[Federal Register Volume 73, Number 132 (Wednesday, July 9, 2008)]
[Proposed Rules]
[Pages 39270-39272]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 08-1424]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-146895-05]
RIN 1545-BF05


Election to Expense Certain Refineries

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations and notice of public hearing.

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SUMMARY: In the Rules and Regulations section of this issue of the 
Federal Register, the IRS is issuing temporary regulations relating to 
the election to expense qualified refinery property under section 179C 
of the Internal Revenue Code (Code) and affects taxpayers who own 
refineries located in the United States. The temporary regulations 
reflect changes to the law by the Energy Policy Act of 2005. The text 
of those regulations also serves as the text of these proposed 
regulations. This document also provides notice of a public hearing.

DATES: Written or electronic comments must be received by September 8, 
2008. Outlines of the topics to be discussed at the public hearing 
scheduled for Thursday, November 20, 2008, at 10 a.m. must be received 
by Tuesday, October 14, 2008.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-146895-05), room 
5203, Internal Revenue Service, PO 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-
146895-05),

[[Page 39271]]

Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW., 
Washington, DC 20224. Alternatively, taxpayers may submit electronic 
comments via the Federal eRulemaking Portal at www.regulations.gov 
(IRS-REG-146895-05).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Philip Tiegerman at (202) 622-3110; concerning submissions of comments, 
hearing, and/or to be placed on the building access list to attend the 
hearing, Oluwafunmilayo Taylor at (202) 622-7180 (not toll-free 
numbers).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The collections of information contained in this notice of proposed 
rulemaking have been submitted to the Office of Management and Budget 
for review in accordance with the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507(d)). Comments on the collections of information should be 
sent to the Office of Management and Budget, Attn: Desk Officer for the 
Department of the Treasury, Office of Information and Regulatory 
Affairs, Washington, DC 20503, with copies to the Internal Revenue 
Service, Attn: IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP, 
Washington, DC 20224. Comments on the collection of information should 
be received by September 8, 2008. Comments are specifically requested 
concerning:
    Whether the proposed collection of information is necessary for the 
proper performance of the functions of the Internal Revenue Service, 
including whether the information will have practical utility;
    The accuracy of the estimated burden associated with the proposed 
collection of information;
    How the quality, utility, and clarity of the information to be 
collected may be enhanced;
    How the burden of complying with the proposed collections of 
information may be minimized, including through the application of 
automated collection techniques or other forms of information 
technology; and
    Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of service to provide information.
    The collection of information in this proposed regulation is in 
Sec.  1.179C-1T(d)(2), Sec.  1.179C-1T(d)(3), Sec.  1.179C-1T(e)(2), 
and Sec.  1.179C-1T(f). The collections of information in Sec.  1.179C-
1T(d)(2) and Sec.  1.179C-1T(f) are required in order for a taxpayer to 
make and support an election under section 179C(a) to expense 50 
percent of the cost of qualified refinery property. The collection of 
information in Sec.  1.179C-1T(d)(3) is required in order for the 
taxpayer to revoke an election under section 179C(a). The collection of 
information in Sec.  1.179C-1T(e)(2) is required in order for a 
taxpayer that is an organization described in section 1381 that has 
made an election under section 179C(a) to allocate all or a portion of 
this expense to its owners that are organizations described in section 
1381. The collection of information is mandatory. The likely 
recordkeepers are owners of certain existing refineries.
    Estimated total annual recordkeeping burden: 120 hours.
    The estimated annual burden per recordkeeper varies depending on 
individual circumstances, with an estimated average of 10 hours.
    Estimated number of recordkeepers: 12.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a valid 
control number assigned by the Office of Management and Budget.
    Books or records relating to a collection of information must be 
retained as long as their contents may become material in the 
administration of any internal revenue law. Generally, tax returns and 
tax return information are confidential, as required by 26 U.S.C. 6103.

Background and Explanation of Provision

    The temporary regulations in the Rules and Regulations section of 
this issue of the Federal Register amend the Income Tax Regulations (26 
CFR part 1) relating to section 179C. The temporary regulations define 
``qualified refinery property'' and assist the taxpayer in identifying 
those costs that may be expensed pursuant to this provision. The text 
of those regulations also serves as the text of these proposed 
regulations. The preamble to the temporary regulations explains the 
amendments.

Special Analyses

    It has been determined that this notice of proposed rulemaking is 
not a significant regulatory action as defined in Executive Order 
12866. The collections of information in Sec.  1.179-1T (d)(2), (e)(2) 
and (f) are required by section 179C(b), (g) and (h), respectively, 
and, therefore, are not imposed by these regulations. Accordingly, they 
are not subject to the Regulatory Flexibility Act. Only the collection 
of information in Sec.  1.179-1T(d)(3), regarding the revocation of an 
election under section 179C(a), is imposed by these regulations. It is 
hereby certified that the collection of information contained in Sec.  
1.179-1T(d)(3) of the regulations will not have a significant economic 
impact on a substantial number of small entities. This certification is 
based upon the fact that although most of the 12 taxpayers who 
potentially could or would make an election under section 179C(a) will 
be small entities, it is expected that few, if any, of those 12 
taxpayers once having made the election will choose to revoke it. 
Therefore, the collection of information will not affect a substantial 
number of small entities. The information required to revoke an 
election under section 179C(a) consists entirely of a portion of the 
information required to make the election. Consequently, the economic 
burden for those taxpayers who choose to revoke the election is minimal 
in nature and the regulations do not impose any burden in addition to 
the burden associated with making the election. Therefore, a Regulatory 
Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. 
chapter 6) is not required. Pursuant to section 7805(f) of the Code, 
this regulation has 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 a Public Hearing

    Before the proposed regulations are adopted as final regulations, 
consideration will be given to any written comments (a signed original 
and eight (8) copies) or electronic comments that are submitted timely 
to the IRS. The IRS and Treasury Department specifically request 
comments on the clarity of the proposed rule and how it may be made 
easier to understand. All comments will be available for public 
inspection and copying.
    A public hearing has been scheduled for Thursday, November 20, 
2008, beginning at 10 a.m. in the IRS Auditorium, Internal Revenue 
Building, 1111 Constitution Avenue, NW., Washington, DC. Due to 
building security procedures, visitors must enter at the Constitution 
Avenue entrance. In addition, all visitors must present photo 
identification to enter the building. Because of access restrictions, 
visitors will not be admitted beyond the Constitution Avenue entrance 
area more than 30 minutes before the hearing starts. For information 
about having your name placed on the building

[[Page 39272]]

access list to attend the hearing, see the FOR FURTHER INFORMATION 
CONTACT section of this preamble.
    The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who 
wish to present oral comments at the hearing must submit written 
comments or electronic comments by October 7, 2008 and an outline of 
the topics to be discussed and the time to be devoted to each topic 
(signed original and eight (8) copies) by Tuesday, October 14, 2008. 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 Philip Tiegerman of 
the Office of the Associate Chief Counsel (Passthroughs and Special 
Industries). 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 is amended by adding 
an entry in numerical order to read as follows:

    Authority: 26 U.S.C. 7805 * * *
    Section 1.179C also issued under 26 U.S.C. 179C. * * *
    Par. 2. Section 1.179C-1 is added to read as follows:

Sec.  1.179C-1  Election to expense certain refineries.

    [The text of proposed Sec.  1.79C-1 is the same as the text of 
Sec.  1.179C-1T (a) through (g) published elsewhere in this issue of 
the Federal Register].

Linda E. Stiff,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 08-1424 Filed 7-3-08; 3:33 pm]
BILLING CODE 4830-01-P