SECTION 5. RECORDS

The books and records of the in-scope applicable entity must be closed as of the last day of the first effective year. An in-scope applicable entity must continue to maintain adequate books and records. See § 6001.

3 See Notice of Proposed Rulemaking (REG-113628-21) published October 9, 2024, 89 F.R. 81877. (The proposed regulations would amend the § 6417 final regulations published on March 11, 2024, which provide that these entities are disregarded. See § 1.6417-1(f), T.D. 9988, 89 F.R. 17585.)

REG-113628-21 would, upon being finalized after a notice and comment period, apply to taxable years ending after October 9, 2024. REG-113628-21 would also generally allow an entity the option to apply proposed § 1.6417-1(c)(7) and (f) to taxable years ending on or before October 9, 2024, provided that the Indian Tribal government(s) that own the entity also apply proposed § 1.6417-1(c)(7) and (f) consistently with respect to such entity for all such taxable years. However, this option would not be available for any taxable period for a federal excise tax or employment tax with respect to which the entity was, as of October 9, 2024, a party to any administrative or judicial proceeding.

A taxpayer may rely upon proposed § 1.6417-1(c)(7) before it is finalized for purposes of this revenue procedure if the taxpayer complies with the requirement to apply proposed § 1.64171(c)(7) and (f) consistently with respect to such entity for all such taxable years.

4 This rule would encompass wholly owned Tribal housing authorities and utilities. See Notice of Proposed Rulemaking (REG-113628-21), described in footnote 3.

February 3, 2025 714 Bulletin No. 2025–6