Guidance Under Section 956 for Determining the Basis of Property Acquired in Certain Nonrecognition Transactions, 35606-35607 [E8-14170]

Download as PDF 35606 Federal Register / Vol. 73, No. 122 / Tuesday, June 24, 2008 / Proposed Rules Other FAA AD Provisions DEPARTMENT OF THE TREASURY (g) The following provisions also apply to this AD: (1) Alternative Methods of Compliance (AMOCs): The Manager, International Branch, ANM–116, Transport Airplane Directorate, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Send information to ATTN: Vladimir Ulyanov, Aerospace Engineer, International Branch, ANM–116, Transport Airplane Directorate, FAA, 1601 Lind Avenue, SW., Renton, Washington 98057–3356; telephone (425) 227–1138; fax (425) 227–1149. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector (PI) in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO. (2) Airworthy Product: For any requirement in this AD to obtain corrective actions from a manufacturer or other source, use these actions if they are FAA-approved. Corrective actions are considered FAAapproved if they are approved by the State of Design Authority (or their delegated agent). You are required to assure the product is airworthy before it is returned to service. (3) Reporting Requirements: For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act, the Office of Management and Budget (OMB) has approved the information collection requirements and has assigned OMB Control Number 2120–0056. Related Information (h) Refer to MCAI European Aviation Safety Agency (EASA) Airworthiness Directive 2007–0284, dated November 12, 2007, and the service bulletins specified in Table 1 of this AD, for related information. TABLE 1.—SERVICE INFORMATION Airbus Service Bulletin A330–53–3159 A330–53–3160 A330–53–3168 A340–53–4165 A340–53–4172 A340–53–4174 .......... .......... .......... .......... .......... .......... Date September 19, July 9, 2007. September 19, September 19, July 10, 2007. September 19, 2007. 2007. 2007. 2007. ebenthall on PRODPC60 with PROPOSALS Issued in Renton, Washington, on June 9, 2008. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E8–14192 Filed 6–23–08; 8:45 am] BILLING CODE 4910–13–P Internal Revenue Service 26 CFR Part 1 [REG–102122–08] RIN 1545–BH56 Guidance Under Section 956 for Determining the Basis of Property Acquired in Certain Nonrecognition Transactions 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 and the Treasury Department are issuing temporary regulations under section 956 of the Internal Revenue Code (Code) relating to the determination of basis in property acquired by a controlled foreign corporation in certain nonrecognition transactions that are intended to avoid United States income tax. Those regulations affect United States shareholders of a controlled foreign corporation that acquires United States property in certain nonrecognition transactions. 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 September 22, 2008. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG–102122–08), room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand delivered between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG– 102122–08), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC, or sent electronically, via the Federal eRulemaking Portal at http:// www.regulations.gov (IRS REG–102122– 08). FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, John H. Seibert, (202) 622–3860; concerning submissions of comments and/or requests for a hearing, Regina Johnson, (202) 622–7180 (not toll-free numbers). SUPPLEMENTARY INFORMATION: Background and Explanation of Provisions Temporary regulations in the Rules and Regulations section of this issue of VerDate Aug<31>2005 15:03 Jun 23, 2008 Jkt 214001 PO 00000 Frm 00014 Fmt 4702 Sfmt 4702 the Federal Register provide guidance regarding the determination of basis for property acquired in certain nonrecognition transactions that repatriate earnings and profits of a controlled foreign corporation but are structured with the intent to avoid an income inclusion by the United States shareholders of the controlled foreign corporation under section 951(a)(1)(B). This avoidance is achieved by the use of the basis rules under section 362(a) for the acquisition by the controlled foreign corporation of certain stock or obligations that constitute United States property within the meaning of section 956(c). The text of those regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the temporary regulations and these proposed regulations. 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. Pursuant to the Regulatory Flexibility Act (RFA) (5 U.S.C. chapter 6), it is hereby certified that these regulations will not have a significant economic impact on a substantial number of small entities. This certification is based on the fact that these regulations will affect primarily large multi-national United States corporations that own a significant interest in foreign corporations that acquire certain United States property in a transaction subject to the regulations. Accordingly, a regulatory flexibility analysis is not required. Pursuant to section 7805(f) of the Code, this regulation has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small entities. Comments and Requests for a 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 continue to consider, outside the context of section 956, the appropriate basis of stock or obligations issued by a transferor in the hands of the transferee as determined under section 362. The IRS and the Treasury Department are also considering whether any additional rules are necessary or appropriate to coordinate the section 956 basis E:\FR\FM\24JNP1.SGM 24JNP1 Federal Register / Vol. 73, No. 122 / Tuesday, June 24, 2008 / Proposed Rules determinations under these regulations with basis determinations under other provisions of the Code or regulations. Comments are requested in this regard. 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 John H. Seibert, Office of Associate Chief Counsel (International). However, other personnel from the IRS and the Treasury Department participated in their development. 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 1.956–1 is amended by adding a sentence to the end of paragraph (e)(1) and adding new paragraphs (e)(5), (e)(6) and (f) to read as follows: § 1.956–1 Shareholder’s pro rata share of a controlled foreign corporation’s increase in earnings invested in United States property. * * * * * (e) * * * (1) * * * See § 1.956– 1T(e)(6) for a special rule for determining amounts attributable to United States property acquired as the result of certain nonrecognition transactions. ebenthall on PRODPC60 with PROPOSALS * * (e)(5) [The text of the proposed amendment to § 1.956–1(e)(5) is the same as the text for § 1.956–1T(e)(5) published elsewhere in this issue of the Federal Register]. (e)(6) [The text of the proposed amendment to § 1.956–1(e)(6) is the same as the text for § 1.956–1T(e)(6) published elsewhere in this issue of the Federal Register]. (f) [The text of the proposed amendment to § 1.956–1(f) is the same as the text for § 1.956–1T(f) published 15:03 Jun 23, 2008 Jkt 214001 BILLING CODE 4830–01–P DEPARTMENT OF THE INTERIOR Office of Surface Mining Reclamation and Enforcement 30 CFR Part 944 [SATS No. UT–045–FOR; Docket ID: OSM– 2008–0011] Utah Regulatory Program Office of Surface Mining Reclamation and Enforcement, Interior. ACTION: Proposed rule; opening of public comment period and opportunity for public hearing on proposed amendment. Income taxes, Reporting and recordkeeping requirements. VerDate Aug<31>2005 Steven T. Miller, Acting Deputy Commissioner for Services and Enforcement. [FR Doc. E8–14170 Filed 6–23–08; 8:45 am] AGENCY: List of Subjects in 26 CFR Part 1 * elsewhere in this issue of the Federal Register]. SUMMARY: We are announcing receipt of a proposed amendment to the Utah regulatory program (hereinafter, the ‘‘Utah program’’) under the Surface Mining Control and Reclamation Act of 1977 (‘‘SMCRA’’ or ‘‘the Act’’). Utah proposes additions and revisions to its rules regarding Division of Oil Gas and Mining (‘‘DOGM’’ or ‘‘Division’’) requests for additional information required to complete the review of a coal mining permit application, change, or renewal; the casing and sealing of underground openings; the definition of ‘‘intermittent stream’’ and related performance standards. Utah intends to revise its program to clarify Division responsibilities and improve operational efficiency. DATES: We will accept written comments on this amendment until 4 p.m., m.d.t. July 24, 2008. If requested, we will hold a public hearing on the amendment on July 21, 2008. We will accept requests to speak until 4 p.m., m.d.t. on July 9, 2008. ADDRESSES: You may submit comments by any of the following methods: • Federal eRulemaking Portal: www.regulations.gov. The proposed rule has been assigned Docket ID: OSM– 2008–0011. If you would like to submit comments through the Federal eRulemaking Portal, go to www.regulations.gov and do the following. Click on the ‘‘Advanced Docket Search’’ button on the right side of the screen. Type in the Docket ID ‘‘OSM–2008–0011’’ and click the ‘‘Submit’’ button at the bottom of the page. The next screen will display the PO 00000 Frm 00015 Fmt 4702 Sfmt 4702 35607 Docket Search Results for the rulemaking. If you click on OSM–2008– 0011, you can view the proposed rule and submit a comment. You can also view supporting material and any comments submitted by others. • Mail: James F. Fulton, Chief, Denver Field Division Office of Surface Mining Reclamation and Enforcement, P.O. Box 46667, Denver, CO 80201–6667. • Hand Delivery/Courier: James F. Fulton, Chief, Denver Field Division Office of Surface Mining Reclamation and Enforcement, 1999 Broadway, Suite 3320, Denver, CO 80202–5733. Instructions: All submissions received must include the agency name (OSM) and either the Docket ID ‘‘OSM–2008– 0011’’ or SATS No. ‘‘UT–045–FOR’’. For detailed instructions on submitting comments and additional information on the rulemaking process, see the ‘‘III. Public Comment Procedures’’ heading under the SUPPLEMENTARY INFORMATION section of this document. Docket: In addition to viewing the docket and obtaining copies of documents at www.regulations.gov, you may review copies of the Utah program, this amendment, a listing of any public hearings, and all written comments received in response to this document at the addresses listed below during normal business hours, Monday through Friday, excluding holidays. You may also receive one free copy of the amendment by contacting OSM’s Denver Field Division. James F. Fulton, Chief, Denver Field Division, Office of Surface Mining Reclamation and Enforcement, 1999 Broadway, suite 3320, Denver, CO 80202–5733, Telephone: (303) 293– 5015, E-mail: jfulton@osmre.gov. John R. Baza, Director, Division of Oil, Gas and Mining, 1594 West North Temple, suite 1210, Salt Lake City, UT 84114–5801, Telephone: (801) 538–5340, Internet: http:// www.ogm.utah.gov. FOR FURTHER INFORMATION CONTACT: James F. Fulton, Telephone: (303) 293– 5015, Internet: jfulton@osmre.gov. SUPPLEMENTARY INFORMATION: I. Background on the Utah Program II. Description of the Proposed Amendment III. Public Comment Procedures IV. Procedural Determinations I. Background on the Utah Program Section 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its State program includes, among other things, ‘‘a State law which provides for the regulation of E:\FR\FM\24JNP1.SGM 24JNP1

Agencies

[Federal Register Volume 73, Number 122 (Tuesday, June 24, 2008)]
[Proposed Rules]
[Pages 35606-35607]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-14170]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-102122-08]
RIN 1545-BH56


Guidance Under Section 956 for Determining the Basis of Property 
Acquired in Certain Nonrecognition Transactions

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 and the Treasury Department are issuing 
temporary regulations under section 956 of the Internal Revenue Code 
(Code) relating to the determination of basis in property acquired by a 
controlled foreign corporation in certain nonrecognition transactions 
that are intended to avoid United States income tax. Those regulations 
affect United States shareholders of a controlled foreign corporation 
that acquires United States property in certain nonrecognition 
transactions. 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 September 22, 2008.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-102122-08), room 
5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand delivered between the 
hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-102122-08), Courier's 
Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., 
Washington, DC, or sent electronically, via the Federal eRulemaking 
Portal at http://www.regulations.gov (IRS REG-102122-08).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
John H. Seibert, (202) 622-3860; concerning submissions of comments 
and/or requests for a hearing, Regina Johnson, (202) 622-7180 (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 provide guidance regarding the 
determination of basis for property acquired in certain nonrecognition 
transactions that repatriate earnings and profits of a controlled 
foreign corporation but are structured with the intent to avoid an 
income inclusion by the United States shareholders of the controlled 
foreign corporation under section 951(a)(1)(B). This avoidance is 
achieved by the use of the basis rules under section 362(a) for the 
acquisition by the controlled foreign corporation of certain stock or 
obligations that constitute United States property within the meaning 
of section 956(c).
    The text of those regulations also serves as the text of these 
proposed regulations. The preamble to the temporary regulations 
explains the temporary regulations and these proposed regulations.

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. Pursuant to 
the Regulatory Flexibility Act (RFA) (5 U.S.C. chapter 6), it is hereby 
certified that these regulations will not have a significant economic 
impact on a substantial number of small entities. This certification is 
based on the fact that these regulations will affect primarily large 
multi-national United States corporations that own a significant 
interest in foreign corporations that acquire certain United States 
property in a transaction subject to the regulations. Accordingly, a 
regulatory flexibility analysis is not required. Pursuant to section 
7805(f) of the Code, this regulation has been submitted to the Chief 
Counsel for Advocacy of the Small Business Administration for comment 
on its impact on small entities.

Comments and Requests for a 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 continue to consider, outside 
the context of section 956, the appropriate basis of stock or 
obligations issued by a transferor in the hands of the transferee as 
determined under section 362. The IRS and the Treasury Department are 
also considering whether any additional rules are necessary or 
appropriate to coordinate the section 956 basis

[[Page 35607]]

determinations under these regulations with basis determinations under 
other provisions of the Code or regulations. Comments are requested in 
this regard. 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 John H. Seibert, 
Office of Associate Chief Counsel (International). 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 1.956-1 is amended by adding a sentence to the end 
of paragraph (e)(1) and adding new paragraphs (e)(5), (e)(6) and (f) to 
read as follows:


Sec.  1.956-1  Shareholder's pro rata share of a controlled foreign 
corporation's increase in earnings invested in United States property.

* * * * *
    (e) * * * (1) * * * See Sec.  1.956-1T(e)(6) for a special rule for 
determining amounts attributable to United States property acquired as 
the result of certain nonrecognition transactions.

* * *
    (e)(5) [The text of the proposed amendment to Sec.  1.956-1(e)(5) 
is the same as the text for Sec.  1.956-1T(e)(5) published elsewhere in 
this issue of the Federal Register].
    (e)(6) [The text of the proposed amendment to Sec.  1.956-1(e)(6) 
is the same as the text for Sec.  1.956-1T(e)(6) published elsewhere in 
this issue of the Federal Register].
    (f) [The text of the proposed amendment to Sec.  1.956-1(f) is the 
same as the text for Sec.  1.956-1T(f) published elsewhere in this 
issue of the Federal Register].

Steven T. Miller,
Acting Deputy Commissioner for Services and Enforcement.
[FR Doc. E8-14170 Filed 6-23-08; 8:45 am]
BILLING CODE 4830-01-P