[Federal Register Volume 68, Number 138 (Friday, July 18, 2003)]
[Proposed Rules]
[Pages 42652-42653]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-18146]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-113112-03]
RIN 1545-BB98


Reduction of Tax Attributes Due to Discharge of Indebtedness

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations.

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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 reduction of tax attributes under sections 108 and 1017 of the 
Internal Revenue Code. The temporary regulations affect taxpayers that 
exclude discharge of indebtedness income from gross income under 
section 108. The text of those regulations also serves as the text of 
these proposed regulations.

DATES: Written or electronic comments must be received by October 16, 
2003.

ADDRESSES: Send submissions to: CC:PA:RU (REG-113112-03), 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 4 p.m. to CC:PA:RU (REG-113112-03), Courier's Desk, Internal 
Revenue Service, 1111 Constitution Avenue, NW., Washington, DC or sent 
electronically, via the IRS Internet site at: http://www.irs.gov/regs.

FOR FURTHER INFORMATION CONTACT: Theresa M. Kolish ((202) 622-7930) of 
the Office of the Associate Chief Counsel (Corporate) (not a toll-free 
number).

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 sections 108 and 1017. The temporary regulations 
will affect taxpayers that exclude discharge of indebtedness income 
from gross income under section 108. The text of those temporary 
regulations also serves as the text of these proposed regulations. The 
preamble to the temporary regulations explains the amendments.

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 has also 
been determined that section 553(b) of the Administrative Procedures 
Act (5 U.S.C. chapter 5) does not apply to these regulations, and, 
because the

[[Page 42653]]

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 Requests for Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any written (a signed original and 8 
copies) or electronic comments that are submitted timely to the IRS. 
The IRS and Treasury Department request comments on the clarity of the 
proposed rules and how they can be made easier to understand. All 
comments will be available for public inspection and copying. A public 
hearing will 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 public hearing will be 
published in the Federal Register.

Drafting Information

    The principal author of these regulations is Theresa M. Kolish, 
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 proposed to be amended as follows:

PART 1--INCOME TAXES

    Paragraph 1. The authority citation for part 1 is amended by adding 
the following entry in numerical order to read as follows:

    Authority: 26 U.S.C. 7805 * * *
    Section 1.108-7 also issued under 26 U.S.C. 108. * * *

    Par. 2. Section 1.108-7 is added to read as follows:


Sec.  1.108-7  Reduction of attributes.

[The text of the proposed Sec.  1.108-7 is the same as the text for 
Sec.  1.108-7T published elsewhere in this issue of the Federal 
Register].
    Par. 3. Section 1.1017-1 is amended by adding paragraph (b)(4) to 
read as follows:


Sec.  1.1017-1  Basis reductions following a discharge of indebtedness.

* * * * *
    (b) * * *
    (4) [The text of the proposed Sec.  1.1017-1(b)(4) is the same as 
the text for Sec.  1.1017-1T(b)(4) published elsewhere in this issue of 
the Federal Register].
* * * * *

Robert E. Wenzel,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 03-18146 Filed 7-17-03; 8:45 am]
BILLING CODE 4830-01-P