INCOME TAX

Ct. D. 2074, page 954. Lookback period. The Supreme Court has concluded that under sections 6501, 6322, and 6323 of the Code, the lookback period is tolled during the pendency of a prior bankruptcy petition. Young, et ux., v. United States .

Rev. Rul. 2002–27, page 925. Cafeteria plans. Cafeteria plans may use an automatic enrollment process whereby the employee’s salary is reduced each year to pay for a portion of the group health coverage under the plan unless the employee affirmatively elects cash. In addition, employers may treat all participants as being in the cafeteria plan for section 415 purposes even though the plan mandates salary reduction and coverage for uninsured participants.

Rev. Rul. 2002–29, page 940. LIFO; price indexes; department stores . The March 2002 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, March 31, 2002.

T.D. 8988, page 929. REG–163892–01, page 968. Temporary and proposed regulations under section 355(e) of the Code relate to the recognition of gain on certain distributions of stock or securities of a controlled corporation in connection with an acquisition. These regulations provide guidance on whether an acquisition is part of a plan that includes the distribution. The proposed regulations withdraw REG–107566–00 (2001–1 C.B. 346).