47728 Federal Register / Vol. 74, No. 179 / Thursday, September 17, 2009 / Rules and Regulations 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[TD 9461] 

RIN 1545–BH99 

Information Reporting for Discharges 

of Indebtedness 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final regulations and removal of 

temporary regulations. 

SUMMARY: This document contains final 

regulations relating to information 

returns for cancellation of indebtedness 

by certain entities under section 6050P 

of the Internal Revenue Code. The final 

regulations will avoid premature 

information reporting from certain 

businesses and will reduce the number 

of information returns required to be 

filed. The final regulations will impact 

certain businesses required to file 

information returns under the existing 

regulations. 

DATES: Effective Date: These regulations 

are effective on September 17, 2009. 

Applicability Date: For dates of 

applicability, see § 1.6050P–1(h). 

FOR FURTHER INFORMATION CONTACT: 

Barbara Pettoni at (202) 622–4910 (not 

a toll-free number). 

SUPPLEMENTARY INFORMATION: 

Background 

This document contains amendments 

to the Income Tax Regulations (26 CFR 

part 1) under section 6050P relating to 

information reporting for cancellation of 

indebtedness by certain entities. In 

general, section 6050P requires certain 

entities to file information returns with 

the IRS, and to furnish information 

statements to debtors, reporting 

discharges of indebtedness of $600 or 

more. The amendments in this 

document will avoid premature 

reporting of cancellation of 

indebtedness income by reducing the 

information reporting burden on certain 

entities that were not originally within 

the scope of section 6050P. The 

amendments will also protect debtors 

from receiving information returns that 

prematurely report cancellation of 

indebtedness income from such entities. 

Final and temporary regulations (TD 

9430) were published in the Federal 

Register (73 FR 66539) on November 10, 

2008. On the same date, a notice of 

proposed rulemaking (REG–118327–08) 

cross-referencing to temporary 

regulations was published in the 

Federal Register (73 FR 66568). A 

correction to final and temporary 

regulations (73 FR 75326) and a 

correcting amendment (73 FR 75326) to 

the regulations were published in the 

Federal Register on December 11, 2008. 

Only one commenter responded to the 

proposed regulations, presenting oral 

comments at a public hearing on the 

proposed regulations at the IRS on 

March 13, 2009, as well as written 

comments. After considering these oral 

and written comments, the IRS and the 

Treasury Department are adopting the 

proposed regulations without change 

and removing the corresponding 

temporary regulations. 

Explanation of Comments 

The sole commenter agrees with the 

amendments in the proposed 

regulations to reduce the information 

reporting burden on certain entities that 

were not originally within the scope of 

section 6050P and thereby avoid 

premature reporting of cancellation of 

indebtedness income. The commenter, 

however, requested additional guidance 

on several other areas addressed in the 

existing regulations under section 6050P 

including: (1) The meaning of ‘‘stated 

principal’’ as used in § 1.6050P–1(c) and 

(d)(3) when applied to transactions 

involving entities that acquire a loan 

from another person; (2) what 

information, if any, must be provided to 

a debtor prior to filing Form 1099–C, 

‘‘Cancellation of Debt’’; (3) what 

constitutes significant bona fide 

collection activity under § 1.6050P– 

1(b)(2)(iv)(A); and (4) how to report the 

discharge of a debt that has been 

reduced to judgment. These other areas 

are beyond the scope of the proposed 

regulations and are therefore not 

addressed in these final regulations. The 

Treasury Department and the IRS will 

consider the concerns raised in these 

comments in determining whether to 

issue additional guidance under section 

6050P. 

No revisions were made to the 

proposed and temporary regulations or 

the corrections to those regulations. 

Accordingly, this Treasury decision 

adopts the proposed regulations without 

substantive change and removes the 

corresponding temporary 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 

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, and because the 

regulation does 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 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 Barbara Pettoni, Office of 

Associate Chief Counsel (Procedure and 

Administration). 

List of Subjects in 26 CFR Part 1 

Income tax, Reporting and 

recordkeeping requirements. 

Adoption of 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 is amended by removing the 

entry for § 1.6050P–1T to read in part as 

follows: 

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

■ Par. 2. Section 1.6050P–0 is amended 

as follows: 

■ 1. The introductory text is revised. 

■ 2. The entry for § 1.6050P–1(b)(2)(v) is 

added. 

■ 3. The entry for § 1.6050P–1T is 

removed. 

The revisions and addition read as 

follows: 

§ 1.6050P–0 Table of contents. 

This section lists the major captions 

that appear in §§ 1.6050P–1 and 

1.6050P–2. 

§ 1.6050P–1 Information reporting for 

discharges of indebtedness by certain 

entities. 

* * * * * 

(b) * * * 

(2) * * * 

(v) Special rule for certain entities 

required to file in a year prior to 2008. 

* * * * * 

Par. 3. Section 1.6050P–1 is amended 

by revising paragraphs (b)(2)(i)(H), 

(b)(2)(v) and (h)(1) to read as follows: 

§ 1.6050P–1 Information reporting for 

discharges of indebtedness by certain 

entities. 

* * * * * 

(b) * * * 

(2) * * * 

(i) * * * 

(H) In the case of an entity described 

in section 6050P(c)(2)(A) through (C), 


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Federal Register / Vol. 74, No. 179 / Thursday, September 17, 2009 / Rules and Regulations 47729 

the expiration of the non-payment 

testing period, as described in 

§ 1.6050P–1(b)(2)(iv). 

* * * * * 

(v) Special rule for certain entities 

required to file in a year prior to 2008. 

In the case of an entity described in 

section 6050P(c)(1)(A) or (c)(2)(D) 

required to file an information return in 

a tax year prior to 2008 due to an 

identifiable event described in 

paragraph (b)(2)(i)(H) of this section, 

and who failed to so file, the date of 

discharge is the first event, if any, 

described in paragraphs (b)(2)(i)(A) 

through (G) of this section that occurs 

after 2007. 

* * * * * 

(h) * * * 

(1) In general. The rules in this 

section apply to discharges of 

indebtedness after December 21, 1996, 

except paragraphs (e)(1) and (e)(3) of 

this section, which apply to discharges 

of indebtedness after December 31, 

1994, except paragraph (e)(5) of this 

section, which applies to discharges of 

indebtedness occurring after December 

31, 2004, and except paragraphs 

(b)(2)(i)(H) and (b)(2)(v) of this section, 

which apply to discharges of 

indebtedness occurring after November 

10, 2008. 

* * * * * 

■ Par. 4. Section 1.6050P–1T is 

removed. 

Approved: August 28, 2009. 

Linda E. Stiff, 

Deputy Commissioner for Services and 

Enforcement. 

Michael F. Mundaca, 

Acting Assistant Secretary of the Treasury 

(Tax Policy). 

[FR Doc. E9–22354 Filed 9–16–09; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[USCG–2009–0782] 

RIN 1625–AA00 

Safety Zone, Chicago Harbor, Navy 

Pier Southeast, Chicago, IL 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of enforcement of 

regulation. 

SUMMARY: The Coast Guard will enforce 

the Navy Pier Southeast Safety Zone in 

Chicago Harbor from September 2, 2009, 

through September 26, 2009. This action 

is necessary and intended to ensure 

safety of life on the navigable waters 

immediately prior to, during, and 

immediately after fireworks events. This 

rule will establish restrictions upon and 

control movement of vessels in the 

specified area immediately prior to, 

during, and immediately after the 

fireworks events. During the 

enforcement period, no person or vessel 

may enter the safety zone without 

permission of the Captain of the Port 

Lake Michigan. 

DATES: The regulations in 33 CFR 

165.931 will be enforced during the 

times listed in the SUPPLEMENTARY

INFORMATION from September 2, 2009, to 

September 26, 2009. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this notice, call 

or e-mail BM1 Adam Kraft, Prevention 

Department, Coast Guard Sector Lake 

Michigan, Milwaukee, WI; telephone 

414–747–7154, e-mail 

Adam.D.Kraft@uscg.mil. 

SUPPLEMENTARY INFORMATION: The Coast 

Guard will enforce the Safety Zone, 

Chicago Harbor, Navy Pier Southeast, 

Chicago, IL, as listed in 33 CFR 165.931, 

for the following events, dates, and 

times: 

(1) Navy Pier Wednesday Fireworks: 

On September 2, 2009, from 9:15 p.m. 

through 9:45 p.m.; on September 16, 

2009, from 9 p.m. through 9:30 p.m.; 

(2) Navy Pier Friday Fireworks: On 

September 18, 2009, from 8:45 p.m. 

through 9:20 p.m.; on September 25, 

2009, from 8:45 p.m. through 9:20 p.m.; 

(3) Navy Pier Saturday Fireworks: On 

September 5, 2009, from 10 p.m. 

through 10:40 p.m.; on September 19, 

2009, from 8:45 p.m. through 9:20 p.m.; 

on September 26, 2009, from 8:45 p.m. 

through 9:20 p.m.; and 

(4) Navy Pier Sunday Fireworks; On 

September 6, 2009, from 9:15 p.m. 

through 9:45 p.m. 

All vessels must obtain permission 

from the Captain of the Port or a 

designated representative to enter, move 

within, or exit the safety zone. Vessels 

and persons granted permission to enter 

the safety zone shall obey all lawful 

orders or directions of the Captain of the 

Port or the designated representative. 

While within a safety zone, all vessels 

shall operate at the minimum speed 

necessary to maintain a safe course. 

This notice is issued under authority 

of 33 CFR 165.931 Safety Zone, Chicago 

Harbor, Navy Pier Southeast, Chicago, 

IL. and 5 U.S.C. 552(a). In addition to 

this notice in the Federal Register, the 

Coast Guard will provide the maritime 

community with advance notification of 

these enforcement periods via broadcast 

Notice to Mariners or Local Notice to 

Mariners. The Captain of the Port will 

issue a Broadcast Notice to Mariners 

notifying the public when enforcement 

of the safety zone established by this 

section is suspended. If the Captain of 

the Port determines that the safety zone 

need not be enforced for the full 

duration stated in this notice, he or she 

may use a Broadcast Notice to Mariners 

to grant general permission to enter the 

safety zone. The Captain of the Port or 

the designated representative may be 

contacted via VHF–FM Channel 16. 

Dated: August 26, 2009. 

L. Barndt, 

Captain, U.S. Coast Guard, Captain of the 

Port Lake Michigan. 

[FR Doc. E9–22359 Filed 9–16–09; 8:45 am] 

BILLING CODE 4910–15–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

46 CFR Parts 12 and 15 

[USCG–2007–27761] 

RIN 1625–AB16 

Large Passenger Vessel Crew 

Requirements 

AGENCY: Coast Guard, DHS. 

ACTION: Final rule. 

SUMMARY: This rule finalizes, with 

minor non-substantive changes, the 

amendments to Coast Guard regulations 

on merchant mariner documentation 

which were published as an interim rule 

with request for comments on April 24, 

2007. These amendments implement 

section 3509 of the John Warner 

National Defense Authorization Act for 

Fiscal Year 2007 (Warner Act), which 

allows for the issuance of merchant 

mariner’s documents (MMDs), (which 

have since been consolidated by the 

Coast Guard into merchant mariner 

credentials (MMCs)), to certain nonresident aliens for service in the 

steward’s departments of U.S. flag large 

passenger vessels endorsed for 

coastwise trade. Prior to publication of 

the interim rule, the regulations 

prohibited the Coast Guard from issuing 

MMDs, which are required for service 

on large passenger vessels, to nonresident aliens. Specifically, this rule 

finalizes the amendments to Coast 

Guard regulations allowing the Coast 

Guard to issue MMCs to qualified nonresident aliens who are authorized to be 

employed in the United States, the 

amendments setting the requirements 

these aliens must meet in order to 

qualify for MMCs, and the requirements 


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