[Federal Register Volume 65, Number 42 (Thursday, March 2, 2000)]
[Proposed Rules]
[Pages 11272-11274]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-4845]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[REG-110311-98]
RIN 1545-AW26


Corporate Tax Shelter Registration

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Cross-reference notice of proposed rulemaking and notice of 
public hearing.

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SUMMARY: In the Rules and Regulations portion of this issue of the 
Federal Register, the IRS is issuing temporary regulations requiring 
the registration of confidential corporate tax shelters pursuant to 
section 6111(d) as amended by section 1028(a) of the Taxpayer Relief 
Act of 1997 (the Act). The temporary regulations affect persons 
responsible for registering confidential corporate tax shelters and 
corporations participating in confidential corporate tax shelters. The 
text of those temporary regulations also serves as the text of these 
proposed regulations. This document also gives notice of a public 
hearing on this subject.

DATES: Written comments must be received by May 31, 2000.
    Requests to speak and outlines of topics to be discussed at the 
public hearing scheduled for Tuesday, June, 20, 2000, from 10 a.m. 
through 1 p.m. must be received by May 31, 2000.

ADDRESSES: Send submissions to: CC:DOM:CORP:R (REG-110311-98), 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. to: CC:DOM:CORP:R (REG-110311-98), Courier's 
Desk, Internal Revenue Service, 1111 Constitution Avenue NW.,

[[Page 11273]]

Washington DC. Alternatively, taxpayers may submit comments 
electronically via the Internet by selecting the ``Tax Regs'' option of 
the IRS Home Page or by submitting comments directly to the IRS 
Internet site at http://www.irs.gov/tax__regs/regslist.html. A public 
hearing will be held in the IRS Auditorium, Internal Revenue Building, 
1111 Constitution Avenue NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Richard 
Castanon or Mary Beth Collins, (202) 622-3070; concerning submissions 
and the hearings, Guy Traynor, (202) 622-7180.

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The collections of information contained in this notice of proposed 
rulemaking have been submitted to the Office of Management and Budget 
for review in accordance with the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507(d)). Comments on the collections of information should be 
sent to the Office of Management and Budget, Attn: Desk Officer for the 
Department of the Treasury, Office of Information and Regulatory 
Affairs, Washington, DC 20503, with copies to the Internal Revenue 
Service, Attn: IRS Reports Clearance Officer, OP:FS:FP, Washington, DC 
20224. Comments on the collections of information should be received by 
May 1, 2000. Comments are specifically requested concerning:
    Whether the proposed collections of information is necessary for 
the proper performance of the functions of the Internal Revenue 
Service, including whether the information will have practical utility;
    The accuracy of the estimated burden associated with the proposed 
collection of information (see below);
    How the quality, utility, and clarity of the information to be 
collected may be enhanced;
    How the burden of complying with the proposed collections of 
information may be minimized, including through the application of 
automated collection techniques or other forms of information 
technology; and
    Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of service to provide information.
    The collections of information in this proposed regulation are in 
Sec. 301.6111-2T(b)(6), (e)(1)(ii)(A), (e)(2), (e)(3), (g)(2)(ii) and 
(g)(2)(iii). This information is required to comply with the 
registration requirements of section 6111(d) and to avoid the penalty 
provisions of section 6707 for failing to register a confidential 
corporate tax shelter. This information will be used to ensure 
compliance with the Federal tax laws. The collections of information 
are mandatory. The likely respondents and recordkeepers are business or 
other for-profit institutions.
    The burden for the collection of information in Sec. 301.6111-
2T(b)(6), (e)(1)(ii)(A), (e)(2), and (e)(3) will be reflected on Form 
8264. The burden for the collection of information in Sec. 301.6111-
2T(g)(2)(ii) and (iii) is as follows:
    Estimated total annual reporting and/or recordkeeping burden: 1 
hour.
    Estimated average annual burden hours per respondent and/or 
recordkeeper: 15 minutes.
    Estimated number of respondents and/or recordkeepers: 4.
    Estimated annual frequency of responses: On occasion.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a valid 
control number assigned by the Office of Management and Budget.
    Books or records relating to a collection of information must be 
retained as long as their contents may become material in the 
administration of any internal revenue law. Generally, tax returns and 
tax return information are confidential, as required by 26 U.S.C. 6103.

Background

    The temporary regulations amend temporary procedure and 
administrative regulations (26 CFR part 301) relating to section 6111. 
These regulations provide the guidance necessary to activate the 
registration requirements of section 6111 and the penalty provisions of 
section 6707 for confidential corporate tax shelters.
    The text of the temporary regulations also serves as the text of 
these proposed regulations. The preamble to the temporary regulations 
explains the regulations.

Special Analyses

    It has been determined that this notice of proposed rulemaking is 
not a significant regulatory action as defined in Executive Order 
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) does not apply to these regulations. It is hereby 
certified that the collection of information in these regulations will 
not have a significant economic impact on a substantial number of small 
entities. This certification is based upon the fact that the persons 
responsible for promoting and registering the transactions described in 
the regulations are principally large publicly traded corporations, and 
the burden is not significant as described earlier in the preamble. 
Therefore, 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, 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 Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any written comments (preferably a 
signed original and eight (8) copies) or electronically generated 
comments that are submitted timely to the IRS. The IRS and Treasury 
specifically request comments on the clarity of the proposed 
regulations and how they may be made easier to understand.
    Further, the IRS and Treasury specifically request comments on (1) 
the scope and breadth of the characteristics used in the proposed 
regulations to identify transactions structured for the avoidance or 
evasion of Federal income tax; (2) the exceptions to registration 
provided for in the proposed regulations; and (3) whether particular 
types of transactions should be identified as excepted from 
registration. All comments will be available for public inspection and 
copying.
    A public hearing has been scheduled for June 20, 2000, from 10 a.m. 
through 1 p.m., in the IRS Auditorium, Internal Revenue Building, 1111 
Constitution Avenue NW., Washington, DC. Due to building security 
procedures, visitors must enter at the 1111 Constitution Avenue 
entrance, located between 10th and 12th streets. In addition, all 
visitors must present photo identification to enter the building. 
Because of access restrictions, visitors will not be admitted beyond 
the immediate entrance area more than 15 minutes before the hearing 
starts. For information about having your name placed on the access 
list to attend the hearing, see the FOR FURTHER INFORMATION CONTACT 
section of this preamble.
    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 timely written 
comments and an outline of the topics to be discussed and the time to 
be devoted to

[[Page 11274]]

each topic (signed original and eight (8) copies) by May 31, 2000. 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 authors of these regulations are Mary Beth Collins 
and Richard Castanon, Office of Assistant Chief Counsel (Passthroughs 
and Special Industries). 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 is amended by 
adding an entry in numerical order to read in part as follows:

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

    Section 301.6111-2 also issued under 26 U.S.C. 6111(f)(4).
* * * * *
    Par. 2. Section 301.6111-2 is added to read as follows:


Sec. 301.6111-2  Confidential corporate tax shelters.

    [The text of this proposed section is the same as the text of 
Sec. 301.6111-2T published elsewhere in this issue of the Federal 
Register.]

Charles O. Rossotti,
Commissioner of Internal Revenue.
[FR Doc. 00-4845 Filed 2-28-00; 8:45 am]
BILLING CODE 4830-01-U