[Federal Register Volume 73, Number 31 (Thursday, February 14, 2008)]
[Rules and Regulations]
[Pages 8608-8610]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 08-674]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 702

[TD 9382]
RIN 1545-BH41


Payments From the Presidential Primary Matching Payment Account

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final and temporary regulations.

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SUMMARY: This document contains final and temporary regulations 
relating to the financing of presidential primary campaigns. The 
temporary regulations relate to Treasury procedures for making payments 
from the Presidential Primary Matching Payment Account (Primary 
Account). These temporary regulations affect all candidates eligible to 
receive payments from the Primary Account. The text of the temporary 
regulations also serves as the text for the proposed regulations (REG-
149475-07) set forth in the notice of proposed rulemaking on this 
subject in the Proposed Rules section in this issue of the Federal 
Register.

DATES: Effective Date: These regulations are effective on February 14, 
2008.
    Applicability Date: For dates of applicability, see Sec. Sec.  
702.9037-1(b), 702.9037-1T(b), 702.9037-2(e) and 702.9037-2T(c).

FOR FURTHER INFORMATION CONTACT: Karla M. Meola at (202) 622-4930 (not 
a toll-free number).

SUPPLEMENTARY INFORMATION: 

Background

    Under section 6096 of the Internal Revenue Code (Code), individuals 
whose income tax liability for the taxable year is $3 or more may 
designate $3 for the Presidential Election Campaign Fund (Fund) on 
their tax returns. Section 9006(a) establishes the

[[Page 8609]]

Fund and requires the Treasury Secretary (Treasury) to transfer amounts 
designated under section 6096 to the Fund. Three types of payments are 
made from the Fund: (1) Payments to the national committee of each 
major and minor party, (2) payments to the eligible candidates of a 
political party for President and Vice President, and (3) payments to 
eligible candidates seeking nomination for election to be President. 
See sections 9008(b)(3), 9006(b) and 9037(b).
    Section 9008 requires the Treasury to maintain a separate account 
in the Fund for payments to the national committee of each major and 
minor party for their presidential nominating conventions, to be made 
upon receipt of certification by the Federal Election Commission 
(Commission). Section 9008(a) directs the Treasury to fund this account 
before making payments under section 9006(b) to eligible candidates for 
President and Vice President. Section 9037(a) directs the Treasury to 
establish within the Fund an additional separate account, the Primary 
Account. Section 9037(a) also directs the Treasury to make deposits to 
the Primary Account only after funds ``are available'' for payments for 
the nominating conventions under section 9008 and the general election 
under section 9006. Section 9037(b) requires the Treasury to transfer 
amounts certified by the Commission from the Primary Account to 
candidates seeking nomination for President. Section 9037(b) also 
provides that in making such transfers to candidates of the same 
political party, the Treasury will seek to achieve an equitable 
distribution of available funds, and will take into account, in seeking 
to achieve an equitable distribution, the sequence in which 
certifications from the Commission are received. Under section 9032(6), 
primary candidates may receive payments under section 9037(b) beginning 
on the first day of the calendar year of the presidential general 
election.
    Section 702.9037-2(c) establishes a ``shortfall rule,'' which 
provides that if the amount certified by the Commission for primary 
candidates in a calendar month exceeds the balance in the Primary 
Account on the last day of the calendar month, the amount paid to a 
candidate for that month from the Primary Account is determined by 
multiplying the amount certified by the Commission for the candidate 
during that month by the ratio of the balance in the Primary Account on 
the last day of the calendar month over the total amount certified by 
the Commission for all the candidates during that month. Any amount 
certified by the Commission, but not paid to a candidate because of the 
operation of this shortfall rule, is treated as an amount certified by 
the Commission for that candidate during the succeeding calendar month.
    Notice 96-13 (1996-1 CB 366) announced a change in the payment 
procedures contained in Sec.  702.9037-2(c). The notice stated that 
when the Primary Account is in a shortfall position, the Treasury may 
make an additional payment between regular payment dates promptly after 
funds are available. Such payment is determined by multiplying the 
amount certified by the Commission for the candidate in month 1 by the 
ratio of the balance in the Primary Account (but not to exceed the 
shortfall) on the 15th day of month 2 (or the first business day 
thereafter if the 15th is not a business day) over the total amount 
certified by the Commission for all the candidates in month 1. Notice 
96-13 stated that the regulations would be amplified to reflect these 
changed procedures and that the revised regulations would have an 
effective date of February 2, 1996. See Sec.  601.601(d)(2)(ii)(b).
    Notice 2007-96 (2007-49 IRB 1091) superseded Notice 96-13 and 
announced that the procedures for making payments from the Primary 
Account would be changed. The notice also announced that the Treasury 
intended to modify the regulations under section 9037 to reflect the 
changed procedures. In compliance with section 7805(b)(1)(C), and as 
stated in Notice 2007-96, pursuant to Notice 96-13, the effective date 
of these amendments to the regulations would be February 2, 1996.

Explanation of Provisions

    The regulations under section 9037 were promulgated in 1991 and 
provide procedures for administering the Primary Account. The 
procedures specified in these regulations have not kept pace with 
technological changes that allow the Primary Account to be administered 
and operated more efficiently. For example, the regulations do not 
provide for more than monthly payments in the event of a shortfall as 
contemplated by Notice 96-13. Accordingly, the temporary regulations 
remove these outdated administrative procedures. Concurrently with the 
issuance of these temporary regulations the Internal Revenue Service is 
publishing a revenue procedure specifying revised procedures for 
administering the Primary Account. These revised procedures allow 
weekly payments from the Primary Account to candidates.

Effective/Applicability Date

    These temporary regulations apply to payments from the Primary 
Account on or after February 2, 1996.

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. For the 
applicability of the Regulatory Flexibility Act (5 U.S.C. chapter 6) 
refer to the Special Analysis section of the preamble to the cross-
reference notice of proposed rulemaking published in the Proposed Rule 
section in this issue of the Federal Register. Pursuant to section 
7805(f) of the Code, these regulations have been 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 regulations is Karla M. Meola, Office 
of the Associate Chief Counsel (Income Tax and Accounting), IRS. 
However, other personnel from the IRS and Treasury Department 
participated in their development.

List of Subjects in 26 CFR Part 702

    Campaign funds.

Amendments to the Regulations

0
Accordingly, 26 CFR part 702 is amended as follows:

PART 702--PRESIDENTIAL PRIMARY MATCHING PAYMENT ACCOUNT

0
Paragraph 1. The authority citation for part 702 continues to read in 
part as follows:

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

0
Par. 2. Section 702.9037-1 is amended as follows:
0
1.The undesignated text is designated as paragraph (a).
0
2. Paragraph (b) is added.
    The revision reads as follows:


Sec.  702.9037-1  Transfer of amounts to the Presidential Primary 
Matching Payment Account.

* * * * *
    (b) Effective/applicability date. These regulations apply to the 
Primary Account before February 2, 1996.


0
Par. 3. Section 702.9037-1T is added to read as follows:

[[Page 8610]]

Sec.  702.9037-1T  Transfer of amounts to the Presidential Primary 
Matching Payment Account (temporary).

    (a) In general. The Secretary will deposit amounts into the 
Presidential Primary Matching Payment Account (Primary Account) only to 
the extent that there are amounts in the Presidential Election Campaign 
Fund (Fund) after the transfers prescribed by Sec.  701.9006-1(c) and 
(d). The Secretary will make this deposit promptly from amounts that 
have actually been transferred to the Fund under Sec.  701.9006-1(a). 
Any amounts in the Primary Account after October 31 following a 
presidential election will be returned to the Fund for the purpose of 
making the transfers prescribed by Sec.  701.9006-1(c), (d), and (f) 
for the next presidential election.
    (b) Effective/applicability date. (1) These regulations apply to 
the Primary Account on or after February 2, 1996.
    (2) Expiration Date. This section expires on February 11, 2011.


0
Par. 4. Section 702.9037-2 is amended by adding paragraph (e) to read 
as follows:


Sec.  702.9037-2  Payments from the Presidential Primary Matching 
Payment Account.

* * * * *
    (e) Effective/applicability date. These regulations apply to the 
Primary Account before February 2, 1996.
0
Par. 5. Section 702.9037-2T is added to read as follows:


Sec.  702.9037-2T  Payments from the Presidential Primary Matching 
Payment Account (temporary).

    (a) In general. Pursuant to section 9036, the Federal Election 
Commission (Commission) will certify to the Secretary the full amount 
of payment to which a candidate is entitled under section 9034. The 
Secretary will pay promptly, but not before the start of the matching 
payment period under section 9032(6), the amounts certified by the 
Commission from the Presidential Primary Matching Payment Account 
(Primary Account) to the candidate.
    (b) Additional guidance. The Internal Revenue Service may publish 
guidance in the Internal Revenue Bulletin (see Sec.  
601.601(d)(2)(ii)(b) of this chapter) prescribing additional rules and 
procedures for the Primary Account.
    (c) Effective/applicability date. (1) These regulations apply to 
the Primary Account on or after February 2, 1996.
    (2) Expiration Date. This section expires on February 11, 2011.

Linda E. Stiff,
 Deputy Commissioner for Services and Enforcement.
    Approved: February 1, 2008.
Eric Solomon,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 08-674 Filed 2-11-08; 12:09 pm]
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