[Federal Register Volume 67, Number 204 (Tuesday, October 22, 2002)]
[Proposed Rules]
[Pages 64842-64844]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-26727]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[REG-103736-00]
RIN 1545-AX79


Requirement To Maintain a List of Investors in Potentially 
Abusive Tax Shelters

AGENCY: Internal Revenue Service (IRS), Treasury.

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

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SUMMARY: These proposed rules relate to the preparation, maintenance, 
and furnishing of lists of persons in potentially abusive tax shelters 
under section 6112. These regulations apply to sellers and organizers, 
collectively known as material advisors, 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 list maintenance requirements under section 
6112. The text of those temporary regulations also serves as the text 
of these proposed regulations.

DATES: Written or electronic comments and requests to speak and 
outlines of topics to be discussed at the public hearing scheduled for 
December 11, 2002, at 10 a.m., must be received by December 2, 2002.

ADDRESSES: Send submissions to: CC:ITA:RU (REG-103736-00), 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:ITA:RU (REG-103736-00), 
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 www.irs.gov/regs. The 
public hearing will be held in room 6718, Internal Revenue Building, 
1111 Constitution Ave., NW., Washington, DC.

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

SUPPLEMENTARY INFORMATION:

[[Page 64843]]

Paperwork Reduction Act

    The collections of information contained in this notice of proposed 
rulemaking have been submitted to the Office of Management and Budget 
for review in accordance with the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507(d)). Comments on the collections of information should be 
sent to the Office of Management and Budget, Attn: Desk Officer for the 
Department of the Treasury, Office of Information and Regulatory 
Affairs, Washington, DC 20503, with copies to the Internal Revenue 
Service, Attn: IRS Reports Clearance Officer, W:CAR:MP:FP:S, 
Washington, DC 20224. Comments on the collection of information should 
be received by December 23, 2002. Comments are specifically requested 
concerning:
    Whether the proposed collections of information are necessary for 
proper performance of the functions of the Internal Revenue Service, 
including whether the information will have practical utility;
    The accuracy of the estimated burden associated with the proposed 
collections of information (see below);
    How the quality, utility, and clarity of the information to be 
collected may be enhanced;
    How the burden of complying with the proposed collections of 
information may be minimized, including through the application of 
automated collection techniques or other forms of information 
technology; and
    Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of service to provide information.
    The collections of information in this proposed regulation are in 
Sec.  301.6112-1T(a), (e), (f) and (i). This information is required to 
comply with the list maintenance requirement of section 6112. Section 
6708 provides penalties for failing to maintain a list under section 
6112. This information will be used to ensure compliance with the 
Federal tax laws. The collections of information are mandatory. The 
likely respondents and recordkeepers are individuals, business or other 
for-profit and not for-profit institutions, and small businesses or 
organizations.
    Estimated total annual reporting and/or recordkeeping burden: 
15,000 hours.
    Estimated average annual burden hours per respondent and/or 
recordkeeper: 100 hours.
    Estimated number of respondents and/or recordkeepers: 150.
    Estimated annual frequency of responses: On occasion.
    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 301 regarding rules 
relating to the list maintenance requirements under section 6112. 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 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. 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 number of 
respondents is small, those persons responsible for maintaining the 
list described in the regulations are principally sophisticated 
businesses, including accounting firms and law firms and very few 
respondents, if any, are likely to be small businesses. 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, 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 (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 has been scheduled for December 11, 2002, 
beginning at 10 a.m., in room 6718 of the Internal Revenue Building, 
1111 Constitution Avenue, NW., Washington, DC. Due to building security 
procedures, visitors must enter at the Constitution Avenue entrance. 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 30 minutes before the 
hearing starts. For information about having your name placed on the 
building access list to attend the hearing, see the FOR FURTHER 
INFORMATION CONTACT section of this preamble.
    The rules of 26 CFR 606.601(a)(3) apply to the hearing. Persons who 
wish to present oral comments at the hearing must submit electronic or 
written comments and an outline of the topics to be discussed and the 
time to be devoted to each topic (signed original and eight (8) copies) 
by December 2, 2002. 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 outlines has 
passed. Copies of the agenda will be available free of charge at the 
hearing.

Drafting Information

    The principal authors of these regulations are Charlotte Chyr, Tara 
P. Volungis, and Danielle M. Grimm, 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 in 26 CFR Part 301

    Administrative practice and procedure, 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, which was proposed to be amended at 
65 FR 49955 (August 16, 2000), is proposed to be further amended as 
follows:

PART 301--PROCEDURE AND ADMINISTRATION

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

    Authority: 26 U.S.C. 7805 * * *
    Section 301.6112-1 also issued under 26 U.S.C. 6112. * * *
    2. Section 301.6112-1, as proposed to be amended at 65 FR 49957 
(August 16, 2000), is revised to read as follows:

[[Page 64844]]

Sec.  301.6112-1  Requirement to prepare, maintain, and furnish lists 
with respect to potentially abusive tax shelters.

    [The text of the revision of this proposed section is the same as 
the text of the revision of Sec.  301.6112-1T published elsewhere in 
this issue of the Federal Register.]

Robert E. Wenzel,
Deputy Commissioner of Internal Revenue.
[FR Doc. 02-26727 Filed 10-17-02; 3:10 pm]
BILLING CODE 4830-01-P