83 FR 28397 - Proposed Removal of Temporary Regulations on a Partner's Share of a Partnership Liability for Disguised Sale Purposes
DEPARTMENT OF THE TREASURY
Internal Revenue Service Federal Register Volume 83, Issue 118 (June 19, 2018)
Internal Revenue Service
Federal Register Volume 83, Issue 118 (June 19, 2018)
| Page Range | 28397-28401 | |
| FR Document | 2018-13129 |
[Federal Register Volume 83, Number 118 (Tuesday, June 19, 2018)] [Proposed Rules] [Pages 28397-28401] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-13129] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [REG-131186-17] RIN 1545-BO05 Proposed Removal of Temporary Regulations on a Partner's Share of a Partnership Liability for Disguised Sale Purposes AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking; public hearing; partial withdrawal of notice of proposed rulemaking. ----------------------------------------------------------------------- SUMMARY: This document contains proposed regulations concerning how partnership liabilities are allocated for disguised sale purposes. The proposed regulations, if finalized, would replace existing temporary regulations with final regulations that were in effect prior to the temporary regulations. This document also partially withdraws proposed regulations cross-referencing the temporary regulations. These regulations affect partnerships and their partners. Finally, this document provides notice of a public hearing on these proposed regulations. DATES: Written or electronic comments must be received by July 19, 2018. A public hearing will be held at 10:00 a.m. on August 21, 2018. Outlines of topics to be discussed at the public hearing must be received by August 3, 2018. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-131186-17), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG- 131186-17), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, DC, or sent electronically, [[Page 28398]] via the Federal eRulemaking Portal site at http://www.regulations.gov (indicate IRS and REG-131186-17). The public hearing will be held in the IRS Auditorium, Internal Revenue Service Building, 1111 Constitution Ave. NW, Washington, DC 20224. FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Caroline E. Hay or Deane M. Burke at (202) 317-5279; concerning the submission of comments, the hearing, or to be placed on the building access list to attend the hearing, Regina L. Johnson at (202) 317-6901 (not toll-free numbers). SUPPLEMENTARY INFORMATION: Background This document proposes amendments to the Income Tax Regulations (26 CFR part 1) under section 707 of the Internal Revenue Code (Code) regarding allocations of partnership liabilities for disguised sale purposes. Section 707(a)(2)(B) generally provides that, under regulations prescribed by the Secretary of the Treasury (Secretary), related transfers to and by a partnership that, when viewed together, are more properly characterized as a sale or exchange of property, will be treated either as a transaction between the partnership and one who is not a partner or between two or more partners acting other than in their capacity as partners (generally referred to as ``disguised sales''). The Department of the Treasury (Treasury Department) and the IRS published a notice of proposed rulemaking (REG-119305-11) in the Federal Register (79 FR 4826) on January 30, 2014, to amend the then- existing regulations under section 707 relating to disguised sales of property to or by a partnership and under section 752 concerning the treatment of partnership liabilities (2014 Proposed Regulations). The 2014 Proposed Regulations provided certain technical rules intended to clarify the application of the disguised sale rules under section 707 and also contained rules regarding the sharing of partnership recourse and nonrecourse liabilities under section 752. A public hearing on the 2014 Proposed Regulations was not requested or held, but the Treasury Department and the IRS received written comments. Based on a comment received on the 2014 Proposed Regulations requesting that guidance under section 752 regarding a partner's share of partnership liabilities apply for disguised sale purposes, the Treasury Department and the IRS reconsidered the rules under Sec. 1.707-5(a)(2) of the 2014 Proposed Regulations for determining a partner's share of partnership liabilities for purposes of section 707. On October 5, 2016, the Treasury Department and the IRS published in the Federal Register (81 FR 69282) final and temporary regulations (T.D. 9788) implementing a new rule concerning the allocation of liabilities for section 707 purposes. On November 17, 2016, the Treasury Department and the IRS published in the Federal Register (81 FR 80993 and 81 FR 80994) two correcting amendments to T.D. 9788 (the temporary regulations as so corrected, 707 Temporary Regulations). T.D. 9788 also contained rules concerning the treatment of ``bottom dollar payment obligations'' (752 Temporary Regulations). The 707 Temporary Regulations were incorporated by cross reference in a notice of proposed rulemaking (REG-122855-15) published on October 5, 2016, in the Federal Register (81 FR 69301) (707 Proposed Regulations). That notice of proposed rulemaking also incorporated by cross reference the 752 Temporary Regulations and included new proposed regulations under sections 704 and 752 (752 Proposed Regulations). Also on October 5, 2016, the Treasury Department and the IRS published final regulations under section 707 and Sec. 1.752-3 (T.D. 9787) in the Federal Register (81 FR 6929). T.D. 9787 was the subject of a correction notice published in the Federal Register (81 FR 80587) on November 16, 2016 (the final regulations as so corrected, 707 Final Regulations). The 707 Temporary Regulations, in response to the comment received on the 2014 Proposed Regulations, adopted an approach that requires a partner to apply the same percentage used to determine the partner's share of excess nonrecourse liabilities under Sec. 1.752-3(a)(3) (with certain limitations) in determining the partner's share of all partnership liabilities for disguised sale purposes. Also in response to the comment, the 707 Temporary Regulations provide that a partner's share of a partnership liability for section 707 purposes shall not exceed the partner's share of the partnership liability under section 752 and applicable regulations. The 707 Temporary Regulations reserve on the treatment, for disguised sale purposes, of an obligation that would be treated as a recourse liability under Sec. 1.752-1(a)(1) or a nonrecourse liability under Sec. 1.752-1(a)(2) if the liability was treated as a partnership liability for purposes of section 752. The Treasury Department and the IRS received comments supporting the approach taken in the 707 Temporary Regulations, but also received comments expressing concern that a new approach was adopted by temporary regulations rather than in proposed regulations, which denied taxpayers the ability to provide comment prior to the 707 Temporary Regulations being effective. On April 21, 2017, the President issued Executive Order 13789 (E.O. 13789), ``Executive Order on Identifying and Reducing Tax Regulatory Burdens'' (82 FR 19317, April 26, 2017), which directed the Secretary to review all significant tax regulations issued on or after January 1, 2016, and to take concrete action to alleviate the burdens of regulations that (i) impose an undue financial burden on U.S. taxpayers; (ii) add undue complexity to the Federal tax laws; or (iii) exceed the statutory authority of the IRS. E.O. 13789 further directed the Secretary to submit to the President within 60 days an interim report identifying regulations that meet these criteria. Notice 2017-38 (2017-30 IRB 147 (July 24, 2017)) included the 707 Temporary Regulations in a list of eight regulations identified by the Secretary in the interim report as meeting at least one of the first two criteria specified in E.O. 13789. E.O. 13789 further directed the Secretary to submit to the President and publish in the Federal Register a report recommending specific actions to mitigate the burden imposed by regulations identified in the interim report. On October 16, 2017, the Secretary published this second report in the Federal Register (82 FR 48013), ``Second Report to the President on Identifying and Reducing Tax Regulatory Burdens'' (Second Report). The Second Report stated that, while the Treasury Department and the IRS believe that the 707 Temporary Regulations' novel approach to addressing disguised sale treatment merits further study, the Treasury Department and the IRS agree with commenters that such a change should be studied systematically. The second report further stated that the Treasury Department and the IRS therefore would consider whether the 707 Temporary Regulations and the 707 Proposed Regulations should be removed and withdrawn, respectively, and the prior regulations reinstated. After further consideration, the Treasury Department and the IRS are withdrawing the 707 Proposed Regulations and proposing to remove the 707 Temporary Regulations and reinstate the regulations under Sec. 1.707-5(a)(2) as in effect prior to the 707 Temporary Regulations and as [[Page 28399]] contained in 26 CFR part 1 revised as of April 1, 2016 (Prior 707 Regulations). The Second Report also stated that the Treasury Department and the IRS believe that the 752 Temporary Regulations concerning bottom dollar payment obligations should be retained because, consistent with the view of a number of commenters, the 752 Temporary Regulations are needed to prevent abuses and do not meaningfully increase regulatory burdens for the taxpayers affected. The Treasury Department and the IRS will continue to consider these issues and continue to request comments concerning the 752 Proposed Regulations. The Second Report did not identify the 707 Final Regulations, which are not affected by this notice of proposed rulemaking. Explanation of Provisions In addition to withdrawing the 707 Proposed Regulations, this notice of proposed rulemaking proposes to remove the 707 Temporary Regulations and reinstate the Prior 707 Regulations concerning the allocation of liabilities for disguised sale purposes. In determining a partners' share of a partnership liability for disguised sale purposes, Sec. 1.707-5(a)(2) of the Prior 707 Regulations prescribed separate rules for a partnership's recourse liability and a partnership's nonrecourse liability. This notice of proposed rulemaking adopts those same rules. Under Sec. 1.707-5(a)(2)(i) of the Prior 707 Regulations and, if finalized, these proposed regulations, a partner's share of a partnership's recourse liability equals the partner's share of the liability under section 752 and the regulations thereunder. A partnership liability is a recourse liability to the extent that the obligation is a recourse liability under Sec. 1.752-1(a)(1). Under Sec. 1.707-5(a)(2)(ii) of the Prior 707 Regulations and, if finalized, these proposed regulations, a partner's share of a partnership's nonrecourse liability is determined by applying the same percentage used to determine the partner's share of the excess nonrecourse liability under Sec. 1.752-3(a)(3). A partnership liability is a nonrecourse liability of the partnership to the extent that the obligation is a nonrecourse liability under Sec. 1.752- 1(a)(2). The 707 Final Regulations limited the available methods for determining a partner's share of an excess nonrecourse liability under Sec. 1.752-3(a)(3) for disguised sale purposes. Under the 707 Final Regulations, a partner's share of an excess nonrecourse liability for disguised sale purposes is determined only in accordance with the partner's share of partnership profits and by taking into account all facts and circumstances relating to the economic arrangement of the partners. Thus, the significant item method, the alternative method, and the additional method as defined in Sec. 1.752-3(a)(3) do not apply for purposes of determining a partner's share of a partnership's nonrecourse liability for disguised sale purposes. In addition, Sec. 1.707-5(a)(2)(i) and (ii) of the Prior 707 Regulations provided that a partnership liability is a recourse or nonrecourse liability to the extent that the obligation would be a recourse liability under Sec. 1.752-1(a)(1) or a nonrecourse liability under Sec. 1.752-1(a)(2), respectively, if the liability was treated as a partnership liability for purposes of section 752 (Sec. 1.752-7 contingent liabilities). This notice of proposed rulemaking reinstates these rules concerning Sec. 1.752-7 contingent liabilities. However, as noted in the preamble to T.D. 9788, the Treasury Department and the IRS continue to believe additional guidance would be helpful in this area. The preamble to T.D. 9788 explained that, in many cases, Sec. 1.752-7 contingent liabilities may constitute qualified liabilities that would not be taken into account for purposes of determining a disguised sale. Some commenters on the 2014 Proposed Regulations noted that there may be circumstances in which certain transfers of Sec. 1.752-7 contingent liabilities to a partnership may be abusive. The Treasury Department and the IRS continue to study the issue of the effect of contingent liabilities with respect to section 707, as well as other sections of the Code. Finally, this notice of proposed rulemaking reinstates Examples 2, 3, 7, and 8 under Sec. 1.707-5(f) of the Prior 707 Regulations. However, language is added to Example 3 to reflect an amendment to Sec. 1.707-5(a)(3) in the 707 Final Regulations regarding an anticipated reduction in a partner's share of a liability that is not subject to the entrepreneurial risks of partnership operations. Proposed Applicability Date The 707 Temporary Regulations are proposed to be removed thirty days following the date these regulations are published as final regulations in the Federal Register. The amendments to Sec. 1.707-5 are proposed to apply to any transaction with respect to which all transfers occur on or after thirty days following the date these regulations are published as final regulations in the Federal Register. However, a partnership and its partners may apply all the rules in these proposed regulations in lieu of the 707 Temporary Regulations to any transaction with respect to which all transfers occur on or after January 3, 2017. Special Analyses These proposed regulations are not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement (April 11, 2018) between the Department of the Treasury and the Office of Management and Budget regarding review of tax regulations. These proposed regulations are expected to be an Executive Order 13771 deregulatory action. Details on the estimated cost savings of these proposed regulations will be provided in the final regulations. Because these proposed regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Comments and Public Hearing Comments Concerning These Proposed Regulations Before these proposed regulations are adopted as final regulations, consideration will be given to any comments that are submitted timely to the IRS as prescribed in this preamble under the ADDRESSES heading. The Treasury Department and the IRS request comments on all aspects of the proposed rules. All comments will be available at http://www.regulations.gov or upon request. A public hearing has been scheduled for August 21, 2018, beginning at 10:00 a.m. in the IRS Auditorium of the Internal Revenue Service Building, 1111 Constitution Avenue NW, Washington, DC 20224. Due to building security procedures, visitors must enter at the Constitution Avenue entrance. In addition, all visitors must present photo identification to enter the building. Because of access restrictions, visitors will not be admitted beyond the immediate entrance area more than 15 minutes before the hearing starts. For information about having your name placed on the building access list to attend the hearing, see the FOR FURTHER INFORMATION CONTACT section of this preamble. 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 a signed original and eight [[Page 28400]] (8) copies of written or electronic comments by July 19, 2018 and an outline of the topics to be discussed and the time to be devoted to each topic by August 3, 2018. 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. Comments Concerning Approach in the 707 Temporary Regulations As discussed in the Second Report, the Treasury Department and the IRS believe that the 707 Temporary Regulations' novel approach (treating all liabilities as nonrecourse and allocating in accordance with Sec. 1.752-3(a)(3) for disguised sale purposes) merits further study. The 707 Temporary Regulations explained that this approach reflects the overall economic arrangements of the partners as, in most cases, a partnership will satisfy its liabilities with partnership profits, the partnership's assets do not become worthless, and the payment obligations of partners or related persons are not called upon. The Treasury Department and the IRS continue to study this issue and request comments on the approach adopted in the 707 Temporary Regulations. The request for comments in this paragraph on the approach of the 707 Temporary Regulations is not the subject of the scheduled public hearing. Drafting Information The principal authors of these proposed regulations are Caroline E. Hay and Deane M. Burke, Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the Treasury Department and the IRS participated in their development. List of Subjects in 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. Partial Withdrawal of Notice of Proposed Rulemaking Accordingly, under the authority of 26 U.S.C. 7805, Sec. Sec. 1.707-5 and 1.707-9 of the notice of proposed rulemaking (REG-122855- 15) that was published in the Federal Register on October 5, 2016 (81 FR 69301) are withdrawn. Proposed Amendments to the Regulations For the reasons stated in the preamble, 26 CFR part 1 is proposed to be amended as follows: PART 1--INCOME TAXES 0 Paragraph 1. The authority citation for part 1 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * 0 Par. 2. Section 1.707-5 is amended by revising paragraph (a)(2) and Examples 2, 3, 7, and 8 in paragraph (f) to read as follows: Sec. 1.707-5 Disguised sales of property to partnership; special rules relating to liabilities. (a) * * * (2) Partner's share of liability. A partner's share of any liability of the partnership is determined under the following rules: (i) Recourse liability. A partner's share of a recourse liability of the partnership equals the partner's share of the liability under the rules of section 752 and the regulations thereunder. A partnership liability is a recourse liability to the extent that the obligation is a recourse liability under Sec. 1.752-1(a)(1) or would be treated as a recourse liability under that section if it were treated as a partnership liability for purposes of that section. (ii) Nonrecourse liability. A partner's share of a nonrecourse liability of the partnership is determined by applying the same percentage used to determine the partner's share of the excess nonrecourse liability under Sec. 1.752-3(a)(3). A partnership liability is a nonrecourse liability of the partnership to the extent that the obligation is a nonrecourse liability under Sec. 1.752- 1(a)(2) or would be a nonrecourse liability of the partnership under Sec. 1.752-1(a)(2) if it were treated as a partnership liability for purposes of that section. * * * * * (f) * * * Example 2. Partnership's assumption of recourse liability encumbering transferred property. (i) C transfers property Y to a partnership. At the time of its transfer to the partnership, property Y has a fair market value of $10,000,000 and is subject to an $8,000,000 liability that C incurred, immediately before transferring property Y to the partnership, in order to finance other expenditures. Upon the transfer of property Y to the partnership, the partnership assumed the liability encumbering that property. The partnership assumed this liability solely to acquire property Y. Under section 752 and the regulations thereunder, immediately after the partnership's assumption of the liability encumbering property Y, the liability is a recourse liability of the partnership and C's share of that liability is $7,000,000. (ii) Under the facts of this example, the liability encumbering property Y is not a qualified liability. Accordingly, the partnership's assumption of the liability results in a transfer of consideration to C in connection with C's transfer of property Y to the partnership in the amount of $1,000,000 (the excess of the liability assumed by the partnership ($8,000,000) over C's share of the liability immediately after the assumption ($7,000,000)). See paragraphs (a)(1) and (2) of this section. Example 3. Subsequent reduction of transferring partner's share of liability. (i) The facts are the same as in Example 2. In addition, property Y is a fully leased office building, the rental income from property Y is sufficient to meet debt service, and the remaining term of the liability is ten years. It is anticipated that, three years after the partnership's assumption of the liability, C's share of the liability under section 752 will be reduced to zero because of a shift in the allocation of partnership losses pursuant to the terms of the partnership agreement. Under the partnership agreement, this shift in the allocation of partnership losses is dependent solely on the passage of time. (ii) Under paragraph (a)(3) of this section, if the reduction in C's share of the liability was anticipated at the time of C's transfer, was not subject to the entrepreneurial risks of partnership operations, and was part of a plan that has as one of its principal purposes minimizing the extent of sale treatment under Sec. 1.707-3 (that is, a principal purpose of allocating a large percentage of losses to C in the first three years when losses were not likely to be realized was to minimize the extent to which C's transfer would be treated as part of a sale), C's share of the liability immediately after the assumption is treated as equal to C's reduced share. * * * * * Example 7. Partnership's assumptions of liabilities encumbering properties transferred pursuant to a plan. (i) Pursuant to a plan, G and H transfer property 1 and property 2, respectively, to an existing partnership in exchange for interests in the partnership. At the time the properties are transferred to the partnership, property 1 has a fair market value of $10,000 and an adjusted tax basis of $6,000, and property 2 has a fair market value of $10,000 and an adjusted tax basis of $4,000. At the time properties 1 and 2 are transferred to the partnership, a $6,000 nonrecourse liability (liability 1) is secured by property 1 and a $7,000 recourse liability of F (liability 2) is secured by property 2. Properties 1 and 2 are transferred to the partnership, and the partnership takes subject to liability 1 and assumes liability 2. G and H incurred liabilities 1 and 2 immediately prior to transferring properties 1 and 2 to the partnership and used the proceeds for personal expenditures. The liabilities are not qualified liabilities. Assume that G and H are each allocated $2,000 of liability 1 in accordance with Sec. 1.707-5(a)(2)(ii) (which determines a partner's share of a nonrecourse liability). Assume further that G's share of liability 2 is $3,500 and H's share is $0 in accordance with Sec. 1.707- 5(a)(2)(i) (which determines a partner's share of a recourse liability). (ii) G and H transferred properties 1 and 2 to the partnership pursuant to a plan. [[Page 28401]] Accordingly, the partnership's taking subject to liability 1 is treated as a transfer of only $500 of consideration to G (the amount by which liability 1 ($6,000) exceeds G's share of liabilities 1 and 2 ($5,500)), and the partnership's assumption of liability 2 is treated as a transfer of only $5,000 of consideration to H (the amount by which liability 2 ($7,000) exceeds H's share of liabilities 1 and 2 ($2,000)). G is treated under the rule in Sec. 1.707-3 as having sold $500 of the fair market value of property 1 in exchange for the partnership's taking subject to liability 1 and H is treated as having sold $5,000 of the fair market value of property 2 in exchange for the assumption of liability 2. Example 8. Partnership's assumption of liability pursuant to a plan to avoid sale treatment of partnership assumption of another liability. (i) The facts are the same as in Example 7, except that-- (A) H transferred the proceeds of liability 2 to the partnership; and (B) H incurred liability 2 in an attempt to reduce the extent to which the partnership's taking subject to liability 1 would be treated as a transfer of consideration to G (and thereby reduce the portion of G's transfer of property 1 to the partnership that would be treated as part of a sale). (ii) Because the partnership assumed liability 2 with a principal purpose of reducing the extent to which the partnership's taking subject to liability 1 would be treated as a transfer of consideration to G, liability 2 is ignored in applying paragraph (a)(3) of this section. Accordingly, the partnership's taking subject to liability 1 is treated as a transfer of $4,000 of consideration to G (the amount by which liability 1 ($6,000) exceeds G's share of liability 1 ($2,000)). On the other hand, the partnership's assumption of liability 2 is not treated as a transfer of any consideration to H because H's share of that liability equals $7,000 as a result of H's transfer of $7,000 in money to the partnership. * * * * * Sec. 1.707-5T [Removed] 0 Par. 3. Section 1.707-5T is removed. 0 Par. 4. Section 1.707-9 is amended by revising paragraph (a)(4) and removing paragraph (a)(5). The revisions read as follows: Sec. 1.707-9 Effective dates and transitional rules. (a) * * * (4) Section 1.707-5(a)(2) and (f) Examples 2, 3, 7, and 8. (i) Section 1.707-5(a)(2) and (f) Examples 2, 3, 7, and 8, as contained in 26 CFR part 1 revised as of April 1, 2016, apply to any transaction with respect to which any transfers occur before January 3, 2017. (ii) For any transaction with respect to which all transfers occur on or after January 3, 2017, and any of such transfers occurs before the date that is thirty days after the date these regulations are published as final in the Federal Register, see Sec. 1.707-9T(a)(5) as contained in 26 CFR part 1 revised as of April 1, 2017. (iii) Section 1.707-5(a)(2) and (f) Examples 2, 3, 7, and 8 apply to any transaction with respect to which all transfers occur on or after the date that is thirty days after the date these regulations are published as final in the Federal Register. * * * * * Sec. 1.707-9T [Removed] 0 Par. 5. Section 1.707-9T is removed. Kirsten Wielobob, Deputy Commissioner for Services and Enforcement. [FR Doc. 2018-13129 Filed 6-18-18; 8:45 am] BILLING CODE 4830-01-P
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CPSA. The only laboratories that are For the reasons discussed in the 20814, telephone 301–504–7923, or at
expected to provide such services are preamble, the Commission proposes to the National Archives and Records
those that anticipate receiving sufficient amend Title 16 of the Code of Federal Administration (NARA). For
revenue from providing the mandated Regulations as follows: information on the availability of this
testing to justify accepting the material at NARA, call 202–741–6030,
requirements as a business decision. PART 1112—REQUIREMENTS or go to: http://www.archives.gov/
Laboratories that do not expect to PERTAINING TO THIRD PARTY federal_register/code_of_
receive sufficient revenue from these CONFORMITY ASSESSMENT BODIES federalregulations/ibr_locations.html.
services to justify accepting these
■ 1. The authority citation for part 1112 Alberta E. Mills,
requirements would not likely pursue
continues to read as follows:
accreditation for this purpose. Similarly, Secretary, Consumer Product Safety
amending the part 1112 rule to include Authority: 15 U.S.C. 2063; Pub. L. 110– Commission.
the NOR for stationary activity centers 314, section 3, 122 Stat. 3016, 3017 (2008). [FR Doc. 2018–13024 Filed 6–18–18; 8:45 am]
would not have a significant adverse ■ 2. Amend § 1112.15 by adding BILLING CODE 6355–01–P
impact on small laboratories. Moreover, paragraphs (b)(45) through (47) to read
based upon the number of laboratories as follows:
in the United States that have applied DEPARTMENT OF THE TREASURY
§ 1112.15 When can a third party
for CPSC acceptance of the accreditation conformity assessment body apply for
to test for conformance to other juvenile CPSC acceptance for a particular CPSC rule Internal Revenue Service
product standards, we expect that only or test method?
a few laboratories will seek CPSC * * * * * 26 CFR Part 1
acceptance of their accreditation to test (b) The CPSC has published the [REG–131186–17]
for conformance with the stationary requirements for accreditation for third
activity center standard. Most of these RIN 1545–BO05
party conformity assessment bodies to
laboratories will have already been assess conformity for the following
accredited to test for conformance to Proposed Removal of Temporary
CPSC rules or test methods: Regulations on a Partner’s Share of a
other juvenile product standards and
* * * * * Partnership Liability for Disguised Sale
the only costs to them would be the cost
(45) [Reserved] Purposes
of adding the stationary activity center (46) [Reserved]
standard to their scope of accreditation. (47) 16 CFR part 1238, Safety AGENCY: Internal Revenue Service (IRS),
As a consequence, the Commission Standard for Stationary Activity Treasury.
certifies that the proposed notice Centers. ACTION: Notice of proposed rulemaking;
requirements for the stationary activity public hearing; partial withdrawal of
center standard will not have a * * * * *
■ 3. Add part 1238 to read as follows: notice of proposed rulemaking.
significant impact on a substantial
number of small entities. PART 1238—SAFETY STANDARD FOR SUMMARY: This document contains
STATIONARY ACTIVITY CENTERS proposed regulations concerning how
XIII. Request for Comments
partnership liabilities are allocated for
This proposed rule begins a Sec. disguised sale purposes. The proposed
rulemaking proceeding under section 1238.1 Scope. regulations, if finalized, would replace
104(b) of the CPSIA to issue a consumer 1238.2 Requirements for stationary activity existing temporary regulations with
centers. final regulations that were in effect prior
product safety standard for stationary
activity centers. We invite all interested Authority: Sec. 104, Pub. L. 110–314, 122 to the temporary regulations. This
persons to submit comments on any Stat. 3016 (15 U.S.C. 2056a). document also partially withdraws
aspect of the proposed rule. § 1238.1 Scope.
proposed regulations cross-referencing
In particular, the Commission invites the temporary regulations. These
This part establishes a consumer regulations affect partnerships and their
comments on the necessity of additional product safety standard for stationary
requirements pertaining to the potential partners. Finally, this document
activity centers. provides notice of a public hearing on
fraying of the support straps on SACs.
§ 1238.2 Requirements for stationary these proposed regulations.
Comments should be submitted in
activity centers. DATES: Written or electronic comments
accordance with the instructions in the
ADDRESSES section at the beginning of Each stationary activity center must must be received by July 19, 2018.
this notice. comply with all applicable provisions of A public hearing will be held at 10:00
ASTM F2012–18 ε1, Standard Consumer a.m. on August 21, 2018. Outlines of
List of Subjects Safety Specification for Stationary topics to be discussed at the public
16 CFR Part 1112 Activity Centers, approved on May 18, hearing must be received by August 3,
2018. The Director of the Federal 2018.
Administrative practice and Register approves this incorporation by ADDRESSES: Send submissions to:
procedure, Audit, Consumer protection, reference in accordance with 5 U.S.C. CC:PA:LPD:PR (REG–131186–17), Room
Reporting and recordkeeping 552(a) and 1 CFR part 51. You may 5203, Internal Revenue Service, P.O.
daltland on DSKBBV9HB2PROD with PROPOSALS
requirements, Third party conformity obtain a copy from ASTM International, Box 7604, Ben Franklin Station,
assessment body. 100 Bar Harbor Drive, P.O. Box 0700, Washington, DC 20044. Submissions
16 CFR Part 1238 West Conshohocken, PA 19428; http:// may be hand-delivered Monday through
www.astm.org/cpsc.htm. You may Friday between the hours of 8 a.m. and
Consumer protection, Imports, inspect a copy at the Office of the 4 p.m. to: CC:PA:LPD:PR (REG–131186–
Incorporation by reference, Infants and Secretary, U.S. Consumer Product 17), Courier’s Desk, Internal Revenue
children, Labeling, Law enforcement, Safety Commission, Room 820, 4330 Service, 1111 Constitution Avenue NW,
and Toys. East West Highway, Bethesda, MD Washington, DC, or sent electronically,
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Accordingly, the partnership’s taking subject contained in 26 CFR part 1 revised as of additional information about the docket
to liability 1 is treated as a transfer of only April 1, 2017. available at http://www.epa.gov/
$500 of consideration to G (the amount by (iii) Section 1.707–5(a)(2) and (f) dockets.
which liability 1 ($6,000) exceeds G’s share
Examples 2, 3, 7, and 8 apply to any
of liabilities 1 and 2 ($5,500)), and the FOR FURTHER INFORMATION CONTACT: Greg
partnership’s assumption of liability 2 is transaction with respect to which all
treated as a transfer of only $5,000 of transfers occur on or after the date that Susanke, Office of the Science Advisor,
consideration to H (the amount by which is thirty days after the date these Environmental Protection Agency, 1200
liability 2 ($7,000) exceeds H’s share of regulations are published as final in the Pennsylvania Ave. NW, Washington, DC
liabilities 1 and 2 ($2,000)). G is treated Federal Register. 20460–0001; telephone number: (202)
under the rule in § 1.707–3 as having sold 564–0221; email address: staff_osa@
* * * * *
$500 of the fair market value of property 1 epa.gov.
in exchange for the partnership’s taking § 1.707–9T [Removed]
subject to liability 1 and H is treated as SUPPLEMENTARY INFORMATION:
having sold $5,000 of the fair market value ■ Par. 5. Section 1.707–9T is removed.
of property 2 in exchange for the assumption Kirsten Wielobob, I. What action is EPA taking?
of liability 2.
Deputy Commissioner for Services and
Example 8. Partnership’s assumption of
Enforcement.
Section 25(a)(2)(A) of FIFRA requires
liability pursuant to a plan to avoid sale the EPA Administrator to provide the
treatment of partnership assumption of [FR Doc. 2018–13129 Filed 6–18–18; 8:45 am]
Secretary of USDA with a copy of any
another liability. (i) The facts are the same as BILLING CODE 4830–01–P
in Example 7, except that—
draft proposed rule at least 60 days
(A) H transferred the proceeds of liability before signing it in proposed form for
2 to the partnership; and publication in the Federal Register. The
ENVIRONMENTAL PROTECTION
(B) H incurred liability 2 in an attempt to draft proposed rule is not available to
reduce the extent to which the partnership’s AGENCY
the public until after it has been signed
taking subject to liability 1 would be treated by EPA. If the Secretary of USDA
as a transfer of consideration to G (and 40 CFR Part 26
thereby reduce the portion of G’s transfer of comments in writing regarding the draft
[EPA–HQ–ORD–2018–0280; FRL–9977–78]
property 1 to the partnership that would be proposed rule within 30 days after
treated as part of a sale). RIN 2080–AA13 receiving it, the EPA Administrator
(ii) Because the partnership assumed shall include the comments of the
liability 2 with a principal purpose of Notification of Submission to the Secretary of USDA and the EPA
reducing the extent to which the Secretary of Agriculture; Administrator’s response to those
partnership’s taking subject to liability 1 Harmonization of Regulations
would be treated as a transfer of
comments with the proposed rule that
Safeguarding Human Test Subjects publishes in the Federal Register. If the
consideration to G, liability 2 is ignored in
applying paragraph (a)(3) of this section. AGENCY: Environmental Protection Secretary of USDA does not comment in
Accordingly, the partnership’s taking subject Agency (EPA). writing within 30 days after receiving
to liability 1 is treated as a transfer of $4,000 ACTION: Notification of submission to the draft proposed rule, the EPA
of consideration to G (the amount by which Administrator may sign the proposed
liability 1 ($6,000) exceeds G’s share of
the Secretary of Agriculture.
rule for publication in the Federal
liability 1 ($2,000)). On the other hand, the
SUMMARY: This document notifies the Register any time after the 30-day
partnership’s assumption of liability 2 is not
treated as a transfer of any consideration to public as required by the Federal period.
H because H’s share of that liability equals Insecticide, Fungicide, and Rodenticide
$7,000 as a result of H’s transfer of $7,000 in Act (FIFRA) that the EPA Administrator II. Do any statutory and Executive
money to the partnership. has forwarded to the Secretary of the Order reviews apply to this
* * * * * United States Department of Agriculture notification?
(USDA) a draft regulatory document
§ 1.707–5T [Removed] concerning ‘‘Harmonize 40 CFR 26 No. This document is merely a
■ Par. 3. Section 1.707–5T is removed. Subparts C, D, and K with Subpart A notification of submission to the
■ Par. 4. Section 1.707–9 is amended by (the Common Rule)’’. The draft Secretary of USDA. As such, none of the
revising paragraph (a)(4) and removing regulatory document is not available to regulatory assessment requirements
paragraph (a)(5). The revisions read as the public until after it has been signed apply to this document.
follows: and made available by EPA. List of Subjects in 40 CFR Part 26
§ 1.707–9 Effective dates and transitional DATES: See Unit I. under SUPPLEMENTARY
rules. INFORMATION. Environmental protection,
ADDRESSES: The docket for this action, Administrative practice and procedures,
(a) * * *
(4) Section 1.707–5(a)(2) and (f) identified by docket identification (ID) Human research, Pesticides and pests.
Examples 2, 3, 7, and 8. (i) Section number EPA–HQ–ORD–2018–0280, is Dated: June 4, 2018.
1.707–5(a)(2) and (f) Examples 2, 3, 7, available at http://www.regulations.gov Richard P. Keigwin,
and 8, as contained in 26 CFR part 1 or at the Environmental Protection Director, Office of Pesticide Programs.
revised as of April 1, 2016, apply to any Agency Docket Center (EPA/DC), West
[FR Doc. 2018–12708 Filed 6–18–18; 8:45 am]
transaction with respect to which any William Jefferson Clinton Bldg., Rm.
daltland on DSKBBV9HB2PROD with PROPOSALS
3334, 1301 Constitution Ave. NW, BILLING CODE 6560–50–P
transfers occur before January 3, 2017.
(ii) For any transaction with respect to Washington, DC 20460–0001. The
which all transfers occur on or after Public Reading Room is open from 8:30
January 3, 2017, and any of such a.m. to 4:30 p.m., Monday through
transfers occurs before the date that is Friday, excluding legal holidays. The
thirty days after the date these telephone number for the Public
regulations are published as final in the Reading Room is (202) 566–1744. Please
Federal Register, see § 1.707–9T(a)(5) as review the visitor instructions and
VerDate Sep<11>2014 17:28 Jun 18, 2018 Jkt 244001 PO 00000 Frm 00012 Fmt 4702 Sfmt 9990 E:\FR\FM\19JNP1.SGM 19JNP1](https://thefederalregister.org/doc/83_FR_28515/page/5.svg)
Document Created: 2018-07-02 11:21:18
Document Modified: 2018-07-02 11:21:18
| 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 | Notice of proposed rulemaking; public hearing; partial withdrawal of notice of proposed rulemaking. | |
| Dates | Written or electronic comments must be received by July 19, 2018. | |
| Contact | Concerning the proposed regulations, Caroline E. Hay or Deane M. Burke at (202) 317-5279; concerning the submission of comments, the hearing, or to be placed on the building access list to attend the hearing, Regina L. Johnson at (202) 317-6901 (not toll-free numbers). | |
| FR Citation | 83 FR 28397 | |
| RIN Number | 1545-BO05 | |
| CFR Associated | Income Taxes and Reporting and Recordkeeping Requirements |
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