Treatment of Income From Indian Fishing Rights-Related

Official source: Federal Register (GovInfo) (https://www.govinfo.gov/content/pkg/FR-2026-05-04/pdf/2026-08613.pdf), retrieved 2026-10-03. U.S. Government work (17 U.S.C. § 105).

Federal Register / Vol. 91, No. 85 / Monday, May 4, 2026 / Rules and Regulations 23915

rule to both Houses of Congress and to the Comptroller General.

List of Subjects in 21 CFR Part 1308

Administrative practice and procedure, Drug traffic control, Reporting and recordkeeping requirements.

For the reasons set out above, DEA amends 21 CFR part 1308 as follows:

PART 1308—SCHEDULES OF CONTROLLED SUBSTANCES

1. The authority citation for part 1308 continues to read as follows:

Authority: 21 U.S.C. 811, 812, 871(b), 956(b), unless otherwise noted.

1. Amend § 1308.11 by adding paragraph (d)(115) to read as follows:

§ 1308.11 Schedule I.

- - - (d) * -

power and responsibilities between the Federal government and Indian tribes.

Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) applies to rules that are subject to the notice-and-comment requirements under the APA or other laws. ⁵ As noted in the above section regarding the applicability of the APA, DEA determined that there was good cause to exempt this final rule from notice and comment. Consequently, the RFA does not apply.

Paperwork Reduction Act of 1995

This action does not impose a new collection of information requirement under the Paperwork Reduction Act of 1995. ⁶ This action would not impose recordkeeping or reporting requirements on State or local governments, individuals, businesses, or organizations. An agency may not conduct or sponsor, and a person is not

required to respond to a collection of information unless it displays a currently valid OMB control number.

Unfunded Mandates Reform Act of 1995

In accordance with the Unfunded Mandates Reform Act (UMRA) of 1995, 2 U.S.C. 1532, DEA has determined that this action would not result in any Federal mandate that may result ‘‘in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any 1 year. . . .’’ Therefore, neither a Small Government Agency Plan nor any other action is required under UMRA of 1995.

Congressional Review Act

The Office of Information and Regulatory Affairs has determined that this rule is not a major rule as defined by the Congressional Review Act (CRA), 5 U.S.C. 804. However, pursuant to the CRA, DEA is submitting a copy of this

- - - - - - (115) 6,6,9-trimethyl-3-pentyl-6a,7,8,9,10,10a-hexahydro-6 H -benzo[ c ]chromen-1-ol (other names: hexahydrocannabinol, HHC) ... 7220

- - - - - -

Signing Authority

This document of the Drug Enforcement Administration was signed on April 22, 2026, by DEA Administrator Terrance C. Cole. That document with the original signature and date is maintained by DEA. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DEA Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of DEA. This administrative process in no way alters the legal effect of this document upon publication in the Federal Register .

Heather Achbach, Federal Register Liaison Officer, Drug Enforcement Administration.

[FR Doc. 2026–08595 Filed 5–1–26; 8:45 am]

BILLING CODE 4410–09–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 10046]

RIN 1545–BL61

Treatment of Income From Indian Fishing Rights-Related Activity as Compensation

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final Regulations.

SUMMARY: This document contains final regulations providing that amounts paid to a member of an Indian Tribe as remuneration for services performed in a fishing rights-related activity may be treated as compensation for purposes of applying the limits on qualified retirement plan benefits and contributions. These regulations affect participants, beneficiaries, sponsors, and administrators of Tribal plans.

DATES:

Effective Date: These regulations are effective on May 4, 2026.

Applicability Date: For date of applicability, see § 1.415(a)–1(g)(5).

FOR FURTHER INFORMATION CONTACT: Jamie Dvoretzky at (202) 317–4102, or

Pamela Kinard at (202) 317–6000 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Authority

This Treasury Decision contains final regulations that amend the Income Tax Regulations (26 CFR part 1) under section 415, related to the definition of the term ‘‘compensation’’ for purposes of contribution and benefit limits applicable to qualified retirement plans. These final regulations are issued under the authority granted by section 415(j) of the Internal Revenue Code (Code), which authorizes the Secretary of the Treasury or his delegate (Secretary) to prescribe such regulations as may be necessary to carry out the purposes of section 415. These final regulations are also issued under the authority granted by section 7805(a), which authorizes the Secretary to prescribe all needful rules and regulations for the enforcement of the Code.

Background

This document contains amendments to regulations under section 415 of the Code, which generally imposes limitations on the annual amount that a qualified retirement plan may provide, with respect to a participant, in either benefit payments or in contributions

5 5 U.S.C. 601–612. 6 44 U.S.C. 3501–3521.

VerDate Sep<11>2014 15:49 May 01, 2026 Jkt 268001 PO 00000 Frm 00013 Fmt 4700 Sfmt 4700 E:\FR\FM\04MYR1.SGM 04MYR1

23916 Federal Register / Vol. 91, No. 85 / Monday, May 4, 2026 / Rules and Regulations

Distributions,’’ ‘‘Treating Contributions as Roth Contributions,’’ and ‘‘SelfEmployed Tribal Members’’ in this Summary of Comments and Explanation of Provisions) provides clarifying information relating to many of these issues.

B. Taxation of Distributions

The preamble to the proposed regulations requested comments regarding the taxation of qualified plan distributions attributable to contributions based on fishing rightsrelated income, and the application of section 72(f)(2) ¹ to such distributions. All of the comments received requested that distributions attributable to contributions based on fishing rightsrelated income should not be taxable to a Tribal employee.

Several of the commenters referred to Hall v. Commissioner, 76 T.C.M. 473 (1998), in which the petitioner was a full-time employee in a Tribal fish hatchery who received a choice between an employer contribution to a retirement account or an employer contribution to a health plan. In 1992, the petitioner elected the retirement benefit and the employer contributed a monthly amount to an individual retirement account (IRA). That same year, the petitioner received early distributions from the IRA attributable to those employer contributions and to income earned in the IRA. The Tax Court generally found that, under section 72 (as modified by section 408(d)(1) and (2)), the amount of the distributions attributable to contributions based on fishing rightsrelated income represents a nontaxable return of his investment in the contract, but added that the amount of distributions attributable to the earnings on the IRA contributions represents accrued income that is taxable to the petitioner.

In response to the requests to clarify the taxation of qualified plan distributions attributable to contributions based on fishing rightsrelated income, the Treasury Department and the IRS have determined that the holding in Hall v. Commissioner should apply to these distributions. Thus, consistent with Hall, any contribution to a qualified retirement plan that is attributable to remuneration for services performed by a Tribal employee in a fishing rightsrelated activity is treated as investment in the contract for a plan participant

1 Section 72(f)(2) treats employer contributions as investment in the contract if those amounts would not have been includible in income of the employee had they been paid directly to the employee.

and other additions to the plan. These limitations generally are based on a participant’s compensation. Section 415(c)(3) provides that the term ‘‘participant’s compensation’’ means the compensation of the participant from the employer for the year.

Section 1.415(c)–2(a) of the Income Tax Regulations generally provides that compensation from the employer within the meaning of section 415(c)(3) includes all items of remuneration described in § 1.415(c)–2(b) to the extent that the amounts are includible in gross income, but excludes the items of remuneration described in § 1.415(c)– 2(c), such as contributions made by an employer to a plan of deferred compensation to the extent that the contributions are not includible in the gross income of the employee for the taxable year in which contributed.

Section 7873(a)(1) provides that no tax shall be imposed on income derived from a fishing rights-related activity of an Indian tribe by (A) a member of the Indian tribe directly or through a qualified Indian entity, or (B) a qualified Indian entity. Section 7873(a)(2) provides that no employment tax shall be imposed on remuneration paid for services performed in a fishing rightsrelated activity of an Indian tribe by a member of such tribe for another member of such tribe or for a qualified Indian entity.

On November 15, 2013, proposed regulations under section 415 were published in the Federal Register (78 FR 68780). The proposed regulations would provide that income described in section 7873(a) (‘‘fishing rights-related income’’) is included in the definition of compensation under section 415. Specifically, the proposed regulations would provide that amounts paid to a member of an Indian tribe as remuneration for services performed in a fishing rights-related activity (as defined in section 7873(b)(1)) do not fail to be treated as compensation under § 1.415(c)–2(b)(1) and (b)(2) (and are not excluded from the definition of compensation pursuant to § 1.415(c)– 2(c)(4)) merely because those amounts are not subject to income tax or employment taxes as a result of section 7873(a)(1) and (a)(2). Thus, the determination of whether an amount constitutes wages, salaries, or earned income for purposes of § 1.415(c)– 2(b)(1) or (b)(2) is made without regard to the exemption from income tax under section 7873(a)(1) or employment tax under section 7873(a)(2). In addition, by permitting fishing rights-related income to be treated as wages, salaries, or earned income under § 1.415(c)–2(b)(1) and (b)(2), plans that accept

contributions of fishing rights-related income would not be precluded from utilizing the safe harbor definitions of compensation under § 1.415(c)–2(d)(2) and (d)(3).

Written comments on the proposed regulations were received and considered. The Department of the Treasury (Treasury Department) and the IRS did not receive any requests for a public hearing to address the proposed regulations, and, accordingly, no hearing was held. The Treasury Department held a Tribal consultation on this proposed rule on December 17, 2013. Additionally, on August 22, 2024, the Treasury Department met with the Treasury Tribal Advisory Committee, Subcommittee on Parity and Reform and received additional feedback on the proposed regulations. After consideration of the comments received, the proposed regulations are adopted by this Treasury decision without material modification.

Summary of Comments and Explanation of Provisions

A. Treatment of Fishing Rights-Related Income as Compensation Under Section 415 The proposed regulations were issued primarily in response to requests from the Tribal community that the Treasury Department and the IRS address whether contributions can be made to qualified retirement plans based on fishing rights-related income. Under the proposed regulations, fishing rightsrelated income would not fail to be treated as compensation under § 1.415(c)–2(b)(1) and (b)(2) (and is not excluded from the definition of compensation pursuant to § 1.415(c)– 2(c)(4)) merely because those amounts are not subject to income tax or employment tax as a result of section 7873(a)(1) or (a)(2). Commenters generally reacted favorably to this proposed rule, stating that the proposed regulations provided much needed clarity on how plans should treat fishing rights-related income paid to employees subject to section 7873 (Tribal employees) under section 415. The Treasury Department and the IRS also received comments stating that additional guidance is needed with respect to a variety of issues relating to fishing rights-related income in retirement plans. Many of these issues are outside the scope of these regulations, which are modifying the definition of compensation for purposes of section 415, and so the text of the final regulations does not address them. However, this preamble (under the headings ‘‘Taxation of

VerDate Sep<11>2014 15:49 May 01, 2026 Jkt 268001 PO 00000 Frm 00014 Fmt 4700 Sfmt 4700 E:\FR\FM\04MYR1.SGM 04MYR1

Federal Register / Vol. 91, No. 85 / Monday, May 4, 2026 / Rules and Regulations 23917

under the rules of section 72(f)(2). Therefore, any distribution of such amounts is nontaxable to the participant. However, also consistent with Hall, the amount of the distribution attributable to earnings on those contributions is taxable.

Another commenter raised an issue regarding the ordering for determining the taxable and nontaxable amounts of a qualified retirement plan distribution. Referring to qualified retirement plan distributions attributable to fishing rights-related income, this commenter suggested that plan participants be allowed to elect the order in which the qualified retirement plan distributions are made so that the nontaxable amounts could be received first. This suggestion is not adopted because it is inconsistent with the basis recovery rules in section 72. ² Tribal employees will have investment in the contract on contributions to the plan attributable to fishing rights-related income, and thus the general basis recovery rules of section 72 will apply.

The Treasury Department and the IRS also received comments concerning the treatment of earnings on contributions attributable to fishing rights-related income and the treatment of employer matching and profit-sharing contributions related to contributions attributable to fishing rights-related income. As explained in the preceding paragraph, section 72 provides basis recovery rules for determining the taxable and nontaxable portions of a distribution. Section 72(f) applies to amounts contributed by the employer and does not distinguish employer matching or employer profit-sharing contributions from employee elective deferrals (which are treated as employer contributions pursuant to section 402(e)(3)). Therefore, section 72(f)(2) applies not only to employee elective deferrals but also to employer matching and employer profit-sharing contributions attributable to remuneration for services performed by a Tribal employee in a fishing rightsrelated activity. As explained in Hall v. Commissioner, however, section 72(f)(2) does not apply to earnings. Therefore, qualified retirement plan distributions attributable to the earnings on contributions based on fishing rightsrelated income generally will be taxable to the participant and the basis recovery rules of section 72 will apply in determining the portion of a distribution that is includible in income.

2 Section 72(b) provides that gross income does not include that part of any amount received as an annuity which bears the same ratio to such amount as the investment in the contract bears to the expected return under the contract.

C. Treating Contributions as Roth Contributions

One commenter suggested that guidance be provided to allow a qualified retirement plan to treat contributions attributable to fishing rights-related income as either Roth contributions or after-tax contributions. The commenter added that the guidance could provide that, if the plan permits participants to make Roth contributions, then the employee’s contributions attributable to fishing rights-related income would be treated as Roth contributions. If the plan does not provide for Roth contributions, then these contributions would be treated as after-tax contributions.

Section 1.401(k)–1(f)(2) provides that if an elective contribution would not have been includible in gross income if the amount had been paid directly to the employee (rather than being subject to a cash or deferred election), the elective contribution is nevertheless permitted to be a designated Roth contribution, provided the employee is entitled to treat the amount as an investment in the contract pursuant to section 72(f)(2). As previously stated in this preamble under the heading ‘‘Taxation of Distributions,’’ any contributions attributable to remuneration for services performed in a fishing rights-related activity are treated as investment in the contract for the plan participant under the rules of section 72(f)(2). Therefore, contributions attributable to fishing rights-related income are permitted to be designated Roth contributions under a qualified retirement plan that permits participants to make those contributions.

D. Self-Employed Tribal Members

Two commenters asked about the retirement plan options for Tribal members who earn fishing rights-related income but who may not be employed by an Indian tribe. Section 401(a) provides that a plan of an employer is a qualified plan only if it is created or organized for the exclusive benefit of the employer’s employees or their beneficiaries. For these purposes, whether an individual is an employee of the employer maintaining a plan is generally determined under common law principles. See Nationwide Mutual Insurance Co. v. Darden, 503 U.S. 318 (1992). Self-employed individuals generally may not participate in a qualified retirement plan sponsored by another employer. Moreover, whether an individual earns fishing-rights related income is not determinative of whether that individual is an employee.

However, an individual who is selfemployed under section 401(c)(1) may nevertheless maintain his or her own qualified retirement plan, such as a section 401(k) plan.

E. Additional Comments

Commenters also requested guidance on several other issues, including guidance permitting rollover of contributions attributable to fishing rights-related income from a nonqualified plan to a qualified plan, guidance permitting Tribal employers to take retroactive action to permit Tribal employees to contribute fishing rightsrelated income to a qualified plan, and guidance on testing for contributions attributable to fishing rights-related income. These comments are all beyond the scope of these regulations and, in certain cases, the requested guidance may not be permissible under the Code (for example, rollover of amounts from a nonqualified plan into a qualified plan). However, the Treasury Department and IRS will continue to review comments that are beyond the scope of these regulations and consider if any further guidance is needed. If additional guidance is needed, the Treasury Department and the IRS will conduct Tribal consultation pursuant to Executive Order 13175.

Applicability Date

These final regulations apply for plan years ending on or after May 4, 2026.

Special Analyses

I. Regulatory Planning and Review

OMB’s Office of Information and Regulatory Affairs has determined that this regulation is not significant and is not subject to review under section 6(b) of Executive Order 12866, as amended.

II. Regulatory Flexibility Act

It is hereby certified that these final regulations will not have a significant economic impact on a substantial number of small entities within the meaning of section 601(6) of the Regulatory Flexibility Act (5 U.S.C. chapter 6). This certification is based on the fact that only 5,000 to 6,000 employees nationwide are estimated to earn fishing rights-related income. Therefore, a regulatory flexibility analysis under the Regulatory Flexibility Act is not required.

Pursuant to section 7805(f) of the Code, the proposed regulations that preceded these final regulations were submitted to the Chief Counsel for the Office of Advocacy of the Small Business Administration for comment on their impact on small business, and no comments were received.

VerDate Sep<11>2014 15:49 May 01, 2026 Jkt 268001 PO 00000 Frm 00015 Fmt 4700 Sfmt 4700 E:\FR\FM\04MYR1.SGM 04MYR1

23918 Federal Register / Vol. 91, No. 85 / Monday, May 4, 2026 / Rules and Regulations

Consultation and Coordination With Tribal Governments

In addition to written comments responding to the proposed regulations, these final regulations reflect comments provided in a Tribal consultation held on December 17, 2013, as well as comments provided in a meeting with members of the Treasury Tribal Advisory Committee Subcommittee on Parity and Reform on August 22, 2024.

Drafting Information

The principal author of these regulations is Jamie Dvoretzky, Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes). However, other personnel from the Treasury Department and the IRS participated in the development of these regulations.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

Accordingly, the Treasury Department and the IRS amend 26 CFR part 1 as follows:

PART 1—INCOME TAXES

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

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

Par. 2. Section 1.415(a)–1 is amended by adding paragraph (g)(5) to read as follows:

§ 1.415(a)–1 General rules with respect to limitations on benefits and contributions under qualified plans.

- - - (g) * - (5) Special effective date. Section 1.415(c)–2(g)(9) applies for plan years ending on or after May 4, 2026.
Par. 3. Section 1.415(c)–2 is amended by adding paragraph (g)(9) to read as follows:

§ 1.415(c)–2 Compensation.

- - - (g) * - (9) Income derived by Indians from exercise of fishing rights-related activities. Amounts paid to a member of an Indian tribe directly or through a qualified Indian entity (within the meaning of section 7873(b)(3)) as compensation for services performed in a fishing rights-related activity (as defined in section 7873(b)(1)) of the tribe do not fail to constitute compensation under paragraphs (b)(1)

and (2) of this section (and are not excluded from the definition of compensation pursuant to paragraph (c)(4) of this section) merely because those amounts are not subject to income or employment taxes as a result of section 7873(a)(1) and (a)(2). Thus, the determination of whether an amount constitutes wages, salaries, or earned income for purposes of paragraph (b)(1) or (2) of this section is made without regard to the exemption from taxation under section 7873(a)(1) and (a)(2).

Frank J. Bisignano, Chief Executive Officer, IRS.

Approved: April 1, 2026. Kenneth J. Kies, Assistant Secretary of the Treasury (Tax Policy).

[FR Doc. 2026–08613 Filed 5–1–26; 8:45 am]

BILLING CODE 4831–GV–P

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 648

[Docket No. 260209–0039; RTID 0648– XF756]

Fisheries of the Northeastern United States; Summer Flounder Fishery; Quota Transfer From Virginia to New Jersey

AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

ACTION: Temporary rule; quota transfer.

SUMMARY: NMFS announces that the Commonwealth of Virginia is transferring a portion of its 2026 commercial summer flounder quota to the State of New Jersey. This adjustment to the 2026 fishing year quota is necessary to comply with the Summer Flounder, Scup, and Black Sea Bass Fishery Management Plan (FMP) quota transfer provisions. This announcement informs the public of the revised 2026 commercial quotas for Virginia and New Jersey.

DATES: Effective May 1, 2026, through December 31, 2026.

FOR FURTHER INFORMATION CONTACT: Matthew Rigdon, Fishery Management Specialist, (978) 281–9336.

SUPPLEMENTARY INFORMATION: Regulations governing the summer flounder fishery are found in 50 CFR 648.100 through 648.111. These regulations require annual specification of a commercial quota that is

apportioned among the coastal states from Maine through North Carolina. The process to set the annual commercial quota and the percent allocated to each state is described in § 648.102, and the final 2026 allocations were published on February 19, 2026 (91 FR 7896).

The final rule implementing amendment 5 to the FMP, as published in the Federal Register on December 17, 1993 (58 FR 65936), provided a mechanism for transferring summer flounder commercial quota from one state to another. Two or more states, under mutual agreement and with the concurrence of the NMFS Greater Atlantic Regional Administrator, can transfer or combine summer flounder commercial quota under § 648.102(c)(2). The Regional Administrator is required to consider three criteria in the evaluation of requests for quota transfers or combinations: (1) the transfers or combinations would not preclude the overall annual quota from being fully harvested; (2) the transfers address an unforeseen variation or contingency in the fishery; and (3) the transfers are consistent with the objectives of the FMP and the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). The Regional Administrator has determined these three criteria have been met for the transfer approved in this notification.

Virginia is transferring 13,488 pounds (lb; 6,118 kilograms (kg)) of summer flounder to New Jersey through a mutual agreement between the states. This transfer was requested to repay landings made by an out-of-state permitted vessel under a safe harbor agreement. The revised summer flounder quotas for 2026 are: Virginia, 2,420,512 lb (1,097,926 kg); and New Jersey, 2,109,868 lb (957,020 kg).

Classification

NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR 648.102(c)(2)(i) through (iv), which was issued pursuant to section 304(b) of the Magnuson-Stevens Act, and is exempted from review under Executive Order 12866.

Authority: 16 U.S.C. 1801 et seq.

Dated: April 30, 2026. Kelly Denit, Director, Office of Sustainable Fisheries, National Marine Fisheries Service.

[FR Doc. 2026–08599 Filed 5–1–26; 8:45 am]

BILLING CODE 3510–22–P

VerDate Sep<11>2014 15:49 May 01, 2026 Jkt 268001 PO 00000 Frm 00016 Fmt 4700 Sfmt 9990 E:\FR\FM\04MYR1.SGM 04MYR1