Final_Regulation 105344-01

Federal Register / Vol. 68, No. 13 / Tuesday, January 21, 2003 / Rules and Regulations
provided by section 6103(l)(1)(A) or
(l)(5) may disclose such information to
officers and employees of the Bureau of
Economic Analysis for necessary
purposes described in paragraph (c)(1)
of this section:
(i) From Form SS–4—Principal
industrial activity and geographic codes.
(ii) From an employment tax return—
(A) Total compensation reported; and
(B) Taxable wages paid for purposes
of chapter 21 to each employee.
(d) Procedures and restrictions.
Disclosure of return information
reflected on returns by officers or
employees of the Internal Revenue
Service or the Social Security
Administration as provided by
paragraphs (b) and (c) of this section
will be made only upon written request
to the Commissioner of Internal
Revenue by the Secretary of Commerce
describing—
(1) The particular return information
reflected on returns to be disclosed;
(2) The taxable period or date to
which such return information reflected
on returns relates; and
(3)(i) The particular purpose for
which the return information reflected
on returns is to be used, and designating
by name and title the officers and
employees of the Bureau of the Census
or the Bureau of Economic Analysis to
whom such disclosure is authorized.
(ii) No such officer or employee to
whom return information reflected on
returns is disclosed pursuant to the
provisions of paragraph (b) or (c) of this
section shall disclose such information
to any person, other than the taxpayer
to whom such return information
reflected on returns relates or other
officers or employees of such bureau
whose duties or responsibilities require
such disclosure for a purpose described
in paragraph (b) or (c) of this section,
except in a form which cannot be
associated with, or otherwise identify,
directly or indirectly, a particular
taxpayer. If the Internal Revenue Service
determines that the Bureau of the
Census or the Bureau of Economic
Analysis, or any officer or employee
thereof, has failed to, or does not, satisfy
the requirements of section 6103(p)(4) of
the Internal Revenue Code or
regulations or published procedures
thereunder (see § 601.601(d)(2) of this
chapter), the Internal Revenue Service
may take such actions as are deemed
necessary to ensure that such
requirements are or will be satisfied,
including suspension of disclosures of
return information reflected on returns
otherwise authorized by section 6103
(j)(1) and paragraph (b) or (c) of this
section, until the Internal Revenue
Service determines that such

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requirements have been or will be
satisfied.
(e) Effective date. This section is
applicable to the Bureau of the Census
on January 21, 2003.
§ 301.6103(j)(1)–1T

[Removed]

Par. 3. Section 301.6103(j)(1)–1T is
removed.
David A. Mader,
Assistant Deputy Commissioner of Internal
Revenue.
Approved: December 20, 2002.
Pamela F. Olson,
Assistant Secretary of the Treasury (Tax
Policy).
[FR Doc. 03–871 Filed 1–17–03; 8:45 am]
BILLING CODE 4830–01–P

DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 301 and 602
[TD 9036]
RIN 1545–AY77

Disclosure of Returns and Return
Information by Other Agencies
AGENCY: Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations and removal of
temporary regulations.
SUMMARY: This document contains a
final regulation relating to the
disclosure of returns and return
information by Federal, state and local
agencies other than the IRS. The final
regulation permits the IRS to authorize
agencies with access to returns and
return information under section 6103
of the Internal Revenue Code (Code) to
redisclose returns and return
information, with the approval of the
Commissioner of Internal Revenue
(Commissioner), to any authorized
recipient set forth in section 6103,
subject to the same conditions and
restrictions, and for the same purposes,
as if the recipient had received the
information from the IRS directly.
DATES: This regulation is effective
January 21, 2003.
FOR FURTHER INFORMATION CONTACT: Julie
C. Schwartz, 202–622–4570 (not a tollfree number).
SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act
The collection of information
contained in this final regulation has
been reviewed and approved by the
Office of Management and Budget in
accordance with the Paperwork

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2695

Reduction Act of 1995 (44 U.S.C.
4507(d)) under control number 1545–
1757. The collection of information in
this regulation is in § 301.6103(p)(2)(B)–
1. This information is required for the
Commissioner to authorize the
disclosure of returns and return
information from agencies with access
to returns and return information under
section 6103 to other authorized
recipients of returns and return
information in accordance with section
6103.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless the collection of information
displays a valid OMB control number.
The estimated annual burden per
respondent varies from one half-hour to
two hours, depending on individual
circumstances, with an estimated
average of one hour.
Comments concerning the accuracy of
this burden estimate and suggestions for
reducing this burden should be sent to
the Internal Revenue Service, Attn: IRS
Reports Clearance Officer,
W:CAR:MP:FP:S Washington, DC 20224,
and 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.
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 return information are
confidential, as required by 26 U.S.C.
6103.
Background
This document contains amendments
to 26 CFR parts 301 and 602. On
December 13, 2001, a notice of proposed
rulemaking (REG–105344–01) was
published in the Federal Register (66
FR 64386). No comments were received
from the public in response to the notice
of proposed rulemaking. No public
hearing was requested or held. The
proposed regulations are adopted by
this Treasury decision.
Explanation of Provisions
The final regulation expands the
number of agencies that may redisclose
returns and return information if
authorized by the Commissioner to any
Federal, state or local agency that
receives such information under section
6103. Similarly, it expands the universe
of authorized recipients of returns and
return information pursuant to this
redisclosure authority to any recipient
authorized to receive returns and return
information in accordance with section

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2696

Federal Register / Vol. 68, No. 13 / Tuesday, January 21, 2003 / Rules and Regulations

6103. All redisclosures by agencies
pursuant to this regulation will be made
subject to the same conditions,
restrictions, safeguards, recordkeeping
requirements, and civil and criminal
penalties that would apply if the
disclosure were made by the IRS.
Federal, state and local agencies making
disclosures of return information under
the final regulation will continue to
provide to the IRS certain information
regarding disclosures made pursuant to
this authority, in order for the IRS to
fulfill its reporting requirements under
section 6103(p).
Special Analyses
It has been determined that this
Treasury decision 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
to these regulations. Pursuant to the
Regulatory Flexibility Act (5 U.S.C.
chapter 6), it is hereby certified that this
final rule will not have a significant
economic impact on a substantial
number of small entities. The disclosure
authorized by the rule is voluntary on
the part of small governmental
jurisdictions and, as discussed earlier in
this preamble, the burden associated
with requesting authorization from the
Commissioner to disclose returns and
return information, and to maintain the
necessary records concerning the
disclosure of return information, is
minimal. Accordingly, a Regulatory
Flexibility Analysis is not required.
Pursuant to section 7805(f) of the Code,
the proposed regulations preceding
these regulations were submitted to the
Chief Counsel of the Small Business
Administration for comment on their
impact on small businesses.
Drafting Information
The principal author of these
regulations is Julie C. Schwartz, Office
of the Associate Chief Counsel
(Procedure and Administration),
Disclosure and Privacy Law Division.
List of Subjects
26 CFR Part 301
Employment taxes, Estate taxes,
Excise taxes, Gift taxes, Income taxes,
Penalties, Reporting and Recordkeeping
requirements.
26 CFR Part 602
Reporting and recordkeeping
requirements.

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Amendments to the Regulations
Accordingly, 26 CFR parts 301 and
602 are 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(p)(2)(B)-1 also
issued under 26 U.S.C. 6103(p)(2);
* * *
Par. 2. Section 301.6103(p)(2)(B)–1 is
added to read as follows:
§ 301.6103(p)(2)(B)–1 Disclosure of
Returns and Return Information by Other
Agencies.

(a) General rule. Subject to the
requirements of paragraphs (b), (c), and
(d) of this section, returns or return
information that have been obtained by
a Federal, state or local agency, or its
agents or contractors, in accordance
with section 6103 (the first recipient)
may be disclosed by the first recipient
to another recipient authorized to
receive such returns or return
information under section 6103 (the
second recipient).
(b) Approval by Commissioner. A
disclosure described in paragraph (a) of
this section may be made if the
Commissioner of Internal Revenue (the
Commissioner) determines, after
receiving a written request under this
section, that such returns or return
information are more readily available
from the first recipient than from the
Internal Revenue Service (IRS). The
disclosure authorization by the
Commissioner shall be directed to the
head of the first recipient and may
contain such conditions or restrictions
as the Commissioner may prescribe. The
disclosure authorization may be revoked
by the Commissioner at any time.
(c) Requirements and restrictions. The
second recipient may receive only
returns or return information as
authorized by the provision of section
6103 applicable to such second
recipient. Any returns or return
information disclosed may be used by
the second recipient only for a purpose
authorized by and subject to any
conditions imposed by section 6103 and
the regulations thereunder, including, if
applicable, safeguards imposed by
section 6103(p)(4).
(d) Records and reports of disclosure.
The first recipient shall maintain to the
satisfaction of the IRS a permanent
system of standardized records
regarding such disclosure authorization
described in paragraph (a) of this

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section and any disclosure of returns
and return information made pursuant
to such authorization, and shall provide
such information as prescribed by the
Commissioner in order to enable the IRS
to comply with its obligations under
section 6103(p)(3) to keep accountings
for disclosures and to make annual
reports of disclosures to the Joint
Committee on Taxation. The
information required for reports to the
Joint Committee on Taxation must be
provided within 30 days after the close
of each calendar year. The requirements
of this paragraph do not apply to the
disclosure of returns and return
information as provided by paragraph
(a) of this section which, had such
disclosures been made directly by the
IRS, would not have been subject to the
recordkeeping requirements imposed by
section 6103(p)(3)(A).
(e) Effective date. This section is
applicable on January 21, 2003.
§ 301.6103(p)(2)(B)–1T

[Removed]

Par. 3. Section 301.6103(p)(2)(B)–1T
is removed.
PART 602—OMB CONTROL NUMBERS
UNDER THE PAPERWORK
REDUCTION ACT
Par. 4. The authority citation for part
602 continues to read as follows:
Authority: 26 U.S.C. 7805.

Par. 5. In § 602.101, paragraph (b) is
amended by removing the entry
‘‘301.6103(p)(2)(B)–1T’’ from the table
and adding the entry
‘‘301.6103(p)(2)(B)–1’’ in numerical
order to read as follows:
§ 602.101

*

OMB Control numbers.

*
*
(b) * * *

*

*

CFR part or section where
identified and described

*
*
*
301.6103(p)(2)(B)–1 .............
*

*

*

Current OMB
control No.

*

*

*
1545–1757
*

David A. Mader,
Assistant Deputy Commissioner of Internal
Revenue.
Approved: December 20, 2002.
Pamela F. Olson,
Assistant Secretary (Tax Policy), Department
of the Treasury.
[FR Doc. 03–1158 Filed 1–17–03; 8:45 am]
BILLING CODE 4830–01–P

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