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

Final regulations under section 6661 of the Code remove regulations sections 1.6661-1 through 1.6661-6 relating to an addition to tax in the case of a substantial understatement of income tax liability made pursuant to section 6661. In addition, this regulation corrects a reference to section 6661(b)(2)(C)(ii) in regulations section 1.448-1T(b)(1)(iii) to clarify that the definition of “tax shelter” is now found in section 6662(d)(2)(C).

Tax-exempt leasing involving defeasance. This notice disallows tax benefits claimed by taxpayers who enter into sale-in, lease-out (SILO) transactions and identifies SILOs as listed transactions.

This notice addresses several questions of statutory interpretation arising under section 172(f)(1)(B) of the Code prior to its amendment by section 3004(a) of the Tax and Trade Relief Extension Act of 1998.

Proposed regulations under section 417 of the Code would revise final regulations (T.D. 9099, 2004-2 I.R.B. 255) under section 417(a)(3) concerning content requirements applicable to explanations of qualified joint and survivor annuities and qualified preretirement survivor annuities payable under certain retirement plans.

Weighted average interest rate update; corporate bond indices; 30-year Treasury securities. The weighted average interest rate for February 2005 and the resulting permissible range of interest rates used to calculate current liability and to determine the required contribution are set forth.

A Better Way Credit Counseling, Inc., of Greenacres, FL, and Allen's Pre-School and Day Care, Inc., of Murray, UT, no longer qualify as organizations to which contributions are deductible under section 170 of the Code.

Proposed regulations under section 6103(n) of the Code describe the circumstances under which officers and employees of the Treasury Department, a state tax agency, the Social Security Administration, or the Department of Justice may disclose returns and return information to any person to obtain property or services for tax administration purposes. The proposed regulations clarify the existing regulations with respect to redisclosures of returns or return information by contractors, especially with regard to redisclosures by contractors to agents or subcontractors, and clarify that the civil and criminal penalties for the unauthorized inspection or disclosure of returns or return information apply to the agents or subcontractors.

The differential earnings rate for 2004 is tentatively determined for use by mutual life insurance companies to compute their income tax liability for 2004.

This procedure provides issuers of qualified mortgage bonds and qualified mortgage credit certificates with average area purchase price safe-harbors for statistical areas in the United States and with a nationwide average purchase price for residences in the United States for purposes of the mortgage revenue bond rules under section 143 of the Code (and the mortgage credit certificate rules under section 25). Rev. Proc. 2004-18 obsoleted in part.

This document contains corrections and clarifications to Publication 1220, Specifications for Filing Forms 1098, 1099, 5498, and W-2G Electronically or Magnetically (revised 9-2004).