Final Regulation for CO-24-95

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Rules and Regulatio

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Federal Register
Vol. 61.

No. 5 1

Thursday, March 11. 1996

d the FEDERAL REGISTER
contains regulatory downrents hahng general
appllcabiliy and legal e?feCl,mosl of which
are keyed lo and c&ed
in fie Code of
Fedemk Re@lations. which is published under
50 titles pursuant to 44 U.S,C. 15!0.
This &
s

The Code d Federal Regutati~lsis sold by
Ihe Supmintendew d D
~ Prices o~f
new books are listed in the Crst FED€RAL
REGISTER issue of eath week.

DEPARTMENT OF STATE
22 CFR Part 2a

R w p l mi Dbpartwnt of State
Guidelines on P r m t l o n d Foreign

Mlrskns In the Unkod States

AGENCY: Bureau of Diplomatic Security,
State.

Direct final d e .
-

w&mw?Y:
The Departroent of Stale is
repealing 22 CFR part Za. relating to ik
protective security progratn far the
pmtection at Foreign missions in rhe
United States because these regulations
are outdated and unnecessary.
DATES; This direr-t final rule is efFective
May 1 3. 1996, unless the Stale
Department receives adverse or critical
comments by April 15, 1996.11the
e r e c t i v e date is delayed. timely notice
wgll be published in the Federal
Register.
WRESSES: Intksted persons are
invited to submit cornmenu in
duplicate to the Assistant Legal Adviser
for Legislariun and Gcncral

Management, OfficeOF the Legal
Adviser. Depadment of Slate.

Washington, DC 20520.
FQR R l m E R m M A R D N COMACT:

Cooperativt Agreements. setting fmth
the program's operative procedures, into
which the local government agencies
that participate in the pmgraro dl enter
with the Deparmen~of Stale.
To enru* the proper administration
of this propam, the Department of State
s
i s expanding
its internal regulation in
fu Foreign Affairs M u u a l on Lhts
subject. The rule does not d i ~ c t l y
affect
the-public.Accordingly, this rule is
unlikeiy to engender public comment.
The implementation of t h i s ruIe as a
direct Tmal rule, with provision for postpmmulgacion comment. i s based upon
the "good cause" exception found at 5
U.S.C. 553(d){3).Because lhis mle does
not change the program or its
administration. i t is not expected to
have a slpificant impact on a
subslan~lalnumber of small entities
under the criteria of the Regulatory
Flexibility Act. Neither the mgulatlons
which would be eliminated, nar he
absence of such regulations. constitute a
Federal intergovernmental mandate
under the Unfunded Mandales Act
(Public Law 104-4) since I
d
government agencies voluntarily
participate in the Federal assistance
program. In addition. this ruIe does ncrt
impose Informa l i o n collection
requirements under the provisiorls of
the Paperwork Reduction Act of 1980.
nls rule has been reviewed as required
by h e c r ~ t i v eOrder 12778 and certified
to be Ln compliance therewith. Thii rule
is oxempt from review under Executive
Order 12866,but has been reviewed
irlternally by the Department to ensure
consistency with the objectives thereof.
List of Subjects in 22 CYR Part 2a

Fareign omciaIs. Irltergavcrnmental
Mary Beth West. Assis~antLegal
relations, Security measures.
Adviser for Legislatiori ar~dGeneral
Management, (2021 643-5 154.
Accordingly. under the Authority 22
U.S.C. 265 1a{4), 22 CFR part 2a is
SUPPL&(EHTARV NFOflMATtOEC This rule
repeals 22 CFR part 2a. relating to the
removed.
Department of State's protective securiiy
Dated December 12. 1995.
program for the protection of roreign
missions in the United States. The
Department i s not changing the program Assistant Seuetary for Diplomail c Security.
[FR Doc 96 ..5859 Flled 2-1.3-96: 8.45 am1
itself, which provides, among other
things, for the reimbursement o f certain
local government agencies fot certain
protective services. Rather. the
Department is eliminating the
regulatiolx because they have become
outdated and unnecessary in li@t oFthe

DEPARTMEHT OF THE TREASURY
Intemal Aevmue S w l c e

16CFRPartl

r- o - a q - 9~~

m aw
RlN 1 5 4 5 d T S 1

Consolldatmd Groups-krtsrcompan y
Transadlone and Rdated Rules
A

m

: Internal Revenue Service (IRS) ,

Treasury.
AC-:

Final regulations.

WMY:
This document conrams
regulations disallowing losses and
exduding gain forcertain dispositions
and other transactions imlving stock
of the common parent ~ i consoLidared
a
gm"P.

These regulations are effective
March 14. 1996.
For dates of applicability. see the
effective date provision of these
DATE%

regulations.
FOHFURsHER~TLONCWACT:

Victor Peniar or Richard Osborne of the
Omce or Assistant Chief Counsel
(Corpome) , (202) 622-7750 or (202)
622-7770 (not tdl-Frw numbers).

Papervvork Reduction A d
The collectiu~w~f information
contained in these final regulations have
been reviewed and approved by the
Oflice of Management and Budget in
accordance with b e Paptrwatk
Reduction Act (4 4 U.S.C. 3507)under
conk01 number 2 545-1 433. Responses
to these collections of information are
requited Lo obtam a bwsefit, thc
avoidance of a possible gain because of
basis adjustmenb relating to built-in

loss.
An agency may rmt conduct or

sponsor. and a person is not required to
res~ondto. a colleclion of informa~on
uniess h e edlectian of information
displays a valid c~r~trrrl
number.
The estimated average annual burden
per respondent is 15 minutes.
Comments concerning Lhe accuracy of
this burden esllnlate and suggestions fnr
reducing this burden should be sent to
the Internal Revenueservice, Atm: IRS
Reports Clearance Qficer, T:FP.
Washington. DC 20224, arid to thc
Office of Management and Budget, Artn:
Desk Officer fat the Depanmerit of the
Treasury. Office of Information and

10448

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Federal Register / Vol. 61 No. 5 1 / 7Tiul-sday.M x c h 14, 19!36 / Rules and Regulations

Regulatory Affairs. Washington. D C:
20503.
Books or records reiatlng to this
collection of jnformation must be
retained as long as their contents may
become material in the administration
nf any internal revenue law. Generally,
tax returns and tax return Infurmation

are canfidentlal, as required by 26
U.S.C 5103.

Background
On July 12, 2995. the IRS and
Treasun issued pmposd and
temporary regul;tiok disallowing loss
incurred by a member fJd)nF a
consolidated p u p with respect to the
stock ofthe common parent (P stock).
The regulalinns also eliminate gain in
certain transadions by M with r e s p t
to P stock. The regulations are effective
for mnsactions occurring on or aftet
July 12, 1995.
IRS received comments on -the
pr~posedregulations and held a public
hearing on December 1 1. 1995. After
consideration of the comments and the
statements made at the hearing, the IRS
a d Treasury adop! the proposed
regula~ionswith revisions jn this
Treasury decision The significant

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stock at a loss (and claim the loss). IT t i e
value of the stock has gone up, the
group ran lake advantage ofsingle
entity treatment by having P sell the
stock, and no gain would be r~cognixed
under section 1032. The same would
hold true if insread P had acquired M
already owning P stock. Commentators
did not sugges! any gsrterally applicable
m e ~ l o dof distinguishing between
transactions in which loss should be
allowed and mose III which loss should
nat be allowed.

The IRS and Treasury have therefore
concluded that the final regulations
should retain the general approach of
the proposed regulations.

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suggested elimination of rhe
requirrment that M dispose o f t he P
stack immediately. Commenrators also
suggested the! thegain relief should
apply to options and warrants in P
stock, and not merely to P stock.
The final regulations retain the
requirements for gain relief bur exlend
the rclicf to positions in P stock. Any
Further expansion of the gain relief
would require additional limitations

and cornptexities.

For instance, if M were not required
P stock immediately.

lo dispose nf the

the regulations would have t o require
that M have no minoriry shareholders.
If M had minority shareholders, the gain

relief mechanism (treating cash as
contribrated to M followed by a purchase
Snme cornmentatos suggested that if
of the stock by M) would allow P a full
M joins the paup at a time when i t
bask adjustment in M stock for postIirrlds P stock with a blr ilt-in bss the
conwibution appreciation rather than a
loss should be allowed because it
pro =La adjwunent a required by
accrued outside the group. T h e final
5 1.1502-32 In the m s e of minority
regulations do not allow this loss
shareholders. Amending the mechanism
because doing so without ensurlng that
to dlow o d y pro fata adjustmerlts (for
h c buiIi-irr p i n is taxed would allaw
example, through a direct basis
the same selectivity and lncbnsisterrcies adjustment rdther than a cash
that the regulation is designed to
transaction) would create further
prevent. In addition, allowing the loss
complexities, such as the inieracllon
would require tracing, which i s
with 6 1.1502-20.
Expanding gain relief would r q u i r e
inconsistent with the approaches to
comments and changes are discussed
ful-theradjustments if M stock were sold
similar i s u s in 55 1,1502-20 and
below.
1.1502-32.
ta another member of the p u p . For
Commentators further suggested that
Explanation of Provieloris
example, if I3 purchasa the stock of M
interactions berwen the proposed
from anorher member. B's basls in M
Scope of the regulations
regulations md 5 1.1502-32 could cause wit1 reflect the value of any Y slock held
The proposed regulations disallow all the group 10 recagnize an artificial gain
by M. Thus, an intrea~eto 3's basis in
losoes on P stock and eliminate gain in
from thc purchar e of a corporation
the stock of M when M disposes of P
specified cimumstances. %me
owning depreciated P stock. If M joins
stock would k unwarranted. Additinnal
commentators suggested that the
the group a a time when it holds P
special N ~ would
S
be needed if M were
regulations should treat gain and loss
stock with a built-in loss and M
permitted to acquire P stock by
more symmetrically. Some suggested
subsequently sells the stock. P will have p u r c h e rather than ihmugh a cap ttal
the regulations should achieve t l ~ god
s
a downward basis adjusment in its M
contribution. Moreover, the IRS and
by eliminating gain in all circumstances. stock because of the disallowed i o a .
Treasury belleve that in many caws gain
Others suggested !he regulations should See 5 1.1502-32(b)(3) (iii)(A). The
on P stock is avoidable without further
disallow l u s ~ o n i yin "abusive"
commentarors asserted that this basis
expansion of the regulations. S e , e.g..
c tfcumstances
adjustment would be inappropriate if
5 1.1032-2(b) (no gain ar lass an M's use
Eliminating gain in all circumrances
h e group h a s a cost basis in M stock
of cerLain P stock in triangular
would effectively require complete
because the basis of M will reflect the
reorgantzations). Therefore, the final
single entity treatment of P stock.
value o i ihe P stock at the time nf
re~ulationsretain the requirements of
Lnlpkn~tnringsuch a system would
acquisition (rather rhan M's basis in the the proposed regulations lor gain relief.
significantly increase the complexity of
In addition. commentators claimed
P stock). To address t h i s prublem, the
the consolidated return regulations.
that the relief when h4 is newly formed
final regulations allow the built-in loss
Notire 94-49 (1994-1 C.B. 358)was unclear. The final regulations
to be waived immediately before M
included a detailed discussion of issues joins Che group. The loss waiver is
clarify that M can be newly formed as
relaling to the single entity treatment of modeled aker a similar provision in
part of the plan to dispose of P stock.
P stock.
5 I . 1502-32(b){4].
election,
Limiting the loss dlsdllowancc rule to however. is limited to direct
Some commentators suggested that if
"abucivc situations" would allaw
acquisitions or a corporation holding P
a subsidiw is a dealer in P stock, it
consolidated groups to rely an the
stock I r k a cost basis transartinn.
should be aildwed to tec0gni;r.e b s e s
separate-entity treatment of stock to
from its dealing activily. They argued
claim losses and single-entity treament Gain Relief
Commentators suggested that the gain that dealing in P stock Increases thc
to avoid gains. Far wa~uple.taxpayers
liquidity of the stock and that the
might plan to take advantage ofseparate relief should b e broadened. Sonbe
proposed regulations would curtail this
suggested that the requirement that M
entity treatment by having M purchase
activity by forcing the recognition of
receive the P stock in a capital
P stuck If the value of the stock has
gain but disallowing loss with respect to
conwibutlon or section 351(4
gone down at a time when the group
P strsck.
transattian be eliminated. Others
wanh lo issue equity. M will scll its P

Federal Register / Vol. 6 1. No. 5 1 / Thursday, March

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14.

1906 / Rules and Regulations

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In response to these comments, the
final rtgulatl~nsinclude an exception
The final regulations appiy to gain or
for dealers in P s ~ o c kor positions in P
loss taken into account on ur after July
stock. Under t h e final regulations, a
12, 1995. and to transactions (such as a
dcdcr in P stock ~rpsILionsrecognizes
leaving the group) occurring on
both gain and loss on shares of the stock member
o&after]uly
12, 1945. Thus. the
to the extent taken into account because
regulatlansare intended ro cover the
of section 475(a) (or 1256(a) in the case
same gain, loss and transactions covered
of d@aler equity options).TO be eligible by the rules published in 1995-32
fur t& exception. M must regularly
I.R.R. 47. lf. however, a taxpayer takes
trade i n P stock (of the same class) in
a gain ar loss into account, or engages
h e ordinary course ui its business as a
in a trar~saction.on or after July 12,
dealer In addition, the gain or loss on
1995.during a tax year ending prior to
a share is eligible only to the extent It
December
31. 1995, he taxpayer may
is takmh into account under rection
treat the grin, 10x5 or transaction under
475(a] (or in the case of dealer equity
the rules of the temporary rules
options, section 1256(a) la the extent
published in 1995-32 I.R.B. 47 insfpad
h a t it would he taken into account
under the principles of section 475). and af under the rules of the final
regulations.
the bash or the share of stock r n u ~ not
t
he adjusted by reference to the basis of
Special Analysis
any ocher pmperty (far example, under
It has been determblml that this
1.302-2) or by r~ference
to income,
Treasl~ry
decision is not a signscant
gain,deduction or loss from other
reguIatory achon as defined in EO
property. For example. loss that is
12866. Therefore,a r r g u l a t o ~
suspended under section 475013) and
that is recagnked under sectton 1001 as assessment is not required. Ii b hereby
the r e s d t of a dispasltion of the security certified that these refllallom do mt
have a si@cant eCOn0mic impact on
is not eligible for the relief, but loss
taken into account under'scction 475(a) a substantial number of small entitles.
immediately before a taxpayer ceas@sto This cerfificarluo b based on the facr
that chese regulatiars will primarily
be the owner of the security is eligible
for relief, Finally, relief is not avaiIabJe aEect a d i a t e d groups of curpontIom
h a t have clccted to file mnsolidated
if either M or any other member ofthe
returns. which tend to be larger
group has structured or engaged In mny
businesses. The regulations do not
uansaction while a member (or in
significantly alter the reporting or
anticipation of becoming a member)
recardkeeping duties of small entitres.
during the taxable year or in any year
Therefore, a Regulatory Flexlhilty
within the preceding live taxable years
4nalysis under the Regulalory
&at is open for assessment under
~ection
6501 with a principal purpose of Flexibility Act (5 U.S.C,chapter G) is
avoiding gain or creating loss on P stock not required. Pursr~antto section 7805(f)
o l the Internal Revenue Code. the natice
subject to secrlor~475Ca).
of proposed ruierl~akingpreceding these
Posj:dons In P Stock
renulatbns was submitted to the Small
In response to comments, the flnal
&sines Administration for comment
regulations clarify that the scope of loss on Ils impact on small husinws.
disallowance Ls coextensive with the
List of Subjects h 26 CFR Patt 1
srope of section 1032. For example.
Iar-nms:taxes. Reparrhg and
cash-settled options are wlthlrr the
recordkeeping requirements.
x o p e of lass ditatlnwanee. See Rev.
Rul. 88-31 (1988-1 C.B. 302).NO
Adoption of Amendments to rhe
inference is intended as to the extent tn
Regulatians
which section 1032 and these
Accordingly. 26 CFR part 1 is
regulations apply to derivative positiorls
amended as folIows:
irl P stock other than options.
One commentator argued that the loss
PART 1-INCOM E TAXES
disallowance rule s)luuId no1 apply to
options in P stock because the
Paragraph I. The authority citatton
selectivity available for stock is not
for part I is amended by revising the
present with respect to options. The
entry For 5 I 1502- 13 to read as follows:
final regulations do not adopt this
Authoriy: 26 U.S C 7805 * * *
approach. if M purchases an optiun to
Seciion 1 ,1502- 1 3 also issued under 26
acquire P stock-and he optionexpires
U 5 . C 1502. *
when 4 1 is worlhless, hd has a 10%. If the
Par. 2. In 5 1.267(f)-1 fi), the first
option is in Chi? money, M can purchase
sentence is amended by removing the
the P ztork and hold it indefinit~ly
rcltrencc 1.1 502-13T(flI6)" and adding
Thus, the group would have the abiliry
t o recomlze lusses a h i l e avoiding gains. " 1.1502- L 3(f) (6)" in its pIace.
"

10449

Par. 3. Section 1.:502-13(fj(6) is
added to read as foIIows:

9 1.1502-1 3 Intercompany tranmctlons.
*

*

(0"

*

a

*

*

(61 Stock ofcnmmonpaRnt. [n
addition lo the general rules of t h i s
swtion, this paragraph (1)(6) applies to
parent stock 8 stock) and positions in
P stock held or entered into by another
member. For this purpose. P stock is any
stock or the common parent held by
another member or any stock of a

member (the issuer) h a t war the
common parent if the stock was held by
another menaber while the issuer was
the common parent.
(i)Loss srwk-{A) Recqgnited toss.
Any loss cecngnized, dlrectly w
indirectly, by a memkr with respect to
P stock Is permantlntly d h l l n w e d and
does not reduce earnings and profits.
See 9 1.1502-32(b)(d) J)(lii)(A)
for a
currespanding reduction In the basis or

the member'sstock.
(B) Orher cases. If n member. M. owns
P stock. the stock is subsequently
owned by a nonmember. and,
Immediately before the stock is owned
by the nonmember, M'sbasis in the
share exceeds iu fair market value. then,
to the extent paragraph (1)(6){i)(A) of
this section does not apply, M's basis in
rhe sham is reduced to the share's fair
market value immedlatdy before the
share is held by the nonmember. For
example, if M o w m shares o f P a&
w i h a f lWx basis and M becomes a
nonmernkr at a t l m t when the P sharp5
have a value of $ 6 0 M's
~ basis in the

P shares is reduced to S W x irnrnedlately
befare M becomes a nonmember.
Similarly. if M contributes the P stock
to a nonmember Ln a Wansaction subject
to section 351.M's basis Ln the shares
i s reduced to E60x immediately before
the contribution. See 5 1.150232(bl(3)(iii)(B) for a corresponding
reduction in t
k basis of M's stock.
(C) Waiver o f buUt-in10% on P stock( 1 ) In general. If a nonmember thal owns
P stock with a basis in excess of i t s fair
market value becomes a member of t h e
P consolidated group in a qualifyi~lg
cost basis transactton, the group may
make an irrevocable election to reduce
the basis of the P stock to its fair market
value immediate] y before rhe

nonmember becomes a member o€the P
group. If the nonmember was a member
of another consolidated group
immediately befure becoming a member
of the P group, the reduction In basis is
treated as occurring immediately after it
ceases to be a member of thc prior
p u p . A rlualifyin~cost basis
transaction IS the purchase (i.e.,a
transaction in which basis is determined

10450

Federal Register / Vol. 6i1,

NO. 51 1 Thursday, March
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under section 1012) by members of h e
P consolidated group (while they are
mcrnbers) in a 1 2-monthperiod of an
amount of the nonmemkr's stock
satisfying the requirer~lentsof section
1504(a)(2).

(2)Election. The election described in
this paragraph (6)(i)(C) must be made in
a separate statement entitled
"ELECTION TO REDUCE BASIS OF P
STUCK UNDER 5 1.1502-13(f)(6) " The
statement must be filedwith the P
consolidated group's return for the year
in which the ~lo~irnernbcr
becorner a
member, and it must be signed by h t h
P and the nonmember. The statement
mud identi& the fair market value of.
and the arnQunt d t h e basis reduction
in. the P stock.

( i i ) Gdn stock.If a mernber. M.wodd
otherwise recomze gain on a qualified
disposition of P stock. then immediately
before die qualified disposition. M is
treated as purchasing the P stock Erom
P for fair market ratue with cash co~itributedto M by P (or, it necessaq,
lhmugh any intermediate members). A
dispositian is a qualified dtsposition
m~lyif(A) The member acquires the P stock
directly from the conlrnon parent (P)
through a contrihution to capital or a
transaction qualifying under section
35 1 (a) (or,if necessary, through a series
of such transartions involving only
members);
p) Pursuant to a plan, the mem b ~ r
ttansfers the stock Immediately to a
nonmember that is not related. wlthb~
the meaning of section 267(b) or 707(b).
to any member 01 the gmup;

(C)No nonmember receives a

substituted b a i s in the dock within the
meaning o t section 7701 (aj(42);
@) The P stock Is not exchanged for
P stuck;
CE) P neither becomes nor ceases to be
the common parent as part of. or in
conternplatinn nf, the diiposiiion or

plan, and
(I:) M is neither

a nonmember that

hcorne~
a memkr

nor a member h a t
becomes a nonmember as part of, OF 111
contemp\ation of, the &spasition or
plan
(iii) Mark-to-marketof Pstuck.
Paragcipiis (f)(6)(i)and (ii) of this
ser-tionshall not apply to any gain or
Loss from a share a1P stock heid by a
member, M ,if-(A) M regularly trades in P stock (of
rhe same c l ~ s with
)
customers in Ihc
ordlniuy course orits business as a
dealer:
(B) The gain or loss on c l ~ esham is
taken into account hy M pursuant to
secrion 475(a);
(C)M's basis in the share is not
adjustcd by refer~nr.eto the basis of any

14. 195& / Rules and Reglllations

-

,

~ t h e rproperty or by rcFer~nr~
to
income. gain, deduction, or loss From
other property; and
(D) N e i a e r M nor any uher member
uF the gmup has stri~cturedor engaged
in m y transaction while a member (or
in anticipation of beco~ilirkga member).
during the taxable year or in any year
within the preceding five taxable years
that is open for assessment under
section 6501, with a pri~lcipdpurpose

of avoiding gain or creating loss on P
stock subject to section 4?5(a).
(ivj Options, warrarltr, and other
posltians-(A) fn general. 'Ilzis
paragraph (1) (6) applies with
appropriate adjustments to pasitions in
P stock to the extent lhai P's gain or loss
from an equivalen-ntposition would not
be recognized under section 1032.Thus.
if M purchases an option to buy or sell
P stock and sells the option at a loss. tbe
loss is permanently disaliowed undor
paragraph (f)(6)(1)(A) of this section.
Similarly. if M i s the grantor ofsuch an
aptinn and becomes a r~onmernbtr.than
tile principles ofparagraph (l)(6)(i)(8)of
this secliun apply to &heextent that M
would recognize loss from cash
setUemcnt ofthe option at its fair
market value immediately before M
becomes a nonmember, and proper
adjustments must he made in the
amount of any gain or loss subsequenily
realized from the position by M.if P
grants M an option to acquire P stock in
a wansactian meeting the requhernents

of paragraph (0(6)(il) ofthis section, M
is treated a having purchased the
option from P f ~ fair
r market value with
cash contributed to M by P.
(8) Markm-mark& ofposIUon5 In P
stock.Fnr purpose of paragraph
(0(6)[iij) of this section, gain or loss

with respect tu a position taken intr,
account under section 1256(a) Is treated
as taken into account under section
475(a) to the vxtent that the gain or loss
w.vonIdbe taken into account under the
principles of section 475.
(v) EtTective date. This paragraph
(fl(6) applies to gain or loss taken into

account an or alter July i 2. 1995, and
to transactions occurrin~~
o r 1 or after July
12. 1995. Fot example. if S sells P stock
to 0 at a 10sprior to July 12, 1995. and
B sells the P stock to a nonmember after
July r 2, 1995. S's lass Is disallowed
because it is taken into account after
July 12, 1995. If a taxpayer !a kes a gain
01 iuss into account or &gages in a
transaction on or aEter July 12, 1995,
during a tax year ending priur to
kcernbor 31. 1995, the taxpayer may
treat the gain o r loss o r the transac~ion
undw the rules published in 1 995-32

I.R.B. 47. instead d under the rules of
this paragraph (4(6).
*

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Par. 4. In 5 1.1502-13@(2)(i){Bj.the
last sentence i s amended by rer~~oving
the language "paragraph (f)(4) of this
section and 5 1.1502-13T(f)
(6)" and
adding "paragraphs (fl(4/ and ICJ afthis
section."

Margaret Milner Richardson,
Commisbner offnterml Reven ue.
Appfowd: March 8. 19%.

26 CFR Parts 40,42.48, and 602

Gaaollno and Okwl Fuel Exelse Tax;
Rwttrstkn b q u k ~ e n t a
A m : Internal Elevehue Setvica (IRS),
Treasury.
A
m Final regulations.

This documen4 con&
fml
regulations relating to the taxes on
S U M Y :

garohe and diesel fuel. This dmurnent

also removes obsolete excise tax
regulations. The regulations reflect and
implement certain changes made by the
Omnibus Budget Reconciliation Act of
1990 mb the Clmnibus Bud et
Reconciliarinn Act of 1993
1993
Act). The regulauonr aCfeci certaln
blenders, en terers. industrial users.
refiners, terminal operators, and
thtoughpurters. Tlre regulations alsn
affect c~rtain
persons that sell. buy, or
use diesel fuel for a nontaxable use.
ERECWE DATE: mese regulations are

j$e

eKective March 14, 1996.
FDR F U F ~ ~ Em
R m n w CONTACT:

Frank Boland (202) 621-3130 ( I I O ~a toIIfree calI!.
SUPPLEMEWARY WFORMAllW

Papetwork Reduction Act
The cnll ect ions of inFurmt ion
contained i n these final regulations have
been reviewed and approved by the
Office nf Management and Budgel in
accordance with the Paperwork
Heductron Act (44 U.S.C. 3507)under
contrnl number 1545-1418. Responses
to h i s collection of information are
rnandalory and are required to nbtain
certain credits or payments.
An agency may not conduct or
spansor, and a person is not required to
respond lo. a c o l l ~ c t i o nof information