[Federal Register Volume 69, Number 149 (Wednesday, August 4, 2004)]
[Proposed Rules]
[Pages 47043-47044]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17540]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-152549-03]
RIN 1545-BC69


Section 179 Elections

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: In the Rules and Regulations section of this issue of the 
Federal Register, the IRS is issuing temporary regulations under 
section 179 of the Internal Revenue Code relating to the election to 
expense the cost of property subject to section 179. The temporary 
regulations reflect changes to the law made by the Jobs and Growth Tax 
Relief Reconciliation Act of 2003. The text of those temporary 
regulations also serves as the text of these proposed regulations. This 
document also provides notice of a public hearing on these proposed 
regulations.

DATES: Written or electronic comments must be received by November 2, 
2004. Requests to speak with outlines of topics to be discussed at the 
public hearing scheduled for Tuesday, November 30, 2004, at 10 a.m., 
must be received by November 9, 2004.

ADDRESSES: Send submissions to CC:PA:LPD:PR (REG-152549-03), room 5203, 
Internal Revenue Service, PO 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-
152549-03), 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 or via the Federal 
eRulemaking Portal at http://www.regulations.gov (IRS--REG-152549-03). 
The public hearing will be held in room 4718, Internal Revenue 
Building, 1111 Constitution Avenue NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Winston Douglas, (202) 622-3110; concerning submissions of comments, 
the hearing, and/or to be placed on the building access list to attend 
the hearing, Robin Jones, (202) 622-7180 (not toll-free numbers).

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, SE:W:CAR:MP:T:T:SP, 
Washington, DC 20224. Comments on the collection of information should 
be received by October 4, 2004. 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 collections of information in this proposed regulation are in 
Sec. Sec.  1.179-2T and 1.179-5T. This information is required by Sec.  
1.179-2T to insure that married individuals filing separate returns 
properly allocate the cost of section 179 property elected to be 
expensed in a taxable year and that the dollar limitation is properly 
allocated among the component members of a controlled group. Also, this 
information is required by Sec.  1.179-5T to insure the specific 
identification of each piece of acquired section 179 property and 
reflect how and from whom such property was placed in service. This 
information will be used for audit and examination purposes. The 
collection of information is required to obtain a benefit. The likely 
respondents and/or recordkeepers are individuals, farms, and small 
businesses.
    Estimated total annual reporting and/or recordkeeping burden: 
3,015,000 hours.

[[Page 47044]]

    The estimated annual burden per respondent/recordkeeper varies from 
.50 to 1 hour, depending on individual circumstances, with an estimated 
average of .75 hour.
    Estimated number of respondents and/or recordkeepers: 4,025,000.
    Estimated frequency of responses: Annually.
    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 26 CFR part 1 relating to section 
179 of the Internal Revenue Code (Code). The temporary regulations 
provide guidance under section 179 for making and revoking elections to 
expense the cost of property subject to section 179. 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 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 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. It is hereby 
certified that the collection of information in these regulations will 
not have a significant economic impact on a substantial number of small 
entities. This certification is based upon the fact, as discussed 
earlier in this preamble, that the amount of time necessary to record 
and retain the required information will be minimal for those taxpayers 
electing to expense the cost of section 179 property. 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, 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 comments (a signed original 
and eight (8) copies) or electronic comments that are submitted timely 
to the IRS. The IRS and Treasury Department specifically 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 has been scheduled for November 30, 2004, 
beginning at 10 a.m., in room 4718, Internal Revenue Building, 1111 
Constitution Avenue, NW., Washington, DC. Due to building security 
procedures, visitors must enter at the Constitution Avenue entrance. In 
addition, all visitors must present photo identification to enter the 
building. 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 placed on the 
building access list to attend the hearing, see the FOR FURTHER 
INFORMATION CONTACT section of this preamble.
    The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who 
wish to present oral comments at the hearing must submit an outline of 
the topics to be discussed and the time to be devoted to each topic 
(signed original and eight (8) copies) by November 9, 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 these regulations is Winston H. Douglas, 
Office of Associate Chief Counsel (Passthroughs and Special 
Industries). 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 reads as follows:

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

    Par. 2. Section 1.179-2 is amended by revising paragraphs (b)(1) 
and (b)(2)(ii) to read as follows:


Sec.  1.179-2  Limitations on amount subject to section 179 election.

* * * * *
    (b) * * *
    (1) [The text of the proposed amendment to Sec.  1.179-2(b)(1) is 
the same as the text of Sec.  1.179-2T(b)(1) published elsewhere in 
this issue of the Federal Register].
    (2) * * *
    (i) * * *
    (ii) [The text of the proposed amendment to Sec.  1.179-2(b)(2)(ii) 
is the same as the text of Sec.  1.179-2T(b)(2)(ii) published elsewhere 
in this issue of the Federal Register].
    Par. 3. Section 1.179-4 is amended by revising paragraph (a) to 
read as follows:


Sec.  1.179-4  Definitions.

* * * * *
    (a) [The text of the proposed amendment to Sec.  1.179-4(a) is the 
same as the text of Sec.  1.179-4T(a) published elsewhere in this issue 
of the Federal Register].
* * * * *
    Par. 4. Section 1.179-5 is amended by adding paragraph (c) to read 
as follows:


Sec.  1.179-5  Time and manner of making election.

* * * * *
    (c) [The text of the proposed amendment of Sec.  1.179-5(c) is the 
same as the text of Sec.  1.179-5T(c) published elsewhere in this issue 
of the Federal Register].
    Par. 5. Section 1.179-6 is revised to read as follows:


Sec.  1.179-6  Effective date.

    [The text of the proposed amendment to Sec.  1.179-6 is the same as 
the text of Sec.  1.179-6T published elsewhere in this issue of the 
Federal Register].

    Approved: July 21, 2004.
Mark E. Matthews,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 04-17540 Filed 8-3-04; 8:45 am]
BILLING CODE 4830-01-P