[Federal Register Volume 73, Number 128 (Wednesday, July 2, 2008)]
[Proposed Rules]
[Pages 37910-37911]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-15047]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 26 and 301

[REG-121698-08]
RIN 1545-BI00


Amendments to the Section 7216 Regulations--Disclosure or Use of 
Information by Preparers of Returns

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations and notice of public hearing.

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SUMMARY: In the Procedure and Administration section of this issue of 
the Federal Register, the IRS is issuing temporary regulations that 
provide updated guidance affecting tax return preparers regarding the 
disclosure of a taxpayer's social security number to a tax return 
preparer located outside of the United States in order to provide an 
exception allowing such disclosure with the taxpayer's consent in 
limited circumstances. The text of those temporary regulations also 
serves as the text of these proposed regulations. This document invites 
comments from the public on these regulations, and provides notice of a 
public hearing on these proposed regulations.

DATES: Written or electronic comments must be received by September 30, 
2008. Outlines of topics to be discussed at the public hearing 
scheduled for October 6, 2008 at 10 a.m. must be received by September 
15, 2008.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-121698-08), 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-
121698-08), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue, NW., Washington, DC, or sent electronically, via the Federal 
eRulemaking Portal at www.regulations.gov (IRS REG-121698-08).

[[Page 37911]]


FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Lawrence E. Mack, (202) 622-4940; concerning the submissions of 
comments and requests for hearing, Fumni Taylor, (202) 622-7180 (not 
toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

    This document contains proposed amendments to 26 CFR part 301 under 
section 7216 to provide modified rules relating to the ability of a tax 
return preparer located within the United States to disclose a 
taxpayer's social security number (``SSN'') constituting tax return 
information with the taxpayer's consent to a tax return preparer 
located outside of the United States. Simultaneously with the 
publication of this notice of proposed rulemaking, temporary 
regulations are published in the Rules and Regulations section of this 
issue of the Federal Register amending 26 CFR part 301. Those 
regulations provide a limited exception to the general rule prohibiting 
a return preparer from obtaining a taxpayer's consent to disclose the 
taxpayer's SSN to a tax return preparer located outside of the United 
States. The limited exception provides that a tax return preparer 
within the United States may disclose an SSN with the taxpayer's 
consent to a tax return preparer located outside of the United States 
when both the tax return preparer located within the United States and 
the tax return preparer located outside of the United States maintain 
an ``adequate data protection safeguard'' and the tax return preparer 
located within the United States verifies the maintenance of the 
adequate data protection safeguards in the request for the taxpayer's 
consent. Those regulations also clarify that the general prohibition 
regarding disclosure of SSNs applies only to those taxpayers filing a 
return in the Form 1040 Series, for example, Form 1040, Form 1040NR, 
Form 1040A, or Form 1040EZ. The text of those regulations also serves 
as the text of these regulations. The preamble to the temporary 
regulations explains the temporary regulations and 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 regulation does 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 Internal Revenue 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 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 Treasury Department request comments on the 
clarity of the proposed rules, how they can be made easier to 
understand, and the administrability of the rules in the proposed 
regulations, as well as the accompanying guidance published in Revenue 
Procedure 2008-35. All comments will be available for public inspection 
and copying.
    A public hearing has been scheduled for October 6, 2008, beginning 
at 10 a.m. in the NYU Room (room 2615) of the Internal Revenue 
Building, 1111 Constitution Avenue, NW., Washington, DC. Due to 
building security procedures, visitors must enter at the Constitution 
Avenue entrance. In addition, all visitors must present photo 
identification to enter the building. Because of access restrictions, 
visitors will not be admitted beyond the immediate entrance area more 
than 15 minutes before the hearing starts. For information about having 
your name placed on the building access list to attend the hearing, see 
the FOR FURTHER INFORMATION CONTACT section of this preamble.
    The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who 
wish to present oral comments at the hearing must submit written 
comments on September 30, 2008 and an outline of the topics to be 
discussed and the time to be devoted to each topic (signed original and 
eight (8) copies) by September 15, 2008. A period of 10 minutes will be 
allotted to each person for making comments. An agenda showing the 
schedule of the speakers will be prepared after the deadline for 
receiving outlines has passed. Copies of the agenda will be available 
free of charge at the hearing.

Drafting Information

    The principal author of these regulations is Lawrence E. Mack, 
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

    Par. 1. The authority citation for part 301 continues to read in 
part as follows:

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

    Par. 2. Section 301.7216-3 is amended by revising paragraph (b)(4) 
to read as follows:


Sec.  301.7216-3  Disclosure or use permitted only with the taxpayer's 
consent.

* * * * *
    (b) * * *
    (4) [The text of proposed Sec.  301.7216-3(b)(4) is the same as the 
text for Sec.  301.7216-3T(b)(4), published elsewhere in this issue of 
the Federal Register.]
* * * * *

Linda E. Stiff,
Deputy Commissioner for Services and Enforcement.
 [FR Doc. E8-15047 Filed 7-1-08; 8:45 am]
BILLING CODE 4830-01-P