[Federal Register Volume 81, Number 38 (Friday, February 26, 2016)]
[Rules and Regulations]
[Pages 9766-9768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-04310]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[TD 9754]
RIN 1545-BL59


Disclosures of Return Information Reflected on Returns to 
Officers and Employees of the Department of Commerce for Certain 
Statistical Purposes and Related Activities

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations and removal of temporary regulations.

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

SUMMARY: This document contains final regulations that authorize the 
disclosure of certain items of return information to the Bureau of the 
Census (Bureau) in conformance with section 6103(j)(1) of the Internal 
Revenue Code (Code). These regulations finalize temporary regulations 
that were made pursuant to a request from the Secretary of Commerce. 
These regulations require no action by taxpayers and have no effect on 
their tax liabilities. Thus, no taxpayers are likely to be affected by 
the disclosures authorized by this guidance.

DATES: Effective Date: These regulations are effective on February 26, 
2016.
    Applicability Date: For dates of applicability, see Sec.  
301.6103(j)(1)-1(e).

FOR FURTHER INFORMATION CONTACT: William Rowe, (202) 317-5093 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION: 

Background and Explanation of Provisions

    This document contains amendments to 26 CFR part 301. Section 
6103(j)(1)(A) authorizes the Secretary of Treasury to

[[Page 9767]]

furnish, upon written request by the Secretary of Commerce, such 
returns or return information as the Secretary of Treasury may 
prescribe by regulation to officers and employees of the Bureau for the 
purpose of, but only to the extent necessary in, the structuring of 
censuses and conducting related statistical activities authorized by 
law. Section 301.6103(j)(1)-1 of the existing 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.
    By letter dated May 10, 2013, the Secretary of Commerce requested 
that additional items of return information be disclosed to the Bureau 
for purposes of structuring a census that costs less per housing unit 
and still maintains high quality results. A major cost in previous 
decennial censuses was the high number of follow-up, in-person attempts 
to collect information from housing units that did not return a 
completed census form. The Bureau intends to conduct research and 
testing for the next decennial census using administrative data from 
federal agencies, state agencies, and commercial vendors to determine 
whether the number of non-response follow-up visits can be reduced 
through the strategic reuse of this data. Specifically, the Bureau aims 
to achieve the following research initiatives: (1) Validating and 
enhancing the Master Address File; (2) Designing and assigning 
resources to carry out the next decennial census; (3) Un-duplicating 
public, private, and census lists; and (4) Imputing missing data. All 
administrative data from the above sources, including return 
information, will be integrated into the Bureau's data system that is 
used for the next decennial census and housing counts and will be done 
in a manner such that the source (for example, commercial vendor, IRS, 
or Social Security Administration) will not be associated with any data 
element in the final decennial person-level census records.
    On July 15, 2014, a temporary regulation (TD 9677) was published in 
the Federal Register (79 FR 41132). The text of the temporary 
regulations also serves as the text of proposed regulations set forth 
in a notice of proposed rulemaking (REG-120756-13) published in the 
Federal Register for the same day (79 FR 41152). No public hearing was 
requested or held. Two comments responding to the notice of proposed 
rulemaking were received. After consideration of these comments, the 
proposed regulations are adopted by this Treasury decision, and the 
corresponding temporary regulations are removed.
    The temporary regulations authorized disclosure of additional items 
of return information from the Form 1040, ``U.S. Individual Income Tax 
Return'', and disclosure of items from the Form 1098, ``Mortgage 
Interest Statement''. Specifically, Sec.  301.6103(j)(1)-1T of the 
temporary regulations authorizes the disclosure of the following 
additional items of return information from Forms 1040: (1) Electronic 
Filing System Indicator; (2) Return Processing Indicator; and (3) Paid 
Preparer Code. Section 301.6103(j)(1)-1T authorizes the disclosure of 
the following items of return information from Form 1098: (1) Payee/
Payer/Employee Taxpayer Identification Number; (2) Payee/Payer/Employee 
Name (First, Middle, Last, Suffix); (3) Street Address; (4) City; (5) 
State; (6) ZIP Code (9 digit); (7) Posting Cycle Week; (8) Posting 
Cycle Year; and (9) Document Code. These temporary regulations apply to 
disclosures to the Bureau of the Census made on or after July 15, 2014, 
and expire on or before July 14, 2017.
    Both comments opposed publication of the regulations and questioned 
the underlying authority for the IRS to disclose federal tax return 
information. Contrary to the views expressed in these comments, section 
6103(j)(1) specifically authorizes the IRS to disclose returns or 
return information to the Bureau of the Census for the purpose of, but 
only to the extent necessary in, the structuring of censuses and 
national economic accounts and conducting related statistical 
activities authorized by law. The final regulations under Sec.  
301.6103(j)(1)-1 are being issued under the authority of section 
6103(j)(1). Accordingly, the recommendation of both commentators that 
the regulations not be published has not been adopted.

Special Analyses

    Certain IRS regulations, including this one, are exempt from the 
requirements of Executive Order 12866, as supplemented and reaffirmed 
by Executive Order 13563. 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 to 
these regulations. In addition, 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. Accordingly, a regulatory 
flexibility analysis is not required under the Regulatory Flexibility 
Act (5 U.S.C. chapter 6). Pursuant to section 7805(f) of the Internal 
Revenue Code, the Notice of Proposed Rulemaking preceding this 
regulation was submitted to the Chief Counsel for Advocacy of the Small 
Business Administration for comment on its impact on small businesses.

Drafting Information

    The principal author of these final regulations is William Rowe, 
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.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR part 301 is amended as follows:

PART 301--PROCEDURE AND ADMINISTRATION

0
Paragraph 1. The authority citation for part 301 continues to read in 
part as follows:

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


0
Par. 2. Section 301.6103(j)(1)-1 is amended by adding paragraphs 
(b)(1)(xviii) through (xx) and (b)(7) and revising paragraph (e) to 
read as follows:


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

* * * * *
    (b) * * *
    (1) * * *
    (xviii) Electronic Filing System Indicator.
    (xix) Return Processing Indicator.
    (xx) Paid Preparer Code.
* * * * *
    (7) Officers or employees of the Internal Revenue Service will 
disclose the following return information reflected on Form 1098 
``Mortgage Interest Statement'' 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 statistics programs, censuses, and 
surveys--
    (i) Payee/Payer/Employee Taxpayer Identification Number;
    (ii) Payee/Payer/Employee Name (First, Middle, Last, Suffix);
    (iii) Street Address;
    (iv) City;
    (v) State;

[[Page 9768]]

    (vi) ZIP Code (9 digit);
    (vii) Posting Cycle Week;
    (viii) Posting Cycle Year; and
    (ix) Document Code.
* * * * *
    (e) Effective/applicability date. Paragraphs (b)(1)(xviii) through 
(xx) and (b)(7) of this section apply to disclosures to the Bureau of 
the Census made on or after July 15, 2014. For rules that apply to 
disclosures to the Bureau of the Census before that date, see 26 CFR 
301.6103(j)(1)-1 (revised as of April 1, 2014).


Sec.  301.6103(j)(1)-1T  [Removed]

0
Par. 3. Section 301.6103(j)(1)-1T is removed.

John Dalrymple,
Deputy Commissioner for Services and Enforcement.
    Approved: January 22, 2016.
Mark J. Mazur,
Assistant Secretary of the Treasury.
[FR Doc. 2016-04310 Filed 2-24-16; 4:15 pm]
BILLING CODE 4830-01-P