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October 2006 Plain Language Regulations

Limitations on Transfers of Built-in Losses
The proposed regulations provide guidance to taxpayers on how to apply section 362(e)(2) of the Internal Revenue Code to transfers of net built-in loss property to corporations. It provides rules for determining the amount and allocation of basis reductions required by the Code section.  It also provides instructions to taxpayers on how to make an election to reduce basis in stock received in exchange for net built-in loss property in lieu of reducing the basis in the transferred property.  REG-110405-05.  Published October 23, 2006.
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Use of Electronic Media for Providing Employee Benefit Notices and Making Employee Benefit Elections and Consents
These final regulations set forth guidance on the permitted use of an electronic medium to provide a notice to recipient, or to make a participant election or consent, with respect to a retirement plan, an employee benefit arrangement, or an individual retirement plan.  The final regulations generally affect sponsors of, and individuals entitled to benefits under, certain retirement plans, employee benefit arrangements, and individual retirement plans.  TD 9294.  Published October 20, 2006.
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Allocation of Foreign Tax Expenditure
These final regulations provide that the allocation of creditable foreign tax expenditures cannot have substantial economic effect.  These final regulations further provide that a partner's distributive share of foreign tax expenditures will be deemed to be in accordance with the partner's interest in the partnership if such expenditures are allocated in proportion to the partner's distributive share of income to which the expenditures relate.  TD 9292.  Published October 19, 2006.
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Treatment of Payments in Lieu of Taxes under Section 141
Generally, interest on a private activity bond is not exempt from gross income.  A bond is a private activity bond if it meets the private use and the private security or payment test or the private loan financing test under section 141.  Generally, applicable taxes are not taken into account for purposes of the private security or payment test (that is, they are not payments from a nongovernmental person and are not payments in respect of property used for a private business use).  Certain tax equivalency payments and payments in lieu of taxes are treated as generally applicable taxes under section 141 if they meet certain standards.  The proposed regulations would modify these standards for treating payments in lieu of taxes as generally applicable taxes. 
REG-136806-06.  Published October 19, 2006.
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Deduction for Income Attributable to Domestic Production
Taxpayers may claim a deduction for income attributable to domestic production activities.  The temporary and proposed regulations provide guidance on how to calculate the deduction for income attributable to domestic production after the enactment of the Tax Increase Prevention and Reconciliation Act of 2005.
TD 9293.  Published October 19, 2006.
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Deduction for Income Attributable to Domestic Production
Taxpayers may claim a deduction for income attributable to domestic production activities.  The temporary and proposed regulations provide guidance on how to calculate the deduction for income attributable to domestic production after the enactment of the Tax Increase Prevention and Reconciliation Act of 2005.
REG-127819-06.  Published October 19, 2006.
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Exchanges of Property for an Annuity
The proposed regulations address the tax treatment of an exchange of property for an annuity contract.  The proposed regulations would apply the same rule to exchanges for both private annuities and commercial annuities, but the proposed regulations would not affect charitable gift annuities. 
REG-141901-05.  Published October 18, 2006.
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Miscellaneous Changes to Collection Due Process Procedures Relating to Notice and Opportunity for Hearing Prior to Levy
The final regulations amend regulations relating to a taxpayer's right to a hearing before or after levy under section 6330 of the Internal Revenue Code of 1986. The final regulations make certain clarifying changes in the way collection due process hearings are conducted and specify the period during which a taxpayer may request an equivalent hearing.  The final regulations affect taxpayers against whose property or rights to property the Internal Revenue Service proposes to levy.
TD 9291.  Published October 17, 2006.
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Miscellaneous Changes to Collection Due Process Procedures Relating to Notice and Opportunity for Hearing upon Filing Notice of Federal Tax Lien
The final regulations amend the regulations relating to a taxpayer's right to a hearing under section 6320 of the Internal Revenue Code of 1986 after the filing of a notice of Federal tax lien (NFTL).  The final regulations make certain clarifying changes in the way collection due process hearings are conducted and specify the period during which a taxpayer may request an equivalent hearing.  The final regulations affect taxpayers against whose property or rights to property the Internal Revenue Service files a NFTL.  TD 9290.  Published October 17, 2006.
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Treatment of Disregarded Entities Under Section 752
These final regulations clarify the existing regulations concerning when a partner may be treated as bearing the economic risk of loss for a partnership liability based upon an obligation of a disregarded entity.  The rules affect partnerships and their partners.
TD 9289.  Published October 11, 2006.
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User Fees Relating to Enrollment
This final regulation implements new user fees for the special enrollment examination for enrolled agents (SEE), the application for enrollment of enrolled agents, and the renewal of such enrollment.  The Office of Professional Responsibility has recently contracted out the SEE to a private contractor and the contractor will furnish the resources, facilities, and services necessary to manage the entire SEE program.  The user fee that the IRS currently charges applicants in order to take the SEE is being modified to reflect the change in IRS costs of administering the exam program as a result of the contracting out of the exam.  Furthermore,the user fees that the IRS currently charges applicants for the enrollment and renewal of enrollment process are less than the actual cost of overseeing the enrollment process.  The final regulations establish a $11 per part per applicant user fee for the SEE and separate $125 user fees for the enrollment and renewal of enrollment process. 
TD 9288.  Published October 5, 2006.
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Page Last Reviewed or Updated: 22-Jan-2014