Regulations To Prescribe Return and Time for Filing for Payment of Section 4960, 4966, 4967, and 4968 Taxes and To Update the Abatement Rules for Section 4966 and 4967 Taxes, 55653-55656 [2018-24285]

Download as PDF Federal Register / Vol. 83, No. 216 / Wednesday, November 7, 2018 / Proposed Rules The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to present oral comments at the hearing must submit written or electronic comments and an outline of the topics to be discussed and the time to be devoted to each topic by December 7, 2018. Such persons should submit a signed paper original and eight (8) copies or an electronic copy. A period of ten (10) minutes will be allotted to each person for making comments. An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be available free of charge at the hearing. Drafting Information The principal author of these regulations is Kathryn M. Sneade, Office of Associate Chief Counsel (Financial Institutions and Products), IRS. However, other personnel from the Treasury Department and the IRS participated in their development. Statement of Availability of IRS Documents The IRS notices and revenue procedures cited in this preamble are published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS website at http://www.irs.gov. 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 is amended by removing the entry for § 1.846–2(d), removing the entry for §§ 1.846–1 through 1.846–4, and adding an entry in numerical order for § 1.846–1. The addition reads in part as follows: ■ amozie on DSK3GDR082PROD with PROPOSALS1 Authority: 26 U.S.C. 7805 * * * * * * * * Section 1.846–1 also issued under 26 U.S.C. 846. * * § 1.846–0 * * * [Removed] Par. 2. Section 1.846–0 is removed. Par. 3. Section 1.846–1 is amended by: ■ ■ VerDate Sep<11>2014 17:02 Nov 06, 2018 Jkt 247001 1. Removing ‘‘section 846(f)(3)’’ from the first sentence of paragraph (a)(1) and adding ‘‘section 846(e)(3)’’ in its place. ■ 2. Removing ‘‘and § 1.846–3(b) contains guidance relating to discount factors applicable to accident years prior to the 1987 accident year’’ from the third sentence of paragraph (a)(1). ■ 3. Removing the last sentence of paragraph (a)(1). ■ 4. Removing paragraph (a)(2) and redesignating paragraphs (a)(3) and (4) as paragraphs (a)(2) and (3), respectively. ■ 5. In the first sentence of paragraph (b)(1), removing ‘‘section 846(f)(6)’’ and adding ‘‘section 846(e)(6)’’ in its place; and removing ‘‘, in § 1.846–2 (relating to a taxpayer’s election to use its own historical loss payment pattern)’’. ■ 6. Removing ‘‘for accident years after 1987’’ from the heading for paragraph (b)(3)(i). ■ 7. Removing the designation ‘‘(A)’’ and the accompanying heading ‘‘Accident years after 1991’’ after the heading of paragraph (b)(3)(ii). ■ 8. Removing paragraphs (b)(3)(ii)(B), and (b)(3)(iii) and (iv). ■ 9. Removing paragraph (b)(4) and redesignating paragraph (b)(5) as paragraph (b)(4). ■ 10. Adding paragraphs (c), (d), and (e). The additions read as follows: ■ § 1.846–1 Application of discount factors. * * * * * (c) Determination of annual rate. The applicable interest rate is the annual rate determined by the Secretary for any calendar year on the basis of the corporate bond yield curve (as defined in section 430(h)(2)(D)(i), determined by substituting ‘‘60-month period’’ for ‘‘24month period’’ therein). The annual rate for any calendar year is determined on the basis of a yield curve that reflects the average, for the most recent 60month period ending before the beginning of the calendar year, of monthly yields on corporate bonds described in section 430(h)(2)(D)(i). The annual rate is the average of that yield curve’s monthly spot rates with times to maturity of not more than seventeen and one-half years. (d) Determination of loss payment pattern—(1) In general. Under section 846(d)(1), the loss payment pattern determined by the Secretary for each line of business is determined by reference to the historical loss payment pattern applicable to such line of business determined in accordance with the method of determination set forth in section 846(d)(2) and the computational rules prescribed in section 846(d)(3) on the basis of the annual statement data from annual statements described in PO 00000 Frm 00011 Fmt 4702 Sfmt 4702 55653 section 846(d)(2)(A) and (B). However, the Secretary may adjust the loss payment pattern for any line of business as provided in paragraph (d)(2) of this section. (2) Smoothing adjustments. The Secretary may adjust the loss payment pattern for any line of business using a methodology described by the Secretary in other published guidance if necessary to avoid negative payment amounts and otherwise produce a stable pattern of positive discount factors less than one. (e) Applicability date. (1) Except as provided in paragraph (e)(2) of this section, this section applies to taxable years beginning after December 31, 1986. (2) Paragraphs (c) and (d) of this section apply to taxable years beginning after December 31, 2017. § 1.846–2 ■ § 1.846–2T ■ [Removed] Par. 7. Section 1.846–4 is removed. § 1.846–4T ■ [Removed] Par. 6. Section 1.846–3 is removed. § 1.846–4 ■ [Removed] Par. 5. Section 1.846–2T is removed. § 1.846–3 ■ [Removed] Par. 4. Section 1.846–2 is removed. [Removed] Par. 8. Section 1.846–4T is removed. Kirsten Wielobob, Deputy Commissioner for Services and Enforcement. [FR Doc. 2018–24367 Filed 11–5–18; 4:15 pm] BILLING CODE 4830–01–P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 53 [REG–107163–18] RIN 1545–BO80 Regulations To Prescribe Return and Time for Filing for Payment of Section 4960, 4966, 4967, and 4968 Taxes and To Update the Abatement Rules for Section 4966 and 4967 Taxes Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking. AGENCY: This document contains proposed regulations specifying which return to use to pay certain excise taxes and the time for filing the return. The regulations also implement the statutory addition of two excise taxes to the firsttier taxes subject to abatement. These regulations affect applicable tax-exempt SUMMARY: E:\FR\FM\07NOP1.SGM 07NOP1 55654 Federal Register / Vol. 83, No. 216 / Wednesday, November 7, 2018 / Proposed Rules amozie on DSK3GDR082PROD with PROPOSALS1 organizations and their related organizations, applicable educational institutions, sponsoring organizations that maintain certain donor advised funds, fund managers of such sponsoring organizations, and certain donors, donor advisors and persons related to a donor or donor advisor of a donor advised fund. DATES: Written or electronic comments and requests for a public hearing must be received by December 7, 2018. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG–107163–18), 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–107163– 18), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, DC 20224 or sent electronically via the Federal eRulemaking Portal at http:// www.regulations.gov (indicate IRS REG– 107163–18). FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Amber L. MacKenzie at (202) 317–4086 or Ward L. Thomas at (202) 317–6173; concerning submission of comments and request for hearing, Regina Johnson at (202) 317–6901 (not toll-free numbers). SUPPLEMENTARY INFORMATION: Background This document contains proposed regulations amending regulations under section 6011 of the Internal Revenue Code (Code) to specify the return to accompany payment of excise taxes under sections 4960, 4966, 4967, and 4968; amending regulations under section 6071 to specify the time for filing that return; and amending regulations under section 4963 that define the first-tier taxes subject to abatement under section 4962. These regulations affect applicable tax-exempt organizations described in section 4960(c)(1) and their related organizations described in section 4960(c)(4)(B); applicable educational institutions described in section 4968(b)(1); sponsoring organizations described in section 4966(d)(1) that maintain donor advised funds described in section 4966(d)(2); fund managers of such sponsoring organizations described in sections 4966(d)(3); and donors, donor advisors and persons related to a donor or donor advisor of a donor advised fund described in section 4967(d). These regulations implement section 1231 of the Pension Protection Act of VerDate Sep<11>2014 17:02 Nov 06, 2018 Jkt 247001 2006, Public Law 109–280, 120 Stat. 780, 1094 (‘‘PPA’’), as amended by section 3(h) of the Tax Technical Corrections Act of 2007, Public Law 110–172, 121 Stat. 2473, 2475, and sections 13602 and 13701 of the Tax Cuts and Jobs Act, Public Law 115–97, 131 Stat. 2054, 2157, 2167 (2017) (‘‘TCJA’’). The PPA added sections 4966 and 4967 to the Code. These sections impose excise taxes related to certain distributions from donor advised funds (defined in section 4966(d)(2)) maintained by organizations that are defined as sponsoring organizations in section 4966(d)(1). Section 4966(a)(1) imposes a 20 percent excise tax on each ‘‘taxable distribution’’ from a donor advised fund, payable by the sponsoring organization of the donor advised fund. Section 4966(a)(2) imposes a separate 5 percent excise tax on the agreement of any fund manager (as defined in section 4966(d)(3)) to the making of the distribution, knowing that it is a taxable distribution. Section 4966(b)(1) states that if more than one fund manager is liable for the tax, all such managers are jointly and severally liable with respect to the taxable distribution. Section 4966(b)(2) provides that the maximum amount of tax that may be imposed on all fund managers for any one taxable distribution is $10,000. Section 4966(c)(1) defines the term ‘‘taxable distribution’’ as any distribution from a donor advised fund: (A) To any natural person; or (B) to any other person if (i) the distribution is for any purpose other than one specified in section 170(c)(2)(B), or (ii) the sponsoring organization does not exercise expenditure responsibility in accordance with section 4945(h) with respect to such distribution. Section 4966(c)(2) excepts from the definition of taxable distribution: (A) Distributions to any organization described in section 170(b)(1)(A), other than a disqualified supporting organization (as defined in section 4966(d)(4)); (B) distributions to the sponsoring organization of such donor advised fund; and (C) distributions to any other donor advised fund. Section 4967(a)(1) imposes a tax on the advice of a donor, donor advisor, or related person, described in subsection (d), if a distribution from a donor advised fund results in such person (or any other person described in subsection (d)) receiving, directly or indirectly, a more than incidental benefit (a ‘‘prohibited benefit’’). The tax, which is equal to 125 percent of the amount of the prohibited benefit, is paid by any person described in subsection PO 00000 Frm 00012 Fmt 4702 Sfmt 4702 (d) who advises as to a distribution or who receives a prohibited benefit as a result of the distribution. Section 4967(c)(1) provides that if more than one person is liable for the tax under section 4967(a)(1), then all such persons are jointly and severally liable for the tax. Section 4967(a)(2) imposes a tax on a fund manager (defined in section 4966(d)(3)) who agrees to the making of a distribution described in section 4967(a)(1), knowing that it would confer a more than incidental benefit on a donor, donor advisor, or related person. Section 4967(a)(2) states that the tax is equal to 10 percent of the amount of the prohibited benefit. Section 4967(c)(1) provides that if more than one fund manager is liable for the tax, all such fund managers are jointly and severally liable. Section 4967(c)(2) provides that the maximum amount of tax under section 4967(a)(2) on all fund managers for any one prohibited benefit transaction is $10,000. Section 4967(b) provides that no tax is imposed under section 4967 if a tax has been imposed with respect to the distribution under section 4958 (taxing excess benefit transactions). In 2006, the PPA added section 4966 and section 4967 taxes to the definitions of ‘‘first tier tax’’ in section 4963(a) and ‘‘taxable event’’ in section 4963(c). In 2007, section 4962(b) was amended by the Tax Technical Corrections Act of 2007, Public Law 110–172, sec. 3(h), 121 Stat. 2473, 2475, to add subchapter G of chapter 42 (i.e., section 4966 and section 4967 taxes) to the definition of ‘‘qualified first tier tax’’ for purposes of tax abatement. Thus under the Code, section 4966 and section 4967 taxes are subject to abatement under the generally applicable rules. Treas. Reg. § 53.4963– 1 sets forth definitions with respect to abatement of taxes. The TCJA added sections 4960 and 4968 to the Code. Section 4960 imposes an excise tax equal to the product of the rate of tax under section 11 and the sum of (1) so much of the remuneration paid (other than any excess parachute payment) by an applicable tax-exempt organization for the taxable year with respect to employment of any covered employee in excess of $1,000,000, plus (2) any excess parachute payment paid by such an organization to any covered employee. Section 4960(c)(4)(A) provides that remuneration of a covered employee by an applicable tax-exempt organization includes any remuneration paid with respect to employment of such employee by any related person or governmental entity. Section 4960(c)(4)(C) provides that when remuneration from more than one E:\FR\FM\07NOP1.SGM 07NOP1 Federal Register / Vol. 83, No. 216 / Wednesday, November 7, 2018 / Proposed Rules employer is taken into account in determining the tax imposed by subsection (a), each such employer is liable for a pro rata share of the tax imposed by subsection (a) based on the ratio of the amount of remuneration paid by such employer with respect to such employee to the amount of remuneration paid by all such employers to such employee. Separately, section 4968 imposes an excise tax on each applicable educational institution based on the net investment income of such institution (including certain income of related organizations) for the taxable year. Section 6011(a) generally provides that when required by regulations prescribed by the Secretary, any person liable for any tax imposed by the Code shall make a return or statement according to the forms and regulations prescribed by the Secretary. Section 6071 generally provides that when not otherwise provided for under the Code, return filing dates are prescribed by regulation. Treas. Reg. §§ 53.6011–1 and 53.6071–1 require persons subject to certain enumerated excise taxes under Chapter 42 of the Code to file a Form 4720 to accompany payment of those excise taxes and provide the time for filing the return. (Form 4720 is denominated ‘‘Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code.’’) Sections 4960, 4966, 4967, and 4968 were added to Chapter 42 of the Code, but are not enumerated in Treas. Reg. §§ 53.6011–1 and 53.6071–1. Explanation of Provisions 1. Section 4962 Abatement These proposed regulations add section 4966 and section 4967 taxes to the definitions of ‘‘first tier tax’’ and ‘‘taxable event’’ in Treas. Reg. § 53.4963–1. Qualified first tier taxes are subject to abatement under section 4962. 2. Requirement To File a Form 4720 These proposed regulations amend Treas. Reg. § 53.6011–1(b) to provide that persons (including governmental entities) that are liable for section 4960, 4966, 4967, or 4968 excise taxes are required to file a return on Form 4720. amozie on DSK3GDR082PROD with PROPOSALS1 3. Deadline for Filing a Form 4720 Under § 53.6071–1(i) of these proposed regulations, a person required to file a Form 4720 to report an excise tax under section 4960, 4966, 4967, or 4968 must file a Form 4720 by the 15th day of the fifth month after the end of the person’s taxable year during which the excise tax liability was incurred. VerDate Sep<11>2014 17:02 Nov 06, 2018 Jkt 247001 Thus, for example, an organization reporting on a calendar-year basis that incurred excise tax during the calendar year ending December 31, 2018, would be required to file a Form 4720 and pay the tax due by May 15, 2019. 4. Effective/Applicability Date These regulations are proposed to apply as of the date of publication of the final rule in the Federal Register. Special Analyses This regulation is not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement (April 11, 2018) between the Department of the Treasury and the Office of Management and Budget regarding review of tax regulations. It is hereby certified that the collection of information in these regulations will not have a significant economic impact on a substantial number of small entities. This rule merely provides guidance as to the timing and filing of Form 4720 for persons liable for the specified excise taxes and who have a statutory filing obligation. Completing the applicable portion of the Form 4720 imposes little incremental burden in time or expense as compared to any other filing method. In addition, a person may already be required to file the Form 4720 under the existing final regulations in §§ 53.6011– 1 and 53.6071–1 if it is liable for another excise tax for which filing of the Form is required. 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 will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small entities. Comments and Requests for Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any comments that are timely submitted to the IRS as prescribed in the preamble under the ADDRESSES section. All comments submitted will be made 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 hearing will be published in the Federal Register. PO 00000 Frm 00013 Fmt 4702 Sfmt 4702 55655 Drafting Information The principal authors of these regulations are Amber L. MacKenzie and Ward L. Thomas, Office of Associate Chief Counsel (Tax Exempt and Government Entities). However, other personnel from the IRS and Treasury Department participated in their development. List of Subjects in 26 CFR Part 53 Excise taxes, Foundations, Investments, Lobbying, Reporting and recordkeeping requirements. Proposed Amendments to the Regulations Accordingly, 26 CFR part 53 is proposed to be amended as follows: PART 53—FOUNDATION AND SIMILAR EXCISE TAXES Paragraph 1. The authority citation for part 53 continues to read, in part, as follows: ■ Authority: 26 U.S.C. 7805 * * * § 53.4963–1 [Amended] Par. 2. Section 53.4963–1 is amended as follows: ■ 1. Paragraph (a) is amended by removing the language ‘‘4958, 4971’’ and adding ‘‘4958, 4966, 4967, 4971’’ in its place. ■ 2. Paragraph (c) is amended by removing the language ‘‘4958, 4971’’ and adding ‘‘4958, 4966, 4967, 4971’’ in its place. ■ Par. 3. Section 53.6011–1 is amended by: ■ 1. Revising the first sentence of paragraph (b). ■ 2. Removing from the third sentence of paragraph (b) the language ‘‘4958(a), or 4965(a),’’ and adding ‘‘4958(a), 4960(a), 4965(a), 4966(a), or 4967(a),’’ in its place. The revision reads as follows: ■ § 53.6011–1 General requirement of return, statement or list. * * * * * (b) Every person (including a governmental entity) liable for tax imposed by sections 4941(a), 4942(a), 4943(a), 4944(a), 4945(a), 4955(a), 4958(a), 4959, 4960(a), 4965(a), 4966(a), 4967(a), or 4968(a), and every private foundation and every trust described in section 4947(a)(2) which has engaged in an act of self-dealing (as defined in section 4941(d)) (other than an act giving rise to no tax under section 4941(a)) shall file an annual return on Form 4720 and shall include therein the information required by such form and E:\FR\FM\07NOP1.SGM 07NOP1 55656 Federal Register / Vol. 83, No. 216 / Wednesday, November 7, 2018 / Proposed Rules the instructions issued with respect thereto. * * * * * * * * § 53.6071–1 [Amended] Par. 4. Section 53.6071–1 is amended by: ■ 1. Redesignating paragraph (i) as paragraph (j). ■ 2. Adding new paragraphs (i) and (j)(3). The additions read as follows: ■ § 53.6071–1 Time for filing returns. * * * * * (i) Taxes under section 4960, 4966, 4967, or 4968. A person (including a governmental entity) required by § 53.6011–1(b) to file a return for a tax imposed by section 4960(a), 4966(a), 4967(a), or 4968(a) in a taxable year must file the Form 4720 on or before the 15th day of the fifth month after the end of the person’s taxable year (or, if the person has not established a taxable year for Federal income tax purposes, the person’s annual accounting period). (j) * * * (3) Paragraph (i) of this section applies on and after the date of publication of the Treasury decision adopting these rules as final regulations in the Federal Register. Kirsten Wielobob, Deputy Commissioner for Services and Enforcement. [FR Doc. 2018–24285 Filed 11–5–18; 4:15 pm] BILLING CODE 4830–01–P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA–R08–OAR–2018–0606; FRL–9986–09– Region 8] Approval and Promulgation of Air Quality Implementation Plans; Wyoming; Revisions to Regional Haze State Implementation Plan; Revisions to Regional Haze Federal Implementation Plan Environmental Protection Agency (EPA). ACTION: Proposed rule; extension of comment period. amozie on DSK3GDR082PROD with PROPOSALS1 AGENCY: On October 11, 2018, the Environmental Protection Agency (EPA) published in the Federal Register a proposed rule pertaining to revisions to the regional haze State Implementation Plan (SIP) and Federal Implementation Plan (FIP) for Wyoming and requested comments by November 13, 2018. The EPA is extending the comment period SUMMARY: VerDate Sep<11>2014 17:02 Nov 06, 2018 Jkt 247001 for the proposed rule until December 10, 2018. DATES: Written comments must be received on or before December 10, 2018. ADDRESSES: Submit your comments, identified by Docket ID No. EPA–R08– OAR–2018–0606, to the Federal Rulemaking Portal: https:// www.regulations.gov. Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from www.regulations.gov. The EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e., on the web, cloud, or other file sharing system). For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www.epa.gov/dockets/ commenting-epa-dockets. Docket: All documents in the docket are listed in the www.regulations.gov index. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically in www.regulations.gov or in hard copy at the Air Program, Environmental Protection Agency (EPA), Region 8, 1595 Wynkoop Street, Denver, Colorado 80202–1129. The EPA requests that, if at all possible, you contact the individual listed in the FOR FURTHER INFORMATION CONTACT section to view the hard copy of the docket. You may view the hard copy of the docket Monday through Friday, 8:00 a.m. to 4:00 p.m., excluding federal holidays. FOR FURTHER INFORMATION CONTACT: Jaslyn Dobrahner, Air Program, EPA, Region 8, Mailcode 8P–AR, 1595 Wynkoop Street, Denver, Colorado, 80202–1129, (303) 312–6252, dobrahner.jaslyn@epa.gov. SUPPLEMENTARY INFORMATION: Throughout this document wherever PO 00000 Frm 00014 Fmt 4702 Sfmt 4702 ‘‘we,’’ ‘‘us,’’ or ‘‘our’’ is used, we mean the EPA. On October 11, 2018 (83 FR 51403), we published in the Federal Register a proposed rule pertaining to revisions to the regional haze SIP and FIP for Wyoming and requested comment by November 13, 2018. Specifically, the SIP revisions modify the sulfur dioxide (SO2) emissions reporting requirements for Laramie River Station Units 1 and 2. The revisions to the FIP revise the nitrogen oxides (NOX) best available retrofit technology (BART) emission limits for Laramie River Units 1—3 and establish a SO2 emission limit averaged annually across both Laramie River Station Units 1 and 2. We received a request from several organizations to extend the comment period and, in response, we are extending the comment period to December 10, 2018.1 List of Subjects in 40 CFR Part 52 Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Particulate matter, Sulfur oxides. Authority: 42 U.S.C. 7401 et seq. Dated: November 2, 2018. Douglas Benevento, Regional Administrator, Region 8. [FR Doc. 2018–24366 Filed 11–6–18; 8:45 am] BILLING CODE 6560–50–P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA–R08–OAR–2018–0607; FRL–9986–03– Region 8] Approval and Promulgation of Air Quality Implementation Plans; Wyoming; Revisions to Regional Haze State Implementation Plan Environmental Protection Agency (EPA). ACTION: Proposed rule. AGENCY: The Environmental Protection Agency (EPA) is proposing to approve a source-specific revision to the Wyoming State Implementation Plan (SIP) that provides an alternative to Best Available Retrofit Technology (BART) for Unit 3 at the Naughton Power Plant (‘‘the SIP revision’’) that is owned and operated by PacifiCorp. The EPA proposes to find that the BART alternative for Naughton Unit 3 would provide greater reasonable progress toward natural visibility SUMMARY: 1 A copy of the letter requesting the extension appears in the docket for this action. E:\FR\FM\07NOP1.SGM 07NOP1

Agencies

[Federal Register Volume 83, Number 216 (Wednesday, November 7, 2018)]
[Proposed Rules]
[Pages 55653-55656]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-24285]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 53

[REG-107163-18]
RIN 1545-BO80


Regulations To Prescribe Return and Time for Filing for Payment 
of Section 4960, 4966, 4967, and 4968 Taxes and To Update the Abatement 
Rules for Section 4966 and 4967 Taxes

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking.

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

SUMMARY: This document contains proposed regulations specifying which 
return to use to pay certain excise taxes and the time for filing the 
return. The regulations also implement the statutory addition of two 
excise taxes to the first-tier taxes subject to abatement. These 
regulations affect applicable tax-exempt

[[Page 55654]]

organizations and their related organizations, applicable educational 
institutions, sponsoring organizations that maintain certain donor 
advised funds, fund managers of such sponsoring organizations, and 
certain donors, donor advisors and persons related to a donor or donor 
advisor of a donor advised fund.

DATES: Written or electronic comments and requests for a public hearing 
must be received by December 7, 2018.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-107163-18), 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-
107163-18), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue NW, Washington, DC 20224 or sent electronically via the Federal 
eRulemaking Portal at http://www.regulations.gov (indicate IRS REG-
107163-18).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Amber L. MacKenzie at (202) 317-4086 or Ward L. Thomas at (202) 317-
6173; concerning submission of comments and request for hearing, Regina 
Johnson at (202) 317-6901 (not toll-free numbers).

SUPPLEMENTARY INFORMATION: 

Background

    This document contains proposed regulations amending regulations 
under section 6011 of the Internal Revenue Code (Code) to specify the 
return to accompany payment of excise taxes under sections 4960, 4966, 
4967, and 4968; amending regulations under section 6071 to specify the 
time for filing that return; and amending regulations under section 
4963 that define the first-tier taxes subject to abatement under 
section 4962.
    These regulations affect applicable tax-exempt organizations 
described in section 4960(c)(1) and their related organizations 
described in section 4960(c)(4)(B); applicable educational institutions 
described in section 4968(b)(1); sponsoring organizations described in 
section 4966(d)(1) that maintain donor advised funds described in 
section 4966(d)(2); fund managers of such sponsoring organizations 
described in sections 4966(d)(3); and donors, donor advisors and 
persons related to a donor or donor advisor of a donor advised fund 
described in section 4967(d).
    These regulations implement section 1231 of the Pension Protection 
Act of 2006, Public Law 109-280, 120 Stat. 780, 1094 (``PPA''), as 
amended by section 3(h) of the Tax Technical Corrections Act of 2007, 
Public Law 110-172, 121 Stat. 2473, 2475, and sections 13602 and 13701 
of the Tax Cuts and Jobs Act, Public Law 115-97, 131 Stat. 2054, 2157, 
2167 (2017) (``TCJA'').
    The PPA added sections 4966 and 4967 to the Code. These sections 
impose excise taxes related to certain distributions from donor advised 
funds (defined in section 4966(d)(2)) maintained by organizations that 
are defined as sponsoring organizations in section 4966(d)(1).
    Section 4966(a)(1) imposes a 20 percent excise tax on each 
``taxable distribution'' from a donor advised fund, payable by the 
sponsoring organization of the donor advised fund. Section 4966(a)(2) 
imposes a separate 5 percent excise tax on the agreement of any fund 
manager (as defined in section 4966(d)(3)) to the making of the 
distribution, knowing that it is a taxable distribution. Section 
4966(b)(1) states that if more than one fund manager is liable for the 
tax, all such managers are jointly and severally liable with respect to 
the taxable distribution. Section 4966(b)(2) provides that the maximum 
amount of tax that may be imposed on all fund managers for any one 
taxable distribution is $10,000.
    Section 4966(c)(1) defines the term ``taxable distribution'' as any 
distribution from a donor advised fund: (A) To any natural person; or 
(B) to any other person if (i) the distribution is for any purpose 
other than one specified in section 170(c)(2)(B), or (ii) the 
sponsoring organization does not exercise expenditure responsibility in 
accordance with section 4945(h) with respect to such distribution. 
Section 4966(c)(2) excepts from the definition of taxable distribution: 
(A) Distributions to any organization described in section 
170(b)(1)(A), other than a disqualified supporting organization (as 
defined in section 4966(d)(4)); (B) distributions to the sponsoring 
organization of such donor advised fund; and (C) distributions to any 
other donor advised fund.
    Section 4967(a)(1) imposes a tax on the advice of a donor, donor 
advisor, or related person, described in subsection (d), if a 
distribution from a donor advised fund results in such person (or any 
other person described in subsection (d)) receiving, directly or 
indirectly, a more than incidental benefit (a ``prohibited benefit''). 
The tax, which is equal to 125 percent of the amount of the prohibited 
benefit, is paid by any person described in subsection (d) who advises 
as to a distribution or who receives a prohibited benefit as a result 
of the distribution. Section 4967(c)(1) provides that if more than one 
person is liable for the tax under section 4967(a)(1), then all such 
persons are jointly and severally liable for the tax.
    Section 4967(a)(2) imposes a tax on a fund manager (defined in 
section 4966(d)(3)) who agrees to the making of a distribution 
described in section 4967(a)(1), knowing that it would confer a more 
than incidental benefit on a donor, donor advisor, or related person. 
Section 4967(a)(2) states that the tax is equal to 10 percent of the 
amount of the prohibited benefit. Section 4967(c)(1) provides that if 
more than one fund manager is liable for the tax, all such fund 
managers are jointly and severally liable. Section 4967(c)(2) provides 
that the maximum amount of tax under section 4967(a)(2) on all fund 
managers for any one prohibited benefit transaction is $10,000. Section 
4967(b) provides that no tax is imposed under section 4967 if a tax has 
been imposed with respect to the distribution under section 4958 
(taxing excess benefit transactions).
    In 2006, the PPA added section 4966 and section 4967 taxes to the 
definitions of ``first tier tax'' in section 4963(a) and ``taxable 
event'' in section 4963(c). In 2007, section 4962(b) was amended by the 
Tax Technical Corrections Act of 2007, Public Law 110-172, sec. 3(h), 
121 Stat. 2473, 2475, to add subchapter G of chapter 42 (i.e., section 
4966 and section 4967 taxes) to the definition of ``qualified first 
tier tax'' for purposes of tax abatement. Thus under the Code, section 
4966 and section 4967 taxes are subject to abatement under the 
generally applicable rules. Treas. Reg. Sec.  53.4963-1 sets forth 
definitions with respect to abatement of taxes.
    The TCJA added sections 4960 and 4968 to the Code. Section 4960 
imposes an excise tax equal to the product of the rate of tax under 
section 11 and the sum of (1) so much of the remuneration paid (other 
than any excess parachute payment) by an applicable tax-exempt 
organization for the taxable year with respect to employment of any 
covered employee in excess of $1,000,000, plus (2) any excess parachute 
payment paid by such an organization to any covered employee. Section 
4960(c)(4)(A) provides that remuneration of a covered employee by an 
applicable tax-exempt organization includes any remuneration paid with 
respect to employment of such employee by any related person or 
governmental entity. Section 4960(c)(4)(C) provides that when 
remuneration from more than one

[[Page 55655]]

employer is taken into account in determining the tax imposed by 
subsection (a), each such employer is liable for a pro rata share of 
the tax imposed by subsection (a) based on the ratio of the amount of 
remuneration paid by such employer with respect to such employee to the 
amount of remuneration paid by all such employers to such employee. 
Separately, section 4968 imposes an excise tax on each applicable 
educational institution based on the net investment income of such 
institution (including certain income of related organizations) for the 
taxable year.
    Section 6011(a) generally provides that when required by 
regulations prescribed by the Secretary, any person liable for any tax 
imposed by the Code shall make a return or statement according to the 
forms and regulations prescribed by the Secretary. Section 6071 
generally provides that when not otherwise provided for under the Code, 
return filing dates are prescribed by regulation. Treas. Reg. 
Sec. Sec.  53.6011-1 and 53.6071-1 require persons subject to certain 
enumerated excise taxes under Chapter 42 of the Code to file a Form 
4720 to accompany payment of those excise taxes and provide the time 
for filing the return. (Form 4720 is denominated ``Return of Certain 
Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code.'') 
Sections 4960, 4966, 4967, and 4968 were added to Chapter 42 of the 
Code, but are not enumerated in Treas. Reg. Sec. Sec.  53.6011-1 and 
53.6071-1.

Explanation of Provisions

1. Section 4962 Abatement

    These proposed regulations add section 4966 and section 4967 taxes 
to the definitions of ``first tier tax'' and ``taxable event'' in 
Treas. Reg. Sec.  53.4963-1. Qualified first tier taxes are subject to 
abatement under section 4962.

2. Requirement To File a Form 4720

    These proposed regulations amend Treas. Reg. Sec.  53.6011-1(b) to 
provide that persons (including governmental entities) that are liable 
for section 4960, 4966, 4967, or 4968 excise taxes are required to file 
a return on Form 4720.

3. Deadline for Filing a Form 4720

    Under Sec.  53.6071-1(i) of these proposed regulations, a person 
required to file a Form 4720 to report an excise tax under section 
4960, 4966, 4967, or 4968 must file a Form 4720 by the 15th day of the 
fifth month after the end of the person's taxable year during which the 
excise tax liability was incurred. Thus, for example, an organization 
reporting on a calendar-year basis that incurred excise tax during the 
calendar year ending December 31, 2018, would be required to file a 
Form 4720 and pay the tax due by May 15, 2019.

4. Effective/Applicability Date

    These regulations are proposed to apply as of the date of 
publication of the final rule in the Federal Register.

Special Analyses

    This regulation is not subject to review under section 6(b) of 
Executive Order 12866 pursuant to the Memorandum of Agreement (April 
11, 2018) between the Department of the Treasury and the Office of 
Management and Budget regarding review of tax regulations. It is hereby 
certified that the collection of information in these regulations will 
not have a significant economic impact on a substantial number of small 
entities. This rule merely provides guidance as to the timing and 
filing of Form 4720 for persons liable for the specified excise taxes 
and who have a statutory filing obligation. Completing the applicable 
portion of the Form 4720 imposes little incremental burden in time or 
expense as compared to any other filing method. In addition, a person 
may already be required to file the Form 4720 under the existing final 
regulations in Sec. Sec.  53.6011-1 and 53.6071-1 if it is liable for 
another excise tax for which filing of the Form is required. 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 will be submitted to the Chief Counsel for 
Advocacy of the Small Business Administration for comment on its impact 
on small entities.

Comments and Requests for Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any comments that are timely submitted 
to the IRS as prescribed in the preamble under the ADDRESSES section. 
All comments submitted will be made 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 hearing will be 
published in the Federal Register.

Drafting Information

    The principal authors of these regulations are Amber L. MacKenzie 
and Ward L. Thomas, Office of Associate Chief Counsel (Tax Exempt and 
Government Entities). However, other personnel from the IRS and 
Treasury Department participated in their development.

List of Subjects in 26 CFR Part 53

    Excise taxes, Foundations, Investments, Lobbying, Reporting and 
recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 53 is proposed to be amended as follows:

PART 53--FOUNDATION AND SIMILAR EXCISE TAXES

0
Paragraph 1. The authority citation for part 53 continues to read, in 
part, as follows:

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


Sec.  53.4963-1   [Amended]

0
Par. 2. Section 53.4963-1 is amended as follows:
0
1. Paragraph (a) is amended by removing the language ``4958, 4971'' and 
adding ``4958, 4966, 4967, 4971'' in its place.
0
2. Paragraph (c) is amended by removing the language ``4958, 4971'' and 
adding ``4958, 4966, 4967, 4971'' in its place.
0
Par. 3. Section 53.6011-1 is amended by:
0
1. Revising the first sentence of paragraph (b).
0
2. Removing from the third sentence of paragraph (b) the language 
``4958(a), or 4965(a),'' and adding ``4958(a), 4960(a), 4965(a), 
4966(a), or 4967(a),'' in its place.
    The revision reads as follows:


Sec.  53.6011-1  General requirement of return, statement or list.

* * * * *
    (b) Every person (including a governmental entity) liable for tax 
imposed by sections 4941(a), 4942(a), 4943(a), 4944(a), 4945(a), 
4955(a), 4958(a), 4959, 4960(a), 4965(a), 4966(a), 4967(a), or 4968(a), 
and every private foundation and every trust described in section 
4947(a)(2) which has engaged in an act of self-dealing (as defined in 
section 4941(d)) (other than an act giving rise to no tax under section 
4941(a)) shall file an annual return on Form 4720 and shall include 
therein the information required by such form and

[[Page 55656]]

the instructions issued with respect thereto. * * *
* * * * *


Sec.  53.6071-1   [Amended]

0
Par. 4. Section 53.6071-1 is amended by:
0
1. Redesignating paragraph (i) as paragraph (j).
0
2. Adding new paragraphs (i) and (j)(3).
    The additions read as follows:


Sec.  53.6071-1   Time for filing returns.

* * * * *
    (i) Taxes under section 4960, 4966, 4967, or 4968. A person 
(including a governmental entity) required by Sec.  53.6011-1(b) to 
file a return for a tax imposed by section 4960(a), 4966(a), 4967(a), 
or 4968(a) in a taxable year must file the Form 4720 on or before the 
15th day of the fifth month after the end of the person's taxable year 
(or, if the person has not established a taxable year for Federal 
income tax purposes, the person's annual accounting period).
    (j) * * *
    (3) Paragraph (i) of this section applies on and after the date of 
publication of the Treasury decision adopting these rules as final 
regulations in the Federal Register.

Kirsten Wielobob,
 Deputy Commissioner for Services and Enforcement.
[FR Doc. 2018-24285 Filed 11-5-18; 4:15 pm]
 BILLING CODE 4830-01-P