Internal Revenue Bulletin No. 2006-35, August 28, 2006
Internal Revenue Bulletins  
August 28, 2006

Internal Revenue Bulletin No. 2006-35

Official IRS Bulletin Documents linked below are in HTML. These synopses are intended only as aids to the reader in identifying the subject matter covered. They may not be relied upon as authoritative interpretations.
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INCOME TAX

Rev. Rul. 2006-41(HTML)
LIFO; price indexes; department stores. The June 2006 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, June 30, 2006.

Rev. Rul. 2006-42(HTML)
Levy on bank account. This ruling explains that a superpriority lien argument is not a defense to a levy. If a bank has such an argument, it must file a wrongful levy suit within nine months of the levy. Otherwise, the statute of limitations bars such a suit.

T.D. 9272(HTML)
REG-159929-02(HTML)
Final, temporary, and proposed regulations under section 860G of the Code relate to income that is associated with a residual interest in a Real Estate Mortgage Investment Conduit (REMIC) and that is allocated through certain entities to foreign persons who have invested in those entities. The regulations accelerate the time when income is recognized for withholding tax purposes to conform to the timing of income recognition for general income tax purposes.

T.D. 9275(HTML)
Final regulations under section 410 of the Code implement a statutory directive of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) to amend section 1.410(b)-6(g) of the regulations. The final regulations permit, in certain circumstances, employees of a tax-exempt organization described in section 501(c)(3) to be excluded for the purpose of testing whether a section 401(k) plan (or a section 401(m) plan that is provided under the same general arrangement as the section 401(k) plan of the employer) meets the requirements for minimum coverage specified in section 410(b). The regulations affect tax-exempt employers described in section 501(c)(3), retirement plans sponsored by these employers, and participants in these plans.

EMPLOYEE PLANS

Rev. Rul. 2006-43(HTML)
Government pick-up plans; employer contributions; income tax; prospective application. This ruling describes the actions required for a state or its political subdivisions, etc., to "pick-up" or treat certain contributions as employer contributions to a plan qualified under section 401(a) of the Code. If certain criteria are met, this ruling will be applied prospectively. Rev. Ruls. 81-35, 81-36, and 87-10 amplified and modified.

T.D. 9275(HTML)
Final regulations under section 410 of the Code implement a statutory directive of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) to amend section 1.410(b)-6(g) of the regulations. The final regulations permit, in certain circumstances, employees of a tax-exempt organization described in section 501(c)(3) to be excluded for the purpose of testing whether a section 401(k) plan (or a section 401(m) plan that is provided under the same general arrangement as the section 401(k) plan of the employer) meets the requirements for minimum coverage specified in section 410(b). The regulations affect tax-exempt employers described in section 501(c)(3), retirement plans sponsored by these employers, and participants in these plans.

Notice 2006-74(HTML)
Weighted average interest rate update; 30-year Treasury securities. The weighted average interest rate for August 2006 and the resulting permissible range of interest rates used to calculate current liability and to determine the required contribution are set forth.

EXEMPT ORGANIZATIONS

Announcement 2006-55(HTML)
Aviation Safety Council, Inc., of Pasadena, CA; Budget and Credit Counseling Services, Inc., of New York, NY; and Mason Credit Counseling, Inc., of Hauppauge, NY, no longer qualify as organizations to which contributions are deductible under section 170 of the Code.

ADMINISTRATIVE

Rev. Rul. 2006-42(HTML)
Levy on bank account. This ruling explains that a superpriority lien argument is not a defense to a levy. If a bank has such an argument, it must file a wrongful levy suit within nine months of the levy. Otherwise, the statute of limitations bars such a suit.

Notice 2006-73(HTML)
This notice effects interim revisions to Forms 8898, Statement for Individuals Who Begin or End Bona Fide Residence in a U.S. Possession, and 8840, Closer Connection Exception Statement for Aliens. Taxpayers required to file these forms should disregard certain line items. However, filers are reminded that they must retain the information elicited on those line items, as well as the rest of the form, in their books and records.

Announcement 2006-56(HTML)
This document contains corrections to temporary regulations (T.D. 9262, 2006-24 I.R.B. 1040) concerning the application of section 199 of the Code, which provides a deduction for income attributable to domestic production activities, to certain transactions involving computer software.

Announcement 2006-57((HTML)
Announcement of Disciplinary Actions Involving Attorneys, Certified Public Accountants, Enrolled Agents, and Enrolled Actuaries Suspensions, Censures, Disbarments, and Resignations.

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