Table of Contents

• Highlights of This Issue
  • INCOME TAX
    • Rev. Rul. 2008-46
    • T.D. 9415
    • Notice 2008-70
    • Rev. Proc. 2008-48
    • Rev. Proc. 2008-52
    • Rev. Proc. 2008-53
  • EXCISE TAX
    • REG-120476-07
• Preface
  • The IRS Mission
  • Introduction
• Part I. Rulings and Decisions Under the Internal Revenue Code of 1986
  • T.D. 9415
    • AGENCY:
    • ACTION:
    • SUMMARY:
    • DATES:
    • FOR FURTHER INFORMATION CONTACT:
      • Background
      • Dates of Applicability
      • Special Analyses
    • Adoption of Amendments to the Regulations
      • PART 1—INCOME TAXES
      • §1.860A-1T [Removed]
      • §1.860G-3T [Removed]
      • §1.863-1T [Removed]
      • §1.1441-2T [Removed]
    • Drafting Information
  • Rev. Rul. 2008-46
• Part III. Administrative, Procedural, and Miscellaneous
  • Notice 2008-70
    • SECTION 1. PURPOSE
    • SECTION 2. INTRODUCTION
    • SECTION 3. BACKGROUND AND GENERAL REQUIREMENTS
      • (1) Qualified Tax Credit Bonds
      • (2) Qualified Forestry Conservation Bonds
    • SECTION 4. APPLICATION PROCESS AND DEADLINES
    • SECTION 5. EXPRESSION OF INTEREST
    • SECTION 6. FINAL APPLICATION
    • SECTION 7. PRO FORMA APPLICATION
    • SECTION 8. DRAFT OF FINAL APPLICATION
    • SECTION 9. COORDINATION WITH FEDERAL AND STATE AGENCIES
    • SECTION 10. CONSENT TO DISCLOSURE AND TO USE OF INFORMATION
    • SECTION 11. ELECTION TO TREAT HALF OF THE ALLOCATION AS PAYMENT OF TAX
    • SECTION 12. ISSUANCE OF THE QFCBS
    • SECTION 13. EXTENSIONS OF TIME
    • SECTION 14. TRANSFER OF REPLACEMENT LAND IN PARTIAL SATISFACTION OF SECTION 54B(e)(2) AND THE REQUIREMENTS OF THIS NOTICE
    • SECTION 15. CERTIFICATIONS OF ACQUISITION AND TRANSFER OF LAND
    • SECTION 16. REQUIRED DECLARATIONS
    • SECTION 17. ADDRESSES
    • SECTION 18. INFORMATION REPORTING
    • SECTION 19. DRAFTING INFORMATION
  • Rev. Proc. 2008-48
    • SECTION 1. PURPOSE
    • SECTION 2. BACKGROUND
    • SECTION 3. SCOPE
    • SECTION 4. APPLICATION
    • SECTION 5. EFFECTIVE DATE
    • SECTION 6. ADDITIONAL INFORMATION
  • Rev. Proc. 2008-52
    • SECTION 1. PURPOSE
    • SECTION 2. BACKGROUND
      • .01 Change in method of accounting defined.
      • .02 Securing permission to make a method change.
      • .03 Terms and conditions of a method change.
      • .04 No retroactive method change.
      • .05 Method change with a § 481(a) adjustment.
      • .06 Method change using a cut-off basis.
      • .07 Consistency and clear reflection of income.
      • .08 Separate trades or businesses.
      • .09 Penalties.
      • .10 Change made as part of an examination.
    • SECTION 3. DEFINITIONS
      • .01 Application.
      • .02 Applicable provisions.
      • .03 Taxpayer.
      • .04 Timely mailing as timely filing.
      • .05 Timely performance of acts.
      • .06 Year of change.
      • .07 Section 481(a) adjustment period.
      • .08 Under examination.
      • .09 Issue under consideration.
      • .10 Change within the LIFO inventory method.
      • .11 Director.
    • SECTION 4. SCOPE
      • .01 Applicability.
      • .02 Inapplicability.
      • .03 Nonautomatic changes.
    • SECTION 5. TERMS AND CONDITIONS OF CHANGE
      • .01 In general.
      • .02 Year of change.
      • .03 Section 481(a) adjustment.
      • .04 Section 481(a) adjustment period.
      • .05 NOL carryback limitation for taxpayer subject to criminal investigation.
      • .06 Certain foreign corporations.
      • .07 Change treated as initiated by the taxpayer.
    • SECTION 6. GENERAL APPLICATION PROCEDURES
      • .01 Consent.
      • .02 Filing requirements.
      • .03 Taxpayer under examination.
      • .04 Taxpayer before an appeals office.
      • .05 Taxpayer before a federal court.
      • .06 Compliance with provisions.
    • SECTION 7. AUDIT PROTECTION FOR TAXABLE YEARS PRIOR TO YEAR OF CHANGE
      • .01 In general.
      • .02 Exceptions.
    • SECTION 8. EFFECT OF CONSENT
      • .01 In general.
      • .02 Retroactive change or modification.
    • SECTION 9. REVIEW BY DIRECTOR
      • .01 In general.
      • .02 Changes not made in compliance with all applicable provisions.
      • .03 National office consideration.
    • SECTION 10. REVIEW BY NATIONAL OFFICE
      • .01 In general.
      • .02 Incomplete application.
      • .03 National office determination.
    • SECTION 11. APPLICABILITY OF REV. PROCS. 2008-1 AND 2008-4
    • SECTION 12. EFFECTIVE DATE
      • .01 In general.
      • .02 Transition rules.
    • SECTION 13. EFFECT ON OTHER DOCUMENTS
    • SECTION 14. PAPERWORK REDUCTION ACT
    • SECTION 15. SIGNIFICANT CHANGES
    • DRAFTING INFORMATION
    • SECTION 1. GROSS INCOME (§ 61)
      • .01 Up-front Payments for Network Upgrades received by Utilities.
      • .02 Reserved.
    • SECTION 2. COMMODITY CREDIT LOANS (§ 77)
      • .01 Treating amounts received as loans.
      • .02 Reserved.
    • SECTION 3. TRADE OR BUSINESS EXPENSES (§ 162)
      • .01 Advances made by a lawyer on behalf of clients.
      • .02 ISO 9000 costs.
      • .03 Restaurant or tavern smallwares packages.
      • .04 Timber grower fertilization costs.
    • SECTION 4. BAD DEBTS (§ 166)
      • .01 Change from reserve method to specific charge-off method.
      • .02 Reserved.
    • SECTION 5. AMORTIZABLE BOND PREMIUM (§ 171)
      • .01 Revocation of § 171(c) election.
      • .02 Reserved.
    • SECTION 6. DEPRECIATION OR AMORTIZATION (§ 56(a)(1), 56(g)(4)(A), 167, 168, 197, 280F(a), 1400I, 1400L, or 1400N(d), OR FORMER § 168)
      • .01 Impermissible to permissible method of accounting for depreciation or amortization.
      • .02 Permissible to permissible method of accounting for depreciation.
      • .03 Sale, lease, or financing transactions.
      • .04 Modern golf course greens.
      • .05 Original and replacement tire costs.
      • .06 Depreciation of gas pump canopies.
      • .07 Depreciation of utility assets.
      • .08 Depreciation of cable TV fiber optics.
      • .09 Change in general asset account treatment due to a change in the use of MACRS property.
      • .10 Change in method of accounting for depreciation due to a change in the use of MACRS property.
      • .11 Depreciation of qualified non-personal use vans and light trucks.
      • .12 Depreciation of qualified revitalization building in the expanded area of a renewal community.
      • .13 Loss disallowance rule upon a disposition of an insurance contract acquired in an assumption re-insurance transaction.
      • .14 Income forecast method of depreciation.
      • .15 GO Zone additional first year depreciation deduction.
      • .16 Additional first year depreciation deduction.
      • .17 Impermissible to permissible method of accounting for depreciation or amortization for disposed depreciable or amortizable property.
      • .18 Depreciation of MACRS property acquired in a like-kind exchange or as a result of an involuntary conversion.
      • .19 Lessor improvements abandoned at termination of lease.
      • .20 Repairable and reusable spare parts.
      • .21 Land.
      • .22 Kansas additional first year depreciation.
    • SECTION 7. RESEARCH AND EXPERIMENTAL EXPENDITURES (§ 174)
      • .01 Changes to a different method or different amortization period.
      • .02 Reserved.
    • SECTION 8. ELECTIVE EXPENSING PROVISIONS (§§ 179B(a), 181, and 194(b))
      • .01 Treatment of qualified film and television productions.
      • .02 Expensing of certain reforestation expenditures.
      • .03 Deduction for capital costs incurred in complying with Environmental Protection Agency sulfur regulations.
    • SECTION 9. COMPUTER SOFTWARE EXPENDITURES (§§ 162, 167, and 197)
      • .01 Computer software expenditures.
      • .02 Year 2000 costs.
    • SECTION 10. CAPITAL EXPENDITURES (§ 263)
      • .01 Package design costs.
      • .02 Line pack gas or cushion gas.
      • .03 Removal costs.
      • .04 Distributor commissions.
      • .05 Intangibles.
      • .06 Rotable spare parts.
      • .07 Repairable and reusable spare parts.
    • SECTION 11. UNIFORM CAPITALIZATION (UNICAP) METHODS (§ 263A)
      • .01 Certain uniform capitalization (UNICAP) methods used by resellers and reseller-producers.
      • .02 Certain uniform capitalization (UNICAP) methods used by producers and reseller-producers.
      • .03 Change to no longer capitalize research and experimental expenditures under § 263A.
      • .04 Impact fees.
      • .05 Change to capitalizing environmental remediation costs under § 263A.
      • .06 Change in allocating environmental remediation costs under § 263A.
    • SECTION 12. LOSSES, EXPENSES AND INTEREST WITH RESPECT TO TRANSACTIONS BETWEEN RELATED TAXPAYERS (§ 267)
      • .01 Change to comply with § 267.
      • .02 Reserved.
    • SECTION 13. DEFERRED COMPENSATION (§ 404)
      • .01 Change to comply with § 404(a)(11).
      • .02 Deferred compensation.
      • .03 Grace period contributions.
    • SECTION 14. METHODS OF ACCOUNTING (§ 446)
      • .01 Change in overall method from the cash method to an accrual method.
      • .02 Multi-year insurance policies for multi-year service warranty contracts.
      • .03 Taxpayers changing to overall cash method.
      • .04 Nonaccrual-experience method.
      • .05 Interest accruals on short-term consumer loans-Rule of 78’s method.
      • .06 Film producer’s treatment of certain creative property costs.
      • .07 Deduction of incentive payments to health care providers.
      • .08 Change by bank for uncollected interest.
      • .09 Change from the cash method to an accrual method for specific items.
      • .10 Multi-year service warranty contracts.
      • .11 Overall cash method for specified transportation industry taxpayers.
      • .12 Change to overall cash/hybrid method for certain banks.
      • .13 Change to overall cash method for farmers.
      • .14 Nonshareholder contributions to capital under § 118.
    • SECTION 15. TAXABLE YEAR OF INCLUSION (§ 451)
      • .01 Accrual of interest on nonperforming loans.
      • .02 Advance rentals.
      • .03 State or local income or franchise tax refunds.
      • .04 Capital cost reduction payments.
      • .05 Credit card annual fees.
      • .06 Credit card late fees.
      • .07 Advance payments.
      • .08 Credit card cash advance fees.
      • .09 Sales or dispositions to implement Federal Energy Regulatory Commission or state electric restructuring policy.
      • .10 Retainages.
    • SECTION 16. OBLIGATIONS ISSUED AT DISCOUNT (§ 454)
      • .01 Series E, EE or I U.S. savings bonds.
      • .02 Reserved.
    • SECTION 17. PREPAID SUBSCRIPTION INCOME (§ 455)
      • .01 Prepaid subscription income.
      • .02 Reserved.
    • SECTION 18. SPECIAL RULES FOR LONG-TERM CONTRACTS (§ 460)
      • .01 Change from exempt-contract method to percentage-of-completion method.
      • .02 Reserved.
    • SECTION 19. TAXABLE YEAR OF DEDUCTION (§ 461)
      • .01 Timing of incurring liabilities for employee compensation.
      • .02 Timing of incurring liabilities for real property taxes, personal property taxes, state income taxes, and state franchise taxes.
      • .03 Timing of incurring liabilities under a workers’ compensation act, tort, breach of contract, or violation of law.
      • .04 Timing of incurring certain liabilities for payroll taxes.
      • .05 Cooperative advertising.
      • .06 Timing of incurring certain liabilities for services or insurance.
      • .07 Rebates and allowances.
    • SECTION 20. RENT (§ 467)
      • .01 Change from a ratable inclusion of rental income or expense to inclusion in accordance with the rent allocation.
      • .02 Reserved.
    • SECTION 21. INVENTORIES (§ 471)
      • .01 Cash discounts.
      • .02 Estimating inventory “shrinkage”.
      • .03 Small taxpayer exception from requirement to account for inventories under § 471.
      • .04 Qualifying volume-related trade discounts.
      • .05 Impermissible methods of identification and valuation.
      • .06 Core Alternative Valuation Method.
      • .07 Replacement cost for automobile dealers’ parts inventory.
      • .08 Replacement cost for heavy equipment dealers’ parts inventory.
      • .09 Rotable spare parts.
      • .10 Advance Trade Discount Method.
      • .11 Permissible methods of identification and valuation.
      • .12 Change in the official used vehicle guide utilized in valuing used vehicles.
      • .13 Invoiced advertising association costs for new vehicle retail dealerships.
      • .14 Rolling-average method of accounting for inventories.
    • SECTION 22. LAST-IN, FIRST-OUT (LIFO) INVENTORIES (§ 472)
      • .01 Change from the LIFO inventory method.
      • .02 Determining current-year cost under the LIFO inventory method.
      • .03 Alternative LIFO inventory method for retail automobile dealers.
      • .04 Used vehicle alternative LIFO method.
      • .05 Determining the cost of used vehicles purchased or taken as a trade-in.
      • .06 Change to the inventory price index computation (IPIC) method.
      • .07 Changes within the inventory price index computation (IPIC) method.
      • .08 Changes to the Vehicle-Pool Method.
      • .09 Changes within the used vehicle alternative LIFO method.
      • .10 Changes to dollar-value pools of manufacturers.
    • SECTION 23. MARK-TO-MARKET ACCOUNTING METHOD FOR DEALERS IN SECURITIES (§ 475)
      • .01 Commodities dealers, securities traders, and commodities traders electing to use the mark-to-market method of accounting under § 475(e) or (f).
      • .02 Reserved.
    • SECTION 24. BANK RESERVES FOR BAD DEBTS (§ 585)
      • .01 Changing from the § 585 reserve method to the § 166 specific charge-off method.
      • .02 Reserved.
    • SECTION 25. INSURANCE COMPANY PREMIUM ACQUISITION EXPENSES (§ 832)
      • .01 Safe harbor method of accounting for premium acquisition expenses.
      • .02 Reserved.
    • SECTION 26. DISCOUNTED UNPAID LOSSES (§ 846)
      • .01 Composite method for discounting unpaid losses.
      • .02 Reserved.
    • SECTION 27. REAL ESTATE MORTGAGE INVESTMENT CONDUIT (REMIC) (§§ 860A-860G)
      • .01 REMIC inducement fees.
      • .02 Reserved.
    • SECTION 28. INCOME FROM SOURCES WITHIN THE UNITED STATES (§ 861)
      • .01 Transactions involving computer programs.
      • .02 Reserved.
    • SECTION 29. FUNCTIONAL CURRENCY (§ 985)
      • .01 Change in functional currency.
      • .02 Reserved.
    • SECTION 30. BASIS OF CERTAIN SECURITIES SOLD OR TRANSFERRED (§ 1012)
      • .01 Change to comply with § 1.1012-1(c)(1) - (4).
      • .02 Reserved.
    • SECTION 31. ORIGINAL ISSUE DISCOUNT (§§ 1272, 1273)
      • .01 De minimis original issue discount (OID).
      • .02 Reserved.
    • SECTION 32. MARKET DISCOUNT BONDS (§ 1278)
      • .01 Revocation of § 1278(b) election.
      • .02 Reserved.
    • SECTION 33. SHORT-TERM OBLIGATIONS (§ 1281)
      • .01 Interest income on short obligations.
      • .02 Stated interest on short-term loans of cash method banks.
  • Rev. Proc. 2008-53
    • SECTION 1. PURPOSE
    • SECTION 2. CHANGES
    • SECTION 3. APPLICATION-ESTIMATED TAXES
    • SECTION 4. EFFECTIVE DATE
    • SECTION 5. DRAFTING INFORMATION
• Part IV. Items of General Interest
  • REG-120476-07
    • AGENCY:
    • ACTION:
    • SUMMARY:
    • DATES:
    • ADDRESSES:
    • FOR FURTHER INFORMATION CONTACT:
    • SUPPLEMENTARY INFORMATION:
      • Paperwork Reduction Act
      • Background
      • Explanation of Provisions
      • Proposed Effective/Applicability Date
      • Special Analyses
      • Comments and Public Hearing
    • Proposed Amendments to the Regulations
      • PART 54—PENSION EXCISE TAXES
    • Drafting Information
• Definition of Terms and Abbreviations
  • Definition of Terms
  • Abbreviations
• Numerical Finding List
  • Numerical Finding List
• Effect of Current Actions on Previously Published Items
  • Finding List of Current Actions on Previously Published Items
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