Application of Section 108(i) to Partnerships and S Corporations, 49427-49428 [2010-20061]

Download as PDF Federal Register / Vol. 75, No. 156 / Friday, August 13, 2010 / Proposed Rules standards should the OCC impose on the use of such opinions? 18. Which alternative would be most appropriate for community banks and why? 19. Are there other alternatives that ought to be considered? 20. What level of due diligence should be required when considering the purchase of an investment security? How should the OCC set minimum standards for monitoring the performance of an investment security over time so that banks effectively ensure that their investment securities remain ‘‘investment quality’’ as long as they are held? By the Office of Comptroller of the Currency. John C. Dugan, Comptroller of the Currency. Alternatives Credit-Worthiness Standards for Credit Ratings in Regulations Pertaining to Securities Issuances and International Banking Activities (Parts 16 and 28) As discussed above, the OCC’s regulations include a number of other references to credit ratings, including in regulations pertaining to securities issuances 21 and international banking activities.22 21. Are there considerations, in addition to those discussed above, that the agency should address in developing alternative credit-worthiness standards for regulations pertaining to securities issuances or international banking activities? 22. What standard or standards should the OCC adopt to replace the investment grade requirement in section 16.6? Please comment on how the alternative standard will ensure that potential purchasers of nonconvertible debt have access to necessary information about the issuing bank and have the appropriate knowledge and experience to evaluate that information? 23. What standard or standards should the OCC adopt to specify the types of assets eligible for inclusion in the CED under Part 28 (section 4(g) of the IBA)? To what extent are alternative standards consistent with maintenance of sound financial condition, and the protection of depositors, creditors, and the public interest? Application of Section 108(i) to Partnerships and S Corporations erowe on DSK5CLS3C1PROD with PROPOSALS-1 Dated: August 9, 2010. 21 Certain limitations in Part 16 refer to a security that is ‘‘investment grade,’’ which means that it is rated in one of the top four rating categories by each NSRSO that has rated the security. See, e.g, 12 CFR 16.2(g), and 12 CFR 16.6(a)(4). 22 A foreign bank’s capital equivalency deposits may consist of certificates of deposit, payable in the United States, and banker’s acceptances, provided that, in either case, the issuer or the instrument is rated investment grade by an internationally recognized rating organization, and neither the issuer nor the instrument is rated lower than investment grade by any such rating organization that has rated the issuer or the instrument. 12 CFR 28.15. VerDate Mar<15>2010 14:53 Aug 12, 2010 Jkt 220001 [FR Doc. 2010–20048 Filed 8–12–10; 8:45 am] BILLING CODE 4810–01–P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [REG–144762–09] RIN 1545–BI99 Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking by cross-reference to temporary regulations. AGENCY: In the Rules and Regulations section of this issue of the Federal Register, the IRS is issuing temporary regulations relating to the application of section 108(i) of the Internal Revenue Code (Code) to partnerships and S corporations. The temporary regulations provide rules regarding the deferral of discharge of indebtedness income and original issue discount deductions by a partnership or an S corporation with respect to reacquisitions of applicable debt instruments after December 31, 2008, and before January 1, 2011. The regulations affect partnerships and S corporations with respect to reacquisitions of applicable debt instruments and their partners and shareholders. The text of the temporary regulations published in this issue of the Federal Register also serves as the text of these proposed regulations. DATES: Written or electronic comments and requests for a public hearing must be received by November 12, 2010. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG–144762–09), Room 5203, Internal Revenue Service, P.O. 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–144762– 09), 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–144762– 09). FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, SUMMARY: PO 00000 Frm 00005 Fmt 4702 Sfmt 4702 49427 Megan A. Stoner and Joseph R. Worst, Office of Associate Chief Counsel (Passthroughs and Special Industries) (202) 622–3070; concerning submissions of comments or a request for a public hearing, Richard Hurst, (202) 622–7180 (not toll-free numbers) and his e-mail address is Richard.A.Hurst@irscounsel.treas.gov. SUPPLEMENTARY INFORMATION: Paperwork Reduction Act The collection of information contained in these proposed regulations has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) under control number 1545–2147. The collection of information in these regulations are in § 1.108(i)–2(b)(3)(iv). Under § 1.108(i)–2(b)(3)(iv), a partner in a partnership that makes an election under section 108(i) is required to provide certain information to the partnership so that the partnership can correctly determine the partner’s deferred section 752 amount with respect to an applicable debt instrument. 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. 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 108(i). The temporary regulations set forth rules for applying section 108(i) to partnerships and S corporations. The text of the temporary 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. It is hereby certified that the collection of information contained in these E:\FR\FM\13AUP1.SGM 13AUP1 49428 Federal Register / Vol. 75, No. 156 / Friday, August 13, 2010 / Proposed Rules Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG–142800– 09), 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–142800– 09). FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Robert M. Rhyne (202) 622–7790 and Rubin B. Ranat (202) 622–7530; concerning submissions of comments and/or requests for a public hearing, Richard Hurst (202) 622–7180 (not tollfree numbers), or Richard.a.hurst@irscounsel.treas.gov. regulations 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 imposed on partners of partnerships is minimal in that it requires partners to share information with partnerships that partners already maintain. Moreover, it should take a partner no more than one hour to satisfy the information-sharing requirement in these regulations. Therefore, a regulatory flexibility analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) 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 business. Par. 2. Section 1.108(i)–2 is added to read as follows: 26 CFR Part 1 Paperwork Reduction Act Comments and 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 will be scheduled if requested in writing by any person that timely submits written or electronic 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. [REG–142800–09] The collection of information contained in this notice of proposed rulemaking has been submitted to the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) under control number 1545–2147. Comments on the collection of information should be sent to the Office of Management and Budget, Attn: Desk Officer for the Department of the 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 November 12, 2010. Comments are specifically requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the Internal Revenue Service, including whether the information will have practical utility; 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 of operation, maintenance, and purchase of service to provide information. The collection of information in this proposed regulation is in § 1.108(i)– 1(b)(3). This information is required by the IRS to allow members of a Drafting Information The principal authors of these regulations are Megan A. Stoner and Joseph R. Worst, Office of the Associate Chief Counsel (Passthroughs and Special Industries). 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. erowe on DSK5CLS3C1PROD with PROPOSALS-1 Proposed Amendment 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 is amended by adding an entry in numerical order to read as follows: Authority: 26 U.S.C. 7805 * * * Section 1.108(i)–2 also issued under 26 U.S.C. 108(i)(7). * * * VerDate Mar<15>2010 14:53 Aug 12, 2010 Jkt 220001 § 1.108(i)–2 Application of section 108(i) to partnerships and S corporations. [The text of proposed § 1.108(i)–2 is the same as the text of § 1.108(i)–2T(a) through (f) published elsewhere in this issue of the Federal Register]. Steven T. Miller, Deputy Commissioner for Services and Enforcement. [FR Doc. 2010–20061 Filed 8–11–10; 11:15 am] BILLING CODE 4830–01–P DEPARTMENT OF THE TREASURY Internal Revenue Service SUPPLEMENTARY INFORMATION: RIN 1545–BI96 Guidance Regarding Deferred Discharge of Indebtedness Income of Corporations and Deferred Original Issue Discount Deductions Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking by cross-reference to temporary regulations. AGENCY: In the Rules and Regulations section of this issue of the Federal Register, the IRS and the Treasury Department are issuing temporary regulations (TD 9497) under section 108(i) of the Internal Revenue Code (Code). These regulations primarily affect C corporations regarding the acceleration of deferred discharge of indebtedness (COD) income (deferred COD income) and deferred original issue discount (OID) deductions (deferred OID deductions) under section 108(i)(5)(D), and the calculation of earnings and profits as a result of an election under section 108(i). In addition, these regulations provide rules applicable to all taxpayers regarding deferred OID deductions under section 108(i) as a result of a reacquisition of an applicable debt instrument by an issuer or related party. The text of the temporary regulations also serves as the text of these proposed regulations. DATES: Written or electronic comments and request for a public hearing must be received by November 12, 2010. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG–142800–09), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through SUMMARY: PO 00000 Frm 00006 Fmt 4702 Sfmt 4702 E:\FR\FM\13AUP1.SGM 13AUP1

Agencies

[Federal Register Volume 75, Number 156 (Friday, August 13, 2010)]
[Proposed Rules]
[Pages 49427-49428]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-20061]


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

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-144762-09]
RIN 1545-BI99


Application of Section 108(i) to Partnerships and S Corporations

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 relating to 
the application of section 108(i) of the Internal Revenue Code (Code) 
to partnerships and S corporations. The temporary regulations provide 
rules regarding the deferral of discharge of indebtedness income and 
original issue discount deductions by a partnership or an S corporation 
with respect to reacquisitions of applicable debt instruments after 
December 31, 2008, and before January 1, 2011. The regulations affect 
partnerships and S corporations with respect to reacquisitions of 
applicable debt instruments and their partners and shareholders. The 
text of the temporary regulations published in this issue of the 
Federal Register also serves as the text of these proposed regulations.

DATES: Written or electronic comments and requests for a public hearing 
must be received by November 12, 2010.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-144762-09), Room 
5203, Internal Revenue Service, P.O. 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-
144762-09), 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-144762-09).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Megan A. Stoner and Joseph R. Worst, Office of Associate Chief Counsel 
(Passthroughs and Special Industries) (202) 622-3070; concerning 
submissions of comments or a request for a public hearing, Richard 
Hurst, (202) 622-7180 (not toll-free numbers) and his e-mail address is 
Richard.A.Hurst@irscounsel.treas.gov.

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The collection of information contained in these proposed 
regulations has been reviewed and approved by the Office of Management 
and Budget in accordance with the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507) under control number 1545-2147. The collection of 
information in these regulations are in Sec.  1.108(i)-2(b)(3)(iv). 
Under Sec.  1.108(i)-2(b)(3)(iv), a partner in a partnership that makes 
an election under section 108(i) is required to provide certain 
information to the partnership so that the partnership can correctly 
determine the partner's deferred section 752 amount with respect to an 
applicable debt instrument.
    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.

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 108(i). The temporary regulations set forth 
rules for applying section 108(i) to partnerships and S corporations. 
The text of the temporary 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. It is hereby 
certified that the collection of information contained in these

[[Page 49428]]

regulations 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 imposed on partners of 
partnerships is minimal in that it requires partners to share 
information with partnerships that partners already maintain. Moreover, 
it should take a partner no more than one hour to satisfy the 
information-sharing requirement in these regulations. Therefore, a 
regulatory flexibility analysis under the Regulatory Flexibility Act (5 
U.S.C. chapter 6) 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 business.

Comments and 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 will be scheduled if requested in writing by 
any person that timely submits written or electronic 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.

Drafting Information

    The principal authors of these regulations are Megan A. Stoner and 
Joseph R. Worst, Office of the Associate Chief Counsel (Passthroughs 
and Special Industries). 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 Amendment 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 is amended by adding 
an entry in numerical order to read as follows:

    Authority: 26 U.S.C. 7805 * * *

    Section 1.108(i)-2 also issued under 26 U.S.C. 108(i)(7). * * *

    Par. 2. Section 1.108(i)-2 is added to read as follows:


Sec.  1.108(i)-2  Application of section 108(i) to partnerships and S 
corporations.

    [The text of proposed Sec.  1.108(i)-2 is the same as the text of 
Sec.  1.108(i)-2T(a) through (f) published elsewhere in this issue of 
the Federal Register].

Steven T. Miller,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2010-20061 Filed 8-11-10; 11:15 am]
BILLING CODE 4830-01-P