Rules for Property Produced in a Farming Business

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-208151-91]

RIN 1545-AQ91

Rules for Property Produced in a Farming Business

AGENCY: Internal Revenue Service (IRS), Treasury.

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 application of section 263A of the Internal Revenue Code of 1986 to

property produced in a farming business. The regulations affect

taxpayers engaged in the business of farming that grow or raise plants

or animals. The text of those temporary regulations also serves as the

text of these proposed regulations. This document provides notice of a

public hearing on these proposed regulations.

DATES: Written comments must be received by November 20, 1997. Requests

to speak and outlines of topics to be discussed at the public hearing

scheduled for November 19, 1997, must be received by October 29, 1997.

ADDRESSES: Send submissions to: CC:DOM:CORP:R (REG-208151-91), room

5226, Internal Revenue Service, POB 7604, Ben Franklin Station,

Washington, DC 20044. Submissions may be hand delivered between the

hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R (REG-208151-91), Courier's

Desk, Internal Revenue Service, 1111 Constitution Avenue NW,

Washington, DC. Alternatively, taxpayers may submit comments

electronically via the internet by selecting the ``Tax Regs'' option on

the IRS Home Page, or by submitting comments directly to the IRS

internet site at http://www.irs.ustreas.gov/prod/tax__regs/

comment.html. The public hearing will be held in room 2615, Internal

Revenue Building, 1111 Constitution Avenue, NW, Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Jan

Skelton,

[[Page 44608]]

(202) 622-4970; concerning submissions and the hearing, Michael

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

SUPPLEMENTARY INFORMATION:

Background

Temporary regulations in the Rules and Regulations section of this

issue of the Federal Register amend Regulations on Income Taxes (26 CFR

part 1). The regulations provide guidance with respect to the

application of section 263A to property produced in a farming business.

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) does not apply to these regulations, and because the

regulations do not impose a collection of information on small

entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not

apply. 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 (a signed original and eight

(8) copies) or electronic comments that are submitted timely to the

IRS. All comments will be available for public inspection and copying.

A public hearing has been scheduled for Wednesday, November 19,

1997, at 10 a.m., at the Internal Revenue Building, 1111 Constitution

Ave., N.W., Washington, DC, 20224. 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, 1997 and submit an outline of

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

(signed original and eight (8) copies) by October 29, 1997.

A period of ten minutes will be 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 these regulations is

Jan Skelton of the Office of Assistant Chief Counsel (Income Tax &

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

Department participated in their development.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

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

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 1.263A-0 is amended by:

1. Revising the introductory text.

2. Adding the entries for Sec. 1.263A-4.

The addition and revision read as follows:

Sec. 1.263A-0 Outline of regulations under section 263A.

This section lists the paragraphs in Secs. 1.263A-1 through 1.263A-

4 and Secs. 1.263A-8 through 1.263A-15.

* * * * *

Sec. 1.263A-4 Rules for property produced in a farming business.

[The text of the proposed entries for Sec. 1.263A-4 in Sec. 1.263A-0

is the same as the text of the entries for Sec. 1.263A-4T in

Sec. 1.263A-0T published elsewhere in this issue of the Federal

Register].

* * * * *

Par. 3. Section 1.263A-4 is amended by revising the section heading

and adding new text to read as follows:

Sec. 1.263A-4 Rules for property produced in a farming business.

[The proposed text of Sec. 1.263A-4 is the same as the text in

Sec. 1.263A-4T published elsewhere in this issue of the Federal

Register].

Michael P. Dolan,

Acting Commissioner of Internal Revenue.

[FR Doc. 97-21770 Filed 8-21-97; 8:45 am]

BILLING CODE 4830-01-U