REG-135734-14

On February 11, 2009, the Department of Treasury (Treasury Department) and the IRS published in the Federal Register proposed regulations (REG–147636–08, 74 FR 6840), including § 1.367(b)–4(e), (f), and (g), which provide guidance on the application of section 367(b) to transactions described in section 304(a)(1). The regulations were proposed by cross-reference to temporary regulations in § 1.367(b)–4T in the same issue of the Bulletin (T.D. 9444, 74 FR 6824). This document withdraws these proposed regulations because the rules in the proposed regulations do not reflect current law. See Notice 2012–15, 2012–9 I.R.B. 424 (revising the approach under the proposed regulations regarding the interaction of sections 367 and 304 and providing that section 367(a) and (b) apply fully to certain transctions described in section 304(a)(1)). In this issue of the Bulletin, the Treasury Department and the IRS are issuing additional temporary regulations in § 1.367(b)–4T(e), (f), and (g), as well as (h), that, in the case of certain exchanges, generally require an inclusion of amounts in income as a deemed dividend or recognition of realized gain that is not otherwise recognized, or both. Accordingly, the Treasury Department and the IRS issued a notice of proposed rulemaking in the 2016–18 issue of the Bulletin that proposes new rules in § 1.367(b)–4T by cross-reference to the temporary regulations.

On January 17, 2014, the Treasury Department and the IRS published in the Federal Register proposed regulations (REG–121534–12, 79 FR 3145), including in § 1.7874–4, that provide that certain stock of a foreign corporation is disregarded in calculating ownership of the foreign corporation for purposes of determining whether it is a surrogate foreign corporation for purposes of section 7874. The regulations were proposed by cross-reference to temporary regulations in § 1.7874–4T in the same issue of the Bulletin (T.D. 9654, 79 FR 3094). In this issue of the Bulletin, the Treasury Department and the IRS are amending certain of the temporary regulations in § 1.7874–4T. Accordingly, the Treasury Department and the IRS issued a notice of proposed rulemaking in the 2016–18 issue of the Bulletin that proposes rules in § 1.7874–4 by cross-reference to the amended temporary regulations. This document withdraws the previously proposed regulations that are replaced by the notice of proposed rulemaking in the 2016–18 this issue of the Bulletin.

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Accordingly, under the authority of 26 U.S.C. 7805, § 1.367(b)–4(e), (f), and (g) of the notice of proposed rulemaking (REG–147636–08) published in the Federal Register on February 11, 2009 (74 FR 6840) are withdrawn. Also, under the authority of 26 U.S.C. 7805, § 1.7874–4(c)(1)(i), (c)(1)(ii)(B), (c)(2), (d)(1)(i), (d)(1)(ii), (h), (i)(6), (i)(7)(iii)(C), (i)(7)(iv), (j)(7), (j)(8), and (k)(1), as well as paragraph (ii) of

Example 1, paragraph (ii) of Example 2, and Example 3 through Example 8 of § 1.7874–4(j), of the notice of proposed rulemaking (REG–121534–12) published in the Federal Register on January 17, 2014 (79 FR 3145) are withdrawn.