Determination of Interest Expense Deduction of Foreign Corporations; Correction

Federal Register: November 5, 2009 (Volume 74, Number 213)

Rules and Regulations

Page 57251-57252

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

DOCID:fr05no09-6

DEPARTMENT OF THE TREASURY

Internal Revenue Service 26 CFR Part 1

TD 9465

RIN 1545-BF71

Determination of Interest Expense Deduction of Foreign

Corporations; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendments.

SUMMARY: This document contains corrections to final regulations (TD 9465) that were published in the Federal Register on Monday, September 28, 2009 (74 FR 49315) concerning the determination of the interest expense deduction of foreign corporations engaged in a trade or business within the United States. These final regulations conform the interest expense rules to recent U.S. Income Tax Treaty agreements and adopt other changes to improve compliance.

DATES: This correction is effective on November 5, 2009], and is applicable on September 28, 2009.

FOR FURTHER INFORMATION CONTACT: Anthony J. Marra, (202) 622-3870 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

The final regulations (TD 9465) that are the subject of this document are under sections 882 and 884 of the Internal Revenue Code.

Need for Correction

As published, the final regulations (TD 9465) contain errors that may prove

Page 57252

to be misleading and are in need of clarification.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements.

Correction of Publication 0

Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:

PART 1--INCOME TAXES 0

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

Authority: 26 U.S.C. 7805 * * * 0

Par. 2. Section 1.882-5 is amended by revising the first sentence of paragraph (f)(1) to read as follows:

Sec. 1.882-5 Determination of interest deduction.

* * * * *

(f) Effective/applicability date. (1) This section is applicable for taxable years ending on or after August 15, 2009. * * *

* * * * * 0

Par. 3. Section 1.884-1 is amended by revising the fifth sentence of paragraph (e)(5) Example 2. (i) to read as follows:

Sec. 1.884-1 Branch profits tax.

* * * * *

(e) * * *

(5) * * *

Example 2. (i) * * * As a result of the election, assuming A's

U.S. assets and U.S. liabilities would otherwise have remained constant, A's U.S. net equity as of the close of 2007 will increase by the amount of the decrease in liabilities ($60) from $200 to $260 and its ECEP will be reduced to zero. * * *

* * * * *

LaNita Van Dyke,

Chief, Publications and Regulations Branch, Legal Processing Division,

Associate Chief Counsel, (Procedure and Administration).

FR Doc. E9-26274 Filed 11-4-09; 8:45 am

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