Td 8895

Part I. Rulings and Decisions Under the Internal Revenue Code of 1986
Section 6071.—Time for Filing
Returns and Other Documents
26 CFR 31.6071(b): Electronically filed
information returns.

T.D.8895
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1, 31, and 301
Extension of Due Date for
Electronically Filed Information
Returns; Limitation of Failure to
Pay Penalty for Individuals During
Period of Installment Agreement
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulation.
SUMMARY: This document contains
final regulations implementing section
6071(b) relating to the extension of the
due date for certain electronically filed information returns. The final regulations
also provide rules under section 6651(h)
relating to a penalty reduction for certain
individuals who have agreed with the IRS
to make installment payments in satisfaction of their tax liability. The regulations
relating to extension of filing dates affect
payors required to file information returns
after December 31, 1999. The regulations
relating to penalty reduction affect individual taxpayers with installment agreements in effect during months beginning
after December 31, 1999.
DATES: Effective Date: These regulations are effective August 18, 2000.
Applicability Date: The provisions of
these regulations under section 6071(b)
apply for returns required to be filed after
December 31, 1999. The provisions of
these regulations under section 6651(h)
apply for determining the addition to tax for
months beginning after December 31, 1999.
FOR FURTHER INFORMATION CONTACT: Marilyn E. Brookens, (202) 6224920 (for information relating to the extension of due dates under section
6071(b)); or Robert B. Taylor, (202) 6224940 (for information relating to the reduction in the penalty under section
6651(h)) (not toll-free numbers).

October 2, 2000

SUPPLEMENTARY INFORMATION:

Special Analyses

Background and Explanation of
Provisions

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, and, because the regulations do not
impose a collection of information on
small entities, a Regulatory Flexibility
Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of
the Code, the notice of proposed rulemaking that preceded these regulations
was submitted to the Chief Counsel for
Advocacy of the Small Business Administration for comment on its impact on
small business.

This document contains amendments to
the Income Tax Regulations, Employment
Tax Regulations, and Procedure and Administration Regulations (26 CFR Parts 1,
31, and 301), and implements sections
6071(b) and 6651(h), which were added to
the Internal Revenue Code (Code) by the
Internal Revenue Service Restructuring and
Reform Act of 1998, Public Law 105-206
(112 Stat. 685, 724 (1998 Act)). Section
6071(b) was added to the Code by section
2002 of the 1998 Act and extends the due
date for information returns required by
chapter 61, subchapter A, part III, subparts
B and C (sections 6041 through 6053) that
are filed electronically. The information returns affected include the Form W-2 series,
Form W-2G, the Form 1098 series, the
Form 1099 series, and Form 8027. Under
section 6071(b) such information returns
are due on or before March 31 of the year
following the calendar year to which the returns relate. Section 6071(b) applies to information returns required to be filed with
the IRS or the Social Security Administration after December 31, 1999.
Section 6651(h) was added to the Code
by section 3303 of the 1998 Act and provides that, for individuals, the failure to
pay penalty is reduced from 0.5 percent
per month to 0.25 percent per month during the period an installment agreement
under section 6159 is in effect with regard
to a timely filed return. Section 6651(h)
applies to any Federal tax liability of an
individual (including a liability under
subtitle C) and is effective for determining the addition to tax for months beginning after December 31, 1999.
On January 27, 2000, a notice of proposed rulemaking (REG–105279–99,
2000–8 I.R.B. 707) under sections
6071(b) and 6651(h) was published in the
Federal Register (65 F.R. 4396). Although written or electronic comments
and requests for a public hearing were solicited, no comments were received and
no public hearing was requested or held.
The proposed regulations under sections
6071(b) and 6651(h) are adopted by this
Treasury decision.

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Drafting Information
The principal author of the regulations
relating to the extension of due dates
under section 6071(b) is Marilyn E.
Brookens, Office of Associate Chief
Counsel (Income Tax & Accounting).
The principal author of the regulations relating to the reduction in the penalty
under section 6651(h) is Robert B. Taylor,
Office of Assistant Chief Counsel (Administrative Provisions and Judicial Practice). However, other personnel from the
IRS and Treasury Department participated in their development.
* * * * *
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR parts 1, 31, and
301 are amended as follows:
PART 1–INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. In §1.6041–2, paragraph
(a)(3)(ii) is revised to read as follows:
§1.6041–2 Return of information as to
payments to employees.
(a) * * *
(3) * * *

2000–40 I.R.B.

(ii) Exception. In a case where an employer is not required to file Forms W-3
and W-2 under §31.6011(a)–4 or
§31.6011(a)–5 of this chapter, returns on
Forms W-3 and W-2 required under this
paragraph (a) for any calendar year shall
be filed on or before February 28 (March
31 if filed electronically) of the following
year.
* * * * *
Par. 3. In §1.6041–6, the first sentence
is revised to read as follows:
§1.6041–6 Returns made on Forms 1096
and 1099 under section 6041; contents
and time and place for filing.
Returns made under section 6041 on
Forms 1096 and 1099 for any calendar
year shall be filed on or before February
28 (March 31 if filed electronically) of the
following year with any of the Internal
Revenue Service Centers, the addresses
of which are listed in the instructions for
such forms. * * *
Par. 4. In §1.6042–2, the first sentence
of paragraph (c) is revised to read as follows:
§1.6042–2 Returns of information as to
dividends paid in calendar years after
1962.
* * * * *
(c) Time and place for filing. The returns required under this section for any
calendar year shall be filed after September 30 of such year, but not before the
payer’s final payment for the year, and on
or before February 28 (March 31 if filed
electronically) of the following year with
any of the Internal Revenue Service Centers, the addresses of which are listed in
the instructions for Form 1096. * * *
* * * * *
Par. 5. In §1.6043–2, paragraph (a) is
revised to read as follows:
§1.6043–2 Return of information
respecting distributions in liquidation.
(a) Unless the distribution is one in respect of which information is required to
be filed pursuant to §1.332–6(b),
1.368–3(a), or 1.1081–11, every corporation making any distribution of $600 or
more during a calendar year to any shareholder in liquidation of the whole or any
part of its capital stock shall file a return
of information on Forms 1096 and 1099,

2000–40 I.R.B.

giving all the information required by
such form and by the regulations in this
part. A separate Form 1099 must be prepared for each shareholder to whom such
distribution was made, showing the name
and address of such shareholder, the number and class of shares owned by him in
liquidation of which such distribution was
made, and the total amount distributed to
him on each class of stock. If the amount
distributed to such shareholder on any
class of stock consisted in whole or in part
of property other than money, the return
on such form shall in addition show the
amount of money distributed, if any, and
shall list separately each class of property
other than money distributed, giving a description of the property in each such
class and a statement of its fair market
value at the time of the distribution. Such
forms, accompanied by transmittal Form
1096 showing the number of Forms 1099
filed therewith, shall be filed on or before
February 28 (March 31 if filed electronically) of the year following the calendar
year in which such distribution was made
with any of the Internal Revenue Service
Centers, the addresses of which are listed
in the instructions for Form 1096.
* * * * *
Par. 6. In §1.6044–2, the first sentence
of paragraph (d) is revised to read as follows:
§1.6044–2 Returns of information as to
payments of patronage dividends with
respect to patronage occurring in taxable
years beginning after 1962.
* * * * *
(d) Time and place for filing. The return required under this section on Forms
1096 and 1099 for any calendar year shall
be filed after September 30 of such year,
but not before the payer’s final payment
for the year, and on or before February 28
(March 31 if filed electronically) of the
following year, with any of the Internal
Revenue Service Centers, the addresses
of which are listed in the instructions for
such forms. * * *
* * * * *
Par. 7. Section §1.6045–1 is amended
by adding paragraph (r) to read as follows:
§1.6045–1 Returns of information of
brokers and barter exchanges.

305

* * * * *
(r) Electronic filing. Notwithstanding
the time prescribed for filing in paragraph
(j) of this section, Forms 1096 and 1099
required under this section for reporting
periods ending during a calendar year
shall, if filed electronically, be filed after
the last calendar day of the reporting period elected by the broker or barter exchange and on or before March 31 of the
following calendar year.
Par. 8. In §1.6045–2, paragraph (g)(3)
is revised to read as follows:
§1.6045–2 Furnishing statement required
with respect to certain substitute
payments.
* * * * *
(g) * * *
(3) Time and place of filing. The returns required under this paragraph (g) for
any calendar year shall be filed after September 30 of such year, but not before the
final substitute payment for the year is received by the broker, and on or before
February 28 (March 31 if filed electronically) of the following year with any of
the Internal Revenue Service Centers, the
addresses of which are listed in the instructions for Form 1096.
* * * * *
Par. 9. In §1.6045–4, the first sentence
of paragraph (j) is revised to read as follows:
§1.6045–4 Information reporting on real
estate transactions with dates of closing
on or after January 1, 1991.
* * * * *
(j) Time and place for filing. A reporting person shall file the information returns required by this section with respect
to a real estate transaction after December
31 of the calendar year that includes the
date of closing (as determined under paragraph (h)(2)(ii) of this section) and on or
before February 28 (March 31 if filed
electronically) of the following calendar
year. * * *
* * * * *
Par. 10. In §1.6047–1, the first sentence of paragraph (a)(6) is revised to
read as follows:
§1.6047–1 Information to be furnished
with regard to employee retirement plan
covering an owner-employee.

October 2, 2000

(a) * * *
(6) Time and place for filing. The return required under this section for any
calendar year shall be filed after the close
of that year and on or before February 28
(March 31 if filed electronically) of the
following year with any of the Internal
Revenue Service Centers, the addresses
of which are listed in the instructions for
Form 1096. * * *
* * * * *
Par. 11. Section 1.6049–4 is amended
by:
1. Revising the first sentence of paragraph (g)(1).
2. Revising the first sentence of paragraph (g)(2).
The revisions read as follows:
§1.6049–4 Return of information as to
interest paid and original issue discount
includible in gross income after
December 31, 1982.
* * * * *
(g) * * * (1) Annual return. Except as
provided in paragraph (g)(2) of this section, the returns required under this section for any calendar year for the payment
of interest shall be filed after September
30 of such year, but not before the payor’s
final payment to the payee for the year,
and on or before February 28 (March 31 if
filed electronically) of the following year.
* * *
(2) Transactional return. In the case of
a return under paragraph (e) of this section, relating to returns on a transactional
basis, such return shall be filed at any
time but in no event later than February
28 (March 31 if filed electronically) of the
year following the calendar year in which
the interest was paid. * * *
* * * * *
Par. 12. In §1.6049–7, the first sentence of paragraph (b)(2)(iv) is revised to
read as follows:
§1.6049–7 Returns of information with
respect to REMIC regular interests and
collateralized debt obligations.
* * * * *
(b) * * *
(2) * * *
(iv) Time and place for filing a return
with respect to amounts includible as interest. The returns required under this
paragraph (b)(2) for any calendar year

October 2, 2000

must be filed after September 30 of that
year, but not before the payor’s final payment to the payee for the year, and on or
before February 28 (March 31 if filed
electronically) of the following year.
* * *
* * * * *
Par. 13. In §1.6050A–1, paragraph (b)
is revised to read as follows:
§1.6050A–1 Reporting requirements of
certain fishing boat operators.
* * * * *
(b) Time and place for filing. Returns
required to be made under this section on
Form 1099-MISC shall be filed with the
Internal Revenue Service Center, designated in the instructions for Form 1099MISC, on or before February 28 (March
31 if filed electronically) of the year following the calendar year in which the relevant services were performed.
* * * * *
Par. 14. In §1.6050D–1, paragraph (b)
is revised to read as follows:
§1.6050D–1 Information returns relating
to energy grants and financing.
* * * * *
(b) Time and place for filing. Returns
required to be made under this section
shall be filed with the Internal Revenue
Service Center designated in the instructions for Form 6497 or 1099-G on or before the last day of February (March 31 if
filed electronically) of the year following
the calendar year for which the return is
made.
Par. 15. In §1.6050E–1, the first sentence of paragraph (h) is revised to read as
follows:

§1.6050H–2 Time, form, and manner of
reporting interest received on qualified
mortgage.
(a) * * *
(4) Time and place for filing return. An
interest recipient must file a return required
by this paragraph (a) on or before February
28 (March 31 if filed electronically) of the
year following the calendar year for which
it receives the mortgage interest. If no interest is required to be reported for the calendar year, but a reimbursement of interest
on a qualified mortgage is required to be reported for the calendar year, then a return
required by this paragraph (a) must be filed
on or before February 28 (March 31 if filed
electronically) of the year following the
calendar year in which the reimbursement
was made. * * *
* * * * *
Par. 17. In §1.6050J–1T, A-33 is revised to read as follows:
§1.6050J–1T Questions and answers
concerning information returns relating
to foreclosures and abandonments of
security (temporary).
* * * * *
A-33: The return or returns must be
filed on or before February 28 (March 31
if filed electronically) of the year following the calendar year in which the acquisition of an interest in the property occurs
or in which the lender knows or has reason to know of the abandonment of the
property.
* * * * *
Par. 18. In §1.6050P–1, paragraph
(a)(4)(i) is revised to read as follows:

§1.6050E–1 Reporting of State and local
income tax refunds.

§1.6050P–1 Information reporting for
discharges of indebtedness by certain
financial entities.

* * * * *
(h) Time and place for filing. The returns
required under this section for any calendar
year shall be filed after September 30 of
that calendar year, but not before the refund
officer’s final payment (or allowance of
credit or offset) for the year, and on or before February 28 (March 31 if filed electronically) of the following year. * * *
* * * * *
Par. 16. In §1.6050H–2, the first and
second sentences of paragraph (a)(4) are
revised to read as follows:

(a) * * *
(4) * * * (i) In general. Except as
provided in paragraph (a)(4)(ii) of this
section, returns required by this section
must be filed with the Internal Revenue
Service office designated in the instructions for Form 1099-C on or before February 28 (March 31 if filed electronically)
of the year following the calendar year in
which the identifiable event occurs.
* * * * *
Par. 19. In §1.6052–1, paragraph
(b)(1)(ii) is revised to read as follows:

306

2000–40 I.R.B.

§1.6052–1 Information returns regarding
payment of wages in the form of groupterm life insurance.
* * * * *
(b) * * * (1) * * *
(ii) Exception. In a case where an employer is not required to file Forms W-3
and W-2 under §31.6011(a)–4 or
§31.6011(a)–5 of this chapter, returns on
Forms W-3 and W-2 required under paragraph (a) of this section for any calendar
year shall be filed on or before February
28 (March 31 if filed electronically) of the
following year.
* * * * *
PART 31—EMPLOYMENT TAXES
AND COLLECTION OF INCOME TAX
AT THE SOURCE
Par. 20. The authority citation for part
31 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 21. In §31.3402(q)–1, the first
sentence of paragraph (f)(1) is revised to
read as follows:
§31.3402(q)–1 Extension of withholding
to certain gambling winnings.
* * * * *
(f)(1) In general. Every person making payment of winnings for which a
statement is required under paragraph (e)
of this section shall file a return on Form
W-2G with the Internal Revenue Service
Center serving the district in which is located the principal place of business of
the person making the return on or before
February 28 (March 31 if filed electronically) of the calendar year following the
calendar year in which the payment of
winnings is made. * * *
* * * * *
Par. 22. In §31.6053–3, the first sentence of paragraph (a)(4) is revised to
read as follows:
§31.6053–3 Reporting by certain large
food or beverage establishments with
respect to tips.
(a) * * *
(4) Time and place for filing. The information return required by this paragraph (a) shall be filed on or before the
last day of February (March 31 if filed

2000–40 I.R.B.

electronically) of the year following the
calendar year for which the return is made
with the Internal Revenue Service Center
specified by the Form 8027 or its instructions. * * *
* * * * *
Par. 23. In §31.6071(a)–1, paragraph
(a)(3)(i) is revised to read as follows:
§31.6071(a)–1 Time for filing returns and
other documents.
(a) * * *
(3) * * * (i) General rule. Each information return in respect of wages as defined in the Federal Insurance Contributions Act or of income tax withheld from
wages which is required to be made under
§31.6051–2 shall be filed on or before the
last day of February (March 31 if filed
electronically) of the year following the
calendar year for which it is made, except
that, if a tax return under §31.6011(a)–
5(a) is filed as a final return for a period
ending prior to December 31, the information statement shall be filed on or before the last day of the second calendar
month following the period for which the
tax return is filed.
* * * * *
PART 301—PROCEDURE AND
ADMINISTRATION
Par. 24. The authority citation for part
301 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 25. Section 301.6651–1 is
amended by:
1. Revising the last sentence in paragraph (a)(2).
2. Revising the second sentence in
paragraph (a)(3).
3. Adding paragraph (a)(4).
The revisions and additions read as follows:
§301.6651–1 Failure to file tax return or
to pay tax.
(a) * * *
(2) * * * Except as provided in paragraph (a)(4) of this section, the amount to
be added to the tax is 0.5 percent of the
amount of tax shown on the return if the
failure is for not more than 1 month, with
an additional 0.5 percent for each additional month or fraction thereof during

307

which the failure continues, but not to exceed 25 percent in the aggregate.
(3) * * * Except as provided in paragraph (a)(4) of this section, the amount to
be added to the tax is 0.5 percent of the
amount stated in the notice and demand if
the failure is for not more than 1 month,
with an additional 0.5 percent for each additional month or fraction thereof during
which the failure continues, but not to exceed 25 percent in the aggregate. * * *
(4) Reduction of failure to pay penalty
during the period an installment agreement is in effect—(i) In general. In the
case of a return filed by an individual on
or before the due date for the return (including extensions)—
(A) The amount added to tax for a
month or fraction thereof is determined
by using 0.25 percent instead of 0.5 percent under paragraph (a)(2) of this section
if at any time during the month an installment agreement under section 6159 is in
effect for the payment of such tax; and
(B) The amount added to tax for a
month or fraction thereof is determined
by using 0.25 percent instead of 0.5 percent under paragraph (a)(3) of this section
if at any time during the month an installment agreement under section 6159 is in
effect for the payment of such tax.
(ii) Effective date. This paragraph
(a)(4) applies for purposes of determining
additions to tax for months beginning
after December 31, 1999.
* * * * *
Robert E. Wenzel,
Deputy Commissioner
of Internal Revenue.
Approved August 1, 2000.
Jonathan Talisman,
Acting Assistant Secretary
of the Treasury.
(Filed by the Office of the Federal Register on August 17, 2000, 8:45 a.m., and published in the issue
of the Federal Register for August 18, 2000, 65 F.R.
50405)

October 2, 2000