[Federal Register Volume 65, Number 42 (Thursday, March 2, 2000)]
[Proposed Rules]
[Pages 11271-11272]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-4847]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[REG-103736-00]
RIN 1545-AX79


Requirement To Maintain List of Investors in Potentially Abusive 
Tax Shelters

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 maintenance of lists of investors in potentially abusive tax 
shelters described in section 6112. The temporary regulations affect 
organizers of potentially abusive 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, 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-103736-00), 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-103736-00), 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 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 IRS, 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. 301.6112-1T, A-4, A-13, A-14, A-17, and A-22. This information is 
required to comply with the list maintenance requirement of section 
6112 and to avoid the penalty provisions of section 6708 for failing to 
maintain the investor list under section 6112. 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.
    Estimated total annual reporting and/or recordkeeping burden: 102 
hours.
    Estimated average annual burden hours per respondent and/or 
recordkeeper: 2.04 hours.
    Estimated number of respondents and/or recordkeepers: 50.
    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

[[Page 11272]]

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 
Administration regulations (26 CFR Part 301) regarding the requirement 
to maintain lists of investors in potentially abusive tax shelters 
under section 6112. Section 6708 provides penalties for failing to 
maintain the investor list under section 6112.
    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 maintaining the investor lists 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. All comments 
will be available for public inspection and copying.
    A public hearing has been scheduled for June 22, 2000, from 10 a.m. 
to 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 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 301.6112-1 also issued under 26 U.S.C. 6112. * * *


Sec. 301.6112-1  [Amended]

    Par. 2. Section 301.6112-1 as proposed at 49 FR 34246 (August 29, 
1984) is amended as follows:
    [The text of the amendments to this proposed section is the same as 
the text of the amendments to Sec. 301.6112-1T published elsewhere in 
this issue of the Federal Register.]

Charles O. Rosotti,
Commissioner of Internal Revenue.
[FR Doc. 00-4847 Filed 2-28-00; 8:45 am]
BILLING CODE 4830-01-P