[Federal Register Volume 81, Number 23 (Thursday, February 4, 2016)]
[Proposed Rules]
[Pages 5966-5967]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-01948]



[[Page 5966]]

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-100861-15]
RIN 1545-BM56


Allocation of Creditable Foreign Taxes

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 the allocation by a partnership of foreign income 
taxes. Those temporary regulations are necessary to improve the 
operation of an existing safe harbor rule that is used for determining 
whether allocations of creditable foreign tax expenditures are deemed 
to be in accordance with the partners' interests in the partnership. 
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 4, 2016.

ADDRESSES: Send submissions to CC:PA:LPD:PR (REG-100861-15), 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-
100861-15), Courier's desk, Internal Revenue Service, 1111 Constitution 
Avenue NW., Washington, DC 20224, or sent electronically, via the 
Federal eRulemaking Portal at www.regulations.gov (IRS REG-100861-15).

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Suzanne M. 
Walsh, (202) 317-4908; concerning submissions of comments, 
Oluwafunmilayo Taylor, (202) 317-5179 (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 provide guidance relating to the 
allocation by a partnership of foreign income taxes. 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 
partnerships and their partners.

Special Analyses

    Certain IRS regulations, including this one, are exempt from the 
requirements of Executive Order 12866, as supplemented and reaffirmed 
by Executive Order 13563. 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

0
Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

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

0
Par. 2. Section 1.704-1 is amended as follows:
0
1. In paragraph (b)(0):
0
i. Add an entry for Sec.  1.704-1(b)(1)(ii)(b)(1).
0
ii. Revise the entries for (b)(4)(viii)(c)(1) through (4) and 
(b)(4)(viii)(d)(1).
0
2. Revise paragraphs (b)(1)(ii)(b)(1), (b)(1)(ii)(b)(3)(B), 
(b)(4)(viii)(a)(1), (b)(4)(viii)(c)(1), (b)(4)(viii)(c)(2)(ii) and 
(iii), (b)(4)(viii)(c)(3) and (4), (b)(4)(viii)(d)(1), and Example 25 
of paragraph (b)(5).
0
3. Add Examples 36 and 37 to paragraph (b)(5).
    The revisions read as follows:


Sec.  1.704-1  Partner's distributive share.

* * * * *
    (b) * * *
    (0) [The text of the proposed amendments to Sec.  1.704-1(b)(0) is 
the same as the text of Sec.  1.704-1T(b)(0) published elsewhere in 
this issue of the Federal Register.]
    (1) * * *
    (ii) * * *
    (b) Rules relating to foreign tax expenditures. (1) [The text of 
the proposed amendments to Sec.  1.704-1(b)(1)(ii)(b)(1) is the same as 
the text of Sec.  1.704-1T(b)(1)(ii)(b)(1) published elsewhere in this 
issue of the Federal Register.]
* * * * *
    (3) * * *
    (B) [The text of the proposed amendments to Sec.  1.704-
1(b)(1)(ii)(b)(3)(B) is the same as the text of Sec.  1.704-
1T(b)(1)(ii)(b)(3)(B) published elsewhere in this issue of the Federal 
Register.]
* * * * *
    (4) * * *
    (viii) * * *
    (a) * * *
    (1) [The text of the proposed amendments to Sec.  1.704-
1(b)(4)(viii)(a)(1) is the same as the text of Sec.  1.704-
1T(b)(4)(viii)(a)(1) published elsewhere in this issue of the Federal 
Register.]
* * * * *
    (c) Income to which CFTEs relate. (1) [The text of the proposed 
amendments to Sec.  1.704-1(b)(4)(viii)(c)(1) is the same as the text 
of Sec.  1.704-1T(b)(4)(viii)(c)(1) published elsewhere in this issue 
of the Federal Register.]
    (2) * * *
    (ii) [The text of the proposed amendments to Sec.  1.704-

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1(b)(4)(viii)(c)(2)(ii) is the same as the text of Sec.  1.704-
1T(b)(4)(viii)(c)(2)(ii) published elsewhere in this issue of the 
Federal Register.]
    (iii) [The text of the proposed amendments to Sec.  1.704-
1(b)(4)(viii)(c)(2)(iii) is the same as the text of Sec.  1.704-
1T(b)(4)(viii)(c)(2)(iii) published elsewhere in this issue of the 
Federal Register.]
    (3) [The text of the proposed amendments to Sec.  1.704-
1(b)(4)(viii)(c)(3) is the same as the text of Sec.  1.704-
1T(b)(4)(viii)(c)(3) published elsewhere in this issue of the Federal 
Register.]
    (4) [The text of the proposed amendments to Sec.  1.704-
1(b)(4)(viii)(c)(4) is the same as the text of Sec.  1.704-
1T(b)(4)(viii)(c)(4) published elsewhere in this issue of the Federal 
Register.]
* * * * *
    (d) Allocation and apportionment of CFTEs to CFTE categories. (1) 
[The text of the proposed amendments to Sec.  1.704-1(b)(4)(viii)(d)(1) 
is the same as the text of Sec.  1.704-1T(b)(4)(viii)(d)(1) published 
elsewhere in this issue of the Federal Register.]
* * * * *
    (5) * * *
    Example 25. [The text of the proposed amendments to Sec.  1.704-
1(b)(5) Example 24 is the same as the text of Sec.  1.704-1T(b)(5) 
Example 25 published elsewhere in this issue of the Federal Register.]
* * * * *
    Example 36.  [The text of the proposed amendments to Sec.  
1.704-1(b)(5) Example 36 is the same as the text of Sec.  1.704-
1T(b)(5) Example 36 published elsewhere in this issue of the Federal 
Register.]
    Example 37. [The text of the proposed amendments to Sec.  1.704-
1(b)(5) Example 37 is the same as the text of Sec.  1.704-1T(b)(5) 
Example 37 published elsewhere in this issue of the Federal 
Register.]
* * * * *

John Dalrymple,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2016-01948 Filed 2-3-16; 8:45 am]
BILLING CODE 4830-01-P