Bulletin No. 2002–50 December 16, 2002

REG–127380–02, page 969. Proposed regulations provide guidance regarding the application of section 367(e)(2) of the Code to certain outbound liquidations. The regulations amend the anti-abuse rule of section 1.367(e)–2(d) by narrowing the scope of the rule to apply only to outbound transfers to a foreign corporation in a complete liquidation of a domestic corporation in which a principal purpose of the liquidation is the avoidance of U.S. tax. A public hearing is scheduled for March 3, 2003.

Notice 2002–79, page 964. Gross income; advance payments . This notice proposes a revenue procedure that, if finalized, will modify and supersede Rev. Proc. 71–21, 1971–2 C.B. 549, and allow taxpayers using an accrual method of accounting to defer the inclusion of advance payments in gross income for federal income tax purposes in certain limited situations.