This announcement solicits applications from potential partners to participate in the 2006 IRS Individual e-file Partnership Program. The partnership opportunities support RRA 98 which requires the IRS to receive 80% of all returns electronically by 2007. RRA 98 authorized the IRS Commissioner to promote the benefits and encourage the use of e-file services through partnerships with various entities that offer low cost tax preparation and electronic filing of income tax returns for qualified taxpayers. Applicants that are accepted as partners will have a link(s) and description(s) of their services placed on irs.gov (IRS e-file Partners Page).

Proposed regulations under section 704(b) of the Code provide rules for testing the substantiality of an allocation where the partners are look-through entities or members of a consolidated group, provide additional guidance on the effect of other provisions, such as section 482, upon the tax treatment of a partner with respect to the partner's distributive share under section 704(b), and revise the existing rules for determining the partners' interests in the partnership. A public hearing is scheduled for February 15, 2006.

Substitute tax forms and schedules. Requirements are set forth for privately designed and printed federal tax forms and conditions under which the Service will accept computer prepared, and computer-generated tax forms and schedules. Rev. Proc. 2004-62 superseded.

Application of regulations under section 415; plan amendments. This notice provides that when the final regulations under section 415 of the Code are published, the grandfather rule of regulations section 1.415(a)-1(g)(3) for preexisting benefits in defined benefit plans will be expanded.

Retroactive payment of benefits; multiemployer plan; discretionary relief; extension. This procedure extends the date by which certain qualified retirement plans must be in operational compliance with reforming plan amendments in order to be eligible for the treatment described in section 3.02 of Rev. Proc. 2005-23, 2005-18 I.R.B. 991, which relates to the Supreme Court decision in Central Laborers' Pension Fund v. Heinz, 541 U.S. 739 (2004). Rev. Proc. 2005-23 modified.

A list is provided of organizations now classified as private foundations.

This procedure provides guidance concerning when information shown on a return in accordance with the applicable forms and instructions will be adequate disclosure for purposes of reducing an understatement of income tax under sections 6662(d) and 6694(a) of the Code. Rev. Proc. 2004-73 updated.

The purpose of this announcement is to formally announce the Compliance Assurance Process (CAP) pilot program for large business taxpayers. The objective of the program is to reduce taxpayer burden and uncertainty while assuring the Service of the accuracy of tax returns prior to filing, thereby reducing or eliminating the need for post-filing examinations.