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TREAS/IRS RIN: 1545-BL35 Publication ID: Fall 2014 
Title: Treatment of Delay Rental 
Abstract:

Under the terms of a mineral lease, a lessee acquires, for a stated term, the right and obligation to obtain production of mineral. Oil and gas leases typically provide that for each year that the lessee fails to make efforts to obtain production, the lessee must pay a "delay rental" to the lessor. Under section 1.612-3(c), the payor has the option to deduct delay rental currently under section 266 or charge it to depletable capital account. This project will amend the regulations to clarify the application of section 263A to delay rentals.

 
Agency: Department of the Treasury(TREAS)  Priority: Substantive, Nonsignificant 
RIN Status: Previously published in the Unified Agenda Agenda Stage of Rulemaking: Proposed Rule Stage 
Major: No  Unfunded Mandates: Undetermined 
CFR Citation: 26 CFR 1.612-3   
Legal Authority: 26 USC 7805    26 USC 612   
Legal Deadline:  None
Timetable:
Action Date FR Cite
NPRM  11/00/2014 
Additional Information: REG-148392-12 Drafting attorney: Martha Garcia (202) 317-6853 Reviewing attorney: Brenda Stewart (202) 317-6853 CC:PSI
Regulatory Flexibility Analysis Required: No  Government Levels Affected: None 
Federalism: No 
Included in the Regulatory Plan: No 
RIN Data Printed in the FR: No 
Agency Contact:
Martha M. Garcia
Attorney
Department of the Treasury
Internal Revenue Service
1111 Constitution Avenue NW., Room 5116,
Washington, DC 20224
Phone:202 317-6853
Fax:202 317-6732
Email: martha.m.garcia@irscounsel.treas.gov