Internal Revenue Bulletin: 2006-50
December 11, 2006
Final regulations under section 41 of the Code provide rules for the computation and allocation of the credit for increasing research activities in the case of a controlled group of corporations or a group of trades or businesses under common control. The regulations also provide rules for making and revoking an election to compute the research credit using the alternative incremental research credit rules.
Final regulations under section 937(a) of the Code provide a new alternative under the presence test for determining whether an individual is a bona fide resident of American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, or the U.S. Virgin Islands, referred to as U.S. possessions or territories. Generally, an individual is a bona fide resident of a territory if the individual satisfies a presence test, a tax home test and a closer connection test. Under this new alternative, an individual would satisfy the presence test if the individual meets an averaging test for the minimum number of days spent in the relevant territory.
This announcement contains a correction to a phone number in Announcement 2006-61, 2006-36 I.R.B. 390, which provides an opportunity for small business/self-employed taxpayers to use Fast Track Settlement (FTS) to expedite case resolution within the IRS’s Small Business Self-Employed (SB/SE) organization.
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