Treatment of Services Under Section 482; Allocation of Income and Deductions From Intangible Property; Apportionment of Stewardship Expense; Correction, 46345-46346 [E9-21226]

Download as PDF Federal Register / Vol. 74, No. 173 / Wednesday, September 9, 2009 / Rules and Regulations 227–1149. Before using any approved AMOC on any airplane to which the AMOC applies, notify your principal maintenance inspector (PMI) or principal avionics inspector (PAI), as appropriate, or lacking a principal inspector, your local Flight Standards District Office. The AMOC approval letter must specifically reference this AD. (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 FAA-approved 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 Union Airworthiness Directive 2008–0212, dated December 4, 2008; and Airbus Mandatory Service Bulletin A310–53–2124, Revision 02, dated May 22, 2008; for related information. Material Incorporated by Reference jlentini on DSKJ8SOYB1PROD with RULES (i) You must use Airbus Mandatory Service Bulletin A310–53–2124, Revision 02, dated May 22, 2008, to do the actions required by this AD, unless the AD specifies otherwise. (1) The Director of the Federal Register approved the incorporation by reference of Airbus Service Bulletin A310–53–2124, Revision 02, dated May 22, 2008, under 5 U.S.C. 552 (a) and 1 CF part 51. (2) For service information identified in this AD, contact Airbus SAS—EAW (Airworthiness Office), 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; e-mail: account.airwortheas@airbus.com; Internet http:// www.airbus.com. (3) You may review copies of the service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington. For information on the availability of this material at the FAA, call 425–227–1221 or 425–227–1152. (4) You may also review copies of the service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202–741–6030, or go to: http://www.archives.gov/federal_register/ code_of_federal_regulations/ ibr_locations.html. Issued in Renton, Washington, on August 24, 2009. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E9–21147 Filed 9–8–09; 8:45 am] BILLING CODE 4910–13–P VerDate Nov<24>2008 16:13 Sep 08, 2009 Jkt 217001 DEPARTMENT OF THE TREASURY PART 1—INCOME TAXES Internal Revenue Service 46345 ■ Paragraph 1. The authority citation for part 1 continues to read in part as follows: 26 CFR Part 1 Authority: 26 U.S.C. 7805 * * *. [TD 9456] RIN 1545–BI78, 1545–BI79, 1545–BI80 Treatment of Services Under Section 482; Allocation of Income and Deductions From Intangible Property; Apportionment of Stewardship Expense; Correction AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Correcting amendments. SUMMARY: This document contains corrections to final regulations (TD 9456) that were published in the Federal Register on Tuesday, August 4, 2009 (74 FR 38830) providing guidance regarding the treatment of controlled services transactions under section 482 and the allocation of income from intangible property, in particular with respect to contributions by a controlled party to the value of intangible property owned by another controlled party. These final regulations modify regulations under section 861 concerning stewardship expenses to be consistent with the changes made to the guidance under section 482. DATES: This correction is effective on September 9, 2009, and is applicable on August 4, 2009. FOR FURTHER INFORMATION CONTACT: Carol B. Tan or Gregory A. Spring, (202) 435–5265 for matters relating to section 482, or Richard L. Chewning, (202) 622– 3850 for matters relating to stewardship expenses (not toll-free numbers). SUPPLEMENTARY INFORMATION: Background The final regulations that are the subject of this document are under sections 482, 861, 6038, and 6662 of the Internal Revenue Code. Need for Correction As published, the final regulations (TD 9456) contain errors that may prove to be misleading and are in need of clarification. 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: ■ PO 00000 Frm 00043 Par. 2. Section 1.482–1 is amended by revising the last sentence of paragraph (d)(3)(v) to read as follows: ■ Fmt 4700 Sfmt 4700 § 1.482–1 Allocation of income and deductions among taxpayers. * * * * * (d) * * * (3) * * * (v) * * * For guidance concerning the specific comparability considerations applicable to transfers of tangible and intangible property and performance of services, see §§ 1.482–3 through 1.482– 6 and § 1.482–9; see also §§ 1.482–3(f), 1.482–4(f)(4), and 1.482–9(m), dealing with the coordination of intangible and tangible property and performance of services rules. ■ Par. 3. Section 1.482–6 is amended by revising the third sentence of paragraph (c)(3)(i)(B)(1) to read as follows: § 1.482–6 Profit split method. * * * * * (c) * * * (3) * * * (i) * * * (B) * * * (1) * * * Thus, in cases where such nonroutine contributions are present, there normally will be an unallocated residual profit after the allocation of income described in paragraph (c)(3)(i)(A) of this section. * * * ■ Par. 4. Section 1.482–8 is amended by revising the second sentence of paragraph (b) Example 10. (iv) to read as follows: § 1.482–8 rule. * Examples of the best method * * (b) * * * * * Example 10. * * * (iv) * * * A functional analysis indicates that USSub’s activities to promote Product Y in year 4 are similar to activities performed by Agency A during years 1 through 3 under the contract with USSub. * * * * * * * * Par. 5. Section 1.482–9 is amended as follows: ■ 1. The last sentence of paragraph (b)(8) Example 22. (i) is revised. ■ 2. Paragraphs (b)(8) Example 23. (ii) second occurrence, (b)(8) Example 23. (iii), and (b)(8) Example 23. (iv) are redesignated as paragraphs (b)(8) Example 23. (iii), (b)(8) Example 23. (iv), and (b)(8) Example 23. (v). ■ 3. The table of paragraph (e)(4) Example 4. (ii) is revised. ■ E:\FR\FM\09SER1.SGM 09SER1 46346 Federal Register / Vol. 74, No. 173 / Wednesday, September 9, 2009 / Rules and Regulations 4. The last sentence of paragraph (g)(2) Example 2. (iii) is revised. ■ 5. The table of paragraph (k)(3) Example 2. (iii) is revised. The revisions read as follows: ■ Example 22. (i) * * * Company P’s total services cost for services A, B, C, and D charged within the group is 100. * § 1.482–9 Methods to determine taxable income in connection with a controlled services transaction. * * * (b) * * * (8) * * * * * * (e) * * * (4) * * * * * Example 4. * * * (ii) * * * Category * Rate (g) * * * (2) * * * Example 2. * * * (iii) * * * In an effort to submit a winning bid to secure the contract, Company B points to its Level 2 license and its record of successful completion of projects, and also demonstrates to Country 2 government that it has access to substantial technical expertise pertaining to processing of Level 1 waste. Project managers ...... Technical staff ........... $100 per hour. $75 per hour. * * (k) * * * (3) * * * * * Example 2. * * * (iii) * * * * * * * Company A Allocation ................................................................................................................................................. Amount ..................................................................................................................................................... * * * * * Par. 6. Section 1.861–8 is amended by revising the fourth sentence of paragraph (g). Example 17. (ii)(A) to read as follows: ■ § 1.861–8 Computation of taxable income from sources within the United States and from other sources and activities. * * * (g) * * * * * Example 17. * * * (ii) * * * (A) * * * For purposes of applying the foreign tax credit limitation, the statutory grouping is general category gross income from sources without the United States and the residual grouping is gross income from sources with in the United States. * * * * * * * * LaNita Van Dyke, Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration). [FR Doc. E9–21226 Filed 9–8–09; 8:45 am] BILLING CODE 4830–01–P Background The final regulations that are the subject of this document are under sections 482, 861, 6038, and 6662 of the Internal Revenue Code. DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9456] jlentini on DSKJ8SOYB1PROD with RULES RIN 1545–BI78, 1545–BI79, 1545–BI80 Treatment of Services Under Section 482; Allocation of Income and Deductions From Intangible Property; Apportionment of Stewardship Expense; Correction AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Correction to final regulations. VerDate Nov<24>2008 16:13 Sep 08, 2009 Jkt 217001 SUMMARY: This document contains corrections to final regulations (TD 9456) that were published in the Federal Register on Tuesday, August 4, 2009 (74 FR 38830) providing guidance regarding the treatment of controlled services transactions under section 482 and the allocation of income from intangible property, in particular with respect to contributions by a controlled party to the value of intangible property owned by another controlled party. These final regulations modify regulations under section 861 concerning stewardship expenses to be consistent with the changes made to the guidance under section 482. DATES: This correction is effective on September 9, 2009, and is applicable on August 4, 2009. FOR FURTHER INFORMATION CONTACT: Carol B. Tan or Gregory A. Spring, (202) 435–5265 for matters relating to section 482, or Richard L. Chewning, (202) 622– 3850 for matters relating to stewardship expenses (not toll-free numbers). SUPPLEMENTARY INFORMATION: Need for Correction As published, the final regulations (TD 9456) contain errors that may prove to be misleading and are in need of clarification. Correction of Publication Accordingly, the publication of the final regulations (TD 9456), which was the subject of FR Doc. E9–18326, is corrected as follows: 1. On page 38830, column 1, in the title, the language ‘‘Treatment of PO 00000 Frm 00044 Fmt 4700 Sfmt 4700 400/500 80 * * B 100/500 20 Total .................... 100 Services Under Section 482; Allocation of Income and Deductions From Intangible Property; Stewardship Expense’’ is corrected to read ‘‘Treatment of Services Under Section 482; Allocation of Income and Deductions From Intangible Property; Apportionment of Stewardship Expense’’. 2. On page 38830, column 3, in the preamble, under the paragraph heading ‘‘Background’’, first paragraph of the column, third line from the bottom of the paragraph, the language ‘‘years after December 31, 2006) as the’’ is corrected to read ‘‘years beginning after December 31, 2006) as the’’. 3. On page 38832, column 1, in the preamble, under the paragraph heading ‘‘e. Business Judgment Rule’’, first paragraph, eleventh line, the language ‘‘one or more trades or business of the’’ is corrected to read ‘‘one or more trades or businesses of the’’. 4. On page 38833, column 1, in the preamble, under the paragraph heading ‘‘g. Shared Services Arrangements’’, second paragraph, fifth line, the language ‘‘under an SSA to the service provider’’ is corrected to read ‘‘under a SSA to the service provider’’. 5. On page 38835, column 2, in the preamble, under the paragraph heading ‘‘7. Controlled Services Transactions and Shareholder Activities—Treas. Reg. § 1.482–9(l)’’, second paragraph of the column, lines 1 and 2 from the bottom of the paragraph, the language ‘‘aggregate activity; rather than a component activity-by-activity basis.’’ is corrected to read ‘‘aggregate-activity basis; rather than a component activityby-activity basis.’’. 6. On page 38835, column 3, in the preamble, under the paragraph heading ‘‘b. Global Dealing Operations’’, last line of the paragraph, the language ‘‘of global E:\FR\FM\09SER1.SGM 09SER1

Agencies

[Federal Register Volume 74, Number 173 (Wednesday, September 9, 2009)]
[Rules and Regulations]
[Pages 46345-46346]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-21226]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9456]
RIN 1545-BI78, 1545-BI79, 1545-BI80


Treatment of Services Under Section 482; Allocation of Income and 
Deductions From Intangible Property; Apportionment of Stewardship 
Expense; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendments.

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

SUMMARY: This document contains corrections to final regulations (TD 
9456) that were published in the Federal Register on Tuesday, August 4, 
2009 (74 FR 38830) providing guidance regarding the treatment of 
controlled services transactions under section 482 and the allocation 
of income from intangible property, in particular with respect to 
contributions by a controlled party to the value of intangible property 
owned by another controlled party. These final regulations modify 
regulations under section 861 concerning stewardship expenses to be 
consistent with the changes made to the guidance under section 482.

DATES: This correction is effective on September 9, 2009, and is 
applicable on August 4, 2009.

FOR FURTHER INFORMATION CONTACT: Carol B. Tan or Gregory A. Spring, 
(202) 435-5265 for matters relating to section 482, or Richard L. 
Chewning, (202) 622-3850 for matters relating to stewardship expenses 
(not toll-free numbers).

SUPPLEMENTARY INFORMATION: 

Background

    The final regulations that are the subject of this document are 
under sections 482, 861, 6038, and 6662 of the Internal Revenue Code.

Need for Correction

    As published, the final regulations (TD 9456) contain errors that 
may prove to be misleading and are in need of clarification.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Correction of Publication

0
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 1.482-1 is amended by revising the last sentence of 
paragraph (d)(3)(v) to read as follows:


Sec.  1.482-1  Allocation of income and deductions among taxpayers.

* * * * *
    (d) * * *
    (3) * * *
    (v) * * * For guidance concerning the specific comparability 
considerations applicable to transfers of tangible and intangible 
property and performance of services, see Sec. Sec.  1.482-3 through 
1.482-6 and Sec.  1.482-9; see also Sec. Sec.  1.482-3(f), 1.482-
4(f)(4), and 1.482-9(m), dealing with the coordination of intangible 
and tangible property and performance of services rules.

0
Par. 3. Section 1.482-6 is amended by revising the third sentence of 
paragraph (c)(3)(i)(B)(1) to read as follows:


Sec.  1.482-6  Profit split method.

* * * * *
    (c) * * *
    (3) * * *
    (i) * * *
    (B) * * *
    (1) * * * Thus, in cases where such nonroutine contributions are 
present, there normally will be an unallocated residual profit after 
the allocation of income described in paragraph (c)(3)(i)(A) of this 
section. * * *

0
Par. 4. Section 1.482-8 is amended by revising the second sentence of 
paragraph (b) Example 10. (iv) to read as follows:


Sec.  1.482-8  Examples of the best method rule.

* * * * *
    (b) * * *

    Example 10. * * *
    (iv) * * * A functional analysis indicates that USSub's 
activities to promote Product Y in year 4 are similar to activities 
performed by Agency A during years 1 through 3 under the contract 
with USSub. * * *
* * * * *


0
Par. 5. Section 1.482-9 is amended as follows:
0
1. The last sentence of paragraph (b)(8) Example 22. (i) is revised.
0
2. Paragraphs (b)(8) Example 23. (ii) second occurrence, (b)(8) Example 
23. (iii), and (b)(8) Example 23. (iv) are redesignated as paragraphs 
(b)(8) Example 23. (iii), (b)(8) Example 23. (iv), and (b)(8) Example 
23. (v).
0
3. The table of paragraph (e)(4) Example 4. (ii) is revised.

[[Page 46346]]

0
4. The last sentence of paragraph (g)(2) Example 2. (iii) is revised.
0
5. The table of paragraph (k)(3) Example 2. (iii) is revised.
    The revisions read as follows:


Sec.  1.482-9  Methods to determine taxable income in connection with a 
controlled services transaction.

* * * * *
    (b) * * *
    (8) * * *

    Example 22. (i) * * * Company P's total services cost for 
services A, B, C, and D charged within the group is 100.
* * * * *
    (e) * * *
    (4) * * *

    Example 4. * * *
    (ii) * * *

------------------------------------------------------------------------
                 Category                               Rate
------------------------------------------------------------------------
Project managers..........................  $100 per hour.
Technical staff...........................  $75 per hour.
------------------------------------------------------------------------

* * * * *
    (g) * * *
    (2) * * *

    Example 2. * * *
    (iii) * * * In an effort to submit a winning bid to secure the 
contract, Company B points to its Level 2 license and its record of 
successful completion of projects, and also demonstrates to Country 
2 government that it has access to substantial technical expertise 
pertaining to processing of Level 1 waste.
* * * * *
    (k) * * *
    (3) * * *

    Example 2. * * *
    (iii) * * *

------------------------------------------------------------------------
             Company                    A            B          Total
------------------------------------------------------------------------
Allocation.......................      400/500      100/500  ...........
Amount...........................           80           20          100
------------------------------------------------------------------------

* * * * *

0
Par. 6. Section 1.861-8 is amended by revising the fourth sentence of 
paragraph (g). Example 17. (ii)(A) to read as follows:

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

* * * * *
    (g) * * *

    Example 17. * * *
    (ii) * * *
    (A) * * * For purposes of applying the foreign tax credit 
limitation, the statutory grouping is general category gross income 
from sources without the United States and the residual grouping is 
gross income from sources with in the United States. * * *
* * * * *

LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel (Procedure and Administration).
[FR Doc. E9-21226 Filed 9-8-09; 8:45 am]
BILLING CODE 4830-01-P