Internal Revenue Bulletin: 2005-22
May 31, 2005
LIFO; price indexes; department stores. The March 2005 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, March 31, 2005.
This document provides guidance under new section 965 of the Code generally concerning limitations described in sections 965(b)(1), (2), and (3) on the amount of dividends that a corporation that is a U.S. shareholder of a controlled foreign corporation (CFC) may treat as eligible for the dividends received deduction (DRD) under section 965(a), including the effects of certain corporate transactions on such limitations. In general, and subject to limitations and conditions, section 965(a) provides that a corporation that is a U.S. shareholder of a CFC may elect, for one taxable year, an 85 percent DRD with respect to certain cash dividends it receives from its CFCs. This document also addresses certain foreign tax credit and other consequences of elections under section 965. See also Notice 2005-10, 2005-6 I.R.B. 474, which primarily addresses requirements concerning domestic reinvestment plans described in section 965(b)(4). Notice 2005-10 modified.
This procedure extends the time for issuing authorities to make a carryforward election of unused private activity bond volume cap under section 146(f) of the Code, provided that the issuing authority meets the requirements of the revenue procedure.
This announcement provides supplemental information for the settlement initiative described in Announcement 2005-19 to resolve transactions that are the same as or substantially similar to those described in Notice 2003-47. The transaction generally involved executives transferring compensatory stock options or restricted stock to a related person in exchange for a long-term, unsecured deferred payment obligation. It addresses (1) the penalty under the initiative for taxpayers with unexercised options or nonvested stock, (2) the application of section 6654 for a settlement of taxable year 2004, and (3) filing disclosure statements under regulations section 1.6011-4 for taxpayers that settle their transactions under the initiative. Taxpayers have until May 23, 2005, to notify the Service of their intent to participate in the settlement initiative.
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