[Federal Register Volume 68, Number 217 (Monday, November 10, 2003)]
[Proposed Rules]
[Pages 63743-63744]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-28191]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 68, No. 217 / Monday, November 10, 2003 / 
Proposed Rules  

[[Page 63743]]



DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-115472-03]
RIN 1545-BC04


Return of Partnership Income

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 the Federal Register, 
the IRS is issuing temporary regulations that authorize the 
Commissioner to provide exceptions to the requirements of section 
6031(a) of the Internal Revenue Code for certain partnerships by 
guidance published in the Internal Revenue Bulletin. The text of those 
temporary regulations also serves as the text of these proposed 
regulations. The regulations generally affect both certain partnerships 
that invest in tax-exempt obligations and partners in those 
partnerships.

DATES:  Written or electronic comments must be received by February 9, 
2004.

ADDRESSES:  Send submissions to: CC:PA:LPD:PR (REG-115472-03), room 
5203, 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:LPD:PR (REG-
115472-03), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue, NW., Washington, DC. Alternatively, taxpayers may submit 
comments electronically via the Internet directly to the IRS Internet 
site at http://www.irs.gov/regs.

FOR FURTHER INFORMATION CONTACT:  Concerning the proposed regulations, 
David A. Shulman, (202) 622-3070 (not a toll-free number); concerning 
the submissions of comments or the request for a public hearing, Guy 
Traynor, (202) 622-3693 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    Temporary regulations published elsewhere in this issue of the 
Federal Register amend the Income Tax Regulations (26 CFR part 1) 
relating to section 6031(a). The temporary regulations authorize the 
Commissioner to provide, in guidance published in the Internal Revenue 
Bulletin, exceptions to the requirements of section 6031(a) if all or 
substantially all of the partnership's income is derived from the 
holding or disposition of tax-exempt obligations (as defined in section 
1275(a)(3) and Sec.  1.1275-1(e)) or shares in a regulated investment 
company (as defined in section 851(a)) that pays exempt-interest 
dividends (as defined in section 852(b)(5)). 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.

Proposed Effective Date

    These regulations are proposed to apply November 5, 2003.

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 regulations will not have a significant economic 
impact on a substantial number of small entities. This certification is 
based upon the fact that relatively few partnerships have income that 
is primarily from tax-exempt obligations. Furthermore, the purpose of 
this regulation is to decrease (rather than increase) the number of 
entities required to file a partnership return. 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 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 David A. Shulman of 
the Office of the Associate Chief Counsel (Passthroughs & Special 
Industries), IRS. 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 
revising the entry for ``Section 1.6031(a)-1'' to read in part as 
follows:

    Authority: 26 U.S.C. 7805. * * *
    Section 1.6031(a)-1 is also issued under section 404 of the Tax 
Equity and Fiscal Responsibility Act of 1982 (Pub. L. 97-248; 96 
Stat. 324, 669) (TEFRA), and 26 U.S.C. 6031. * * *

    Par. 2. Section 1.6031(a)-1 is amended as follows:
    1. Paragraph (a)(3)(ii) is revised.
    2. Paragraph (f) is revised.
    The revisions read as follows:


Sec.  1.6031(a)-1  Return of partnership income.

    (a) * * *
    (3) * * *
    (i) * * *
    (ii) [The text of the proposed amendment to Sec.  1.6031(a)-1 
(a)(3)(ii) is the same as the text of Sec.  1.6031(a)-1T (a)(3)(ii) 
published elsewhere in this issue of the Federal Register].
* * * * *

[[Page 63744]]

    (f) * * *
    (1) * * *
    (2) [The text of the proposed amendment to Sec.  1.6031(a)-1(f)(2) 
is the same as the text of Sec.  1.6031(a)-1T (f)(2) published 
elsewhere in this issue of the Federal Register].

Mark E. Matthews,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 03-28191 Filed 11-5-03; 1:41 pm]
BILLING CODE 4830-01-P