Part IV. Items — Internal Revenue Bulletin 2001-48

do not apply to these regulations, and, because the proposed rule does not impose a collection of information on small entities, a Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, these regulations will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

Comments and Public Hearing

Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments (a signed original and eight (8) copies) or electronic comments that are timely submitted to the IRS. All comments will be made available for public inspection and copying. A public hearing may be scheduled if requested in writing by any person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the hearing will be published in the Federal Regis- ter .

Drafting Information

The principal author of these proposed regulations is Marie C. Milnes-Vasquez, Office of the Associate Chief Counsel (Corporate). However, other personnel from the IRS and Treasury Department participated in their development.

Proposed Amendments to the Regulations

Accordingly, 26 CFR part 1 is proposed to be amended as follows:

PART 1 - INCOME TAXES

Paragraph 1. The authority citation for part 1 continues to read in part as follows:

Authority: 26 U.S.C. 7805 *** Par. 2. Section 1.446–1 is amended by adding paragraph (c)(2)(iii) to read as follows:

§ 1.446-1 General rule for methods of accounting.

Notice of Proposed Rulemaking

Conforming Amendments to Section 446

REG–125161–01

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking.

SUMMARY: On July 18, 1995, the Treasury and the IRS published final regulations governing the intercompany transaction system of the consolidated return regulations. Those regulations state that the timing rules of the intercompany transaction system are a method of accounting. At the time of the publication of those regulations, no amendment was made to the regulations promulgated under section 446 to coordinate with that statement. This document contains proposed regulations confirming that the timing rules of the intercompany transaction regulations are a method of accounting.

DATES: Written or electronic comments and requests for a public hearing must be received by January 7, 2002.

ADDRESSES: Send submissions to: CC:ITA:RU, room 5226 (REG–125161– 01), Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. Submissions may also be hand delivered Monday through Friday between the hours of 8 a.m. and 5 p.m. to: CC:ITA:RU, room 5226 (REG– 125161–01), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC. Alternatively, taxpayers may submit comments electronically via the Internet directly to the IRS internet site at http://www.irs.gov/ tax/regs/regslist.html._

FOR FURTHER INFORMATION CONTACT: Concerning the regulation, Marie C. Milnes-Vasquez or Frances Kelly (202) 622–7770, or Jeffery G. Mitchell (202) 622–4930; concerning submissions and/or requests for a public

hearing, Guy Traynor (202) 622–7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background and Explanation

On July 18, 1995, the Treasury and the IRS published in the Federal Regis- ter (60 FR 36671 [1995–2 C.B. 147]) final regulations under §1.1502–13 governing the intercompany transaction system of the consolidated return regulations. Included in such regulations was an express statement that “[t]he timing rules of [the intercompany transaction regulations] are a method of accounting for intercompany transactions, to be applied by each member in addition to the member’s other methods of accounting.” § 1.1502–13(a)(3)(i). At the time of the publication of those final regulations, no amendment was made to the regulations promulgated under section 446 to coordinate with the statement in § 1.1502–13(a)(3)(i) that the timing rules of § 1.1502–13 are a method of accounting.

In General Motors v. Commissioner, 112 T.C. 270 (1999), the Tax Court determined that the timing rule of former § 1.1502–13(b)(2) was not a method of accounting for purposes of section 446(e). The proposed regulations included in this document amend § 1.446–1 to confirm the IRS’s position that the timing rules of current §1.1502–13 are a method of accounting.

Proposed Effective Date

The regulations in this section are proposed to apply to consolidated return years beginning on or after November 7, 2001.

Special Analyses

It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive 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) and the Regulatory Flexibility Act (5 U.S.C. chapter 6)

November 26, 2001 538 2001–48 I.R.B.

(c) *** (2) *** (iii) The timing rules of §1.1502–13 are a method of accounting for intercompany transactions (as defined in § 1.1502–13(b)(1)(i)), to be applied by each member of a consolidated group in addition to the member’s other methods of accounting. See §1.1502–13(a)(3)(i). This paragraph is applicable to consolidated return years beginning on or after November 7, 2001.

- - - Par. 3. In §1.1502-13, the second sentence of paragraph (a)(3)(i) is revised to read as follows:

§1.1502–13 Intercompany transactions.

(a) - - (3) - -

(i) - - - See §1.1502-17 and, with regard to consolidated return years beginning on or after November 7, 2001, §1.446-1(c)(2)(iii). - -

Robert E. Wenzel, Deputy Commissioner

of Internal Revenue.

(Filed by the Office of the Federal Register on November 6, 2001, 8:45 a.m., and published in the issue of the Federal Register for November 7, 2001, 66 F.R. 56262)

New Form 8038–R, Request for Recovery of Overpayments Under Arbitrage Rebate Provisions

Request by Number or address

Telephone 1-800-TAX-FORM (1-800-829-3676) Personal Computer:

IRS Web Site www.irs.gov File transfer protocol ftp.irs.gov

Announcement 2001–115

The IRS has released new Form 8038–R, Request for Recovery of Over- payments Under Arbitrage Rebate Provi- sions . Form 8038–R replaces the procedures of Revenue Procedure 92–83 (1992–2 C.B. 487) the purpose of which was to provide guidance to issuers of taxexempt bonds who seek to recover overpayments of amounts required to be paid under section 148.

You can obtain Form 8038–R by telephone or by using IRS electronic information services.

Updates on Inbound Issues,
Selected Transfer Pricing Issues and
Managing Multinationals’ International Tax Controversies.

Mark A. Weinberger, Assistant Treasury Secretary for Tax Policy, is scheduled to deliver the luncheon address. The second day will also include an “Ask the IRS” panel.

Those interested in attending or obtaining more information should contact The George Washington University, Conference Management Services, by visiting their web site at www.gwu.edu/ ~cms/iti14 or by telephone at 202-9731110.

IRS and The George Washington University To Sponsor Institute on International Tax Issues

Announcement 2001–116

Director, International, LMSB, Carol Dunahoo, has announced the Fourteenth Annual Institute on Current Issues in International Taxation, jointly sponsored by the Internal Revenue Service and The George Washington University, to be held on December 13 and 14, 2001, at the J.W. Marriott Hotel in Washington, DC. Registration is currently underway for the Institute, which is intended for professionals in international tax law.

The program will present a unique opportunity for top IRS and Treasury officials and tax experts, as well as leading private sector specialists, to address

breaking issues and present key perspectives on new developments. The Institute will open with an address by B. John Williams, Jr., IRS Chief Counsel nominee. The first day will also feature sessions on the following:

Moving from CFCs to CFPs: Credit and Deferral Issues in the Partnership Setting;
Le Partnership: Coordinating Foreign and U.S. Taxation of Partnerships;
Evolution of Business Form: Hybrids, Contractual Ventures, Etc.; and
Updates on Outbound Issues. Competent Authority officials from France, Canada, Japan, and the United States will discuss current issues. R. Glenn Hubbard, Chairman of the White House’s Council of Economic Advisors, will deliver the luncheon address.

The second day will focus on such topics as:

2001–48 I.R.B 539 November 26, 2001

Sparks, NV Dead Printers Society, Phoenix, AZ Decker Lake Wetlands Preserve

Foundation, Salt Lake City, UT Deer Valley Spiritline Booster Club,

Foundations Status of Certain Organizations

Announcement 2001–118

The following organizations have failed to establish or have been unable to maintain their status as public charities or as operating foundations. Accordingly, grantors and contributors may not, after this date, rely on previous rulings or designations in the Cumulative List of Organizations (Publication 78), or on the presumption arising from the filing of notices under section 508(b) of the Code. This listing does not indicate that the organizations have lost their status as organizations described in section 501(c)(3), eligible to receive deductible contributions.

Former Public Charities . The following organizations (which have been treated as organizations that are not private foundations described in section 509(a) of the Code) are now classified as private foundations:

Belagana Research Institute, Tucson, AZ Bells Palsy Research Foundation,

Seattle, WA Children and Adults Affected by

Crossroads Treatment Center,

Tucson, AZ Beneficial Care, Incorporated,

Murray, UT Beyond X Harambee Museum and

Glendale, AZ Diamond Magic, Spokane, WA Directions in Education Training and

Cultural Center, Murray, UT Blue Mountain Demonstration Forest,

Port Angeles, WA Border K-9 Search and Rescue, Inc.,

Consultation, Gig Harbor, WA Disease Prevention Program, Roy, UT Divine Mercy Foundation, Tacoma, WA Dolphin Institute, Seattle, WA Door of Hope Ministries,

Bellingham, WA Double Camp Ministries, Glendale, AZ Earth Spirit Wholeness Center,

Las Cruces, NM Brianne Kiner Foundation for

Exceptional Parents & Children, Edmonds, WA Brolly Arts, Salt Lake City, UT Camano Ranch, Camano Island, WA Camwood Players, Stanwood, WA Caribou Trail Housing Association,

Tahotchi, NM Earth Views Center for Ecosystem

Okanogan, WA Caughlin Ranch School Foundation,

Mapping and Monitoring, Santa Fe, NM Eclectic Cross Foundation,

Reno, NV Center for Entrpreneurship and

Las Vegas, NV Ed Rimer Ministries, Inc.,

Economic Development, Inc., Albuquerque, NM Central Area Coaches Association,

Edmonds, WA El Pesebre, Inc., Green Valley, AZ Empathology Research Foundation,

Albuquerque, NM Edison Foundation, Seattle, WA Edmonds Floral and Arts Foundation,

Bellevue, WA Entiat Valley Service Club, Entiat, WA Evergreen Clown Care, Orting, WA Familia of Seattle, Mercer Island, WA Family Mental Health Clinic,

1st Class, Ridgefield, WA 12 Steps on the Way Home, Arlington, WA Aaron A. Hofmann Foundation, Inc.,

Salt Lake City, UT A B A Foundation, Inc., Phoenix, AZ Ace Foundation, Pleasant Grove, UT AC-Tec, Everett, WA Adelante Housing Corporation,

Pesticides, Santa Fe, NM Children’s Dignity Project Foundation,

Inc., Santa Fe, NM Childrens Recording Corporation, Inc.,

Scottsdale, AZ Citizens 911 Guide to Democracy,

Park City, UT Christian Outreach Assembly for

Children, Monroe, WA Cinema Concepts Foundation,

Surprise, AZ All Related Extended Care Services,

Inc., Phoenix, AZ Allied Services for Aids Prevention,

Consortium, Las Vegas, NV Coalition for Community Development,

Seattle, WA Clark County Housing Affordability

Las Cruces, NM Fast Forward Media Lab, Seattle, WA Fillmore Housing Corporation,

Phoenix, AZ Flag Children Services, Inc.,

Las Vegas, NV Ammpec, Inc., Albuquerque, NM Arizona Archival Institute, Inc.,

Seattle, WA Comhaltas Ceoltoiri Eireann,

Glendale, AZ Fork in the Road, Inc., Tucson, AZ Foundation for Colorectal Surgical

Education, Seattle, WA Foundation for Law Enforcement

Education and Training, Inc., Phoenix, AZ Friends of Garfield Foundation,

Glendale, AZ Arizona Citizens Project, Scottsdale, AZ Arizona Jazz Rhythm & Blues Festival,

Albuquerque, NM Community Advocates Aligned to Unite

Ethnic Social Services, Kent, WA Community Built Association, Inc.,

Inc., Flaggstaff, AZ Arizona Junior Ski Racing Association,

Phoenix, AZ Arizona Lawyers Committee on

Violence, Oro Valley, AZ Arizona Minority Counsel Program, Inc.,

Alamogordo, NM Companion Care, Inc., Provo, UT Computer Outreach, Phoenix, AZ Copeland-Freeman Foundation,

Mesa, AZ Cops Racing Against Violence Through

Seattle, WA Friends of the Adelson Drug Clinic, Inc.,

Las Vegas, NV Gamblers at Their End Society,

Graham, WA Gateway Estates, Inc., Silver City, NM Get High on Life-Be Dear to Yourself,

Chandler, AZ Arizona Rising Suns Track Club, Inc.,

Glendale, AZ Arizona Youth Theater, Inc., Tucson, AZ Back-on-Track, Inc., Phoenix, AZ Begin Again Foundation, Phoenix, AZ

Education, Las Vegas, NV Cornerstone Christian Counseling,

Tucson, AZ

Tucson, AZ County Line Riders of Catalina, Inc.,

Inc., Las Vegas, NV Gods Little Creatures Foundation,

Seattle, WA

November 26, 2001 540 2001–48 I.R.B.

Golden Hills Neighborhood Association,

Lead International Ministry Network,

Vancouver, WA Legacy Foundation, Inc., Phoenix, AZ Leonard Bolar Foundation, Tacoma, WA Lewis & Clark Bicentennial Seaplane

NW River Ecology, Spokane, WA Open Gates Ministries, Yuma, AZ Options for Youth Families and

Communities, Inc., Logan, UT Organization Latins Unidos,

Salt Lake City, UT Golden League Association, Kent, WA Goldendale Education Fund,

Goldendale, WA Granny-Nanny Caregivers, Inc.,

Albuquerque, NM Organization of Positive Thought and

Reno, NV Gratitude Fellowship, Salt Lake City, UT Great Basin National Feline Found,

Rendezvous Committee, Vashon, WA Light Foundation, Inc.,

Salt Lake City, UT Light to the Nations, Wasilla, AK Malcom Harris Memorial Educational

Fallon, NV Grey Hound Friends Northwest,

Enrichment Trust, Phoenix, AZ Mannings Child Care Learning Center,

Action, Mesa, AZ Pathway to Freedom Counseling Center,

Inc., Tucson, AZ Peak at Santa Teresa, Santa Teresa, NM Percussion for Kids Association,

Issaquah, WA Harp, Inc., Glendale, AZ Healthy Start Infants Home,

Seattle, WA Personal Credit Assistance, Inc.,

Deer Park, WA Heartpraise Music Association,

Seattle, WA Marine View Homes Association,

Vancouver, WA Help Ministries, Inc., Scottsdale, AZ Herdas Bicycle Club, Las Vegas, NV Hispanic Historical Society, Inc.,

Federal Way, WA Marshall-David Library, Tucson, AZ Mesa American Youth Football, Inc.,

Inc., Albuquerque, NM Mobile Caterer for the Homeless,

Carson City, NV Pierce Housing Corporation,

Mesa, AZ Mighty River Evangelistic Association,

Phoenix, AZ Post-Recovery Aid Foundation,

Federal Way, WA Power to Cope-Missionary Health

Restoration Work, Spokane, WA Pro Homo Arts, Seattle, WA Professionals Helping Amputees Train,

Albuquerque, NM Hope for Coap, Spokane, WA Hosanna Ministries International,

Henderson, NV Howard Memorial Mission, Inc.,

Inc., Tucson, AZ Recycling Insight, Everett, WA Resources United for Supportive

Glendale, AZ Impact Foundation, Salt Lake City, UT Independent Technicians Education

Seattle, WA Mobile Community Council for

Progress, Inc., Maricopa, AZ Mother of Mercy Chapel,

Coulee City, WA My Brothers Resource Center,

Casa Grande, AZ National American Indian Diabetes

Services, Blaine, WA Rialto Foundation, Tucson, AZ Rising Star Communications of the

Coalition, Tukwila, WA Institute for International Economic

Association, Sacramento, CA Native American Fish & Wildlife

Education, Mercer Island, WA International Society for Integrated

Pacific Northwest, Inc., Kennewick, WA Robbins Housing Corp, Santaquin, UT Rocky Mountain Band of Cherokee

Human Development and Universal Peace, West Valley City, UT Inventors Association of Arizona,

Society, Broomfield, CO Native Americas International Film

Descendants, Sandy, UT Safe Passage, Sedro Wooley, WA San Jose Community Center,

Tucson, AZ Irish Pipers Club, Seattle, WA Jackson High Booster Club, Everett, WA JASNET, Seattle, WA Jewish Council For HIV-AIDS, Inc.,

Exposition, Santa Fe, NM NDN Productions, Inc.,

Albuquerque, NM Neighborhood Ice and Recreation

Development Fund, Inc., Salt Lake City, UT New Exodus Ministries, Inc., Mesa, AZ New Mexico Vietnam Veterans

Foundation, Inc., Albuquerque, NM New Shiprock Campus Committee, Inc.,

San Juan Pueblo, NM Sanctuary for Enlightened Action, Inc.,

Montpelier, VA Santa Fe High School Football Booster

San Jose, NM San Juan Resident Committee,

Association, Inc., Sante Fe, NM Santa Fe Institute for Medicine &

Phoenix, AZ Jimi Hendrix Family Foundation,

Tukwila, WA Jonathon Turner Trauma Foundation,

Shiprock, NM Nibbana Foundation, Corrales, NM Nicholas Group, Seattle, WA Nighthawk, Santa Fe, NM Noah 2 Northern Navajo Organization

Incline Village, NV Kandy Productions Company, Inc.,

Scottsdale, AZ King County Samoan Organizing

for the Advancement of Animal Health & Humanity, Shiprock, NM Noahs Ark Animal Refuge, Inc.,

Prayer, Sante Fe, NM Scottsdale Childrens Nature Center for

Science & Education, Scottsdale, AZ Sedro-Woolley Playfield Association,

Sedro Woolley, WA Shield Ministries, Kennewick, WA Shiprock Community Development

Project, Seattle, WA Kingdom Giving Foundation,

Bellingham, WA Kings Kids Day Care, Inc.,

Seniors, Bothell, WA

Roswell, NM Kylies Project, Bellingham, WA La Jicarita Enterprise Communities,

Carlsbad, NM North High School Alumni Association,

Phoenix, AZ North Snohomish County Boxing Club,

Arlington, WA Northwest Tasar Association, Bow, WA Nurses for Christ, Kingman, AZ

Corporation, Shiprock, NM Sierra Vista Ballet Company,

Sierra Vista, AZ Sigma Tau Sigma, Las Vegas, NV Sonja L Harrison Foundation for

Penasco, NM Laughing Horse Productions,

Seattle, WA

2001–48 I.R.B 541 November 26, 2001

Wings Foundation, Tucson, AZ Wings of Love Ministries, Tukwila, WA Womens Resource Center,

Sons of Haiti Manor Housing

Association, Seattle, WA Sons of Haiti Senior Housing

United States Freestyle Ski Team, Inc.,

Sedona, AZ Y.A.F.D.A. Youth Away From Drugs and

Association, Seattle, WA South Asia Cultural Association,

Spokane, WA South Pacific County Cliff Rescue,

Salt Lake City, UT Utah Hispanic Womens Association,

Inc., Mountain Green, UT Valdez Swim Club, Inc., Valdez, AK Valley Crossroads, Inc.,

Carson City, NV Worldwide Cultural Exchange, Inc.,

Albuquerque, NM Zion Temple Ashram Community, Inc.,

Seaview, WA Southern Oregon Hockey Association,

Inc., Medford, OR Stephen Christopher Foundation, Inc.,

Salt Lake City, UT Venturi Foundation, Sun City, AZ Visions World Productions, Inc.,

Alcohol, Moses Lake, WA Young at Heart Ministries,

Scottsdale, AZ Super Kids of America, Springville, UT Tacoma Empowerment Consortium,

Phoenix, AZ Walla Walla Blues Associations,

Walla Walla, WA Wardley Foundation, Inc.,

Salt Lake City, UT Warren and Jolene Young Ministries,

Sun City West, AZ Washington Higher Education Policy

Tucson, AZ Zolo Foundation, Gold Canyon, AZ

Tacoma, WA Theatre Southwest, Inc.,

Albuquerque, NM Therapeutic Living Concept-Message

Therapy for People With AIDS, Everett, WA Threshold House, Mesa, AZ Tohatchi Youth Center, Tohatchi, NM Tseikiin Community Development

Center, Olympia, WA Washington State Council of Firefighters

Benevolent Fund, Olympia, WA Washington Waterfowl Association,

Corporation, Ramah, NM Tucson Marriage Encounter, Inc.,

Edmonds, WA Wellspring Womens Center,

If an organization listed above submits information that warrants the renewal of its classification as a public charity or as a private operating foundation, the Internal Revenue Service will issue a ruling or determination letter with the revised classification as to foundation status. Grantors and contributors may thereafter rely upon such ruling or determination letter as provided in section 1.509(a)–7 of the Income Tax Regulations. It is not the practice of the Service to announce such revised classification of foundation status in the Internal Revenue Bulletin.

Tucson, AZ Tucson Mormon Battalion Monument

Sacramento, CA West Bountiful Little League Baseball,

West Bountiful, UT West Jordan Municipal Soccer Authority

Incorporated, West Jordan, UT

Foundation, Tucson, AZ

November 26, 2001 542 2001–48 I.R.B.