Linda M. Beale (Illinois) has published Proposed Mark-to-Market Regs: Four Requirements, Three Limitations, Two Procedures, and One Safe Harbor, 109 Tax Notes 781 (Nov. 7, 2005), also available on the Tax Analysts web site as Doc 2005-21775, 2005 TNT 215-32.  Here is the abstract:

In mid-2005, the government released proposed regulations that provide a safe harbor valuation method permitting the use of financial statement valuations for tax purposes under section 475. This article briefly reviews the types of concerns raised by book-tax conformity in a rapidly changing area such as valuation of derivitives — ranging from permitting a private board to set standards for determining taxable income to the incentives for taxpayers to manipulate financial reporting rules to reduce their income tax liability. The article considers the eligible method requirements, limitations, and recordkeeping and revocation provisions set forth in the regulations for the proposed safe harbor, and proposes some clarifications and additions to better address concerns. Although still skeptical about the compatibility of financial statement valuations with section 475, Beale concludes that the safe harbor’s requirements and limitations may give the IRS more clout on audit than initially expected.