[Federal Register Volume 60, Number 71 (Thursday, April 13, 1995)]
[Rules and Regulations]
[Pages 18741-18742]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-9049]



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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 8592]
RIN 1545-AT17


Subchapter K Anti-Abuse Rule

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulation.

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SUMMARY: This final regulation amends the subchapter K anti-abuse rule 
to provide that the rule applies solely with respect to taxes under 
subtitle A of the Internal Revenue Code. This document provides 
guidance to partnerships and the partners of those partnerships.

DATES: This regulation is effective May 12, 1994, except the amendment 
to Sec. 1.701-2(f) is effective December 29, 1994.
    For a discussion of dates of applicability of this regulation, see 
Explanation of Provisions under SUPPLEMENTARY INFORMATION.

FOR FURTHER INFORMATION CONTACT: D. Lindsay Russell on (202) 622-3050 
(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    On May 17, 1994, a notice of proposed rulemaking was published in 
the Federal Register (59 FR 25581) containing a proposed anti-abuse 
rule under subchapter K. On January 3, 1995, Sec. 1.701-2 (TD 8588) was 
published in the Federal Register (60 FR 23) containing the final anti-
abuse rule under subchapter K.

Explanation of Provisions

    Section 1.701-2 is amended to provide that it applies solely with 
respect to taxes under subtitle A of the Internal Revenue Code. No 
inference is intended as to the treatment under current law of 
transactions not covered by the regulation.
    This amendment is effective as of the effective dates of 
Sec. 1.701-2(g) (May 12, 1994, except that paragraphs (e) and (f) are 
effective December 29, 1994).

Special Analyses

    It has been determined that this Treasury decision 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) 
and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do not apply to 
this amendment, and, therefore, a Regulatory Flexibility Analysis is 
not required. Pursuant to section 7805(f) of the Internal Revenue Code, 
this amendment was submitted to the Small Business Administration for 
comment on its impact on small business.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR part 1 is 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 1.701-2 is amended by:
    1. Amending the fourth sentence of paragraph (a)(3) by:
    a. Removing the language ``Example 8'' and adding ``Example 6'' in 
its place.
    b. Removing the language ``Example 11'' and adding ``Example 9'' in 
its place.
    c. Removing the language ``Examples 12 and 13'' and adding 
``Examples 10 and 11'' in its place.
    2. Removing Examples 5 and 6 of paragraph (d) and redesignating 
Examples 7 through 13 of paragraph (d) as Examples 5 through 11, 
respectively.
    3. Removing the last sentence of paragraph (f) introductory text.
    4. Redesignating paragraph (h) as paragraph (i).
    5. Adding a new paragraph (h).
    The addition reads as follows:


Sec. 1.701-2  Anti-abuse rule.

* * * * *
    (h) Scope and application. This section applies solely with respect 
to taxes under subtitle A of the Internal Revenue Code, and for 
purposes of this section, any reference to a federal tax is limited to 
any tax imposed under subtitle A of the Internal Revenue Code.
* * * * *

[[Page 18742]]

    Approved: March 28, 1995.
Leslie Samuels,
Assistant Secretary of the Treasury.
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 95-9049 Filed 4-12-95; 8:45 am]
BILLING CODE 4830-01-U