Indirect Stock Transfers and Coordination Rule Exceptions; Transfers of Stock or Securities in Outbound Asset Reorganizations, 17066-17067 [2013-05702]

Download as PDF 17066 Federal Register / Vol. 78, No. 53 / Tuesday, March 19, 2013 / Proposed Rules Robert B. Williams, Jr., (202) 622–3860; concerning submissions of comments or requests for a public hearing, Oluwafunmilayo Taylor, (202) 622–7180 (not toll-free numbers). SUPPLEMENTARY INFORMATION: DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [REG–132702–10] RIN 1545–BJ74 Indirect Stock Transfers and Coordination Rule Exceptions; Transfers of Stock or Securities in Outbound Asset Reorganizations 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 that eliminate one of two exceptions to the coordination rule between asset transfers and indirect stock transfers for certain outbound asset reorganizations. The temporary regulations also modify the exception to the coordination rule for certain outbound exchanges so that it is consistent with the remaining asset reorganization exception. In addition, the regulations modify, in various contexts, procedures for obtaining reasonable cause relief. Finally, the temporary regulations implement certain changes with respect to transfers of stock or securities by a domestic corporation to a foreign corporation in a section 361 exchange. The regulations primarily affect domestic corporations that transfer property to foreign corporations in certain outbound nonrecognition exchanges. The text of the temporary regulations published in this issue of the Federal Register also serves as the text of these proposed regulations. DATES: Comments and requests for a public hearing must be received by June 17, 2013. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG–132702–10), room 5205, 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–132702– 10), 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– 132702–10). FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, tkelley on DSK3SPTVN1PROD with PROPOSALS2 SUMMARY: VerDate Mar<15>2010 18:03 Mar 18, 2013 Jkt 229001 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) under section 367 of the Internal Revenue Code (Code). The text of those regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the amendments. 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 collections of information contained in these regulations will not have a significant economic impact on a substantial number of small entities. Accordingly, a regulatory flexibility analysis is not required. These regulations primarily will affect United States persons that are large corporations engaged in corporate transactions among their controlled corporations. Thus, the number of affected small entities—in whichever of the three categories defined in the Regulatory Flexibility Act (small businesses, small organizations, and small governmental jurisdictions)—will not be substantial. The IRS and the Treasury Department estimate that small organizations and small governmental jurisdictions are likely to be affected only insofar as they transfer the stock of a controlled corporation to a related corporation. While a certain number of small entities may engage in such transactions, the IRS and the Treasury Department do not anticipate the number to be substantial. 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 Requests for a Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any comments that are submitted timely to the IRS as prescribed in this preamble under ‘‘Addresses’’ heading. The IRS and the Treasury Department request comments on all aspects of the proposed PO 00000 Frm 00001 Fmt 4701 Sfmt 4702 rules. All comments will be available at www.regulations.gov or upon request. A public hearing will be scheduled if requested in writing by any person that timely submits written 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 author of these regulations is Robert B. Williams, Jr. of the 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 as follows: ■ Authority: 26 U.S.C. 7805 * * * Par. 2. Section 1.367(a)–3 is amended by: ■ 1. Revising paragraphs (d)(2)(vi)(B) and (d)(3) Examples 6B, 6C, and 9. ■ 2. Revising paragraph (e). ■ 3. Adding paragraphs (g)(1)(vii)(A) and (g)(1)(ix) . The revisions and additions read as follows: ■ § 1.367(a)–3 Treatment of transfers of stock or securities to foreign corporations. * * * * * (d) * * * (2) * * * (vi) * * * (B) [The text of proposed § 1.367(a)– 3(d)(2)(vi)(B) is the same as the text of § 1.367(a)–3T(d)(2)(vi)(B) published elsewhere in this issue of the Federal Register]. * * * * * (3) * * * Example 6B. [The text of proposed § 1.367(a)–3(d)(3) Example 6B is the same as the text of § 1.367(a)–3T(d)(3) Example 6B published elsewhere in this issue of the Federal Register]. Example 6C. [The text of proposed § 1.367(a)–3(d)(3) Example 6C is the same as the text of § 1.367(a)–3T(d)(3) Example 6C published elsewhere in this issue of the Federal Register]. * * * * * Example 9. [The text of proposed § 1.367(a)–3(d)(3) Example 9 is the same as the text of § 1.367(a)–3T(d)(3) Example 9 E:\FR\FM\19MRP2.SGM 19MRP2 Federal Register / Vol. 78, No. 53 / Tuesday, March 19, 2013 / Proposed Rules 17067 published elsewhere in this issue of the Federal Register]. § 1.367(a)–6 Transfer of foreign branch with previously deducted losses. § 1.1248(f)–3 Reasonable cause and effective/applicability dates. * * (a) [The text of proposed § 1.1248(f)– 3 is the same as the text of proposed § 1.1248(f)–3T published elsewhere in this issue of the Federal Register]. * * * * * ■ Par. 6. Section 1.6038B–1 is amended by revising paragraph (f)(3) to read as follows: tkelley on DSK3SPTVN1PROD with PROPOSALS2 * * * * (e) [The text of proposed § 1.367(a)– 3(e) is the same as the text of § 1.367(a)– 3T(e) published elsewhere in this issue of the Federal Register]. * * * * * (g) * * * (1) * * * (vii)(A) [The text of proposed § 1.367(a)–3(a)(1)(vii)(A) is the same as the text of § 1.367(a)–3T(g)(1)(vii)(A) published elsewhere in this issue of the Federal Register]. * * * * * (ix) [The text of proposed § 1.367(a)– 3(g)(1)(ix) is the same as the text of § 1.367(a)–3T(g)(1)(ix) published elsewhere in this issue of the Federal Register]. * * * * * ■ Par. 3. Section 1.367(a)–6 is amended by adding a sentence to paragraph (e)(4) to read as follows: VerDate Mar<15>2010 18:03 Mar 18, 2013 Jkt 229001 * * * * (e) * * * (4) * * * [The text of the final sentence of proposed § 1.367(a)–6(e)(4) is the same as the text of the final sentence of § 1.367(a)–6T(e)(4) published elsewhere in this issue of the Federal Register]. ■ Par. 4. Section 1.367(a)–7 is amended by revising paragraph (e)(2) to read as follows: § 1.367(a)–7 Outbound transfers of property described in section 361(a) or (b). * * * * * (e) * * * (2) [The text of proposed § 1.367(a)– 7(e)(2) is the same as the text of § 1.367(a)–7T(e)(2) published elsewhere in this issue of the Federal Register]. * * * * * ■ Par. 5. Section 1.1248(f)–3 is amended by revising paragraph (a) to read as follows: PO 00000 Frm 00002 Fmt 4701 Sfmt 9990 § 1.6038B–1 Reporting of certain transfers to foreign corporations. * * * * * (f) * * * (3) [The text of proposed § 1.6038B– 1(f)(3) is the same as the text of § 1.6038B–1T(f)(3) published elsewhere in this issue of the Federal Register]. * * * * * Steven T. Miller, Deputy Commissioner for Services and Enforcement. [FR Doc. 2013–05702 Filed 3–18–13; 8:45 am] BILLING CODE 4830–01–P E:\FR\FM\19MRP2.SGM 19MRP2

Agencies

[Federal Register Volume 78, Number 53 (Tuesday, March 19, 2013)]
[Proposed Rules]
[Pages 17066-17067]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-05702]



Federal Register / Vol. 78, No. 53 / Tuesday, March 19, 2013 / 
Proposed Rules

[[Page 17066]]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-132702-10]
RIN 1545-BJ74


Indirect Stock Transfers and Coordination Rule Exceptions; 
Transfers of Stock or Securities in Outbound Asset Reorganizations

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 that eliminate one of two exceptions to the 
coordination rule between asset transfers and indirect stock transfers 
for certain outbound asset reorganizations. The temporary regulations 
also modify the exception to the coordination rule for certain outbound 
exchanges so that it is consistent with the remaining asset 
reorganization exception. In addition, the regulations modify, in 
various contexts, procedures for obtaining reasonable cause relief. 
Finally, the temporary regulations implement certain changes with 
respect to transfers of stock or securities by a domestic corporation 
to a foreign corporation in a section 361 exchange. The regulations 
primarily affect domestic corporations that transfer property to 
foreign corporations in certain outbound nonrecognition exchanges. The 
text of the temporary regulations published in this issue of the 
Federal Register also serves as the text of these proposed regulations.

DATES: Comments and requests for a public hearing must be received by 
June 17, 2013.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-132702-10), room 
5205, 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-
132702-10), 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-132702-10).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Robert B. Williams, Jr., (202) 622-3860; concerning submissions of 
comments or requests for a public hearing, Oluwafunmilayo Taylor, (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 amend the Income Tax Regulations (26 CFR 
part 1) under section 367 of the Internal Revenue Code (Code). The text 
of those regulations also serves as the text of these proposed 
regulations. The preamble to the temporary regulations explains the 
amendments.

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 collections of information contained in these 
regulations will not have a significant economic impact on a 
substantial number of small entities. Accordingly, a regulatory 
flexibility analysis is not required. These regulations primarily will 
affect United States persons that are large corporations engaged in 
corporate transactions among their controlled corporations. Thus, the 
number of affected small entities--in whichever of the three categories 
defined in the Regulatory Flexibility Act (small businesses, small 
organizations, and small governmental jurisdictions)--will not be 
substantial. The IRS and the Treasury Department estimate that small 
organizations and small governmental jurisdictions are likely to be 
affected only insofar as they transfer the stock of a controlled 
corporation to a related corporation. While a certain number of small 
entities may engage in such transactions, the IRS and the Treasury 
Department do not anticipate the number to be substantial. 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 Requests for a Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any comments that are submitted timely 
to the IRS as prescribed in this preamble under ``Addresses'' heading. 
The IRS and the Treasury Department request comments on all aspects of 
the proposed rules. All comments will be available at 
www.regulations.gov or upon request. A public hearing will be scheduled 
if requested in writing by any person that timely submits written 
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 author of these regulations is Robert B. Williams, 
Jr. of the 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

0
Paragraph 1. The authority citation for part 1 continues to read as 
follows:

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

0
Par. 2. Section 1.367(a)-3 is amended by:
0
1. Revising paragraphs (d)(2)(vi)(B) and (d)(3) Examples 6B, 6C, and 9.
0
2. Revising paragraph (e).
0
3. Adding paragraphs (g)(1)(vii)(A) and (g)(1)(ix) .
    The revisions and additions read as follows:


Sec.  1.367(a)-3  Treatment of transfers of stock or securities to 
foreign corporations.

* * * * *
    (d) * * *
    (2) * * *
    (vi) * * *
    (B) [The text of proposed Sec.  1.367(a)-3(d)(2)(vi)(B) is the same 
as the text of Sec.  1.367(a)-3T(d)(2)(vi)(B) published elsewhere in 
this issue of the Federal Register].
* * * * *
    (3) * * *
    Example 6B.  [The text of proposed Sec.  1.367(a)-3(d)(3) 
Example 6B is the same as the text of Sec.  1.367(a)-3T(d)(3) 
Example 6B published elsewhere in this issue of the Federal 
Register].
    Example 6C. [The text of proposed Sec.  1.367(a)-3(d)(3) Example 
6C is the same as the text of Sec.  1.367(a)-3T(d)(3) Example 6C 
published elsewhere in this issue of the Federal Register].
* * * * *
    Example 9.  [The text of proposed Sec.  1.367(a)-3(d)(3) Example 
9 is the same as the text of Sec.  1.367(a)-3T(d)(3) Example 9

[[Page 17067]]

published elsewhere in this issue of the Federal Register].
* * * * *
    (e) [The text of proposed Sec.  1.367(a)-3(e) is the same as the 
text of Sec.  1.367(a)-3T(e) published elsewhere in this issue of the 
Federal Register].
* * * * *
    (g) * * *
    (1) * * *
    (vii)(A) [The text of proposed Sec.  1.367(a)-3(a)(1)(vii)(A) is 
the same as the text of Sec.  1.367(a)-3T(g)(1)(vii)(A) published 
elsewhere in this issue of the Federal Register].
* * * * *
    (ix) [The text of proposed Sec.  1.367(a)-3(g)(1)(ix) is the same 
as the text of Sec.  1.367(a)-3T(g)(1)(ix) published elsewhere in this 
issue of the Federal Register].
* * * * *
0
Par. 3. Section 1.367(a)-6 is amended by adding a sentence to paragraph 
(e)(4) to read as follows:


Sec.  1.367(a)-6  Transfer of foreign branch with previously deducted 
losses.

* * * * *
    (e) * * *
    (4) * * * [The text of the final sentence of proposed Sec.  
1.367(a)-6(e)(4) is the same as the text of the final sentence of Sec.  
1.367(a)-6T(e)(4) published elsewhere in this issue of the Federal 
Register].
0
Par. 4. Section 1.367(a)-7 is amended by revising paragraph (e)(2) to 
read as follows:


Sec.  1.367(a)-7  Outbound transfers of property described in section 
361(a) or (b).

* * * * *
    (e) * * *
    (2) [The text of proposed Sec.  1.367(a)-7(e)(2) is the same as the 
text of Sec.  1.367(a)-7T(e)(2) published elsewhere in this issue of 
the Federal Register].
* * * * *
0
Par. 5. Section 1.1248(f)-3 is amended by revising paragraph (a) to 
read as follows:


Sec.  1.1248(f)-3  Reasonable cause and effective/applicability dates.

    (a) [The text of proposed Sec.  1.1248(f)-3 is the same as the text 
of proposed Sec.  1.1248(f)-3T published elsewhere in this issue of the 
Federal Register].
* * * * *
0
Par. 6. Section 1.6038B-1 is amended by revising paragraph (f)(3) to 
read as follows:


Sec.  1.6038B-1  Reporting of certain transfers to foreign 
corporations.

* * * * *
    (f) * * *
    (3) [The text of proposed Sec.  1.6038B-1(f)(3) is the same as the 
text of Sec.  1.6038B-1T(f)(3) published elsewhere in this issue of the 
Federal Register].
* * * * *

Steven T. Miller,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2013-05702 Filed 3-18-13; 8:45 am]
BILLING CODE 4830-01-P