Tax News

CCH (cch.taxgroup.com) reports:

  The IRS has issued a final regulation that provides guidance for determining which corporations are included in a controlled group of corporations. The regulation adopts without substantive changes a temporary and proposed regulation that was issued on December 22, 2006 (T.D. 9304; NPRM REG-161919-05), and amended on December 26, 2007 (T.D. 9369; NPRM REG-161919-05). The temporary regulation, Temporary Reg. 1.1563-1T, expired on May 26, 2009. Other proposed regulations that were published as part of T.D. 9304 were not adopted; their status will be addressed at a later date.

  The final regulation reflects the modified definition of a brother-sister controlled group under Code Sec. 1563(a)(2) by the American Jobs Creation Act of 2004 (P.L. 108-357). The regulation further clarifies that an S corporation is treated as an excluded member of a controlled group for purposes of any tax benefit item to which it is not subject. In addition, if one or more life insurance companies are members of an affiliated group for the consolidated return year for which a Code Sec. 1504(c)(2) election is in effect, then those members are not treated as either excluded members of the controlled group or as members of a separate life insurance controlled group. Rather, any eligible members are treated as members of the consolidated group, and any ineligible members are treated, along with the eligible and includible members of the consolidated group, as members of a life-nonlife controlled group.

  The regulation applies to tax years beginning on or after May 26, 2009. However, taxpayers may apply the regulation to tax years beginning prior to May 26, 2009, using Temporary Reg. 1.1563-1T.

   
T.D. 9451, 2009FED ¶47,019
 
Other References:
 
Code Sec. 1563
 
CCH Reference - 2009FED ¶33,361C
 
CCH Reference - 2009FED ¶33,363
 
Tax Research Consultant
 
CCH Reference - TRC CCORP: 42,202
 
CCH Reference - TRC CCORP: 42,204