Finalization of Controlled Group Qualification Rules - Guidance Necessary To Facilitate Business Election Filing.

TD 9451
RIN 1545-BF25

SUMMARY: This document contains a final regulation that provides
guidance to taxpayers for determining which corporations are included
in a controlled group of corporations. This regulation is being
published to replace an expiring temporary regulation.

DATES: Effective Date: This regulation is effective on May 27, 2009.
   Applicability Date: Section 1.1563-1T(c)(2)(i)-(iii) expired on May
26, 2009, pursuant to section 7805(e)(2) and Sec.  1.1563-1T(e)(2). In
accordance with section 7805(b)(1)(B), this regulation applies to
taxable years beginning on or after May 26, 2009. However, taxpayers
may apply this regulation to taxable years beginning before May 26,
2009. See Sec.  1.1563-1(e).

FOR FURTHER INFORMATION CONTACT: Grid Glyer, (202) 622-7930 (not a
toll-free number).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

   The collection of information contained in this final regulation
has been reviewed and approved by the Office of Management and Budget
in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3507(d)) under control number 1545-2019.
   This collection of information is in Sec.  1.1563-1(c)(2). This
information is required if a taxpayer or taxpayers could be a member of
more than one brother-sister controlled group and does not elect which
group to be a member of. In that case, the IRS would designate a group.
   An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid control number by the Office of Management
and Budget.
   Books or records relating to a collection of information must be
retained as long as their contents might 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

   On December 22, 2006, the IRS and the Treasury Department published
several temporary regulations, including Sec.  1.1563-1T. See TD 9304
(71 FR 76904), 2007-1 CB 423. Also on December 22, 2006, the IRS and
the Treasury Department issued a notice of proposed rulemaking cross-
referencing those temporary regulations. See REG-161919-05 (71 FR
76955), 2007-1 CB 463. Section 1.1563-1T was also amended by the
publication of a temporary regulation on December 26, 2007. See TD 9369
(72 FR 72929), 2008-6 IRB 394. Also on December 26, 2007, the IRS and
Treasury Department issued a notice of proposed rulemaking cross-
referencing that temporary regulation. See REG-104713-07 (72 FR 72970),
2008-6 IRB 409.
   Section 1.1563-1T republished Sec.  1.1563-1 to conform it to
current formatting conventions. It was not intended that any such
reformatting constitute a substantive change. See Sec.  3.A of the
preamble to TD 9304. Treasury decision 9304 also removed Sec.  1.1563-
1. Section 1.1563-1T provides guidance to taxpayers for determining
which corporations are included in a controlled group of corporations.
   This Treasury decision adopts the proposed regulation Sec.  1.1563-
1 with no substantive changes. In addition, this Treasury decision
removes the corresponding temporary regulation, Sec.  1.1563-1T.
   This Treasury decision does not adopt the other proposed
regulations that were published as part of TD 9304. Those proposed
regulations are now found in REG-113688-09, and their status will be
addressed at a later date.
   The IRS and the Treasury Department received no written or
electronic comments from the public in response to the notice of
proposed rulemaking and no public hearing was requested or held.

Special Analysis

   It has been determined that this Treasury Decision 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 this regulation. Pursuant to the
Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified
that this rule will not have a significant economic impact on a
substantial number of small entities. This certification is based on
the fact that this regulation primarily affects large corporations
(which are members of either controlled or consolidated groups).
Accordingly, a regulatory flexibility analysis is not required.
Pursuant to section 7805(f) of the Internal Revenue Code, the notice of
proposed rulemaking preceding this regulation was submitted to the
Chief Counsel for Advocacy of the Small Business Administration for
comment on their impact on small business.

Drafting Information

   The principal author of this regulation is Grid Glyer, Office of
Associate Chief Counsel (Corporate). However, other personnel from the
IRS and the Treasury Department participated in its development.

List of Subjects in 26 CFR Part 1

   Income taxes, Reporting and recordkeeping requirements.

Full Text Of TD 9451 Here

For More Information Contact The Atlanta, Georgia Law Offices Of AttorneyBritt:

AttorneyBritt
Gary L. Britt, CPA, J.D.
1200 Abernathy Road, Suite 1700
Atlanta, Georgia 30328

404-567-6445

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IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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