[4830-01-u]
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 301 and 602
[TD 8739]
RIN 1545-AV09
IRS Adoption Taxpayer Identification Numbers
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final and temporary regulations.
SUMMARY: This document contains final and temporary regulations
under section 6109 relating to taxpayer identifying numbers. The
final regulations include a cross reference to the temporary
regulations, which provide rules for obtaining and using IRS
adoption taxpayer identification numbers. The temporary
regulations assist individuals who are in the process of adopting
children and wish to claim certain tax benefits with respect to
those children. The text of these temporary regulations also
serves as the text of the proposed regulations set forth in the
notice of proposed rulemaking on this subject in the Proposed
Rules section of this issue of the Federal Register.
DATES: These regulations are effective November 24, 1997.
FOR FURTHER INFORMATION CONTACT: Michael L. Gompertz, (202) 622-
4910 (not a toll-free number)..2
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
These final and temporary regulations are being issued
without prior notice and public procedure pursuant to the
Administrative Procedure Act (5 U.S.C. 553). For this reason,
the collection of information contained in these regulations has
been reviewed and, pending receipt and evaluation of public
comments, approved by the Office of Management and Budget under
control number 1545-1564. Responses to this collection of
information are required to obtain a taxpayer identification
number.
For further information concerning this collection of
information, and where to submit comments on the collection of
information and the accuracy of the estimated burden, and
suggestions for reducing this burden, please refer to the
preamble to the cross-referencing notice of proposed rulemaking
published in the Proposed Rules section of this issue of the
Federal Register.
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 control number.
Books or records relating to this 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 tax return information are confidential, as required
by 26 U.S.C. 6103..3
Background
This document contains amendments to the Regulations on
Procedure and Administration (26 CFR Part 301) relating to
identifying numbers under section 6109. Section 6109(a)(1)
provides that any person required to make a return, statement, or
other document must include in the document such identifying
number as may be prescribed for securing proper identification of
the person. Section 6109(a)(2) provides that any person with
respect to whom a return, statement, or other document is
required to be made by another person or whose identifying number
must be shown on a return of another person, must furnish to the
other person such identifying number as may be prescribed for
securing the person's proper identification. Section 6109(d)
provides that an individual must use a social security number as
the individual's taxpayer identification number unless the
Secretary prescribes otherwise by regulations.
Currently, there are three types of taxpayer identification
numbers (TINs) assigned to individuals: (1) a social security
number (SSN), (2) an IRS individual taxpayer identification
number (ITIN) assigned to an alien individual who is ineligible
to obtain an SSN, and (3) an employer identification number (EIN)
assigned to an individual who is engaged in a trade or business
as a sole proprietor. An SSN is assigned by the Social Security
Administration. An ITIN or an EIN is assigned by the IRS.
Section 1615 of the Small Business Job Protection Act of
1996 (Public Law 104-188, 110 Stat. 1755, 1853 (1996)) added.4
sections 21(e)(10) and 151(e) to deny the dependent care credit
and the deduction for the dependency exemption if the TIN (as
defined by section 6109 and the regulations thereunder) of the
dependent is not included on the return claiming the credit or
deduction. Sections 21(e)(10) and 151(e) generally are effective
for tax returns due (without regard to extensions) after
September 18, 1996.
In addition, section 101 of the Taxpayer Relief Act of 1997
(Public Law 105-34, 111 Stat. 788, 796 (1997)) added section 24
to the Code to provide a child tax credit for each qualifying
child, effective for taxable years beginning after December 31,
1997. Pursuant to section 24(e), the taxpayer will be denied the
credit if the qualifying child's TIN is not included on the
return claiming the credit.
In most cases, taxpayers can meet the TIN requirements of
sections 21, 24, and 151 by including a child's SSN on the return
claiming the credit or deduction. In the case of adoption,
however, a child may not have an SSN or, if the child does have
an SSN, the taxpayer adopting the child (the prospective adoptive
parent) may be unable to obtain the SSN because of
confidentiality laws. See H.R. Rep. No. 542, 104th Cong., 2d
Sess. 20 (1996); S. Rep. No. 412, 103d Cong., 2d Sess. 163
(1994).
Explanation of Provisions
These temporary regulations authorize the IRS to assign a
new form of taxpayer identification number, the IRS adoption.5
taxpayer identification number (ATIN), to a child who is in the
process of being adopted (a prospective adoptive child). The
regulations are effective for income tax returns due (without
regard to extension) on or after April 15, 1998.
The temporary regulations provide that an ATIN is a
temporary taxpayer identification number that expires two years
after the date of issuance. However, upon application, the IRS
may grant an extension of the ATIN. A prospective adoptive
parent may apply for an ATIN for a child if: (1) the prospective
adoptive parent is eligible to claim a personal exemption under
section 151 with respect to the child; (2) the child is placed
with the prospective adoptive parent for legal adoption by an
authorized placement agency (as defined in §1.152-2(c)); (3) the
Social Security Administration will not assign the prospective
adoptive parent an SSN for the child (for example, because the
adoption is not final); and (4) the prospective adoptive parent
has used all reasonable means to obtain the child's assigned SSN,
if any, but has been unsuccessful in obtaining this number (for
example, because the birth parent who obtained the number is not
legally required to disclose the number to the prospective
adoptive parent).
The temporary regulations provide that an application for an
ATIN must be made on the Form W-7A, Application for Taxpayer
Identification Number for Pending Adoptions, or such other form
prescribed by the IRS. The ATIN application must be accompanied
by documentary evidence to establish that an authorized placement.6
agency placed the child in the prospective adoptive parent's
household for legal adoption by the parent. Such documentary
evidence may include: a copy of a placement agreement entered
into between the prospective adoptive parent and an authorized
placement agency; an affidavit signed by the adoption attorney or
government official who placed the child for legal adoption
pursuant to state law; a document authorizing the release of a
newborn child from a hospital to a prospective adoptive parent
for adoption; or a court document ordering or approving the
placement of a child for adoption.
When an adoption becomes final, the adoptive parent must
apply for an SSN for the child. Once obtained, the SSN, rather
than the ATIN, must be used as the child's TIN on all future
returns, statements, or other documents required by the Code.
An ATIN may be used by the prospective adoptive parents to
meet the TIN requirements of sections 21(e)(10), 24(e), and
151(e), relating to the dependent care credit, the child tax
credit, and the dependency exemption, respectively. Also, as may
be prescribed by forms, instructions, or otherwise, an ATIN may
be used to meet the TIN requirements under sections 23(f) and
137(e), relating to qualified adoption expenses. The ATIN may
not be used to meet the TIN requirement of section 32. See
section 32(l).
The ATIN procedures do not apply to adoptions involving
alien children. Generally, the Social Security Administration
will assign an SSN to an alien child if all the requirements for.7
assigning a number are met. When the Social Security
Administration cannot assign an SSN, the child generally will be
eligible for an ITIN.
In addition to adoptions involving alien children, there are
two other types of adoptions to which the ATIN procedures may not
apply. If the child placed for adoption is a foster child or is
otherwise in the custody of a government agency or court
(because, for example, the birth parents' rights were previously
terminated for abuse or neglect), the government agency or court
will generally obtain an SSN for the child and can make the SSN
available to the prospective adoptive parent. Also, the
prospective adoptive parent may be able to obtain the child's SSN
from the birth parents (or other person) in the case of an
adoption by the child's relatives or an adoption in which the
adoptive parent and birth parent share information about the
child and themselves.
Taxpayers are invited to comment on two issues partially
addressed by the temporary regulations. First, comments are
requested regarding what types of documents are available to
establish that a child has been placed in the prospective
adoptive parent's household for legal adoption. Also, comments
are requested as to whether certain types of adoptions (in
addition to foreign adoptions) should be completely excluded from
the ATIN process. In particular, comments are requested
regarding whether a prospective adoptive parent is always able to
obtain a prospective adoptive child's SSN if the child is a.8
foster child or is otherwise in the custody of a government
agency or court.
Special Analyses
It has been determined that this Treasury decision is not a
significant regulatory action as defined in EO 12866. Therefore,
a regulatory assessment is not required. It also has 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 regulation does not impose a collection of
information on small entities, the Regulatory Flexibility Act (5
U.S.C. chapter 6) does not apply. Only individuals may receive
ATINs under this Treasury decision, and an individual is not a
small entity as defined in the Regulatory Flexibility Act. See 5
U.S.C. 601(6).
Pursuant to section 7805(f) of the Internal Revenue Code,
these regulations will be submitted to the Chief Counsel for
Advocacy of the Small Business Administration for comment on
their impact on small business.
Drafting Information
The principal author of these regulations is Michael L.
Gompertz of the Office of Assistant Chief Counsel (Income Tax and
Accounting). However, other personnel from the IRS and Treasury
Department participated in their development.
List of Subjects
26 CFR Part 301.9
Employment taxes, Estate taxes, Excise taxes, Gift taxes,
Income taxes, Penalties, Reporting and recordkeeping
requirements.
26 CFR Part 602
Reporting and recordkeeping requirements.
Adoption of 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 entries in numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
Section 301.6109-1T also issued under 26 U.S.C. 6109;
Section 301.6109-3T also issued under 26 U.S.C. 6109; * * *
Par. 2 Section 301.6109-1 is amended by adding paragraph
(h)(2)(iii) to read as follows:
§301.6109-1 Identifying numbers.
* * * * *
(h) * * *
(2) * * *
(iii) Paragraphs (a)(1)(i), (a)(1)(ii) introductory text,
(a)(1)(ii)(A), and (a)(1)(ii)(B) of this section do not apply
after November 24, 1997. For further guidance after November
24,1997, see §301.6109-1T(a)(1)(i), (a)(1)(ii) introductory text,
and (a)(1)(ii)(A) and (a)(1)(ii)(B).
Par. 3. Sections 301.6109-1T is added to read as follows:.10
§301.6109-1T Identifying numbers (temporary).
(a) In general--(1) Taxpayer identifying numbers--(i)
Principal types. There are four principal types of taxpayer
identifying numbers: social security numbers, Internal Revenue
Service (IRS) individual taxpayer identification numbers,
employer identification numbers, and IRS adoption taxpayer
identification numbers. Social security numbers take the form
000-00-0000. IRS individual taxpayer identification numbers and
IRS adoption taxpayer identification numbers also take the form
000-00-0000 but include a specific number or specific numbers
designated by the IRS. Employer identification numbers take the
form 00-0000000.
(ii) Uses. Social security numbers, IRS individual taxpayer
identification numbers, and IRS adoption taxpayer identification
numbers are used to identify individual persons. For the
definition of social security number and employer identification
number, see §§301.7701-11 and 301.7701-12, respectively. For the
definition of IRS individual taxpayer identification number, see
§301.6109-1 (d)(3). For the definition of IRS adoption taxpayer
identification number, see §301.6109-3T. Except as otherwise
provided in applicable regulations under this title or on a
return, statement, or other document, and related instructions,
taxpayer identifying numbers must be used as follows--
(A) Except as otherwise provided in §301.6109-
1(a)(1)(ii)(D), paragraph (a)(1)(ii)(B) of this section, and.11
§301.6109-3T, an individual required to furnish a taxpayer
identifying number must use a social security number.
(B) Except as otherwise provided in §301.6109-1(a)(1)(ii)(D)
and §301.6109-3T, an individual required to furnish a taxpayer
identifying number but who is not eligible to obtain a social
security number must use an IRS individual taxpayer
identification number.
(a)(1)(ii)(C) through (g) [Reserved]. For further guidance,
see §301.6109-1(a)(1)(ii)(C) through (g).
(h) Effective date. Paragraphs (a)(1)(i), (a)(1)(ii)
introductory text, (a)(1)(ii)(A), and (a)(1)(ii)(B) of this
section are applicable after November 24, 1997. For guidance
applicable prior to November 24, 1997, see §301.6109-1(a)(1)(i),
(a)(1)(ii) introductory text, (a)(1)(ii)(A) and (a)(1)(ii)(B).
Par. 4. Section 301.6109-3T is added to read as follows:
§301.6109-3T IRS adoption taxpayer identification numbers
(temporary).
(a) In general--(1) Definition. An IRS adoption taxpayer
identification number (ATIN) is a temporary taxpayer identifying
number assigned by the Internal Revenue Service (IRS) to a child
(other than an alien individual as defined in §301.6109-
1(d)(3)(i)) who has been placed, by an authorized placement
agency, in the household of a prospective adoptive parent for
legal adoption. An ATIN is assigned to the child upon
application for use in connection with filing requirements under
this title. When an adoption becomes final, the adoptive parent.12
must apply for a social security number for the child. After the
social security number is assigned, that number, rather than the
ATIN, must be used as the child's taxpayer identification number
on all returns, statements, or other documents required under
this title.
(2) Expiration and extension. An ATIN automatically expires
two years after the number is assigned. However, upon request,
the IRS may grant an extension if the IRS determines the
extension is warranted.
(b) Definitions. The following definitions apply for
purposes of this section--
(1) Authorized placement agency has the same meaning as in
§1.152-2(c) of this chapter;
(2) Prospective adoptive child or child refers to a child
who has not been adopted, but who has been placed in the
household of a prospective adoptive parent for legal adoption by
an authorized placement agency; and
(3) Prospective adoptive parent or parent refers to an
individual in whose household a prospective adoptive child is
placed by an authorized placement agency for legal adoption.
(c) General rule for obtaining a number--(1) Who may apply.
A prospective adoptive parent may apply for an ATIN for a child
if--
(i) The prospective adoptive parent is eligible to claim a
personal exemption under section 151 with respect to the child;.13
(ii) An authorized placement agency places the child with
the prospective adoptive parent for legal adoption;
(iii) The Social Security Administration will not process an
application for an SSN by the prospective adoptive parent on
behalf of the child (for example, because the adoption is not
final); and
(iv) The prospective adoptive parent has used all reasonable
means to obtain the child's assigned social security number, if
any, but has been unsuccessful in obtaining this number (for
example, because the birth parent who obtained the number is not
legally required to disclose the number to the prospective
adoptive parent).
(2) Procedure for obtaining an ATIN. If the requirements of
paragraph (c)(1) of this section are satisfied, the prospective
adoptive parent may apply for an ATIN for a child on Form W-7A,
Application for Taxpayer Identification Number for Pending
Adoptions (or such other form as may be prescribed by the IRS).
An application for an ATIN should be made far enough in advance
of the first intended use of the ATIN to permit issuance of the
ATIN in time for such use. An application for an ATIN must
include the information required by the form and accompanying
instructions, including the name and address of each prospective
adoptive parent and the child's name and date of birth. In
addition, the application must include such documentary evidence
as the IRS may prescribe to establish that a child was placed in
the prospective adoptive parent's household by an authorized.14
placement agency for legal adoption. Examples of acceptable
documentary evidence establishing placement for legal adoption by
an authorized placement agency may include--
(i) A copy of a placement agreement entered into between the
prospective adoptive parent and an authorized placement agency;
(ii) An affidavit signed by the adoption attorney or
government official who placed the child for legal adoption
pursuant to state law;
(iii) A document authorizing the release of a newborn child
from a hospital to a prospective adoptive parent for adoption;
and
(iv) A court document ordering or approving the placement of
a child for adoption.
(d) Effective date. The provisions of this section apply to
income tax returns due (without regard to extension) on or after
April 15, 1998.
PART 602--OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT
Par. 5. The authority citation for part 602 continues to
read as follows:
Authority: 26 U.S.C. 7805.
Par. 6. Section 602.101(c) is amended by adding an entry in
numerical order to the table to read as follows:
§602.101 OMB Control numbers.
* * * * *
(c) * * *.15
CFR part or section where Current OMB
identified and described control No.
* * * * *
301.6109-3T . . . . . . . . . . . . . . . . . . . . . 1545-1564
* * * * *
Acting Commissioner of Internal Revenue
Michael P. Dolan
Approved: October 24, 1997
Acting Assistant Secretary of the Treasury
Donald C. Lubick