[Federal Register Volume 66, Number 8 (Thursday, January 11, 2001)]
[Proposed Rules]
[Pages 2373-2374]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-486]



Internal Revenue Service

26 CFR Part 301

[REG-103320-00 ]
RIN 1545-AX85

Disclosure of Returns and Return Information to Designee of 

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking.


SUMMARY: In the Rules and Regulations section of this issue of Federal 
Register, the IRS is issuing a temporary regulation relating to the 
disclosure of returns and return information to the designee of a 
taxpayer. The text of that temporary regulation also serves as the text 
of this regulation.

DATES: Written and electronic comments and requests for a public 
hearing must be received by April 11, 2001.

ADDRESSES: Send submissions to: CC:M&SP:RU (REG-103320-00), 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-103320-00), 
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 on 
the IRS Home Page, or by submitting comments directly to the IRS 
Internet site: http://www.irs.gov/prod/tax_regs/comments/html.

FOR FURTHER INFORMATION CONTACT: Joseph Conley (202) 622-4580 (not a 
toll-free number).



    Section 6103(c), as amended by section 1207 of the Taxpayer Bill of 
Rights II, Public Law 104-168 (110 Stat. 1452), authorizes the IRS to 
disclose returns and return information to such person or persons as 
the taxpayer may designate in a request for or consent to disclosure or 
to any other person at the taxpayer's request to the extent necessary 
to comply with a request for information or assistance made by the 
taxpayer to such other person. Disclosure is permitted subject to such 
requirements and conditions as may be prescribed by regulations. With 
the amendment in 1996, Congress eliminated the longstanding requirement 
that disclosures to designees of the taxpayer must be pursuant to the 
written request or consent of the taxpayer. The purpose of this 
amendment to section 6103(c) was to assist the IRS in developing a 
paperless tax administration system that relies on, among other things, 
electronic communication. H.R. Rep. No. 104-506, at 49 (1996), 
reprinted in 1996 U.S.C.A.N. 1143, 1172.
    On October 3, 1980, a final regulation (TD 7723) relating to the 
disclosure of tax returns and return information to a

[[Page 2374]]

person designated by the taxpayer in a written request or consent was 
published in the Federal Register (45 FR 65564). Since the publication 
of this final regulation, the IRS has determined that further guidance 
on written consent requirements is necessary.
    This document contains a proposed regulation that authorizes the 
disclosure of tax returns and return information to a designee of the 
taxpayer pursuant to nonwritten requests or consents authorizing the 
disclosures. Such proposed regulation also amends the existing 
regulation to clarify the rules applicable to written requests or 
consents to disclosure.
    The text of the temporary regulation published in this issue of the 
Federal Register serves as the text of this proposed regulation. The 
preamble to the temporary regulation explains the regulation.

Special Analysis

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in Executive Order 12866. 
Therefore, a regulatory assessment is not required. It is hereby 
certified that this proposed regulation will not impose a significant 
economic impact on a substantial number of small entities. The 
regulation is intended to reduce the burden on taxpayers and to 
facilitate the development of a paperless tax administration system. 
The prior regulation required that a taxpayer provide a written request 
or consent before the IRS could disclose the taxpayer's return 
information to a designee of the taxpayer; this regulation permits such 
a disclosure, under certain specified circumstances, pursuant to the 
taxpayer's nonwritten request or consent. The regulation also provides 
parameters for the development of consents for the electronic filing 
program, and it reduces the burden on taxpayers in combined Federal-
State return filing programs by facilitating the electronic filing of a 
Federal-State return by means of a single electronic transmission.
    Pursuant to section 7805(f) of the Internal Revenue Code, this 
notice of proposed rulemaking will be submitted to the Chief Counsel of 
Small Business Administration for comment on its impact on small 

Comments and Requests for a Public Hearing

    Before the proposed regulation is adopted as a final regulation, 
consideration will be given to any electronic and written comments (a 
signed original and eight (8) copies) that are submitted timely to the 
IRS. The IRS and Treasury Department specifically request comments on 
consents or notices authorizing disclosures in an electronic 
environment. Additionally, the IRS and Treasury Department specifically 
request comments on the clarity of the proposed regulation and how it 
can be made easier to understand. All comments will be available for 
public inspection and copying. A public hearing may be scheduled if 
requested in writing by a person that timely submits comments. If a 
public hearing is scheduled, notice of the date, time, and place for 
the hearing will be published in the Federal Register.

Drafting Information

    The principal author of this regulation is Jamie Bernstein, Office 
of the Associate Chief Counsel, Procedure and Administration 
(Disclosure & Privacy Law Division). However, other personnel from the 
IRS and Treasury Department participated in its development.

List of Subjects in 26 CFR part 301

    Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income 
taxes, Penalties, Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR part 301 is amended as follows:


    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 301.6103(c)-1 also issued under 26 U.S.C. 6103(c). * * *
    Par. 2. Section 301.6103(c)-1 is added to read as follows:

Sec. 301.6103(c)-1  Disclosure of returns and return information to 
designee of taxpayer.

    [The text of this proposed section is the same as the text of 
Sec. 301.6103(c)-1T published elsewhere in this issue of the Federal 

Robert E. Wenzel,
Deputy Commissioner of Internal Revenue.
[FR Doc. 01-486 Filed 1-10-01; 8:45 am]