[Federal Register Volume 85, Number 209 (Wednesday, October 28, 2020)]
[Rules and Regulations]
[Pages 68249-68250]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-21175]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9901]
RIN 1545-BO55


Deduction for Foreign-Derived Intangible Income and Global 
Intangible Low-Taxed Income; Correcting Amendments

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendments.

-----------------------------------------------------------------------

SUMMARY: This document contains corrections to the Treasury Decision 
9901, which was published in the Federal Register on Wednesday July 15, 
2020. Treasury Decision 9901 contained final regulations that provide 
guidance regarding the deduction for foreign-derived intangible income 
(FDII) and global intangible low-taxed income (GILTI) and for 
coordinating the deduction for FDII and GILTI with other provisions in 
the Internal Revenue Code.

DATES: These corrections are effective on October 28, 2020. For dates 
of applicability, see Sec. Sec.  1.250-1(b) and 1.861-8(h).

FOR FURTHER INFORMATION CONTACT: Brad McCormack at (202) 317-6911 and 
Lorraine Rodriguez at (202) 317-6726 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

    The final regulations (TD 9901) that are the subject of this 
correction are under sections 250 and 861 of the Internal Revenue Code.

Need for Correction

    As published on July 15, 2020 (85 FR 43042), the final regulations 
(TD 9901; FR Doc. 2020-14649) contains 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 * * *


Sec.  1.250-1  [Amended]

0
Par. 2. Section 1.250-1, paragraph (b), is amended by adding at the end 
of the third sentence ``, but once applied, taxpayers must apply the 
final regulations for all subsequent taxable years beginning before 
January 1, 2021''.


Sec.  1.250(b)-4  [Amended]

0
Par. 3. Section 1.250(b)-4 is amended:
0
a. In the last sentence of paragraph (d)(1)(ii)(D), by adding ``for the 
seller's taxable year'' after the words ``less than $50,000''.
0
b. In the last sentence of paragraph (d)(2)(ii)(A), by adding ``or 
(iii)'' after ``(d)(1)(ii)''.
0
c. In paragraph (d)(2)(iv)(B)(10)(ii), by removing ``potion'' and 
adding in its place ``portion''.

0
Par. 4. Section 1.250(b)-5 is amended:
0
a. In paragraph (c)(1), by removing ``to consumers'';
0
b. In the first sentence of paragraph (e)(2)(iii), by removing 
``accesses the service'' and adding in its place ``accesses or 
otherwise uses the service'';
0
c. By revising paragraph (e)(5)(ii)(F)(1); and
0
d. By revising the third and fourth sentences of paragraph 
(e)(5)(ii)(F)(2).
    The revisions read as follows:


Sec.  1.250(b)-5  Foreign-derived deduction eligible income (FDDEI) 
services.

* * * * *
    (e) * * *
    (5) * * *
    (ii) * * *
    (F) Example 6: Electronically supplied services that are accessed 
by the business recipient--(1) Facts. DC maintains an inventory 
management

[[Page 68250]]

website for R, a company that sells consumer goods online. R's offices 
and all of its employees, who use the website, are located in the 
United States, but R sells its products to customers both within and 
outside the United States.
    (2) * * * Accordingly, under paragraph (e)(2)(i) of this section, 
as modified by paragraph (e)(2)(iii) of this section, R's operations 
that benefit from DC's services are deemed to be located where the 
service is accessed by employees. Therefore, none of the provision of 
the inventory management website is treated as a service to a person 
located outside the United States and none is a FDDEI service under 
paragraph (b)(2) of this section.
* * * * *


Sec.  1.250(b)-6  [Amended]

0
Par. 5. Section 1.250(b)-6 paragraph (c)(3) is amended by adding ``the 
seller and'' before the words ``all related parties of the seller''.

0
Par. 6. Section 1.861-8 is amended by revising paragraph (h) to read as 
follows:


Sec.  1.861-8  Computation of taxable income from sources within the 
United States and from other sources and activities.

* * * * *
    (h) Applicability date. Except as provided in this paragraph (h), 
this section applies to taxable years that both begin after December 
31, 2017 and end on or after December 4, 2018. The last sentence of 
paragraph (d)(2)(ii)(C)(1) of this section, and paragraph (f)(1)(vi)(N) 
of this section, apply to taxable years beginning on or after January 
1, 2021.

Crystal Pemberton,
Senior Federal Register Liaison, Publications and Regulations Branch, 
Legal Processing Division, Associate Chief Counsel (Procedure and 
Administration).
[FR Doc. 2020-21175 Filed 10-27-20; 8:45 am]
BILLING CODE 4830-01-P