Internal Revenue Bulletin: 2004-17
April 26, 2004
LIFO; price indexes; department stores. The February 2004 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, February 29, 2004.
Final regulations eliminate the references to manually signed returns in the current regulations under section 6695 of the Code. In addition, the regulations provide that the Commissioner may prescribe, in forms, instructions, or other appropriate guidance, the manner in which preparers may satisfy their obligations under section 6107 to furnish returns to taxpayers and to retain copies of returns.
Electricity produced from certain renewable resources; calendar year 2004 inflation adjustment factor and reference prices. This notice announces the calendar year 2004 inflation adjustment factor and reference prices for the renewable electricity production credit under section 45 of the Code.
S corporation tax shelter. This notice advises taxpayers and their representatives about a tax shelter in which a shareholder of an S corporation donates nonvoting stock of the S corporation to an organization described in section 1361(c)(6) of the Code that is not subject to tax on unrelated business income under section 511 or that has UBIT carry-over losses. The transaction is made in order to defer taxation on S corporation income. The notice notifies taxpayers and their representatives that the claimed tax benefits purportedly generated by these transactions are not allowable for federal income tax purposes. The notice also states that this transaction is a listed transaction and warns of the potential penalties that may be imposed if taxpayers participate in such a transaction.
This notice identifies as a listed transaction under section 6111 of the Code certain equity financing structures using partnerships, special allocations of partnership items, and guaranteed payments that are entered into to avoid the limitations of section 163(j).
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