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Federal Register / Vol. 76, No. 163 / Tuesday, August 23, 2011 / Rules and Regulations

annual fiscal period, other than a period
in the fiscal year within which the
registration statement became effective,
or, for offerings conducted pursuant to
§ 230.415(a)(1)(vii) or § 230.415(a)(1)(x),
the takedown for the offering occurred,
there are no asset-backed securities of
such class that were sold in a registered
transaction held by non-affiliates of the
depositor and a certification on Form 15
(17 CFR 249.323) has been filed; or
(2) When there are no asset-backed
securities of such class that were sold in
a registered transaction still
outstanding, immediately upon filing
with the Commission a certification on
Form 15 (17 CFR 249.323) if the issuer
of such class has filed all reports
required by Section 13(a), without
regard to Rule 12b–25 (17 CFR 249.322),
for the shorter of its most recent three
fiscal years and the portion of the
current year preceding the date of filing
Form 15, or the period since the issuer
became subject to such reporting
obligation. If the certification on Form
15 is subsequently withdrawn or
denied, the issuer shall, within 60 days,
file with the Commission all reports
which would have been required if such
certification had not been filed.
Note 1 to Paragraph (b): Securities held of
record by a broker, dealer, bank or nominee
for any of them for the accounts of customers
shall be considered as held by the separate
accounts for which the securities are held.
Note 2 to Paragraph (b): An issuer may not
suspend reporting if the issuer and its
affiliates acquire and resell securities as part
of a plan or scheme to evade the reporting
obligations of Section 15(d).

(c) This section does not affect any
other reporting obligation applicable
with respect to any classes of securities
from additional takedowns under the
same or different registration statements
or any reporting obligation that may be
applicable pursuant to section 12 of the
Act (15 U.S.C. 78l).
PART 249—FORMS, SECURITIES
EXCHANGE ACT OF 1934
5. The authority citation for part 249
continues to read in part as follows:

■

Authority: 15 U.S.C. 78a et seq. and 7201
et seq.; and 18 U.S.C. 1350, unless otherwise
noted.

*

*
*
*
*
6. Amend Form 15 (referenced in
§ 249.323) by:
■ a. Adding a checkbox referring to
‘‘Rule 15d–22(b)’’ after the checkbox
referring to ‘‘Rule 15d–6’’; and
■ b. By revising the first sentence of the
Instruction to read: ‘‘This form is
required by Rules 12g–4, 12h–3, 15d–6
and 15d–22 of the General Rules and

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■

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Regulations under the Securities
Exchange Act of 1934.’’
Note: The text of Form 15 does not and this
amendment will not appear in the Code of
Federal Regulations.
By the Commission.
Dated: August 17, 2011.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–21500 Filed 8–22–11; 8:45 am]
BILLING CODE 8011–01–P

DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1 and 602
[TD 9547]
RIN 1545–BF05

Election To Expense Certain Refineries
Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations and removal of
temporary regulations.
AGENCY:

This document provides final
regulations relating to the election to
expense qualified refinery property
under section 179C of the Internal
Revenue Code (Code). These final
regulations adopt the temporary
regulations with certain modifications
to reflect changes to the law made by
the Energy Improvement and Extension
Act of 2008.
DATES: Effective Date: These regulations
are effective August 22, 2011.
FOR FURTHER INFORMATION CONTACT:
Philip Tiegerman (202) 622–3110 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
SUMMARY:

Paperwork Reduction Act
The collection of information
contained in these regulations has been
reviewed and approved by the Office of
Management and Budget in accordance
with the Paperwork Reduction Act of
1995 (44 U.S.C. 3507(d)) under control
number (1545–2103). Responses to this
collection of information are mandatory.
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 OMB control number.
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
U.S.C. 6103.

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Background
Section 179C was added to the Code
by section 1323(a) of the Energy Policy
Act of 2005, Public Law 109–58 (119
Stat. 594), to encourage the construction
of new refineries and the expansion of
existing refineries to enhance the
nation’s refinery capacity. Section
179C(a) allows a taxpayer to elect to
deduct as an expense 50 percent of the
cost of any qualified refinery property.
The remaining 50 percent of the
taxpayer’s qualifying expenditures
generally are recovered under section
168 and section 179B, if applicable. All
costs properly capitalized into qualified
refinery property are includable in the
cost of the qualified refinery property.
As originally enacted, section
179C(c)(1)(B) required that qualified
refinery property be placed in service by
a taxpayer after August 8, 2005, and
before January 1, 2012. Under section
179C(c)(1)(F) as originally enacted, (i)
the construction of the property must
have been subject to a written binding
construction contract entered into
before January 1, 2008, (ii) the property
must have been placed in service before
January 1, 2008, or (iii) in the case of
self-constructed property, the
construction of the property must have
begun after June 14, 2005, and before
January 1, 2008. Section 179C(d)(1)
originally required that a qualified
refinery be designed to serve the
primary purpose of processing liquid
fuel from crude oil or qualified fuels (as
defined in section 45K(c)). Under
section 179C(e) as originally enacted,
qualified refinery property must have
enabled the existing qualified refinery to
increase total volume output
(determined without regard to asphalt or
lube oil) by 5 percent or more on an
average daily basis or to process
qualified fuels (as defined in section
45K(c)) at a rate that is equal to or
greater than 25 percent of the total
throughput of the qualified refinery on
an average daily basis.
Section 209 of the Energy
Improvement and Extension Act of 2008
(the ‘‘2008 Act’’), Division B, Public
Law 110–343 (122 Stat. 3765), amended
section 179C in several respects. The
2008 Act extended the placed in service
date of section 179C(c)(1)(B) to January
1, 2014. In addition, the 2008 Act
amended section 179C(c)(1)(F) to
provide that (i) the construction of the
property must be subject to a written
binding construction contract entered
into before January 1, 2010, (ii) the
property must be placed in service
before January 1, 2010, or (iii) in the
case of self-constructed property, the
construction of the property must begin

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Federal Register / Vol. 76, No. 163 / Tuesday, August 23, 2011 / Rules and Regulations
after June 14, 2005, and before January
1, 2010.
Effective for property placed in
service after October 3, 2008, the 2008
Act amended the definition of
‘‘qualified refinery’’ under section
179C(d)(1) to include a refinery that is
designed to serve the primary purpose
of processing liquid fuel directly from
shale or tar sands, and expanded the
production capacity requirement of
section 179C(e)(2) to include property
that enables the existing qualified
refinery to process shale or tar sands.
On July 9, 2008, the Treasury
Department and the IRS published in
the Federal Register temporary
regulations (TD 9412), 73 FR 39230, and
a notice of proposed rulemaking (REG–
146895–05), 73 FR 39270, by crossreference to temporary regulations. A
public hearing was scheduled for
November 20, 2008. The public hearing
was cancelled on November 6, 2008 (73
FR 66001) because no written comments
or requests to speak were received.
The temporary regulations and
proposed regulations are hereby
removed and the final regulations adopt
the rules of the temporary and proposed
regulations with certain revisions,
described below, to reflect amendments
to the statute made by the 2008 Act.
Explanation of Provisions

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Placed in Service and Construction and
Written Binding Contract Requirements
Section 1.179C–1T(b)(4) and
§ 1.179C–1T(b)(7)(i)(A) of the temporary
regulations required that qualified
refinery property be placed in service by
the taxpayer after August 8, 2005, and
before January 1, 2012. Section 1.179C–
1(b)(4) and § 1.179C–1(b)(7)(i)(A) of the
final regulations provide that the
property must be placed in service after
August 8, 2005, and before January 1,
2014.
Section 1.179C–1T(b)(7)(iii) of the
temporary regulations provided that the
manufacture, construction, or
production of self-constructed property
must begin before January 1, 2008.
Under § 1.179C–1(b)(7)(iii) of the final
regulations, the manufacture,
construction, or production of selfconstructed property must begin before
January 1, 2010.
Under § 1.179C–1T(b)(7)(iii)(C) of the
temporary regulations, a component of
self-constructed property had to be
acquired or self-constructed before
January 1, 2008, in order to qualify as
qualified refinery property. Section
1.179C–1(b)(7)(iii)(C) of the final
regulations provides that the component
must be acquired or self-constructed
before January 1, 2010.

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Qualified Refinery Property
Section 1.179C–1T(b)(2)(i) of the
temporary regulations provided that a
qualified refinery is any refinery located
in the United States that is designed to
serve the primary purpose of processing
crude oil or qualified fuels. The final
regulations add new § 1.179C–
1(b)(2)(i)(A) and new § 1.179C–
1(b)(2)(i)(B). Section 1.179C–
1(b)(2)(i)(A) of the final regulations
provides that in the case of property
placed in service after August 8, 2005,
and on or before October 3, 2008, a
qualified refinery is any refinery located
in the United States that is designed to
serve the primary purpose of processing
liquid fuel from crude oil or qualified
fuels. Section 1.179C–1(b)(2)(i)(B) of the
final regulations provides that, in the
case of property placed in service after
October 3, 2008, and before January 1,
2014, a qualified refinery is any refinery
located in the United States that is
designed to serve the primary purpose
of processing liquid fuel from crude oil,
qualified fuels, or directly from shale or
tar sands.
Production Capacity
Section 1.179C–1T(b)(5)(i) of the
temporary regulations generally
provided that refinery property is
considered to be qualified refinery
property if (A) it enables the existing
qualified refinery to increase the total
volume output by at least 5 percent on
an average daily basis; or (B) it enables
the existing qualified refinery to
increase the percentage of total
throughput attributable to processing
qualified fuels to a rate that is at least
25 percent of the total throughput on an
average daily basis. The final
regulations, in § 1.179C–1(b)(5)(i),
modify this definition to provide
generally that refinery property is
considered to be qualified refinery
property if (A) it enables the existing
qualified refinery to increase the total
volume output by at least 5 percent on
an average daily basis; (B) in the case of
property placed in service after August
8, 2005, and on or before October 3,
2008, it enables the existing qualified
refinery to increase the percentage of
total throughput attributable to
processing qualified fuels to a rate that
is at least 25 percent of the total
throughput on an average daily basis; or
(C) in the case of property placed in
service after October 3, 2008, and before
January 1, 2014, it enables the existing
qualified refinery to increase the
percentage of total throughput
attributable to processing shale, tar
sands, or qualified fuels to a rate that is

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52557

at least 25 percent of total throughput
on an average daily basis.
Effective/Applicability Date
This section is applicable for taxable
years ending on or after August 22,
2011. For taxable years ending before
August 22, 2011, taxpayers may apply
the proposed regulations published on
July 9, 2008, or, in the alternative, may
apply these final regulations.
Special Analyses
It has been determined that this
Treasury decision is not a significant
regulatory action as defined in
Executive Order 12866 as supplemented
by Executive Order 13563. The
collections of information in § 1.179–
1(d)(2), (e)(2), and (f) are required by
section 179C(b), (g), and (h),
respectively, and, therefore, are not
imposed by these regulations.
Accordingly, they are not subject to the
Regulatory Flexibility Act. Only the
collection of information in § 1.179–
1(d)(3), regarding the revocation of an
election under section 179C(a), is
imposed by these regulations. It is
hereby certified that the collection of
information contained in § 1.179–1(d)(3)
of the regulations will not have a
significant economic impact on a
substantial number of small entities.
This certification is based upon the fact
that although most of the 12 taxpayers
who potentially could or would make
an election under section 179C(a) will
be small entities, it is expected that few,
if any, of those 12 taxpayers once having
made the election will choose to revoke
it. Therefore, the collection of
information will not affect a substantial
number of small entities. The
information required to revoke an
election under section 179C(a) consists
entirely of a portion of the information
required to make the election.
Consequently, the economic burden for
those taxpayers who choose to revoke
the election is minimal in nature and
the regulations do not impose any
burden in addition to the burden
associated with making the election.
Therefore, a regulatory assessment is not
required. It also has been determined
that section 553(b) of the Administrative
Procedure Act (5 U.S.C. chapter 6) does
not apply to these regulations.
Drafting Information
The principal author of these
regulations is Philip Tiegerman, Office
of Associate Chief Counsel
(Passthroughs and Special Industries).
However, other personnel from the IRS
and Treasury Department participated
in their development.

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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 26, CFR parts 1 and 602
are 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 1.179C–1 is added to
read as follows:

■

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§ 1.179C–1
refineries.

Election to expense certain

(a) Scope and definitions—(1) Scope.
This section provides the rules for
determining the deduction allowable
under section 179C(a) for the cost of any
qualified refinery property. The
provisions of this section apply only to
a taxpayer that elects to apply section
179C in the manner prescribed under
paragraph (d) of this section.
(2) Definitions. For purposes of
section 179C and this section, the
following definitions apply:
(i) Applicable environmental laws are
any applicable federal, state, or local
environmental laws.
(ii) Qualified fuels has the meaning
set forth in section 45K(c).
(iii) Cost is the unadjusted
depreciable basis (as defined in
§ 1.168(b)–1(a)(3), but without regard to
the reduction in basis for any portion of
the basis the taxpayer properly elects to
treat as an expense under section 179C
and this section) of the property.
(iv) Throughput is a volumetric rate
measuring the flow of crude oil,
qualified fuels, or, in the case of
property placed in service after October
3, 2008, and before January 1, 2014,
shale or tar sands, processed over a
given period of time, typically
referenced on the basis of barrels per
calendar day.
(v) Barrels per calendar day is the
amount of fuels that a facility can
process under usual operating
conditions, expressed in terms of
capacity during a 24-hour period and
reduced to account for down time and
other limitations.
(vi) United States has the same
meaning as that term is defined in
section 7701(a)(9).

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(b) Qualified refinery property—(1) In
general. Qualified refinery property is
any property that meets the
requirements set forth in paragraphs
(b)(2) through (b)(7) of this section.
(2) Description of qualified refinery
property—(i) In general. Property that
comprises any portion of a qualified
refinery may be qualified refinery
property. For purposes of section 179C
and this section, a qualified refinery is
any refinery located in the United States
that—
(A) In the case of property placed in
service after August 8, 2005, and on or
before October 3, 2008, is designed to
serve the primary purpose of processing
liquid fuel from crude oil or qualified
fuels; or
(B) In the case of property placed in
service after October 3, 2008, and before
January 1, 2014, is designed to serve the
primary purpose of processing liquid
fuel from crude oil, qualified fuels, or
directly from shale or tar sands.
(ii) Nonqualified refinery property.
Refinery property is not qualified
refinery property for purposes of this
paragraph (b)(2) if—
(A) The primary purpose of the
refinery property is for use as a topping
plant, asphalt plant, lube oil facility,
crude or product terminal, or blending
facility; or
(B) The refinery property is built
solely to comply with consent decrees
or projects mandated by Federal, State,
or local governments.
(3) Original use—(i) In general. For
purposes of the deduction allowable
under section 179C(a), refinery property
will meet the requirements of this
paragraph (b)(3) if the original use of the
property commences with the taxpayer.
Except as provided in paragraph
(b)(3)(ii) of this section, original use
means the first use to which the
property is put, whether or not that use
corresponds to the use of the property
by the taxpayer. Thus, if a taxpayer
incurs capital expenditures to
recondition or rebuild property acquired
or owned by the taxpayer, only the
capital expenditures incurred by the
taxpayer to recondition or rebuild the
property acquired or owned by the
taxpayer satisfy the original use
requirement. However, the cost of
reconditioned or rebuilt property
acquired by a taxpayer does not satisfy
the original use requirement. Whether
property is reconditioned or rebuilt
property is a question of fact. For
purposes of this paragraph (b)(3)(i),
acquired or self-constructed property
that contains used parts will be treated
as reconditioned or rebuilt only if the
cost of the used parts is more than 20
percent of the total cost of the property.

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(ii) Sale-leaseback. If any new portion
of a qualified refinery is originally
placed in service by a person after
August 8, 2005, and is sold to a taxpayer
and leased back to the person by the
taxpayer within three months after the
date the property was originally placed
in service by the person, the taxpayerlessor is considered the original user of
the property.
(4) Placed-in-service date—(i) In
general. Refinery property will meet the
requirements of this paragraph (b)(4) if
the property is placed in service by the
taxpayer after August 8, 2005, and
before January 1, 2014.
(ii) Sale-leaseback. If a new portion of
refinery property is originally placed in
service by a person after August 8, 2005,
and is sold to a taxpayer and leased
back to the person by the taxpayer
within three months after the date the
property was originally placed in
service by the person, the property is
treated as originally placed in service by
the taxpayer-lessor not earlier than the
date on which the property is used by
the lessee under the leaseback.
(5) Production capacity—(i) In
general. Refinery property is considered
qualified refinery property if—
(A) It enables the existing qualified
refinery to increase the total volume
output, determined without regard to
asphalt or lube oil, by at least 5 percent
on an average daily basis;
(B) In the case of property placed in
service after August 8, 2005, and on or
before October 3, 2008, it enables the
existing qualified refinery to increase
the percentage of total throughput
attributable to processing qualified fuels
to a rate that is at least 25 percent of
total throughput on an average daily
basis; or
(C) In the case of property placed in
service after October 3, 2008, and before
January 1, 2014, it enables the existing
qualified refinery to increase the
percentage of total throughput
attributable to processing qualified
fuels, shale, or tar sands to a rate that
is at least 25 percent of total throughput
on an average daily basis.
(ii) When production capacity is
tested. The production capacity
requirement of this paragraph (b)(5) is
determined as of the date the property
is placed in service by the taxpayer. Any
reasonable method may be used to
determine the appropriate baseline for
measuring capacity increases and to
demonstrate and substantiate that the
capacity of the existing qualified
refinery has been sufficiently increased.
(iii) Multi-stage projects. In the case of
multi-stage projects, a taxpayer must
satisfy the reporting requirements of
paragraph (f)(2) of this section,

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Federal Register / Vol. 76, No. 163 / Tuesday, August 23, 2011 / Rules and Regulations
sufficient to establish that the
production capacity requirements of
this paragraph (b)(5) will be met as a
result of the taxpayer’s overall plan.
(6) Applicable environmental laws—
(i) In general. The environmental
compliance requirement applies only
with respect to refinery property, or any
portion of refinery property, that is
placed in service after August 8, 2005.
A refinery’s failure to meet applicable
environmental laws with respect to a
portion of the refinery that was in
service prior to August 8, 2005 will not
disqualify a taxpayer from making the
election under section 179C(a) with
respect to otherwise qualifying refinery
property.
(ii) Waiver under the Clean Air Act.
Refinery property must comply with the
Clean Air Act, notwithstanding any
waiver received by the taxpayer under
that Act.
(7) Construction of property—(i) In
general. Qualified property will meet
the requirements of this paragraph (b)(7)
if no written binding contract for the
construction of the property was in
effect before June 14, 2005, and if—
(A) The construction of the property
is subject to a written binding contract
entered into before January 1, 2010;
(B) The property is placed in service
before January 1, 2010; or
(C) In the case of self-constructed
property, the construction of the
property began after June 14, 2005, and
before January 1, 2010.
(ii) Definition of binding contract—(A)
In general. A contract is binding only if
it is enforceable under state law against
the taxpayer or a predecessor, and does
not limit damages to a specified amount
(for example, by use of a liquidated
damages provision). For this purpose, a
contractual provision that limits
damages to an amount equal to at least
5 percent of the total contract price will
not be treated as limiting damages to a
specified amount. In determining
whether a contract limits damages, the
fact that there may be little or no
damages because the contract price does
not significantly differ from fair market
value will not be taken into account.
(B) Conditions. A contract is binding
even if subject to a condition, as long as
the condition is not within the control
of either party or the predecessor of
either party. A contract will continue to
be binding if the parties make
insubstantial changes in its terms and
conditions, or if any term is to be
determined by a standard beyond the
control of either party. A contract that
imposes significant obligations on the
taxpayer or a predecessor will be treated
as binding, notwithstanding the fact that

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insubstantial terms remain to be
negotiated by the parties to the contract.
(C) Options. An option to either
acquire or sell property is not a binding
contract.
(D) Supply agreements. A binding
contract does not include a supply or
similar agreement if the payment
amount and design specification of the
property to be purchased have not been
specified.
(E) Components. A binding contract to
acquire one or more components of a
larger property will not be treated as a
binding contract to acquire the larger
property. If a binding contract to acquire
a component does not satisfy the
requirements of this paragraph (b)(7),
the component is not qualified refinery
property.
(iii) Self-constructed property—(A) In
general. Except as provided in
paragraph (b)(7)(iii)(B) of this section, if
a taxpayer manufactures, constructs, or
produces property for use by the
taxpayer in its trade or business (or for
the production of income by the
taxpayer), the construction of property
rules in this paragraph (b)(7) are treated
as met for qualified refinery property if
the taxpayer begins manufacturing,
constructing, or producing the property
after June 14, 2005, and before January
1, 2010. Property that is manufactured,
constructed, or produced for the
taxpayer by another person under a
written binding contract (as defined in
paragraph (b)(7)(ii) of this section) that
is entered into prior to the manufacture,
construction, or production of the
property for use by the taxpayer in its
trade or business (or for the production
of income) is considered to be
manufactured, constructed, or produced
by the taxpayer.
(B) When construction begins. For
purposes of this paragraph (b)(7)(iii),
construction of property generally
begins when physical work of a
significant nature begins. Physical work
does not include preliminary activities
such as planning or designing, securing
financing, exploring, or researching. The
determination of when physical work of
a significant nature begins depends on
the facts and circumstances.
(C) Components of self-constructed
property—(1) Acquired components. If a
binding contract (as defined in
paragraph (b)(7)(ii) of this section) to
acquire a component of self-constructed
property is in effect on or before June
14, 2005, the component does not
satisfy the requirements of paragraph
(b)(7)(i) of this section, and is not
qualified refinery property. However, if
construction of the self-constructed
property begins after June 14, 2005, the
self-constructed property may be

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qualified refinery property if it meets all
other requirements of section 179C and
this section (including paragraph
(b)(7)(i) of this section), even though the
component is not qualified refinery
property. If the construction of selfconstructed property begins before June
14, 2005, neither the self-constructed
property nor any component related to
the self-constructed property is
qualified refinery property. If the
component is acquired before January 1,
2010, but the construction of the selfconstructed property begins after
December 31, 2009, the component may
qualify as qualified refinery property
even if the self-constructed property is
not qualified refinery property.
(2) Self-constructed components. If
the manufacture, construction, or
production of a component fails to meet
any of the requirements of paragraph
(b)(7)(iii) of this section, the component
is not qualified refinery property.
However, if the manufacture,
construction, or production of a
component fails to meet any of the
requirements provided in paragraph
(b)(7)(iii) of this section, but the
construction of the self-constructed
property begins after June 14, 2005, the
self constructed property may qualify as
qualified refinery property if it meets all
other requirements of section 179C and
this section (including paragraph
(b)(7)(i) of this section). If the
construction of the self-constructed
property begins before June 14, 2005,
neither the self-constructed property nor
any components related to the selfconstructed property are qualified
refinery property. If the component was
self-constructed before January 1, 2010,
but the construction of the selfconstructed property begins after
December 31, 2009, the component may
qualify as qualified refinery property,
although the self-constructed property is
not qualified refinery property.
(c) Computation of expense deduction
for qualified refinery property. In
general, the allowable deduction under
paragraph (d) of this section for
qualified refinery property is
determined by multiplying by 50
percent the cost of the qualified refinery
property paid or incurred by the
taxpayer.
(d) Election—(1) In general. A
taxpayer may make an election to
deduct as an expense 50 percent of the
cost of any qualified refinery property.
A taxpayer making this election takes
the 50 percent deduction for the taxable
year in which the qualified refinery
property is placed in service.
(2) Time and manner for making
election—(i) Time for making election.
An election specified in this paragraph

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(d) generally must be made not later
than the due date (including extensions)
for filing the original Federal income tax
return for the taxable year in which the
qualified refinery property is placed in
service by the taxpayer.
(ii) Manner of making election. The
taxpayer makes an election under
section 179C(a) and this paragraph (d)
by entering the amount of the deduction
at the appropriate place on the
taxpayer’s timely filed original Federal
income tax return for the taxable year in
which the qualified refinery property is
placed in service, and attaching a report
as specified in paragraph (f) of this
section to the taxpayer’s timely filed
original federal income tax return for
the taxable year in which the qualified
refinery property is placed in service.
(3) Revocation of election—(i) In
general. An election made under section
179C(a) and this paragraph (d), and any
specification contained in such election,
may not be revoked except with the
consent of the Commissioner of Internal
Revenue.
(ii) Revocation prior to the revocation
deadline. A taxpayer is deemed to have
requested, and to have been granted, the
consent of the Commissioner to revoke
an election under section 179C(a) and
this paragraph (d) if the taxpayer
revokes the election before the
revocation deadline. The revocation
deadline is 24 months after the due date
(including extensions) for filing the
taxpayer’s Federal income return for the
taxable year for which the election
applies. An election under section
179C(a) and this paragraph (d) is
revoked by attaching a statement to an
amended return for the taxable year for
which the election applies. The
statement must specify the name and
address of the refinery for which the
election applies and the amount
deducted on the taxpayer’s original
Federal income tax return for the
taxable year for which the election
applies.
(iii) Revocation after the revocation
deadline. An election under section
179C(a) and this paragraph (d) may not
be revoked after the revocation
deadline. The revocation deadline may
not be extended under § 301.9100–1.
(iv) Revocation by cooperative
taxpayer. A taxpayer that has made an
election to allocate the section 179C
deduction to cooperative owners under
section 179C(g) and paragraph (e) of this
section may not revoke its election
under section 179C(a).
(e) Election to allocate section 179C
deduction to cooperative owners—(1) In
general. If a cooperative taxpayer makes
an election under section 179C(g) and
this paragraph (e), the cooperative

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taxpayer may elect to allocate all, some,
or none of the deduction allowable
under section 179C(a) for that taxable
year to the cooperative owner(s). This
allocation is equal to the cooperative
owner(s)’ ratable share of the total
amount allocated, determined on the
basis of each cooperative owner’s
ownership interest in the cooperative
taxpayer. For purposes of this section, a
cooperative taxpayer is an organization
to which part I of subchapter T applies,
and in which another organization to
which part I of subchapter T applies
(cooperative owner) directly holds an
ownership interest. No deduction shall
be allowed under section 1382 for any
amount allocated under this paragraph
(e).
(2) Time and manner for making
election—(i) Time for making election.
A cooperative taxpayer must make the
election under section 179C(g) and this
paragraph (e) by the due date (including
extensions) for filing the cooperative
taxpayer’s original Federal income tax
return for the taxable year to which the
cooperative taxpayer’s election under
section 179C(a) and paragraph (d) of this
section applies.
(ii) Manner of making election. An
election under this paragraph (e) is
made by attaching to the cooperative
taxpayer’s timely filed Federal income
tax return for the taxable year (including
extensions) to which the cooperative
taxpayer’s election under section
179C(a) and paragraph (d) of this section
applies a statement providing the
following information:
(A) The name and taxpayer
identification number of the cooperative
taxpayer.
(B) The amount of the deduction
allowable to the cooperative taxpayer
for the taxable year to which the
election under section 179C(a) and
paragraph (d) of this section applies.
(C) The name and taxpayer
identification number of each
cooperative owner to which the
cooperative taxpayer is allocating all or
some of the deduction allowable.
(D) The amount of the allowable
deduction that is allocated to each
cooperative owner listed in paragraph
(e)(2)(ii)(C) of this section.
(3) Written notice to owners. If any
portion of the deduction allowable
under section 179C(a) is allocated to a
cooperative owner, the cooperative
taxpayer must notify the cooperative
owner of the amount of the deduction
allocated to the cooperative owner in a
written notice, and on Form 1099–
PATR, ‘‘Taxable Distributions Received
from Cooperatives.’’ This notice must be
provided on or before the due date
(including extensions) of the

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cooperative taxpayer’s original federal
income tax return for the taxable year
for which the cooperative taxpayer’s
election under section 179C(a) and
paragraph (d) of this section applies.
(4) Irrevocable election. A section
179C(g) election, once made, is
irrevocable.
(f) Reporting requirement—(1) In
general. A taxpayer may not claim a
deduction under section 179C(a) for any
taxable year unless the taxpayer files a
report with the Secretary containing
information with respect to the
operation of the taxpayer’s refineries.
(2) Information to be included in the
report. The taxpayer must specify—
(i) The name and address of the
refinery;
(ii) Under which production capacity
requirement under section 179C(e) and
paragraph (b)(5)(i)(A), (B), and (C) of
this section the taxpayer’s qualified
refinery qualifies;
(iii) Whether the refinery is qualified
refinery property under section 179C(d)
and paragraph (b)(2) of this section,
sufficient to establish that the primary
purpose of the refinery is to process
liquid fuel from crude oil, qualified
fuels, or directly from shale or tar sands.
(iv) The total cost basis of the
qualified refinery property at issue for
the taxpayer’s current taxable year; and
(v) The depreciation treatment of the
capitalized portion of the qualified
refinery property.
(3) Time and manner for submitting
report—(i) Time for submitting report.
The taxpayer is required to submit the
report specified in this paragraph (f) not
later than the due date (including
extensions) of the taxpayer’s Federal
income tax return for the taxable year in
which the qualified refinery property is
placed in service.
(ii) Manner of submitting report. The
taxpayer must attach the report
specified in this paragraph (f) to the
taxpayer’s timely filed original Federal
income tax return for the taxable year in
which the qualified refinery property is
placed in service.
(g) Effective/applicability date. This
section is applicable for taxable years
ending on or after August 22, 2011. For
taxable years ending before August 22,
2011, taxpayers may apply the proposed
regulations published on July 9, 2008,
or, in the alternative, may apply these
final regulations.
§ 1.179C–1T
■

[Removed]

Par. 3. Section 1.179C–1T is removed.

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Federal Register / Vol. 76, No. 163 / Tuesday, August 23, 2011 / Rules and Regulations
PART 602—OMB CONTROL NUMBERS
UNDER THE PAPERWORK
REDUCTION ACT
Par. 4. The authority citation for part
602 continues to read as follows:

■

Authority: 26 U.S.C. 7805.

Par. 5. In § 602.101, paragraph (b) is
amended by adding the following entry
in numerical order to the table to read
as follows:

■

§ 602.101

*

OMB control numbers.

*
*
(b) * * *

*

*

Paperwork Reduction Act

CFR part or section where
identified and described

Current OMB
Control No.

*
*
*
*
*
1.179C–1 ................................
1545–2103
*

*

*

*

*

Approved: August 9, 2011.
Steven T. Miller,
Deputy Commissioner for Services and
Enforcement.
Emily S. McMahon,
(Acting) Assistant Secretary of the Treasury
(Tax Policy).
[FR Doc. 2011–21408 Filed 8–22–11; 8:45 am]
BILLING CODE 4830–01–P

DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 301
[TD 9543]
RIN 1545–BA99

Timely Mailing Treated as Timely Filing
Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations.
AGENCY:

This document contains
regulations amending a Treasury
Regulation to provide guidance as to the
only ways to establish prima facie
evidence of delivery of documents that
have a filing deadline prescribed by the
internal revenue laws, absent direct
proof of actual delivery. The regulations
provide that the proper use of registered
or certified mail, or a service of a private
delivery service (PDS) designated under
criteria established by the IRS, will
constitute prima facie evidence of
delivery. The regulations are necessary
to provide greater certainty on this issue
and to provide specific guidance. The
regulations affect taxpayers who mail
Federal tax documents to the Internal

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SUMMARY:

VerDate Mar<15>2010

Revenue Service or the United States
Tax Court.
DATES: Effective Date: These regulations
are effective on August 23, 2011.
Applicability Date: These regulations
apply to any payment or document
mailed and delivered in accordance
with the requirements of this section in
an envelope bearing a postmark dated
after September 21, 2004.
FOR FURTHER INFORMATION CONTACT:
Steven Karon, (202) 622- 4570 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:

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The collection of information
contained in these final regulations has
been reviewed and approved by the
Office of Management and Budget in
accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C.
3507(d)) under control number 1545–
1899. The collection of information in
these final regulations is in § 301.7502–
1. This information is required in order
for taxpayers to be able to establish the
postmark date and prima facie evidence
of delivery when using certified or
registered mail.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a valid control
number.
Books or records relating to a
collection of information must be
retained as long as their contents might
become material in the administration
of any internal revenue law. Generally,
tax returns and return information are
confidential, as required by 26 U.S.C.
6103.
Background
This document contains regulations
amending 26 CFR part 301 under
section 7502 of the Internal Revenue
Code (Code). Section 7502(a) first
appeared as part of the recodification of
the Code in 1954. Section 7502(a) is
commonly known as the timely mailing/
timely filing rule. Section 301.7502–1 of
the Procedure and Administration
Regulations provides rules for taxpayers
to follow to qualify for favorable
treatment under section 7502. There is
a conflict among the Federal circuit
courts of appeal as to whether the
provisions in section 7502 provide the
exclusive means to establish prima facie
evidence of delivery of a document to
the IRS or the United States Tax Court.
Specifically, courts have reached
differing conclusions regarding whether
a taxpayer may raise a presumption of
delivery of Federal tax documents to the
IRS and the United States Tax Court

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52561

only in situations in which the taxpayer
uses registered or certified mail.
A notice of proposed rulemaking
(REG–138176–02) was published in the
Federal Register (69 FR 56377) on
September 21, 2004. The proposed
regulations clarified that, other than
direct proof of actual delivery, the
exclusive means to establish prima facie
evidence of delivery of Federal tax
documents to the IRS and the United
States Tax Court is to prove the use of
registered or certified mail. Under
section 7502(f)(3), the IRS may extend to
a service provided by a PDS a rule
similar to the prima facie evidence of
delivery rule applicable to certified and
registered mail. Prior to the publication
of the notice of proposed rulemaking,
the IRS had not received any comments
or suggestions for extending this rule,
even though the IRS and the Treasury
Department previously requested
comments in a prior notice of proposed
rulemaking under section 7502. See
Federal Register, 64 FR 2606 (January
15, 1999). Because the IRS was
clarifying what documentation it will
accept as proof of delivery, additional
comments were sought on this issue.
Accordingly, in the notice of proposed
rulemaking, the IRS and the Treasury
Department encouraged the public to
make comments regarding whether the
prima facie evidence of delivery rule
should be extended to a service
provided by a PDS.
Eighteen written comments were
received in response to the notice of
proposed rulemaking. Three
commenters requested a public hearing.
A notice of public hearing on proposed
rulemaking was published in the
Federal Register (69 FR 68282) on
November 24, 2004. A public hearing
was held on January 11, 2005. Three
commenters appeared at the public
hearing and commented on the notice of
proposed rulemaking.
All comments were considered and
are available for public inspection upon
request. After consideration of the
written comments and the comments
provided at the public hearing, the
proposed regulations under section
7502 are adopted as revised by this
Treasury Decision. The public
comments, public hearing, and the
revisions are discussed in this preamble.
Summary of Comments and
Explanation of Provisions
Four commenters expressed concern
that the proposed regulations limited
the proof to satisfy the timely mailing/
timely filing rule of section 7502(a)
rather than the prima facie evidence of
delivery rule of section 7502(c). These
final regulations do not limit the use of

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