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February 2002 Plain Language Regulations

Golden Parachute Payments
The IRS is issuing proposed regulations to provide guidance about the denial of a deduction to a corporation and the imposition of an excise tax on an individual for any excess parachute payment (which is a payment in the nature of compensation made to a disqualified individual that is contingent on a change in ownership or control of the corporation). The regulations are effective for a parachute payment made on or after January 1, 2004. REG-209114-90. Published February 20, 2002. Correction Notice June 21, 2002.
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Definition of Income for Trust Purposes
This proposed regulation revises the definition of trust accounting income to take into account changes in the definition of trust accounting income under state laws, which allow certain amounts traditionally considered as principal to be treated as income. The proposed regulation will also clarify the situation in which capital gains will be included in a trust's distributable net income. Conforming amendments with regard to the revised definition of trust accounting income are made to regulations affecting various trusts, including pooled income funds, charitable remainder trusts, trusts qualifying for marital deduction, and trusts exempt from the generation-skipping transfer tax. The regulations are proposed to apply on or after the date the final regulations are published in the Federal Register. REG-106513-00. Published February 15, 2001.
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Form 720 for Eligible Air Carriers to File
These final regulations will simplify the requirements for excise tax returns, payments, and deposits. The rules became effective on August 9, 2001. The regulations provide for: (1) one filing date for quarterly returns; (2) one deposit date for all taxes other than air transportation and communications taxes under the alternative method; and (3) a deposit requirement for each semimonthly period of 95% of liability incurred unless the look-back safe harbor rule is met. TD 8983. Published February 6, 2002.
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Unit-Livestock Price Method
The unit-livestock-price method is a method of accounting for the costs of raising livestock. These proposed regulations, which were published in the Federal Register on February 4, 2002, modify the existing regulations by requiring taxpayers using the unit-livestock-price method to annually decrease unit costs without securing the consent of the Commissioner in response to changes in the costs of raising livestock and by permitting taxpayers to depreciate the unit costs of livestock used for draft, breeding or dairy purposes. A public hearing is scheduled for June 12, 2002. REG-125626-01. Published: February 4, 2002.
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Definition of a Disqualified Person
If certain conditions are met, the tax law allows for the tax-free exchange of many types of business and investment property. Taxpayers often use banks to assist them in meeting the conditions set forth in the tax law. These final regulations make it easier for banks and their affiliates to provide the necessary services relating to tax-free exchanges of business or investment property. TD 8982. Published February 1, 2002.
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Definition of Agent for Certain Purposes
The proposed regulations clarify that the term agent in certain provisions of section 6103 of the Internal Revenue Code includes contractors. REG-120135-01. Published February 1, 2002.
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Page Last Reviewed or Updated: 17-Aug-2012