||March 20, 2006
Notice of Proposed Rulemaking by Cross-Reference
to Temporary Regulations Procedures for Administrative Review
of a Determination That an Authorized Recipient Has Failed
to Safeguard Tax Returns or Return Information
Internal Revenue Service (IRS), Treasury.
Notice of proposed rulemaking by cross-reference to temporary regulations.
In this issue of the Bulletin, the IRS is issuing temporary regulations
(T.D. 9252) regarding administrative review procedures for certain government
agencies and other authorized recipients of tax returns or return information
(authorized recipients) whose receipt of returns and return information may
be suspended or terminated because they do not maintain proper safeguards.
The temporary regulations provide guidance to responsible IRS personnel and
authorized recipients as to these administrative procedures. The text of
the temporary regulations published in this issue of the Bulletin serves as
the text of the proposed regulations.
Written and electronic comments and requests for a public hearing must
be received by May 25, 2006.
Send submissions to: CC:PA:LPD:PR (REG-157271-05), Room 5203, Internal
Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.
Submissions may be hand-delivered between the hours of 8 a.m. and 4 p.m.
to CC:PA:LPD:PR (REG-157271-05), Courier’s Desk, Internal Revenue Service,
1111 Constitution Avenue, NW, Washington, DC, or sent electronically, via
the IRS Internet site at www.irs.gov/regs, or via the
Federal eRulemaking Portal at www.regulations.gov (IRS
FOR FURTHER INFORMATION CONTACT:
Concerning submission of comments, Treena Garrett, (202) 622-7180; concerning
the temporary regulations, Melinda K. Fisher, (202) 622-4580 (not toll-free
Under section 6103 of the Internal Revenue Code (Code), tax returns
and return information are protected from disclosure except in specifically
enumerated circumstances. Where disclosure is permitted, section 6103 generally
imposes strict safeguarding requirements and requires the IRS to monitor and
enforce compliance with those requirements. Section 6103(p)(7) requires the
Secretary of the Treasury to prescribe procedures providing for administrative
review of any determination under section 6103(p)(4) that an agency, body,
or commission receiving returns or return information pursuant to section
6103(d) has failed to meet the safeguarding requirements. Withdrawn §301.6103(p)(7)-1
set forth the procedures for terminating future disclosures to these authorized
recipients. These proposed regulations provide the intermediate review and
termination procedures for all authorized recipients identified in section
With an increasing volume of authorized disclosures of returns and return
information, it is critical that authorized recipients of returns and return
information adhere to the strict safeguard requirements of the Code and that
the IRS take all necessary steps to ensure that those requirements are met.
If unauthorized disclosures do occur, it is similarly important that the
IRS take steps to address them and ensure that they are not repeated. Such
steps include, as appropriate, suspension or termination of further disclosures
to an authorized recipient. Nevertheless, because the authority to receive
returns and return information is provided by law, authorized disclosures
should not be suspended or terminated for failure to maintain adequate safeguards
without appropriate administrative review procedures. The temporary regulations
set forth procedures to ensure that authorized recipients provide the proper
security and protection to returns and return information.
Temporary regulations in this issue of the Bulletin amend the Procedure
and Administration Regulations (26 CFR Part 301) relating to section 6103(p)(4)
and (p)(7). The temporary regulations provide the intermediate review and
termination procedures for all authorized recipients.
The text of the temporary regulations also serves as the text of these
proposed regulations. The preamble to the temporary regulations explains
the proposed regulations.
It has been determined that this notice of proposed rulemaking is not
a significant regulatory action as defined in Executive Order 12866. Therefore,
a regulatory assessment is not required. Pursuant to the Regulatory Flexibility
Act (5 U.S.C. chapter 6), it is hereby certified that these regulations will
not have a significant economic impact on a substantial number of small businesses.
These regulations do not impose burdens or obligations on any person, but
instead provide certain rights of administrative review. Accordingly, a regulatory
flexibility analysis is not required. Pursuant to section 7805(f) of the
Code, these proposed regulations will be submitted to the Chief Counsel for
Advocacy of the Small Business Administration for comment on their impact
on small business.
Comments and Requests for a Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any electronic and written comments (a signed
original and eight (8) copies) that are submitted timely to the IRS. The
IRS and Treasury Department specifically request comments on the clarity of
the proposed regulations and how they can be made easier to understand. All
comments will be available for public inspection and copying. A public hearing
may be scheduled if requested in writing by a person who timely submits comments.
If a public hearing is scheduled, notice of the date, time, and place for
the hearing will be published in the Federal Register.
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 301 is proposed to be amended as follows:
PART 301—PROCEDURE AND ADMINISTRATION
Paragraph 1. The authority citation for part 301 is amended, in part,
by adding an entry in numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
Sections 301.6103(p)(4)-1 and 301.6103(p)(7)-1 also issued under 26
U.S.C. 6103(p)(4) and (7) and (q); * * *
Par. 2. Section 301.6103(p)(4)-1 is added to read as follows:
§ 301.6103(p)(4)-1T Procedures relating to safeguards
for returns or return information.
[The text of proposed § 301.6103(p)(4)-1 is the same as the
text of § 301.6103(p)(4)-1T published elsewhere in this issue of
Par. 3. Section 301.6103(p)(7)-1 is added to read as follows:
§301.6103(p)(7)-1 Procedures for administrative review
of a determination that an authorized recipient has failed to safeguard tax
returns or return information.
[The text of proposed §301.6103(p)(7)-1 is the same as the text
of §301.6103(p)(7)-1T published elsewhere in this issue of the Bulletin].
Mark E. Matthews,
Services and Enforcement.
(Filed by the Office of the Federal Register on February 23, 2006, 8:45
a.m., and published in the issue of the Federal Register for February 24,
2006, 71 F.R. 9487)
The principal author of these regulations is Melinda K. Fisher, Office
of the Associate Chief Counsel (Procedure & Administration), Disclosure
and Privacy Law Division.
* * * * *
Internal Revenue Bulletin 2006-12
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