[Federal Register Volume 77, Number 30 (Tuesday, February 14, 2012)]
[Proposed Rules]
[Pages 8184-8185]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-3350]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-132736-11]
RIN 1545-BK49


Foreign Tax Credit Splitting Events

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 in this issue of the 
Federal Register, the IRS is issuing temporary regulations that provide 
guidance relating to a new provision of the Internal Revenue Code 
(Code) that addresses situations in which foreign income taxes have 
been separated from the related income. Those regulations are necessary 
to provide guidance on applying the new statutory provision, which was 
enacted as part of legislation commonly referred to as the Education 
Jobs and Medicaid Assistance Act (EJMAA) on August 10, 2010. The text 
of those temporary regulations published in this issue of the Federal 
Register also serves as the text of these proposed regulations.

DATES: Comments and requests for a public hearing must be received by 
May 14, 2012.

ADDRESSES: Send submissions to CC:PA:LPD:PR (REG-132736-11), room 5205, 
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-
132736-11), Courier's desk, Internal Revenue Service, 1111 Constitution 
Avenue NW., Washington, DC 20044, or sent electronically, via the 
Federal eRulemaking Portal at www.regulations.gov (IRS REG-132736-11).

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Suzanne M. 
Walsh, (202) 622-3850; concerning submissions of comments, 
Oluwafunmilayo Taylor, (202) 622-7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION: 

Background and Explanation of Provisions

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register contain amendments to the Income Tax 
Regulations (26 CFR part 1) which

[[Page 8185]]

provide rules relating to a new provision of the Code that was enacted 
as part of EJMAA (Pub. L. 111-226, 124 Stat. 2389 (2010)) which 
addresses situations in which foreign income taxes have been separated 
from the related income. The text of those regulations also serves as 
the text of these proposed regulations. The preamble to the temporary 
regulations explains the temporary regulations and these proposed 
regulations. The regulations affect taxpayers claiming foreign tax 
credits.

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 
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), these regulations have been 
submitted to the Chief Counsel for Advocacy of the Small Business 
Administration for comment on its impact on small business.

Comments and Requests for Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any comments that are submitted timely 
to the IRS as prescribed in this preamble under ADDRESSES. The Treasury 
Department and the IRS request comments on all aspects of the proposed 
rules. All comments will be available at www.regulations.gov or upon 
request. A public hearing will be scheduled if requested in writing by 
any person that timely submits 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 Suzanne M. Walsh of 
the Office of Associate Chief Counsel (International). However, other 
personnel from the IRS and the Treasury Department participated in 
their development.

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 in 
part as follows:

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

    Par. 2. Section 1.704-1 is amended as follows:
    1. Paragraph (b)(1)(ii)(b)(3) is added.
    2. Paragraph (b)(4)(viii)(d)(3) and paragraph (b)(5) Example 24 are 
revised.
    The addition and revisions read as follows:


Sec.  1.704-1  Partner's distributive share.

* * * * *
    (b) * * *
    (1) * * *
    (ii) * * *
    (b) * * *
    (3) [The text of the proposed amendments to Sec.  1.704-
1(b)(1)(ii)(b)(3) is the same as the text of Sec.  1.704-
1T(b)(1)(ii)(b)(3) published elsewhere in this issue of the Federal 
Register.]
* * * * *
    (4) * * *
    (viii) * * *
    (d) * * *
    (3) [The text of the proposed amendments to Sec.  1.704-
1(b)(4)(viii)(d)(3) is the same as the text of Sec.  1.704-
1T(b)(4)(viii)(d)(3) published elsewhere in this issue of the Federal 
Register.]
* * * * *
    (5) * * *
    Example 24. [The text of the proposed amendments to Sec.  1.704-
1(b)(5) Example 24 is the same as the text of Sec. Sec.  1.704-1T(b)(5) 
Example 24 published elsewhere in this issue of the Federal Register.]
* * * * *
    Par. 3. Section 1.909-0 is added to read as follows:


Sec.  1.909-0  Outline of regulation provisions for section 909.

    [The text of proposed Sec.  1.909-0 is the same as the text of 
Sec.  1.909-0T published elsewhere in this issue of the Federal 
Register.]

    Par. 4. Sections 1.909-1 through 1.909-6 are added to read as 
follows:


Sec.  1.909-1  Definitions and special rules.

    [The text of proposed Sec.  1.909-1 is the same as the text of 
Sec.  1.909-1T(a) through (e) published elsewhere in this issue of the 
Federal Register.]


Sec.  1.909-2  Splitter arrangements.

    [The text of proposed Sec.  1.909-2 is the same as the text of 
Sec.  1.909-2T(a) through (c) published elsewhere in this issue of the 
Federal Register.]


Sec.  1.909-3  Rules regarding related income and split taxes.

    [The text of proposed Sec.  1.909-3 is the same as the text of 
Sec.  1.909-3T(a) through (c) published elsewhere in this issue of the 
Federal Register.]


Sec.  1.909-4  Coordination rules.

    [The text of proposed Sec.  1.909-4 is the same as the text of 
Sec.  1.909-4T(a) through (b) published elsewhere in this issue of the 
Federal Register.]


Sec.  1.909-5  2011 and 2012 Splitter arrangements.

    [The text of proposed Sec.  1.909-5 is the same as the text of 
Sec.  1.909-5T(a) through (c) published elsewhere in this issue of the 
Federal Register.]


Sec.  1.909-6  Pre-2011 foreign tax credit splitting events.

    [The text of proposed Sec.  1.909-6 is the same as the text of 
Sec.  1.909-6T(a) through (h) published elsewhere in this issue of the 
Federal Register.]

Steven T. Miller,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2012-3350 Filed 2-9-12; 4:15 pm]
BILLING CODE 4830-01-P