Final regulations under section 368 of the Code provide guidance regarding the satisfaction of the continuity of interest requirement for corporate reorganizations. Specifically, these regulations identify certain circumstances in which the determination, of whether a proprietary interest in the target corporation is preserved, would be made by reference to the value of the issuing corporation's consideration on the last business day before there is an agreement to effect the potential reorganization.

Proposed regulations under section 863 of the Code govern the source of income from certain space and ocean activities. It also contains proposed regulations governing the source of income from certain communications activities. The regulations affect persons who derive income from activities conducted in space, or on or under water not within the jurisdiction of a foreign country, possession of the United States, or the United States (in international water). It also affects persons who derive income from transmission of communications. A public hearing is scheduled for December 15, 2005.

This notice announces that Treasury and the Internal Revenue Service (IRS) will amend the regulations under section 367(a) of the Code to clarify the application of regulations section 1.367(a)-8, including the provisions addressing the treatment of gain recognition agreements as a result of certain common asset reorganizations involving the U.S. transferor, the transferee foreign corporation, and the transferred corporation.

Proposed regulations clarify the substantive requirements for tax exemption under section 501(c)(3) of the Code. This document also contains provisions that clarify the relationship between the substantive requirements for tax exemption under section 501(c)(3) and the imposition of section 4958 excise taxes.

Alpha Kappa Psi Scholarship Fund, of Minneapolis, MN; Alphabets Childcare Center, Inc., of Clarksville, TN; Inner City Development Foundation, of Los Angeles, CA; and Rocky Road Incorporated, of Snowmass Village, CO, no longer qualify as organizations to which contributions are deductible under section 170 of the Code.

This notice summarizes and clarifies the relief previously granted under sections 6081, 6161, 6656, and 7508A of the Code with respect to taxpayers affected by Hurricane Katrina. By news releases issued on August 30, 2005, September 2, 2005, September 8, 2005, and September 14, 2005, the IRS granted relief from filing and payment deadlines, and granted relief from the acts listed in regulations section 301.7508A-1(c)(1) and Rev. Proc. 2005-27, 2005-20 I.R.B. 1050. See IR-2005-84, IR-2005-91, IR-2005-96, and IR-2005-103. The news releases provided that taxpayers affected by the disaster will have until January 3, 2006, to file certain tax returns and submit payments. In addition, the news releases announced that the IRS will abate interest and any late filing or late payment penalties that otherwise would apply. This relief includes the September 15, 2005, due date for estimated taxes and for calendar-year corporate returns with automatic extensions. This notice summarizes the relief previously granted in the news releases.

Per diem allowances. This procedure provides optional rules for deeming substantiated the amount of certain business expenses of traveling away from home reimbursed to an employee or deductible by an employee or self-employed individual. Rev. Proc. 2005-10 superseded.

This document changes the date of a public hearing on proposed regulations (REG-108524-00, 2005-23 I.R.B. 1209) 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. The public hearing is rescheduled for November 16, 2005.