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August 2005 Plain Language Regulations

Updating Estimated Income Tax Regulations Under Section 6654
This document contains the final regulations for making payments of estimated income tax by individuals. The regulations incorporate the Tax Reform Act of 1984 changes and are necessary to update, clarify, and reorganize the rules and procedures under section 6654 of the Internal Revenue Code.  The final regulations do not impose any new requirements for taxpayers.  TD 9224.  Published September 2, 2005.
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Application of the Federal Insurance Contributions Act to Payments Made for Certain Services
The proposed regulations amend existing regulations as to the dollar threshold amounts and time periods used to determine whether payments for (1) domestic service in a private home of the employer (to which section 3121(a)(7)(B) relates), (2) agricultural labor (to which section 3121(a)(8) relates), (3) service not in the course of the employer's trade or business (to which section 3121(a)(7)(C) relates), and (4) services provided by home workers described in section 3121(d)(3)(C) (to which section 3121(a)(10) relates) are wages subject to Federal Insurance Contributions Act (FICA) taxes. REG-104143-05.  Published August 26, 2005.
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Value of Life Insurance Contracts when Distributed from a Qualified Retirement Plan
These final regulations address the amount includible in a distributee's income when life insurance contracts are distributed by a qualified retirement plan and also address the treatment of property sold by a qualified retirement plan to a plan participant or beneficiary for less than fair market value.  These final regulations also provide guidance regarding the amounts includible in income when an employee is provided permanent benefits in combination with group-term life insurance or when a life insurance contract is transferred in connection with the performance of services.
TD 9223.  Published August 29, 2005.
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Employer Comparable Contributions to Health Savings Accounts
These proposed regulations provide guidance regarding employer comparable contributions to the health savings accounts (HSAs) of employees under section 4980G of the Internal Revenue Code (Code).  Specifically, the proposed regulations set forth the rules for determining the applicability of the comparability rules and for determining whether an employer's contributions satisfy the comparability rules.
REG-138647-04.  Published August 26, 2005.
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Special Rule Regarding Certain Section 951 Pro Rata Allocations
Under subpart F of the Internal Revenue Code (sections 951 through 965), a United States shareholder of a controlled foreign corporation (CFC) is currently taxed on his pro rata share of the CFC's subpart F income.  These proposed regulations provide rules for determining these pro rata amounts in two specified circumstances.  First, if a CFC is partly owned by a tax-indifferent person, and the CFC sells stock of a related corporation to another related corporation as part of a plan to avoid Federal income tax, the proposed regulations provide that the CFC's earnings and profits from the sale will be allocated to each class of stock classes.  Second, if a CFC has mandatorily redeemable preferred stock with cumulative dividend rights which is held by a foreign person, the proposed regulations provide that the amount of the CFC's earnings and profits allocated to that stock will be the discounted present value of accrued but unpaid dividends with respect to the stock. 
REG-129782-05.  Published August 25, 2005.
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Guidance Under Section 951 for Determining Pro Rata Share
Under subpart F of the Internal Revenue Code (sections 951 through 965), a United States shareholder of a controlled foreign corporation (CFC) is currently taxed on his pro rata share of the CFC's subpart F income.  These regulations provide rules for determining these pro rata amounts.  In particular, there are special rules for CFCs that have move than one class of shares outstanding, and at least one class has discretionary distribution rights.  These regulations also provide that a restriction or other limitation on the distribution of earnings and profits (E&P) to a United States shareholder by a CFC is not taken into account for purposes of determining either the amount of E&P allocated to a class of CFC stock or the amount of the United States shareholder's pro rata share.  TD 9222.  Published August 25, 2005.
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Collected Excise Taxes; Duties of Collector
These final regulations provide guidance relating to the obligations of persons that collect excise taxes for air transportation or communications services when persons liable for the tax refuse to pay the tax.  Collectors are responsible for filing returns with respect to the collected excise taxes and for making required deposits of the tax.  The regulations provide the time by which the collector must report the refusal to pay the tax to the Internal Revenue Service.
TD 9221.  Published August 25, 2005.
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Methods to Determine Taxable Income in Connection with a Cost Sharing Arrangement under Section 482
These proposed regulations provide guidance with respect to the sharing of costs and risks under cost sharing arrangements.  They replace the existing guidance under section 1.482-7 to provide clarification and additional guidance regarding the scope and valuation of the external inputs for which arm's length consideration must be provided as an entry condition into cost sharing ("buy-ins" under the current regulations), as well as to address other technical and procedural issues that have arisen in the course of the administration of the cost sharing rules.
REG-144615-02.  Published August 29, 2005.
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Dividends Paid Deduction for Stock Held in Employee Stock Ownership Plan
These proposed regulations contain rules under sections 162(k) and 404(k) of the Internal Revenue Code (Code) relating to employee stock ownership plans (ESOPs).  The regulations provide guidance concerning which corporation is entitled to the deduction for applicable dividends under section 404(k).  These regulations also clarify that a payment in redemption of employer securities held by an ESOP is not deductible.  These regulations will affect administrators of, employers maintaining, participants in, and beneficiaries of ESOPs.  In addition, they will affect corporations that make distributions in redemption of stock held in an ESOP. 
REG-133578-05.  Published August 25, 2005.
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Converting an IRA Annuity to a Roth IRA
This document contains temporary regulations under section 408A of the Internal Revenue Code.  These temporary regulations provide guidance concerning the tax consequences of converting a non-Roth IRA annuity to a Roth IRA.  These temporary regulations affect individuals establishing Roth IRAs, beneficiaries under Roth IRAs, and trustees, custodians and issuers of Roth IRAs. 
TD 9220.  Published August 22, 2005.
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Converting an IRA Annuity to a Roth IRA
This document contains cross-referencing proposed under section 408A of the Internal Revenue Code. These proposed regulations provide guidance concerning the tax consequences of converting a non-Roth IRA annuity to a Roth IRA.  These proposed regulations affect individuals establishing Roth IRAs, beneficiaries under Roth IRAs, and trustees, custodians and issuers of Roth IRAs.
REG-122857-05.  Published August 22, 2005.
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Section 411(d)(6) Protected Benefits
These final regulations address the limited circumstances under which a qualified retirement plan is permitted under the anti-cutback rules to be amended to eliminate or reduce early retirement benefits, retirement-type subsidies, or optional forms of benefit.  The final regulations also provide guidance relating to the notification requirements for a plan amendment that significantly reduces the rate of future benefit accrual or that eliminates or significantly reduces an early retirement benefit or a retirement-type subsidy.
TD 9219.  Published August 12, 2005.
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Section 411(d)(6) Protected Benefits
These proposed regulations would address the interaction between the anti-cutback rules of section 411(d)(6) and the nonforfeitability requirements of section 411(a), and would also provide a utilization test under which certain plan amendments would be permitted to eliminate or reduce early retirement benefits, retirement-type subsidies, or optional forms of benefit.  The proposed regulations would generally affect sponsors of, and participants in, qualified retirement plans. 
REG-156518-04.  Published August 12, 2005.
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Exclusions from Gross Income of Foreign Corporations
Section 423 of the American Jobs Creation Act of 2004 delayed for one year the applicability date of the final regulations under section 883 (TD 9087), which were published in the Federal Register on August 26, 2003 (68 FR 51394).  Those regulations relate to income derived by a foreign corporation from the international operation of ships or aircraft.  This document makes the conforming changes to the applicability date of those final regulations so that they apply to taxable years of foreign corporations beginning after September 24, 2004.
TD 9218.  Published August 8, 2005.
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Guidance Regarding the Simplified Service Cost Method and the Simplified Production Method Under Section 263A
These final and temporary regulations provide guidance on whether self-constructed assets are produced on a "routine and repetitive" basis for purposes of the simplified service cost method and the simplified production method provided in regulations under section 263A of the Internal Revenue Code.  The regulations provide that self-constructed assets are produced on a routine and repetitive basis in the ordinary course of a taxpayer's trade or business only if numerous substantially identical units of tangible personal property are produced within a taxable year using standardized designs and assembly line techniques and the applicable recovery period of the assets under section 168(c) is not longer than 3 years. 
TD 9217.  Published August 3, 2005.
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Guidance Regarding the Simplified Service Cost Method and the Simplified Production Method Under Section 263A
This notice of proposed rulemaking by cross-reference to temporary regulations informs taxpayers of temporary regulations that provide guidance on whether self-constructed assets are produced on a "routine and repetitive" basis for purposes of the simplified service cost method and the simplified production method provided in regulations under section 263A of the Internal Revenue Code.
REG-121584-05.  Published August 3, 2005.
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