LIFO; price indexes; department stores. The July 2005 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, July 31, 2005.

Interaction of sections 469 and 4261. This ruling describes the circumstances in which losses incurred by an individual who provides air transportation through a passthrough entity can qualify as passive losses under section 469 of the Code. In addition, this ruling describes the applicability of section 4261 to the amounts paid for the air transportation services.

Proposed regulations under section 162(k) of the Code provide guidance concerning which corporation is entitled to the deduction for applicable dividends under section 404(k) and also clarify that a payment in redemption of employer securities held by an ESOP is not deductible.

This notice clarifies that employers that amend their cafeteria plans to provide a grace period for dependent care assistance may continue to rely on the safe harbor in Notice 89-111, 1989-2 C.B. 449, and report salary reduction amounts elected by an employee for a calendar year on Form W-2. Notice 89-111 amplified.

The Department of Homeland Security issued a temporary waiver of the Jones Act as a result of Hurricane Katrina. The waiver permits foreign corporations to operate ships in the U.S. domestic trade to transport petroleum and refined petroleum products between U.S. ports for a limited period. The notice provides that the IRS will not challenge certain positions taken by foreign corporations operating ships pursuant to the waiver and by ships’ nonresident alien crewmembers.

This announcement advises donee organizations of the release of new Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes. The form is used by donee organizations to file with the IRS to satisfy the reporting requirements of new section 170(f)(12) of the Code. The form may also be used to furnish the donor of a qualified vehicle with a contemporaneous written acknowledgment.

Temporary and proposed regulations under section 408A of the Code provide guidance concerning the tax consequences of converting a non-Roth IRA annuity to a Roth IRA. The regulations affect individuals establishing Roth IRAs, beneficiaries under Roth IRAs, and trustees, custodians and issuers of Roth IRAs.

Temporary and proposed regulations under section 408A of the Code provide guidance concerning the tax consequences of converting a non-Roth IRA annuity to a Roth IRA. The regulations affect individuals establishing Roth IRAs, beneficiaries under Roth IRAs, and trustees, custodians and issuers of Roth IRAs.

Final regulations under section 402 of the Code address the amount includible in a distributee’s income when life insurance contracts are distributed by a qualified retirement plan and also address the treatment of property sold by a qualified retirement plan to a plan participant or beneficiary for less than fair market value. The regulations also provide guidance regarding the amounts includible in income when an employee is provided permanent benefits in combination with group-term life insurance or when a life insurance contract is transferred in connection with the performance of services.

Proposed regulations under section 162(k) of the Code provide guidance concerning which corporation is entitled to the deduction for applicable dividends under section 404(k) and also clarify that a payment in redemption of employer securities held by an ESOP is not deductible.

Minimum funding standards; disaster relief. The Internal Revenue Service, the Employee Benefits Security Administration of the Department of Labor, and the Pension Benefit Guaranty Corporation are providing relief in connection with certain employee benefit plans because of damage in Louisiana, Mississippi, and Alabama caused by Hurricane Katrina. The relief provided by this notice is in addition to the relief already provided by the Service to victims of Hurricane Katrina.

This announcement advises donee organizations of the release of new Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes. The form is used by donee organizations to file with the IRS to satisfy the reporting requirements of new section 170(f)(12) of the Code. The form may also be used to furnish the donor of a qualified vehicle with a contemporaneous written acknowledgment.

Interaction of sections 469 and 4261. This ruling describes the circumstances in which losses incurred by an individual who provides air transportation through a passthrough entity can qualify as passive losses under section 469 of the Code. In addition, this ruling describes the applicability of section 4261 to the amounts paid for the air transportation services.

Final regulations under section 4291 of the Code provide guidance for collectors of communications excise taxes under section 4251 and excise taxes on amounts paid for taxable transportation under sections 4261 and 4271. These regulations clarify the time by which collectors must report refusals to pay or other failures to collect these excise taxes.

This document contains corrections to proposed regulations (REG-108524-00, 2005-23 I.R.B. 1209) under section 1446 of the Code relating to the circumstances under which a partnership may take partner-level deductions and losses into account in computing its withholding tax obligation with respect to a foreign partner’s allocable share of effectively connected taxable income.