SECTION 7. EFFECT OF THE

CONSENT UNDER § 1.1502–13(e)(3)

.01 A consent under § 1.1502–13(e)(3) shall, unless revoked pursuant to Section 8, apply to all members of the consolidated group for the consent year and all subsequent taxable years ending prior to the first taxable year for which the group does not file a consolidated return.

.02 Section 446(e) consent is granted under § 1.1502–13(e)(3)(iii) for any changes in methods of accounting for intercompany transactions that are necessary solely to conform a member’s methods to a consent obtained pursuant to this revenue procedure, provided the changes are made in the consent year. Any such changes in methods are effected on a cutoff basis (that is, no § 481(a) adjustment will be made). For any subsequent taxable year, § 446(e) consent must be separately requested under applicable administrative procedures if a member has failed to conform its accounting practices to the treatment of intercompany transactions required as a result of obtaining a consent pursuant to this revenue procedure. S e e R e v. Proc. 97–27, 1997–21 I.R.B. 10, or its successor. Any such changes in methods are effected on a cutoff basis (that is, no § 481(a) adjustment will be made).

.03 A consent shall not preclude the application of § 482 to members of a consolidated group.

.04 A consent granted under § 1.1502–13(e)(3) to treat intercompany transactions on a separate entity basis does not apply for purposes of taking into account losses and deductions deferred under § 267(f).