[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: 94-2076] [[Page Unknown]] [Federal Register: February 2, 1994] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [IL-21-91] RIN 1545-AS24 Imposition of Accuracy-Related Penalty AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking by cross reference to temporary regulations. ----------------------------------------------------------------------- SUMMARY: In the Rules and Regulations section of this issue of the Federal Register, the IRS is issuing temporary regulations that provide guidance on the imposition of the accuracy-related penalty under Internal Revenue Code sections 6662(e) and (h) and section 6664(c) for transactions between persons described in Internal Revenue Code section 482 and net section 482 transfer price adjustments. The text of those temporary regulations also serves as the comment document for this notice of proposed rulemaking. DATES: Comments and requests for a public hearing must be received within June 2, 1994. ADDRESSES: Send submissions to: CC:DOM:CORP:T:R (IL-21-91), room 5228, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. In the alternative, submissions may be hand delivered to: CC:DOM:CORP:T:R (IL-21-91), Internal Revenue Service, room 5228, 1111 Constitution Avenue NW, Washington, DC 20224. FOR FURTHER INFORMATION CONTACT: Thomas L. Ralph at (202) 622-3880 (not a toll-free number). SUPPLEMENTARY INFORMATION: Paperwork Reduction Act 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 (44 U.S.C. 3504(h)). 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, DC 20503, with copies to the Internal Revenue Service, Attn: IRS Reports Clearance Officer PC:FP, Washington, DC 20224. The collection of information in this notice of proposed rulemaking is in Secs. 1.6662-6T(d)(2)(iii) and (d)(3)(iii). This information is required by the IRS to implement section 6662(e)(3)(B) of the Internal Revenue Code. This information will be used to determine whether the taxpayer reasonably concluded that the transfer prices charged in related party transactions were consistent with the arm's length standard. The likely recordkeepers are business or other for-profit institutions and small businesses or organizations. These estimates are an approximation of the average time expected to be necessary for a collection of information. They are based on such information as is available to the IRS. Individual recordkeepers may require greater or less time, depending on their particular circumstances. Estimated total annual recordkeeping burden: 20,000 hours. The estimated annual burden per recordkeeper varies from 5 hours to 15 hours, depending on individual circumstances, with an estimated average of 10 hours. Estimated number of recordkeepers: 2000. Background The temporary regulations published in the Rules and Regulations section of this issue of the Federal Register contain amendments to the Income Tax Regulations under sections 6662(e) and (h) and section 6664(c) relating to the imposition of accuracy-related penalties. The final regulations that will result from the regulations proposed in this notice would be based on the text of the temporary regulations and would provide rules relating to the imposition of accuracy-related penalties under those sections for transactions between persons described in section 482 and net section 482 transfer price adjustments. The text of those temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains these proposed regulations. Special Analysis It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. It has also 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 Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments that are timely submitted (preferably a signed original and eight copies) to the Internal Revenue Service. 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 timely submits written comments on the proposed rules. Notice of the date, time, and place for the hearing will be published in the Federal Register. Drafting Information The principal author of these proposed regulations is Thomas L. Ralph of the Office of the Associate Chief Counsel (International), Internal Revenue Service. 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 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 is amended by adding an entry in numerical order to read as follows: Authority: 26 U.S.C. 7805 * * * Secs. 1.6625-5 and 1.6625-6T also issued under 26 U.S.C. 6662. * * * Par. 2. Section 1.6662-0 is amended by adding entries to the table to read as follows: Sec. 1.6662-0 Table of contents. [The text of the proposed amendments to this section is the same as the text of the amendments to Sec. 1.6662-0 published elsewhere in this issue of the Federal Register]. Par. 3. Section 1.6662-5 is amended by revising paragraph (e) and adding the text of paragraph (j) to read as follows: Sec. 1.6662-5 Substantial and gross valuation misstatements under chapter 1. [The text of proposed paragraphs (e) and (j) of this section are the same as the text of paragraphs (e) and (j) of Sec. 1.6662-5T published elsewhere in this issue of the Federal Register.] Par. 4. Section 1.6662-6 is added to read as follows: Sec. 1.6662-6 Transactions between persons described in section 482 and net section 482 transfer price adjustments. [The text of this proposed section is the same as the text of Sec. 1.6662-6T published elsewhere in this issue of the Federal Register.] Par. 5. Section 1.6664-0 is amended by adding an entry to read as follows: Sec. 1.6664-0 Table of contents. [The text of the proposed amendment to this section is the same as the text of the amendment to Sec. 1.6664-0 published elsewhere in this issue of the Federal Register.] Par. 6. Section 1.6664-4, the text of paragraph (d) is added to read as follows: Sec. 1.6664-4 Reasonable cause and good faith exception to section 6662 penalties. [The text of this proposed paragraph (d) is the same as the text of paragraph (d) in Sec. 1.6664-4T published elsewhere in this issue of the Federal Register.] Margaret Milner Richardson, Commissioner of Internal Revenue. [FR Doc. 94-2076 Filed 1-27-94; 11:10 am] BILLING CODE 4830-01-U