[Federal Register Volume 75, Number 235 (Wednesday, December 8, 2010)]
[Proposed Rules]
[Pages 76321-76322]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-30896]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG-132724-10]
RIN 1545-BJ78
Source of Income From Qualified Fails Charges
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking by cross-reference to temporary
regulations.
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SUMMARY: In the Rules and Regulations section of this Federal Register,
the IRS and the Treasury Department are issuing temporary regulations
(TD 9508) under section 863(a) of the Internal Revenue Code. These
regulations set forth the source of income attributable to qualified
fails charges. This action is necessary to provide guidance about the
treatment of fails charges for purposes of sections 871 and 881, which
generally require gross-basis taxation of foreign persons not otherwise
subject to U.S. net-basis taxation and the withholding of such tax
under sections 1441 and 1442. The text of the temporary regulations
also serves as the text of these proposed regulations.
DATES: Written or electronic comments and requests for a public hearing
must be received by March 8, 2011.
ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-132724-10), 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-
132724-10), 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-132724-10).
FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations,
Sheila Ramaswamy or Anthony J. Marra, Office of Associate Chief Counsel
(International) (202) 622-3870; concerning submissions of comments or a
request for a public hearing, Richard Hurst at (202) 622-7180.
SUPPLEMENTARY INFORMATION:
Background and Explanation of Provisions
The temporary regulations published in the Rules and Regulations
section of this issue of the Federal Register provide guidance for the
treatment of fails charges for purposes of sections 871, 881, 1441 and
1442 by establishing source rules for qualified fails charges that
arise in the delivery-versus-payment market for Treasury securities.
The text of those temporary regulations also serves as the text of
these proposed regulations. The preamble to the temporary regulations
explains the temporary regulations and these 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. 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, and because
these regulations do not impose a collection of information on small
entities, the provisions of the Regulatory Flexibility Act (5 U.S.C.
chapter 6) do not apply. Pursuant to section 7805(f) of the Internal
Revenue Code, this notice of proposed rulemaking will be 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 (a signed original and eight
(8) copies) or electronic comments that are submitted timely to the
IRS. In addition to the specific requests for comments made elsewhere
in this preamble or the preamble to the temporary regulations, the IRS
and the Treasury Department request comments on the clarity of the
proposed regulations and how they can be made easier to understand. A
public hearing may be scheduled if requested in writing by any person
who timely
[[Page 76322]]
submitted written comments. If a public hearing is scheduled, notice of
the date, time, and place of the hearing will be published in the
Federal Register.
Drafting Information
The principal authors of these regulations are Sheila Ramaswamy and
Anthony J. Marra, Office of the Associate Chief Counsel
(International). However, other persons from the Office of Associate
Chief Counsel (International) and the Treasury Department have
participated in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Proposed Amendment 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 continues to read in
part as follows:
Authority: 26 U.S.C. 863(a) and 7805 * * *
Par. 2. Section 1.863-10 is added to read as follows:
Sec. 1.863-10 Source of income from a qualified fails charge.
[The text of proposed Sec. 1.863-10 is the same as the text of
Sec. 1.863-10T published elsewhere in this issue of the Federal
Register].
Steven T. Miller,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2010-30896 Filed 12-7-10; 8:45 am]
BILLING CODE 4830-01-P