Requirements to Ensure Collection of Section 2056A Estate Tax

DEPARTMENT OF TREASURY

Internal Revenue Service

26 CFR Part 20

[PS-25-94]

RIN 1545-AS66

Requirements to Ensure Collection of Section 2056A Estate Tax

AGENCY: Internal Revenue Service (IRS), Treasury.

[[Page 43575]]

ACTION: Notice of proposed rulemaking by cross-reference to temporary

regulations and notice of public hearing.

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SUMMARY: In the Rules and Regulations section of this issue of the

Federal Register, the IRS is issuing temporary regulations relating to

the additional requirements necessary to ensure the collection of the

estate tax imposed under section 2056A(b) with respect to taxable

events involving qualified domestic trusts described in section

2056A(a). The text of those temporary regulations also serves as the

text of these proposed regulations. This document also provides notice

of a public hearing on these proposed regulations.

DATES: Written comments must be received by November 20, 1995. Outlines

of topics to be discussed at the public hearing scheduled for January

16, 1996, at 10 a.m., must be received by December 26, 1995.

ADDRESSES: Send submissions to: CC:DOM:CORP:T:R: (PS-25-94), room 5228,

Internal Revenue Service, POB 7604, Ben Franklin Station, Washington,

DC 20044. In the alternative, submissions may be hand delivered to:

CC:DOM:CORP:T:R (PS-25-94), Internal Revenue Service, room 5228, 1111

Constitution Avenue NW., Washington, DC. The public hearing will be

held in the Auditorium, Internal Revenue Service Building, 1111

Constitution Avenue NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Susan

Hurwitz, (202) 622-3090; concerning submissions and the hearing,

Michael Slaughter, (202) 622-7190 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

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 (44 U.S.C.

3504(h)). Comments on the collections of information should be sent to

the Office of Management and Budget, Attn: Desk Officer for the

Department of Treasury, Office of Information and Regulatory Affairs,

Washington, DC 20503, with copies to the Internal Revenue Service,

Attn: IRS Reports Clearance Officer, PC:FP, Washington, DC 20224.

The collections of information are in Secs. 20.2056A-2T(d). This

information is required by the IRS in order to ensure the

collectibility of the estate tax imposed under section 2056A(b) in

cases (1) where a bond or letter of credit security arrangement

alternative is adopted and (2) where the qualified domestic trust holds

foreign real property or the principal residence exclusion applies.

This information will be used to monitor compliance with the additional

regulatory requirements contained in Sec. 20.2056A-2T(d)(1)(i) and

(iv). The likely respondents will be trustees of qualified domestic

trusts. Estimated total annual reporting burden: 6110 hours. The

estimated annual burden per respondent varies from 30 minutes to 3

hours, depending upon individual circumstances, with an estimated

average of 1.37 hours.

Estimated number of respondents: 4470.

Estimated annual frequency of responses: 1.

Background

Temporary regulations in the Rules and Regulations portion of this

issue of the Federal Register amend Estate Tax Regulations (26 CFR part

20) relating to section 2056A. The temporary regulations contain rules

relating to the additional requirements to ensure the collectibility of

the estate tax imposed under section 2056A.

The text of those temporary regulations also serves as the text of

these proposed regulations. The preamble to the temporary regulations

explains the temporary regulations.

Special Analyses

It has been determined that this notice of proposed rulemaking is

not a significant regulatory action as defined in EO 12866. 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) and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do

not apply to these regulations, and therefore, a Regulatory Flexibility

Analysis is not required. Pursuant to section 7805(f) of the Internal

Revenue Code, this notice of proposed rulemaking will be submitted to

the Chief Counsel for Advocacy of the Small Business Administration for

comment on its impact on small business.

Comments and Public Hearing

Before these proposed regulations are adopted as final regulations,

consideration will be given to any written comments that are submitted

timely (preferably a signed original and eight copies) to the IRS. All

comments will be available for public inspection and copying.

A public hearing has been scheduled for January 16, 1996, at 10

a.m. in the Auditorium, Internal Revenue Building, 1111 Constitution

Avenue NW., Washington, DC. Because of access restrictions, visitors

will not be admitted beyond the building lobby more than 15 minutes

before the hearing starts.

The rules of 26 CFR 601.601(a)(3) apply to the hearing.

Persons that wish to present oral comments at the hearing must

submit written comments by November 20, 1995 and submit an outline of

the topics to be discussed and the time to be devoted to each topic by

December 26, 1995.

A period of 10 minutes will allotted to each person for making

comments.

An agenda showing the scheduling of the speakers will be prepared

after the deadline for receiving outlines has passed. Copies of the

agenda will be available free of charge at the hearing.

Drafting Information

The principal author of the proposed regulations is Susan Hurwitz,

Office of Assistant Chief Counsel (Passthroughs and Special

Industries). However, other personnel from IRS and the Treasury

Department participated in their development.

List of Subjects in 26 CFR Part 20

Estate taxes, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

Accordingly, 26 CFR part 20 is proposed to be amended as follows:

PART 20--ESTATE TAX; ESTATES OF DECEDENTS DYING AFTER AUGUST 16,

1954

Par. 1. The authority citation for part 20 continues to read in

part as follows:

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

Par. 2. Section 20.2056A-2 is amended by adding paragraph (d) to

read as follows:

Sec. 20.2056A-2 Requirements for qualified domestice trust.

* * * * *

(d) [The text of this proposed regulation is the same as the text

of Sec. 20.2056A-2T(d) published elsewhere in this issue of the Federal

Register].

Margaret Milner Richardson,

Commissioner of Internal Revenue.

[FR Doc. 95-19865 Filed 8-21-95; 8:45 am]

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