SECTION 5. REVIEW OF STATEMENT

The appropriate director of the Internal Revenue Service (within the meaning of § 1.01(3) of Rev. Proc. 2006–1, 2006–1 I.R.B. 1) may ascertain if the tax

payer changed its election(s) in compliance with all the applicable provisions of this revenue procedure. A taxpayer changing its election(s) pursuant to this revenue procedure without complying with all the provisions (including the terms and conditions) of this revenue procedure ordinarily will be deemed to have initiated the change in election(s) without the approval of the Commissioner. Upon examination, a taxpayer that has initiated an unauthorized change of election(s) may be denied the change. For example, the taxpayer may be required to redetermine its apportioned interest and/or R&E expense in accordance with its former election(s).

SECTION 6. EFFECTIVE DATE, DEADLINE, AND TRANSITION RULE

.01 EFFECTIVE DATE. This revenue procedure is effective for either:

(1) a taxpayer’s first taxable year beginning after December 31, 2004 (the taxpayer’s 2005 taxable year); or

(2) a taxpayer’s first taxable year immediately following the taxpayer’s 2005 taxable year, but only with respect to elections that first took effect in a taxable year preceding the taxpayer’s 2005 taxable year.

.02 DEADLINE. This revenue procedure is effective only if the taxpayer submits the statement(s) required by § 4.02 of this revenue procedure by the later of (i) one year after October 30, 2006, or (ii) the due date (including extensions) of the taxpayer’s income tax return to which the statement(s) relates.

.03 TRANSITION RULE. If a taxpayer within the scope of this revenue procedure filed an application to change an election(s) to which the revenue procedure applies with the national office and the application is pending with the national office on October 30, 2006, the taxpayer may obtain approval under this revenue procedure. However, the national office will process the application in accordance with the authority under which it was filed, unless the taxpayer notifies the national office that the taxpayer wants to use this revenue procedure before the national office issues the letter ruling granting or denying approval for the change. If the taxpayer timely notifies the national office that it wants to use this revenue procedure,

2006–47 I.R.B. 933 November 20, 2006

the money amounts entered on these forms must be verifiable. Annual guidance under Treas. Reg. § 1.6662–4(f)(2) and Treas. Reg. § 1.6694–3(e)(1) and (2) for returns filed on 2005, 2004, and 2003 tax forms is provided in Rev. Proc. 2005–75, Rev. Proc. 2004–73, 2004–2 C.B. 999, and Rev. Proc. 2003–77, 2003–2 C.B. 964, respectively.

.06 Fiscal and short tax year returns. (a) In general. This revenue procedure may apply to a return for a fiscal tax year that begins in 2006 and ends in 2007. This revenue procedure may also apply to a short year return for a period beginning in 2007 where the return is to be filed before the 2007 forms are available. (Note that individuals are generally not put in this position as a decedent’s final return for a fractional part of a year is due the fifteenth day of the fourth month following the close of the12-month period which began with the first day of such fractional part of the year. See Treas. Reg. section 1.6072–1(b).) In the case of fiscal year and short year returns, the taxpayer must take into account any tax law changes that are effective for tax years beginning after December 31, 2006, even though these changes are not reflected on the form.

(b) Tax law changes effective after December 31, 2006. This document does not take into account the effect of tax law changes effective for tax years beginning after December 31, 2006. If a line referenced in this revenue procedure is affected by such a change and requires additional reporting, a taxpayer may have to file Form 8275, Disclosure Statement, or Form 8275–R, Regulation Disclosure Statement, until the Service prescribes criteria for complying with the requirement.