[Federal Register Volume 69, Number 77 (Wednesday, April 21, 2004)]
[Proposed Rules]
[Pages 21454-21455]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-8705]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-139792-02]
RIN 1545-BB11


Partner's Distributive Share: Foreign Tax Expenditures

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rule making by cross-reference to temporary 
regulations and notice of public hearing.

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SUMMARY: This document contains proposed regulations relating to the 
proper allocation of partnership expenditures for foreign taxes. The 
proposed regulations affect partnerships and their partners. In the 
rules and regulations portion of this issue of the Federal Register, 
the IRS is issuing temporary regulations that modify the rules relating 
to the proper allocation of creditable foreign taxes. The text of the 
temporary regulations also serves as the text of these proposed 
regulations. This document also contains a notice of public hearing on 
these proposed regulations.

[[Page 21455]]


DATES: Written or electronic comments must be received by Tuesday, 
August 24, 2004. Outlines of topics to be discussed at the public 
hearing scheduled for Tuesday, September 14, 2004, at 10 a.m., must be 
received by Tuesday, August 24, 2004.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-139792-02), room 
5203, Internal Revenue Service, P.O. Box 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-
139792-02), 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 or http://www.regulations.gov. The public hearing will 
be held in the Auditorium, Internal Revenue Building, 1111 Constitution 
Avenue, NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Beverly M. Katz, (202) 622-3050; concerning submissions and the 
hearing, Treena Garrett, (202) 622-7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

    The temporary regulations amend the rules in 26 CFR part 1 
regarding the allocation of foreign taxes among partners under section 
704(b). The text of the temporary regulations also serves as the text 
of these proposed regulations. The preamble to the temporary 
regulations explains the regulation.

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 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 
these regulations do not impose on small entities a collection of 
information requirement, the Regulatory Flexibility Act (5 U.S.C. 
chapter 6) does not apply. Therefore, a Regulatory Flexibility Analysis 
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 Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any written (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 has been scheduled for Tuesday, September 14, 
2004, at 10 a.m. in the Auditorium, Internal Revenue Building, 1111 
Constitution Avenue, NW., Washington, DC. Because of access 
restrictions, visitors will not be admitted beyond the immediate 
entrance area more than 30 minutes before the hearing starts. For 
information about having your name on the building access list to 
attend the hearing, see the FOR FURTHER INFORMATION CONTACT portion of 
this preamble. The rules of 26 CFR 601.601(a)(3) apply to the hearing. 
Persons who wish to present oral comments must submit written or 
electronic comments by Tuesday, August 24, 2004, and an outline of the 
topics to be discussed and the time to be devoted to each topic (a 
signed original and eight (8) copies) by Tuesday, August 24, 2004. 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 this regulation is Beverly M. Katz, Office 
of the Associate Chief Counsel (Passthroughs & Special Industries). 
However, other personnel from the IRS and Treasury Department 
participated in its 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

    1. The authority citation for part 1 continues to read in part as 
follows:

    Authority: 26 U.S.C. 7805 * * *

    2. Section 1.704-1 is amended as follows:
    1. Paragraphs (b)(1)(ii)(b) and (b)(4)(xi) are added.
    2. Paragraph (b)(5) is amended by adding Example 25 through Example 
28.
    The additions and revisions read as follows.


Sec.  1.704-1  Partner's distributive share.

* * * * *
    (b) * * *
    (1) * * *
    (ii) * * *
    (b) [The text of this proposed amendment is the same as the text of 
Sec.  1.704-1T(b)(1)(ii)(b) published elsewhere in this issue of the 
Federal Register].
* * * * *
    (4) * * *
    (xi) [The text of this proposed amendment is the same as the text 
of Sec.  1.704-1T(b)(4)(xi) published elsewhere in this issue of the 
Federal Register].
* * * * *
    (5) [The text of this proposed amendment of Sec.  1.704-1(b)(5) is 
the same as the text of Sec.  1.704-1T(b)(5) published elsewhere in 
this issue of the Federal Register].

John M. Dalrymple,
Acting Deputy Commissioner for Services and Enforcement.
[FR Doc. 04-8705 Filed 4-20-04; 8:45 am]
BILLING CODE 4830-01-P