Part I. Rulings — Internal Revenue Bulletin 2015-11

26 CFR 57.2T Explanation of Terms.

T.D. 9711

DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 57

Health Insurance Providers Fee

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final and temporary regulations.

SUMMARY: This document contains temporary regulations that provide rules for the definition of a covered entity for purposes of the fee imposed by section 9010 of the Patient Protection and Affordable Care Act, as amended. The temporary regulations are necessary to clarify certain terms in section 9010. The temporary regulations affect persons engaged in the business of providing health insurance for United States health risks. The text of the temporary regulations also serves as the text of the proposed regulations (REG–143416–14) published in the Proposed Rules section in this issue of the Federal Register.

DATES: Effective Date : These regulations are effective on February 26, 2015.

Applicability Date : For dates of applicability, see §§ 57.10 and 57.10T.

FOR FURTHER INFORMATION CONTACT: Rachel S. Smith, (202) 3176855 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

Section 9010 of the Patient Protection and Affordable Care Act (PPACA), Public Law No. 111–148 (124 Stat. 119 (2010)), as amended by section 10905 of PPACA, and as further amended by section 1406 of the Health Care and Education Reconciliation Act of 2010, Public Law 111–152 (124 Stat. 1029 (2010)) (collectively, the Affordable Care Act or

ACA) imposes an annual fee on covered entities that provide health insurance for United States health risks. All references in this preamble to section 9010 are references to the ACA. Section 9010 did not amend the Internal Revenue Code (Code) but contains cross-references to specified Code sections. Unless otherwise indicated, all other references to subtitles, chapters, subchapters, and sections in this preamble are references to subtitles, chapters, subchapters, and sections in the Code and related regulations. All references to “fee” in this preamble are references to the fee imposed by section 9010.

On November 27, 2013, the Treasury Department and the IRS issued the Health Insurance Providers Fee regulations as final regulations (TD 9643). On August 12, 2014, the Treasury Department and the IRS issued Notice 2014–47, 2014–35 IRB 522, to provide further guidance for the 2014 fee year on the definition of a covered entity. The temporary regulations provide further guidance on the definition of a covered entity for the 2015 fee year and subsequent fee years.

General Overview

Section 9010(a) imposes an annual fee on each covered entity engaged in the business of providing health insurance. The fee is due by the annual date specified by the Secretary, but in no event later than September 30 ^th of each calendar year in which a fee must be paid (fee year).

Section 9010(b) requires the Secretary to determine the annual fee for each covered entity based on the ratio of the covered entity’s net premiums written for health insurance for any United States health risk that are taken into account for the calendar year immediately before the fee year (data year) to the aggregate net premiums written for health insurance of United States health risks of all covered entities that are taken into account during the data year. In calculating the fee, the Secretary must determine each covered entity’s net premiums written for United States health risks based on reports submitted to the Secretary by the covered

entity and through the use of any other source of information available to the Secretary.

Section 9010(c)(1) defines a covered entity as any entity that provides health insurance for any United States health risk during each fee year. Section 9010(c)(2) excludes the following entities from being covered entities: (A) Any employer to the extent that the employer self-insures its employees’ health risks; (B) any governmental entity; (C) any entity (i) that is incorporated as a nonprofit corporation under a State law, (ii) no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in section 501(h)), and which does not participate in, or intervene in, any political campaign on behalf of (or in opposition to) any candidate for public office, and (iii) more than 80 percent of the gross revenues of which is received from government programs that target low income, elderly, or disabled populations under titles XVIII, XIX, and XXI of the Social Security Act; and (D) any entity that is described in section 501(c)(9) (a voluntary employees’ beneficiary association (VEBA)) and is established by an entity (other than by an employer or employers) for purposes of providing health care benefits.

Section 9010(c)(3)(A) provides a controlled group rule under which all persons treated as a single employer under section 52(a) or (b) or section 414(m) or (o) are treated as a single covered entity. Section 9010(c)(4) provides that, if more than one person is liable to pay the fee on a single covered entity by reason of the application of the controlled group rule, then all such persons are jointly and severally liable for payment of the fee.

Section 57.2(c)(1) of the Health Insurance Providers Fee regulations defines the term controlled group to mean a group of two or more persons, including at least one person that is a covered entity, that is treated as a single employer under section 52(a), 52(b), 414(m), or 414(o). Section

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minimum gross revenues requirement of section 9010(c)(2)(C)(iii) and therefore did not qualify for this or any other exclusion under section 9010(c)(2) for the 2015 fee year. Under the temporary regulations, this entity must use the data year for each subsequent fee year to determine whether it qualifies for an exclusion under section 9010(c)(2). Thus, for the 2016 fee year, because this entity must determine its eligibility for an exclusion based on the 2015 data year, it would not be eligible for an exclusion under section 9010(c)(2) for the 2016 fee year and must submit a report in that year. This entity must also use the data year as its test year for the 2017 fee year and each subsequent fee year.

The Treasury Department and the IRS request comments regarding whether there are any circumstances in which an entity should be permitted by the IRS to change its test year, and if so, what conditions and limitations should apply to any such change.

Reporting for Controlled Group Members

Notice 2014–47 provided that a controlled group must report net premiums written only for each person who is a controlled group member at the end of the day on December 31 ^st of the data year and who would qualify as a covered entity in the fee year if it were a single-person covered entity (that is, not a member of a controlled group). The temporary regulations incorporate this rule for the 2015 fee year and each subsequent fee year. Therefore, a controlled group must not report net premiums written for any controlled group member who would fail to be a covered entity in the fee year if it were not a member of a controlled group. Although that person’s net premiums written are not taken into account, it remains a member of the controlled group and is jointly and severally liable for the fee amount allocated to the controlled group.

Special Analyses

57.2(c)(3)(ii) further provides that a person is treated as being a member of the controlled group if it is a member of the group at the end of the day on December 31 ^st of the data year.

Explanation of Provisions

Following the publication of the final regulations in TD 9643, the Treasury Department and the IRS received questions about how to apply the exclusions under section 9010(c)(2) to the general definition of a covered entity. The Treasury Department and the IRS also received questions about whether covered entities must report information on net premiums written for certain members of a controlled group. Notice 2014–47 was subsequently issued to resolve those questions for the 2014 fee year. The temporary regulations adopt the general approach of Notice 2014–47 to resolve those questions for the 2015 fee year and each subsequent fee year.

Application of Exclusions under Section 9010(c)(2)

Notice 2014–47 provided that, for the 2014 fee year, the Treasury Department and the IRS would not treat any entity as a covered entity if it would be excluded from the definition of a covered entity because it qualified for one of the exclusions under section 9010(c)(2) either for the entire 2013 data year or for the entire 2014 fee year, which began on January 1, 2014. As described later in this preamble, the controlled group rules under section 9010(c)(3)(A) and § 57.2(c)(1) do not apply for the limited purpose of determining whether an entity qualifies for an exclusion under section 9010(c)(2). Notice 2014–47 further provided that the entity should not report its net premiums written for the 2013 data year because the Treasury Department and the IRS would not treat such an entity as a covered entity.

The temporary regulations amend the rules in the existing Health Insurance Providers Fee regulations to incorporate the general approach in Notice 2014–47. Specifically, the temporary regulations provide that, for the 2015 fee year and each subsequent fee year, an entity qualifies for an exclusion under section 9010(c)(2) if it qualifies for an exclusion

either for the entire data year ending on the prior December 31 ^st or for the entire fee year beginning on January 1 ^st . An entity that qualifies for an exclusion under this rule is not a covered entity for that fee year and must not report its net premiums written.

The temporary regulations also impose two additional requirements. First, the temporary regulations generally impose a consistency requirement that binds an entity to its original selection of either the data year or the fee year (its test year) to determine whether it qualifies for an exclusion under section 9010(c)(2) for the 2015 fee year and each subsequent fee year. For example, if an entity selects the 2014 data year as its test year for the 2015 fee year, it must use the data year as its test year for the 2016 fee year and each subsequent fee year.

Second, the temporary regulations impose a special rule for an entity that uses the fee year as its test year. A special rule is important in this context because the fee is due by September 30 ^th of the fee year, and it may not be clear until the end of the fee year whether an entity will in fact qualify for an exclusion. If an entity using the fee year as its test year does not report its net premiums written because it expects to qualify for an exclusion under section 9010(c)(2), but the entity ultimately does not qualify for an exclusion, the temporary regulations require the entity to use the data year as its test year in all subsequent fee years. In this circumstance, the entity will necessarily be a covered entity that is required to report its net premiums written for the immediately following fee year. In addition, an entity that does not timely file a report in a fee year, and that is a covered entity for that fee year because it does not qualify for an exclusion, may be subject to penalties, including the failure to report penalty under section 9010(g)(2).

For example, assume that for the 2015 fee year an entity used the fee year as its test year and reasonably expected to qualify for the section 9010(c)(2)(C) exclusion for that fee year. As a result, the entity did not report its net premiums written and it was not treated as a covered entity for purposes of the 2015 fee calculation. Further assume that as of December 31, 2015, the entity did not satisfy the 80 percent

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determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because these regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, these temporary regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small businesses.

Drafting Information

The principal author of these regulations is Rachel S. Smith, IRS Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the Treasury Department and the IRS participated in their development.

Adoption of Amendments to the Regulations

Accordingly, 26 CFR part 57 is amended as follows:

PART 57—HEALTH INSURANCE PROVIDERS FEE

Paragraph 1. The authority citation for part 57 continues to read in part as follows:

Authority: 26 U.S.C. 7805; sec. 9010, Public Law 111–148 (124 Stat. 119 (2010)).

- - - Par. 2. Section 57.2 is amended by:

Redesignating paragraph (b)(3) as paragraph (b)(4).
Adding paragraph (b)(3).
Revising paragraph (c)(3)(ii). The addition and revision read as follows:

§ 57.2 Explanation of terms .

- - - (b) - - (3) [Reserved]. For further guidance, see § 57.2T(b)(3).
- - - (c) - - (3) - -

(ii) [Reserved]. For further guidance see § 57.2T(c)(3)(ii).

- - - Par. 3. Section 57.2T is added to read as follows:

§ 57.2T Explanation of terms (temporary) .

(a) through (b)(2) [Reserved]. For further guidance, see § 57.2(a) through (b)(2).

(3) Application of exclusions —(i) Test year . An entity qualifies for an exclusion described in § 57.2(b)(2)(i) through (iv) if it so qualifies in its test year. The term test year means either the entire data year or the entire fee year.

(ii) Consistency rule . For purposes of paragraph (b)(3)(i) of this section, an entity must use the same test year as it used in its first fee year beginning after December 31, 2014, and in each subsequent fee year. Thus, for example, if an entity used the 2014 data year as its test year for the 2015 fee year, that entity must use the data year as its test year for each subsequent fee year.

(iii) Special rule for fee year as test year . For purposes of paragraph (b)(3) of this section, any entity that uses the fee year as its test year but ultimately does not qualify for an exclusion described in § 57.2(b)(2)(i) through (iv) for that entire fee year must use the data year as its test year for each subsequent fee year.

(b)(4) through (c)(3)(i) [Reserved]. For further guidance, see § 57.2(b)(4) through (c)(3)(i).

(ii) A person is treated as being a member of the controlled group if it is a member of the group at the end of the day on December 31 ^st of the data year. However, a person’s net premiums written are included in net premiums written for the controlled group only if the person would qualify as a covered entity in the fee year if the person were not a member of the controlled group.

(d) through (n) [Reserved]. For further guidance, see § 52.7(d) through (n).

Par. 4. Section 57.10 is revised to read as follows:

§ 57.10 Effective/applicability date .

(a) In general . Except as provided in paragraph (b), §§ 57.1 through 57.9 apply

to any fee that is due on or after September 30, 2014.

(b) [Reserved]. For further guidance, see § 57.10T(b).

Par. 5. Section 57.10T is added to read as follows:

§ 57.10T Effective/applicability date (temporary) .

(a) [Reserved]. For further guidance, see § 57.10(a).

(b) Paragraphs (b)(3) and (c)(3)(ii) of § 57.2T . Paragraphs (b)(3) and (c)(3)(ii) of § 57.2T apply on February 26, 2015.

John Dalrymple, Deputy Commissioner for Services and Enforcement.

Approved: February 19, 2015.

Mark J. Mazur, Assistant Secretary of the

Treasury (Tax Policy).

(Filed by the Office of the Federal Register on February 23, 2015, 4:15 p.m., and published in the issue of the Federal Register for February 26, 2015, 80 F.R. 10333)

26 CFR 1.41–9: Alternative simplified credit

T.D. 9712

DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1

Alternative Simplified Credit Election

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations and removal of temporary regulations.

SUMMARY: This document contains final regulations relating to the election of the alternative simplified credit under section 41(c)(5) of the Internal Revenue Code (Code). The final regulations affect certain taxpayers claiming the credit under section 41.

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DATES: Effective Date : These regulations are effective on February 27, 2015.

Applicability Date : For dates of applicability, see § 1.41–9(d).

FOR FURTHER INFORMATION CONTACT: David Selig (202) 317-4137 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

This document amends 26 CFR part 1 to provide rules relating to the time and manner of electing the alternative simplified credit (ASC) under section 41(c)(5) of the Internal Revenue Code (Code).

Section 41(a) provides an incremental tax credit for increasing research activities (research credit) based on a percentage of a taxpayer’s qualified research expenses above a base amount. A taxpayer can apply the rules and credit rate percentages under section 41(a)(1) to calculate the credit (commonly referred to as the regular credit) or a taxpayer can make an election to apply the ASC rules and credit rate percentages under section 41(c)(5) to calculate the credit. Section 41(c)(5)(C) provides that an ASC election under section 41(c)(5) applies to the taxable year for which it is made and all succeeding taxable years unless revoked with the consent of the Secretary.

On June 10, 2011, the Treasury Department and the IRS published final regulations (TD 9528) (2011 Final Regulations) in the Federal Register (76 FR 33994) relating to the election and calculation of the ASC. Section 1.41–9(b)(2) provides that a taxpayer makes an election under section 41(c)(5) by completing the portion of Form 6765, “Credit for Increasing Research Activities,” (or successor form) relating to the ASC election, and attaching the completed form to the taxpayer’s timely filed (including extensions) original return for the taxable year to which the election applies. Section 1.41– 9(b)(2) also provides that a taxpayer may not make an election under section 41(c)(5) on an amended return and that an extension of time to make an election under section 41(c)(5) will not be granted under § 301.9100–3.

Following the publication of the 2011 Final Regulations, the Treasury Department and the IRS received requests to

amend the regulations to allow taxpayers to make an ASC election on an amended return. The requests explained that the burden of substantiating expenditures and costs for the base period under the regular credit can be costly, time-consuming, and difficult, and suggested that taxpayers often need additional time to determine whether to claim the regular credit or the ASC.

On June 3, 2014, the Treasury Department and the IRS published a notice of proposed rulemaking by cross-reference to temporary regulations (REG–133495– 13) in the Federal Register (79 FR 31892), and final and temporary regulations (TD 9666) (the Temporary Regulations) in the Federal Register (79 FR 31863). The final regulations removed the rule in § 1.41–9(b)(2) that prohibited a taxpayer from making an ASC election for a tax year on an amended return. In its place, the Temporary Regulations provided a rule allowing a taxpayer to make an ASC election for a tax year on an amended return if the taxpayer had not previously claimed a section 41 credit for that tax year on an original or amended return. In addition, the Temporary Regulations provided that a taxpayer that is a member of a controlled group in a tax year may not make an election under section 41(c)(5) for that tax year on an amended return if any member of the controlled group for that year claimed the research credit using a method other than the ASC on an original or amended return.

Written and electronic comments responding to the proposed regulations were received. No requests for a public hearing were made and no public hearing was held. After consideration of all the comments, the proposed regulations are adopted as revised by this Treasury decision.

Summary of Comments and Explanation of Provisions

Interaction with Section 280C Elections

A commenter requested clarification regarding whether a section 280C(c)(3) election made for a taxable year on line 17 of Form 6765, Credit For Increasing Research Activities, where no amount of regular credit is claimed, will be viewed by the IRS as a claim of the section 41(a)(1) credit and preclude an ASC election from

being made on an amended return for that taxable year. Section 280(c)(3) allows a taxpayer to make an annual irrevocable election to claim a reduced research credit rather than reducing the section 174 deduction, as required by section 280(c)(1). A section 280C(c)(3) election must be made on an original return. If a taxpayer is undecided whether to claim the regular credit for a taxable year but wants to preserve the operative effect of the section 280C(c)(3) election for that taxable year, then the taxpayer will make the section 280C(c)(3) election on line 17 of Form 6765, but leave the remaining section of the form blank. A section 280C(c)(3) election on line 17 of Form 6765 made in a taxable year does not, in and of itself, constitute a credit claim under section 41(a)(1), and accordingly does not preclude a taxpayer from making an ASC election on an amended return for that taxable year.

Section 9100 Relief

One commenter requested that the final regulations allow an extension of time to make an election under section 41(c)(5) under § 301.9100–3. Under § 301.9100– 3(c), the Commissioner will grant a reasonable extension of time to make a regulatory election only when the interests of the Government will not be prejudiced by the granting of relief. Under § 301.9100– 3(c)(1)(ii), the interests of the Government are ordinarily prejudiced if the taxable year in which the regulatory election should have been made or any taxable years that would have been affected by the election had it been timely made are closed by the period of limitations on assessment under section 6501(a) before the taxpayer’s receipt of a ruling granting relief under this section. Because the final regulations allow a taxpayer to amend its return to make the ASC election in a taxable year that is not closed by the period of limitations for assessment under section 6501(a) if no credit under section 41(a)(1) was claimed in the prior taxable year on an original or amended return, an extension of time under § 301.9100–3 to make the ASC election is not necessary during this period. An extension of time to make an ASC election in a taxable year closed by the period of limitations on as

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sessment under section 6501(a) ordinarily prejudices the interests of the government. See section 301.9100–3(c)(1)(ii). Accordingly, the final regulations retain the rule that an extension of time to make an election under section 41(c)(5) will not be granted under § 301.9100–3.

Period for Making an ASC Election

One commenter requested that the final regulations provide that a taxpayer may make an ASC election for an earlier, closed tax year on a later year’s return in which a research credit from that closed year is reported on a carryforward schedule, or actually used as a credit against tax, so long as no intervening amended return claiming a research credit for that tax year using a different method has been claimed. The Temporary Regulations only permitted a taxpayer to elect the ASC on an amended return for taxable years ending before June 3, 2014, (the effective/ applicability date of those regulations) if the taxpayer makes the election before the period of limitations for assessment of tax has expired for that year. The rule in the Temporary Regulations provided a reasonable time period for taxpayers to determine whether or not to make an ASC election with respect to a prior, open tax year. To permit a taxpayer to make an ASC election for a tax year in which the period of limitations for assessment of tax has expired has the practical effect of permitting the taxpayer to make an ASC election on a return that cannot be amended. Therefore, these final regulations do not adopt this suggested modification.

One commenter requested that these final regulations provide that an ASC election can be made on an amended return for a tax year so long as the period for making a refund claim under section 6511 has not expired for that tax year, even in cases where the statute of limitations on assessment under section 6501 is closed. These final regulations retain the rule of the Temporary Regulations that a taxpayer must make an ASC election on an amended return before the statute of limitations on assessment under section 6501(a) is closed. The general period under the statute of limitations on assessment under section 6501(a), which is three years after the tax return is filed, provides

a reasonable time for taxpayers to file an ASC election on an amended return, and a reasonable time for the IRS to examine the amended return. This rule also preserves the integrity of the rule in the final regulations providing that an extension of time to make an election under section 41(c)(5) will not be granted under § 301.9100–3. Under § 301.9100–3, the interests of the government are ordinarily prejudiced if the taxable year in which a regulatory election should have been made or any taxable years that would have been affected by the election had it been timely made are closed by the period of limitations on assessment under section 6501(a) before the taxpayer’s receipt of a ruling granting relief under § 301.9100. This requirement is mitigated by the fact that the period of limitations on assessment may be extended by agreement of the IRS and the taxpayer. For clarity, the language found in the effective date of the Temporary Regulations referencing the period of limitations for assessment of tax is added to the text of the final regulations under § 1.41–9(b)(2) relating to the time and manner of making the ASC election.

Controlled Group ASC Elections

One commenter requested that the final regulations modify the rules for controlled group ASC elections under § 1.41– 9(b)(4), under which only the designated member of a controlled group may make or revoke an ASC election. Revising those rules is beyond the scope of these regulations. Therefore, the final regulations do not amend § 1.41–9(b)(4).

Modification of the Election Rule

One commenter requested that these final regulations amend the rule in the Temporary Regulations that allows a taxpayer to make an ASC election for a tax year on an amended return only if the taxpayer has not previously claimed the section 41 credit on its original return or an amended return for that tax year to clarify that the previously claimed section 41 credit is determined under section 41(a)(1), and not under sections 41(a)(2) or (3). The commenter stated that the ASC is an alternative method to the regular credit under section 41(a)(1), and whether

a taxpayer elects the ASC or claims the regular credit does not impact the determination of the credits allowable under sections 41(a)(2) and 41(a)(3). This approach is consistent with the language of section 41(c)(5)(A) and § 1.41–9(a), which specifically reference section 41(a)(1). Accordingly, the final regulations provide that a taxpayer may make an ASC election for a tax year on an amended return only if the taxpayer has not previously claimed the section 41(a)(1) credit on its original return or an amended return for that tax year.

Effect on Other Documents

The Temporary Regulations are obsolete for taxable years beginning on or after February 27, 2015.

Special Analyses

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. It is hereby certified that the collection of information in these regulations will not have a significant economic impact on a substantial number of small entities. Although a substantial number of small entities may make an ASC election on an amended return pursuant to these regulations, the economic impact of any collection burden on these entities relating to this election is minimal because the regulations will result in a benefit to taxpayers by providing additional time for taxpayer to calculate and elect the ASC. Accordingly, a regulatory flexibility analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the Code, these regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

Drafting Information

The principal author of these regulations is David Selig, Office of the Asso

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ciate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the IRS and the Treasury Department participated in their development.

Adoption of Amendments to the Regulations

Accordingly, 26 CFR part 1 is amended as follows:

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 - - Section 1.41–9 also issued under 26 U.S.C. 41(c)(5)(C). - - Par. 2. Section 1.41–9 is amended by:

Revising paragraph (b)(2).
Adding a third and fourth sentence to paragraph (d).

The revision and addition read as follows:

§ 1.41–9 Alternative simplified credit .

- - - (b) - -

(2) Time and manner of election . A taxpayer makes an election under section 41(c)(5) by completing the portion of Form 6765, “Credit for Increasing Research Activities,” (or successor form) relating to the election of the ASC, and attaching the completed form to the taxpayer’s timely filed (including extensions) original return for the taxable year to which the election applies. A taxpayer may make an election under section 41(c)(5) for a tax year on an amended return, but only if the taxpayer has not previously claimed a section 41(a)(1) credit on its original return or an amended return for that tax year, and only if that tax year is not closed by the period of limitations on assessment under section 6501(a). An extension of time to make an election under section 41(c)(5) will not be granted under § 301.9100–3 of this chapter. A taxpayer that is a member of a controlled group in a tax year may not make an election under section 41(c)(5) for that tax year on an amended return if any member of the controlled group for that tax year previously claimed the research credit under section 41(a)(1) using a method other than the ASC on an original or amended return for that tax year. See paragraph (b)(4) of this section for

additional rules concerning controlled groups. See also § 1.41–6(b)(1) requiring that all members of the controlled group use the same method of computation.

- - - (d) Effective/applicability date . - - Paragraph (b)(2) of this section applies to elections with respect to taxable years ending on or after February 27, 2015. For taxable years ending before February 27, 2015, see § 1.41–9T as contained in 26 CFR part 1, revised April 1, 2015.

§ 1.41–9T [Removed]

Par. 3. Section 1.41–9T is removed.

John Dalrymple, Deputy Commissioner for Services and Enforcement.

Approved: February 3, 2015.

Mark J. Mazur, Assistant Secretary of the

Treasury (Tax Policy).

(Filed by the Office of the Federal Register on February 26, 2015, 8:45 a.m., and published in the issue of the Federal Register for February 27, 2015, 80 F.R. 10587)

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