82 FR 32281 - Transactions Involving the Transfer of No Net Value

DEPARTMENT OF THE TREASURY
Internal Revenue Service

Federal Register Volume 82, Issue 133 (July 13, 2017)

Page Range		32281-32282
FR Document		2017-14723

This document withdraws the remaining part of a notice of proposed rulemaking containing proposed regulations that would have required an exchange or distribution of net value for certain corporate formations and reorganizations to qualify for nonrecognition treatment under the Internal Revenue Code (Code). Other parts of the notice of proposed rulemaking were previously adopted as final regulations. The proposed regulations being withdrawn also addressed the treatment of certain distributions not qualifying for tax-free treatment under section 332 of the Code. The proposed regulations being withdrawn would have affected corporations and their shareholders.

Federal Register, Volume 82 Issue 133 (Thursday, July 13, 2017)

[Federal Register Volume 82, Number 133 (Thursday, July 13, 2017)]
[Proposed Rules]
[Pages 32281-32282]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-14723]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-139633-08]
RIN 1545-BI18


Transactions Involving the Transfer of No Net Value

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Partial withdrawal of notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: This document withdraws the remaining part of a notice of 
proposed rulemaking containing proposed regulations that would have 
required an exchange or distribution of net value for certain corporate 
formations and reorganizations to qualify for nonrecognition treatment 
under the Internal Revenue Code (Code). Other parts of the notice of 
proposed rulemaking were previously adopted as final regulations. The 
proposed regulations being withdrawn also addressed the treatment of 
certain distributions not qualifying for tax-free treatment under 
section 332 of the Code. The proposed regulations being withdrawn would 
have affected corporations and their shareholders.

DATES: As of July 13, 2017, the proposed revisions to Sec.  1.332-2(b) 
and (e); the proposed addition of Example 2 to Sec.  1.332-2(e); the 
proposed additions of Sec.  1.351-1(a)(1)(iii) and (a)(1)(iv); the 
proposed addition of Example 4 to Sec.  1.351-1(a)(2); the proposed 
amendments to Sec.  1.368-1(a) and (b); the proposed addition of Sec.  
1.368-1(f); and the proposed revision to Sec.  1.368-2(d)(1) in the 
notice of proposed rulemaking (REG-163314-03) that was published in the 
Federal Register (70 FR 11903) on March 10, 2005 are withdrawn.

FOR FURTHER INFORMATION CONTACT: Jean Broderick at (202) 317-6848 (not 
a toll-free number).

SUPPLEMENTARY INFORMATION: 

Background

    On March 10, 2005, the Department of the Treasury (the Treasury 
Department) and the IRS published a notice of proposed rulemaking (REG-
163314-03) in the Federal Register (70 FR 11903) containing proposed 
regulations under sections 332, 351, and 368 (2005 Proposed 
Regulations). The 2005 Proposed Regulations generally would have 
provided that the non-recognition rules in subchapter C of chapter 1 of 
subtitle 1 of the Code do not apply unless there is an exchange (or, in 
the case of section 332, a distribution) of net value (the net value 
requirement). The 2005 Proposed Regulations also provided that section 
332 would apply only if the recipient corporation receives some payment 
for each class of stock it owns in the liquidating corporation. 
Finally, the 2005 Proposed Regulations provided guidance on the 
circumstances in which (and the extent to which) creditors of a 
corporation are treated as proprietors of the corporation in 
determining whether continuity of interest is preserved in a potential 
reorganization (Creditor Continuity of Interest).
    On December 12, 2008, the Treasury Department and the IRS adopted 
the Creditor Continuity of Interest provisions of the 2005 Proposed 
Regulations as final regulations (TD 9434) published in the Federal 
Register (73 FR 75566). Minor portions of the 2005 Proposed Regulations 
that reflected statutory changes to sections 332 and 351 were adopted 
as final regulations as part of a Treasury decision adopting final 
regulations under sections 334(b)(1)(B) and 362(e)(1) (TD 9759), 
published in the Federal Register (81 FR 17066) on March 28, 2016. The 
Treasury Department and the IRS have decided to withdraw the remainder 
of the 2005 Proposed Regulations.
    The Treasury Department and the IRS are of the view that current 
law is sufficient to ensure that the reorganization provisions and 
section 351 are used to accomplish readjustments of continuing 
interests in property held in modified corporate form. With respect to 
section 332, the holdings of H.K. Porter Co. v. Commissioner, 87 T.C. 
689 (1986), Spaulding Bakeries Inc. v. Commissioner, 27 T.C. 684 
(1957), aff'd, 252 F.2d 293 (2d Cir., 1958), H.G. Hill Stores, Inc. v. 
Commissioner, 44 B.T.A. 1182 (1941), Rev. Rul. 2003-125, 2003-2 C.B. 
1243, Rev. Rul. 68-602, 1968-2 C.B. 135, Rev. Rul. 68-359, 1968-2 C.B. 
161, and Rev. Rul. 59-296, 1959-2 C.B. 87, continue to reflect the 
position of the Treasury Department and the IRS.

Drafting Information

    The principal author of this withdrawal notice is Jean Broderick of 
the Office of Associate Chief Counsel (Corporate). However, other 
personnel from the Treasury Department and the IRS participated in its 
development.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

[[Page 32282]]

Partial Withdrawal of Proposed Rulemaking

    Accordingly, under the authority of 26 U.S.C. 7805, the Treasury 
Department and the IRS withdraw the proposed revisions to Sec.  1.332-
2(b) and (e); the proposed addition of Example 2 to Sec.  1.332-2(e); 
the proposed additions of Sec.  1.351-1(a)(1)(iii) and (a)(1)(iv); the 
proposed addition of Example 4 to Sec.  1.351-1(a)(2); the proposed 
amendments to Sec.  1.368-1(a) and (b); the proposed addition of Sec.  
1.368-1(f); and the proposed revision to Sec.  1.368-2(d)(1) in the 
notice of proposed rulemaking (REG-163314-03) that was published in the 
Federal Register (70 FR 11903) on March 10, 2005.

Kirsten B. Wielobob,
Deputy Commissioner of Services and Enforcement.
[FR Doc. 2017-14723 Filed 7-12-17; 8:45 am]
 BILLING CODE 4830-01-P

Federal Register / Vol. 82, No. 133 / Thursday, July 13, 2017 / Proposed Rules 32281

circumstances expected to arise from DEPARTMENT OF THE TREASURY case of section 332, a distribution) of net
these conditions. Emergency employees value (the net value requirement). The
must report to work at their regular Internal Revenue Service 2005 Proposed Regulations also
worksite or another approved location provided that section 332 would apply
as directed by the agency, unless— 26 CFR Part 1 only if the recipient corporation
[REG–139633–08] receives some payment for each class of
(1) The agency determines that travel
stock it owns in the liquidating
to or performing work at the worksite is RIN 1545–BI18 corporation. Finally, the 2005 Proposed
unsafe for emergency employees, in Regulations provided guidance on the
which case the agency may require the Transactions Involving the Transfer of circumstances in which (and the extent
employees to work at another location, No Net Value to which) creditors of a corporation are
including a telework site as provided in AGENCY: Internal Revenue Service (IRS), treated as proprietors of the corporation
paragraph (a) of this section, as Treasury. in determining whether continuity of
appropriate; or interest is preserved in a potential
ACTION: Partial withdrawal of notice of
(2) The agency determines that proposed rulemaking. reorganization (Creditor Continuity of
circumstances justify granting leave Interest).
under this subpart to emergency SUMMARY: This document withdraws the On December 12, 2008, the Treasury
employees. remaining part of a notice of proposed Department and the IRS adopted the
rulemaking containing proposed Creditor Continuity of Interest
§ 630.1606 Administration of weather and regulations that would have required an provisions of the 2005 Proposed
safety leave. exchange or distribution of net value for Regulations as final regulations (TD
(a) An agency must use the same certain corporate formations and 9434) published in the Federal Register
reorganizations to qualify for (73 FR 75566). Minor portions of the
minimum charge increments for
nonrecognition treatment under the 2005 Proposed Regulations that
weather and safety leave as it does for
Internal Revenue Code (Code). Other reflected statutory changes to sections
annual and sick leave under § 630.206.
parts of the notice of proposed 332 and 351 were adopted as final
(b) Employees may be granted rulemaking were previously adopted as regulations as part of a Treasury
weather and safety leave only for hours final regulations. The proposed decision adopting final regulations
within the tour of duty established for regulations being withdrawn also under sections 334(b)(1)(B) and
purposes of charging annual and sick addressed the treatment of certain 362(e)(1) (TD 9759), published in the
leave when absent. For full-time distributions not qualifying for tax-free Federal Register (81 FR 17066) on
employees, that tour is the 40-hour basic treatment under section 332 of the Code. March 28, 2016. The Treasury
workweek as defined in 5 CFR 610.102, The proposed regulations being Department and the IRS have decided to
the basic work requirement established withdrawn would have affected withdraw the remainder of the 2005
for employees on a flexible or corporations and their shareholders. Proposed Regulations.
compressed work schedule as defined in DATES: As of July 13, 2017, the proposed
revisions to § 1.332–2(b) and (e); the The Treasury Department and the IRS
5 U.S.C. 6121(3), or an uncommon tour
proposed addition of Example 2 to are of the view that current law is
of duty under § 630.210. sufficient to ensure that the
§ 1.332–2(e); the proposed additions of
(c) Employees may not receive reorganization provisions and section
§ 1.351–1(a)(1)(iii) and (a)(1)(iv); the
weather and safety leave for hours 351 are used to accomplish
proposed addition of Example 4 to
during which they are on other § 1.351–1(a)(2); the proposed readjustments of continuing interests in
preapproved leave (paid or unpaid) or amendments to § 1.368–1(a) and (b); the property held in modified corporate
paid time off. Agencies should not proposed addition of § 1.368–1(f); and form. With respect to section 332, the
approve weather and safety leave for an the proposed revision to § 1.368–2(d)(1) holdings of H.K. Porter Co. v.
employee who, in the agency’s in the notice of proposed rulemaking Commissioner, 87 T.C. 689 (1986),
judgment, is cancelling preapproved (REG–163314–03) that was published in Spaulding Bakeries Inc. v.
leave or paid time off, or changing a the Federal Register (70 FR 11903) on Commissioner, 27 T.C. 684 (1957), aff’d,
regular day off in a flexible or March 10, 2005 are withdrawn. 252 F.2d 293 (2d Cir., 1958), H.G. Hill
compressed work schedule, for the Stores, Inc. v. Commissioner, 44 B.T.A.
FOR FURTHER INFORMATION CONTACT: Jean
primary purpose of obtaining weather 1182 (1941), Rev. Rul. 2003–125, 2003–
Broderick at (202) 317–6848 (not a toll- 2 C.B. 1243, Rev. Rul. 68–602, 1968–2
and safety leave. free number). C.B. 135, Rev. Rul. 68–359, 1968–2 C.B.
§ 630.1607 Records and reporting. SUPPLEMENTARY INFORMATION: 161, and Rev. Rul. 59–296, 1959–2 C.B.
Background 87, continue to reflect the position of
(a) Record of placement on leave. An the Treasury Department and the IRS.
agency must maintain an accurate On March 10, 2005, the Department of
record of the placement of an employee the Treasury (the Treasury Department) Drafting Information
on weather and safety leave. and the IRS published a notice of
proposed rulemaking (REG–163314–03) The principal author of this
(b) Reporting. In agency data systems withdrawal notice is Jean Broderick of
sradovich on DSK3GMQ082PROD with PROPOSALS2

in the Federal Register (70 FR 11903)
(including timekeeping systems) and in the Office of Associate Chief Counsel
containing proposed regulations under
data reports submitted to OPM, an (Corporate). However, other personnel
sections 332, 351, and 368 (2005
agency must record weather and safety from the Treasury Department and the
Proposed Regulations). The 2005
leave under § 6329c and this subpart as Proposed Regulations generally would IRS participated in its development.
a category of leave separate from other have provided that the non-recognition
types of leave. List of Subjects in 26 CFR Part 1
rules in subchapter C of chapter 1 of
[FR Doc. 2017–14712 Filed 7–12–17; 8:45 am] subtitle 1 of the Code do not apply Income taxes, Reporting and
BILLING CODE 6325–39–P unless there is an exchange (or, in the recordkeeping requirements.

VerDate Sep<11>2014 16:37 Jul 12, 2017 Jkt 241001 PO 00000 Frm 00019 Fmt 4702 Sfmt 4702 E:\FR\FM\13JYP1.SGM 13JYP1

32282 Federal Register / Vol. 82, No. 133 / Thursday, July 13, 2017 / Proposed Rules

Partial Withdrawal of Proposed OAR–2015–0617 at http:// Register volume, date, and page
Rulemaking www.regulations.gov. Follow the online number);
Accordingly, under the authority of instructions for submitting comments. • Follow directions and organize your
26 U.S.C. 7805, the Treasury Once submitted, comments cannot be comments;
Department and the IRS withdraw the edited or removed from • Explain why you agree or disagree;
www.regulations.gov. The EPA may • Suggest alternatives and substitute
proposed revisions to § 1.332–2(b) and
publish any comment received to its language for your requested changes;
(e); the proposed addition of Example 2 • Describe any assumptions and
to § 1.332–2(e); the proposed additions public docket. Do not submit
electronically any information you provide any technical information and/
of § 1.351–1(a)(1)(iii) and (a)(1)(iv); the
consider to be Confidential Business or data that you used;
proposed addition of Example 4 to • If you estimate potential costs or
§ 1.351–1(a)(2); the proposed Information (CBI) or other information
whose disclosure is restricted by statute. burdens, explain how you arrived at
amendments to § 1.368–1(a) and (b); the your estimate in sufficient detail to
proposed addition of § 1.368–1(f); and Multimedia submissions (audio, video,
etc.) must be accompanied by a written allow for it to be reproduced;
the proposed revision to § 1.368–2(d)(1) • Provide specific examples to
in the notice of proposed rulemaking comment. The written comment is
considered the official comment and illustrate your concerns, and suggest
(REG–163314–03) that was published in alternatives;
the Federal Register (70 FR 11903) on should include discussion of all points
you wish to make. The EPA will • Explain your views as clearly as
March 10, 2005. possible, avoiding the use of profanity
generally not consider comments or
Kirsten B. Wielobob, comment contents located outside of the or personal threats; and,
Deputy Commissioner of Services and primary submission (i.e., on the web, • Make sure to submit your
Enforcement. cloud, or other file sharing system). For comments by the comment period
[FR Doc. 2017–14723 Filed 7–12–17; 8:45 am] additional submission methods, the full deadline identified.
BILLING CODE 4830–01–P EPA public comment policy, II. Analysis of the State Submittal
information about CBI or multimedia
On January 28, 2013, the State of Utah
submissions, and general guidance on
requested that the EPA approve a repeal
ENVIRONMENTAL PROTECTION making effective comments, please visit
and reenactment of R307–202, Emission
AGENCY http://www2.epa.gov/dockets/
Standards: General Burning. The rule
commenting-epa-dockets.
40 CFR Part 52 was changed to add an ‘‘Applicability’’
FOR FURTHER INFORMATION CONTACT: section that clarifies that the rule only
[EPA–R08–OAR–2015–0617; FRL–9964–72– Chris Dresser, Air Program, U.S. applies to incorporated communities
Region 8] Environmental Protection Agency under the authority of a county or
(EPA), Region 8, Mail Code 8P–AR, municipal fire authority. Additionally,
Approval and Promulgation of Air 1595 Wynkoop Street, Denver, Colorado
Quality Implementation Plans; State of the 30-day burning windows allowing
80202–1129, (303) 312–6385, the burning of material covered under
Utah; General Burning Rule Revisions dresser.chris@epa.gov. R307–202 were eliminated in the
AGENCY: Environmental Protection SUPPLEMENTARY INFORMATION: amendment because they were a source
Agency (EPA). I. General Information of localized air quality impairment. This
ACTION: Proposed rule. request was made by several local fire
What should I consider as I prepare my chiefs with support from the Utah State
SUMMARY: The Environmental Protection comments for EPA? Fire Marshal. Language was also added
Agency (EPA) is proposing approval of 1. Submitting Confidential Business to the rule that states that no person
State Implementation Plan (SIP) Information (CBI). Do not submit CBI to shall burn under R307–202 when the
revisions submitted by Utah on January the EPA through http:// director of the Division of Air Quality
28, 2013, and July 8, 2015. In the letter www.regulations.gov or email. Clearly (DAQ) issues a public announcement of
accompanying the rule revisions sent to mark the part or all of the information a mandatory no-burn period.
the EPA on July 8, 2015, the Governor that you claim to be CBI. For CBI The changes made to R307–202
stated that no further action is necessary information on a disk or CD–ROM that include the following five amendments:
on the January 28, 2013 submittal since you mail to the EPA, mark the outside (1) Fire marshals were previously
it has been superseded. Upon of the disk or CD–ROM as CBI and then permitted to establish a spring 30-day
consultation with Utah Department of identify electronically within the disk or burn window between March 1 and May
Air Quality (DAQ) staff, the EPA was CD–ROM the specific information that 30. The rule amendment expanded the
informed that this is not accurate. A is claimed as CBI. In addition to one spring burning window for the entire
clarifying letter was sent by the complete version of the comment that period from March 1 to May 30 for
Governor of Utah on June 6, 2017 includes information claimed as CBI, a Washington, Kane, San Juan, Iron,
requesting that the EPA act on both SIP copy of the comment that does not Garfield, Beaver, Piute, Wayne, Grand,
revisions. The submittals request SIP contain the information claimed as CBI and Emery counties. The burn window
revisions to the State’s General Burning must be submitted for inclusion in the was expanded because fire marshals
rule; a repeal and reenactment of the public docket. Information so marked reported adverse localized air quality
General Burning rule with changes to
sradovich on DSK3GMQ082PROD with PROPOSALS2

will not be disclosed except in conditions within the 30-day burn
applicability, timing, and duration of accordance with procedures set forth in window because the window was
burning windows, and an amendment to 40 CFR part 2. actually compressed to a few days
exempt Native American ceremonial 2. Tips for preparing your comments. where the Clearing Index was over 500.
burning during restricted burning days. When submitting comments, remember The Utah DAQ relies on a metric called
DATES: Written comments must be to: the Clearing Index, an Air Quality/
received on or before August 14, 2017. • Identify the rulemaking by docket Smoke Dispersal Index, to determine
ADDRESSES: Submit your comments, number and other identifying when ventilation and dispersion are
identified by Docket ID No. EPA–R08– information (subject heading, Federal adequate for general burning and as an

VerDate Sep<11>2014 16:37 Jul 12, 2017 Jkt 241001 PO 00000 Frm 00020 Fmt 4702 Sfmt 4702 E:\FR\FM\13JYP1.SGM 13JYP1

Document Created: 2017-07-13 01:00:30
Document Modified: 2017-07-13 01:00:30

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Proposed Rules
Action		Partial withdrawal of notice of proposed rulemaking.
Dates		As of July 13, 2017, the proposed revisions to Sec. 1.332-2(b) and (e); the proposed addition of Example 2 to Sec. 1.332-2(e); the proposed additions of Sec. 1.351-1(a)(1)(iii) and (a)(1)(iv); the proposed addition of Example 4 to Sec. 1.351-1(a)(2); the proposed amendments to Sec. 1.368-1(a) and (b); the proposed addition of Sec. 1.368-1(f); and the proposed revision to Sec. 1.368-2(d)(1) in the notice of proposed rulemaking (REG-163314-03) that was published in the Federal Register (70 FR 11903) on March 10, 2005 are withdrawn.
Contact		Jean Broderick at (202) 317-6848 (not a toll-free number).
FR Citation		82 FR 32281
RIN Number		1545-BI18
CFR Associated		Income Taxes and Reporting and Recordkeeping Requirements

82 FR 32281 - Transactions Involving the Transfer of No Net Value

DEPARTMENT OF THE TREASURYInternal Revenue Service

Federal Register Volume 82, Issue 133 (July 13, 2017)

DEPARTMENT OF THE TREASURY
Internal Revenue Service