[Federal Register Volume 60, Number 82 (Friday, April 28, 1995)]
[Rules and Regulations]
[Pages 20898-20899]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10424]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
[TD 8594]
RIN 1545-AS97
Losses on Small Business Stock
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations.
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SUMMARY: This document contains final regulations amending regulations
under section 1244 relating to losses on small business stock. The
final regulations remove the requirement that a taxpayer claiming a
section 1244 ordinary loss file an information statement with the
taxpayer's income tax return.
DATES: These regulations are effective April 27, 1995.
For dates of applicability of these regulations, see ``Effective
Date'' under SUPPLEMENTARY INFORMATION portion of preamble.
FOR FURTHER INFORMATION CONTACT: Kirsten L. Simpson, (202) 622-7790
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information contained in these final regulations
has been reviewed and approved by the Office of Management and Budget
in accordance with the Paperwork Reduction Act (44 U.S.C. 3504(h))
under control number 1545-1447. The estimated annual burden per
recordkeeper varies from .10 hours to .30 hours, depending on
individual circumstances, with an estimated average of .20 hours.
Comments concerning the accuracy of this burden estimate and
suggestions for reducing this burden should be sent to the Internal
Revenue Service, Attn: IRS Reports Clearance Officer, PC:FP,
Washington, DC 20224, and to the Office of Management and Budget, Attn:
Desk Officer for the Department of the Treasury, Office of Information
and Regulatory Affairs, Washington, DC 20503.
Background
On November 15, 1994, a notice of proposed rulemaking (CO-46-94),
amending regulations under section 1244 of the Internal Revenue Code
relating to losses on small business stock, was published in the
Federal Register (59 FR 58800). No public hearing was requested or
held.
One written comment responding to the notice was received. The
comment was favorable. The regulations proposed by CO-46-94 are adopted
without revision by this Treasury decision.
Explanation of Provision
Section 1.1244(e)-1(b) of the Income Tax Regulations is revised to
eliminate the requirement that a taxpayer file an information statement
with the taxpayer's income tax return. However, because a taxpayer who
claims an ordinary loss under section 1244 still bears the burden of
establishing that the deduction is proper, Sec. 1.1244(e)-1(b) is
revised to state that a person who claims an ordinary loss with respect
to stock under section 1244 must have records sufficient to establish
that the taxpayer is entitled to the loss and satisfies the
requirements of section 1244.
Effective Date
These regulations are effective for open taxable years beginning
after December 31, 1953, the effective date of Treasury Decision 6495,
which prescribed regulations under section 1244.
Special Analyses
It has been determined that this Treasury decision is not a
significant regulatory action as defined in EO 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)
and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do not apply to
these regulations, and, therefore, a Regulatory Flexibility Analysis is
not required. Pursuant to section 7805(f) of the Internal Revenue Code,
the notice of proposed rulemaking preceding these regulations was
submitted to the Small Business Administration for comment on its
impact on small business.
Drafting Information
The principal author of these regulations is Kirsten L. Simpson,
Office of Assistant Chief Counsel (Corporate), IRS. However, other
personnel from the IRS and Treasury Department participated in their
development.
List of Subjects
26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
26 CFR Part 602
Reporting and recordkeeping requirements.
Adoption of Amendments to the Regulations
Accordingly, 26 CFR parts 1 and 602 are amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 is amended by adding
an entry in numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * * Section 1.1244(e)-1 also issued
under 26 U.S.C. 1244(e).* * *
Par. 2. Section 1.1244(e)-1 is amended as follows:
1. The section heading is revised.
2. In paragraph (a)(1), the reference in the second sentence to
``paragraph (c)(2) of Sec. 1.1244(c)-2'' is removed and
``Sec. 1.1244(c)-2(b)(2)'' is added in its place.
3. Paragraph (b) is revised.
The revisions read as follows:
Sec. 1.1244(e)-1 Records to be kept.
* * * * *
(b) By the taxpayer. A person who claims an ordinary loss with
respect to [[Page 20899]] stock under section 1244 must have records
sufficient to establish that the taxpayer is entitled to the loss and
satisfies the requirements of section 1244. See also section 6001,
requiring records to be maintained.
PART 602--OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT
Par. 3. The authority citation for part 602 continues to read as
follows:
Authority: 26 U.S.C. 7805.
Par. 4. In Sec. 602.101, paragraph (c) is amended by revising the
entry in the table for Sec. 1.1244(e)-1 to read as follows:
1.1244(e)-1................................................ 1545-0123
1545-1447
Margaret Milner Richardson,
Commissioner of the Internal Revenue.
Dated: March 27, 1995.
Leslie Samuels,
Assistant Secretary for the Treasury.
[FR Doc. 95-10424 Filed 4-27-95; 8:45 am]
BILLING CODE 4830-01-U
