Department of the Treasury July 2008 – Federal Register Recent Federal Regulation Documents

In the Rules and Regulations section of this issue of the Federal Register, the IRS is issuing temporary regulations relating to the elections to deduct start-up expenditures under section 195 of the Internal Revenue Code (Code), organizational expenditures of corporations under section 248, and organizational expenses of partnerships under section 709. The American Jobs Creation Act of 2004 amended these three sections of the Code to provide similar rules for deducting these types of expenses that are paid or incurred after October 22, 2004. The regulations affect taxpayers that pay or incur these expenses and provide guidance on how to elect to deduct the expenses in accordance with the new rules. The text of those temporary regulations also serves as the text of these proposed regulations.

This document contains final and temporary regulations addressing the treatment of certain income and assets related to the leasing of aircraft or vessels in foreign commerce under sections 367, 954, and 956 of the Internal Revenue Code (Code). The regulations reflect statutory changes made by section 415 of the American Jobs Creation Act of 2004 (AJCA). In general, the regulations will affect United States shareholders of controlled foreign corporations that derive income from the leasing of aircraft or vessels in foreign commerce and U.S. persons that transfer property subject to these leases to a foreign corporation. The text of these temporary regulations also serves as the text of the proposed regulations set forth in the Proposed Rules section in this issue of the Federal Register.

In the Procedure and Administration section of this issue of the Federal Register, the IRS is issuing temporary regulations that provide updated guidance affecting tax return preparers regarding the disclosure of a taxpayer's social security number to a tax return preparer located outside of the United States in order to provide an exception allowing such disclosure with the taxpayer's consent in limited circumstances. The text of those temporary regulations also serves as the text of these proposed regulations. This document invites comments from the public on these regulations, and provides notice of a public hearing on these proposed regulations.

This document contains final regulations relating to a claim that a child is a dependent by parents who are divorced, legally separated under a decree of separate maintenance, or separated under a written separation agreement, or who live apart at all times during the last 6 months of the calendar year. The regulations reflect amendments under the Working Families Tax Relief Act of 2004 (WFTRA) and the Gulf Opportunity Zone Act of 2005.

This document contains final regulations relating to employment tax adjustments and employment tax refund claims. The final regulations modify the process for making interest-free adjustments for both underpayments and overpayments of Federal Insurance Contributions Act (FICA) and Railroad Retirement Tax Act (RRTA) taxes and Federal income tax withholding (ITW) under sections 6205(a) and 6413(a), respectively, of the Internal Revenue Code (Code). These regulations also modify the process for filing claims for refund of overpayments of employment taxes under sections 6402 and 6414. This document contains final regulations relating to the return requirements under section 6011 to reflect the changes to the adjustment and refund processes, and to reflect additional statutory and process updates. This document also contains final regulations under section 6302 to clarify deposit obligations with respect to interest-free adjustments of underpayments and the effect of adjustments and refunds on the deposit schedule of a Form 943 filer.

In the Rules and Regulations section of this issue of the Federal Register, the IRS is issuing final and temporary regulations relating to the simplification of procedures for automatic extensions of time to file certain returns. These simplified procedures are aimed at reducing overall taxpayer burden. The text of the temporary regulations also serves as the text of these proposed regulations.

The Treasury Department's Office of Foreign Assets Control (``OFAC'') is removing the name of one individual from the list of Specially Designated Nationals and Blocked Persons whose property and interests in property have been blocked pursuant to Executive Order 13224 of September 23, 2001, Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism. The individual, MOHAMMED, Lokman Amin, was designated pursuant to Executive Order 13224 on December 5, 2005.

The Treasury Department's Office of Foreign Assets Control (``OFAC'') is removing the names of two persons from the list of Specially Designated Nationals and Blocked Persons whose property and interests in property have been unblocked pursuant to Executive Order 13382 of June 28, 2005, ``Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters.'' The entities, China Great Wall Industry Corporation and G.W. Aerospace, Inc, were designated pursuant to Executive Order 13382 on June 13, 2006.

Under section 459A of the Higher Education Act of 1965, as amended (``HEA''), as enacted within the Ensuring Continued Access to Student Loans Act of 2008 (Pub. L. 110-227), the Department of Education (``Department'') has the authority to purchase, or enter into forward commitments to purchase, Federal Family Education Loan Program (``FFELP'') loans made under sections 428 (subsidized Stafford loans), 428B (PLUS loans), or 428H (unsubsidized Stafford loans) of the HEA, on such terms as the Secretary of Education (``Secretary''), the Secretary of the Treasury, and the Director of the Office of Management and Budget (collectively, ``Secretaries and Director'') jointly determine are ``in the best interest of the United States'' and ``shall not result in any net cost to the Federal Government (including the cost of servicing the loans purchased).'' This notice (a) establishes the terms and conditions that will govern the loan purchases made under section 459A of the HEA, (b) outlines the methodology and factors that have been considered in evaluating the price at which the Department will purchase loans made under section 428, 428B, or 428H of the HEA, and (c) describes how the use of those factors and methodology will ensure that the loan purchases do not result in any net cost to the Federal Government. The Secretaries and Director concur in the publication of this notice and have jointly determined that the programs described in this notice are in the best interest of the United States and shall not result in any net cost to the Federal Government (including the cost of servicing the loans purchased).

The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the Office of Foreign Assets Control (``OFAC'') within the Department of the Treasury is soliciting comments concerning OFAC's ``Request for a Specific License to Visit an Immediate Family Member in Cuba who is a National of Cuba once in a three year period'' Application Form TD-F 90-22 60 and TD-F 90-22 60 (SP).

The Office of Foreign Assets Control (``OFAC'') of the Department of the Treasury is amending Appendix A to 31 CFR chapter V to (1) reflect the addition or removal from Appendix A, since it was last published, of the names of individuals and entities subject to the various economic sanctions programs administered by OFAC, and (2) provide updated identifying and clarifying information for certain individuals and entities included in the appendix. OFAC also is amending the notes to the appendices to 31 CFR chapter V to reflect the revisions to Appendix A and changes in the status of several programs.