Source: http://www.thefederalregister.com/d.p/2006-05-08-E6-6888
Timestamp: 2013-05-19 00:16:09
Document Index: 586975974

Matched Legal Cases: ['art 7114', 'art 3944', 'art 6726', 'art 140', 'art 5250', 'art 1739', 'art 30206', 'art 514', 'art 9740', 'art 180']

Intercompany transactions; consolidated returns; withdrawn, Daily Rules, Proposed Rules, and Notices of the Federal Government
14 CFR Part 7114 CFR Part 3944 CFR Part 6726 CFR Part 140 CFR Part 5250 CFR Part 1739 CFR Part 30206 CFR Part 514 CFR Part 9740 CFR Part 180	Federal Register: May 8, 2006 (Volume 71, Number 88)
DOCID: FR Doc E6-6888
RIN ID: RIN 1545-BD55
REG ID: [REG-131264-04]
DOCUMENT ACTION: Withdrawal of notice of proposed rulemaking.
SUBJECT CATEGORY: Withdrawal of Proposed Regulations Regarding Intercompany Transactions; Manufacturer Incentive Payments DATES: These proposed regulations are withdrawn May 8, 2006.
DOCUMENT SUMMARY: This document withdraws a notice of proposed rulemaking (REG-
13126404) regarding the treatment of manufacturer incentive payments. The proposed regulations were published in the Federal Register on August 13, 2004 (69 FR 50112). After consideration of additional issues, the IRS and Treasury Department have decided to withdraw the proposed regulations.
SUMMARY: Intercompany transactions; consolidated returns; withdrawn, SUPPLEMENTAL INFORMATION
Background On August 13, 2004, the IRS and Treasury Department published a notice of proposed rulemaking (REG13126404) in the Federal Register (69 FR 50112) proposing regulations to address additional transactions involving [[Page 26722]]
manufacturer incentive payments and to clarify the proper treatment of such incentive payments under the intercompany transaction regulations.
On April 25, 2005, the IRS and Treasury Department published Rev. Rul. 200528 (200519 IRB 997), which suspends, in part, Rev. Rul. 76
96 (19761 CB 23). Rev. Rul. 200528 states that the IRS will not apply, and taxpayers may not rely upon, the conclusion reached in Rev. Rul. 7696 that certain rebates made by a manufacturer to retail customers are ordinary and necessary business expenses deductible under section 162, pending the IRS's reconsideration of the issue and publication of subsequent guidance. The example in paragraph (c) of the proposed regulations relies, in part, upon the premise that the manufacturer incentive payment is an ordinary and necessary business expense deductible under section 162. To the extent that this premise is correct, paragraph (d) of the proposed regulations illustrates the proper application of the intercompany transaction regulations. However, because Rev. Rul. 2005
28 suspends Rev. Rul. 7696, in pertinent part, these paragraphs of the proposed regulations are withdrawn pending further guidance on the section 162 issue considered in Rev. Rul. 7696. The example in paragraph (e) of the proposed regulations illustrates the application of the original issue discount rules to the facts described in paragraph (e) and, based on these facts, concludes that the transaction is not an intercompany transaction. This conclusion is not dependent upon the issue being reconsidered in Rev. Rul. 7696. Nevertheless, because the example in paragraph (e), standing alone, does not provide guidance with respect to the application of the intercompany transaction regulations to an intercompany transaction, paragraph (e) of the proposed regulations is also withdrawn.
Income taxes, Reporting and recordkeeping requirements. Withdrawal of Notice of Proposed Rulemaking Accordingly, under the authority of 26 U.S.C. 7805, the notice of proposed rulemaking (REG13126404) that was published in the Federal Register on August 13, 2004 (69 FR 50112) is withdrawn. Mark E. Matthews, Deputy Commissioner for Services and Enforcement. [FR Doc. E66888 Filed 5506; 8:45 am]
Frances Kelly, (202) 622-7770 (not a tollfree number).