Beruflich Dokumente
Kultur Dokumente
2005-36
September 6, 2005
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX imum tax, and the credit for prior year minimum tax. Notice
2005–10 clarified and Notice 2005–38 modified.
Rev. Rul. 2005–57, page 466. Rev. Proc. 2005–63, page 491.
Federal rates; adjusted federal rates; adjusted federal Time periods for requesting consent to change a method
long-term rate and the long-term exempt rate. For pur- of accounting. For a taxpayer desiring consent to change a
poses of sections 382, 642, 1274, 1288, and other sections method of accounting provided for under certain regulations,
of the Code, tables set forth the rates for September 2005. this procedure waives the requirement to request consent
within the time periods prescribed in those regulations pro-
Rev. Rul. 2005–58, page 465. vided the taxpayer requests consent in accordance with this
Mutual life insurance companies; differential earnings procedure. Rev. Proc. 83–77 superseded.
rate. The differential earnings rate for 2004 is determined
for use by mutual life insurance companies to compute their Rev. Proc. 2005–64, page 492.
income tax liability for 2004. This procedure provides the domestic asset/liability percent-
ages and domestic investment yields needed by foreign life in-
T.D. 9216, page 461. surance companies and foreign property and liability insurance
Final regulations under section 269B of the Code concern the companies to compute their minimum effectively connected
definition and treatment of a stapled foreign corporation, which net investment income under section 842(b) of the Code for
is generally treated for U.S. tax purposes as a domestic cor- taxable years beginning after December 31, 2003.
poration. The regulations also put in regulation form Notices
89–94 and 2003–50, treating a stapled foreign corporation
as foreign for purposes of determining whether it is an includi-
ble corporation within the meaning of section 1504(d), except
when applying sections 1.904(i)–1 and 1.861–11T(d)(6) of the
regulations.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of court decisions, rulings, and procedures must be considered,
the Commissioner of Internal Revenue for announcing official and Service personnel and others concerned are cautioned
rulings and procedures of the Internal Revenue Service and for against reaching the same conclusions in other cases unless
publishing Treasury Decisions, Executive Orders, Tax Conven- the facts and circumstances are substantially the same.
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
The Bulletin is divided into four parts as follows:
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis. Part I.—1986 Code.
This part includes rulings and decisions based on provisions of
It is the policy of the Service to publish in the Bulletin all sub- the Internal Revenue Code of 1986.
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, mod- Part II.—Treaties and Tax Legislation.
ify, or amend any of those previously published in the Bulletin. This part is divided into two subparts as follows: Subpart A,
All published rulings apply retroactively unless otherwise indi- Tax Conventions and Other Related Items, and Subpart B, Leg-
cated. Procedures relating solely to matters of internal man- islation and Related Committee Reports.
agement are not published; however, statements of internal
practices and procedures that affect the rights and duties of
taxpayers are published. Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
Revenue rulings represent the conclusions of the Service on the included in this part are Bank Secrecy Act Administrative Rul-
application of the law to the pivotal facts stated in the revenue ings. Bank Secrecy Act Administrative Rulings are issued by
ruling. In those based on positions taken in rulings to taxpayers the Department of the Treasury’s Office of the Assistant Sec-
or technical advice to Service field offices, identifying details retary (Enforcement).
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements. Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be The last Bulletin for each month includes a cumulative index
relied on, used, or cited as precedents by Service personnel in for the matters published during the preceding months. These
the disposition of other cases. In applying published rulings and monthly indexes are cumulated on a semiannual basis, and are
procedures, the effect of subsequent legislation, regulations, published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.
For additional background concerning Section 1274.—Determi- for purposes of section 1274(d) of the
the differential earnings rates, see Rev. nation of Issue Price in the Internal Revenue Code. Table 2 contains
Rul. 2001–33, 2001–2 C.B. 118. Case of Certain Debt Instru- the short-term, mid-term, and long-term
ments Issued for Property adjusted applicable federal rates (adjusted
DRAFTING INFORMATION AFR) for the current month for purposes
(Also Sections 42, 280G, 382, 412, 467, 468, 482,
483, 642, 807, 846, 1288, 7520, 7872.)
of section 1288(b). Table 3 sets forth the
The principal author of this revenue rul- adjusted federal long-term rate and the
ing is Katherine A. Hossofsky of the Office long-term tax-exempt rate described in
Federal rates; adjusted federal rates;
of the Associate Chief Counsel (Financial section 382(f). Table 4 contains the ap-
adjusted federal long-term rate and the
Institutions and Products). For further in- propriate percentages for determining the
long-term exempt rate. For purposes of
formation regarding this revenue ruling, low-income housing credit described in
sections 382, 642, 1274, 1288, and other
contact Ms. Hossofsky at (202) 622–8435 section 42(b)(2) for buildings placed in
sections of the Code, tables set forth the
(not a toll-free call). service during the current month. Finally,
rates for September 2005.
Table 5 contains the federal rate for deter-
Rev. Rul. 2005–57 mining the present value of an annuity, an
Section 846.—Discounted interest for life or for a term of years, or
Unpaid Losses Defined This revenue ruling provides various a remainder or a reversionary interest for
The adjusted applicable federal short-term, mid-
prescribed rates for federal income tax purposes of section 7520.
term, and long-term rates are set forth for the month purposes for September 2005 (the current
of September 2005. See Rev. Rul. 2005-57, page month). Table 1 contains the short-term,
466. mid-term, and long-term applicable fed-
eral rates (AFR) for the current month
Mid-term
AFR 4.19% 4.15% 4.13% 4.11%
110% AFR 4.62% 4.57% 4.54% 4.53%
120% AFR 5.04% 4.98% 4.95% 4.93%
130% AFR 5.47% 5.40% 5.36% 5.34%
150% AFR 6.33% 6.23% 6.18% 6.15%
175% AFR 7.39% 7.26% 7.20% 7.15%
1 The term U.S. shareholder means, with respect to any foreign corporation, a U.S. person who owns (within the meaning of section 958(a)), or is considered as owning by applying the rules
of ownership of section 958(b), 10 percent or more of the total combined voting power of all classes of stock entitled to vote of such foreign corporation. Section 951(b).
2 Section 965(c)(4) provides that no deduction is allowed under section 243 or 245 for any dividend for which a deduction is allowed under section 965.
4 Any taxpayer that had filed its return for the election year before Form 8895 was made available to the public in final form need not file Form 8895 to identify the cash dividends, but should
retain the information requested on the Form to be made available to the IRS on request.
5 See footnote 4.
6 Section 7.06 of Notice 2005–38 provides that an increase in a CFC’s related party indebtedness is allocated among U.S. shareholders that are related persons with respect to the CFC in the
order that cash dividends are received. The provision of Notice 2005–38 allocates among the U.S. shareholders the reduction in the amount of cash dividends eligible for the section 965(a)
DRD, but does not preclude a U.S. shareholder from identifying any specific cash dividend as a qualifying dividend.
7 In the case of cash received as part of a deemed liquidation resulting from an election under Treas. Reg. §301.7701–3(c), the date of distribution is the date the cash is received, not the date
of the deemed liquidation.
D E F G Group
Aggregate
Credit Year QREs $580x $10x $70x $15x $675x
*****
D E F G Group
Aggregate
Credit Year QREs . . . . . . . . . . . . . . . . . . . . . . . . . . . . ***
*** $500x $25x $100x $25x $650x
3. Section 1.41–6T(e) Example 2 tiplied by the group’s aggregate average 4. Section 1.41–6T(e) Example 2 (iii),
(ii)(B)(1), the first sentence is revised annual gross receipts for the 4 taxable the eighth sentence is revised to read as
to read as follows: “The group’s base years preceding the credit year ($17,000x), follows: “Because the group credit of
amount equals the greater of: the group’s or the group’s minimum base amount $29.76x is greater than the sum of the
fixed-base percentage (3.10 percent) mul- ($337.50x).” stand-alone entity credits of all the mem-
D E F G Total
*****
Excess Group Credit . . . . . . . . . . . . . . . . . . . . . . . . . . $8.09x $8.09x $8.09x $8.09x
*****
7. Section 1.41–6T(e) Example 3 located among the members of the group 8. Section 1.41–6T(e) Example 3
(ii)(C), the second sentence is revised based on the ratio that each member’s (ii)(C), the fourth line in the table is re-
to read as follows: “The excess of the QREs bear to the sum of the QREs of all vised to read as follows:
group credit over the sum of the members’ the members of the group.”
stand-alone entity credits ($10.00x) is al-
DE F G Total
*****
Excess Group Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10.00x $10.00x $10.00x
*****
D E Total
*****
Excess Group Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6.83x $6.83x
*****
10. Section 1.41–6T(e) Example 5 (iii), method of computing and allocating the (Filed by the Office of the Federal Register on August 11,
2005, 8:45 a.m., and published in the issue of the Federal
the first sentence is revised to read as fol- credit for taxable years ending before May Register for August 12, 2005, 70 F.R. 47108)
lows: “Under paragraph (c)(2) of this sec- 24, 2005.”
tion, the stand-alone entity credit for each
member of the group must be computed Guy Traynor,
using the method that results in the greater Acting Chief, Publications
stand-alone entity credit for that member.” and Regulations Branch,
11. Section 1.41–6T(j), the second sen- Legal Processing Division,
tence is revised to read as follows: “Gen- Associate Chief Counsel
erally, a taxpayer may use any reasonable (Procedure and Administration).
Abbreviations
The following abbreviations in current use ER—Employer. PRS—Partnership.
and formerly used will appear in material ERISA—Employee Retirement Income Security Act. PTE—Prohibited Transaction Exemption.
EX—Executor. Pub. L.—Public Law.
published in the Bulletin.
F—Fiduciary. REIT—Real Estate Investment Trust.
FC—Foreign Country. Rev. Proc.—Revenue Procedure.
A—Individual.
FICA—Federal Insurance Contributions Act. Rev. Rul.—Revenue Ruling.
Acq.—Acquiescence.
B—Individual. FISC—Foreign International Sales Company. S—Subsidiary.
FPH—Foreign Personal Holding Company. S.P.R.—Statement of Procedural Rules.
BE—Beneficiary.
F.R.—Federal Register. Stat.—Statutes at Large.
BK—Bank.
B.T.A.—Board of Tax Appeals. FUTA—Federal Unemployment Tax Act. T—Target Corporation.
FX—Foreign corporation. T.C.—Tax Court.
C—Individual.
G.C.M.—Chief Counsel’s Memorandum. T.D. —Treasury Decision.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations. GE—Grantee. TFE—Transferee.
GP—General Partner. TFR—Transferor.
CI—City.
GR—Grantor. T.I.R.—Technical Information Release.
COOP—Cooperative.
Ct.D.—Court Decision. IC—Insurance Company. TP—Taxpayer.
I.R.B.—Internal Revenue Bulletin. TR—Trust.
CY—County.
LE—Lessee. TT—Trustee.
D—Decedent.
DC—Dummy Corporation. LP—Limited Partner. U.S.C.—United States Code.
LR—Lessor. X—Corporation.
DE—Donee.
M—Minor. Y—Corporation.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation. Nonacq.—Nonacquiescence. Z —Corporation.
O—Organization.
DR—Donor.
P—Parent Corporation.
E—Estate.
EE—Employee. PHC—Personal Holding Company.
PO—Possession of the U.S.
E.O.—Executive Order.
PR—Partner.
1 A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2005–1 through 2005–26 is in Internal Revenue Bulletin
2005–26, dated June 27, 2005.
1 A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2005–1 through 2005–26 is in Internal Revenue Bulletin 2005–26, dated June 27, 2005.
September 6, 2005 iii *U.S. Government Printing Office: 2005—310–365/20021 2005–36 I.R.B.