[Federal Register Volume 68, Number 109 (Friday, June 6, 2003)]
[Rules and Regulations]
[Pages 33857-33858]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-14205]



[[Page 33857]]

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[TD 9060]
RIN 1545-BB91


Disclosure of Return Information to the Department of Agriculture

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final and temporary regulations.

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SUMMARY: This document contains regulations that incorporate and 
clarify the phrase ``return information reflected on returns'' in 
conformance with the terms of section 6103(j)(5) of the Internal 
Revenue Code (Code). These temporary regulations also remove certain 
items of return information that the IRS currently discloses, but the 
Department of Agriculture no longer needs, for conducting the census of 
agriculture. The text of the temporary regulations serves as the text 
of the proposed regulations set forth in the notice of proposed 
rulemaking on this subject in the Proposed Rules section of this issue 
of the Federal Register.

DATES: Effective Date. These regulations are effective on June 6, 2003.

FOR FURTHER INFORMATION CONTACT: Christine Irwin at (202) 622-4570 (not 
a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    These temporary regulations incorporate the phrase ``return 
information reflected on returns'' into Sec.  301.6103(j)(5)-1 in 
conformance with the statutory language that describes the type of 
return information that the IRS may disclose to the Department of 
Agriculture under section 6103(j)(5) of the Code. These temporary 
regulations are consistent with a recent clarification of the same 
phrase (i.e., return information reflected on returns) in Sec.  
301.6103(j)(1)-1, involving the disclosure of return information to the 
Bureau of the Census. See 68 FR 2691.
    Also, currently Sec.  301.6103(j)(5)-1 provides an itemized 
description of the return information authorized for disclosure in 
conjunction with the census of agriculture. These temporary regulations 
remove certain items of return information currently listed in Sec.  
301.6103(j)(5)-1 that the Department of Agriculture no longer needs in 
conjunction with the census of agriculture.

Explanation of Provisions

    These temporary regulations adopt the phrase ``return information 
reflected on returns'' in lieu of the phrase ``return information'' 
that currently appears in Sec.  301.6103(j)(5)-1. (The phrase ``return 
information reflected on returns'' encompasses the phrase ``return 
information reflected thereon'' in section 6103(j)(5) of the Code.) 
These temporary regulations clarify the phrase ``return information 
reflected on returns'' by explaining that the phrase includes, but is 
not limited to, information on returns, information derived from 
processing such returns, and information derived from other sources for 
the purposes of establishing and maintaining taxpayer information 
relating to returns. The phrase includes information derived from 
returns, monthly corrections of, and additions to, taxpayer information 
contained in IRS databases (e.g., taxpayer address and name changes) 
that are obtained from other sources, and computer codes the IRS 
derives from returns and/or tax forms and integrates within taxpayer 
data bases.
    On March 4, 2003 and March 17, 2003, the Department of 
Agriculture's National Agriculture Statistics Service (NASS) notified 
the IRS that certain items of return information that are currently 
listed in Sec.  301.6103(j)(5)-1 are no longer needed in conjunction 
with the census of agriculture. Specifically, the Department of 
Agriculture no longer needs the following items currently extracted 
from IRS forms: (1) From Form 1040, Schedule F (Profit or Loss from 
Farming): sales of livestock and produce raised; (2) From Form 1120 
series: Parent corporation Employer Identification Number, and related 
Name and Principal Business Activity (PBA) code for entities with 
agricultural activity; and (3) From Form 851 (Affiliations Schedule): 
subsidiary taxpayer identity information, annual accounting period, 
subsidiary PBA code, parent taxpayer identity information, parent PBA 
code, Master File Tax Code, Document Locator Number, and cycle posted. 
As a result, these items of return information currently listed in 
Sec.  301.6103(j)(5)-1 will be removed by this document.

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, and because no 
preceding notice of proposed rulemaking is required for this temporary 
regulation, the provisions of the Regulatory Flexibility Act (5 U.S.C. 
chapter 6) do not apply. Pursuant to section 7805(f) of the Code, the 
IRS will submit this Treasury decision to the Chief Counsel for 
Advocacy of the Small Business Administration for comment on its impact 
on small business.

Drafting Information

    The principal author of these regulations is Christine Irwin, 
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.

Adoption of Amendments to the Regulations

0
Accordingly, 26 CFR part 301 is amended as follows:

PART PART 301--PROCEDURE AND ADMINISTRATION

0
1. The authority citation for part 301 is amended by removing the entry 
for ``Section 301.6103(j)(5)-1'' and adding an entry in numerical order 
to read in part as follows:

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

0
Section 301.6103(j)(5)-1T also issued under 26 U.S.C. 6103(j)(5). * * *


Sec.  301.6103(j)(5)-1  [Removed]

0
2. Section 301.6103(j)(5)-1 is removed.

0
3. Section 301.6103(j)(5)-1T is added to read as follows:


Sec.  301.6103(j)(5)-1T  Disclosures of return information reflected on 
returns to officers and employees of the Department of Agriculture for 
conducting the census of agriculture (temporary).

    (a) General rule. Pursuant to the provisions of section 6103(j)(5) 
of the Internal Revenue Code and subject to the requirements of 
paragraph (c) of this section, officers or employees of the Internal 
Revenue Service will disclose return information reflected on returns 
to officers and employees of the Department of Agriculture to the 
extent, and for such purposes, as may be provided by paragraph (b) of 
this section. ``Return information reflected on returns'' includes, but 
is not limited to, information on returns, information derived from 
processing such returns, and information derived from other sources for 
the purposes of establishing

[[Page 33858]]

and maintaining taxpayer information relating to returns.
    (b) Disclosure of return information reflected on returns to 
officers and employees of the Department of Agriculture. (1) Officers 
or employees of the Internal Revenue Service will disclose the 
following return information reflected on returns in this paragraph (b) 
for individuals, partnerships and corporations with agricultural 
activity, as determined generally by industry code classification or 
the filing of returns for such activity, to officers and employees of 
the Department of Agriculture for purposes of, but only to the extent 
necessary in, structuring, preparing, and conducting, as authorized by 
chapter 55 of title 7, United States Code, the census of agriculture.
    (2) From Form 1040 (Schedule F)--

(i) Taxpayer identity information (as defined in section 6103(b)(6) of 
the Internal Revenue Code);
(ii) Spouse's Social Security Number;
(iii) Annual accounting period;
(iv) Principal Business Activity (PBA) code;
(v) Taxable cooperative distributions;
(vi) Income from custom hire and machine work;
(vii) Gross income;
(viii) Master File Tax (MFT) code;
(ix) Document Locator Number (DLN);
(x) Cycle posted;
(xi) Final return indicator;
(xii) Part year return indicator; and
(xiii) Taxpayer telephone number.
(3) From Form 943--
(i) Taxpayer identity information;
(ii) Annual accounting period;
(iii) Total wages subject to Medicare taxes;
(iv) MFT code;
(v) DLN;
(vi) Cycle posted;
(vii) Final return indicator; and
(viii) Part year return indicator.
(4) From Form 1120 series--
(i) Taxpayer identity information;
(ii) Annual accounting period;
(iii) Gross receipts less returns and allowances;
(iv) PBA code;
(v) MFT Code;
(vi) DLN;
(vii) Cycle posted;
(viii) Final return indicator;
(ix) Part year return indicator; and
(x) Consolidated return indicator.
(5) From Form 1065 series--
(i) Taxpayer identity information;
(ii) Annual accounting period;
(iii) PBA code;
(iv) Gross receipts less returns and allowances;
(v) Net farm profit (loss);
(vi) MFT code;
(vii) DLN;
(viii) Cycle posted;
(ix) Final return indicator; and
(x) Part year return indicator.

    (c) Procedures and Restrictions. (1) Disclosure of return 
information reflected on returns by officers or employees of the 
Internal Revenue Service as provided by paragraph (b) of this section 
will be made only upon written request designating, by name and title, 
the officers and employees of the Department of Agriculture to whom 
such disclosure is authorized, to the Commissioner of Internal Revenue 
by the Secretary of Agriculture and describing--
    (i) The particular return information reflected on returns for 
disclosure;
    (ii) The taxable period or date to which such return information 
reflected on returns relates; and
    (iii) The particular purpose for the requested return information 
reflected on returns.
    (2)(i) No such officer or employee to whom the Internal Revenue 
Service discloses return information reflected on returns pursuant to 
the provisions of paragraph (b) of this section shall disclose such 
information to any person, other than the taxpayer to whom such return 
information reflected on returns relates or other officers or employees 
of the Department of Agriculture whose duties or responsibilities 
require such disclosure for a purpose described in paragraph (b) of 
this section, except in a form that cannot be associated with, or 
otherwise identify, directly or indirectly, a particular taxpayer.
    (ii) If the Internal Revenue Service determines that the Department 
of Agriculture, or any officer or employee thereof, has failed to, or 
does not, satisfy the requirements of section 6103(p)(4) of the 
Internal Revenue Code or regulations or published procedures 
thereunder, the Internal Revenue Service may take such actions as are 
deemed necessary to ensure that such requirements are or shall be 
satisfied, including suspension of disclosures of return information 
reflected on returns otherwise authorized by section 6103(j)(5) and 
paragraph (b) of this section, until the Internal Revenue Service 
determines that such requirements have been or will be satisfied.
    (d) Effective date. This section is applicable on June 6, 2003.

David A. Mader,
Assistant Deputy Commissioner of Internal Revenue.
    Approved: May 12, 2003.
Pamela F. Olson,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 03-14205 Filed 6-5-03; 8:45 am]
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