[Federal Register Volume 82, Number 202 (Friday, October 20, 2017)]
[Proposed Rules]
[Page 48779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-22777]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 82, No. 202 / Friday, October 20, 2017 / 
Proposed Rules  

[[Page 48779]]



DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-129067-15]
RIN 1545-BM99


Definition of Political Subdivision

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Withdrawal of notice of proposed rulemaking.

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SUMMARY: This document withdraws a notice of proposed rulemaking 
regarding the definition of a political subdivision for purposes of 
tax-exempt bonds.

DATES: As of October 20, 2017, the notice of proposed rulemaking (REG-
129067-15) that was published in the Federal Register on February 23, 
2016, (81 FR 8870) is withdrawn.

FOR FURTHER INFORMATION CONTACT: Spence Hanemann at (202) 317-6980 (not 
a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    On February 23, 2016, the Department of the Treasury (the Treasury 
Department) and the IRS published in the Federal Register a notice of 
proposed rulemaking (81 FR 8870) that defines political subdivision for 
purposes of tax-exempt bonds under section 103 of the Internal Revenue 
Code (the Proposed Regulations). The Treasury Department and the IRS 
received public comments and, on June 6, 2016, held a public hearing on 
the Proposed Regulations. In response to the Proposed Regulations, 
commenters stated that long-settled law establishes the meaning of 
political subdivision and that no further guidance is necessary. 
Commenters also stated that the Proposed Regulations would call into 
doubt the status of numerous existing issuers and users of tax-exempt 
bonds and that reorganizing these entities to qualify as political 
subdivisions under the Proposed Regulations would be burdensome.
    Executive Order 13789, issued on April 21, 2017, instructs the 
Secretary of the Treasury (the Secretary) to review all significant tax 
regulations issued on or after January 1, 2016, and to take concrete 
action to alleviate the burdens of regulations that (i) impose an undue 
financial burden on U.S. taxpayers; (ii) add undue complexity to the 
Federal tax laws; or (iii) exceed the statutory authority of the IRS. 
E.O. 13789 further instructs the Secretary to submit to the President 
within 60 days an interim report that identifies regulations that meet 
these criteria. Notice 2017-38 (2017-30 I.R.B. 147 (July 24, 2017)) 
included the Proposed Regulations in a list of eight regulations 
identified by the Secretary in the interim report as meeting at least 
one of the first two criteria specified in E.O. 13789.
    E.O. 13789 further instructs the Secretary to submit to the 
President by September 18, 2017, a final report that recommends 
specific actions to mitigate the burden imposed by regulations 
identified in the interim report. On October 16, 2017, the Secretary 
published this final report in the Federal Register (82 FR 48013), 
recommending a complete withdrawal of the Proposed Regulations to 
mitigate their potential burden. To implement the Secretary's 
recommendation, the Treasury Department and the IRS are withdrawing the 
Proposed Regulations.

Drafting Information

    The principal authors of this withdrawal notice are Spence Hanemann 
and Timothy Jones, Office of the Associate Chief Counsel (Financial 
Institutions and Products), IRS.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Withdrawal of Notice of Proposed Rulemaking

    Accordingly, under the authority of 26 U.S.C. 7805, the notice of 
proposed rulemaking (REG-129067-15) that was published in the Federal 
Register on February 23, 2016, (81 FR 8870) is withdrawn.

Kirsten Wielobob,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2017-22777 Filed 10-19-17; 8:45 am]
BILLING CODE 4830-01-P