Federal Register / Vol. 62, No. 11 / Thursday, January 16, 1997 / Proposed Rules 2335

rulemaking is scheduled to end on

January 16, 1997. The Commission has

determined, in this instance, to extend

the comment period.

DATES: Comments on the proposed

rulemaking must be received by January

31, 1997.

ADDRESSES: Comments should be

mailed to Jean A. Webb, Secretary,

Commodity Futures Trading

Commission, Three Lafayette Centre,

1155 21st Street, N.W., Washington,

D.C. 20581; transmitted by facsimile to

(202) 418–5521; or transmitted

electronically to [secretary@cftc.gov].

FOR FURTHER INFORMATION CONTACT:

David P. Van Wagner, Special Counsel,

Division of Trading and Markets,

Commodity Futures Trading

Commission, Three Lafayette Centre,

1155 21st Street, N.W., Washington,

D.C. 20581. Telephone: (202) 418–5490.

SUPPLEMENTARY INFORMATION: The

Futures Industry Association (‘‘FIA’’)

has filed a petition requesting an

extension of time to submit comments

on the Commission’s proposed

rulemaking concerning the review of

non-term and condition contract market

rule changes. FIA requested a thirty-day

extension of the comment period for the

proposed rulemaking that currently is

scheduled to close on January 16, 1997.

FIA stated that it was requesting an

extension of the comment period in

order to ensure that its members had

sufficient opportunity to consider the

proposed rulemaking and to prepare any

appropriate comment.

The Commission has determined to

extend the comment period for the

proposed rulemaking by fifteen days

until January 31, 1997. The Commission

believes that such an extension of the

comment period should permit FIA,

FIA’s members and any other interested

parties to evaluate fully the

Commission’s proposed rulemaking and

to submit their comments to the

Commission, while also allowing the

Commission to deal with this

rulemaking in an expeditious manner.

Issued in Washington, D.C. on January 9,

1997, by the Commission.

Jean A. Webb,

Secretary of the Commission.

[FR Doc. 97–1027 Filed 1–15–97; 8:45 am]

BILLING CODE 6351–01–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG–252665–96]

RIN 1545–AU82

Intangibles Under Sections 1060 and

338

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Notice of proposed rulemaking

by cross-reference to temporary

regulations and notice of public hearing.

SUMMARY: In the Rules and Regulations

section of this issue of the Federal

Register, the IRS amends the temporary

regulations under sections 1060 and

338(b) of the Internal Revenue Code

(Code) relating to purchase price

allocations in taxable asset acquisitions

and deemed asset purchases. The

amendments revise the treatment of

intangible assets in such acquisitions to

take into account the enactment of

section 197 by the Omnibus Budget

Reconciliation Act of 1993. The

regulations provide guidance to parties

to taxable asset acquisitions and to

deemed asset purchases resulting from

elections under section 338. The text of

those temporary regulations also serves

as the text of these proposed

regulations. This document also

provides notice of a public hearing on

these proposed regulations.

DATES: Written comments must be

received by April 16, 1997. Outlines of

topics to be discussed at the public

hearing scheduled for Thursday, May

22, 1997, at 10 a.m. must be received by

May 1, 1997.

ADDRESSES: Send submissions to:

CC:DOM:CORP:R (REG 252665–96),

room 5228, Internal Revenue Service,

POB 7604, Ben Franklin Station,

Washington, DC 20044. In the

alternative, submissions may be hand

delivered between the hours of 8 a.m.

and 5 p.m. to: CC:DOM:CORP:R (REG

252665–96), Courier’s Desk, Internal

Revenue Service, 1111 Constitution

Avenue NW., Washington, DC.

Taxpayers may also submit comments

electronically via the internet by

selecting the ‘‘Tax Regs’’ option on the

IRS Home Page, or by submitting

comments directly to the IRS internet

site at http://www.irs.ustreas.gov/prod/

taxlregs/comments.html. The public

hearing will be held in the

Commissioner’s Conference Room, room

3313, Internal Revenue Building, 1111

Constitution Avenue NW., Washington,

DC.

FOR FURTHER INFORMATION CONTACT:

Concerning the regulations, Brendan

O’Hara at (202) 622–7530; concerning

submissions and the hearing, Michael

Slaughter, (202) 622–7180 (not toll-free

numbers).

SUPPLEMENTARY INFORMATION:

Background

The temporary and final regulations

published in the Rules and Regulations

section of this issue of the Federal

Register amend the current temporary

regulations under sections 1060

(§ 1.1060–1T) and 338(b) (§§ 1.338(b)–

2T and 1.338(b)–3T), and related

examples in the final regulations under

section 338 (§ 1.338–3), concerning the

treatment of acquired intangible assets.

The text of those temporary

regulations also serves as the text of

these proposed regulations. The

preamble to the temporary and final

regulations explains the reasons for the

amendments.

The amendments only address the

effect of the enactment of section 197.

The IRS and Treasury also intend to

study other aspects of the current

regulations under sections 1060 and

338(b). The current regulations have

been the subject of public comments.

The IRS and Treasury welcome further

comments on all issues raised by the

current regulations concerning purchase

price allocation under sections 338(b)

and 1060.

Special Analyses

It has been determined that this notice

of proposed rulemaking is not a

significant regulatory action as defined

in EO 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 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 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. All comments will be available

for public inspection and copying.

A public hearing has been scheduled

for Thursday, May 22, 1997, at 10 a.m.

in the Commissioner’s Conference
2336 Federal Register / Vol. 62, No. 11 / Thursday, January 16, 1997 / Proposed Rules

Room, room 3313, Internal Revenue

Building, 1111 Constitution Avenue

NW., Washington, DC. Because of access

restrictions, visitors will not be

admitted beyond the Internal Revenue

Service Building lobby more than 15

minutes before the hearing starts.

The rules of 26 CFR 601.601(a)(3)

apply to the hearing.

Persons that wish to present oral

comments at the hearing must submit

comments by April 16, 1997 and submit

an outline of the topics to be discussed

and the time to be devoted to each topic

by May 1, 1997.

A period of 10 minutes will be

allotted to each person for making

comments.

An agenda showing the scheduling of

the speakers will be prepared after the

deadline for receiving outlines has

passed. Copies of the agenda will be

available free of charge at the hearing.

Drafting Information

The principal author of these

regulations is Brendan P. O’Hara, Office

of the Assistant Chief Counsel

(Corporate), IRS. However, other

personnel from the IRS and 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 1.338(b)–2 is added to

read as follows:

§ 1.338(b)–2 Allocation of adjusted

grossed-up basis among target assets.

[The text of this section is the same

as the text of the amendments to

§ 1.338(b)–2T published elsewhere in

this issue of the Federal Register].

Par. 3. Section 1.338(b)–3 is added to

read as follows:

§ 1.338(b)–3 Subsequent adjustments to

adjusted grossed-up basis.

[The text of this section is the same

as the text of the amendments to

§ 1.338(b)–3T published elsewhere in

this issue of the Federal Register].

Par. 4. Section 1.1060–1 is added to

read as follows:

§ 1.1060–1 Special allocation rules for

certain asset acquisitions.

[The text of this section is the same

as the text of the amendments to

§1.1060–1T published elsewhere in this

issue of the Federal Register].

Margaret Milner Richardson,

Commissioner of Internal Revenue.

[FR Doc. 97–655 Filed 1–9–97; 2:53 pm]

BILLING CODE 4830–01–U

26 CFR Part 1

[REG–209709–94]

RIN 1545–AS77

Amortization of Intangible Property

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Notice of proposed rulemaking

and notice of public hearing.

SUMMARY: This document contains

proposed regulations relating to the

amortization of certain intangible

property. The proposed regulations

reflect changes to the law made by the

Omnibus Budget Reconciliation Act of

1993 (OBRA ’93), and affect taxpayers

who acquired intangible property after

August 10, 1993, or made a retroactive

election to apply OBRA ’93 to

intangibles acquired after July 25, 1991.

This document also provides notice of

a public hearing on the proposed

regulations.

DATES: Comments must be received by

April 16, 1997. Requests to appear and

outlines of oral comments to be

presented at the public hearing

scheduled for May 15, 1997, must be

received by April 24, 1997.

ADDRESSES: Send submissions to:

CC:DOM:CORP:R (REG–209709–94),

room 5228, Internal Revenue Service,

POB 7604, Ben Franklin Station,

Washington, DC 20044. Submissions

may be hand delivered between the

hours of 8 a.m. and 5 p.m. to:

CC:DOM:CORP:R (REG–209709–94),

Courier’s Desk, Internal Revenue

Service, 1111 Constitution Avenue NW.,

Washington, DC. Alternatively,

taxpayers may submit comments

electronically via the Internet by

selecting the Tax Regs option of the IRS

Home Page, or by submitting comments

directly to the IRS Internet site at

http:\\www.irs.ustreas.gov\prod\tax

lregs\comments.html. The public

hearing will be held in the

Commissioner’s Conference Room

(Room 3313), Internal Revenue

Building, 1111 Constitution Avenue

NW., Washington, DC 20224.

FOR FURTHER INFORMATION CONTACT:

Concerning the regulations, John

Huffman at (202) 622–3110; concerning

submissions and the hearing, Michael

Slaughter at (202) 622–8452 (not tollfree numbers).

SUPPLEMENTARY INFORMATION:

Background

This document contains proposed

regulations under sections 167(f) and

197. These provisions were added to the

Internal Revenue Code of 1986 (the

Code) by section 13261 of OBRA ’93,

and apply to intangible property

acquired after August 10, 1993 (or after

July 25, 1991, if a valid retroactive

election to apply OBRA ’93 to

intangibles has been made pursuant to

§ 1.197–1T).

The proposed regulations provide

definitions and rules for amortization of

intangible property subject to sections

197 and 167(f). On June 24, 1994, the

IRS published Announcement 94–92

(1994–28 I.R.B. 139) in the Federal

Register (59 FR 32670) inviting

comments under section 197 relating to

the amortization of goodwill and certain

other intangibles that should be

addressed in proposed regulations. The

IRS has reviewed these comments and

has addressed certain issues raised in

the comments in the proposed

regulations. However, because these

comments were received in anticipation

of the issuance of these proposed

regulations, and because these

regulations are subject to further

comment and a public hearing, no

attempt has been made to describe all of

the principal comments that are not

reflected in these regulations or the

reasons therefor.

Explanation of Provisions

1. General Overview

Sections 167(f) and 197 provide

comprehensive rules for the

depreciation and amortization of many

intangible assets. Intangible assets

subject to section 197 are broadly

defined to include most intangible

assets acquired in connection with the

acquisition of a trade or business and

certain other separately acquired

intangible assets. The adjusted basis of

an amortizable section 197 intangible

must be amortized over a 15-year

period. Certain other intangible assets

are excluded from section 197 for

various reasons. In some cases, such as

stock and partnership interests, the asset

is property of a character that is not

subject to an allowance for depreciation

because it represents a permanent

investment that can only be recovered

through disposition of the asset

(including worthlessness). In other

cases, such as computer software,