[Federal Register Volume 67, Number 117 (Tuesday, June 18, 2002)]
[Proposed Rules]
[Pages 41362-41363]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-15322]



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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1 and 301

[REG-103735-00; REG-110311-98]
RIN 1545-AX81; 1545-AW26


Modification of Tax Shelter Rules III

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations.

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SUMMARY: These proposed rules provide the public with additional 
guidance needed to comply with the disclosure rules under section 
6011(a) and the registration requirement under section 6111(d). These 
rules also affect the list maintenance requirement under section 6112. 
The proposed rules affect taxpayers participating in certain reportable 
transactions, persons responsible for registering confidential 
corporate tax shelters, and organizers of potentially abusive tax 
shelters. In the rules and regulations portion of this issue of the 
Federal Register, the IRS is issuing temporary regulations modifying 
the rules relating to the requirement that certain taxpayers file a 
statement with their Federal income tax returns under section 6011(a), 
and the registration of confidential corporate tax shelters under 
section 6111(d). The text of those temporary regulations also serves as 
the text of these proposed regulations.

DATES: Written or electronic comments and requests for a public hearing 
must be received by September 16, 2002.

ADDRESSES: Send submissions to: CC:ITA:RU (REG-103735-00; REG-110311-
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:ITA:RU 
(REG-103735-00; REG-110311-98), Courier's Desk, Internal Revenue 
Service, 1111 Constitution Avenue, NW., Washington, DC. Alternatively, 
taxpayers may submit electronic comments directly to the IRS Internet 
site at http://www.irs.gov/regs.

FOR FURTHER INFORMATION CONTACT: Danielle M. Grimm or Tara P. Volungis, 
202-622-3080 (not a toll-free number); concerning submissions, Sonya 
Cruse, 202-622-7180 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The collections of information contained in this notice of proposed 
rulemaking have been previously reviewed and approved by the Office of 
Management and Budget in accordance with the Paperwork Reduction Act of 
1995 (44 U.S.C. 3507(d)) under control number 1545-1685.
    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 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 26 CFR part 1 regarding rules 
relating to the filing and records requirements for certain taxpayers 
under section 6011. The temporary regulations also amend 26 CFR part 
301 regarding the registration of confidential corporate tax shelters 
under section 6111.
    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 Treasury decision 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. 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 time 
required to prepare or retain the disclosure is minimal and will not 
have a significant impact on those small entities that are required to 
provide disclosure. 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, these 
temporary regulations will be submitted to the Chief Counsel for 
Advocacy of the Small Business Administration for comment on their 
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 comments (preferably a 
signed original and eight (8) copies) or electronically generated 
comments that are submitted timely to the IRS. The IRS and Treasury 
request comments on the clarity of the proposed rules and how they can 
be made easier to understand. All comments will be available for public 
inspection and copying. A public hearing will be scheduled if requested 
in writing by any person that timely submits written 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.

Drafting Information

    The principal authors of these regulations are Danielle M. Grimm 
and Tara P. Volungis, Office of the Associate Chief Counsel 
(Passthroughs and Special Industries). However, other personnel from 
the IRS and Treasury Department participated in their development.

List of Subjects

26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 301

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

Proposed Amendments to the Regulations

    Accordingly, 26 CFR parts 1 and 301, which were proposed to be 
amended at 66 FR 41169 (August 7, 2001), are proposed to be further 
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 1.6011-4, as proposed at 66 FR 41169 (August 7, 
2001), is amended as follows:
    1. The heading of Sec. 1.6011-4 is amended by removing the language 
``corporate''.
    2. The heading of paragraph (a) is revised.
    3. Paragraph (a) is amended by adding ``(1) In general.'' after the 
heading.
    4. Newly designated paragraph (a)(1) is amended by adding the 
language

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``corporate'' before ``taxpayer'' in the first sentence, and by 
removing the second sentence and adding three new sentences in its 
place.
    5. Paragraphs (a)(2) and (a)(3) are added.
    6. Paragraph (b)(1) is amended by revising the first sentence.
    7. Paragraphs (b)(1)(i) and (b)(1)(ii) are added.
    8. Paragraph (b)(4)(i) is amended by removing the first sentence.
    9. Paragraph (b)(5) Example 3 is amended by revising the seventh 
sentence.
    10. Paragraphs (c)(1)(iii) and (c)(1)(v) are revised.
    11. Paragraph (c)(2) Example is amended by adding the language 
``Example.'' after ``of this section:'' in the first sentence and by 
adding ``as in effect at that time.'' to the end of the third sentence.
    12. Paragraph (d)(1) is revised.
    13. Paragraph (e) is amended by removing the language 
``corporation's'' in the first sentence and adding ``taxpayer's'' in 
its place.
    14. Paragraph (g) is revised.
    The revisions and additions read as follows:


Sec. 1.6011-4  Requirement of statement disclosing participation in 
certain transactions by taxpayers.

    [The text of the amendments to this proposed section is the same as 
the text of the amendments to Sec. 1.6011-4T published elsewhere in 
this issue of the Federal Register.]

PART 301--PROCEDURE AND ADMINISTRATION

    Par. 3. The authority citation for part 301 continues to read in 
part as follows:

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

    Par. 4. Section 301.6111-2, as proposed to be added at 66 FR 41169 
(August 7, 2001), is amended as follows:
    1. Paragraph (a)(3) is amended by adding four sentences to the end 
of the paragraph.
    2. The heading for paragraph (h) is revised and the entire text 
after the second sentence is removed and four new sentences are added 
in their place.
    The revision and additions read as follows:


Sec. 301.6111-2  Confidential corporate tax shelters.

    [The text of the amendments to this proposed section is the same as 
the text of the amendments to Sec. 301.6111-2T published elsewhere in 
this issue of the Federal Register.]

Robert E. Wenzel,
Deputy Commissioner of Internal Revenue.
[FR Doc. 02-15322 Filed 6-14-02; 11:32 am]
BILLING CODE 4830-01-P