Internal Revenue Bulletin:  2011-33 

August 15, 2011 

REG-118809-11

Notice of Proposed Rulemaking by Cross-Reference to Temporary Regulations Modification of Treasury Regulations Pursuant to Section 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act


AGENCY:

Internal Revenue Service (IRS), Treasury.

ACTION:

Notice of proposed rulemaking by cross-reference to temporary regulations.

SUMMARY:

In this issue of the Bulletin, the IRS is issuing final and temporary regulations that remove any reference to, or requirement of reliance on, credit ratings in regulations under the Internal Revenue Code (Code) and provide substitute standards of credit-worthiness where appropriate. The Dodd-Frank Wall Street Reform and Consumer Protection Act requires each Federal agency to take such actions regarding its regulations. These regulations affect persons subject to various provisions of the Code. The text of the temporary regulations published in this issue of the Bulletin also serves as the text of the proposed regulations.

DATES:

Written and electronic comments and requests for a public hearing must be received by September 5, 2011.

ADDRESSES:

Send submissions to: CC:PA:LPD:PR (REG-118809-11), Room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered to: CC:PA:LPD:PR Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-118809-11), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC, or sent electronically via the Federal eRulemaking Portal at http://www.regulations.gov (IRS REG-118809-11).

FOR FURTHER INFORMATION CONTACT:

Concerning the proposed regulations, Arturo Estrada, (202) 622-3900; concerning submissions of comments and requests for a public hearing, Oluwafunmilayo Taylor, (202) 622-7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

Section 939A(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111-203 (124 Stat. 1376 (2010)), (the “Dodd-Frank Act”), requires each Federal agency to review its regulations that require the use of an assessment of credit-worthiness of a security or money market instrument, and to review any references or requirements in those regulations regarding credit ratings. Section 939A(b) directs each agency to modify any regulation identified in the review required under section 939A(a) by removing any reference to, or requirement of reliance on, credit ratings and substituting a standard of credit-worthiness that the agency deems appropriate. Numerous provisions under the Code are affected.

Temporary regulations in this issue of the Bulletin amend the Income Tax Regulations (26 CFR part 1) under sections 150, 171, 197, 249, 475, 860G, and 1001 of the Code. The temporary regulations also amend the Manufacturers and Retailers Excise Tax Regulations (26 CFR part 48) under section 4101 of the Code. The text of the temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the temporary regulations and the proposed regulations.

Special Analyses

It has been determined that this notice of proposed rulemaking 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 has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because these regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

Comments and Requests for a Public Hearing

Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments (a signed original and eight (8) copies) or electronic comments that are submitted timely to the IRS. The IRS and the Treasury Department specifically request comments on the clarity of the proposed regulations and how they may be made easier to understand. All comments will be available for public inspection and copying. A public hearing may 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.

Proposed Amendments to the Regulations

Accordingly, 26 CFR parts 1 and 48 are proposed to be amended as follows:

PART 1—INCOME TAXES

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

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

Par. 2. Section 1.150-1 is amended as follows:

1. Paragraph (a)(4) is added.

2. In paragraph (b), the definition of Issuance costs, is revised.

The addition and revision read as follows:

§1.150-1 Definitions.

* * * * *

(4) [The text of the proposed amendments to §1.150-1(a)(4) is the same as the text of §1.150-1T(a)(4) published elsewhere in this issue of the Bulletin].

(b) * * *

Issuance costs. [The text of the proposed amendments to §1.150-1(b), Issuance costs, is the same as the text of §1.150-1T(b), Issuance costs, published elsewhere in this issue of the Bulletin].

* * * * *

Par. 3. Section 1.171-1 is amended by revising paragraph (f) Example 2 to read as follows:

§1.171-1 Bond premium.

* * * * *

(f) * * *

Example 2. [The text of the proposed amendments to §1.171-1(f) Example 2 is the same as the text of §1.171-1T(f) Example 2 published elsewhere in this issue of the Bulletin].

Par. 4. Section 1.197-2 is amended by revising paragraph (b)(7) to read as follows:

§1.197-2 Amortization of goodwill and certain other intangibles.

* * * * *

(b) * * *

(7) [The text of the proposed amendments to §1.197-2(b)(7) is the same as the text of §1.197-2T(b)(7) published elsewhere in this issue of the Bulletin].

* * * * *

Par. 5. Section 1.249-1 is amended by revising paragraphs (e)(2)(ii) and adding paragraph (f)(3) to read as follows:

§1.249-1 Limitation on deduction of bond premium on repurchase.

* * * * *

(e) * * *

(2) * * *

(ii) [The text of the proposed amendments to §1.249-1(e)(2)(ii) is the same as the text of §1.249-1T(e)(2)(ii) published elsewhere in this issue of the Bulletin].

* * * * *

(f) Effective/applicability dates. * * *

(3) [The text of the proposed amendments to §1.249-1(f)(3) is the same as the text of §1.249-1T(f)(3) published elsewhere in this issue of the Bulletin].

* * * * *

Par. 6. Section 1.475(a)-4 is amended by revising paragraph (d)(4) Examples 1, 2, and 3 and paragraph (n) to read as follows:

§1.475(a)-4 Valuation safe harbor.

* * * * *

(d) * * *

(4) * * *

Example 1. [The text of the proposed amendments to §1.475(a)-(4)(d)(4) Example 1 is the same as the text of §1.475(a)-4T(d)(4) Example 1 published elsewhere in this issue of the Bulletin].

Example 2. [The text of the proposed amendments to §1.475(a)-4(d)(4) Example 2 is the same as the text of §1.475(a)-4T(d)(4) Example 2 published elsewhere in this issue of the Bulletin].

Example 3. [The text of the proposed amendments to §1.475(a)-4(d)(4) Example 3 is the same as the text of §1.475(a)-4T(d)(4) Example 3 published elsewhere in this issue of the Bulletin].

* * * * *

Par. 7. Section 1.860G-2 is amended by revising paragraphs (g)(3)(ii)(B), (C), and (D) to read as follows:

§1.860G-2 Other rules.

* * * * *

(g) * * *

(3) * * *

(ii) * * *

(B) [The text of the proposed amendments to §1.860G-2(g)(3)(ii)(B) is the same as the text of §1.860G-2T(g)(3)(ii)(B) published elsewhere in this issue of the Bulletin].

(C) [The text of the proposed amendments to §1.860G-2(g)(3)(ii)(C) is the same as the text of §1.860G-2T(g)(3)(ii)(C) published elsewhere in this issue of the Bulletin].

(D) [The text of the proposed amendments to §1.860G-2(g)(3)(ii)(D) is the same as the text of §1.860G-2T(g)(3)(ii)(D) published elsewhere in this issue of the Bulletin].

* * * * *

Par. 8. Section 1.1001-3 is amended as follows:

1. Paragraph (d) Example 9 is revised.

2. Paragraph (e)(4)(iv)(B) is revised.

3. Paragraph (e)(5)(ii)(B)(2) is revised.

4. Paragraph (g) Examples 1, 5, and 8 are revised.

The revisions read as follows:

§1.1001-3 Modifications of debt instruments.

* * * * *

(d) * * *

Example 9. [The text of the proposed amendments to §1.1001-3(d) Example 9 is the same as the text of §1.1001-3T(d) Example 9 published elsewhere in this issue of the Bulletin].

* * * * *

(e) * * *

(4) * * *

(iv) * * *

(B) [The text of the proposed amendments to §1.1001-3(e)(4)(iv)(B) is the same as the text of §1.1001-3T(e)(4)(iv)(B) published elsewhere in this issue of the Bulletin].

* * * * *

(5) * * *

(ii) * * *

(B) * * *

(2) [The text of the proposed amendments to §1.1001-3(e)(5)(ii)(B)(2) is the same as the text of §1.1001-3T(e)(5)(ii)(B)(2) published elsewhere in this issue of the Bulletin].

* * * * *

(g) * * *

Example 1. [The text of the proposed amendments to §1.1001-3(g) Example 1 is the same as the text of §1.1001-3T(g) Example 1 published elsewhere in this issue of the Bulletin].

* * * * *

Example 5. [The text of the proposed amendments to §1.1001-3(g) Example 5 is the same as the text of §1.1001-3T(g) Example 5 published elsewhere in this issue of the Bulletin].

* * * * *

Example 8. [The text of the proposed amendments to §1.1001-3(g) Example 8 is the same as the text of §1.1001-3T(g) Example 8 published elsewhere in this issue of the Bulletin].

PART 48—MANUFACTURERS AND RETAILERS EXCISE TAXES

Par. 9. The authority citation for part 48 continues to read in part as follows:

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

Par. 10. Section 48.4101-1 paragraphs (f)(4)(ii)(B) and (l)(5) are revised to read as follows:

§48.4101-1 Taxable fuel; registration.

* * * * *

(f) * * *

(4) * * *

(ii) * * *

(B) [The text of the proposed amendments to §48.4101-1(f)(4)(ii)(B) is the same as the text of §48.4101-1T(f)(4)(ii)(B) published elsewhere in this issue of the Bulletin].

* * * * *

(l) * * *

(5) [The text of the proposed amendments to §48.4101-1(l)(5) is the same as the text of §48.4101-1T(l)(5) published elsewhere in this issue of the Bulletin].

Steven T. Miller,
Deputy Commissioner for
Services and Enforcement.

Note

(Filed by the Office of the Federal Register on July 1, 2011, 11:15 a.m., and published in the issue of the Federal Register for July 6, 2011, 76 F.R. 39341)

Drafting Information

These regulations were drafted by personnel in the Office of Associate Chief Counsel (Financial Institutions and Products), the Office of Associate Chief Counsel (Income Tax and Accounting), the Office of Associate Chief Counsel (International) and the Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the IRS and the Treasury Department participated in their development.

* * * * *


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