Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for June 2005.

Insurance companies; premium stabilization reserves. This ruling holds that additions to premium stabilization reserves are return premiums for purposes of determining the amount of premiums earned on insurance contracts during a taxable year.

Final, temporary, and proposed regulations under section 1446 of the Code provide guidance on the withholding tax liability of a partnership with income that is effectively connected with its U.S. trade or business, all or a portion of which is allocable under section 704 to foreign partners. The regulations also provide rules permitting a partnership under certain circumstances to consider partner-level deductions and losses when computing its section 1446 withholding tax obligation with respect to a foreign partner. A public hearing on the proposed regulations is scheduled for October 3, 2005.

Final, temporary, and proposed regulations under section 1446 of the Code provide guidance on the withholding tax liability of a partnership with income that is effectively connected with its U.S. trade or business, all or a portion of which is allocable under section 704 to foreign partners. The regulations also provide rules permitting a partnership under certain circumstances to consider partner-level deductions and losses when computing its section 1446 withholding tax obligation with respect to a foreign partner. A public hearing on the proposed regulations is scheduled for October 3, 2005.

Charitable contributions; qualified intellectual property. This notice explains how amendments to section 170 of the Code made by the American Jobs Creation Act of 2004 limit the initial charitable contribution deduction allowable to a donor of qualified intellectual property. The notice also provides guidance on how, under the amendments, the donor may qualify for additional charitable contribution deductions based on the income received by or accrued to the donee organization with respect to the donated property.

This notice allows employers sponsoring cafeteria plans the option to amend the cafeteria plan document to provide a grace period after the end of the plan year, during which unused benefits or contributions remaining at the end of the immediately preceding plan year may be paid or reimbursed to participants for qualified benefit expenses incurred during the grace period. The grace period must not extend beyond the fifteenth day of the third calendar month following the end of the immediately preceding plan year.

Final regulations under section 330 of title 31 of the U.S. Code modify section 10.35 which prescribes specific requirements for covered opinions. Certain written advice issued after a tax return is filed, advice provided by taxpayer’s in-house counsel, and negative advice are excluded from the requirements of covered opinions. These regulations also clarify “principal purpose” and “prominently disclose”.

This procedure provides guidance on when an IRS examination is considered closed, when a closed examination may be reopened (to include reinspecting a taxpayer’s books of account), and who may approve a reopening. The procedure also describes by category certain IRS contacts with taxpayers and other actions taken as to taxpayers that are not examinations, inspections of books of account, or reopenings. Rev. Proc. 94-68 modified and superseded.

This document contains corrections to final regulations and removal of temporary regulations (T.D. 9198, 2005-18 I.R.B. 972) that relate to the recognition of gain on certain distributions of stock or securities of a controlled corporation in connection with an acquisition.