Disregarded Entities and the Indoor Tanning Services Excise Tax; Correction, 43157-43158 [2012-17959]
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Federal Register / Vol. 77, No. 142 / Tuesday, July 24, 2012 / Rules and Regulations
Emcdonald on DSK67QTVN1PROD with RULES
Statement is generally consistent with
the agencies’ Uniform Agreement on the
Classification of Assets and Appraisal of
Securities Held by Banks and Thrifts,
which describes the importance of
management’s credit risk analysis and
its use in examiner decisions
concerning investment security risk
ratings and classifications.2
Determining Whether Securities Are
Permissible Prior to Purchase
The FDIC expects savings associations
to conduct an appropriate level of due
diligence in determining whether a
corporate debt security is eligible for
investment under 12 CFR 362.11(b).
This may include consideration of
internal analyses, third-party research
and analytics including internal risk
ratings, external credit ratings, default
statistics, and other sources of
information appropriate for the
particular security. The depth of the due
diligence should be a function of the
security’s credit quality, the complexity
of the issuer’s financial structure, and
the size of the investment. As an issuer’s
financial structure becomes more
complex, the more credit-related due
diligence an institution should perform,
even when the credit quality is
perceived to be very high. Management
should ensure they understand the
security’s structure and how the
security will perform in various
scenarios throughout the business cycle.
The FDIC expects savings associations
to consider a variety of factors relevant
to the particular security when
determining whether a security is a
permissible and sound investment. The
range and type of specific factors an
institution should consider will vary
depending on the particular type and
nature of the security. As a general
matter, a savings association will have
a greater burden to support its
determination if one factor is
contradicted by a finding under another
factor.
Although part 362 does not provide
specific investment quality
requirements, savings associations
should conduct an appropriate level of
due diligence prior to purchasing a
corporate debt security to ensure that it
is eligible for investment under part
362. A savings association should
review and update this analysis
periodically, as appropriate for the size
and risk profile of the security. By way
of example, appropriate factors a
savings association should consider
include, but should not be limited to,
the following:
D Confirm spread to U.S. Treasuries is
consistent with bonds of similar credit
quality;
D Confirm risk of default is low and
consistent with bonds of similar credit
quality;
D Confirm capacity to pay through
internal credit analysis that can be
supplemented with other third-party
analytics;
D Understand applicable market
demographics/economics; and
D Understand current levels and
trends in operating margins, operating
efficiency, profitability, return on assets
and return on equity.
Maintaining an Appropriate and
Effective Portfolio Risk Management
Framework
Savings associations should have in
place an appropriate risk management
framework for the level of risk in their
corporate debt investment portfolios.
Failure to maintain an adequate
investment portfolio risk management
process, which includes understanding
key portfolio risks, is considered an
unsafe and unsound practice. Savings
associations should conform to safe and
sound banking practices and, similarly,
should consider appropriate investment
portfolio risks in connection with the
acquisition of a corporate debt security.3
Having a strong and robust risk
management framework appropriate for
the level of risk of a savings
association’s investment portfolio is
particularly critical for managing
portfolio credit risk. A key role for
management in the oversight process is
to translate the risk tolerance levels
established by the board of directors
into a set of internal operating policies
and procedures that govern the
institution’s investment activities.
Specifically, investment policies should
provide credit risk concentration limits.
Such limits may apply to concentrations
relating to a single or related issuer, a
geographical area, and obligations with
similar characteristics. Savings
associations with investment portfolios
that lack diversification in one of the
aforementioned areas should enhance
their monitoring and reporting systems.
Safety and soundness principles
warrant effective concentration risk
management programs to ensure that
credit exposures do not reach an
excessive level.
Savings associations should identify
and measure the risks of their
investments periodically after
acquisition. Such analyses allow an
institution to understand and effectively
manage the risks of its investment
2 See, FDIC Financial Institution Letter, 70–2004
(June 15, 2004).
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3 See
supra footnote 1.
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43157
portfolio, including credit risk, and are
an essential element of a sound
investment portfolio risk management
framework. Exposure to each type of
risk for each security should be
measured and aggregated with similar
exposures on an institution-wide basis.
Risk measurement should be obtained
from sources independent of sellers or
counterparties and should be
periodically validated. Irrespective of
any contractual or other arrangements,
savings associations are responsible for
understanding and managing the risks
of all of their investments.
By order of the Board of Directors.
Dated at Washington, DC, this 18th day of
July, 2012.
Federal Deposit Insurance Corporation
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2012–17854 Filed 7–20–12; 11:15 am]
BILLING CODE 6714–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 301
[TD 9596]
RIN 1545–BK39
Disregarded Entities and the Indoor
Tanning Services Excise Tax;
Correction
Internal Revenue Service (IRS),
Treasury.
ACTION: Correcting amendment.
AGENCY:
This document contains
corrections to temporary regulations (TD
9596), which were published in the
Federal Register on June 25, 2012 (77
FR 37806) relating to disregarded
entities (including qualified subchapter
S subsidiaries) and the indoor tanning
services excise tax.
DATES: This correction is effective on
July 24, 2012, and applies on and after
June 25, 2012.
FOR FURTHER INFORMATION CONTACT:
Michael H. Beker, (202) 622–3130 (not
a toll-free number).
SUPPLEMENTARY INFORMATION:
SUMMARY:
Background
The temporary regulations (TD 9596)
that are the subject of this correction are
under section 7701 of the Internal
Revenue Code.
Need for Correction
As published, the temporary
regulations contain errors that may
prove to be misleading and are in need
of clarification.
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43158
Federal Register / Vol. 77, No. 142 / Tuesday, July 24, 2012 / Rules and Regulations
List of Subjects in 26 CFR Part 301
Employment taxes, Estate taxes,
Excise taxes, Gift taxes, Income taxes,
Penalties, Reporting and recordkeeping
requirements.
Correction of Publication
Accordingly, 26 CFR part 301 is
corrected by making the following
correcting amendment:
PART 301—PROCEDURE AND
ADMINISTRATION
Paragraph 1. The authority citation
for part 1 continues to read in part as
follows:
■
Authority: 26 U.S.C. 7805 * * *
§ 301.7701–2T
[Corrected]
Par. 2. Section 301.7701–2T is revised
to read as follows:
■
Emcdonald on DSK67QTVN1PROD with RULES
§ 301.7701–2T Business entities;
definitions (temporary).
(a) Through (c)(2)(iv) [Reserved]. For
further guidance, see § 301.7701–2(a)
through (c)(2)(iv).
(A) In general. Section 301.7701–
2(c)(2)(i) (relating to certain wholly
owned entities) does not apply to taxes
imposed under Subtitle C—Employment
Taxes and Collection of Income Tax
(Chapters 21, 22, 23, 23A, 24 and 25 of
the Internal Revenue Code). However,
§ 301.7701–2(c)(2)(i) does apply to
withholding requirements imposed
under section 3406 (backup
withholding). The owner of a business
entity that is disregarded under
§ 301.7701–2 is subject to the
withholding requirements imposed
under section 3406 (backup
withholding). Section 301.7701–
2(c)(2)(i) also applies to taxes imposed
under Subtitle A, including Chapter 2—
Tax on Self Employment Income. The
owner of an entity that is treated in the
same manner as a sole proprietorship
under § 301.7701–2(a) will be subject to
tax on self-employment income.
(B) [Reserved]. For further guidance,
see § 301.7701–2(c)(2)(iv)(B).
(C) Exceptions. For exceptions to the
rule in § 301.7701–2(c)(2)(iv)(B), see
sections 31.3121(b)(3)-1(d), 31.3127–
1(c), and 31.3306(c)(5)-1(d).
(D) through (c)(2)(v) [Reserved]. For
further guidance, see § 301.7701–
2(c)(2)(iv)(D) through (c)(2)(v).
(vi) Tax liabilities with respect to the
indoor tanning services excise tax—(A)
In general. Notwithstanding any other
provision of § 301.7701–2, § 301.7701–
2(c)(2)(i) (relating to certain wholly
owned entities) does not apply for
purposes of—
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(1) Federal tax liabilities imposed by
Chapter 49 of the Internal Revenue
Code;
(2) Collection of tax imposed by
Chapter 49 of the Internal Revenue
Code; and
(3) Claims of a credit or refund related
to the tax imposed by Chapter 49 of the
Internal Revenue Code.
(B) Treatment of entity. An entity that
is disregarded as an entity separate from
its owner for any purpose under
§ 301.7701–2 is treated as a corporation
with respect to items described in
paragraph (c)(2)(vi)(A) of this section.
(d) through (e)(4) [Reserved]. For
further guidance, see § 301.7701–2(d)
through (e)(4).
(5) Paragraphs (c)(2)(iv)(A) and
(c)(2)(iv)(C) of this section apply to
wages paid on or after November 1,
2011. For rules that apply to paragraph
(c)(2)(iv)(A) of this section before
November 1, 2011, see 26 CFR part 301
revised as of April 1, 2009. However,
taxpayers may apply paragraphs
(c)(2)(iv)(A) and (c)(2)(iv)(C) of this
section to wages paid on or after January
1, 2009.
(e)(6) through (e)(7) [Reserved]. For
further guidance, see § 301.7701–2(e)(6)
and (e)(7).
(8) Expiration date. The applicability
of paragraphs (c)(2)(iv)(A) and
(c)(2)(iv)(C) of this section expires on or
before October 31, 2014.
(9) Indoor tanning services excise
tax—(i) Effective/applicability date.
Paragraph (c)(2)(vi) of this section
applies to taxes imposed on amounts
paid on or after July 1, 2012.
(ii) Expiration date. The applicability
of paragraph (c)(2)(vi) of this section
expires on or before June 22, 2015.
LaNita Van Dyke,
Chief, Publications and Regulations Branch,
Legal Processing Division, Associate Chief
Counsel (Procedure and Administration).
[FR Doc. 2012–17959 Filed 7–23–12; 8:45 am]
BILLING CODE P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 100
[Docket Number USCG–2012–0629]
RIN 1625–AA08
Special Local Regulation; Battle on the
Bay Powerboat Race Atlantic Ocean,
Fire Island, NY
Coast Guard, DHS.
Temporary final rule.
AGENCY:
ACTION:
PO 00000
Frm 00010
Fmt 4700
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The Coast Guard is
establishing a temporary special local
regulation on the navigable waters of the
Atlantic Ocean off Smith Point Park,
Fire Island, NY during the Battle on the
Bay Powerboat Race. This action is
necessary to provide for the safety of life
of participants and spectators during
this event. Entering into, transiting
through, remaining, anchoring or
mooring within these regulated areas
would be prohibited unless authorized
by the Captain of the Port (COTP) Sector
Long Island Sound.
DATES: This rule is effective August 25
and 26, 2012 and will be enforced from
7 a.m. through 7 p.m. each day.
ADDRESSES: Documents mentioned in
this preamble are part of docket [USCG–
2012–0629]. To view documents
mentioned in this preamble as being
available in the docket, go to https://
www.regulations.gov, type the docket
number in the ‘‘SEARCH’’ box and click
‘‘SEARCH.’’ Click on Open Docket
Folder on the line associated with this
rulemaking. You may also visit the
Docket Management Facility in Room
W12–140 on the ground floor of the
Department of Transportation West
Building, 1200 New Jersey Avenue SE.,
Washington, DC 20590, between 9 a.m.
and 5 p.m., Monday through Friday,
except Federal holidays.
FOR FURTHER INFORMATION CONTACT: If
you have questions on this rule, call or
email Petty Officer Joseph Graun,
Prevention Department, Coast Guard
Sector Long Island Sound, (203) 468–
4544, Joseph.L.Graun@uscg.mil. If you
have questions on viewing or submitting
material to the docket, call Renee V.
Wright, Program Manager, Docket
Operations, telephone (202) 366–9826.
SUPPLEMENTARY INFORMATION:
SUMMARY:
Table of Acronyms
COTP Captain of the Port
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of Proposed Rulemaking
A. Regulatory History and Information
The Battle on the Bay Powerboat Race
has had three separate rulemakings
prior to this rule listed here in
chronological order.
On September 3, 2008 the Coast
Guard published a final rule entitled,
Safety Zone; Patchogue Bay, Patchogue,
NY, in the Federal Register (73 FR
51367) establishing a safety zone on
Patchogue Bay, Patchogue, NY in 33
Code of Federal Regulation (CFR)
165.158 for the Battle on the Bay
Powerboat Race. No comments or
requests for public meeting were
received during the rulemaking.
E:\FR\FM\24JYR1.SGM
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]]>Agencies
[Federal Register Volume 77, Number 142 (Tuesday, July 24, 2012)]
[Rules and Regulations]
[Pages 43157-43158]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-17959]
=======================================================================
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 301
[TD 9596]
RIN 1545-BK39
Disregarded Entities and the Indoor Tanning Services Excise Tax;
Correction
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Correcting amendment.
-----------------------------------------------------------------------
SUMMARY: This document contains corrections to temporary regulations
(TD 9596), which were published in the Federal Register on June 25,
2012 (77 FR 37806) relating to disregarded entities (including
qualified subchapter S subsidiaries) and the indoor tanning services
excise tax.
DATES: This correction is effective on July 24, 2012, and applies on
and after June 25, 2012.
FOR FURTHER INFORMATION CONTACT: Michael H. Beker, (202) 622-3130 (not
a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The temporary regulations (TD 9596) that are the subject of this
correction are under section 7701 of the Internal Revenue Code.
Need for Correction
As published, the temporary regulations contain errors that may
prove to be misleading and are in need of clarification.
[[Page 43158]]
List of Subjects in 26 CFR Part 301
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income
taxes, Penalties, Reporting and recordkeeping requirements.
Correction of Publication
Accordingly, 26 CFR part 301 is corrected by making the following
correcting amendment:
PART 301--PROCEDURE AND ADMINISTRATION
0
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
Sec. 301.7701-2T [Corrected]
0
Par. 2. Section 301.7701-2T is revised to read as follows:
Sec. 301.7701-2T Business entities; definitions (temporary).
(a) Through (c)(2)(iv) [Reserved]. For further guidance, see Sec.
301.7701-2(a) through (c)(2)(iv).
(A) In general. Section 301.7701-2(c)(2)(i) (relating to certain
wholly owned entities) does not apply to taxes imposed under Subtitle
C--Employment Taxes and Collection of Income Tax (Chapters 21, 22, 23,
23A, 24 and 25 of the Internal Revenue Code). However, Sec. 301.7701-
2(c)(2)(i) does apply to withholding requirements imposed under section
3406 (backup withholding). The owner of a business entity that is
disregarded under Sec. 301.7701-2 is subject to the withholding
requirements imposed under section 3406 (backup withholding). Section
301.7701-2(c)(2)(i) also applies to taxes imposed under Subtitle A,
including Chapter 2--Tax on Self Employment Income. The owner of an
entity that is treated in the same manner as a sole proprietorship
under Sec. 301.7701-2(a) will be subject to tax on self-employment
income.
(B) [Reserved]. For further guidance, see Sec. 301.7701-
2(c)(2)(iv)(B).
(C) Exceptions. For exceptions to the rule in Sec. 301.7701-
2(c)(2)(iv)(B), see sections 31.3121(b)(3)-1(d), 31.3127-1(c), and
31.3306(c)(5)-1(d).
(D) through (c)(2)(v) [Reserved]. For further guidance, see Sec.
301.7701-2(c)(2)(iv)(D) through (c)(2)(v).
(vi) Tax liabilities with respect to the indoor tanning services
excise tax--(A) In general. Notwithstanding any other provision of
Sec. 301.7701-2, Sec. 301.7701-2(c)(2)(i) (relating to certain wholly
owned entities) does not apply for purposes of--
(1) Federal tax liabilities imposed by Chapter 49 of the Internal
Revenue Code;
(2) Collection of tax imposed by Chapter 49 of the Internal Revenue
Code; and
(3) Claims of a credit or refund related to the tax imposed by
Chapter 49 of the Internal Revenue Code.
(B) Treatment of entity. An entity that is disregarded as an entity
separate from its owner for any purpose under Sec. 301.7701-2 is
treated as a corporation with respect to items described in paragraph
(c)(2)(vi)(A) of this section.
(d) through (e)(4) [Reserved]. For further guidance, see Sec.
301.7701-2(d) through (e)(4).
(5) Paragraphs (c)(2)(iv)(A) and (c)(2)(iv)(C) of this section
apply to wages paid on or after November 1, 2011. For rules that apply
to paragraph (c)(2)(iv)(A) of this section before November 1, 2011, see
26 CFR part 301 revised as of April 1, 2009. However, taxpayers may
apply paragraphs (c)(2)(iv)(A) and (c)(2)(iv)(C) of this section to
wages paid on or after January 1, 2009.
(e)(6) through (e)(7) [Reserved]. For further guidance, see Sec.
301.7701-2(e)(6) and (e)(7).
(8) Expiration date. The applicability of paragraphs (c)(2)(iv)(A)
and (c)(2)(iv)(C) of this section expires on or before October 31,
2014.
(9) Indoor tanning services excise tax--(i) Effective/applicability
date. Paragraph (c)(2)(vi) of this section applies to taxes imposed on
amounts paid on or after July 1, 2012.
(ii) Expiration date. The applicability of paragraph (c)(2)(vi) of
this section expires on or before June 22, 2015.
LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division,
Associate Chief Counsel (Procedure and Administration).
[FR Doc. 2012-17959 Filed 7-23-12; 8:45 am]
BILLING CODE P
