Section 6166(j) provides: (j) Regulations

The Secretary shall prescribe such regulations as may be necessary to the application of this section.

The regulations currently applicable to Code section 6166 are:

NOTE: Regulations 20.6166A-1 through 20.6166A-4 were published in 1960 (without the "A") for the statute then designated as section 6166, which had been enacted in 1958. In 1976 a new section 6166 was enacted and the old section 6166 was renumbered section 6166A.

The existing regulations were redesignated as shown above (with the "A") to reflect the renumbering of old section 6166 as new section 6166A and were published on July 31, 1980.

Current regulation 20.6166-1 was also published on July 31, 1980 to reflect the version of section 6166 that was enacted in 1976.

Section 301.9100-6T(k) was published in response to the Deficit Reduction Act of 1984, to require that a section 6166(b)(8) election must contain a reference to either "section 6166(b)(8)" or "section 1021(d)(2) of the Deficit Reduction Act of 1984".

In 1981 section 6166A was repealed, but the regulations cited above continue to apply to current section 6166 as Congress did not intend to repeal the regulations themselves.

Although Regulation sections 20.6166A-1 et seq. were published in 1960 and are applicable to section 6166 existing today, they must be used with caution because of the statutory changes that have been made to section 6166 since 1980. Any provision within the 6166A regulations that is inconsistent with the statute existing today has no effect. See e.g. PLR 200613020. Reading the 6166A regulations can be misleading without this knowledge. The comments below provide some examples.

Section 6166(j), Comment 1:   Reg. §20.6166A-2(a)(3)(c) provides:

(c) Carrying on a trade or business. (1) In order for the interest in a partnership or the stock of a corporation to qualify as an interest in a closely held business it is necessary that the partnership or the corporation be engaged in carrying on a trade or business at the time of the decedent's death. However, it is not necessary that all the assets of the partnership or the corporation be utilized in the carrying on of the trade or business.
Section 6166(b)(9) was enacted in 1984. It is captioned Deferral not available for passive assets, which is defined in §6166(b)(9)(B)(i) as "any asset other than an asset used in carrying on a trade or business." This new statutory provision in 1984 renders inapplicable the portion of Reg. §20.6166A-2(a)(3)(c) providing that it is not necessary that all of the assets of a closely held business be used in the carrying on of a trade or business.
Section 6166(b)(9)(A) provides:

(9) Deferral not available for passive assets

(A) In general

For purposes of subsection (a)(1) and determining the closely held business amount (but not for purposes of subsection (g)), the value of any interest in a closely held business shall not include the value of that portion of such interest which is attributable to passive assets held by the business.
Section 6166(b)(9)(B)(i) provides:

(B) Passive asset defined

For purposes of this paragraph-

(i) In general

The term "passive asset" means any asset other than an asset used in carrying on a trade or business.