[Federal Register Volume 59, Number 98 (Monday, May 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12465]
[[Page Unknown]]
[Federal Register: May 23, 1994]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 301
[GL-520-87]
RIN 1545-AL20
Payment of Excess Expenses Incurred by Purchaser in Connection
With the Redemption of Real Property Under I.R.C. Sec. 7425
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of Proposed Rulemaking.
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SUMMARY: This document contains a proposed regulatory amendment
relating to the payment of excess expenses incurred by a purchaser at a
nonjudicial sale in connection with redemptions of real property by the
United States under Internal Revenue Code section 7425. The existing
regulations provide guidelines for submitting claims for excess
expenses incurred by a purchaser, or his or her successor in interest,
after a foreclosure sale and before redemption, but do not provide a
cutoff date for submission of claims for excess expenses. The intent of
the proposed regulations is to provide such a cutoff date. These
proposed regulations provide that when requested by the district
director, a purchaser at a nonjudicial foreclosure sale must submit a
written claim for excess expenses within 30 days of the request for
such claim to be considered. If, however, the purchaser does not submit
a claim at that time, but does incur excess expenses, the purchaser may
submit a claim within 30 days after the redemption. Failure to submit a
claim within that time period forecloses the right to do so.
DATES: Written comments and requests for a public hearing must be
received by July 22, 1994.
ADDRESSES: Send submissions to: CC:DOM:CORP:T:R (GL-520-87), room 5228,
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington,
DC 20044. In the alternative, submissions may be hand delivered between
the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:T:R (GL-520-87),
Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW.,
Washington, DC.
FURTHER INFORMATION CONTACT: Robert A. Walker, (202) 622- 3640 (not a
toll-free call).
SUPPLEMENTARY INFORMATION:
Background
This document contains proposed regulations that would amend the
Income Tax Regulations (26 CFR part 301) under section 7425 of the
Internal Revenue Code (Code). The regulations would impose a time limit
within which a purchaser of real property at a nonjudicial sale may
submit a claim for excess expenses to the United States when it is
redeeming such real property. The United States will not consider any
claim made after expiration of the time limits.
Explanation of Provisions
Treasury Regulation Sec. 301.7425-4(b)(3)(ii) does not provide a
specific time period within which the purchaser at a nonjudicial
foreclosure sale may submit a claim for excess expenses after the
redemption. The proposed regulations clarify that claims for excess
expenses must be submitted within the time periods specified in the
regulations in order for the purchaser to be reimbursed.
The proposed regulations establish a 30-day limit after a request
is made by the district director for the purchaser at a nonjudicial
sale or his or her successor in interest to furnish a written itemized
statement of expenses in excess of income. Since excess expenses could
be incurred after a district director's request, a purchaser who fails
to submit a claim at this time may submit a claim within 30 days after
the date of redemption. These limits will allow the purchaser a
reasonable amount of time within which to determine the amount of any
excess expenses and to submit a claim to the United States. After the
expiration of the relevant time periods, the United States may
distribute all surplus proceeds associated with the sale of the
redeemed property unhindered by any possibility of a claim for excess
expenses made in the future when the surplus proceeds of sale are no
longer available to satisfy such a claim. Adding time limits will also
expedite the handling of redemption sales by earlier disposition of
surplus proceeds of sale. Disputes concerning properly submitted claims
will still be resolved by the United States within a reasonable time
after the redemption period. The Service solicits comments as to
whether the 30-day period after the date of redemption for a purchaser
to submit an itemized statement of excess expenses or to submit
additional excess expenses is adequate.
Special Analyses
It has been determined that this notice of proposed rulemaking 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, an initial Regulatory
Flexibility Analysis is not required. Pursuant to section 7805(f) of
the Internal Revenue Code, this notice of proposed rulemaking will be
submitted to the Chief Counsel for Advocacy of the Small Business
Administration for comment on its impact on small business.
Comments and Requests for a Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments that are submitted
timely (preferably a signed original and eight copies) to the IRS. All
comments will be available for public inspection and copying. A public
hearing may be scheduled if requested in writing by a 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.
Drafting Information
The principal author of these regulations is Robert A. Walker,
Office of Assistant Chief Counsel (General Litigation). However, other
personnel from the IRS and Treasury Department participated in their
development.
List of Subjects in 26 CFR Part 301
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income
taxes, Penalties, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 301 is proposed to be amended as follows:
PART 301--PROCEDURE AND ADMINISTRATION
Paragraph 1. The authority citation for part 301 continues to read
in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 301.7425-4(b)(3)(ii) is amended by revising the
third sentence and adding a fourth sentence to read as follows:
Sec. 301.7425-4 Discharge of liens; redemption by United States.
* * * * *
(b) * * *
(3) * * *
(ii) * * * If a purchaser or his or her successor in interest has
failed to furnish the written itemized statement within 30 days after
the request therefor is made by the district director, or there is a
disagreement as to the amount properly payable under paragraph
(b)(1)(iii) of this section, or if there were additional excess
expenses that were not claimed in the original itemized statement, the
purchaser or his or her successor in interest may submit a written
itemized statement to the district director within 30 days after the
date of redemption. If the purchaser or his or her successor in
interest fails to timely submit such a written itemized statement, no
amount shall be payable for expenses in excess of income.
* * * * *
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 94-12465 Filed 5-20-94; 8:45 am]
BILLING CODE 4830-01-U
