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Section 707 Regarding Disguised Sales, Generally; Correction

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Internal Revenue Service (IRS), Treasury.


Correcting amendment.


This document contains corrections to final regulations (TD 9787) that were published in the Federal Register on Wednesday, October 5, 2016 (81 FR 69291). The final regulations are under sections 707 and 752 of the Internal Revenue Code.


This correction is effective November 16, 2016 and is applicable on and after October 5, 2016.

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Deane M. Burke or Caroline E. Hay at (202) 317-5279 (not a toll-free number).

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The final regulations (TD 9787) that are the subject of this correction are under sections 707 and 752 of the Internal Revenue Code.

Need for Correction

As published, the final regulations (TD 9787) contain errors that may prove to be misleading and are in need of clarification.

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List of Subjects in 26 CFR Part 1

  • Income taxes
  • Reporting and recordkeeping requirements
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Correction of Publication

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

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

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

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Section 1.707-5 also issued under 26 U.S.C. 707(a)(2)(B).

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Par. 2. For each entry in § 1.707-5(f) in the “Section” column, remove the language in the “Remove” column from wherever it appears in the Example and add in its place the language in the “Add” column as set forth below:

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Paragraph (f) Example 5 (i)20162017
Paragraph (f) Example 10 (i)20162017
Paragraph (f) Example 10 (ii)20162017
Paragraph (f) Example 11 (i)20162017
Paragraph (f) Example 11 (ii)20162017
Paragraph (f) Example 12 (i)20162017
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Martin V. Franks,

Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration).

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[FR Doc. 2016-27515 Filed 11-15-16; 8:45 am]