[Federal Register Volume 65, Number 15 (Monday, January 24, 2000)]
[Proposed Rules]
[Pages 3629-3630]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-1378]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1

[REG-116048-99]
RIN 1545-AX63


Stock Transfer Rules: Supplemental Rules

AGENCY:  Internal Revenue Service (IRS), Treasury.

ACTION:  Notice of proposed rulemaking and notice of public hearing.

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SUMMARY:  This document proposes, by cross-reference to temporary 
regulations, amendments to the final regulations concerning the Federal 
tax treatment of certain exchanges subject to section 367(b) of the 
Internal Revenue Code (Code). The temporary regulations, published in 
the Rules and Regulations section of this issue of the Federal 
Register, provide an election for certain taxpayers engaged in certain 
exchanges described in section 367(b). The temporary regulations 
provide guidance for taxpayers that make the specified election in 
order to determine the extent to which income must be included and 
certain corresponding adjustments must be made. The text of the 
temporary regulations also serves as the text of the proposed 
regulations. This document also provides notice of a public hearing on 
the proposed regulations.

DATES:  Written comments must be received by April 24, 2000. Requests 
to speak (with outlines of oral comments) at the public hearing 
scheduled for April 20, 2000, must be submitted by March 31, 2000.

ADDRESSES:  Send submissions to: CC:DOM:CORP:R (REG-116048-99), room 
5228, Internal Revenue Service, POB 7604, Ben Franklin Station, 
Washington, DC 20044. In the alternative, submissions may be hand 
delivered between the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R 
(REG-116048-99), 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 of the IRS Home Page, or by submitting comments directly 
to the IRS Internet site at: http://www.irs.ustreas.gov/prod/tax--regs/
regslist.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, Mark D. 
Harris, (202) 622-3860 (not a toll-free number); concerning submissions 
and the hearing, Guy Traynor, (202) 622-7180 (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 of 1995 (44 
U.S.C. 3507(d)). 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, OP:FS:FP, Washington, DC 
20224. Comments on the collection of information should be received by 
March 24, 2000. Comments are specifically requested concerning:
    Whether the proposed collection of information is necessary for the 
proper performance of the functions of the Internal Revenue Service, 
including whether the information will have practical utility;
    The accuracy of the estimated burden associated with the proposed 
collection of information (see below);
    How the quality, utility, and clarity of the information to be 
collected may be enhanced;
    How the burden of complying with the proposed collection of 
information may be minimized, including through the application of 
automated collection techniques or other forms of information 
technology; and
    Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of service to provide information.
    The collection of information in this proposed regulation is in 
Sec. 1.367(b)-3(b)(4). This information is required to properly make an 
election to include an amount in income that is different than the 
inclusion currently required under Sec. 1.367(b)-3 of the final 
regulations. This information will be used to verify proper compliance 
with the section 367(b) regulations, including that the election 
provided herein was made and that the required adjustments will be made 
by all parties to the section 367(b) transaction. The collection of 
information is mandatory. The likely respondents are businesses or 
other for-profit institutions.
    Estimated total annual reporting burden: 85 hours.

[[Page 3630]]

    Estimated average annual burden hours per respondent: 4 hours, 15 
minutes.
    Estimated number of respondents: 20
    Estimated annual frequency of responses: once
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a valid 
control number assigned by the Office of Management and Budget.
    Books or records relating to a collection of information must be 
retained as long as their contents may become material in the 
administration of any internal revenue law. Generally, tax returns and 
tax return information are confidential, as required by 26 U.S.C. 6103.

Background

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register amend the Income Tax Regulations (26 CFR 
part 1) relating to section 367(b). The temporary regulations contain 
rules that provide an election for certain taxpayers engaged in certain 
exchanges described in section 367(b).
    The text of those temporary regulations also serves as the text of 
these proposed regulations. The preamble to the temporary regulations 
explains the proposed regulations.

Proposed Effective Date

    Except as otherwise specified, these regulations are proposed to 
apply to section 367(b) exchanges that occur on or after the date final 
regulations are published in the Federal Register.

Special Analyses

    It has been determined that these regulations are not a significant 
regulatory action as defined in Executive Order 12866. Therefore, a 
regulatory assessment is not required. It is hereby certified that the 
collection of information contained in these regulations will not have 
a significant economic impact on a substantial number of small 
entities. This certification is based upon the fact that the number of 
section 367(b) exchanges that require reporting under these regulations 
is estimated to be only 20 per year. Therefore, a Regulatory 
Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. 
chapter 6) is not required.
    Pursuant to section 7805(f) of the Code, these proposed regulations 
will be submitted to the Chief Counsel for Advocacy of the Small 
Business Administration for comment on their impact.

Comments and Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any written comments (preferably a 
signed original and eight (8) copies) that are submitted timely to the 
IRS. The IRS and Treasury request comments on the clarity of the 
proposed regulation and how it may be made easier to understand. All 
comments will be available for public inspection and copying.
    A public hearing has been scheduled for April 20, 2000, beginning 
at 10 a.m., in room 2615, Internal Revenue Building, 1111 Constitution 
Avenue 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 the hearing.
    Persons that wish to present oral comments at the hearing must 
submit timely written comments and an outline of the topics to be 
discussed and the time to be devoted to each topic by (preferably a 
signed original and eight (8) copies) March 31, 2000. However, comments 
not to be presented at the hearing must be submitted by April 24, 2000.
    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 
Mark Harris of the Office of Associate Chief Counsel (International). 
However, other personnel from the IRS and Treasury Department 
participated in their development.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 1 is proposed to be amended as follows:
    Income taxes, Reporting and recordkeeping requirements.

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 1.367(b)-3 is amended by adding paragraph (b)(4) to 
read as follows:


Sec. 1.367(b)-3  Repatriation of foreign corporate assets in certain 
nonrecognition transactions.

* * * * *
    (b) * * *
    (4) [The text of this proposed addition is the same as the text of 
Sec. 1.367(b)-3T(b)(4) published elsewhere in this issue of the Federal 
Register].

John M. Dalrymple,
Acting Deputy Commissioner of Internal Revenue.
[FR Doc. 00-1378 Filed 1-21-00; 8:45 am]
BILLING CODE 4830-01-U