 1.382–8(a) .................... paragraphs (c)(1), (c)(3), (c)(4) and (c)(5) of paragraph (c) of this section.
this section and paragraph (c)(2) of
§ 1.382–8T.
§ 1.382–8(c)(3) ................................................... paragraph (c)(2) of § 1.382–8T ........................ paragraph (c)(2) of this section.
The first sentence of § 1.382–8(c)(4) ................. paragraphs (c)(1) and (c)(3) of this section paragraphs (c)(1), (2), and (3) of this section.
and paragraph (c)(2) of § 1.382–8T.
§ 1.382–8(c)(5) ................................................... paragraphs (c)(1), (c)(3), (c)(4), and (c)(5) of this paragraph (c).
this section, and paragraph (c)(2) of
§ 1.382–8T.
The fifth sentence of § 1.382–8(f) ...................... paragraphs (c)(1), (c)(3), (c)(4), and (c)(5) of paragraph (c) of this section.
this section, and paragraph (c)(2) of
§ 1.382–8T.
§ 1.382–8(g), Example (1)(b)(2) ......................... paragraphs (c)(1), (c)(3), (c)(4), and (c)(5) of paragraph (c) of this section.
this section, and paragraph (c)(2) of
§ 1.382–8T.
The second sentence of § 1.382–8(g), Example paragraphs (c)(1), (c)(3), (c)(4), and (c)(5) of paragraph (c) of this section.
(1)(c). this section, and paragraph (c)(2) of
§ 1.382–8T.
§ 1.382–8(g), Example (2)(c) .............................. paragraph (c)(2) of § 1.382–8T ........................ paragraph (c)(2) of this section.
The first sentence of § 1.382–8(g), Example paragraph (c)(2) of § 1.382–8T ........................ paragraph (c)(2) of this section.
(2)(e).
§ 1.382–8(g), Example (3)(b) ............................. paragraph (c)(2) of § 1.382–8T ........................ paragraph (c)(2) of this section.
§ 1.382–8(g), Example (3)(c)(1)(B) ..................... paragraph (c)(1) of this section and paragraph paragraphs (c)(1) and (2) of this section.
(c)(2) of § 1.382–8T.
The second sentence of § 1.382–8(g), Example paragraph (c)(2) of § 1.382–8T ........................ paragraph (c)(2) of this section.
(4)(c).
The second sentence of § 1.382–8(g), Example paragraph (c)(2) of § 1.382–8T ........................ paragraph (c)(2) of this section.
(5)(c).
§ 1.1502–13(a)(6)(ii), Matching rule, Example Manufacturer incentive payments .................... [Reserved].
13.
The first sentence of § 1.1502–32(b)(4)(v)(A) .... paragraph (b)(4)(iv) of § 1.1502–32T ............... paragraph (b)(4)(iv) of this section.
The first sentence of § 1.1502–32(b)(4)(v)(B) .... paragraph (b)(4)(iv) of § 1.1502–32T ............... paragraph (b)(4)(iv) of this section.
§ 1.1502–92(e)(1) ............................................... § 1.382–11T(a) ................................................. § 1.382–11(a).
The first sentence of § 1.1502–92(e)(2) ............. § 1.382–11T(a) ................................................. § 1.382–11(a).
The first sentence of § 1.1502–94(d) ................. § 1.382–11T(a) ................................................. § 1.382–11(a).
The second sentence of § 1.1502–94(d) ........... § 1.382–11T(a) ................................................. § 1.382–11(a).
The last sentence of § 1.1502–95(b)(3) ............. paragraph (f) of § 1.1502–95T ......................... paragraph (f) of this section.
The second sentence of § 1.1563–3(d)(2)(i) ...... paragraphs (d)(2)(ii) and (iii) of this section, paragraphs (d)(2)(ii), (iii) and (iv) of this sec-
and paragraph (d)(2)(iv) of § 1.1563–3T. tion.
The first sentence of § 1.6043–2(a) ................... § 1.332–6T(a), § 1.368–3T(a), or § 1.1081– § 1.332–6(b), 1.368–3(a), or 1.1081–11.
11T.

PART 301—PROCEDURE AND Authority: 26 U.S.C. 7805. * * * § 301.6011–5T [Amended]


ADMINISTRATION Section 301.6011–5T also issued under 26
U.S.C. 6011. ■ Par. 46b. In the following table
■ Par. 46a. The authority citation for remove the language in the ‘‘remove’’
part 300 continues to read in part as column and add the text from the ‘‘add’’
follows: column in its place.

Location Remove Add

The first sentence of § 301.6011–5T(a)(twice) ... paragraphs (a), (b) and (d) through (j) of § 1.6012–2.
§ 1.6012–2, and paragraph (c) of § 1.6012–
2T.
pwalker on PROD1PC71 with RULES

VerDate Aug<31>2005 17:11 Jun 13, 2007 Jkt 211001 PO 00000 Frm 00036 Fmt 4700 Sfmt 4700 E:\FR\FM\14JNR1.SGM 14JNR1
Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Rules and Regulations 32809

PART 602—OMB CONTROL NUMBERS SUMMARY: The Office of Federal increasing the CAS applicability
UNDER THE PAPERWORK Procurement Policy, Cost Accounting threshold to $650,000 to comply with
REDUCTION ACT Standards (CAS) Board, is revising the Public Law 109–163.
threshold for the application of CAS to
■ Par. 47. The authority citation for part B. Public Comments
negotiated Government contracts. This
602 continues to read as follows: rulemaking is authorized pursuant to The Board received three sets of
Authority: 26 U.S.C. 7805. Section 26 of the Office of Federal public comments in response to the
Procurement Policy Act. The Board is proposed rule.
§ 602.101 [Amended] taking final action on this topic in order 1. PL 108–375 Does Not Require
■ Par. 48. to adjust the CAS applicability Threshold Adjustments
■ 1. In § 602.101(b), the following threshold in accordance with Section
822 of the 2006 National Defense Comment: Two commenters opined
entries to the table are removed: that Section 807 of Public Law 108–375
Authorization Act (Pub. L. 109–163).
Section 822 amended 41 U.S.C. does not apply to statutory thresholds in
1.302–2T ............................... 1545–2019 the Board’s rules, regulations and
1.302–4T ............................... 1545–2019 422(f)(2)(A) to require that the threshold
1.331–1T ............................... 1545–2019 for CAS applicability be the same as the standards. These commenters asserted
1.332–6T ............................... 1545–2019 threshold for compliance with the Truth that the law applies only to acquisition-
1.338–10T ............................. 1545–2019 in Negotiations Act (TINA). related statutory dollar thresholds
1.351–3T ............................... 1545–2019 contained in the FAR. Thus, the Board
DATES: This final rule is effective June
1.355–5T ............................... 1545–2019 is not required to adjust its statutory
1.368–3T ............................... 1545–2019 14, 2007. thresholds in response to Pub. L. 108–
1.381(b)–1T .......................... 1545–2019 FOR FURTHER INFORMATION CONTACT: 375.
1.382–8T ............................... 1545–2019 Laura Auletta, Manager, Cost Response: After further review of this
1.382–11T ............................. 1545–2019 Accounting Standards Board, 725 17th issue, the Board agrees that Section 807
1.1081–11T ........................... 1545–2019 Street, NW., Room 9013, Washington, does not apply to the CAS thresholds.
1.1221–2T ............................. 1545–2019 DC 20503 (telephone: 202–395–3256).
1.1502–13T ........................... 1545–2019
Section 807 of Public Law 108–375
1.1502–31T ........................... 1545–2019 SUPPLEMENTARY INFORMATION: requires the Federal Acquisition
1.1502–32T ........................... 1545–2019 Regulatory Council to adjust each
A. Background
1.1502–33T ........................... 1545–2019 ‘‘acquisition-related dollar threshold.’’
1.1502–95T ........................... On December 15, 2005, the CAS
1545–2019 Section 807 defines an acquisition-
1.1563–3T ............................. Board issued a proposed rule with
1545–2019 related dollar threshold as ‘‘a dollar
1.6012–2T ............................. request for comment (70 FR 73423) for
1545–2019 threshold that is specified in law as a
the purpose of implementing Sec. 807 of factor in defining the scope of the
■ 2. The following entries are added in the Ronald W. Reagan National Defense applicability of a policy, procedure,
numerical order to the table: Authorization Act for Fiscal Year 2005, requirement, or restriction provided in
Pub. L. 108–375, ‘‘Inflation Adjustment that law to the procurement of property
1.332–6 ................................. 1545–2019 of Acquisition-Related Dollar or services by an executive agency, as
1.351–3 ................................. 1545–2019 Thresholds.’’ Section 807 of Pub. L. determined by the Federal Acquisition
1.355–5 ................................. 1545–2019 108–375 requires the periodic
1.368–3 ................................. 1545–2019 adjustment of acquisition-related
Regulatory Council.’’ The scope and
1.382–11 ............................... 1545–2019 applicability of the CAS is within the
1.1081–11 ............................. 1545–2019
thresholds contained in statutes that sole purview of the CAS Board. The
were in effect on October 1, 2000, with Federal Acquisition Regulatory Council
certain exceptions. The Federal does not determine the scope or
Kevin M. Brown, Acquisition Regulation (FAR) Council is applicability of the Cost Accounting
Deputy Commissioner for Services and authorized to adjust these thresholds Standards. Therefore, for purposes of
Enforcement. based on increases in the Consumer applying Section 807, the thresholds in
Approved: June 4, 2007. Price Index for all-urban consumers the CAS do not meet the definition of
Eric Solomon, (CPI) and as prescribed in the Public an ‘‘acquisition threshold.’’ Thus, the
Assistant Secretary of the Treasury. Law. requirements of Public Law 108–375 do
[FR Doc. E7–11148 Filed 6–13–07; 8:45 am] Based on further review, the Board not apply to the CAS thresholds.
BILLING CODE 4830–01–P has determined that its thresholds are However, the Board is issuing a final
not subject to the provisions of Section rule to adjust the CAS applicability
807 of the Pub. L 108–375 because these threshold required by Public Law 109–
thresholds are not ‘‘acquisition related,’’ 163.
OFFICE OF MANAGEMENT AND as defined by Section 807. Therefore,
BUDGET this final rule does not adjust the CAS 2. Consistency Between CAS
thresholds to reflect the provisions of Applicability and TINA Thresholds
Office of Federal Procurement Policy Section 807. Comment: One commenter
However, subsequent to the issuance recommended that the CAS
48 CFR Parts 9901 and 9903 of the CAS Board’s proposed rule, applicability threshold be modified to
Section 822 of the 2006 National adopt the Truth in Negotiations Act
Cost Accounting Standards Board Defense Authorization Act (Pub. L. 109– (TINA) threshold for requiring cost or
(CAS) Changes to Acquisition 163) amended 41 U.S.C. 422(f)(2)(A) to pricing data (FAR 15.403–4) since it will
Thresholds require that the threshold for CAS be very difficult to administer the
pwalker on PROD1PC71 with RULES

AGENCY: Cost Accounting Standards applicability be the same as the impact of CAS issues associated with
Board, Office of Federal Procurement threshold for compliance with the Truth such contracts.
Policy, OMB. in Negotiations Act (TINA). The TINA Response: As previously noted,
ACTION: Final rule.
threshold is currently $650,000 (71 FR shortly after the publication of the
57363). Accordingly, the Board is proposed rule, 41 U.S.C. 422(f)(2)(A)

VerDate Aug<31>2005 17:11 Jun 13, 2007 Jkt 211001 PO 00000 Frm 00037 Fmt 4700 Sfmt 4700 E:\FR\FM\14JNR1.SGM 14JNR1