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Internal Revenue Bulletin:

2008-17 April 28, 2008


Notice of Proposed Rulemaking by Cross-Reference to Temporary RegulationsClassification of Certain Foreign Entities



Internal Revenue Service (IRS), Treasury.


Notice of proposed rulemaking by cross-reference to temporary regulations.


In this issue of the Bulletin, the IRS and the Treasury Department are issuing temporary and final regulations (T.D. 9388) relating to certain business entities included on the list of foreign business entities that are always classified as corporations for Federal tax purposes. The regulations are needed to make the Federal tax classification of Bulgarian public limited liability companies consistent with the Federal tax classification of public limited liability companies organized in other countries of the European Economic Area. They will affect persons owning an interest in a Bulgarian aktsionerno druzhestvo on or after January 1, 2007. The text of the temporary regulations also serves as the text of these proposed regulations.


Written or electronic comments and requests for a public hearing must be received by June 19, 2008.


Send submissions to CC:PA:LPD:PR (REG-143468-07), 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-143468-07), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC 20224, or sent electronically via the Federal eRulemaking Portal at (IRS REG-143468-07).


Concerning the proposed regulations, S. James Hawes, (202) 622-3860; concerning submissions of comments, Kelly Banks, (202) 622-7180 (not toll-free numbers).


Background and Explanation of Provisions

Temporary regulations in this issue of the Bulletin amend and revise 26 CFR part 301 relating to section 7701 of the Internal Revenue Code. The temporary regulations add certain business entities to the list of foreign business entities that are always classified as corporations for Federal tax purposes. The preamble to the temporary regulations explains both 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. Therefore, a regulatory assessment is not required. It has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. Chapter 5) does not apply to this regulation. Because the regulation does not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. Chapter 6) does not apply, either. 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 Request 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 Internal Revenue Service (IRS). The IRS and the Treasury Department 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. A public hearing will 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.

Proposed Effective Date

The regulations proposed in this document would be applicable for entities existing on or after March 21, 2008.

Proposed Amendments to the Regulations

Accordingly, 26 CFR part 301 is proposed to be amended as follows:


Paragraph 1. The authority citation for part 301 continues to read in part as follows:

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

Par. 2. Section 301.7701-2 is amended by revising paragraphs (b)(8)(vi) and (e)(7) to read as follows:

§301.7701-2 Business entities; definitions. * * * * *

(b) * * *

(8) * * *

(vi) [The text of the proposed amendment to §301.7701-2(b)(8)(vi) is the same as the text of §301.7701-2T(b)(8)(vi) published elsewhere in this issue of the Bulletin.]

* * * * *

(e) * * *

(7) [The text of the proposed amendment to §301.7701-2(e)(7) is the same as the text of §301.7701-2T(e)(7) published elsewhere in this issue of the Bulletin.]

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

Note (Filed by the Office of the Federal Register on March 20, 2008, 8:45 a.m., and published in the issue of the Federal Register for March 21, 2008, 73 F.R. 15107)

Drafting Information

The principal author of these proposed regulations is S. James Hawes of the Office of Associate Chief Counsel (International); however, other personnel from the IRS and the Treasury Department participated in their development.

* * * * *

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