In this issue of the Bulletin, the IRS is issuing final and temporary regulations that remove any reference to, or requirement of reliance on, credit ratings in regulations under the Internal Revenue Code (Code) and provide substitute standards of credit-worthiness where appropriate. The Dodd-Frank Wall Street Reform and Consumer Protection Act requires each Federal agency to take such actions regarding its regulations. These regulations affect persons subject to various provisions of the Code. The text of the temporary regulations published in this issue of the Bulletin also serves as the text of the proposed regulations.
Written and electronic comments and requests for a public hearing must be received by September 5, 2011.
Send submissions to: CC:PA:LPD:PR (REG-118809-11), Room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered to: CC:PA:LPD:PR Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-118809-11), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC, or sent electronically via the Federal eRulemaking Portal at http://www.regulations.gov (IRS REG-118809-11).
Concerning the proposed regulations, Arturo Estrada, (202) 622-3900; concerning submissions of comments and requests for a public hearing, Oluwafunmilayo Taylor, (202) 622-7180 (not toll-free numbers).
Section 939A(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111-203 (124 Stat. 1376 (2010)), (the “Dodd-Frank Act”), requires each Federal agency to review its regulations that require the use of an assessment of credit-worthiness of a security or money market instrument, and to review any references or requirements in those regulations regarding credit ratings. Section 939A(b) directs each agency to modify any regulation identified in the review required under section 939A(a) by removing any reference to, or requirement of reliance on, credit ratings and substituting a standard of credit-worthiness that the agency deems appropriate. Numerous provisions under the Code are affected.
Temporary regulations in this issue of the Bulletin amend the Income Tax Regulations (26 CFR part 1) under sections 150, 171, 197, 249, 475, 860G, and 1001 of the Code. The temporary regulations also amend the Manufacturers and Retailers Excise Tax Regulations (26 CFR part 48) under section 4101 of the Code. The text of the temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the temporary regulations and the proposed regulations.
It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. It has 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 these 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 notice of proposed rulemaking 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 specifically request comments on the clarity of the proposed regulations and how they may be made easier to understand. All comments will be available for public inspection and copying. A public hearing may be scheduled if requested in writing by any person that timely submits written 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 parts 1 and 48 are 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 1.150-1 is amended as follows:
1. Paragraph (a)(4) is added.
2. In paragraph (b), the definition of Issuance costs, is revised.
The addition and revision read as follows:
* * * * *
(4) [The text of the proposed amendments to §1.150-1(a)(4) is the same as the text of §1.150-1T(a)(4) published elsewhere in this issue of the Bulletin].
(b) * * *
Issuance costs. [The text of the proposed amendments to §1.150-1(b), Issuance costs, is the same as the text of §1.150-1T(b), Issuance costs, published elsewhere in this issue of the Bulletin].
* * * * *
Par. 3. Section 1.171-1 is amended by revising paragraph (f) Example 2 to read as follows:
* * * * *
(f) * * *
Example 2. [The text of the proposed amendments to §1.171-1(f) Example 2 is the same as the text of §1.171-1T(f) Example 2 published elsewhere in this issue of the Bulletin].
Par. 4. Section 1.197-2 is amended by revising paragraph (b)(7) to read as follows:
* * * * *
(b) * * *
(7) [The text of the proposed amendments to §1.197-2(b)(7) is the same as the text of §1.197-2T(b)(7) published elsewhere in this issue of the Bulletin].
* * * * *
Par. 5. Section 1.249-1 is amended by revising paragraphs (e)(2)(ii) and adding paragraph (f)(3) to read as follows:
* * * * *
(e) * * *
(2) * * *
(ii) [The text of the proposed amendments to §1.249-1(e)(2)(ii) is the same as the text of §1.249-1T(e)(2)(ii) published elsewhere in this issue of the Bulletin].
* * * * *
(f) Effective/applicability dates. * * *
(3) [The text of the proposed amendments to §1.249-1(f)(3) is the same as the text of §1.249-1T(f)(3) published elsewhere in this issue of the Bulletin].
* * * * *
Par. 6. Section 1.475(a)-4 is amended by revising paragraph (d)(4) Examples 1, 2, and 3 and paragraph (n) to read as follows:
* * * * *
(d) * * *
(4) * * *
Example 1. [The text of the proposed amendments to §1.475(a)-(4)(d)(4) Example 1 is the same as the text of §1.475(a)-4T(d)(4) Example 1 published elsewhere in this issue of the Bulletin].
Example 2. [The text of the proposed amendments to §1.475(a)-4(d)(4) Example 2 is the same as the text of §1.475(a)-4T(d)(4) Example 2 published elsewhere in this issue of the Bulletin].
Example 3. [The text of the proposed amendments to §1.475(a)-4(d)(4) Example 3 is the same as the text of §1.475(a)-4T(d)(4) Example 3 published elsewhere in this issue of the Bulletin].
* * * * *
Par. 7. Section 1.860G-2 is amended by revising paragraphs (g)(3)(ii)(B), (C), and (D) to read as follows:
* * * * *
(g) * * *
(3) * * *
(ii) * * *
(B) [The text of the proposed amendments to §1.860G-2(g)(3)(ii)(B) is the same as the text of §1.860G-2T(g)(3)(ii)(B) published elsewhere in this issue of the Bulletin].
(C) [The text of the proposed amendments to §1.860G-2(g)(3)(ii)(C) is the same as the text of §1.860G-2T(g)(3)(ii)(C) published elsewhere in this issue of the Bulletin].
(D) [The text of the proposed amendments to §1.860G-2(g)(3)(ii)(D) is the same as the text of §1.860G-2T(g)(3)(ii)(D) published elsewhere in this issue of the Bulletin].
* * * * *
Par. 8. Section 1.1001-3 is amended as follows:
1. Paragraph (d) Example 9 is revised.
2. Paragraph (e)(4)(iv)(B) is revised.
3. Paragraph (e)(5)(ii)(B)(2) is revised.
4. Paragraph (g) Examples 1, 5, and 8 are revised.
The revisions read as follows:
* * * * *
(d) * * *
Example 9. [The text of the proposed amendments to §1.1001-3(d) Example 9 is the same as the text of §1.1001-3T(d) Example 9 published elsewhere in this issue of the Bulletin].
* * * * *
(e) * * *
(4) * * *
(iv) * * *
(B) [The text of the proposed amendments to §1.1001-3(e)(4)(iv)(B) is the same as the text of §1.1001-3T(e)(4)(iv)(B) published elsewhere in this issue of the Bulletin].
* * * * *
(5) * * *
(ii) * * *
(B) * * *
(2) [The text of the proposed amendments to §1.1001-3(e)(5)(ii)(B)(2) is the same as the text of §1.1001-3T(e)(5)(ii)(B)(2) published elsewhere in this issue of the Bulletin].
* * * * *
(g) * * *
Example 1. [The text of the proposed amendments to §1.1001-3(g) Example 1 is the same as the text of §1.1001-3T(g) Example 1 published elsewhere in this issue of the Bulletin].
* * * * *
Example 5. [The text of the proposed amendments to §1.1001-3(g) Example 5 is the same as the text of §1.1001-3T(g) Example 5 published elsewhere in this issue of the Bulletin].
* * * * *
Example 8. [The text of the proposed amendments to §1.1001-3(g) Example 8 is the same as the text of §1.1001-3T(g) Example 8 published elsewhere in this issue of the Bulletin].
Par. 9. The authority citation for part 48 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 10. Section 48.4101-1 paragraphs (f)(4)(ii)(B) and (l)(5) are revised to read as follows:
* * * * *
(f) * * *
(4) * * *
(ii) * * *
(B) [The text of the proposed amendments to §48.4101-1(f)(4)(ii)(B) is the same as the text of §48.4101-1T(f)(4)(ii)(B) published elsewhere in this issue of the Bulletin].
* * * * *
(l) * * *
(5) [The text of the proposed amendments to §48.4101-1(l)(5) is the same as the text of §48.4101-1T(l)(5) published elsewhere in this issue of the Bulletin].
Steven T. Miller,These regulations were drafted by personnel in the Office of Associate Chief Counsel (Financial Institutions and Products), the Office of Associate Chief Counsel (Income Tax and Accounting), the Office of Associate Chief Counsel (International) and the Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the IRS and the Treasury Department participated in their development.
* * * * *
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.