[Federal Register Volume 59, Number 22 (Wednesday, February 2, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-2074]


[[Page Unknown]]

[Federal Register: February 2, 1994]


-----------------------------------------------------------------------


DEPARTMENT OF THE TREASURY
26 CFR Part 1

[FI-189-84; FI-64-89; FI-5-94]
RIN 1545-AH46; 1545-AO03; 1545-AS35

 

Debt Instruments With Original Issue Discount; Anti-Abuse Rule; 
Price Level Adjusted Mortgages

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations and withdrawal of notices of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: In the rules and regulations section of this issue of the 
Federal Register, the IRS is issuing a temporary regulation that adds 
an anti-abuse rule to the final regulations relating to the tax 
treatment of debt instruments with original issue discount. The rule 
allows the Commissioner of Internal Revenue, in certain circumstances, 
to apply or depart from the final regulations in a manner that ensures 
a reasonable result in light of the purposes of the statutes governing 
original issue discount. The text of the temporary regulation also 
serves as the text of this proposed regulation. This document also 
withdraws the proposed regulations relating to the tax treatment of 
price level adjusted mortgages and the portion of the 1992 proposed 
regulations relating to the treatment of a debt instrument that 
provides for contingent payments.

DATES: Written comments and requests for a public hearing must be 
received by April 4, 1994.

ADDRESSES: Send submissions to: CC:DOM:CORP:T:R (FI-5-94), room 5228, 
Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, 
Washington, DC 20044. In the alternative, submissions may be hand 
delivered to: CC:DOM:CORP:T:R (FI-5-94), Internal Revenue Service, room 
5228, 1111 Constitution Avenue NW., Washington, DC 20224.

FOR FURTHER INFORMATION CONTACT: Andrew C. Kittler at (202) 622-3940 or 
William E. Blanchard at (202) 622-3950 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

    A temporary regulation in the Rules and Regulations portion of this 
issue of the Federal Register amends the Income Tax Regulations (26 CFR 
part 1) relating to section 1275 by adding Sec. 1.1275-2T. The text of 
that temporary regulation also serves as the text of this proposed 
regulation. The preamble to the temporary regulation explains the 
temporary regulation.
    This document also withdraws the portion of the 1992 proposed 
regulations relating to the treatment of a debt instrument under 
section 1274 of the Internal Revenue Code if the debt instrument 
provides for contingent payments. In addition, this document withdraws 
the proposed regulations relating to the tax treatment of price level 
adjusted mortgages.

Special Analyses

    It has been determined that this notice of proposed rulemaking is 
not a significant regulatory action as defined in Executive Order 
12866. It also has been determined that section 553(b) of the 
Administrative Procedure Act (5 U.S.C. chapter 5) and the Regulatory 
Flexibility Act (5 U.S.C. chapter 6) do not apply to these regulations, 
and, therefore, a Regulatory Flexibility Analysis is not required. 
Pursuant to section 7805(f) of the Internal Revenue Code, this notice 
of proposed rulemaking will be submitted to the Chief Counsel for 
Advocacy of the Small Business Administration for comment on its impact 
on small business.

Comments and Public Hearing

    Before the proposed regulation relating to the anti-abuse rule is 
adopted as a final regulation, consideration will be given to any 
written comments that are submitted timely (preferably a signed 
original and eight copies) to the IRS. All comments will be available 
for public inspection and copying. A public hearing may be scheduled 
and held upon written request by any person who submits written 
comments on the proposed regulation. Notice of the time and place for 
the hearing will be published in the Federal Register.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Proposed Amendments 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 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805 * * *

    Sec. 1.1275-2T also issued under 26 U.S.C. 1275(d).

    Par. 2. Section 1.163-11, as proposed on January 9, 1990 (55 FR 
739), is withdrawn as of February 2, 1994.
    Par. 3. Paragraph (e) of Sec. 1.1274-2, as proposed on December 22, 
1992 (57 FR 60770), is withdrawn as of February 2, 1994.
    Par. 4. Section 1.1275-2T is added to read as follows:


Sec. 1.1275-2T  Special rules relating to debt instruments.

[The text of this proposed section is the same as the text of 
Sec. 1.1275-2T published elsewhere in this issue of the Federal 
Register.]
    Par. 5. Section 1.1275-6, as proposed on January 9, 1990 (55 FR 
739), is withdrawn as of February 2, 1994.
    Par. 6. Section 6050H-2, as proposed on January 9, 1990 (55 FR 
739), is withdrawn as of February 2, 1994.
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 94-2074 Filed 1-27-94; 11:10 am]
BILLING CODE 4830-01-U