||December 21, 2001
New Markets Tax Credit
DEPARTMENT OF THE TREASURY
Internal Revenue Service 26 CFR Part 1 [REG-119436-01] RIN 1545-AY87
TITLE: New Markets Tax Credit
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking by cross-reference to
temporary regulations and notice of public hearing.
SUMMARY: In the Rules and Regulations section of this issue of the
Federal Register , the IRS is issuing temporary regulations relating
to the new markets tax credit. The text of those 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 and electronic comments must be received by February
25, 2002. Outlines of topics to be discussed at the public hearing
scheduled for March 14, 2002, must be received by February 21, 2002.
ADDRESSES: Send submissions to: CC:ITA:RU (REG-119436-01), room
5226, Internal Revenue Service, POB 7604, Ben Franklin Station,
Washington, DC 20044. Submissions may be hand delivered Monday
through Friday between the hours of 8 a.m. and 5 p.m. to: CC:ITA:RU
(REG-119436-01), Courier's Desk, Internal Revenue Service, 1111
Constitution Avenue NW., Washington, DC. Alternatively, taxpayers.
may send submissions electronically via the Internet by selecting
the "Tax Regs" option on the IRS Home Page, or directly to the IRS
Internet site at The public hearing will be held in the IRS
Auditorium, Internal Revenue Building, 1111 Constitution Avenue,
NW., Washington, DC.
FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Paul
Handleman, (202) 622-3040; concerning submissions, the hearing,
and/or to be placed on the building access list to attend the
hearing, Treena Garret, (202) 622-7180 (not toll-free numbers).
Paperwork Reduction Act
The collection of information contained in this notice of proposed
rulemaking has been submitted to the Office of Management and Budget
for review in accordance with the Paperwork Reduction Act of 1995
(44 U.S.C. 3507(d)). Comments on the collection of information
should be sent to the Office of Management and Budget, Attn: Desk
Officer for the DEPARTMENT OF THE TREASURY, Office of Information
and Regulatory Affairs, Washington, DC 20503, with copies to the
Internal Revenue Service , Attn: IRS Reports Clearance Officer,
W:CAR:MP:FP:S:O, Washington, DC 20224. Comments on the collection of
information should be received by February 25, 2002.
Comments are specifically requested concerning:
Whether the proposed collection of information is necessary for the
proper performance of the functions of the IRS, including whether
the information will have practical utility;
The accuracy of the estimated burden associated with the proposed
collection of information (see below);
How the quality, utility, and clarity of the information to be
collected may be enhanced; How the burden of complying with the
proposed collection of information may be minimized, including
through the application of automated collection techniques or other
forms of information technology; and
Estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of services to provide information.
The requirement for the collection of information in this notice of
proposed rulemaking is in §1.45D-1(g)(2). The information is
required so that a taxpayer may claim a new markets tax credit on
each credit allowance date during the 7-year credit period and
report compliance with the requirements of section 45D and the
regulations thereunder to the Secretary. The collection of
information is mandatory. The likely respondents are businesses or
other for-profit institutions, nonprofit institutions, and small
businesses or organizations.
Estimated total annual reporting burden: 378 hours.
The estimated annual burden per respondent: 2.5 hours.
Estimated number of respondents: 151.
Estimated annual frequency of responses: once.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid control number assigned by the Office
of Management and Budget.
Books or records relating to a collection of information must be
retained as long as their contents may become material in the
administration of any internal revenue law. Generally, tax returns
and tax return information are confidential, as required by 26
Temporary regulations in the Rules and Regulations section of this
issue of the Federal Register amend the Income Tax Regulations (26
CFR part 1) relating to section 45D. The temporary regulations
provide guidance for taxpayers claiming the new markets tax credit
under section 45D. The text of those regulations also serves as the
text of these proposed regulations. The preamble to the temporary
regulations explains the amendments.
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in Executive Order
12866. Therefore, a regulatory assessment is not required. It is
hereby certified that the collection of information in these
regulations will not have a significant economic impact on a
substantial number of small entities. This certification is based
upon the fact that any burden on taxpayers is minimal. Accordingly,
a Regulatory Flexibility Analysis under the Regulatory Flexibility
Act (5 U.S.C. chapter 6) 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
Comments and Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments (a signed
original and eight (8) copies) or electronic comments that are
submitted timely to the IRS. The IRS and Treasury Department
specifically request comments on the clarity of the proposed rule
and how it may be made easier to understand. All comments will be
available for public inspection and copying.
A public hearing has been scheduled for March 14, 2002, at 10 a.m.
in the IRS Auditorium, Internal Revenue Building, 1111 Constitution
Avenue, NW., Washington, DC. Due to building security procedures,
visitors must use the main building entrance on Constitution Avenue,
NW. In addition, all visitors must present photo identification to
enter the building. Because of access restrictions, visitors will
not be admitted beyond the immediate entrance area more than 15
minutes before the hearing starts. For information about having your
name placed on the building access list to attend the hearing, see
the "FOR FURTHER INFORMATION CONTACT" section of this preamble.
The rules of 26 CFR 601.601(a)(3) apply to the hearing.
Persons who wish to present oral comments at the hearing must 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 February 21,
2002. A period of 10 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
The principal author of these regulations is Paul F. Handleman,
Office of the Associate Chief Counsel (Passthroughs and Special
Industries), IRS. 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 is amended by adding
an entry in numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.45D-1 also issued under 26 U.S.C. 45D(i); * * *
Par. 2. Section 1.45D-1 is added to read as follows:
§1.45D-1 New markets tax credit.
[The text of proposed §1.45D-1 is the same as the text of
§1.45D-1T published elsewhere in this issue of the Federal
Robert E. Wenzel
Deputy Commissioner of Internal Revenue.
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