Source: http://www.irs.gov/irb/2004-06_IRB/ar14.html
Timestamp: 2013-05-18 12:42:23
Document Index: 466368519

Matched Legal Cases: ['art 1', '§1', '§1', '§1', '§1', '§1', 'art 1', '§1', '§1', '§1', '§1', '§1', '§1', '§1', '§1', 'art 1', '§1', '§1', '§1', '§1', '§1', 'art 1']

Internal Revenue Bulletin - February 9, 2004 - REG-126459-03
Internal Revenue Bulletin: 2004-6 February 9, 2004 REG-126459-03
Notice of Proposed Rulemaking; Notice of Proposed Rulemaking by Cross-Reference to Temporary Regulations and Notice of Public
HearingChanges in Computing Depreciation Table of Contents
In this issue of the Bulletin, the IRS is issuing temporary regulations (T.D. 9105) under sections 446(e) and 1016(a)(2) of
the Internal Revenue Code relating to a change in computing depreciation or amortization as well as a change from a nondepreciable
or nonamortizable asset to a depreciable or amortizable asset (or vice versa). The text of those temporary regulations also
serves as the text of these proposed regulations. This document also provides notice of a public hearing on these proposed
Written or electronic comments must be received by April 1, 2004. Outlines of topics to be discussed at the public hearing
scheduled for April 7, 2004, at 10 a.m. must be received by March 17, 2004.
Send submissions to CC:PA:LPD:PR (REG-126459-03), room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station,
4 p.m. to CC:PA:LPD:PR (REG-126459-03), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington,
DC, or sent electronically, via the IRS Internet site at: http://www.irs.gov/regs. FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Sara Logan or Douglas Kim, (202) 622-3110; concerning submissions of comments, the hearing,
and/or to be placed on the building access list to attend the hearing, Sonya Cruse, (202) 622-4693 (not toll-free numbers).
Background Temporary regulations (T.D. 9105) in this issue of the Bulletin amend 26 CFR part 1 relating to sections 167, 446, and 1016
of the Internal Revenue Code (Code). The temporary regulations provide guidance under section 446(e) on whether a change
in computing depreciation or amortization as well as a change from a nondepreciable or nonamortizable asset to a depreciable
or amortizable asset (or vice versa) is a change in method of accounting that requires the consent of the Commissioner.
The text of those temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary
regulations explains the temporary regulations and these proposed regulations.
Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the
Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations and, because these regulations do not
impose on small entities a collection of information requirement, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does
not apply. Therefore, a Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Internal Revenue
Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration
signed original and eight (8) copies) or electronic comments that are submitted timely to the IRS. The IRS and Treasury Department
specifically request comments on the clarity of the proposed rules and how they can be made easier to understand. All comments
will be available for public inspection and copying.
A public hearing has been scheduled for April 7, 2004, beginning at 10:00 a.m. in the Auditorium, 7th Floor, Internal Revenue
Building, 1111 Constitution Avenue, NW, Washington, DC. Due to building security procedures, visitors must enter at the Constitution
about having your name placed on the building access list to attend the hearing, see the FOR FURTHER INFORMATION CONTACT section of this preamble.
an outline of the topics to be discussed and the time to be devoted to each topic (signed original and eight (8) copies) by
March 17, 2004. A period of 10 minutes will be allotted to each person for making comments. An agenda showing the scheduling
§1.167(e)-1 Change in method. (a) [The text of the proposed amendment to §1.167(e)-1(a) is the same as the text of §1.167(e)-1T(a) published elsewhere in
* * * * * (e) Effective date. This section applies on or after December 30, 2003. For the applicability of regulations before December 30, 2003, see
§1.167(e)-1 in effect prior to December 30, 2003 (§1.167(e)-1 as contained in 26 CFR part 1 edition revised as of April 1,
§1.446-1 General rule for methods of accounting. * * * * * (e) * * * (2) * * * (ii)(a) and (b) [The text of the proposed amendment to §1.446-1(e)(2)(ii)(a) and (b) is the same as the text of §1.446-1T(e)(2)(ii)(a) and (b) published elsewhere in this issue of the Bulletin].
* * * * * (d) [The text of this paragraph (e)(2)(ii)(d) is the same as the text of §1.446-1T(e)(2)(ii)(d) published elsewhere in this issue of the Bulletin].
(iii) [The text of the proposed amendment to §1.446-1(e)(2)(iii) is the same as the text of §1.446-1T(e)(2)(iii) published
* * * * * (4) Effective date—(i) In general. Except as provided in paragraphs (e)(3)(iii) and (e)(4)(ii) of this section, paragraph (e) of this section applies on or
after December 30, 2003. For the applicability of regulations before December 30, 2003, see §1.446-1(e) in effect prior to
December 30, 2003 (§1.446-1(e) as contained in 26 CFR part 1 edition revised as of April 1, 2003).
(ii) Changes involving depreciable or amortizable assets. With respect to paragraph (e)(2)(ii)(d) of this section, paragraph (e)(2)(iii) Examples 9 through 17 of this section, the addition of the language “certain changes in computing depreciation or amortization (see paragraph (e)(2)(ii)(d) of this section)” to the last sentence of paragraph (e)(2)(ii)(a) of this section, and the removal of all language regarding useful life and the sentence “On the other hand, a correction
to require depreciation in lieu of a deduction for the cost of a class of depreciable assets which had been consistently treated
as an expense in the year of purchase involves the question of the proper timing of an item, and is to be treated as a change
in method of accounting” from paragraph (e)(2)(ii)(b) of this section— (A) For any change in depreciation or amortization that is a change in method of accounting, this section applies to such
a change in method of accounting made for taxable years ending on or after December 30, 2003; and
(B) For any change in depreciation or amortization that is not a change in method of accounting, this section applies to such
a change made for taxable years ending on or after December 30, 2003. Par. 4. Section 1.1016-3 is amended by revising paragraphs (h) and (j) to read as follows:
§1.1016-3 Exhaustion, wear and tear, obsolescence, amortization, and depletion for periods since February 28, 1913. * * * * * (h) [The text of the proposed amendment to §1.1016-3(h) is the same as the text of §1.1016-3T(h) published elsewhere in this
* * * * * (j) Effective date—(1) In general. Except as provided in paragraph (j)(2) of this section, this section applies on or after December 30, 2003. For the applicability
of regulations before December 30, 2003, see §1.1016-3 in effect prior to December 30, 2003 (§1.1016-3 as contained in 26
CFR part 1 edition revised as of April 1, 2003). (2) Depreciation or amortization changes. Paragraph (h) of this section applies to a change in depreciation or amortization for property subject to section 167,
168, 197, 1400I, 1400L(b), or 1400L(c), or former section 168 for taxable years ending on or after December 30, 2003.
(Filed by the Office of the Federal Register on December 30, 2003, 8:45 a.m., and published in the issue of the Federal Register
for January 2, 2004, 69 F.R. 42)
The principal author of these regulations is Sara Logan, Office of Associate Chief Counsel (Passthroughs and Special Industries).