05-22260. Guidance Under Section 951 for Determining Pro Rata Share; Correction

AGENCY:

Internal Revenue Service (IRS), Treasury.

ACTION:

Correcting amendment.

SUMMARY:

This document corrects final regulations (TD 9222) that were published in the Federal Register on Thursday, August 25, 2005 (70 FR 49864). The final regulations under section 951(a) of the Internal Revenue Code (Code) provide guidance for determining a United States shareholder's pro rata share of a controlled foreign corporation's (CFC's) subpart F income, previously excluded subpart F income withdrawn from investment in less developed countries, and previously excluded subpart F income withdrawn from foreign base company shipping operations.

DATES:

This correction is effective August 25, 2005.

FOR FURTHER INFORMATION CONTACT:

Jeffrey L. Vinnik, [phone] (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

The final regulations (TD 9222) that are the subject of this correction are under section 951(a) of the Internal Revenue Code.

Need for Correction

As published, the final regulations (TD 9222) contain errors that may prove to be misleading and are in need of clarification.

List of Subjects 26 CFR Part 1

• Income taxes
• Reporting and recordkeeping requirements

Correction of Publication

Accordingly, 26 CFR Part 1 is corrected by making the following correcting amendment:

PART 1—INCOME TAXES

Paragraph 1. The authority citation for part 1 continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

§ 1.951-1

[Corrected]

1. In § 1.951-1(a), the undesignated paragraph is designated as paragraph (a)(3).

2. Section 1.951-1(e)(6), paragraph (ii) of Example 5, sixth sentence, the language “common shareholders by reference to the” is removed and the language “common shares by reference to the” is added in its place.

3. Section 1.951-1(e)(6), paragraph (i) of Example 7, sixth sentence, the language “income of United States shareholder under” is removed and the language “income of a United States shareholder under” is added in its place.

4. Section 1.951-1(e)(6), paragraph (i) of Example 8, third sentence, the language “Foreign Individual N, a foreign individual.” is removed and the language “Individual N, a foreign individual.” is added in its place.

Cynthia E. Grigsby,

Acting Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel, (Procedure and Administration).