[Federal Register Volume 73, Number 175 (Tuesday, September 9, 2008)]
[Proposed Rules]
[Pages 52218-52220]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-20556]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 73, No. 175 / Tuesday, September 9, 2008 / 
Proposed Rules  

[[Page 52218]]



DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-142333-07]
RIN 1545-BH28


Implementation of Form 990

AGENCY: Internal Revenue Service (IRS), Treasury.

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

-----------------------------------------------------------------------

SUMMARY: In the Rules and Regulations section of this issue of the 
Federal Register, the IRS and the Treasury Department are issuing 
temporary regulations necessary to implement the redesigned Form 990, 
``Return of Organization Exempt From Income Tax.'' The temporary 
regulations make revisions to the regulations under section 6033 and 
section 6043 to allow for new threshold amounts for reporting 
compensation, to require that compensation be reported on a calendar 
year basis, and to modify the scope of organizations subject to 
information reporting requirements upon a substantial contraction. The 
temporary regulations also eliminate the advance ruling process for new 
organizations, change the public support computation period for 
organizations described in sections 170(b)(1)(A)(vi) and 509(a)(1) and 
in section 509(a)(2) to five years, consistent with the revised Form 
990, and clarify that support must be reported using the organization's 
overall method of accounting. All tax exempt organizations required 
under section 6033 of the Internal Revenue Code (Code) to file annual 
information returns are affected by the temporary regulations. The text 
of the temporary regulations also serves as the text of these proposed 
regulations.

DATES: Written or electronic comments and requests for a public hearing 
must be received by November 10, 2008.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-142333-07), Room 
5203, Internal Revenue Service, P.O. 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-
142333-07), 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-142333-07).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Terri Harris, at (202) 622-6070; concerning submissions of comments or 
requests for a hearing, Oluwafunmilayo Taylor, at (202) 622-3401 (not 
toll-free numbers).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The collection of information contained in this notice of proposed 
rulemaking has been reviewed and approved by the Office of Management 
and Budget in accordance with the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507(d)) under control number 1545-2117. Comments on the 
collection of information should be sent to the Office of Management 
and Budget, Attn: Desk Officer for the Department of the Treasury, 
Office of Information and Regulatory Affairs, Washington, DC 20503, 
with copies to the Internal Revenue Service, Attn: IRS Reports 
Clearance Officer, SE:W:CAR: MP:T:T:SP, Washington, DC 20224. Comments 
on the collection of information should be received by November 10, 
2008. Comments are specifically requested concerning:
    Whether the proposed collection of information is necessary for the 
proper performance of the functions of the Internal Revenue Service, 
including whether the information will have practical utility;
    The accuracy of the estimated burden associated with the proposed 
collection of information;
    How the quality, utility and clarity of the information to be 
collected may be enhanced;
    How the burden of complying with the proposed collection of 
information may be minimized, including through the application of 
automated collection techniques or other forms of information 
technology; and
    Estimates of capital or start-up costs and costs of operation, 
maintenance and purchase of service to provide information.
    The collection of information in this proposed regulation is in 
Sec.  1.6033-2T. The information collected under Sec.  1.6033-2T 
relates to compensation reporting by tax exempt organizations. The 
information that is required to be collected for purposes of Sec.  
1.6033-2T is required to be submitted on Form 990, ``Return of 
Organization Exempt From Income Tax.'' The estimated number of 
recordkeepers that will submit Form 990 is approximately 105,000.
    Estimated total annual reporting burden: One hour.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a valid 
control number assigned by the Office of Management and Budget.
    Books or records relating to a collection of information must be 
retained as long as their contents may become material in the 
administration of any internal revenue law. Generally, tax returns and 
tax return information are confidential, as required by 26 U.S.C. 6103.

Background and Explanation of Provision

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register amend the Income Tax Regulations (26 CFR 
part 1) relating to sections 170(b), 507, 509(a), 6033, and 6043. The 
amendments to Sec. Sec.  1.170A-9, 1.507-2 and 1.509(a)-3 eliminate the 
advance ruling process, clarify that support must be reported using the 
organization's overall method of accounting, eliminate the exception 
for material changes in sources of support, and change the public 
support computation period for organizations described in sections 
170(b)(1)(A)(vi) and 509(a)(1) and in section 509(a)(2) to five years, 
consistent with the revised Schedule A to the redesigned Form 990, 
``Return of Organization Exempt From Income Tax.'' The amendments to 
Sec. Sec.  1.6033-2(a)(2)(ii)(g) and (h) allow for new threshold 
amounts for reporting compensation and require that organizations use a 
calendar year basis or a basis that is prescribed by publication, form 
or instruction when

[[Page 52219]]

reporting listed officer, director, trustee, key employee and 
independent contractor compensation. The amendments to Sec. Sec.  
1.6043-3(b)(8) and (d) expand the scope of organizations subject to 
information reporting requirements upon a substantial contraction. The 
text of those temporary regulations also serves as the text of these 
proposed 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 has also 
been determined that section 553(b) of the Administrative Procedure Act 
(5 U.S.C. chapter 5) does not apply. It is hereby certified that the 
collection of information in this regulation will not have a 
significant economic impact on a substantial number of small entities. 
This certification is based on the fact that burden on tax-exempt 
entities will be reduced by (1) eliminating the separate advance ruling 
process and the additional process for subsequently seeking a 
definitive ruling, (2) clarifying rules regarding the method of 
accounting and period for reporting certain items, and (3) providing 
discretion for the IRS to narrow or clarify circumstances under which 
reporting is required. Accordingly, a Regulatory Flexibility Analysis 
under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not 
required. 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.

Comments and Requests for 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. Comments are requested on all aspects of the proposed 
regulations. 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 inspection and 
copying.
    A public hearing will be scheduled if requested in writing by any 
person that timely submits written comments. If a public hearing is 
scheduled, notice of the date, time, and place for the public hearing 
will be published in the Federal Register.

Drafting Information

    The principal author of this regulation is Terri Harris of the 
Office of Division Counsel/Associate Chief Counsel (Tax Exempt and 
Government Entities). However, other personnel from the IRS and the 
Treasury Department participated in their development.

List of Subjects for 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 1 is proposed to be amended as follows:

PART 1--INCOME TAXES

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

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

    Par. 2. Section 1.170A-9 is amended by revising paragraphs (f) and 
(k) to read as follows:


Sec.  1.170A-9  Definition of section 170(b)(1)(A) organization.

* * * * *
    (f) [The text of this proposed amendment to Sec.  1.170A-9(f) is 
the same as the text of Sec.  1.170A-9T(f) published elsewhere in this 
issue of the Federal Register.]
* * * * *
    (k) [The text of this proposed amendment to Sec.  1.170A-9(k) is 
the same as the text of Sec.  1.170A-9T(k)(1) and (k)(2) published 
elsewhere in this issue of the Federal Register.]
    Par. 3. Section 1.507-2 is revised to read as follows:


Sec.  1.507-2  Special rules; transfer to, or operation as, public 
charity.

    [The text of this proposed amendment to Sec.  1.507-2 is the same 
as the text of Sec.  1.507-2T(a) through (f)(2) published elsewhere in 
this issue of the Federal Register.]
    Par. 4. Section 1.509(a)-3 is amended by revising paragraphs 
(a)(2), (a)(3)(i), (c), (d), (e), (k), and (n) and adding paragraph (o) 
to read as follows:


Sec.  1.509(a)-3  Broadly, publicly supported organizations.

    (a) * * *
    (2) [The text of this proposed amendment to Sec.  1.509(a)-3(a)(2) 
is the same as the text of Sec.  1.509(a)-3T(a)(2) published elsewhere 
in this issue of the Federal Register.]
    (3) * * *
    (i) [The text of this proposed amendment to Sec.  1.509(a)-
3(a)(3)(i) is the same as the text of Sec.  1.509(a)-3T(a)(3)(i) 
published elsewhere in this issue of the Federal Register.]
* * * * *
    (c) [The text of this proposed amendment to Sec.  1.509(a)-3(c) is 
the same as the text of Sec.  1.509(a)-3T(c) published elsewhere in 
this issue of the Federal Register.]
    (d) [The text of this proposed amendment to Sec.  1.509(a)-3(d) is 
the same as the text of Sec.  1.509(a)-3T(d) published elsewhere in 
this issue of the Federal Register.]
    (e) [The text of this proposed amendment to Sec.  1.509(a)-3(e) is 
the same as the text of Sec.  1.509(a)-3T(e) published elsewhere in 
this issue of the Federal Register.]
* * * * *
    (k) [The text of this proposed amendment to Sec.  1.509(a)-3(k) is 
the same as the text of Sec.  1.509(a)-3T(k) published elsewhere in 
this issue of the Federal Register.]
* * * * *
    (n) [The text of this proposed amendment to Sec.  1.509(a)-3(n) is 
the same as the text of Sec.  1.509(a)-3T(n) published elsewhere in 
this issue of the Federal Register.]
    (o) [The text of this proposed Sec.  1.509(a)-3(o) is the same as 
the text of Sec.  1.509(a)-3T(o)(1) and (o)(2) published elsewhere in 
this issue of the Federal Register.]
    Par. 5. Section 1.6033-2 is amended by revising paragraphs 
(a)(2)(ii)(g), (a)(2)(ii)(h) and (k) to read as follows:


Sec.  1.6033-2  Returns by exempt organizations (taxable years 
beginning after December 31, 1969) and returns by certain nonexempt 
organizations (taxable years beginning after December 31, 1980).

    (a) * * *
    (2) * * *
    (ii) * * *
    (g) [The text of this proposed amendment to Sec.  1.6033-
2(a)(2)(ii)(g) is the same as the text of Sec.  1.6033-2T(a)(2)(ii)(g) 
published elsewhere in this issue of the Federal Register.]
    (h) [The text of this proposed amendment to Sec.  1.6033-
2(a)(2)(ii)(h) is the same as the text of Sec.  1.6033-2T(a)(2)(ii)(h) 
published elsewhere in this issue of the Federal Register.]
* * * * *
    (k) [The text of this proposed amendment to Sec.  1.6033-2(k) is 
the same as the text of Sec.  1.6033-2T(k)(1) and (k)(2) published 
elsewhere in this issue of the Federal Register.]
    Par. 6. Section 1.6043-3 is amended by revising paragraphs (b)(8) 
and (d) and adding paragraph (e) to read as follows:

[[Page 52220]]

Sec.  1.6043-3  Returns regarding liquidation, dissolution, 
termination, or substantial contraction of organizations exempt from 
taxation under section 501(a).

* * * * *
    (b) * * *
    (8) [The text of this proposed amendment to Sec.  1.6043-3(b)(8) is 
the same as the text of Sec.  1.6043-3T(b)(8) published elsewhere in 
this issue of the Federal Register.]
* * * * *
    (d) [The text of this proposed amendment to Sec.  1.6043-3(d) is 
the same as the text of Sec.  1.6043-3T(d) published elsewhere in this 
issue of the Federal Register.]
    (e) [The text of this proposed amendment to Sec.  1.6043-3(e) is 
the same as the text of Sec.  1.6043-3T(e)(1) and (e)(2) published 
elsewhere in this issue of the Federal Register.]

 Linda E. Stiff,
Deputy Commissioner for Services and Enforcement.
[FR Doc. E8-20556 Filed 9-8-08; 8:45 am]
BILLING CODE 4830-01-P