[Federal Register Volume 76, Number 137 (Monday, July 18, 2011)]
[Proposed Rules]
[Pages 42076-42077]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-17919]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-126519-11]
RIN 1545-BK41


Determining the Amount of Taxes Paid for Purposes of the Foreign 
Tax Credit

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 in this issue of the 
Federal Register, the IRS is issuing temporary regulations that provide 
guidance relating to the determination of the amount of taxes paid for 
purposes of the foreign tax credit. These regulations address certain 
highly structured arrangements that produce inappropriate foreign tax 
credit results. The text of those temporary regulations published in 
this issue of the Federal Register also serves as the text of these 
proposed regulations.

DATES: Written or electronic comments and requests for a public hearing 
must be received by October 17, 2011.

ADDRESSES: Send submissions to CC:PA:LPD:PR (REG-126519-11), room 5205, 
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-
126519-11), Courier's desk, Internal Revenue Service, 1111 Constitution 
Avenue, NW., Washington, DC 20044, or sent electronically, via the 
Federal eRulemaking Portal at http://www.regulations.gov (IRS REG-
126519-11).

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Jeffrey P. 
Cowan, (202) 622-3850; concerning submissions of comments or a request 
for a public hearing, Oluwafunmilayo Taylor at (202) 622-7180.

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register contain amendments to the Income Tax 
Regulations (26 CFR part 1) which provide rules relating to the 
determination of the amount of taxes paid for purposes of the foreign 
tax credit. The text of those regulations also serves as the text of 
these proposed regulations. The preamble to the temporary regulations 
explains the temporary regulations and these proposed regulations. The 
regulations affect individuals and corporations that claim direct and 
indirect foreign tax credits.

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 
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), these regulations have 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 electronic or written comments (a

[[Page 42077]]

signed original and eight (8) copies) that are submitted timely to the 
IRS. All comments will be available for public inspection and copying. 
A public hearing may be scheduled if requested in writing by any person 
who timely submitted written comments. If a public hearing is 
scheduled, notice of the date, time, and place of the hearing will be 
published in the Federal Register.

Drafting Information

    The principal author of these regulations is Jeffrey P. Cowan of 
the Office of Chief Counsel (International). However, other personnel 
from the Treasury Department and the IRS 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 continues to read in 
part as follows:

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

    Par. 2. Section 1.901-2 is amended by revising paragraphs 
(e)(5)(iii) and (iv) and adding paragraph (h)(3) to read as follows:


Sec.  1.901-2  Income, war profits, or excess profits tax paid or 
accrued.

* * * * *
    (e) * * *
    (5) * * *
    (iii) through (iv)(B)(1)(ii) [The text of proposed Sec.  1.901-
2(e)(5)(iv)(B)(1)(iii) through (iv)(B)(1)(ii) is the same as the text 
of Sec.  1.901-2T(e)(5)(iv)(B)(1)(iii) through (iv)(B)(1)(ii) published 
elsewhere in this issue of the Federal Register.]
    (iii) [The text of proposed Sec.  1.901-2(e)(5)(iv)(B)(1)(iii) is 
the same as the text of Sec.  1.901-2T(e)(5)(iv)(B)(1)(iii) published 
elsewhere in this issue of the Federal Register.]
* * * * *
    (h) * * *
    (3) [The text of proposed Sec.  1.901-2(h)(3) is the same as the 
text of Sec.  1.901-2T(h)(3) published elsewhere in this issue of the 
Federal Register.]

Steven T. Miller,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2011-17919 Filed 7-14-11; 8:45 am]
BILLING CODE 4830-01-P