rp-06-21.pdf

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Part III

Administrative, Procedural, and Miscellaneous

26 CFR 601.201: Ruling and determination letters.
(Also Part I, §§ 1502, 1504; 1.1502-33, 1.1502-75, 1.1502-76, 1.1504-1.)

Rev. Proc. 2006-21

SECTION 1. PURPOSE

This revenue procedure modifies Rev. Proc. 89-56, 1989-2 C.B. 643, Rev. Proc.
90-39, 1990-2 C.B. 365, and Rev. Proc. 2002-32, 2002-1 C.B. 959, to eliminate
impediments to the electronic filing of Federal income tax returns (e-filing) and to
reduce the reporting requirements in each of these revenue procedures.
SECTION 2. BACKGROUND

.01 Rev. Proc. 89-56, Rev. Proc. 90-39, and Rev. Proc. 2002-32 each provide a
means for a consolidated group to obtain a specified consent or waiver from the
Commissioner without requesting a private letter ruling. The revenue procedures each
provide that, in order to obtain the subject consent or waiver, a statement containing
specified information must be included on or with the group’s return. The Internal
Revenue Service has concluded that the amount of information required to be included

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in these statements is greater than is necessary to facilitate the administration of the
tax law. Moreover, each of these statements presents an impediment to e-filing.
.02 Rev. Proc. 89-56 provides a means for a consolidated group to obtain the
Commissioner’s consent to file a consolidated Federal income tax return in which one
or more members of the group use a 52-53 week tax year. Section 3.01 of the
revenue procedure sets forth the information and representations that must be
provided in a statement included on or with the group’s return in order to obtain the
consent. Section 3.02 requires the statement to be signed under penalties of perjury
by a duly authorized officer of the common parent.
.03 Rev. Proc. 90-39 provides a means for a consolidated group to obtain the
Commissioner’s consent to elect or change its method of allocating the consolidated
Federal income tax liability to its members for purposes of determining the earnings
and profits of each member. Section 4.01 of the revenue procedure sets forth the
information and representations that must be provided in a statement included on or
with the group’s return in order to obtain the consent. Section 4.02 requires the
statement to be signed under penalties of perjury by a duly authorized officer of the
common parent.
.04 Rev. Proc 2002-32 provides a means for a consolidated group to obtain the
Commissioner’s waiver of the prohibition against including a previously disaffiliated
corporation in the group’s return during the sixty-month period following the
disaffiliation. See § 1504(a)(3)(A) of the Internal Revenue Code. Paragraphs 5.01
through 5.14 of the revenue procedure set forth the information and representations

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that must be provided in a statement included on or with the group’s return in order to
obtain the consent. In the unnumbered paragraph following the heading, Section 5
requires the statement to be filed under penalties of perjury.
SECTION 3. SCOPE

This revenue procedure applies to any taxpayer that applies for a consent or
waiver under the provisions of Rev. Proc. 89-56, Rev. Proc. 90-39, or Rev. Proc. 2002-
32.
SECTION 4. APPLICATION

.01 To remove e-filing impediments, this revenue procedure eliminates the
signature requirement of each of Rev. Proc. 89-56, Rev. Proc. 90-39, and Rev. Proc.
2002-32. Thus, the following provisions of these revenue procedures are deleted:
section 3.02 of Rev. Proc. 89-56, section 4.02 of Rev. Proc. 90-39, and the clause,
“filed under penalties of perjury,” in the second sentence in the unnumbered paragraph
following the heading of Section 5 of Rev. Proc. 2002-32.
.02 To reduce the reporting requirements of Rev. Proc. 89-56, this revenue
procedure permits a consolidated group to obtain consent under that revenue
procedure by including the following statement on or with its return in lieu of the
statement described in section 3.01 of Rev. Proc. 89-56: “THIS IS A REQUEST
UNDER REV. PROC. 89-56 TO USE A 52-53 WEEK TAX YEAR. THE GROUP HAS
COMPLIED, AND WILL CONTINUE TO COMPLY, WITH THE CONDITIONS SET
FORTH IN SECTION 3.01 OF REV. PROC. 89-56.”
.03 To reduce the reporting requirements of Rev. Proc. 90-39, this revenue

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procedure permits a consolidated group to obtain consent under that revenue
procedure by including the following statement on or with its return in lieu of the
statement described in section 4.01 of Rev. Proc. 90-39: “THIS IS A REQUEST
UNDER REV. PROC. 90-39 TO ELECT OR CHANGE THE METHOD OF
ALLOCATING CONSOLIDATED FEDERAL INCOME TAX LIABILITY FOR
PURPOSES OF DETERMINING MEMBERS’ EARNINGS AND PROFITS. THE
GROUP HAS COMPLIED, AND WILL CONTINUE TO COMPLY, WITH THE
CONDITIONS SET FORTH IN SECTION 4.01 OF REV. PROC. 90-39.”
.04 To reduce the reporting requirements of Rev. Proc. 2002-32, this revenue
procedure permits a consolidated group to obtain a waiver under that revenue
procedure by including the following statement on or with its return in lieu of the
statement described in section 5 of Rev. Proc. 2002-32: “THIS IS A REQUEST
UNDER REV. PROC. 2002-32 FOR A WAIVER OF SECTION 1504(a)(3)(A) FOR
[INSERT NAME AND EMPLOYER IDENTIFICATION NUMBER OF SUBSIDIARY].
THE GROUP HAS COMPLIED, AND WILL CONTINUE TO COMPLY, WITH THE
CONDITIONS SET FORTH IN SECTIONS 5.01 THROUGH 5.14 OF REV. PROC.
2002-32.”
.05 Although paragraphs 4.02, 4.03, and 4.04 of this revenue procedure reduce
the amount of information that a taxpayer is required to include on or with its return,
the taxpayer’s recordkeeping requirement remains unchanged. Taxpayers should
maintain records to establish the information described in Rev. Proc. 89-56 (Sec.
3.01), Rev. Proc. 90-39 (Sec. 4.01), and 2002-32 (Secs. 5.01 through 5.14) in order to

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substantiate their reporting positions. See § 1.6001-1(e) of the Procedure and
Administration Regulations.
SECTION 5. EFFECT ON OTHER REVENUE PROCEDURES
Rev. Proc. 89-56, Rev. Proc. 90-39, and Rev. Proc 2002-32 are modified. The
IRS and Treasury Department intend to modify Rev. Proc. 89-56 and Rev. Proc. 90-39
to reflect revisions to §§ 1.1502-13 and 1.1502-33 of the Income Tax
Regulations. Until these revenue procedures are so modified, taxpayers should
continue to apply the provisions of both revenue procedures in a manner that reflects
the approach in the applicable regulations.
SECTION 6. EFFECTIVE DATE

This revenue procedure is effective on May 26, 2006. However, taxpayers may
rely on this revenue procedure for prior taxable years.
SECTION 7. PAPERWORK REDUCTION ACT

The collections of information in this revenue procedure have been previously
reviewed and approved by the Office of Management and Budget (OMB) in
accordance with the Paperwork Reduction Act (44 U.S.C. 3507) under control number
1545-1784.
An agency may not conduct or sponsor, and a person is not required to respond
to, a collection of information unless the collection of information displays a valid OMB
control number.
Books or records relating to a collection of information must be retained as long
as their contents may be material in the administration of any internal revenue tax law.

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Generally tax returns and tax return information are confidential, as required by
§ 6103.
SECTION 8. DRAFTING INFORMATION
The principal author of this revenue procedure is Grid R. Glyer of the Office of
Associate Chief Counsel (Corporate). For further information regarding this revenue
procedure contact Grid R. Glyer at (202) 622-7930 (not a toll free call).