Calculating and Apportioning the Section 11(b)(1) Additional Tax Under Section 1561 for Controlled Groups, 72970 [E7-24886]

Agencies

• Internal Revenue Service
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 72, Number 246 (Wednesday, December 26, 2007)]
[Proposed Rules]
[Page 72970]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-24886]



[[Page 72970]]

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-104713-07]
RIN 1545-BG39


Calculating and Apportioning the Section 11(b)(1) Additional Tax 
Under Section 1561 for Controlled Groups

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations.

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SUMMARY: In the Rules and Regulations section of this issue of the 
Federal Register, the IRS is issuing temporary regulations that affect 
component members of a controlled group of corporations and 
consolidated groups filing life-nonlife Federal income tax returns. 
These temporary regulations provide guidance for calculating and 
apportioning between component members any amount of additional tax and 
any reduction in the amount exempted from the alternative minimum tax. 
These temporary regulations also update and clarify the allocation of 
tax-benefit items in the case in which a component member has a short 
taxable year not including a December 31st date. Finally, these 
temporary regulations provide explanations of two concepts: A group's 
testing date and a member's testing period for use in determining which 
members of the group and which taxable years of those members are 
subject to the controlled group rules. The text of those regulations 
also serves as the text of these proposed regulations.

DATES: Written or electronic comments and a request for a public 
hearing must be received by March 25, 2008.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-104713-07), room 
5203, Internal Revenue Service, P.O. 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-
104713-07), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue, NW., Washington, DC, or sent electronically via the Federal 
eRulemaking Portal at https://www.regulations.gov (IRS REG-104713-07).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulation, 
Grid Glyer, (202) 622-7930, concerning submissions of comments and 
requests for public hearings, Richard A. Hurst, (202) 622-7180 (not 
toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register amend 26 CFR part 1 to add Sec. Sec.  
1.1502-47T and 1.1561-0T, remove Sec.  1.1561-2, and amend Sec. Sec.  
1.1561-2T and 1.1563-1T. The text of those regulations also serves as 
the text of these proposed regulations. The preamble to the final and 
temporary regulations explains these proposed regulations.

Special Analyses

    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 has also 
been determined that section 553(b) of the Administrative Procedure Act 
(5 U.S.C. chapter 5) does not apply to these regulations. With respect 
to Sec.  1.1502-47, 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 that 
have elected to file consolidated returns, which tend to be larger 
businesses. Further, these regulations do not require any additional 
collection of information under Sec.  1.1502-47 because these 
regulations simply add a section that had been inadvertently removed 
from the Code of Federal Regulations. Therefore, a regulatory 
flexibility analysis is not required. Pursuant to section 7805(f) of 
the Internal Revenue Code, these regulations have been submitted to the 
Chief Counsel for Advocacy of the Small Business Administration for 
comment on their 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 comments (a signed original 
and eight (8) copies) or electronic comments that are submitted timely 
to the IRS. The IRS and the Treasury Department specifically request 
comments on the clarity of the proposed regulations and how they can be 
made easier to understand. All comments will be available for public 
inspection and copying. A public hearing may be scheduled if requested 
in writing by any person that timely submits written or electronic 
comments. If a public hearing is scheduled, notice of the date, time 
and place for the public hearing will be published in the Federal 
Register.

Drafting Information

    The principal author of these regulations is Grid Glyer of the 
Office of Associate Chief Counsel (Corporate). Other personnel from the 
Treasury Department and the IRS participated in their development.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 1 is proposed to be amended as follows:

PART 1--INCOME TAXES

    Paragraph 1. The authority citation for part 1 continues to read, 
in part, as follows:

    Authority: 26 U.S.C. 7805 * * *

    Par. 2. Section 1.1561-0 is added to read as follows:


Sec.  1.1561-0  Table of contents.

    [The text of the proposed Sec.  1.1561-0 is the same as the text 
for Sec.  1.1561-0T published elsewhere in this issue of the Federal 
Register].
    Par. 3. Section 1.1561-2 is added to read as follows:


Sec.  1.1561-2  Special rules for allocating reductions to certain 
section 1561(a) tax-benefit items.

    [The text of the proposed Sec.  1.1561-2 is the same as the text 
for Sec.  1.1561-2T(a) through (f)(1) published elsewhere in this issue 
of the Federal Register].
    Par. 4. Section 1.1563-1 is amended to read as follows:


Sec.  1.1563-1  Definition of controlled group of corporations and 
component members and related concepts.

    [The text of the proposed Sec.  1.1563-1 is the same as the text 
for Sec.  1.1563-1T published elsewhere in this issue of the Federal 
Register].

Linda E. Stiff,
Deputy Commissioner for Services and Enforcement.
[FR Doc. E7-24886 Filed 12-21-07; 8:45 am]
BILLING CODE 4830-01-P