[Code of Federal Regulations]
[Title 26, Volume 10]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.925(a)-1]

[Page 81]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.925(a)-1  Transfer pricing rules for FSCs.

    (a)-(c)(7) [Reserved] For further guidance, see Sec. 1.925(a)-1T(a) 
through (c)(7).
    (c)(8) Grouping transactions. (i) The determinations under this 
section are to be made on a transaction-by-transaction basis. However, 
at the annual choice made by the related supplier if the administrative 
pricing methods are used, some or all of these determinations may be 
made on the basis of groups consisting of products or product lines. The 
election to group transactions shall be evidenced on Schedule P of the 
FSC's U.S. income tax return for the taxable year. No untimely or 
amended returns filed later than one year after the due date of the 
FSC's timely filed (including extensions) U.S. income tax return will be 
allowed to elect to group, to change a grouping basis, or to change from 
a grouping basis to a transaction-by-transaction basis (collectively 
``grouping redeterminations''). The rule of the previous sentence is 
applicable to taxable years beginning after December 31, 1999. For any 
taxable year beginning before January 1, 2000, a grouping 
redetermination may be made no later than the due date of the FSC's 
timely filed (including extensions) U.S. income tax return for the FSC's 
first taxable year beginning on or after January 1, 2000. 
Notwithstanding the time limits for filing grouping redeterminations 
otherwise specified in the previous three sentences, a grouping 
redetermination may be made at any time during the one-year period 
commencing upon notification of the related supplier by the Internal 
Revenue Service of an examination, provided that both the FSC and the 
related supplier agree to extend their respective statutes of 
limitations for assessment by one year. In addition, any grouping 
redeterminations made under this paragraph must meet the requirements 
under Sec. 1.925(a)-1T(e)(4) with respect to redeterminations other 
than grouping. The language ``or grouping of transactions'' is removed 
from the fourth sentence of Sec. 1.925(a)-1T(e)(4), applicable to 
taxable years beginning after December 31, 1997. See also Sec. 
1.925(b)-1T(b)(3)(i).
    (c)(8)(ii)-(f) [Reserved] For further guidance, see Sec. 1.925(a)-
1T(c)(8)(ii) through (f).
    (g) Effective date. The provisions of this section apply on or after 
March 2, 2001.

[T.D. 8944, 66 FR 13428, Mar. 6, 2001]