Federal Register / Vol. 61, No. 125 / Thursday, June 27, 1996 / Proposed Rules 33395

Par. 5. Section 1.1502–23 is added to

read as follows:

§ 1.1502–23 Consolidated net section 1231

gain or loss.

[The text of this proposed section is the

same as the text of § 1.1502–23T

published elsewhere in this issue of the

Federal Register.]

Margaret Milner Richardson,

Commissioner of Internal Revenue.

[FR Doc. 96–15826 Filed 6–26–96; 8:45 am]

BILLING CODE 4830–01–U

26 CFR Part 1

[CO–25–96]

RIN 1545–AU32

Regulations Under Section 1502 of the

Internal Revenue Code of 1986;

Limitations on Net Operating Loss

Carryforwards and Certain Built-in

Losses and Credits Following an

Ownership Change of a Consolidated

Group

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Withdrawal of prior proposed

rule, notice of proposed rulemaking by

cross-reference to temporary

regulations, and notice of public

hearing.

SUMMARY: On February 4, 1991,

proposed rules under section 1502 were

published in the Federal Register (CO–

132–87; see 56 FR 4194; 1991–1 C.B.

728). A public hearing was held on

April 8, 1991. The IRS and Treasury

published Notice 91–27 (1991–2 C.B.

629) to advise of intended modifications

to the proposed regulations. The

February, 1991, proposed rules are

withdrawn and these proposed

regulations are issued in their place.

In the Rules and Regulations section

of this issue of the Federal Register, the

IRS is issuing temporary regulations

regarding the operation of sections 382

and 383 of the Internal Revenue Code of

1986 (relating to limitations on net

operating loss carryforwards and certain

built-in losses and credits following an

ownership change) with respect to

consolidated groups. The text of those

temporary regulations also serves as the

text of these proposed regulations. This

document also provides a notice of

public hearing on these proposed

regulations.

DATES: Written comments must be

received by September 25, 1996.

Outlines of topics to be discussed at the

public hearing scheduled for Thursday,

October 17, 1996, at 10 a.m. must be

received by Thursday, September 26,

1996.

ADDRESSES: Send submissions to:

CC:DOM:CORP:R (CO–25–96), 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 (CO–25–96),

Courier’s Desk, Internal Revenue

Service, 1111 Constitution Avenue NW.,

Washington, DC. The public hearing

will be held in the NYU Classroom,

Room 2615, Internal Revenue Building,

1111 Constitution Avenue NW.,

Washington, DC.

FOR FURTHER INFORMATION CONTACT:

Concerning the regulations, David B.

Friedel, (202) 622–7550; concerning

submissions and the hearing,

Evangelista Lee, (202) 622–7190 (not

toll-free numbers).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The collection of information

contained in this notice of proposed

rulemaking has been reviewed and

approved by the Office of Management

and Budget in accordance with the

Paperwork Reduction Act (44 U.S.C.

3507) under the control number 1545–

1218. The collection requires a response

from certain consolidated groups. The

IRS requires the information described

in Proposed § 1.1502–95(e) to assure

that a section 382 limitation is properly

determined in cases of corporations that

cease to be members of a group.

Comments concerning the collection

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, T:FP. Washington,

DC, 20224. Comments on the collection

of information should be received by

August 26, 1996.

An agency may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless the collection of information

displays a valid control number.

The collection of information is in

Proposed § 1.1502–95(e). That section

permits an election with respect to the

apportionment of a group section 382

limitation to a departing member. A

statement evidencing the apportionment

must be filed by the group and the

departing member indicating relevant

information regarding the

apportionment. The likely respondents

and/or recordkeepers are corporations

that are members of certain consolidated

groups. Responses to this collection of

information are required to obtain a

benefit (relating to the section 382

limitation applicable to the departing

member(s)).

Books or records relating to this

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.

Estimated total annual reporting

burden: 380 hours. The estimated

annual burden per respondent varies

from ten to thirty minutes, depending

on individual circumstances, with an

estimated average of fifteen minutes.

Estimated number of respondents:

9,125. Estimated frequency of responses:

once every six years.

Background

Temporary regulations in the Rules

and Regulations section of this issue of

the Federal Register amend the Income

Tax Regulations (26 CFR Part 1) under

section 1502, relating to limitations on

net operating loss carryforwards and

certain built-in losses and credits

following an ownership change with

respect to consolidated groups. The

final regulations that are proposed to be

based on these proposed regulations

would be added to part 1 of title 26 of

the Code of Federal Regulations. Those

final regulations would provide rules

relating to limitations on net operating

loss carryforwards and certain built-in

losses following an ownership change.

For the text of these new temporary

regulations, see TD 8678. The preamble

to the temporary regulations explains

the regulations.

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 is hereby

certified that these regulations do not

have a significant economic impact on

a substantial number of small entities.

This certification is based on the fact

that these regulations will primarily

affect affiliated groups of corporations

that have elected to file consolidated

returns, which tend to be larger

businesses. 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 Internal Revenue

Code, this notice of proposed

rulemaking will be submitted to the

Chief Counsel for Advocacy of the Small
33396 Federal Register / Vol. 61, No. 125 / Thursday, June 27, 1996 / Proposed Rules

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

written comments (a signed original and

eight (8) copies) 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, October 17, 1996, at 10

a.m. in the NYU Classroom, Room 2615,

Internal Revenue Building, 1111

Constitution Avenue NW., Washington,

DC. Because of access restrictions,

visitors will not be admitted beyond the

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

written comments by September 25,

1996 and submit an outline of the topics

to be discussed and the time to be

devoted to each topic (signed original

and eight (8) copies) by Thursday,

September 26, 1996.

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 the temporary regulations is David B.

Friedel of the Office of Assistant Chief

Counsel (Corporate), IRS. Other personnel

from the IRS and Treasury participated in

their development.

Withdrawal of Notice of Proposed

Rulemaking

Accordingly, under the authority of

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

rulemaking that was published on

February 4, 1991 (56 FR 4194) is

withdrawn.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting and

recordkeeping requirements.

Proposed Amendments to the

Regulations

Accordingly, 26 CFR parts 1 and 602

are proposed to be amended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation for

part 1 is amended by adding entries in

numerical order to read as follows:

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

Section 1.1502–91 also issued under 26

U.S.C. 382(m) and 26 U.S.C. 1502.

Section 1.1502–92 also issued under 26

U.S.C. 382(m) and 26 U.S.C. 1502.

Section 1.1502–93 also issued under 26

U.S.C. 382(m) and 26 U.S.C. 1502.

Section 1.1502–94 also issued under 26

U.S.C. 382(m) and 26 U.S.C. 1502.

Section 1.1502–95 also issued under 26

U.S.C. 382(m) and 26 U.S.C. 1502.

Section 1.1502–96 also issued under 26

U.S.C. 382(m) and 26 U.S.C. 1502.

Section 1.1502–98 also issued under 26

U.S.C. 382(m) and 26 U.S.C. 1502.

Section 1.1502–99 also issued under 26

U.S.C. 382(m) and 26 U.S.C. 1502. * * *

Par. 2. Sections 1.1502–90 through

1.1502–99 are added to read as follows:

§ 1.1502–90 Table of contents.

§ 1.1502–91 Application of section 382 with

respect to a consolidated group.

§ 1.1502–92 Ownership change of a loan

group of a loss subgroup.

§ 1.1502–93 Consolidated section 382

limitation (or subgroup section 382

limitation).

§ 1.1502–94 Coordination with section 382

and the regulations thereunder when a

corporation becomes a member of a

consolidated group.

§ 1.1502–95 Rules on ceasing to be a

member of a consolidated group (or loss

subgroup).

§ 1.1502–96 Miscellaneous rules.

§ 1.1502–97 Special rules under section 382

for members under the jurisdiction of a

court in a title 11 or similar case.

[Reserved]

§ 1.1502–98 Coordination with section 383.

§ 1.1502–99 Effective dates.

[The text of the above proposed sections

is the same as the text of §§ 1.1502–90T

through 1.1502–99T published

elsewhere in this issue of the Federal

Register.]

Margaret Milner Richardson,

Commissioner of Internal Revenue.

[FR Doc. 96–15827 Filed 6–26–96; 8:45 am]

BILLING CODE 4830–01–U

26 CFR Part 1

[FI–48–95]

RIN 1545–AU09

Amortizable Bond Premium

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

federal income tax treatment of bond

premium and bond issuance premium.

The proposed regulations reflect

changes to the law made by the Tax

Reform Act of 1986 and the Technical

and Miscellaneous Revenue Act of 1988.

The proposed regulations in this

document would provide needed

guidance to holders and issuers of debt

instruments. This document also

provides a notice of a public hearing on

the proposed regulations.

DATES: Written comments must be

received by September 25, 1996.

Requests to appear and outlines of

topics to be discussed at the public

hearing scheduled for October 23, 1996,

at 10 a.m. must be received by October

2, 1996.

ADDRESSES: Send submissions to:

CC:DOM:CORP:R (FI–48–95), room

5226, 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 (FI–48–95),

Courier’s Desk, Internal Revenue

Service, 1111 Constitution Avenue NW,

Washington, DC. A public hearing will

be held in the Commissioner’s

Conference Room, Internal Revenue

Building, 1111 Constitution Avenue

NW, Washington, DC.

FOR FURTHER INFORMATION CONTACT:

Concerning the regulations, William P.

Cejudo, (202) 622–4016, or Jeffrey W.

Maddrey, (202) 622–3940; concerning

submissions and the hearing, Christina

Vasquez, (202) 622–7190 (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).

Comments on the collections of

information should be sent to the Office

of Management and Budget, Attn: Desk

Officer for the Department of Treasury,

Office of Information and Regulatory

Affairs, Washington, DC 20503, with

copies to the Internal Revenue Service,

Attn: IRS Reports Clearance Officer,

T:FP, Washington, DC 20224. Comments

on the collections of information should

be received by August 26, 1996.

An agency may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless the collection of information

displays a valid control number.

The collections of information are in

proposed §§ 1.163–13(h)(3), 1.171–

4(a)(1), and 1.171–5(c)(2)(iii). This

information is required by the IRS to

monitor compliance with the federal tax

rules for amortizing bond premium and

bond issuance premium. The likely

respondents are taxpayers who either