[Federal Register Volume 77, Number 142 (Tuesday, July 24, 2012)]
[Rules and Regulations]
[Pages 43157-43158]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-17959]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[TD 9596]
RIN 1545-BK39


Disregarded Entities and the Indoor Tanning Services Excise Tax; 
Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

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SUMMARY: This document contains corrections to temporary regulations 
(TD 9596), which were published in the Federal Register on June 25, 
2012 (77 FR 37806) relating to disregarded entities (including 
qualified subchapter S subsidiaries) and the indoor tanning services 
excise tax.

DATES: This correction is effective on July 24, 2012, and applies on 
and after June 25, 2012.

FOR FURTHER INFORMATION CONTACT: Michael H. Beker, (202) 622-3130 (not 
a toll-free number).

SUPPLEMENTARY INFORMATION: 

Background

    The temporary regulations (TD 9596) that are the subject of this 
correction are under section 7701 of the Internal Revenue Code.

Need for Correction

    As published, the temporary regulations contain errors that may 
prove to be misleading and are in need of clarification.

[[Page 43158]]

List of Subjects in 26 CFR Part 301

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

Correction of Publication

    Accordingly, 26 CFR part 301 is corrected by making the following 
correcting amendment:

PART 301--PROCEDURE AND ADMINISTRATION

0
Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

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


Sec.  301.7701-2T  [Corrected]

0
Par. 2. Section 301.7701-2T is revised to read as follows:


Sec.  301.7701-2T  Business entities; definitions (temporary).

    (a) Through (c)(2)(iv) [Reserved]. For further guidance, see Sec.  
301.7701-2(a) through (c)(2)(iv).
    (A) In general. Section 301.7701-2(c)(2)(i) (relating to certain 
wholly owned entities) does not apply to taxes imposed under Subtitle 
C--Employment Taxes and Collection of Income Tax (Chapters 21, 22, 23, 
23A, 24 and 25 of the Internal Revenue Code). However, Sec.  301.7701-
2(c)(2)(i) does apply to withholding requirements imposed under section 
3406 (backup withholding). The owner of a business entity that is 
disregarded under Sec.  301.7701-2 is subject to the withholding 
requirements imposed under section 3406 (backup withholding). Section 
301.7701-2(c)(2)(i) also applies to taxes imposed under Subtitle A, 
including Chapter 2--Tax on Self Employment Income. The owner of an 
entity that is treated in the same manner as a sole proprietorship 
under Sec.  301.7701-2(a) will be subject to tax on self-employment 
income.
    (B) [Reserved]. For further guidance, see Sec.  301.7701-
2(c)(2)(iv)(B).
    (C) Exceptions. For exceptions to the rule in Sec.  301.7701-
2(c)(2)(iv)(B), see sections 31.3121(b)(3)-1(d), 31.3127-1(c), and 
31.3306(c)(5)-1(d).
    (D) through (c)(2)(v) [Reserved]. For further guidance, see Sec.  
301.7701-2(c)(2)(iv)(D) through (c)(2)(v).
    (vi) Tax liabilities with respect to the indoor tanning services 
excise tax--(A) In general. Notwithstanding any other provision of 
Sec.  301.7701-2, Sec.  301.7701-2(c)(2)(i) (relating to certain wholly 
owned entities) does not apply for purposes of--
    (1) Federal tax liabilities imposed by Chapter 49 of the Internal 
Revenue Code;
    (2) Collection of tax imposed by Chapter 49 of the Internal Revenue 
Code; and
    (3) Claims of a credit or refund related to the tax imposed by 
Chapter 49 of the Internal Revenue Code.
    (B) Treatment of entity. An entity that is disregarded as an entity 
separate from its owner for any purpose under Sec.  301.7701-2 is 
treated as a corporation with respect to items described in paragraph 
(c)(2)(vi)(A) of this section.
    (d) through (e)(4) [Reserved]. For further guidance, see Sec.  
301.7701-2(d) through (e)(4).
    (5) Paragraphs (c)(2)(iv)(A) and (c)(2)(iv)(C) of this section 
apply to wages paid on or after November 1, 2011. For rules that apply 
to paragraph (c)(2)(iv)(A) of this section before November 1, 2011, see 
26 CFR part 301 revised as of April 1, 2009. However, taxpayers may 
apply paragraphs (c)(2)(iv)(A) and (c)(2)(iv)(C) of this section to 
wages paid on or after January 1, 2009.
    (e)(6) through (e)(7) [Reserved]. For further guidance, see Sec.  
301.7701-2(e)(6) and (e)(7).
    (8) Expiration date. The applicability of paragraphs (c)(2)(iv)(A) 
and (c)(2)(iv)(C) of this section expires on or before October 31, 
2014.
    (9) Indoor tanning services excise tax--(i) Effective/applicability 
date. Paragraph (c)(2)(vi) of this section applies to taxes imposed on 
amounts paid on or after July 1, 2012.
    (ii) Expiration date. The applicability of paragraph (c)(2)(vi) of 
this section expires on or before June 22, 2015.

LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel (Procedure and Administration).
[FR Doc. 2012-17959 Filed 7-23-12; 8:45 am]
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