[Federal Register Volume 62, Number 32 (Tuesday, February 18, 1997)]
[Proposed Rules]
[Pages 7188-7189]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3399]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 20

[REG-209830-96]
RIN 1545-AU27


Estate and Gift Tax Marital Deduction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations and notice of public hearing.

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SUMMARY: In the Rules and Regulations section of this issue of the 
Federal Register, the IRS is issuing temporary regulations relating to 
the estate tax marital deduction to conform the Estate Tax Regulations 
to recent court decisions. The text of those temporary regulations also 
serves as the text of these proposed regulations. This document also 
provides notice of a public hearing on these proposed regulations.

DATES: Comments must be received by May 19, 1997. Outlines of topics to 
be discussed at the public hearing scheduled for June 3, 1997, at 10 
a.m. must be received by May 13, 1997.

ADDRESSES: Send submissions to: CC:DOM:CORP:R (REG-209830-96), room 
5228, Internal Revenue Service, POB 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may also be hand delivered between 
the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R (REG-209830-96), 
Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW., 
Washington, DC. Alternatively, taxpayers may submit comments 
electronically via the internet by selecting the ``Tax Regs'' option on 
the IRS Home Page, or by submitting comments directly to the IRS 
internet site at http://www.irs.ustreas.gov/prod/tax____ regs/
comments.html. The public hearing will be held in the Commissioner's 
Conference Room, room 3313, Internal Revenue Building, 1111 
Constitution Avenue NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Susan B. 
Hurwitz, (202) 622-3090; concerning submissions and the hearing, 
Evangelista Lee, (202) 622-7190 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register amend the Estate Tax Regulations (26 CFR 
part 20) relating to sections 2044 and 2056. The temporary regulations 
conform the estate tax marital deduction regulations to recent court 
decisions in Estate of Clayton v. Commissioner, 976 F.2d 1486 (5th Cir. 
1992), rev'g 97 T.C. 327 (1991); Estate of Robertson v. Commissioner, 
15 F.3d 779 (8th Cir. 1994), rev'g 98 T.C. 678 (1992); Estate of 
Spencer v. Commissioner, 43 F.3d 226 (6th Cir. 1995), rev'g T.C. Memo. 
1992-579; and Estate of Clack v. Commissioner, 106 T.C. 131 (1996).
    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.

Special Analyses

    It has been determined that this notice of proposed rulemaking is 
not a significant regulatory action as defined in EO 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 these regulations and, because these 
regulations do not impose on small entities a collection of information 
requirement, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does 
not apply. 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 these proposed regulations are adopted as final regulations, 
consideration will be given to any comments that are submitted timely 
(in the manner described in ADDRESSES) to the IRS. All comments will be 
available for public inspection and copying.
    A public hearing has been scheduled for June 3, 1997, at 10 a.m. in 
the Commissioner's Conference Room, room 3313, Internal Revenue 
Building, 1111 Constitution Avenue NW., Washington, DC. Because of 
access restrictions, visitors will not be admitted beyond the building 
lobby more than 15 minutes before the hearing starts.
    The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons 
that wish to present oral comments at the hearing must submit comments 
by May 19, 1997 and submit an outline of the topics to be discussed and 
the time to be devoted to each topic by May 13, 1997.
    A period of 10 minutes will be allotted to each person for making 
comments.
    An agenda showing the scheduling of the speakers will be prepared 
after the deadline for receiving outlines has passed.
    Copies of the agenda will be available free of charge at the 
hearing.

Drafting Information

    The principal author of the proposed regulations is Susan B. 
Hurwitz, Office of Assistant Chief Counsel (Passthroughs and Special 
Industries). However, other personnel from the IRS and the Treasury 
Department participated in their development.

List of Subjects in 26 CFR Part 20

    Estate taxes, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 20 is proposed to be amended as follows:

PART 20--ESTATE TAX; ESTATES OF DECEDENTS DYING AFTER AUGUST 16, 
1954

    Paragraph 1. The authority citation for part 20 continues to read 
in part as follows:

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

    Par. 2. In Sec. 20.2044-1, paragraph (e) Example 8 is added to read 
as follows:


Sec. 20.2044-1  Certain property for which marital deduction was 
previously allowed.

    [The text of paragraph (e) Example 8 as proposed is the same as the 
text of Sec. 20.2044-1T(e) Example 8 published elsewhere in this issue 
of the Federal Register].
    Par. 3. Section 20.2056(b)-7 is amended to read as follows:


Sec. 20.2056(b)-7  Election with respect to life estate for surviving 
spouse.

    [The text of paragraphs (d)(3), and (h) Example 6 is the same as 
the text of Sec. 20.2056(b)-7T(d)(3) (ii), and (h) Example 6 published 
elsewhere in this issue of the Federal Register].

[[Page 7189]]

    Par. 4. Section 20.2056(b)-10 is revised to read as follows:


Sec. 20.2056(b)-10  Effective dates.

    Except as specifically provided in Secs. 20.2056(b)-5(c)(3)(ii) and 
(iii), 20.2056(b)-7T(d)(3), 20.2056(b)-7(e)(5), and 20.2056(b)-8(b), 
the provisions of Secs. 20.2056(b)-5(c), 20.2056(b)-7, 20.2056(b)-8, 
and 20.2056(b)-9 are effective with respect to estates of decedents 
dying after March 1, 1994. With respect to decedents dying on or before 
March 1, 1994, the executor of the decedent's estate may rely on any 
reasonable interpretation of the statutory provisions. For these 
purposes, the provisions of Secs. 20.2056(b)-5(c), 20.2056(b)-7, 
20.2056(b)-8, and 20.2056(b)-9 (as well as project LR-211-76 (1984-1 
C.B. 598), see Sec. 601.601(d)(2)(ii)(b) of this chapter), are 
considered a reasonable interpretation of the statutory provisions.
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 97-3399 Filed 2-14-97; 8:45 am]
BILLING CODE 4830-01-U