In this issue of the Bulletin, the IRS is issuing temporary regulations (T.D. 9577) that provide guidance relating to a new provision of the Internal Revenue Code (Code) that addresses situations in which foreign income taxes have been separated from the related income. Those regulations are necessary to provide guidance on applying the new statutory provision, which was enacted as part of legislation commonly referred to as the Education Jobs and Medicaid Assistance Act (EJMAA) on August 10, 2010. The text of those temporary regulations published in this issue of the Bulletin also serves as the text of these proposed regulations.
Send submissions to CC:PA:LPD:PR (REG-132736-11), room 5205, Internal Revenue Service, PO Box 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-132736-11), Courier’s desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC 20044, or sent electronically, via the Federal eRulemaking Portal at www.regulations.gov (IRS REG-132736-11).
Concerning the regulations, Suzanne M. Walsh, (202) 622-3850; concerning submissions of comments, Oluwafunmilayo Taylor, (202) 622-7180 (not toll-free numbers).
Temporary regulations in this issue of the Bulletin contain amendments to the Income Tax Regulations (26 CFR Part 1) which provide rules relating to a new provision of the Code that was enacted as part of EJMAA (Public Law 111-226, 124 Stat. 2389 (2010)) which addresses situations in which foreign income taxes have been separated from the related income. The text of those regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the temporary regulations and these proposed regulations. The regulations affect taxpayers claiming foreign tax credits.
It has been determined that 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 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, and 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), these regulations have 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 comments that are submitted timely to the IRS as prescribed in this preamble under “Addresses.” The Treasury Department and the IRS request comments on all aspects of the proposed rules. All comments will be available at www.regulations.gov or upon request. 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 public hearing will be published in the Federal Register.
Accordingly, 26 CFR part 1 is 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 1.704-1 is amended as follows:
1. Paragraph (b)(1)(ii)(b)(3) is added.
2. Paragraph (b)(4)(viii)(d)(3) and paragraph (b)(5) Example 24 are revised.
The addition and revisions read as follows:
* * * * *
(b) * * *
(1) * * *
(ii) * * *
(b) * * *
(3) [The text of the proposed amendments to §1.704-1(b)(1)(ii)(b)(3) is the same as the text of §1.704-1T(b)(1)(ii)(b)(3) published elsewhere in this issue of the Bulletin.]
* * * * *
(4) * * *
(viii) * * *
(d) * * *
(3) [The text of the proposed amendments to §1.704-1(b)(4)(viii)(d)(3) is the same as the text of §1.704-1T(b)(4)(viii)(d)(3) published elsewhere in this issue of the Bulletin.]
* * * * *
(5) * * *
Example 24. [The text of the proposed amendments to §1.704-1(b)(5) Example 24 is the same as the text of §§1.704-1T(b)(5) Example 24 published elsewhere in this issue of the Bulletin.]
* * * * *
Par. 3. Section 1.909-0 is added to read as follows:
[The text of proposed §1.909-0 is the same as the text of §1.909-0T published elsewhere in this issue of the Bulletin.]
Par. 4. Sections 1.909-1 through 1.909-6 are added to read as follows:
[The text of proposed §1.909-1 is the same as the text of §1.909-1T(a) through (e) published elsewhere in this issue of the Bulletin.]
[The text of proposed §1.909-2 is the same as the text of §1.909-2T(a) through (c) published elsewhere in this issue of the Bulletin.]
[The text of proposed §1.909-3 is the same as the text of §1.909-3T(a) through (c) published elsewhere in this issue of the Bulletin.]
[The text of proposed §1.909-4 is the same as the text of §1.909-4T(a) through (b) published elsewhere in this issue of the Bulletin.]
[The text of proposed §1.909-5 is the same as the text of §1.909-5T(a) through (c) published elsewhere in this issue of the Bulletin.]
[The text of proposed §1.909-6 is the same as the text of §1.909-6T(a) through (h) published elsewhere in this issue of the Bulletin.]
Steven T. Miller,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.