Final regulations: Agent’s identity, authority for consolidated group

Agent’s identity, authority for consolidated group

The Treasury Department and IRS today released for publication in the Federal Register final regulations (T.D 9715) concerning the agent for an affiliated group that files a consolidated return.

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The final regulations [PDF 235 KB] finalize and expand rules that were initially proposed in May 2012.

In general, the common parent of a consolidated group serves as the agent for the consolidated group for any tax year during which it is the common parent. This agency generally continues regardless of whether the common parent remains a member of the consolidated group.

The 2012 proposed regulations generally provided clarity as to which entities could serve as a successor agent and when the IRS Commissioner could designate an agent for a consolidated group.

Today’s final regulations generally retain that guidance but also provide that a replacement agent may be appointed when the Commissioner believes that the agent, or its default successor, fails to perform its obligations as agent. Further, the regulations provide guidance as to the limited situation for when an agent may resign from that role.

Rev. Proc. 2015-26

In conjunction with the final regulations, the IRS released an advance version of Rev. Proc. 2015-26 [PDF 74 KB] providing instructions concerning the manner of making all communications that relate to the identification of an agent pursuant to today’s final regulations.

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