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B-332883 Feb 02, 2021 1 (2021-02-02)

handle is hein.gao/gaobaecpk0001 and id is 1 raw text is: Ijoo U.S. GOVERNMENT ACCOUNTABILITY OFFICE G A0 A Century of Non-Partisan Fact-Based Work 441 G St. N.W. Washington, DC 20548 B-332883 February 2, 2021 Chair Ranking Member Committee on Finance United States Senate The Honorable Richard Neal Chairman The Honorable Kevin Brady Republican Leader Committee on Ways and Means House of Representatives Subject: Department of the Treasury, Internal Revenue Service: Guidance Under Section 1061 Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a major rule promulgated by the Department of the Treasury, Internal Revenue Service (IRS) entitled Guidance Under Section 1061 (RIN: 1545-B081). We received the rule on January 14, 2021. It was published in the Federal Register as final regulations on January 19, 2021. 86 Fed. Reg. 5452. The final rule is effective January 13, 2021. According to IRS, this final rule provides guidance under section 1061 of the Internal Revenue Code (Code). See generally 26 U.S.C. § 1061. IRS stated, section 1061 recharacterizes certain net long-term capital gains of a partner that holds one or more applicable partnership interests as short-term capital gains. IRS also stated, an applicable partnership interest is an interest in a partnership that is transferred to or held by a taxpayer, directly or indirectly, in connection with the performance of substantial services by the taxpayer, or any other related person, in any applicable trade or business. IRS stated further, these final regulations also amend existing regulations on holding periods to clarify the holding period of a partner's interest in a partnership that includes in whole or in part an applicable partnership interest and/or a profits interest. IRS noted that these regulations affect taxpayers who directly or indirectly hold applicable partnership interests in partnerships and the pass-through entities through which the applicable partnership interest is held. The Congressional Review Act (CRA) requires a 60-day delay in the effective date of a major rule from the date of publication in the Federal Register or receipt of the rule by Congress, whichever is later. 5 U.S.C. § 801(a)(3)(A). The 60-day delay in effective date can be waived, however, if the agency finds for good cause that delay is impracticable, unnecessary,

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