Regs on OBRA '93 Elections

 (4830-01-u)

 ACTION: Temporary regulations.

 SUMMARY: This document contains temporary regulations relating to the time and manner of making certain elections under the Omnibus Budget Reconciliation Act of 1993. These regulations provide guidance to persons making the elections. The text also serves as the text of the notice of proposed rulemaking on this subject that is published in the Proposed Rules section of this issue of the Federal Register.

 EFFECTIVE DATE: December 27, 1993

 FOR FURTHER INFORMATION CONTACT: George Bradley, 202-622-8104 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

PAPERWORK REDUCTION ACT

These regulations are being issued without prior notice and public procedure pursuant to the Administrative Procedure Act (5 U.S.C. 553). For that reason, the collections of information contained in these regulations have been reviewed and, pending receipt and evaluation of public comments, approved by the Office of Management and Budget (OMB) under control number 1545-1421. The estimated annual burden per respondent varies from 15 minutes to 45 minutes, depending on individual circumstances and the particular election involved, with an estimated average of 30 minutes.

 These estimates are an approximation of the average time expected to be necessary for a collection of information. They are based on such information as is available to the Internal Revenue Service. Individual respondents may require greater or less time, depending on their particular circumstances.

 For further information concerning these collections of information, and where to submit comments on these collections of information, the accuracy of the estimated burden, and suggestions for reducing this burden, please refer to the preamble of the cross- referencing notice of proposed rulemaking published in the Proposed Rules section of this issue of the Federal Register.

BACKGROUND

      This document contains temporary regulations relating to elections under the following sections of the Internal Revenue Code of 1986 and the Omnibus Budget Reconciliation Act of 1993, (Pub. L. 103-66, 107 Stat. 312) (the Act):

SPECIAL ANALYSES

 It has been determined that these regulations are not significant rules as defined in Executive Order 12866. It has 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 rules, and, therefore, an initial Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, these regulations will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

DRAFTING INFORMATION

 The principal author of these regulations is George Bradley, Office of Assistant Chief Counsel (Income Tax and Accounting), Internal Revenue Service. However, personnel from other offices of the Internal Revenue Service and the Treasury Department participated in their development.

LIST OF SUBJECTS

26 CFR Part 1

 Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 602

Reporting and recordkeeping requirements.

ADOPTION OF AMENDMENTS TO THE REGULATIONS

Accordingly, parts 1 and 602 of title 26 of the Code of Federal Regulations are amended as follows:

PART 1 -- INCOME TAXES

Paragraph 1. The authority citation for part 1 is amended by adding the following citation:

Authority: 26 U.S.C. 7805 * * * section 1.108(c)-1T also issued under the authority of 26 U.S.C. 108(d)(9) * * *

Par. 2. Section 1.108(c)-1T is added to read as follows.

SECTION 1.108(C)-1T TIME AND MANNER FOR MAKING ELECTION UNDER THE OMNIBUS BUDGET RECONCILIATION ACT OF 1993 (TEMPORARY).

(a) DESCRIPTION. Code section 108(c)(3)(C), as added by section 13150 of the Omnibus Budget Reconciliation Act of 1993, allows certain noncorporate taxpayers to elect to treat certain indebtedness described in section 108(c)(3) that is discharged after December 31, 1992, as qualified real property business indebtedness. This discharged indebtedness is excluded from gross income to the extent allowed by Code section 108.

(b) TIME AND MANNER FOR MAKING THE ELECTION. The election described in this section must be made on the taxpayer's income tax return for the taxable year in which the discharge occurs. However, if the taxpayer establishes to the satisfaction of the Commissioner reasonable cause for failure to file the election with the taxpayer's original return, the taxpayer may file the election with an amended return or claim for credit or refund. The election is to be made on a completed Form 982 in accordance with that Form and its instructions.

(c) REVOCABILITY OF ELECTION. The election described in this section is revocable with the consent of the Commissioner.

(d) TRANSITION RULE. If the taxpayer's income tax return has been filed or is due before March 28, 1994, the taxpayer may make the election with an amended return filed before June 27, 1994.

(e) EFFECTIVE DATE. The rules set forth in this section are effective December 27, 1993.

Par. 3. Section

SECTION 1.1044(A)-1T TIME AND MANNER FOR MAKING ELECTION UNDER THE OMNIBUS BUDGET RECONCILIATION ACT OF 1993 (TEMPORARY).

Par. 7. Section 602.101(c) is amended by adding the following to the table:

"1.108(c)-1T...1545-1421,

1.163(d)-1T...1545-1421,

1.1044(a)-1T...1545-1421,

1.6655(e)-1T...1545-1421.11."