[Federal Register Volume 74, Number 101 (Thursday, May 28, 2009)]
[Rules and Regulations]
[Pages 25429-25430]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-12298]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9450]
RIN 1545-BE73


Information Reporting for Lump-Sum Timber Sales

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

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SUMMARY: This document contains final regulations that provide guidance 
regarding the information reporting requirements contained in section 
6045(e) of the Internal Revenue Code (Code) on sales or exchanges of 
standing timber for lump-sum (outright) payments. The final regulations 
amend Sec.  1.6045-4 of the Income Tax Regulations to require real 
estate reporting persons, as defined in section 6045(e)(2) of the Code, 
to report lump-sum payments received by sellers (landowners) for sales 
or exchanges of standing timber. The final regulations do not change 
the information reporting requirements that currently apply to sales or 
exchanges of standing timber for pay-as-cut (contingent) payments under 
section 6050N of the Code.

DATES: 
    Effective date: These regulations are effective on May 28, 2009.
    Applicability date: The amendments to paragraphs (b)(2)(i)(E), 
(b)(2)(ii) and (c)(2)(i) of Sec.  1.6045-4 shall apply to sales or 
exchanges of standing timber for lump-sum payments completed after May 
28, 2009.

FOR FURTHER INFORMATION CONTACT: Timothy S. Sheppard of the Office of 
Chief Counsel (Procedure and Administration), at (202) 622-4910.

SUPPLEMENTARY INFORMATION: 

Paperwork Reduction Act

    The collection of information contained in these final regulations 
has been reviewed and approved by the Office of Management and Budget 
(OMB) in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)) under control number 1545-1085. The collection of information 
in these final regulations is

[[Page 25430]]

in Sec.  1.6045-4. This information is required by the IRS to verify 
compliance with income reporting obligations with respect to lump-sum 
sales of timber. This information will be used to enable the IRS to 
verify that a taxpayer is reporting the correct amount of income.
    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 OMB control number.
    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 
return information are confidential, as required by 26 U.S.C. 6103.

Background

    This document contains amendments to the Income Tax Regulations 
under section 6045(e) of the Code. These amendments provide that sales 
or exchanges of standing timber for lump-sum payments are ``reportable 
real estate'' transactions under Sec.  1.6045-4(b)(2) and, thus, shall 
be reported as provided in section 6045(e) and the regulations.
    On November 29, 2007, a notice of proposed rulemaking (REG-155669-
04) was published in the Federal Register (72 FR 67589). No comments 
were received from the public in response to the notice of proposed 
rulemaking and no public hearing was requested or held. Accordingly, 
the proposed regulations are adopted by this Treasury decision. The 
final regulations make certain minor clarifying changes to the rules of 
the proposed regulations.

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in Executive Order 12866. 
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. It is hereby 
certified that these regulations will not have a significant economic 
impact on a substantial number of small entities. This certification is 
based on the fact that the collection of information burden imposed by 
these regulations flows directly from section 6045(e) of the Code. 
Moreover, requiring information reporting as described in the preamble 
with regard to sales or exchanges of standing timber for lump-sum 
payments imposes minimal burden in time or expense. 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, the notice of proposed rulemaking preceding this regulation has 
been submitted to the Chief Counsel for Advocacy of the Small Business 
Administration for comment on its impact on small business.

Drafting Information

    The principal author of these regulations is Timothy S. Sheppard of 
the Office of Associate Chief Counsel (Procedure and Administration). 
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.

Adoption of Amendments to the Regulations

0
Accordingly, 26 CFR part 1 is 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 1.6045-4 is amended by:
0
1. Redesignating paragraph (b)(2) introductory text as (b)(2)(i) 
introductory text.
0
2. In redesignated paragraph (b)(2)(i), further redesignating 
paragraphs (2)(i), (2)(ii), (2)(iii), and (2)(iv) as paragraphs 
(2)(i)(A), (2)(i)(B), (2)(i)(C), and (2)(i)(D), respectively.
0
3. Redesignating the undesignated text after newly designated paragraph 
(b)(2)(i)(D) as paragraph (b)(2)(ii) and adding a sentence at the end 
of newly-designated paragraph (b)(2)(ii).
0
4. Adding new paragraph (b)(2)(i)(E).
0
5. Revising paragraphs (c)(2)(i) and (s).
    The revisions and additions read as follows:


Sec.  1.6045-4  Information reporting on real estate transactions with 
dates of closing on or after January 1, 1991.

* * * * *
    (b) * * *
    (2) * * *
    (i) * * *
    (E) Any non-contingent interest in standing timber.
    (ii) * * * Further, the term ``ownership interest'' includes any 
contractual interest in a sale or exchange of standing timber for a 
lump-sum payment that is fixed and not contingent.
* * * * *
    (c) * * *
    (2) * * *
    (i) An interest in surface or subsurface natural resources (for 
example, water, ores, and other natural deposits) or crops, whether or 
not such natural resources or crops are severed from the land. For 
purposes of this section, the terms ``natural resources'' and ``crops'' 
do not include standing timber.
* * * * *
    (s) Effective/applicability date. This section applies for real 
estate transactions with dates of closing (as determined under 
paragraph (h)(2)(ii) of this section) that occur on or after January 1, 
1991. The amendments to paragraphs (b)(2)(i)(E), (b)(2)(ii) and 
(c)(2)(i) of this section shall apply to sales or exchanges of standing 
timber for lump-sum payments completed after May 28, 2009.

Linda E. Stiff,
Deputy Commissioner for Services and Enforcement.
    Approved: May 15, 2009.
Bernard J. Knight, Jr.,
Acting General Counsel of the Treasury.
[FR Doc. E9-12298 Filed 5-27-09; 8:45 am]
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