LIFO; price indexes; department stores. The December 2004 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, December 31, 2004.

Final regulations under section 6661 of the Code remove regulations sections 1.6661-1 through 1.6661-6 relating to an addition to tax in the case of a substantial understatement of income tax liability made pursuant to section 6661. In addition, this regulation corrects a reference to section 6661(b)(2)(C)(ii) in regulations section 1.448-1T(b)(1)(iii) to clarify that the definition of “tax shelter” is now found in section 6662(d)(2)(C).

Tax-exempt leasing involving defeasance. This notice disallows tax benefits claimed by taxpayers who enter into sale-in, lease-out (SILO) transactions and identifies SILOs as listed transactions.

This notice addresses several questions of statutory interpretation arising under section 172(f)(1)(B) of the Code prior to its amendment by section 3004(a) of the Tax and Trade Relief Extension Act of 1998.