[Federal Register Volume 68, Number 124 (Friday, June 27, 2003)]
[Proposed Rules]
[Pages 38247-38248]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-16230]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-108676-03]
RIN 1545-BC00


Distributions of Interests in a Loss Corporation from Qualified 
Trusts

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: This document contains proposed regulations under section 382 
of the Internal Revenue Code of 1986. The proposed regulations affect 
loss corporations and provide guidance on whether a loss corporation 
has an ownership change where a qualified trust described in section 
401(a) distributes an ownership interest in an entity. The text of the 
temporary regulations published in this issue of the Federal Register 
serves as the text of these proposed regulations.

DATES: Written or electronic comments and requests for a public hearing 
must be received by September 25, 2003.

ADDRESSES: Send submissions to: CC:PA:RU (REG-108676-03), room 5226, 
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, 
DC 20044. Submissions may be hand-delivered Monday through Friday 
between the hours of 8 a.m. and 4 p.m. to: CC:PA:RU (REG-108676-03), 
Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW., 
Washington, DC. Alternatively, taxpayers may submit electronic comments 
directly to the IRS Internet site at http://www.irs.gov/regs.

[[Page 38248]]


FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Martin Huck, (202) 622-7750; concerning submissions of comments and/or 
requests for a public hearing, Treena Garrett, (202) 622-7180 (not 
toll-free numbers).

SUPPLEMENTARY INFORMATION: 

Background and Explanation of Provisions

    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 382. The temporary regulations provide 
rules for determining whether a loss corporation has an ownership 
change where a qualified trust described in section 401(a) distributes 
an ownership interest in an entity. The text of those regulations also 
serves as the text of these proposed regulations. The preamble to the 
temporary regulations explains the amendments and these proposed 
regulations.

Special Analyses

    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 is hereby 
certified that these proposed regulations will not have a significant 
economic impact on a substantial number of small entities. This 
certification is based on the fact that the regulations provide relief 
to qualifying loss corporations that might be affected by an unintended 
consequence of the operation of the statute. Therefore, a Regulatory 
Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. 
chapter 6) is not required. Nevertheless, the IRS and Treasury request 
comments from small entities that believe they might be adversely 
affected by these regulations. 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 their impact.

Comments and Requests for a 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) or electronic comments that are submitted timely 
to the IRS. All comments will be available for public inspection and 
copying. A public hearing may be scheduled if requested in writing by 
any person that timely submits written comments. If a public hearing is 
scheduled, notice of the date, time, and place for the hearing will be 
published in the Federal Register.

Drafting Information

    The principal author of these regulations is Martin Huck, Office of 
Associate Chief Counsel (Corporate). However, other personnel from the 
IRS and 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 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 in part as follows:

    Authority: 26 U.S.C. 7805 * * *
    Section 1.382-10 is also issued under 26 U.S.C. 382(m). * * *

    Par. 2. Section 1.382-1 is amended by revising the entry for Sec.  
1.382-10 to read as follows:


Sec.  1.382-10  Special rules for determining time and manner of 
acquisition of an interest in a loss corporation (temporary).

    Par. 3. Section 1.382-10 is added to read as follows:


Sec.  1.382-10  Special rules for determining time and manner of 
acquisition of an interest in a loss corporation (temporary).

    [The text of proposed Sec.  1.382-10 is the same as the text of 
Sec.  1.382-10T published elsewhere in this issue of the Federal 
Register].

Robert E. Wenzel,
Deputy Commissioner of Internal Revenue.
[FR Doc. 03-16230 Filed 6-26-03; 8:45 am]
BILLING CODE 4830-01-P