Part IV. Items of General Interest

Notice of Proposed Rulemaking by Cross-Reference to Temporary Regulations

Built-in Gains and Losses Under Section 382(h)

REG–144540–06

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rule making by cross-reference to temporary regulations.

SUMMARY: In this issue of the Bulletin, the IRS is issuing temporary regulations (T.D. 9330) that apply to corporations that have undergone ownership changes within the meaning of section 382. These regulations provide guidance on the treatment of prepaid income under the built-in gain provisions of section 382(h). The text of the temporary regulations published in this issue of the Bulletin serves as the text of these proposed regulations.

DATES: Written or electronic comments and requests for a public hearing must be received by September 12, 2007.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG–144540–06), Room 5203, Internal Revenue Service, PO 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–144540–06), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC; or sent electronically, via the Federal eRulemaking Portal at http://www.regulations.gov (IRS REG–144540–06).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Keith Stanley, (202) 622–7750; concerning submission of comments, the hearing, and/or to be placed on the building access list to attend the hearing, Richard Hurst, at (202) 622–2949 (TDD Telephone) (not

toll-free numbers) and his Email address is Richard.A.Hurst@irscounsel.treas.gov .

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

Temporary regulations in this issue of the Bulletin amend the Income Tax Regulations (26 CFR part 1) relating to section 382 of the Code. The text of the temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the amendments.

Special Analyses

It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It is hereby certified that these proposed regulations will not have a significant economic impact on a substantial number of small entities. These regulations only apply in the rare circumstance in which a qualifying loss corporation that uses a particular accounting method undergoes an ownership change. Therefore, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Nevertheless, the IRS and Treasury Department request comments from small entities that believe they might be adversely affected by these regulations. 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 Requests for a Public Hearing

Before these proposed regulations are adopted as final regulations, consideration will be given to any written (a signed original and eight (8) copies) or electronic comments that are submitted timely to the IRS. Please see the “Comments” section of the temporary regulation on this subject for a description of specific issues on which comments are requested. The

IRS and Treasury Department also request comments on the clarity of the proposed rules and how they can be made easier to understand. All comments will be available for public inspection and copying. If a public hearing is scheduled, notice of the date, time, and place for the public hearing will be published in the Federal Register .

Drafting Information

The principal author of these regulations is Sean McKeever, Office of Associate Chief Counsel (Corporate).

- - - -

Proposed Amendments to the Regulations

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

PART 1—INCOME TAXES

Paragraph 1. The authority citation for part 1 is amended by adding an entry in numerical order to read as follows:

Authority: 26 U.S.C. 7805 * * * Section 1.382–7 is also issued under 26 U.S.C. 382(m). - * *

Par. 2. Section 1.382–7 is added to read as follows:

§1.382–7 Built-in gains and losses.

[The text of this proposed section is the same as the text of §1.382–7T(a) through (b)(1) published elsewhere in this issue of the Bulletin].

Kevin M. Brown, Deputy Commissioner for Services and Enforcement.

(Filed by the Office of the Federal Register on June 13, 2007, 8:45 a.m., and published in the issue of the Federal Register for June 14, 2007, 72 F.R. 32828)

Section 1221(a)(4) Capital Asset Exclusion for Accounts and Notes Receivable; Hearing

Announcement 2007–66

AGENCY: Internal Revenue Service (IRS), Treasury

July 30, 2007 296 2007–31 I.R.B.

335 F.2d 125 (9 ^th Cir. 1964), and Fed- eral National Mortgage Association v. Commissioner, 100 T.C. 541 (1993). The Treasury Department and the IRS request participants at the forthcoming public hearing to focus on whether the interpretation in the proposed regulations is legally correct, and whether the decisions in Bur- bank Liquidating and Federal National Mortgage Association correctly applied section 1221(a)(4).

To attend the hearing, taxpayers must notify the IRS by Monday, July 23, 2007. Because of access restrictions, the IRS will not admit visitors beyond the immediate entrance area more than 30 minutes before the hearing. To notify the IRS that you plan to attend the hearing and for information about having your name placed on the building access list to attend the hearing, see the section in this document entitled “FOR FURTHER INFORMATION CONTACT.”

LaNita Van Dyke, Chief, Publications and

Regulations Branch, Legal Processing Division,

Associate Chief Counsel (Procedure and Administration).

(Filed by the Office of the Federal Register on July 6, 2007, 8:45 a.m., and published in the issue of the Federal Register for July 9, 2007, 72 F.R. 37155)

ACTION: Notice of public hearing on proposed rulemaking.

SUMMARY: This document provides a notice of a hearing on the proposed regulations (REG–109367–06, 2006–41 I.R.B. 683) under section 1221(a)(4) of the Internal Revenue Code.

DATES: The hearing will be held on Wednesday, August, 22, 2007 at 10:00 a.m.

ADDRESSES: The public hearing is being held in the IRS Auditorium, Internal Revenue Building, 1111 Constitution Avenue, NW, Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, K. Scott Brown (202) 622–7454; to notify the IRS that you plan to attend the hearing and to be placed on the building access list, Kelly Banks at (202) 622–0392 (not toll-free numbers).

SUPPLEMENTARY INFORMATION: On August 7, 2006, the Treasury Department and the IRS published in the Federal Register (71 FR 44600) proposed regulations § 1.1221–1(e), under section 1221(a)(4) of the Internal Revenue Code. These regulations clarify the circumstances in which accounts or notes receivable are “acquired … for services rendered” within the meaning of section 1221(a)(4). A public hearing was held on November 7, 2006, to discuss these regulations. Only two individuals spoke at the hearing.

Additional written comments were received from interested parties after the period for comments closed and the hearing was held. Several of these written comments contained requests for private meetings. Because it is more appropriate to address the concerns raised in the comments publicly, the Treasury Department and the IRS are scheduling a public hearing at which taxpayers will have another opportunity to discuss the proposed regulations. The views expressed at the hearing will be used in the rulemaking process.

Most of the written comments focused on the length of time that the decisions have been outstanding in Burbank Liq- uidating Corp. v. Commissioner, 39 T.C. 999 (1963), acq. sub. nom. United Assocs., Inc., 1965–1 C.B. 3, aff’d in part and rev’d in part on other grounds,

2007–31 I.R.B. 297 July 30, 2007