Adjustment of Applicable Schedule Amount, 48474-48475 [2020-17424]

Download as PDF 48474 Federal Register / Vol. 85, No. 155 / Tuesday, August 11, 2020 / Rules and Regulations (i) Example 1. In year 1, Taxpayer A makes a payment of $500 to an entity described in section 170(c). In return for the payment, A receives a dollar-fordollar State income tax credit. Prior to application of the credit, A’s State income tax liability for year 1 was more than $500. A applies the $500 credit to A’s year 1 State income tax liability. Under paragraph (j)(1) of this section, A treats the $500 payment as a payment of State income tax in year 1. To determine A’s deduction amount, A must apply the provisions of section 164 applicable to payments of State and local taxes, including the limitation in section 164(b)(6). See paragraph (j)(3) of this section. (ii) Example 2. In year 1, Taxpayer B makes a payment of $7,000 to an entity described in section 170(c). In return for the payment, B receives a dollar-fordollar State income tax credit, which under State law may be carried forward for three taxable years. Prior to application of the credit, B’s State income tax liability for year 1 was $5,000; B applies $5,000 of the $7,000 credit to B’s year 1 State income tax liability. Under paragraph (j)(1) of this section, B treats $5,000 of the $7,000 payment as a payment of State income tax in year 1. Prior to application of the remaining credit, B’s State income tax liability for year 2 exceeds $2,000. B applies the excess credit of $2,000 to B’s year 2 State income tax liability. For year 2, under paragraph (j)(2) of this section, B treats the $2,000 as a payment of State income tax under section 164. To determine B’s deduction amounts in years 1 and 2, B must apply the provisions of section 164 applicable to payments of State and local taxes, including the limitation under section 164(b)(6). See paragraph (j)(3) of this section. (iii) Example 3. In year 1, Taxpayer C makes a payment of $7,000 to an entity described in section 170(c). In return for the payment, C receives a local real property tax credit equal to 25 percent of the amount of this payment ($1,750). Prior to application of the credit, C’s local real property tax liability in year 1 was more than $1,750. C applies the $1,750 credit to C’s year 1 local real property tax liability. Under paragraph (j)(1) of this section, for year 1, C treats $1,750 of the $7,000 payment as a payment of local real property tax for purposes of section 164. To determine C’s deduction amount, C must apply the provisions of section 164 applicable to payments of State and local taxes, including the limitation under section 164(b)(6). See paragraph (j)(3) of this section. VerDate Sep<11>2014 15:51 Aug 10, 2020 Jkt 250001 (7) Applicability date. This paragraph (j) applies to payments made to section 170(c) entities on or after June 11, 2019. However, a taxpayer may choose to apply this paragraph (j) to payments made to section 170(c) entities after August 27, 2018. ■ Par. 4. Section 1.170A–1 is amended as follows: ■ 1. Paragraph (c)(5) is revised. ■ 2. In paragraph (h)(1) introductory text, remove the cross-references to ‘‘§ 1.170A–13(f)(6)’’ and ‘‘§ 1.170A– 13(f)(5)’’ and add in their places ‘‘paragraph (h)(4)(i) of this section’’ and ‘‘paragraph (h)(4)(ii) of this section’’, respectively. ■ 3. Paragraphs (h)(2)(i)(B) and (h)(3)(iii) are revised. ■ 4. Paragraph (h)(3)(viii) is redesignated as paragraph (h)(3)(x). ■ 5. New paragraph (h)(3)(viii) and paragraph (h)(3)(ix) are added. ■ 6. Paragraphs (h)(4) through (6) are redesignated as paragraphs (h)(5) through (7). ■ 7. New paragraph (h)(4) is added. The revisions and additions read as follows: § 1.170A–1 Charitable, etc., contributions and gifts; allowance of deduction. * * * * * (c) * * * (5) For payments or transfers to an entity described in section 170(c) by a taxpayer carrying on a trade or business, see § 1.162–15(a). * * * * * (h) * * * (2) * * * (i) * * * (B) The fair market value of the goods or services received or expected to be received in return. * * * * * (3) * * * (iii) In consideration for. For purposes of paragraph (h) of this section, the term in consideration for has the meaning set forth in paragraph (h)(4)(i) of this section. * * * * * (viii) Safe harbor for payments by C corporations and specified passthrough entities. For payments by a C corporation or by a specified passthrough entity to an entity described in section 170(c), where the C corporation or specified passthrough entity receives or expects to receive a State or local tax credit that reduces the charitable contribution deduction for such payments under paragraph (h)(3) of this section, see § 1.162–15(a)(3) (providing safe harbors under section 162(a) to the extent of that reduction). (ix) Safe harbor for individuals. Under certain circumstances, an individual PO 00000 Frm 00010 Fmt 4700 Sfmt 4700 who itemizes deductions and makes a payment to an entity described in section 170(c) in consideration for a State or local tax credit may treat the portion of such payment for which a charitable contribution deduction is disallowed under paragraph (h)(3) of this section as a payment of State or local taxes under section 164. See § 1.164–3(j), providing a safe harbor for certain payments by individuals in exchange for State or local tax credits. * * * * * (4) Definitions. For purposes of this paragraph (h), the following definitions apply: (i) In consideration for. A taxpayer receives goods or services in consideration for a taxpayer’s payment or transfer to an entity described in section 170(c) if, at the time the taxpayer makes the payment to such entity, the taxpayer receives or expects to receive goods or services from that entity or any other party in return. (ii) Goods or services. Goods or services means cash, property, services, benefits, and privileges. (iii) Applicability date. The definitions provided in this paragraph (h)(4) are applicable to amounts paid or property transferred on or after December 17, 2019. * * * * * § 1.170A–13 [Amended] Par. 5.Section 1.170A–13 is amended in paragraph (f)(7) by removing the cross-reference ‘‘§ 1.170A–1(h)(5)’’ and adding in its place ‘‘§ 1.170A–1(h)(6)’’. ■ Sunita Lough, Deputy Commissioner for Services and Enforcement. Approved: July 27, 2020. David J. Kautter, Assistant Secretary of the Treasury (Tax Policy). [FR Doc. 2020–17393 Filed 8–7–20; 4:15 pm] BILLING CODE 4830–01–P DEPARTMENT OF THE TREASURY Office of Foreign Assets Control 31 CFR Part 501 Adjustment of Applicable Schedule Amount Office of Foreign Assets Control, Treasury. ACTION: Final rule. AGENCY: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing this final rule to make technical amendments to the SUMMARY: E:\FR\FM\11AUR1.SGM 11AUR1 Federal Register / Vol. 85, No. 155 / Tuesday, August 11, 2020 / Rules and Regulations definition of ‘‘applicable schedule amount’’ in its regulations. In recent years, OFAC has adjusted its civil monetary penalties (CMPs) as required by the Federal Civil Penalties Inflation Adjustment Act, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. While OFAC’s ‘‘applicable schedule amount’’ values are not civil monetary penalties that are required to be adjusted pursuant to such statute, OFAC is making technical changes to this definition to ensure the applicable schedule amount values continue to correspond appropriately to OFAC’s CMPs. DATES: This rule is effective August 11, 2020. FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for Licensing, tel.: 202–622–2480; Assistant Director for Regulatory Affairs, tel.: 202–622– 4855; or Assistant Director for Sanctions Compliance & Evaluation, tel.: 202–622– 2490. SUPPLEMENTARY INFORMATION: Electronic Availability This document and additional information concerning OFAC are available on OFAC’s website (www.treasury.gov/ofac). Background On September 8, 2008, OFAC issued as an interim final rule the ‘‘Economic Sanctions Enforcement Guidelines’’ (Enforcement Guidelines) as appendix A to the Reporting, Procedures and Penalties Regulations at 31 CFR part 501 (73 FR 51933, September 8, 2008). On November 9, 2009, OFAC re-issued as a final rule the Enforcement Guidelines (74 FR 57593, November 9, 2009). OFAC’s Enforcement Guidelines provide a general framework for the enforcement of all economic sanctions programs administered by OFAC. Section V.B.2.a.ii. of the Enforcement Guidelines states that the base amount of a proposed civil penalty in a PrePenalty Notice shall be the ‘‘applicable schedule amount,’’ subject to certain caps noted in that section, where the case is deemed non-egregious and the apparent violation has come to OFAC’s attention by means other than a voluntary self-disclosure. Section I.B. of the Enforcement Guidelines provides a definition of ‘‘applicable schedule amount.’’ Separately, as required by the Federal Civil Penalties Inflation Adjustment Act (1990 Pub. L. 101–410, 104 Stat. 890; 28 U.S.C. 2461 note), as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of VerDate Sep<11>2014 15:51 Aug 10, 2020 Jkt 250001 2015 (Pub. L. 114–74, 129 Stat. 599, 28 U.S.C. 2461 note) (collectively, the FCPIA Act), OFAC has adjusted its CMPs five times since the Federal Civil Penalties Inflation Adjustment Act Improvements Act went into effect on November 2, 2015: An initial catch-up adjustment on August 1, 2016 (81 FR 43070, July 1, 2016), and annual adjustments on February 10, 2017 (82 FR 10434, February 10, 2017), March 19, 2018 (83 FR 11876, March 19, 2018), June 14, 2019 (84 FR 27714, June 14, 2019), and April 9, 2020 (85 FR 19884, April 9, 2020). OFAC’s applicable schedule amount values in the Enforcement Guidelines, while not required to be adjusted pursuant to the FCPIA Act, correspond in certain ways with OFAC’s CMPs. As a result, to correspond with OFAC’s recent CMP adjustments required by the FCPIA Act, OFAC is now amending the definition of ‘‘applicable schedule amount’’ in section I.B. of appendix A to 31 CFR part 501, to adjust applicable schedule amount values for transactions valued at $100,000 or more. Specifically, OFAC is amending sections I.B.6. and I.B.7., such that in the case of transactions valued at $100,000 or more but less than $200,000, the applicable schedule amount is now $200,000, and in the case of transactions valued at $200,000 or more, the applicable schedule amount is now $307,922, which corresponds with the current maximum CMP amount for a violation of the International Emergency Economic Powers Act (50 U.S.C. 1701–1706, at 1705). These changes are not required pursuant to the FCPIA; however, OFAC is making these changes to ensure the applicable schedule amount values continue to correspond appropriately to OFAC’s CMPs as the CMPs are adjusted pursuant to the FCPIA annually. Additionally, OFAC is amending the authorities section of 31 CFR part 501 to shorten citations to conform to Federal Register guidance. Public Participation Because this final rule imposes no obligations on any person, but only amends OFAC’s enforcement policy and procedures based on existing substantive rules, provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, opportunity for public participation, and delay in effective date are inapplicable. Further, this final rule is not a significant regulatory action for purposes of Executive Order 12866. Accordingly, the provisions of Executive Order 13771 are inapplicable. Because no notice of proposed PO 00000 Frm 00011 Fmt 4700 Sfmt 4700 48475 rulemaking is required for this rule, the Regulatory Flexibility Act (5 U.S.C. 601–612) does not apply. Paperwork Reduction Act The Paperwork Reduction Act does not apply because this rule does not impose information collection requirements that would require the approval of the Office of Management and Budget under 44 U.S.C. 3501 et seq. List of Subjects in 31 CFR Part 501 Administrative practice and procedure, Banks, banking, Blocking of assets, Exports, Foreign trade, Licensing, Penalties, Sanctions. For the reasons set forth in the preamble, the Department of the Treasury’s Office of Foreign Assets Control amends 31 CFR part 501 as follows: PART 501—REPORTING, PROCEDURES AND PENALTIES REGULATIONS 1. The authority citation for part 501 is revised to read as follows: ■ Authority: 8 U.S.C. 1189; 18 U.S.C. 2332d, 2339B; 19 U.S.C. 3901–3913; 21 U.S.C. 1901– 1908; 22 U.S.C. 287c; 22 U.S.C. 2370(a), 6009, 6032, 7205; 28 U.S.C. 2461 note; 31 U.S.C. 321(b); 50 U.S.C. 1701–1706; 50 U.S.C. 4301–4341; 22 U.S.C. 8501–8551. Appendix A to Part 501 [Amended] 2. Amend appendix A to part 501 as follows: ■ a. In section I.B.6., remove ‘‘$170,000’’ in both places it appears and add in its place ‘‘$200,000’’ in both places. ■ b. In section I.B.7., remove ‘‘$250,000’’ and add in its place ‘‘$307,922’’, and remove ‘‘$170,000’’ and add in its place ‘‘$200,000’’. ■ Dated: August 5, 2020. Andrea Gacki, Director, Office of Foreign Assets Control. [FR Doc. 2020–17424 Filed 8–10–20; 8:45 am] BILLING CODE 4810–AL–P DEPARTMENT OF AGRICULTURE Forest Service 36 CFR Part 251 RIN 0596–AD36 Land Uses; Special Uses; Procedures for Operating Plans and Agreements for Powerline Facility Maintenance and Vegetation Management Within and Abutting the Linear Boundary of a Special Use Authorization for a Powerline Facility; Correction AGENCY: E:\FR\FM\11AUR1.SGM Forest Service, USDA. 11AUR1

Agencies

[Federal Register Volume 85, Number 155 (Tuesday, August 11, 2020)]
[Rules and Regulations]
[Pages 48474-48475]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17424]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 501


Adjustment of Applicable Schedule Amount

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule.

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

SUMMARY: The Department of the Treasury's Office of Foreign Assets 
Control (OFAC) is issuing this final rule to make technical amendments 
to the

[[Page 48475]]

definition of ``applicable schedule amount'' in its regulations. In 
recent years, OFAC has adjusted its civil monetary penalties (CMPs) as 
required by the Federal Civil Penalties Inflation Adjustment Act, as 
amended by the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015. While OFAC's ``applicable schedule amount'' 
values are not civil monetary penalties that are required to be 
adjusted pursuant to such statute, OFAC is making technical changes to 
this definition to ensure the applicable schedule amount values 
continue to correspond appropriately to OFAC's CMPs.

DATES: This rule is effective August 11, 2020.

FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for 
Licensing, tel.: 202-622-2480; Assistant Director for Regulatory 
Affairs, tel.: 202-622-4855; or Assistant Director for Sanctions 
Compliance & Evaluation, tel.: 202-622-2490.

SUPPLEMENTARY INFORMATION:

Electronic Availability

    This document and additional information concerning OFAC are 
available on OFAC's website (www.treasury.gov/ofac).

Background

    On September 8, 2008, OFAC issued as an interim final rule the 
``Economic Sanctions Enforcement Guidelines'' (Enforcement Guidelines) 
as appendix A to the Reporting, Procedures and Penalties Regulations at 
31 CFR part 501 (73 FR 51933, September 8, 2008). On November 9, 2009, 
OFAC re-issued as a final rule the Enforcement Guidelines (74 FR 57593, 
November 9, 2009). OFAC's Enforcement Guidelines provide a general 
framework for the enforcement of all economic sanctions programs 
administered by OFAC. Section V.B.2.a.ii. of the Enforcement Guidelines 
states that the base amount of a proposed civil penalty in a Pre-
Penalty Notice shall be the ``applicable schedule amount,'' subject to 
certain caps noted in that section, where the case is deemed non-
egregious and the apparent violation has come to OFAC's attention by 
means other than a voluntary self-disclosure. Section I.B. of the 
Enforcement Guidelines provides a definition of ``applicable schedule 
amount.''
    Separately, as required by the Federal Civil Penalties Inflation 
Adjustment Act (1990 Pub. L. 101-410, 104 Stat. 890; 28 U.S.C. 2461 
note), as amended by the Federal Civil Penalties Inflation Adjustment 
Act Improvements Act of 2015 (Pub. L. 114-74, 129 Stat. 599, 28 U.S.C. 
2461 note) (collectively, the FCPIA Act), OFAC has adjusted its CMPs 
five times since the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act went into effect on November 2, 2015: An initial 
catch-up adjustment on August 1, 2016 (81 FR 43070, July 1, 2016), and 
annual adjustments on February 10, 2017 (82 FR 10434, February 10, 
2017), March 19, 2018 (83 FR 11876, March 19, 2018), June 14, 2019 (84 
FR 27714, June 14, 2019), and April 9, 2020 (85 FR 19884, April 9, 
2020).
    OFAC's applicable schedule amount values in the Enforcement 
Guidelines, while not required to be adjusted pursuant to the FCPIA 
Act, correspond in certain ways with OFAC's CMPs. As a result, to 
correspond with OFAC's recent CMP adjustments required by the FCPIA 
Act, OFAC is now amending the definition of ``applicable schedule 
amount'' in section I.B. of appendix A to 31 CFR part 501, to adjust 
applicable schedule amount values for transactions valued at $100,000 
or more. Specifically, OFAC is amending sections I.B.6. and I.B.7., 
such that in the case of transactions valued at $100,000 or more but 
less than $200,000, the applicable schedule amount is now $200,000, and 
in the case of transactions valued at $200,000 or more, the applicable 
schedule amount is now $307,922, which corresponds with the current 
maximum CMP amount for a violation of the International Emergency 
Economic Powers Act (50 U.S.C. 1701-1706, at 1705). These changes are 
not required pursuant to the FCPIA; however, OFAC is making these 
changes to ensure the applicable schedule amount values continue to 
correspond appropriately to OFAC's CMPs as the CMPs are adjusted 
pursuant to the FCPIA annually. Additionally, OFAC is amending the 
authorities section of 31 CFR part 501 to shorten citations to conform 
to Federal Register guidance.

Public Participation

    Because this final rule imposes no obligations on any person, but 
only amends OFAC's enforcement policy and procedures based on existing 
substantive rules, provisions of the Administrative Procedure Act (5 
U.S.C. 553) requiring notice of proposed rulemaking, opportunity for 
public participation, and delay in effective date are inapplicable. 
Further, this final rule is not a significant regulatory action for 
purposes of Executive Order 12866. Accordingly, the provisions of 
Executive Order 13771 are inapplicable. Because no notice of proposed 
rulemaking is required for this rule, the Regulatory Flexibility Act (5 
U.S.C. 601-612) does not apply.

Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because this rule does 
not impose information collection requirements that would require the 
approval of the Office of Management and Budget under 44 U.S.C. 3501 et 
seq.

List of Subjects in 31 CFR Part 501

    Administrative practice and procedure, Banks, banking, Blocking of 
assets, Exports, Foreign trade, Licensing, Penalties, Sanctions.

    For the reasons set forth in the preamble, the Department of the 
Treasury's Office of Foreign Assets Control amends 31 CFR part 501 as 
follows:

PART 501--REPORTING, PROCEDURES AND PENALTIES REGULATIONS

0
1. The authority citation for part 501 is revised to read as follows:

    Authority:  8 U.S.C. 1189; 18 U.S.C. 2332d, 2339B; 19 U.S.C. 
3901-3913; 21 U.S.C. 1901-1908; 22 U.S.C. 287c; 22 U.S.C. 2370(a), 
6009, 6032, 7205; 28 U.S.C. 2461 note; 31 U.S.C. 321(b); 50 U.S.C. 
1701-1706; 50 U.S.C. 4301-4341; 22 U.S.C. 8501-8551.

Appendix A to Part 501 [Amended]

0
2. Amend appendix A to part 501 as follows:
0
a. In section I.B.6., remove ``$170,000'' in both places it appears and 
add in its place ``$200,000'' in both places.
0
b. In section I.B.7., remove ``$250,000'' and add in its place 
``$307,922'', and remove ``$170,000'' and add in its place 
``$200,000''.

    Dated: August 5, 2020.
Andrea Gacki,
Director, Office of Foreign Assets Control.
[FR Doc. 2020-17424 Filed 8-10-20; 8:45 am]
BILLING CODE 4810-AL-P
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