[Federal Register Volume 60, Number 106 (Friday, June 2, 1995)]
[Rules and Regulations]
[Pages 28719-28720]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13444]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 301
[TD 8596]
RIN 1545-AL20
Payment of Excess Expenses Incurred by Purchaser in Connection
With the Redemption of Real Property Under Internal Revenue Code
Section 7425
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations.
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SUMMARY: This document contains final regulations regarding the payment
of excess expenses incurred by a purchaser at a nonjudicial sale in
connection with redemptions of real property by the United States.
These regulations affect purchasers in connection with the redemption
of real property.
EFFECTIVE DATE: June 2, 1995.
FOR FURTHER INFORMATION CONTACT: Robert A. Walker, (202) 622-3640 (not
a toll-free call).
SUPPLEMENTARY INFORMATION:
Background
These final regulations amend the Income Tax Regulations (26 CFR
part 301) under section 7425 of the Internal Revenue Code (Code). The
regulations 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.
The IRS published a notice of proposed rulemaking in the Federal
Register on May 23, 1994 (59 FR 26608) providing proposed rules under
section 7425 of the Code. No public comments were received and
accordingly, the final regulations adopt the proposed regulations with
only technical changes.
Explanation of Provisions
Section 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. These
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 regulations establish a 15-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.
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 was submitted to the Chief Counsel
for Advocacy of the Small Business Administration for comment on its
impact on small business.
Drafting Information. The principal author of these final
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.
Adoption of Amendments to the Regulations
Accordingly, 26 CFR part 301 is 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. In Sec. 301.7425-4, paragraph (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 15 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.
* * * * *
Approved: April 27, 1995.
Margaret Milner Richardson,
Commissioner of Internal Revenue.
Leslie Samuels,
Assistant Secretary of the Treasury.
[FR Doc. 95-13444 Filed 6-1-95; 8:45 am]
BILLING CODE 4830-01-U
