[Federal Register Volume 77, Number 92 (Friday, May 11, 2012)]
[Proposed Rules]
[Page 27669]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-11327]
[[Page 27669]]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG-107548-11]
RIN 1545-BK10
Modifications to Definition of United States Property
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking by cross-reference to temporary
regulations.
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SUMMARY: In the Rules and Regulations section of this Federal Register,
the IRS and the Treasury Department are issuing temporary regulations
relating to the treatment of upfront payments made pursuant to certain
notional principal contracts. The temporary regulations provide that
certain obligations of United States persons arising from upfront
payments made by controlled foreign corporations pursuant to contracts
that are cleared by a derivatives clearing organization or clearing
agency do not constitute United States property. The text of the
temporary regulations also serves as the text of these proposed
regulations.
DATES: Comments and requests for a public hearing must be received by
August 9, 2012.
ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-107548-11), room
5205, 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-
107548-11), Courier's Desk, Internal Revenue Service, 1111 Constitution
Avenue NW., Washington, DC, or sent electronically, via the Federal
eRulemaking Portal at http://www.regulations.gov (IRS REG-107548-11).
FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations,
Kristine A. Crabtree, (202) 622-3840; concerning submissions of
comments or a request for a public hearing, Oluwafunmilayo Taylor,
(202) 622-7180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background and Explanation of Provisions
The temporary regulations published in the Rules and Regulations
section of this issue of the Federal Register establish an exception to
the definition of United States property (within the meaning of section
956(c)) for obligations of United States persons arising from certain
upfront payments made with respect to certain contracts that are
properly classified as notional principal contracts for U.S. Federal
income tax purposes and that are cleared by a derivatives clearing
organization or clearing agency. The text of those temporary
regulations also serves as the text of these proposed regulations. The
preamble to the temporary regulations explains the temporary
regulations and these proposed regulations.
Special Analyses
It has been determined that this Treasury decision is not a
significant regulatory action as defined in Executive Order 12866.
Therefore, a regulatory assessment is not required. It also has been
determined that section 553(b) of the Administrative Procedure Act (5
U.S.C. chapter 5) does not apply to these regulations, and because
these regulations do not impose a collection of information on small
entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not
apply. Pursuant to section 7805(f) of the Internal Revenue Code, this
notice of proposed rulemaking has been submitted to the Chief Counsel
for Advocacy of the Small Business Administration for comment on its
impact on small entities.
Comments and Requests for a Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any comments that are submitted timely
to the IRS as prescribed in this preamble under ADDRESSES. In addition
to the specific requests for comments made elsewhere in this preamble
or the preamble to the temporary regulations, the IRS and the Treasury
Department request comments on all aspects of the proposed rules. All
comments will be available at www.regulations.gov or upon request. A
public hearing will be scheduled if requested in writing by any person
who timely submitted written comments. If a public hearing is
scheduled, notice of the date, time, and place of the hearing will be
published in the Federal Register.
Drafting Information
The principal author of these regulations is Kristine A. Crabtree
of the Office of Associate Chief Counsel (International). However,
other personnel from the IRS and the Treasury Department participated
in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Proposed Amendment to the Regulations
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 is amended by adding
an entry in numerical order to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.956-2(b)(1)(xi) also issued under 26 U.S.C. 956(e). *
* *
Par. 2. Section 1.956-2 is amended by adding new paragraphs
(b)(1)(xi) and (f) to read as follows:
Sec. 1.956-2 Definition of United States property.
* * * * *
(b)(1)(xi) [The text of this proposed amendment is the same as the
text of Sec. 1.956-2T(b)(1)(xi) published elsewhere in this issue of
the Federal Register].
* * * * *
(f) [The text of this proposed amendment is the same as the text of
Sec. 1.956-2T(f) published elsewhere in this issue of the Federal
Register].
Steven T. Miller,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2012-11327 Filed 5-10-12; 8:45 am]
BILLING CODE 4830-01-P