[Federal Register Volume 63, Number 210 (Friday, October 30, 1998)]
[Rules and Regulations]
[Pages 58587-58590]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-28955]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1, 4, 13, 14, 15, and 52
[FAC 97-09; FAR Case 97-003; Item I]
RIN 9000-AI14
Federal Acquisition Regulation; Taxpayer Identification Numbers
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule with request for comments.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council have agreed on an interim rule amending
the Federal Acquisition Regulation (FAR) to implement Subsection (i) of
the Debt Collection Improvement Act of 1996 and Section 1022 of the
Taxpayer Relief Act of 1997, and to clarify the Government requirements
for reporting of contract information and payment information to the
Internal Revenue Service (IRS). This regulatory action was not subject
to Office of Management and Budget review under Executive Order 12866,
dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.
EFFECTIVE DATE: October 30, 1998.
Comment Date: Comments should be submitted to the FAR Secretariat
at the address shown below on or before December 29, 1998, to be
considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to:
General Services Administration FAR Secretariat (MVR), 800 F Street,
NW, Room 4035, Attn: Ms. Laurie Duarte, Washington, DC 20405.
E-Mail comments submitted over the Internet should be addressed to:
[email protected]
Please cite FAC 97-09, FAR case 97-003 in all correspondence
related to this case.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC 20405, (202) 501-4755, for information
pertaining to status or publication schedules. For clarification of
content, contact Mr. Jeremy Olson at (202) 501-0692. Please cite FAC
97-09, FAR case 97-003.
SUPPLEMENTARY INFORMATION:
[[Page 58588]]
A. Background
Subsection (i) of the Debt Collection Improvement Act of 1996 (Pub.
L. 104-134) amends 31 U.S.C. 7701 by requiring that the head of each
Federal agency require each contractor doing business with the
Government to furnish its Taxpayer Identification Number (TIN) and by
requiring the Government to disclose its intent to use such number for
purposes of collecting and reporting on any delinquent amounts. Section
1022 of the Taxpayer Relief Act of 1997 (Pub. L. 105-32) amends 26
U.S.C. 6041A(d) to add payments for services provided by corporations
to the types of payments that the Government is required to report to
the IRS using Form 1099.
This interim rule expands the scope of FAR Subpart 4.9 to require
the contractor to provide a TIN for debt collection purposes. Prior to
this revision, FAR Subpart 4.9 required the contractor to provide a TIN
only to facilitate Government reporting of certain contract information
and payment information to the IRS. The rule also deletes the
provisions at FAR 52.214-2, Type of Business Organization-Sealed
Bidding, and 52.215-4, Type of Business Organization, since the
information requested in these provisions is duplicative of the
information requested in the provisions at FAR 52.204-3, Taxpayer
Identification, and 52.212-3, Offeror Representations and
Certifications-Commercial Items, as amended by this rule. In addition,
this rule clarifies and updates the requirement for Government agencies
to obtain contract information and payment information to facilitate
issuance of Form 1099 and other reports to the IRS.
B. Regulatory Flexibility Act
The interim rule is not expected to have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule
merely clarifies existing requirements for contractors to submit TINs,
requires the Government to advise contractors of the potential debt
collection usage of the TIN, and clarifies and updates requirements for
Government reporting of contract information and payment information to
the IRS. An Initial Regulatory Flexibility Analysis has, therefore, not
been performed. Comments are invited from small businesses and other
interested parties. Comments from small entities concerning the
affected FAR subparts also will be considered in accordance with 5
U.S.C. 610. Such comments must be submitted separately and should cite
5 U.S.C 601, et seq. (FAR Case 97-003), in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. 3501, et seq.) is deemed to
apply because the interim rule contains information collection
requirements. The interim rule decreases the collection requirements
currently approved under Office of Management and Budget (OMB) Control
Number 9000-0046, since the rule deletes the provisions at FAR 52.214-2
and 52.215-4.
OMB Control Numbers 9000-0097 and 9000-0136 approved the
information collection requirements that existed in the FAR at 52.204-3
and 52.212-3, respectively, prior to implementation of this interim
rule. Revisions to these provisions required by the interim rule have
no net impact on the collection requirements currently approved.
D. Determination to Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense (DoD), the Administrator of General Services (GSA), and the
Administrator of the National Aeronautics and Space Administration
(NASA) that urgent and compelling reasons exist to promulgate this
interim rule without prior opportunity for public comment. This rule
implements Subsection (i) of the Debt Collection Improvement Act of
1996 (Pub. L. 104-134), which was effective upon enactment on April 25,
1996; and Section 1022 of the Taxpayer Relief Act of 1997 (Pub. L. 105-
32), which applies to payments made after December 31, 1997. An interim
rule is necessary to ensure that changes are made to the FAR to address
the statutory requirements to notify contractors that the TIN may be
used for debt collection purposes, and to add payments for services
provided by corporations to the types of payments subject to IRS Form
1099 reporting requirements. However, pursuant to Public Law 98-577 and
FAR 1.501, public comments received in response to this interim rule
will be considered in the formation of the final rule.
List of Subjects in 48 CFR Parts 1, 4, 13, 14, 15, and 52
Government procurement.
Dated: October 22, 1998.
Edward C. Loeb,
Director, Federal Acquisition, Policy Division.
Therefore, 48 CFR Parts 1, 4, 13, 14, 15, and 52 are amended as set
forth below:
1. The authority citation for 48 CFR Parts 1, 4, 13, 14, 15, and 52
continues to read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM
1.106 [Amended]
2. Section 1.106 is amended in the table following the introductory
paragraph by removing the FAR segments at 52.214-2 and 52.215-4 and
their corresponding OMB Control Numbers.
PART 4--ADMINISTRATIVE MATTERS
3. Section 4.203 is revised to read as follows:
4.203 Taxpayer identification information.
(a) If the contractor has furnished a Taxpayer Identification
Number (TIN) when completing the solicitation provision at 52.204-3,
Taxpayer Identification, or paragraph (b) of the solicitation provision
at 52.212-3, Offeror Representations and Certifications--Commercial
Items, the contracting officer shall, unless otherwise provided in
agency procedures, attach a copy of the completed solicitation
provision as the last page of the copy of the contract sent to the
payment office.
(b) If the TIN or type of organization is derived from a source
other than the provision at 52.204-3 or 52.212-3(b), the contracting
officer shall annotate the last page of the contract or order forwarded
to the payment office to state the contractor's TIN and type of
organization, unless this information is otherwise provided to the
payment office in accordance with agency procedures.
(c) If the contractor provides its TIN or type of organization to
the contracting officer after award, the contracting officer shall
forward the information to the payment office within 7 days of its
receipt.
(d) Federal Supply Schedule contracts. Each contracting officer
that places an order under a Federal Supply Schedule contract (see
Subpart 8.4) shall provide the TIN and type of organization information
to the payment office in accordance with paragraph (b) of this section.
[[Page 58589]]
(e) Basic ordering agreements and indefinite-delivery contracts
(other than Federal Supply Schedule contracts).
(1) Each contracting officer that issues a basic ordering agreement
or indefinite-delivery contract (other than a Federal Supply Schedule
contract) shall provide to contracting officers placing orders under
the agreement or contract--
(i) A copy of the agreement or contract with a copy of the
completed solicitation provision at 52.204-3 or 52.212-3(b) as the last
page of the agreement or contract; or
(ii) The contractor's TIN and type of organization information.
(2) Each contracting officer that places an order under a basic
ordering agreement or indefinite-delivery contract (other than a
Federal Supply Schedule contract) shall provide the TIN and type of
organization information to the payment office in accordance with
paragraph (a) or (b) of this section.
4. Subpart 4.9 is revised to read as follows:
Subpart 4.9--Taxpayer Identification Number Information
Sec.
4.900 Scope of subpart.
4.901 Definitions.
4.902 General.
4.903 Reporting contract information to the IRS.
4.904 Reporting payment information to the IRS.
4.905 Solicitation provision.
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
Subpart 4.9--Taxpayer Identification Number Information
4.900 Scope of subpart.
This subpart provides policies and procedures for obtaining--
(a) Taxpayer Identification Number (TIN) information that may be
used for debt collection purposes; and
(b) Contract information and payment information for submittal to
the payment office for Internal Revenue Service (IRS) reporting
purposes.
4.901 Definitions.
Common parent, as used in this subpart, means that corporate entity
that owns or controls an affiliated group of corporations that files
its Federal income tax returns on a consolidated basis, and of which
the offeror is a member.
Taxpayer Identification Number (TIN), as used in this subpart,
means the number required by the IRS to be used by the offeror in
reporting income tax and other returns. The TIN may be either a Social
Security Number or an Employer Identification Number.
4.902 General.
(a) Debt collection. 31 U.S.C. 7701(c) requires each contractor
doing business with a Government agency to furnish its TIN to that
agency. 31 U.S.C. 3325(d) requires the Government to include, with each
certified voucher prepared by the Government payment office and
submitted to a disbursing official, the TIN of the contractor receiving
payment under the voucher. The TIN may be used by the Government to
collect and report on any delinquent amounts arising out of the
contractor's relationship with the Government.
(b) Information reporting to the IRS. The TIN is also required for
Government reporting of certain contract information (see 4.903) and
payment information (see 4.904) to the IRS.
4.903 Reporting contract information to the IRS.
(a) 26 U.S.C. 6050M, as implemented in 26 CFR, requires heads of
Federal executive agencies to report certain information to the IRS.
(b)(1) The required information applies to contract modifications--
(i) Increasing the amount of a contract awarded before January 1,
1989, by $50,000 or more; and
(ii) Entered into on or after April 1, 1990.
(2) The reporting requirement also applies to certain contracts and
modifications thereto in excess of $25,000 entered into on or after
January 1, 1989.
(c) The information to report is--
(1) Name, address, and TIN of the contractor;
(2) Name and TIN of the common parent (if any);
(3) Date of the contract action;
(4) Amount obligated on the contract action; and
(5) Estimated contract completion date.
(d) Transmit the information to the IRS through the Federal
Procurement Data System (see Subpart 4.6 and implementing
instructions).
4.904 Reporting payment information to the IRS.
26 U.S.C. 6041 and 6041A, as implemented in 26 CFR, in part,
require payors, including Government agencies, to report to the IRS, on
Form 1099, payments made to certain contractors. 26 U.S.C. 6109
requires a contractor to provide its TIN if a Form 1099 is required.
The payment office is responsible for submitting reports to the IRS.
4.905 Solicitation provision.
The contracting officer shall insert the provision at 52.204-3,
Taxpayer Identification, in solicitations that are not conducted under
the procedures of Part 12, unless the TIN, type of organization, and
common parent information for each offeror will be obtained from some
other source (e.g., centralized database) in accordance with agency
procedures.
PART 13--SIMPLIFIED ACQUISITION PROCEDURES
5. Section 13.106-3 is amended by adding paragraph (e) to read as
follows:
13.106-3 Award and documentation.
* * * * *
(e) Taxpayer Identification Number. If an oral solicitation is
used, the contracting officer shall ensure that the copy of the award
document sent to the payment office is annotated with the contractor's
Taxpayer Identification Number (TIN) and type of organization (see
4.203), unless this information will be obtained from some other source
(e.g., centralized database). The contracting officer shall disclose to
the contractor that the TIN may be used by the Government to collect
and report on any delinquent amounts arising out of the contractor's
relationship with the Government (31 U.S.C. 7701(c)(3)).
PART 14--SEALED BIDDING
14.201-6 [Amended]
6. Section 14.201-6 is amended by removing and reserving paragraph
(b)(2).
PART 15--CONTRACTING BY NEGOTIATION
15.209 [Amended]
7. Section 15.209 is amended by removing and reserving paragraph
(d).
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
8. Section 52.204-3 is revised to read as follows:
52.204-3 Taxpayer identification.
As prescribed in 4.905, insert the following provision:
Taxpayer Identification (Oct 1998)
(a) Definitions.
Common parent, as used in this provision, means that corporate
entity that owns or controls an affiliated group of corporations
that files its Federal income tax returns on a consolidated basis,
and of which the offeror is a member.
Taxpayer Identification Number (TIN), as used in this provision,
means the number required by the Internal Revenue Service (IRS) to
be used by the offeror in reporting income tax and other returns.
The TIN may be either a Social Security Number or an Employer
Identification Number.
[[Page 58590]]
(b) All offerors must submit the information required in
paragraphs (d) through (f) of this provision to comply with debt
collection requirements of 31 U.S.C. 7701(c) and 3325(d), reporting
requirements of 26 U.S.C. 6041, 6041A, and 6050M, and implementing
regulations issued by the IRS. If the resulting contract is subject
to the payment reporting requirements described in Federal
Acquisition Regulation (FAR) 4.904, the failure or refusal by the
offeror to furnish the information may result in a 31 percent
reduction of payments otherwise due under the contract.
(c) The TIN may be used by the Government to collect and report
on any delinquent amounts arising out of the offeror's relationship
with the Government (31 U.S.C. 7701(c)(3)). If the resulting
contract is subject to the payment reporting requirements described
in FAR 4.904, the TIN provided hereunder may be matched with IRS
records to verify the accuracy of the offeror's TIN.
(d) Taxpayer Identification Number (TIN).
{time} TIN:.--------------------------------------------------------
{time} TIN has been applied for.
{time} TIN is not required because:
{time} Offeror is a nonresident alien, foreign corporation, or
foreign partnership that does not have income effectively connected
with the conduct of a trade or business in the United States and
does not have an office or place of business or a fiscal paying
agent in the United States;
{time} Offeror is an agency or instrumentality of a foreign
government;
{time} Offeror is an agency or instrumentality of the Federal
Government.
(e) Type of organization.
{time} Sole proprietorship;
{time} Partnership;
{time} Corporate entity (not tax-exempt);
{time} Corporate entity (tax-exempt);
{time} Government entity (Federal, State, or local);
{time} Foreign government;
{time} International organization per 26 CFR 1.6049-4;
{time} Other--------------------------------------------------------
(f) Common parent.
{time} Offeror is not owned or controlled by a common parent as
defined in paragraph (a) of this provision.
{time} Name and TIN of common parent:
Name-------------------------------------------------------------------
TIN--------------------------------------------------------------------
(End of provision)
9. Section 52.212-3 is amended by revising the date of the
provision and paragraph (b) to read as follows:
52.212-3 Offeror representations and certifications--Commercial items.
* * * * *
Offeror Representations and Certifications--Commercial Items (Oct 1998)
* * * * *
(b) Taxpayer Identification Number (TIN) (26 U.S.C. 6109, 31
U.S.C. 7701). (Not applicable if the offeror is required to provide
this information to a central contractor registration database to be
eligible for award.)
(1) All offerors must submit the information required in
paragraphs (b)(3) through (b)(5) of this provision to comply with
debt collection requirements of 31 U.S.C. 7701(c) and 3325(d),
reporting requirements of 26 U.S.C. 6041, 6041A, and 6050M, and
implementing regulations issued by the Internal Revenue Service
(IRS).
(2) The TIN may be used by the Government to collect and report
on any delinquent amounts arising out of the offeror's relationship
with the Government (31 U.S.C. 7701(c)(3)). If the resulting
contract is subject to the payment reporting requirements described
in FAR 4.904, the TIN provided hereunder may be matched with IRS
records to verify the accuracy of the offeror's TIN.
(3) Taxpayer Identification Number (TIN).
{time} TIN:---------------------------------------------------------
{time} TIN has been applied for.
{time} TIN is not required because:
{time} Offeror is a nonresident alien, foreign corporation, or
foreign partnership that does not have income effectively connected
with the conduct of a trade or business in the United States and
does not have an office or place of business or a fiscal paying
agent in the United States;
{time} Offeror is an agency or instrumentality of a foreign
government;
{time} Offeror is an agency or instrumentality of the Federal
Government.
(4) Type of organization.
{time} Sole proprietorship;
{time} Partnership;
{time} Corporate entity (not tax-exempt);
{time} Corporate entity (tax-exempt);
{time} Government entity (Federal, State, or local);
{time} Foreign government;
{time} International organization per 26 CFR 1.6049-4;
{time} Other--------------------------------------------------------
(5) Common parent.
{time} Offeror is not owned or controlled by a common parent;
{time} Name and TIN of common parent:
Name-------------------------------------------------------------------
TIN--------------------------------------------------------------------
* * * * *
52.214-2 [Reserved]
10. Section 52.214-2 is removed and reserved.
52.215-4 [Reserved]
11. Section 52.215-4 is removed and reserved.
[FR Doc. 98-28955 Filed 10-29-98; 8:45 am]
BILLING CODE 6820-EP-U