Internal Revenue Bulletin: 2006-3
January 17, 2006
Table of Contents
Low-income housing credit; satisfactory bond; “bond factor” amounts for the period January through March 2006. This ruling provides the monthly bond factor amounts to be used by taxpayers who dispose of qualified low-income buildings or interests therein during the period January through March 2006.
Proposed regulations under section 7216 of the Code update the rules regarding the disclosure and use of tax return information by tax return preparers. The regulations announce new and additional rules for taxpayers to consent electronically to the disclosure or use of their tax return information by tax return preparers. The proposed rules provide guidelines for tax return preparers using or disclosing information obtained in the process of preparing income tax returns. A public hearing is scheduled for April 4, 2006.
Section 1(h) of the Code provides that certain dividends paid to an individual shareholder from either a domestic corporation or a “qualified foreign corporation” are subject to tax at the reduced rates applicable to certain capital gains. This notice provides guidance for persons required to make returns and provide statements under section 6042 regarding distributions with respect to securities issued by a foreign corporation, and for individuals receiving such statements. This notice provides generally that the simplified procedures and other rules contained in Notice 2003-79 and Notice 2004-71 are extended to apply for 2005 information reporting of distributions with respect to securities issued by foreign corporations and for future years.
This notice addresses the application of section 409A of the Code to outstanding stock rights and specifically the determination, for purposes of the exclusion from coverage under section 409A for certain stock rights, of whether a stock right has an exercise price equal to or greater than the fair market value of the underlying stock at the date of grant. For stock rights issued before January 1, 2005, the notice provides that the determination will be made in accordance with the rules governing incentive stock options. For stock rights issued on or after January 1, 2005, but before the effective date of final regulations, the notice reiterates the standard set forth in Notice 2005-1 that the determination of fair market value may be made using any reasonable valuation method.
Simplified service cost and simplified production method change procedures. This document provides procedures under which a taxpayer may use either the advance consent procedures of Rev. Proc. 97-27 or the automatic consent procedures of Rev. Proc. 2002-9 to request a change in method of accounting to comply with section 1.263A-1T or 1.263A-2T for the taxpayer’s first taxable year ending on or after August 2, 2005. Rev. Procs. 97-27 and 2002-9 modified.
This document provides procedures under which certain taxpayers may obtain automatic consent for a taxable year ending on or after December 31, 2005, and for certain earlier taxable years, to change to a method of accounting provided in regulations sections 1.263(a)-4, 1.263(a)-5, or 1.167(a)-3(b). Rev. Procs. 97-27 and 2002-9 modified and amplified. Rev. Procs. 2004-23 and 2005-9 superseded for certain taxable years.
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