[4830-01-u]
DEPARTMENT OF TREASURY
Internal Revenue Service
26 CFR Part 20
[PS-25-94]
RIN 1545-AS66
Requirements to Ensure Collection of Section 2056A Estate Tax
AGENCY:  Internal Revenue Service (IRS), Treasury.
ACTION:  Notice of proposed rulemaking by cross-reference to temporary
regulations and notice of public hearing.
SUMMARY:  In the Rules and Regulations section of this issue of the Federal
Register, the IRS is issuing temporary regulations relating to the additional
requirements necessary to ensure the collection of the estate tax imposed
under section 2056A(b) with respect to taxable events involving qualified
domestic trusts described in section 2056A(a).  The text of those temporary
regulations also serves as the text of these proposed regulations.  This
document also provides notice of a public hearing on these proposed
regulations.
DATES:  Written comments must be received by November 20, 1995.  Outlines of
topics to be discussed at the public hearing scheduled for January 16, 1996,
at 10 a.m., must be received by December 26, 1995.
ADDRESSES:  Send submissions to: CC:DOM:CORP:T:R: (PS-25-94), room 5228,
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC
20044.  In the alternative, submissions may be hand delivered to:
CC:DOM:CORP:T:R (PS-25-94), Internal Revenue Service, room 5228, 1111
Constitution Avenue NW., Washington, DC.  The public hearing will be held in
the Auditorium, Internal Revenue Service Building, 1111 Constitution Avenue
NW., Washington, DC.
FOR FURTHER INFORMATION CONTACT:  Concerning the regulations, Susan Hurwitz,
(202) 622-3090; concerning submissions and the hearing, Michael Slaughter,
(202) 622-7190 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
     The collections of information contained in this notice of proposed
rulemaking have been submitted to the Office of Management and Budget for
review in accordance with the Paperwork Reduction Act (44 U.S.C. 3504(h)).
Comments on the collections of information should be sent to the Office of
Management and Budget, Attn: Desk Officer for the Department of Treasury,
Office of Information and Regulatory Affairs, Washington, DC 20503, with
copies to the Internal Revenue Service, Attn: IRS Reports Clearance Officer,
PC:FP, Washington, DC 20224.
     The collections of information are in 20.2056A-2T(d).  This information
is required by the IRS in order to ensure the collectibility of the estate tax
imposed under section 2056A(b) in cases (1) where a bond or letter of credit
security arrangement alternative is adopted and (2) where the qualified
domestic trust holds foreign real property or the principal residence
exclusion applies.  This information will be used to monitor compliance with
the additional regulatory requirements contained in 20.2056A-2T(d)(1)(i) and
(iv).  The likely respondents will be trustees of qualified domestic trusts.
Estimated total annual reporting burden: 6110 hours.  The estimated annual
burden per respondent varies from 30 minutes to 3 hours, depending upon
individual circumstances, with an estimated average of 1.37 hours.
Estimated number of respondents: 4470.
Estimated annual frequency of responses: 1.
Background
     Temporary regulations in the Rules and Regulations portion of this issue
of the Federal Register amend Estate Tax Regulations (26 CFR part 20) relating
to section 2056A.  The temporary regulations contain rules relating to the
additional requirements to ensure the collectibility of the estate tax imposed
under section 2056A.
     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.
Special Analyses
     It has been determined that this notice of proposed rulemaking is not a
significant regulatory action as defined in EO 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) and the Regulatory
Flexibility Act (5 U.S.C. chapter 6) do not apply to these regulations, and
therefore, a Regulatory Flexibility Analysis is not required.  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 Public Hearing
     Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments that are submitted timely
(preferably a signed original and eight copies) to the IRS.  All comments will
be available for public inspection and copying.
     A public hearing has been scheduled for January 16, 1996, at 10 a.m. in
the Auditorium, Internal Revenue Building, 1111 Constitution Avenue NW.,
Washington, DC.  Because of access restrictions, visitors will not be admitted
beyond the building lobby more than 15 minutes before the hearing starts.
     The rules of 26 CFR 601.601(a)(3) apply to the hearing.
     Persons that wish to present oral comments at the hearing must submit
written comments by November 20, 1995, and submit an outline of the topics to
be discussed and the time to be devoted to each topic by December 26, 1995.
     A period of 10 minutes will allotted to each person for making comments.
     An agenda showing the scheduling of the speakers will be prepared after
the deadline for receiving outlines has passed.  Copies of the agenda will be
available free of charge at the hearing.
Drafting Information
     The principal author of the proposed regulations is Susan Hurwitz, Office
of Assistant Chief Counsel (Passthroughs and Special Industries).  However,
other personnel from IRS and the Treasury Department participated in their
development.
List of Subjects in 26 CFR Part 20
     Estate taxes, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
     Accordingly, 26 CFR part 20 is proposed to be amended as follows:
PART 20--ESTATE TAX; ESTATES OF DECEDENTS DYING AFTER AUGUST 16, 1954
     Par. 1.  The authority citation for part 20 continues to read in part as
follows:
     Authority: 26 U.S.C. 7805 * * *     Par. 2  Section 20.2056A-2 is amended by adding paragraph (d) to read as
follows:
20.2056A-2  Requirements for qualified domestice trust.
* * * * *
    (d)  [The text of this proposed regulation is the same as the text of
20.2056A-2T(d) published elsewhere in this issue of the Federal Register].
                                Margaret Milner Richardson
                              Commissioner of Internal Revenue