[Federal Register Volume 62, Number 250 (Wednesday, December 31, 1997)]
[Proposed Rules]
[Pages 68241-68242]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-33790]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 301
[REG-100841-97]
RIN 1545-AU97
Agreements for Payment of Tax Liability in Installments
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: This document contains proposed regulations relating to
terminations of agreements for the payment of tax liabilities in
installments (installment agreements). The proposed regulations reflect
changes made to section 6159 of the Internal Revenue Code of 1986
(Code) by the Taxpayer Bill of Rights 2. The proposed regulations
provide a procedure for requesting an independent administrative review
of an alteration, modification, or termination of an installment
agreement.
DATES: Written comments and requests for a public hearing must be
received by March 2, 1998.
ADDRESSES: Send submissions to: CC:DOM:CORP:R (REG-100841-97), room
5226, Internal Revenue Service, POB 7604, Ben Franklin Station,
Washington, DC 20044. Submissions may be hand delivered between the
hours of 8 a.m. and 5 p.m.: CC:DOM:CORP:R (REG-100841-97), Courier's
Desk, Internal Revenue Service, 1111 Constitution Avenue 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.
FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Kevin B.
Connelly, (202) 622-3640 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document contains proposed amendments to the Procedure and
Administration Regulations (26 CFR part 301) relating to installment
agreements under section 6159 of the Code. Section 201 of the Taxpayer
Bill of Rights 2 (TBOR2), Pub. L. No. 104-168, 110 Stat. 1452 (1996),
amended section 6159 to provide that the Secretary may not alter,
modify, or terminate an installment agreement unless notice of such
action is given not later than 30 days before the date of the action.
The notice must explain why the Secretary intends to take the proposed
action. Section 202 of TBOR2 provides that the Secretary shall provide
an independent administrative review of the termination of an
installment agreement upon request of the taxpayer. These proposed
regulations reflect the change made by Section 202 of TBOR2. In
addition, although the IRS rarely alters or modifies an installment
agreement, the proposed regulations give taxpayers the right to an
independent administrative review of alterations or modifications.
Explanation of Provisions
Sections 201 and 202 of TBOR2 amended section 6159 of the Code with
respect to installment agreements. Section 201 provides that the
Secretary may not alter, modify, or terminate an installment agreement
unless notice of such action is given to the taxpayer at least 30 days
before the action. The notice must explain why the Secretary intends to
take the proposed action. Notice is not necessary if collection of the
tax to which the installment agreement relates is in jeopardy.
Prior to the enactment of TBOR2, Section 6159 of the Code required
notice only if the Internal Revenue Service intended to alter, modify,
or terminate an installment agreement because of a change in the
taxpayer's financial condition. Section 301.6159-1(c)(4) of the
regulations that are being amended by this notice of proposed
rulemaking, however, already requires 30 days notice whenever the IRS
intends to alter, modify, or terminate any agreement, regardless of the
reason for the action. The only exception to this rule is that no
notice is required if collection of the tax to which the installment
agreement relates is in jeopardy. In addition, existing paragraph
(c)(4) requires the notice to explain the reason for the intended
action. In light of existing paragraph (c)(4), the regulations do not
have to be amended to reflect section 201 of TBOR2.
Section 202 of TBOR2 provides that, upon request by a taxpayer, the
Secretary shall provide an independent administrative review of the
termination of an installment agreement. In addition, although the IRS
rarely alters or modifies an installment agreement, the proposed
regulations grant taxpayers the right to request an independent
administrative review of alterations or modifications. Procedures for
requesting an independent administrative review are contained in the
proposed regulations.
When the Internal Revenue Service intends to terminate an
installment agreement, it currently sends the taxpayer a written notice
of its intent. The notice (1) informs the taxpayer why the Internal
Revenue Service intends to terminate the agreement, (2) notifies the
taxpayer that the Internal Revenue Service intends to levy the
taxpayer's property, (3) explains that the taxpayer has a right to
request an independent review of the Internal Revenue Service's
decision, and (4) tells the taxpayer to call the telephone number
listed on the notice within 30 days of the date of the notice if the
taxpayer wishes to stay collection and request the Internal Revenue
Service to review its decision. If the taxpayer timely calls the
telephone number listed on the notice, the employee attempts to resolve
the case with the taxpayer. If the taxpayer and the employee are not
able to resolve the case to the taxpayer's satisfaction, a conference
is set up with a manager. If the manager and the taxpayer are unable to
resolve the case, the manager forwards the case to Appeals for an
[[Page 68242]]
independent administrative review. Absent jeopardy, collection action
is stayed until the appeals officer has informed the taxpayer of a
decision.
The proposed regulations provide that, if a taxpayer disagrees with
a determination to alter, modify, or terminate an installment
agreement, the taxpayer may initiate an independent administrative
review of the determination by calling the telephone number listed on
the notice within 30 days of the date of the notice. This will set the
review process in motion.
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 also has been determined
that section 553(b) of the Administrative Procedure Act (5 U.S.C.
chapter 5) does not apply to these regulations, and because the
regulation does not impose a collection of information on small
entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not
apply. 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 (a signed original and eight (8) 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 a 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 regulations is Kevin B. Connelly,
Office of Assistant Chief Counsel (General Litigation) CC:EL:GL, IRS.
However, other personnel from the IRS 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 * * *
Par. 2. Section 301.6159-1 is amended by revising paragraphs
(c)(4) and (g) to read as follows:
Sec. 301.6159-1 Agreements for payment of tax liability in
installments.
* * * * *
(c) * * *
(4) Notice. Unless the director determines that collection of the
tax is in jeopardy, the director will notify the taxpayer in writing at
least 30 days before altering, modifying, or terminating an installment
agreement pursuant to paragraph (c)(1) or (2) of this section. A notice
provided pursuant to this paragraph must briefly describe the reason
for the intended alteration, modification, or termination. If the
taxpayer disagrees with the director's decision to terminate, alter, or
modify the installment agreement, the taxpayer has the right to an
independent administrative review. The taxpayer may initiate an
independent administrative review by calling the telephone number
listed on the notice within 30 days of the date of the notice. If, upon
calling the telephone number listed on the notice, the dispute is not
resolved to the taxpayer's satisfaction, the taxpayer must speak with a
manager. If, after speaking with a manager, the dispute still is not
resolved to the taxpayer's satisfaction, the taxpayer may request the
Office of Appeals to independently review the decision. The Office of
Appeals shall conduct a review to determine whether the facts and
circumstances warrant the alteration, modification, or termination of
the taxpayer's installment agreement.
* * * * *
(g) Effective date. This section is applicable December 23, 1994,
except that paragraph (c)(4) of this section is applicable on the date
final regulations are published in the Federal Register.
Michael P. Dolan,
Deputy Commissioner of Internal Revenue.
[FR Doc. 97-33790 Filed 12-30-97; 8:45 am]
BILLING CODE 4830-01-U