[Federal Register Volume 59, Number 240 (Thursday, December 15, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-30774]


[[Page Unknown]]

[Federal Register: December 15, 1994]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1 and 602

[TD 8572]
RIN 1545-AT07

 

Cash Reporting by Court Clerks

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Temporary regulations.

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SUMMARY: This document contains temporary regulations relating to the 
information reporting requirements of court clerks upon receipt of more 
than $10,000 in cash as bail for any individual charged with a 
specified criminal offense. The regulations reflect changes to the 
Internal Revenue Code made by section 20415 of the Violent Crime 
Control and Law Enforcement Act of 1994 (the Act). The text of these 
temporary regulations also serves as the text of the proposed 
regulations set forth in the notice of proposed rulemaking on this 
subject in the Proposed Rules section of this issue of the Federal 
Register.

EFFECTIVE DATE: These regulations are effective February 13, 1995.

FOR FURTHER INFORMATION CONTACT: Susie K. Bird at (202) 622-4960 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    This regulation is being issued without prior notice and public 
procedure pursuant to the Administrative Procedure Act (5 U.S.C. 553). 
For this reason, the collection of information contained in this 
regulation has been reviewed and, pending receipt and evaluation of 
public comments, approved by the Office of Management and Budget under 
control number 1545-1449. The time estimates for the reporting 
requirements contained in this regulation are reflected in the burden 
estimates for Form 8300.
    For further information concerning this collection of information, 
where to submit comments on the collection of information, the accuracy 
of the estimated burden, and suggestions for reducing this burden, 
please refer to the preamble to the cross-referencing notice of 
proposed rulemaking published in the Proposed Rules section of this 
issue of the Federal Register.

Background

    This document contains amendments to the Income Tax Regulations (26 
CFR parts 1 and 602) under section 6050I of the Internal Revenue Code 
of 1986 (Code). Section 6050I generally requires persons engaged in a 
trade or business to report cash receipts of more than $10,000. Section 
6050I(g), which was enacted on September 13, 1994, by section 20415 of 
the Act, requires court clerks to report certain cash receipts of more 
than $10,000. Section 20415(c) of the Act provides that the Secretary 
of the Treasury or the Secretary's delegate shall prescribe temporary 
regulations relating to section 6050I(g) of the Code within 90 days of 
enactment of the Act. Thus, these temporary regulations are required by 
statute in order to set forth the time, form, and manner of reporting 
under section 6050I(g).

Explanation of Provisions

    The temporary regulations reflect the statutory requirement that 
any clerk of a Federal or State court who receives more than $10,000 in 
cash as bail for any individual charged with a specified criminal 
offense must make a return with respect to the receipt of that cash. 
For this purpose, a clerk is the clerk's office or the office, 
department, division, branch, or unit of the court that is authorized 
to receive bail.
    The temporary regulations define the term cash as coin and currency 
of the United States or of any other country, and a cashier's check, 
bank draft, traveler's check, or money order having a face amount of 
$10,000 or less. The term ``specified criminal offense'' is defined in 
the temporary regulations as (a) a Federal criminal offense involving a 
controlled substance (as defined in section 802 of title 21 of the 
United States Code), provided the offense is described in Part D of 
Subchapter I or Subchapter II of title 21 of the United States Code; 
(b) racketeering (as defined in section 1951, 1952, or 1955 of title 18 
of the United States Code); (c) money laundering (as defined in section 
1956 or 1957 of title 18 of the United States Code); and (d) any state 
criminal offense substantially similar to an offense described above. 
The IRS welcomes comments on what constitutes a state criminal offense 
that is substantially similar to one of the federal specified criminal 
offenses described in the temporary regulations.
    The temporary regulations provide that the required information 
must be reported on Form 8300 and must be filed with the IRS by the 
15th day after the date the cash bail is received. The information 
return must be filed with the IRS office designated in the instructions 
for Form 8300 and must contain: (a) The name, address, and taxpayer 
identification number (TIN) of the individual charged with the 
specified criminal offense; (b) the name, address, and TIN of each 
person posting the bail, other than a person posting bail who is 
licensed as a bail bondsman; (c) the amount of cash received; (d) the 
date the cash was received; and (e) any other information required by 
Form 8300 or its instructions.
    The temporary regulations also require the furnishing of a written 
statement to the United States Attorney for the jurisdiction in which 
the individual charged with the specified criminal offense resides and 
the jurisdiction in which the specified criminal offense occurred 
(applicable United States Attorney(s)). The written statement must be 
filed with the applicable United States Attorney(s) by the 15th day 
after the date the cash bail is received. The written statement must 
include the information required to be included on the Form 8300 filed 
with the IRS, and a copy of the Form 8300 may be used to satisfy this 
requirement.
    The temporary regulations also require the furnishing of a written 
statement to each person posting bail (payor of bail) whose name is set 
forth in a Form 8300 required to be filed with the IRS. The statement 
must be furnished to such a payor of bail on or before January 31 of 
the year following the year in which the cash is received. The 
statement must contain: (a) The name and address of the clerk's office 
making the return; (b) the aggregate amount of reportable cash received 
during the calendar year by the clerk required to file the Form 8300 in 
all cash transactions relating to the payor of bail; and (c) a legend 
stating that the information contained in the statement has been 
reported to the IRS and the applicable United States Attorney(s).
    The temporary regulations apply to cash received by court clerks on 
or after February 13, 1995.

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in EO 12866. Therefore, a 
regulatory assessment is not required. It has also been determined that 
section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) 
and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do not apply to 
these regulations, and, therefore, a Regulatory Flexibility Analysis is 
not required. Pursuant to section 7805(f) of the Internal Revenue Code, 
these temporary regulations will be submitted to the Chief Counsel for 
Advocacy of the Small Business Administration for comment on their 
impact on small businesses.

Drafting Information

    The principal author of these regulations is Susie K. Bird of the 
Office of Assistant Chief Counsel (Income Tax and Accounting). However, 
other personnel from the IRS and Treasury Department participated in 
their development.

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 is amended by adding 
an entry in numerical order to read as follows:

    Authority: 26 U.S.C. 7805 * * * Section 1.6050I-2T is issued 
under 26 U.S.C. 6050I. * * *
    Par. 2. Sections 1.6050I-0T and 1.6050I-2T are added to read as 
follows:


Sec. 1.6050I-0T  Table of contents (temporary).

    This section lists the major captions that appear in Secs. 1.6050I-
1 and 1.6050I-2T.

Sec. 1.6050I-1  Returns relating to cash in excess of $10,000 
received in a trade or business.

(a) Reporting requirement.
(1) In general.
(2) Cash received for the account of another.
(3) Cash received by agents.
(i) General rule.
(ii) Exception.
(iii) Example.
(b) Multiple payments.
(1) Initial payment in excess of $10,000.
(2) Initial payment of $10,000 or less.
(3) Subsequent payments.
(4) Example.
(c) Meaning of terms.
(1) Cash.
(i) Amounts received prior to February 3, 1992.
(ii) Amounts received on or after February 3, 1992.
(iii) Designated reporting transaction.
(iv) Exception for certain loans.
(v) Exception for certain installment sales.
(vi) Exception for certain down payment plans.
(vii) Examples.
(2) Consumer durable.
(3) Collectible.
(4) Travel or entertainment activity.
(5) Retail sale.
(6) Trade or business.
(7) Transaction.
(8) Recipient.
(d) Exceptions to the reporting requirements of section 6050I.
(1) Receipt of cash by certain financial institutions.
(2) Receipt of cash by certain casinos having gross annual gaming 
revenue in excess of $1,000,000.
(i) In general.
(ii) Casinos exempt under 31 CFR 103.45(c).
(iii) Reporting of cash received in a nongaming business.
(iv) Example.
(3) Receipt of cash not in the course of the recipient's trade or 
business.
(4) Receipt is made with respect to a foreign cash transaction.
(i) In general.
(ii) Example.
(e) Time, manner, and form of reporting.
(1) Time of reporting.
(2) Form of reporting.
(3) Manner of reporting.
(i) Where to file.
(ii) Verification.
(iii) Retention of returns.
(f) Requirement of furnishing statements.
(1) In general.
(2) Form of statement.
(3) When statement is to be furnished.
(g) Cross-reference to penalty provisions.
(1) Failure to file correct information return.
(2) Failure to furnish correct statement.
(3) Criminal penalties.

Sec. 1.6050I-2T  Returns relating to cash in excess of $10,000 
received as bail by court clerks (temporary).

(a) Reporting requirement.
(b) Meaning of terms.
(c) Time, form, and manner of reporting.
(1) Time of reporting.
(2) Form of reporting.
(3) Manner of reporting.
(i) Where to file.
(ii) Verification of identity.
(d) Requirement to furnish statements.
(1) Information to federal prosecutors.
(i) In general.
(ii) Form of statement.
(2) Information to payors of bail.
(i) In general.
(ii) Form of statement.
(e) Cross-reference to penalty provisions.
(f) Effective date.


Sec. 1.6050I-2T  Returns relating to cash in excess of $10,000 received 
as bail by court clerks (temporary).

    (a) Reporting requirement. Any clerk of a Federal or State court 
who receives more than $10,000 in cash as bail for any individual 
charged with a specified criminal offense must make a return of 
information with respect to that cash receipt. For purposes of this 
section, a clerk is the clerk's office or the office, department, 
division, branch, or unit of the court that is authorized to receive 
bail.
    (b) Meaning of terms. The following definitions apply for purposes 
of this Sec. 1.6050I-2T--
    Cash means--
    (1) The coin and currency of the United States, or of any other 
country, that circulate in and are customarily used and accepted as 
money in the country in which issued; and
    (2) A cashier's check (by whatever name called, including 
treasurer's check and bank check), bank draft, traveler's check, or 
money order having a face amount of not more than $10,000.
    Specified criminal offense means--
    (1) A Federal criminal offense involving a controlled substance (as 
defined in section 802 of title 21 of the United States Code), provided 
the offense is described in Part D of Subchapter I or Subchapter II of 
title 21 of the United States Code;
    (2) Racketeering (as defined in section 1951, 1952, or 1955 of 
title 18 of the United States Code);
    (3) Money laundering (as defined in section 1956 or 1957 of title 
18 of the United States Code); and
    (4) Any State criminal offense substantially similar to an offense 
described in paragraph (b)(2)(i), (ii), or (iii) of this section.
    (c) Time, form, and manner of reporting--(1) Time of reporting. The 
information return required by this section must be filed with the 
Internal Revenue Service by the 15th day after the date the cash bail 
is received.
    (2) Form of reporting. A report required by paragraph (a) of this 
section must be made on Form 8300 and must contain the following 
information--
    (i) The name, address, and taxpayer identification number (TIN) of 
the individual charged with the specified criminal offense;
    (ii) The name, address, and TIN of each person posting the bail 
(payor of bail), other than a person posting bail who is licensed as a 
bail bondsman in the jurisdiction in which the bail is received;
    (iii) The amount of cash received;
    (iv) The date the cash was received; and
    (v) Any other information required by Form 8300 or its 
instructions.
    (3) Manner of reporting--(i) Where to file. Returns required by 
this section must be filed with the Internal Revenue Service office 
designated in the instructions for Form 8300. A copy of the information 
return required to be filed under this section must be retained for 
five years from the date of filing.
    (ii) Verification of identity. A clerk required to make an 
information return under this section must, in accordance with 
Sec. 1.6050I-1(e)(3)(ii), verify the identity of each payor of bail 
listed in the return.
    (d) Requirement to furnish statements--(1) Information to federal 
prosecutors--(i) In general. A clerk required to make an information 
return under this section must furnish a written statement to the 
United States Attorney for the jurisdiction in which the individual 
charged with the specified crime resides and the United States Attorney 
for the jurisdiction in which the specified criminal offense occurred 
(applicable United States Attorney(s)). The written statement must be 
filed with the applicable United States Attorney(s) by the 15th day 
after the date the cash bail is received.
    (ii) Form of statement. The written statement must include the 
information required by paragraph (c)(2) of this section. This 
paragraph (d)(1)(ii) requirement will be satisfied if the clerk 
provides to the applicable United States Attorney(s) a copy of the Form 
8300 that is filed with the Internal Revenue Service pursuant to this 
section.
    (2) Information to payors of bail--(i) In general. A clerk required 
to make an information return under this section must furnish a written 
statement to each payor of bail whose name is set forth in a return 
required by this section. A statement required under this paragraph 
(d)(2) must be furnished to a payor of bail on or before January 31 of 
the year following the calendar year in which the cash is received. A 
statement shall be considered to be furnished to a payor of bail if it 
is mailed to the payor of bail's last known address.
    (ii) Form of statement. The statement required by this paragraph 
(d)(2) need not follow any particular format, but it must contain the 
following information--
    (A) The name and address of the clerk's office making the return;
    (B) The aggregate amount of reportable cash received during the 
calendar year by the clerk who made the information return required by 
this section in all cash transactions relating to the payor of bail; 
and
    (C) A legend stating that the information contained in the 
statement has been reported to the Internal Revenue Service and the 
applicable United States Attorney(s).
    (e) Cross-reference to penalty provisions. See sections 6721 
through 6724 for penalties relating to the failure to comply with the 
provisions of this section.
    (f) Effective Date. This section applies with respect to cash 
received by court clerks on or after February 13, 1995.

PART 602--OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT

    Par. 3. The authority citation for part 602 continues to read as 
follows:

    Authority: 26 U.S.C. 7805.


Sec. 602.101  [Amended]

    Par. 4. Section 602.101(c) is amended by adding the entry for 
``1.6050I-2T ......1545-1449'' in numerical order in the table.

    Approved:
Cynthia G. Beerbower,
Deputy Assistant Secretary of the Treasury.
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 94-30774 Filed 12-12-94; 8:45 am]
BILLING CODE 4830-01-U