[Federal Register Volume 85, Number 156 (Wednesday, August 12, 2020)]
[Rules and Regulations]
[Page 48651]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15842]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9896]
RIN 1545-BO53


Rules Regarding Certain Hybrid Arrangements; Correcting Amendment

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendments.

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SUMMARY: This document contains corrections to final regulations 
Treasury Decision 9896 that were published in the Federal Register on 
Wednesday, April 8, 2020. The final regulations providing guidance 
regarding hybrid dividends and certain amounts paid or accrued pursuant 
to hybrid arrangements, which generally involve arrangements whereby 
U.S. and foreign tax law classify a transaction or entity differently 
for tax purposes.

DATES: 
    Effective date: This correction is effective on August 12, 2020.
    Applicability dates: For dates of applicability, see Sec. Sec.  
1.267A-7 and 1.1503(d).

FOR FURTHER INFORMATION CONTACT: Tracy Villecco at (202) 317-6933 or 
Tianlin (Laura) Shi at (202) 317-6936 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

    The final regulations (TD 9896) that are the subject of this 
correction are issued under sections 267A and 1503(d) of the Code.

Need for Correction

    As published April 8, 2020 (85 FR 19802), the final regulation (TD 
9896; FR Doc. 2020-05924) contained errors that need to be corrected.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Correction of Publication

    Accordingly, 26 CFR part 1 is corrected by making the following 
correcting amendments:

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 * * *


0
Par. 2. Section 1.267A-5 is amended by revising paragraph (a)(20)(ii) 
to read as follows:


Sec.  1.267A-5   Definitions and special rules.

    (a) * * *
    (20) * * *
    (ii) Party to a structured arrangement. A party to a structured 
arrangement means a tax resident, a taxable branch, or an entity that 
participates in the structured arrangement. For purposes of this 
paragraph (a)(20)(ii), in the case of an entity, the entity's 
participation in a structured arrangement is imputed to its investors. 
However, a tax resident, a taxable branch or an entity (the relevant 
party) is considered to participate in the structured arrangement only 
if--
    (A) The relevant party (or a related tax resident or taxable 
branch, determined under paragraph (a)(14) of this section by treating 
the relevant party as a specified party) could, based on all the facts 
and circumstances, reasonably be expected to be aware of the hybrid 
mismatch; and
    (B) The relevant party or one or more of its investors (or a 
related tax resident or taxable branch, determined under paragraph 
(a)(14) of this section by treating the relevant party or an investor 
as a specified party) shares in the value of the tax benefit resulting 
from the hybrid mismatch.
* * * * *

0
Par. 3. Section 1.267A-7 is amended by revising paragraph (a) to read 
as follows:


Sec.  1.267A-7   Applicability dates.

    (a) General rule. Except as provided in paragraph (b) of this 
section, Sec. Sec.  1.267A-1 through 1.267A-6 apply to taxable years 
ending on or after December 20, 2018, provided that such taxable years 
begin after December 31, 2017. However, taxpayers may apply the 
regulations in Sec. Sec.  1.267A-1 through 1.267A-6 in their entirety 
(including by taking into account paragraph (b) of this section) for 
taxable years beginning after December 31, 2017, and ending before 
December 20, 2018. In lieu of applying the regulations in Sec. Sec.  
1.267A-1 through 1.267A-6 (including paragraph (b) of this section), 
taxpayers may apply the provisions matching Sec. Sec.  1.267A-1 through 
1.267A-6 (including by taking into account the provision matching 
paragraph (b) of this section) from the Internal Revenue Bulletin (IRB) 
2019-03 (https://www.irs.gov/pub/irs-irbs/irb19-03.pdf) in their 
entirety for all taxable years ending on or before April 8, 2020.
* * * * *


Sec.  1.1503(d)-7   [Amended]

0
Par. 4. Section 1.1503(d)-7(c)(6)(iii)(A) is amended by removing 
``paragraphs'' and adding ``paragraph'' in its place.

Martin V. Franks,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel (Procedure and Administration).
[FR Doc. 2020-15842 Filed 8-11-20; 8:45 am]
BILLING CODE 4830-01-P