[Federal Register Volume 63, Number 3 (Tuesday, January 6, 1998)]
[Proposed Rules]
[Pages 453-454]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG-121755-97]
RIN 1545-AV86
Reorganizations; Nonqualified Preferred Stock
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking by cross-reference to temporary
regulations and notice of public hearing.
-----------------------------------------------------------------------
SUMMARY: In the Rules and Regulations section of this issue of the
Federal Register, the IRS and Treasury Department are issuing a
temporary regulation under section 356(e) of the Internal Revenue Code
(Code) relating to the receipt of nonqualified preferred stock in
certain exchanges. The temporary regulation provides guidance on when
nonqualified preferred stock (as defined in section 351(g)(2)) will not
be treated as stock or securities for purposes of sections 354, 355,
and 356. The guidance also addresses the treatment of the receipt of a
right to acquire nonqualified preferred stock. The temporary regulation
provides that in certain circumstances the terms stock and securities
will not include nonqualified preferred stock, or a right to acquire
such stock, when received in exchange for stock or rights to acquire
stock. The text of the temporary regulation also serves as the text of
this proposed regulation. This document also provides notice of a
public hearing on this proposed regulation.
DATES: Written comments must be received by April 6, 1998. Requests to
appear and outlines of topics to be discussed at the public hearing
scheduled for May 5, 1998, at 10 a.m. must be received by April 14,
1998.
ADDRESSES: Send submissions to: CC:DOM:CORP:R [REG-121755-97], room
5226, Internal Revenue Service, POB 7604, Ben Franklin Station,
Washington, DC 20044. Submissions may be hand delivered between the
hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R [REG-121755-97], Courier's
Desk, Internal Revenue Service, 1111 Constitution Avenue NW,
Washington, DC. Alternatively, taxapayers 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 room 2615, Internal
Revenue Building, 1111 Constitution Avenue NW, Washington, DC 20224.
FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulation,
Michael J. Danbury, (202) 622-7750; concerning submissions and the
public hearing, LaNita Van Dyke, (202) 622-7180 (not toll-free
numbers).
SUPPLEMENTARY INFORMATION:
Background
A temporary regulation in the Rules and Regulations section of this
issue of the Federal Register amends the Income Tax Regulations (26 CFR
part 1) relating to section 356 by adding Sec. 1.356-6T. The text of
that temporary regulation also serves as the text of this proposed
regulation. The preamble to the temporary regulation explains the
reason for the addition.
[[Page 454]]
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 this regulation. Because the regulation
does 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 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 this proposed regulation is adopted as a final regulation,
consideration will be given to any written comments (a signed original
and eight (8) copies) that are submitted timely to the IRS. All
comments will be available for public inspection and copying.
A public hearing has been scheduled for May 5, 1998, at 10 a.m. in
room 2615, Internal Revenue Building, 1111 Constitution Ave., 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 who wish to present oral comments at the hearing must
submit written comments by April 6, 1998 and submit an outline of the
topics to be discussed and the time to be devoted to each topic (signed
original and eight (8) copies) by April 14, 1998.
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 this regulation is
Michael J. Danbury of the Office of Assistant Chief Counsel
(Corporate). However, other personnel from the IRS and Treasury
Department participated in its 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 continues to read,
in part, as follows:
Authority: 26 U.S.C. 7805 * * *
Par 2. Section 1.356-6 is added to read as follows:
Sec. 1.356-6 Rules for treatment of nonqualified preferred stock as
``other property.''
[The text of this proposed section is the same as the text of
Sec. 1.356-6T published elsewhere in this issue of the Federal
Register.]
Michael P. Dolan,
Deputy Commissioner of Internal Revenue.
[FR Doc. 98-18 Filed 1-5-98; 8:45 am]
BILLING CODE 4830-01-U