Part IV. Items — Internal Revenue Bulletin 2008-33

Notice of Proposed Rulemaking by Cross-Reference to Temporary Regulations and Notice of Proposed Rulemaking

Extension of Time for Filing Returns

REG–115457–08

AGENCY: Internal Revenue Service (IRS), Treasury.

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

SUMMARY: In this issue of the Bulletin, the IRS is issuing final and temporary regulations relating to the simplification of procedures for automatic extensions of time to file certain returns. These simplified procedures are aimed at reducing overall taxpayer burden. The text of the temporary regulations (T.D. 9407) also serves as the text of these proposed regulations.

DATES: Written or electronic comments and requests for a public hearing must be received by September 29, 2008.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG–115457–08), 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–115457–08), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC. Alternatively, taxpayers may submit comments electronically via the Federal eRulemaking Portal at www.regulations.gov (IRS REG–115457–08).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Matthew P. Howard, (202) 622–4910; concerning submissions of comments and requests for a public

hearing, Oluwafunmilayo Taylor (202) 622–7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

Partnerships, Trusts, and Estates

Final and temporary regulations in this issue of the Bulletin amend 26 CFR part 1 relating to section 6081. The text of the temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the amendments. The temporary regulations allow certain pass-through entities (most partnerships, estates, and certain trusts) to obtain an automatic fivemonth extension of time to file certain returns if an application is submitted on Form 7004, “Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Re- turns.”

In a previous notice of proposed rulemaking by cross-reference to temporary regulations, it was proposed that pass-through entities be allowed to obtain an automatic six-month extension of time to file. In response to comments received regarding the automatic six-month extension of time to file, and in an attempt to alleviate overall taxpayer burden, the Treasury Department and IRS have determined that the automatic extension period for certain pass-through entities should be five months. As a result, a majority of taxpayers with ownership interests in these pass-through entities will receive, in a timely manner, information returns from the entities that they need in order to complete their own income tax returns before those returns are due. For example, an individual income taxpayer with a six-month extension of time to October 15 ^th to file the Form 1040, “U.S. Individ- ual Income Tax Return” will now receive a Schedule K–1, “Partner’s Share of In- come, Deductions, Credits, etc.” from a partnership in which the taxpayer holds an interest shortly after the partnership files its Form 1065, “U.S. Return of Partner- ship Income” on its extended due date of September 15 ^th .

Although the Treasury Department and IRS are attempting to alleviate overall taxpayer burden, because the automatic extension period for certain pass-through entities will now be five months, comments are requested on whether a five-month extension of time to file for these pass-through entities might increase overall taxpayer burden. Please follow the instructions in the “Comments and Requests for a Public Hearing” portion of this preamble.

Pension Excise Taxes

This notice of proposed rulemaking also proposes to amend 26 CFR part 54. This amendment would allow filers of Form 8928, “Return of Certain Excise Taxes Under Chapter 43 of the Internal Revenue Code,” to obtain an automatic six-month extension of time to file the return after the date prescribed for filing the return.

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 also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. Although these regulations reference forms that are approved under the Paperwork Reduction Act (44 U.S.C. chapter 35), the regulations themselves do not impose a collection of information on small entities. Therefore the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Internal Revenue Code, this regulation has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact.

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) and electronic comments that are submitted timely to the

August 18, 2008 390 2008–33 I.R.B.

(f) Effective/applicability date . This section is applicable for applications for an automatic extension of time to file a return due under chapter 43, filed on or after the date final regulations are published in the Federal Register .

Linda E. Stiff, Deputy Commissioner for Services and Enforcement.

(Filed by the Office of the Federal Register on June 30, 2008, 8:45 a.m., and published in the issue of the Federal Register for July 1, 2008, 73 F.R. 37389)

Guidance Under Sections 642 and 643 (Income Ordering Rules); Correction

Announcement 2008–73

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correction to notice of proposed rulemaking.

SUMMARY: This document contains corrections to a notice of proposed rulemaking (REG–101258–08, 2008–28 I.R.B. 111) that was published in the Federal Register on Wednesday, June 18, 2008 (73 FR 34670) providing guidance under Internal Revenue Code section 642(c) with regard to the Federal tax consequences of an ordering provision in a trust, a will, or a provision of local law that attempts to determine the tax character of the amounts paid to a charitable beneficiary of the trust or estate. The proposed regulations also make conforming amendments to the regulations under section 643(a)(5). The proposed regulations affect estates, charitable lead trusts (CLTs) and other trusts making payments or permanently setting aside amounts for a charitable purpose.

FOR FURTHER INFORMATION CONTACT: Vishal Amin at (202) 622–3060 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

The correction notice that is the subject of this document is under sections 642 and 643 of the Internal Revenue Code.

IRS. The IRS and Treasury Department specifically request comments on the clarity of the proposed regulations and how they can be made easier to understand. All comments will be available for public inspection and copying. A public hearing will be scheduled if requested in writing by any person that timely submits comments. 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 Matthew P. Howard of the Office of the Associate Chief Counsel (Procedure and Administration).

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Proposed Amendments to the Regulations

Accordingly, 26 CFR parts 1 and 54, are proposed to be amended to read 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 1.6081–2 is added to read as follows:

§1.6081–2 Automatic extension of time to file certain returns filed by partnerships .

[The text of proposed §1.6081–2 is the same as the text of §1.6081–2T(a) through (i) published elsewhere in this issue of the Bulletin].

Par. 3. Section 1.6081–6 is added to read as follows:

§1.6081–6 Automatic extension of time to file estate or trust income tax return .

[The text of proposed §1.6081–6 is the same as the text of §1.6081–6T(a) through (h) published elsewhere in this issue of the Bulletin].

PART 54—PENSION EXCISE TAXES

Par. 4. The authority citation for part 54 is amended by adding an entry in numerical order to read in part as follows:

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

Section 54.6081–1 also issued under authority of 26 U.S.C. 6081(a).

Par. 5. Section 54.6081–1 is added to read as follows:

§54.6081–1 Automatic extension of time for filing returns for certain excise taxes under Chapter 43 .

(a) In general . An employer, other person or health plan that is required to file a return on Form 8928, “Return of Cer- tain Excise Taxes Under Chapter 43 of the Internal Revenue Code,” will be allowed an automatic 6-month extension of time to file the return after the date prescribed for filing the return if the employer, other person or health plan files an application under this section in accordance with paragraph (b) of this section.

(b) Requirements . To satisfy this paragraph (b), an employer, other person or health plan must—

(1) Submit a complete application on Form 7004, “Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Re- turns,” or in any other manner prescribed by the Commissioner;

(2) File the application on or before the date prescribed for filing the return with the Internal Revenue Service office designated in the application’s instructions; and

(3) Remit the amount of the properly estimated unpaid tax liability on or before the date prescribed for payment.

(c) No extension of time for the payment of tax . An automatic extension of time for filing a return granted under paragraph (a) of this section will not extend the time for payment of any tax due on such return.

(d) Termination of automatic extension . The Commissioner may terminate an automatic extension at any time by mailing to the estate or trust a notice of termination at least 10 days prior to the termination date designated in such notice. The Commissioner must mail the notice of termination to the address shown on the Form 7004 or to the estate or trust’s last known address. For further guidance regarding the definition of last known address, see §301.6212–2 of this chapter.

(e) Penalties . See section 6651 for failure to file a pension excise tax return or failure to pay the amount shown as tax on the return.

2008–33 I.R.B. 391 August 18, 2008

Correction of Publication

Accordingly, 26 CFR part 1 is corrected by making the following correcting amendment:

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 * * *

§1.881–5T [Removed]

Par. 2. Section 1.881–5T is removed.

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 17, 2008, 8:45 a.m., and published in the issue of the Federal Register for July 18, 2008, 73 F.R. 41259)

Tax Return Preparer Penalties Under Sections 6694 and 6695; Correction

Announcement 2008–75

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correction to notice of proposed rulemaking.

SUMMARY: This document contains corrections to a notice of proposed rulemaking (REG–129243–07, 2008–27 I.R.B. 32) that was published in the Federal Reg- ister on Tuesday, June 17, 2008 (73 FR 34560) implementing amendments to the tax return preparer penalties under sections 6694 and 6695 of the Internal Revenue Code and related provisions under sections 6060, 6107, 6109, 6696 and 7701(a)(36) reflecting amendments to the Code made by section 8246 of the Small Business and Work Opportunity Tax Act of 2007. The proposed regulations affect tax return preparers and provide guidance regarding the amended provisions.

FOR FURTHER INFORMATION CONTACT: Michael E. Hara, (202)

Need for Correction

As published, the notice of proposed rulemaking (REG–101258–08) contains errors that may prove to be misleading and are in need of clarification.

Correction of Publication

Accordingly, the publication of the notice of proposed rulemaking (REG–101258–08), which was the subject of FR Doc. E8–13611, is corrected as follows:

On page 34671, column 1, in the preamble, under the paragraph heading “Explanation of Provisions”, first paragraph, line 19, the language “proposed regulation will amend the” is corrected to read “proposed regulations will amend the”.
On page 34671, column 2, in the preamble, under the paragraph heading “Explanation of Provisions”, first paragraph of the column, line 3, the language “unrelated business tax income and tax-” is corrected to read “unrelated business taxable income and tax-”.
On page 34671, column 2, in the preamble, under the paragraph heading “Explanation of Provisions”, first paragraph of the column, line 22, the language “independent of the income tax” is corrected to read “independent of income tax”.

§1.642(c)–3 [Corrected]

On page 34672, column 1, §1.642(c)–3, paragraph 2., first entry of the amendatory instructions, the language “Revising the paragraph heading of paragraph (b) and add a heading to paragraph (b)(1).” is corrected to read “Revising the paragraph heading of paragraph (b) and adding a heading to paragraph (b)(1).”.

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 15, 2008, 8:45 a.m., and published in the issue of the Federal Register for July 16, 2008, 73 F.R. 40793)

Source Rules Involving U.S. Possessions and Other Conforming Changes; Correction

Announcement 2008–74

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

SUMMARY: This document contains a correction to final regulations (T.D. 9391, 2008–20 I.R.B. 945) that were published in the Federal Register on Wednesday, April 9, 2008 (73 FR 19350) providing rules under section 937(b) of the Internal Revenue Code for determining whether income is derived from sources within a U.S. possession or territory specified in section 937(a)(1) (generally referred to in this preamble as a “territory”) and whether income is effectively connected with the conduct of a trade or business within a territory.

DATES: This correction is effective July 18, 2008, and is applicable on April 9, 2008.

FOR FURTHER INFORMATION CONTACT: J. David Varley, (202) 622–7790 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

The final regulations and removal of temporary regulations that are the subjects of this document are under sections 1, 170A, 861, 871, 876, 881, 884, 901, 931, 932, 933, 934, 935, 937, 957, 1402, 6012, 6038, 6046, 6688, and 7701 of the Internal Revenue Code.

Need for Correction

As published, final regulations (T.D. 9391) contain an error that may prove to be misleading and is in need of clarification.

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August 18, 2008 392 2008–33 I.R.B.

for any contributions made after an organization ceases to qualify under section 170(c)(2) if the organization has not timely filed a suit for declaratory judgment under section 7428 and if the contributor (1) had knowledge of the revocation of the ruling or determination letter, (2) was aware that such revocation was imminent, or (3) was in part responsible for or was aware of the activities or omissions of the organization that brought about this revocation.

If on the other hand a suit for declaratory judgment has been timely filed, contributions from individuals and organizations described in section 170(c)(2) that are otherwise allowable will continue to be deductible. Protection under section 7428(c) would begin on August 11, 2008, and would end on the date the court first determines that the organization is not described in section 170(c)(2) as more particularly set forth in section 7428(c)(1). For individual contributors, the maximum deduction protected is $1,000, with a husband and wife treated as one contributor. This benefit is not extended to any individual, in whole or in part, for the acts or omissions of the organization that were the basis for revocation.

Family Housing Revitalization Program

Atlanta, GA Educational Solutions, Inc.

Jacksonville, FL Western Pacific University

Moreno Valley, CA Maine Medical Partners

S. Portland, ME PEP Transportation, Inc.

Decatur, AL TLAPALCALLI, Inc.

Brownsville, TX Missing Children Project, Inc.

Monroe, MI Adair County Rescue Squad, Inc.

Columbia, KY Credit Counseling Centers of Ohio, Inc.

Las Vegas, NV Fishermen’s Hospital, Inc.

Marathon, FL

622–4910 and Matthew S. Cooper, (202) 622–4940 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

The correction notice that is the subject of this document is under sections 6107, 6694, 6696, and 7701 of the Internal Revenue Code.

Need for Correction

As published, the notice of proposed rulemaking (REG–129243–07) contains errors that may prove to be misleading and are in need of clarification.

Correction of Publication

Accordingly, the publication of the notice of proposed rulemaking (REG–129243–07), which was the subject of FR Doc. E8–12898, is corrected as follows:

On page 34563, column 2, in the preamble, under the paragraph heading “ Fur- nishing of Copy of the Tax Return ”, first paragraph of the column, line 2, the language “Single Filers and Joint Filers With No” is corrected to read “Single and Joint Filers With No”.
On page 34567, column 1, in the preamble, under the paragraph heading “ Def- inition of Tax Return Preparer ”, first paragraph of the column, line 3, the language “under proposed §301.7701–15(b)(2) and” is corrected to read “under proposed §§301.7701–15(b)(2) and”.

§1.6694–1 [Corrected]

On page 34572, column 1, §1.6694–1(e)(2), line 6, the language “would be sustained on its merits and” is corrected to read “be sustained on its merits and”.

§26.6694–1 [Corrected]

On page 34583, column 3, §26.6694–1(a), line 5, the language “see

§1.66994–1 of this chapter.” is corrected to read “see §1.6694–1 of this chapter.”.

§41.6107–1 [Corrected]

On page 34586, column 3, §41.6107–1(a), line 3, the language “or claim for refund of excise tax section” is corrected to read “or claim for refund of excise tax under section”.

§156.6107–1 [Corrected]

On page 34593, column 1, §156.6107–1(a), line 3, the language “or claim for refund of tax under Section” is corrected to read “or claim for refund of tax under section”.

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 18, 2008, 8:45 a.m., and published in the issue of the Federal Register for July 21, 2008, 73 F.R. 42294)

Deletions From Cumulative List of Organizations Contributions to Which are Deductible Under Section 170 of the Code

Announcement 2008–76

The Internal Revenue Service has revoked its determination that the organizations listed below qualify as organizations described in sections 501(c)(3) and 170(c)(2) of the Internal Revenue Code of 1986. Generally, the Service will not disallow deductions for contributions made to a listed organization on or before the date of announcement in the Internal Revenue Bulletin that an organization no longer qualifies. However, the Service is not precluded from disallowing a deduction

2008–33 I.R.B. 393 August 18, 2008