[Federal Register Volume 68, Number 147 (Thursday, July 31, 2003)]
[Proposed Rules]
[Pages 44905-44909]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-19537]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[REG-208199-91]
RIN 1545-BC55


Suspension of Running of Period of Limitations During a 
Proceeding To Enforce or Quash a Designated or Related Summons

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document contains proposed regulations regarding the use 
of designated summonses and related summonses and the effect on the 
period of limitations on assessment when a case is brought with respect 
to a designated or related summons. These proposed regulations reflect 
changes to section 6503 of the Internal Revenue Code of 1986 made by 
the Omnibus Budget Reconciliation Act of 1990 and the Small Business 
Job Protection Act of 1996. This regulation affects corporate taxpayers 
that are examined under the coordinated issue case (CIC) program and 
are served with designated or related summonses. This regulation also 
affects third parties that are served with designated or related 
summonses for information pertaining to the corporate examination.

DATES: Written or electronic comments and requests for a public hearing 
must be received by October 29, 2003.

ADDRESSES: Send submissions to: CC:PA:RU (REG-208199-91), room 5203, 
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, 
DC 20044. Submissions may be hand delivered between the hours of 8 a.m. 
and 4 p.m. to: CC:PA:RU (REG-208199-91), Courier's Desk, Internal 
Revenue Service, 1111 Constitution Avenue NW., Washington, DC. 
Taxpayers may also submit electronic comments directly to the IRS 
Internet site at www.irs.gov/regs.

FOR FURTHER INFORMATION CONTACT: Elizabeth Rawlins, (202) 622-3630 (not 
a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    This document contains proposed regulations amending the Procedure 
and Administration Regulations (26 CFR part 301) under section 6503 of 
the Internal Revenue Code of 1986. Section 11311 of the Omnibus Budget 
Reconciliation Act of 1990 (Public Law 101-508, 104 Stat. 1388) (1990 
Act) amended section 6503(k) to suspend the period of limitations on 
assessment when a case is brought with respect to a designated or 
related summons. Section 6503(k) was redesignated as section 6503(j) by 
section 1702(h)(17)(A) of the Small Business Job Protection Act of 1996 
(Public Law 104-188, 110 Stat. 1874).

Explanation of Provisions

    These proposed regulations generally provide that the period of 
limitations on assessment provided for in section 6501 is suspended 
with respect to any return of tax by a corporation that is the subject 
of a designated or related summons if a court proceeding to enforce or 
quash is instituted with respect to that summons.

Designated Summonses and Related Summonses

    A designated summons is a summons issued to determine the amount of 
any internal revenue tax of a corporation for which a return was filed 
if certain additional requirements are satisfied. A designated summons 
may only be issued to a corporation (or any other person to whom such 
corporation has transferred records) if the corporation is being 
examined under the IRS' coordinated examination program ``or any 
successor program.'' The existing successor program to the coordinated 
examination program is the coordinated issue case (CIC) program.
    Section 6503(j)(2)(A)(i) requires that the issuance of the summons 
be preceded by a review by the regional counsel of the Office of Chief 
Counsel for the region in which the examination of the corporation is 
being conducted. Because the prior regional structure of the IRS no 
longer exists, these proposed regulations provide that the review must 
by completed by the Division Commissioner and the Division Counsel of 
the Office of Chief Counsel for the organizations that have 
jurisdiction over the corporation whose liability is the subject of the 
summons. The summons also must be issued at least 60 days before the 
day on which the statute of limitations on assessment under section 
6501 would otherwise expire. Finally, the summons must clearly state 
that it is a designated summons for purposes of section 6503(j).
    A related summons is any other summons that is issued with respect 
to the same tax return of the corporation as a designated summons and 
is issued during the 30-day period that begins on the date the 
designated summons is issued.

Suspension of Period of Limitations on Assessment

    Section 6503(j)(1) suspends the period of limitations on assessment 
under section 6501 for the applicable tax period when a court 
proceeding is brought with respect to a designated or related summons. 
For purposes of these proposed regulations, a court proceeding is a 
proceeding brought in a United States district court either to quash a 
designated or related summons under section 7609(b)(2) or to enforce a 
designated or related summons under section 7604. The court proceeding 
must be brought within the otherwise applicable period of limitations 
in order to suspend that period under section 6503(j).
    The proposed regulations provide that the suspension begins on the 
day that a court proceeding is brought and continues until there is a 
final resolution as to the summoned party's response to the summons 
(discussed in the next section), plus an additional 120 days if the 
court requires any compliance with the summons at issue. If the court 
does not require any compliance, then the period of limitations on 
assessment resumes running on the day following the date of the final 
resolution and in no event shall expire before the 60th day following 
the date of final resolution.

Final Resolution of a Summoned Party's Response to a Summons

    Under section 6503(j)(3)(B), the length of the suspension under 
section 6503(j) depends on when ``final resolution'' of a summoned 
party's response to the designated or related summons occurs. The term 
``final resolution'' is not defined in the statute. The legislative 
history to the 1990 Act states that the term ``final resolution'' has 
the same meaning it has under section 7609(e)(2)(B), relating to third-
party summonses. H.R. Conf. Rep. No. 101-964 (1990). Specifically, the 
conference report to the 1990 Act states that final resolution means 
that no court proceeding remains pending and that the summoned party 
has complied with

[[Page 44906]]

the summons to the extent required by the court.
    Accordingly, the proposed regulations provide that final resolution 
occurs when the summoned party complies with a summons to the extent 
required by the court and all court proceedings and times for appeals 
applicable to those proceedings have terminated. If the summoned party 
has complied with the summons to the extent required by a court but 
there still remains time to appeal that order, final resolution occurs 
when the time for appeal has expired. (Were final resolution deemed to 
occur before that point, the period of limitations on assessment might 
resume running even though a later order after appeal might require 
additional compliance.) If all appeal periods have expired but the 
summoned party has not complied with the summons to the extent required 
by the court order, the proposed regulations provide that final 
resolution does not occur until the summoned party has complied with 
the summons to the extent required by the court order.
    Whether a party has complied with the terms of the summons as 
enforced by the court cannot be determined until the completeness of 
the materials produced and the testimony given have been evaluated. In 
cases where the court wholly denies enforcement or orders that the 
summons in its entirety be quashed, the date of compliance with the 
court's order is treated as occurring on the date when all appeals are 
disposed of or when all appeal periods expire.
    In cases where the court orders the summons enforced in whole or in 
part, the determination of whether the summoned party has complied with 
the order will be made by the Commissioner or his delegate 
(Commissioner). This determination will be made as soon as practicable 
after the summoned party has given testimony or produced books, papers, 
records, or other data as required by the court order. Notification of 
a favorable determination, and the date of such determination, will be 
made in writing and sent to the summoned party (and the taxpayer if the 
taxpayer is not the summoned party) within five days after the date the 
determination is made. If the period to appeal the court's order has 
already run, the date of the favorable determination shall be the date 
of final resolution for purposes of determining the length of the 
suspension under section 6503(j).
    The proposed regulations provide that the Commissioner is not 
required to give notice that the court's order has not been complied 
with prior to instituting a collateral proceeding challenging whether 
the testimony given or the production made by the summoned party fully 
satisfies the court order and requesting that sanctions be imposed 
against the summoned party for a failure to testify or produce. The 
proposed regulations further provide that if such a collateral 
proceeding is instituted, then the collateral proceeding shall be 
treated as a continuation of the original proceeding.

Statement of Compliance

    A summoned party also may request a determination from the IRS that 
it has fully complied with a designated or related summons to the 
extent required by court order. Under this procedure, if the summoned 
party believes that it has complied, the summoned party may submit a 
written statement (statement of compliance) to the IRS that the 
summoned party has fully complied with the court order. The statement 
of compliance must be properly addressed and sent by registered or 
certified mail. The statement of compliance must contain the summoned 
party's current contact information and information specifically 
identifying the applicable summons and court order.
    To prevent the filing of premature or repetitious statements of 
compliance, the proposed regulations provide that a statement of 
compliance will be disregarded as a nullity if it is submitted before 
production or the giving of testimony (or the last act of production 
when there is a mutual agreement that production will be accomplished 
in stages) or before the IRS has responded to a previously-submitted 
statement of compliance. A statement of compliance also will be treated 
as a nullity if it is submitted by the summoned party while a referral 
to the Department of Justice for a collateral proceeding with respect 
to the court order or an appeal of the court order is pending.
    Unless the IRS, within 180 days of the receipt of a statement of 
compliance, or within the time agreed to by the IRS and the summoned 
party, mails to the summoned party by registered or certified mail 
notification that it has not fully satisfied the designated or related 
summons, the summons will be treated as having been fully complied with 
as of the 180th day following the date the IRS received the statement. 
The date on which the statement of compliance was mailed by registered 
or certified mail will be treated as the date on which the IRS received 
the statement.

Other Rules

    These proposed regulations provide additional rules regarding the 
number of designated and related summonses that may be issued with 
respect to a return for any taxable period, the time within which a 
court proceeding must be brought to enforce or quash a designated or 
related summons, the computation of the suspension period in cases of 
multiple court proceedings, and the computation of the 60-day period 
for assessment when the last day falls on a weekend or holiday.
    The proposed regulations also address the relationship of the 
suspension period provided for in section 6503(j) with other suspension 
provisions in the Code. The proposed regulations first provide that if 
a designated or related summons also could be subject to the suspension 
rules governing third-party summonses under section 7609(e), then the 
suspension rules in section 6503(j) govern. In addition, the section 
6503(j) suspension period is independent of, and may run concurrently 
with, any other period of suspension, such as the suspension period for 
third-party summonses under section 7609(e) if a separate third-party 
summons also was issued in a case. Examples of these rules are 
contained in the proposed regulations.

Proposed Effective Date

    These regulations are proposed to be applicable on the date final 
regulations are published in the Federal Register.

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) of the 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 Requests for a 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. The IRS and the Treasury Department 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

[[Page 44907]]

inspection and copying. A public hearing may be scheduled if requested 
in writing by a person who 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 Elizabeth Rawlins of 
the Office of the Associate Chief Counsel, Procedure and Administration 
(Collection, Bankruptcy and Summonses Division), IRS. However, other 
personnel from the IRS and the Treasury Department participated in 
their development.

Lists 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 continues to read 
in part as follows:

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

    Par. 2. Section 301.6503(j)-1 is added to read as follows:


Sec.  301.6503(j)-1  Suspension of running of period of limitations; 
extension in case of designated and related summonses.

    (a) General rule. The running of the applicable period of 
limitations on assessment provided for in section 6501 is suspended 
with respect to any return of tax by a corporation that is the subject 
of a designated or related summons if a court proceeding is instituted 
with respect to that summons.
    (b) Period of suspension. The period of suspension is the time 
during which the running of the applicable period of limitations on 
assessment provided for in section 6501 is suspended under section 
6503(j). If the court requires any compliance with a designated or 
related summons by ordering that any record, document, paper, object, 
or items be produced, or the testimony of any person be given, the 
period of suspension consists of the judicial enforcement period plus 
120 days. If the court does not require any compliance with a 
designated or related summons, the period of suspension consists of the 
judicial enforcement period, and the period of limitations on 
assessment provided in section 6501 shall not expire before the 60th 
day after the judicial enforcement period.
    (c) Definitions--(1) Designated summons. A designated summons is a 
summons issued to a corporation (or to any other person to whom the 
corporation has transferred records) with respect to any return of tax 
by such corporation for a taxable period for which such corporation is 
being examined under the coordinated industry case program or any other 
successor to the coordinated examination program--
    (i) If the Division Commissioner and the Division Counsel of the 
Office of Chief Counsel (or their successors) for the organizations 
that have jurisdiction over the corporation whose tax liability is the 
subject of the summons have reviewed the summons before it is issued;
    (ii) If the IRS issues the summons at least 60 days before the day 
the period prescribed in section 6501 for the assessment of tax expires 
(determined with regard to extensions); and
    (iii) If the summons states that it is a designated summons for 
purposes of section 6503(j).
    (2) Related summons. A related summons is any summons issued that--
    (i) Relates to the same return of the corporation under examination 
as the designated summons; and
    (ii) Is issued to any person, including the person to whom the 
designated summons was issued, during the 30-day period that begins on 
the day the designated summons is issued.
    (3) Judicial enforcement period. The judicial enforcement period is 
the period that begins on the day on which a court proceeding is 
instituted with respect to a designated or related summons and ends on 
the day on which there is a final resolution as to the summoned 
person's response to that summons.
    (4) Court proceeding--(i) In general. For purposes of this section, 
a court proceeding is a proceeding filed in a United States district 
court either to quash a designated or related summons under section 
7609(b)(2) or to enforce a designated or related summons under section 
7604 and includes any collateral proceeding to that proceeding such as 
a civil contempt proceeding.
    (ii) Date when proceeding is no longer pending. A proceeding to 
quash or to enforce a designated or related summons is no longer 
pending when all appeals are resolved, or after the expiration of the 
period in which an appeal may be taken or a request for further review 
may be made. If, however, following an enforcement order, a collateral 
proceeding is brought challenging whether the testimony given or 
production made by the summoned party fully satisfied the court order 
and whether sanctions should be imposed against the summoned party for 
a failure to so testify or produce, the proceeding to quash or to 
enforce the summons shall include the time from which the proceeding to 
quash or to enforce the summons was brought until the decision in the 
collateral proceeding becomes final. The decision becomes final on the 
date when all appeals are disposed of or when the period in which an 
appeal may be taken or a request for further review may be made 
expires. Any collateral proceeding to the original proceeding shall be 
considered to be a continuation of the original proceeding.
    (5) Compliance--(i) In general. Compliance is the giving of 
testimony or the performance of an act or acts of production, or both, 
in response to a court order concerning the designated or related 
summons and the determination that the terms of the court order have 
been satisfied.
    (ii) Date compliance occurs. Compliance with a court order that 
wholly denies enforcement of a designated or related summons is deemed 
to occur on the date when all appeals are disposed of or when the 
period in which an appeal may be taken or a request for further review 
may be made expires. Compliance with a court order that grants 
enforcement, in whole or in part, of a designated or related summons, 
occurs on the date the Commissioner or his delegate (Commissioner) 
determines that the testimony given, or the books, papers, records, or 
other data produced, or both, by the summoned party fully satisfy the 
court order concerning the summons. The determination whether there has 
been compliance will be made as soon as practicable after the testimony 
is given or the materials are produced.
    (6) Final resolution. Final resolution means that compliance with a 
court order concerning the designated or related summons has occurred 
and that court proceedings are no longer pending.
    (d) Special rules--(1) Number of summonses that may be issued--(i) 
Designated summons. Only one designated summons may be issued in 
connection with the examination of a specific taxable year or other 
period of a corporation. A designated summons may cover more than one 
year or other period of a corporation. The designated summons may seek 
information that was previously sought in a summons

[[Page 44908]]

(other than a designated summons) that was issued in the course of the 
examination of that particular corporation.
    (ii) Related summonses. There is no restriction on the number of 
related summonses that may be issued in connection with the examination 
of a corporation. As provided in paragraph (c)(2) of this section, 
however, a related summons must be issued within the 30-day period that 
begins on the date on which the designated summons to which it relates 
is issued and must relate to the same return as the designated summons. 
A related summons may request the same information as the designated 
summons.
    (2) Time within which court proceedings must be brought. In order 
for the period of limitations on assessment to be suspended under 
section 6503(j), a court proceeding to enforce or to quash a designated 
or related summons must be instituted within the period of limitations 
on assessment provided in section 6501 otherwise applicable to that tax 
return.
    (3) Computation of suspension period if multiple court proceedings 
are instituted. If multiple court proceedings are instituted to enforce 
or to quash a designated or one or more related summonses concerning 
the same tax return, the period of limitations on assessment is 
suspended for the entire period beginning on the day the first court 
proceeding is brought and ending on the last day of the last-ending 
suspension period resulting from the court proceedings that were 
brought.
    (4) Effect on other suspension periods--(i) In general. The periods 
of suspension on the running of the period of limitations under section 
6501 provided for under sections 7609(e)(1) and (2) are not applicable 
with respect to any summons that is issued pursuant to section 6503(j). 
The suspension under section 6503(j) on the running of the period of 
limitations on assessment under section 6501 is independent of, and may 
run concurrent with, any other period of suspension of the period of 
limitations on assessment applicable to the tax return to which the 
designated or related summons relates.
    (ii) Examples. The rules of paragraph (d)(4)(i) of this section are 
illustrated by the following examples:

    Example 1. The period of limitations on assessment against 
Corporation P for its calendar 1997 return is scheduled to end on 
March 15, 2001. On January 3, 2001, a designated summons is issued 
to Corporation P concerning its 1997 return. On March 1, 2001 (14 
days before the period of limitations on assessment would otherwise 
expire with respect Corporation P's 1997 tax return), a court 
proceeding is brought to enforce the designated summons issued to 
Corporation P. On June 5, 2001, the court orders Corporation P to 
comply with the designated summons. Corporation P does not appeal 
the court's order. On September 3, 2001, agents for Corporation P 
deliver material that they state are the records requested by the 
designated summons. On October 15, 2001, a final resolution to 
Corporation P's response to the designated summons occurs when the 
Commissioner determines that Corporation P has fully complied with 
the court's order. The suspension period applicable with respect to 
the designated summons issued to Corporation P consists of the 
judicial enforcement period (March 1, 2001, through October 15, 
2001) and an additional 120-day period under section 6503(j)(1)(B), 
because the court required Corporation P to comply with the 
designated summons. Thus, the suspension period applicable with 
respect to the designated summons issued to Corporation P would 
begin on March 1, 2001, and end on February 12, 2002. Under the 
facts of this example, the period of limitations on assessment 
against Corporation P would be extended to February 26, 2002, to 
account for the additional 14 days that remained on the period of 
limitations on assessment under section 6501 when the suspension 
period under section 6503(j) began.
    Example 2. Assume the same facts set forth in Example 1. On 
April 3, 2001, a summons concerning Corporation P's calendar 1997 
return is issued and served on individual A, a third party. This 
summons is not a related summons because it was not issued during 
the 30-day period that began on the date the designated summons was 
issued. The third-party summons served on individual A is subject to 
the notice requirements of section 7609(a). If there is no final 
resolution of individual A's response to this summons by October 3, 
2001, i.e., six months from the date of service of the summons, the 
period of limitations on assessment against Corporation P would be 
suspended under section 7609(e)(2) to the date on which there is a 
final resolution to that response for the purposes of section 
7609(e)(2). If a final resolution to the summons served on 
individual A occurs after February 12, 2002, the end of the 
suspension period for the designated summons, the period of 
limitations on assessment against Corporation P expires 14 days 
after the date that the final resolution as provided for in section 
7609(e)(2) occurs with respect to the summons served on individual 
A.

    (5) Computation of 60-day period when last day of assessment period 
falls on a weekend or holiday. For purposes of paragraph (c)(1)(ii) of 
this section, in determining whether a designated summons has been 
issued at least 60 days before the date on which the period of 
limitations on assessment prescribed in section 6501 expires, the 
provisions of section 7503 apply when the last day of the assessment 
period falls on a Saturday, Sunday, or legal holiday.
    (6) Determination of compliance with designated and related 
summonses if a court proceeding has been instituted--(i) In general. 
The Commissioner will determine, in an expeditious manner, whether a 
summoned party has fully complied with any court order if the 
designated or related summons is the subject of a court proceeding to 
quash or to enforce. The determination will be made as soon as 
practicable after the later of--
    (A) The giving of any testimony required to be given by a summoned 
party; or
    (B) The act of production (or the last act of production in the 
case of production that is accomplished in parts or in stages pursuant 
to a mutual agreement between the summoned party and the Commissioner) 
by the summoned party.
    (ii) Procedure for a favorable determination. If the Commissioner 
determines that the summoned party has fully complied with the court 
order, the Commissioner will mail notice of that determination within 5 
business days after the date of the determination, which will be sent 
by certified or registered mail, to the summoned party and the taxpayer 
under examination (if the taxpayer is not the summoned party).
    (iii) Notification of favorable determination. The written 
notification that the summoned party has fully complied with the court 
order will contain the following information--
    (A) The name and address of the summoned party;
    (B) The name, address, type of tax, and taxable period of the 
taxpayer corporation with respect to which testimony or records, or 
both, were sought by the summons; and
    (C) The date on which the Commissioner made the determination that 
the summoned party fully complied with court order.
    (iv) Effective date of favorable determination. The Commissioner's 
determination that the summoned party has fully complied with the court 
order will be effective on the date the determination is stated to have 
been made in the written notification sent to the summoned party.
    (7) Statement of compliance with a court order--(i) In general. In 
the case of a court order to which paragraph (d)(6)(i) of this section 
applies, the summoned party may submit a statement in writing that the 
summoned party has fully complied with the court order to the office 
identified on the summons (marked for the attention of the Internal 
Revenue Service employee

[[Page 44909]]

who issued the summons to which the order relates).
    (ii) Form. The statement of compliance shall be sent by registered 
or certified mail and shall include--
    (A) The name, current address, current home and work telephone 
numbers of the person making the statement and any convenient times 
that person can be contacted;
    (B) A specific identification of the court order with which 
compliance has been achieved and the summons to which the order 
relates; and
    (C) The signature of the summoned party or the duly authorized 
representative.
    (iii) Response. (A) As soon as practicable after receipt of such a 
statement of compliance, but in no event later than 180 days after such 
receipt, the Commissioner will mail a response to the summoned party 
(and a copy of the response to the taxpayer, if the summoned party is 
not the taxpayer) by registered or certified mail. The date on which 
the summoned person mails the statement of compliance shall be deemed 
to be the date on which the Commissioner receives it. The 
Commissioner's response will notify the summoned party--
    (1) That a determination of compliance with the court order has 
been made and the date of that determination; or
    (2) That a determination of noncompliance has been made and the 
date of that determination.
    (B) The Commissioner is not required to give notice that the court 
order has not been complied with prior to instituting a collateral 
proceeding challenging whether the testimony given or the production 
made by the summoned party fully satisfies the court order and 
requesting that sanctions be imposed against the summoned party for a 
failure to comply with the order. The institution of a collateral 
proceeding shall constitute notice of a determination of noncompliance.
    (C) The summoned party may, in writing, grant the Commissioner 
additional time within which to notify it regarding compliance or 
noncompliance with the summons.
    (iv) Failure to respond within 180 days. If the Commissioner fails 
to respond to a properly submitted statement of compliance within the 
180-day period, described in paragraph (d)(7)(iii)(A) of this section, 
or such longer period as agreed to in writing by the summoned party, 
then the court order with respect to which the summoned party submitted 
a statement of compliance shall be deemed complied with as of the 
expiration of 180 days or such longer period.
    (v) Limitations. The Commissioner may treat as a nullity and return 
to the summoned party without action, as described in paragraph 
(d)(7)(iii) of this section, a statement of compliance that is filed in 
the following circumstances--
    (A) Before the summoned party has provided testimony, or books, 
papers, records, or other data, or both in response to the court order 
(or before the last act of production in the case of production that is 
accomplished in stages pursuant to a mutual agreement);
    (B) Before the Commissioner has issued a determination pursuant to 
paragraph (d)(7)(iii) of this section with respect to a previously-
tendered statement of compliance or before the expiration of 180 days 
from the date such statement of compliance was received by the 
Commissioner, whichever is earlier; or
    (C) While a referral to the Department of Justice for a collateral 
proceeding with respect to the court order or an appeal of that order 
is pending.
    (e) Effective date. This section is applicable on the date final 
regulations are published in the Federal Register.

Robert E. Wenzel,
Deputy Commissioner of Internal Revenue.
[FR Doc. 03-19537 Filed 7-30-03; 8:45 am]
BILLING CODE 4830-01-P