[Federal Register Volume 72, Number 40 (Thursday, March 1, 2007)]
[Proposed Rules]
[Pages 9284-9285]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-3533]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-157834-06]
RIN 1545-BG28


Corporate Reorganizations; Additional Guidance on Distributions 
Under Sections 368(a)(1)(D) and 354(b)(1)(B)

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 that amend 
Sec.  1.368-2T(l), which provides guidance regarding the qualification 
of certain transactions as reorganizations described in section 
368(a)(1)(D) where no stock and/or securities of the acquiring 
corporation are issued and distributed in the transaction. These 
regulations clarify that the rules in Sec.  1.368-2T(l) are not 
intended to affect the qualification of related party triangular asset 
acquisitions as reorganizations described in section 368. These 
regulations affect corporations engaging in such transactions and their 
shareholders. The text of those regulations also serves as the text of 
these proposed regulations.

DATES: Written or electronic comments and requests for a public hearing 
must be received by May 30, 2007.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-157834-06), Internal 
Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 
20044. Submissions may be hand delivered to CC:PA:LPD:PR (REG-157834-
06), Courier 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-157834-06).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Bruce A. Decker, (202) 622-7550; concerning submission of comments, 
requests for a public hearing, and/or a publication and regulations 
specialist, Kelly Banks, (202) 622-7180.

SUPPLEMENTARY INFORMATION:

Background

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register amend 26 CFR part 1. The temporary 
regulations amend Sec.  1.368-2T(l), which provides guidance regarding 
the qualification of certain transactions as reorganizations described 
in section 368(a)(1)(D) where no stock and/or securities of the 
acquiring corporation are issued and distributed in the transaction. 
The text of those regulations also serves as the text of these proposed 
regulations. The preamble to the temporary regulations explains the 
amendments.

Explanation of Provisions

    These regulations clarify that the rules in Sec.  1.368-2T(l) are 
not intended to affect the qualification of related party triangular 
asset acquisitions as reorganizations described in section 368.

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 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 a 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 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 Bruce A. Decker, 
Office of Associate Chief Counsel (Corporate).

[[Page 9285]]

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 continues to read as 
follows:

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

    Par. 2. Section 1.368-2 is amended by adding paragraph (l)(2)(iv) 
to read as follows:


Sec.  1.368-2  Definition of terms.

* * * * *
    [The text of this proposed amendment to Sec.  1.368-2(l)(2)(iv) is 
the same as the text of Sec.  1.368-2T(l)(2)(iv) published elsewhere in 
this issue of the Federal Register].

Kevin M. Brown,
Deputy Commissioner for Services and Enforcement.
[FR Doc. E7-3533 Filed 2-28-07; 8:45 am]
BILLING CODE 4830-01-P