Part IV. Items — Internal Revenue Bulletin 2013-11

Partial Withdrawal of Notice of Proposed Rulemaking and Notice of Proposed Rulemaking by Cross-Reference to Temporary Regulation.

Payout Requirements for Type III Supporting Organizations That Are Not Functionally Integrated

REG–155929–06

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Partial withdrawal of notice of proposed rulemaking and notice of proposed rulemaking by cross-reference to temporary regulation.

SUMMARY: This document withdraws portions of the notice of proposed rulemaking published on September 24, 2009, relating to the payout requirements for Type III supporting organizations that are not functionally integrated. The withdrawal affects Type III supporting organizations that are not functionally integrated. In this issue of the Bulletin, the IRS is issuing temporary regulations (T.D. 9605) regarding the requirements to qualify as a Type III supporting organization that is operated in connection with one or more supported organizations. Those regulations reflect changes to the law made by the Pension Protection Act of 2006 and will affect Type III supporting organizations and their supported organizations. The text of those temporary regulations published in this issue of the Bulletin also serves as the text of these proposed regulations.

DATES: Written or electronic comments and requests for a public hearing must be received by March 28, 2013.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG–155929–06), 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–155929–06), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC, or sent electronically via the Federal eRulemaking Portal at http://www.reg- ulations.gov/ (IRS REG–155929–06).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Preston J. Quesenberry at (202) 622–6070; concerning submissions of comments and requests for a public hearing, Oluwafunmilayo Taylor at (202) 622–7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

Final and temporary regulations in this issue of the Bulletin contain amendments to the Income Tax Regulations (26 CFR part 1) regarding organizations described in section 509(a)(3) of the Internal Revenue Code (Code), which are known as supporting organizations. The final and temporary regulations provide requirements to qualify as a supporting organization that is operated in connection with one or more supported organizations (called “Type III Supporting Organizations”). Those regulations reflect changes to the law made by the Pension Protection Act of 2006, Public Law 109–280 (120 Stat. 780 (2006)), and will affect Type III supporting organizations and their supported organizations. The text of those temporary regulations also serves as the text of these proposed regulations. The preamble to the final and temporary regulations explains the temporary regulations and these proposed regulations.

Special Analyses

It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because these regulations do not impose a collection of information on small

entitles, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, this regulation has been 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 electronic comments or written comments (a signed original and eight (8) copies) that are submitted timely to the IRS. The Treasury Department and the IRS request comments on all aspects of the proposed rules. All comments that are submitted by the public will be available for public inspection and copying at www.regulations.gov or upon request. A public hearing may be scheduled if requested in writing by any person that timely submits written 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 authors of these regulations are Preston J. Quesenberry, and Stephanie N. Robbins, Office of Associate Chief Counsel (Tax-Exempt and Government Entities). However, other personnel from the Treasury Department and the IRS participated in their development.

- - - -

Partial Withdrawal of Notice of Proposed Rulemaking

Accordingly, under the authority of 26 U.S.C. 7805, §§1.509(a)–4(i)(5)(ii)(B) and 1.509(a)–4(i)(8) of the notice of proposed rulemaking (REG–155929–06) that was published in the Federal Register on September 24, 2009, (78 FR 48672) are withdrawn.

Proposed Amendments to the Regulations

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

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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 1.509(a)–4 is amended by revising paragraphs (i)(5)(ii)(B), (i)(5)(ii)(C), and (i)(8) to read as follows:

§1.509(a)–4 Supporting organizations.

- - - (i) - - (5) - - (ii) * - (B) [The text of proposed amendments to §1.509(a)–4(i)(5)(ii)(B) is the same as the text of §1.509(a)–4T(i)(5)(ii)(B) published elsewhere in this issue of the Bulletin].

(C) [The text of proposed amendments to §1.509(a)–4(i)(5)(ii)(C) is the same as the text of §1.509(a)–4T(i)(5)(ii)(C) published elsewhere in this issue of the Bulletin].

- - - (8) [The text of proposed amendments to §1.509(a)–4(i)(8) is the same as the text of §1.509(a)–4T(i)(8) published elsewhere in this issue of the Bulletin].

Steven T. Miller, Deputy Commissioner for Services and Enforcement.

(Filed by the Office of the Federal Register on December 21, 2012, 4:15 p.m., and published in the issue of the Federal Register for December 26, 2012, 77 F.R. 76426)

Announcement 2013–12

AGENCY: Internal Revenue Service (IRS), Treasury

ACTION: Eliminating printing on paper of the Internal Revenue Bulletin (IRB) and eliminating the creation of the Cumulative Bulletin (CB)

SUMMARY: The IRS is no longer printing paper copies of the IRB, which the IRS distributed directly to certain stakeholders. The yearly subscription sold by the Superintendent of Documents is unaffected. Also, the IRS will not create the CB after the 2008–2 edition.

DATE: This announcement is effective immediately.

SUPPLEMENTARY INFORMATION:

Background

The IRB is available on IRS.gov before printed copies are available. Also, the majority of items (about two-thirds) that appear in the IRB are released with a News Release about a month ahead of when the item appears in the IRB. Since all items in the IRB are available electronically, almost a month in advance of being available in the printed IRB, we are eliminating the printing of paper copies of the IRB, which are distributed directly from the IRS. The cost savings to printing and postage would be $148,000 annually.

Media and Publications contacted several IRB external stakeholders in May 2011 to elicit their comments and concerns. From the stakeholders we heard from, the most pressing concerns were for paper copies of the January issue continue to be printed and electronic notification of when the new IRB is available.

Accordingly, as a cost cutting measure, the IRS is no longer printing paper copies of the IRB, which the IRS distributed directly to certain stakeholders. Also, the IRS will not create the CB after the 2008–2 edition.

FOR FURTHER INFORMATION CONTACT:

If you have comments concerning this issue, you can write to the Gerald J. Shields, LL.M., Internal Revenue Service, Tax Products Coordinating Committee, SE:W:CAR:MP:T:M:S, 1111 Constitution Ave. NW, IR–6526, Washington, DC 20224. Do not send any tax forms to this address.

U.S.-Norway Agreement on Fiscally Transparent Entities

Announcement 2013–14

The following is a copy of the Competent Authority Agreement (“the Agreement”) that was released to the public on January 31, 2013, by the Competent Authorities of the United States and Norway regarding the eligibility of entities that are treated as fiscally transparent under the laws of either Contracting State to benefit

under the Convention Between the United States of America and the Kingdom of Norway for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Property, signed on December 3, 1971, and as amended by the Protocol signed on September 19, 1980 (the “Treaty”).

The text of the Agreement is as follows:

COMPETENT AUTHORITY

AGREEMENT

The Competent Authorities of the United States and Norway hereby enter into the following mutual agreement regarding the eligibility of entities that are treated as fiscally transparent under the laws of either Contracting State to benefit under the Convention Between the United States of America and the Kingdom of Norway for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Property, signed on December 3, 1971, and as amended by the Protocol signed on September 19, 1980 (the “Treaty”). This agreement clarifies the cases in which fiscally transparent entities are entitled to treaty benefits and clarifies the procedure for claiming treaty benefits from Norway. The agreement is entered into under paragraph 2 of Article 27 (Mutual Agreement Procedure) of the Treaty.

1) Eligibility of fiscally transparent entities for treaty benefits

Paragraph 1(a)(ii) of Article 3 (Fiscal Residence) of the Treaty provides, in relevant part, that the term “resident of Norway” means a partnership, estate or trust only to the extent that the income derived by such person is subject to Norwegian tax as the income of a resident.

Paragraph 1(b)(ii) of Article 3 of the Treaty provides, in relevant part, that the term “resident of the United States” means a partnership, estate, or trust only to the extent that the income derived by such person is subject to U.S. tax as the income of a resident.

The Competent Authorities agree that in applying paragraphs 1(a)(ii) and 1(b)(ii) of Article 3, income from sources within one of the Contracting States received by an entity, wherever organized, that is treated as fiscally transparent under the laws of either Contracting State will be

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U.S. partners. The same procedures apply to an LLC seeking certification if it has more than one owner and is treated as a partnership for U.S. tax purposes.

An S corporation may submit a Form 8802 and obtain a Form 6166 certificate of residence in a manner similar to that of a partnership. A Form 6166 confirms the filing of an information return, Form 1120S, U.S. Income Tax Return for an S Corpora- tion, as required for an S corporation, and includes a list of shareholders who filed returns as U.S. residents.

A grantor trust that is owned by a U.S. resident may submit a Form 8802 to obtain a Form 6166 that provides that the owner or owners listed on the form have filed tax returns as U.S. residents.

A U.S. resident that is the single member owner of an LLC or other entity that is disregarded as an entity separate from its owner for U.S. tax purposes may submit a Form 8802 to obtain a Form 6166 that provides that the LLC or other entity is (or is treated as) a branch, division or business unit of its single member owner and that such single member has filed a tax return as a resident of the United States.

Persons applying for a Form 6166 must identify the type of entity as well as the country for which they are requesting certification. This permits the United States to determine that a taxpayer is a resident for U.S. tax purposes as well as for purposes of the applicable treaty. See Form 8802 and the associated instructions. As such, Norway accepts the Form 6166 as a certification of U.S. residency for U.S. tax purposes as well as for purposes of the Treaty.

Agreed to by the undersigned competent authorities:

terested parties, in accordance with the corrections to Rev. Proc. 2013–6 made by Ann. 2013–13, 2013–9 I.R.B. 532.

treated as income derived by a resident of the other Contracting State to the extent that such income is subject to tax as the income of a resident of the other Contracting State.

For an entity to be fiscally transparent, the income subject to tax in the hands of the resident must have the same source and character as if the income were received directly by the resident. It is not relevant whether the entity would be fiscally transparent for tax purposes in the other Contracting State or any third jurisdiction in which the entity is organized. For U.S. tax purposes, a fiscally transparent entity includes any entity treated as a partnership under subchapter K of the Internal Revenue Code (Code), a “disregarded entity” (an entity such as an LLC that is disregarded as an entity separate from its single member owner), a subchapter S corporation (a domestic corporation with exclusively U.S. shareholders described in section 1361 of the Code), a “grantor trust” described in section 671 of the Code, et seq ., and a common trust fund within the meaning of section 584 of the Code.

For example, if a resident of the United States is a partner in a partnership or a member of a limited liability company (“LLC”) organized in the United States, and the entity is treated for U.S. federal tax purposes as a partnership, the resident of the United States would be entitled to benefits of the Treaty on the income that the resident derives from Norway through the partnership to the extent of the U.S. resident’s distributive share of that income. Similar rules would apply to a resident of the United States that is a shareholder of a subchapter S corporation, the single member owner of an LLC that is a disregarded

Michael Danilack United States Competent Authority

Stig Sollund Norwegian Competent Authority

Announcement 2013–15

This announcement contains a revised Exhibit: Sample Notice to Interested

entity, or an owner of a grantor trust that derives income from Norway through the grantor trust.

Procedures for entities that are fiscally transparent for U.S. tax purposes to claim treaty benefits from Norway

An entity, wherever organized, that is treated as fiscally transparent for U.S. federal tax purposes and that has a U.S. resident member, partner or owner, may claim treaty benefits from Norway on behalf of the U.S. resident by providing the Norwegian withholding agent with a U.S. residency certification that identifies the names of the fiscally transparent entity and the U.S. resident.

For example, a partnership, whether organized in the United States, Norway, or a third jurisdiction, may obtain a certificate of residence on Form 6166 on behalf of its partners, by submitting a request for certification on Form 8802 ( Application for U.S. Residency Certification ) to the Internal Revenue Service. For those partnerships required to file a Form 1065, U.S. Return of Partnership Income, generally domestic partnerships and foreign partnerships with U.S. source income, the Form 6166 confirms the filing of such form and includes the names of all partners who have filed tax returns as U.S. residents. The Form 6166 will inform the withholding agent to contact the partnership directly to provide information regarding the allocation of the Norwegian source income to the listed U.S. partners. If a foreign partnership with U.S. partners is not required to file a Form 1065, the Form 6166 will confirm that position and otherwise contain the same information regarding its

Date

Parties, attached to Rev. Proc. 2013–6, 2013–1 I.R.B. 198. The Exhibit is revised to include the correct addresses for submitting applications for determination letters and comments submitted by in

2013–11 I.R.B. 652 March 11, 2013

EXHIBIT: SAMPLE NOTICE TO INTERESTED PARTIES

The Exhibit set forth below, may be used to satisfy the requirements of section 18 of this revenue procedure.

EXHIBIT: SAMPLE NOTICE TO INTERESTED PARTIES

Notice To: [describe class or classes of interested parties]

An application is to be made to the Internal Revenue Service for an advance determination on the qualification of the following employee pension benefit plan:

(name of plan)

(plan number)

(name and address of applicant)

(applicant EIN)

(name and address of plan administrator)

The application will be filed on for an advance determination as to whether the plan meets the qualification requirements of § 401 or 403(a) of the Internal Revenue Code of 1986, with respect to the plan’s [initial qualification, amendment, termination, or partial termination].

The application will be filed with:

Internal Revenue Service EP Determinations P. O. Box 12192 Covington, KY 41012–0192

The employees eligible to participate under the plan are:
The Internal Revenue Service [has/has not] previously issued a determination letter with respect to the qualification of this plan.

RIGHTS OF INTERESTED PARTIES

You have the right to submit to EP Determinations, either individually or jointly with other interested parties, your comments as to whether this plan meets the qualification requirements of the Internal Revenue Code. Your comments to EP Determinations may be submitted to:

Internal Revenue Service EP Determinations Attn: Customer Service Manager P. O. Box 2508 Cincinnati, OH 45202

You may instead, individually or jointly with other interested parties, request the Department of Labor to submit, on your behalf, comments to EP Determinations regarding qualification of the plan. If the Department declines to comment on all or some of the matters you raise, you may, individually, or jointly if your request was made to the Department jointly, submit your comments on these matters directly to EP Determinations at the Cincinnati address above.

REQUESTS FOR COMMENTS BY THE DEPARTMENT OF LABOR

The Department of Labor may not comment on behalf of interested parties unless requested to do so by the lesser of 10 employees or 10 percent of the employees who qualify as interested parties. The number of persons needed for the Department to comment with respect to this plan is . If you request the Department to comment, your request must be in writing and must specify the matters upon which comments are requested, and must also include:

March 11, 2013 653 2013–11 I.R.B.

(1) the information contained in items 2 through 5 of this Notice; and

(2) the number of persons needed for the Department to comment.

A request to the Department to comment should be addressed as follows:

Deputy Assistant Secretary Employee Benefits Security Administration ATTN: 3001 Comment Request U. S. Department of Labor, 200 Constitution Avenue, N.W. Washington, D.C. 20210

COMMENTS TO THE INTERNAL REVENUE SERVICE

Comments submitted by you to EP Determinations must be in writing and received by it by . However, if there are matters that you request the Department of Labor to comment upon on your behalf, and the Department declines, you may submit comments on these matters to EP Determinations to be received by it within 15 days from the time the Department notifies you that it will not comment on a particular matter, or by , whichever is later, but not after . A request to the Department to comment on your behalf must be received by it by if you wish to preserve your right to comment on a matter upon which the Department declines to comment, or by if you wish to waive that right.

ADDITIONAL INFORMATION

Detailed instructions regarding the requirements for notification of interested parties may be found in sections 17 and 18 of Rev. Proc. 2013–6. Additional information concerning this application (including, where applicable, an updated copy of the plan and related trust; the application for determination; any additional documents dealing with the application that have been submitted to the Service; and copies of section 17 of Rev. Proc. 2013–6 are available at during the hours of for inspection and copying. (There is a nominal charge for copying and/or mailing.)

2013–11 I.R.B. 654 March 11, 2013