Td 9036

(TD 9036).pdf

Disclosure of Returns and Return Information by Other Agencies

TD 9036

OMB: 1545-1757

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Treasury Decisions
Copyright 2007 LexisNexis Group, All Rights Reserved
Rules and Regulations
DEPARTMENT OF THE TREASURY
Internal Revenue Service (IRS)
26 CFR Parts 301 and 602
68 FR 2695; RIN 1545-AY77
Disclosure of Returns and Return Information by Other Agencies
T.D. 9036
DATE: January 21, 2003
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 toll-free 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 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.

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T.D. 9036

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 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.

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T.D. 9036

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.
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 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

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T.D. 9036

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

Current OMB control No.

where identified and
described
*****
301.6103(p)(2)(B)-1

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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