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###### Department of the Treasury

###### Internal Revenue Service 

          - 26 CFR Part 1 
          - [REG-157834-06] 
          - RIN 1545-BG28 

# AGENCY:

Internal Revenue Service (IRS), Treasury. 

# ACTION:

Notice of proposed rulemaking by cross-reference to temporary regulations. 

# SUMMARY:

                        In the Rules and Regulations section of this issue of the                         **Federal Register**                        , the IRS is issuing temporary regulations that amend § 1.368-2T(l), which provides guidance regarding the qualification of certain transactions as reorganizations described in section 368(a)(1)(D) where no stock and/or securities of the acquiring corporation are issued and distributed in the transaction. These regulations clarify that the rules in § 1.368-2T(l) are not intended to affect the qualification of related party triangular asset acquisitions as reorganizations described in section 368. These regulations affect corporations engaging in such transactions and their shareholders. The text of those 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 May 30, 2007. 

# ADDRESSES:

                        Send submissions to: CC:PA:LPD:PR (REG-157834-06), Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand delivered to CC:PA:LPD:PR (REG-157834-06), Courier Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC, or sent electronically, via the IRS Internet site at                         *http://www.irs.gov/​regs*                         or via the Federal eRulemaking Portal at                         *http://www.regulations.gov*                         (IRS REG-157834-06).                     

# FOR FURTHER INFORMATION CONTACT:

Concerning the proposed regulations, Bruce A. Decker, (202) 622-7550; concerning submission of comments, requests for a public hearing, and/or a publication and regulations specialist, Kelly Banks, (202) 622-7180. 

# SUPPLEMENTARY INFORMATION:

## Background 

                    Temporary regulations in the Rules and Regulations section of this issue of the                     **Federal Register**                     amend 26 CFR part 1. The temporary regulations amend § 1.368-2T(l), which provides guidance regarding the qualification of certain transactions as reorganizations described in section 368(a)(1)(D) where no stock and/or securities of the acquiring corporation are issued and distributed in the transaction. The text of those regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the amendments.                 

## Explanation of Provisions 

These regulations clarify that the rules in § 1.368-2T(l) are not intended to affect the qualification of related party triangular asset acquisitions as reorganizations described in section 368. 

## 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 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 regulations do 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, 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. The IRS and Treasury Department request comments on the clarity of the proposed rules and how they can be made easier to understand. All comments will be available for public inspection and copying. A public hearing will be scheduled if requested in writing by any person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the public hearing will be published in the                     **Federal Register**                    .                 

## Drafting Information 

The principal author of these regulations is Bruce A. Decker, Office of Associate Chief Counsel (Corporate). 

      ( print page 9285)    

# List of Subjects in 26 CFR Part 1

      - Income taxes
      - Reporting and recordkeeping requirements

## Proposed Amendments 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 as follows:                     

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

**Par. 2.**                         Section 1.368-2 is amended by adding paragraph (l)(2)(iv) to read as follows:                     

§ 1.368-2 

* * * * *

                            [The text of this proposed amendment to § 1.368-2(l)(2)(iv) is the same as the text of § 1.368-2T(l)(2)(iv) published elsewhere in this issue of the                             **Federal Register**                            ].                         

Kevin M. Brown, 

Deputy Commissioner for Services and Enforcement.

[FR Doc. E7-3533 Filed 2-28-07; 8:45 am] 

BILLING CODE 4830-01-P