Information Reporting for Lump-Sum Timber Sales, 67589-67591 [E7-23098]
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Federal Register / Vol. 72, No. 229 / Thursday, November 29, 2007 / Proposed Rules
The Proposal
The FAA is proposing an amendment
to Title 14 Code of Federal Regulations
(14 CFR) part 71 to establish two low
altitude RNAV routes in the St. Louis,
MO, terminal area. The routes,
designated as T–251 and T–272, would
be depicted on the appropriate IFR En
Route Low Altitude charts. These Troutes are only intended for use by GPS/
GNSS equipped aircraft and are being
proposed to enhance safety, and to
facilitate the more flexible and efficient
use of the navigable airspace for en
route IFR operations transitioning
through and around the St. Louis Class
B airspace area.
Low altitude RNAV routes are
published in paragraph 6011 of FAA
Order 7400.9R signed August 15, 2007
and effective September 15, 2007, which
is incorporated by reference in 14 CFR
71.1. The low altitude RNAV routes
listed in this document will be
published subsequently in the Order.
The FAA has determined that this
proposed regulation only involves an
established body of technical
regulations for which frequent and
routine amendments are necessary to
keep them operationally current.
Therefore, this proposed regulation: (1)
Is not a ‘‘significant regulatory action’’
under Executive Order 12866; (2) is not
a ‘‘significant rule’’ under Department of
Transportation (DOT) Regulatory
Policies and Procedures (44 FR 11034;
February 26, 1979); and (3) does not
warrant preparation of a regulatory
evaluation as the anticipated impact is
so minimal. Since this is a routine
matter that will only affect air traffic
procedures and air navigation, it is
certified that this proposed rule, when
promulgated, will not have a significant
economic impact on a substantial
number of small entities under the
criteria of the Regulatory Flexibility Act.
The FAA’s authority to issue rules
regarding aviation safety is found in
Title 49 of the United States Code.
Subtitle I, Section 106 describes the
authority of the FAA Administrator.
Subtitle VII, Aviation Programs,
describes in more detail the scope of the
agency’s authority.
This rulemaking is promulgated
under the authority described in
Subtitle VII, Part A, Subpart I, Section
40103. Under that section, the FAA is
charged with prescribing regulations to
assign the use of the airspace necessary
to ensure the safety of aircraft and the
efficient use of airspace. This regulation
is within the scope of that authority as
it establishes low altitude Area
Navigation routes (T-routes) at St. Louis,
MO.
Environmental Review
The FAA has determined that this
action qualifies for categorical exclusion
under the National Environmental
Policy Act in accordance with FAA
Order 1050.1E, ‘‘Environmental
Impacts: Policies and Procedures,’’
paragraph 311a, 311b, and 311k. This
T–251 Farmington, MO to RIVRS, IL [New]
FARMINGTON, MO (FAM) .......................... VORTAC ........................................................
FORISTELL, MO (FTZ) ................................. VORTAC ........................................................
RIVRS, IL ....................................................... INT .................................................................
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[REG–155669–04]
26 CFR Part 1
rmajette on PROD1PC64 with PROPOSALS
RIN 1545–BE73
Information Reporting for Lump-Sum
Timber Sales
Internal Revenue Service (IRS),
Treasury.
ACTION: Notice of proposed rulemaking.
AGENCY:
Frm 00003
Fmt 4702
In consideration of the foregoing, the
Federal Aviation Administration
proposes to amend 14 CFR part 71 as
follows:
PART 71—DESIGNATION OF CLASS A,
B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND
REPORTING POINTS
1. The authority citation for part 71
continues to read as follows:
Authority: 49 U.S.C. 106(g), 40103, 40113,
40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–
1963 Comp., p. 389.
§ 71.1
[Amended]
2. The incorporation by reference in
14 CFR 71.1 of FAA Order 7400.R,
Airspace Designations and Reporting
Points, signed August 15, 2006 and
effective September 15, 2007, is
amended as follows:
Paragraph 6011—Area Navigation
Routes.
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Sfmt 4702
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(Lat. 39°06′49″ N., long. 92°07′42″ W.)
(Lat. 39°05′37″ N., long. 89°09′45″ W.)
Internal Revenue Service
PO 00000
The Proposed Amendment
*
BILLING CODE 4910–13–P
Jkt 214001
Airspace, Incorporation by reference,
Navigation (air).
*
DEPARTMENT OF THE TREASURY
14:41 Nov 28, 2007
List of Subjects in 14 CFR Part 71
*
Issued in Washington, DC, on November
23, 2007.
Paul Gallant,
Acting Manager, Airspace and Rules Group.
[FR Doc. E7–23175 Filed 11–28–07; 8:45 am]
VerDate Aug<31>2005
airspace action is not expected to cause
any potentially significant
environmental impacts, and no
extraordinary circumstances exist that
warrant preparation of an
environmental assessment.
(Lat. 37°40′24″ N., long. 90°14′03″ W.)
(Lat. 38°41′40″ N., long. 90°58′17″ W.)
(Lat. 39°25′21″ N., long. 90°55′56″ W.)
T–272 Hallsville, MO to Vandalia, IL [New]
HALLSVILLE, MO (HLV) ............................. VORTAC ........................................................
VANDALIA, IL (VLA) ................................... VORTAC ........................................................
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67589
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SUMMARY: This document contains
proposed regulations that provide
guidance regarding the information
reporting requirements contained in
section 6045(e) of the Internal Revenue
Code (Code) on sales or exchanges of
standing timber for lump-sum (outright)
payments. The proposed regulations
amend § 1.6045–4 of the Income Tax
Regulations to require real estate
reporting persons, as defined in section
6045(e)(2) of the Code, to report lumpsum payments received by sellers
(landowners) for sales or exchanges of
standing timber. This action is being
E:\FR\FM\29NOP1.SGM
29NOP1
67590
Federal Register / Vol. 72, No. 229 / Thursday, November 29, 2007 / Proposed Rules
rmajette on PROD1PC64 with PROPOSALS
taken to make the reporting
requirements for lump-sum sales of
standing timber consistent with the
reporting requirements applicable to
pay-as-cut timber sales. The proposed
regulations do not change the
information reporting requirements that
currently apply to sales or exchanges of
standing timber for pay-as-cut
(contingent) payments under section
6050N of the Code.
DATES: Written or electronic comments
and requests for a public hearing must
be received by February 27, 2008.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR (REG–155669–04), 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–155669–04),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue,
NW., Washington, DC, or via the Federal
eRulemaking Portal at https://
www.regulations.gov (IRS REG–155669–
04).
FOR FURTHER INFORMATION CONTACT:
Concerning the proposed regulation,
Julie Hanlon-Bolton of the Office of
Chief Counsel (Procedure and
Administration), at (202) 622–7028; for
questions concerning submissions of
comments, contact Kelly Banks at (202)
622–7180.
SUPPLEMENTARY INFORMATION:
Background
This document contains a proposed
amendment to the Income Tax
Regulations under section 6045(e). The
amendment imposes information
reporting requirements on sales or
exchanges of standing timber for lumpsum payments, commonly referred to as
lump-sum or outright timber sales. A
lump-sum contract provides for a preset, fixed, and non-contingent payment
in exchange for the right to cut and
remove designated trees. In these
transactions, sellers of standing timber
receive fixed payments that are not
based on the amount of the timber
actually cut. The sellers do not retain
any economic interest in the timber and
bear no risk of loss upon execution of
the sales contract.
Sales or exchanges of standing timber
for contingent payments, commonly
referred to as pay-as-cut timber sales,
allow purchasers to cut designated trees
in exchange for a payment that is based
on a specified rate for each unit of
timber actually cut and measured. In
these transactions, sellers of standing
timber receive payments that are
contingent on the amount of timber
VerDate Aug<31>2005
14:41 Nov 28, 2007
Jkt 214001
actually cut. The sellers retain an
economic interest in the timber and
continue to bear economic risk
associated with the sales contract until
the timber is actually cut and removed.
Because the sellers of standing timber
who enter into pay-as-cut transactions
retain an economic interest until the
timber is actually cut and removed, the
payments are characterized as timber
royalties reportable under section
6050N on Form 1099–S, ‘‘Proceeds from
Real Estate Transactions.’’ See
Announcement 90–129, 1990–48 IRB
10.
However, currently, no information
reporting obligation applies to a sale or
exchange of standing timber for a lumpsum payment. The information
reporting requirements of section 6050N
do not apply to a sale or exchange of
timber for a lump-sum payment because
the seller retains no economic interest
and bears no economic risk of loss in
the timber upon execution of the sales
contract.
Recognizing the disparate treatment
in the reporting of timber sale and
exchange transactions, the Treasury
Department has reconsidered the
information reporting requirements
under section 6045(e) as they apply to
lump-sum sales or exchanges of
standing timber and has decided to
amend the regulations to require
information reporting for these
transactions.
Currently, section 6045(e) requires a
‘‘real estate reporting person,’’ as
defined in section 6045(e)(2), to make
an information return and furnish a
statement to the transferor with respect
to a real estate transaction that consists
in whole or in part of the sale or
exchange of ‘‘reportable real estate.’’
Section 1.6045–4(b)(2) defines
‘‘reportable real estate’’ as, among other
things, any present or future ownership
interest in land. Section 1.6045–
4(c)(2)(i) provides that no return of
information is required with respect to
a sale or exchange of an interest in
timber, provided that the sale or
exchange of such property is not related
to the sale or exchange of reportable real
estate.
The preamble to § 1.6045–4 provides
background information concerning the
exception for timber sales in § 1.6045–
4(c)(2)(i), stating in pertinent part as
follows:
The proposed regulations provided an
exception from the reporting requirements
for transactions involving natural resources,
including standing timber. Section 6050N of
the Code requires reporting for certain
royalty payments, including timber royalties,
but not for other transactions involving
timber. The IRS believes that the disparity in
PO 00000
Frm 00004
Fmt 4702
Sfmt 4702
the reporting requirements for different forms
of timber transactions may be inappropriate.
However, this issue was not addressed in the
public comments and was not considered at
the public hearing. Accordingly, the final
regulations contain the exception for natural
resource transactions, including standing
timber. The IRS will open a new regulations
project to consider the expansion of the
reporting requirements to include sales and
exchanges of standing timber. Any
requirements for the reporting of standing
timber will apply only to transactions
occurring after the issuance of such
requirements. See 55 FR 51282, TD 8323.
The IRS has found that some
taxpayers are underreporting income
from lump-sum or outright sales of
timber, resulting in a loss of tax
revenue. Additionally, the Treasury
Department and the IRS do not think
that the disparate treatment of lumpsum and pay-as-cut timber transactions
for information reporting purposes is in
the interests of sound tax
administration. Based on considerations
of tax policy and sound tax
administration, the Treasury
Department has decided to amend the
regulations under section 6045(e) to
require information reporting for sales
or exchanges of standing timber for
lump-sum payments.
This amendment provides that sales
or exchanges of standing timber for
lump-sum payments are ‘‘reportable real
estate’’ transactions under § 1.6045–
4(b)(2) and, thus, shall be reported as
provided in section 6045(e) and the
regulations.
Paperwork Reduction Act
The collection of information
contained in this notice of proposed
rulemaking has been submitted to the
Office of Management and Budget for
review in accordance with the
Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)). Comments on the
collection of information should be sent
to the Office of Management and
Budget, Attn: Desk Officer for the
Department of Treasury, Office of
Information and Regulatory Affairs,
Washington, DC 20503, with copies to
the Internal Revenue Service, Attn: IRS
Reports Clearance Officer,
SE:W:CAR:MP:T:T:SP, Washington, DC
20224. Comments on the collection of
information should be received by
February 27, 2008. The Treasury
Department is interested in comments
on the following:
Whether the proposed collection of
information is necessary for the proper
performance of the function of the IRS,
including whether the information will
have practical utility;
E:\FR\FM\29NOP1.SGM
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Federal Register / Vol. 72, No. 229 / Thursday, November 29, 2007 / Proposed Rules
The accuracy of the estimated burden
associated with the proposed collection
of information (see below);
How the quality, utility, and clarity of
the information to be collected may be
enhanced;
How the burden of complying with
the proposed collections of information
may be minimized, including through
the application of automated collection
techniques or other forms of information
technology; and
Estimates of capital or start-up costs
and costs of operation, maintenance,
and purchase of service to provide
information.
The collection of information affected
by this proposed regulation is described
in § 1.6045–4. The collection of
information is mandatory. The likely
respondents are for-profit corporations
and small business entities.
Estimated total annual reporting
burden: 10,000 hours.
Estimated average annual burden
hours per respondent: .5 hours.
Estimated number of respondents:
20,000.
Estimated frequency of responses:
annually.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a valid control
number assigned by the Office of
Management and Budget.
Books or records relating to a
collection of information must be
retained as long as their contents may
become material in the administration
of any Internal Revenue Law. Generally,
tax returns and tax return information
are confidential, as required by 26
U.S.C. 6103.
rmajette on PROD1PC64 with PROPOSALS
Proposed Effective Date
These amendments shall apply to
sales or exchanges of standing timber for
lump-sum payments completed on or
after the date of publication of a
Treasury decision adopting these rules
as final regulations in the Federal
Register.
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. It is hereby
certified that collection of information
in this regulation will not have a
significant economic impact on a
substantial number of small entities.
This certification is based on the fact
VerDate Aug<31>2005
14:41 Nov 28, 2007
Jkt 214001
67591
that the collection of information
burden imposed by these regulations
flows directly from section 6045(e) of
the Code. Moreover, requiring
information reporting as described in
the preamble with regard to sales or
exchanges of standing timber for lumpsum payments imposes minimal burden
in time or expense. Therefore, a
Regulatory Flexibility Analysis under
the Regulatory Flexibility Act (5 U.S.C.
Chapter 6) is not required. The IRS
invites comments on the accuracy of
this certification. Pursuant to section
7805(f) of the Code, this notice of
proposed rulemaking has been
submitted to the Chief Counsel for
Advocacy of the Small Business
Administration for comment on its
impact on small business.
1. Redesignating paragraphs (b)(2)(i),
(b)(2)(ii), (b)(2)(iii), and (b)(2)(iv) as
paragraphs (b)(2)(i)(A), (b)(2)(i)(B),
(B)(2)(i)(C), and (b)(2)(i)(D), respectively.
2. Adding paragraph (b)(2)(i)(E).
3. Redesignating paragraph (b)(2)
introductory text as (b)(2)(i)
introductory text.
4. Designating the undesignated text
as paragraph (b)(2)(ii).
5. Adding a new last sentence at the
end of newly designated paragraph
(b)(2)(ii).
6. Revising paragraph (c)(2)(i) and
paragraph (s).
The revisions and additions read as
follows:
Comments and Request for Public
Hearing
§ 1.6045–4 Information reporting on real
estate transactions with dates of closing on
or after January 1, 1991.
Before these proposed regulations are
adopted as final regulations,
consideration will be given to any
written (a signed original and eight (8)
copies) or electronic comments that are
submitted timely to the IRS. The IRS
and the Treasury Department request
comments on the clarity of the proposed
rules and how they can be made easier
to understand. All comments will be
available for public inspection and
copying.
A public hearing may be scheduled if
requested by any person who timely
submits comments. If a public hearing is
scheduled, notice of the date, time and
place for the hearing will be published
in the Federal Register.
*
Drafting Information
The principal author of these
regulations is Julie A. Hanlon-Bolton of
the Office of Associate Chief Counsel
(Procedure and Administration).
However, other personnel from the IRS
and the 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 * * *
*
*
*
*
(b) * * *
(2)* * * (i) * * *
(E) Any non-contingent interest in
standing timber.
(ii) * * * Further, the term ownership
interest includes any contractual
interest in a sale or exchange of standing
timber for a lump-sum payment that is
fixed and not contingent.
*
*
*
*
*
(c) * * *
(2) * * *
(i) An interest in surface or subsurface
natural resources (for example, water,
ores, and other natural deposits) or
crops, whether or not such natural
resources or crops are severed from the
land. For purposes of this section, the
terms ‘‘natural resources’’ and ‘‘crops’’
do not include standing timber.
*
*
*
*
*
(s) Effective/applicability date. This
section applies for real estate
transactions with dates of closing (as
determined under paragraph (h)(2)(ii) of
this section) that occur on or after
January 1, 1991. The amendments to
paragraphs (b)(2)(i)(e), (b)(2)(ii) and
(c)(2)(i) of this section shall apply to
sales or exchanges of standing timber for
lump-sum payments completed after the
date specified in the final regulations.
Linda E. Stiff,
Deputy Commissioner for Services and
Enforcement.
[FR Doc. E7–23098 Filed 11–28–07; 8:45 am]
BILLING CODE 4830–01–P
Par. 2. Section 1.6045–4 is amended
by:
PO 00000
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]]>Agencies
[Federal Register Volume 72, Number 229 (Thursday, November 29, 2007)]
[Proposed Rules]
[Pages 67589-67591]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-23098]
=======================================================================
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG-155669-04]
RIN 1545-BE73
Information Reporting for Lump-Sum Timber Sales
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This document contains proposed regulations that provide
guidance regarding the information reporting requirements contained in
section 6045(e) of the Internal Revenue Code (Code) on sales or
exchanges of standing timber for lump-sum (outright) payments. The
proposed regulations amend Sec. 1.6045-4 of the Income Tax Regulations
to require real estate reporting persons, as defined in section
6045(e)(2) of the Code, to report lump-sum payments received by sellers
(landowners) for sales or exchanges of standing timber. This action is
being
[[Page 67590]]
taken to make the reporting requirements for lump-sum sales of standing
timber consistent with the reporting requirements applicable to pay-as-
cut timber sales. The proposed regulations do not change the
information reporting requirements that currently apply to sales or
exchanges of standing timber for pay-as-cut (contingent) payments under
section 6050N of the Code.
DATES: Written or electronic comments and requests for a public hearing
must be received by February 27, 2008.
ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-155669-04), 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-
155669-04), Courier's Desk, Internal Revenue Service, 1111 Constitution
Avenue, NW., Washington, DC, or via the Federal eRulemaking Portal at
https://www.regulations.gov (IRS REG-155669-04).
FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulation,
Julie Hanlon-Bolton of the Office of Chief Counsel (Procedure and
Administration), at (202) 622-7028; for questions concerning
submissions of comments, contact Kelly Banks at (202) 622-7180.
SUPPLEMENTARY INFORMATION:
Background
This document contains a proposed amendment to the Income Tax
Regulations under section 6045(e). The amendment imposes information
reporting requirements on sales or exchanges of standing timber for
lump-sum payments, commonly referred to as lump-sum or outright timber
sales. A lump-sum contract provides for a pre-set, fixed, and non-
contingent payment in exchange for the right to cut and remove
designated trees. In these transactions, sellers of standing timber
receive fixed payments that are not based on the amount of the timber
actually cut. The sellers do not retain any economic interest in the
timber and bear no risk of loss upon execution of the sales contract.
Sales or exchanges of standing timber for contingent payments,
commonly referred to as pay-as-cut timber sales, allow purchasers to
cut designated trees in exchange for a payment that is based on a
specified rate for each unit of timber actually cut and measured. In
these transactions, sellers of standing timber receive payments that
are contingent on the amount of timber actually cut. The sellers retain
an economic interest in the timber and continue to bear economic risk
associated with the sales contract until the timber is actually cut and
removed.
Because the sellers of standing timber who enter into pay-as-cut
transactions retain an economic interest until the timber is actually
cut and removed, the payments are characterized as timber royalties
reportable under section 6050N on Form 1099-S, ``Proceeds from Real
Estate Transactions.'' See Announcement 90-129, 1990-48 IRB 10.
However, currently, no information reporting obligation applies to
a sale or exchange of standing timber for a lump-sum payment. The
information reporting requirements of section 6050N do not apply to a
sale or exchange of timber for a lump-sum payment because the seller
retains no economic interest and bears no economic risk of loss in the
timber upon execution of the sales contract.
Recognizing the disparate treatment in the reporting of timber sale
and exchange transactions, the Treasury Department has reconsidered the
information reporting requirements under section 6045(e) as they apply
to lump-sum sales or exchanges of standing timber and has decided to
amend the regulations to require information reporting for these
transactions.
Currently, section 6045(e) requires a ``real estate reporting
person,'' as defined in section 6045(e)(2), to make an information
return and furnish a statement to the transferor with respect to a real
estate transaction that consists in whole or in part of the sale or
exchange of ``reportable real estate.'' Section 1.6045-4(b)(2) defines
``reportable real estate'' as, among other things, any present or
future ownership interest in land. Section 1.6045-4(c)(2)(i) provides
that no return of information is required with respect to a sale or
exchange of an interest in timber, provided that the sale or exchange
of such property is not related to the sale or exchange of reportable
real estate.
The preamble to Sec. 1.6045-4 provides background information
concerning the exception for timber sales in Sec. 1.6045-4(c)(2)(i),
stating in pertinent part as follows:
The proposed regulations provided an exception from the
reporting requirements for transactions involving natural resources,
including standing timber. Section 6050N of the Code requires
reporting for certain royalty payments, including timber royalties,
but not for other transactions involving timber. The IRS believes
that the disparity in the reporting requirements for different forms
of timber transactions may be inappropriate. However, this issue was
not addressed in the public comments and was not considered at the
public hearing. Accordingly, the final regulations contain the
exception for natural resource transactions, including standing
timber. The IRS will open a new regulations project to consider the
expansion of the reporting requirements to include sales and
exchanges of standing timber. Any requirements for the reporting of
standing timber will apply only to transactions occurring after the
issuance of such requirements. See 55 FR 51282, TD 8323.
The IRS has found that some taxpayers are underreporting income
from lump-sum or outright sales of timber, resulting in a loss of tax
revenue. Additionally, the Treasury Department and the IRS do not think
that the disparate treatment of lump-sum and pay-as-cut timber
transactions for information reporting purposes is in the interests of
sound tax administration. Based on considerations of tax policy and
sound tax administration, the Treasury Department has decided to amend
the regulations under section 6045(e) to require information reporting
for sales or exchanges of standing timber for lump-sum payments.
This amendment provides that sales or exchanges of standing timber
for lump-sum payments are ``reportable real estate'' transactions under
Sec. 1.6045-4(b)(2) and, thus, shall be reported as provided in
section 6045(e) and the regulations.
Paperwork Reduction Act
The collection of information contained in this notice of proposed
rulemaking has been submitted to the Office of Management and Budget
for review in accordance with the Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)). Comments on the collection of information should be
sent to the Office of Management and Budget, Attn: Desk Officer for the
Department of Treasury, Office of Information and Regulatory Affairs,
Washington, DC 20503, with copies to the Internal Revenue Service,
Attn: IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP, Washington, DC
20224. Comments on the collection of information should be received by
February 27, 2008. The Treasury Department is interested in comments on
the following:
Whether the proposed collection of information is necessary for the
proper performance of the function of the IRS, including whether the
information will have practical utility;
[[Page 67591]]
The accuracy of the estimated burden associated with the proposed
collection of information (see below);
How the quality, utility, and clarity of the information to be
collected may be enhanced;
How the burden of complying with the proposed collections of
information may be minimized, including through the application of
automated collection techniques or other forms of information
technology; and
Estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of service to provide information.
The collection of information affected by this proposed regulation
is described in Sec. 1.6045-4. The collection of information is
mandatory. The likely respondents are for-profit corporations and small
business entities.
Estimated total annual reporting burden: 10,000 hours.
Estimated average annual burden hours per respondent: .5 hours.
Estimated number of respondents: 20,000.
Estimated frequency of responses: annually.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a valid
control number assigned by the Office of Management and Budget.
Books or records relating to a collection of information must be
retained as long as their contents may become material in the
administration of any Internal Revenue Law. Generally, tax returns and
tax return information are confidential, as required by 26 U.S.C. 6103.
Proposed Effective Date
These amendments shall apply to sales or exchanges of standing
timber for lump-sum payments completed on or after the date of
publication of a Treasury decision adopting these rules as final
regulations in the Federal Register.
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. It is hereby
certified that collection of information in this regulation will not
have a significant economic impact on a substantial number of small
entities. This certification is based on the fact that the collection
of information burden imposed by these regulations flows directly from
section 6045(e) of the Code. Moreover, requiring information reporting
as described in the preamble with regard to sales or exchanges of
standing timber for lump-sum payments imposes minimal burden in time or
expense. Therefore, a Regulatory Flexibility Analysis under the
Regulatory Flexibility Act (5 U.S.C. Chapter 6) is not required. The
IRS invites comments on the accuracy of this certification. Pursuant to
section 7805(f) of the Code, this notice of proposed rulemaking has
been submitted to the Chief Counsel for Advocacy of the Small Business
Administration for comment on its impact on small business.
Comments and Request for Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written (a signed original and eight
(8) copies) or electronic comments that are submitted timely to the
IRS. The IRS and the Treasury Department request comments on the
clarity of the proposed rules and how they can be made easier to
understand. All comments will be available for public inspection and
copying.
A public hearing may be scheduled if requested by any person who
timely submits comments. If a public hearing is scheduled, notice of
the date, time and place for the hearing will be published in the
Federal Register.
Drafting Information
The principal author of these regulations is Julie A. Hanlon-Bolton
of the Office of Associate Chief Counsel (Procedure and
Administration). However, other personnel from the IRS and the 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 1.6045-4 is amended by:
1. Redesignating paragraphs (b)(2)(i), (b)(2)(ii), (b)(2)(iii), and
(b)(2)(iv) as paragraphs (b)(2)(i)(A), (b)(2)(i)(B), (B)(2)(i)(C), and
(b)(2)(i)(D), respectively.
2. Adding paragraph (b)(2)(i)(E).
3. Redesignating paragraph (b)(2) introductory text as (b)(2)(i)
introductory text.
4. Designating the undesignated text as paragraph (b)(2)(ii).
5. Adding a new last sentence at the end of newly designated
paragraph (b)(2)(ii).
6. Revising paragraph (c)(2)(i) and paragraph (s).
The revisions and additions read as follows:
Sec. 1.6045-4 Information reporting on real estate transactions with
dates of closing on or after January 1, 1991.
* * * * *
(b) * * *
(2)* * * (i) * * *
(E) Any non-contingent interest in standing timber.
(ii) * * * Further, the term ownership interest includes any
contractual interest in a sale or exchange of standing timber for a
lump-sum payment that is fixed and not contingent.
* * * * *
(c) * * *
(2) * * *
(i) An interest in surface or subsurface natural resources (for
example, water, ores, and other natural deposits) or crops, whether or
not such natural resources or crops are severed from the land. For
purposes of this section, the terms ``natural resources'' and ``crops''
do not include standing timber.
* * * * *
(s) Effective/applicability date. This section applies for real
estate transactions with dates of closing (as determined under
paragraph (h)(2)(ii) of this section) that occur on or after January 1,
1991. The amendments to paragraphs (b)(2)(i)(e), (b)(2)(ii) and
(c)(2)(i) of this section shall apply to sales or exchanges of standing
timber for lump-sum payments completed after the date specified in the
final regulations.
Linda E. Stiff,
Deputy Commissioner for Services and Enforcement.
[FR Doc. E7-23098 Filed 11-28-07; 8:45 am]
BILLING CODE 4830-01-P
