[Federal Register Volume 68, Number 33 (Wednesday, February 19, 2003)]
[Proposed Rules]
[Pages 7956-7958]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-3865]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 157 and 602

[REG-139768-02]
RIN 1545-BB14


Excise Tax Relating to Structured Settlement Factoring 
Transactions

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 manner and method of reporting and paying the 40-percent excise tax 
imposed on any person who acquires structured settlement payment rights 
in a structured settlement factoring transaction. The text of those 
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 or electronic comments must be received by May 20, 2003. 
Outlines of topics to be discussed at the public hearing scheduled for 
June 12, 2003, at 10 a.m. must be received by May 22, 2003.

ADDRESSES: Send submissions to: CC:PA:RU (REG-139768-02), room 5226, 
Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand delivered Monday through 
Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:RU (REG-139768-
02), 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. The public hearing will be held in room 6718 of the 
Internal Revenue Building, 1111 Constitution Avenue, NW., Washington, 
DC.

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Shareen S. Pflanz, 202-622-8488; concerning submissions of comments, 
Sonya Cruse, 202-622-7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION: 

Paperwork Reduction Act

    The collection of information contained in this notice of proposed 
rulemaking has 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 collection 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 April 21, 2003. Comments are specifically requested concerning:
    Whether the proposed collection of information is necessary for the 
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 
collection 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 collection 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 collection of information in this proposed regulation is in 
Sec. Sec.  157.6001-1T, 157.6011-1T, 157.6081-1T, and 157.6161-1T. This 
information is required by the IRS to verify that the excise tax 
imposed under section 5891 of the Internal Revenue Code is properly 
reported on Form 8876 and timely paid. This information will be used 
for that purpose. The collection of information is mandatory. The 
likely respondents and/or recordkeepers are individuals, business or 
other for-profit institutions, and small businesses and organizations. 
The reporting burden is also reflected on Form 8876.
    Estimated total annual reporting and/or recordkeeping burden: 2 
hours.
    Estimated average annual burden hours per respondent and/or 
recordkeeper: 30 minutes.
    Estimated number of respondents and/or recordkeepers: 4.
    Estimated annual frequency of responses (for reporting requirements 
only): On occasion.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information

[[Page 7957]]

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 and Explanation of Provisions

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register add a new part 157 to title 26 of the 
Code of Federal Regulations. The temporary regulations set forth the 
manner and method of paying the excise tax imposed under section 5891. 
The text of those regulations also serves as the text of these proposed 
regulations. The preamble to the temporary regulations explains the 
amendments.

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. Further, it 
is hereby certified, pursuant to sections 603(a) and 605(b) of the 
Regulatory Flexibility Act, 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 expectation that the excise tax imposed by section 5891 of the Code 
will apply to few structured settlement factoring transactions. 
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.

Comments and Requests for 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) or electronic comments that are submitted timely 
to the IRS. All comments will be available for public inspection and 
copying.
    A public hearing has been scheduled for June 12, 2003 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 will not be admitted beyond the immediate entrance 
area more than 15 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 601.601(a)(3) apply to the hearing. Persons who 
wish to present oral comments at the hearing must submit 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 May 
22, 2003. 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 author of these regulations is Shareen Soltanzadeh 
Pflanz, Office of Associate Chief Counsel (Income Tax and Accounting). 
However, other personnel from the IRS and Treasury Department 
participated in their development.

List of Subjects

26 CFR Part 157

    Excise taxes, Structured Settlement Factoring Transactions, 
Reporting and recordkeeping requirements.

26 CFR Part 602

    Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, title 26 of the Code of Federal Regulations is 
proposed to be amended as follows:

SUBCHAPTER D--MISCELLANEOUS EXCISE TAXES
    1. A new part 157 is added to read as follows:

PART 157--EXCISE TAX ON STRUCTURED SETTLEMENT FACTORING 
TRANSACTIONS

Subpart A--Tax on Structured Settlement Factoring Transactions
Sec.
157.5891-1 Imposition of excise tax on structured settlement 
factoring transactions.
Subpart B--Procedure and Administration
157.6001-1 Records, statements, and special returns.
157.6011-1 General requirement of return, statement, or list.
157.6061-1 Signing of returns and other documents.
157.6065-1 Verification of returns.
157.6071-1 Time for filing returns.
157.6081-1 Extension of time for filing the return.
157.6091-1 Place for filing returns.
157.6151-1 Time and place for paying of tax shown on returns.
157.6161-1 Extension of time for paying tax.
157.6165-1 Bonds where time to pay tax has been extended.

    Authority: 26 U.S.C. 7805
    Section 157.6001-1 also issued under 26 U.S.C. 6001.
    Section 157.6011-1 also issued under 26 U.S.C. 6011.
    Section 157.6061-1 also issued under 26 U.S.C. 6061.
    Section 157.6091-1 also issued under 26 U.S.C. 6091.
    Section 157.6161-1 also issued under 26 U.S.C. 6161.

Subpart A--Tax on Structured Settlement Factoring Transactions


Sec.  157.5891-1  Imposition of excise tax on structured settlement 
factoring transactions.

    [The text of proposed Sec.  157.5891-1 is the same as the text of 
Sec.  157.5891-1T published elsewhere in this issue of the Federal 
Register].

Subpart B--Procedure and Administration


Sec.  157.6001-1  Records, statements, and special returns.

    [The text of proposed Sec.  157.6001-1 is the same as the text of 
Sec.  157.6001-1T published elsewhere in this issue of the Federal 
Register].


Sec.  157.6011-1  General requirement of return, statement, or list.

    [The text of proposed Sec.  157.6011-1 is the same as the text of 
Sec.  157.6011-1T published elsewhere in this issue of the Federal 
Register].


Sec.  157.6061-1  Signing of returns and other documents.

    [The text of proposed Sec.  157.6061-1 is the same as the text of 
Sec.  157.6061-1T published elsewhere in this issue of the Federal 
Register].


Sec.  157.6065-1  Verification of returns.

    [The text of proposed Sec.  157.6065-1 is the same as the text of 
Sec.  157.6065-1T published elsewhere in this issue of the Federal 
Register].

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Sec.  157.6071-1  Time for filing returns.

    [The text of proposed Sec.  157.6071-1 is the same as the text of 
Sec.  157.6071-1T published elsewhere in this issue of the Federal 
Register].


Sec.  157.6081-1  Extension of time for filing the return.

    [The text of proposed Sec.  157.6081-1 is the same as the text of 
Sec.  157.6081-1T published elsewhere in this issue of the Federal 
Register].


Sec.  157.6091-1  Place for filing returns.

    [The text of proposed Sec.  157.6091-1 is the same as the text of 
Sec.  157.6091-1T published elsewhere in this issue of the Federal 
Register].


Sec.  157.6151-1  Time and place for paying of tax shown on returns.

    [The text of proposed Sec.  157.6151-1 is the same as the text of 
Sec.  157.6151-1T published elsewhere in this issue of the Federal 
Register].


Sec.  157.6161-1  Extension of time for paying tax.

    [The text of proposed Sec.  157.6156-1 is the same as the text of 
Sec.  157.6161-1T published elsewhere in this issue of the Federal 
Register].


Sec.  157.6165-1  Bonds where time to pay tax has been extended.

    [The text of proposed Sec.  157.6165-1 is the same as the text of 
Sec.  157.6165-1T published elsewhere in this issue of the Federal 
Register].

David Mader,
Assistant Deputy Commissioner of Internal Revenue.
[FR Doc. 03-3865 Filed 2-18-03; 8:45 am]
BILLING CODE 4830-01-P