SECTION 5. INFORMATION

TAXPAYERS MUST INCLUDE IN REQUEST

.01 General.

This section describes the information, representations, and documentation that taxpayers are expected to provide with a §1.1503–2(g)(2)(iv)(B)(2)(i) closing agreement request. Taxpayers should organize information and representations

following the format of this procedure and should use appropriate descriptive headings. To facilitate the processing of the closing agreement request, taxpayers must also provide a full statement of all relevant facts related to the taxpayers and the DCLs.

Taxpayers must address each item in this section, providing all relevant facts. If an item is not applicable, taxpayers should so state and briefly explain why.

Taxpayers must provide a full statement of the facts, including the following general information, as appropriate, about each Taxpayer Party, relevant member of the consolidated group, and DRC with losses that will be covered by the closing agreement.

1. Name, address, and employer identification number.
2. Type of entity, and date and place of incorporation or other formation.
3. Information about the formation and treatment of disregarded entities directly or indirectly owned by a Taxpayer Party (including the date the entity became or elected to become a disregarded entity under §301.7701–3).
4. Classifications of the entity under §1.1503–2(c)(2) – (4) (e.g., dual resident corporation, foreign branch separate unit, hybrid entity separate unit) before and after any triggering event. If the taxpayer is requesting that the closing agreement include losses covered by the temporary regulations, the taxpayer should classify the entity under §1.1503–2A(b) (e.g., dual resident corporation, foreign branch separate unit, partnership interest separate unit).
5. Detailed explanation of the chain of ownership between the parent of the consolidated group (or in the case where there is no U.S. consolidated group, the unaffiliated domestic owner of the DRC) and the DRC before and after any triggering event (as described in §1.1503–2(g)(2)(iii) or §1.1503–2A(c)(3)(iii), as appropriate).

.02 Information Related To Taxpayer

Parties, Relevant Members Of The Consolidated Group, And DRCs.

2000–43 I.R.B. 397 October 23, 2000

6. The taxable year of a Taxpayer Party to the closing agreement (both before and after any triggering event). If as a result of a triggering event there is a requirement for filing a short-period return under §1.1502–76(b) or other relevant provision, taxpayer should provide related information and an explanation.
7. The office that has jurisdiction over the Federal income tax returns of a Taxpayer Party to the closing agreement.

.03 Additional Information Related

To DRCs.

Taxpayers must provide the following additional information for each DRC with losses that will be covered by the closing agreement:

1. The country or countries that tax the DRC on its worldwide income or on a residence basis. If the DRC is a separate unit, identify the separate unit and name under which it conducts business, and the country in which its principal place of business is located.
2. Description of the principal business activity.
3. Amounts and taxable years of DRC’s NOLs.
4. Date the period of limitations on assessment of tax expires related to each DCL.

.04 List And Description Of All

Triggering Events.

For all losses to be included in the §1.1503–2(g)(2)(iv)(B)(2)(i) closing agreement, taxpayers must provide a list and description of all triggering events described in §1.1503–2(g)(2)(iii) and §1.1503–2A(c)(3)(iii) as appropriate (including specific citations). In particular, taxpayers should explain how the triggering events are treated under the Code, including information about any taxable transfers or any nonrecognition provisions that apply, and should provide information about all parties, stock, and assets involved. Taxpayers should indicate whether any triggering event listed includes a transaction within the meaning of §1.1502–75(d)(2) or (3) whereby the common parent of the consolidated group that filed the §1.1503–2(g)(2)(i) agree

Taxpayers must provide the following representations and agreements, when applicable, to secure a §1.1503–2(g)(2)(iv) (B)(2)(i) closing agreement:

1. That a corporation is a DRC as described in §1.1503–2(c)(2). Taxpayers must provide a representation for each relevant entity, and provide a §1.1503–2A representation as appropriate.
2. That a foreign branch, interest in a partnership, or interest in a trust is a separate unit as described in the appropriate subsection of §1.1503–2 (c)(3) and a DRC as described in §1.1503–2(c)(2). Taxpayers must provide a representation for each relevant entity, and provide a §1.1503–2A representation as appropriate.
3. That a hybrid entity separate unit is a hybrid entity separate unit as described in §1.1503–2(c)(4) and a DRC as described in §1.1503–2 (c)(2). Taxpayers must provide a representation for each relevant entity, and provide a §1.1503–2A representation as appropriate.
4. That the NOLs described are DCLs under §1.1503–2(c)(5) (or under §1.1503–2A(b)(2) as appropriate).
5. That the requisite elections, agreements, and certifications were timely made under §1.1503–2(g)(2)(i) (or §1.1503–2A(c)(3) or (d)(3) as appropriate).
6. That the DCLs were computed as required under §1.1503–2(d)(1) (or §1.1503–2A(f)(1) as appropriate).
7. That the necessary reporting and cer

ments is no longer in existence or whereby the common parent was a party to a reverse acquisition, through which the consolidated group continues.

Taxpayers should state whether an exception to a triggering event applies and should explain the exception in detail and include a citation to the relevant provision (e.g., §1.1503–2(g)(2)(iv)(A), §1.1503–2 (g)(2)(iv)(B), or §1.1503–2A(c)(3)(vi)). If a taxpayer has exercised rebuttal rights provided in §§1.1503–2(g)(2)(iii)(A)(2) – (7), taxpayer must provide information related to those rebuttals.

.05 Specific Representations And

Agreements Required For Closing Agreement.

tifications were made under §1.1503–2(g)(2)(vi) (or §1.1503–2 A(c)(3)(v) as appropriate). 8. That the consolidated group, unaffiliated DRC, or unaffiliated domestic owner will or has filed an election and agreement described in §1.1503–2(g)(2)(i) with its timely filed Federal income tax return for the year(s) of the triggering event(s) described in §1.1503–2(g)(2)(iii). Taxpayers should provide a §1.1503–2A representation as appropriate. 9. That apart from the triggering events listed, no triggering event described in §1.1503–2(g)(2)(iii) (or §1.1503–2A(c)(3)(iii) as appropriate) has occurred applicable to the DCLs. 10. That upon any subsequent triggering event described in §1.1503–2(g) (2)(iii), the Taxpayer Parties will be jointly and severally liable for the total amount of the recapture of the DCLs to which the closing agreement relates and the related interest charge under §1.1503–2 (g)(2)(vii), to the extent the triggering event does not fall under one of the exceptions provided in §1.1503–2(g) (2)(iv)(A) or (B). 11. That the new consolidated group or unaffiliated domestic corporation will treat any potential recapture of the DCLs under §1.1503–2(g) (2)(vii) as unrealized built–in gain for purposes of §384(a), subject to any applicable exceptions thereunder, and will treat the total recapture amount of the described DCLs as recognized built-in gain for purposes of §384(a), subject to any applicable exceptions thereunder. 12. That the new consolidated group or unaffiliated domestic corporation will comply with the reporting requirements described in §1.1503–2(g)(2)(vi) for each DCL for the taxable years covered by the closing agreement. 13. That an election was made (or was not made) under §1.1503–2(h)(2) or (3) for any DCLs incurred in taxable years beginning before October 1, 1992. Taxpayers should provide an explanation for the election provision used. 14. That an event described in

October 23, 2000 398 2000–43 I.R.B.

§§1.1503–2(g)(2)(iii)(A)(2) – (7) is not a triggering event under such provision because the transfer did not result in a carryover under foreign law of such losses, or because such losses cannot be used to offset the income of another person under foreign law. Taxpayers should represent the specific requirements under the provision cited. See, e.g., section 3.01(4) and section 4.01(22), Rev. Proc. 2000–7 (the National Office of the Service generally will not make a determination related to the rebuttals).

.06 Documents Required.

As part of the initial submission requesting a §1.1503–2(g)(2)(iv)(B)(2)(i) closing agreement, taxpayers must provide the following documents when applicable:

1. Copies of all elections, agreements and certifications required by §1.1503–2(g)(2) (or §1.1503–2A (c)(3) or (d)(3)).
2. Copies of all ruling letters issued by the Service under §301.9100 providing for an extension of time to make a required election or application under the §1503(d) regulations.
3. Copy of all consents to an extension of the statute of limitations on assessment and collection.
4. Documents supporting the rebuttal of a presumption of a triggering event described in §§1.1503–2(g)(2)(iii) (A)(2) – (7).
5. Other documents as requested by the Service.