[Federal Register Volume 65, Number 231 (Thursday, November 30, 2000)]
[Proposed Rules]
[Pages 71277-71278]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-30228]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-107279-00]
RIN 1545-AY18


Rules Relating to General Definition of Dependent

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document contains proposed regulations that amend the 
definition of ``authorized placement agency'' for purposes of 
determining whether a child placed for legal adoption in a taxpayer's 
home is a dependent of the taxpayer. A taxpayer who has a child placed 
for legal adoption in his or her home by an authorized placement agency 
will be affected by these regulations.

DATES: Written or electronically generated comments and requests for a 
public hearing must be received by February 28, 2001.

ADDRESSES: Send submissions to: CC:M&SP:RU (REG-107279-00), room 5226, 
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, 
DC 20044. Submissions may be hand delivered Monday through Friday 
between the hours of 8 a.m. and 5 p.m. to: CC:M&SP:RU (REG-107279-00), 
Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue., 
NW., Washington, DC. Taxpayers may also 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/tax_regs/regslist.html. The IRS will publish 
the time and date of any public hearing in the Federal Register.

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Elizabeth 
Kaye, (202) 622-4910; concerning submissions of comments and requests 
for a public hearing, Guy Traynor, (202) 622-7180 (not toll-free 
calls).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

    This document contains proposed amendments to Sec. 1.152-2(c)(2) of 
the Income Tax Regulations (26 CFR part 1) relating to the general 
definition of a dependent.
    On October 12, 1999, the IRS published final regulations under 
section 6109 regarding IRS adoption taxpayer identification numbers (TD 
8839, 64 FR 51241). Those regulations provided, in part, that in order 
for an adoption taxpayer identification number (ATIN) to be assigned, a 
child must be placed for adoption by an ``authorized placement 
agency'', as defined in Sec. 1.152-2(c)(2). Commentators expressed 
concern that because of this requirement, ATINs are not available in 
the case of independent adoptions as defined by state law. In general, 
independent adoptions take two forms. In one type, the biological 
parent(s) uses an attorney or other intermediary to place the child 
with the adoptive parents. In other independent adoptions, no 
intermediary is necessary because the adoptive parents and the 
biological parent(s) know one another.
    The proposed regulations amend the definition of authorized 
placement agency to provide that an ``authorized placement agency'' is 
not limited to governmental and private organizations authorized by 
state law to place children for legal adoption, but also includes 
biological parents and other persons authorized by state law to place 
children for legal adoption.
    These regulations are proposed to apply for taxable years beginning 
after December 31, 2000. Taxpayers may rely on these proposed 
regulations for guidance pending the issuance of the final regulations. 
If, and to the extent, future guidance is more restrictive than the 
guidance in the proposed regulations, the future guidance will be 
applied without retroactive effect.

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, and because 
these regulations do not impose on small entities a collection of 
information requirement, 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 and electronic comments that 
are submitted timely to the IRS. The IRS and Treasury specifically 
request comments on the clarity of the proposed regulations and how it 
can be made easier to understand. All comments will be available for 
public inspection and copying. A public hearing will be scheduled if 
requested by any person who timely submits comments. If a public 
hearing is scheduled, notice of the date, time, and place for the 
public hearing will be published in the Federal Register.

[[Page 71278]]

Drafting Information

    The principal author of these proposed regulations is Elizabeth 
Kaye, Office of Assistant Chief Counsel (Income Tax and Accounting). 
However, other personnel from the IRS and the Treasury Department 
participated in the development of the regulations.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 1 is proposed to be amended as follows:

PART 1--INCOME TAXES

    Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805 * * *
    Par. 2. Section 1.152-2 is amended by revising paragraph (c)(2) to 
read as follows:


Sec. 1.152-2  Rules relating to general definition of dependent.

* * * * *
    (c) * * *
    (2) For any taxable year beginning after December 31, 2000, a child 
who is a member of an individual's household will be treated as a child 
of that individual by blood if the child was placed with the individual 
by an authorized placement agency for legal adoption pursuant to a 
formal application filed by the individual with the agency. For 
purposes of this paragraph (c)(2), an authorized placement agency is 
any agency that is authorized by a State, the District of Columbia, a 
possession of the United States, a foreign country, or a political 
subdivision of any of the foregoing to place children for adoption. An 
authorized placement agency also includes biological parents and other 
persons authorized by state law to place children for legal adoption.
* * * * *

Robert E. Wenzel,
Deputy Commissioner of Internal Revenue.
[FR Doc. 00-30228 Filed 11-29-00; 8:45 am]
BILLING CODE 4830-01-P