97-17468. Guidance Regarding Claims for Income Tax Convention Benefits

[Federal Register Volume 62, Number 127 (Wednesday, July 2, 1997)]
[Proposed Rules]
[Pages 35755-35756]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-17468]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-104893-97]
RIN 1545-AV10


Guidance Regarding Claims for Income Tax Convention Benefits

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations and notice of public hearing.

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SUMMARY: In the Rules and Regulations section of this issue of the 
Federal Register, the IRS is issuing temporary regulations regarding 
rules for determining whether U.S. source payments made to entities, 
including entities that are fiscally transparent in the United States 
and/or the applicable treaty jurisdiction, are eligible for treaty-
reduced tax rates. The text of those temporary regulations also serves 
as the text of these proposed regulations. This document also provides 
notice of a public hearing on these proposed regulations.

DATES: Comments and outlines of topics to be discussed at the public 
hearing scheduled for September 24, 1997, at 10 a.m. must be received 
by September 3, 1997.

ADDRESSES: Send submissions to: CC:DOM:CORP:R (REG-104893-97), room 
5228, Internal Revenue Service, POB 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may also be hand delivered between 
the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R (REG-104893-97), 
Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW., 
Washington, DC. Alternatively, taxpayers may submit comments 
electronically via the internet by selecting the ``Tax Regs'' option on 
the IRS Home Page, or by submitting comments directly to the IRS 
internet site at http://www.irs.ustreas.gov/prod/tax__regs/
comments.html. The public hearing will be held in the Commissioner's 
Conference Room, room 3313, Internal Revenue Building, 1111 
Constitution Avenue, NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Elizabeth 
Karzon, [phone]; concerning submissions and the hearing, 
Evangelista Lee, [phone] (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

    Temporary regulations in the Rules and Regulations portion of this 
issue of the Federal Register amend the Income Tax Regulations (26 CFR 
part 1) relating to section 894. The temporary regulations contain 
rules relating to eligibility for benefits under income tax conventions 
for payments to flow-through entities or arrangements.
    The text of those temporary regulations also serves as the text of 
these proposed regulations. The preamble to the temporary regulations 
explains the temporary regulations.

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 also has 
been determined that section 553(b) of the Administrative Procedure Act 
(5 U.S.C. chapter 5) does not apply to these regulations and, because 
these regulations do not impose on small entities a collection of 
information requirement, the Regulatory Flexibility Act (5 U.S.C. 
chapter 6) does not apply. Therefore, a 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 Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any comments that are submitted timely 
to the IRS. All comments will be available for public inspection and 
copying.
    A public hearing has been scheduled for September 24, 1997, at 10 
a.m. in the Commissioner's Conference Room, room 3313, Internal Revenue 
Building, 1111 Constitution Avenue NW., Washington DC. Because of 
access restrictions, visitors will not be admitted beyond the Internal 
Revenue Building lobby more

[[Page 35756]]

than 15 minutes before the hearing starts.
    The rules of 26 CFR 601.601(a)(3) apply to the hearing.
    Persons who wish to present oral comments at the hearing must 
submit comments and an outline of the topics to be discussed and the 
time to be devoted to each topic by September 3, 1997.
    A period of 10 minutes will be allotted to each person for making 
comments.
    An agenda showing the scheduling of the speakers will be prepared 
after the deadline for receiving outlines has passed. Copies of the 
agenda will be available free of charge at the hearing.

Proposed Effective Date

    This amendment applies to payments received by an entity on or 
after January 1, 1998.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 part 1 is proposed to be amended as follows:

PART 1--INCOME TAXES

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

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

    Par. 2. In Sec. 1.894-1, paragraph (d) is added to read as follows:


Sec. 1.894-1  Income affected by treaty.

* * * * *
    [The text of proposed paragraph (d) is the same as the text of 
Sec. 1.894-1T(d) published elsewhere in this issue of the Federal 
Register].
Michael P. Dolan,
Acting Commissioner of Internal Revenue.
[FR Doc. 97-17468 Filed 6-30-97; 12:19 pm]
BILLING CODE 4830-01-U