[Federal Register Volume 60, Number 241 (Friday, December 15, 1995)]
[Proposed Rules]
[Pages 64402-64403]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30505]
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DEPARTMENT OF THE TREASURY
26 CFR Part 301
[DL-01-95]
RIN 1545-AT48
Disclosure of Returns and Return Information to Procure Property
or Services for Tax Administration Purposes
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: These proposed regulations relate to the disclosure of returns
and return information in connection with the procurement of property
and services for tax administration purposes. The amendments would
authorize the Department of Justice, including offices of United States
Attorneys, to make such disclosures. Current disclosure authority
within the Department of Justice rests only with the Tax Division. The
amendments also reflect a change to the law made by the Omnibus Budget
Reconciliation Act of 1990 regarding the type of services about which
disclosures may be made.
DATES: Comments and requests for a public hearing must be received by
March 14, 1996.
ADDRESSES: Send submissions to: CC:DOM:CORP:R (DL-01-95), room 5228,
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington,
DC 20044. In the alternative, submissions may be hand delivered between
the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R (DL-01-95), Courier's
Desk, Internal Revenue Service, 1111 Constitution Avenue NW.,
Washington, DC.
FOR FURTHER INFORMATION CONTACT: Donald Squires, 202-622- 4570 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Background
Section 6103(n) of the Internal Revenue Code (Code) authorizes the
disclosure of returns and return information, pursuant to regulations
prescribed by the Secretary of the Treasury, ``to the extent necessary
in connection with the processing, storage, transmission, and
reproduction of such returns and return information, the programming,
maintenance, repair,
[[Page 64403]]
testing, and procurement of equipment, and the providing of other
services, for purposes of tax administration.''
Existing regulations promulgated under this section prescribe the
persons who may make such disclosures, the situations under which such
disclosures may be made and the notification and safeguarding
procedures to be followed when such disclosures are made. Among the
persons who may make such disclosures are officers and employees of the
Tax Division of the Department of Justice. The amendments would
authorize such disclosures by the Department of Justice (not solely the
Tax Division) to third parties who provide services for tax
administration purposes under the conditions and restrictions of the
regulations. The amendments would provide that, for the purpose of this
section, the ``Department of Justice'' includes offices of United
States Attorneys.
The amendments would also conform the regulation to the language of
section 6103(n), which was amended by the Omnibus Budget Reconciliation
Act of 1990 to clarify that the disclosures authorized by this section
included those in connection with ``the providing of other services''
(i.e., services other than those related to the mechanical processing
of returns and return information).
Explanation of Provisions
As currently written, 26 CFR 301.6103(n)-1 authorizes the Tax
Division of the Department of Justice, among other entities and
individuals, to make disclosures of returns and return information
pursuant to section 6103(n) of the Internal Revenue Code. This
authority allows the Tax Division to disclose tax information incident
to its contracts to private parties for, among other purposes,
automated litigation support services.
The Department of Justice has indicated its intention to establish
an expanded automated tracking system for all monetary judgments in
favor of the United States, which will be operated by a private company
under contract with the Department. Although the majority of tax cases
are handled by the Tax Division, there are several United States
Attorneys' offices that also have litigation responsibility in the
civil tax area. In addition, the Tax Division refers some judgments in
tax cases to the United States Attorneys for collection. Existing
regulations arguably would not permit these offices, which are
technically not part of the Tax Division, to disclose tax information
incident to their inclusion of tax judgments in the automated tracking
system.
The proposed amendment would authorize the Department of Justice,
including offices of United States Attorneys, to make disclosures to
procure property and services for tax administration purposes. Any such
disclosures will be made under the same conditions and restrictions
already set forth in the existing regulations. By definition, any
office within the Department of Justice without tax administration
duties will not have occasion or authority pursuant to these
regulations to make such disclosures.
The proposed amendment would also authorize disclosures in
connection with ``the providing of other services,'' i.e., services not
related to the strict mechanical processing or manipulation of tax
returns or return information. This would conform the regulations to
the language of the statute, as amended by the Omnibus Budget
Reconciliation Act of 1990 (Pub. L. 101-508, 104 Stat. 1388-353).
Special Analyses
It has been determined that this notice of proposed rulemaking 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, this notice of proposed rulemaking will be
submitted to the Chief Counsel for Advocacy of the Small Business
Administration for comment on its impact on small business.
Comments and Requests for a Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments that are submitted
timely (preferably a signed original and eight copies) to the IRS. All
comments will be available for public inspection and copying. A public
hearing may be scheduled if requested in writing by any person that
timely submits written comments. If a public hearing is scheduled,
notice of the date, time, and place for the hearing will be published
in the Federal Register.
Drafting Information
The principal author of these proposed regulations is Donald
Squires, Office of the Assistant Chief Counsel (Disclosure Litigation),
IRS. However, other personnel from the IRS, Department of Justice and
Treasury Department participated in their development.
List of Subjects in 26 CFR Part 301
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income
taxes, Penalties, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 301 is proposed to be amended as follows:
PART 301--PROCEDURE AND ADMINISTRATION
Paragraph 1. The authority citation for part 301 continues to read
in part as follows:
Authority: 26 U.S.C. 7805 * * *
Para. 2. Section 301.6103(n)-1 is amended as follows:
1. The first sentence of paragraph (a) introductory text is amended
by removing the language ``Tax Division,''.
2. Paragraph (a)(2) is amended by removing the language ``or to''.
3. Paragraph (a)(2) is further amended by adding the language ``or
the providing of other services,'' immediately following the text
``other property,''.
4. The concluding text following paragraph (a)(2) is amended by
removing the language ``Tax Division,''.
5. The second sentence of paragraph (d) introductory text is
amended by removing the language ``Tax Division,''.
6. Paragraph (d)(2) is amended by removing the language ``Tax
Division,''.
7. Paragraph (e)(1) is amended by removing the language ``, and''
at the end of the paragraph and adding a semicolon in its place.
8. Paragraph (e)(2) is amended by removing the period at the end of
the paragraph and adding ``; and'' in its place.
9. Paragraph (e)(3) is added.
10. The authority citation immediately following Sec. 301.6103(n)
is removed.
The addition reads as follows:
Sec. 301.6103(n)-1 Disclosure of returns and return information in
connection with procurement of property and services for tax
administration purposes.
* * * * *
(e) * * *
(3) The term Department of Justice includes offices of the United
States Attorneys.
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 95-30505 Filed 12-14-95; 8:45 am]
BILLING CODE 4830-01-U