SECTION 12. DRAFTING

INFORMATION

The principal author of this revenue procedure is Bruce A. Decker of the Office of Associate Chief Counsel (Corporate). For further information regarding this revenue procedure, contact Bruce A. Decker at (202) 622–7550 (not a toll-free call).

consent under § 1.1502–13(e)(3) has been revoked pursuant to this section 8.01.

.02 The Service’s consent under § 1.1502–13(e)(3) is granted for any consolidated group to revoke a valid consent received from the Service under § 1.1502–13(e)(3) to treat intercompany transactions on a separate entity basis, and thus treat intercompany transactions on a single entity basis, provided a statement is attached to the consolidated group’s original return for the taxable year in which the revocation is to be effective indicating its revocation of the consent pursuant to this section 8.02. In cases where a valid consent from the Service to report intercompany transactions on a separate entity basis was not previously obtained and the consolidated group wants to change from separate entity reporting to single entity reporting, see section 9.

.03 Notwithstanding that the Service has granted consent under § 1.1502–13(e)(3) and that such consent has not been revoked pursuant to section 8.01 or 8.02, the Director of Field Operations may, upon examination of tax returns for years subsequent to the consent year, recommend that the ruling granting such consent be modified or revoked if the conditions and circumstances under which the ruling was granted have changed substantially and it is determined that single entity reporting is necessary in order to clearly reflect CTI under § 446 or CTL under § 1502. If the Director of Field Operations recommends that the ruling granting such consent be modified or revoked, the Director of Field Operations will forward the matter to the national office for consideration before any further action is taken. Such a referral to the national office will be treated as a request for technical advice, and the provisions of Rev. Proc, 2009–2, 2009–1 I.R.B. 87, or its successor, will be followed.

In determining whether the conditions and circumstances under which the ruling was granted have changed substantially, the Service will consider the factors and guidelines under section 6 (with the exception of section 6.02 which is addressed in section 8.01) of this revenue procedure, and may also consider other factors that may be relevant to clearly reflect the CTI and CTL of the consolidated group.

.04 When consent under § 1.1502–13(e)(3) is revoked pursuant to section 8.01, 8.02 or 8.03, each member of the consolidated group must report those intercompany transactions for which consent has been revoked on a single entity basis for the taxable year of the revocation and all subsequent taxable years (ending prior to the first taxable year for which the group does not file a consolidated return) unless consent is received pursuant to a new request submitted under section 4.

5. Section 446(e) consent is granted under § 1.1502–13(e)(3)(iii) for any changes in methods of accounting for intercompany transactions that are necessary solely to conform a member’s methods to a revocation of consent made pursuant to this revenue procedure, provided the changes are made in the taxable year for which the revocation is made. Any such changes in methods are effected on a cut-off basis (that is, no § 481(a) adjustment will be made). For any subsequent taxable year, § 446(e) consent must be separately requested under Rev. Proc. 97–27, or its successor, if a member has failed to conform its accounting practices to the treatment of intercompany transactions required as a result of a revocation made pursuant to this revenue procedure. Any such changes in methods are effected on a cut-off basis (that is, no § 481(a) adjustment will be made).

July 6, 2009 110 2009–27 I.R.B.