Internal Revenue Bulletin:  2010-31 

August 2, 2010 


Notice of Proposed Rulemaking by Cross-Reference to Temporary Regulations Extended Carryback of Losses to or from a Consolidated Group


Internal Revenue Service (IRS), Treasury.


Notice of proposed rulemaking by cross-reference to temporary regulations.


In this issue of the Bulletin, the IRS is issuing temporary regulations (T.D. 9490) that provides guidance to consolidated groups that implements the revisions to section 172(b)(1)(H). The text of those regulations also serves as the text of these proposed regulations.


Written or electronic comments and a request for a public hearing must be received by September 21, 2010.


Send submissions to: CC:PA:LPD:PR (REG-151605-09), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-151605-09), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, DC, or sent electronically via the Federal eRulemaking Portal at (IRS REG-151605-09).


Concerning the proposed regulations, Grid Glyer, (202) 622-7930, concerning submissions of comments, Regina Johnson (202) 622-7180 (not toll-free numbers).


Paperwork Reduction Act

The collection of information contained in this notice of proposed rulemaking has been submitted to the Office of Management and Budget for review in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d) under control number 1545-2171). Comments on the collection of information should be sent to the Office of Management and Budget, Attn: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, D.C. 20503, with copies to the Internal Revenue Service, Attn: IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP, Washington, D.C. 20224. Comments on the collection of information should be received by August 23, 2010.

Comments are specifically requested concerning:

Whether the proposed collection of information is necessary for the proper performance of the functions of the Internal Revenue Service, including whether the information will have practical utility;

The accuracy of the estimated burden associated with the proposed collection of information;

How the quality, utility and clarity of the information to be collected may be enhanced;

How the burden of complying with the proposed collection of information may be minimized, including through the application of automated collection techniques or other forms of information technology; and

Estimates of capital or start-up costs and costs of operation, maintenance and purchase of service to provide information.

The collection of information in these proposed regulations is in §§1.1502-21(b)(3)(ii)(C)(2) and 1.1502-21(b)(3)(ii)(C)(3).

The proposed regulations provide guidance to consolidated groups that implements the revisions to section 172(b)(1)(H).

The collection of information is required in order to obtain a benefit. The likely respondents are corporations that are members of consolidated groups.

Estimated total annual reporting burden: 1,000 hours.

Estimated average annual burden hours per respondent: 0.25 hours.

Estimated number of respondents: 4,000.

Estimated frequency of responses: Once.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

Background and Explanation of Provisions

Temporary regulations in this issue of the Bulletin amend 26 CFR Part 1 to revise §1.1502-21T. The text of those temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the amendments.

Special Analyses

It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. With respect to the proposed regulation, §1.1502-21, it is hereby certified that this provision will not have a significant economic impact on a substantial number of small entities. This certification is based on the fact that these regulations primarily affect large corporations that are members of consolidated groups and will provide a benefit if the election is made. Therefore, a regulatory flexibility analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, these regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

Comments and Requests for a Public Hearing

Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments (a signed original and eight (8) copies) or electronic comments that are submitted timely to the IRS. All comments will be available for public inspection and copying. A public hearing may be scheduled if requested in writing by any person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the public hearing will be published in the Federal Register.

Proposed Amendments to the Regulations

Accordingly, 26 CFR part 1 is proposed to be amended as follows:


Paragraph 1. The authority citation for part 1 continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

Section 1.1502-21 also issued under 26 U.S.C. 1502. * * *

Par. 2. Section 1.1502-21 is revised to read as follows:

§1.1502-21 Net operating losses.

[The text of proposed §1.1502-21 is the same as the text for §1.1502-21T(a) through (h)(9)(i) published elsewhere in this issue of the Bulletin].

Steven T. Miller,
Deputy Commissioner for
Services and Enforcement.


(Filed by the Office of the Federal Register on June 22, 2010, 8:45 a.m., and published in the issue of the Federal Register for June 23, 2010, 75 F.R. 35710)

Drafting Information

The principal author of these regulations is Grid Glyer of the Office of Associate Chief Counsel (Corporate). Other personnel from the Treasury Department and the IRS participated in their development.

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