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

Proposed regulations under section 368 of the Code clarify that a transferor may transfer, after a reorganization, assets or stock to a transferee controlled by the transferor. The regulations also make conforming changes relating to continuity of business enterprise and to the definition of a party to a reorganization.

Proposed regulations under section 446 of the Code relate to the inclusion into income or deduction of a contingent nonperiodic payment made pursuant to a notional principal contract. The regulations also contain rules relating to the character of payments made pursuant to notional principal contracts, bullet swaps, and forward contracts. In general, contingent nonperiodic payments are accounted for under the noncontingent swap method or under an elective mark-to-market regime. With respect to character, the regulations provide ordinary treatment for most notional principal contract payments. As a general exception to ordinary treatment, the regulations provide capital treatment for termination payments. The regulations also provide capital treatment for payments made pursuant to bullet swaps and forward contracts. A public hearing is scheduled for May 25, 2004.

Publication 1542, Per Diem Rates (For Travel Within the Continental United States), will now be revised each time new per diem rates are announced. All revisions will be available on the IRS website. Paper copies will be available by request only.

Weighted average interest rate update. The weighted average interest rate for March 2004 and the resulting permissible range of interest rates used to calculate current liability and to determine the required contribution are set forth.

A list is provided of organizations now classified as private foundations.

Foundation to Save Our Children’s Environment of Tulsa, OK, no longer qualifies as an organization to which contributions are deductible under section 170 of the Code.

Automobile owners and lessees. This procedure provides owners and lessees of passenger automobiles (including trucks, vans, and electric automobiles) with tables detailing the limitations on depreciation deductions for passenger automobiles first placed in service during calendar year 2004 and the amounts to be included in income for passenger automobiles first leased during calendar year 2004. Separate tables are provided for passenger automobiles qualifying for additional first-year bonus depreciation under section 168(k). In addition, this procedure provides the maximum allowable value of employer-provided automobiles first made available to employees for personal use in calendar year 2004 for which the vehicle cents-per-mile valuation rule provided under section 1.61-21(e) of the regulations may be applicable.

The Service announces that Form 3115, Application for Change in Accounting Method, and its instructions were revised December 2003. This revision is the current version of Form 3115 used to request a change in accounting method. Rev. Procs. 2001-10, 2001-23, 2002-9, and 2002-28 modified.

The Service announces that an updated edition of Publication 538, Accounting Periods and Methods, (revised March 2004) is now available.