[Federal Register Volume 80, Number 181 (Friday, September 18, 2015)]
[Proposed Rules]
[Pages 56415-56416]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-21753]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-127895-14]
RIN 1545-BM33


Dividend Equivalents From Sources Within the United States

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: 

DATES: Written or electronic comments must be received by December 17, 
2015. Outlines of topics to be discussed at the public hearing 
scheduled for January 15, 2016, at 10 a.m. must be received by December 
17, 2015.

ADDRESSES: Send submissions to CC:PA:LPD:PR (REG-127895-14), Room 5203, 
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-
127895-14), Courier's desk, Internal Revenue Service, 1111 Constitution 
Avenue NW., Washington, DC 20044, or sent electronically, via the 
Federal eRulemaking Portal at www.regulations.gov (IRS REG-127895-14). 
The public hearing will be held in the IRS Auditorium, Internal Revenue 
Building, 1111 Constitution Avenue NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, D. Peter 
Merkel or Karen Walny at (202) 317-6938; concerning submissions of 
comments, the hearing, and/or to be placed on the building access list 
to attend the hearing Oluwfunmilayo Taylor at (202) 317-6901 (not toll-
free numbers).

SUPPLEMENTARY INFORMATION: 

Background and Explanation of Provisions

    Final and 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 for 
determining when a payment made pursuant to certain financial products 
will be treated as a dividend equivalent for purposes of section 
871(m). These proposed regulations provide guidance relating to the 
substantial equivalence test, which

[[Page 56416]]

is used to determine whether a complex contract is a section 871(m) 
transaction. These proposed regulations also provide guidance to 
qualified derivatives dealers. The text of those temporary regulations 
also serves as the text of these proposed regulations. The preamble to 
the final and temporary regulations explains the temporary regulations 
and these proposed regulations. The regulations affect nonresident 
alien individuals, foreign corporations, and withholding agents.

Special Analyses

    Certain IRS regulations, including this one, are exempt from the 
requirements of Executive Order 12866, as supplemented and reaffirmed 
by Executive Order 13563. Therefore, a regulatory impact 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 Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any comments that are submitted timely 
to the IRS as prescribed in this preamble under the ADDRESSES heading. 
The Treasury Department and the IRS request comments on all aspects of 
the proposed rules. All comments will be available at 
www.regulations.gov or upon request.
    A public hearing has been scheduled for January 15, 2016, beginning 
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 more than 30 minutes before the hearing 
starts. For information about having your name placed on the building 
access list to attend the hearing, see the FOR FURTHER INFORMATION 
CONTACT section of this preamble.
    The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who 
wish to present oral comments at the hearing must submit an outline of 
the topics to be discussed and the time to be devoted to each topic by 
December 17, 2015. Submit a signed paper or electronic copy of the 
outline as prescribed in this preamble under the ADDRESSES heading. A 
period of 10 minutes will be allotted to each person for making 
comments. An agenda showing the scheduling of the 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.

Drafting Information

    The principal authors of these regulations are D. Peter Merkel and 
Karen Walny 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

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

    Authority: 26 U.S.C. 7805 * * *
    Sec.  1.871-15 also issued under 26 U.S.C. 871(m). * * *

0
Par. 2. Section 1.871-15 is amended by revising paragraph (c)(2)(vi) 
and paragraph (h) to read as follows:


Sec.  1.871-15  Treatment of dividend equivalents.

* * * * *
    (c) * * *
    (2) * * *
    (iv) [The text of the proposed amendments to Sec.  1.871-
15(c)(2)(iv) is the same as the text of Sec.  1.871-15T(c)(2)(iv) 
published elsewhere in this issue of the Federal Register.]
* * * * *
    (h) [The text of the proposed amendments to Sec.  1.871-15(h) is 
the same as the text of Sec.  1.871-15T(h) published elsewhere in this 
issue of the Federal Register.]
* * * * *
    (q) [The text of the proposed amendments to Sec.  1.871-15(q) is 
the same as the text of Sec.  1.871-15T(q) published elsewhere in this 
issue of the Federal Register.]
0
Par. 3. Section 1.1441-1 is amended by revising paragraph (e)(3)(vii) 
and paragraph (e)(6) to read as follows:


Sec.  1.1441-1  Requirement for the deduction and withholding of tax on 
payments to foreign persons.

* * * * *
    (e) * * *
    (3) * * *
    (ii) * * *
    (E) [The text of the proposed amendments to Sec.  1.1441-
1(e)(3)(ii)(E) is the same as the text of Sec.  1.1441-1T(e)(3)(ii)(E) 
published elsewhere in this issue of the Federal Register.]
* * * * *
    (5) [The text of the proposed amendments to Sec.  1.1441-1(e)(5) is 
the same as the text of Sec.  1.1441-1T(e)(5) published elsewhere in 
this issue of the Federal Register.]
    (6) [The text of the proposed amendments to Sec.  1.1441-1(e)(6) is 
the same as the text of Sec.  1.1441-1T(e)(6) published elsewhere in 
this issue of the Federal Register.]

John Dalrymple,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2015-21753 Filed 9-17-15; 8:45 am]
BILLING CODE 4830-01-P