Segregation Rule Effective Date, 31996-31998 [2015-13711]
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31996
Federal Register / Vol. 80, No. 108 / Friday, June 5, 2015 / Rules and Regulations
date to make the regulations apply to
transfers that occur on or after January
1, 2016.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Amendments to the Regulations
Accordingly, 26 CFR part 1 is
corrected by making the following
correcting amendments:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 continues to read in part as
follows:
■
Background and Explanation of
Provisions
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.6045A–1T is
amended by:
■ 1. Revising the second sentence in
paragraph (f).
■ 2. Adding a sentence at the end of
paragraph (f).
The revision and addition read as
follows:
■
§ 1.6045A–1T Statements of information
required in connection with transfers of
securities (temporary).
*
*
*
*
*
(f) * * * This paragraph (f) applies to
a transfer that occurs on or after January
1, 2016. A broker, however, may rely on
this paragraph (f) for a transfer of a
covered security that occurs on or after
June 30, 2015, and before January 1,
2016.
*
*
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*
*
Martin V. Franks,
Branch Chief, Publications & Regulations
Branch, Legal Processing Division, Associate
Chief Counsel (Procedure & Administration).
[FR Doc. 2015–13796 Filed 6–4–15; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9721]
RIN 1545–BM17
Segregation Rule Effective Date
Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations and removal of
temporary regulations.
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AGENCY:
This document contains final
regulations under section 382 of the
Internal Revenue Code (Code) that
modify the effective date provision of
recently published regulations. These
SUMMARY:
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regulations affect corporations whose
stock is or was acquired by the
Department of the Treasury (Treasury)
pursuant to certain programs under the
Emergency Economic Stabilization Act
of 2008 (EESA).
DATES: Effective Date: These regulations
are effective on June 5, 2015.
Applicability Date: For dates of
applicability, see § 1.382–3(j)(17).
FOR FURTHER INFORMATION CONTACT:
Stephen R. Cleary, (202) 317–5353 (not
a toll-free number).
SUPPLEMENTARY INFORMATION:
Section 382
Section 382 of the Code provides that
the taxable income of a loss corporation
for a year following an ownership
change may be offset by pre-change
losses only to the extent of the section
382 limitation for such year. An
ownership change occurs with respect
to a corporation if it is a loss corporation
on a testing date and, immediately after
the close of the testing date, the
percentage of stock of the corporation
owned by one or more 5-percent
shareholders has increased by more
than 50 percentage points over the
lowest percentage of stock of such
corporation owned by such
shareholders at any time during the
testing period. A testing date is any date
on which occurs any change in the
ownership of loss corporation stock that
affects the percentage of stock owned by
any 5-percent shareholder (owner shift).
Pursuant to section 382(g)(4)(A),
shareholders who own less than five
percent of a loss corporation are
aggregated and treated as a single 5percent shareholder (a public group). In
addition, new public groups may be
created as a result of certain transactions
under the segregation rules in the
section 382 regulations. Any new public
group is tracked separately from, and in
addition to, the public group or groups
that existed previously and is treated as
a new 5-percent shareholder that
increases its ownership interest in the
loss corporation.
One particular segregation rule, which
was imposed by § 1.382–2T(j)(3)(i) of
the Temporary Income Tax Regulations
until it was superseded, required
segregation when an individual or entity
that owned five percent or more of the
loss corporation transferred an interest
in the loss corporation to public
shareholders. After the sale, stock
owned by a public group that existed
immediately before the sale was treated
separately from the stock owned by the
public group that acquired stock from
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the seller. This separate public group
was treated as a new 5-percent
shareholder. However, this rule was
rendered inoperative by § 1.382–3(j)(13),
part of a set of regulations published in
TD 9638 [78 FR 62418] on October 22,
2013. Under the new regulation, no new
public group is created on the transfer
of stock to the public shareholders;
instead, the transferred stock is treated
as acquired proportionately by the
public groups existing at the time of the
transfer.
Notice 2010–2 (2010–2 IRB 251
(December 16, 2009)) (see
§ 601.601(d)(2)(ii)(b) of this chapter)
provides guidance regarding the
application of section 382 and other
provisions of law to corporations whose
instruments are acquired and disposed
of by the Treasury pursuant to EESA.
Notice 2010–2 relates to instruments
acquired by Treasury pursuant to the
following EESA programs: (i) The
Capital Purchase Program for publiclytraded issuers; (ii) the Capital Purchase
Program for private issuers; (iii) the
Capital Purchase Program for S
corporations; (iv) the Targeted
Investment Program; (v) the Asset
Guarantee Program; (vi) the
Systemically Significant Failing
Institutions Program; (vii) the
Automotive Industry Financing
Program; and (viii) the Capital
Assistance Program for publicly-traded
issuers. (These programs are collectively
referred to as ‘‘Programs’’ in that Notice
and in this preamble.)
Under Section III(G) of Notice 2010–
2, a ‘‘Covered Instrument’’ is an
instrument that is acquired by Treasury
in exchange for an instrument that was
issued to Treasury under the Programs,
or is acquired by Treasury in exchange
for another Covered Instrument. For
most purposes of that Notice, a Covered
Instrument is treated as though it had
been issued directly to Treasury under
the Programs.
Section III(E) of Notice 2010–2
provides the following rule to govern
the sale by Treasury of stock of a
corporation to public shareholders:
Section 382 treatment of stock sold by
Treasury to public shareholders. If Treasury
sells stock that was issued to it pursuant to
the Programs (either directly or upon the
exercise of a warrant) and the sale creates a
public group (‘‘New Public Group’’), the New
Public Group’s ownership in the issuing
corporation shall not be considered to have
increased solely as a result of such a sale. A
New Public Group’s ownership shall be
treated as having increased to the extent the
New Public Group increases its ownership
pursuant to any transaction other than a sale
of stock by Treasury, including pursuant to
a stock issuance described in § 1.382–3(j)(2)
or a redemption (see § 1.382–2T(j)(2)(iii)(C)).
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Federal Register / Vol. 80, No. 108 / Friday, June 5, 2015 / Rules and Regulations
Such stock is considered outstanding for
purposes of determining the percentage of
stock owned by other 5-percent shareholders
on any testing date, and section 382 (and the
regulations thereunder) shall otherwise apply
to the New Public Group in the same manner
as with respect to other public groups.
This rule was created to prevent a loss
corporation from experiencing an owner
shift when Treasury sells stock to public
shareholders. By its terms, the rule
relies on the assumption that the stock
sale ‘‘creates a public group.’’ As
explained earlier in this preamble,
§ 1.382–2T(j)(3)(i), before it was
superseded, required creation of a new
public group when a 5-percent
shareholder sold stock in a loss
corporation to public shareholders.
However, under § 1.382–3(j)(13) as now
in effect, such a transfer does not create
a new public group.
The Treasury Department and the IRS
became concerned that the elimination
of the segregation rule described earlier
in this preamble may have
unintentionally rendered inoperative
the rule in Notice 2010–2 that protects
a loss corporation from an owner shift
when Treasury sells stock that it held
pursuant to the Programs to public
shareholders.
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The Temporary Regulations
On July 31, 2014, the Treasury
Department and the IRS published final
and temporary regulations (TD 9685) in
the Federal Register (79 FR 44280). The
temporary regulations modified the
effective/applicability date rule of TD
9638 to except from the changes to the
segregation rules in those regulations
the sale by the Treasury Department to
public shareholders of any ‘‘Program
Instrument’’ (an instrument issued
pursuant to a Program or a Covered
Instrument). As a result, under the
temporary regulations, a sale of stock by
Treasury to the public creates a public
group, and the rule of Section III(E) of
Notice 2010–2 continues to apply as
intended. This provision only affects the
sale of a Program Instrument by the
Treasury Department and does not affect
the application of the segregation rule
changes in TD 9638 to any other
transactions involving stock of the
corporations that participated in the
Programs.
A notice of proposed rulemaking
(REG–105067–14) cross-referencing the
temporary regulations and incorporating
the text of the temporary regulations
was also published in the Federal
Register (79 FR 44324) on July 31, 2014.
No written comments were received in
response to the notice of proposed
rulemaking. No requests for a public
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hearing were received, and accordingly
no hearing was held.
The Final Regulations
This Treasury Decision adopts the
text of the temporary and proposed
regulations without substantive change.
As a result, the effective date
modification provided in the temporary
regulations is now a part of the
permanent section 382 regulations, and
the temporary regulations are removed.
Special Analyses
It has been determined that this final
regulation is not a significant regulatory
action as defined in Executive Order
12866, as supplemented by Executive
Order 13563. Therefore, a regulatory
assessment is not required. 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, if the regulations apply to any
small entities, the effect will not be to
increase their tax liability, but to
prevent a potential increase in tax
liability that might otherwise occur.
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, the notice of proposed
rulemaking preceding these regulations
was submitted to the Chief Counsel for
Advocacy of the Small Business
Administration for comment on their
impact on small business, and no such
comments were received.
Drafting Information
The principal author of these
regulations is Stephen R. Cleary of the
Office of Associate Chief Counsel
(Corporate). However, other personnel
from the Treasury Department and the
IRS participated in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Amendments to the Regulations
Accordingly, 26 CFR part 1 is
amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 is amended by revising the
entry for § 1.382–3 to read in part as
follows:
■
Authority: 26 U.S.C. 7805 * * *
Section 1.382–3 also issued under 26
U.S.C. 382(g)(4)(C) and 26 U.S.C. 382(m).
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Par. 2. Section 1.382–3 is amended by
revising paragraph (j)(17) to read as
follows:
■
§ 1.382–3 Definitions and rules relating to
a 5-percent shareholder.
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*
*
*
*
(j) * * *
(17) Effective/applicability date. This
paragraph (j) generally applies to
issuances or deemed issuances of stock
in taxable years beginning on or after
November 4, 1992. However, paragraphs
(j)(11)(ii) and (j)(13) through (15) of this
section and Examples 5 through 13 of
paragraph (j)(16) of this section apply to
testing dates occurring on or after
October 22, 2013, other than with
respect to the sale of a Program
Instrument by the Treasury Department.
For purposes of this paragraph (j)(17), a
Program Instrument is an instrument
issued pursuant to a Program, as defined
in Internal Revenue Service Notice
2010–2 (2010–2 IRB 251 (December 16,
2009)) (see § 601.601(a)(2)(ii)(b) of this
chapter), or a Covered Instrument, as
defined in that Notice. Taxpayers may
apply paragraphs (j)(11)(ii) and (j)(13)
through (15) of this section and
Examples 5 through 13 of paragraph
(j)(16) of this section in their entirety
(other than with respect to a sale of a
Program Instrument by the Treasury
Department) to all testing dates that are
included in a testing period beginning
before and ending on or after October
22, 2013. However, the provisions
described in the preceding sentence
may not be applied to any date on or
before the date of any ownership change
that occurred before October 22, 2013,
under the regulations in effect before
October 22, 2013, and they may not be
applied as described in the preceding
sentence if such application would
result in an ownership change occurring
on a date before October 22, 2013, that
did not occur under the regulations in
effect before October 22, 2013. See
§ 1.382–3(j)(14)(ii) and (iii), as contained
in 26 CFR part 1 revised as of April 1,
1994 for the application of paragraph
(j)(10) of this section to stock issued on
the exercise of certain options exercised
on or after November 4, 1992, and for
an election to apply paragraphs (j)(1)
through (12) of this section retroactively
to certain issuances and deemed
issuances of stock occurring in taxable
years prior to November 4, 1992.
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31997
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31998
§ 1.382–3T
■
Federal Register / Vol. 80, No. 108 / Friday, June 5, 2015 / Rules and Regulations
(Removed)
Par. 3. Section 1.382–3T is removed.
John M. Dalrymple,
Deputy Commissioner for Services and
Enforcement.
Approved: May 13, 2015.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax
Policy).
[FR Doc. 2015–13711 Filed 6–4–15; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF JUSTICE
28 CFR Part 0
[Directive No. 1–15]
Redelegation of Authority to Deputy
Assistant Attorneys General, Branch
Directors, Heads of Offices, and United
States Attorneys in Civil Division
Cases
Office of the Assistant Attorney
General, Civil Division, Department of
Justice.
ACTION: Final rule.
AGENCY:
This final rule amends Civil
Directive 1–10, which sets forth the
redelegation of authority by the
Assistant Attorney General of the Civil
Division to deputy assistant attorneys
general, branch directors, heads of
offices, and United States Attorneys. On
May 21, 2015, the Attorney General
signed Order No. 3532–2015 increasing
the monetary thresholds for the
authority of Assistant Attorneys General
to compromise or close civil claims, and
increasing the redelegation authority to
the United States Attorneys with respect
to accepting offers of compromise for
affirmative claims. Pursuant to the
Attorney General’s order, the new rule
increases the redelegated authority to
Branch Directors, heads of offices, and
United States Attorneys to close or
compromise affirmative claims.
Additionally, the new rule redelegates
to United States Attorneys, directors,
and attorneys-in-charge the authority to
issue compulsory process, and makes a
few ‘‘housekeeping’’ revisions.
DATES: Effective Date: This rule is
effective June 5, 2015, and is applicable
beginning May 29, 2015.
FOR FURTHER INFORMATION CONTACT:
Joyce R. Branda, Deputy Assistant
Attorney General, Commercial
Litigation Branch, Civil Division,
Department of Justice, Washington, DC
20530; 202–307–0231.
SUPPLEMENTARY INFORMATION: This rule
is a matter of internal Department
management. It has been drafted and
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SUMMARY:
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reviewed in accordance with section
1(b) of Executive Order 12866. The
Assistant Attorney General for the Civil
Division has determined that this rule is
not a ‘‘significant regulatory action’’
under section 3(f) of Executive Order
12866 and accordingly this rule has not
been reviewed by the Office of
Management and Budget. In accordance
with the Regulatory Flexibility Act (5
U.S.C. 605(b)), the Assistant Attorney
General for the Civil Division has
reviewed this rule, and by approving it
certifies that this rule will not have a
significant economic impact on a
substantial number of small entities.
This rule will not have substantial
direct effects on the states, on the
relationship between the national
government and the states, or on the
distribution of power and
responsibilities among the various
levels of government. Therefore, in
accordance with Executive Order 13132,
it is determined that this rule does not
have sufficient federalism implications
to warrant the preparation of a
Federalism Assessment.
List of Subjects in 28 CFR Part 0
Authority delegations (Government
agencies), Government employees,
Organization and functions
(Government agencies), Privacy,
Reporting and recordkeeping
requirements, Whistleblowing.
Accordingly, for the reasons stated in
the preamble, title 28, chapter I, part 0,
of the Code of Federal Regulations is
amended as set forth below:
PART 0—ORGANIZATION OF THE
DEPARTMENT OF JUSTICE
1. The authority citation for part 0
continues to read as follows:
■
Authority: 5 U.S.C. 301; 28 U.S.C. 509,
510, 515–519.
2. Appendix to Subpart Y is amended
by removing Civil Directive No. 1–10
and adding in its place Civil Directive
No. 1–15, to read as follows:
■
Appendix to Subpart Y of Part 0—
Redelegations of Authority to
Compromise and Close Civil Claims
*
*
*
*
*
[Directive No. 1–15]
By virtue of the authority vested in me by
part 0 of title 28 of the Code of Federal
Regulations, particularly §§ 0.45, 0.160,
0.164, and 0.168, it is hereby ordered as
follows:
Section 1. Scope of Delegation Authority
(a) Delegation to Deputy Assistant
Attorneys General. The Deputy Assistant
Attorneys General are hereby delegated all
the power and authority of the Assistant
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Attorney General in charge of the Civil
Division, including with respect to the
institution of suits, the acceptance or
rejection of compromise offers, the
administrative settlement of claims, and the
closing of claims or cases, unless any such
authority or power is required by law to be
exercised by the Assistant Attorney General
personally or has been specifically delegated
to another Department official.
(b) Delegation to United States Attorneys;
Branch, Office and Staff Directors; and
Attorneys-in-Charge of Field Offices. Subject
to the limitations imposed by 28 CFR
0.160(d) and 0.164, and sections 1(e) and 4(b)
of this directive, and the authority of the
Solicitor General set forth in 28 CFR 0.163,
United States Attorneys; Branch, Office, and
Staff Directors; and Attorneys-in-Charge of
Field Offices, with respect to matters
assigned or delegated to their respective
components, are hereby delegated the
authority to:
(1) Accept offers in compromise of claims
asserted by the United States in all cases in
which the gross amount of the original claim
does not exceed $10,000,000;
(2) Accept offers in compromise of, or
settle administratively, claims against the
United States in all cases in which the
principal amount of the proposed settlement
does not exceed $1,000,000;
(3) Reject any offers in compromise; and
(4) Close any affirmative claim or case
where the gross amount of the original claim
does not exceed $10,000,000.
(c) Subject to the limitations imposed by
sections 1(e), 4(b), and 5 of this directive,
United States Attorneys, Directors, and
Attorneys-in-Charge are hereby delegated the
authority to:
(1) File suits, counterclaims, and crossclaims, or take any other action necessary to
protect the interests of the United States in
all routine nonmonetary cases, in all routine
loan collection and foreclosure cases, and in
other monetary claims or cases where the
gross amount of the original claim does not
exceed $10,000,000. Such actions in
nonmonetary cases which are other than
routine will be submitted for the approval of
the Assistant Attorney General, Civil
Division; and,
(2) Issue subpoenas, civil investigative
demands, and any other compulsory process.
(d) United States Attorneys may redelegate
in writing the above-conferred compromise
and suit authority to Assistant United States
Attorneys who supervise other Assistant
United States Attorneys who handle civil
litigation.
(e) Limitations on delegations.
(1) The authority to compromise cases,
settle claims administratively, file suits,
counterclaims, and cross-claims, to close
claims or cases, or take any other action
necessary to protect the interests of the
United States, delegated by paragraphs (a),
(b), and (c) of this section, may not be
exercised, and the matter shall be submitted
for resolution to the Assistant Attorney
General, Civil Division, when:
(i) For any reason, the proposed action, as
a practical matter, will control or adversely
influence the disposition of other claims
totaling more than the respective amounts
designated in the above paragraphs.
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]]>Agencies
[Federal Register Volume 80, Number 108 (Friday, June 5, 2015)]
[Rules and Regulations]
[Pages 31996-31998]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-13711]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9721]
RIN 1545-BM17
Segregation Rule Effective Date
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations and removal of temporary regulations.
-----------------------------------------------------------------------
SUMMARY: This document contains final regulations under section 382 of
the Internal Revenue Code (Code) that modify the effective date
provision of recently published regulations. These regulations affect
corporations whose stock is or was acquired by the Department of the
Treasury (Treasury) pursuant to certain programs under the Emergency
Economic Stabilization Act of 2008 (EESA).
DATES: Effective Date: These regulations are effective on June 5, 2015.
Applicability Date: For dates of applicability, see Sec. 1.382-
3(j)(17).
FOR FURTHER INFORMATION CONTACT: Stephen R. Cleary, (202) 317-5353 (not
a toll-free number).
SUPPLEMENTARY INFORMATION:
Background and Explanation of Provisions
Section 382
Section 382 of the Code provides that the taxable income of a loss
corporation for a year following an ownership change may be offset by
pre-change losses only to the extent of the section 382 limitation for
such year. An ownership change occurs with respect to a corporation if
it is a loss corporation on a testing date and, immediately after the
close of the testing date, the percentage of stock of the corporation
owned by one or more 5-percent shareholders has increased by more than
50 percentage points over the lowest percentage of stock of such
corporation owned by such shareholders at any time during the testing
period. A testing date is any date on which occurs any change in the
ownership of loss corporation stock that affects the percentage of
stock owned by any 5-percent shareholder (owner shift).
Pursuant to section 382(g)(4)(A), shareholders who own less than
five percent of a loss corporation are aggregated and treated as a
single 5-percent shareholder (a public group). In addition, new public
groups may be created as a result of certain transactions under the
segregation rules in the section 382 regulations. Any new public group
is tracked separately from, and in addition to, the public group or
groups that existed previously and is treated as a new 5-percent
shareholder that increases its ownership interest in the loss
corporation.
One particular segregation rule, which was imposed by Sec. 1.382-
2T(j)(3)(i) of the Temporary Income Tax Regulations until it was
superseded, required segregation when an individual or entity that
owned five percent or more of the loss corporation transferred an
interest in the loss corporation to public shareholders. After the
sale, stock owned by a public group that existed immediately before the
sale was treated separately from the stock owned by the public group
that acquired stock from the seller. This separate public group was
treated as a new 5-percent shareholder. However, this rule was rendered
inoperative by Sec. 1.382-3(j)(13), part of a set of regulations
published in TD 9638 [78 FR 62418] on October 22, 2013. Under the new
regulation, no new public group is created on the transfer of stock to
the public shareholders; instead, the transferred stock is treated as
acquired proportionately by the public groups existing at the time of
the transfer.
Notice 2010-2 (2010-2 IRB 251 (December 16, 2009)) (see Sec.
601.601(d)(2)(ii)(b) of this chapter) provides guidance regarding the
application of section 382 and other provisions of law to corporations
whose instruments are acquired and disposed of by the Treasury pursuant
to EESA. Notice 2010-2 relates to instruments acquired by Treasury
pursuant to the following EESA programs: (i) The Capital Purchase
Program for publicly-traded issuers; (ii) the Capital Purchase Program
for private issuers; (iii) the Capital Purchase Program for S
corporations; (iv) the Targeted Investment Program; (v) the Asset
Guarantee Program; (vi) the Systemically Significant Failing
Institutions Program; (vii) the Automotive Industry Financing Program;
and (viii) the Capital Assistance Program for publicly-traded issuers.
(These programs are collectively referred to as ``Programs'' in that
Notice and in this preamble.)
Under Section III(G) of Notice 2010-2, a ``Covered Instrument'' is
an instrument that is acquired by Treasury in exchange for an
instrument that was issued to Treasury under the Programs, or is
acquired by Treasury in exchange for another Covered Instrument. For
most purposes of that Notice, a Covered Instrument is treated as though
it had been issued directly to Treasury under the Programs.
Section III(E) of Notice 2010-2 provides the following rule to
govern the sale by Treasury of stock of a corporation to public
shareholders:
Section 382 treatment of stock sold by Treasury to public
shareholders. If Treasury sells stock that was issued to it pursuant
to the Programs (either directly or upon the exercise of a warrant)
and the sale creates a public group (``New Public Group''), the New
Public Group's ownership in the issuing corporation shall not be
considered to have increased solely as a result of such a sale. A
New Public Group's ownership shall be treated as having increased to
the extent the New Public Group increases its ownership pursuant to
any transaction other than a sale of stock by Treasury, including
pursuant to a stock issuance described in Sec. 1.382-3(j)(2) or a
redemption (see Sec. 1.382-2T(j)(2)(iii)(C)).
[[Page 31997]]
Such stock is considered outstanding for purposes of determining the
percentage of stock owned by other 5-percent shareholders on any
testing date, and section 382 (and the regulations thereunder) shall
otherwise apply to the New Public Group in the same manner as with
respect to other public groups.
This rule was created to prevent a loss corporation from experiencing
an owner shift when Treasury sells stock to public shareholders. By its
terms, the rule relies on the assumption that the stock sale ``creates
a public group.'' As explained earlier in this preamble, Sec. 1.382-
2T(j)(3)(i), before it was superseded, required creation of a new
public group when a 5-percent shareholder sold stock in a loss
corporation to public shareholders. However, under Sec. 1.382-3(j)(13)
as now in effect, such a transfer does not create a new public group.
The Treasury Department and the IRS became concerned that the
elimination of the segregation rule described earlier in this preamble
may have unintentionally rendered inoperative the rule in Notice 2010-2
that protects a loss corporation from an owner shift when Treasury
sells stock that it held pursuant to the Programs to public
shareholders.
The Temporary Regulations
On July 31, 2014, the Treasury Department and the IRS published
final and temporary regulations (TD 9685) in the Federal Register (79
FR 44280). The temporary regulations modified the effective/
applicability date rule of TD 9638 to except from the changes to the
segregation rules in those regulations the sale by the Treasury
Department to public shareholders of any ``Program Instrument'' (an
instrument issued pursuant to a Program or a Covered Instrument). As a
result, under the temporary regulations, a sale of stock by Treasury to
the public creates a public group, and the rule of Section III(E) of
Notice 2010-2 continues to apply as intended. This provision only
affects the sale of a Program Instrument by the Treasury Department and
does not affect the application of the segregation rule changes in TD
9638 to any other transactions involving stock of the corporations that
participated in the Programs.
A notice of proposed rulemaking (REG-105067-14) cross-referencing
the temporary regulations and incorporating the text of the temporary
regulations was also published in the Federal Register (79 FR 44324) on
July 31, 2014. No written comments were received in response to the
notice of proposed rulemaking. No requests for a public hearing were
received, and accordingly no hearing was held.
The Final Regulations
This Treasury Decision adopts the text of the temporary and
proposed regulations without substantive change. As a result, the
effective date modification provided in the temporary regulations is
now a part of the permanent section 382 regulations, and the temporary
regulations are removed.
Special Analyses
It has been determined that this final regulation is not a
significant regulatory action as defined in Executive Order 12866, as
supplemented by Executive Order 13563. Therefore, a regulatory
assessment is not required. 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, if the regulations apply to any small entities, the
effect will not be to increase their tax liability, but to prevent a
potential increase in tax liability that might otherwise occur.
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, the notice of proposed rulemaking
preceding these regulations was submitted to the Chief Counsel for
Advocacy of the Small Business Administration for comment on their
impact on small business, and no such comments were received.
Drafting Information
The principal author of these regulations is Stephen R. Cleary of
the Office of Associate Chief Counsel (Corporate). However, other
personnel from the Treasury Department and the IRS participated in
their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Amendments to the Regulations
Accordingly, 26 CFR part 1 is amended as follows:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 is amended by revising
the entry for Sec. 1.382-3 to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.382-3 also issued under 26 U.S.C. 382(g)(4)(C) and 26
U.S.C. 382(m).
* * * * *
0
Par. 2. Section 1.382-3 is amended by revising paragraph (j)(17) to
read as follows:
Sec. 1.382-3 Definitions and rules relating to a 5-percent
shareholder.
* * * * *
(j) * * *
(17) Effective/applicability date. This paragraph (j) generally
applies to issuances or deemed issuances of stock in taxable years
beginning on or after November 4, 1992. However, paragraphs (j)(11)(ii)
and (j)(13) through (15) of this section and Examples 5 through 13 of
paragraph (j)(16) of this section apply to testing dates occurring on
or after October 22, 2013, other than with respect to the sale of a
Program Instrument by the Treasury Department. For purposes of this
paragraph (j)(17), a Program Instrument is an instrument issued
pursuant to a Program, as defined in Internal Revenue Service Notice
2010-2 (2010-2 IRB 251 (December 16, 2009)) (see Sec.
601.601(a)(2)(ii)(b) of this chapter), or a Covered Instrument, as
defined in that Notice. Taxpayers may apply paragraphs (j)(11)(ii) and
(j)(13) through (15) of this section and Examples 5 through 13 of
paragraph (j)(16) of this section in their entirety (other than with
respect to a sale of a Program Instrument by the Treasury Department)
to all testing dates that are included in a testing period beginning
before and ending on or after October 22, 2013. However, the provisions
described in the preceding sentence may not be applied to any date on
or before the date of any ownership change that occurred before October
22, 2013, under the regulations in effect before October 22, 2013, and
they may not be applied as described in the preceding sentence if such
application would result in an ownership change occurring on a date
before October 22, 2013, that did not occur under the regulations in
effect before October 22, 2013. See Sec. 1.382-3(j)(14)(ii) and (iii),
as contained in 26 CFR part 1 revised as of April 1, 1994 for the
application of paragraph (j)(10) of this section to stock issued on the
exercise of certain options exercised on or after November 4, 1992, and
for an election to apply paragraphs (j)(1) through (12) of this section
retroactively to certain issuances and deemed issuances of stock
occurring in taxable years prior to November 4, 1992.
* * * * *
[[Page 31998]]
Sec. 1.382-3T (Removed)
0
Par. 3. Section 1.382-3T is removed.
John M. Dalrymple,
Deputy Commissioner for Services and Enforcement.
Approved: May 13, 2015.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2015-13711 Filed 6-4-15; 8:45 am]
BILLING CODE 4830-01-P
