Td 9036

CFR part or section where
identified and described

Current OMB
control No.

*****
1.1041–2 ......................................................................................................................................................... 1545–1751
*****
David A. Mader,
Assistant Deputy Commissioner of
Internal Revenue.
Approved December 30, 2002.
Pamela F. Olson,
Assistant Secretary of the Treasury.
(Filed by the Office of the Federal Register on January 10,
2003, 8:45 a.m., and published in the issue of the Federal Register for January 13, 2003, 68 F.R. 1534)

tions, 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

Section 6103.—Confidentiality and Disclosure of
Returns and Return
Information
26 CFR 301.6103(p)(2)(B)–1: Disclosure of returns
and return information by other agencies.

T.D. 9036
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Parts 301 and 602
Disclosure of Returns and
Return Information by Other
Agencies
AGENCY: Internal Revenue Service (IRS),
Treasury.
ACTION: Final 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 restric-

March 3, 2003

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.
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

533

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, 2002–2 I.R.B. 302
[66 FR 64386]) was published in the Federal Register. 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

2003–9 I.R.B.

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.
*****
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 sat-

isfaction 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 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
Paragraph 4. The authority citation for
part 602 continues to read as follows:
Authority: 26 U.S.C. 7805 ***
Paragraph 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
Current OMB
identified and described
control No.
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301.6103(p)(2)(B)–1 ....................................................................................................................................1545–1757
*****

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534

March 3, 2003

David A. Mader,
Assistant Deputy Commissioner of
Internal Revenue.
Approved December 20, 2002.
Pamela F. Olson,
Assistant Secretary of
the Treasury (Tax Policy).
(Filed by the Office of the Federal Register on January 17,
2003, 8:45 a.m., and published in the issue of the Federal Register for January 21, 2003, 68 F.R. 2695)

26 CFR 301.6103(j)(1)–1: Disclosures of return
information reflected on returns to officers and
employees of the Department of Commerce for certain statistical purposes and related activities.

T.D. 9037
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 301
Disclosure of Return
Information to the Bureau of
the Census
AGENCY: Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations and removal of
temporary regulations.
SUMMARY: This document contains regulations relating to the list of items of tax information disclosed to the Bureau of the
Census. These regulations reflect an agreement between the IRS and the Bureau of
the Census as to items of tax information
needed to more effectively meet the Bureau of the Census’ program objectives as
authorized under chapter 5 of title 13,
United States Code (U.S.C.), including the
Longitudinal Employer-Household Dynamics (LEHD) project and the Survey of Income and Program Participation (SIPP)
project.
DATES: Effective Date: These regulations
are effective January 21, 2003.
FOR FURTHER INFORMATION CONTACT: Christine Irwin, (202) 622–4570 (not
a toll-free number).

March 3, 2003

Background
This document contains amendments to
26 CFR part 301 under section 6103(j) of
the Internal Revenue Code (Code). On February 13, 2001, the Federal Register published temporary regulations (T.D. 8943,
2001–15 I.R.B. 1054 [66 FR 9957]) regarding tax information disclosed to the Bureau of the Census for use in the LEHD and
SIPP projects, and a notice of proposed rulemaking (REG–121109–00, 2001–15 I.R.B.
1064 [66 FR 9991]) cross-referencing the
temporary regulations. A correction to the
notice of proposed rulemaking by crossreference to the temporary regulations was
published on March 23, 2001 (66 FR
16161). Three comments on these temporary regulations were received and considered, but no public hearing was requested
or held. After consideration of the comments, the Treasury decision adopts the
regulations as proposed with certain changes
and removes the corresponding temporary regulations.
The changes include corrections to punctuation and clarification of certain terms
used in the regulations, e.g., references to
Form SS–4 as a “form” as opposed to a tax
“return.” Additional changes include adopting the generic term “location code” to refer to locations of IRS offices from which
tax information is retrieved. Changes also
include using the terms “area/district office” and “campus/service” center as examples of location codes. The tax
information disclosed to the Bureau of the
Census is retrieved from older files, as well
as current files. The older information is retrieved from files which contain the terms
“district offices” and “service centers” as
the location codes, while the more recent
information is retrieved from files that use
the terms “area offices” and “campuses” (in
addition to other location codes). Although
the terms “district offices” and “service centers” are no longer used by the IRS, having been replaced by the terms “area
offices” and “campuses” respectively, as a
result of the IRS reorganization mandated
by section 1001 of the IRS Restructuring
and Reform Act of 1998, the regulations’
reference to “location code” will encompass all of these terms to ensure that tax information may be retrieved from both older
and more current files.
Also, the final regulations narrow the tax
information to be disclosed to the Bureau
of the Census under §301.6103(j)(1)–

535

1(b)(3)(xxviii) pertaining to “Gross Distributions from Form 1099–R.” Although the
temporary regulations authorized the disclosure of all gross distributions from
Form 1099–R under §301.6103(j)(1)–
1T(b)(3)(xxviii), the Bureau of the Census needs only tax information related to
distributions from employer-sponsored and
individual retirement plans, according to a
letter sent to the IRS from the Secretary of
Commerce dated October 4, 2002. Therefore, the final regulations authorize the disclosure only of distributions from employersponsored and individual retirement
plans from the Forms 1099-R under
§301.6103(j)(1)–1(b)(3)(xxviii).
The final regulations also clarify the
phrase “return information reflected on returns” — language that was incorporated
into §301.6103(j)(1)–1 when the regulations were first promulgated in 1980 (see
T.D. 7724, 1980–2 C.B. 360 [45 FR
65561]). The phrase “return information reflected on returns” is used in the regulations to describe the type of return
information that may be disclosed to agencies under sections 6103(j)(1)(A) and (B)
of the Code. (The phrase “return information reflected on returns” encompasses the
phrases used in the statute under section
6103(j)(1)(A) and (B) of the Code that refer to “return information reflected thereon”
and “return information reflected on returns of corporations.”) The legislative history of section 6103(j)(1)(A) of the Code,
authorizing the disclosure of “returns” and
“return information reflected thereon” to officers and employees of the Bureau of the
Census, does not specifically define the
phrase “return information reflected
thereon.” Nor does the legislative history
of section 6103(j)(1)(B) of the Code, authorizing the disclosure of “return information reflected on returns of corporations”
to officers and employees of the Bureau of
Economic Analysis, define the phrase “return information reflected on returns of corporations.” These final regulations clarify
the concept of “return information reflected
on returns.” Although the legislative history does not explicitly define the concept of “return information reflected on
returns,” it does use the term “information from tax returns” and expresses Congress’ intent that only “limited information”
for statistical purposes should be provided
to the Bureau of the Census and the Bureau of Economic Analysis. The legisla-

2003–9 I.R.B.