Final Regulation

- redetaf Regisier
50484

/

Val. 47. No.
- 218

hlondap, November 8, 1982

1 Rules

and RepuIstions
I

26 CFR Port 301

,

lnlpectlon al AppUeations tor Tan
E ~ a m p l k n8nd App!:xtfam far
Osttrmlnatlon Let!ors for Pension and
0 t h Plan8
~
mtncf: Internal Revenue Sendcc.
,
Trtr~ury.

henow Final regulations.
--.
.SUMMAW:

-

Thu dneunent contains final

regulationr relating to public inspection
at applications for iax exrmpti~ln.
applications !or determination d the

qualification of pension and o:t,cr plans,
and ocher reb ted mrrttt;?l. Change! to
the applicable law were made by the
Employse Retirement beomc Secwlty
Act of 1874 and tbe Tax Reium Act of
1978.The regulations provide guidancc
to the public on how doecmenu may be
obtained lor inspeclion, and would
affect aU persons wishing to inspccl tht
ducumento, a8 well as Itrobe ~obmitting
them.
DAE
The regulatiom arc ef!ectlve for #pplicatianr for tax exempuon filed
after k t o b w 31,lark and epp1iutici.g
Im dctcmtnetion letttm far pension mid
oihtr P J ~ R Dfiltd nltrr September 2,1874.
FOR R l R M E A tMFOIIMhT9OH cornam

Pmul R Aecettura 01the Employee Plans
and Esempi Orpanlzntionr Division..
Omce ofthe Chief Counsel, hternal

Revenue Sen-ict. 1111 Constitution
Avenw, N.W, W a s h i q t m D.C. 2E14
(httentio~;:CC:LR ( ~ D W - H ~
not
. a

t o l l - h e number).

r r.

Federal Register / Vol. 47, No- 216

1 Mondav.

November 8. 1982

parlicipani (or other person) may be
am~mincd
ir not to be open 10 public
inspadioh (However, nll other ~nlormalionin

$U~P~YEKTACIY
LUFORYAROM:

1 Rules end Regularions

50485

inspection gave adequate notice l o t h e
spplicantr that comptnsatinn ranges
to be dirclostd, nu$,
gppliCable date
proposed
regulati~nmremains unchanged in thc
final mgulationa.

Bockground
these documents i s lo be rvailablt to the
On December 30. l9803 he
public. including inIormatipn such as the
RegLs~trpubl~shedptoposed
numbera of individuals e o n n d end not
amendments lo !he Renuletions on
covered in a plan, listed by con~ensetion
One comment also ~tairncdthat --h o-e- ~. .d u t eand ~drninkratian(26 CFR
range.)
ruler srr to Lnabl; plan
---pariiaip&ntland kneficiarir~to obtain the
compensation ranges may be trade
Part 3af) mder dection 6104(a)(l) of the
full kzipnnatian needed to cnfom their plan
secret infomelion. After careful
~~~~~~l
R~~~~~~ code of 19% (45 f~
right#, pwurnt to tht new rulea c~teblirhcd cons~deration.i t war determined that
857881. The amendments ware pmpored
In bill.*nd rra
compensation ranges, except under
to conform the regulations under section Eonndmti,llty of i~ormltion
the
extr~ordinarycircums~ances,cannot be
6WalIll(Al to section 1201(d) of
financial statul of ~pedfie
indiciduab,
considered pade secret material. The
Tax Rtfom Act of Is76 (90S t n t 16671,
H.R.Rep. No. 9-7,
g3rd Cong., 2d
lrade secret rection of the proposed
and the regulations under reclfon
St56.162 [1974], 1 g 7 W (supp.) C.B. 397.
regda tions section 301.61D4[a)-5] is
61~ ( s ) , l(8).
L (C] and [Dlto mectian
Tbt above quote rpecificsl1y etatea
equally applicable to compensation
lozzlg) DI
the Employee Retirement
eongrealional intent that compensation
ranger, and serve0 an 4 proleetion for an
Income Sceurity ~ c oft 1974 (ERISA] [#
runges are not consided confidential
appiicact'r trade secret information.
Stat. €40).
Apublichearingwrrnotrrqutsted~ ~ m ~ ~ n ~ a ~ o n ~ f o ~ a ~ o n w i ~ i n t h e
meaning of section BlW{a)[l)(C]. and
the regulmtionr. After carthl
am to be made available 10 lhe P ~ M ~ c One comment claimed there was en
conajderatjon of nll c o m c n t a received
regarding
proposed
h e u d e t 8eCtion 6104(aJ. The above quote
inconsistency between I 301.61W (8)-1
amendments ore adopted ar revised by
'dditionah
out the
(il(21 and O 301.8104 Ief-3 (cI(4)
Congrcaaional intent in providing plan
this Treasury Decision.
regarding disclosure of letters from the
prrticipantg and beneficiaries with full
Internal Revenue Service revoking
Croup Exemption Situatioam
information to enforce their plan rights.
-favorable determination letters. The
Compen~etionranges arc an important
One comment questioned how the
wordlng ofsections BlW[a)[1)(A)and
part
of
mmny
plan
eppiicationa
and
regulations apply to requests for
6104(e)[f)(Bl are distinct from each other
allow
intemsted
partite
to
better
enforce
idonnation with respecl to an
regarding the scope of disclosure of
their plan right5 when spptopriata.
organization covered by a group
letien icrued by the Internal Revenue
Accordin~ly,
the
fmal
regulations
retain
exemptio~Ln h e m t e x t . a request for
Service. These dislinctions result in
h e provision that e~mpenrationrengcs
information with respect to any
mvocation letters regarding pension
. oganization will be treated ar a request do not constilute reclion BIW[a)[l)(C)
plans being disclosed (section
material mnd are, tbcnfore, ~vailablato
for information only on h a t
B1 WIa)[l)(BJ and section 3M.61W (a)9
the public tu the extent orhemire
organization The Internal Revenue
[c)[4)) while rimitar material relating to
provided
in
&ere
reguletionm.
Service's response will provide PU
tax-txempt organizations is not
One comment an compensation
disclosable infomation relaang to the
disclosed Iseclion blOP[r)(l](A)and
organization. If the infonnation received ranges alru objttted to the retmaetivity
4 301.6104 tab1 [i](2]).B ~ t hpro\ isions
of
O
3Q1.610(
(
n
H
fbI(4).
In
addition
to
shows that the organization is a
are
retained aa proposed.
the actual lrnguagc of aection
rubordinate organization covered by a
B
~
W
~
a
l
(
l
#
C
h
l
o
e
above
quoted
group exemption, the person making the
Debition of "I~suedBy"
~ the public on
request can then proceed with a requeat Ie~islativtb i s t o put
One comment objected to
notice that ruch information would be
under these regulations for all
I
301.61M[at-3(bl
of the proposed
disclosed
b
the
public.
The
public
was
disclosable information relating to
regulations en unduly limiting the
also informed of the disclosure of
parent organization upon which b e
definition of documents "issued by" the
cornptnsaIioq mnges in the 5300 series
group exemption is based.
of epplications completed end filed with Internal Revenue Service, within the
Compcn~tionReages
meaning of aection fllM(s)[l)[B](iv).This
the lntemal Revenue Service. The
definition bar been retained since
inrtiuctiona for Forms 5300. 53m. 5303
Two comments specifically objected
Congressional intent only extended to
and 3307 specifically r!atc that "the
to tbt last aenlenct of aectian 3Ul.61M
those lettera or documents issued by the
application b open to public inspection
lak5 [b)[rJof the proposed regulations,
Internal Revenue Service to the
.
If t h e n are more than 25 participants."
T h a t sentence stated: "Furher. 4
applicant. or the applicant's
Alao. Fomr 5302 and 5310A. which
dcsuiptlon of the numbcn of
representative.
d a l e to the twenty-five highest paid
individuals covered and not covered by
PaftidpaUn8 emp)o~ets.stat? in the
a plan. ticled by cnrnpensatian range,
Plan Partidpant
upper right hand corner: 'This iorm
does no1 eonslirute confidcnti4l
(Schedule]
is
N
O
T
open
to
Public
compenss~ioniniorrna tion:' Section
One comment objected to
Inspcctiorz" The inrrructianr to Form
3M.6104 (0)-5 (b)(lj i~ intended Iu
I 3 a l . B f M l a ~ ( c of
) the proposed
5302 rpecifically refer to section
describe that inlormetion which
regulations which provided that an
~~DIIII(~I(C)
8 8 the nouree of the
constitute, confidential comptnsation
administrator. executoi: or t v s t e e of the
nondiscloaurc of the information
iniorrr.ation within the meaning OI
estate of a deceased plan participant
included in Farm 5301. The statement in
automatically qualified as 8 plan
section 61(W[a)[l]Ic).
the Howe Repart a n d the statement in
The following three sentences a n
participant [or purpose6 of inspecting
thc In:tmetiohr to Forms 5300, 5301.
contained in the House Report on
material relating to a plan with fewer
5303 and 5307 ]in which cornpensati~n
ERISA. snd relate lo section 8101 in
than 29 prflicipanls. T h ~ sarction has
range ~nformationis required in cerrain
general and section 6lW(a)(l](C]in
been rev~sedto include as plan
circumstancesl, aa well as the rgecific
narticular:
partic~pantr,lor purposes of inspecting
r
-statement in F o n s 5302 and $ 3 1 0 ~that
material relating to a plan with fewer
However, undpr thc bill intomnation
it in contrast is not open to public
than 26 partieipank only those
contained in thest paperr and documcnU
-

h m ch~chthe cornpensfition or my

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Federal Register

Vol. 47.

No. Zl6 I Mondav. November a 1982 1 Rules and Regulations

exemption upon which Lhc
application for lax exempbon include#
determination is b s t d . together with
the form and aH documents and
any supporting d ~ m m e n t si,s open t o
statements the lnternal Revenue Service
ent;tled to nceire future benefits under
pubIic inspection. Some spplications for requiru to be filed with he form
thr pian in their official capmtity.
tax exemption have been deslroyed and .-14 hb pre-bd aPp,ja~,m jorm
Trade S t m t s
t h e d o n arc not available lor
no form i s prtscribcd for en
inspection. For purposes oI dr?t m i n i n g .ogenirrtion.rappjicB tot tax
With regard l o material identified in
the ayailability for puMic inspection. a
extmptiop,
applicetion for tax
5 301.61M(a)-5. addilioer of ~ p e G c
claim for tax exemption filed to
lime deadlines have been made for
extmption tndudes:
reatabikh exempt mtetuu s f t w dmial
organiraliom 10respond to a
1'1
application letter and a cow of
determinstion by \he Commissioner that thereof under the provision* of lection
fht
. r t i c l ~ l of incorporation, declaration
503
or
[
a
s
in
enEd
on
~~~~~b~~
n,
iurormation which an organization
of trus~,or other instrument of similar
sought to protect from disdodure will be 19691, or under the corresponding .
import that d e l l forth the permitted
pmvisionr
of
any
p
r
j
~
r
mvenur
low,
discloaeb
powers or activities or he oganiration.
considered an appliation for tax
Non-AppE~eMlityof Extmtivs Ordsr
Iii)The byIaw~or other code 01
exemption
12291
Ib] Leuem or d ~ e u m u r bisfued by the regda~ona.
In&
Revenue S e r v i a with nspeci
The Treasury Department has
(iii] The latest financial stalemen!
to on a~~ljmfiofi
bflu
If
determined that this regulation is not
showing u s e ts, lialilibes, rtecjpto and
subjtei to review under Executive Order an applicafim h tax txernpLion u filed
djsbumemenh,
with the Internal Revenue Semice alter
lZZgI or the Treasury and 0(iv) Stalementn lhowing the character
implementation of the Order dated April Octoberal. 1076, and
to public
,I the
tfrCpur;lore for
undu
VPP'
la]
Of
thh
ZB,1862
which
it
war
orgrnizrd.
itr .eual
section. then any letiu or document
8c'i'4iie6'
Regulatory Flcxibiiity Act
issued lo t h t applicant by the Internal
{v') Staiernentr showing sources of
Revenue Service w h d relates to the
Na general notice of proposed
income and receipk and the d:sposition
nhemaking is mquired by 5 U.S.C.553IbI application L also open to public
thereof, and whether or not any income
inspeetioh F O d~ e * relatbg 10 whtn
for interprttativt regulations.
or receipts is credited to surplus or may
letter or docurnent ia issued. ree
Accordingly, the RepuIatoq Flexibility
any private
5 301h1104(h).Letters or doeummtr 10 inure to 'cfie benect DI
Ac! (5 U.S.C. ChsprZr 66) doer not apply
shareholder or indwidual and
which thlb paragraph appliea includ~
and no regulatory Flexibi!ity Analysis i s
required for t b i ~rule. - but am not h t e d t ~ (vij Any other eta tments nr
[I)
Favorable tulingc and
docrunentr tht Inkmat Revmue Sawice
Drafting ldnrmation
dettnninalion Ietten (see
require# to be filed with the application
The printipal suthor 01 this regulation
1 601.201[n)Il!) isrued in reaponst to
le tlter.
i s Pad C.Accetturr or the Employee
applicationr Tor tax exemption.
(3) Rahibiled troncacrjom. An
(2) Technical advice memoranda [see
Plans and Exempt Organizations
applicatian for tax ezemption doer no1
Division of the Ofice of Chief Counsel,
p 6 O l ~ l I n l I i r lissuad
l
witb respect to an
iadude a ngutrt for 4 ruling as to
approved or subsequently approved.
Internal Revmue Service. Howevu,
whether o propomed transaction is a
appIication for tax exemption and
personnel from other offices of tht
prohibittd trensr chon under section 5[13.
(3)
tetiers
issued
in
response
to
an
laternal Revenue Senlice and Treasury
(el Suppomng documents dqfined For
application for W exemption that
Department. participated in developing
purposcs of thjs section, "aupporting
propose a fmding that &beorganization
!he regulations. bolh on matters of
documents", as used with mspect 10 an
i s not entitled lo be exempt Irom la& if
aulstanct and style.
application for tax exemption. means
the organization is subsequendy
Lisl of SubjectS in 26 CrR Parts
any statement or document not
cie~crminedon the basis of the
301.6104{~~1-301.E1~4(a~
deiuibed in paragraph [dl o i this
appiicaGon to be exempt from lax.
(c] Requimment cf exempt &&;us. hn
section that is s u b ~ t t e dbv an
Administrative ptaclice and
appiication for Lax exemption
organization in support of its
~rocedure.DLclosun.
supporting documents. and letters at
application. For example. a legal bricf
Adoption ot hendrncntn lo the
documents issued by the hternal
submitted in suppori of an npplica!ion
Rtgulationr
Revmue Service that relate to the
. for tax cxemption is a supporting
Accordingly. 26 ClT Part 30: B
app ticalion wiil nut be open to public
document.
amended as follows:
inspection before the organization filing
( f ) Stolemenf of exempt slotus. h
the npplica!ion i s determined. on the
addition to having !he opportunity to
PART 301-[AMENDED]
basis of the applicaticn. to be exempt
inspec! material relating to tar exempt
from taxation Zc- any taxable ye=. On
Paragraph 2. Section 301.610e-1 b
orgeniral~onr,a pcrron may request P
the othct h n d , i[ t h organize
~
tion is
removed. and h e foliowing new
statemtnt set~mgIorth the follow~ng
determined to be exempt for any tawble infomatian;
secllons art added in itr placc
year. the maleriel rx-ill nct be withheld
[I] T h e subsection and paragraph ol
5 301.6101(a)-1 Publlc lna2ctllm ol
from public inspation on the ground
section 501 (or the corresponding
maltrial rclatlng to trxtaempt
that !he organitation i~determined not
provision of any p:ior revenue law]
organlrationr
to be exempt lor any other taxable yeer.
under which an organization has been
(d) Docmznls included in Ihe term
[ a Applicu!iun ?or !ox ~xcmphbnand
detcrmined. on the basis of an
"upp/ica:ionfor tax exrmphon ': For
s s p o c i n g docu;nents. 1f the Internal
cpplicatian open to pu?.!ic ics~ection,to
purposes of this sectionRevenue Service determines that an
qualify for exemption from taxattoz, and
oppanization dcrcribcd in section 501 (c)
(I] Prescribed application !arm. 1f a
(2) Whether the organization is
form is prescribed ior an organization's
or (dl is txerzgl fmn tsxa!ion f3r any
application for tax excmptlon, Ihe
ti*able year, the appIicaiion for tax
currently hzld to be exempt.
adminismton. executors. or trustem
who am rrce~vingbenefits or are

ne