SECTION 3. SPECIFIC

BACKGROUND INFORMATION REGARDING DIFFERENT MEANS OF IDENTIFYING AN AGENT

.01 In general . Section 1.1502–77(c) provides for several different means of identifying an agent to act on behalf of a consolidated group. Each method is described below and applies to consolidated return years beginning on or after April 1, 2015. For consolidated return years beginning prior to April 1, 2015, see Rev. Proc. 2002–43. .02 Terminating agent’s default suc- cessor is the agent . See § 1.1502–77(c)(1). The general rule is that if a terminating agent has a sole successor (within the meaning of § 1.1502–77(b)(1)), that successor is the default successor and automatically becomes the agent. In such cases, approval of the Commissioner is not required before the default successor is the agent, but the Commissioner is not required to send communications to, or act on communications from, the default successor until the default successor provides the notification required under § 1.1502–77(c)(4) (notification to Commissioner of status as a default successor) in the manner prescribed in section 6 of this revenue procedure.

.03 Terminating agent’s designation of an agent . See § 1.1502–77(c)(5). In general, if an agent’s existence terminates and there is no default successor for a completed year, the terminating agent may designate as the agent any member of the consolidated group during any part of that completed year, or any entity that is a successor of such a member as provided under § 1.1502–77(c)(5)(ii). A terminating agent previously designated by the Commissioner under § 1.1502–77(c)(6)(i)(A)( 2 )–( 4 ) cannot make a designation under § 1.1502– 77(c)(5). The notification by the terminating agent to the Commissioner required under § 1.1502–77(c)(5)(iii) must be provided in the manner prescribed in section 7 of this revenue procedure.

.04 Commissioner’s designation of an agent . See § 1.1502–77(c)(6). The Commissioner can designate an agent: (1) on the Commissioner’s own accord under four circumstances pursuant to § 1.1502– 77(c)(6)(i)(A), or (2) upon a request from a member of the group pursuant to § 1.1502–77(c)(6)(i)(B).

More specifically, the Commissioner may designate any member or successor of a member as the agent on the Commissioner’s own accord if: (1) the terminating agent does not have a default successor and does not designate an agent under § 1.1502–77(c)(5)(i) (see § 1.1502– 77(c)(6)(i)(A)( 1 )); (2) an agent previously designated by the Commissioner is no longer a member of the group in a current year and does not have a default successor that is a member of the group (see § 1.1502–77(c)(6)(i)(A)( 2 )); (3) the Commissioner believes that an agent or its default successor exists but such entity has not timely responded to Internal Revenue Service (IRS) notices sent to the entity’s last known address or left at the entity’s usual place of business or in situations in which the agent fails to perform its obligations as agent as prescribed by the Code or regulations promulgated thereunder (see § 1.1502–77(c)(6)(i)(A)( 3 )); or (4) the agent is or becomes a foreign entity (see § 1.1502–77(c)(6)(i)(A)( 4 )).

In addition, the Commissioner may designate an agent to replace an agent previously designated by the Commissioner if a member submits a written request to replace such agent (see § 1.1502– 77(c)(6)(i)(B)). Any written request to the Commissioner to designate an agent, whether under § 1.1502–77(c)(6)(i)(A) or § 1.1502–77(c)(6)(i)(B), must be provided in the manner prescribed in section 8 of this revenue procedure.

.05 Resignation of an agent . See § 1.1502–77(c)(7). An agent may resign for a completed year in the following circumstances: (i) the agent provides written notice to the Commissioner that it no longer intends to be the agent for the completed year, (ii) an entity that will replace the resigning agent consents in writing to be the agent with respect to the completed year for which the agent wishes to resign, (iii) the agent that is resigning is not the agent for any year other than a completed year immediately after its resignation takes effect, and (iv) the Commissioner does not object to the agent’s resignation. The written notice by the resigning agent and the consent of the agent that will replace the resigning agent, under § 1.1502–77(c)(7), must be provided in the manner prescribed in section 9 of this revenue procedure.

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.06 Certain communications by the Commissioner . See § 1.1502–77(c)(6)(ii) and (iv); § 1.1502–77(c)(7)(i)(D); § 1.1502–77(f)(2)(i). The Commissioner will notify, in writing, an agent designated by the Commissioner pursuant to § 1.1502–77(c)(6) in the manner prescribed in section 10.02 of this revenue procedure. In addition, the Commissioner will object to an agent’s resignation request pursuant to § 1.1502–77(c)(7) in the manner prescribed in section 10.03 of this revenue procedure. The Commissioner will also provide written notice to the agent under § 1.1502–77(f)(2)(i) that the Commissioner will deal with a member separately with regard to its income tax liability under § 1.1502–6 in the manner prescribed in section 10.04 of this revenue procedure.

.07 Documentation to the Commis- sioner . All documentation to be provided to the Commissioner should be submitted in the manner prescribed by section 5 of this revenue procedure.