Rev. Proc. 65-17 Amend. 1

SECTION 1. SCOPE.

This amendment to Revenue Procedure 65-17, C.B. 1965-1, 833, extends certain of its provisions to apply to taxable years beginning prior to January 1, 1965.

SEC. 2. BACKGROUND.

.01 Revenue Procedure 65-17, among other things, permits a qualifying United States taxpayer, whose taxable income has been increased by reason of allocation under section 482 of the Internal Revenue Code of 1954 and who complies with the requirements of the Revenue Procedure, to receive payment from the related entity from, or to, which the allocation of income, or deductions, was made, of an amount determined in accordance with the Revenue Procedure, without having the receipt of such amount considered as a taxable distribution for Federal income tax purposes. Section 3 of Revenue Procedure 65-17, provides, in part, that a United States taxpayer shall qualify for the treatment provided in the Revenue Procedure, if, for a taxable year beginning prior to January 1, 1963, the taxable income of such taxpayer is increased by the Internal Revenue Service under section 482 of the Code and no part of any underpayment of tax by such taxpayer for the taxable year involved in the allocation is due to fraud. Section 4.03 of the Revenue Procedure provides, in part, that the account receivable, which is established to adjust accounts between the entities involved in the section 482 allocation, shall bear interest from the day after the date the account is deemed to have been created or from the first day of the taxpayer's first taxable year beginning after December 31, 1962, whichever is later, to the date of payment.

SEC. 3. EXTENSION OF REVENUE PROCEDURE 65-17.

.01 It has been ascertained that the circumstances which warranted the application of the policy of Revenue Procedure 65-17 to United States taxpayers whose cases did not involve fraud have continued beyond January 1, 1963.

.02 Accordingly, the date, `January 1, 1963,' appearing in Section 3.01 of the Revenue Procedure is amended to read, `January 1, 1965.' The date, `December 31, 1962,' which appears in Sections 3.02 and 5.011(b) is amended to read, `December 31, 1964.' The date, `December 31, 1962,' appearing in Section 4.03 (relating to interest on accounts receivable) of the Revenue Procedure is amended to read, `December 31, 1964.'

¹ Also Released as Technical Information Release 837, dated August 2, 1966.