Td 9679

REV. RUL. 2014–19 TABLE 2
Adjusted AFR for August 2014

Short-term adjusted AFR
Mid-term adjusted AFR
Long-term adjusted AFR

Annual
.36%
1.38%
3.05%

Period for Compounding
Semiannual
.36%
1.38%
3.03%

Quarterly
.36%
1.38%
3.02%

Monthly
.36%
1.38%
3.01%

REV. RUL. 2014–19 TABLE 3
Rates Under Section 382 for August 2014
Adjusted federal long-term rate for the current month
Long-term tax-exempt rate for ownership changes during the current month (the highest
of the adjusted federal long-term rates for the current month and the prior two months.)

3.05%
3.14%

REV. RUL. 2014–19 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for August 2014
Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after
July 30, 2008, with respect to housing credit dollar amount allocations made before January 1, 2014, shall not be less than
9%.
Appropriate percentage for the 70% present value low-income housing credit
7.57%
Appropriate percentage for the 30% present value low-income housing credit
3.25%

REV. RUL. 2014–19 TABLE 5
Rate Under Section 7520 for August 2014
Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years,
or a remainder or reversionary interest

Section 1288.—Treatment
of Original Issue Discount
on Tax-Exempt Obligations
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month
of August 2014. See Rev. Rul. 2014 –19, page 266.

Section 6039.—Returns
Required in Connection
with Certain Options
26 CFR 1.6039E–1: Provide guidance to certain
individuals about the information that must be included with their passport applications.

TD 9679

Bulletin No. 2014 –32

DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 301

Information Reporting by
Passport Applicants
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document contains final regulations that provide information
reporting rules for certain passport applicants. These final regulations apply to certain individuals applying for passports (including renewals) and provide guidance to
such individuals about the information

267

2.2%

that must be included with their passport
applications.
DATES: Effective Date: These regulations are effective on July 18, 2014.
Applicability Date: For dates of applicability, see § 301.6039E–1(d).
FOR FURTHER INFORMATION
CONTACT: Rosy Lor at (202) 317-6933
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
On January 26, 2012, the Internal Revenue Service (IRS) and the Department of
Treasury (Treasury Department) published in the Federal Register (77 FR
3964) a notice of proposed rulemaking
(REG–208274 – 86) (the proposed regula-

August 04, 2014

tions) that proposed amendments to 26
CFR part 301 under section 6039E of the
Internal Revenue Code (Code). Section
6039E provides rules concerning information reporting by U.S. passport and permanent resident applicants, and requires
specified federal agencies to provide certain information to the IRS.
The proposed regulations set forth the
information a U.S. citizen applying for a
U.S. passport (passport applicant), other
than a citizen who applies for an official
passport, diplomatic passport, or passport
for use on other official U.S. government
business, must provide pursuant to section
6039E. They do not address information
reporting by permanent resident applicants. The proposed regulations also withdrew a prior notice of proposed rulemaking (REG–208274 – 86, 1993–1 CB 822)
published in the Federal Register (57 FR
61373) on December 24, 1992. The proposed regulations are proposed to be effective for applications submitted after the
date final regulations are published in the
Federal Register.
Comments were received on the proposed regulations. No public hearing was
requested or held. After consideration of
the comments, this Treasury decision
adopts the proposed regulations with minor revisions as described in this preamble.
Explanation and Summary of
Comments
Scope of information reporting by
passport applicants
The proposed regulations require a
passport applicant, other than an individual who applies for an official passport,
diplomatic passport, or passport for use on
other official U.S. government business,
to provide certain information with his or
her passport application pursuant to section 6039E. Specifically, the applicant
must provide his or her full name and, if
applicable, previous name; permanent address and, if different, the applicant’s
mailing address; taxpayer identifying
number (TIN); and date of birth. A commentator requested that the scope of information be limited to the passport applicant’s name, TIN, if any, and foreign
country of residence, if any. The final
regulations do not adopt this comment.

August 04, 2014

Section 6039E(b)(4) grants the Secretary
the authority to require any additional information as he may prescribe. The Department of State (State Department) requires the items of information required
by these final regulations as part of its
application process. Accordingly, the IRS
and the Treasury Department believe that
requiring this information is not unduly
burdensome to the applicant.
Penalty for failure to provide
information
The proposed regulations provide
guidance on the circumstances under
which the IRS may impose a $500 penalty
on a passport applicant who fails to provide the required information. Under the
proposed regulations, before assessing the
penalty, the IRS will provide to the passport applicant written notice of the potential assessment of the penalty, and the
applicant has 60 days (90 days if the notice is addressed to an applicant outside of
the United States) to respond to the notice.
If the passport applicant demonstrates to
the satisfaction of the Commissioner or
the Commissioner’s delegate that the failure to provide the required information is
due to reasonable cause and not due to
willful neglect, after considering all the
surrounding circumstances, then the IRS
will not assess the penalty.
A commentator requested clarification
with respect to when the period for responding begins to run. In response to the
comment, the final regulations provide
that a passport applicant has 60 days from
the date of the notice of potential assessment of the penalty, or 90 days from such
date if the notice is addressed to an applicant outside the United States, to respond
to the notice.
A commentator requested that additional guidance be provided with respect
to the factors that will be considered in
determining whether a passport applicant
has established reasonable cause for the
failure to provide the required information. The comment was not adopted because this factual determination by the
IRS is made on a case-by-case basis and
involves consideration of all the surrounding circumstances.

268

Other Comments Received
Commentators requested that the proposed regulations be withdrawn because
they may unduly affect the right of U.S.
citizens to travel and apply for a U.S.
passport. The IRS and the Treasury Department coordinated with the State Department in promulgating the proposed
and final regulations. These regulations do
not affect the manner in which the State
Department processes passport applications, and Code section 6039E requires
information reporting by passport applicants for tax administration purposes. Accordingly, the comments were not adopted.
The proposed regulations provide that
the rules would apply to passport applications submitted after the date of publication of the Treasury decision adopting
these rules as final regulations. A commentator requested that the regulations be
effective for applications submitted after
January 1st of the year following the date
the regulations are published, rather than
for applications submitted after the date
the final regulations are published, on
grounds that section 7805(b) of the Code
requires such a delay of the effective date.
This comment was not adopted. Section
7805(b), as amended in 1996 by the Taxpayer Bill of Rights 2, only applies with
respect to regulations which relate to statutory provisions enacted on or after July
30, 1996. Because section 6039E was enacted in 1986, section 7805(b) does not
apply to these final regulations. Furthermore, even if the version of section
7805(b) cited by the commentator were to
apply, section 7805(b) does not require
the requested delay of the effective date.
This is so because the final regulations
apply to passport applications submitted
after July 18, 2014, which is not before
January 26, 2012, the date of the proposed
regulations. See section 7805(b)(1)(B).
Accordingly, these final regulations adopt
the effective/applicability date included in
the proposed regulations.
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 also has been deter-

Bulletin No. 2014 –32

mined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter
5) does not apply to these regulations, and
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. Pursuant to
section 7805(f), this regulation has been
submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small
business.
Drafting Information
The principal author of this regulation
is Rosy Lor of the Office of Associate
Chief Counsel (International). However,
other personnel from the IRS and the
Treasury Department participated in their
development.
*****
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR part 301 is
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 in part as follows:
Authority: 26 U.S.C. 7805 * * *
Section 301.6039E–1 also issued under
26 U.S.C. 6039E.
Par. 2. Section 301.6039E–1 is added
to read as follows:
§ 301.6039E–1 Information reporting by
passport applicants.
(a) In general. Every individual who
applies for a U.S. passport or the renewal
of a passport (passport applicant), other
than a passport for use in diplomatic, military, or other official U.S. government
business, shall include with his or her
passport application the information described in paragraph (b)(1) of this section

Bulletin No. 2014 –32

in the time and manner described in paragraph (b)(2) of this section.
(b) Required information—(1) In general. The information required under paragraph (a) of this section shall include the
following information:
(i) The passport applicant’s full name
and, if applicable, previous name;
(ii) The passport applicant’s permanent
address and, if different, mailing address;
(iii) The passport applicant’s taxpayer
identifying number (TIN), if such a number has been issued to the passport applicant. A TIN means the individual’s social
security number (SSN) issued by the Social Security Administration. A passport
applicant who does not have an SSN must
enter zeros in the appropriate space on the
passport application; and
(iv) The passport applicant’s date of
birth.
(2) Time and manner for furnishing
information. A passport applicant must
provide the information required by this
section with his or her passport application, whether by personal appearance or
mail, to the Department of State (including United States Embassies and Consular
posts abroad).
(c) Penalties—(1) In general. If the
information required by paragraph (b)(1)
of this section is incomplete or incorrect,
or the information is not filed in the time
and manner described in paragraph (b)(2)
of this section, then the passport applicant
may be subject to a penalty equal to $500
per application. Before assessing a penalty
under this section, the IRS will provide to
the passport applicant written notice of the
potential assessment of the $500 penalty,
requesting the information being sought,
and offering the applicant an opportunity
to explain why the information was not
provided with the passport application. A
passport applicant has 60 days from the
date of the notice of the potential assessment of the penalty (90 days from such
date if the notice is addressed to an applicant outside the United States) to respond
to the notice. If the passport applicant
demonstrates to the satisfaction of the

269

Commissioner (or the Commissioner’s
delegate) that the failure is due to reasonable cause and not due to willful neglect,
after considering all the surrounding circumstances, then the IRS will not assess
the penalty.
(2) Example. The following example
illustrates the provisions of paragraph (c)
of this section.
Example. C, a citizen of the United States, makes
an error in supplying information on his passport
application. Based on the nature of the error and C’s
timely response to correct the error after being contacted by the IRS, the Commissioner concludes that
the mistake is due to reasonable cause and not due to
willful neglect. Accordingly, no penalty is assessed.

(d) Effective/applicability date. This
section applies to passport applications
submitted after July 18, 2014.

John Dalrymple
Deputy Commissioner for
Services and Enforcement.
Approved June 26, 2014.

Mark J. Mazur
Assistant Secretary of the
Treasury (Tax Policy).
(Filed by the Office of the Federal Register on July 17, 2014,
8:45 a.m., and published in the issue of the Federal Register
for July 18, 2014, 79 F.R. 41889)

Section 7520.—Valuation
Tables
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month
of August 2014. See Rev. Rul. 2014 –19, page 266.

Section 7872.—Treatment
of Loans With BelowMarket Interest Rates
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month
of August 2014. See Rev. Rul. 2014 –19, page 266.

August 04, 2014