Nprm_intl-939-86

DEPARTH E N T OF THC TREASURY

( fun-539-461

l o lire Office of M a n i a t m t n ~ard
Budget Aliention Desk OfIitl lor t h e
Departatw of rkc Ttcas\rrj. OL:lcr of
Inlnrmation and R e a c ! i ~ o r yAlialn.
Washiagton. DC 205C3. wblh c o p ~ e s10
the inrrrnal i l c v t n u t 5crc.1c<. Altcn~lon:

RIH 1545-AJ7O

Washington.

l n t t t n a l R C W L O U ~S C ~ V I C L

26 C F R Parts t and 6 0 2

1RS Reports Clearrnct Dfliccr T F?.

Insurance lncornt o f Conttolled
Formign Corpmaiiofl lor Taxable Years
Btgindng Alttr Otccmbrr 3 1. t 986
A G ~ H C Y :lnicrnaj Rcvrnur

Scrvicc,

Treasury.

*enour Notlcc of proposed nrlemrhng.
Suuu~rtr.T h i s documen! carnoins
proposed income u x rtgulPlionr
rclilting lo the deliniben rab
tornpulation of the insurance income of
a con'mtlrd fottign corpoioriox The
troposcd frgulrtioas also coalria

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rncoml to 4 paflieuhr crrtgory d
insurance income: to * l l c c a ~ tdeductions
ID partitular c a t e g o y or insurance
incomr. to detemunt h e .mwn\ of
those !tams. ruth r g rrttrvts. whi& arc
dcfinit~ohtand n h t r rpgliublr to
certain captive insuanct e o r n p a n i ~ s ~ ~ computed with nferencc to m - . . insuraner cernpany'r annual rtarc3enl:
t h i s acuon'~sntcessuy bemuse o t
to t l ~ IDt have rela~tdpenon insu:ancr
c n i l n ~ e sto tht applrc*hIt lax h w made
income treated 4 s income cHective)y
by tne Tax Rcbrm A a 01 1- and t y
cnnnccud wilh the conduct of 4 Uaittd
the T t c h n i d and hii~cltan~oru

Skater h d e w businelc and ha culltcl
the idonnnhorr required by rechon #H6
relaling to wntrolltd fomlga
corpralionr ra &lined ta section
OsJ(c). The i n f o m i i o n will b* used lo
verify h a t loutiry movable property on
the basis of whcm rhc proptrty ia
lour& In prior puiod dws no1 result
in & mmtcrial distordan whoa compated
to w h e n the p m m is act~allyl o u ~ e d

Rtvtnut Act 1n t r r rrgplrtjam
would gtuvidt g h n c e needed to
comply w i t h t h t 3 d d u n g t ~md would
affrct cantraUcd foreign corponriom
with ineamt &rived fram intunnu
opermrions.
O A n k

W r i t t a tOlUmtDU must k

rectivtd by )vat 17,100t A pubbe

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DC 2 0 2 : .

The colfectlcn of r n i ~ r r ~ a l ~in
oii
rcpklationr ir in !f 1.953-2(e](3)(iii].
1-953+IbL 1.953-SI 8 ) . 1.9556(r). 1 . g ~ ~
Vcl181b1.504&.11a][2lI1)Ic). and 1.G01~1 l c X I ) l i i i ) . T h i s iclomatioa IS requ~red
by the Internal Revenue Strvirt in order
for trxpaytm 10 deer to loeatt risk5
with nspcct lo movrble proptny by
rtltrenct to the loca\ion nf tit property
in I pnor ptnod: to ~ i l e u l investment
t

hearing on thew pmporcd mgulrtienr
wrU be bid M d y . run. 24.1991.
beg~nrung*t:OraStcthtnotieof
publrc hearing or,hear propsscd
rrgulationr elatwhen in thin iuw of the
Fedtrtl Rc$s(+r.
noortrssrs k n d comrprntt to:
Comrnism~ntrof ln~anrrlRevtnuc P.O.
Box 7W. Ben FranWin Station
~t ~enrjuxCC.€DWTR I--L
roam &a.
Wishrngton. DC W .
FOR ~ ~ r n ~ rn ~
~ oan r * * mC uO K A ~
-- Davrd R Coop*' :D lk O f l e e of
Assocrrtt Chef Counsel H o t r n a tronrl].

during m o;rmnt p e r i d ta verify rh*
connection between censin items of
invcrtmcat lawme and a specific
aregory 01 idruranw income: to vcriip
rhc cunnecuon between dtducti~nsand
r specific crlcgoiy of insurance Income:
3 verify Iht accuracy of :hcsc i r s m
which ate d t t m i n c d by refcrtacc to a n
Insurance cpmprny-s rnnurl suiemtnr;
la ptmit rtlrted person rnrurancc
lncomt to bt U x t d at the corparaar
I t v t l 11 Incoma *,Necritely connected
with the conduct of r Unite& S t a i t s
w ~ t h i nthe Offie. of C h e f br;nst!.
trade ar buunc#s trihcr r h n a: :he
Inirrnal Rtvtnue Senrct. l l f 1
~hircholdtrlevel rs subpan F income;
Consulubon Avmrrr. m..
W&shm#ton. and 10 ensiut complirnce ~ t the
h
DC 20221. AtlmbO3: CCIYSLBr:
Initmal Revenue Code rs rt r c ; ~ l tlo
s
( I W - I
13:-3-5.
not r 1011controll~dIorrign corporation3 a s
Int d l ) .
defined in sectlon 953(c). T a t I t i t l y
ttlmndentr arc business or o ~ h t rfor.
su-~~rnrar INFORWATlO~
+

p r o f i ~msaiutions.
Thane tsr~mnttsan k n approxlnitlon
h e 4vcrrgc m e r x ? t c t r d !o be
: n c c t ~ w r ylor a colltcraob or
rniorn~ii~n.
They ate based on
'In[~rmatjm
as is a v a l h b i t to t k ~
leiemrl Revenue S!nmiCt-l ~ d l ~ l d > ~ I
r t r p c n d e n ~ ~ ~ r r c o r d i : e ~ ~ ert~~ a ~ ~ : c
gnater or Ittr trmt. C t p c n d w on lhclr

.

Ihr collu~ronof in!urm~tiuu
conrarntd m thlr norrce ol proposd.
rulem4kir.g has been submitted ro k
Oltic?oi Manrfrmcnt and Budget 'I0r
r t v i r w in

auordanct with L!I~

"

Papework Rrduct~anAct o l 1 W [U
U.S.C Z a l h J ) .C o m t n ~ s
on &r
c~llrcljonol inlomtrl~onshould bt sent
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porl,cular cjrcumstlnces.