[Code of Federal Regulations]
[Title 26, Volume 12]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.1502-77A]

[Page 582-584]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.1502-77A  Common parent agent for subsidiaries applicable for 
consolidated return years beginning before June 28, 2002.

    (a) Scope of agency of common parent corporation. The common parent, 
for all purposes (other than the making of the consent required by 
paragraph (a)(1) of Sec. 1.1502-75, the making of an election under 
section 936(e), the making of an election to be treated as a DISC under 
Sec. 1.992-2, and a change of the annual accounting period pursuant to 
paragraph (b)(3)(ii) of Sec. 1.991-1) shall be the sole agent for each 
subsidiary in the group, duly authorized to act in its own name in all 
matters relating to the tax liability for the consolidated return year. 
Except as provided in the preceding sentence, no subsidiary shall have 
authority to act for or to represent itself in any such matter. For 
example, any election available to a subsidiary corporation in the 
computation of its seperate taxable income must be made by the common 
parent, as must any change in an election previously made by the 
subsidiary corporation; all correspondence will be carried on directly 
with the common parent; the common parent shall file for all extensions 
of time including extensions of time for payment of tax under section 
6164; notices of deficiencies will be mailed only to the common parent, 
and the mailing to the common parent shall be considered as a mailing to 
each subsidiary in the group; notice and demand for payment of taxes 
will be given only to the common parent and such notice and demand will 
be considered as a notice and demand to each subsidiary; the common 
parent will file petitions and conduct proceedings before the Tax Court 
of the United States, and any such petition shall be considered as also 
having been filed by each such subsidiary. The common parent will file 
claims for refund or credit, and any refund will be made directly to and 
in the name of the common parent and will discharge any liability of the 
Government in respect thereof to any such subsidiary; and the common 
parent in its name will give waivers, give bonds, and execute closing 
agreements, offers in compromise, and all other documents, and any 
waiver or bond so given, or agreement, offer in compromise, or any other 
document so executed, shall be considered as having also been given or 
executed by each such subsidiary. Notwithstanding the provisions of this 
paragraph, any notice of deficiency, in respect of the tax for a 
consolidated return year, will name each corporation which was a member 
of the group during any part of such period (but a failure to include 
the name of any such member will not affect the validity of the notice 
of deficiency as to the other members); any notice and demand for 
payment will name each corporation which was a member of the group 
during any part of such period (but a failure to include the name of any 
such member will not affect the validity of the notice and demand as to 
the other members); and any levy, any notice of a lien, or any other 
proceeding to collect the amount of any assessment, after the assessment 
has been made, will name the corporation from which such collection is 
to be made. The provisions of this paragraph shall apply whether or not 
a consolidated return is made for any subsequent year, and

[[Page 583]]

whether or not one or more subsidiaries have become or have ceased to be 
members of the group at any time. Notwithstanding the provisions of this 
paragraph, the Commissioner may, upon notifying the common parent, deal 
directly with any member of the group in respect of its liability, in 
which event such member shall have full authority to act for itself.
    (b) Notification of deficiency to corporation which has ceased to be 
a member of the group. If a subsidiary has ceased to be a member of the 
group and if such subsidiary files written notice of such cessation with 
the Commissioner, then the Commissioner upon request of such subsidiary 
will furnish it with a copy of any notice of deficiency in respect of 
the tax for a consolidated return year for which it was a member and a 
copy of any notice and demand for payment of such deficiency. The filing 
of such written notification and request by a corporation shall not have 
the effect of limiting the scope of the agency of the common parent 
provided for in paragraph (a) of this section and a failure by the 
Commissioner to comply with such written request shall not have the 
effect of limiting the tax liability of such corporation provided for in 
Sec. 1.1502-6.
    (c) Effect of waiver given by common parent. Unless the Commissioner 
agrees to the contrary, an agreement entered into by the common parent 
extending the time within which an assessment may be made or levy or 
proceeding in court begun in respect of the tax for a consolidated 
return year shall be applicable:
    (1) To each corporation which was a member of the group during any 
part of such taxable year, and
    (2) To each corporation the income of which was included in the 
consolidated return for such taxable year, notwithstanding that the tax 
liability of any such corporation is subsequently computed on the basis 
of a separate return under the provisions of Sec. 1.1502-75.
    (d) Effect of dissolution of common parent corporation. If the 
common parent corporation contemplates dissolution, or is about to be 
dissolved, or if for any other reason its existence is about to 
terminate, it shall forthwith notify the Commissioner of such fact and 
designate, subject to the approval of the Commissioner, another member 
to act as agent in its place to the same extent and subject to the same 
conditions and limitations as are applicable to the common parent. If 
the notice thus required is not given by the common parent, or the 
designation is not approved by the Commissioner, the remaining members 
may, subject to the approval of the Commissioner, designate another 
member to act as such agent, and notice of such designation shall be 
given to the Commissioner. Until a notice in writing designating a new 
agent has been approved by the Commissioner, any notice of deficiency or 
other communication mailed to the common parent shall be considered as 
having been properly mailed to the agent of the group; or, if the 
Commissioner has reason to believe that the existence of the common 
parent has terminated, he may, if he deems it advisable, deal directly 
with any member in respect of its liability.
    (e) General rules--(1) Scope. This section applies if the 
corporation that is the common parent of the group ceases to be the 
common parent, whether or not the group remains in existence under Sec. 
1.1502-75(d).
    (2) Notice of deficiency. A notice of deficiency mailed to any one 
or more corporations referred to in paragraph (a)(4) of this section is 
deemed for purposes of Sec. 1.1502-77 to be mailed to the agent of the 
group. If the group has designated an agent that has been approved by 
the Commissioner under Sec. 1.1502-77(d), a notice of deficiency shall 
be mailed to that designated agent in addition to any other corporation 
referred to in paragraph (a)(4) of this section. However, failure by the 
Commissioner to mail a notice of deficiency to that designated agent 
shall not invalidate the notice of deficiency mailed to any other 
corporation referred to in paragraph (a)(4) of this section.
    (3) Waiver of statute of limitations. A waiver of the statute of 
limitations with respect to the group given by any one or more 
corporations referred to in paragraph (a)(4) of this section is deemed 
to be given by the agent of the group.

[[Page 584]]

    (4) Alternative agents. The corporations referred to in paragraph 
(a) (2) and (3) of this section are--
    (i) The common parent of the group for all or any part of the year 
to which the notice or waiver applies,
    (ii) A successor to the former common parent in a transaction to 
which section 381(a) applies,
    (iii) The agent designated by the group under Sec. 1.1502-77(d), or
    (iv) If the group remains in existence under Sec. 1.1502-75(d) (2) 
or (3), the common parent of the group at the time the notice is mailed 
or the waiver given.
    (f) Cross-reference. For further rules applicable to groups that 
include insolvent financial institutions, see Sec. 301.6402-7 of this 
chapter.
    (g) Effective date. This section applies to taxable years beginning 
before June 28, 2002, except paragraph (e) of this section applies to 
statutory notices and waivers of the statute of limitations for taxable 
years for which the due date (without extensions) of the consolidated 
return is after September 7, 1988, and which begin before June 28, 2002.

[T.D. 6894, 31 FR 11794, Sept. 8, 1966, as amended by T.D. 7323, 39 FR 
34409, Sept. 25, 1974; T.D. 7673, 45 FR 8588, Feb. 8, 1980; T.D. 8226, 
53 FR 34733, Sept. 8, 1988; T.D. 8446, 57 FR 53034, Nov. 6, 1992. 
Redesignated and amended by T.D. 9002, 67 FR 43540, 43544, June 28, 
2002]

     REGULATIONS APPLICABLE TO TAXABLE YEARS BEFORE JANUARY 1, 1997