| REG-134317-05 |
June 26, 2006 |
Notice of Proposed Rulemaking by Cross-Reference
to Temporary Regulations Guidance Necessary
to Facilitate Business Electronic Filing
and Burden Reduction
Internal Revenue Service (IRS), Treasury.
Notice of proposed rulemaking by cross-reference to temporary regulations.
In this issue of the Bulletin, the IRS is issuing temporary regulations
(T.D. 9264) that simplify, clarify, or eliminate reporting burdens. Those
regulations also eliminate regulatory impediments to the electronic filing
of certain statements that taxpayers are required to include on or with their
Federal income tax returns. The text of those regulations also serves as
the text of these proposed regulations.
Written or electronic comments, and a request for a public hearing,
must be received by August 28, 2006.
Send submissions to: CC:PA:LPD:PR (REG-134317-05), Room 5203, Internal
Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.
Submissions may be hand-delivered Monday through Friday between the hours
of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-134317-05), Courier’s Desk,
Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC, or
sent electronically, via the IRS internet site at www.irs.gov/regs or
via the Federal eRulemaking Portal at www.regulations.gov (indicate
IRS and REG-134317-05).
FOR FURTHER INFORMATION CONTACT:
Concerning the proposed regulations, Grid Glyer, (202) 622-7930, concerning
submissions of comments, Kelly Banks (202) 622-7180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
The collection of information contained in this notice of proposed rulemaking
has been submitted to the Office of Management and Budget for review in accordance
with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). Comments on
the collection of information should be sent to the Office
of Management and Budget, Attn: Desk Officer for the Department
of the Treasury, Office of Information and Regulatory Affairs, Washington,
D.C. 20503, with copies to the Internal Revenue Service,
Attn: IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP, Washington, D.C.
20224. Comments on the collection of information should be received by August
28, 2006. Comments are specifically requested concerning:
Whether the proposed collection of information is necessary for the
proper performance of the functions of the Internal
Revenue Service, including whether the information will have practical
utility;
The accuracy of the estimated burden associated with the proposed collection
of information (see below);
How the quality, utility and clarity of the information to be collected
may be enhanced;
How the burden of complying with the proposed collection of information
may be minimized, including through the application of automated collection
techniques or other forms of information technology; and
Estimates of capital or start-up costs and costs of operation, maintenance
and purchase of service to provide information.
The collection of information in these proposed regulations is in each
of the corresponding temporary regulations.
The proposed regulations simplify, clarify, or eliminate reporting burdens.
These regulations also eliminate regulatory impediments to the electronic
filing of certain statements that taxpayers are required to include on or
with their Federal income tax returns.
The collection of information is mandatory. The likely respondents
are large corporations, many of which will be members of a consolidated group
and/or component members of a controlled group.
Estimated total annual reporting burden: 262,500 hours.
Estimated average annual burden hours per respondent: 0.75 hours.
Estimated number of respondents: 350,000.
Estimated frequency of responses: annually.
An agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a valid control
number assigned by the Office of Management and Budget.
Books or records relating to a collection of information must be retained
as long as their contents may become material in the administration of any
internal revenue law. Generally, tax returns and tax return information are
confidential, as required by 26 U.S.C. 6103.
Background and Explanation of Provisions
Temporary Regulations in this issue of the Bulletin amend 26 CFR Part
1 to add §§1.302-2T, 1.302-4T, 1.331-1T, 1.332-6T, 1.338-10T, 1.351-3T,
1.355-5T, 1.368-3T, 1.381(b)-1T, 1.382-8T, 1.382-11T, 1.1081-11T, 1.1221-2T,
1.1502-13T, 1.1502-31T, 1.1502-32T, 1.1502-33T, 1.1502-35T, 1.1502-76T, 1.1502-95T,
1.1563-1T, 1.1563-3T, and amend Part 602 to add §1.6012-2T. The text
of those temporary regulations also serves as the text of these proposed regulations.
The preamble to the temporary regulations explains the amendments.
It has been determined that this notice of proposed rulemaking is not
a significant regulatory action as defined in Executive Order 12866. Therefore,
a regulatory assessment is not required. It has also been determined that
section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does
not apply to the following proposed regulations: §§1.302-2, 1.302-4,
1.331-1, 1.332-6, 1.351-3, 1.355-5, 1.368-3, 1.381(b)-1, 1.1081-11, 1.1563-1,
1.1563-3, and 1.6012-2. With respect to the collections of information in
such regulations, and with respect to the following proposed regulations,
§§1.338-10, 1.382-8, 1.382-11, 1.1221-2, 1.1502-13, 1.1502-31, 1.1502-32,
1.1502-33, 1.1502-35, 1.1502-76 and 1.1502-95, it is hereby certified that
these provisions will not have a significant economic impact on a substantial
number of small entities. This certification is based on the fact that these
regulations primarily affect large corporations (which are members of either
controlled or consolidated groups) and in the case of all corporations will
substantially reduce or eliminate the existing reporting burden. Therefore,
a regulatory flexibility analysis is not required. Pursuant to section 7805(f)
of the Internal Revenue Code, these proposed regulations have been submitted
to the Chief Counsel for Advocacy of the Small Business Administration for
comment on their impact on small business.
Comments and Requests for a Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments (a signed original and
eight (8) copies) or electronic comments that are submitted timely to the
IRS. All comments will be available for public inspection and copying. A
public hearing may be scheduled if requested in writing by any person that
timely submits written comments. If a public hearing is scheduled, notice
of the date, time, and place for the public hearing will be published in the Federal Register.
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
Paragraph 1. The authority citation for part 1 continues to read, in
part, as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.302-2 is amended by:
1. Redesignating paragraph (b) as paragraph (b)(1).
2. Revising newly designated paragraph (b)(1).
3. Adding paragraphs (b)(2) and (d).
The additions and revisions read as follows:
§1.302-2 Redemptions not taxable as dividends.
[The text of the proposed amendment to §1.302-2 is the same as
the text for §1.302-2T published elsewhere in this issue of the Bulletin].
Par. 3. Section 1.302-4 is amended by revising paragraph (a) and adding
paragraph (h) to read as follows:
§1.302-4 Termination of shareholder’s interest.
[The text of the proposed amendment to §1.302-4 is the same as
the text for §1.302-4T published elsewhere in this issue of the Bulletin].
Par. 4. Section 1.331-1 is amended by revising paragraph (d) and adding
paragraph (f) to read as follows:
§1.331-1 Corporate liquidations.
[The text of the proposed amendment to §1.331-1 is the same as
the text for §1.331-1T published elsewhere in this issue of the Bulletin].
Par. 5. Section 1.332-6 added to read as follows:
§1.332-6 Records to be kept and information to be filed
with return.
[The text of the proposed §1.332-6 is the same as the text for
§1.332-6T published elsewhere in this issue of the Bulletin].
Par. 6. Section 1.338-10 is amended by revising paragraph (a)(4)(iii)
and adding paragraph (c) to read as follows:
§1.338-10 Filing of returns.
[The text of the proposed amendment to §1.338-10 is the same as
the text for §1.338-10T published elsewhere in this issue of the Bulletin].
Par. 7. Section 1.351-3 is added to read as follows:
§1.351-3 Records to be kept and information to be filed.
[The text of the proposed §1.351-3 is the same as the text for
§1.351-3T published elsewhere in this issue of the Bulletin].
Par. 8. Section 1.355-5 is added to read as follows:
§1.355-5 Records to be kept and information to be filed.
[The text of the proposed §1.355-5 is the same as the text for
§1.355-5T published elsewhere in this issue of the Bulletin].
Par. 9. Section 1.368-3 is added to read as follows:
§1.368-3 Records to be kept and information to be filed
with returns.
[The text of the proposed §1.368-3 is the same as the text for
§1.368-3T published elsewhere in this issue of the Bulletin].
Par. 10. Section 1.381(b)-1 is amended by revising paragraph (b)(3)
and adding paragraph (e) to read as follows:
§1.381(b)-1 Operating rules applicable to carryovers
in certain corporate acquisitions.
[The text of the proposed amendment to §1.381(b)-1 is the same
as the text for §1.381(b)-1T published elsewhere in this issue of the
Bulletin].
Par. 11. Section 1.382-8 is amended by:
1. Revising paragraphs (c)(2) and (h).
2. Redesignating paragraph (e)(4) as paragraph (e)(5).
3. Adding new paragraphs (e)(4) and (j)(4).
The additions and revisions read as follows:
§1.382-8 Controlled groups.
[The text of the proposed amendment to §1.382-8 is the same as
the text for §1.382-8T published elsewhere in this issue of the Bulletin].
Par. 12. Section 1.382-11 is added to read as follows:
§1.382-11 Reporting requirements.
[The text of the proposed §1.382-11 is the same as the text for
§1.382-11T published elsewhere in this issue of the Bulletin].
Par. 13. Section 1.1081-11 is added to read as follows:
§1.1081-11 Records to be kept and information to be
filed with returns.
[The text of the proposed §1.1081-11 is the same as the text for
§1.1081-11T published elsewhere in this issue of the Bulletin].
Par. 14. Section 1.1221-2 is amended by revising paragraph (e)(2)(iv)
and adding paragraphs (i) through (j) to read as follows:
§1.1221-2 Hedging transactions.
[The text of the proposed amendment to §1.1221-2 is the same as
the text for §1.1221-2T published elsewhere in this issue of the Bulletin].
Par. 15. Section 1.1502-13 is amended by revising paragraphs (f)(5)(ii)(E)
and (f)(6)(i)(C)(2) and adding paragraph (m) to read
as follows:
§1.1502-13 Intercompany transactions.
[The text of the proposed amendment to §1.1502-13 is the same as
the text for §1.1502-13T published elsewhere in this issue of the Bulletin].
Par. 16. Section 1.1502-31 is amended by revising paragraph (e)(2)
and adding paragraphs (i) through (j) to read as follows:
§1.1502-31 Stock basis after a group structure change.
[The text of the proposed amendment to §1.1502-31 is the same as
the text for §1.1502-31T published elsewhere in this issue of the Bulletin].
Par. 17. Section 1.1502-32 is amended by revising paragraph (b)(4)(iv)
and adding paragraphs (i) through (j) to read as follows:
§1.1502-32 Investment adjustments.
[The text of the proposed amendment to §1.1502-32 is the same as
the text for §1.1502-32T published elsewhere in this issue of the Bulletin].
Par. 18. Section 1.1502-33 is amended by revising paragraph (d)(5)(i)(D)
and adding paragraph (k) to read as follows:
§1.1502-33 Earnings and profits.
[The text of the proposed amendment to §1.1502-33 is the same as
the text for §1.1502-33T published elsewhere in this issue of the Bulletin].
Par. 19. Section 1.1502-35 is amended by revising paragraph (c)(4)(i)
and adding paragraph (k) to read as follows:
§1.1502-35 Transfers of subsidiary stock and deconsolidations
of subsidiaries.
[The text of the proposed amendment to § 1.1502-35 is the
same as the text of §1.1502-35T published elsewhere in this issue of
the Bulletin].
Par. 20. Section 1.1502-76 is amended by revising paragraph (b)(2)(ii)(D)
and adding paragraph (d) to read as follows:
§1.1502-76 Taxable year of members of group.
[The text of the proposed amendment to §1.1502-76 is the same as
the text for §1.1502-76T published elsewhere in this issue of the Bulletin].
Par. 21. Section 1.1502-95 is amended by revising paragraphs (e)(8)
and (f) and adding paragraph (g) to read as follows:
§1.1502-95 Rules on ceasing to be a member of a consolidated
group (or loss subgroup).
[The text of the proposed amendment to §1.1502-95 is the same as
the text for §1.1502-95T published elsewhere in this issue of the Bulletin].
Par. 22. Section 1.1563-1 is amended by revising paragraph (c)(2) and
adding paragraph (e) to read as follows:
§1.1563-1 Definition of controlled group of corporations
and component members.
[The text of the proposed amendment to §1.1563-1 is the same as
the text for §1.1563-1T published elsewhere in this issue of the Bulletin].
Par. 23. Section 1.1563-3 is amended by revising paragraph (d)(2)(iv)
and adding paragraph (e) to read as follows:
§1.1563-3 Rules for determining stock ownership.
[The text of the proposed amendment to §1.1563-3 is the same as
the text for §1.1563-3T published elsewhere in this issue of the Bulletin].
Par. 24. Section 1.6012-2 is amended by revising paragraph (c) and
adding paragraph (k) to read as follows:
§1.6012-2 Corporations required to make returns of income.
[The text of the proposed amendment to §1.6012-2 is the same as
the text for §1.6012-2T published elsewhere in this issue of the Bulletin].
Mark E. Matthews,
Deputy
Commissioner for
Services and Enforcement.
Note
(Filed by the Office of the Federal Register on May 26, 2006, 8:45 a.m.,
and published in the issue of the Federal Register for May 30, 2006, 71 F.R.
30640)
The principal author of these regulations is Grid Glyer of the Office
of Associate Chief Counsel (Corporate). Other personnel from the Treasury
Department and the IRS participated in their development.
* * * * *
Internal Revenue Bulletin 2006-26
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