[Federal Register Volume 63, Number 160 (Wednesday, August 19, 1998)]
[Proposed Rules]
[Page 44416]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-21827]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-115446-97]
RIN 1545-AV68


Termination of Puerto Rico and Possession Tax Credit; New Lines 
of Business Prohibited

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 TD 8778, published elsewhere in this issue of the Federal 
Register, the IRS is issuing temporary regulations that provide 
guidance regarding the addition of a substantial new line of business 
by a possessions corporation that is an existing credit claimant. These 
regulations reflect changes made by the Small Business Job Protection 
Act of 1996. 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: Written comments must be received by November 17, 1998. Requests 
to speak and outlines of topics to be discussed at the public hearing 
scheduled for Tuesday, December 1, 1998, at 10 a.m. must be received by 
Tuesday, November 10, 1998.

ADDRESSES: Send submissions to: CC:DOM:CORP:R (REG-115446-97), 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-115446-97), 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 room 2615, Internal 
Revenue Building, 1111 Constitution Avenue, NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Patricia 
A. Bray or Elizabeth Beck, (202) 622-3880 or Jacob Feldman, (202) 622-
3830; concerning submissions and the hearing, Michael Slaughter, (202) 
622-7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

    Temporary Regulations in the Rules and Regulations portion of this 
issue of the Federal Register amend Income Tax Regulations (26 CFR Part 
1) relating to section 936. Section 1.936-11T, published in TD 8778, 
provides guidance to possessions corporations that could lose their 
status as an existing credit claimant, and, as a result, their right to 
claim the possession tax credit, due to the addition of a substantial 
new line of business.
    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 Analysis

    It has been determined that this notice of proposed rulemaking is 
not a significant regulatory action as defined in Executive Order 
12866. Therefore, a regulatory assessment is not required. It also has 
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 
the regulations do 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 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 written comments (a signed original 
and eight (8) copies) that are submitted timely to the IRS. All 
comments will be made available for public inspection and copying.
    A public hearing has been scheduled for December 1, 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 Internal Revenue Building lobby more than 15 
minutes before the hearing starts.
    The rules of 26 CFR 601.601(a)(3) apply to this hearing.
    Persons who wish to present oral comments at the hearing must 
submit written comments and an outline of the topic (preferably a 
signed original and eight (8) copies) to be discussed by November 10, 
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 these regulations is 
Patricia A. Bray of the Office of the Associate Chief Counsel 
(International). Other personnel from the IRS and the Department of the 
Treasury participated in the development of these regulations.

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 * * *

    Section 1.936-11 also issued under 26 U.S.C. 936. * * *
    Par. 2. Section 1.936-11 is added to read as follows:


Sec. 1.936-11  New lines of business prohibited.

    [The text of this proposed section is the same as the text of 
Sec. 1.936-11T published elsewhere in this issue of the Federal 
Register.]
Michael P. Dolan,
Deputy Commissioner of Internal Revenue.
[FR Doc. 98-21827 Filed 8-18-98; 8:45 am]
BILLING CODE 4831-01-U