Corporate Reorganizations; Guidance on the Measurement of Continuity of Interest, 13058-13059 [E7-5045]
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Federal Register / Vol. 72, No. 53 / Tuesday, March 20, 2007 / Proposed Rules
customer, and the benefit the service
provider derives from the funds is in
lieu of a fee for services, the transaction
is a compensation-related loan under
section 7872. H.R. Conf. Rep. No. 861,
98th Cong., 2d Sess. 1019 (1984) (1984–
3 (Vol. 2) CB 272). Moreover, it was
determined that exchange funds are not
received in consideration for the sale or
exchange of property (within the
meaning of section 1274(c)(1)) or
received as a deferred payment on
account of a sale or exchange of
property (within the meaning of section
483).
The industry survey indicates that 30
percent of respondents closed at least
half of their deferred like-kind exchange
transactions within 60 days or less.
Only eight percent completed at least
half of their transactions in more than
150 days. In addition, 42 percent of
survey respondents reported that at least
half of their transactions typically
involve exchange funds of $250,000 or
less, while about 8 percent of
respondents reported that most of their
transactions involve exchange funds in
excess of $1 million. In light of this
information, comments specifically are
requested regarding the average
duration of exchange transactions, the
average dollar amount of exchange
funds, and the appropriateness and
nature of a de minimis rule that would
except certain exchange transactions
from the application of section 7872.
If exchange funds are characterized as
loaned by the taxpayer to the exchange
facilitator, interest may be imputed if
the exchange facilitator does not pay
sufficient interest to the taxpayer. To
reduce the administrative burden of
determining imputed interest, the 2006
proposed regulations provide a special
AFR, equal to the investment rate on a
182-day Treasury bill, in lieu of the
short-term AFR (which applies to loans
of 3 years or less), to qualify as
sufficient interest for purposes of
determining whether interest must be
imputed. This special AFR was
intended to be a more accurate measure
of a market rate of interest for these
loans than the short-term AFR, and was
expected to result in characterization of
fewer transactions as below-market
loans than if the short-term AFR were
used. Commentators have stated that the
special AFR is significantly higher than
the market rate paid on funds held for
the periods of time that exchange funds
typically are held by QIs. They state, for
example, that few if any QIs that pay
less than all the income to the taxpayer
pay an amount that is equal to or greater
than the special AFR provided in the
2006 proposed regulations. Specific
comments are requested identifying the
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rate of return typically earned by small
business QIs on exchange funds, the
interest rate QIs typically pay to
taxpayers, and an appropriate rate for
testing exchange facilitator loans for
sufficient interest under section 7872.
Duplicative, Overlapping, and
Conflicting Rules
The IRS and the Department of the
Treasury are not aware of any
duplicative, overlapping, or conflicting
Federal rules.
Kevin M. Brown,
Deputy Commissioner for Services and
Enforcement.
[FR Doc. E7–4968 Filed 3–19–07; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG–146247–06]
RIN 1545–BG15
Corporate Reorganizations; Guidance
on the Measurement of Continuity of
Interest
Internal Revenue Service (IRS),
Treasury.
ACTION: Notice of proposed rulemaking
by cross-reference to temporary
regulations.
AGENCY:
SUMMARY: In the Rules and Regulations
section of this issue of the Federal
Register, the IRS is issuing temporary
regulations that provide guidance
regarding the satisfaction of the
continuity of interest requirement for
corporate reorganizations. The text of
those regulations also serves as the text
of these proposed regulations.
DATES: Written or electronic comments
and requests for a public hearing must
be received by June 18, 2007.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR (REG–146247–06), room
5203, Internal Revenue Service, PO Box
7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be handdelivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to CC:PA: LPD:PR (REG–146247–06),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue, NW,
Washington, DC, or sent electronically,
via the Federal eRulemaking Portal at
https://www.regulations.gov/ (IRS and
REG–146247–06).
FOR FURTHER INFORMATION CONTACT:
Concerning the proposed regulations,
Lisa S. Dobson at (202) 622–7790;
PO 00000
Frm 00011
Fmt 4702
Sfmt 4702
concerning submissions of comments
and requests for a public hearing, Kelly
Banks at (202) 622–0392 (not toll-free
numbers).
SUPPLEMENTARY INFORMATION:
Background and Explanation of
Provisions
Temporary regulations in the Rules
and Regulations section of this issue of
the Federal Register amend the Income
Tax Regulations (26 CFR part 1) relating
to section 368, which provides for
general nonrecognition treatment for
reorganizations. In addition to
complying with the statutory and
certain other requirements, to qualify as
a reorganization, a transaction generally
must satisfy the continuity of interest
(COI) requirement. COI requires that, in
substance, a substantial part of the value
of the proprietary interests in the target
corporation be preserved in the
reorganization. The text of those
regulations also serves as the text of
these proposed regulations. The
preamble to the temporary regulations
explains the amendments.
Special Analyses
It has been determined that this notice
of proposed rulemaking is not a
significant regulatory action as defined
in Executive Order 12866. Therefore, a
regulatory 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
regulation does 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) of the Internal Revenue
Code, this notice of proposed
rulemaking will be submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment
on its impact on small business.
Comments and Requests for Public
Hearing
Before the proposed regulations are
adopted as final regulations,
consideration will be given to any
written comments (a signed original and
eight (8) copies) or electronic comments
that are submitted timely to the IRS.
Comments are requested on all aspects
of the proposed regulations. All
comments will be available for public
inspection and copying. A public
hearing will be scheduled if requested
in writing by any person that timely
submits written comments. If a public
hearing is scheduled, notice of the date,
time, and place for the public hearing
will be published in the Federal
Register.
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Federal Register / Vol. 72, No. 53 / Tuesday, March 20, 2007 / Proposed Rules
Drafting Information
The principal author of these
regulations is Lisa S. Dobson of the
Office of the Associate Chief Counsel
(Corporate). However, other personnel
from the IRS and Treasury Department
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
Paragraph 1. The authority citation
for part 1 continues to read, in part, as
follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.368–1 is amended
by:
1. Revising paragraph (e)(2).
2. Revising and redesignating the text
of paragraph (e)(8) as paragraph (e)(8)(i).
3. Adding paragraph (e)(8)(ii).
The revisions and addition read as
follows:
§ 1.368–1 Purpose and scope of exception
of reorganization exchanges.
[The text of the proposed amendment
to § 1.368–1(e)(2) and (e)(8) is the same
as the text of § 1.368–1T(e)(2) and (e)(8)
published elsewhere in this issue of the
Federal Register].
Kevin M. Brown,
Deputy Commissioner for Services and
Enforcement.
[FR Doc. E7–5045 Filed 3–19–07; 8:45 am]
BILLING CODE 4830–01–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 70
[Docket No. EPA–R02–OAR–2006–0963;
FRL–8289–4]
Clean Air Act Title V Operating Permit
Program Revision; New Jersey
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
erjones on PRODPC74 with PROPOSALS
AGENCY:
SUMMARY: The Environmental Protection
Agency (EPA) is proposing to approve a
revision to the New Jersey title V
Operating Permit Program submitted by
the New Jersey Department of
Environmental Protection (NJDEP) on
October 4, 2006. The New Jersey
Operating Permit Program is
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15:26 Mar 19, 2007
Jkt 211001
implemented through its Operating
Permits Rule, codified at Subchapter 22
of Chapter 27 of Title 7 of the New
Jersey Administrative Code. The
October 4, 2006 revision changes the
title V fee program that funds the New
Jersey Operating Permit Program, and
various sections of the Operating
Permits Rule relating to definitions,
general provisions, general application
procedures, operating permit
application contents and completeness
review. These changes resulted in both
substantial and nonsubstantial revisions
to New Jersey’s Operating Permit
Program. EPA is proposing to approve
these revisions. The intended affect of
this action is to improve the State’s
Operating Permit Program.
DATES: Comments must be received on
or before April 19, 2007.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–R02–
OAR–2006–0963, by one of the
following methods:
• www.regulations.gov: Follow the
on-line instructions for submitting
comments.
• E-mail: Werner.Raymond@epa.gov
• Fax: 212–637–3901.
• Mail: Raymond Werner, Chief, Air
Programs Branch, Environmental
Protection Agency, Region 2 Office, 290
Broadway, 25th Floor, New York, New
York 10007–1866.
• Hand Delivery: Raymond Werner,
Chief, Air Programs Branch,
Environmental Protection Agency,
Region 2 Office, 290 Broadway, 25th
Floor, New York, New York 10007–
1866. Such deliveries are only accepted
during the Regional Office’s normal
hours of operation. The Regional
Office’s official hours of business are
Monday through Friday, 8:30 to 4:30
excluding Federal holidays.
Instructions: Direct your comments to
Docket ID No. EPA–R02–OAR–2006–
0963. EPA’s policy is that all comments
received will be included in the public
docket without change and may be
made available online at
www.regulations.gov, including any
personal information provided, unless
the comment includes information
claimed to be Confidential Business
Information (CBI) or other information
whose disclosure is restricted by statute.
Do not submit information that you
consider to be CBI or otherwise
protected through www.regulations.gov
or e-mail. The www.regulations.gov Web
site is an ‘‘anonymous access’’ system,
which means EPA will not know your
identity or contact information unless
you provide it in the body of your
comment. If you send an e-mail
comment directly to EPA without going
PO 00000
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13059
through www.regulations.gov your email address will be automatically
captured and included as part of the
comment that is placed in the public
docket and made available on the
Internet. If you submit an electronic
comment, EPA recommends that you
include your name and other contact
information in the body of your
comment and with any disk or CD–ROM
you submit. If EPA cannot read your
comment due to technical difficulties
and cannot contact you for clarification,
EPA may not be able to consider your
comment. Electronic files should avoid
the use of special characters, any form
of encryption, and be free of any defects
or viruses. For additional information
about EPA’s public docket visit the EPA
Docket Center homepage at https://www.
epa.gov/epahome/dockets.htm.
FOR FURTHER INFORMATION CONTACT:
Suilin Chan, Air Programs Branch,
Environmental Protection Agency, 290
Broadway, 25th Floor, New York, New
York 10007–1866, (212) 637–4019.
SUPPLEMENTARY INFORMATION: This
section provides additional information
by addressing the following questions:
I. Background
The Clean Air Act (the Act)
Amendments of 1990 required all states
to develop Operating Permit Programs
pursuant to title V of the Act, 42 U.S.C.
7661–7661f, and the regulations
promulgated under title V, which are
found at 40 CFR part 70. EPA granted
interim approval (effective June 17,
1996) of the Operating Permit Program
submitted by New Jersey in response to
this directive. 61 FR 24715 (May 16,
1996); 40 CFR part 70, Appendix A.
Effective November 30, 2001, EPA
granted full approval to New Jersey’s
title V Operating Permit Program. 66 FR
63168 (December 5, 2001).
The current revision to the Operating
Permits Rule adjusts the title V fee
schedules to conform with the Omnibus
Legislation adopted by the New Jersey
state legislature in 2002, and ensures
that requisite funding needs of the New
Jersey Operating Permit Program are
met. The revised Operating Permits Rule
also includes changes that improve New
Jersey’s Operating Permit Program. New
Jersey submitted its program revision
request to the EPA on October 4, 2006.
The revision request describes the
specific changes made to New Jersey’s
Operating Permits Rule.
II. What Is Being Addressed in This
Action?
In today’s action, EPA is proposing to
approve revisions to N.J.A.C. 7:27–22, as
identified below, which NJDEP adopted
E:\FR\FM\20MRP1.SGM
20MRP1
]]>Agencies
[Federal Register Volume 72, Number 53 (Tuesday, March 20, 2007)]
[Proposed Rules]
[Pages 13058-13059]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-5045]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG-146247-06]
RIN 1545-BG15
Corporate Reorganizations; Guidance on the Measurement of
Continuity of Interest
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking by cross-reference to temporary
regulations.
-----------------------------------------------------------------------
SUMMARY: In the Rules and Regulations section of this issue of the
Federal Register, the IRS is issuing temporary regulations that provide
guidance regarding the satisfaction of the continuity of interest
requirement for corporate reorganizations. The text of those
regulations also serves as the text of these proposed regulations.
DATES: Written or electronic comments and requests for a public hearing
must be received by June 18, 2007.
ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-146247-06), 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-
146247-06), Courier's Desk, Internal Revenue Service, 1111 Constitution
Avenue, NW, Washington, DC, or sent electronically, via the Federal
eRulemaking Portal at https://www.regulations.gov/ (IRS and REG-146247-
06).
FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations,
Lisa S. Dobson at (202) 622-7790; concerning submissions of comments
and requests for a public hearing, Kelly Banks at (202) 622-0392 (not
toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background and Explanation of Provisions
Temporary regulations in the Rules and Regulations section of this
issue of the Federal Register amend the Income Tax Regulations (26 CFR
part 1) relating to section 368, which provides for general
nonrecognition treatment for reorganizations. In addition to complying
with the statutory and certain other requirements, to qualify as a
reorganization, a transaction generally must satisfy the continuity of
interest (COI) requirement. COI requires that, in substance, a
substantial part of the value of the proprietary interests in the
target corporation be preserved in the reorganization. The text of
those regulations also serves as the text of these proposed
regulations. The preamble to the temporary regulations explains the
amendments.
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in Executive Order
12866. Therefore, a regulatory 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 regulation does 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) of the Internal Revenue Code, this
notice of proposed rulemaking will be submitted to the Chief Counsel
for Advocacy of the Small Business Administration for comment on its
impact on small business.
Comments and Requests for Public Hearing
Before the proposed regulations are adopted as final regulations,
consideration will be given to any written comments (a signed original
and eight (8) copies) or electronic comments that are submitted timely
to the IRS. Comments are requested on all aspects of the proposed
regulations. All comments will be available for public inspection and
copying. A public hearing will be scheduled if requested in writing by
any person that timely submits written comments. If a public hearing is
scheduled, notice of the date, time, and place for the public hearing
will be published in the Federal Register.
[[Page 13059]]
Drafting Information
The principal author of these regulations is Lisa S. Dobson of the
Office of the Associate Chief Counsel (Corporate). However, other
personnel from the IRS and Treasury Department 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
Paragraph 1. The authority citation for part 1 continues to read,
in part, as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.368-1 is amended by:
1. Revising paragraph (e)(2).
2. Revising and redesignating the text of paragraph (e)(8) as
paragraph (e)(8)(i).
3. Adding paragraph (e)(8)(ii).
The revisions and addition read as follows:
Sec. 1.368-1 Purpose and scope of exception of reorganization
exchanges.
[The text of the proposed amendment to Sec. 1.368-1(e)(2) and
(e)(8) is the same as the text of Sec. 1.368-1T(e)(2) and (e)(8)
published elsewhere in this issue of the Federal Register].
Kevin M. Brown,
Deputy Commissioner for Services and Enforcement.
[FR Doc. E7-5045 Filed 3-19-07; 8:45 am]
BILLING CODE 4830-01-P
