[Federal Register Volume 86, Number 124 (Thursday, July 1, 2021)]
[Rules and Regulations]
[Pages 34957-34958]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-14050]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 70

[Docket No. TTB-2021-0004; T.D. TTB-169]
RIN 1513-AC56


Removal of Obsolete Regulation Regarding Rewards for Information 
Relating to Violations of Tax Laws Administered by the Alcohol and 
Tobacco Tax and Trade Bureau

AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION: Final rule; Treasury decision.

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SUMMARY: In this final rule, the Alcohol and Tobacco Tax and Trade 
Bureau (TTB) is removing obsolete regulatory provisions related to 
whistleblower rewards. Under the Internal Revenue Code, individuals who 
provide information to the Treasury Department regarding underpayment 
of taxes or violations of internal revenue laws may file claims for 
monetary ``whistleblower'' awards. Recent changes to the Code have made 
the TTB regulation regarding whistleblower rewards obsolete, and, 
therefore, TTB is removing that provision from its regulations. TTB has 
signed a memorandum of understanding with the Internal Revenue Service, 
under which the Internal Revenue Service will process whistleblower 
award claims for information regarding underpayment of taxes collected 
by TTB or violations of the internal revenue laws administered by TTB.

DATES: This final rule is effective on July 1, 2021.

FOR FURTHER INFORMATION CONTACT: Michael Hoover, Regulations and 
Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G 
Street NW, Box 12, Washington, DC 20005; 202-453-1039, ext. 135.

SUPPLEMENTARY INFORMATION:

Background

    The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the 
following provisions of the Internal Revenue Code of 1986, as amended 
(IRC, 26 U.S.C.): Chapter 51 (imposing Federal excise tax on distilled 
spirits, wine, and beer), chapter 52 (imposing Federal excise tax on 
tobacco products and cigarette papers and tubes), and sections 4181-
4182 (imposing Federal excise tax on firearms and ammunition). TTB 
administers these provisions pursuant to section 1111(d) of the 
Homeland Security Act of 2002, as codified at 6 U.S.C. 531(d). The 
Secretary of the Treasury (the Secretary) has delegated related IRC 
administrative and enforcement authorities to TTB through Treasury 
Order 120-01. The Secretary also has delegated administration and 
enforcement of other internal revenue laws to the Internal Revenue 
Service under Treasury Order 150-10.
    Under section 7623 of the IRC (26 U.S.C. 7623), individuals who 
provide information to the Department of the Treasury that is used to 
detect underpayments of Federal taxes or violations of internal revenue 
laws may be eligible for monetary ``whistleblower'' awards under 
regulations issued by the Secretary.
    TTB had previously issued a whistleblower reward regulation at 27 
CFR 70.41. However, amendments to the Internal Revenue Code have made 
this regulation obsolete. See the amendments made to 26 U.S.C. 7623 by 
section 406 of the Tax Relief and Health Care Act of 2006 (Pub L. 109-
432), section 41108 of the Balanced Budget Act of 2018 (Pub. L. 115-
123), and section 1405 of the Taxpayer First Act (Pub. L. 116-25). As a 
result of these statutory amendments, described more fully below, Sec.  
70.41 has become obsolete, and TTB is removing that section from its 
regulations in 27 CFR part 70, Procedure and Administration.
    Section 406 of the Tax Relief and Health Care Act of 2006 
significantly revised 26 U.S.C. 7623 and required the Treasury 
Department to establish a ``Whistleblower Office'' within the Internal 
Revenue Service (IRS) to analyze information received by whistleblower 
claimants and determine the amount of any award under 26 U.S.C. 
7623(b). The IRS Whistleblower Office processes claims pertaining to 
underpayments of tax that are owed to the IRS or violations of internal 
revenue laws administered by the IRS that may be eligible for an award 
under 26 U.S.C. 7623(a) and (b). See IRS Delegation Order 25-07 
(delegation to the Whistleblower Office of the authority to approve IRS 
discretionary awards under section 7623(a)). Section 41108 of the 
Balanced Budget Act of 2018 then clarified the definition of 
``collected proceeds'' from which the Treasury Department may make 
awards to whistleblowers. The Taxpayer First Act further amended 26 
U.S.C. 7623 by establishing a notification process for whistleblowers 
and adding protections for whistleblowers against retaliation.
    To modernize the process for accepting, processing, and rewarding 
whistleblowers and to give effect to the statutory changes, TTB has 
entered into

[[Page 34958]]

a memorandum of understanding (MOU) with the IRS Whistleblower Office. 
As set forth in that MOU, the IRS Whistleblower Office will accept 
claims from whistleblowers via IRS Form 211, Application for Award for 
Original Information, and refer such information to TTB when 
applicable. TTB will determine if the information is actionable after 
any investigation undertaken, collect proceeds, and provide 
information, including an evaluation of the whistleblower's 
contributions, to the IRS Whistleblower Office. The IRS Whistleblower 
Office will process all TTB-related whistleblower award claims filed 
under 26 U.S.C. 7623 under the IRS regulations and procedures. Under 
the MOU, the IRS will consider references to the ``Internal Revenue 
Service'' or ``IRS'' in the relevant IRS regulations and procedures to 
include TTB personnel and TTB actions when appropriate.
    Updated information on the whistleblower program, including how and 
where to file such claims with the IRS Whistleblower Office is 
available on the TTB website at www.ttb.gov.

Regulatory Analysis and Notices

Executive Order 12866

    It has been determined that this notice is not a significant 
regulatory action as defined in Executive Order 12866 of September 30, 
1993. Therefore, a regulatory assessment is not necessary.

Inapplicability of Prior Notice and Public Comment Procedures and 
Delayed Effective Date

    TTB is issuing this final rule without prior notice and opportunity 
for public comment pursuant to authority under section 4(a) of the 
Administrative Procedure Act, as amended (APA) (5 U.S.C. 553(b)(B)). 
That provision authorizes an agency to issue a rule without prior 
notice when the agency for good cause finds that those procedures are 
``impracticable, unnecessary, or contrary to the public interest.'' In 
this final rule, TTB is removing a regulatory provision that has become 
obsolete due to statutory changes, so TTB finds that prior notice is 
unnecessary. TTB also finds that it is unnecessary to provide a delayed 
effective date for revoking its obsolete regulation under section 4(c) 
of the APA (5 U.S.C. 553(d)); this rule is therefore effective 
immediately.

Regulatory Flexibility Act

    Because no notice of proposed rulemaking is required, the 
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do 
not apply. Pursuant to 26 U.S.C. 7805(f), TTB submitted this final rule 
to the Chief Counsel for Advocacy of the Small Business Administration 
(SBA) for comment on the impact of the regulations on small businesses. 
TTB received no comments from SBA in response to this final rule.

Paperwork Reduction Act

    This final rule imposes no new collection of information. The IRS 
will account for any burden associated with additional respondents to 
its information collection, IRS Form 211, Application for Reward for 
Original Information (20,000 annual respondents and 15,000 burden 
hours), which has been previously reviewed and approved by OMB and 
assigned control number 1545-0409.

Drafting Information

    Michael Hoover of the Regulations and Rulings Division drafted this 
document with the assistance of other Alcohol and Tobacco Tax and Trade 
Bureau personnel.

List of Subjects in 27 CFR Part 70

    Administrative practice and procedure, Claims, Excise taxes, 
Freedom of information, Law enforcement, Penalties, Reporting and 
recordkeeping requirements, Surety bonds.

Amendments to the Regulations

    For the reasons discussed in the preamble, TTB is amending 27 CFR 
chapter I, part 70 as follows:

PART 70--PROCEDURE AND ADMINISTRATION

0
1. The authority citation for part 70 continues to read as follows:

    Authority:  5 U.S.C. 301 and 552; 26 U.S.C. 4181, 4182, 5123, 
5203, 5207, 5275, 5367, 5415, 5504, 5555, 5684(a), 5741, 5761(b), 
5802, 6020, 6021, 6064, 6102, 6155, 6159, 6201, 6203, 6204, 6301, 
6303, 6311, 6313, 6314, 6321, 6323, 6325, 6326, 6331-6343, 6401-
6404, 6407, 6416, 6423, 6501-6503, 6511, 6513, 6514, 6532, 6601, 
6602, 6611, 6621, 6622, 6651, 6653, 6656-6658, 6665, 6671, 6672, 
6701, 6723, 6801, 6862, 6863, 6901, 7011, 7101, 7102, 7121, 7122, 
7207, 7209, 7214, 7304, 7401, 7403, 7406, 7423, 7424, 7425, 7426, 
7429, 7430, 7432, 7502, 7503, 7505, 7506, 7513, 7601-7606, 7608-
7610, 7622, 7623, 7653, 7805.


Sec.  70.41   [Removed and Reserved]

0
2. Section 70.41 is removed and reserved.

    Signed: June 21, 2021.
Mary G. Ryan,
Administrator.

    Approved: June 21, 2021.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade and Tariff Policy).
[FR Doc. 2021-14050 Filed 6-30-21; 8:45 am]
BILLING CODE 4810-31-P