17314 Federal Register / Vol. 80, No. 62 / Wednesday, April 1, 2015 / Rules and Regulations 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Parts 1 and 602 

[TD 9715] 

RIN 1545–BH31 

Regulations Revising Rules Regarding 

Agency for a Consolidated Group 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final regulations. 

SUMMARY: This document contains final 

regulations regarding the agent for an 

affiliated group of corporations that files 

a consolidated return (consolidated 

group). The final regulations provide 

guidance concerning the identity and 

authority of the agent for a consolidated 

group. These final regulations affect all 

corporations in consolidated groups. 

DATES:

Effective Date: These regulations are 

effective on April 1, 2015. 

Applicability Date: For dates of 

applicability, see § 1.1502–77(j). 

FOR FURTHER INFORMATION CONTACT: 

Gerald B. Fleming at (202) 317–6975 or 

Richard M. Heinecke at (202) 317–6065 

(not toll-free numbers). 

SUPPLEMENTARY INFORMATION: 

Paperwork Reduction Act 

The collection of information 

contained in these final regulations has 

been reviewed and approved by the 

Office of Management and Budget in 

accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3507) 

under control number 1545–1699. The 

collection of information in these final 

regulations is in paragraphs (c)(4), 

(c)(5)(iii), (c)(6)(i)(B), (c)(6)(ii), (c)(6)(iv), 

(c)(7)(i)(A), (c)(7)(i)(B), (c)(7)(ii), and 

(f)(3) of § 1.1502–77. The collection of 

information is necessary to make certain 

that the Commissioner of Internal 

Revenue (Commissioner), agent for the 

consolidated group, and members of the 

group are each informed of the proper 

identity of the agent for any given 

period, and are able to timely exercise 

their privileges and fulfill their 

responsibilities with respect to the filing 

of a consolidated return. 

For more information, see Rev. Proc. 

2015–26, IRB 2015–15, the revenue 

procedure published to accompany the 

final regulations that provides 

instructions with respect to all 

communications relating to the 

identification of an agent for a 

consolidated group. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a valid control 

number assigned by the Office of 

Management and Budget. 

Books or records relating to a 

collection of information must be 

retained as long as their contents may 

become material in the administration 

of any internal revenue law. Generally, 

tax returns and return information are 

confidential, as required by section 

6103. 

Background and Explanation of 

Provisions 

1. Introduction 

This Treasury Decision contains final 

regulations that amend 26 CFR part 1, 

under section 1502 of the Internal 

Revenue Code of 1986 (Code) (Final 

Regulations). Section 1502 authorizes 

the Secretary to prescribe regulations for 

corporations that join in filing 

consolidated returns and provides that 

such rules may be different from the 

provisions of chapter 1 of subtitle A of 

the Code that would apply if such 

corporations filed separate returns. 

These Final Regulations provide 

guidance under § 1.1502–77 with 

respect to the agent for a group of 

affiliated corporations that file a 

consolidated return (agent), including 

rules for identifying and communicating 

with the agent, and determining the 

scope of the agent’s authority. 

The Final Regulations apply to 

consolidated return years beginning on 

or after April 1, 2015. Regulations in 

effect before April 1, 2015 will continue 

to apply to consolidated tax years 

beginning before April 1, 2015. 

Contemporaneously with the 

publication of the Final Regulations in 

the Federal Register, the IRS is issuing 

Rev. Proc. 2015–26, IRB 2015–15, 

providing instructions regarding the 

manner of making all communications 

that relate to the identification of an 

agent under the Final Regulations. Rev. 

Proc. 2015–26, IRB 2015–15, will 

obsolete Rev. Proc. 2002–43, 2002–2 CB 

99 (see § 601.601(d)(2)(ii)(b) of this 

chapter) (Determination of Substitute 

Agent for a Consolidated Group When 

the Common Parent Ceases to Exist) 

with respect to consolidated return 

years for which these Final Regulations 

apply. Thus, Rev. Proc. 2002–43 will 

continue to apply for consolidated 

return years subject to prior regulations. 

2. Overview of Prior Guidance 

Regarding Agents 

On June 28, 2002, the IRS and the 

Treasury Department promulgated final 

regulations under § 1.1502–77 in TD 

9002, 67 FR 43538, to provide rules 

concerning the identity and authority of 

the agent and the designation of a new 

agent. These regulations were amended 

by TD 9255 (71 FR 13001) (March 14, 

2006) and TD 9343 (72 FR 40066) (July 

23, 2007). (The June 28, 2002 

regulations and amendments are 

collectively referred to in this preamble 

as the 2002 Regulations.) 

On June 29, 2002, the IRS released 

Rev. Proc. 2002–43 to prescribe 

instructions for all communications 

relating to the determination of a 

substitute agent and the designation of 

a substitute agent by a terminating 

common parent. 

On May 30, 2012, the IRS and the 

Treasury Department proposed 

regulations that would replace the 2002 

Regulations (2012 Proposed 

Regulations). The 2012 Proposed 

Regulations were published in the 

Federal Register (77 FR 31786). No 

request for a hearing was received. One 

comment was received with respect to 

the 2012 Proposed Regulations, but it 

made no specific recommendations. No 

other comments were received, 

including with respect to the specific 

request for comments regarding the 

expansion of the circumstances in 

which the Commissioner could 

designate agents, and the ability of an 

agent to resign. 

3. Summary of the 2002 Regulations 

Under the 2002 Regulations, the 

common parent of a group ceased to be 

the agent if its existence terminated 

under applicable law, if it became 

disregarded as an entity separate from 

its owner for federal tax purposes (a 

disregarded entity), or if it became an 

entity classified as a partnership for 

federal tax purposes. In such cases, the 

common parent could generally 

designate its successor, another member 

of the group, or a group member’s 

successor as the substitute agent for the 

group (provided such designee was a 

domestic corporation for federal tax 

purposes). However, any such 

designation required affirmative 

approval by the Commissioner. 

Although in general a common parent 

must be a domestic corporation, a 

common parent could be an entity 

created or organized under the laws of 

a foreign country and treated as a 

domestic corporation by reason of 

section 7874 (treating a foreign 

corporation as a domestic corporation as 

a result of certain outbound inversion 

transactions) or an election under 

section 953(d) to treat a foreign 

insurance company as a domestic 

corporation (foreign common parent). In 

recognition of the logistical problems 

this could create, the 2002 Regulations 


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permitted the Commissioner to 

designate a domestic member of the 

group to act as the agent (domestic 

substitute agent) in the case of a foreign 

common parent. 

Finally, the 2002 Regulations 

provided certain rules relating to 

partnerships and partners subject to 

sections 6221 through 6234 of the Code, 

enacted by section 402 of the Tax Equity 

and Fiscal Responsibility Act of 1982 

(96 Stat. 324) (TEFRA), generally 

providing that the Commissioner would 

deal directly with a member that was 

the tax matters partner (TMP) regarding 

specified matters for the partners in a 

TEFRA partnership even if the TMP is 

not the agent. 

4. Overview of the 2012 Proposed 

Regulations 

The 2012 Proposed Regulations 

retained the general rules, concepts, and 

examples of the 2002 Regulations. 

However, the 2012 Proposed 

Regulations renumbered, restructured, 

and revised the 2002 Regulations to 

minimize the circumstances under 

which the identity of the agent would 

not be clear. The 2012 Proposed 

Regulations also increased the number 

of situations in which the identity of the 

agent would be determined without 

action by taxpayers or the 

Commissioner. The proposed changes 

are described in the following 

paragraphs 4.A. through 4.G. 

A. Default Successors 

The 2002 Regulations generally 

permitted a terminating agent to 

designate the substitute agent. However, 

the IRS observed that terminating 

agents, to the extent they designated at 

all, tended to designate their successors 

rather than another member of their 

group. To simplify the procedures and 

align them with taxpayers’ practices, the 

2012 Proposed Regulations provided 

that if an agent had a sole successor 

(default successor), the default 

successor would automatically become 

the group’s agent when the prior agent 

ceased to exist, such as in a merger. The 

terminating agent would not be 

permitted to designate an agent unless 

there was no default successor, in which 

case the agent could only designate an 

entity that was a member of the group 

for the consolidated return year (or a 

successor of such a member). The 2012 

Proposed Regulations also prescribed 

limited circumstances under which the 

Commissioner could replace a default 

successor. 

B. Entities Eligible To Be an Agent 

The 2012 Proposed Regulations 

included disregarded entities and 

partnerships among the entities 

permitted to be agents for prior years in 

which they or their predecessors were 

not treated as disregarded. Thus, if a 

common parent converted or merged 

into a disregarded entity or partnership, 

whether by reason of a state law merger, 

a state law conversion, or a federal tax 

election, the continuing or successor 

juridical entity (whether a disregarded 

entity or partnership) would continue as 

the agent for the prior periods. 

C. TEFRA Partnerships 

In general, the Code and regulations 

governing the treatment of TEFRA 

partnerships provide that the 

Commissioner will deal with the TMP 

regarding specified matters for the 

partners in a TEFRA partnership. See 

generally, sections 6221 through 6234. 

The 2002 Regulations provided two 

TEFRA specific rules relating to 

members that were partners in a TEFRA 

partnership. Under the first rule, a 

subsidiary that was the TMP of a TEFRA 

partnership would act in its own name 

regarding partnership matters, without 

requiring any action by the agent. Under 

the second rule, the Commissioner 

would deal with a subsidiary that was 

a partner in a TEFRA partnership in the 

performance of an examination of the 

TEFRA partnership. This second rule, 

however, appeared to create some 

confusion in the context of other 

provisions of the 2002 Regulations. 

To provide more clarity with respect 

to the second rule, the 2012 Proposed 

Regulations provided that: (1) The agent 

will generally act as agent for a member 

that is a partner in a TEFRA partnership 

regarding all matters related to the 

partnership, including execution of a 

settlement agreement under section 

6224(c) (as illustrated in Example 12 in 

§ 1.1502–77(g) of the 2012 Proposed 

Regulations) and extension of the statute 

of limitations with respect to items 

other than the items of the TEFRA 

partnership (as illustrated in Example 

11 in § 1.1502–77(g) of the 2012 

Proposed Regulations); and (2) the 

Commissioner, without having to deal 

with each member separately by 

‘‘breaking agency’’ pursuant to § 1.1502– 

77(f)(2)(i) of the 2012 Proposed 

Regulations, may communicate directly 

with a subsidiary or a disregarded entity 

owned by a subsidiary that is a partner 

in a TEFRA partnership whenever the 

Commissioner determines that such 

direct communication will facilitate the 

conduct of an examination, appeal, or 

settlement with respect to the 

partnership. However, like the 2002 

Regulations, the 2012 Proposed 

Regulations provided that any member 

of the group designated as the TMP of 

a TEFRA partnership will act in its own 

name and perform its responsibilities 

with respect to the partnership without 

requiring any action by the agent. 

D. Commissioner’s Approval of 

Substitute Agent 

Although the 2002 Regulations 

required the Commissioner to approve 

any designation, in practice, designation 

approval requests were denied only 

rarely. To simplify procedures, and 

thereby conserve resources and enhance 

efficiency, the 2012 Proposed 

Regulations eliminated the requirement. 

However, to ensure that IRS records 

accurately reflect the identity of an 

agent, the 2012 Proposed Regulations 

provided that a default successor, or a 

terminating agent that has no default 

successor, must notify the IRS (in 

writing in the manner prescribed by the 

Commissioner) when the default 

successor or an entity designated by a 

terminating agent becomes the group’s 

new agent. 

E. Commissioner’s Authority To 

Designate Agent 

The 2012 Proposed Regulations 

provided several limited circumstances 

in which the Commissioner could 

designate or replace an agent, either on 

its own initiative or at the request of 

other members. Examples were 

included in the 2012 Proposed 

Regulations to illustrate the 

circumstances in which an agent may be 

designated. 

The 2012 Proposed Regulations did 

not provide the Commissioner with the 

ability to replace a domestic default 

successor under circumstances in which 

it could not replace the common parent. 

F. Foreign Entity as Agent 

As previously noted, the 2002 

Regulations did not preclude foreign 

entities from acting as agent, but 

provided that the Commissioner could 

designate a domestic substitute agent. 

The IRS and the Treasury Department 

recognize that such an entity may have 

the best access to information, but also 

that these situations present unique 

logistical issues. Accordingly, the 2012 

Proposed Regulations did not preclude 

a foreign entity from being the agent and 

preserved the Commissioner’s 

discretion to replace a foreign entity. 

G. Post-Dissolution Winding Up Period 

Questions arose under the 2002 

Regulations with respect to the actions 

that could be performed by a 

terminating agent during the ‘‘winding 

up’’ period following its dissolution. 

Because winding up statutes vary 

widely among the states, the IRS and the 


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Treasury Department determined that 

no single rule for post-dissolution 

terminating agents would be appropriate 

in all cases. The 2012 Proposed 

Regulations resolved the issue by 

providing that an entity that has 

dissolved or otherwise ceased to exist 

under applicable law can no longer be 

the agent, irrespective of its powers 

under state or local law during its postdissolution winding up period. 

5. Final Regulations 

The rules adopted in these Final 

Regulations are consistent with those set 

forth in the 2012 Proposed Regulations. 

The Final Regulations, however, make 

several revisions to the 2012 Proposed 

Regulations. First, as further described 

in section 5.A. of this preamble, the 

Final Regulations expand the 

circumstances under which the 

Commissioner may replace an agent on 

the Commissioner’s own accord. 

Second, the Final Regulations clarify 

that a terminating agent without a 

default successor may only designate an 

agent with respect to a completed year. 

See section 5.A.iii. of this preamble. 

Third, the Final Regulations organize 

the provisions that permit the 

Commissioner to designate an agent into 

two categories: (1) Those provisions that 

authorize the Commissioner to replace 

an agent on the Commissioner’s own 

accord, with or without a written 

request from a member; and (2) a 

provision described in section 5.B. of 

this preamble permitting the 

Commissioner to replace an agent 

pursuant to a member’s written request. 

Fourth, as described in section 5.C. of 

this preamble, the Final Regulations 

allow an agent to resign under certain 

circumstances. Fifth, the Final 

Regulations clarify that an agent other 

than the common parent generally 

serves as agent under the same terms 

and with the same rights as the common 

parent. A significant exception to this 

general rule discussed in section 5.A.iii. 

of this preamble applies in the case of 

an agent designated by the 

Commissioner, in that such an agent 

may not designate an agent upon its 

termination unless the Commissioner 

designated the agent solely because a 

prior agent terminated without a default 

successor and without designating an 

agent (other than in the case of a group 

structure change as defined in § 1.1502– 

33(f)(1)). 

In addition, the Final Regulations 

contain clarifying and non-substantive 

changes to the text of the 2012 Proposed 

Regulations and redesignate the 2002 

Regulations as § 1.1502–77B (§ 1.1502– 

77A continues to apply for consolidated 

return years beginning before June 28, 

2002). 

A. Designation on Commissioner’s Own 

Accord 

The Final Regulations prescribe four 

circumstances in which the 

Commissioner may designate an agent 

on the Commissioner’s own accord. 

Three of the circumstances are adopted 

from the 2012 Proposed Regulations: 

The Commissioner may designate an 

agent if (1) a terminating agent has no 

default successor and fails to designate 

an agent; (2) the Commissioner believes 

that the agent or its default successor 

exists but such entity fails to timely 

respond to notices properly sent by the 

Commissioner; or (3) the agent is or 

becomes a foreign entity (for example, 

through the agent’s continuance into a 

foreign jurisdiction or certain 

transactions subject to the inversion 

rules of section 7874). The Final 

Regulations add an additional situation 

to the second circumstance so that the 

Commissioner may designate an agent 

where the agent either fails timely 

respond to notices or fails to perform its 

obligations as agent. Finally, the Final 

Regulations add a fourth circumstance: 

The Commissioner may designate a new 

agent for a current year if a previously 

designated agent ceases to be a member 

of the group. 

i. Replacing Agent That Fails To 

Perform Its Obligations 

The IRS and the Treasury Department 

recognize that there may be situations in 

which an agent is failing to perform its 

obligations as agent under the Code or 

regulations. Neither the 2002 

Regulations nor the 2012 Proposed 

Regulations provided a remedy to 

designate an agent in such situations. As 

a result, members would not be able to 

accurately file a return, determine their 

federal tax liability, or obtain refunds, 

and the Commissioner might have to 

deal with each member separately by 

‘‘breaking agency’’ pursuant to § 1.1502– 

77(f)(2)(i) of the 2012 Proposed 

Regulations. This could, in turn, result 

in significant uncertainty and undue 

burden for group members as well as the 

Commissioner. For example, assume the 

Commissioner breaks agency for a 

consolidated return year that has ended 

(completed year) and then one or more 

members files a claim for refund of 

income taxes paid for that year. Because 

of the uncertainty as to which 

member(s) would be entitled to all or a 

portion of the refund, the Government 

would likely be forced to interplead all 

potential member-claimants in an 

ensuing refund case. 

The preamble to the 2012 Proposed 

Regulations requested comments with 

respect to this issue, but no comments 

were received. Nevertheless, the IRS 

and the Treasury Department have 

considered this issue and determined 

that the best interests of all concerned 

would be served by providing the 

Commissioner the authority to replace 

an agent that fails to perform its 

obligations as agent as prescribed by 

federal tax law. Accordingly, the Final 

Regulations provide that the 

Commissioner may, with or without a 

written request from a member, 

designate an agent to replace any agent 

that fails to perform its obligations as 

agent as prescribed by the Code or 

regulations promulgated thereunder. 

ii. Replacing Agent That Ceases To Be 

a Member for Current Year 

The 2012 Proposed Regulations did 

not provide guidance for situations in 

which an agent previously designated 

by the Commissioner ceases to be a 

member during a consolidated return 

year that is not a completed year 

(current year). Thus, under the 2012 

Proposed Regulations, there could be 

situations in which a group would have 

a non-member agent or no agent at all. 

The Final Regulations address these 

issues by requiring that the agent for the 

current year be a member of the group. 

An agent designated by the 

Commissioner will generally continue 

as the agent in successive consolidated 

return years except in three 

circumstances: (1) If the Commissioner 

specifies a limited or specific period of 

agency in the designation; (2) if the 

agent ceases to be a member of the 

group; or (3) if the agent is replaced 

pursuant to the Final Regulations. 

The Final Regulations also provide an 

additional circumstance in which the 

Commissioner may designate an agent 

on the Commissioner’s own accord. 

Specifically, the Final Regulations 

permit the Commissioner, with or 

without a written request from a 

member, to designate an agent for the 

current year if an agent previously 

designated by the Commissioner ceases 

to be a member of the group without 

leaving a default successor in the group. 

In that situation, a member of the group 

should request that the Commissioner 

designate an agent. 

iii. Effect of Certain Designations on the 

Commissioner’s Own Accord 

The Proposed Regulations permitted 

an agent that terminates without a 

default successor to designate an agent. 

If a terminating agent had no default 

successor and failed to designate an 

agent, the Commissioner could 


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designate an agent with or without the 

request of any member. The Final 

Regulations generally adopt these rules 

with one significant modification. If a 

terminating agent was itself designated 

by the Commissioner on the 

Commissioner’s own accord and the 

terminating agent does not have a 

default successor, the Final Regulations 

provide that the terminating agent is not 

permitted to designate an agent if it was 

designated because the agent it replaced 

(1) ceased to be a member of the group 

in a current year; (2) failed to timely 

respond to notices or failed to fulfill its 

obligations under the Code or 

regulations; or (3) became a foreign 

entity. Because the Commissioner’s 

ability to administer the tax law is 

impaired under these circumstances, the 

IRS and the Treasury Department 

determined that the interests of tax 

administration would be best served by 

monitoring of designated agents and 

groups in these limited cases. 

Accordingly, the IRS and the Treasury 

Department determined that the 

Commissioner, rather than the 

terminating agent, should designate the 

agent in these situations. In such cases, 

any member (including the terminating 

agent) of the group is permitted to 

request that the Commissioner designate 

a new agent. The Final Regulations 

permit other categories of agents 

previously designated by the 

Commissioner to designate an agent 

upon termination provided the 

terminating agent does not (1) have a 

default successor or (2) terminate in a 

group structure change. The Final 

Regulations clarify that a terminating 

agent that is permitted to designate an 

agent may only do so with respect to 

completed years. 

Finally, to prevent groups from 

nullifying a designation made by the 

Commissioner, the Final Regulations 

provide that a designating agent may not 

designate as an agent any entity that the 

Commissioner previously replaced as 

agent. The designating agent may, 

however, submit a request that the 

Commissioner designate as agent the 

entity previously replaced as agent. 

B. Designation Upon Written Request by 

a Member 

The 2002 Regulations and the 2012 

Proposed Regulations provided a 

mechanism whereby upon the written 

request from a member, the 

Commissioner could, but was not 

required to, replace an agent previously 

designated by the Commissioner. The 

Final Regulations retain this provision 

to permit a member to request that the 

Commissioner designate a new agent in 

circumstances other than the 

specifically enumerated circumstances 

in which the Commissioner may 

designate an agent on the 

Commissioner’s own accord. 

C. Resignation of Agent 

Under the 2002 Regulations, a 

common parent remained the agent for 

any year for which it was the common 

parent, with only a termination of the 

common parent terminating that agency. 

However, the IRS and the Treasury 

Department recognize that there could 

be circumstances in which an agent 

would want to resign and have another 

entity take its place as agent. For 

example, assume P, the common parent 

of the P consolidated group, becomes a 

subsidiary of the group in a transaction 

under § 1.1502–75(d) (resulting in a 

group structure change described in 

§ 1.1502–33(f)(1)), and the group 

continues with N as the new common 

parent and agent. If unrelated X acquires 

the stock of P, P would leave the group 

but would still be the agent for the years 

during which it was the group’s 

common parent. In that situation, it 

might be more efficient for all 

concerned if P were to resign as agent 

in favor of another member. Although 

the 2012 Proposed Regulations did not 

include a mechanism for an existing 

agent to resign, the preamble to the 2012 

Proposed Regulations requested 

comments with respect to this issue. No 

comments were received. Nevertheless, 

the IRS and the Treasury Department 

have considered the issue and 

determined that it would be in the best 

interests of all concerned and sound tax 

administration for agents to have the 

ability to resign, at least in limited 

situations. 

Accordingly, the Final Regulations 

provide a mechanism for agents to 

resign with respect to completed years. 

However, there are four conditions that 

must be met. First, the agent must 

provide written notice to the 

Commissioner that it no longer intends 

to be the agent for a completed year. 

Second, an entity that could have been 

designated by the resigning agent upon 

its termination must consent, in writing, 

to be the agent for that year. Third, 

immediately after its resignation takes 

effect, the resigning agent must not be 

the agent for the current year. Fourth, 

the Commissioner must not object to the 

agent’s resignation. If these conditions 

are satisfied, the new agent must notify 

each member of the group that it has 

become the agent. 

Effective/Applicability Date 

The Final Regulations apply to 

consolidated return years beginning on 

or after April 1, 2015. The 2002 

Regulations, redesignated as § 1.1502– 

77B, and Rev. Proc. 2002–43 continue to 

apply with respect to consolidated 

return years beginning on or after June 

28, 2002, and before April 1, 2015. 

However, the new rules permitting the 

resignation of agents may be relied upon 

for completed years otherwise governed 

by the 2002 Regulations (or any 

predecessor regulations). 

Special Analyses 

It has been determined that this 

Treasury Decision is not a significant 

regulatory action as defined in 

Executive Order 12866, as 

supplemented by Executive Order 

13563. Therefore, a regulatory 

assessment is not required. It is hereby 

certified that these regulations will not 

have a significant economic impact on 

a substantial number of small entities. 

This certification is based on the fact 

that these regulations will affect 

affiliated groups of corporations that 

have elected to file consolidated returns, 

which tend to be larger entities. 

Therefore, a Regulatory Flexibility 

Analysis under the Regulatory 

Flexibility Act (5 U.S.C. chapter 6) is 

not required. Pursuant to section 7805(f) 

of the Code, the proposed regulations 

preceding these final regulations were 

submitted to the Chief Counsel for 

Advocacy of the Small Business 

Administration for comment on its 

impact on small business, and no 

comments were received. 

Drafting Information 

The principal author of these final 

regulations is Richard M. Heinecke, 

Office of Associate Chief Counsel 

(Corporate). However, other personnel 

from the IRS and the Treasury 

Department participated in their 

development. 

List of Subjects 

26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

26 CFR Part 602 

Reporting and recordkeeping 

requirements. 

Adoption of Amendments to the 

Regulations 

Accordingly, 26 CFR part 1 is 

amended as follows: 

PART 1—INCOME TAXES 

■ Paragraph 1. The authority citation 

for part 1 is amended by adding an entry 

in numerical order to read in part as 

follows: 


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

* * * * * 

Section 1.1502–77B also issued under 26 

U.S.C. 1502 and 6402(j). 

* * * * * 

§ 1.338–1 [Amended] 

■ Par. 2. Section 1.338–1 is amended by 

removing the language ‘‘§ 1.1502– 

77(e)(4)’’ in the last sentence of 

paragraph (b)(2)(viii) and adding the 

language ‘‘§ 1.1502–77(c)(8)’’ in its 

place. 

■ Par. 3. Section 1.1502–77A is 

amended as follows: 

■ 1. Paragraph (e)(2) is amended by 

removing every occurrence of the 

language ‘‘(a)(4)’’ and adding ‘‘(e)(4)’’ in 

its place. 

■ 2. In paragraph (e)(2), the first 

sentence is amended by removing the 

language ‘‘§ 1.1502–77’’ and adding 

‘‘§ 1.1502–77A’’ in its place. 

■ 3. In paragraph (e)(2), the second 

sentence is amended by removing the 

language ‘‘§ 1.1502–77(d)’’ and adding 

‘‘§ 1.1502–77A(d)’’ in its place. 

■ 4. Paragraph (e)(3) is amended by 

removing the language ‘‘(a)(4)’’ and 

adding ‘‘(e)(4)’’ in its place. 

■ 5. Paragraph (e)(4) is amended by 

removing the language ‘‘(a)(2)’’ and 

adding ‘‘(e)(2)’’ in its place. 

■ 6. Paragraph (e)(4)(iii) is amended by 

removing the language ‘‘§ 1.1502–77(d)’’ 

and adding ‘‘§ 1.1502–77A(d)’’ in its 

place. 

■ 7. The heading for paragraph (g) is 

revised. 

The revision reads as follows: 

§ 1.1502–77A Common parent agent for 

subsidiaries applicable for consolidated 

return years beginning before June 28, 

2002. 

* * * * * 

(g) Effective/applicability dates. * * * 

§ 1.1502.77 [Redesignated as § 1.1502– 

77B] 

■ Par. 4. Add an undesignated center 

heading under § 1.1502.77A, redesignate 

§ 1.1502–77 as § 1.1502–77B and, in 

newly redesignated § 1.1502–77B, revise 

the section heading and paragraph 

(h)(1)(i) to read as follows: 

Regulations Applicable to Taxable 

Years Beginning on or After June 28, 

2002, and Before April 1, 2015 

§ 1.1502–77B Agent for the group 

applicable for consolidated return years 

beginning on or after June 28, 2002, and 

before April 1, 2015. 

* * * * * 

(h) Effective/applicability date—(1) 

Application—(i) In general. This section 

applies to consolidated return years 

beginning on or after June 28, 2002, and 

before April 1, 2015. For instructions 

regarding communications relating to 

the determination of a substitute agent 

and other matters under this section, see 

Rev. Proc. 2002–43, 2002–2 CB 99 (see 

§ 601.601(d)(2)(ii)(b) of this chapter). 

For rules governing the resignation of 

certain agents for the group subject to 

this section, see § 1.1502–77(c)(7) and 

(j)(2). 

* * * * * 

■ Par. 5. Section 1.1502–77 is added to 

read as follows: 

§ 1.1502–77 Agent for the group. 

(a) Agent for the group—(1) Sole 

agent. Except as provided in paragraphs 

(e) and (f)(2) of this section, one entity 

(the agent) is the sole agent that is 

authorized to act in its own name 

regarding all matters relating to the 

federal income tax liability for the 

consolidated return year for each 

member of the group and any successor 

or transferee of a member (and any 

subsequent successors and transferees 

thereof). The identity of that agent is 

determined under the rules of paragraph 

(c) of this section. 

(2) Agent for each consolidated return 

year. Agency for the group is established 

for each consolidated return year and is 

not affected by the status or membership 

of the group in later years. Thus, subject 

to the rules of paragraph (c) of this 

section, the agent will generally remain 

agent for that consolidated return year 

regardless of whether one or more 

subsidiaries later cease to be members of 

the group, whether the group files a 

consolidated return for any subsequent 

year, whether the agent ceases to be the 

agent or a member of the group in any 

subsequent year, or whether the group 

continues pursuant to § 1.1502–75(d) 

with a new common parent in any 

subsequent year. 

(3) Communications under this 

section. Any designation, notification, 

objection, request, or other 

communication made to or by the 

Commissioner pursuant to paragraphs 

(c) and (f)(2) of this section must be 

made in accordance with procedures 

prescribed by the Commissioner in the 

Internal Revenue Bulletin (see 

§ 601.601(d)(2)(ii) of this chapter), 

forms, instructions, or other appropriate 

guidance. 

(b) Definitions. The following 

definitions apply for purposes of this 

section only— 

(1) Successor. A successor is an 

individual or entity (including a 

disregarded entity as defined in 

paragraph (b)(3) of this section) that is 

primarily liable, pursuant to applicable 

law (including, for example, by 

operation of a state or federal merger 

statute), for the tax liability of a 

corporation that was a member of the 

group but is no longer in existence 

under applicable law. The 

determination of tax liability is made 

without regard to § 1.1502–1(f)(4) or 

§ 1.1502–6(a). (For inclusion of a 

successor in references to a subsidiary 

or member, see paragraph (b)(5)(iii) of 

this section.) 

(2) Entity. The term entity includes 

any corporation, limited liability 

company, or partnership formed under 

any state, federal, or foreign jurisdiction. 

The term entity includes a disregarded 

entity (as defined in paragraph (b)(3) of 

this section). The term entity does not 

include an entity that has terminated 

even if it is in a winding up period 

under the law under which it is 

organized. 

(3) Disregarded entity. The term 

disregarded entity includes any of the 

following types of entities that are 

disregarded as separate from their 

owners— 

(i) Qualified real estate investment 

trust subsidiaries (within the meaning of 

section 856(i)(2)); 

(ii) Qualified subchapter S 

subsidiaries (within the meaning of 

section 1361(b)(3)(B)); and 

(iii) Eligible entities with a single 

owner (within the meaning of 

§ 301.7701–3 of this chapter). 

(4) Default successor. A successor to 

the agent is the default successor if it is 

an entity (whether domestic or foreign) 

that is the sole successor to the agent. 

A partnership is treated as a sole 

successor with primary liability 

notwithstanding that one or more 

partners may also be primarily liable by 

virtue of being partners. 

(5) Member or subsidiary. All 

references to a member or subsidiary for 

a consolidated return year include— 

(i) Each corporation that was a 

member of the group during any part of 

such year (except that any reference to 

a subsidiary does not include the 

common parent); 

(ii) Each corporation whose income 

was included in the consolidated return 

for such year, notwithstanding that the 

tax liability of such corporation should 

have been computed on the basis of a 

separate return, or as a member of 

another consolidated group, under the 

provisions of § 1.1502–75; and 

(iii) Except as indicated otherwise, a 

successor of any of the foregoing 

corporations. 

(6) Completed year. A completed year 

is a consolidated return year that has 


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ended, or will end at the time of the 

referenced event. 

(7) Current year. A current year is a 

consolidated return year that is not a 

completed year. 

(c) Identity of the agent—(1) In 

general. Except as otherwise provided 

in this section, the agent for a current 

year is the common parent and the agent 

for a completed year is the common 

parent at the close of the completed year 

or its default successor, if any. Except as 

specifically provided otherwise in this 

paragraph (c), any entity that is an agent 

pursuant to paragraph (c)(3) of this 

section (agent following group structure 

change), paragraph (c)(5) of this section 

(agent designated by agent terminating 

without default successor), paragraph 

(c)(6) of this section (agent designated 

by Commissioner), or paragraph (c)(7) of 

this section (agent designated by 

resigning agent) of this section (and any 

entity that subsequently serves as agent) 

acts as an agent for and under the same 

terms and conditions that apply to a 

common parent. For example, such an 

agent would generally be able to 

designate an agent if it terminates 

without a default successor; however, 

an entity that became agent pursuant to 

a designation by the Commissioner 

under paragraphs (c)(6)(i)(A)(2), (3), or 

(4) of this section is not permitted to 

designate an agent if it terminates 

without a default successor. Other 

special rules described in this paragraph 

(c) apply. 

(2) Purported agent. If any entity files 

a consolidated return, or takes any other 

action related to the tax liability for the 

consolidated return year, purporting to 

be the agent but is subsequently 

determined not to have been the agent 

with respect to the claimed group, that 

entity is treated, to the extent necessary 

to avoid prejudice to the Commissioner, 

as if it were the agent. 

(3) New common parent after a group 

structure change. If the group continues 

in existence after a group structure 

change (as described in § 1.1502– 

33(f)(1)), the former common parent is 

the agent until the group structure 

change, and the new common parent 

becomes the agent after the group 

structure change. Following the group 

structure change, the new common 

parent is the agent with respect to the 

entire current year (including the period 

before the group structure change) and 

the former common parent is no longer 

the agent for that year. However, actions 

taken by the former common parent as 

the agent before the group structure 

change are not nullified when the new 

common parent becomes the agent with 

respect to the entire consolidated return 

year. Following the group structure 

change, the new common parent 

continues as the agent for succeeding 

years subject to the rules of this section. 

(4) Notification by default successor— 

(i) In general. Failure to provide notice 

to the Commissioner pursuant to this 

paragraph (c)(4)(i) does not invalidate 

an entity’s status as the default 

successor. However, until the 

Commissioner receives notification in 

writing that an entity is the default 

successor— 

(A) Any notice of deficiency or other 

communication mailed to the 

predecessor agent, even if no longer in 

existence, is considered as having been 

properly mailed to the agent; and 

(B) The Commissioner is not required 

to act on any communication 

(including, for example, a claim for 

refund) submitted on behalf of the group 

by any person (including the default 

successor) other than the predecessor 

agent. 

(ii) Conversions and continuances. 

For purposes of the notice requirements 

under paragraph (c)(4)(i) of this section, 

any entity that results from the agent’s 

conversion or continuance by operation 

of state law and that qualifies as a 

default successor under paragraph (b)(4) 

of this section is treated as a default 

successor for purposes of the notice 

provisions of paragraph (c)(4)(i) of this 

section, even if applicable state or local 

law may treat the converted or 

continued entity as not ceasing to exist. 

(5) Designation by terminating 

agent—(i) In general. Prior to the 

termination of its existence without a 

default successor, an agent may 

designate an entity described in 

paragraph (c)(5)(ii) of this section to act 

as agent for any completed year. This 

designation is effective upon the 

termination of the designating agent’s 

existence. However, this paragraph 

(c)(5) does not apply to, and no 

designation can be made by, an agent 

that was designated by the 

Commissioner under paragraphs 

(c)(6)(i)(A)(2), (3), or (4) of this section, 

or any successor of such an agent; in 

such a case, the terminating agent 

should request that the Commissioner 

designate an agent pursuant to 

paragraph (c)(6)(i)(B) of this section. 

(ii) Permissible agents—(A) The 

terminating agent may designate as 

agent a member of the group during any 

part of the completed year, or an entity 

(whether domestic or foreign) that is a 

successor of such a member, including 

an entity that will become a successor 

at the time the agent’s existence 

terminates. 

(B) The terminating agent may not 

designate as agent any entity that was 

previously replaced as agent by the 

Commissioner pursuant to paragraphs 

(c)(6)(i)(A)(2), (3), or (4) of this section, 

or any successor of such an agent. 

However, the terminating agent may 

submit a request pursuant to paragraph 

(c)(6)(i)(B) of this section that the 

Commissioner designate such an entity 

as agent. 

(iii) Notification of designation. The 

terminating agent must notify the 

Commissioner in writing of its 

designation of an entity as agent 

pursuant to paragraph (c)(5)(i) of this 

section and provide a statement 

executed by the designated entity 

acknowledging that it will serve as the 

agent for each specified completed year 

for which it is designated as the agent. 

If the designated entity was not itself a 

member of the group during any 

specified year (because it is a successor 

of a member), the notification must 

include a statement acknowledging that 

the designated entity is or will be 

primarily liable for the tax liability for 

the specified completed year as a 

successor of a member. 

(iv) Failure to designate an agent. If 

the agent terminates without a default 

successor, and no agent is designated 

pursuant to this paragraph (c)(5)— 

(A) Any notice of deficiency or other 

communication mailed to the agent, 

even if no longer in existence, is 

considered as having been properly 

mailed to the agent; and 

(B) The Commissioner is not required 

to act on any communication 

(including, for example, a claim for 

refund) submitted on behalf of the group 

by any person. 

(6) Designation by the 

Commissioner—(i) In general. The 

Commissioner has the authority to 

designate an entity to act as the agent 

under the circumstances prescribed in 

this paragraph (c)(6)(i). The designated 

agent for a completed year must be an 

entity described in paragraph 

(c)(5)(ii)(A) of this section when the 

designation becomes effective. The 

designated agent for a current year must 

be a member of the group when the 

designation becomes effective. If, 

pursuant to this paragraph (c)(6), the 

Commissioner replaces the common 

parent or another entity as the agent, the 

common parent or other entity, or any 

successor thereof, may not later act as 

the agent unless so designated by the 

Commissioner. 

(A) On Commissioner’s own accord. 

With or without a request from any 

member of the group, the Commissioner 

may designate an entity to act as the 

agent if— 

(1) The agent’s existence terminates, 

other than in a group structure change, 

without there being a default successor 


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and without any designation made 

under paragraph (c)(5)(i) of this section; 

(2) An agent previously designated by 

the Commissioner is no longer a 

member of the group in the current year 

and does not have a default successor 

that is a member of the group; 

(3) The Commissioner believes that 

the agent or its default successor exists 

but such entity has either not timely 

responded to the Commissioner’s 

notices (sent to the last known address 

on file for the entity or left at the usual 

place of business for such entity) or has 

failed to perform its obligations as agent 

as prescribed by the Internal Revenue 

Code (Code) or regulations promulgated 

thereunder; or 

(4) The agent is or becomes a foreign 

entity as a result of any action or 

transaction (including, for example, a 

continuance into a foreign jurisdiction 

or certain inversion transactions subject 

to section 7874 in which a foreign 

parent is treated as a domestic 

corporation). 

(B) Written request from any member. 

At the request of any member, in a 

circumstance not described in 

paragraph (c)(6)(i)(A) of this section, the 

Commissioner may, but is not required 

to, replace an agent previously 

designated under this paragraph (c)(6). 

(ii) Notification by Commissioner. The 

Commissioner will notify the designated 

entity in writing of the Commissioner’s 

designation of the entity as agent 

pursuant to paragraph (c)(6)(i) of this 

section, and the designation will be 

effective as prescribed by the 

Commissioner. The designated entity 

should give notice of the designation by 

the Commissioner pursuant to 

paragraph (c)(6)(i) of this section to each 

member of the group during any part of 

the consolidated return year. However, 

a failure by the designated entity to 

notify any such member of the group 

does not invalidate the designation by 

the Commissioner. 

(iii) Term and effect of designation. 

Unless otherwise provided by the 

Commissioner in the designation, any 

agent designated by the Commissioner 

pursuant to paragraph (c)(6)(i) of this 

section (new agent) is the agent with 

respect to the entire consolidated return 

year for which it is designated and 

successive years, subject to the rules of 

this section. An agent immediately 

preceding a new agent (former agent) 

ceases to be the agent for a particular 

consolidated return year once the new 

agent has been designated for that year, 

but the designation of the new agent 

does not nullify actions taken on behalf 

of the group by the former agent while 

it was agent. If there is more than one 

new agent designated by the 

Commissioner for a consolidated return 

year, the new agent that is designated 

last in time by the Commissioner is the 

agent with respect to the entire 

consolidated return year. A designation 

pursuant to this paragraph (c)(6) is 

effective as prescribed by the 

Commissioner in such designation or 

the Internal Revenue Bulletin (see 

§ 601.601(d)(2)(ii) of this chapter), 

forms, instructions, or other appropriate 

guidance. 

(iv) Request by member of the group 

where agent previously designated by 

the Commissioner is no longer a 

member. If an agent at any time after it 

is designated as agent by the 

Commissioner pursuant to paragraph 

(c)(6)(i) of this section is no longer a 

member of the group for any current 

year, and its default successor, if any, is 

not a member of the group at that time, 

a member of the group, including the 

agent that will cease to be a member, 

should request, in writing, that the 

Commissioner designate a member of 

the group to be the new agent pursuant 

to paragraph (c)(6)(i)(A)(2) of this 

section. Until such a request is made— 

(A) Any notice of deficiency or other 

communication mailed to the agent, 

even if no longer a member, is 

considered as having been properly 

mailed to the agent; and 

(B) The Commissioner is not required 

to act on any communication 

(including, for example, a claim for 

refund) submitted on behalf of the group 

by any person. 

(7) Agent resigns—(i) In general. The 

agent may resign for a completed year 

if— 

(A) It provides written notice to the 

Commissioner that it no longer intends 

to be the agent for that completed year; 

(B) An entity described in paragraph 

(c)(5)(ii)(A) of this section consents, in 

writing, to be the agent with respect to 

that completed year; 

(C) Immediately after its resignation 

takes effect, the resigning agent will not 

be the agent for the current year; and 

(D) The Commissioner does not object 

to the agent’s resignation. 

(ii) Notification by agent that replaces 

agent that resigns. If the Commissioner 

does not object to the agent’s 

resignation, the agent that replaces the 

agent that resigns should give written 

notice that it is the new agent to each 

member of the group for any part of the 

completed year for which it is 

designated the agent. 

(8) Transactions under the Code. 

Notwithstanding section 338(a)(2), a 

target corporation for which an election 

is made under section 338 is not 

deemed to terminate for purposes of this 

section. 

(d) Examples of matters subject to 

agency. With respect to any 

consolidated return year for which it is 

the agent— 

(1) The agent makes any election (or 

similar choice of a permissible option) 

that is available to a subsidiary in the 

computation of its separate taxable 

income, and any change in an election 

(or similar choice of a permissible 

option) previously made by or for a 

subsidiary, including, for example, a 

request to change a subsidiary’s method 

or period of accounting; 

(2) All correspondence concerning the 

income tax liability for the consolidated 

return year is carried on directly with 

the agent; 

(3) The agent files for all extensions 

of time, including extensions of time for 

payment of tax under section 6164, and 

any extension so filed is considered as 

having been filed by each member; 

(4) The agent gives waivers, gives 

bonds, and executes closing agreements, 

offers in compromise, and all other 

documents, and any waiver or bond so 

given, or agreement, offer in 

compromise, or any other document so 

executed, is considered as having also 

been given or executed by each member; 

(5) The agent files claims for refund, 

and any refund is made directly to and 

in the name of the agent and discharges 

any liability of the Government to any 

member with respect to such refund; 

(6) The agent takes any action on 

behalf of a member of the group with 

respect to a foreign corporation 

including, for example, elections by, 

and changes to the method of 

accounting of, a controlled foreign 

corporation in accordance with § 1.964– 

1(c)(3); 

(7) Notices of claim disallowance are 

mailed only to the agent, and the 

mailing to the agent is considered as a 

mailing to each member; 

(8) Notices of deficiencies are mailed 

only to the agent (except as provided in 

paragraph (f)(3) of this section), and the 

mailing to the agent is considered as a 

mailing to each member; 

(9) Notices of final partnership 

administrative adjustment under section 

6223 with respect to any partnership in 

which a member of the group is a 

partner may be mailed to the agent, and, 

if so, the mailing to the agent is 

considered as a mailing to each member 

that is a partner entitled to receive such 

notice (for other rules regarding 

partnership proceedings, see paragraph 

(f)(2)(iii) of this section); 

(10) The agent files petitions and 

conducts proceedings before the United 

States Tax Court, and any such petition 

is considered as also having been filed 

by each member; 


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(11) Any assessment of tax may be 

made in the name of the agent, and an 

assessment naming the agent is 

considered as an assessment with 

respect to each member; and 

(12) Notice and demand for payment 

of taxes is given only to the agent, and 

such notice and demand is considered 

as a notice and demand to each member. 

(e) Matters reserved to subsidiaries. 

Except as provided in this paragraph (e) 

and paragraph (f)(2) of this section, no 

subsidiary (unless it is or becomes an 

agent pursuant to paragraph (c) of this 

section) has authority to act for or to 

represent itself in any matter related to 

the tax liability for the consolidated 

return year. The following matters, 

however, are reserved exclusively to 

each subsidiary— 

(1) The making of the consent 

required by § 1.1502–75(a)(1); 

(2) Any action with respect to the 

subsidiary’s liability for a federal tax 

other than the income tax imposed by 

chapter 1 of the Code (including, for 

example, employment taxes under 

chapters 21 through 25 of the Code, and 

miscellaneous excise taxes under 

chapters 31 through 47 of the Code); and 

(3) The making of an election to be 

treated as a Domestic International Sales 

Corporation under § 1.992–2. 

(f) Dealings with members—(1) 

Identifying members in notice of a lien. 

Notwithstanding any other provisions of 

this section, any notice of a lien, any 

levy, or any other proceeding to collect 

the amount of any assessment, after the 

assessment has been made, must name 

the entity from which such collection is 

to be made. 

(2) Direct dealing with a member—(i) 

Several liability. The Commissioner 

may, upon issuing to the agent written 

notice that expressly invokes the 

authority of this provision, deal directly 

with any member of the group with 

respect to its liability under § 1.1502–6 

for the consolidated tax of the group, in 

which event such member has sole 

authority to act for itself with respect to 

that liability. However, if the 

Commissioner believes or has reason to 

believe that the existence of the agent 

has terminated without an agent being 

identified under this section, the 

Commissioner may, if the Commissioner 

deems it advisable, deal directly with 

any member with respect to that 

member’s liability under § 1.1502–6 

without issuing notice to any other 

entity. 

(ii) Information requests. The 

Commissioner may, upon issuing to the 

agent written notice, request 

information relevant to the consolidated 

tax liability from any member of the 

group. However, if the Commissioner 

believes or has reason to believe that the 

existence of the agent has terminated 

without an agent being identified under 

this section, the Commissioner may 

request such information from any 

member of the group without issuing 

notice to any other entity. 

(iii) Members as partners in 

partnerships subject to the provisions of 

the Code. Except as otherwise provided 

in this paragraph (f)(2)(iii), the general 

rule of paragraph (a)(1) of this section 

applies so that the agent is the agent for 

any subsidiary member that for any part 

of the consolidated return year is a 

partner in a partnership subject to the 

provisions of sections 6221 through 

6234 of the Code (as originally enacted 

by the Tax Equity and Fiscal 

Responsibility Act of 1982 and 

subsequently amended) and the 

accompanying regulations (TEFRA 

partnership). However— 

(A) Any subsidiary or any disregarded 

entity owned by a subsidiary that is 

designated as tax matters partner of a 

TEFRA partnership will act in its own 

name and perform its responsibilities 

under sections 6221 through 6234 and 

the accompanying regulations without 

requiring any action by the agent (but 

see paragraph (d)(9) of this section 

regarding the mailing of a final 

partnership administrative adjustment 

to the agent); and 

(B) The Commissioner may at any 

time communicate directly with a 

subsidiary or a disregarded entity 

owned by a subsidiary that is a partner 

in a TEFRA partnership, without having 

to deal with each member separately 

pursuant to paragraph (f)(2)(i) of this 

section, whenever the Commissioner 

determines that such direct 

communication will facilitate the 

conduct of an examination, appeal, or 

settlement with respect to the 

partnership. 

(3) Copy of notice of deficiency to 

entity that has ceased to be a member 

of the group. A subsidiary that ceases to 

be a member of the group during or after 

a consolidated return year may file a 

written notice of that fact with the 

Commissioner and request a copy of any 

notice of deficiency with respect to the 

tax for a consolidated return year during 

which it was a member, or a copy of any 

notice and demand for payment of such 

deficiency, or both. Such filing does not 

limit the scope of the agency of the 

agent provided for in this section. Any 

failure by the Commissioner to comply 

with such request does not limit the 

subsidiary’s tax liability under § 1.1502– 

6. 

(g) Examples. Unless otherwise 

indicated, all entities are domestic and 

have a calendar year taxable year, and 

each of P, S, S–1, S–2, S–3, T, V, W, 

W–1, Y, Z, and Z–1 is a corporation. For 

none of the consolidated return years at 

issue does the Commissioner exercise 

the authority under paragraph (f)(2) of 

this section to deal with any member 

separately. Any surviving entity in a 

merger is either a successor as described 

in paragraph (b)(1) of this section, or a 

default successor as described in 

paragraph (b)(4) of this section, as the 

case may be. Except as otherwise 

indicated, no agent will be replaced 

under paragraph (c)(6) of this section or 

will resign under paragraph (c)(7) of this 

section, and all communications to and 

from the Commissioner are made in 

accordance with procedures prescribed 

by the Commissioner. 

Example 1. Disposition of all group 

members where the agent remains the agent. 

(i) Facts. As of January 1 of Year 1, P is the 

common parent and agent for the P 

consolidated group, consisting of P and its 

two subsidiaries, S and S–1. P files 

consolidated returns for the P group in Years 

1 and 2. On December 31 of Year 1, P sells 

all the stock of S–1 to X. On December 31 of 

Year 2, P distributes all the stock of S to P’s 

shareholders. P files a separate return for 

Year 3. 

(ii) Analysis. Although the consolidated 

group terminates after Year 2 under § 1.1502– 

75(d)(1) and P is no longer the common 

parent nor the agent for years after Year 2, 

P remains the agent for the P group for Years 

1 and 2 under paragraph (a)(2) of this section. 

Accordingly, for as long as P remains in 

existence, P is the agent for the P group 

under paragraphs (a)(1) and (2) and (c)(1) of 

this section for Years 1 and 2. 

Example 2. Acquisition of the agent by 

another group where the agent remains the 

agent. (i) Facts. The facts are the same as in 

Example 1, except on January 1 of Year 3, all 

of the outstanding stock of P is acquired by 

Y, which is the common parent and agent of 

the Y consolidated group. P thereafter joins 

in the Y group’s consolidated return as a 

member of the Y group. 

(ii) Analysis. Although P is a member of 

the Y group in Year 3 and succeeding years, 

P remains the agent for the P group for Years 

1 and 2 under paragraph (a)(2) of this section. 

Accordingly, for as long as P remains in 

existence, P is the agent for the P group 

under paragraphs (a)(1) and (2) and (c)(1) of 

this section for Years 1 and 2. 

Example 3. Reverse triangular merger of 

the agent where the agent remains the agent. 

(i) Facts. As of January 1 of Year 1, P is the 

common parent and agent for the P 

consolidated group consisting of P and its 

two subsidiaries, S and S–1. P files 

consolidated returns for the P group in Years 

1 and 2. On March 1 of Year 3, W–1, a 

subsidiary of W, merges into P in a reverse 

triangular merger qualifying as a 

reorganization under section 368(a)(1)(A) and 

(a)(2)(E). P survives the merger with W–1. 

The transaction constitutes a reverse 

acquisition under § 1.1502–75(d)(3)(i) 

because P’s shareholders receive more than 

50 percent of W’s stock in exchange for all 


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of P’s stock. The transaction is therefore a 

group structure change as described in 

paragraph (c)(3) of this section. 

(ii) Analysis. Because the transaction 

constitutes a reverse acquisition that results 

in a group structure change, the P group is 

treated as remaining in existence with W as 

its common parent and agent. Under 

paragraphs (a)(1) and (2) and (c)(1) of this 

section, P remains the agent for the P group 

for Years 1 and 2 for as long as P remains 

in existence, even though the P group 

continues with W as its new common parent 

pursuant to § 1.1502–75(d)(3)(i). Until the 

merger of W–1 and P on March 1 of Year 3, 

P is the agent for the P group for Year 3. From 

the time of that merger, W, as common parent 

of the P group, becomes the agent for the P 

group with respect to all of Year 3 (including 

the period through March 1) and succeeding 

consolidated return years. The actions taken 

by P before the merger as agent for the P 

group for Year 3 are not nullified by the fact 

that W becomes the agent for all of Year 3. 

Example 4. Reverse triangular merger of 

the agent—subsequent distribution of agent 

where the agent remains the agent. (i) Facts. 

The facts are the same as in Example 3, 

except that on April 1 of Year 4, in a 

transaction unrelated to the March 1, Year 3 

reverse acquisition, P distributes the stock of 

its subsidiaries S and S–1 to W, and W then 

distributes the stock of P to the W 

shareholders. 

(ii) Analysis. Although P is no longer a 

member of the P group after the Year 4 

distribution, P remains the agent for the P 

group under paragraphs (a)(1) and (2) and 

(c)(1) of this section for Years 1 and 2 for as 

long as P remains in existence. 

Example 5. Agent Resigns. (i) Facts. The 

facts are the same as in Example 4, except 

that on August 1 of Year 4, P provides 

written notice to the Commissioner that it 

resigns as the agent for Years 1 and 2. 

Included with the written notice is a 

statement executed by either S or S–1 

consenting to be the agent for the P group for 

Years 1 and 2. 

(ii) Analysis. Pursuant to paragraph (c)(7) 

of this section, because P is not the agent in 

Year 4, the current year, it will not be the 

agent immediately after its resignation takes 

effect. Accordingly, if the Commissioner does 

not object to P’s resignation, P may resign 

with respect to Years 1 and 2, both of which 

are completed years, and either S or S–1, 

each an entity described in paragraph 

(c)(5)(ii)(A) of this section, can be the agent 

for the P group for Years 1 and 2 if it 

consents in writing. W cannot be the agent 

for the P group for Years 1 and 2 because it 

is not an entity described in paragraph 

(c)(5)(ii)(A) of this section with respect to the 

P group for Years 1 and 2. 

Example 6. Qualified stock purchase and 

section 338 election where the agent remains 

the agent. (i) Facts. As of January 1 of Year 

1, P is the common parent and agent for the 

P consolidated group consisting of P and its 

two subsidiaries, S and S–1. P files 

consolidated returns for the P group in Years 

1 and 2. On March 31 of Year 2, V purchases 

the stock of P in a qualified stock purchase 

(within the meaning of section 338(d)(3)), 

and V makes a timely election pursuant to 

section 338(g) with respect to P. 

(ii) Analysis. Although section 338(a)(2) 

provides that P is treated as a new 

corporation as of the beginning of the day 

after the acquisition date for purposes of 

subtitle A, paragraph (c)(8) of this section 

provides that P’s existence is not deemed to 

terminate for purposes of this section 

notwithstanding the general rule of section 

338(a)(2). Accordingly, new P is the agent for 

the P group for Year 1 and the period ending 

March 31 of Year 2 regardless of the election 

under section 338(g). 

Example 7. Change in the agent’s federal 

income tax classification to a partnership 

and the resulting partnership continues as 

the agent. (i) Facts. P, a State M limited 

liability partnership with two partners that is 

formed on January 1 of Year 1, elects 

pursuant to § 301.7701–3(c) of this chapter to 

be an association taxable as a corporation for 

federal income tax purposes effective on the 

date of formation. P is the common parent 

and agent for the P consolidated group 

consisting of P and its two subsidiaries, S 

and S–1. P files consolidated returns for the 

P group in Years 1 through 6. On January 1 

of Year 7, P elects pursuant to § 301.7701– 

3(c) of this chapter to be treated as a 

partnership. P remains in existence under 

applicable law. 

(ii) Analysis. The P group terminates and 

P is no longer the common parent of a 

consolidated group after its election to be 

treated as a partnership for federal income 

tax purposes. Because P remains in existence 

under applicable law, P is the agent for the 

P group under paragraphs (a)(1) and (2) and 

(c)(1) of this section for Years 1 through 6. 

If P merged into a foreign partnership instead 

of converting to a partnership, the foreign 

partnership would be P’s default successor 

and agent for the P group for Years 1 through 

6. See paragraphs (b)(4) and (c)(1) of this 

section. 

Example 8. Forward triangular merger of 

agent—successor as default successor. (i) 

Facts. As of January 1 of Year 1, P is the 

common parent and agent for the P 

consolidated group consisting of P and its 

two subsidiaries, S and S–1. P files a 

consolidated return for the P group for Year 

1. On January 1 of Year 3, P merges with and 

into Z–1, a subsidiary of Z, in a forward 

triangular merger qualifying as a 

reorganization under section 368(a)(1)(A) and 

(a)(2)(D). The transaction constitutes a 

reverse acquisition under § 1.1502–75(d)(3)(i) 

resulting in a group structure change as 

described in paragraph (c)(3) of this section 

because P’s shareholders receive more than 

50 percent of Z’s stock in exchange for all of 

P’s stock. Z–1, the corporation that survives 

the merger and the successor of P, is the 

default successor for the P group for Years 1 

and 2. 

(ii) Analysis. Although Z is the new 

common parent for the P group (which 

continues pursuant to § 1.1502–75(d)(3)(i)) 

for consolidated return years after the merger, 

and, as a consequence, Z is the new agent as 

a result of this group structure change, P may 

not designate an agent for Years 1 or 2 

because Z–1 is P’s default successor and the 

agent for the P group for Years 1 and 2. 

Z–1 must file the P group’s consolidated 

return for Year 2. See paragraphs (b)(4) and 

(c)(1) of this section. 

Example 9. Merger of the agent into a 

disregarded entity in exchange for stock of 

owner in a transaction qualifying as a 

reorganization under the Code where 

successor is the default successor. (i) Facts. 

As of January 1 of Year 1, P is the common 

parent and agent for the P consolidated group 

consisting of P and its two subsidiaries, S 

and S–1. P files a consolidated return for the 

P group in Year 1. On January 1 of Year 2, 

the shareholders of P form Y, a State M 

corporation. On the same date, Y forms Y– 

1, a State M limited liability company that is 

a disregarded entity (as defined in paragraph 

(b)(3) of this section) for federal income tax 

purposes, and P merges into Y–1 under State 

M law. In the merger, the P shareholders 

receive all of the Y stock. Y (through Y–1) is 

treated as acquiring the assets of P in a 

transaction qualifying as a reorganization of 

P into Y under section 368(a)(1)(F), and the 

P group continues under § 1.1502–75(d)(2) 

with Y as the common parent and, as a 

consequence, the transaction is treated as a 

group structure change as described in 

paragraph (c)(3) with Y as the P group’s agent 

for Year 2. In Year 4, the Commissioner seeks 

to extend the period of limitations on 

assessment with respect to Year 1 of the P 

group. In Year 5, the Commissioner seeks to 

extend the period of limitations on 

assessment with respect to Year 2 of the Y 

group (formerly the P group). 

(ii) Analysis. (A) Year 1 extension. As a 

result of the January 1, Year 2 merger, Y–1 

is the default successor of P, and the agent 

for the P group for Year 1. See paragraphs 

(b)(4) and (c)(1) of this section. Therefore, Y– 

1 is the only party that can sign the extension 

with respect to the P group for Year 1. 

(B) Year 2 extension. Because the January 

1, Year 2 merger qualified as a reorganization 

under section 368(a)(1)(F), the P group 

remains in existence with Y as the common 

parent. Therefore, Y, the common parent of 

the P group after the merger, is the P group’s 

agent for all of Year 2 (see paragraph (c)(3) 

of this section) and is the only party that can 

sign the extension with respect to the P group 

for that year and in succeeding years. See 

paragraphs (a)(1) and (2) and (c)(1) of this 

section. 

Example 10. Designation of agent where 

there is no default successor. (i) Facts. P is 

incorporated under the laws of State X. Fifty 

percent of its stock is owned at all times by 

A, an individual, and 50 percent by BCD, a 

partnership. On January 1 of Year 1, P forms 

two subsidiaries, S and T, and becomes the 

common parent of the P group. P files 

consolidated returns for the P group 

beginning in Year 1 and is the agent for the 

P consolidated group beginning on January 1 

of Year 1. On November 30 of Year 3, P 

dissolves under X law. Under X law, A and 

BCD are primarily liable for the federal 

income tax liability of dissolved corporation 

P. State X law allows the officers of a 

dissolved corporation to perform certain 

actions incident to the winding up of its 

affairs after its dissolution, including the 

filing of tax returns. 

(ii) Analysis. Upon P’s dissolution, there is 

no default successor to P, pursuant to 

paragraph (b)(4) of this section, because there 

are two successors. Prior to its dissolution on 


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November 30 of Year 3, pursuant to 

paragraph (c)(5)(i) of this section, P may 

designate an agent for the P group for Years 

1 and 2 and the short taxable year ending on 

November 30 of Year 3, to be effective upon 

P’s dissolution. P may designate S or T, 

pursuant to paragraph (c)(5)(ii)(A) of this 

section (because they are members of the 

former group), or BCD (because it is an entity 

that is a successor to P pursuant to paragraph 

(b)(1) of this section). P cannot designate A 

pursuant to paragraph (c)(5)(ii) of this 

section, because A is not an entity. Under 

paragraph (b)(2) of this section, the officers 

of P cannot designate an agent for the P group 

after P dissolves on November 30 of Year 3, 

notwithstanding the winding up provisions 

of State X law. Accordingly, P should 

designate an agent prior to its dissolution to 

ensure that there is an agent authorized to 

file the short Year 3 consolidated return. If 

P does not designate an agent prior to 

dissolution under paragraph (c)(5)(i) of this 

section, the Commissioner may designate an 

agent under paragraph (c)(6)(i)(A)(1) of this 

section from among S, T, or BCD, upon their 

request or otherwise. If any of S, T, A, or BCD 

realizes that P has dissolved without 

designating an agent, it should request, in 

writing, a designation of an agent by the 

Commissioner as soon as possible. 

Example 11. Commissioner designates a 

new agent. (i) Agent fails to fulfill its 

obligations. (A) Facts. P is the common 

parent and agent for the P consolidated group 

consisting of P and its two subsidiaries, 

S–1 and S–2, each a State Y corporation. P 

files a consolidated return for the P group in 

Year 1. In Year 2, S–3, also a State Y 

corporation, joins the P group. The P group 

continues as a consolidated group in Years 2, 

3, and 4. As of Year 4, P has failed to file 

the P group consolidated returns for Years 2 

and 3. 

(B) Analysis. (1) Scope of designation. 

Because P failed to perform its obligations as 

agent as prescribed by federal tax law, the 

Commissioner may, under the authority of 

paragraph (c)(6)(i)(A)(3) of this section, on 

his own accord, with or without a written 

request from a member, designate another 

entity described in paragraph (c)(6)(i) of this 

section to act as the agent for not just Years 

2 and 3, but any of Years 1 through 4. 

(2) Year 1 designation. The Commissioner 

may designate either S–1 or S–2, both of 

which are entities described in paragraphs 

(c)(6)(i) and (c)(5)(ii)(A) of this section, to act 

as the agent for the P group for Year 1. 

Because S–3 was not a member of the group 

in Year 1, it is not an entity described in 

paragraphs (c)(6)(i) and (c)(5)(ii)(A) of this 

section for Year 1 and therefore cannot be the 

agent for Year 1. Unless otherwise provided 

in the designation, the designation of either 

S–1 or S–2 will also be effective for Years 2, 

3, and 4 and all succeeding consolidated 

return years of the group. 

(3) Year 2 designation. The Commissioner 

may designate either S–1, S–2, or S–3, all of 

which are entities described in paragraph 

(c)(5)(ii)(A) of this section, to act as the agent 

for the P group for Year 2. Unless otherwise 

provided in the designation, the designation 

of either S–1, S–2, or S–3 will also be 

effective for Years 3 and 4 and all succeeding 

consolidated return years of the group. 

(4) Year 3 designation. The Commissioner 

may designate any of S–1, S–2, or S–3 as the 

agent for Year 3. Unless otherwise provided 

in the designation, the designation of either 

S–1, S–2, or S–3 will also be effective for 

Year 4 and all succeeding consolidated 

return years of the group. 

(5) Year 4 designation. The Commissioner 

may designate any of S–1, S–2, or S–3 as the 

agent for Year 4. Unless otherwise provided 

in the designation, the designation of either 

S–1, S–2, or S–3 will also be effective for all 

succeeding consolidated return years of the 

group. 

(ii) Member requests replacement of 

designated agent. (A) Facts. The facts are the 

same as in paragraph (i)(A) of this Example 

11, except that in Year 4 the Commissioner 

designates S–1 as agent for Years 1 and 

succeeding years to replace P for P’s failure 

to fulfill its obligations. After receiving 

notification that S–1 has been designated, 

S–3 submits a request in Year 4, pursuant to 

paragraph (c)(6)(i)(B) of this section, that the 

Commissioner designate S–2 as the agent 

because S–1 does not have ready access to 

the group’s books and records, which are 

located in another state and are in the 

possession of S–2. 

(B) Analysis. In light of S–3’s request, the 

Commissioner may, under the authority of 

paragraph (c)(6)(i)(B) of this section, 

designate either S–2 (for all or any years) or 

S–3 (for any year or years other than Year 1) 

as agent in lieu of the previously designated 

agent, S–1. However, notwithstanding S–3’s 

request, the Commissioner is not required to 

replace S–1 as agent for any of the 

consolidated return years for which S–1 was 

designated. 

Example 12. Designated agent ceases to be 

a member of the group. (i) Facts. The facts 

are the same as in paragraph (ii)(A) of 

Example 11, except that in Year 4 no member 

requests that the Commissioner replace S–1, 

which accordingly continues to be the agent 

for the P group in Year 5 pursuant to 

paragraph (c)(6)(iii) of this section. On May 

2 of Year 5, S–1 converts under State Y law 

into S–1 LLC, a limited liability company 

that is an entity that is treated as a 

disregarded entity (as defined in paragraph 

(b)(3) of this section) and, as a consequence, 

is no longer a member of the P group after 

the conversion. 

(ii) Analysis for completed years. S–1 LLC, 

the disregarded entity resulting from the 

conversion, becomes S–1’s default successor. 

As such, S–1 LLC is the agent for Years 

1–4. 

(iii) Analysis for current and succeeding 

years. S–1 is an agent designated by the 

Commissioner pursuant to paragraph 

(c)(6)(i)(A)(3) of this section. Because S–1 is 

no longer a member of the P group after May 

2 of Year 5, S–1 is the agent for the P group 

for Year 5 only while it remains a member 

(see paragraphs (c)(6)(i) and (iii) of this 

section). According to paragraph (c)(6)(i) of 

this section, although S–1 LLC is S–1’s 

default successor, it is not a member of the 

group for the current year and therefore 

cannot be its agent. Furthermore, S–1 cannot 

designate an agent for Year 5 under 

paragraph (c)(5)(i) of this section because that 

paragraph pertains only to designations for 

completed years for which there is no default 

successor. In addition, S–1 cannot designate 

an agent for Year 5 under paragraph (c)(5)(i) 

of this section because S–1 was previously 

designated by the Commissioner under 

paragraph (c)(6)(i)(A)(3) of this section. 

(iv) Member’s notice to Commissioner for 

Commissioner to designate a member of the 

group for a current year. A member of the 

group in Year 5 should request that the 

Commissioner designate, pursuant to 

paragraphs (c)(6)(i)(A)(2) and (c)(6)(iv) of this 

section, another member of the P group to be 

the agent of the group for Year 5. The 

Commissioner may then, pursuant to 

paragraph (c)(6)(i)(A)(2) of this section, 

designate either S–2, S–3, or P to be the agent 

for the P group and, once so designated, that 

member will be, effective on May 3 of Year 

5, the agent for all of Year 5 and for 

succeeding years (subject to the rules of this 

section) pursuant to paragraph (c)(6)(iii) of 

this section. No actions taken by S–1 on 

behalf of the P group through May 2, Year 5, 

are nullified by the Commissioner’s 

designation of another agent even though the 

agent so designated will be the agent for all 

of Year 5. 

Example 13. Fraudulent conveyance of 

assets. (i) Facts. As of January 1 of Year 1, 

P is the common parent and agent for the P 

consolidated group consisting of P and its 

two subsidiaries, S and S–1. On March 15 of 

Year 2, P files a consolidated return that 

includes the income of S and S–1 for Year 

1. On December 1 of Year 2, S–1 transfers 

assets having a fair market value of $100x to 

U in exchange for $10x. This transfer of 

assets for less than fair market value 

constitutes a fraudulent conveyance under 

applicable state law. On March 1 of Year 5, 

P executes a waiver extending to December 

31 of Year 6 the period of limitations on 

assessment with respect to the P group’s Year 

1 consolidated return. On February 1 of Year 

6, the Commissioner issues a notice of 

deficiency to P asserting a deficiency of $30x 

for the P group’s Year 1 consolidated tax 

liability. P does not file a petition for 

redetermination in the Tax Court, and the 

Commissioner makes a timely assessment 

against the P group. P, S, and S–1 are all 

insolvent and are unable to pay the 

deficiency. On February 1 of Year 8, the 

Commissioner sends a notice of transferee 

liability to U, which does not file a petition 

in the Tax Court. On August 1 of Year 8, the 

Commissioner assesses the amount of the P 

group’s deficiency against U. Under section 

6901(c), the Commissioner may assess U’s 

transferee liability within one year after the 

expiration of the period of limitations against 

the transferor, S–1. By operation of section 

6213(a) and 6503(a), the issuance of the 

notice of deficiency to P and the expiration 

of the 90-day period for filing a petition in 

the Tax Court have the effect of further 

extending by 150 days the P group’s 

limitations period on assessment from the 

previously extended date of December 31 of 

Year 6 to May 30 of Year 7. 

(ii) Analysis. Pursuant to paragraph (a)(1) 

of this section, the waiver executed by P on 

March 1 of Year 5 to extend the period of 

limitations on assessment to December 31 of 

Year 6 and the further extension of the P 


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group’s limitations period to May 30 of Year 

7 (by operation of sections 6213(a) and 

6503(a)) have the derivative effect of 

extending the period of limitations on 

assessment of U’s transferee liability to May 

30 of Year 8. By operation of section 6901(f), 

the issuance of the notice of transferee 

liability to U and the expiration of the 90-day 

period for filing a petition in the Tax Court 

have the effect of further extending the 

limitations period on assessment of U’s 

liability as a transferee by 150 days, from 

May 30 of Year 8 to October 27 of Year 8. 

Accordingly, the Commissioner may send a 

notice of transferee liability to U at any time 

on or before May 30 of Year 8 and assess the 

unpaid liability against U at any time on or 

before October 27 of Year 8. The result would 

be the same even if S–1 ceased to exist before 

March 1 of Year 5, the date P executed the 

waiver. 

Example 14. Consent to extend the statute 

of limitations for a partnership where a 

member of the consolidated group is a 

partner of such partnership subject to the 

provisions of the Code and the tax matters 

partner is not a member of the group. (i) 

Facts. P is the common parent and agent for 

the P consolidated group consisting of P and 

its two subsidiaries, S and S–1. The P group 

has a November 30 fiscal year end and P files 

consolidated returns for the P group for the 

years ending November 30, Year 1 and 

November 30, Year 2. S–1 is a partner in the 

PRS partnership, which is subject to the 

provisions of sections 6221 through 6234. 

PRS has a calendar year end and A, an 

individual, is the tax matters partner of the 

PRS partnership. PRS files a partnership 

return for the year ending December 31, Year 

1. On January 10, Year 5, A, as the tax 

matters partner for the PRS partnership, 

executes a consent to extend the period for 

assessment of partnership items of PRS for all 

partners, and the Commissioner co-executes 

the consent on the same day for the year 

ending December 31, Year 1. 

(ii) Analysis. A’s consent to extend the 

statute of limitations for the partnership 

items of PRS partnership for the year ending 

December 31, Year 1, extends the statute of 

limitations with respect to the partnership 

items for all members of the P group, 

including P, S, and S–1 for the consolidated 

return year ending November 30, Year 2. This 

is because S–1 is a partner in the PRS 

partnership for which A, the tax matters 

partner for the PRS partnership, consents, 

pursuant to section 6229(b)(1)(B), to extend 

the statute of limitations for the year ending 

December 31, Year 1. However, under 

paragraph (f)(2)(iii) of this section, such 

agreement with respect to the statute of 

limitations for the PRS partnership for the 

year ending December 31, Year 1 does not 

obviate the need to obtain a consent from P, 

the agent for the P consolidated group, to 

extend the statute of limitations for the P 

consolidated group for the P group’s 

consolidated return years ending November 

30, Year 1 and November 30, Year 2 

regarding any items other than partnership 

items or affected items of the PRS 

partnership. 

Example 15. Contacting subsidiary member 

in order to facilitate the conduct of an 

examination, appeal, or settlement where a 

member of the consolidated group is a 

partner of a partnership subject to the 

provisions of the Code. (i) Facts. P is the 

common parent and agent for the P 

consolidated group consisting of P and its 

two subsidiaries, S and S–1. The P group has 

a November 30 fiscal year end, and P files 

consolidated returns for the P group for the 

years ending November 30, Year 1 and 

November 30, Year 2. S–1 is a partner in the 

PRS partnership, which is subject to the 

provisions of sections 6221 through 6234. 

PRS has a calendar year end and A, an 

individual, is the tax matters partner of the 

PRS partnership. PRS files a partnership 

return for the year ending December 31, Year 

1. The Commissioner, on January 10, Year 4, 

in the course of an examination of the PRS 

partnership for the year ending December 31, 

Year 1, seeks to obtain information in the 

course of that examination to resolve the 

audit. 

(ii) Analysis. Because the direct contact 

with a subsidiary member of a consolidated 

group that is a partner in a partnership 

subject to the provisions under sections 6221 

through 6234 may facilitate the conduct of an 

examination, appeal, or settlement, the 

Commissioner, under paragraph (f)(2)(iii) of 

this section, may communicate directly with 

either S–1, P, or A regarding the PRS 

partnership without breaking agency 

pursuant to paragraph (f)(2)(i) of this section. 

However, if the Commissioner were instead 

seeking to execute a settlement agreement 

with respect to S–1 as a partner with respect 

to its liability as a partner in PRS 

partnership, P would need to execute such 

settlement agreement for all members of the 

group including the partner subsidiary. 

(h) Cross-reference. For further rules 

applicable to groups that include 

insolvent financial institutions, see 

§ 301.6402–7 of this chapter. 

(i) [Reserved] 

(j) Effective/applicability date—(1) In 

general. The rules of this section apply 

to consolidated return years beginning 

on or after April 1, 2015. For prior years 

beginning before June 28, 2002, see 

§ 1.1502–77A. For prior years beginning 

on or after June 28, 2002, and before 

April 1, 2015, see § 1.1502–77B. 

(2) Application of this section to prior 

years. Notwithstanding paragraph (j)(1) 

of this section, an agent may apply the 

rules of paragraph (c)(7) of this section 

to resign as agent for a completed year 

that began before April 1, 2015. 

§ 1.1502–78 [Amended] 

■ Par. 6. Section 1.1502–78 is amended 

as follows: 

■ 1. Paragraph (a) is amended by 

removing every occurrence of the 

language ‘‘(or substitute agent 

designated under § 1.1502–77(d) for the 

carryback year)’’ and adding ‘‘(or the 

agent determined under § 1.1502–77(c) 

or § 1.1502–77B(d) for the carryback 

year)’’ in its place. 

■ 2. Paragraph (b)(1) is amended by 

removing the language ‘‘(or substitute 

agent designated under § 1.1502–77(d) 

for the carryback year)’’ and adding ‘‘(or 

the agent determined under § 1.1502– 

77(c) or § 1.1502–77B(d) for the 

carryback year)’’ in its place. 

■ 3. Paragraph (c) is amended by 

removing each occurrence of the 

language ‘‘1966’’ and adding ‘‘2003’’ in 

its place; removing the language ‘‘1967’’ 

and adding ‘‘2004’’ in its place; 

removing each occurrence of the 

language ‘‘1968’’ and adding ‘‘2005’’ in 

its place; and removing each occurrence 

of the language ‘‘1969’’ and adding 

‘‘2006’’ in its place. 

PART 602—OMB CONTROL NUMBERS 

UNDER THE PAPERWORK 

REDUCTION ACT 

■ Par. 7. The authority citation for part 

602 continues to read as follows: 

Authority: 26 U.S.C. 7805. 

■ Par. 8. In § 602.101, revise paragraph 

(b) by adding an entry in numerical 

order to the table to read as follows: 

§ 602.101 OMB Control numbers. 

* * * * * 

(b) * * * 

CFR part or section where 

identified and described 

Current OMB 

control No. 

* * * * * 

1.1502–77B .......................... 1545–1699 

* * * * * 

John Dalrymple, 

Deputy Commissioner for Services and 

Enforcement. 

Approved: February 23, 2015. 

Mark D. Mazur, 

Assistant Secretary of the Treasury (Tax 

Policy). 

[FR Doc. 2015–07182 Filed 3–31–15; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[Docket No. USCG–2015–0082] 

RIN 1625–AA09 

Drawbridge Operation Regulation; 

Ontonagon River, Ontonagon, MI 

AGENCY: Coast Guard, DHS. 

ACTION: Final rule. 


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