Public hearings with Chief Counsel Donald L. Korb and Associate Chief Counsel (International) Hal Hicks will be held on January 5, 2005, and February 1, 2005, to solicit comments and suggestions regarding the operation of the Advance Pricing Agreement program within the Office of Associate Chief Counsel (International).

Contract cancellation; employment contract. This ruling holds that an amount paid to an employee as consideration for cancellation of an employment contract and relinquishment of contract rights is ordinary income and wages for purposes of the Federal Insurance Contributions Act (FICA), the Federal Unemployment Tax Act (FUTA), and the Collection of Income Tax at Source (federal income tax withholding). Rev. Ruls. 55-520 and 58-301 modified and superseded. Rev. Ruls. 74-252 and 75-44 modified.

This notice alerts taxpayers to recent amendments to sections 6111, 6112, and 6708 of the Code and provides interim guidance until regulations or other guidance is published.

This procedure provides exceptions to the contractual protection filter, which is a reportable transaction under section 1.6011-4(b)(4) of the regulations.

This procedure provides exceptions to the loss transaction filter, which is a reportable transaction under section 1.6011-4(b)(5) of the regulations. Rev. Proc. 2003-24 modified and superseded.

This procedure provides exceptions to the book-tax filter, which is a reportable transaction under section 1.6011-4(b)(6) of the regulations. Rev. Proc. 2003-25 modified and superseded.

This procedure provides exceptions to the brief asset holding period filter, which is a reportable transaction under section 1.6011-4(b)(7) of the regulations.

Signing or ratifying bonuses. This ruling holds that certain amounts paid to an employee as a signing bonus for a baseball contract or as a ratifying bonus pursuant to a collective bargaining agreement are wages for purposes of the Federal Insurance Contributions Act (FICA), the Federal Unemployment Tax Act (FUTA), and the Collection of Income Tax at Source on Wages (federal income tax withholding). Rev. Ruls. 58-145 and 74-108 revoked. Rev. Ruls. 69-424 and 71-532 obsoleted.

Contract cancellation; employment contract. This ruling holds that an amount paid to an employee as consideration for cancellation of an employment contract and relinquishment of contract rights is ordinary income and wages for purposes of the Federal Insurance Contributions Act (FICA), the Federal Unemployment Tax Act (FUTA), and the Collection of Income Tax at Source (federal income tax withholding). Rev. Ruls. 55-520 and 58-301 modified and superseded. Rev. Ruls. 74-252 and 75-44 modified.

Cost-of-living adjustments for 2005. This procedure provides cost-of-living adjustments for the tax rate tables for individuals, estates, and trusts, the standard deduction amounts, the personal exemption, and several other items that use the adjustment method provided for the tax rate tables. The Service also provides the adjustment for eligible long-term care premiums and another item that uses the adjustment method provided for eligible long-term care premiums.

This document provides notice of a public hearing for proposed regulations (REG-128767-04, 2004-39 I.R.B. 534) that provide rules under section 752 of the Code for taking into account certain obligations of a business entity that is disregarded as separate from its owner under sections 856(i), 1361(b)(3), or regulations sections 301.7701-1 through 301.7701-3 (disregarded entity) for purposes of characterizing and allocating partnership liabilities. A public hearing is scheduled for January 14, 2005.