Reg-135898-04

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Federal Register / Vol. 69, No. 165 / Thursday, August 26, 2004 / Proposed Rules

DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG–135898–04]
RIN 1545–BD63

Extension of Time To Elect Method for
Determining Allowable Loss
Internal Revenue Service (IRS),
Treasury.
ACTION: Notice of proposed rulemaking
by cross-reference to temporary
regulations.
AGENCY:

SUMMARY: This document contains
proposed regulations under section
1502 of the Internal Revenue Code of
1986. The proposed regulations extend
the time for consolidated groups to elect
to apply a method for determining
allowable loss on a disposition of
subsidiary stock, and permit
consolidated groups to revoke such
elections. The proposed regulations
affect corporations filing consolidated
returns, both during and after the period
of affiliation, and also affect purchasers
of the stock of members of a
consolidated group. The text of the
temporary regulations published in this
issue of the Federal Register serves as
the text of these proposed regulations.
DATES: Written or electronic comments
must be received by November 24, 2004.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR (REG–135898–04), room
5203, Internal Revenue Service, P.O.
Box 7604, Ben Franklin Station,
Washington, DC 20044. Submissions
may be hand-delivered between the
hours of 8 a.m. and 4 p.m. to
CC:PA:LPD:PR (REG–135898–04),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue,
NW., Washington, DC, or sent
electronically, via the IRS Internet site
at http://www.irs.gov/regs or via the
Federal eRulemaking Portal at http://
www.regulations.gov (IRS and REG–
135898–04).
FOR FURTHER INFORMATION CONTACT:
Concerning the proposed regulations,
Theresa Abell (202) 622–7700 or Martin
Huck, (202) 622–7750; concerning
submissions of comments, Robin Jones,
(202) 622–7180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act
The collection of information
contained in this notice of proposed
rulemaking has been submitted to the
Office of Management and Budget for
review in accordance with the
Paperwork Reduction Act of 1995 (44

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U.S.C. 3507(d)). Comments on the
collection of information should be sent
to the Office of Management and
Budget, Attn: Desk Officer for the
Department of Treasury, Office of
Information and Regulatory Affairs,
Washington, DC 20503, with copies to
the Internal Revenue Service, Attn: IRS
Reports Clearance Officer,
SE:W:CAR:MP:T:T:SP, Washington, DC
20224. Comments on the collection of
information should be received by
October 25, 2004. Comments are
specifically requested concerning:
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the IRS,
including whether the information will
have practical utility;
The accuracy of the estimated burden
associated with the proposed collection
of information (see below);
How the quality, utility, and clarity of
the information to be collected may be
enhanced;
How the burden of complying with
the proposed collection of information
may be minimized, including through
the application of automated collection
techniques or other forms of information
technology; and
Estimates of capital or start-up costs
and costs of operation, maintenance,
and purchase of services to provide
information.
The collection of information in this
proposed regulation was previously
approved and reviewed by the Office of
Management and Budget under control
number 1545–1774. The collection of
information is required to allow the
taxpayer to make certain elections to
determine the amount of allowable loss
under § 1.1502–20 in its entirety,
§ 1.1502–20 without regard to the
duplicated loss factor, or § 1.337(d)–2T;
to allow the taxpayer to reapportion a
section 382 limitation in certain cases;
to allow the taxpayer to waive certain
loss carryovers; and to ensure that loss
is not disallowed under § 1.337–2T and
basis is not reduced under§ 1.337(d)–2T
to the extent that the taxpayer
establishes that the loss or basis is not
attributable to the recognition of builtin gain on the disposition of an asset.
This collection of information is
modified with respect to §§ 1.1502–20T
and 1.1502–32T. Regarding § 1.1502–
20T, the collection of information also
is necessary to allow the common
parent of the selling group to
reapportion a separate, subgroup or
consolidated section 382 limitation
when the acquiring group amends its
§ 1.1502–32(b)(4) election. With respect
to § 1.1502–32T, the collection of
information also is necessary to allow
the acquiring group to amend its

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previous § 1.1502–32(b)(4) election, so
that it may use previously waived losses
of its subsidiary.
The collection of information is
required to obtain a benefit. The likely
respondents are corporations that file
consolidated income tax returns.
Estimated total annual reporting and/
or recordkeeping burden: 36,720 hours.
Estimated average annual burden per
respondent: 2 hours.
Estimated number of respondents:
18,360.
Estimated annual frequency of
responses: Once.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a valid control
number assigned by the Office of
Management and Budget.
Books or records relating to a
collection of information must be
retained as long as their contents may
become material in the administration
of any internal revenue law. Generally,
tax returns and tax return information
are confidential, as required by 26
U.S.C. 6103.
Background and Explanation of
Provisions
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 extend the time for
consolidated groups to elect to apply a
method for determining allowable loss
on a disposition of subsidiary stock, and
permit consolidated groups to revoke
such elections. The temporary
regulations affect corporations filing
consolidated returns, both during and
after the period of affiliation, and also
affect purchasers of the stock of
members of a consolidated group. The
text of those regulations serves as the
text for these proposed regulations. The
preamble to the temporary regulations
explains the amendments and 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
is hereby certified that these proposed
regulations will not have a significant
economic impact on a substantial
number of small entities. This
certification is based on the fact that the
regulations provide relief to
consolidated groups by extending the
time in which a group may make, or
allowing a group to revoke, certain

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Federal Register / Vol. 69, No. 165 / Thursday, August 26, 2004 / Proposed Rules
elections of methods for determining
allowable loss. In addition, members of
consolidated groups are generally large
corporations rather than small
businesses. Therefore, the Regulatory
Flexibility Act (5 U.S.C. chapter 6) does
not apply. Nevertheless, the IRS and
Treasury Department request comments
from small entities that believe they
might be adversely affected by these
regulations. 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 the
impact of these regulations.
Comments and Public Hearing
Before the 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 Treasury Department request
comments on the clarity of the proposed
rules and how they can be made easier
to understand. All comments will be
made available for public inspection
and copying. A public hearing may be
scheduled. 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 authors of these
regulations are Theresa Abell and
Martin Huck of the Office of Associate
Chief Counsel (Corporate). However,
other personnel from the IRS and
Treasury Department 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 1.1502–20 is amended
by:
1. Revising the first sentence of
paragraph (i)(4).
2. Redesignating paragraph (i)(6) as
(i)(7).
3. Adding new paragraph (i)(6).
The revisions and addition read as
follows:

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§ 1.1502–20 Disposition or
deconsolidation of subsidiary stock.

*

*
*
*
*
(i) * * *
(4) [The text of proposed § 1.1502–
20(i)(4) is the same as the text of
§ 1.1502–20T(i)(4) published elsewhere
in this issue of the Federal Register.]
*
*
*
*
*
(6) [The text of proposed § 1.1502–
20(i)(6) is the same as the text of
§ 1.1502–20T(i)(6) published elsewhere
in this issue of the Federal Register.]
Par. 3. Section 1.1502–32(b)(4)(vii)(C)
is amended by removing the language
‘‘May 7, 2003’’ and adding the language
‘‘August 25, 2004’’ each time it appears.
Mark E. Matthews,
Deputy Commissioner for Services and
Enforcement.
[FR Doc. 04–19477 Filed 8–25–04; 8:45 am]
BILLING CODE 4830–01–P

ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[R05–OAR–2004–IN–0003; FRL–7806–6]

Approval and Promulgation of
Implementation Plans; Indiana
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:

SUMMARY: The EPA is proposing to
approve Indiana’s August 6, 2004,
submittal of revised mobile emission
inventories and 2005 and 2007 motor
vehicle emissions budgets (MVEBs)
which have been developed using
MOBILE6, an updated model for
calculating mobile emissions of ozone
precursors. These inventories and
associated motor vehicle emissions
budgets are part of the 1-hour ozone
attainment plan approved for the
Northwest Indiana area. The Northwest
Indiana area consists of Lake and Porter
Counties in Indiana. The State’s
submittal meets a commitment to revise
and resubmit the MVEBs using
MOBILE6 methods within two years
following the release of MOBILE6
provided that transportation conformity
is not determined without adequate
MOBILE6-based MVEBs during the
second year.
In the final rules section of this
Federal Register, EPA is approving the
SIP revision as a direct final rule
without prior proposal, because EPA
views this as a noncontroversial
revision and anticipate no adverse
comments. A detailed rationale for the
approval is set forth in the direct final

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52463

rule. If no adverse comments are
received in response to this proposed
rule, no further activity is contemplated
in relation to this proposed rule. If EPA
receives adverse comments, the direct
final rule will be withdrawn and all
public comments received will be
addressed in a subsequent final rule
based on this proposed rule. EPA will
not institute a second comment period
on this action. Any parties interested in
commenting on this action should do so
at this time.
DATES: Written comments must be
received on or before September 27,
2004.
Submit comments,
identified by Docket ID No. R05–OAR–
2004–IN–0003 by one of the following
methods: Federal eRulemaking Portal:
http://www.regulations.gov. Follow the
on-line instructions for submitting
comments.
E-mail: [email protected].
Fax: (312) 886–5824.
Mail: You may send written
comments to: J. Elmer Bortzer, Chief,
Air Programs Branch, (AR–18J),
Environmental Protection Agency, 77
West Jackson Boulevard, Chicago,
Illinois 60604.
Hand delivery: Deliver your
comments to: J. Elmer Bortzer, Chief,
Air Programs Branch (AR–18J),
Environmental Protection Agency,
Region 5, 77 West Jackson Boulevard,
18th floor, Chicago, Illinois 60604.
Such deliveries are only accepted
during the Regional Office’s normal
hours of operation. The Regional
Office’s official hours of business are
Monday through Friday, 8:30 a.m. to
4:30 p.m. excluding Federal holidays.
Instructions: Direct your comments to
Docket ID No. R05–OAR–2004–IN–
0003. EPA’s policy is that all comments
received will be included in the public
docket without change, including any
personal information provided, unless
the comment includes information
claimed to be Confidential Business
Information (CBI) or other information
whose disclosure is restricted by statute.
Do not submit information that you
consider to be CBI or otherwise
protected through regulations.gov, or email. The Federal regulations.gov Web
site is an ‘‘anonymous access’’ system,
which means EPA will not know your
identity or contact information unless
you provide it in the body of your
comment. If you send an e-mail
comment directly to EPA without going
through regulations.gov, your e-mail
address will be automatically captured
and included as part of the comment
that is placed in the public docket and
made available on the Internet. If you
ADDRESSES:

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