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IRS Lists Time-Sensitive Acts That May Be Postponed

NOV. 2, 2001

Rev. Proc. 2001-53; 2001-2 C.B. 506

DATED NOV. 2, 2001
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Cross-Reference
    Part III

    Administrative, Procedural, and Miscellaneous

    26 CFR 301.7508-1: Time for performing certain acts postponed by

    reason of service in a combat zone or a Presidentially declared

    disaster.

    (Also Part I, section 7508A; section 301.7508A-1.)
  • Code Sections
  • Subject Areas/Tax Topics
  • Index Terms
    combat zone service, time computations, effect on
    disasters, time computation, effect on
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2001-27710 (39 original pages)
  • Tax Analysts Electronic Citation
    2001 TNT 214-13
Citations: Rev. Proc. 2001-53; 2001-2 C.B. 506

Superseded by Rev. Proc. 2002-71

Rev. Proc. 2001-53

SECTION 1. PURPOSE

.01 This revenue procedure provides a list of time-sensitive acts, the performance of which may be postponed under sections 7508 and 7508A of the Internal Revenue Code (Code). Section 7508 of the Code postpones specified acts for individuals serving in the Armed Forces of the United States or serving in support of such Armed Forces in a combat zone. Section 7508A of the Code permits a postponement of specified acts for taxpayers affected by a Presidentially declared disaster. The list of acts in this revenue procedure supplements the list of postponed acts in section 7508(a)(1) of the Code and section 301.7508A-1(b) of the Regulations on Procedure and Administration.

.02 This revenue procedure does not, by itself, provide any postponements under sections 7508 or 7508A. In order for taxpayers to be entitled to a postponement of any act listed in this revenue procedure, the IRS generally will publish a Notice or other guidance providing relief with respect to a specific combat zone or Presidentially declared disaster.

.03 This revenue procedure will be updated as needed when the IRS determines that additional acts should be included in the list of postponed acts or that certain acts should be removed from the list. Also, taxpayers may recommend that additional acts be considered for postponement under sections 7508 and 7508A. See section 17 of this revenue procedure.

SECTION 2. BACKGROUND

.01 Section 7508(a)(1) of the Internal Revenue Code permits a postponement of certain time-sensitive acts for individuals serving in the Armed Forces or in support of such Armed Forces in an area designated by the President as a combat zone under section 112. Among these acts are the filing of returns, the payment of tax, the filing of a Tax Court petition, and the filing of a refund claim. In the event of service in a combat zone, the acts specified in section 7508(a)(1) of the Code are AUTOMATICALLY POSTPONED. In addition, if the Service publishes a Notice or other guidance providing additional relief under section 7508, some or all of the acts listed in this revenue procedure may be postponed. Likewise, acts not listed in this revenue procedure may be included in published guidance.

.02 Section 7508A of the Code provides that certain acts performed by taxpayers and the government may be postponed if the taxpayer is affected by a Presidentially declared disaster. A "Presidentially declared disaster" is defined in section 1033(h)(3) of the Code. Section 301.7508A-1(d)(1) of the Regulations on Procedure and Administration defines seven types of affected taxpayers, including any individual whose principal residence (for purposes of 1033(h)(4)) is located in a "covered disaster area" and any business entity or sole proprietor whose principal place of business is located in a "covered disaster area." Postponements under section 7508A are not available simply because a disaster has occurred. Generally, the IRS will publish a Notice or other guidance authorizing the postponement. Such guidance will describe the acts postponed, the duration of the postponement, and the location of the covered disaster area. See, for example, Notice 2001-30, 2001-35 I.R.B. 1 and Notice 97-62, 1997-2 C.B. 320, 1997-49 I.R.B. 8. When a Notice or other guidance for a particular disaster is published, the guidance generally will refer to this revenue procedure and may provide for a postponement of all the acts listed in the regulations and this revenue procedure. Alternatively, the guidance may provide that only certain acts listed in this revenue procedure are postponed based on the time when the disaster occurred, its severity, and other factors.

SECTION 3. SCOPE

This revenue procedure applies to individuals serving in the Armed Forces in a combat zone, or in support of such Armed Forces, and to affected taxpayers within the meaning of section 301.7508A- 1(d)(1) of the Regulations on Procedure and Administration.

SECTION 4. APPLICATION

.01 The tables below list sections of the Internal Revenue Code and Treasury Regulations requiring the timely performance of specified acts that may be postponed under sections 7508 and 7508A.

.02 In order to avoid unnecessary duplication, the following tables do not include acts specified in sections 7508 or 7508A or the regulations thereunder. Thus, for example, no mention is made in the following tables of the filing of tax returns or the payment of taxes (or an installment thereof) because these acts are already covered by sections 7508 and 7508A and the regulations thereunder. Also, the following tables do not refer to the making of accounting method elections or any other elections required to be made on tax returns or attachments thereto. Reference to these elections is not necessary because postponement of the filing of a tax return automatically postpones the making of any election required to be made on the return or an attachment thereto.

.03 The following tables refer only to postponement of acts performed by taxpayers. Additional guidance will be published in the Internal Revenue Bulletin if a decision is made that acts performed by the government may be postponed under section 7508 or section 7508A.

SECTION 5. ACCOUNTING METHODS AND PERIODS

 _____________________________________________________________________

 

        Statute or

 

        Regulation           Act Postponed

 

 _____________________________________________________________________

 

 

 1.     Chapter 1,           Any act relating to the adoption,

 

        Subchapter E of      election, retention, or change of any

 

        the Code             accounting method or accounting period,

 

                             or to the use of an accounting method or

 

                             accounting period, that is required to be

 

                             performed on or before the due date of a

 

                             tax return (including extensions).

 

                             Examples of such acts are (a) the

 

                             requirement in Rev. Proc. 2000-11,

 

                             section 6.02, that Form 1128 must be

 

                             filed with the Director, Internal Revenue

 

                             Service Center, on or before the due date

 

                             of the tax return for the short period

 

                             required to effect the change in

 

                             accounting period; and (b) the

 

                             requirement in Rev. Proc. 99-49, section

 

                             6.02, that a copy of Form 3115 must be

 

                             filed with the national office no later

 

                             than when the original Form 3115 is filed

 

                             with the timely filed tax return for the

 

                             year of the accounting method change.

 

 

 2.     Treas. Reg. section  If the acquiring corporation is not

 

        1.381(c)(4)-1(d)(2)  permitted to use the method of accounting

 

                             used by the acquiring corporation, the

 

                             method of accounting used by the

 

                             distributor/transferor corporation, or

 

                             the principal method of accounting; or if

 

                             the corporation wishes to use a new

 

                             method of accounting, then the acquiring

 

                             corporation must apply to the

 

                             Commissioner to use another method.

 

                             Treas. Reg. section 1.381(c)(4)-1(d)(2)

 

                             requires applications to be filed not

 

                             later than 90 days after the date of

 

                             distribution or transfer. Rev. Proc. 83-

 

                             77, 1983-2C.B. 594, provides an automatic

 

                             90-day extension.

 

 

 3.     Treas. Reg. section  If the acquiring corporation is not

 

        1.381(c)(5)-1(d)(2)  permitted to use the inventory method

 

                             used by the acquiring corporation, the

 

                             inventory method used by the

 

                             distributor/transferor corporation, or

 

                             the principal method of accounting, or

 

                             wishes to use a new method of accounting,

 

                             then the acquiring corporation must apply

 

                             to the Commissioner to use another

 

                             method. Treas. Reg. section 1.381(c)(5)-

 

                             1(d)(2) requires applications to be filed

 

                             not later than 90 days after the date of

 

                             distribution or transfer. Rev. Proc. 83-

 

                             77 provides an automatic 90-day

 

                             extension.

 

 

 4.     Treas. Reg.          In order to secure prior approval of an

 

        section 1.442-       adoption, change or retention of a

 

        1(b)(1)              taxpayer's annual accounting period, the

 

                             taxpayer generally must file an

 

                             application on Form 1128, Application to

 

                             Adopt, Change, or Retain a Tax Year, with

 

                             the Commissioner. The application must be

 

                             filed on or before the 15th day of the

 

                             second calendar month following the close

 

                             of the short period. (But see Rev. Proc.

 

                             2001-11, 2000-3 I.R.B. 309 for automatic

 

                             changes in annual accounting period that

 

                             can be made with the return.)

 

 

 5.     Treas. Reg.          A section 444 election must be made by

 

        section 1.444-       filing Form 8716, Election to Have a Tax

 

        3T(b)(1)             Year Other Than a Required Tax Year, with

 

                             the Service Center. Generally, Form 8716

 

                             must be filed by the earlier of (a) the

 

                             15th day of the fifth month following the

 

                             month that includes the first day of the

 

                             taxable year for which the election will

 

                             first be effective, or (b) the due date

 

                             (without regard to extensions) of the

 

                             income tax return resulting from the

 

                             section 444 election.

 

 

 6.     Treas. Reg.          To secure the Commissioner's consent to a

 

        section 1.446-       change in method of accounting, the

 

        1(e)(3)(i)           taxpayer must file an application on Form

 

                             3115, Application for Change in

 

                             Accounting Method, with the Commissioner

 

                             during the taxable year in which the

 

                             taxpayer desires to make the change in

 

                             method of accounting (i.e., must be filed

 

                             by the last day of such taxable year).

 

                             This filing requirement is also in Rev.

 

                             Proc. 97-27, 1997-21 I.R.B. 11. (But see

 

                             Rev. Proc. 99-49, 1999-2 C.B. 725, for

 

                             automatic changes in method of accounting

 

                             that can be made with the return.)

 

 

 7.     Treas. Reg.          A taxpayer may elect, with the consent of

 

        section 1.461-       the Commissioner, to accrue real property

 

        1(c)(3)(ii)          taxes ratably in accordance with section

 

                             461(c). A written request for permission

 

                             to make such an election must be

 

                             submitted within 90 days after the

 

                             beginning of the taxable year to which

 

                             the election is first applicable. Rev.

 

                             Proc. 83-77 provides an automatic 90-day

 

                             extension.

 

 

 8.     Sec. 461(h)(3)       A taxpayer may elect the recurring item

 

                             exception method of accounting under

 

                             which certain items that are recurring in

 

                             nature (for example, rebates, prizes, and

 

                             provision of services under warranty

 

                             contracts) are treated as incurred during

 

                             a taxable year if, (among other

 

                             requirements) for each such item,

 

                             economic performance occurs within 8 1/2-

 

                             months after the close of the taxable

 

                             year.

 

 

 9.      Treas. Reg.         A partnership or S corporation must file

 

         section 1.7519-     the Form 8752, Required Payment or Refund

 

         2T(a)(2), (3)       Under Section 7519, if the taxpayer has

 

         and (4)             made an election under section 444 to use

 

                             a taxable year other than its required

 

                             taxable year and the election is still in

 

                             effect. The Form 8752 must be filed and

 

                             any required payment must be made by the

 

                             date stated in the instructions to Form

 

                             8752.

 

 

 10.    Rev. Proc.           Certain partnerships, S corporations,

 

        87-32, 1987-2        corporations electing to be S

 

        C.B. 396             corporations, or personal service

 

                             corporations that desire to change or

 

                             retain a tax year that is its natural

 

                             business year, as defined in section

 

                             4.01(1) of Rev. Proc. 87-32, and S

 

                             corporations or corporations electing to

 

                             be S corporations that desire to change

 

                             to a tax year that meets the "ownership

 

                             tax year test" set forth in section 4.02,

 

                             must file Form 1128, Application to

 

                             Adopt, Change, or Retain a Tax Year, with

 

                             the Service Center on or before the 15th

 

                             day of the second calendar month

 

                             following the close of the short period

 

                             for which a return is required.

 

 

                             If a partnership, S corporation or a

 

                             personal service corporation desires to

 

                             retain a tax year not described in Rev.

 

                             Proc. 87-32, then the taxpayer should

 

                             request permission to retain its tax year

 

                             by filing Form 1128 on or before the 75th

 

                             day of the tax year fr which the

 

                             retention is to apply.

 

 

                             An electing S corporation that desires to

 

                             adopt, change to, or retain a tax year

 

                             not described in Rev. Proc. 87-32 must

 

                             request permission by filing Form 2553,

 

                             Election by a Small Business Corporation,

 

                             when the election to be an S corporation

 

                             is filed.

 

 

 11.    Rev. Proc. 92-29,    A developer of real estate requesting the

 

        section 6.02         Commissioner's consent to use the

 

                             alternative cost method must file a

 

                             private letter ruling request within 30

 

                             days after the close of the taxable year

 

                             in which the first benefitted property in

 

                             the project is sold. The request must

 

                             include a consent extending the period of

 

                             limitation on the assessment of income

 

                             tax with respect to the use of the

 

                             alternative cost method.

 

 

 _____________________________________________________________________

 

 

 SECTION 6. BUSINESS AND INDIVIDUAL TAX ISSUES

 

 _____________________________________________________________________

 

        Statute or

 

        Regulation           Act Postponed

 

 _____________________________________________________________________

 

 

 1.     Treas. Reg.          A payer spouse may send cash to a third

 

        section 1.71-1T(b),  party on behalf of a spouse that

 

        Q&A-7                qualifies for alimony or separate

 

                             maintenance payments if the payments are

 

                             made to the third party at the written

 

                             request or consent of the payee spouse.

 

                             The request or consent must state that

 

                             the parties intend the payment to be

 

                             treated as an alimony payment to the

 

                             payee spouse subject to the rules of

 

                             section 71. The payer spouse must receive

 

                             the request or consent prior to the date

 

                             of filing of the payer spouse's first

 

                             return of tax for the taxable year in

 

                             which the payment was made.

 

 

 2.     Treas. Reg.          A taxpayer who receives a loan from the

 

        section 1.77-1       Commodity Credit Corporation may elect to

 

                             include the amount of the loan in his

 

                             gross income for the taxable year in

 

                             which the loan is received. The taxpayer

 

                             in subsequent taxable years must include

 

                             in his gross income all amounts received

 

                             during those years as loans from the

 

                             Commodity Credit Corporation, unless he

 

                             secures the permission of the

 

                             Commissioner to change to a different

 

                             method of accounting. Treas. Reg. section

 

                             1.77-1 requires such requests to be filed

 

                             within 90 days after the beginning of the

 

                             taxable year of change. Rev. Proc. 83-77

 

                             provides an automatic 90-day extension.

 

 

 3.     Treas. Reg.          The lessee must expend its construction

 

        section 1.110-       allowance on the qualified long-term real

 

        1(b)(4)(ii)(A)       property within eight and one-half months

 

                             after the close of the taxable year in

 

                             which the construction allowance was

 

                             received.

 

 

 4.     Sec. 118(c)(2)       A contribution in aid of construction

 

                             received by a regulated public utility

 

                             that provides water or sewerage disposal

 

                             services must be expended by the utility

 

                             on qualifying property before the end of

 

                             the second taxable year after the year in

 

                             which it was received by the utility.

 

 

 5.     Treas. Reg.          A contribution of an undivided present

 

        section              interest in tangible personal property

 

        1.170A-5(a)(2)       shall be treated as made upon receipt by

 

                             the donee of a formally executed and

 

                             acknowledged deed of gift. However, the

 

                             period of initial possession by the donee

 

                             may not be deferred for more than one

 

                             year.

 

 

 6.     Sec. 468A(g)         A taxpayer that makes payments to a

 

                             nuclear decommissioning fund with respect

 

                             to a taxable year must make the payments

 

                             within 2 1/2 months after the close

 

                             of such taxable year (the deemed payment

 

                             date).

 

 

 7.     Sec. 530(h)          A trustee of a Coverdell education

 

                             savings account must provide certain

 

                             information concerning the account to the

 

                             beneficiary by January 31 following the

 

                             calendar year to which the information

 

                             relates. In addition, Form 5498 must be

 

                             filed with the IRS by May 31 following

 

                             the calendar year to which the

 

                             information relates.

 

 

 8.     Sec. 563(a)          In the determination of the dividends

 

                             paid deduction for purposes of the

 

                             accumulated earnings tax imposed by

 

                             section 531, a dividend paid after the

 

                             close of any taxable year and on or

 

                             before the 15th day of the third month

 

                             following the close of such taxable year

 

                             shall be considered as paid during such

 

                             taxable year. The close of the taxable

 

                             year is not affected by this revenue

 

                             procedure; the 3 1/2-month period within

 

                             which the dividend is paid is the period

 

                             extended.

 

 

 9.     Sec. 563(b)          In the determination of the dividends

 

                             paid deduction for purposes of the

 

                             personal holding company tax imposed by

 

                             section 541, a dividend paid after the

 

                             close of any taxable year and on or

 

                             before the 15th day of the third month

 

                             following the close of such taxable year

 

                             shall, to the extent the taxpayer elects

 

                             on its return for the taxable year, be

 

                             considered as paid during such taxable

 

                             year. The close of the taxable year is

 

                             not affected by this revenue procedure;

 

                             the 3 1/2-month period within which the

 

                             dividend is paid is the period extended.

 

 

 10.    Sec. 563(c)          In the determination of the dividends

 

                             paid deduction for purposes of part III,

 

                             a dividend paid after the close of any

 

                             taxable year and on or before the 15th

 

                             day of the third month following the

 

                             close of such taxable year shall, to the

 

                             extent the company designates such

 

                             dividend as being taken into account, be

 

                             considered as paid during such taxable

 

                             year. The close of the taxable year is

 

                             not affected by this revenue procedure;

 

                             the 3 1/2-month period within which the

 

                             dividend is paid is the period extended.

 

 

 11.    Treas. Reg.          A taxpayer must file a request for a

 

        section 1.468A-      schedule of ruling amounts for a nuclear

 

        3(h)(1)(v)           decommissioning fund by the deemed

 

                             payment date (2 1/2-months after the

 

                             close of the taxable year for which the

 

                             schedule of ruling amounts is sought).

 

 

 12.    Treas. Reg.          A taxpayer has 30 days to provide

 

        section 1.468A-      additional requested information with

 

        3(h)(1)(vii)         respect to a request for a schedule of

 

                             ruling amounts. If the information is not

 

                             provided within the 30 days, the request

 

                             will not be considered filed until the

 

                             date the information is provided.

 

 

 13.    Sec. 529             A rollover contribution to another

 

        (c)(3)(C)(i)         qualified tuition program must be made no

 

                             later than the 60th day after the date of

 

                             a distribution from a qualified tuition

 

                             program.

 

 

 14.    Sec.                 Excess contributions to a Coverdell

 

        530(d)(4)(C)(i)      education savings account must be

 

                             distributed before a specified time in

 

                             the taxable year following the taxable

 

                             year in which the contribution is made.

 

 

 15.    Sec. 530(d)(5)       A rollover contribution to another

 

                             Coverdell education savings account must

 

                             be made no later than the 60th day after

 

                             the date of a payment or distribution

 

                             from a Coverdell education savings

 

                             account.

 

 

 16.    Sec. 563(d)          For the purpose of applying section

 

                             562(a), with respect to distributions

 

                             under subsection (a), (b), or (c) of

 

                             section 562, a distribution made after

 

                             the close of the taxable year and on or

 

                             before the 15th day of the third month

 

                             following the close of the taxable year

 

                             shall be considered as made on the last

 

                             day of such taxable year. The close of

 

                             the taxable year is not affected by this

 

                             revenue procedure; the 3 1/2-month period

 

                             within which the dividend is paid is the

 

                             period extended.

 

 

 17.    Sec. 1031(a)         Any property received by the taxpayer

 

                             shall be treated as property which is not

 

                             like-kind property if -- (A) such

 

                             property is not identified as property to

 

                             be received in the exchange on or before

 

                             the day which is 45 days after the date

 

                             on which the taxpayer transfers the

 

                             property relinquished in the exchange, or

 

                             (B) such property is received after the

 

                             earlier of (i) the day which is 180 days

 

                             after the date on which the taxpayer

 

                             transfers the property relinquished in

 

                             the exchange, or (ii) the due date

 

                             (determined with regard to extension) for

 

                             the transferor's return of the tax

 

                             imposed by this chapter for the taxable

 

                             year in which the transfer of the

 

                             relinquished property occurs.

 

 

 18.    Sec. 1043(a)         If an eligible person (as defined under

 

                             section 1043(b)) sells any property

 

                             pursuant to a certificate of divestiture,

 

                             then at the election of the taxpayer,

 

                             gain from such sale shall be recognized

 

                             only to the extent that the amount

 

                             realized on such sale exceeds the cost of

 

                             any permitted property purchased by the

 

                             taxpayer during the 60-day period

 

                             beginning on the date of such sale.

 

 

 19.    Sec. 1045(a)         A taxpayer other than a corporation may

 

                             elect to roll over gain from the sale of

 

                             qualified small business stock held for

 

                             more than six months if other qualified

 

                             small business stock is purchased by the

 

                             taxpayer during the 60-day period

 

                             beginning on the date of sale.

 

 

 20.    Sec. 1382(d)         An organization, to which section 1382(d)

 

                             applies, is required to pay a patronage

 

                             dividend within 8 1/2 months after the

 

                             close of the year.

 

 

 21.    Sec. 1388(j)(3)(A)   Any cooperative organization that

 

                             exercises its option to net patronage

 

                             gains and losses, is required to give

 

                             notice to its patrons of the netting by

 

                             the 15th day of the 9th month following

 

                             the close of the taxable year.

 

 

 22.    Treas. Reg.          The effective date of an entity

 

        section 301.7701-    classification election (Form 8832)

 

        3(c)                 cannot be more than 75 days prior to the

 

                             date on which the election is filed.

 

 

 23.    Treas. Reg.          An automatic extension of 6 months from

 

        sections 301.9100-   the due date of a return, excluding

 

        2(b)-(d)             extensions, is granted to make the

 

                             regulatory of statutory elections whose

 

                             due dates are the due date of the return

 

                             or the due date of the return including

 

                             extensions (for example, an application

 

                             to change a method of accounting under

 

                             Rev. Proc. 99-49), provided the taxpayer

 

                             (a) timely filed its return for the year

 

                             of election, (b) within that 6-month

 

                             extension period, takes the required

 

                             corrective action to file the election in

 

                             accordance with the statute, regulations,

 

                             revenue procedure, revenue ruling, notice

 

                             or announcement permitting the election,

 

                             and (c) writes at the top of the return,

 

                             statement of election or other form

 

                             "FILED PURSUANT TO SECTION 301.9100-2."

 

 

 24.    Treas. Reg.          An automatic extension of 12 months from

 

        section 301.9100-    the due date for making a regulatory

 

        2(a)(1)              election is granted to make certain

 

                             elections, including the election to use

 

                             other than the required taxable year

 

                             under section 444, and the election to

 

                             use LIFO under section 472.

 

 _____________________________________________________________________

 

 

 SECTION 7. CORPORATE ISSUES

 

 _____________________________________________________________________

 

        Statute or

 

        Regulation           Act Postponed

 

 _____________________________________________________________________

 

 

 1.     Sec. 302(e)(1)       A corporation must complete a

 

                             distribution in pursuance of a plan of

 

                             partial liquidation of a corporation

 

                             within the specified period.

 

 

 2.     Sec. 303 and         A corporation must complete the

 

        Treas. Reg.          distribution of property to a shareholder

 

        section 1.303-2      in redemption of all or part of the stock

 

                             of the corporation which (for Federal

 

                             estate tax purposes) is included in

 

                             determining the estate of a decedent.

 

                             Section 303 and Treas. Reg. section

 

                             1.303-2 require, among other things, that

 

                             the distribution occur within the

 

                             specified period.

 

 

 3.     Sec. 304(b)(3)(C)    If certain requirements are met, section

 

                             304(a) does not apply to a transaction

 

                             involving the formation of a bank holding

 

                             company. One requirement is that within a

 

                             specified period (generally 2 years)

 

                             after control of a bank is acquired,

 

                             stock constituting control of the bank is

 

                             transferred to a bank holding company in

 

                             connection with the bank holding

 

                             company's formation.

 

 

 4.     Sec. 332(b)          A corporation must completely liquidate a

 

        and                  corporate subsidiary within the specified

 

        Treas. Reg.          period.

 

        sections 1.332-3

 

        and 1.332-4

 

 

 5.     Sec. 338(d)(3)       An acquiring corporation must complete a

 

        and (h), and         "qualified stock purchase" of a target

 

        Treas. Reg. section  corporation's stock within the specified

 

        1.338-2              acquisition period.

 

 

 6.     Sec. 338(g)          An acquiring corporation may elect to

 

        and Treas.           treat certain stock purchases as asset

 

        Reg.                 acquisitions. The election must be made

 

        section 1.338-2      within the specified period.

 

 

 7.     Sec.                 An acquiring corporation and selling

 

        338(h)(10)           group of corporations may elect to treat

 

        and Treas.           certain stock purchases as asset

 

        Reg.                 purchases, and to avoid gain or loss upon

 

        section              the stock sale. The election must be made

 

        1.338(h)(10)-        within the specified period.

 

        1(c)

 

 

 8.     Sec. 341 and         A shareholder of a collapsible

 

        Treas. Reg.          corporation must sell its stock in the

 

        section 1.341-7      corporation within the specified period.

 

 

 9.     Treas. Reg.          An acquiring corporation files a Form

 

        section              976, Claim for Deficiency Dividends

 

        1.381(c)(17)-1(c)    Deduction by a Personal Holding Company,

 

                             Regulated Investment Company, or Real

 

                             Estate Investment Trust, within 120 days

 

                             after the date of the determination under

 

                             section 547(c) to claim a deduction of a

 

                             deficiency dividend.

 

 

 10.    Sec.                 In the case of a complete liquidation

 

        562(b)(1)(B)         (except in the case of a complete

 

                             liquidation of a personal holding company

 

                             or foreign personal holding company)

 

                             occurring within 24 months after the

 

                             adoption of a plan of liquidation, any

 

                             distribution within such period pursuant

 

                             to such plan shall, to the extent of the

 

                             earnings and profits (computed without

 

                             regard to capital losses) of the

 

                             corporation for the taxable year in which

 

                             such distribution is made, be treated as

 

                             a dividend for purposes of computing the

 

                             dividends paid deduction.

 

 

 11.    Sec. 562(b)(2)       In the case of a complete liquidation of

 

                             a personal holding company occurring

 

                             within 24 months after the adoption of a

 

                             plan of liquidation, the amount of any

 

                             distribution within such period pursuant

 

                             to such plan shall be treated as a

 

                             dividend for purposes of computing the

 

                             dividends paid deduction to the extent

 

                             that such is distributed to corporate

 

                             distributees and represents such

 

                             corporate distributees' allocable share

 

                             of the undistributed personal holding

 

                             company income for the taxable year of

 

                             such distribution.

 

 

 12.    Sec. 1502 and        A common parent must apply for permission

 

        Treas. Reg.          to discontinue filing consolidated

 

        section 1.1502-      returns within a specified period after

 

        75(c)(1)(i)          the date of enactment of a law affecting

 

                             the computation of tax liability.

 

 

 13.    Sec. 6425            Corporations applying for an adjustment

 

        and Treas.           of an overpayment of estimated tax income

 

        Reg.                 tax must file Form 4466, Corporation

 

        section 1.6425-1     Application for Quick Refund of

 

                             Overpayment of Estimated Tax, on or

 

                             before the 15th day of the third month

 

                             after the taxable year, or before the

 

                             date the corporation first files its

 

                             income tax return for such year,

 

                             whichever is earlier.

 

 

 _____________________________________________________________________

 

 

 SECTION 8. EMPLOYEE BENEFIT ISSUES

 

 _____________________________________________________________________

 

        Statute or

 

        Regulation           Act Postponed

 

 _____________________________________________________________________

 

 

 1.     Sec.                 A loan from a qualified employer plan to

 

        72(p)(2)(B)          a participant in, or a beneficiary of,

 

        and (C), and         such plan must be repaid according to

 

        Treas. Reg.          certain time schedules specified in

 

        section 1.72(p)-1,   section 72(p)(2)(B) and (C) (including,

 

        Q&A-10               if applicable, any grace period granted

 

                             pursuant to Treas. Reg. section 1.72(p)-

 

                             1, Q&A-10).

 

 

 2.     Sec. 72(t)(2)(A)(iv) Under section 72(t)(2)(A)(iv), to avoid

 

                             the imposition of a 10-percent

 

                             additional tax on a distribution from a

 

                             qualified retirement plan, the

 

                             distribution must be part of a series of

 

                             substantially equal periodic payments,

 

                             made at least annually.

 

 

 3.     Sec. 72(t)(2)(F)     To avoid the imposition of a 10-percent

 

                             additional tax on a distribution from an

 

                             individual retirement arrangement (IRA)

 

                             for a first-time home purchase, such

 

                             distribution must be used within 120 days

 

                             of the distribution to pay qualified

 

                             acquisition costs or rolled into an IRA.

 

 

 4.     Sec. 83(b)           Any person who performs services in

 

        and Treas.           connection with which property is

 

        Reg.                 transferred to any person may elect not

 

        section 1.83-2(a)    later than 30 days after the date of the

 

                             transfer of the property to include in

 

                             his gross income, for the taxable year in

 

                             which such property is transferred, the

 

                             excess of the fair market value of the

 

                             property over the amount (if any) paid

 

                             for the property.

 

 

 5.     Proposed             Cafeteria plan participants will avoid

 

        Treas. Reg. section  constructive receipt of the taxable

 

        1.125-1,             amounts if they elect the benefits they

 

        Q&A-15               will receive before the beginning of the

 

                             period during which the benefits will be

 

                             provided.

 

 

 6.     Proposed             Cafeteria plan participants will not be

 

        Treas. Reg. section  in constructive receipt if, at the end of

 

        1.125-1,             the plan year, they forfeit amounts

 

        Q&A-14 and           elected but not used during the plan

 

        Proposed             year.

 

        Treas. Reg. section

 

        1.125-2,

 

        Q&A-7

 

 

 7.     Proposed             Cafeteria plan participants may receive

 

        Treas. Reg. section  in cash the value of unused vacation days

 

        1.125-2,             on or before the earlier of the last day

 

        Q&A-5                of the cafeteria plan year or the last

 

                             day of the employee's taxable year to

 

                             which the unused days relate.

 

 

 8.     Treas. Reg.          A performance goal is considered pre-

 

        section 1.162-       established if it is established in

 

        27(e)(2)             writing by the corporation's compensation

 

                             committee not later than 90 days after

 

                             the commencement of the period of service

 

                             to which the performance goal relates if

 

                             the outcome is substantially uncertain at

 

                             the time the compensation committee

 

                             actually establishes the goal. In no

 

                             event, however, will the performance goal

 

                             be considered pre-established if it is

 

                             established after 25 percent of the

 

                             period of service has elapsed.

 

 

 9.     Sec. 220(f)(5)       A rollover contribution to an Archer MSA

 

                             must be made no later than the 60th day

 

                             after the day on which the holder

 

                             receives a payment or distribution from

 

                             an Archer MSA.

 

 

 10.    Sec. 220(h)          A trustee or custodian of an MSA (Archer

 

                             MSA or Medicare+Choice MSA) must provide

 

                             certain information concerning the MSA to

 

                             the account holder by January 31

 

                             following the calendar year to which the

 

                             information relates. In addition, MSA

 

                             contribution information must be

 

                             furnished to the account holder, and Form

 

                             5498, IRA Contribution Information, filed

 

                             with the IRS, by May 31 following the

 

                             calendar year to which the information

 

                             relates.

 

 

 11.    Secs.                The first required minimum distribution

 

        401(a)(9),           from plans subject to the rules in

 

        403(a)(1),           section 401(a)(9) must be made no later

 

        403(b)(10),          than the required beginning date.

 

        408(a)(6),           Subsequent required minimum distributions

 

        408(b)(3) and        must be made by the end of each

 

        457(d)(2)            distribution calendar year.

 

 

 12.    Sec.                 A qualified participant in an ESOP (as

 

        401(a)(28)(B)(i)     defined in section 401(a)(28)(B)(iii))

 

                             may elect within 90 days after the close

 

                             of each plan year in the qualified

 

                             election period (as defined in section

 

                             401(a)(28)(B)(iv)) to direct the plan as

 

                             to the investment of at least 25 percent

 

                             of the participant's account in the plan

 

                             (50 percent in the case of the last

 

                             election).

 

 

 13.    Sec.                 A plan must distribute the portion of the

 

        401(a)(28)(B)(ii)    participant's account covered by an

 

                             election under section 401(a)(28)(B)(i)

 

                             within 90 days after the period during

 

                             which an election can be made; or the

 

                             plan must offer at least 3 investment

 

                             options (not inconsistent with

 

                             regulations prescribed by the Secretary)

 

                             to each participant making the election

 

                             under section 401(a)(28)(B)(i) and within

 

                             90 days after the period during which the

 

                             election may be made, the plan must

 

                             invest the portion of the participant's

 

                             account in accordance with the

 

                             participant's election.

 

 

 14.    Sec.                 Excess deferrals for a calendar year,

 

        401(a)(30)           plus income attributable to the excess,

 

        and Treas.           must be distributed no later than the

 

        Reg.                 first April 15 following the calendar

 

        section 1.401(a)-30  year.

 

        and

 

        section 1.402(g)-1

 

 

 15.    Sec. 401(b)          A retirement plan that fails to satisfy

 

        and Treas.           the requirements of section 401(a) or

 

        Reg.                 section 403(a) on any day because of a

 

        section 1.401(b)-1   disqualifying provision will be treated

 

                             as satisfying such requirements on such

 

                             day if, prior to the expiration of the

 

                             applicable remedial amendment period, all

 

                             plan provisions necessary to satisfy the

 

                             requirements of section 401(a) or 403(a)

 

                             are in effect and have been made

 

                             effective for the whole of such period.

 

 

 16.    Sec. 401(k)(8)       A cash or deferred arrangement must

 

                             distribute excess contributions for a

 

                             plan year, plus income attributable to

 

                             the excess, pursuant to the terms of the

 

                             arrangement no later than the close of

 

                             the following plan year.

 

 

 17.    Sec. 401(m)(6)       A plan subject to section 401(m) must

 

                             distribute excess aggregate contributions

 

                             for a plan year, plus income attributable

 

                             to the excess, pursuant to the terms of

 

                             the plan no later than the close of the

 

                             following plan year.

 

 

 18.    Sec.                 An individual with excess deferrals for a

 

        402(g)(2)(A)         taxable year must notify a plan, not

 

        and Treas.           later than a specified date following the

 

        Reg.                 taxable year, that excess deferrals have

 

        section 1.402(g)-1   been contributed to that plan for the

 

                             taxable year. A distribution of excess

 

                             deferrals identified by the individual,

 

                             plus income attributable to the excess,

 

                             must be accomplished no later than the

 

                             first April 15 following the taxable year

 

                             of the excess.

 

 

 19.    Sec.                 An ESOP receiving dividends on stock of

 

        404(k)(2)(A)(ii)     the C corporation maintaining the plan

 

                             must distribute the dividend in cash to

 

                             participants or beneficiaries not later

 

                             than 90 days after the close of the plan

 

                             year in which the dividend was paid.

 

 

 20.    Secs. 408(i)         A trustee or issuer of an individual

 

        and 6047(c)          retirement arrangement (IRA) must provide

 

                             certain information concerning the IRA to

 

                             the IRA owner by January 31 following the

 

                             calendar year to which the information

 

                             relates. In addition, IRA contribution

 

                             information must be furnished to the

 

                             owner, and Form 5498, Individual

 

                             Retirement Arrangement Information, filed

 

                             with the IRS, by May 31 following the

 

                             calendar year to which the information

 

                             relates.

 

 

 21.    Sec. 409(h)(4)       An employer required to repurchase

 

                             employer securities under section

 

                             409(h)(1)(B) must provide a put option

 

                             for a period of at least 60 days

 

                             following the date of distribution of

 

                             employer securities to a participant, and

 

                             if the put option is not exercised, for

 

                             an additional 60-day period in the

 

                             following plan year. A participant who

 

                             receives a distribution of employer

 

                             securities under section 409(h)(1)(B)

 

                             must exercise the put option provided by

 

                             that section within a period of at least

 

                             60 days following the date of

 

                             distribution, or if the put option is not

 

                             exercised within that period, for an

 

                             additional 60-day period in the following

 

                             plan year.

 

 

 22.    Sec. 409(h)(5)       An employer required to repurchase

 

                             employer securities distributed as part

 

                             of a total distribution must pay for the

 

                             securities in substantially equal

 

                             periodic payments (at least annually)

 

                             over a period beginning not later than 30

 

                             days after the exercise of the put option

 

                             and not exceeding 5 years.

 

 

 23.    Sec. 409(h)(6)       An employer required to repurchase

 

                             employer securities distributed as part

 

                             of an installment distribution must pay

 

                             for the securities not later than 30 days

 

                             after the exercise of the put option

 

                             under section 409(h)(4).

 

 

 24.    Sec. 409(o)          An ESOP must commence the distribution of

 

                             a participant's account balance, if the

 

                             participant elects, not later than 1 year

 

                             after the close of the plan year -- i) in

 

                             which the participant separates from

 

                             service by reason of attaining normal

 

                             retirement age under the plan, death or

 

                             disability; or ii) which is the 5th plan

 

                             year following the plan year in which the

 

                             participant otherwise separates from

 

                             service (except if the participant is

 

                             reemployed before distribution is

 

                             required to begin).

 

 

 25.    Sec. 1042(a)(2)      A taxpayer must purchase qualified

 

                             replacement property (defined in section

 

                             1042(c)(4)) within the replacement

 

                             period, defined in section 1042(c)(3) as

 

                             the period which begins 3 months before

 

                             the date of the sale of qualified

 

                             securities to an ESOP and ends 12 months

 

                             after the date of such sale.

 

 

 26.    Treas. Reg.          A taxpayer must notarize any statement of

 

        section 1.1042-1T,   purchase with respect to qualified

 

        Q&A-3                replacement property required under

 

                             Treas. Reg. section 1.1042-1T, Q&A-3 no

 

                             later than 30 days after a purchase of

 

                             qualified replacement property.

 

 

 27.    Sec. 4972(c)(3)      Nondeductible plan contributions must be

 

                             distributed prior to a certain date to

 

                             avoid a 10 percent tax.

 

 

 28.    Sec. 4979            A 10 percent tax on the amount of excess

 

        and Treas.           contributions and excess aggregate

 

        Reg. section         contributions under a plan for a plan

 

        54.4979-1            year will be imposed unless the excess,

 

                             plus income attributable to the excess is

 

                             distributed (or, if forfeitable,

 

                             forfeited) no later than 2 1/2-months

 

                             after the close of the plan year. In the

 

                             case of an employer maintaining a SARSEP,

 

                             employees must be notified of the excess

 

                             by the employer within the 2 1/2-month

 

                             period to avoid the tax.

 

 

 29.    Secs. 6033,          Form 5500 and Form 5500-EZ, which are

 

        6039D, 6047,         used to report annual information

 

        6057, 6058,          concerning employee benefit plans and

 

        and 6059             fringe benefit plans, must be filed by a

 

                             specified time.

 

 

                             GENERAL ADVICE

 

 

                             Affected filers are advised to follow the

 

                             instructions accompanying the Form 5500

 

                             series (or other guidance published on

 

                             the postponement) regarding how to file

 

                             the forms when postponements are granted

 

                             pursuant to section 7508 or section

 

                             7508A.

 

 

                             COMBAT ZONE POSTPONEMENTS UNDER SECTION

 

                             7508

 

 

                             In the case of taxpayers who are

 

                             individuals, the IRS may permit a

 

                             postponement of the filing of the Form

 

                             5500 or Form 5500-EZ under section 7508.

 

                             Whatever postponement of the Form 5500

 

                             series filing due date is permitted by

 

                             the IRS under section 7508 will also be

 

                             permitted by the Department of Labor and

 

                             the Pension Benefit Guaranty Corporation

 

                             (PBGC) for similarly situated individuals

 

                             who are plan administrators.

 

 

                             POSTPONEMENTS FOR PRESIDENTIALLY DECLARED

 

                             DISASTERS UNDER SECTION 7508A

 

 

                             In the case of "affected taxpayers," as

 

                             defined in Treas. Reg. section 301.7508A-

 

                             1(d), the IRS may permit a postponement

 

                             of the filing of the Form 5500 or Form

 

                             5500-EZ. Taxpayers who are unable to

 

                             obtain on a timely basis information

 

                             necessary for completing the forms from a

 

                             bank, insurance company, or any other

 

                             service provider because such service

 

                             providers' operations are located in a

 

                             covered disaster area will be treated as

 

                             "affected taxpayers." Whatever

 

                             postponement of the Form 5500 series

 

                             filing due date is permitted by the IRS

 

                             under section 7508A will also be

 

                             permitted by the Department of Labor and

 

                             PBGC for similarly situated plan

 

                             administrators and direct filing

 

                             entities.

 

 

 30.    Rev. Proc.           The correction period for self-correction

 

        2001-17,             of operational failures is the last day

 

        Sections             of the second plan year following the

 

        9.02(1), (2)         plan year for which the failure occurred.

 

        and (3)              The correction period for self-

 

                             correction of operational failures for

 

                             transferred assets does not end until the

 

                             last day of the first plan year that

 

                             begins after the corporate merger,

 

                             acquisition, or other similar employer

 

                             transaction.

 

 

 31.    Rev. Proc.           If the submission involves a plan with

 

        2001-17,             transferred assets and the IRS determines

 

        Section 12.08        that none of the failures in the

 

                             submission occurred after the end of the

 

                             second plan year that begins after the

 

                             corporate merger, acquisition or other

 

                             similar employer transaction, the plan

 

                             sponsor may calculate the amount of plan

 

                             assets and number of plan participants

 

                             based on the Form 5500 information that

 

                             would have been filed by the plan sponsor

 

                             for the plan year that includes the

 

                             employer transaction if the transferred

 

                             assets were maintained as a separate

 

                             plan.

 

 

 32.    Rev. Proc.           If an examination involves a plan with

 

        2001-17,             transferred assets and the IRS determines

 

        Section 14.03        that the failures did not occur after the

 

                             end of the second plan year that begins

 

                             after the corporate merger, acquisition,

 

                             or other similar employer transaction

 

                             occurred, the sanction under Audit CAP

 

                             will not exceed the sanction that would

 

                             apply if the transferred assets were

 

                             maintained as a separate plan.

 

 _____________________________________________________________________

 

 

 SECTION 9. ESTATE, GIFT AND TRUST ISSUES

 

 _____________________________________________________________________

 

        Statute or

 

        Regulation           Act Postponed

 

 _____________________________________________________________________

 

 

 1.     Sec. 643(g)          The trustee may elect to treat certain

 

                             payments of estimated tax as paid by the

 

                             beneficiary. The election shall be made

 

                             on or before the 65th day after the close

 

                             of the taxable year of the trust.

 

 

 2.     Sec. 2011(c)         The executor of a decedent's estate must

 

                             file a claim for a credit for state

 

                             estate, inheritance, legacy or succession

 

                             taxes by filing a claim within 4 years of

 

                             filing Form 706, United States Estate

 

                             (and Generation Skipping Transfer) Tax

 

                             Return.

 

 

 3.     Sec. 2014(e)         The executor of a decedent's estate must

 

                             file a claim for foreign death taxes

 

                             within 4 years of filing Form 706, United

 

                             States Estate (and Generation Skipping

 

                             Transfer) Tax Return.

 

 

 4.     Sec. 2016            If an executor of a decedent's estate (or

 

        and                  any other person) receives a refund of

 

        Treas. Reg.          any state or foreign death taxes claimed

 

        section 20.2016-1    as a credit on Form 706, the IRS must be

 

                             notified within 30 days of receipt.

 

 

 5.     Sec. 2031(c)         If an executor of a decedent's estate

 

                             elects on Form 706 to exclude a portion

 

                             of the value of land that is subject to a

 

                             qualified conservation easement,

 

                             agreements relating to development rights

 

                             must be implemented within 2 years after

 

                             the date of the decedent's death.

 

 

 6.     Sec. 2032(d)         The executor of a decedent's estate may

 

                             elect an alternate valuation on a late

 

                             filed Form 706 if the Form 706 is not

 

                             filed later than 1 year after the due

 

                             date.

 

 

 7.     Sec. 2032A(c)(7)     A qualified heir, with respect to

 

                             specially valued property, is provided a

 

                             two-year grace period immediately

 

                             following the date of the decedent's

 

                             death in which the failure by the

 

                             qualified heir to begin using the

 

                             property in a qualified use will not be

 

                             considered a cessation of qualified use

 

                             and therefore will not trigger additional

 

                             estate tax.

 

 

 8.     Sec. 2032A(d)(3)     The executor of a decedent's estate has

 

                             90 days after notification of incomplete

 

                             information/signatures to provide the

 

                             information/signatures to the IRS

 

                             regarding an election on Form 706 with

 

                             respect to specially valued property.

 

 

 9.     Sec. 2046            A taxpayer may make a qualified

 

                             disclaimer no later than 9 months after

 

                             the date on which the transfer creating

 

                             the interest is made, or the date the

 

                             person attains age 21.

 

 

 10.    Sec. 2053(d)         If the executor of a decedent's estate

 

        and Treas.           elects to take a deduction for state and

 

        Reg.                 foreign death tax imposed upon a transfer

 

        sections 20.2053-    for charitable or other uses, the

 

        9(c) and 10(c)       executor must file a written notification

 

                             to that effect with the IRS before

 

                             expiration of the period of limitations

 

                             on assessments (generally 3 years).

 

 

 11.    Sec. 2055(e)(3)      A party in interest must commence a

 

                             judicial proceeding to change an interest

 

                             into a qualified interest no later than

 

                             the 90th day after the estate tax return

 

                             (Form 706) is required to be filed or, if

 

                             no return is required, the last date for

 

                             filing the income tax return for the

 

                             first taxable year of the trust.

 

 

 12.    Sec. 2056(d)         A qualified domestic trust (QDOT)

 

                             election must be made on Form 706,

 

                             Schedule M, and the property must be

 

                             transferred to the trust before the date

 

                             on which the return is made. Any

 

                             reformation to determine if a trust is a

 

                             QDOT requires that the judicial

 

                             proceeding be commenced on or before the

 

                             due date for filing the return.

 

 

 13.    Sec. 2056A(b)(2)     The trustee of a QDOT must file a claim

 

                             for refund of excess tax no later than 1

 

                             year after the date of final

 

                             determination of the decedent's estate

 

                             tax liability.

 

 

 14.    Sec. 2057(i)(3)(G)   A qualified heir, with respect to

 

                             qualified family owned business, has a

 

                             two-year grace period immediately

 

                             following the date of the decedent's

 

                             death in which the failure by the

 

                             qualified heir to begin using the

 

                             property in a qualified use will not be

 

                             considered a cessation of qualified use

 

                             and therefore will not trigger additional

 

                             estate tax.

 

 

 15.    Sec. 2057(i)(3)(H)   The executor of a decedent's estate has

 

                             90 days after notification of incomplete

 

                             information/signatures to provide the

 

                             information/signatures to the IRS

 

                             regarding an election on Form 706 with

 

                             respect to specially valued property.

 

 

 16.    Sec. 2516            The IRS will treat certain transfers as

 

                             made for full and adequate consideration

 

                             in money or money's worth where husband

 

                             and wife enter into a written agreement

 

                             relative to their marital and property

 

                             rights and divorce actually occurs within

 

                             the 3-year period beginning on the date 1

 

                             year before such agreement is entered

 

                             into.

 

 

 17.    Sec. 2518(b)         A taxpayer may make a qualified

 

                             disclaimer no later than 9 months after

 

                             the date on which the transfer creating

 

                             the interest is made, or the date the

 

                             person attains age 21.

 

 

 18.    Sec. 26.2654-1(b)    The IRS recognizes the division of a

 

                             trust for generation-skipping transfer

 

                             tax purposes if the severance occurs (or

 

                             a reformation proceeding, if required, is

 

                             commenced) prior to the date prescribed

 

                             for filing the estate tax return, Form

 

                             706.

 

 _____________________________________________________________________

 

 

 SECTION 10. EXEMPT ORGANIZATION ISSUES

 

 _____________________________________________________________________

 

        Statute or

 

        Regulation           Act Postponed

 

 _____________________________________________________________________

 

 

 1.     Sec. 505(c)(1)       An organization must give notice by

 

                             filing Form 1024, Application for

 

                             Recognition of Exemption Under Section

 

                             501(a), to be recognized as an

 

                             organization exempt under section

 

                             501(c)(9) or section 501(c)(17).

 

                             Generally, if the exemption is to apply

 

                             for any period before the giving of the

 

                             notice, Treas. Reg. section 505(c)-1T,

 

                             Q&A-6, of the regulations requires that

 

                             Form 1024 be filed within 15 months from

 

                             the end of the month in which the

 

                             organization was organized.

 

 

 2.     Sec. 508 and         A purported section 501(c)(3)

 

        Treas. Reg.          organization must generally file Form

 

        section 1.508-1      1023, Application for Recognition of

 

                             Exemption, to qualify for exemption.

 

                             Generally, if the exemption is to apply

 

                             for any period before the giving of the

 

                             notice, the Form 1023 must be filed

 

                             within 15 months from the end of the

 

                             month in which the organization was

 

                             organized.

 

 

 3.     Sec. 6072(e)         Annual returns of organizations exempt

 

        and Treas.           under section 501(a) must be filed on or

 

        Reg. section         before the 15th day of the 5th month

 

        1.6033-2(e)          following the close of the taxable year.

 

 _____________________________________________________________________

 

 

 SECTION 11. EXCISE TAX ISSUES

 

 _____________________________________________________________________

 

        Statute or

 

        Regulation           Act Postponed

 

 _____________________________________________________________________

 

 

 1.     Treas. Reg.          A registrant must notify the IRS of any

 

        section 48.4101-     change in the information a registrant

 

        1(h)(v)              has submitted within 10 days.

 

 

 2.     Sec. 4221(b)         A manufacturer is allowed to make a tax-

 

        and Treas.           free sale of articles for resale to a

 

        Reg.                 second purchaser for use in further

 

        section 48.4221-     manufacture. This rule ceases to apply

 

        2(c)                 six months after the earlier of the sale

 

                             or shipment date unless the manufacturer

 

                             receives certain proof.

 

 

 3.     Sec. 4221(b)         A manufacturer is allowed to make a tax-

 

        and Treas.           free sale of articles for export. This

 

        Reg.                 rule ceases to apply six months after the

 

        section 48.4221-     earlier of the sale or shipment date

 

        3(c)                 unless the manufacturer receives certain

 

                             proof.

 

 

 4.     Sec.                 A manufacturer is allowed to make a tax-

 

        4221(e)(2)(A)        free sale of tires for use by the

 

        and Treas.           purchaser in connection with the sale of

 

        Reg.                 another article manufactured or produced

 

        section 48.4221-     by the purchaser. This rule ceases to

 

        7(c)                 apply six months after the earlier of the

 

                             sale or shipment date unless the

 

                             manufacturer receives certain proof.

 

 _____________________________________________________________________

 

 

 SECTION 12. INTERNATIONAL ISSUES

 

 _____________________________________________________________________

 

        Statute or

 

        Regulation           Act Postponed

 

 _____________________________________________________________________

 

 

 1.     Sec. 482 and         A claim for a setoff of a section 482

 

        Treas. Reg.          allocation by the IRS must be filed

 

        section 1.482-       within 30 days of either the date of the

 

        1(g)(4)(ii)(C)       IRS's letter transmitting an examination

 

                             report with notice of the proposed

 

                             adjustment or the date of a notice of

 

                             deficiency.

 

 

 2.     Sec. 482 and         A claim for retroactive application of

 

        Treas. Reg.          the final section 482 regulations,

 

        section              otherwise effective only for taxable

 

        1.482-1(j)(2)        years beginning after October 6, 1994,

 

                             must be filed prior to the expiration of

 

                             the statute of limitations for the year

 

                             for which retroactive application is

 

                             sought.

 

 

 3.     Sec. 482 and         A participant in a cost-sharing

 

        Treas. Reg.          arrangement must provide documentation

 

        section              regarding the arrangement, as well as

 

        1.482-7(j)(2)        documentation specified in Treas. Reg.

 

                             sections 1.482-7(b)(4) and 1.482-7(c)(1),

 

                             within 30 days of a request by the IRS.

 

 

 4.     Treas. Reg.          Liabilities of a foreign corporation that

 

        section 1.882-       is not a bank must be entered on a set of

 

        5(d)(2)(ii)(A)(2)    books at a time reasonably

 

                             contemporaneous with the time the

 

                             liabilities are incurred.

 

 

 5.     Treas. Reg.          Liabilities of foreign corporations that

 

        section 1.882-       are engaged in a banking business must be

 

        5(d)(2)(iii)(A)(1)   entered on a set of books relating to an

 

                             activity that produces ECI before the

 

                             close of the day on which the liability

 

                             is incurred.

 

 

 6.     Treas. Reg.          Requirement that marketable securities be

 

        section 1.884-       identified on the books of a U.S. trade

 

        2T(b)(3)(i)          or business within 30 days of the date an

 

                             equivalent amount of U.S. assets ceases

 

                             to be U.S. assets. This requirement

 

                             applies when a taxpayer has elected to be

 

                             treated as remaining engaged in a U.S.

 

                             trade or business for branch profits tax

 

                             purposes.

 

 

 7.     Treas. Reg.          Requirement that a foreign corporation

 

        section 1.884-       which identifies liabilities as giving

 

        4(b)(3)(ii)(B)       rise to U.S. branch interest, send a

 

                             statement to the recipients of such

 

                             interest within two months of the end of

 

                             the calendar year in which the interest

 

                             was paid, stating that such interest was

 

                             U.S. source income (if the corporation

 

                             did not make a return pursuant to section

 

                             6049 with respect to the interest

 

                             payment).

 

 

 8.     Sec.                 The FSC must appoint a new non-U.S.

 

        922(a)(1)(E)         resident director within 30 days of the

 

        and Treas.           date of death, resignation, or removal of

 

        Reg. section 1.922-  the former director, in the event that

 

        1(j) (Q&A-19)        the sole non-U.S. resident director of a

 

                             FSC dies, resigns, or is removed.

 

 

 9.     Sec.                 A taxpayer must execute an agreement

 

        924(b)(2)(B) and     regarding unequal apportionment at a time

 

        Treas. Reg.          when at least 12 months remain in the

 

        section 1.924(a)-    period of limitations (including

 

        1T(j)(2)(i)          extensions) for assessment of tax with

 

                             respect to each shareholder of the small

 

                             FSC in order to apportion unequally among

 

                             shareholders of a small FSC the $5

 

                             million foreign trading gross receipts

 

                             used to determine exempt foreign trade

 

                             income.

 

 

 10.    Sec. 924(c)(2)       The FSC must open a new qualifying

 

        and Treas.           foreign bank account within 30 days of

 

        Reg.                 the date of termination of the original

 

        section 1.924(c)-    bank account, if a FSC's qualifying

 

        1(c)(4)              foreign bank account terminates during

 

                             the taxable year due to circumstances

 

                             beyond the control of the FSC.

 

 

 11.    Sec. 924(c)(3)       The FSC must transfer funds from its

 

        and Treas.           foreign bank account to its U.S. bank

 

        Reg.                 account, equal to the dividends, salaries

 

        section 1.924(c)-    or fees disbursed, and such transfer must

 

        1(d)(1)              take place within 12 months of the date

 

                             of the original disbursement from the

 

                             U.S. bank account, if dividends,

 

                             salaries, or fees are disbursed from a

 

                             FSC's U.S. bank account.

 

 

 12.    Sec. 924(c)(3)       The FSC must reimburse from its own bank

 

        and Treas.           account any dividends or other expenses

 

        Reg.                 that are paid by a related person, on or

 

        section 1.924(c)-    before the due date (including

 

        1(d)(2)              extensions) of the FSC's tax return for

 

                             the taxable year to which the

 

                             reimbursement relates.

 

 

 13.    Sec. 924(c)(3)       If the Commissioner determines that the

 

        and Treas.           taxpayer acted in good faith, the

 

        Reg.                 taxpayer may comply with the

 

        section 1.924(c)-    reimbursement requirement by reimbursing

 

        1(d)(3)              the funds within 90 days of the date of

 

                             the Commissioner's determination,

 

                             notwithstanding a taxpayer's failure to

 

                             meet the return-filing-date reimbursement

 

                             deadline in Treas. Reg. section 1.924(c)-

 

                             1(d)(2).

 

 

 14.    Sec.                 If a payment with respect to a

 

        924(e)(4) and        transaction is made directly to the FSC

 

        Treas. Reg.          or the related supplier in the United

 

        section 1.924(e)-    States, the funds must be transferred to

 

        1(d)(2)(iii)         and received by the FSC bank account

 

                             outside the United States no later than

 

                             35 days after the receipt of good funds

 

                             (i.e., date of check clearance) on the

 

                             transaction.

 

 

 15.    Temp. Treas.         A FSC and its related supplier may

 

        Reg. section         redetermine a transfer pricing method,

 

        1.925(a)-            the amount of foreign trading gross

 

        1T(e)(4)             receipts, and costs and expenses,

 

                             provided such redetermination occurs

 

                             before the expiration of the statute of

 

                             limitations for claims for refund for

 

                             both the FSC and related supplier, and

 

                             provided such redetermination shall

 

                             affect both the FSC and the related

 

                             supplier. See Treas. Reg. section

 

                             1.925(a)-1(c)(8)(i) for time limitations

 

                             with respect to FSC administrative

 

                             pricing grouping redeterminations and for

 

                             a cross-reference to Temp. Treas. Reg.

 

                             section 1.925(a)-1T(e)(4).

 

 

 16.    Sec.                 A corporation may terminate its election

 

        927(f)(3)(A)         to be treated as a FSC or a small FSC by

 

        and Treas.           revoking the election during the first 90

 

        Reg.                 days of the FSC taxable year (other than

 

        section              the first year in which the election is

 

        1.927(f)-1(b)        effective) in which the election was to

 

        (Q&A-12)             take effect.

 

 

 17.    Sec. 927 and         A taxpayer may satisfy the destination

 

        Temp. Treas.         test with respect to property sold or

 

        Reg.                 leased by a seller or lessor if such

 

        section 1.927(a)     property is delivered by the seller or

 

        -1T(d)(2)(i)(B)      lessor (or an agent of the seller or

 

                             lessor) within the United States to a

 

                             purchaser or lessee, if the property is

 

                             ultimately delivered outside the United

 

                             States (including delivery to a carrier

 

                             or freight forwarder for delivery outside

 

                             the United States) by the purchaser or

 

                             lessee (or a subsequent purchaser or

 

                             sublessee) within one year after the sale

 

                             or lease.

 

 

 18.    Sec. 927 and         A taxpayer that claims FSC commission

 

        Temp. Treas.         deductions must designate the sales,

 

        Reg.                 leases, or rentals subject to the FSC

 

        section 1.927(b)-    commission agreement no later than the

 

        1T(e)(2)(i)          due date (as extended) of the tax return

 

                             of the FSC for the taxable year in which

 

                             the transaction(s) occurred.

 

 

 19.    Sec. 927 and         A transferee or other recipient of shares

 

        Treas. Reg.          in the corporation (other than a

 

        section              shareholder that previously consented to

 

        1.927(f)-1(a)        the election) must consent to be bound by

 

        (Q&A 4)              the prior election within 90 days of the

 

                             first day of the FSC's taxable year to

 

                             preserve the status of a corporation that

 

                             previously qualified as a FSC or as a

 

                             small FSC.

 

 

 20.    Sec. 936 and         If a "qualified investment" in a

 

        Treas. Reg.          Caribbean Basin country ceases to meet

 

        section 1.936-10(c)  the qualification requirements, the

 

                             taxpayer may correct any disqualifying

 

                             events within a reasonable period of

 

                             time, which is defined as not more than

 

                             60 days from the date that such events

 

                             came to the attention of the taxpayer (or

 

                             should have come to its attention by the

 

                             exercise of reasonable diligence).

 

 

 21.    Sec. 936 and         A taxpayer that elects retroactive

 

        Treas. Reg.          application of the temporary regulation

 

        section 1.936-11     regarding separate lines of business for

 

                             taxable years beginning after December

 

                             31, 1995, must elect to do so prior to

 

                             the expiration of the statute of

 

                             limitations for the year in question.

 

 

 22.    Treas. Reg.          An election of, or an adoption of or

 

        sections 1.964-      change in a method of accounting of a CFC

 

        1(c)(3)(ii) and      (controlled foreign corporation) requires

 

        -1T(g)(2).           the filing of a written statement jointly

 

                             executed by the controlling U.S.

 

                             shareholders of the CFC within 180 days

 

                             after the close of the taxable year of

 

                             the CFC.

 

 

 23.    Sec. 982(c)(2)(A)    Any person to whom a formal document

 

                             request is mailed shall have the right to

 

                             bring a proceeding to quash such request

 

                             not later than the 90th day after the day

 

                             such request was mailed.

 

 

 24.    Treas. Reg.          An election to have Treas. Reg. section

 

        section 1.988-       1.988-1(a)(2)(iii) apply to regulated

 

        1(a)(7)(ii).         futures contracts and nonequity options

 

                             must be made on or before the first day

 

                             of the taxable year, or if later, on or

 

                             before the first day during such taxable

 

                             year on which the taxpayer holds a

 

                             contract described in section

 

                             988(c)(1)(D)(ii) and Treas. Reg. section

 

                             1.988-1(a)(7)(ii). A late election may be

 

                             made within 30 days after the time

 

                             prescribed for the election.

 

 

 25.    Sec.                 A qualified fund election must be made on

 

        988(c)(1)(E)(iii)(V) or before the first day of the taxable

 

        (qualified           year, or if later, on or before the first

 

        fund) and            day during such taxable year on which the

 

        Treas. Reg.          partnership holds an instrument described

 

        section              in section 988(c)(1)(E)(i).

 

        1.988-1(a)(8)(i)(E).

 

 

 26.    Treas. Reg.          An election to treat (under certain

 

        section 1.988-3(b)   circumstances) any gain or loss

 

                             recognized on a contract described in

 

                             Treas. Reg. section 1.988-2(d)(1) as

 

                             capital gain or loss must be made by

 

                             clearly identifying such transaction on

 

                             taxpayer's books and records on the date

 

                             the transaction is entered into.

 

 

 27.    Treas. Reg.          Taxpayer must establish a record, and

 

        section 1.988-       before the close of the date the hedge is

 

        5(a)(8)(i)           entered into, the taxpayer must enter

 

                             into the record for each qualified

 

                             hedging transaction the information

 

                             contained in Treas. Reg. sections 1.988-

 

                             5(a)(8)(i)(A) through (E).

 

 

 28.    Treas. Reg.          Taxpayer must establish a record and

 

        section 1.988-       before the close of the date the hedge is

 

        5(b)(3)(i)           entered into, the taxpayer must enter

 

                             into the record a clear description of

 

                             the executory contract and the hedge.

 

 

 29.    Treas. Reg.          Taxpayer must identify a hedge and

 

        section 1.988-       underlying stock or security under the

 

        5(c)(2)              rules of Treas. Reg. section 1.988-

 

                             5(b)(3).

 

 

 30.    Sec. 991             A corporation that elects IC-DISC

 

                             treatment (other than in the

 

                             corporation's first taxable year) must

 

                             file Form 4876-A, Election To Be Treated

 

                             as an Interest Charge DISC, with the

 

                             regional service center during the 90-day

 

                             period prior to the beginning of the tax

 

                             year in which the election is to take

 

                             effect.

 

 

 31.    Sec. 991 and         A corporation that filed a tax return as

 

        Treas. Reg.          a DISC, but subsequently determines that

 

        section 1.991-       it does not wish to be treated as a DISC,

 

        1(g)(2)              must notify the [district director] more

 

                             than 30 days before the expiration of

 

                             period of limitations on assessment

 

                             applicable to the tax year.

 

 

 32.    Sec. 992 and         A qualifying corporation must file Form

 

        Treas. Reg.          4876-A, or attachments thereto,

 

        section 1.992-       containing the consent of every

 

        2(a)(1)(i)           shareholder of the corporation to be

 

                             treated as a DISC as of the beginning of

 

                             the corporation's first taxable year.

 

 

 33.    Sec. 992 and         A qualifying corporation must file

 

        Treas. Reg.          consents of the shareholders of the

 

        section 1.992-       corporation to be treated as a DISC with

 

        2(b)(2)              the service center with which the DISC

 

                             election was first filed, within 90 days

 

                             after the first day of the taxable year,

 

                             or within the time granted for an

 

                             extension to file such consents.

 

 

 34.    Sec. 992 and         A corporation seeking to revoke a prior

 

        Treas. Reg.          election to be treated as a DISC, must

 

        section 1.992-       file a statement within the first 90 days

 

        2(e)(2)(ii)          of the taxable year in which the election

 

                             is to take effect with the service center

 

                             with which it filed the election or, if

 

                             the corporation filed an annual

 

                             information return, by filing the

 

                             statement at the service center with

 

                             which it filed its most recent annual

 

                             information return.

 

 

 35.    Sec. 992 and         A DISC that receives notification that it

 

        Treas. Reg.          failed to satisfy the 95 percent of gross

 

        section 1.992-       receipts test or the 95 percent assets

 

        3(c)(3)              test, or both tests, for a particular

 

                             taxable year, must make a corrective

 

                             deficiency distribution within 90 days of

 

                             the date of the first written

 

                             notification from the IRS.

 

 

 36.    Sec. 993 and         A taxpayer must deliver export property

 

        Treas. Reg.          outside the U.S. within one year of the

 

        section 1.993-       date of sale or lease in order to

 

        3(d)(2)(i)(b)        generate DISC benefits from a qualifying

 

                             export transaction.

 

 

 37.    Sec. 1445 Treas.     Form 8288, U.S. Withholding Tax Return

 

        Reg. section         for Dispositions by Foreign Persons of

 

        1.1445-1             U.S. Real Property Interests, must be

 

                             filed by a buyer or other transferee of a

 

                             U.S. real property interest, and a

 

                             corporation, partnership, or fiduciary

 

                             that is required to withhold tax. The

 

                             amount withheld is to be transmitted with

 

                             Form 8288, which is generally to be filed

 

                             by the 20th day after the date of

 

                             transfer.

 

 

 38.    Sec. 1446            All partnerships with effectively

 

                             connected gross income allocable to a

 

                             foreign partner in any tax year must file

 

                             forms 8804, Annual Return for Partnership

 

                             Withholding Tax, and 8805, Foreign

 

                             Partner's Information Statement of

 

                             Section 1446 Withholding Tax, on or

 

                             before the 15th day of the 4th month

 

                             following the close of the partnership's

 

                             taxable year.

 

 

 39.    Sec. 1446            Form 8813, Partnership Withholding Tax

 

                             Payment Voucher, is used to pay the

 

                             withholding tax under section 1446 for

 

                             all partnerships with effectively

 

                             connected gross income allocable to a

 

                             foreign partner in any tax year. Form

 

                             8813 must accompany each payment of

 

                             section 1446 tax made during the

 

                             partnership's taxable year. Form 8813 is

 

                             to be filed on or before the 15th day of

 

                             the 4th, 6th, 9th, and 12th months of the

 

                             partnership's taxable year for U.S.

 

                             income tax purposes.

 

 

 40.    Sec.                 A reporting corporation must cure any

 

        6038A(d)(2)          failure to furnish information or failure

 

        and Treas.           to maintain records within 90 days after

 

        Reg.                 the IRS gives notice of the failure to

 

        section 1.6038A-     avoid the continuation penalty.

 

        4(d)(1)

 

 

 41.    Sec.                 A reporting corporation must cure any

 

        6038A(d)(2)          failure to furnish information or failure

 

        and Treas.           to maintain records before the beginning

 

        Reg.                 of each 30-day period after expiration of

 

        section 1.6038A-     the initial 90-day period to avoid

 

        4(d)(1)              additional continuation penalties.

 

 

 42.    Sec.                 A reporting corporation must furnish an

 

        6038A(e)(1)          authorization of agent within 30 days of

 

        and Treas.           a request by the IRS to avoid a penalty.

 

        Reg.

 

        section 1.6038A-

 

        5(b)

 

 

 43.    Sec.                 A reporting corporation must commence any

 

        6038A(e)(4)(A)       proceeding to quash a summons filed by

 

                             the IRS in connection with an information

 

                             request within 90 days of the date the

 

                             summons is issued.

 

 

 44.    Sec. 6038A(e)(4)(B)  A reporting corporation must commence any

 

                             proceeding to review the IRS's

 

                             determination of noncompliance with a

 

                             summons within 90 days of the IRS's

 

                             notice of noncompliance.

 

 

 45.    Sec. 6038A           A reporting corporation must supply an

 

        and Treas.           English translation of records provided

 

        Reg.                 pursuant to a request for production

 

        section 1.6038A-     within 30 days of a request by the IRS

 

        3(b)(3)              for a translation to avoid a penalty.

 

 

 46.    Sec. 6038A           A reporting corporation must, within 60

 

        and Treas.           days of a request by the IRS for records

 

        Reg.                 maintained outside the United States,

 

        section 1.6038A-     either provide the records to the IRS, or

 

        3(f)(2)              move them to the United States and

 

                             provide the IRS with an index to the

 

                             records to avoid a penalty.

 

 

 47.    Sec. 6038A           A reporting corporation must supply

 

        and Treas.           English translations of documents

 

        Reg.                 maintained outside the United States

 

        section 1.6038A-     within 30 days of a request by the IRS

 

        3(f)(2)(i)           for translation to avoid a penalty.

 

 

 48.    Sec. 6038A           A reporting corporation must request an

 

        and Treas.           extension of time to produce or translate

 

        Reg.                 documents maintained outside the United

 

        section 1.6038A-     States beyond the period specified in the

 

        3(f)(4)              regulations within 30 days of a request

 

                             by the IRS to avoid a penalty.

 

 

 49.    Sec. 6662(e)         A taxpayer must provide, within 30 days

 

        and Treas.           of a request by the IRS, specified

 

        Reg.                 "principal documents" regarding the

 

        section 1.6662-      taxpayer's selection and application of

 

        6(d)(2)(iii)(A)      transfer pricing method to avoid

 

                             potential penalties in the event of a

 

                             final transfer pricing adjustment by the

 

                             IRS. See also Treas. Reg. section 1.6666-

 

                             6(d)(2)(iii)(C) (similar requirement re:

 

                             background documents).

 

 

 50.    Secs. 6038,          The filing of Form 8865, Return of U.S.

 

        6038B, and           Persons With Respect to Certain Foreign

 

        6046A                Partnerships, for those taxpayers who do

 

                             not have to file an income tax return.

 

                             The form is due at the time that an

 

                             income tax return would have been due had

 

                             the taxpayer been required to file an

 

                             income tax return.

 

 _____________________________________________________________________

 

 

 SECTION 13. PARTNERSHIP AND S CORPORATION ISSUES

 

 _____________________________________________________________________

 

        Statute or

 

        Regulation           Act Postponed

 

 _____________________________________________________________________

 

 

 1.     Treas. Reg.          A partnership may apply for approval to

 

        section 1.706-       change a partnership taxable year by

 

        1(b)(4)(i)           filing Form 1128, Application to Adopt,

 

                             Change, or Retain a Tax Year, on or

 

                             before the 15th day of the second

 

                             calendar month following the close of the

 

                             short period involved.

 

 

 2.     Treas. Reg.          A partnership may apply for approval to

 

        section 1.706-       adopt a partnership taxable year by

 

        1(b)(4)(ii)          filing Form 1128, Application to Adopt,

 

                             Change, or Retain a Tax Year, on or

 

                             before the last day of the month

 

                             following the close of the taxable year

 

                             to be adopted.

 

 

 3.     Treas. Reg.          A transferee that acquires, by sale or

 

        section 1.743-       exchange, an interest in a partnership

 

        1(k)(2)              with an election under section 754 in

 

                             effect for the taxable year of the

 

                             transfer, must notify the partnership, in

 

                             writing, within 30 days of the sale or

 

                             exchange. A transferee that acquires, on

 

                             the death of a partner, an interest in a

 

                             partnership with an election under

 

                             section 754 in effect for the taxable

 

                             year of the transfer, must notify the

 

                             partnership, in writing, within one year

 

                             of the death of the deceased partner.

 

 

 4.     Treas. Reg.          Generally, a partnership may revoke a

 

        section 1.754-       section 754 election by filing the

 

        1(c)(1)              revocation no later than 30 days after

 

                             the close of the partnership taxable year

 

                             with respect to which the revocation is

 

                             intended to take effect.

 

 

 5.     Treas. Reg.          A partnership may generally elect to be

 

        section 1.761-       excluded from subchapter K. The election

 

        2(b)(3)              will be effective unless within 90 days

 

                             after the formation of the organization

 

                             any member of the organization notifies

 

                             the Commissioner that the member desires

 

                             subchapter K to apply to such

 

                             organization and also advises the

 

                             Commissioner that he has so notified all

 

                             other members of the organization. In

 

                             addition, an application to revoke an

 

                             election to be excluded from subchapter K

 

                             must be submitted no later than 30 days

 

                             after the beginning of the first taxable

 

                             year to which the revocation is to apply.

 

 

 6.     Treas. Reg.          A partnership requesting permission to be

 

        section 1.761-2(c)   excluded from certain provisions of

 

                             subchapter K must submit the request to

 

                             the Commissioner no later than 90 days

 

                             after the beginning of the first taxable

 

                             year for which partial exclusion is

 

                             desired.

 

 

 7.     Sec. 1361(e)         In general, the trustee of the electing

 

                             small business trust (ESBT) must file the

 

                             ESBT election within the 2-month and 16-

 

                             day period beginning on the day the stock

 

                             is transferred to the trust. See Notice

 

                             97-12, 1997-1 C.B. 385.

 

 

 8.     Treas. Reg.          The current income beneficiary of a

 

        section 1.1361-      qualified subchapter S trust (QSST) must

 

        1(j)(6)              make a QSST election within the 2-month

 

                             and 16-day period from one of the dates

 

                             prescribed in Treas. Reg. section 1.1361-

 

                             1(j)(6)(iii).

 

 

 9.     Treas. Reg.          The successive income beneficiary of a

 

        section 1.1361-      QSST may affirmatively refuse to consent

 

        1(j)(10)             to the QSST election. The beneficiary

 

                             must sign the statement and file the

 

                             statement with the IRS within 15 days and

 

                             2 months after the date on which the

 

                             successive income beneficiary becomes the

 

                             income beneficiary.

 

 

 10.    Treas. Reg.          If an S corporation elects to treat an

 

        section 1.1361-      eligible subsidiary as a qualified

 

        3(a)(4)              subchapter S subsidiary (QSUB), the

 

                             election cannot be effective more than 2

 

                             months and 15 days prior to the date of

 

                             filing the election.

 

 

 11.    Treas. Reg.          An S corporation may revoke a QSUB

 

        section 1.1361-      election by filing a statement with the

 

        3(b)(2)              service center. The effective date of a

 

                             revocation of a QSUB election cannot be

 

                             more than 2 months and 15 days prior to

 

                             the filing date of the revocation.

 

 

 12.    Treas. Reg.          If a corporation revokes its subchapter S

 

        section 1.1362-      election after the first 2 1/2-months of

 

        2(a)(2), (4)         its taxable year, the revocation will not

 

                             be effective until the following taxable

 

                             year. An S corporation may rescind a

 

                             revocation of an S election at any time

 

                             before the revocation becomes effective.

 

 

 13.    Sec. 1362(b)(3)      If a corporation files a subchapter S

 

                             election after the first 2 1/2-months of

 

                             a corporation's taxable year, that

 

                             corporation will not be treated as an S

 

                             corporation until the taxable year after

 

                             the year in which the S election is made.

 

 _____________________________________________________________________

 

 

 SECTION 14. PROCEDURE & ADMINISTRATION ISSUES

 

 

      .01 Bankruptcy and Collection

 

 _____________________________________________________________________

 

        Statute or

 

        Regulation            Act Postponed

 

 _____________________________________________________________________

 

 

 1.     Sec.                 A taxpayer has 30 days after receiving a

 

        6320(a)(3)(B),       notice of a lien to request a Collection

 

        6230(c) and          Due Process (CDP) administrative hearing.

 

        Treas. Reg.          After a determination at the CDP hearing,

 

        sections 301.6320-   the taxpayer may appeal this

 

        1T(b), (c) and       determination within 30 days to the

 

        (f)                  United States Tax Court or a United

 

                             States district court.

 

 

 2.     Sec.                 The taxpayer must request a Collections

 

        6330(a)(3)(B)        Due Process (CDP) administrative hearing

 

        and (d)(1)           within 30 days after the IRS sends notice

 

        and Treas.           of a proposed levy. After a determination

 

        Reg.                 at the CDP hearing, the taxpayer may

 

        sections 301.6330-   appeal this determination within 30 days

 

        1T(b), (c) and (f)   to the United States Tax Court or a

 

                             United States district court.

 

 

 3.     Treas. Reg.          A court-appointed receiver or fiduciary

 

        sections 301.6036-   in a non-bankruptcy receivership, a

 

        1(a)(2) and (3)      fiduciary in aid of foreclosure who takes

 

                             possession of substantially all of the

 

                             debtor's assets, or an assignee for

 

                             benefit of creditors, must give written

 

                             notice within ten days of his appointment

 

                             to the IRS as to where the debtor will

 

                             file his tax return.

 

 

 _____________________________________________________________________

 

 

      .02 Information Returns

 

 _____________________________________________________________________

 

 

 1.     Sec. 6050I           Any person engaged in a trade or business

 

                             receiving more than $10,000 cash in one

 

                             transaction (or 2 or more related

 

                             transactions) must file an information

 

                             return, Form 8300, Report of Cash

 

                             Payments over $10,000 Received in a Trade

 

                             or Business, by the 15th day after the

 

                             date the cash was received.

 

                             Additionally, a statement must be

 

                             provided to the person with respect to

 

                             whom the information is required to be

 

                             furnished by Jan. 31st of the year

 

                             following.

 

 

 2.     Sec. 6050L           Returns relating to certain dispositions

 

                             of donated property, Forms 8282, Donee

 

                             Information Return, must be filed within

 

                             125 days of the disposition.

 

 

 _____________________________________________________________________

 

 

      .03 Miscellaneous

 

 

 _____________________________________________________________________

 

 

 1.     Sec. 1314(b)         A taxpayer may file a claim for refund or

 

                             credit of tax based upon the mitigation

 

                             provisions of sections 1311 through 1314

 

                             if, as of the date a determination (as

 

                             defined in section 1313(a)) is made, one

 

                             year remains on the period for filing a

 

                             claim for refund.

 

 

 2.     Sec. 6015            A requesting spouse must request relief

 

                             under section 6015 within 2 years of the

 

                             first collection activity against the

 

                             requesting spouse.

 

 

 3.     Sec. 6411            Taxpayers applying for a tentative

 

                             carryback adjustment of the tax for the

 

                             prior taxable year must file Form 1139

 

                             (for corporations) or Form 1045 (for

 

                             entities other than corporations) within

 

                             12 months after the end of such taxable

 

                             year that generates such net operating

 

                             loss, net capital loss, or unused

 

                             business credit from which the carryback

 

                             results.

 

 

 4.     Sec. 6656(e)(2)      A taxpayer who is required to deposit

 

                             taxes and fails to do so is subject to a

 

                             penalty under section 6656. Under section

 

                             6656(e)(2), the taxpayer may, within 90

 

                             days of the date of the penalty notice,

 

                             designate to which deposit period within

 

                             a specified tax period the deposits

 

                             should be applied.

 

 _____________________________________________________________________

 

 

 SECTION 15. TAX CREDIT ISSUES

 

 

 _____________________________________________________________________

 

        Statute or

 

        Regulation           Act Postponed

 

 _____________________________________________________________________

 

 

 1.     Treas. Reg.          The taxpayer and an Agency may elect to

 

        section 1.42-        use an appropriate percentage under

 

        8(a)(3)(v)           section 42(b)(2)(A)(ii)(I) by notarizing

 

                             a binding agreement by the 5th day

 

                             following the end of the month in which

 

                             the binding agreement was made.

 

 

 2.     Treas. Reg.          The taxpayer and an Agency may elect an

 

        section 1.42-8(b)    appropriate percentage under section

 

        (1)(vii)             42(b)(2)(A)(ii)(II) by notarizing a

 

                             binding agreement by the 5th day

 

                             following the end of the month in which

 

                             the tax-exempt bonds are issued.

 

 

 3.     Sec.                 In order to claim section 42 credits on

 

        42(d)(2)(D)          an existing building, section

 

        (ii)(IV)             42(d)(2)(B)(ii)(I) requires that the

 

                             building must have been placed in service

 

                             at least ten years before the date the

 

                             building was acquired by the taxpayer. A

 

                             building is not considered placed in

 

                             service for purposes of section

 

                             42(d)(2)(B)(ii) if the building is resold

 

                             within a 12-month period after

 

                             acquisition by foreclosure of any

 

                             purchase-money security interest.

 

 

 4.     Sec. 42(g)(3)(A)     A building shall be treated as a

 

                             qualified low-income building only if the

 

                             project meets the minimum set aside

 

                             requirement by the close of the first

 

                             year of the credit period of the

 

                             building.

 

 

 5.     Sec. 42(h)(6)(J)     A low-income housing agreement commitment

 

                             must be in effect as of the beginning of

 

                             the year for a building to receive

 

                             credit. If such a commitment was not in

 

                             effect, the taxpayer has a one-year

 

                             period for correcting the failure.

 

 

 6.     Sec.                 The taxpayer's basis in the building

 

        42(h)(1)(E)          project, as of the later of the date

 

        and (F)              which is 6 months after the date the

 

                             allocation was made or the close of the

 

                             calendar year in which the allocation is

 

                             made, must be more than 10 percent of the

 

                             taxpayer's reasonably expected basis in

 

                             the project.

 

 

 7.     Sec.                 A taxpayer has a 24- or 60-month

 

        47(c)(1)(C)          measuring period in which the requisite

 

        and Treas.           amount of rehabilitation expenditures

 

        Reg.                 have to be incurred in order to satisfy

 

        section 1.48-        the "substantial rehabilitation" test.

 

        12(b)(2)

 

 

 8.     Treas. Reg. section  In the historic rehabilitation context,

 

        1.48-12(d)(7)        if the taxpayer fails to receive final

 

                             certification of completed work prior to

 

                             the date that is 30 months after the date

 

                             that the taxpayer filed the return on

 

                             which the credit is claimed, the taxpayer

 

                             must, prior to the last day of the 30th

 

                             month, consent to extending the statute

 

                             of limitations by submitting a written

 

                             statement to the District Director.

 

 

 9.     Sec.                 An employer seeking the Work Opportunity

 

        51(d)(12)(A)         Credit or the Welfare-to-Work Credit with

 

        (ii)(II) and         respect to an individual must submit Form

 

        51A(d)(1)            8850, Pre-Screening Notice and

 

                             Certification Request for the Work

 

                             Opportunity and Welfare-to-Work Credits,

 

                             to the State Employment Security Agency

 

                             not later than the 21st day after the

 

                             individual begins work for the employer.

 

 _____________________________________________________________________

 

 

 SECTION 16. TAX-EXEMPT BOND ISSUES

 

 

 _____________________________________________________________________

 

        Statute or

 

        Regulation           Act Postponed

 

 _____________________________________________________________________

 

 

 1.     Treas. Reg.          An issuer must provide notice to the

 

        sections 1.141-      Commissioner of the establishment of a

 

        12(d)(3) and         defeasance escrow within 90 days of the

 

        1.142-2(c)(2)        date such defeasance escrow is

 

                             established in accordance with Treas.

 

                             Reg. section 1.141-12(d)(1) or 1.142-

 

                             2(c)(1).

 

 

 2.     Sec. 142(d)(7)       An operator of a multi-family housing

 

                             project for which an election was made

 

                             under section 142(d) must submit to the

 

                             Secretary an annual certification as to

 

                             whether such project continues to meet

 

                             the requirements of section 142(d).

 

 

 3.     Sec. 142(f)(4)       A person engaged in the local furnishing

 

        and Treas.           of electric energy or gas (a local

 

        Reg.                 furnisher) that uses facilities financed

 

        section              with exempt facility bonds under section

 

        1.142(f)(4)-1        142(a)(8) and expands its service area in

 

                             a manner inconsistent with the

 

                             requirements of sections 142(a)(8) and

 

                             142(f), may make an election to ensure

 

                             that those bonds will continue to be

 

                             treated as exempt facility bonds. The

 

                             election must be filed with the IRS on or

 

                             before 90 days after the date of the

 

                             service area expansion that causes the

 

                             bonds to cease to meet the applicable

 

                             requirements.

 

 

 4.     Sec. 146(f)          If an issuing authority's volume cap for

 

        and Notice           any calendar year exceeds the aggregate

 

        89-12                amount of tax-exempt private activity

 

                             bonds issued during such calendar year by

 

                             such authority, such authority may elect

 

                             to treat all (or any portion) of such

 

                             excess as a carryforward for 1 or more

 

                             carryforward purposes.  Such election

 

                             must be filed by the earlier of (1)

 

                             February 15 of the calendar year

 

                             following the year in which the excess

 

                             amount arises, or (2) the date of issue

 

                             of bonds issued pursuant to the

 

                             carryforward election.

 

 

 5.     Sec. 148(f)(3)       An issuer of a tax-exempt municipal

 

        and Treas.           obligation must make any required rebate

 

        Reg.                 payment no later than 60 days after the

 

        section 1.148-3(g)   computation date to which the payment

 

                             relates. A rebate payment is paid when it

 

                             is filed with the IRS at the place or

 

                             places designated by the Commissioner. A

 

                             payment must be accompanied by the form

 

                             provided by the Commissioner for this

 

                             purpose.

 

 

 6.     Treas. Reg. section  An issuer of a tax-exempt municipal

 

        1.148-5(c)           obligation must make a yield reduction

 

                             payment on or before the date of required

 

                             rebate installment payments as described

 

                             in Treas. Reg. section 1.148-3(f), (g)

 

                             and (h).

 

 

 7.     Sec.                 As issuer of a tax-exempt municipal

 

        148(f)(4)(C)         obligation that elects to pay certain

 

        (xvi) and            penalties in lieu of rebate must make any

 

        Treas. Reg.          required penalty payments not later than

 

        section 1.148-       90 days after the period to which the

 

        7(k)(1)              penalty relates.

 

 

 8.     Sec. 149(e)          An issuer of a tax-exempt municipal

 

                             obligation must submit to the Secretary a

 

                             statement providing certain information

 

                             regarding the municipal obligation not

 

                             later than the 15th day of the 2nd

 

                             calendar month after the close of the

 

                             calendar quarter in which the municipal

 

                             obligation is issued.

 

 _____________________________________________________________________

 

 

SECTION 17. INQUIRIES

If you wish to recommend that other acts qualify for postponement, please write to the Office of Associate Chief Counsel, Procedure and Administration (Administrative Provisions and Judicial Practice Division), CC:PA:APJP:B2, 1111 Constitution Avenue, NW, Washington, DC 20224. Please mark "7508A List" on the envelope. In the alternative, e-mail your comments to: Notice.Comments@m1.irscounsel.treas.gov.

SECTION 18. EFFECTIVE DATE

This revenue procedure is effective for acts which may be performed on or after September 11, 2001.

SECTION 19. DRAFTING INFORMATION

The principal author of this revenue procedure is Marcy W. Mendelsohn of the Office of Associate Chief Counsel, Procedure and Administration (Administrative Provisions and Judicial Practice Division). For further information regarding this revenue procedure, contact Ms. Mendelsohn at (202) 622-4940 (not a toll free call).

DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Cross-Reference
    Part III

    Administrative, Procedural, and Miscellaneous

    26 CFR 301.7508-1: Time for performing certain acts postponed by

    reason of service in a combat zone or a Presidentially declared

    disaster.

    (Also Part I, section 7508A; section 301.7508A-1.)
  • Code Sections
  • Subject Areas/Tax Topics
  • Index Terms
    combat zone service, time computations, effect on
    disasters, time computation, effect on
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2001-27710 (39 original pages)
  • Tax Analysts Electronic Citation
    2001 TNT 214-13
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