Federal Register / Vol. 69, No. 26 / Monday, February 9, 2004 / Rules and Regulations 5931

DEPARTMENT OF THE TREASURY

Internal Revenue Service 

26 CFR Part 1 

[TD 9113] 

RIN 1545–BD02 

Electronic Filing of Duplicate Forms 

5472

AGENCY: Internal Revenue Service (IRS), 

Treasury.

ACTION: Final and temporary 

regulations. 

SUMMARY: This document contains final 

and temporary regulations providing 

that a Form 5472 that is timely filed 

electronically is treated as satisfying the 

requirement timely to file a duplicate 

Form 5472 with the Internal Revenue 

Service Center in Philadelphia, 

Pennsylvania. This action is necessary 

to clarify how the duplicate filing 

requirements for Form 5472 apply when 

a reporting corporation electronically 

files its income tax return (including 

any attachments such as Form 5472). 

This document affects corporations 

subject to the reporting requirements in 

sections 6038A and 6038C that file 

Form 5472 electronically. The text of 

the 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.

DATES: Effective Date: These regulations 

are effective February 9, 2004. 

Applicability Date: For the dates of 

applicability, see §§ 1.6038A–2(h) and 

1.6038A–2T(h).

FOR FURTHER INFORMATION CONTACT:

Edward R. Barret, (202) 435–5265 (not a 

toll-free number).

SUPPLEMENTARY INFORMATION: 

Background 

Section 6038A of the Internal 

Revenue Code (Code) requires 

information reporting by 25-percent 

foreign-owned domestic corporations 

with respect to certain transactions 

between such domestic corporations 

and foreign or domestic related parties. 

Section 6038C of the Code requires 

foreign corporations engaged in a trade 

or business within the United States at 

any time during a taxable year to report 

the information described in section 

6038A with respect to certain 

transactions between such foreign 

corporations and foreign related parties. 

On June 19, 1991, the Treasury 

Department and the IRS published in 

the Federal Register (56 FR 28056) final 

regulations (TD 8353, 1991–2 CB 402) 

under section 6038A. A correction to TD 

8353 was published in the Federal 

Register on August 23, 1991, at 56 FR 

41792. 

The 1991 final regulations under 

section 6038A contain guidance at 

§§ 1.6038A–1 and 1.6038A–2 regarding 

the information reporting requirements 

under sections 6038A and 6038C. 

Section 1.6038A–2(a)(1) generally 

requires a reporting corporation to file a 

separate annual information return on 

Form 5472 with respect to each related 

party with which the reporting 

corporation has had a reportable 

transaction during the taxable year. 

Section 1.6038A–1(c)(1) defines a 

reporting corporation as either a 

domestic corporation that is 25-percent 

foreign-owned or a foreign corporation 

engaged in a trade or business within 

the United States at any time during a 

taxable year. Section 1.6038A–2(d) 

provides that Form 5472 shall be filed 

with the reporting corporation’s income 

tax return for the taxable year by the due 

date of that return. A duplicate Form 

5472 shall be filed at the same time with 

the Internal Revenue Service Center in 

Philadelphia, Pennsylvania (the 

Philadelphia Service Center). Section 

1.6038A–2(e) provides that even if the 

reporting corporation’s income tax 

return is not timely filed, Form 5472 

(with a duplicate to the Philadelphia 

Service Center) nonetheless is required 

to be timely filed at the service center 

where the return is due, with a copy of 

Form 5472 to be attached to the income 

tax return when ultimately filed. 

However, neither § 1.6038A–2(d) nor 

§ 1.6038A–2(e) directly addresses the 

duplicate filing requirements for Form 

5472 when a reporting corporation 

electronically files its income tax return 

(including any attachments such as 

Form 5472). 

Explanation of Provisions 

To clarify how the duplicate filing 

requirements for Form 5472 apply when 

a reporting corporation electronically 

files its income tax return (including 

any attachments such as Form 5472), 

the temporary regulations amend 

§ 1.6038A–2(d) to provide that a Form 

5472 that is timely filed electronically is 

treated as satisfying the requirement 

timely to file a duplicate Form 5472 

with the Philadelphia Service Center. 

Accordingly, the filing of a copy of such 

timely filed electronic Form 5472 with 

the Philadelphia Service Center will not 

be required. 

The temporary regulations do not 

amend the requirement of § 1.6038A–

2(e) that Form 5472 be timely filed (with 

a duplicate to the Philadelphia Service 

Center) even if the income tax return of 

the reporting corporation is not timely 

filed. As a transitional matter, for the 

filing season for taxable year 2003 

returns it is anticipated that electronic 

filing of Form 5472 will be possible only 

as an attachment to an electronically 

filed income tax return; electronic filing 

of Form 5472 separately rather than as 

an attachment to an electronically filed 

income tax return will not be 

technically possible. Accordingly, if a 

reporting corporation’s income tax 

return is filed after its due date 

(including extensions), regardless of 

whether that return is filed 

electronically, § 1.6038A–2(e) requires 

the reporting corporation timely to file 

Form 5472 on paper (with a copy to the 

Philadelphia Service Center) at the 

service center where the income tax 

return is due. In subsequent filing 

seasons, it is anticipated that electronic 

filing technology will allow separate 

electronic filing of Form 5472. The 

Treasury Department and the IRS intend 

that the guidance contained in the 

amendment to § 1.6038A–2(d) in these 

temporary regulations would apply to 

any such separate electronic filing of 

Form 5472. Accordingly, a Form 5472 

that is timely and separately filed 

electronically would be treated as 

satisfying the requirement timely to file 

a duplicate Form 5472 with the 

Philadelphia Service Center. 

Similarly, an electronic attachment of 

a copy of Form 5472 to an income tax 

return that is not timely filed satisfies 

the requirement of the second sentence 

of § 1.6038A–2(e). 

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 

also has been determined that section 

553(b) of the Administrative Procedure 

Act (5 U.S.C. chapter 5) does not apply 

to these regulations. For the 

applicability of the Regulatory 

Flexibility Act (5 U.S.C. chapter 6) refer 

to the Special Analyses section of the 

preamble to the cross-reference notice of 

proposed rulemaking published in the 

proposed rules section in this issue of 

the Federal Register. Pursuant to 

section 7805(f) of the Code, these 

regulations will be submitted to the 

Chief Counsel for Advocacy of the Small 

Business Administration for comment 

on its impact on small businesses. 

Drafting Information 

The principal author of these 

regulations is Edward Barret, Office of 

the Associate Chief Counsel 

(International). However, other 

personnel from the IRS and Treasury 

5932 Federal Register / Vol. 69, No. 26 / Monday, February 9, 2004 / Rules and Regulations 

Department participated in their 

development.

List of Subjects in 26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements.

Amendments to the Regulations

■ Accordingly, 26 CFR part 1 is 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 1.6038A–2 is amended 

by revising paragraph (d) to read as 

follows:

§ 1.6038A–2 Requirement of return.

* * * * *

(d) [Reserved]. For further guidance, 

see § 1.6038A–2T(d).

* * * * *

■ Par. 3. Section 1.6038A–2T is added to 

read as follows:

§ 1.6038A–2T Requirement of return 

(temporary). 

(a) through (c) [Reserved]. For further 

guidance, see § 1.6038A–2(a) through 

(c).

(d) Time and place for filing returns.

A Form 5472 required under this 

section shall be filed with the reporting 

corporation’s income tax return for the 

taxable year by the due date (including 

extensions) of that return. A duplicate 

Form 5472 (including any attachments 

and schedules) shall be filed at the same 

time with the Internal Revenue Service 

Center, Philadelphia, PA 19255. A Form 

5472 that is timely filed electronically 

satisfies the duplicate filing 

requirement. 

(e) Through (g) [Reserved]. For further 

guidance, see § 1.6038A–2(e) through 

(g). 

(h) Effective date. (1) This section 

applies for taxable years ending on or 

after January 1, 2003. For taxable years 

ending prior to January 1, 2003, see

§ 1.6038A–2(d) in effect prior to January 

1, 2003 (see 26 CFR part 1 revised as of 

April 1, 2002). 

(2) The applicability of this section 

expires on or before February 6, 2007.

Mark E. Matthews, 

Deputy Commissioner for Services and 

Enforcement. 

Approved: January 28, 2004. 

Pamela F. Olson, 

Assistant Secretary of the Treasury.

[FR Doc. 04–2645 Filed 2–6–04; 8:45 am] 

BILLING CODE 4830–01–P

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[MI83–03; FRL–7617–7] 

Approval and Promulgation of State 

Implementation Plans; Michigan

AGENCY: Environmental Protection 

Agency (EPA).

ACTION: Final rule.

SUMMARY: The EPA is approving a 

revision to Michigan’s definition of 

volatile organic compound (VOC). 

EPA’s approval will revise Michigan’s 

State Implementation Plan (SIP) for 

ozone. The Michigan Department of 

Environmental Quality (MDEQ) 

submitted this SIP revision on April 25, 

2003. On September 2, 2003, the EPA 

proposed approval of this SIP revision 

and published a direct final approval as 

well. EPA received adverse comments 

on the proposed rulemaking, and 

therefore withdrew the direct final 

rulemaking on October 31, 2003.

DATES: This final rule is effective March 

10, 2004.

ADDRESSES: Copies of the documents 

relevant to this action are available for 

public inspection during normal 

business hours at the following address: 

U.S. Environmental Protection Agency, 

Region 5, Air and Radiation Division, 77 

West Jackson Boulevard, Chicago, 

Illinois 60604. We recommend that you 

telephone Kathleen D’Agostino at (312) 

886–1767 before visiting the Region 5 

office.

FOR FURTHER INFORMATION CONTACT:

Kathleen D’Agostino, Environmental 

Engineer, Criteria Pollutant Section, Air 

Programs Branch (AR–18J), EPA, Region 

5, 77 West Jackson Boulevard, Chicago, 

Illinois 60604. Telephone: (312) 886–

1767. E-Mail Address: 

dagostino.kathleen@epa.gov.

SUPPLEMENTARY INFORMATION: The 

SUPPLEMENTARY INFORMATION is 

organized in the following order:

I. What Action Is EPA Taking Today? 

II. What Public Comments Were Received 

and What Is EPA’s Response? 

III. Statutory and Executive Order Reviews.

I. What Action Is EPA Taking Today? 

EPA is approving a revision to 

Michigan’s definition of VOC. 

Michigan’s revised definition of the 

term volatile organic compound is ‘‘any 

compound of carbon or mixture of 

compounds of carbon that participates 

in photochemical reactions, excluding 

the following materials, all of which 

have been determined by the United 

States Environmental Protection Agency 

to have negligible photochemical 

reactivity: * * *’’ The definition goes 

on to list the exempt compounds. When 

test methods measure exempt 

compounds, i.e. any of those contained 

in the list of excluded compounds, 

Michigan’s definition allows for their 

exclusion providing that two specific 

criteria are met: (1) The exempt 

compounds must be accurately 

quantified and (2) MDNR must approve 

the exclusion. 

EPA’s approval of the new definition 

of VOC will revise Michigan’s SIP for 

ozone. 

II. What Public Comments Were 

Received and What Is EPA’s Response? 

We received one adverse comment on 

our proposed approval of Michigan’s 

revised definition of VOC. Below, we 

have paraphrased the comment and 

responded to it. 

Comment: I assume ozone and VOC 

standards are being made more lax and 

for that reason I oppose this proposal. 

Polluted air from Michigan is 

transported east and negatively impacts 

the health of citizens of the eastern 

United States. Michigan power plants 

must be required to clean the air. 

Response: Ozone and VOC standards 

are not being made more lax. The 

definition of VOC currently in 

Michigan’s SIP for ozone was approved 

in 1992. It met EPA’s approval criteria, 

but had a more complicated structure, 

with divisions based on vapor pressure. 

In 1998, Michigan submitted a revised 

definition of VOC that we believe would 

have relaxed ozone standards. We 

proposed to disapprove this revision on 

June 10, 1999. After we published this 

proposed disapproval in the Federal 

Register, Michigan withdrew that 

version of the definition and revised it, 

modeling its definition after the federal 

definition at 40 CFR 51.100(s).

Since the 1992 approval, EPA has 

issued rules listing additional 

compounds as non-photochemically 

reactive. Michigan has included these 

compounds as exempt in the revised 

definition. This does not relax 

Michigan’s definition of VOC because 

compounds which are not 

photochemically reactive, by their 

nature, do not contribute to the 

formation of ozone. 

EPA recognizes that the transport of 

ozone and its precursors, particularly 

oxides of nitrogen (NOX), is a significant 

problem that must be addressed if all 

areas in the country are to attain the 

national ambient air quality standards 

for ozone. This is why EPA issued the 

Ozone Transport Rulemaking on 

October 27, 1998. In that rule, EPA 

limits NOX emissions by assigning states