[Federal Register Volume 69, Number 155 (Thursday, August 12, 2004)]
[Proposed Rules]
[Pages 49840-49841]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-18481]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[REG-124872-04]
RIN 1545-BD37


Clarification of Definitions

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 issue of the Federal Register contains temporary 
regulations that provide clarification of the definitions of a 
corporation and a domestic entity in circumstances where the business 
entity is considered to be created or organized in more than one 
jurisdiction. These regulations will affect business entities that are 
created or organized under the laws of more than one jurisdiction. The 
text of those temporary regulations also serves as the text of these 
proposed regulations. This document also provides a notice of a public 
hearing on these proposed regulations.

DATES: Written or electronic comments and must be received by November 
10, 2004. Requests to speak and outlines of topics to be discussed at 
the public hearing scheduled for November 3, 2004 must be received by 
October 15, 2004.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-124872-04), Room 
5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may also be hand-delivered Monday 
through Friday (excluding Federal holidays) between the hours of 8 a.m. 
and 4 p.m. to CC:PA:LPD:PR (REG-124872-04), Courier's Desk, Internal 
Revenue Service, 1111 Constitution Avenue NW., Washington, DC or sent 
electronically, via either the IRS internet site at www.irs.gov/regs or 
the Federal eRulemaking Portal at http://www.regulations.gov (IRS and 
REG-124872-04). 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, 
Thomas Beem, (202) 622-3860; concerning submissions of comments or the 
public hearing, Sonya Cruse, (202) 622-7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

    Temporary regulations in this issue of the Federal Register amend 
26 CFR part 301 relating to section 7701 of the Internal Revenue Code 
of 1986 (Code). The temporary regulations provide guidance as to the 
definitions of a corporation and of domestic and foreign entities in 
circumstances in which an entity is created or organized under the laws 
of more than one jurisdiction (a dually chartered entity). The text of 
those regulations also serves as the text of these proposed 
regulations. The preamble to the temporary regulations explains both 
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, and because 
the 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 7806(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.

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. 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 has been scheduled for November 3, 2004 at 10 a.m. 
in the Auditorium of the 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 earlier than 30 minutes prior to the start 
of the hearing. For information about having your name placed on the 
building access list to

[[Page 49841]]

attend the hearing, see the FOR FURTHER INFORMATION CONTACT section of 
this preamble.
    The rules of 26 CFR 601.601(a)(3) apply to this hearing. Persons 
who wish to present oral comments at the hearing must submit electronic 
or written comments and an outline of the topics to be discussed and 
the time devoted to each topic (signed original and eight (8) copies) 
by October 15, 2004. A period of ten minutes will be allotted to each 
person for making comments. An agenda showing the scheduling of 
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.

Proposed Effective Date

    The regulations proposed in this document would apply on August 12, 
2004 to all business entities existing on or after that date.

Drafting Information

    The principal author of these proposed regulations is Thomas Beem 
of the Office of Associate Chief Counsel (International). However, 
other personnel from the IRS and Treasury Department participated in 
their development.

List of Subjects in 26 CFR Part 301

    Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income 
taxes, Penalties, Reporting and Recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 301 is proposed to be amended as follows:

PART 301--PROCEDURE AND ADMINISTRATION

    Paragraph 1. The authority citation for part 301 continues to read, 
in part, as follows:

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

    Par. 2. In Sec.  301.7701-1, paragraph (d) is revised to read as 
follows:


Sec.  301.7701-1  Classification of organizations for federal tax 
purposes.

* * * * *
    (d) [The text of the proposed amendment revising Sec.  301.7701-
1(d) is the same as the text of Sec.  301.7701-1T(d) published 
elsewhere in this issue of the Federal Register.]
* * * * *
    Par. 3. In Sec.  301.7701-2 paragraph (b)(9) is added to read as 
follows:


Sec.  301.7701-2  Business entities; definitions.

* * * * *
    (b) * * *
    (9) [The text of the proposed amendment adding Sec.  301.7701-
2(b)(9) is the same as the text of Sec.  301.7701-2T(b)(9) published 
elsewhere in this issue of the Federal Register.]
* * * * *
    Par. 4. Section 301.7701-5 is revised to read as follows:


Sec.  301.7701-5  Domestic and foreign business entities.

    [The text of the proposed amendment revising Sec.  301.7701-5 is 
the same as the text of Sec.  301.7701-5T published elsewhere in this 
issue of the Federal Register.]

Mark E. Matthews,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 04-18481 Filed 8-11-04; 8:45 am]
BILLING CODE 4830-01-P