Source: http://www.irs.gov/irb/2004-03_IRB/ar07.html
Timestamp: 2014-07-23 16:11:53
Document Index: 287095246

Matched Legal Cases: ['ART 1', 'arts 1', '§1', 'art 1', 'art 301', '§1']

Internal Revenue Bulletin - January 20, 2004 - T.D. 9100 Internal Revenue Bulletin: 2004-3 January 20, 2004 T.D. 9100 Guidance Necessary to Facilitate Business Electronic Filing Table of Contents
Paperwork Reduction Act Background Explanation of Provisions 1. Form 926: Return by a U.S. Transferor of Property to a Foreign Corporation 2. Form 972: Consent of Shareholder To Include Specific Amount in Gross Income 3. Form 973: Corporation Claim for Deduction for Consent Dividends 4. Form 982: Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) 5. Form 1120: U.S. Corporation Income Tax Return 6. Form 1120S: U.S. Income Tax Return for an S Corporation 7. Form 1122: Authorization and Consent of Subsidiary Corporation To Be Included in a Consolidated Income Tax Return 8. Form 5471: Information Return of U.S. Persons With Respect to Certain Foreign Corporations.
9. Form 5712-A: Election and Verification of the Cost Sharing or Profit Split Method Under Section 936(h)(5) 10. Form 8832: Entity Classification Election Special Analyses Adoption of Amendments to the Regulations PART 1—INCOME TAXES
DEPARTMENT OF THE TREASURYInternal Revenue Service26 CFR Parts 1, 301 and 602 AGENCY:
This document contains regulations designed to eliminate regulatory impediments to the electronic filing of certain income
tax returns and other forms. These regulations affect business taxpayers who file income tax returns electronically. The
text of the temporary regulations also serves as the text of the proposed regulations (REG-116664-01) set forth in this issue
Applicability Date: These regulations apply with respect to taxable years beginning after December 31, 2002. The applicability of §§1.170A-11T,
1.556-2T, 1.565-1T, 1.936-7T, 1.1017-1T, 1.1368-1T, 1.1377-1T, 1.1502-21T, 1.1502-75T, 1.1503-2T, 1.6038B-1T, and 301.7701-3T
will expire on or before December 18, 2006.
Paperwork Reduction Act These regulations are being issued without prior notice and public procedure pursuant to the Administrative Procedure Act
(5 U.S.C. 553). For this reason, the collection of information contained in these regulations has been reviewed and pending
receipt and evaluation of public comments, approved by the Office of Management and Budget under control number 1545-1868.
Responses to this collection of information are mandatory.
and the accuracy of the estimated burden, and suggestions for reducing this burden, please refer to the preamble to the cross-referencing
notice of proposed rulemaking published in this issue of the Bulletin.
Background This document contains amendments to the Income Tax Regulations (26 CFR part 1) and the Procedure and Administration Regulations
(26 CFR part 301) designed to eliminate regulatory impediments to the electronic submission of tax returns and other forms
filed by corporations, partnerships and other businesses. In 1998, Congress enacted the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 1998), Public Law 105-206
(112 Stat. 685) (1998). In relevant part, RRA 1998 states that the policy of Congress is to promote the paperless filing
of Federal tax returns. Section 2001(a) of RRA 1998 sets a long-range goal for the IRS to have at least 80 percent of all
Federal tax returns filed electronically by 2007. Section 2001(b) of RRA 1998 requires the IRS to establish a 10-year strategic
plan to eliminate barriers to electronic filing. On January 30, 2003, the IRS published final regulations (T.D. 9040, 2003-10
I.R.B. 568) eliminating a number of regulatory impediments to the electronic filing of Form 1040, “U.S. Individual Income Tax Return.” The IRS has identified a number of regulatory provisions that impede the ability of business entities to file returns electronically.
Some of these regulations, for example, impede electronic filing by requiring taxpayers to include third-party signatures
on their tax returns or by requiring taxpayers to attach documents or statements generated by a third party. Others require
a taxpayer to sign an IRS form and file it as an attachment to the taxpayer’s income tax return. These regulations eliminate
the impediments for taxable years beginning after December 31, 2002. The regulations generally affect taxpayers who must
file any of the following forms: Form 926, “Return by a U.S. Transferor of Property to a Foreign Corporation”; Form 972, “Consent of Shareholder To Include Specific Amount in Gross Income”; Form 973, “Corporation Claim for Deduction for Consent Dividends”; Form 982, “Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)”; Form 1120, “U.S. Corporation Income Tax Return”; Form 1120S, “U.S. Income Tax Return for an S Corporation”; Form 1122, “Authorization and Consent of Subsidiary Corporation To Be Included in a Consolidated Income Tax Return”; Form 5471, “Information Return of U.S. Persons With Respect To Certain Foreign Corporations”; Form 5712-A, “Election and Verification of the Cost Sharing or Profit Split Method Under Section 936(h)(5)”; and Form 8832, “Entity Classification Election.”
Explanation of Provisions 1. Form 926: Return by a U.S. Transferor of Property to a Foreign Corporation Section 6038B provides that transferors of property to foreign corporations must, in certain circumstances, file information
returns with the Secretary regarding such transactions. Section 1.6038B-1(b)(1)(i) requires the transferor to file the return
on Form 926 as an attachment to its income tax return. Under §1.6038B-1(b)(1)(i) and (ii), filers of Form 926 must sign the
form and attachments to the form are subject to the declaration under penalties of perjury that the information submitted
is true, correct, and complete. The signature requirement impedes electronic filing of the transferor’s income tax return
because Form 926 cannot yet be signed electronically. These regulations eliminate the obligation to sign Form 926 and provide,
instead, that Form 926 and any attachments to the form are verified by signing the income tax return with which the form and
attachments are filed.
2. Form 972: Consent of Shareholder To Include Specific Amount in Gross Income Section 565 allows a corporation and its shareholders to treat certain hypothetical corporate distributions as actual dividends.
Section 1.565-1(b)(1) requires shareholders to use Form 972 to elect suc