Procedures relating solely to matters of internal management are not published; however, statements of internal practices and procedures that affect the rights and duties of taxpayers are published.Revenue rulings represent the conclusions of the Service on the application of the law to the pivotal facts stated in the revenue ruling.The last Bulletin for each month includes a cumulative index for the matters published during the preceding months.These monthly indexes are cumulated on a semiannual basis, and are published in the last Bulletin of each semiannual period.The regulations also set forth the requirements for designated Roth contributions under a section 403(b) plan and address the application of the universal availability requirement to the right of any employee to make designated Roth contributions under a section 403(b) plan. It is published weekly and may be obtained from the Superintendent of Documents on a subscription basis.Until further guidance is issued, the Service will disregard a spousal right of election for purposes of determining whether a charitable remainder annuity trust (CRAT) or charitable remainder unitrust (CRUT) meets the requirements of section 664(d)(1)(B) or (d)(2)(B) of the Code, provided that the right of election is not exercised. Bulletin contents are compiled semiannually into Cumulative Bulletins, which are sold on a single-copy basis.In the course of developing the proposed regulations, the IRS and Treasury Department considered whether a tracing method or an averaging method should be used to determine the basis of stock and securities received in such transactions.The proposed regulations’ adoption of the tracing method is based on the view of the IRS and Treasury Department that, in light of the carryover basis rule of section 358, a reorganization is not an event that justifies averaging the bases of exchanged stock or securities that have been purchased at different times and at different prices.
This document also contains temporary regulations under section 1502 that govern certain basis determinations and adjustments of subsidiary stock in certain transactions involving members of a consolidated group.Temporary and proposed regulations under section 1502 of the Code provide additional guidance on the treatment of an excess loss account when a consolidated group member’s original shares have an excess loss account or the member would otherwise determine that new shares would have an excess loss account at the time of a basis adjustment or determination under the Internal Revenue Code. This notice invites public comments on certain distributions treated as sales or exchanges under section 751(b) of the Code. This notice announces that the IRS and Treasury intend to issue final regulations under section 1503(d) of the Code to provide that a reasonable cause standard similar to proposed regulations section 1.1503(d)-1(c)(1) will apply to cure all late filings under section 1503(d).On May 3, 2004, the IRS and Treasury Department published a notice of proposed rulemaking (REG-116564-03, 2004-1 C. 927) in the (69 FR 24107) that included regulations under section 358 (the proposed regulations) providing guidance regarding the determination of the basis of shares or securities received in a reorganization described in section 368 and a distribution to which section 355 applies.The proposed regulations adopt a tracing method pursuant to which the basis of each share of stock or security received in a reorganization under section 368 is traced to the basis of each surrendered share of stock or security, and each share of stock or security received in a distribution under section 355 is allocated basis from a share of stock or security of the distributing corporation.In those based on positions taken in rulings to taxpayers or technical advice to Service field offices, identifying details and information of a confidential nature are deleted to prevent unwarranted invasions of privacy and to comply with statutory requirements.Rulings and procedures reported in the Bulletin do not have the force and effect of Treasury Department Regulations, but they may be used as precedents.Final and temporary regulations under section 367 of the Code amend income tax regulations under sections 367, 884, and 6038B dealing with statutory mergers or consolidations under section 368(a)(1)(A) involving one or more foreign corporations, and provide guidance necessary to facilitate business electronic filing under section 6038B. Final regulations under section 358 of the Code provide a tracing approach for the determination of basis of stock or securities received in exchange for or with respect to stock and securities in certain transactions. Prior to issuance of those regulations, taxpayers may rely on the reasonable cause procedure set forth in proposed regulations section 1.1503(d)-1(c)(1), as modified by this notice, to cure late filings under the current regulations.Final regulations under section 358 of the Code provide a tracing approach for the determination of basis of stock or securities received in exchange for or with respect to stock and securities in certain transactions. Temporary and proposed regulations under section 1502 of the Code provide additional guidance on the treatment of an excess loss account when a consolidated group member’s original shares have an excess loss account or the member would otherwise determine that new shares would have an excess loss account at the time of a basis adjustment or determination under the Internal Revenue Code. Additionally, until the final regulations are issued, taxpayers may choose to apply for relief for untimely section 1503(d) filings under the provisions of regulations sections 301.9100-1 through 301.9100-3 or elect to use the reasonable cause standard set forth in the proposed regulations as modified by this notice.The Bulletin is divided into four parts as follows: To the extent practicable, pertinent cross references to these subjects are contained in the other Parts and Subparts.Also included in this part are Bank Secrecy Act Administrative Rulings.