[Federal Register: April 7, 2008 (Volume 73, Number 67)]
[Rules and Regulations]
[Page 18709-18710]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07ap08-5]
[[Page 18709]]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
[TD 9392]
RIN 1545-BE11
Information Returns by Donees Relating to Qualified Intellectual
Property Contributions
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations and removal of temporary regulations.
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SUMMARY: This document contains final regulations that provide guidance
for filing information returns by donees relating to qualified
intellectual property contributions. These final regulations reflect
changes to the law made in 2004. The regulations affect donees
receiving net income from qualified intellectual property contributions
made after June 3, 2004.
DATES: Effective date: These regulations are effective April 7, 2008.
Applicability date: For dates of applicability, see Sec. 1.6050L-
2(f).
FOR FURTHER INFORMATION CONTACT: Timothy S. Sheppard, (202) 622-4910
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information contained in these final regulations
has been reviewed and approved by the Office of Management and Budget
in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3507(d)) under control number 1545-1932. The collection of information
in these final regulations is in Sec. 1.6050L-2(a) and (b). Responses
to this collection of information are required to obtain a tax benefit.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid OMB control number.
Books or records relating to a collection of information must be
retained as long as their contents may become material in the
administration of any internal revenue law. Generally, tax returns and
return information are confidential, as required by 26 U.S.C. 6103.
Background
This document contains amendments to the Income Tax Regulations (26
CFR Part 1) relating to section 6050L of the Internal Revenue Code
(Code). These regulations reflect changes to the law made by the
American Jobs Creation Act of 2004, Public Law 108-357 (118 Stat.
1418). On May 23, 2005, temporary regulations (TD 9206) relating to
information returns by donees with respect to qualified intellectual
property contributions under section 6050L were published in the
Federal Register (70 FR 29450). A notice of proposed rulemaking (REG-
158138-04) cross-referencing the temporary regulations was published in
the Federal Register (70 FR 29460) on the same date. No comments were
received from the public in response to the notice of proposed
rulemaking and no public hearing was requested or held. Accordingly,
the proposed regulations are adopted as amended by this Treasury
decision and the corresponding temporary regulations are removed. The
final regulations generally retain the provisions of the proposed and
temporary regulations but eliminate transition rules that are no longer
needed and make other minor editorial changes.
Explanation of Changes
The final regulations do not include certain transition rules that
were included in the temporary and proposed regulations. Specifically,
the proposed and temporary regulations provide guidance for donees on
making the required information return before a form is prescribed by
the IRS. The IRS has since issued a new Form 8899 on which donees must
report qualified donee income. Thus, these transition rules are no
longer needed and are not included in the final regulations. The
proposed and temporary regulations also include a transition rule that
applies to donees with taxable years to which net income from the
qualified intellectual property is properly allocable that end prior to
or on May 23, 2005, the issuance date of the proposed and temporary
regulations. Under this transition rule, the donee shall furnish the
information required under section 6050L to the donor on or before
August 22, 2005. This transition rule is no longer needed and is not
included in the final regulations.
Special Analyses
It has been determined that this Treasury decision is not a
significant regulatory action as defined in Executive Order 12866.
Therefore, a regulatory assessment is not required. It has also been
determined that section 553(b) of the Administrative Procedure Act (5
U.S.C. chapter 5) does not apply to these regulations. 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 upon the fact that few, if any, small entities will be required
to file under these regulations. 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 Internal Revenue Code,
the notice of proposed rulemaking preceding this regulation was
submitted to the Chief Counsel for Advocacy of the Small Business
Administration for comment on its impact on small business.
Drafting Information
The principal author of these regulations is Timothy S. Sheppard,
Office of Associate Chief Counsel (Procedure and Administration).
List of Subjects
26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
26 CFR Part 602
Reporting and recordkeeping requirements.
Adoption of Amendments to the Regulations
0
Accordingly, 26 CFR parts 1 and 602 are amended as follows:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 2. Sec. 1.6050L-2 is added to read as follows:
Sec. 1.6050L-2 Information returns by donees relating to qualified
intellectual property contributions.
(a) In general. Each donee organization described in section
170(c), except a private foundation (as defined in section 509(a)),
other than a private foundation described in section 170(b)(1)(F), that
receives or accrues net income during a taxable year from any qualified
intellectual property contribution (as defined in section 170(m)(8))
must make an annual information return on the form prescribed by the
IRS. The information return is required for any taxable year of the
donee that includes any portion of the 10-year period beginning on the
date of the contribution, but not for taxable years beginning after the
expiration of the legal life of the qualified intellectual property.
(b) Information required to be provided on return. The information
[[Page 18710]]
return required by section 6050L and paragraph (a) of this section
shall include the following--
(1) The name, address, taxable year, and employer identification
number of the donee making the information return;
(2) The name, address, and taxpayer identification number of the
donor;
(3) A description of the qualified intellectual property in
sufficient detail to identify the qualified intellectual property
received by such donee;
(4) The date of the contribution to the donee;
(5) The amount of net income of the donee for the taxable year that
is properly allocable to the qualified intellectual property
(determined without regard to paragraph (10)(B) of section 170(m) and
with the modifications described in paragraphs (5) and (6) of such
section); and
(6) Such other information as may be specified by the form or its
instructions.
(c) Special rule--statement to be furnished to donors. Every donee
making an information return under section 6050L and this section with
respect to a qualified intellectual property contribution shall furnish
a copy of the information return to the donor of the property. The
information return required by section 6050L and this section shall be
furnished to the donor on or before the date the donee is required to
file the return with the IRS.
(d) Place and time for filing information return--(1) Place for
filing. The information return required by section 6050L and this
section shall be filed with the IRS location listed on the prescribed
form or in its instructions.
(2) Time for filing. A donee is required to file the return
required by section 6050L and this section on or before the last day of
the first full month following the close of the donee's taxable year to
which net income from the qualified intellectual property is properly
allocable.
(e) Penalties. For penalties for failure to comply with the
requirements of this section, see sections 6721 through 6724.
(f) Effective/applicability date. The rules of this section apply
to qualified intellectual property contributions made after June 3,
2004.
Sec. 1.6050L-2T [Removed]
0
Par. 3. Section 1.6050L-2T is removed.
PART 602--OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT
0
Par. 4. The authority citation for part 602 continues to read as
follows:
Authority: 26 U.S.C. 7805.
0
Par. 5. In Sec. 602.101, paragraph (b) is amended by removing the
following entry from the table:
Sec. 602.101 OMB Control numbers.
* * * * *
(b) * * *
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Current OMB
CFR part or section where identified and described control No.
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* * * * *
1.6050L-2T.............................................. 1545-1932
* * * * *
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Linda E. Stiff,
Deputy Commissioner for Services and Enforcement.
Approved: March 31, 2008.
Eric Solomon,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. E8-7223 Filed 4-4-08; 8:45 am]
BILLING CODE 4830-01-P