Rev. Rul. 79-252 (1979-2 C.B. 333)

states that interest on a Federal estate tax deficiency is a necessary administration expense under section 2053(a)(2) and is

deductible to the extent allowable under local law. Rev. Rul. 81-154 (1981-1 C.B. 470) states, in the second holding, that interest incurred because of a late payment of tax is deductible under section 2053(a)(2) to the extent it is allowable under local law. Rev. Rul. 79-252 will be obsoleted and Rev. Rul. 81-154 will be modified, effective as of the date that a Treasury decision adopting these rules as final regulations is published in the Fed- eral Register .

Statement of Availability of IRS Documents

IRS revenue procedures, revenue rulings, notices, and other guidance cited in this document are published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS website at https://www.irs.gov.

Special Analyses

Regulatory Planning and Review

This regulation is not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement (April 11, 2018) between the Treasury Department and the Office of Management and Budget regarding review of tax regulations. Therefore, a regulatory impact assessment is not required.

Regulatory Flexibility Act

Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that these regulations will not have a significant economic impact on a substantial number of small entities. This certification is based on the fact that these regulations primarily affect estates of a decedent which generally are not small entities under the Act. Accordingly, these regulations are not expected to have a significant economic impact on a substantial number of small entities, and a regulatory flexibility analysis is not required.

Pursuant to section 7805(f) of the Code, these proposed regulations will be submitted to the Chief Counsel for the Office of

Bulletin No. 2022–28 77 July 11, 2022

Advocacy of the Small Business Administration for comment on their impact on small businesses.

Paperwork Reduction Act

The collections of information contained in this notice of proposed rulemaking have been submitted to the Office of Management and Budget for review in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), under Form 706, United States Estate (and Gen- eration-Skipping Transfer) Tax Return, and assigned control number 1545-0015. Comments on the collection of information should be sent to the Office of Management and Budget, Attn: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503, and to Clearance Officer, SE:CAR:MP:T:T:SP, Washington, DC 20224. Comments on the collection of information should be received by August 29, 2022. Comments are specifically requested concerning:

Whether the proposed collections of information are necessary for the proper performance of the functions of the IRS, including whether the information will have practical utility;

The accuracy of the estimated burden associated with the proposed collection of information;

How the quality, utility, and clarity of the information to be collected may be enhanced;

How the burden of complying with the proposed collections of information may be minimized, including through the application of automated collection techniques or other forms of information technology; and

Estimates of capital or start-up costs of operation, maintenance, and purchase of services to provide information.

The collections of information in these proposed regulations are in proposed §§20.2053-1(d)(6)(iv) and 20.2053-4(b) (1)(iv) and (c)(1)(iv). The information requested in §20.2053-1(d)(6)(iv) is necessary in order to evaluate whether an estate is entitled to a deduction in the amount claimed on Form 706. The collection of information is mandatory to obtain a benefit. The information requested in §20.2053-4(b)(1)(iv) and (c)(1)(iv) is

necessary in order to evaluate whether an estate is entitled to a deduction claimed on Form 706 and, if so, the amount of the deduction. The collection of information is mandatory to obtain a benefit. The likely respondents are estates of decedents seeking to deduct on Form 706 funeral expenses, administration expenses, and/ or certain claims against the estate under section 2053.

Estimated total annual reporting burden: 23,661 hours.

Estimated average annual burden per respondent: 3 hours.

Estimated number of respondents: 7,887. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number assigned by the Office of Management and Budget.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

Unfunded Mandates Reform Act

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a state, local, or tribal government, in the aggregate, or by the private sector, of $100 million (updated annually for inflation). This proposed rule does not include any Federal mandate that may result in expenditures by state, local, or tribal governments, or by the private sector in excess of that threshold.

Executive Order 13132: Federalism

E.O. 13132, titled “Federalism,” prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on state and local governments, and is not required by statute, or preempts state law, unless the agency meets the

consultation and funding requirements of section 6 of the E.O. This proposed rule does not have federalism implications and does not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the E.O.

Drafting Information

The principal authors of these regulations are Karlene Lesho and Melissa Liquerman, Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the Treasury Department and the IRS participated in their development.

Comments and Public Hearing

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 section. The Treasury Department and the IRS request comments on all aspects of the proposed regulations.

Any electronic comments submitted, and to the extent practicable, any paper comments submitted, will be made available at www.regulations.gov or upon request.

A public hearing is being held by teleconference on October 12, 2022, at 10:00 a.m. EST unless no outlines are received by September 26, 2022.

The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to comment by telephone at the hearing must submit electronic or written comments and an outline of the topics to be discussed and the time to be devoted to each topic by September 26, 2022 as prescribed in the preamble under the ADDRESSES section. A period of ten minutes will be allotted to each person for making comments (although this rule may be waived in unusual circumstances or for good cause shown). After the deadline for receiving outlines has passed, the IRS will prepare an agenda containing the schedule of speakers. Copies of the agenda will be made available at www.regulations.gov, search IRS and REG-130975-08. Copies of the agenda will also be available by emailing a request to publichearings@irs.

July 11, 2022 78 Bulletin No. 2022–28

gov . Please put “REG-130975-08 Agenda Request” in the subject line of the email.