[Federal Register Volume 59, Number 130 (Friday, July 8, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-16358]


[[Page Unknown]]

[Federal Register: July 8, 1994]


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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.

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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) for 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 to appear at the public hearing scheduled 
on September 19, 1994, must be received by August 19, 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 respondents and recordkeepers are business or 
other for-profit institutions and small businesses or organizations. 
Estimated total reporting burden: 125 hours. The estimated average 
burden per respondent: .25 hour. Estimated number of respondents: 500. 
Estimated annual frequency of responses: 1. Estimated total annual 
recordkeeping burden: 20,000. 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: 2,000.

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) 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 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 has been scheduled on 
September 19, 1994, at 10 a.m. in the IRS auditorium.

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 * * *
    Sec. 1.6662-6 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 1.6662-6 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.]
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 94-16358 Filed 7-5-94; 12:26 pm]
BILLING CODE 4830-01-P