[Federal Register Volume 74, Number 176 (Monday, September 14, 2009)]
[Proposed Rules]
[Pages 46957-46958]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-21986]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[REG-116614-08]
RIN 1545-BH90


Disregarded Entities and Excise Taxes

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 clarifying 
that a single-owner eligible entity that is disregarded as an entity 
separate from its owner for any purpose, but regarded as a separate 
entity for certain excise tax purposes, is treated as a corporation for 
tax administration purposes related to those excise taxes. Those 
regulations also make conforming changes to the tax liability rule for 
disregarded entities and the treatment of entity rule for disregarded 
entities with respect to employment taxes. The regulations affect 
disregarded entities in general and, in particular, disregarded 
entities that pay or pay over certain federal excise taxes or that are 
required to be registered by the IRS. The text of those temporary 
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 December 14, 2009.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-116614-08), 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-
116614-08), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue, NW., Washington, DC, or sent electronically via the Federal 
eRulemaking Portal at http://www.regulations.gov (IRS REG-116614-08).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Michael H. Beker, (202) 622-3070; concerning the submissions of 
comments and requests for a public hearing, Richard Hurst, (202) 622-
2949 (TDD telephone) (not toll-free numbers) and his e-mail address is 
[email protected].

SUPPLEMENTARY INFORMATION: 

Background and Explanation of Provisions

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register amend 26 CFR part 301. The temporary 
regulations clarify that a single-owner eligible entity that is 
disregarded as an entity separate from its owner for any purpose, but 
regarded as a separate entity for certain excise tax purposes, is 
treated as a corporation for tax administrative purposes related to 
those excise taxes (that is, excise taxes reported on Form 720, 
``Quarterly Federal Excise Tax Return;'' Form 730, ``Monthly Tax Return 
for Wagers;'' Form 2290, ``Heavy Highway Vehicle Use Tax Return;'' and 
Form 11-C, ``Occupation Tax and Registration Return for Wagering;'' 
excise tax refunds or payments claimed on Form 8849, ``Claim for Refund 
of Excise Taxes;'' and excise tax registrations on Form 637, 
``Application for Registration (For Certain Excise Tax Activities).'' 
The temporary regulations also make conforming changes to the tax 
liability rule for disregarded entities in Sec.  301.7701-2(c)(2)(iii) 
and the treatment of entity rule for disregarded entities with respect 
to employment taxes in Sec.  301.7701-2(c)(2)(iv)(B). The text of those 
temporary regulations also serves as the text of these proposed

[[Page 46958]]

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 has also 
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 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 
regulation has been 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 comments (a signed original 
and eight (8) copies) or electronic comments that are submitted timely 
to the IRS. The IRS and the Treasury Department specifically request 
comments on the clarity of the proposed rules and how they may be made 
easier to understand. All comments will be available for public 
inspection and copying. A public hearing may be scheduled if requested 
by any person who timely submits 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 Michael H. Beker, 
Office of the Associate Chief Counsel (Passthroughs and Special 
Industries). However, other personnel from the IRS and the 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. Section 301.7701-2 is amended by:
    1. Revising paragraphs (c)(2)(iii) and (c)(2)(iv)(B).
    2. Redesignating paragraph (c)(2)(v)(B) as paragraph (c)(2)(v)(C) 
and adding new paragraph (c)(2)(v)(B).
    3. In newly-designated paragraph (c)(2)(v)(C), Example (iv) is 
added.
    4. Revising paragraphs (e)(2), (e)(5) and (e)(6).
    The additions and revisions read as follows:


Sec.  301.7701-2  Business entities; definitions.

* * * * *
    (c) * * *
    (2) * * *
    (iii) [The text of this proposed amendment to Sec.  301.7701-
2(c)(2)(iii) is the same as the text of Sec.  301.7701-2T(c)(2)(iii) 
published elsewhere in this issue of the Federal Register].
    (iv) * * *
    (B) [The text of this proposed amendment to Sec.  301.7701-
2(c)(2)(iv)(B) is the same as the text of Sec.  301.7701-
2T(c)(2)(iv)(B) published elsewhere in this issue of the Federal 
Register].
* * * * *
    (v) * * *
    (B) [The text of this proposed amendment to Sec.  301.7701-
2(c)(2)(v)(B) is the same as the text of Sec.  301.7701-2T(c)(2)(v)(B) 
published elsewhere in this issue of the Federal Register].
    (C) * * * (iv) [The text of this proposed amendment to Sec.  
301.7701- 2(c)(2)(v)(C) Example (iv) is the same as the text of Sec.  
301.7701-2T(c)(2)(v)(C) Example (iv) published elsewhere in this issue 
of the Federal Register].
* * * * *
    (e) * * *
    (2) [The text of this proposed amendment to Sec.  301.7701-2(e)(2) 
is the same as the text of Sec.  301.7701-2T(e)(2) published elsewhere 
in this issue of the Federal Register].
* * * * *
    (5) [The text of this proposed amendment to Sec.  301.7701-2(e)(5) 
is the same as the text of Sec.  301.7701-2T(e)(5) published elsewhere 
in this issue of the Federal Register].
    (6) [The text of this proposed amendment to Sec.  301.7701-2(e)(6) 
is the same as the text of Sec.  301.7701-2T(e)(6) published elsewhere 
in this issue of the Federal Register].
* * * * *

L.E. Stiff,
Deputy Commissioner for Services and Enforcement.
[FR Doc. E9-21986 Filed 9-11-09; 8:45 am]
BILLING CODE 4830-01-P