24660 Federal Register / Vol. 77, No. 80 / Wednesday, April 25, 2012 / Proposed Rules 

Therefore, the value of the lodging is 

excluded from the employees’ income as a 

working condition fringe. 

(iii) Employer may deduct the expenses for 

lodging the players and coaches at the hotel 

as ordinary and necessary business expenses 

under section 162(a). 

Example 4. (i) Employer hires Employee, 

who currently resides 500 miles from 

Employer’s business premises. Employer 

pays for temporary lodging for Employee 

near Employer’s business premises while 

Employee searches for a residence. 

(ii) Employer is paying the temporary 

lodging expense primarily to provide a 

personal benefit to Employee by providing 

housing while Employee searches for a 

residence. Employer incurs the expense only 

as additional compensation and not for a 

noncompensatory business purpose. If 

Employee paid the temporary lodging 

expense, the expense would not be an 

ordinary and necessary employee business 

expense under section 162(a) because the 

lodging primarily provides a personal benefit 

to Employee. Therefore, the value of the 

lodging is includible in Employee’s gross 

income as additional compensation. 

(iii) Employer may deduct the lodging 

expenses as ordinary and necessary business 

expenses under section 162(a) and § 1.162– 

25T. 

Example 5. (i) Employee normally travels 

two hours each way between her home and 

her office. Employee is working on a project 

that requires Employee to work late hours. In 

order to maximize Employee’s availability to 

work on the project, Employer provides 

Employee with lodging at a hotel near the 

office. 

(ii) Employer is paying the temporary 

lodging expense primarily to provide a 

personal benefit to Employee by relieving her 

of the daily commute to her residence. 

Employer incurs the expense only as 

additional compensation and not for a 

noncompensatory business purpose. If 

Employee paid the temporary lodging 

expense, the expense would not be an 

ordinary and necessary business expense 

under section 162(a) because the lodging 

primarily provides a personal benefit to 

Employee. Therefore, the value of the lodging 

is includible in Employee’s gross income as 

additional compensation. 

(iii) Employer may deduct the lodging 

expenses as ordinary and necessary business 

expenses under section 162(a) and § 1.162– 

25T. 

Example 6. (i) Employer requires an 

employee to be ‘‘on duty’’ each night to 

respond quickly to emergencies that may 

occur outside of normal working hours. 

Employees who work daytime hours each 

serve a ‘‘duty shift’’ once each month in 

addition to their normal work schedule. 

Emergencies that require the duty shift 

employee to respond occur regularly. 

Employer has no sleeping facilities on its 

business premises and pays for a hotel room 

nearby where the duty shift employee stays 

until called to respond to an emergency. 

(ii) Employer has a noncompensatory 

business purpose for paying the lodging 

expenses. Employer is not providing the 

lodging to duty shift employees primarily to 

provide a social or personal benefit to the 

employees. If the employees had paid for 

their lodging, the expenses would have been 

deductible by the employees under section 

162(a) as ordinary and necessary business 

expenses. Therefore, the value of the lodging 

is excluded from the employees’ income as 

a working condition fringe. 

(iii) Employer may deduct the lodging 

expenses as ordinary and necessary business 

expenses under section 162(a). 

(d) Effective/applicability date. This 

section applies to expenses paid or incurred 

on or after the date these regulations are 

published as final regulations in the Federal 

Register. However, until these proposed 

regulations are published as final regulations 

in the Federal Register, taxpayers may apply 

the proposed regulations to local lodging 

expenses that are paid or incurred in taxable 

years for which the period of limitation on 

credit or refund under section 6511 has not 

expired. 

Par. 3. In § 1.262–1, paragraph (b)(5) 

is amended to read as follows: 

§ 1.262–1 Personal, living, and family 

expenses. 

* * * * * 

(b) * * * 

(5) Expenses incurred in traveling 

away from home (which include 

transportation expenses, meals, and 

lodging) and any other transportation 

expenses are not deductible unless they 

qualify as expenses deductible under 

section 162 (relating to trade or business 

expenses), section 170 (relating to 

charitable contributions), section 212 

(relating to expenses for production of 

income), section 213 (relating to 

medical expenses), or section 217 

(relating to moving expenses), and the 

regulations under those sections. The 

taxpayer’s costs of commuting to his 

place of business or employment are 

personal expenses and do not qualify as 

deductible expenses. For expenses paid 

or incurred before the date these 

regulations are published as final 

regulations in the Federal Register, a 

taxpayer’s expenses for lodging when 

not traveling away from home (local 

lodging) are nondeductible personal 

expenses. For expenses paid or incurred 

on or after the date these regulations are 

published as final regulations in the 

Federal Register, a taxpayer’s expenses 

for local lodging are personal expenses 

and are not deductible unless they 

qualify as deductible expenses under 

section 162. However, until these 

regulations are published as final 

regulations in the Federal Register, 

taxpayers may deduct local lodging 

expenses that qualify under section 162 

and are paid or incurred in taxable years 

for which the period of limitation on 

credit or refund under section 6511 has 

not expired. Except as permitted under 

section 162 or 212, the costs of a 

taxpayer’s meals not incurred in 

traveling away from home are 

nondeductible personal expenses. 

* * * * * 

Steven T. Miller, 

Deputy Commissioner for Services and 

Enforcement. 

[FR Doc. 2012–9885 Filed 4–24–12; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 31 

[REG–151687–10] 

RIN 1545–BJ98 

Withholding on Payments by 

Government Entities to Persons 

Providing Property or Services 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Withdrawal of notice of 

proposed rulemaking. 

SUMMARY: This document withdraws a 

notice of proposed rulemaking relating 

to withholding by government entities 

on payments to persons providing 

property or services. The proposed 

regulations are withdrawn because 

Public Law 112–56, ‘‘The 3% 

Withholding Repeal and Job Creation 

Act,’’ repealed the provision of the 

Internal Revenue Code underlying the 

proposed rules. The guidance affects 

government entities that would have 

been required to withhold and report 

tax from payments to persons providing 

property or services and also affects the 

persons receiving payments for property 

or services from these government 

entities. 

FOR FURTHER INFORMATION CONTACT: 

A.G. Kelley, (202) 622–6040 (not a tollfree number). 

SUPPLEMENTARY INFORMATION: 

Background 

Section 3402(t) of the Internal 

Revenue Code (Code) was added by 

section 511 of the Tax Increase 

Prevention and Reconciliation Act of 

2005, Public Law 109–222 (TIPRA), 120 

Stat. 345, which was enacted on May 

17, 2006. 

Section 102 of the 3% Withholding 

Repeal and Job Creation Act (Pub. L. 

112–56, 125 Stat. 711), which was 

enacted on November 21, 2011, repealed 

section 3402(t) of the Code. 

The Treasury Department and the IRS 

issued proposed regulations under 

section 3402(t), published in the 


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Federal Register / Vol. 77, No. 80 / Wednesday, April 25, 2012 / Proposed Rules 24661 

Federal Register on May 9, 2011 (REG– 

151687–10, 76 FR 26678, 2011–23 IRB 

867). This document withdraws those 

proposed regulations in light of the 

repeal of section 3402(t). 

At the same time as the issuance of 

the proposed regulations, the Treasury 

Department and the IRS issued final 

regulations under sections 3402(t), 3406, 

6011, 6051, 6071, and 6302 of the Code 

that were published in the Federal 

Register on May 9, 2011 (TD 9524, 76 

FR 26583, 2011–23 IRB 843). A related 

document (TD 9586, REG–148417–11) 

removes the final regulations under 

section 3402(t) and makes conforming 

amendments to the regulations under 

other sections reflecting that removal. 

List of Subjects in 26 CFR Part 31 

Employment taxes, Fishing vessels, 

Gambling, Income taxes, Penalties, 

Pensions, Railroad retirement, Reporting 

and recordkeeping requirements, Social 

Security, Unemployment compensation. 

Withdrawal of Notice of Proposed 

Rulemaking 

Accordingly, under the authority of 

26 U.S.C. 7805, the notice of proposed 

rulemaking (REG–151687–10) that was 

published in the Federal Register on 

May 9, 2011 (76 FR 26678) is 

withdrawn. 

Steven T. Miller, 

Deputy Commissioner for Services and 

Enforcement. 

[FR Doc. 2012–9886 Filed 4–24–12; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE INTERIOR 

Office of Surface Mining Reclamation 

and Enforcement 

30 CFR Part 934 

[SATS No. ND–053–FOR; Docket ID OSM– 

2012–0006] 

North Dakota Regulatory Program 

AGENCY: Office of Surface Mining 

Reclamation and Enforcement, Interior. 

ACTION: Proposed rule; public comment 

period and opportunity for public 

hearing on proposed amendment. 

SUMMARY: We are announcing receipt of 

a proposed amendment to the North 

Dakota regulatory program (hereinafter, 

the ‘‘North Dakota program’’) under the 

Surface Mining Control and 

Reclamation Act of 1977 (‘‘SMCRA’’ or 

‘‘the Act’’). North Dakota proposes 

changes to the North Dakota 

Administrative Code to address letter of 

credit provisions in the collateral bond 

rule under Administrative Code Section 

69–5.2–12–04. The changes involve the 

financial information and notices that 

banks issuing a letter of credit must 

provide to the North Dakota Public 

Service Commission (hereinafter, the 

‘‘Commission’’). 

This document gives the times and 

locations that the North Dakota program 

and proposed amendment to that 

program are available for your 

inspection, the comment period during 

which you may submit written 

comments on the amendment, and the 

procedures that we will follow for the 

public hearing, if one is requested. 

DATES: We will accept written 

comments on this amendment until 

4 p.m., m.d.t. May 25, 2012. If 

requested, we will hold a public hearing 

on the amendment on May 21, 2012. We 

will accept requests to speak until 

4 p.m., m.d.t. on May 10, 2012. 

ADDRESSES: You may submit comments 

by either of the following two methods: 

Federal eRulemaking Portal: 

www.regulations.gov. This proposed 

rule has been assigned Docket ID: OSM– 

2012–0006. If you would like to submit 

comments through the Federal 

eRulemaking Portal, go to 

www.regulations.gov and follow the 

instructions. 

• Mail/Hand Delivery/Courier: 

Jeffrey Fleischman, Director, Casper 

Field Office, Office of Surface Mining 

Reclamation and Enforcement, Dick 

Cheney Federal Building, POB 11018, 

150 East B Street, Casper, Wyoming 

82601–1018. 

For detailed instructions on 

submitting comments and additional 

information on the rulemaking process, 

see the ‘‘III. Public Comment 

Procedures’’ in the SUPPLEMENTARY

INFORMATION section of this document. 

In addition to viewing the docket and 

obtaining copies of documents at 

www.regulations.gov, you may review 

copies of the North Dakota program, this 

amendment, a listing of any public 

hearings, and all written comments 

received in response to this document at 

the addresses listed below during 

normal business hours, Monday through 

Friday, excluding holidays. You may 

also receive one free copy of the 

amendment by contacting OSM’s Casper 

Field Office. 

Jeffrey Fleischman, Director, Casper 

Field Office, Office of Surface Mining 

Reclamation and Enforcement, Dick 

Cheney Federal Building, PO Box 

11018, 150 East B Street, Casper, 

Wyoming 82601–1018, (307) 261–6555, 

jfleischman@osmre.gov. 

James Deutsch, Director, Reclamation 

Division, North Dakota Public Service 

Commission, 600 East Boulevard, Dept. 

408, Bismarck, North Dakota 58505– 

0480, (701) 328–2251, jdeutsch@nd.gov. 

FOR FURTHER INFORMATION CONTACT: 

Jeffrey Fleischman, Telephone: (307) 

261–6555. Internet: 

jfleischman@osmre.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background on the North Dakota Program 

II. Description of the Proposed Amendment 

III. Public Comment Procedures 

IV. Procedural Determinations 

I. Background on the North Dakota 

Program 

Section 503(a) of the Act permits a 

State to assume primacy for the 

regulation of surface coal mining and 

reclamation operations on non-Federal 

and non-Indian lands within its borders 

by demonstrating that its State program 

includes, among other things, ‘‘a State 

law which provides for the regulation of 

surface coal mining and reclamation 

operations in accordance with the 

requirements of this Act * * *; and 

rules and regulations consistent with 

regulations issued by the Secretary 

pursuant to this Act.’’ See 30 U.S.C. 

1253(a)(1) and (7). On the basis of these 

criteria, the Secretary of the Interior 

conditionally approved the North 

Dakota program on December 15, 1980. 

You can find background information 

on the North Dakota program, including 

the Secretary’s findings, the disposition 

of comments, and conditions of 

approval of the North Dakota program in 

the December 15, 1980 Federal Register 

(45 FR 82214). You can also find later 

actions concerning North Dakota’s 

program and program amendments at 30 

CFR 934.15 and 934.30. 

II. Description of the Proposed 

Amendment 

By letter dated February 2, 2012, 

North Dakota sent us a proposed 

amendment to its program 

(Administrative Record Document ID 

No. OSM–2012–0006–0002) under 

SMCRA (30 U.S.C. 1201 et seq.). North 

Dakota sent the amendment to include 

changes made at its own initiative to the 

North Dakota Administrative Code 

(NDAC). The full text of the program 

amendment is available for you to read 

at the locations listed above under 

ADDRESSES. 

Specifically, North Dakota proposes to 

change letter of credit provisions in the 

collateral bond rule under NDAC 69– 

5.2–12–04. The financial information 

that banks issuing a letter of credit must 

provide to the Commission is 

specifically addressed. An option is 

being added to let banks provide a 

certified copy of financial reports that 


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