[Federal Register Volume 81, Number 68 (Friday, April 8, 2016)]
[Proposed Rules]
[Pages 20587-20588]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-07295]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-135734-14]
RIN 1545-BL00; RIN 1545-BN30


Partial Withdrawal of Proposed Application of Section 367 to a 
Section 351 Exchange Resulting From a Transaction Described in Section 
304(a)(1); Partial Withdrawal of Proposed Guidance for Determining 
Stock Ownership

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Partial withdrawal of notice of proposed rulemaking.

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SUMMARY: This document withdraws portions of a notice of proposed 
rulemaking published in the Federal Register on February 11, 2009. The 
withdrawn portions relate to the application of section 367(b) to 
transactions described in section 304(a)(1). This document also 
withdraws portions of a notice of proposed rulemaking published in the 
Federal Register on January 17, 2014. The withdrawn portions relate to 
the identification of certain stock of a foreign corporation that is 
disregarded in calculating ownership of the foreign corporation for 
purposes of determining whether it is a surrogate foreign corporation 
for purposes of section 7874.

DATES: As of April 8, 2016, portions of proposed rules (REG-147636-08 
and REG-121534-12) published in the Federal Register on February 11, 
2009 (74 FR 6840) and January 17, 2014 (79 FR 3145) are withdrawn.

FOR FURTHER INFORMATION CONTACT: Shane M. McCarrick or David A. Levine, 
(202) 317-6937.

SUPPLEMENTARY INFORMATION: 

Background

    On February 11, 2009, the Department of Treasury (Treasury 
Department) and the IRS published in the Federal Register proposed 
regulations (REG-147636-08, 74 FR 6840), including Sec.  1.367(b)-4(e), 
(f), and (g), which provide guidance on the application of section 
367(b) to transactions described in section 304(a)(1). The regulations 
were proposed by cross-reference to temporary regulations in Sec.  
1.367(b)-4T in the same issue of the Federal Register (T.D. 9444, 74 FR 
6824). This document withdraws these proposed regulations because the 
rules in the proposed regulations do not reflect current law. See 
Notice 2012-15, 2012-9 I.R.B. 424 (revising the approach under the 
proposed regulations regarding the interaction of sections 367 and 304 
and providing that section 367(a) and (b) apply fully to certain 
transctions described in section 304(a)(1)). In the Rules and 
Regulations section of this issue of the Federal Register, the Treasury 
Department and the IRS are issuing additional temporary regulations in 
Sec.  1.367(b)-4T(e), (f), and (g), as well as (h), that, in the case 
of certain exchanges, generally require an inclusion of amounts in 
income as a deemed dividend or recognition of realized gain that is not 
otherwise recognized, or both. Accordingly, the Treasury Department and 
the IRS are issuing a notice of proposed rulemaking in the Proposed 
Rules section of this issue of the Federal Register that proposes new 
rules in Sec.  1.367(b)-4T by cross-reference to the temporary 
regulations.
    On January 17, 2014, the Treasury Department and the IRS published 
in the Federal Register proposed regulations (REG-121534-12, 79 FR 
3145), including in Sec.  1.7874-4, that provide that certain stock of 
a foreign corporation is disregarded in calculating ownership of the 
foreign corporation for purposes of determining whether it is a 
surrogate foreign corporation for purposes of section 7874. The 
regulations were proposed by cross-reference to temporary regulations 
in Sec.  1.7874-4T in the same issue of the Federal Register (T.D. 
9654, 79 FR

[[Page 20588]]

3094). In the Rules and Regulations section of this issue of the 
Federal Register, the Treasury Department and the IRS are amending 
certain of the temporary regulations in Sec.  1.7874-4T. Accordingly, 
the Treasury Department and the IRS are issuing a notice of proposed 
rulemaking in the Proposed Rules section of this issue of the Federal 
Register that proposes rules in Sec.  1.7874-4 by cross-reference to 
the amended temporary regulations. This document withdraws the 
previously proposed regulations that are replaced by the notice of 
proposed rulemaking in the Proposed Rules section of this issue of the 
Federal Register.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Partial Withdrawal of a Notice of Proposed Rulemaking

    Accordingly, under the authority of 26 U.S.C. 7805, Sec.  1.367(b)-
4(e), (f), and (g) of the notice of proposed rulemaking (REG-147636-08) 
published in the Federal Register on February 11, 2009 (74 FR 6840) are 
withdrawn. Also, under the authority of 26 U.S.C. 7805, Sec.  1.7874-
4(c)(1)(i), (c)(1)(ii)(B), (c)(2), (d)(1)(i), (d)(1)(ii), (h), (i)(6), 
(i)(7)(iii)(C), (i)(7)(iv), (j)(7), (j)(8), and (k)(1), as well as 
paragraph (ii) of Example 1, paragraph (ii) of Example 2, and Example 3 
through Example 8 of Sec.  1.7874-4(j), of the notice of proposed 
rulemaking (REG-121534-12) published in the Federal Register on January 
17, 2014 (79 FR 3145) are withdrawn.

John Dalrymple,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2016-07295 Filed 4-4-16; 5:00 pm]
 BILLING CODE 4830-01-P