||May 15, 2006
Notice of Proposed Rulemaking by Cross-Reference
to Temporary Regulations Guidance Under Section 1502;
Amendment of Tacking Rule Requirements of
Life-Nonlife Consolidated Regulations
Internal Revenue Service (IRS), Treasury.
Notice of proposed rulemaking by cross-reference to temporary regulations.
In this issue of the Bulletin, the IRS is issuing temporary regulations
(T.D. 9258) relating to the requirements for including insurance companies
in a life-nonlife consolidated return. The text of those regulations also
serves as the text of these proposed regulations. These regulations affect
corporations filing life-nonlife consolidated returns.
Written or electronic comments and requests for a public hearing must
be received by July 24, 2006.
Send submissions to: CC:PA:LPD:PR (REG-133036-05), room 5203, Internal
Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044.
Submissions may be hand-delivered Monday through Friday between the hours
of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-133036-05), Courier’s Desk,
Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC, or
sent electronically, via the IRS Internet site at www.irs.gov/regs or
via the Federal eRulemaking Portal at www.regulations.gov (IRS
FOR FURTHER INFORMATION CONTACT:
Concerning the proposed regulations, Drafting Attorney, Ross Poulsen,
(202) 622-7770; concerning submission of comments and/or requests for a public
hearing, Richard Hurst, [email protected],
(202) 622-7180 (not toll-free numbers).
Background and Explanation of Provisions
Temporary regulations in this issue of the Bulletin amend the Income
Tax Regulations (26 CFR part 1) under section 1502 relating to the life-nonlife
consolidated return regulations. The temporary regulations contain an exception
(the tacking rule) to the five-year affiliation rules of sections 1503(c)(2)
and 1504(c)(2). The temporary regulations replace the tacking rule of §1.1502-47(d)(12)(v)
with a rule that does not contain a condition relating to the separation of
profitable activities from loss activities. The text of those regulations
also serves as the text of these proposed regulations. The preamble to the
temporary regulations explains the amendments.
It has been determined that this notice of proposed rulemaking is not
a significant regulatory action as defined in Executive Order 12866. Therefore,
a regulatory assessment is not required. It is hereby certified that these
regulations will not have a significant economic impact on a substantial number
of small entities. This certification is based on the fact that these regulations
primarily affect affiliated groups of corporations with one or more life insurance
company members, which tend to be larger businesses. Moreover, the number
of taxpayers affected is minimal. Therefore, a Regulatory Flexibility Analysis
under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required.
Pursuant to section 7805(f) of the Internal Revenue Code, this notice of proposed
rulemaking will be submitted to the Chief Counsel for Advocacy of the Small
Business Administration for comment on its impact on small business.
Comments and Requests for a Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written (a signed original and eight (8)
copies) or electronic comments that are submitted timely to the IRS. All comments
will be available for public inspection and copying. A public hearing will
be scheduled if requested in writing by any person that timely submits written
comments. If a public hearing is scheduled, notice of the date, time, and
place for the public hearing will be published in the Federal
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
Paragraph 1. The authority citation for part 1 continues to read, in
part, as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.1502-47 is amended by:
1. Adding paragraphs (b)(2)(i) and (b)(2)(ii).
2. Removing paragraph (d)(12)(v)(C).
3. Redesignating paragraph (d)(12)(v)(D) and (d)(12)(v)(E) as (d)(12)(v)(C)
4. Revising paragraph (d)(12)(v), and newly-designated paragraphs (d)(12)(v)(C)
The revisions and additions read as follows:
§1.1502-47 Consolidated returns by life-nonlife groups.
[The text of this proposed section is the same as the text of §1.1502-47T
published elsewhere in this issue of the Bulletin].
Par. 3. Section 1.1502-76 is amended by:
1. Removing paragraph (a)(2).
2. Redesignating paragraph (a)(1) as paragraph (a).
3. Revising the paragraph heading for newly-designated paragraph (a).
The revision reads as follows:
§1.1502-76 Taxable year of members of group.
[The text of this proposed section is the same as the text of §1.1502-76T
published elsewhere in this issue of the Bulletin].
Mark E. Matthews,
Services and Enforcement.
(Filed by the Office of the Federal Register on April 24, 2006, 8:45
a.m., and published in the issue of the Federal Register for April 25, 2006,
71 F.R. 23882)
The principal author of these regulations is Ross Poulsen, Office of
Associate Chief Counsel (Corporate). However, other personnel from the IRS
and Treasury Department participated in their development.
* * * * *
Internal Revenue Bulletin 2006-20
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