Revenue Ruling 2004-92

Rev. Rul. 2004-92
Rev. Rul. 2004-92, 2004-37 I.R.B. 466
                       Internal Revenue Service (I.R.S.)
                                 Revenue Ruling
                 INTEREST RATES; UNDERPAYMENTS AND OVERPAYMENTS
                            Released: August 31, 2004
                          Published: September 13, 2004
 Section 6621.–Determination of Rate of Interest, 26 CFR 301.6621-1: Interest rate.

  Interest rates; underpayments and overpayments. The rate of interest determined under section 6621 of the Code for the calendar quarter beginning October 1, 2004, will be 5 percent for overpayments (4 percent in the case of a corporation), 5 percent for underpayments, and 7 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 2.5 percent.

  Interest rates; underpayments and overpayments. The rate of interest determined under section 6621 of the Code for the calendar quarter beginning October 1, 2004, will be 5 percent for overpayments (4 percent in the case of a corporation), 5 percent for underpayments, and 7 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 2.5 percent.

  Section 6621 of the Internal Revenue Code establishes the rates for interest on tax overpayments and tax underpayments. Under section 6621(a)(1), the overpayment rate is the sum of the federal short-term rate plus 3 percentage points (2 percentage points in the case of a corporation), except the rate for the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the sum of the federal short-term rate plus 0.5 of a percentage point for interest computations made after December 31, 1994. Under section 6621(a)(2), the underpayment rate is the sum of the federal short-term rate plus 3 percentage points.

  Section 6621(c) provides that for purposes of interest payable under section 6601 on any large corporate underpayment, the underpayment rate under section 6621(a)(2) is determined by substituting “5 percentage points” for “3 percentage points.” See section 6621(c) and section 301.6621-3 of the Regulations on Procedure and Administration for the definition of a large corporate underpayment and for the rules for determining the applicable date. Section 6621(c) and section 301.6621-3 are generally effective for periods after December 31, 1990.

  Section 6621(b)(1) provides that the Secretary will determine the federal short-term rate for the first month in each calendar quarter.

  Section 6621(b)(2)(A) provides that the federal short-term rate determined under section 6621(b)(1) for any month applies during the first calendar quarter beginning after such month.

  Section 6621(b)(3) provides that the federal short-term rate for any month is the federal short-term rate determined during such month by the Secretary in accordance with s 1274(d), rounded to the nearest full percent (or, if a multiple of 1/2 of 1 percent, the rate is increased to the next highest full percent).

  Notice 88-59, 1988-1 C.B. 546, announced that, in determining the quarterly interest rates to be used for overpayments and underpayments of tax under section 6621, the Internal Revenue Service will use the federal short-term rate based on daily compounding because that rate is most consistent with section 6621 which, pursuant to section 6622, is subject to daily compounding.

  Rounded to the nearest full percent, the federal short-term rate based on daily compounding determined during the month of July 2004 is 2 percent. Accordingly, an overpayment rate of 5 percent (4 percent in the case of a corporation) and an underpayment rate of 5 percent are established for the calendar quarter beginning October 1, 2004. The overpayment rate for the portion of a corporate overpayment exceeding $10,000 for the calendar quarter beginning October 1, 2004, is 2.5 percent. The underpayment rate for large corporate underpayments for the calendar quarter beginning October 1, 2004, is 7 percent. These rates apply to amounts bearing interest during that calendar quarter.

  Interest factors for daily compound interest for annual rates of 2.5 percent, 4 percent, 5 percent, and 7 percent are published in Tables 58, 61, 63, and 67 of Rev. Proc. 95-17, 1995-1 C.B. 556, 612, 615, 617, and 621.

  Annual interest rates to be compounded daily pursuant to section 6622 that apply for prior periods are set forth in the tables accompanying this revenue ruling.

DRAFTING INFORMATION

  The principal author of this revenue ruling is Crystal Foster of the Office of Associate Chief Counsel (Procedure & Administration). For further information regarding this revenue ruling, contact Ms. Foster at (202) 622- 7326 (not a toll-free call).

——————————————————————
                     TABLE OF INTEREST RATES
   PERIODS BEFORE JUL. 1, 1975 — PERIODS ENDING DEC. 31, 1986
                  OVERPAYMENTS AND UNDERPAYMENTS
PERIOD                       RATE  In 1995-1 C.B. DAILY RATE TABLE
Before Jul. 1, 1975            6%                 Table 2, pg. 557
Jul. 1, 1975–Jan. 31, 1976    9%                 Table 4, pg. 559

Feb. 1, 1976–Jan. 31, 1978    7%                 Table 3, pg. 558
Feb. 1, 1978–Jan. 31, 1980    6%                 Table 2, pg. 557
Feb. 1, 1980–Jan. 31, 1982   12%                 Table 5, pg. 560
Feb. 1, 1982–Dec. 31, 1982   20%                 Table 6, pg. 560
Jan. 1, 1983–Jun. 30, 1983   16%                Table 37, pg. 591
Jul. 1, 1983–Dec. 31, 1983   11%                Table 27, pg. 581
Jan. 1, 1984–Jun. 30, 1984   11%                Table 75, pg. 629
Jul. 1, 1984–Dec. 31, 1984   11%                Table 75, pg. 629
Jan. 1, 1985–Jun. 30, 1985   13%                Table 31, pg. 585
Jul. 1, 1985–Dec. 31, 1985   11%                Table 27, pg. 581
Jan. 1, 1986–Jun. 30, 1986   10%                Table 25, pg. 579
Jul. 1, 1986–Dec. 31, 1986    9%                Table 23, pg. 577
——————————————————————

——————————————————————————-
                            TABLE OF INTEREST RATES
                      FROM JAN. 1, 1987 — Dec. 31, 1998
                                   OVERPAYMENTS             UNDERPAYMENTS
                             ————————————————–
                             RATE   1995-1 C.B.   PG   RATE   1995-1 C.B.   PG
                                       TABLE                     TABLE
Jan. 1, 1987–Mar. 31, 1987    8%             21  575    9%             23  577
Apr. 1, 1987–Jun. 30, 1987    8%             21  575    9%             23  577
Jul. 1, 1987–Sep. 30, 1987    8%             21  575    9%             23  577
Oct. 1, 1987–Dec. 31, 1987    9%             23  577   10%             25  579
Jan. 1, 1988–Mar. 31, 1988   10%             73  627   11%             75  629
Apr. 1, 1988–Jun. 30, 1988    9%             71  625   10%             73  627
Jul. 1, 1988–Sep. 30, 1988    9%             71  625   10%             73  627
Oct. 1, 1988–Dec. 31, 1988   10%             73  627   11%             75  629
Jan. 1, 1989–Mar. 31, 1989   10%             25  579   11%             27  581
Apr. 1, 1989–Jun. 30, 1989   11%             27  581   12%             29  583
Jul. 1, 1989–Sep. 30, 1989   11%             27  581   12%             29  583
Oct. 1, 1989–Dec. 31, 1989   10%             25  579   11%             27  581
Jan. 1, 1990–Mar. 31, 1990   10%             25  579   11%             27  581
Apr. 1, 1990–Jun. 30, 1990   10%             25  579   11%             27  581
Jul. 1, 1990–Sep. 30, 1990   10%             25  579   11%             27  581
Oct. 1, 1990–Dec. 31, 1990   10%             25  579   11%             27  581
Jan. 1, 1991–Mar. 31, 1991   10%             25  579   11%             27  581
Apr. 1, 1991–Jun. 30, 1991    9%             23  577   10%             25  579
Jul. 1, 1991–Sep. 30, 1991    9%             23  577   10%             25  579
Oct. 1, 1991–Dec. 31, 1991    9%             23  577   10%             25  579
Jan. 1, 1992–Mar. 31, 1992    8%             69  623    9%             71  625
Apr. 1, 1992–Jun. 30, 1992    7%             67  621    8%             69  623
Jul. 1, 1992–Sep. 30, 1992    7%             67  621    8%             69  623
Oct. 1, 1992–Dec. 31, 1992    6%             65  619    7%             67  621
Jan. 1, 1993–Mar. 31, 1993    6%             17  571    7%             19  573
Apr. 1, 1993–Jun. 30, 1993    6%             17  571    7%             19  573
Jul. 1, 1993–Sep. 30, 1993    6%             17  571    7%             19  573
Oct. 1, 1993–Dec. 31, 1993    6%             17  571    7%             19  573
Jan. 1, 1994–Mar. 31, 1994    6%             17  571    7%             19  573
Apr. 1, 1994–Jun. 30, 1994    6%             17  571    7%             19  573
Jul. 1, 1994–Sep. 30, 1994    7%             19  573    8%             21  575
Oct. 1, 1994–Dec. 31, 1994    8%             21  575    9%             23  577
Jan. 1, 1995–Mar. 31, 1995    8%             21  575    9%             23  577
Apr. 1, 1995–Jun. 30, 1995    9%             23  577   10%             25  579
Jul. 1, 1995–Sep. 30, 1995    8%             21  575    9%             23  577
Oct. 1, 1995–Dec. 31, 1995    8%             21  575    9%             23  577
Jan. 1, 1996–Mar. 31, 1996    8%             69  623    9%             71  625
Apr. 1, 1996–Jun. 30, 1996    7%             67  621    8%             69  623
Jul. 1, 1996–Sep. 30, 1996    8%             69  623    9%             71  625
Oct. 1, 1996–Dec. 31, 1996    8%             69  623    9%             71  625
Jan. 1, 1997–Mar. 31, 1997    8%             21  575    9%             23  577

Apr. 1, 1997–Jun. 30, 1997    8%             21  575    9%             23  577
Jul. 1, 1997–Sep. 30, 1997    8%             21  575    9%             23  577
Oct. 1, 1997–Dec. 31, 1997    8%             21  575    9%             23  577
Jan. 1, 1998–Mar. 31, 1998    8%             21  575    9%             23  577
Apr. 1, 1998–Jun. 30, 1998    7%             19  573    8%             21  575
Jul. 1, 1998–Sep. 30, 1998    7%             19  573    8%             21  575
Oct. 1, 1998–Dec. 31, 1998    7%             19  573    8%             21  575
——————————————————————————-

———————————————————-
                 TABLE OF INTEREST RATES
             FROM JANUARY 1, 1999 — PRESENT
       NONCORPORATE OVERPAYMENTS AND UNDERPAYMENTS
                             RATE  1995-1 C.B. TABLE  PAGE
Jan. 1, 1999–Mar. 31, 1999   7%          19          573
Apr. 1, 1999–Jun. 30, 1999   8%          21          575
Jul. 1, 1999–Sep. 30, 1999   8%          21          575
Oct. 1, 1999–Dec. 31, 1999   8%          21          575
Jan. 1, 2000–Mar. 31, 2000   8%          69          623
Apr. 1, 2000–Jun. 30, 2000   9%          71          625
Jul. 1, 2000–Sep. 30, 2000   9%          71          625
Oct. 1, 2000–Dec 31, 2000    9%          71          625
Jan. 1, 2001–Mar. 31, 2001   9%          23          577
Apr. 1, 2001–Jun. 30, 2001   8%          21          575
Jul. 1, 2001–Sep. 30, 2001   7%          19          573
Oct. 1, 2001–Dec. 31, 2001   7%          19          573
Jan. 1, 2002–Mar. 31, 2002   6%          17          571
Apr. 1, 2002–Jun. 30, 2002   6%          17          571
Jul. 1, 2002–Sep. 30, 2002   6%          17          571
Oct. 1, 2002–Dec. 31, 2002   6%          17          571
Jan. 1, 2003–Mar. 31, 2003   5%          15          569
Apr. 1, 2003–Jun. 30, 2003   5%          15          569
Jul. 1, 2003–Sep. 30, 2003   5%          15          569
Oct. 1, 2003–Dec. 31, 2003   4%          13          567
Jan. 1, 2004–Mar. 31, 2004   4%          61          615
Apr. 1, 2004–Jun. 30, 2004   5%          63          617
Jul. 1, 2004–Sep. 30, 2004   4%          61          615
Oct. 1, 2004–Dec. 31, 2004   5%          63          617
———————————————————-

——————————————————————————-
                            TABLE OF INTEREST RATES
                        FROM JANUARY 1, 1999 — PRESENT
                   CORPORATE OVERPAYMENTS AND UNDERPAYMENTS
                                   OVERPAYMENTS             UNDERPAYMENTS
                             ————————————————–
                             RATE   1995-1 C.B.   PG   RATE   1995-1 C.B.   PG
                                       TABLE                     TABLE
Jan. 1, 1999–Mar. 31, 1999    6%             17  571    7%             19  573
Apr. 1, 1999–Jun. 30, 1999    7%             19  573    8%             21  575
Jul. 1, 1999–Sep. 30, 1999    7%             19  573    8%             21  575
Oct. 1, 1999–Dec. 31, 1999    7%             19  573    8%             21  575
Jan. 1, 2000–Mar. 31, 2000    7%             67  621    8%             69  623
Apr. 1, 2000–Jun. 30, 2000    8%             69  623    9%             71  625
Jul. 1, 2000–Sep. 30, 2000    8%             69  623    9%             71  625
Oct. 1, 2000–Dec. 31, 2000    8%             69  623    9%             71  625
Jan. 1, 2001–Mar. 31, 2001    8%             21  575    9%             23  577
Apr. 1, 2001–Jun. 30, 2001    7%             19  573    8%             21  575
Jul. 1, 2001–Sep. 30, 2001    6%             17  571    7%             19  573
Oct. 1, 2001–Dec. 31, 2001    6%             17  571    7%             19  573
Jan. 1, 2002–Mar. 31, 2002    5%             15  569    6%             17  571
Apr. 1, 2002–Jun. 30, 2002    5%             15  569    6%             17  571
Jul. 1, 2002–Sep. 30, 2002    5%             15  569    6%             17  571
Oct. 1, 2002–Dec. 31, 2002    5%             15  569    6%             17  571
Jan. 1, 2003–Mar. 31, 2003    4%             13  567    5%             15  569
Apr. 1, 2003–Jun. 30, 2003    4%             13  567    5%             15  569
Jul. 1, 2003–Sep. 30, 2003    4%             13  567    5%             15  569
Oct. 1, 2003–Dec. 31, 2003    3%             11  565    4%             13  567
Jan. 1, 2004–Mar. 31, 2004    3%             59  613    4%             61  615
Apr. 1, 2004–Jun. 30, 2004    4%             61  615    5%             63  617
Jul. 1, 2004–Sep. 30, 2004    3%             59  613    4%             61  615
Oct. 1, 2004–Dec. 31, 2004    4%             61  615    5%             63  617
——————————————————————————-

—————————————————————
   TABLE OF INTEREST RATES FOR LARGE CORPORATE UNDERPAYMENTS
                FROM JANUARY 1, 1991 — PRESENT
                              RATE    1995-1 C.B. TABLE    PG
Jan. 1, 1991–Mar. 31, 1991      13%                 31     585
Apr. 1, 1991–Jun. 30, 1991      12%                 29     583
Jul. 1, 1991–Sep. 30, 1991      12%                 29     583
Oct. 1, 1991–Dec. 31, 1991      12%                 29     583
Jan. 1, 1992–Mar. 31, 1992      11%                 75     629
Apr. 1, 1992–Jun. 30, 1992      10%                 73     627
Jul. 1, 1992–Sep. 30, 1992      10%                 73     627
Oct. 1, 1992–Dec. 31, 1992       9%                 71     625
Jan. 1, 1993–Mar. 31, 1993       9%                 23     577
Apr. 1, 1993–Jun. 30, 1993       9%                 23     577
Jul. 1, 1993–Sep. 30, 1993       9%                 23     577
Oct. 1, 1993–Dec. 31, 1993       9%                 23     577
Jan. 1, 1994–Mar. 31, 1994       9%                 23     577
Apr. 1, 1994–Jun. 30, 1994       9%                 23     577
Jul. 1, 1994–Sep. 30, 1994      10%                 25     579
Oct. 1, 1994–Dec. 31, 1994      11%                 27     581
Jan. 1, 1995–Mar. 31, 1995      11%                 27     581
Apr. 1, 1995–Jun. 30, 1995      12%                 29     583
Jul. 1, 1995–Sep. 30, 1995      11%                 27     581
Oct. 1, 1995–Dec. 31, 1995      11%                 27     581
Jan. 1, 1996–Mar. 31, 1996      11%                 75     629
Apr. 1, 1996–Jun. 30, 1996      10%                 73     627
Jul. 1, 1996–Sep. 30, 1996      11%                 75     629
Oct. 1, 1996–Dec. 31, 1996      11%                 75     629
Jan. 1, 1997–Mar. 31, 1997      11%                 27     581
Apr. 1, 1997–Jun. 30, 1997      11%                 27     581
Jul. 1, 1997–Sep. 30, 1997      11%                 27     581
Oct. 1, 1997–Dec. 31, 1997      11%                 27     581
Jan. 1, 1998–Mar. 31, 1998      11%                 27     581
Apr. 1, 1998–Jun. 30, 1998      10%                 25     579
Jul. 1, 1998–Sep. 30, 1998      10%                 25     579
Oct. 1, 1998–Dec. 31, 1998      10%                 25     579
Jan. 1, 1999–Mar. 31, 1999       9%                 23     577
Apr. 1, 1999–Jun. 30, 1999      10%                 25     579
Jul. 1, 1999–Sep. 30, 1999      10%                 25     579
Oct. 1, 1999–Dec. 31, 1999      10%                 25     579
Jan. 1, 2000–Mar. 31, 2000      10%                 73     627
Apr. 1, 2000–Jun. 30, 2000      11%                 75     629
Jul. 1, 2000–Sep. 30, 2000      11%                 75     629
Oct. 1, 2000–Dec. 31, 2000      11%                 75     629
Jan. 1, 2001–Mar. 31, 2001      11%                 27     581
Apr. 1, 2001–Jun. 30, 2001      10%                 25     579
Jul. 1, 2001–Sep. 30, 2001       9%                 23     577
Oct. 1, 2001–Dec. 31, 2001       9%                 23     577
Jan. 1, 2002–Mar. 31, 2002       8%                 21     575
Apr. 1, 2002–Jun. 30, 2002       8%                 21     575
Jul. 1, 2002–Sep. 30, 2002       8%                 21     575
Oct. 1, 2002–Dec. 30, 2002       8%                 21     575
Jan. 1, 2003–Mar. 31, 2003       7%                 19     573
Apr. 1, 2003–Jun. 30, 2003       7%                 19     573
Jul. 1, 2003–Sep. 30, 2003       7%                 19     573
Oct. 1, 2003–Dec. 31, 2003       6%                 17     571
Jan. 1, 2004–Mar. 31, 2004       6%                 65     619
Apr. 1, 2004–Jun. 30, 2004       7%                 67     621
Jul. 1, 2004–Sep. 30, 2004       6%                 65     619
Oct. 1, 2004–Dec. 31, 2004       7%                 67     621
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————————————————————————–
   TABLE OF INTEREST RATES FOR CORPORATE OVERPAYMENTS EXCEEDING $10,000
                     FROM JANUARY 1, 1995 — PRESENT
                                 RATE      1995-1 C.B. TABLE       PG
Jan. 1, 1995–Mar. 31, 1995  6.5%                 18          572
Apr. 1, 1995–Jun. 30, 1995  7.5%                 20          574
Jul. 1, 1995–Sep. 30, 1995  6.5%                 18          572
Oct. 1, 1995–Dec. 31, 1995  6.5%                 18          572
Jan. 1, 1996–Mar. 31, 1996  6.5%                 66          620
Apr. 1, 1996–Jun. 30, 1996  5.5%                 64          618
Jul. 1, 1996–Sep. 30, 1996  6.5%                 66          620
Oct. 1, 1996–Dec. 31, 1996  6.5%                 66          620
Jan. 1, 1997–Mar. 31, 1997  6.5%                 18          572
Apr. 1, 1997–Jun. 30, 1997  6.5%                 18          572
Jul. 1, 1997–Sep. 30, 1997  6.5%                 18          572
Oct. 1, 1997–Dec. 31, 1997  6.5%                 18          572
Jan. 1, 1998–Mar. 31, 1998  6.5%                 18          572
Apr. 1, 1998–Jun. 30, 1998  5.5%                 16          570
Jul. 1. 1998–Sep. 30, 1998  5.5%                 16          570
Oct. 1, 1998–Dec. 31, 1998  5.5%                 16          570
Jan. 1, 1999–Mar. 31, 1999  4.5%                 14          568
Apr. 1, 1999–Jun. 30, 1999  5.5%                 16          570
Jul. 1, 1999–Sep. 30, 1999  5.5%                 16          570
Oct. 1, 1999–Dec. 31, 1999  5.5%                 16          570
Jan. 1, 2000–Mar. 31, 2000  5.5%                 64          618
Apr. 1, 2000–Jun. 30, 2000  6.5%                 66          620
Jul. 1, 2000–Sep. 30, 2000  6.5%                 66          620
Oct. 1, 2000–Dec. 31, 2000  6.5%                 66          620
Jan. 1, 2001–Mar. 31, 2001  6.5%                 18          572
Apr. 1, 2001–Jun. 30, 2001  5.5%                 16          570
Jul. 1, 2001–Sep. 30, 2001  4.5%                 14          568
Oct. 1, 2001–Dec. 31, 2001  4.5%                 14          568
Jan. 1, 2002–Mar. 31, 2002  3.5%                 12          566
Apr. 1, 2002–Jun. 30, 2002  3.5%                 12          566
Jul. 1, 2002–Sep. 30, 2002  3.5%                 12          566
Oct. 1, 2002–Dec. 31, 2002  3.5%                 12          566
Jan. 1, 2003–Mar. 31, 2003  2.5%                 10          564
Apr. 1, 2003–Jun. 30, 2003  2.5%                 10          564
Jul. 1, 2003–Sep. 30, 2003  2.5%                 10          564
Oct. 1, 2003–Dec. 31, 2003  1.5%                  8          562
Jan. 1, 2004–Mar. 31, 2004  1.5%                 56          610
Apr. 1, 2004–Jun. 30, 2004  2.5%                 58          612
Jul. 1, 2004–Sep. 30, 2004  1.5%                 56          610
Oct. 1, 2004–Dec. 31, 2004  2.5%                 58          612
————————————————————————–

 Rev. Rul. 2004-92, 2004-37 I.R.B. 466

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Revenue Ruling 2004-91

Rev. Rul. 2004-91
Rev. Rul. 2004-91, 2004-35 I.R.B. 357
                       Internal Revenue Service (I.R.S.)
                                 Revenue Ruling
                     LIFO; PRICE INDEXES; DEPARTMENT STORES
                           Published: August 30, 2004

 Section 472.–Last-in, First-out Inventories, 26 CFR 1.472-1: Last-in, first-out inventories.

  LIFO; price indexes; department stores. The June 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, June 30, 2004.

  LIFO; price indexes; department stores. The June 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, June 30, 2004.

  The following Department Store Inventory Price Indexes for June 2004 were issued by the Bureau of Labor Statistics. The indexes are accepted by the Internal Revenue Service, under s 1.472-1(k) of the Income Tax Regulations and Rev. Proc. 86-46, 1986-2 C.B. 739, for appropriate application to inventories of department stores employing the retail inventory and last-in, first-out inventory methods for tax years ended on, or with reference to, June 30, 2004.

  The Department Store Inventory Price Indexes are prepared on a national basis and include (a) 23 major groups of departments, (b) three special combinations of the major groups — soft goods, durable goods, and miscellaneous goods, and (c) a store total, which covers all departments, including some not listed separately, except for the following: candy, food, liquor, tobacco, and contract departments.

    BUREAU OF LABOR STATISTICS, DEPARTMENT STORE INVENTORY PRICE INDEXES BY
        DEPARTMENT GROUPS (January 1941 = 100, unless otherwise noted)
                      Groups               June 2003    June 2004     Percent
                                                                      Change
                                                                     from June
                                                                      2003 to
                                                                     June 2004
                                                                       [FN1]
——————————————————————————-
1.         Piece Goods …………………… 464.3        490.9          5.7
2.         Domestics and Draperies ………… 557.0        538.7         -3.3
3.         Women’s and Children’s Shoes ……. 629.1        631.8          0.4
4.         Men’s Shoes …………………… 849.5        854.5          0.6
5.         Infants’ Wear …………………. 588.9        567.3         -3.7
6.         Women’s Underwear ……………… 516.1        508.4         -1.5
7.         Women’s Hosiery ……………….. 348.9        329.9         -5.4
8.         Women’s and Girls’
             Accessories …………………. 547.9        581.5          6.1
9.         Women’s Outerwear and Girls’
             Wear ……………………….. 362.9        361.9         -0.3
10.        Men’s Clothing ………………… 541.8        540.3         -0.3
11.        Men’s Furnishings ……………… 570.2        578.3          1.4
12.        Boys’ Clothing and
             Furnishings …………………. 449.6        431.3         -4.1
13.        Jewelry ………………………. 877.8        897.4          2.2
14.        Notions ………………………. 791.4        791.9          0.1
15.        Toilet Articles and Drugs ………. 990.0        998.9          0.9
16.        Furniture and Bedding ………….. 619.9        624.2          0.7
17.        Floor Coverings ……………….. 586.6        592.9          1.1
18.        Housewares ……………………. 726.0        712.6         -1.8
19.        Major Appliances ………………. 214.1        200.4         -6.4
20.        Radio and Television ……………. 45.4         41.9         -7.7
21.        Recreation and Education
             [FN2] ……………………….. 83.1         80.7         -2.9
22.        Home Improvements [FN2] ………… 125.4        129.3          3.1
23.        Automotive Accessories [FN2] ……. 111.5        112.4          0.8
Groups 1-15: Soft Goods ………………….. 559.5        559.3          0.0
Groups 16-20: Durable Goods ………………. 395.6        384.1         -2.9
Groups 21-23: Misc. Goods [FN2] ……………. 94.4         93.4         -1.1
           Store Total [FN3] ……………… 500.1        496.5         -0.7
FN1. Absence of a minus sign before the percentage change in this column
  signifies a price increase.
FN2. Indexes on a January 1986 = 100 base.
FN3. The store total index covers all departments, including some not listed
  separately, except for the following: candy, food, liquor, tobacco and
  contract departments.

 

DRAFTING INFORMATION

  The principal author of this revenue ruling is Michael Burkom of the Office of Associate Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact Mr. Burkom at (202) 622- 7924 (not a toll-free call).

 Rev. Rul. 2004-91, 2004-35 I.R.B. 357

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Revenue Ruling 2004-90

Rev. Rul. 2004-90
Rev. Rul. 2004-90, 2004-34 I.R.B. 317
                       Internal Revenue Service (I.R.S.)
                                 Revenue Ruling
                            OBSOLETE REVENUE RULINGS
                           Published: August 23, 2004

 Section 7805.–Rules and Regulations, 26 CFR 301.7805-1: Rules and regulations.

  Obsolete revenue rulings. This ruling obsoletes prior rulings that are no longer considered determinative. Rev. Ruls. 58-120, 70-58, 79-64, and  80-366 obsoleted. Rev. Procs. 89-37 and 96-18 obsoleted.

  Obsolete revenue rulings. This ruling obsoletes prior rulings that are no longer considered determinative. Rev. Ruls. 58-120, 70-58, 79-64, and  80-366 obsoleted. Rev. Procs. 89-37 and 96-18 obsoleted.

  The Internal Revenue Service is continuing its program of reviewing rulings  (including revenue rulings, revenue procedures and notices) published in the Internal Revenue Bulletin to identify those rulings that, although not specifically revoked or superseded, are no longer considered determinative because: (1) the applicable statutory provisions or regulations have been changed or repealed; (2) the ruling position is specifically covered by statute, regulations, or subsequent published position; or (3) the facts set forth no longer exist or are not sufficiently described to permit clear application of the current statute and regulations.

  This revenue ruling publishes a list of rulings that have been identified under the Service’s review program as no longer being determinative. The rulings are categorized by the Assistant Chief Counsel offices in the Office of Associate Chief Counsel (Procedure and Administration) that have primary jurisdiction over the subject matter of the rulings that have been identified as no longer being determinative.

  Accordingly, the rulings listed below are hereby declared obsolete.

—————————————————————————
Assistant Chief Counsel (Administrative Provisions and Judicial Practice)
Ruling No.                             C.B. Citation
Rev. Rul. 80-366                       1980-2 C.B. 343
Rev. Proc. 89-37 [FN1]                 1989-1 C.B. 919
Rev. Proc. 96-18                       1996-1 C.B. 637
Assistant Chief Counsel (Disclosure and Privacy Law)
Ruling No.                             Citation
Rev. Rul. 58-120                       1958-1 C.B. 498
Rev. Rul. 70-58 [FN2]                  1970-1 C.B. 268
Rev. Rul. 79-64                        1979-1 C.B. 390
—————————————————————————

  The Service will continue to review other rulings to ascertain those that, for the reasons stated above, are no longer determinative. Therefore, failure to include a particular ruling in the above list should not be construed as an indication that the ruling is determinative.

DRAFTING INFORMATION

  The principal author of this revenue ruling is Sarah Tate of the Office of Associate Chief Counsel, Procedure and Administration (Disclosure & Privacy Law). For further information regarding the rulings obsoleted in this revenue ruling, contact the following persons from the appropriate Assistant Chief Counsel offices (not toll-free calls):

———————————————————————–
Name               Assistant Chief Counsel                Telephone No.
Blaise Dusenberry  Administrative Prov. & Judicial Prac.  202-622-7940
Sarah Tate         Disclosure & Privacy Law               202-622-4570
FN1. The procedures described in Rev. Proc. 89-37 for obtaining employer identification numbers (EINs) have been supplanted by the

Service’s Online EIN Application (I-EIN) process. EINs also may be obtained through the Service’s Tele-TIN or Fax-TIN programs, or by submitting a Form SS-4 by mail to the appropriate IRS service center. Additional information regarding EINs is available on the Service website at www.irs.gov.

FN2. Subsequent statutory amendments address the issue in the revenue ruling.

 Rev. Rul. 2004-90, 2004-34 I.R.B. 317

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Revenue Ruling 2004-81

Rev. Rul. 2004-81
Rev. Rul. 2004-81, 2004-32 I.R.B. 161
                       Internal Revenue Service (I.R.S.)
                                 Revenue Ruling
                     LIFO; PRICE INDEXES; DEPARTMENT STORES
                            Published: August 9, 2004

 Section 472.–Last-in, First-out Inventories, 26 CFR 1.472-1: Last-in, first-out inventories.

  LIFO; price indexes; department stores. The May 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, May 31, 2004.

  LIFO; price indexes; department stores. The May 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, May 31, 2004.

  The following Department Store Inventory Price Indexes for May 2004 were issued by the Bureau of Labor Statistics. The indexes are accepted by the Internal Revenue Service, under s 1.472-1(k) of the Income Tax Regulations and Rev. Proc. 86-46, 1986-2 C.B. 739, for appropriate application to inventories of department stores employing the retail inventory and last-in, first-out inventory methods for tax years ended on, or with reference to, May 31, 2004.

  The Department Store Inventory Price Indexes are prepared on a national basis and include (a) 23 major groups of departments, (b) three special combinations of the major groups — soft goods, durable goods, and miscellaneous goods, and (c) a store total, which covers all departments, including some not listed separately, except for the following: candy, food, liquor, tobacco, and contract departments.

    BUREAU OF LABOR STATISTICS, DEPARTMENT STORE INVENTORY PRICE INDEXES BY
                               DEPARTMENT GROUPS
                  (January 1941 = 100, unless otherwise noted)
                      Groups               May 2003     May 2004      Percent
                                                                      Change
                                                                     from May
                                                                      2003 to
                                                                     May 2004
                                                                       [FN1]
——————————————————————————-
1.         Piece Goods …………………… 456.3        483.5          6.0
2.         Domestics and Draperies ………… 557.6        542.2         -2.8
3.         Women’s and Children’s Shoes ……. 637.0        645.0          1.3
4.         Men’s Shoes …………………… 855.8        868.4          1.5
5.         Infants’ Wear …………………. 599.6        575.6         -4.0
6.         Women’s Underwear ……………… 519.8        512.2         -1.5
7.         Women’s Hosiery ……………….. 349.5        338.2         -3.2
8.         Women’s and Girls’
             Accessories …………………. 550.2        567.5          3.1
9.         Women’s Outerwear and Girls’
             Wear ……………………….. 374.5        377.2          0.7
10.        Men’s Clothing ………………… 562.3        548.4         -2.5
11.        Men’s Furnishings ……………… 587.2        594.3          1.2
12.        Boys’ Clothing and
             Furnishings …………………. 463.5        445.2         -3.9
13.        Jewelry ………………………. 877.9        905.2          3.1
14.        Notions ………………………. 789.7        797.5          1.0
15.        Toilet Articles and Drugs ………. 979.7       1001.4          2.2
16.        Furniture and Bedding ………….. 620.2        613.8         -1.0
17.        Floor Coverings ……………….. 578.9        587.9          1.6
18.        Housewares ……………………. 730.9        714.8         -2.2
19.        Major Appliances ………………. 213.7        201.6         -5.7
20.        Radio and Television ……………. 45.9         42.4         -7.6
21.        Recreation and Education
             [FN2] ……………………….. 83.4         80.8         -3.1
22.        Home Improvements [FN2] ………… 126.1        129.1          2.4
23.        Automotive Accessories [FN2] ……. 111.6        112.1          0.4
Groups 1-15: Soft Goods ………………….. 568.1        570.1          0.4
Groups 16-20: Durable Goods ………………. 397.1        384.2         -3.2
Groups 21-23: Misc. Goods [FN2] ……………. 94.7         93.4         -1.4
           Store Total [FN3] ……………… 506.0        503.2         -0.6
FN1. Absence of a minus sign before the percentage change in this column
  signifies a price increase.
FN2. Indexes on a January 1986 = 100 base.
FN3. The store total index covers all departments, including some not listed
  separately, except for the following: candy, food, liquor, tobacco and
  contract departments.

DRAFTING INFORMATION

  The principal author of this revenue ruling is Michael Burkom of the Office of Associate Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact Mr. Burkom at (202) 622- 7924 (not a toll-free call).

 Rev. Rul. 2004-81, 2004-32 I.R.B. 161

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Revenue Ruling 2004-77

Rev. Rul. 2004-77
Rev. Rul. 2004-77, 2004-31 I.R.B. 119
                       Internal Revenue Service (I.R.S.)
                                 Revenue Ruling
                              DISREGARDED ENTITIES
                            Published: August 2, 2004

 Section 7701.–Definitions, 26 CFR 301.7701-1: Classification of organizations for federal tax purposes.

(Also: s 301.7701-2, 301.7701-3.)

  Disregarded entities. This ruling concludes that, if an eligible entity has two owners under local law, but one of the owners is, for federal tax purposes, disregarded as an entity separate from the other owner of the eligible entity, then the eligible entity cannot be classified as a partnership and is either disregarded as an entity separate from its owner or an association taxable as a corporation.

  Disregarded entities. This ruling concludes that, if an eligible entity has two owners under local law, but one of the owners is, for federal tax purposes, disregarded as an entity separate from the other owner of the eligible entity, then the eligible entity cannot be classified as a partnership and is either disregarded as an entity separate from its owner or an association taxable as a corporation.

ISSUE

  How is an eligible entity (as defined in s 301.7701-3(a) of the Procedure and Administration Regulations) classified for federal tax purposes if the entity has two members under local law, but one of the members of the eligible entity is disregarded as an entity separate from the other member of the eligible entity for federal tax purposes?

FACTS

  Situation 1. X, a domestic corporation, is the sole owner of L, a domestic limited liability company (LLC). Under s 301.7701-3(b)(1), L is disregarded as an entity separate from its owner, X. L and X are the only members under local law of P, a state law limited partnership or LLC. There are no other constructive or beneficial owners of P other than L and X. L and P are eligible entities that do not elect under s 301.7701-3(c) to be treated as associations for federal tax purposes.

  Situation 2. X is an entity that is classified as a corporation under s 301.7701-2(b). X is the sole owner of L, a foreign eligible entity. Under s 301.7701-3(c), L has elected to be disregarded as an entity separate from its owner. L and X are the only members under local law of P, a foreign eligible entity. There are no other constructive or beneficial owners of P other than L and X.

LAW AND ANALYSIS

  Section 7701(a)(2) of the Internal Revenue Code provides that the term partnership includes a syndicate, group, pool, joint venture, or other unincorporated organization through or by means of which any business, financial operation, or venture is carried on, and which is not a trust, estate, or corporation.

  Section 301.7701-1(a)(1) provides that whether an organization is an entity separate from its owners for federal tax purposes is a matter of federal tax law and does not depend on whether the organization is recognized as an entity under local law.

  Section 301.7701-2(a) provides that a business entity is any entity recognized for federal tax purposes (including an entity with a single owner that may be disregarded as an entity separate from its owner under s 301.7701- 3) that is not properly classified as a trust under s 301.7701-4 or otherwise subject to special treatment under the Code. A business entity with two or more owners is classified for federal tax purposes as either a corporation or a partnership. A business entity with only one owner is classified as a corporation or is disregarded; if the entity is disregarded, its activities are treated in the same manner as a sole proprietorship, branch, or division of the owner.

  Section 301.7701-2(c)(1) provides that, for federal tax purposes, the term  “partnership” means a business entity that is not a corporation under s 301.7701-2(b) and that has at least two owners.

  Section 301.7701-2(c)(2)(i) provides, in general, that a business entity that has a single owner and is not a corporation under s 301.7701-2(b) is disregarded as an entity separate from its owner.

  Section 301.7701-3(a) provides that a business entity that is not classified as a corporation under s 301.7701-2(b)(1), (3), (4), (5), (6), (7), or (8) (an eligible entity) can elect its classification for federal tax purposes. An eligible entity with at least two owners can elect to be classified as either an association (and thus a corporation under s 301.7701-2(b)(2)) or a partnership, and an eligible entity with a single owner can elect to be classified as an association or to be disregarded as an entity separate from its owner.

  Section 301.7701-3(b)(1) provides generally that in the absence of an election otherwise, a domestic eligible entity is (a) a partnership if it has at least two members, or (b) disregarded as an entity separate from its owner if it has a single owner.

  Section 301.7701-3(b)(2) provides generally that, in the absence of an election otherwise, a foreign eligible entity is (a) a partnership if it has two or more owners and at least one owner does not have limited liability, (b) an association if all its owners have limited liability, or (c) disregarded as an entity separate from its owner if it has a single owner that does not have limited liability.

  Situation 1. Under s 301.7701-2(c)(2), L is disregarded as an entity separate from its owner, X, and its activities are treated in the same manner as a branch or division of X. Because L is disregarded as an entity separate from X, X is treated as owning all of the interests in P. P is a domestic entity, with only one owner for federal tax purposes, that has not made an election to be classified as an association taxable as a corporation. Because P has only one owner for federal tax purposes, P cannot be classified as a partnership under s 7701(a)(2). For federal tax purposes, P is disregarded as an entity separate from its owner.

  Situation 2. Under s 301.7701-3(c), L is disregarded as an entity separate from its owner, X, and its activities are treated in

the same manner as a branch or division of X. Because L is disregarded as an entity separate from X, X is treated as owning all of the interests in P. Because P has only one owner for federal tax purposes, P cannot be classified as a partnership under s 7701(a)(2). For federal tax purposes, P is either disregarded as an entity separate from its owner or an association taxable as a corporation.

HOLDING

  If an eligible entity has two members under local law, but one of the members of the eligible entity is, for federal tax purposes, disregarded as an entity separate from the other member of the eligible entity, then the eligible entity cannot be classified as a partnership and is either disregarded as an entity separate from its owner or an association taxable as a corporation.

DRAFTING INFORMATION

  The principal author of this revenue ruling is Jason T. Smyczek of the Office of the Associate Chief Counsel (Passthroughs and Special Industries). For further information regarding this revenue ruling, contact Mr. Smyczek at (202) 622-3050 (not a toll-free call).

 Rev. Rul. 2004-77, 2004-31 I.R.B. 119

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