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July 2004 Plain Language Regulations

Entry of Taxable Fuel
These regulations provide that on or after September 28, 2004, an importer of record (under Customs law) is jointly and severally liable with an enterer for the tax imposed by section 4081on the entry of taxable fuel into the United States if (1) the importer of record is not the enterer of the taxable fuel (that is, the importer of record is a customs broker engaged by the enterer) and (2) the enterer is not a taxable fuel registrant. A "safe harbor" from liability is available if an importer of record engaged by an enterer verifies that the enterer is registered by the IRS.  The regulations also provide that the IRS will not charge a surety bond (posted with Customs for entry of fuel) for the section 4081 tax until September 28, 2004.  A Customs bond posted for the entry of taxable fuel, however, will not be charged for the section 4081 tax if the enterer is a taxable fuel registrant.  TD 9145.  Published July 30, 2004.
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Deemed Election to be an Association Taxable as a Corporation for a Qualified Electing S Corporation
This temporary regulation deems certain eligible entities that file timely S Corporation elections to have elected to be classified as associations taxable as corporations.  This regulation affects certain eligible entities filing timely elections to be S corporations on or after July 20, 2004.  TD 9139. Published July 20, 2004.
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Entry of Taxable Fuel
These regulations provide that on or after September 28, 2004, an importer of record (under Customs law) is jointly and severally liable with an enterer for the tax imposed by section 4081on the entry of taxable fuel into the United States if (1) the importer of record is not the enterer of the taxable fuel (that is, the importer of record is a customs broker engaged by the enterer) and (2) the enterer is not a taxable fuel registrant. A "safe harbor" from liability is available if an importer of record engaged by an enterer verifies that the enterer is registered by the IRS.  The regulations also provide that the IRS will not charge a surety bond (posted with Customs for entry of fuel) for the section 4081 tax until September 28, 2004.  A Customs bond posted for the entry of taxable fuel, however, will not be changed for the section 4081 tax if the enterer is a taxable fuel registrant.  REG-120616-03.  Published July 30, 2004.
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Deductions for Charitable Contributions
These temporary and final regulations under section 861 provide that deductions for charitable contributions (as defined in section 170(c)) are definitely related and allocable to all of a taxpayer's gross income and are apportioned on the basis of income from sources within the United States.  The final regulations, which provide that deductions for charitable contributions are not definitely related to any gross income and therefore are ratably apportioned between or among the statutory and residual groupings, are removed.  The temporary regulations will affect individuals and corporations with foreign source income that make contributions to charitable organizations and that calculate their foreign tax credit limitations under section 904.
TD 9143.  Published July 28, 2004.
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Deductions for Charitable Contributions
This document withdraws the notice of proposed rulemaking published on March 12, 1991, relating to the allocation and apportionment of charitable deductions.  In addition, regulations are proposed which provide that the deduction for a charitable contribution (as defined in section 170(c)) is to be allocated to all of the taxpayer's gross income and apportioned on the basis of income from sources within the United States; the text of the proposed regulations is found in the temporary regulations that are being published simultaneously,  Further, regulations are proposed in this document with respect to deductions for charitable contributions that are provided by an income tax treaty rather than by sections 170, 873(b)(2), and 882(c)(1)(B).  The proposed regulations will affect individuals and corporations with foreign source income that make contributions to certain foreign charitable organizations and that calculate their foreign tax credit limitations under section 904. 
REG-208246-90.  Published July 28, 2004.
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Qualified Interest
These proposed regulations amend the regulations under the gift tax special valuation rules to provide that a unitrust amount or annuity payable for a specified term of years to the grantor, or to grantor's estate if the grantor dies prior to the expiration of the term, is a qualified interest for the specified term.  The proposed regulations also clarify that the exception treating a spouse's revocable successor interest as a retained qualified interest applies only if the spouse's annuity or unitrust interest, standing alone, would constitute a qualified interest that meets the requirements of section 25.2702-3(d)(3), but for the grantor's revocation power.  REG-163679-02. 
Published July 26, 2004.
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Deemed IRAs in Governmental Plans/Qualified Nonbank Trustee Rules
These final regulations under section 408(q) relates to requirements for "deemed IRAs".  The regulations also contains an amendment to final regulations under section 408(a) relating to requirements for non-bank trustees for deemed IRAs, and temporary regulations under section 408(a) relating to governmental entities serving as non-bank trustees for deemed IRAs.  These final and temporary regulations will affect qualified employer plan sponsors, and administrators, and participants in and beneficiaries of qualified employer plans.  TD 9142.  Published July 22, 2004.
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Deemed IRAs in Governmental Plans/Qualified Nonbank Trustee Rules
These proposed regulations under section 408(a) relates to governmental entities serving as non-bank trustees for deemed IRAs.  A deemed IRA is a separate account or annuity, established under a qualified employer plan, which satisfies the tax laws applicable to an individual retirement account or an individual retirement annuity.  Deemed IRAs may be either traditional IRAs or Roth IRAs.  A deemed IRA may only be included in qualified employer plans, which are plans are limited to plans described in section 401(a) of the Internal Revenue Code, section 403(a), section 403(b), and governmental plans under section 457(b).  These proposed regulations will affect qualified employer plan sponsors, and administrators, and participants in and beneficiaries of qualified employer plans. REG-101447-04.  Published July 22, 2004.
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Application of Separate Foreign Tax Credit Limitations
The final regulations contain rules relating to the limitations on foreign tax credits that apply to separate categories of income, including rules relating to rents and royalties.  The final regulations provide rules for adjusting the limitations on foreign tax credits when an individual or company has capital gains (or losses) or, for an individual, qualified dividend income.  The final regulations provide rules for qualifying individuals who make an election not to apply the limitations on foreign tax credits for a particular year.  The final regulations provide guidance on the allocation of foreign taxes to the separate categories of income.  Finally, the final regulations provide guidance on the exclusion of certain export financing interest from foreign personal holding company income.  TD 9141.  Published July 20, 2004.
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Transfer of Notes or Stock to Provide for the Satisfaction of Contested Liabilities
As an exception to the general rules of tax accounting, a taxpayer may deduct in the taxable year of transfer an amount of money or other property transferred to satisfy an asserted liability that the taxpayer continues to contest.  These final regulations provide that a transfer of a taxpayer's stock, or the stock or indebtedness of a related person, does not qualify as a transfer for this purpose, unless the transfer is made to the person who is asserting the liability.  The transfer of a taxpayer's indebtedness or promise to provide services or property in the future also does not qualify for this purpose.  The regulations provide additional rules for satisfying economic performance for asserted liabilities for which economic performance requires payment.
TD 9140.  Published July 20, 2004.
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Optional 10-Year Writeoff of Certain Tax Preferences
These proposed regulations provide rules governing the time and manner for making and revoking an election to treat certain qualified expenditures which are otherwise deductible under the Internal Revenue Code as amortized over the applicable period provided for in the statute.  The regulations provide that the election may be made for any specific dollar amount of the qualified expenditures, but cannot be made by reference to a formula. To revoke the election, a taxpayer must receive the permission of the Commissioner.  Permission will only be granted in rare and unusual circumstances.  If permission is granted, the revocation will be effective in the taxpayer's earliest open taxable year affected by the election.
REG-124405-03.  Published July 20, 2004.
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Removal of Transitional Rule for Vested Accrued Vacation Pay
The Treasury decision removes a temporary regulation, section 1.463-1T, that provides guidance on making a transitional rule election to deduct vested accrued vacation pay for a taxpayer's first taxable year ending after July 18, 1984.  The regulation was issued under section 463 of the Internal Revenue Code, which was repealed in 1987.  The passage of time and the repeal of the underlying section of the Internal Revenue Code have rendered the regulation obsolete.
TD 9138.  Published July 16, 2004.
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Partnership Transactions Involving Long-term Contracts
These final regulations describe the tax consequences of contributions of contracts accounted for under a long-term contract method of accounting to partnerships.  The regulations also describe the tax consequences of transfers of interests in, and distributions from, partnerships holding these contracts.  Current regulations under section 460 divide the rules regarding a mid-contract change in taxpayer engaged in completing long-term contracts into two categories-constructive completion transactions and step-in-the-shoes transactions.  The contribution of a contract or other property to a partnership in a transaction described in section 721(a), a transfer of a partnership interest, and a distribution by a partnership to which section 731 applies (other than a distribution of a contract accounted for using a long-term contract method of accounting) are step-in-the-shoes transactions.
TD 9137.  Published July 16, 2004.
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Application to Partnerships
The proposed regulations provide rules regarding the deferral of gain on a partnership's sale of qualified small business stock for federal income tax purposes, and deferral of gain on a partner's sale of qualified small business stock distributed by a partnership.  The proposed regulations affect partnerships that invest in qualified small business stock and their partners. REG-150562-03. 
Published July 15, 2004.
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Election Out of GST Deemed Allocations
These proposed regulations provide guidance for making the election under section 2632(c)(5)(A)(i) of the Internal Revenue Code to not have the deemed allocation of unused generation-skipping transfer (GST) tax exemption under section 2632(c)(1) apply with regard to certain transfers to a GST trust, as defined in section 2632(c)(3)(B).  The proposed regulations also provide guidance for making the election under section 2632(c)(5)(A)(ii) to treat a trust as a GST trust.  REG-153841-02. 
Published July 13, 2004.
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Information Reporting and Backup Withholding for Payment Card Transactions and IRS Tin Matching Program
These final regulations provide guidance on the information reporting and backup withholding requirements for payment card transactions made through a Qualified Payment Card Agent (QPCAs). These regulations provide a limited exception to backup withholding for reportable payments made through a QPCA.  These regulations also finalize temporary regulations under section 3406(i) expanding the IRS TIN Matching Program to payors' authorized agents.  TD 9136.
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Excise Tax on Structured Settlement Factoring Transactions
These final regulations relates to the manner and method of reporting and paying the nondeductible 40 percent excise tax imposed on any person who acquires structured settlement payment rights in a structured settlement factoring transaction.  TD 9134.  Published July 8, 2004.
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Rents and Royalties
This final regulations will amend existing regulations in order to permit the Commissioner of Internal Revenue to provide rules allowing taxpayers to include advance rents in gross income for federal income tax purposes in a year other than the year the rents are received.  Prior to these amendments, existing regulations generally required taxpayers to include advance rents in gross income in the year of receipt.  
TD 9135.  Published July 8, 2004.
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Communications Excise Tax; Taxable Communications Services
This advance notice of proposed rulemaking requests information from the public on issues that the IRS may address in proposed regulations relating to the tax on amounts paid for communications services.  REG-137076-02.  Published July 8, 2004.
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Page Last Reviewed or Updated: 11-Dec-2014