Internal Revenue Bulletin 2010-31 (PDF rendition): IRS Revenue Procedures

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Bulletin No. 201
0-31
August 2, 2010
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX
Rev. Rul. 2010–19, page 174.
Federal rates; adjusted federal rates; adjusted federal
long-term rate and the long-term exempt rate.For pur-
poses of sections 382, 642, 1274, 1288, and other sections
of the Code, tables set forth the rates for August 2010.
T.D. 9490, page 176.
REG–151605–09, page 184.
Final, temporary, and proposed regulations under section 1502
of the Code contain rules regarding the implementation of sec-
tion 172(b)(1)(H) within a consolidated group. The regulations
also permit certain acquiring consolidated groups to elect to
waive all or a portion of the pre-acquisition portion of the ex-
tended carryback period pursuant to section 172(b)(1)(H) for
specific losses attributable to certain acquired members.
Rev. Proc. 2010–27, page 183.
This procedure informs the trustee (or debtor in possession)
representing the bankruptcy estate of the debtor of the proce-
dure to be followed to properly request a tax refund from the
Service. Rev. Proc. 81–18 obsoleted.
EMPLOYMENT TAX
Rev. Proc. 2010–27, page 183.
This procedure informs the trustee (or debtor in possession)
representing the bankruptcy estate of the debtor of the proce-
dure to be followed to properly request a tax refund from the
Service. Rev. Proc. 81–18 obsoleted.
EXCISE TAX
Rev. Proc. 2010–27, page 183.
This procedure informs the trustee (or debtor in possession)
representing the bankruptcy estate of the debtor of the proce-
dure to be followed to properly request a tax refund from the
Service. Rev. Proc. 81–18 obsoleted.
ADMINISTRATIVE
Notice 2010–53, page 182.
This notice contains updated addresses for certain elections,
statements, returns and other documents. Notice 2003–19
revoked.
Rev. Proc. 2010–27, page 183.
This procedure informs the trustee (or debtor in possession)
representing the bankruptcy estate of the debtor of the proce-
dure to be followed to properly request a tax refund from the
Service. Rev. Proc. 81–18 obsoleted.
Finding Lists begin on page ii.

The IRS Mission
Provide Americ
a’s taxpayers top-quality service by helping
them understa
nd and meet their tax responsibilities and en-
force the law wi
th integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, mod-
ify, or amend any of those previously published in the Bulletin.
All published rulings apply retroactively unless otherwise indi-
cated. Procedures relating solely to matters of internal man-
agement are not published; however, statements of internal
practices and procedures that affect the rights and duties of
taxpayers are published.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpayers
or technical advice to Service field offices, identifying details
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—19
86 Code.
This part i
ncludes rulings and decisions based on provisions of
the Intern
al Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B, Leg-
islation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secre-
tary (Enforcement).
Part IV
.—Items of General Interest.
This par
t includes notices of proposed rulemakings, disbar-
ment an
d suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The c
ontents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S.Government Printing Office, Washington, DC 20402.
August 2, 20102010–31 I.R.B.

Part I. Rulings
and Decisions Under the Internal Revenue Code
of 1986
Section 42.—L
ow-Income
Housing Credi
t
The adjusted a
pplicable federal short-term, mid-
term, and long
-term rates are set forth for the month
of August 2010
. See Rev. Rul. 2010-19, page 174.
Section 280G.—Golden
Parachute Payments
Federal short-term, mid-term, and long-term rates
are set forth for the month of August 2010. See Rev.
Rul. 2010-19, page 174.
Section 382.—Limitation
on Net Operating Loss
Carryforwa
rds and Certain
Built-In Losses Following
Ownership Change
The adjusted applicable federal long-term rate is
set forth for the month of August 2010. See Rev. Rul.
2010-19, page 174.
Section 412.—Minimum
Funding Standards
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of August 2010. See Rev. Rul. 2010-19, page 174.
Section 467.—Certain
Payments for the Use of
Property or Services
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of August 2010. See Rev. Rul. 2010-19, page 174.
Section 468.—Special
Rules for Mining and Solid
Waste
Reclamation and
Closi
ng Costs
The ad
justed applicable federal short-term, mid-
term,
and long-term rates are set forth for the month
of Aug
ust 2010. See Rev. Rul. 2010-19, page 174.
Section 482.—
Allocation
of Income and D
eductions
Among Taxpaye
rs
Federal short
-term, mid-term, and long-term rates
are set forth f
or the month of August 2010. See Rev.
Rul. 2010-19
, page 174.
Section 483.—Interest on
Certain Deferred Payments
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of August 2010. See Rev. Rul. 2010-19, page 174.
Section 642.—Special
Rules for Credits and
Deductions
Federal short-term, mid-term, and long-term rates
are set forth for the month of August 2010. See Rev.
Rul. 2010-19, page 174.
Section 807.—Rules for
Certain Reserves
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of August 2010. See Rev. Rul. 2010-19, page 174.
Section 846.—Discounted
Unpaid Losses Defined
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of August 2010. See Rev. Rul. 2010-19, page 174.
Section 1274.—Determi-
nation of Issue Price in the
Case of Certain Debt Instru-
ments Issued for Property
(Also Sections 42, 280G, 382, 412, 467, 468, 482,
483, 642, 807, 846, 1288, 7520, 7872.)
Federal rates; adjusted federal rates;
adjusted federal long-term rate and the
long-term exempt rate.For purposes of
sections 382,
642, 1274, 1288, and other
sections of th
e Code, tables set forth the
rates for Augu
st 2010.
Rev. Rul. 2010
–19
This revenue
ruling provides various
prescribed r
ates for federal income tax
purposes for
August 2010 (the current
month). Tabl
e 1 contains the short-term,
mid-term, an
d long-term applicable fed-
eral rates (
AFR) for the current month
for purpose
s of section 1274(d) of the
Internal Re
venue Code. Table 2 contains
the short-t
erm, mid-term, and long-term
adjusted a
pplicable federal rates (ad-
justed AFR
) for the current month for
purposes o
f section 1288(b). Table 3 sets
forth the a
djusted federal long-term rate
and the lo
ng-term tax-exempt rate de-
scribed i
n section 382(f). Table 4 contains
the appro
priate percentages for deter-
mining th
e low-income housing credit
describe
d in section 42(b)(1) for build-
ings pla
ced in service during the current
month. H
owever, under section 42(b)(2),
the appl
icable percentage for non-feder-
ally sub
sidized new buildings placed in
service
after July 30, 2008, and before
Decemb
er 31, 2013, shall not be less than
9%. Fin
ally, Table 5 contains the federal
rate fo
r determining the present value of
an annu
ity, an interest for life or for a term
of year
s, or a remainder or a reversionary
inter
est for purposes of section 7520.
2010–31 I.R.B.174August 2, 2010

REV. RUL. 2010–19 TABLE 1
Applicable Federal Rates (AFR) for August 2010
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
AFR
.53%.53%.53%.53%
110% AFR
.58%.58%.58%.58%
120% AFR.64%.64%.64%.64%
130% AFR.69%.69%.69%.69%
Mid-term
AFR2.18%2.17%2.16%2.16%
110% AFR2.40%2.39%2.38%2.38%
120% AFR2.62%2.60%
2.59%2.59%
130% AFR2.84%2.82%2.81%2.80%
150% AFR
3.29%3.26%
3.25%
3.24%
175% AFR
3.84%3.80%3.78%3.77%
Long-term
AFR3.79%
3.75%
3.73%3.72%
110% AFR4.17%4.13%4.11%4.09%
120% AFR
4.55%4.50%
4.47%4.46%
130% AFR4.94%4.88%
4.85%
4.83%
REV. RUL. 2010–19 TABLE 2
Adjusted AFR for August 2010
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-ter
madjusted
AFR
.58%.58%.58%.58%
Mid-term adjusted AFR1.93%1.92%1.92%1.91%
Long-term adjusted
AFR
3.98%3.94%3.92%3.91%
REV. RUL.
2010–19 TABLE 3
Rates Under Section 382 for August 2010
Adjusted federal long-term rate for the current month3.98%
Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted
federal long-term rates for the current month and the prior two months.)4.01%
REV. RUL. 2010–19 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for August 2010
Note: Under Section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after
July 30, 2008, and before December 31, 2013, shall not be less than 9%.
Appropriate percentage for the 70% present value low-income housing credit7.69%
Appropriate percentage for the 30% present value low-income housing credit3.30%
August 2, 20101752010–31 I.R.B.

REV. RUL. 2010–19 TABLE 5
Rate Under Section 7520 for August 2010
Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years,
or a remainder or reversionary interest2.6%
Section 1288.—Treatment
of Original Issue Discount
on Tax-Exempt Obligations
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of August 2010. See Rev. Rul. 2010-19, page 174.
Section 1502.—Regulations
26 CFR 1.1502–21: Net operating losses.
T.D. 9490
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
Extended Carryback of Losses
to or from a Consolidated
Group
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final and temporary regula-
tions.
SUMMARY: This document contains final
and temporary regulations under section
1502 that affect corporations filing con-
solidated returns. These regulations con-
tain rules regarding the implementation of
section 172(b)(1)(H) within a consolidated
group. These regulations also permit cer-
tain acquiring consolidated groups to elect
to waive all or a portion of the pre-ac-
quisition carryback period pursuant to sec-
tion 172(b)(1)(H) for specific losses attrib-
utable to certain acquired members. The
text of these temporary regulations also
serves as the text of the proposed regu-
lations (REG–151605–09) set forth in the
notice of proposed rulemaking on this sub-
ject in this issue of the Bulletin.
DATES:Effective Date:These regulations
are effective on June 23, 2010.
Applicability Date:For date of applica-
bility, see §1.1502–21T(h)(9)(i). The ap-
plicability of these regulations will expire
on June 21, 2013.
FOR FURTHER INFORMATION
CONTACT: Grid Glyer, (202) 622–7930
(not a toll-free number).
SUPPLE
MENTARY INFORMATION:
Paperwork Reduction Act
These regulations are being issued
without prior notice and public procedure
pursuant to the Administrative Procedure
Act (5 U.S.C. 553). For this reason, the
collection of information contained in
these regulations has been reviewed and,
pending receipt and evaluation of pub-
lic comments, approved by the Office of
Management and Budget under control
number 1545–2171. Responses to this
collection of information are required to
obtain a benefit.
An agency may not conduct or sponsor,
and a person is not required to respond to, a
collection of information unless it displays
a valid control number assigned by the Of-
fice of Management and Budget.
For further information concerning this
collection of information, and where to
submit comments on the collection of in-
formation and the accuracy of the esti-
mated burden, and suggestions for reduc-
ing this burden, please refer to the pream-
ble to the cross-referencing notice of pro-
posedrulemakingpublishedinthisissueof
the Bulletin.
Books or records relating to the col-
lection of information must be retained as
long as their contents may become mate-
rial in the administration of any internal
revenue law. Generally, tax returns and tax
return information are confidential, as re-
quired by 26 U.S.C. 6103.
Background
Section 172(b)(1) provides, in part, that
a net operating loss for any taxable year
must generally be carried back to each of
the two taxable years preceding the taxable
year of the loss. Section 172(b)(3) pro-
vides that any taxpayer entitled to a carry-
back period pursuant to section 172(b)(1)
may elect to relinquish the carryback pe-
riod with respect to a loss for any taxable
year. An election to relinquish the carry-
back period pursuant to section 172(b)(3)
must be made by the due date (including
extensions) of the taxpayer’s return for the
taxable year of the loss and in the man-
ner prescribed by the Secretary. Normally,
this election is irrevocable. A consoli-
dated group is permitted to make this elec-
tion for its entire consolidated net oper-
ating loss (CNOL) pursuant to the proce-
dures provided in §1.1502–21(b)(3)(i). In
addition, §1.1502–21(b)(3)(ii)(B) permits
an acquiring consolidated group to make a
separate election to waive, for all taxable
years of the acquiring group, and solely
with respect to all consolidated net operat-
ing losses attributable to certain acquired
members, the portion of the carryback pe-
riod for which the acquired corporations
were members of another group. This
election is irrevocable and must be made
by the due date (including extensions) of
the acquiring group for the taxable year of
the acquisition.
Section 172(b)(1)(H) was amended
by the Worker, Homeownership, and
Business Assistance Act of 2009,
which was signed by the President on
November 6, 2009 (Public Law 111–92,
123 Stat. 2984) (the Act). As amended,
section 172(b)(1)(H) allows taxpayers
to elect to extend the standard two-year
carryback period for an additional period
of up to three years (Extended Carryback
Period) for a net operating loss arising
in a single taxable year ending after
December 31, 2007, and beginning before
January 1, 2010 (Applicable NOL).
However, section 172(b)(1)(H) does not
apply to any taxpayer if that taxpayer, or
any member of the taxpayer’s affiliated
group (within the meaning of the Act), is
described in section 13(f) of the Act.
As described in Revenue Procedure
2009–52, 2009–49 I.R.B. 744, section
2010–31 I.R.B.176August 2, 2010

13(e)(4) of the Act permits any taxpayer
that previously elected pursuant to section
172(b)(3) to forgo the carryback period
for a loss arising in a taxable year end-
ing before the date of enactment of the
Act (November 6, 2009) to revoke such
election in order to take advantage of the
Extended Carryback Period, provided that
the taxpayer revokes the election before
the due date (including extensions) for fil-
ing the return for the taxpayer’s last taxable
year beginning in 2009. Revenue Proce-
dure 2009–52 also permits a taxpayer that
filed an application for a tentative car-
ryback adjustment or an amended return
using the two-year carryback period for
an Applicable NOL to file certain forms
to claim the Extended Carryback Period
provided pursuant to section 172(b)(1)(H).
Revenue Procedure 2009–52 further clar-
ifies that a taxpayer includes an affiliated
group filing a consolidated return, an Ap-
plicable NOL includes a CNOL, and the
section 172(b)(1)(H) election is made by
the common parent of the group.
Explanation of Provisions
1.Extended Carryback Period election
and computation of limitation for fifth
preceding consolidated return year
a.Extended Carryback Period election
and revocation of prior elections
These temporary regulations provide
that a consolidated group may elect to
carry back a consolidated net operating
loss arising in a consolidated return year
ending after December 31, 2007, or begin-
ning before January 1, 2010 (Applicable
CNOL) to the Extended Carryback Pe-
riod. In addition, these regulations provide
that a group may revoke a prior election
pursuant to §1.1502–21(b)(3)(i) in order
to make an election pursuant to section
172(b)(1)(H). See section 4.01(3) and (4)
of Rev. Proc. 2009–52 for the manner in
which a group makes the election pursuant
to section 172(b)(1)(H) and revokes a prior
election pursuant to §1.1502–21(b)(3)(i).
If a member (Electing Member) of a
consolidated group elects an Extended
Carryback Period pursuant to section
172(b)(1)(H) with regard to an Appli-
cable NOL arising in a separate return
year ending before the Electing Member’s
acquisition by a consolidated group, the
election will not disqualify the acquiring
group from making an otherwise available
election pursuant to section 172(b)(1)(H)
with regard to an Applicable CNOL for a
consolidated return year.
b.Implementation of the Extended
Carryback Period with respect to a
consolidated return year
As contemplated by section
172(b)(1)(H), the designated taxable year
within the Extended Carryback Period
may be the fifth taxable year preceding the
year of the loss (Five-Year Carryback).
A taxpayer may also choose the third
or fourth preceding taxable year for the
Extended Carryback Period. However,
section 172(b)(1)(H)(iv) provides that the
amount of an Applicable NOL that may
be the subject of a Five-Year Carryback
shall not exceed 50 percent oftaxpayer’s
taxable income(computed without regard
to the NOL deduction attributable to the
loss year or any taxable year thereafter)
for such fifth preceding taxable year.
These temporary regulations provide
that, if a group elects pursuant to section
172(b)(1)(H) to make a Five-Year Carry-
back into a consolidated return year of the
same group, for purposes of computing the
group’s 50 percent limitation,taxpayer’s
taxable incomemeans the consolidated
taxable income (CTI) (computed without
regard to any CNOL deduction attributable
to the loss year or any equivalent taxable
year as defined in §1.1502–21(b)(2)(iii),
or any taxable year thereafter) of the group
in its fifth consolidated return year preced-
ing the year of the loss for which the group
has elected the Five-Year Carryback.
These temporary regulations also pro-
vide that a limitation applies to each year
of a consolidated group that absorbs a
Five-Year Carryback, even if the group
itself has not made a section 172(b)(1)(H)
election. For example, the annual limi-
tation provided in these temporary reg-
ulations may limit the amount of loss
absorbed by the group where such loss
represents a Five-Year Carryback from
separate return years of one or more for-
mer members. See also §1.1502–21(c)
(SRLY limitation).
2.Elections to waive the entire carryback
period or the Extended Carryback Period
for pre-acquisition consolidated return
years of acquired members
Given the enactment of section
172(b)(1)(H), and taxpayers’ ability to
revoke prior elections pursuant to section
172(b)(3) in order to take advantage of
the Extended Carryback Period, the IRS
and the Treasury Department believe that
it is appropriate to afford consolidated
groups an opportunity to waive the entire
carryback period or the Extended Car-
ryback Period with regard to the portion
of the Applicable CNOL that is alloca-
ble to certain acquired members. The
carryback period may be waived only to
the extent of years preceding the acquisi-
tion during which the acquired members
were included in another consolidated
group. Further, this election is available
only to groups that did not make an elec-
tion described in §1.1502–21(b)(3)(ii)(B)
to waive all carrybacks with respect to
the acquired members. In this regard,
the regulations in this Treasury deci-
sion add §1.1502–21T(b)(3)(ii)(C), which
sets forth two elections. These tempo-
rary regulations accordingly permit a
consolidated group to make a carryback
waiver that, as to an Applicable CNOL,
is similar to the waiver described in
§1.1502–21(b)(3)(ii)(B), even though the
latter waiver election would otherwise be
time-barred.
Each of the two carryback waiver elec-
tions added by this temporary regulation
applies only if (i) the acquiring consoli-
dated group makes a section 172(b)(1)(H)
election; and (ii) a portion of the Appli-
cable CNOL is attributable to a member
acquired from another group. Pursuant to
the first election, anacquiring group may
waive the part of the five-year carryback
period during which the member was a
member of another group. With regard to
the apportioned loss,this election may re-
sult in a waiver of the entire five-year car-
ryback period to the taxable years prior
to the acquisition. However, the waiver
is only available where none of such loss
has previously been carried back to a tax-
able year of a group of which the acquired
member was previously a member.
Pursuant to the second election, an ac-
quiring group may waive the part of the
Extended Carryback Period during which
August 2, 20101772010–31 I.R.B.

the member was a member of another
group. Thus, with regard to the appor-
tioned loss, this second election permits
a waiver of the third, fourth, and fifth
carryback years only, to the extent that
such years are prior to the acquisition.
Moreover, this election is available even
where such loss has been carried back to
the first or second carryback years of the
acquired member that are pre-acquisition
years. However, this second election is
available only where none of the loss has
been carried back to a taxable year of a
group of which the acquired member was
previously a member which is prior to the
second taxable year preceding the taxable
year of the loss. Depending upon the
facts of a particular group, it is possible
that either of the two carryback waiver
elections added by this Treasury decision
could produce the same result.
Unlike the election pursuant to
§1.1502–21(b)(3)(ii)(B), the elections pro-
vided in these regulations apply only to
a group’s Applicable CNOL with regard
to which the taxpayer makes an election
pursuant to section 172(b)(1)(H) (that is,
a single taxable year). An election that
relates to an Applicable CNOL must be
made by the due date (including exten-
sion of time) for filing the return for the
taxpayer’s last taxable year beginning in
2009.
If the acquiring consolidated group
files a valid election described in
§1.1502–21(b)(3)(ii)(B) with respect to
the acquisition of a member, no elec-
tion pursuant to §1.1502–21T(b)(3)(ii)(C)
needstobe(norshouldbe)filedtoensure
that an Applicable CNOL is not carried
back to the relevant pre-acquisition years
of the acquired member.
Special Analyses
These regulations are necessary to pro-
vide taxpayers with immediate elective
relief pursuant to section 172(b)(1)(H),
which was amended as part of the Act.
These regulations provide rules necessary
to implement section 172(b)(1)(H) within
a consolidated group. These regulations
further permit certain acquiring consoli-
dated groups to elect to waive the standard
carryback period or Extended Carryback
Period with respect to certain acquired
members. The regulations apply to NOLs
arising in taxable years ending after De-
cember 31, 2007, and beginning before
January 1, 2010. Based on these consid-
erations, it has been determined that these
regulations will provide taxpayers with
the necessary guidance and authority to
ensure equitable administration of the tax
laws. Because of the need for immediate
guidance, notice and public procedure are
impracticable and contrarytothepublic
interest pursuant to 5 U.S.C. 553(b)(3)(B)
and a delayed effective date is not required
pursuant to 5 U.S.C. 553(d)(1) and (3).
Further, it has been determined that this
Treasury decision is not a significant reg-
ulatory action as defined in Executive Or-
der 12866. Therefore, a regulatory assess-
ment is not required. It has also been de-
termined that section 553(b) of the Admin-
istrative Procedure Act (5 U.S.C. chapter
5) does not apply to these regulations. For
the applicability of the Regulatory Flexi-
bility Act (5 U.S.C. chapter 6) refer to the
Special Analyses section of the preamble
to the cross-reference notice of proposed
rulemaking published in this issue of the
Bulletin. Pursuant to section 7805(f) of the
Internal Revenue Code, these regulations
have been submitted to the Chief Counsel
for Advocacy of the Small Business Ad-
ministration for comment on their impact
on small business.
Drafting Information
The principal author of these regula-
tions is Grid Glyer, Office of Associate
Chief Counsel (Corporate). However,
other personnel from the IRS and the
Treasury Department participated in their
development.
*****
Amendments to the Regulations
Accordingly, 26 CFR parts 1 and 602
are 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 * * *
Par. 2. Section 1.1502–21 is amended
by adding paragraphs (b)(3)(v) and (h)(9)
to read as follows:
§1.1502–21 Net operating losses.
*****
(b) * * *
(3) * * *
(v) [Reserved]. For further guidance,
see §1.1502–21T(b)(3)(v).
*****
(h) * * *
(9) [Reserved]. For further guidance,
see §1.1502–21T(h)(9).
Par. 3. Section 1.1502–21T is revised
to read as follows:
§1.1502–21T Net operating losses
(temporary).
(a) through (b)(3)(ii)(B) [Reserved].
For further guidance, see §1.1502–21(a)
through (b)(3)(ii)(B).
(C)Partial waiver of carryback pe-
riod for an applicable consolidated net
operating loss—(1)Application.The
acquiring group may make an election
described in paragraph (b)(3)(ii)(C)(2)or
(b)(3)(ii)(C)(3) of this section with respect
to an acquired member or members only
if it did not file a valid election described
in §1.1502–21(b)(3)(ii)(B) with respect to
such acquired member or members on or
before June 23, 2010.
(2)Partial waiver of entire pre-acqui-
sition carryback period. If one or more
members of a consolidated group become
members of another consolidated group,
then, with respect to the consolidated net
operating loss arising in a taxable year end-
ing after December 31, 2007, and begin-
ning before January 1, 2010 (Applicable
CNOL) for which the group has made an
election pursuant to section 172(b)(1)(H),
the acquiring group may make an irrev-
ocable election to relinquish, for the part
of the Applicable CNOL attributable to
such member, the portion of the carryback
period during which the corporation was
a member of another group. This election
could thus operate to relinquish carryback
for up to five taxable years, including the
Extended Carryback Period (as defined in
paragraph (b)(3)(v) of this section). How-
ever, any other corporation joining the
acquiring group that was affiliated with
the member immediately before it joined
the acquiring group must also be included
in the waiver, and the conditions of this
paragraph (b)(3)(ii)(C)(2)mustbesatis-
fied. The acquiring group cannot make
the election described in this paragraph
(b)(3)(ii)(C)(2) with respect to any par-
ticular portion of an Applicable CNOL if
2010–31 I.R.B.178August 2, 2010

any carryback is claimed, as provided in
paragraph (b)(3)(ii)(C)(4)ofthissection,
withrespecttoanysuchlossonareturn
or other filing by a group of which the ac-
quired member was previously a member
andsuchclaimisfiledonorbeforethe
date the election described in this para-
graph (b)(3)(ii)(C)(2) is filed. The election
must be made in a separate statement
entitled “THIS IS AN ELECTION PUR-
SUANT TO §1.1502–21T(b)(3)(ii)(C)(2)
TO WAIVE THE PRE-[insert the first
day of the first taxable year for which
the member (or members) was a member
of the acquiring group] CARRYBACK
PERIOD FOR THE CNOL ATTRIBUT-
ABLE TO THE [insert taxable year of
loss] TAXABLE YEAR OF [insert names
and employer identification numbers of
members].” Such statement must be filed
as provided in paragraph (b)(3)(ii)(C)(5)
of this section.
(3)Partial waiver of pre-acquisition
Extended Carryback Period. If one or
more members of a consolidated group
become members of another consolidated
group, then, with respect to the Applica-
ble CNOL for which the acquiring group
has made an election pursuant to section
172(b)(1)(H), the acquiring group may
make an irrevocable election to relinquish,
for the part of the Applicable CNOL attrib-
utable to such member, the portion of the
Extended Carryback Period (as defined in
paragraph (b)(3)(v) of this section) during
which the corporation was a member of
another group. This election could thus
operate to relinquish carryback for up to
three taxable years. However, any other
corporation joining the acquiring group
that was affiliated with the member im-
mediately before it joined the acquiring
groupmustalsobeincludedinthewaiver,
and the conditions of this paragraph
(b)(3)(ii)(C)(3) must be satisfied. The
acquiring group cannot make the election
described in this paragraph (b)(3)(ii)(C)(3)
with respect to any particular portion of
an Applicable CNOL if a carryback to
one or more taxable years that are prior to
the taxable year that is two taxable years
preceding the taxable year of the Appli-
cable CNOL is claimed, as provided in
paragraph (b)(3)(ii)(C)(4)ofthissection,
withrespecttoanysuchlossonareturn
or other filing by a group of which the ac-
quired member was previously a member,
andsuchclaimisfiledonorbeforethe
date the election described in this para-
graph (b)(3)(ii)(C)(3) is filed. The election
must be made in a separate statement
entitled “THIS IS AN ELECTION PUR-
SUANT TO §1.1502–21T(b)(3)(ii)(C)(3)
TO WAIVE THE PRE-[insert the first
day of the first taxable year for which the
member (or members) was a member of
the acquiring group] EXTENDED CAR-
RYBACK PERIOD FOR THE CNOL
ATTRIBUTABLE TO THE [insert tax-
able year of losses] TAXABLE YEAR OF
[insert names and employer identification
numbers of members].” Such statement
must be filed as provided in paragraph
(b)(3)(ii)(C)(5)ofthissection.
(4)Claim for a carryback. For pur-
poses of paragraphs (b)(3)(ii)(C)(2)and
(b)(3)(ii)(C)(3) of this section, a carryback
is claimed with respect to a net operat-
ing loss if there is a claim for refund, an
amended return, an application for a ten-
tative carryback adjustment, or any other
filing that claims the benefit of the NOL
or CNOL in a taxable year prior to the
taxable year of the loss, whether or not
subsequently revoked in favor of a claim
basedonanExtendedCarrybackPeriod
provided under section 172(b)(1)(H).
(5)Time and manner for filing state-
ment. A statement described in paragraph
(b)(3)(ii)(C)(2)or(b)(3)(ii)(C)(3)ofthis
section that relates to an Applicable CNOL
shall be made by the due date (including
extension of time) for filing the return for
the taxpayer’s last taxable year beginning
in 2009.
(6)Example.(i)Waiver in case of pre-consol-
idation separate return years.Twasaseparate
corporation that was not part of a consolidated group,
until December 31, 2004, when it was acquired by the
X Group. On December 31,2007, the X Group sold
all of the stock of T to the P Group. P did not make
the election described in §1.1502–21(b)(3)(ii)(B) to
relinquish, with respect to all CNOLs attributable
to T, the portion of the carryback period for which
T was a member of the X Group. In 2008, the P
Group sustained a $1,000 CNOL, $600 of which was
attributable to T under §1.1502–21(b)(2)(iv)(A). P
elected a Five-Year Carryback (as defined in para-
graph (b)(3)(v) of this section) pursuant to section
172(b)(1)(H) with regard to the P Group’s 2008
CNOL, and the P Group elected, pursuant to para-
graph (b)(3)(ii)(C)(2) of this section, to waive the
portion of the carryback period during which T was
included in any other consolidated group. T’s fifth
and fourth taxable years preceding the year of the
loss were its 2003 and 2004 separate return years.
Due to the P Group’s election pursuant to paragraph
(b)(3)(ii)(C)(2) of this section, T’s allocable portion
of the P Group’s 2008 CNOL will not be carried
back to the years for which it was a member of
the X Group. However, T’s allocable portion of
the P Group’s 2008 CNOL will be carried back
to T’s non-consolidated taxable years (2003 and
2004), subject to the limitation provided in section
172(b)(1)(H)(iv).
(ii)Split-waiver election made. The facts are the
same as in paragraph (i) except that the group made
the election described in §1.1502–21(b)(3)(ii)(B)
with regard to its acquisition of T in 2007.
Due to the P Group’s election pursuant to
§1.1502–21(b)(3)(ii)(B), T’s allocable portion of the
P Group’s 2008 CNOL will not be carried back to
theyearsforwhichTwasamemberoftheXGroup.
However, T’s allocable portion of the P Group’s
2008 CNOL will be carried back to T’s non-consol-
idated taxable years (2003 and 2004), subject to the
limitation provided in section 172(b)(1)(H)(iv).
(b)(3)(iii) and (b)(3)(iv) [Re-
served]. For further guidance, see
§1.1502–21(b)(3)(iii) and (b)(3)(iv).
(v)Extended Carryback Period
under section 172(b)(1)(H). Section
172(b)(1)(H) allows a taxpayer to elect
to carry back a single net operating loss
arising in a taxable year ending after De-
cember 31, 2007, and beginning before
January 1, 2010 (Applicable NOL) to its
third, fourth, or fifth taxable year preced-
ing the taxable year of the loss (Extended
Carryback Period).As contemplated by
section 172(b)(1)(H), the designated tax-
able year within the Extended Carryback
Period may be the fifth taxable year pre-
ceding the year of the loss (Five-Year
Carryback), and section 172(b)(1)(H)(iv)
limits the amount of the Applicable NOL
that may be carried back to 50 percent of
the taxpayer’s taxable income (computed
without regard to any NOL deduction at-
tributable to the loss year or any taxable
year thereafter) for such fifth preceding
taxable year. This paragraph (b)(3)(v) pro-
vides rules for computing the 50 percent
limitation under section 172(b)(1)(H)(iv)
where a Five-Year Carryback is made to a
consolidated return year from any consol-
idated return year or separate return year.
(A)Election—(1)In general. Except
as otherwise provided in this section, a
consolidated group may elect an Extended
Carryback Period pursuant to section
172(b)(1)(H) with regard to a consolidated
net operating loss arising in a taxable year
ending after December 31, 2007 and be-
ginning before January 1, 2010 (Applica-
ble CNOL). However, no election may be
made under this paragraph for a taxpayer
described in section 13(f) of the Worker,
Homeownership, and Business Assistance
Act of 2009, Public Law 111–92, 123
August 2, 20101792010–31 I.R.B.

Stat. 2984 (November 6, 2009). The
election pursuant to section 172(b)(1)(H)
applies to the entire Applicable CNOL,
except as otherwise provided in paragraph
(b)(3)(ii)(C) of this section or in this para-
graph (b)(3)(v). See also paragraph (c) of
this section (SRLY limitation).
(2)Revoking a previous carryback
waiver. A consolidated group may
revoke a prior election pursuant to
§1.1502–21(b)(3)(i) to relinquish the en-
tire carryback period with respect to an
Applicable CNOL, but only if the group
makes the election pursuant to section
172(b)(1)(H) with regard to such Applica-
ble CNOL.
(3)Pre-acquisition electing member.If
a member (Electing Member) of a con-
solidated group makes an Extended Car-
ryback Period election pursuant to section
172(b)(1)(H) with regard to a loss from
a separate return year ending before the
Electing Member’s inclusion in a consol-
idated group, the election will not dis-
qualify the acquiring group from making
an otherwise available election pursuant
to section 172(b)(1)(H) with regard to an
Applicable CNOL incurred in a consoli-
dated return year that includes the Electing
Member.
(B)Taxpayer’s taxable income.For
purposes of computing the limitation
under section 172(b)(1)(H)(iv) on a
Five-Year Carryback to any consoli-
dated return year from any consolidated
return year or separate return year,tax-
payer’s taxable incomeas used in section
172(b)(1)(H)(iv)(I) means consolidated
taxable income (CTI) in the consolidated
return year that is the fifth taxable year
preceding the year of the loss. For pur-
poses of the preceding sentence, CTI is
computed without regard to any CNOL
deduction attributable to the particular
Five-Year Carryback or any NOL from
any member’s taxable year ending on the
same date as the taxable year in which the
Five-Year Carryback arises, or any taxable
year thereafter.
(C)Limitation on Five-Year Carry-
backs to a consolidated group.—(1)An-
nual Limitation. The aggregate amount of
Five-Year Carrybacks from years ending
on the same date (Testing Date) to any
consolidated return year may not exceed
the excess of 50 percent of the CTI for
that year over the total of Five-Year Car-
rybacks to that consolidated return year
from years ending before the Testing Date
(Annual Limitation). For purposes of
the preceding sentence, CTI is computed
without regard to—
(i) Any CNOL deduction attributable to
Five-Year Carrybacks to such year; or
(ii) Any NOL from any member’s tax-
able year ending on the Testing Date or any
taxable year thereafter.
(2)Pro rata absorption of limited and
non-limited losses. Any Five-Year Carry-
back, and other net operating losses, from
years ending on the same date that are
available to offset CTI in the same year
are absorbed on apro ratabasis.See
§1.1502–21(b)(1).
(D)Election by small business.This
paragraph (b)(3)(v) does not apply to any
loss of an eligible small business as de-
fined in section 172(b)(1)(H)(v)(II) with
respect to any election made pursuant to
section 172(b)(1)(H) as in effect on the
day before the date of the enactment of
the Worker, Homeownership, and Busi-
ness Assistance Act of 2009.
(E)Examples. The rules of this para-
graph (b)(3)(v) are illustrated by the fol-
lowing examples. For purposes of the ex-
amples, all affiliated groups file consoli-
dated returns, all corporations are includi-
ble corporations that have calendar taxable
years, the facts set forth the only relevant
corporate activity, and all transactions are
with unrelated parties.
Example 1.Computation and Absorption of Five-
Year Carrybacks.(i)Facts. P is the common par-
ent of the P Group. On June 30, 2006, P acquired
all of the stock of T from X, the common parent of
the X Group. The X Group has been in existence
since 1996. P did not make the election described
in §1.1502–21(b)(3)(ii)(B) to relinquish, with respect
to all CNOLs attributable to T, the portion of the car-
ryback period for which T was a member of the X
Group. In 2008, the P Group sustained a $1,000
CNOL, $600 of which was attributable to T under
§1.1502–21(b)(2)(iv)(A). P elected a Five-Year Car-
ryback pursuant to section 172(b)(1)(H) with regard
to the P Group’s 2008 CNOL. P did not make an elec-
tion pursuant to paragraph (b)(3)(ii)(C) of this section
to waive any portion of the period during which T was
included in the X Group. T’s fifth taxable year pre-
ceding the year of the loss was the X Group’s 2004
consolidated return year. For 2004, T’s separate re-
turn limitation year (SRLY) limitation for losses car-
ried into the X Group was $400. The X Group’s
CTI for 2004 is $200. The X Group did not make
a Five-Year Carryback election for a CNOL from its
2008 or 2009 taxable year. There are no other NOL
carrybacks into the X Group’s 2004 consolidated tax-
able year.
(ii)Five-Year Carryback from separate return
year. Pursuant to paragraph (b)(3)(v)(C)(1)ofthis
section, the amount of T’s apportioned loss that is
eligible for Five-Year Carryback is limited to 50 per-
cent of the X Group’s CTI for 2004, or $100 ($200 x
50 percent). Therefore, $100 of T’s apportioned loss
will be carried into the X Group’s 2004 consolidated
return year. In addition, T’s 2008 loss is subject to
the SRLY limitation of $400 with respect to the X
Group. Thus, the amount of T’s portion of the P
Group’s 2008 CNOL that may offset the X Group’s
2004 CTI is $100 (the lesser of $400 (T’s SRLY
limitation) or $100 (the amount of T’s Five-Year
Carryback)).
(iii)Pro rata absorption of limited and non-lim-
ited losses within a single consolidated return year.
The facts are the same as in paragraph (i), except that
the X Group sustained a $750 CNOL in 2008, which
X elected to carry back four years to its 2004 consoli-
dated return year (no Five-Year Carryback). Further,
the X Group had CTI of $500 in 2004. Therefore, the
X Group and the P Group both carry back CNOLs
from years ending December 31, 2008, although only
the P Group’s CNOL (including the portion alloca-
ble to T) constitutes a Five-Year Carryback. The
Annual Limitation on Five-Year Carrybacks will be
$250 ($500 x 50 percent), with CTI determined with-
out taking into account the portion of P’s 2008 CNOL
carried back to the X Group’s 2004 consolidated re-
turn year or the X Group’s 2008 CNOL, which arises
from a taxable year ending on the same date as the
Five-Year Carryback. The $750 CNOL carryback
within the X Group is subject to no limitation. Under
§1.1502–21(b)(1), because the 2008 CNOL of the X
Group and the 2008 SRLY loss of T are losses from
years ending on the same date and are available to
offset CTI in the same year, the two losses offset the
X Group’s $500 CTI on apro ratabasis. Accord-
ingly, $375 of the X’s Group’s 2008 CNOL [$500 x
$750/($750 + $250)] and $125 of T’s portion of the
P Group’s 2008 CNOL [$500 x $250/($750 + $250)]
offset the X Group’s 2004 CTI.
Example 2.Multiple carryback years.(i)Facts.
On January 1, 2004, Individual A formed X, which
formed corporations S and T, and X elected to file
a consolidated Federal income tax return. For its
2004 consolidated taxable year, the X Group’s CTI
was $1,100. For its 2005 consolidated taxable year,
the X Group’s CTI was $1,000. On June 30, 2007,
the X Group sold all of the S stock to the Y Group
andsoldalloftheTstocktotheZGroup. TheX
Groupterminatedin2007. NeitherYnorZmade
the election described in §1.1502–21(b)(3)(ii)(B) to
relinquish, with respect to all CNOLs attributable to
S and T, respectively, the portion of the carryback
period for which S and T were members of the X
Group. In 2008, the Y Group sustained an $800
CNOL, $400 of which was attributable to S under
§1.1502–21(b)(2)(iv)(A). Y elected a Five-Year Car-
ryback with regard to the Y Group’s 2008 CNOL
pursuant to section 172(b)(1)(H). Y did not make an
election pursuant to paragraph (b)(3)(ii)(C) of this
section to waive any portion of the period during
which S was included in the X Group. In 2009, the
Z Group sustained a $1,000 CNOL, $600 of which
was attributable to T under §1.1502–21(b)(2)(iv)(A).
Z elected a Five-Year Carryback with regard to
the Z Group’s 2009 CNOL pursuant to section
172(b)(1)(H). Z did not make an election pursuant to
paragraph (b)(3)(ii)(C) of this section to waive any
2010–31 I.R.B.180August 2, 2010

portion of the Extended Carryback Period during
which T was included in the X Group.
(ii)Analysis. The $400 of Y Group’s 2008 CNOL
that is apportioned to S is carried back as a sepa-
rate return year Five-Year Carryback to the X Group’s
2004 consolidated return year. The $600 of Z Group’s
2009 CNOL that is apportioned to T is also a sepa-
rate return year Five-Year Carryback to the X Group’s
2005 consolidated return year. The Annual Limita-
tion on Five-Year Carryback to the X Group’s 2004
consolidated return year computed under paragraph
(b)(3)(v)(C)(1) of this section equals $550 ($1,100
of CTI x 50 percent). Because S is making the sole
Five-Year Carryback to the X Group’s 2004 consol-
idated return year, S will make a Five-Year Carry-
back of the full $400. Similarly, the Annual Limita-
tion for Five-Year Carryback to the X Group’s 2005
consolidated return year computed under paragraph
(b)(3)(v)(C)(1) of this section equals $500 ($1,000
of CTI x 50 percent). Because T is making the sole
Five-Year Carryback to the X Group’s 2005 consoli-
dated return year, T will make a Five-Year Carryback
of the full $500. The SRLY limitations for S and T, re-
spectively, may limit the absorption of the Five-Year
Carrybacks within the X Group.
Example 3.Pre-acquisition election by T. P is the
common parent of the P Group. On December 31,
2008, P acquired all of the stock of T from X, the
common parent of the X Group. T had been a mem-
ber of the X Group since 1999. P did not make the
election described in §1.1502–21(b)(3)(ii)(B) to re-
linquish, with respect to all CNOLs attributable to
T, the portion of the carryback period for which T
was a member of the X Group. Pursuant to sec-
tion 172(b)(1)(H), the X Group elected to make a
Five-Year Carryback of its 2008 CNOL back to 2003.
A portion of this CNOL is attributable to T pursuant
to §1.1502–21(b)(2)(iv)(A). In 2009, the P Group in-
curred a CNOL of $1,000, $600 of which is attribut-
able to T pursuant to §1.1502–21(b)(2)(iv)(A). Pur-
suant to section 172(b)(1)(H), the P Group elected a
Five-Year Carryback with regard to its 2009 CNOL.
P did not make the election pursuant to paragraph
(b)(3)(ii)(C) of this section to waive any portion of the
period during which T was included in the X Group.
The Five-Year Carryback election by the X Group
with respect to its 2008 CNOL (which includes the
portion of the CNOL attributable to T) does not dis-
qualify the P Group from electing a Five-Year Carry-
back with regard to its 2009 CNOL. Therefore, the P
Group may carry back its CNOL, including the por-
tion attributable to T, in accordance with §1.1502–21
and the rules of this section.
(c) through (h)(8) [Reserved]. For fur-
ther guidance, see §1.1502–21(c) through
(h)(8).
(9)Section 172(b)(1)(H)—(i)Applica-
bility date. This section applies to any con-
solidated Federal income tax return due
(without extensions) after June 23, 2010, if
such return was not filed on or before such
date. However, a consolidated group may
apply this section to any consolidated Fed-
eral income tax return that is not described
in the preceding sentence.
(ii)Expiration date. The applicability
of this section will expire on June 21, 2013.
PART 602—OMB CONTROL
NUMBERS UNDER THE PAPERWORK
REDUCTION ACT
Par. 4. The authority citation for part
602 continues to read as follows:
Authority: 26 U.S.C. 7805.
Par. 5. In §602.101, paragraph (b) the
entry for §1.1502–21T is revised to read as
follows:
§602.101 OMB Control Numbers.
*****
(b) * * *
CFR part or section where
identified and described
Current OMB
control No.
*****
1.1502–21T
...........................................................
1545–2171
*****
Steven T.
Miller,
Deputy Co
mmissioner for
Services
and Enforcement.
Approved
June 16, 2010.
Michael F
. Mundaca,
Assistan
t Secretary
of the Tr
easury (Tax Policy).
(Filed by the Office of the Federal Register on June 22, 2010,
8:45 a.m., and published in the issue of the Federal Register
for June
23, 2010, 75 F.R. 35643)
Section 7
520.—Valuation
Tables
The adjus
ted applicable federal short-term, mid-
term, and
long-term rates are set forth for the month
of August
2010. See Rev. Rul. 2010-19, page 174.
Section 7
872.—Treatment
of Loans W
ith Below-Market
Interest
Rates
The adjus
ted applicable federal short-term, mid-
term, and
long-term rates are set forth for the month
of Augus
t 2010. See Rev. Rul. 2010-19, page 174.
August 2, 20101812010–31 I.R.B.

Part III. Administrative, Procedural, and Miscellaneous
Revocation of Notice 2003–19
Notice 2010–53
PURPOSE
This notice revokes Notice 2003–19,
2003–1 C.B. 703.
DISCUSSION
SECTION 1. BACKGROUND
Section 1001(a) of the Internal Revenue
Service Restructuring and Reform Act of
1998, Pub. L. No. 105–206, 112 Stat. 686,
(“RRA 1998”) required the Commissioner
of Internal Revenue to develop and im-
plement a plan to reorganize the Service.
As part of this reorganization, the Service
replaced the national, regional, and dis-
trict structure with organizational units that
serve particular industries and groups of
taxpayers.
AtthetimetheServicewasreorga-
nized, existing regulations directed tax-
payers to file certain elections, statements,
returns, and other documents with various
national, regional, and district offices that
the Service abolished during the reorgani-
zation. Some of those regulations spec-
ified what later became outdated places
of filing due to the reorganization (e.g.,
the Office of District Director), contained
outdated filing instructions, or lacked spe-
cific filing addresses for documents that,
at the time, were required or permitted to
be filed. Accordingly, the Service pub-
lished Notice 2003–19, 2003–1 C.B. 703,
Place of Filing Certain Elections, State-
ments, Returns, and Other Documents, to
advise taxpayers of theproper addresses to
file these documents with the Service as a
result of the reorganization.
SECTION 2. DISCUSSION
Since its publication, many of the
locations that Notice 2003–19 lists for
taxpayers to file documents have changed
and are now inaccurate. Accordingly,
Notice 2003–19 is revoked and taxpayers
should no longer rely on it to determine
where to file the documents listed therein.
Instead, the location to file many of the
documents listed in Notice 2003–19 can
be found on the IRS website,irs.gov,
or in current IRS forms, instructions to
forms, and publications. For those doc-
uments where the location to file is not
listed on an existing IRS webpage, or in
an IRS form, instruction, or publication,
a new IRS webpage will list where to file
that particular document. To access this
new webpage, typehttp://www.irs.gov/
into the address box on your Internet
browser. Once the webpage opens, click
“Contact IRS” on the toolbar at the
top and click “IRS Mailing Addresses
(“Where To File”)”. Then click “Where
to File Certain Elections, Statements,
Returns, and Other Documents”. Or
you may typehttp://www.irs.gov/file/arti-
cle/0,,id=224931,00.htmlinto the address
box on your Internet browser. This web-
page describes where to file all of the
documents listed in Notice 2003–19, ex-
cept those documents for which addresses
already can be found onirs.gov,orin
current IRS forms, instructions to forms,
or publications. If additional assistance
is needed taxpayers may contact an IRS
representative at the appropriate telephone
numbers listed below.
Type of TaxpayerPhone number to call for assistance in determining
where to file document
Individuals1–800–829–1040
Monday-Friday: 7:00 AM-10:00 PM your local time (Alaska
and Hawaii follow Pacific time)
Businesses1–800–829–4933
Monday-Friday: 7:00 AM-10:00 PM your local time (Alaska
and Hawaii follow Pacific time)
Exempt Organizations, Retirement Plan Administrators, and
Government Entities
1–877–829–5500
Monday-Friday: 7:00 AM-5:30 PM Central Time
For people with hearing impairments
1–800–829–4059 (TDD)
Monday-Friday: 7:00 AM-10:00 PM your local time (Alaska
and Hawaii follow Pacific time)
In addition, taxpayers required to
file elections, statements, returns, and
other documents may obtain assistance
at one of the IRS Taxpayer Assistance
Centers. Information regarding the lo-
cation of the nearest office can be found
athttp://www.irs.gov/localcontacts/in-
dex.html.
SECTION 3. EFFECTIVE DATE
The notice is effective for elections,
statements, returns, and other documents
filed on or after August 2, 2010.
EFFECT ON OTHER DOCUMENTS
Notice 2003–19, 2003–1 C.B. 703,
Place of Filing Certain Elections, State-
ments, Returns, and Other Documents, is
revoked.
DRAFTING INFORMATION
The principal author of this notice is
Melissa Segal of the Office of Associate
Chief Counsel (Procedure & Administra-
tion). For further information regarding
2010–31 I.R.B.182August 2, 2010

this notice, contact Melissa Segal at (202)
622–7950 (not a toll-free call).
26 CFR § 601.105: Examination of returns and
claims for refund, credit or abatement; determination
of correct tax liability.
(Also: 26 C.F.R. § 301.6402–2: Claims for credit or
refund.)
Rev. Proc. 2010–27
SECTION 1. PURPOSE
This revenue procedure informs the
trustee (or debtor in possession) represent-
ing the bankruptcy estate of the debtor of
the procedure to be followed to properly
request a tax refund from the Service. This
revenue procedure does not apply to the
filing by the trustee of an application for
a tentative carrybackor refund adjustment
under section 6411 of the Internal Revenue
Code.
SECTION 2. BACKGROUND
During the administration of a bank-
ruptcy case, the bankruptcy estate may
have a right to a tax refund. Under sec-
tion 505(a)(2)(B) of Title 11 of the United
States Code (Bankruptcy Code) the bank-
ruptcy court may not determine any right
of the bankruptcy estate to a tax refund
before the earlier of
(1) 120 days after the trustee properly
requests such refund from the governmen-
tal unit from which such refund is claimed;
or
(2) a determination by such governmen-
tal unit of such request.
SECTION 3. APPLICATION
.01 If a credit or refund of an over-
payment of tax was not claimed on a re-
turn previously filed by the debtor, the
trustee may do so by filing the appropri-
ate amended return or form.
(1) Pursuant to section 301.6402–3(a)
of the Regulations on Procedure and Ad-
ministration and section 601.105(e)(1)
of the Statement of Procedural Rules
(26 CFR Part 601), in the case of an
overpayment of income taxes for a taxable
year for which:
(a) a Form 1040 or 1040A has been filed
by an individual debtor, a claim for credit
or refund shall be made by the trustee on
Form 1040X,Amended U.S. Individual In-
come Tax Return;
(b) a Form 1120 has been filed by a
corporate debtor, a claim for credit or
refund shall be made by the trustee on
Form 1120X,Amended U.S. Corporation
Income Tax Return;
(c) a form other than Form 1040,
1040A, or 1120 has been filed by a debtor
(such as Form 1041,U.S. Fiduciary In-
come Tax Return), a claim for credit or
refundshallbemadebythetrusteeonthe
appropriate amended income tax return.
(2) Pursuant to section 301.6402–2(c)
and section 601.105(e)(1), in the case of
an overpayment of taxes other than income
tax for which the debtor has filed a return,
a claim for credit or refund shall be made
on Form 843,Claim for Refund and Re-
quest for Abatement.An exact copy of
the return (or returns) that is the subject
of the claim should also be submitted, to-
gether with a statement of the name and lo-
cation of the office where the return was
filed.Seesection 301.6402–2(e), relating
to proof of representative capacity to ac-
company the claim.
.02 If the debtor has claimed a credit
or refund of an overpayment of tax on a
properly filed returnorform,thetrustee
mayrelyonsuchclaim.
.03 With regard to an overpayment of
taxes of the bankruptcy estate incurred dur-
ing the administration of the bankruptcy
case, a properly executed tax return shall,
at the election of the trustee, constitute a
claim for credit or refund of the overpay-
ment.
.04 The forms or returns described in
this section must be mailed to Central-
ized Insolvency Operation, Post Office
Box 21126, Philadelphia, PA 19114. The
return or form must be marked “Request
for Prompt Refund” and be accompanied
by a written statement explaining that the
request is being submitted pursuant to
section 505(a) of the Bankruptcy Code.
.05 The Service will examine the appro-
priate amended return, Form 843, or orig-
inal return filed by the trustee on an expe-
dited basis. The Service will complete the
examination and notify the trustee of the
decision rendered within 120 days from
the date of the filing of the claim.
SECTION 4. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 81–18, 1981–1 C.B. 688, is
obsoleted.
SECTION 5. EFFECTIVE DATE
This revenue procedure applies to all
cases commenced under the Bankruptcy
Code with the exception of chapter 9 mu-
nicipal debt adjustment cases and chapter
15 ancillary and cross-border cases.
SECTION 6. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Teresa Dondlinger Trissell
of the Office of Associate Chief Counsel
(Procedure & Administration). For fur-
ther information regarding this revenue
procedure, contact William Beard at (202)
622–3620 (not a toll-free call).
August 2, 20101832010–31 I.R.B.

Part IV. Items o
fGeneralInterest
Notice of Prop
osed
Rulemaking by
Cross-Refere
nce to
Temporary Re
gulations
Extended Car
ryback of Losses
to or from a Co
nsolidated
Group
REG–151605
–09
AGENCY: Int
ernal Revenue Service
(IRS), Trea
sury.
ACTION: Not
ice of proposed rulemaking
by cross-re
ference to temporary regula-
tions.
SUMMARY: I
n this issue of the Bulletin,
the IRS is i
ssuing temporary regulations
(T.D. 9490
) that provides guidance to con-
solidated
groups that implements the revi-
sions to s
ection 172(b)(1)(H). The text of
those reg
ulations also serves as the text of
these pro
posed regulations.
DATES: Wr
itten or electronic comments
and a requ
est for a public hearing must be
received
by September 21, 2010.
ADDRESSE
S: Send submissions to:
CC:PA:L
PD:PR(REG–151605–09),
Room 520
3, Internal Revenue Service,
P.O. Box
7604, Ben Franklin Station,
Washing
ton, DC 20044. Submissions may
be hand-
delivered Monday through Friday
betwee
n the hours of 8 a.m. and 4 p.m.
to CC:P
A:LPD:PR (REG–151605–09),
Courie
r’s Desk, Internal Revenue Ser-
vice, 1
111 Constitution Avenue NW,
Washin
gton, DC, or sent electroni-
cally
via the Federal eRulemaking Por-
tal at
http://www.regulations.gov(IRS
REG–1
51605–09).
FOR FU
RTHER INFORMATION
CONTA
CT: Concerning the proposed
regul
ations, Grid Glyer, (202) 622–7930,
conc
erning submissions of comments,
Regi
na Johnson (202) 622–7180 (not
toll
-free numbers).
SUPPLEMENTAR
Y INFORMATION:
Paperwork Red
uction Act
The collectio
n of information contained
in this notice
of proposed rulemaking has
been submitte
d to the Office of Manage-
ment and Budge
t for review in accordance
with the Pape
rwork Reduction Act of 1995
(44 U.S.C. 35
07(d) under control number
1545–2171).
Comments on the collection
of informati
on should be sent to theOf-
fice of Manag
ement and Budget, Attn:
Desk Office
r for the Department of the
Treasury, O
ffice of Information and Reg-
ulatory Aff
airs, Washington, D.C. 20503,
with copies
to theInternal Revenue Ser-
vice,Attn
: IRS Reports Clearance Offi-
cer, SE:W:
CAR:MP:T:T:SP, Washington,
D.C. 20224
. Comments on the collec-
tion of inf
ormation should be received by
August 23
, 2010.
Comments a
re specifically requested
concerni
ng:
Whether th
eproposedcollectionofin-
formatio
n is necessary for the proper per-
formance
of the functions of theInternal
Revenue S
ervice, including whether the
informat
ion will have practical utility;
The accur
acy of the estimated burden
associat
ed with the proposed collection of
informat
ion;
How the qu
ality, utility and clarity of
the info
rmation to be collected may be en-
hanced;
How the b
urden of complying with the
propose
d collection of information may be
minimiz
ed, including through the appli-
cation o
f automated collection techniques
or other
forms of information technology;
and
Estimat
es of capital or start-up costs
and cos
ts of operation, maintenance and
purcha
se of service to provide information.
The col
lection of information
in thes
e proposed regulations is
in §§1.
1502–21(b)(3)(ii)(C)(2)and
1.1502
–21(b)(3)(ii)(C)(3).
The pro
posed regulations provide
guidan
ce to consolidated groups that
implem
ents the revisions to section
172(b
)(1)(H).
The co
llection of information is re-
quire
d in order to obtain a benefit. The
likel
y respondents are corporations that
are me
mbers of consolidated groups.
Estimated tot
al annual reporting bur-
den: 1,000 hou
rs.
Estimated ave
rage annual burden hours
per responden
t: 0.25 hours.
Estimated num
ber of respondents:
4,000.
Estimated fre
quency of responses:
Once.
An agency may n
ot conduct or sponsor,
and a person is
not required to respond to, a
collection of
information unless it displays
a valid contr
ol number assigned by the Of-
fice of Manag
ement and Budget.
Books or reco
rds relating to a collection
of informati
on must be retained as long
as their cont
ents may become material in
the administ
ration of any internal revenue
law. Genera
lly, tax returns and tax return
informatio
n are confidential, as required
by 26 U.S.C.
6103.
Background
and Explanation of
Provisions
Temporary r
egulations in this issue of
the Bulleti
n amend 26 CFR Part 1 to revise
§1.1502–2
1T. The text of those temporary
regulatio
ns also serves as the text of these
proposed r
egulations. The preamble to the
temporary
regulations explains the amend-
ments.
Special An
alyses
It has bee
n determined that this notice
of propos
ed rulemaking is not a signifi-
cant regu
latory action as defined in Execu-
tive Orde
r 12866. Therefore, a regulatory
assessme
nt is not required. With respect
to the pr
oposed regulation, §1.1502–21,
it is her
eby certified that this provision
will not
have a significant economic im-
pact on a
substantial number of small enti-
ties. Th
is certification is based on the fact
that th
ese regulations primarily affect large
corpor
ations that are members of consoli-
dated g
roups and will provide a benefit if
the ele
ction is made. Therefore, a regu-
latory
flexibility analysis is not required.
Pursu
ant to section 7805(f) of the Inter-
nal Re
venue Code, these regulations have
been s
ubmitted to the Chief Counsel for
Advoc
acy of the Small Business Admin-
istra
tion for comment on their impact on
small
business.
2010–31 I.R.B.184August 2, 2010

Comments and Requests for a Public
Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any written comments
(a signed original and eight (8) copies)
or electronic comments that are submitted
timely to the IRS. All comments will be
available for public inspection and copy-
ing. A public hearing may be scheduled
ifrequestedinwritingbyanypersonthat
timely submits written comments. If a
public hearing is scheduled, notice of the
date, time, and place for the public hearing
will be published in theFederal Register.
Drafting Information
The principal author of these regula-
tions is Grid Glyer of the Office of As-
sociate Chief Counsel(Corporate). Other
personnel from the Treasury Department
and the IRS participated in their develop-
ment.
*****
Proposed Amendments to the
Regulations
Accordingly, 26 CFR part 1 is proposed
to be 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 1.1502–21 also issued under
26 U.S.C. 1502. * * *
Par. 2. Section 1.1502–21 is revised to
read as follows:
§1.1502–21 Net operating losses.
[The text of proposed §1.1502–21 is
the same as the text for §1.1502–21T(a)
through (h)(9)(i) published elsewhere in
this issue of the Bulletin].
Steven T. Miller,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on June 22, 2010,
8:45 a.m., and published in the issue of the Federal Register
for June 23, 2010, 75 F.R. 35710)
August 2, 20101852010–31 I.R.B.

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the ef-
fect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is be-
ingextendedtoapplytoavariationofthe
fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that the
same principle also applies to B, the earlier
ruling is amplified. (Compare withmodi-
fied,below).
Clarifiedis used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion.
It is not used where a position in a prior
ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
withamplifiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
beingstatedinanewruling.
Supersededdescribes a situation where
the new ruling does nothing more than re-
state the substance and situation of a previ-
ously published ruling (or rulings). Thus,
the term is used to republish under the
1986 Code and regulations the same po-
sition published under the 1939 Code and
regulations. The term is also used when
it is desired to republish in a single rul-
ing a series of situations, names, etc., that
were previously published over a period of
time in separate rulings. If the new rul-
ing does more than restate the substance
of a prior ruling, a combination of terms
is used. For example,modifiedandsu-
persededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is self
contained. In this case, the previously pub-
lished ruling is first modified and then, as
modified, is superseded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names in
subsequent rulings. After the original rul-
ing has been supplemented several times, a
new ruling may be published that includes
the list in the original ruling and the ad-
ditions, and supersedes all prior rulings in
the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cases
in litigation, or the outcome of a Service
study.
Abbreviations
The fol
lowing abbreviations in current use
and for
merly used will appear in material
publis
hedintheBulletin.
A—Individual.
Acq.—A
cquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank
.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cu
mulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Coo
perative.
Ct.D.—Court Decision.
CY—County.
D—Decede
nt.
DC—Dummy Corporation.
DE—Donee.
Del. Order
—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Emp
loyer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduc
iary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Fo
reign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Fed
eral Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grante
e.
GP—General Partner.
GR—Grantor.
IC—Insura
nce Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited
Partner.
LR—Lessor.
M—Minor.
Nonacq.—No
nacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Persona
l Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Pa
rtnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Re
al Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsi
diary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target
Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Trans
feree.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpay
er.
TR—Trust.
TT—Trustee.
U.S.C.—Uni
ted States Code.
X—Corporation.
Y—Corporation.
Z—Corporat
ion.
2010–31 I.R.B.iAugust 2, 2010

Numerical Finding List
1
Bulletins 2010–27 through 2010–31
Announcements:
2010-43, 2010-27 I.R.B.42
2010-44, 2010-28 I.R.B.54
2010-45, 2010-29 I.R.B.87
2010-46, 2010-29 I.R.B.87
2010-47, 2010-30 I.R.B.173
Notices:
2010-48, 2010-27 I.R.B.9
2010-49, 2010-27 I.R.B.10
2010-50, 2010-27 I.R.B.12
2010-51, 2010-29 I.R.B.83
2010-52, 2010-30 I.R.B.88
2010-53, 2010-31 I.R.B.182
Proposed Regulations:
REG-151605-09, 2010-31 I.R.B.184
REG-112841-10, 2010-27 I.R.B.41
REG-118412-10, 2010-29 I.R.B.85
Revenue Procedures:
2010-25, 2010-27 I.R.B.16
2010-26, 2010-30 I.R.B.91
2010-27, 2010-31 I.R.B.183
Revenue Rulings:
2010-18, 2010-27 I.R.B.1
2010-19, 2010-31 I.R.B.174
Treasury Decisions:
9486, 2010-27 I.R.B.3
9487, 2010-28 I.R.B.48
9488, 2010-28 I.R.B.51
9489, 2010-29 I.R.B.55
9490, 2010-31 I.R.B.176
1
A cumulative list of all revenue rulings, revenueprocedures, Treasury decisions, etc., publishedin Internal Revenue Bulletins 2010–1 through 2010–26 is in Internal Revenue Bulletin
2010–26, dated June 28, 2010.
August 2, 2010ii2010–31 I.R.B.

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2010–27 through 2010–31
Notices:
2003-19
Revoked by
Notice 2010-53, 2010-31 I.R.B.182
Revenue Procedures:
2007-44
Modified by
Notice 2010-48, 2010-27 I.R.B.9
2009-18
Obsoleted in part by
Rev. Proc. 2010-25, 2010-27 I.R.B.16
2009-30
Superseded by
Rev. Proc. 2010-26, 2010-30 I.R.B.91
81-18
Obsoleted by
Rev. Proc. 2010-27, 2010-31 I.R.B.183
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2010–1 through 2010–26 is in Internal Revenue Bulletin 2010–26, dated June 28, 2010.
2010–31 I.R.B.iiiAugust 2, 2010

August 2, 20102010–31 I.R.B.

INTERNAL REVENUE BULLETIN
The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue
Bulletin is sold on a yearly subscription basis by the Superintendent of Documents. Current subscribers are notified by the Superin-
tendent of Documents when their subscriptions must be renewed.
CUMULATIVE BULLETINS
The contents of this weekly Bulletin are consolidated semiannually into a permanent, indexed, Cumulative Bulletin. These are
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would be pleased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page (www.irs.gov)
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