[Federal Register Volume 66, Number 3 (Thursday, January 4, 2001)]
[Proposed Rules]
[Pages 749-750]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-199]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[REG-121928-98]
RIN 1545-AW99


Awards of Attorney's Fees and Other Costs Based Upon Qualified 
Offers

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations and notice of public hearing.

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SUMMARY: In the Rules and Regulations section of this issue of the 
Federal Register, the IRS is issuing temporary regulations relating to 
the circumstances in which a party, by reason of having made a 
qualified offer, will be entitled to an award of court costs and 
certain fees in a civil tax proceeding brought in a court of the United 
States (including the Tax Court). The text of those temporary 
regulations also serves as the text of these proposed regulations. This 
document also provides notice of a public hearing on these proposed 
regulations.

DATES: Written comments must be received by April 4, 2001. Outlines of 
topics to be discussed at the public hearing scheduled for May 23, 
2001, at 10 a.m., must be received by May 2, 2001.

ADDRESSES: Send submissions to: CC:M&SP:RU (REG-121928-98), 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-121928-98), 
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 on 
the IRS Home Page, or by submitting comments directly to the IRS 
Internet site at http://www.irs.gov/prod/tax__regs/regslist.html. The 
public hearing will be held in room 4718, Internal Revenue Building, 
1111 Constitution Avenue NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the hearing, submission of 
written comments, and to be placed on the building access list to 
attend the hearing, Treena V. Garrett, (202) 622-7180; concerning the 
regulations, Thomas D. Moffitt (202) 622-7900 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register provide rules relating to the 
circumstances in which a party, by reason of having made a qualified 
offer, will be entitled to an award of court costs and certain fees in 
a civil tax proceeding brought in a court of the United States 
(including the Tax Court). The text of those regulations also serves as 
the text of these proposed regulations. The preamble to the temporary 
regulations explains the temporary regulations.
    Comments are specifically requested on the rule requiring the 
provision of information and arguments regarding adjustments raised by 
taxpayers after the issuance of the first letter of proposed deficiency 
which provides the taxpayer with an opportunity for administrative 
review in the Internal Revenue Service Office of Appeals and still 
unresolved at the time the last qualified offer is made. The changes to 
section 7430 made by Congress anticipate qualified offers based upon 
the adjustments at issue when the first letter of proposed deficiency 
is sent. Adjustments subsequently raised by taxpayers would not be 
subject to the audit development preceding the issuance of such first 
letter of proposed deficiency. The proposed rule is intended to 
eliminate any such differences between the adjustments subject to the 
last qualified offer.
    Comments are also specifically requested on the rule establishing 
the end of the qualified offer period, for courts using trial 
calendars, at the point where the case remains listed on a trial 
calendar thirty days before the scheduled date for the calendar call 
for that trial session. The proposed rule is intended to keep the 
qualified offer period open until shortly before trial while ensuring 
that the last day of the qualified offer period can be ascertained on 
that day.

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 also has 
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. Therefore, a Regulatory Flexibility

[[Page 750]]

Analysis 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 (a signed original 
and eight (8) copies) that are submitted timely to the IRS. The IRS and 
Treasury Department request comments on the clarity of the proposed 
rules 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 May 23, 2001, at 10 a.m., 
in room 4718, Internal Revenue Building, 1111 Constitution Avenue NW., 
Washington, DC. Due to building security procedures, visitors must 
enter at the 10th Street entrance, located between Constitution and 
Pennsylvania Avenues, NW. 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 
a visitor's name placed on the building access list to attend the 
hearing, see the FOR FURTHER INFORMATION CONTACT caption.
    An outline of the topics to be discussed and the time to be devoted 
to each topic (a signed original and eight (8) copies) must be 
submitted by any person that wishes to present oral comments at the 
hearing. Outlines must be received by May 2, 2001.
    The rules of 26 CFR 601.601(a)(3) apply to the hearing. 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 requests to speak has passed. Copies 
of the agenda will be available free of charge at the hearing.

Drafting Information

    The principal author of these regulations is Thomas D. Moffitt, 
Office of Assistant Chief Counsel (Field Service). 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 continues to read 
in part as follows:

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


Sec. 301.7430-0  [Removed]

    Par. 2. Section 301.7430-0 is removed.
    Par. 3. Section 301.7430-7 is added to read as follows:


Sec. 301.7430-7  Qualified offers.

    [The text of this proposed section is the same as the text of 
Sec. 301.7430-7T published elsewhere in this issue of the Federal 
Register.]

Robert E. Wenzel,
Deputy Commissioner of Internal Revenue.
[FR Doc. 01-199 Filed 1-3-01; 8:45 am]
BILLING CODE 4830-01-P