[Federal Register Volume 67, Number 22 (Friday, February 1, 2002)]
[Proposed Rules]
[Pages 4938-4939]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-2533]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[REG-120135-01]
RIN 1545-AY94


Definition of Agent for Certain Purposes

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document contains proposed regulations relating to the 
definition of agent for certain purposes. The proposed regulations 
clarify that the term agent in certain provisions of section 6103 of 
the Internal Revenue Code includes contractors.

DATES: Written and electronic comments and requests for a public 
hearing must be received by May 2, 2002.

ADDRESSES: Send submissions to CC:ITA:RU (REG-120135-01), room 5226, 
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, 
DC 20044. Submissions may be delivered Monday through Friday between 
the hours of 8 a.m. and 5 p.m. to CC:ITA:RU (REG-120135-01), 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.ustreas.gov/tax_regs/regslist.html.

FOR FURTHER INFORMATION CONTACT: Helene R. Newsome, 202-622-4580 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    Generally, returns and return information are confidential under 
section 6103 of the Internal Revenue Code (Code) unless a specific 
statutory exception applies. In cases of non-tax-related disclosures, 
returns and return information generally may only be disclosed to 
officers and employees of Federal, state, and local government 
agencies, and not to contractors or agents of such agencies. In certain 
limited circumstances, however, Congress has permitted disclosures to 
agents of these agencies. See sections 6103(l)(6)(B), 6103(l)(12), 
6103(m)(2), 6103(m)(4), 6103(m)(5), and 6103(m)(7).
    This document contains proposed regulations that clarify that the 
term agent in sections 6103(l) and (m) includes contractors. 
Clarification that the term agent includes contractors is necessary for 
the purpose of bringing certain statutory grants of disclosure 
authority into alignment with the reality of many agencies' operations. 
Agencies generally procure the services of third parties under public 
contracting laws, which do not necessarily correlate with common law 
concepts of agent. This clarification is also consistent with 
Congressional intent. For example, the Senate Finance Committee, in 
amending section 6103(m)(2), stated, ``Agents are those who are engaged 
directly in performing or assisting in collection functions for the 
federal government, presumably, private collection agencies who have 
contracted with the government to collect claims . . .'' S. Rep. No. 
97-378, at 15 (1982).
    This clarification does not provide any new disclosure authority, 
nor does it authorize the disclosure of return information to 
contractors that Congress has not previously specifically authorized in 
the Code. With regard to protection of taxpayer data, agents/
contractors are subject to safeguard requirements, redisclosure 
prohibitions, and civil and criminal penalties for unauthorized 
disclosures. Accordingly, the proposed regulations do not have an 
impact on taxpayer privacy.

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) and the Regulatory Flexibility Act (5 U.S.C. 
chapter 6) do not apply to these regulations, and, therefore, a 
Regulatory Flexibility Analysis is not required. Pursuant to section 
7805(f), this notice of proposed rulemaking will be submitted to the 
Chief Counsel of the Small Business Administration for comment on its 
impact on small businesses.

Comments and Request for a Public Hearing

    Before these proposed regulations are adopted as final regulations, 
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 request comments on the clarity of 
the proposed rule and how it may 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 written 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 these regulations is Helene R. Newsome, 
Office of the Associate Chief Counsel (Procedure & Administration), 
Disclosure & Privacy Law Division.

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 as follows:

    Authority: 26 U.S.C. 7805 * * *
Section 301.6103(l)-1 also issued under 26 U.S.C. 6103(q); * * *
Section 301.6103(m)-1 also issued under 26 U.S.C. 6103(q); * * *
    Par. 2. Section 301.6103(l)-1 is added to read as follows:


Sec. 301.6103(l)-1  Disclosure of returns and return information for 
purposes other than tax administration.

    (a) Definition. For purposes of applying the provisions of section 
6103(l) of the Internal Revenue Code, the term agent includes a 
contractor.
    (b) Effective date. This section is applicable on or after the date 
of publication of the Treasury decision adopting these regulations as 
final regulations in the Federal Register.
    Par. 3. Section 301.6103(m)-1 is added to read as follows:

[[Page 4939]]

Sec. 301.6103(m)-1  Disclosure of taxpayer identity information.

    (a) Definition. For purposes of applying the provisions of section 
6103(m) of the Internal Revenue Code, the term agent includes a 
contractor.
    (b) Effective date. This section is applicable on or after the date 
of publication of the Treasury decision adopting these regulations as 
final regulations in the Federal Register.

Robert E. Wenzel,
Deputy Commissioner of Internal Revenue.
[FR Doc. 02-2533 Filed 1-31-02; 8:45 am]
BILLING CODE 4830-01-P