Part IV. Items — Internal Revenue Bulletin 2009-12

Suspension of Tax-Exempt Status of an Organization Identified With Terrorism

Announcement 2009–17

I. Purpose

This announcement is a public notice of the suspension under section 501(p) of the Internal Revenue Code of the federal tax exemption of a certain organization that has been designated as supporting or engaging in terrorist activity or supporting terrorism. Contributions made to an organization during the period that the organization’s tax-exempt status is suspended are not deductible for federal tax purposes.

II. Background

The federal government has designated a number of organizations as supporting or engaging in terrorist activity or supporting terrorism under the Immigration and Nationality Act, the International Emergency Economic Powers Act, and the United Nations Participation Act of 1945. Federal law prohibits most contributions to organizations that have been so designated.

Section 501(p) of the Code was enacted as part of the Military Family Tax Relief Act of 2003 (P. L. 108–121), effective November 11, 2003. Section 501(p)(1) suspends the exemption from tax under section 501(a) of any organization described in section 501(p)(2). An organization is described in section 501(p)(2) if the organization is designated or otherwise individually identified (1) under certain provisions of the Immigration and Nationality Act as a terrorist organization or foreign terrorist organization; (2) in or pursuant to an Executive Order which is related to terrorism and issued under the authority of the International Emergency Economic Powers Act or section 5 of the United Nations Participation Act of 1945 for the purpose of imposing on such organization an economic or other sanction; or (3) in or pursuant to an Executive Order issued under the authority of any federal law, if the organization is designated or otherwise individually identified in or pursuant to the Executive Order as supporting

or engaging in terrorist activity (as defined in the Immigration and Nationality Act) or supporting terrorism (as defined in the Foreign Relations Authorization Act) and the Executive Order refers to section 501(p)(2). Under section 501(p)(3) of the Code, suspension of an organization’s tax exemption begins on the date of the first publication of a designation or identification with respect to the organization, as described above, or the date on which section 501(p) was enacted, whichever is later. This suspension continues until all designations and identifications of the organization are rescinded under the law or Executive Order under which such designation or identification was made.

Under section 501(p)(4) of the Code, no deduction is allowed under any provision of the Internal Revenue Code for any contribution to an organization during any period in which the organization’s tax exemption is suspended under section 501(p). Thus, for example, no charitable contribution deduction is allowed under section 170 (relating to the income tax), section 545(b)(2) (relating to undistributed personal holding company income), section 556(b)(2) (relating to undistributed foreign personal holding company income), section 642(c) (relating to charitable set asides), section 2055 (relating to the estate tax), section 2106(a)(2) (relating to the estate tax for nonresident aliens) and section 2522 (relating to the gift tax) for contributions made to the organization during the suspension period.

On February 11, 2009, the organization listed below was designated under Executive Order 13224, entitled “Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism.”

III. Notice of Suspension and Non-deductibility of Contributions

The organization whose tax exemption has been suspended under section 501(p) and the effective date of such suspension are listed below. Contributions made to this organization during the period of suspension are not deductible for federal tax purposes.

Tamil Foundation, Inc. Cumberland, MD Effective date: 2–11–09

IV. Federal Tax Filings

An organization whose exempt status has been suspended under section 501(p) does not file Form 990 and is required to file the appropriate Federal income tax returns for the taxable periods beginning on the date of the suspension. The organization must continue to file all other appropriate federal tax returns, including employment tax returns, and may also have to file federal unemployment tax returns.

V. Contact Information

For additional information regarding the designation or identification of an organization described in section 501(p)(2), contact the Compliance Division at the Office of Foreign Assets Control of the U.S. Treasury Department at 202–622–2490. Additional information is also available for download from the Office’s Internet Home Page at http://www.treas.gov/offices/enforcement/ofac/

For additional information regarding the suspension of the federal tax exemption of an organization under section 501(p), contact Ward L. Thomas at (202) 283–8913 at the Internal Revenue Service.

Section 482: Methods To Determine Taxable Income in Connection With a Cost Sharing Arrangement; Correction

Announcement 2009–18

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correction to final and temporary regulations.

SUMMARY: This document contains corrections to final and temporary regulations (T.D. 9441, 2009–7 I.R.B. 460) that were published in the Federal Register on Monday, January 5, 2009 (74 FR 340)

2009–12 I.R.B. 714 March 23, 2009

FOR FURTHER INFORMATION CONTACT: Kenneth P. Christman, (202) 435–5265 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

The correction notice that is the subject of this document is under section 482 of the Internal Revenue Code.

Need for Correction

As published, the notice of proposed rulemaking by cross-reference to temporary regulations (REG–144615–02) contains errors that may prove to be misleading and are in need of clarification.

Correction of Publication

Accordingly, the publication of the notice of proposed rulemaking by cross-reference to temporary regulations (REG–144615–02), which was the subject of FR Doc. E8–30712, is corrected as follows:

On page 236, in the document headings, under the caption “ACTION:”, the language “Notice of proposed rulemaking by cross-reference to temporary regulations, notice of proposed rulemaking, and notice of public hearing.” is corrected to read “Notice of proposed rulemaking by cross-reference to temporary regulations and notice of public hearing.”.
On page 236, column 3, in the preamble, under the paragraph heading “Special Analyses”, last line of the column, the language “sharing agreements. Few small entities” is corrected to read “sharing arrangements. Few small entities”.
On page 237, column 1, in the preamble, under the paragraph heading “Special Analyses”, first paragraph of the column, line 2, the language “agreements, as defined by these” is corrected to read “arrangements, as defined by these”.
On page 237, column 1, in the preamble, under the paragraph heading “Comments and Public Hearing”, third paragraph, line 1, the language “The rules of 26 CFR 601.601(a)(93)” is corrected to read “The rules of 26 CFR 601.601(a)(3)”.

§1.482–2 [Corrected]

On page 237, column 3, §1.482–2(f)(2), the language “Election

providing further guidance and clarification regarding methods under section 482 to determine taxable income in connection with a cost sharing arrangement in order to address issues that have arisen in administering the current regulations. The temporary regulations affect domestic and foreign entities that enter into cost sharing arrangements described in the temporary regulations.

DATES: This correction is effective March 5, 2009, and is applicable on January 5, 2009.

FOR FURTHER INFORMATION CONTACT: Kenneth P. Christman, (202) 435–5265 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

The final and temporary regulations that are the subject of this document are under sections 367 and 482 of the Internal Revenue Code.

Need for Correction

As published, final and temporary regulations (T.D. 9441) contains errors that may prove to be misleading and are in need of clarification.

Correction of Publication

Accordingly, the publication of the final and temporary regulations (T.D. 9441), which was the subject of FR Doc. E8–30715, is corrected as follows:

On page 346, column 2, in the preamble, under the paragraph heading “4. Acquisition Price and Market Capitalization Methods—Temp. Treas. Reg. §1.482–7T(g)(5) and (6), third paragraph of the column, line 17, the language “PCT Payor’s, nonroutine contributions” is corrected to read “PCT Payee’s, nonroutine contributions”.
On page 347, column 1, in the preamble, the language of the paragraph heading “2. Contingent Payments—Temp. Treas. Reg. §1.482–7T(h)(2)(iv) and (v)” is corrected to read “2. Contingent Payments—Temp. Treas. Reg. §1.482–7T(h)(2)(iii) and (iv)”.
On page 348, column 2, in the preamble, under the paragraph heading “Spe

cial Analyses”, last paragraph of the column, line 13, the language “preamble to the cross-reference notice of” is corrected to read “preamble to the cross-referenced notice of”.

On page 348, column 3, in the preamble, under the paragraph heading “Drafting Information”, second paragraph of the column, line 2, the language “proposed regulations is Kenneth P.” is corrected to read “temporary regulations is Kenneth P.”.

LaNita Van Dyke, Chief, Publications and

Regulations Branch, Legal Processing Division,

Associate Chief Counsel (Procedure and Administration).

(Filed by the Office of the Federal Register on March 4, 2009, 8:45 a.m., and published in the issue of the Federal Register for March 5, 2009, 74 F.R. 9570)

Section 482: Methods To Determine Taxable Income in Connection With a Cost Sharing Arrangement; Correction

Announcement 2009–19

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correction to notice of proposed rulemaking by cross-reference to temporary regulations.

SUMMARY: This document contains corrections to a notice of proposed rulemaking by cross-reference to temporary regulations (REG–144615–02, 2009–7 I.R.B. 561) that was published in the Fed- eral Register on Monday, January 5, 2009 (74 FR 236) providing further guidance and clarification regarding methods under section 482 to determine taxable income in connection with a cost sharing arrangement in order to address issues that have arisen in administering the current regulations. These temporary regulations potentially affect controlled taxpayers within the meaning of section 482 that enter into cost sharing arrangements as defined therein.

March 23, 2009 715 2009–12 I.R.B.

( vi ) The stock of the transferee member (or a higher-tier member other than a higher-tier member of an 80-percent chain that includes the transferor and transferee) is disposed of within 12 months from the assignment of the intercompany obligation, unless at the time of the assignment, the transferor member, transferee member (or in the case of successive section 351 exchanges, each transferor and transferee member) and the debtor member are all in the same 80-percent chain; and all of the stock of the transferee (or in the case of successive section 351 exchanges, the lowest-tier transferee) held by members of the group is disposed of as part of the same plan or arrangement, either directly or indirectly, to persons that are not members of the group.

- - - (7) - * (ii) - * Example 4 . - * * (ii) No deemed satisfaction and reissuance . Because the assignment of the B note is an exchange to which section 351 applies and neither S nor B recognize gain or loss, the transaction is not a triggering transaction under paragraph (g)(3)(i)(B)( 1 ) of this section, and the note is not treated as satisfied and reissued under paragraph (g)(3)(ii) of this section.
- - - (iv) Transferee loss subject to limita- tion . - -
- - - Example 5 . - * * (i) * * * The terms and conditions of the note are not modified in connection with the sales transaction, the transaction does not result in a change in payment expectations, and no amount of income, gain, deduction, or loss is recognized by S, B, or T with respect to the note.

Guy Traynor,

Acting Chief, Publications and Regulations Branch, Legal Processing Division,

Associate Chief Counsel (Procedure and Administration).

(Filed by the Office of the Federal Register on March 4, 2009, 8:45 a.m., and published in the issue of the Federal Register for March 5, 2009, 74 F.R. 6828)

to apply paragraph (b) of this section to earlier taxable years.” is corrected to read “Election to apply paragraph (b) to earlier taxable years.”.

LaNita Van Dyke, Chief, Publications and

Regulations Branch, Legal Processing Division,

Associate Chief Counsel (Procedure and Administration).

(Filed by the Office of the Federal Register on March 4, 2009, 8:45 a.m., and published in the issue of the Federal Register for March 5, 2009, 74 F.R. 9577)

Consolidated Returns; Intercompany Obligations; Correction

Announcement 2009–20

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

SUMMARY: This document contains corrections to final regulations (T.D. 9442, 2009–6 I.R.B. 434) that were published in the Federal Register on Monday, December 29, 2008 (73 FR 79324) under section 1502 of the Internal Revenue Code providing guidance regarding the treatment of transactions involving obligations between members of a consolidated group.

DATES: This correction is effective February 11, 2009, and is applicable on December 29, 2008.

FOR FURTHER INFORMATION CONTACT: Frances Kelly, (202) 622–7770 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

The final regulations that are the subject of this document are under section 1502 of the Internal Revenue Code.

Need for Correction

As published, final regulations (T.D. 9442) contains errors that may prove to be misleading and are in need of clarification.

- - - -

Correction of Publication

Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:

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 1.1502–13 is amended as follows:

The second sentence of paragraph (g)(3)(i)(B) is revised.
Paragraph (g)(3)(i)(B)( 1 )( vi ) is revised.
Paragraph (g)(7)(ii) Example 4 . (ii) is revised.
The paragraph title for paragraph (g)(7)(ii) Example 4 . (iv) is added.
The sixth sentence of paragraph (g)(7)(ii) Example 5 . (i) is revised.

§1.1502–13 Intercompany transactions .

- - - (g) - - (3) - - (i) - - (B) * * * In making this determination, if a creditor or debtor realizes an amount in a transaction in which a creditor assigns all or part of its rights under an intercompany obligation to the debtor, or a debtor assigns all or part of its obligations under an intercompany obligation to the creditor, the transaction will be treated as an extinguishment and will be excepted from the definition of “triggering transaction” only if either of the exceptions in paragraphs (g)(3)(i)(B)( 5 ) or ( 6 ) of this section apply.
- ( 1 ) - -

2009–12 I.R.B. 716 March 23, 2009