In this issue of the Bulletin, the IRS is issuing temporary regulations (T.D. 9411) relating to the elections to deduct start-up expenditures under section 195 of the Internal Revenue Code (Code), organizational expenditures of corporations under section 248, and organizational expenses of partnerships under section 709. The American Jobs Creation Act of 2004 amended these three sections of the Code to provide similar rules for deducting these types of expenses that are paid or incurred after October 22, 2004. The regulations affect taxpayers that pay or incur these expenses and provide guidance on how to elect to deduct the expenses in accordance with the new rules. The text of those temporary regulations also serves as the text of these proposed regulations.
Send submissions to: CC:PA:LPD:PR (REG-164965-04), room 5203, Internal Revenue Service, POB 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-164965-04), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC, or sent electronically via the Federal eRulemaking Portal at www.regulations.gov (IRS REG-164965-04).
Concerning the proposed regulations, Grace Matuszeski, (202) 622-7900; concerning submission of comments or a request for a public hearing, Richard Hurst, at Richard.A.Hurst@irscounsel.treas.gov or (202) 622-7180 (not toll-free numbers).
Temporary regulations in this issue of the Bulletin amend the Income Tax Regulations (26 CFR Part 1) to implement the changes to sections 195, 248, and 709 of the Code made by section 902 of the American Jobs Creation Act of 2004, Public Law 108-357 (118 Stat. 1418). The text of those temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the amendments.
This notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 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) does not apply to these regulations. 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) 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.
Before these 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 the Treasury Department request comments on the clarity of the proposed rules and how they can be made easier to understand. All comments will be available for public inspection and copying.
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 hearing will be published in the Federal Register.
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
Paragraph 1. The authority citation for part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.195-1 is revised to read as follows:
[The text of this section is the same as the text of §1.195-1T(a) through (d) published elsewhere in this issue of the Bulletin.]
Par. 3. Section 1.248-1 is amended by revising paragraphs (a) and (c), and adding paragraphs (d) through (f), to read as follows:
(a) [The text of this proposed amendment to §1.248-1(a) is the same as the text of §1.248-1T(a) published elsewhere in this issue of the Bulletin.]
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(c) through (f) [The text of these proposed amendments to §1.248-1(c) through (f) are the same as the text of §1.248-1T(c) through (f) published elsewhere in this issue of the Bulletin.]
Par. 4. Section 1.709-1 is amended by revising the section heading and paragraph (b) to read as follows:
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(b) [The text of this proposed amendment to §1.709-1(b) is the same as the text of §1.709-1T(b)(1) through (b)(5) published elsewhere in this issue of the Bulletin.]
Linda E. Stiff,The Internal Revenue Bulletin is produced and published by the Internal Revenue Service and contains IRS pronouncements affecting tax analysis under the Code and the Regulations, including but not limited to Revenue Procedures, Revenue Rulings, Notices and Announcements. Access the IRS site at https://www.irs.gov/help/irsgov-accessibility for information concerning accessibility of IRS materials. While every effort has been made to ensure that the IRB database files available through the TouchTax application are accurate, those using TouchTax for legal research should verify their results against the printed versions of the IRBs available from the IRS.