SECTION 2. REGULATIONS TO BE

ISSUED UNDER SECTION 382(m)

The IRS and Treasury will issue regulations under section 382(m) providing that notwithstanding any other provision of the Code or the regulations thereunder, for purposes of section 382 and the regulations thereunder, with respect to a loss corporation, the term “testing date” (as defined in § 1.382–2(a)(4)) shall not include any date as of the close of which the United States directly or indirectly owns a morethan-50-percent interest in the loss corporation. Thus, the loss corporation will be required to determine whether there is a testing date and, if so, whether there has been an ownership change for purposes of section 382, on any date as of the close of which the United States does not directly

2008–41 I.R.B. 855 October 14, 2008

.02 On February 12, 2008, auctions with respect to auction rate securities began to fail. Thereafter, as a result of auction failures, many taxpayers were unable to sell auction rate securities for the par amount of the securities.

.03 Taxpayers may assert legal claims against another person (hereinafter, “Corporation X ”) for its conduct as it relates to auction rate securities. For example, a taxpayer might allege that Corporation X improperly failed to disclose (1) at the time of the taxpayer’s purchase, the potential that the auction rate security could become illiquid, or (2) subsequent to the taxpayer’s purchase, information relating to the market for auction rate securities which might have suggested it would soon become illiquid.

.04 Corporation X may make an offer (the “Settlement Offer”) to affected taxpayers. Pursuant to the terms of the Settlement Offer, the taxpayer will have the right during a specified period (the “Window Period”) to cause Corporation X to buy the taxpayer’s auction rate securities for the par amount of the securities, upon the taxpayer’s giving notice to Corporation X . If the taxpayer receives the Settlement Offer,

EFFECTIVE DATE

This revenue procedure is effective for allocations of housing credit dollar amounts attributable to the National Pool component of a qualified state’s housing credit ceiling for calendar year 2008.

DRAFTING INFORMATION

The principal author of this revenue procedure is Christopher J. Wilson of the Office of Associate Chief Counsel (Passthroughs and Special Industries). For further information regarding this revenue procedure, contact Mr. Wilson at (202) 622–3040 (not a toll-free call).

26 CFR 601.601: Rules and regulations. (Also Part I, §§ 61, 1001.)

Rev. Proc. 2008–58