[Federal Register Volume 61, Number 198 (Thursday, October 10, 1996)]
[Proposed Rules]
[Pages 53161-53163]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25541]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1 and 301

[REG-209803-95]
RIN 1545-AU08


Magnetic Media Filing Requirements for Information Returns

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking and notice of public hearing.

-----------------------------------------------------------------------

SUMMARY: In the Rules and Regulations section of this issue of the 
Federal Register, the IRS is issuing temporary regulations relating to 
the requirements for filing information returns on magnetic media or in 
other machine-readable form under section 6011(e) of the Internal 
Revenue Code. The text of those temporary regulations also serves as 
the text of the proposed regulations. This document also contains a 
proposed amendment to Sec. 301.6011-2(g)(2). This document also 
provides notice of a public hearing on these proposed regulations.

DATES: Written comments must be received by January 8, 1997. Outlines 
of

[[Page 53162]]

topics to be discussed at the public hearing scheduled for February 5, 
1997, must be received by January 15, 1997.

ADDRESSES: Send submissions to: CC:DOM:CORP:R (REG-209803-95), 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 
(REG-209803-95), Courier's Desk, Internal Revenue Service, 1111 
Constitution Ave., NW., Washington, DC. Alternatively, taxpayers may 
submit comments electronically via the internet by selecting the ``Tax 
Regs'' option on the IRS Home Page, or by submitting comments directly 
to the IRS internet site at http://www.irs.ustreas.gov/prod/tax__regs/
comments.html . The public hearing will be held in Room 3313 of the 
Internal Revenue Building, 1111 Constitution Ave., NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Donna 
Welch, (202) 622-4910; concerning submissions and the hearing, Mike 
Slaughter, (202) 622-7190 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

    Temporary regulations in the Rules and Regulations portion of this 
issue of the Federal Register amend the Income Tax Regulations (26 CFR 
part 1) relating to section 6045 and the Procedure and Administration 
Regulations (26 CFR part 301) relating to section 6011(e). The 
temporary regulations contain rules relating to the filing requirements 
of information returns on magnetic media or in other machine-readable 
form under section 6011(e).
    The text of those temporary regulations also serves as the text of 
these proposed regulations. The preamble to the temporary regulations 
explains the temporary regulations.

Special Analyses

    It has been determined that these proposed regulations are not a 
significant regulatory action as defined in EO 12866. Therefore, a 
regulatory assessment is not required.
    It is hereby certified that the regulations in this document will 
not have a significant economic impact on a substantial number of small 
entities. This certification is based on a determination that these 
regulations impose no additional reporting or recordkeeping requirement 
and only prescribe the method of filing information returns that are 
already required to be filed. Further, these regulations are consistent 
with the requirements imposed by statute. Section 6011(e)(2)(A) 
provides that, in prescribing regulations providing standards for 
determining which returns must be filed on magnetic media or in other 
machine-readable form, the Secretary shall not require any person to 
file returns on magnetic media unless the person is required to file at 
least 250 returns during the calendar year. Consistent with the 
statutory provision, these regulations do not require information 
returns to be filed on magnetic media unless 250 or more returns are 
required to be filed. Further, the economic impact caused by requiring 
filing on magnetic media should be minimal. If a taxpayer's operations 
are computerized, reporting in accordance with the regulations should 
be less costly than filing on paper. If the taxpayer's operations are 
not computerized, the incremental cost of magnetic media reporting 
should be minimal in most cases because of the availability of computer 
service bureaus. In addition, the existing regulations provide that the 
IRS may waive the magnetic media filing requirements upon a showing of 
hardship. It is anticipated that the waiver authority will be exercised 
so as not to unduly burden taxpayers lacking both the necessary data 
processing facilities and access at a reasonable cost to computer 
service bureaus. Accordingly, a Regulatory Flexibility Analysis under 
the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required.
    Pursuant to section 7805(f) of the Internal Revenue Code, these 
proposed regulations will be submitted to the Chief Counsel for 
Advocacy of the Small Business Administration for comment on their 
impact on small business.

Comments and Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any written comments (a signed original 
and eight (8) copies) that are submitted timely to the IRS. All 
comments will be available for public inspection and copying.
    A public hearing has been scheduled for February 5, 1997, at 10 am. 
The hearing will be held in room 3313 of the Internal Revenue Building, 
1111 Constitution Ave., NW., Washington, DC. Because of access 
restrictions, visitors will not be admitted beyond the Internal Revenue 
Building lobby more than 15 minutes before the hearing starts.
    The rules of 26 CFR 601.601(a)(3) apply to the hearing.
    Persons who wish to present oral comments at the hearing must 
submit written comments by January 8, 1997 and submit an outline of the 
topics to be discussed and the time to be devoted to each topic (signed 
original and eight (8) copies) by January 15, 1997.
    A period of 10 minutes will be allotted to each person for making 
comments.
    An agenda showing the scheduling of the speakers will be prepared 
after the deadline for receiving outlines has passed. Copies of the 
agenda will be available free of charge at the hearing.

Drafting Information

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

List of Subjects

26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

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 parts 1 and 301 are proposed to be amended as 
follows:

PART 1--INCOME TAXES

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

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

    Par. 2. In Sec. 1.6045-1, paragraph (l) is revised to read as 
follows:


Sec. 1.6045-1  Returns of information of brokers and barter exchanges.

    [The text of paragraph (l) as proposed is the same as the first 
sentence of Sec. 1.6045-1T(l) published elsewhere in this issue of the 
Federal Register].
    Par. 3. In Sec. 1.6045-2, paragraph (g)(2) is revised to read as 
follows:


Sec. 1.6045-2  Furnishing statement required with respect to certain 
substitute payments.

    [The text of paragraph (g)(2) as proposed is the same as the text 
of the first sentence of Sec. 1.6045-2T(g)(2) published elsewhere in 
this issue of the Federal Register].

[[Page 53163]]

PART 301--PROCEDURE AND ADMINISTRATION

    Par. 4. The authority citation for part 301 continues to read in 
part as follows:

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

    Par. 5. Section 301.6011-2 is amended by revising paragraphs 
(a)(1), (b) (1) and (2), (c)(1) (i) and (iii), (c)(2), (f) and (g)(2), 
and by adding (c)(1)(iv), and by removing paragraphs (c) (3) and (4) 
and the last sentence of paragraph (e). The revisions and additions 
read as follows:


Sec. 301.6011-2  Required use of magnetic media.

    [The text of paragraphs (a)(1), (b)(1) and (2), (c)(1) (i), (iii), 
and (iv), (c)(2), (f), and (g)(2) as proposed is the same as the text 
in Sec. 301.6011-2T(a)(1), (b) (1) and (2), (c)(1) (i), (iii), and 
(iv), (c)(2), (f), and the first sentence of (g)(2) published elsewhere 
in this issue of the Federal Register].
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 96-25541 Filed 10-9-96; 8:45 am]
BILLING CODE 4830-01-U