Consolidated GroupsIntercompany Transactions and Related Rules

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[CO-24-95]

RIN 1545-AT51

Consolidated Groups--Intercompany Transactions and Related Rules

AGENCY: Internal Revenue Service (IRS), Treasury.

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

regulations and notice of public hearing.

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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 provide

rules for disallowing loss and excluding gain for certain dispositions

and other transactions involving stock of the common parent of a

consolidated group. The text of those temporary regulations also serves

as the text of these proposed regulations. This document also provides

notice of a public hearing on these proposed regulations.

DATES: Written comments must be received by October 16, 1995. Outlines

of topics to be discussed at the public hearing scheduled for November

16, 1995 must be received by October 26, 1995.

ADDRESSES: Send submissions to: CC:DOM:CORP:T:R (CO-24-95), room 5228,

Internal Revenue Service, P.O.B. 7604, Ben Franklin Station,

Washington, DC 20044. In the alternative, submissions may be hand

delivered between the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:T:R

(CO-24-95), Courier's Desk, Internal Revenue Service, 1111 Constitution

Avenue, NW., Washington, DC. The hearing will be held in the IRS

Auditorium, 1111 Constitution Avenue, NW, Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations,

Victor Penico, (202) 622-7750; concerning submissions and the hearing,

Christina Vazquez, (202) 622-7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

Temporary regulations in the Rules and Regulations section of this

issue of the Federal Register amend the Income Tax Regulations (26 CFR

part 1) relating to section 1502. The temporary regulations provide

rules for disallowing loss and excluding gain for certain dispositions

and other transactions involving stock of the common parent of a

consolidated group.

The text of those temporary regulations also serves as the text of

these proposed regulations. The preamble to the temporary regulations

explains the temporary regulations.

Special Analysis

Is has been determined that this notice of proposed rulemaking is

not a significant regulatory action as defined in EO 12866. Therefore,

a regulatory assessment is not required. It also has been determined

that section 553(b) of the Administrative Procedure Act (5 U.S.C.

chapter 5) and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do

not apply to these regulations, and, therefore, a Regulatory

Flexibility Analysis 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 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) that are submitted timely to the IRS. All

comments will be available for public inspection and copying.

A public hearing has been scheduled for November 16, 1995 at 10

a.m., in the

[[Page 36756]]

IRS Auditorium. Because of access restrictions, visitors will not be

admitted beyond the Internal Revenue Building lobby more than 15

minutes before the hearing starts.

The rules of 26 CFR 601.601(a)(3) apply to the hearing.

Persons who wish to present oral comments at the hearing must

submit written comments by October 26, 1995 and submit an outline of

the topics (signed original and eight (8) copies) to be discussed by

October 26, 1995.

A period of 10 minutes will be allotted to each person for making

comments.

An agenda showing the scheduling of the speakers will be prepared

after the deadline for receiving outlines has passed. Copies of the

agenda will be available free of charge at the hearing.

Drafting Information

These regulations were drafted by personnel from the Treasury

Department and the IRS.

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. In Sec. 1.1502-13, paragraph (f)(6) is added to read as

follows:

Sec. 1.1502-13 Intercompany transactions.

[The text of proposed paragraph (f)(6) is the same as the text of

Sec. 1.1502-13T(f)(6) published elsewhere in this issue of the Federal

Register].

Michael P. Dolan,

Acting Commissioner of Internal Revenue.

[FR Doc. 95-16971 Filed 7-12-95; 12:56 pm]

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