[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