[Federal Register Volume 70, Number 47 (Friday, March 11, 2005)]
[Rules and Regulations]
[Pages 12140-12141]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-4869]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[TD 9188]
RIN 1545-BE01


Disclosure of Return Information to the Bureau of the Census

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTIONS: Temporary regulations.

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SUMMARY: This document contains temporary regulations relating to 
additions to the list of items of return information disclosed to the 
Bureau of the Census (Bureau). The regulation adds two items of return 
information for use in producing demographic statistics programs, 
including the Bureau's Small Area Income and Poverty Estimates (SAIPE). 
The temporary regulations also remove four items that the Bureau has 
indicated are no longer necessary. The text of these 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 March 10, 2005.
    Applicability Date: For dates of applicability, see Sec.  
301.6103(j)(1)-1T(e).

FOR FURTHER INFORMATION CONTACT: James O'Leary, (202) 622-4580 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    Under section 6103(j)(1), upon written request from the Secretary 
of Commerce, the Secretary of the Treasury is to furnish to the Bureau 
return information that is prescribed by Treasury regulations for the 
purpose of, but only to the extent necessary in, structuring censuses 
and national economic accounts and conducting related statistical 
activities authorized by law. Section 301.6103(j)(1)-1 of the 
regulations further defines such purposes by reference to 13 U.S.C. 
chapter 5 and provides an itemized description of the return 
information authorized to be disclosed for such purposes.
    This document adopts temporary regulations that authorize the IRS 
to disclose the additional items of return information that have been 
requested by the Secretary of Commerce to the extent necessary in 
developing and preparing demographic statistics, including statutorily 
mandated Small Area Income and Poverty Estimates (SAIPE). The temporary 
regulations also remove certain items of return information that are 
enumerated in the existing regulations but that the Secretary of 
Commerce has indicated are no longer needed.
    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register amend the Procedure and Administration 
Regulations (26 CFR part 301) relating to Internal Revenue Code (Code) 
section 6103(j)(1). The temporary regulations contain rules relating to 
the disclosure of return information reflected on returns to officers 
and employees of the Department of Commerce for structuring censuses 
and national economic accounts and conducting related statistical 
activities authorized by law.

Explanation of Provisions

    By letter dated May 11, 2004, the Department of Commerce requested 
that additional items of return information be disclosed to the Bureau 
for purposes related to conducting the SAIPE program and used to 
estimate the number of school-aged children in poverty for each of the 
over 14,000 districts in the United States. Specifically, the 
Department of Commerce requested Earned Income and the number of Earned 
Income Tax Credit-eligible qualifying children. The request indicates 
that under the Improving America's Schools Act of 1994 (Public Law 103-
382, 108 Stat. 3518 (October 20, 1994)), these estimates were mandated 
biennially, and under the No Child Left Behind Act of 2002 (Public Law 
107-110, 115 Stat. 1425 (January 8, 2002)), they are required annually.
    The regulations also remove four items of return information that 
the Bureau indicated it no longer requires. These items are: end-of-
year code; months actively operated; total number of documents and the 
total amount reported on the Form 1096 (Annual Summary and Transmittal 
of U.S. Information Returns) transmitting Forms 1099-MISC 
(Miscellaneous Income); and Form 941 (Employer's Quarterly Federal Tax 
Return) indicator and business address on Schedule C (Profit or Loss 
From Business) of Form 1040. Accordingly, the temporary regulations 
have removed these items from the enumeration of return information to 
be disclosed to the Bureau.

Special Analyses

    It has been determined that these temporary regulations are 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. For 
applicability of the Regulatory Flexibility Act (5 U.S.C. chapter 6), 
please refer to the cross-reference notice of proposed rulemaking 
published elsewhere in this issue of the Federal Register. Pursuant to 
section 7805(f) of the 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.

Drafting Information

    The principal author of these temporary regulations is James C. 
O'Leary, Office of the Associate Chief

[[Page 12141]]

Counsel (Procedure & Administration), Disclosure and 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.

Amendments to the Regulations

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

PART 301--PROCEDURE AND ADMINISTRATION

0
Paragraph 1. The authority citation for part 301 is amended by adding 
an entry in numerical order to read in part, as follows:

    Authority: 26 U.S.C. 7805 * * *
    Section 301.6103(j)(1)-1T also issued under 26 U.S.C. 
6103(j)(1); * * *


0
Par. 2. Section 301.6103(j)(1)-1 is amended by revising paragraphs 
(b)(1) introductory text and (b)(3) introductory text to read as 
follows:


Sec.  301.6103(j)(1)-1  Disclosures of return information to officers 
and employees of the Department of Commerce for certain statistical 
purposes and related activities.

* * * * *
    (b)(1) [Reserved]. For further guidance, see Sec.  301.6103(j)(1)-
1T(b)(1).
* * * * *
    (b)(3) [Reserved]. For further guidance, see Sec.  301.6103(j)(1)-
1T(b)(3).
* * * * *

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


Sec.  301.6103(j)(1)-1T  Disclosures of return information to officers 
and employees of the Department of Commerce for certain statistical 
purposes and related activities (temporary).

    (a) [Reserved]. For further guidance, see Sec.  301.6103(j)(1)-
1(a).
    (b) Disclosure of return information reflected on returns to 
officers and employees of the Bureau of the Census.
    (1) Officers or employees of the Internal Revenue Service will 
disclose the following return information reflected on returns of 
individual taxpayers to officers and employees of the Bureau of the 
Census for purposes of, but only to the extent necessary in, conducting 
and preparing, as authorized by chapter 5 of title 13, United States 
Code, intercensal estimates of population and income for all geographic 
areas included in the population estimates program and demographic 
statistics programs, censuses, and related program evaluation:
    (i) Taxpayer identity information (as defined in section 6103(b)(6) 
of the Internal Revenue Code), validity code with respect to the 
taxpayer identifying number (as described in section 6109), and 
taxpayer identity information of spouse and dependents, if reported.
    (ii) Location codes (including area/district office and campus/
service center codes).
    (iii) Marital status.
    (iv) Number and classification of reported exemptions.
    (v) Wage and salary income.
    (vi) Dividend income.
    (vii) Interest income.
    (viii) Gross rent and royalty income.
    (ix) Total of--
    (A) Wages, salaries, tips, etc.;
    (B) Interest income;
    (C) Dividend income;
    (D) Alimony received;
    (E) Business income;
    (F) Pensions and annuities;
    (G) Income from rents, royalties, partnerships, estates, trusts, 
etc.;
    (H) Farm income;
    (I) Unemployment compensation; and
    (J) Total Social Security benefits.
    (x) Adjusted gross income.
    (xi) Type of tax return filed.
    (xii) Entity code.
    (xiii) Code indicators for Form 1040, Form 1040 (Schedules A, C, D, 
E, F, and SE), and Form 8814.
    (xiv) Posting cycle date relative to filing.
    (xv) Social Security benefits.
    (xvi) Earned Income (as defined in section 32(c)(2)).
    (xvii) Number of Earned Income Tax Credit-eligible qualifying 
children.
    (b)(2) [Reserved]. For further guidance, see Sec.  301.6103(j)(1)-
1(b)(2).
    (b)(3) Officers or employees of the Internal Revenue Service will 
disclose the following business related return information reflected on 
returns of taxpayers to officers and employees of the Bureau of the 
Census for purposes of, but only to the extent necessary in, conducting 
and preparing, as authorized by chapter 5 of title 13, United States 
Code, demographic and economic statistics programs, censuses, and 
surveys. (The ``returns of taxpayers'' include, but are not limited to: 
Form 941; Form 990 series; Form 1040 series and Schedules C and SE; 
Form 1065 and all attending schedules and Form 8825; Form 1120 series 
and all attending schedules and Form 8825; Form 851; Form 1096; and 
other business returns, schedules and forms that the Internal Revenue 
Service may issue.):
    (i) Taxpayer identity information (as defined in section 
6103(b)(6)) including parent corporation, shareholder, partner, and 
employer identity information.
    (ii) Gross income, profits, or receipts.
    (iii) Returns and allowances.
    (iv) Cost of labor, salaries, and wages.
    (v) Total expenses or deductions.
    (vi) Total assets.
    (vii) Beginning- and end-of-year inventory.
    (viii) Royalty income.
    (ix) Interest income, including portfolio interest.
    (x) Rental income, including gross rents.
    (xi) Tax-exempt interest income.
    (xii) Net gain from sales of business property.
    (xiii) Other income.
    (xiv) Total income.
    (xv) Percentage of stock owned by each shareholder.
    (xvi) Percentage of capital ownership of each partner.
    (xvii) Principal industrial activity code, including the business 
description.
    (xviii) Consolidated return indicator.
    (xix) Wages, tips, and other compensation.
    (xx) Social Security wages.
    (xxi) Deferred wages.
    (xxii) Social Security tip income.
    (xxiii) Total Social Security taxable earnings.
    (xxiv) Gross distributions from employer-sponsored and individual 
retirement plans from Form 1099-R.
    (b)(4) through (b)(6) [Reserved]. For further guidance, see Sec.  
301.6103(j)(1)-1 (b)(4) through (b)(6).
    (c) through (d) [Reserved]. For further guidance, see Sec.  
301.6103(j)(1)-1(c) and (d).
    (e) Effective date. This section is applicable to disclosures to 
the Bureau of the Census on March 10, 2005.

Mark E. Matthews,
Deputy Commissioner for Services and Enforcement.

    Approved: February 26, 2005.
Eric Solomon,
Acting Deputy Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 05-4869 Filed 3-10-05; 8:45 am]
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