[Federal Register Volume 73, Number 58 (Tuesday, March 25, 2008)]
[Proposed Rules]
[Pages 15687-15688]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-6040]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[REG-114942-07]
RIN 1545-BG73


Disclosure of Return Information in Connection With Written 
Contracts Among the IRS, Whistleblowers, and Legal Representatives of 
Whistleblowers

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations.

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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 disclosure of return information, pursuant to section 6103(n), to 
whistleblowers and their legal representatives. The temporary 
regulations describe the circumstances by which an officer or employee 
of the Treasury Department may disclose return information to a 
whistleblower and, if applicable, the legal representative of the 
whistleblower, to the extent necessary in connection with a written 
contract among the IRS, the whistleblower and, if applicable, the legal 
representative of the whistleblower, for services relating to the 
detection of violations of the internal revenue laws or related 
statutes. The temporary regulations will affect officers and employees 
of the Treasury Department who disclose return information to 
whistleblowers, or their legal representatives, in connection with 
written contracts among the IRS, whistleblowers and, if applicable, 
their legal representatives, for services relating to the detection of 
violations of the internal revenue laws or related statutes. The 
temporary regulations will also affect any whistleblower, or legal 
representative of a whistleblower, who receives return information in 
connection with a written contract among the IRS, the whistleblower 
and, if applicable, the legal representative of the whistleblower, for 
services relating to the detection of violations of the internal 
revenue laws or related statutes.

DATES: Written or electronic comments and requests for a public hearing 
must be received by June 23, 2008.

ADDRESSES: Send submissions to CC:PA:LPD:PR (REG-114942-07), room 5203, 
Internal Revenue Service, PO 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:LPD:PR (REG-
114942-07), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue, NW., Washington, DC, or sent electronically, via the Federal 
eRulemaking Portal at http://www.regulations.gov (IRS-REG-114942-07).

FOR FURTHER INFORMATION CONTACT: Helene R. Newsome, 202-622-7950 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

    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) under section 6103(n) relating to the 
disclosure of return information in connection with written contracts 
among the IRS, whistleblowers and, if applicable, their legal 
representatives.
    The Tax Relief and Health Care Act of 2006, Public Law 109-432 (120 
Stat. 2958) (the Act), was enacted on December 20, 2006. Section 406 of 
the Act amends section 7623, concerning the payment of awards to 
whistleblowers, and establishes a Whistleblower Office within the IRS 
that has responsibility for the administration of a whistleblower 
program. The Whistleblower Office, in connection with administering a 
whistleblower program, will analyze information provided by a 
whistleblower, and either investigate the matter itself or assign it to 
the appropriate IRS office for investigation. In analyzing information 
provided by a whistleblower, or investigating a matter, the 
Whistleblower Office may determine that it requires the assistance of 
the whistleblower, or the legal representative of the whistleblower. 
The legislative history of section 406 of the

[[Page 15688]]

Act states that ``[t]o the extent the disclosure of returns or return 
information is required [for the whistleblower or his or her legal 
representative] to render such assistance, the disclosure must be 
pursuant to an IRS tax administration contract.'' Joint Committee of 
Taxation, Technical Explanation of H.R. 6408, The ``Tax Relief and 
Health Care Act of 2006,'' as Introduced in the House on December 7, 
2006, at 89 (JCX-50-06), December 7, 2006. The legislative history 
further states that ``[i]t is expected that such disclosures will be 
infrequent and will be made only when the assigned task cannot be 
properly or timely completed without the return information to be 
disclosed.'' Id.
    Under section 6103(a), returns and return information are 
confidential unless the Internal Revenue Code (Code) authorizes 
disclosure. Section 6103(n) is the authority by which returns and 
return information may be disclosed pursuant to a tax administration 
contract. Section 6103(n) authorizes, pursuant to regulations 
prescribed by the Secretary, returns and return information to be 
disclosed to any person, including any person described in section 
7513(a), for purposes of tax administration, to the extent necessary in 
connection with: (1) The processing, storage, transmission, and 
reproduction of returns and return information; (2) the programming, 
maintenance, repair, testing, and procurement of equipment; and (3) the 
providing of other services. These proposed regulations describe the 
circumstances, pursuant to section 6103(n), by which officers and 
employees of the Treasury Department may disclose return information to 
whistleblowers and, if applicable, their legal representatives, in 
connection with written contracts for services relating to the 
detection of violations of the internal revenue laws or related 
statutes.
    The text of the temporary regulations also serves as the text of 
these proposed regulations. The preamble to the temporary regulations 
explains these proposed regulations.

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, and because 
the regulations do not impose a collection of information on small 
entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not 
apply. Pursuant to section 7805(f) of the Code, these regulations have 
been submitted to the Chief Counsel of the Small Business 
Administration for comment on its impact on small businesses.

Comments and Request for a Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any electronic and written comments (a 
signed original and eight (8) copies) that are submitted timely to the 
IRS. The IRS and Treasury Department request comments on the clarity of 
the proposed rule and how it may be made easier to understand. All 
comments will be available for public inspection and copying. A public 
hearing may be scheduled if requested in writing by a person that 
timely submits written comments. If a public hearing is scheduled, 
notice of the date, time, and place of the hearing will be published in 
the Federal Register.

Drafting Information

    The principal author of these regulations is Helene R. Newsome, 
Office of the Associate Chief Counsel (Procedure & Administration).

List 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 is amended by 
adding an entry in numerical order to read as follows:

    Authority: 26 U.S.C. 7805 * * *
    Section 301.6103(n)-2 also issued under 26 U.S.C. 6103(n); * * *

    Par. 2. Section 301.6103(n)-2 is added to read as follows:


Sec.  301.6103(n)-2  Disclosure of return information in connection 
with written contracts among the IRS, whistleblowers, and legal 
representatives of whistleblowers.

    [The text of this proposed section is the same as the text of Sec.  
301.6103(n)-2T published elsewhere in this issue of the Federal 
Register.]

Linda E. Stiff,
Deputy Commissioner for Services and Enforcement.
 [FR Doc. E8-6040 Filed 3-24-08; 8:45 am]
BILLING CODE 4830-01-P