Examination of returns and claims for refund, credit, or abatement; determination of correct tax liability

Revenue Procedure 2010-13 requires taxpayers to report to the Internal Revenue Service their groupings and regroupings of activities and the addition of specific activities within their existing groupings of activities for purposes of section 469.

Internal Revenue Code Section 469 generally provides that income, losses, and credits from an activity will be passive unless the taxpayer materially participates in the activity. Treasury Regulation Section 1.469-4 allows taxpayers to group activities provided they make up an appropriate economic unit to enable taxpayers to meet the material participation standards.

Revenue Procedure 2010-13 will be published in Internal Revenue Bulletin 2010-4 on January 25, 2010.