Procedures for Administrative Review of a Determination That an Authorized Recipient Has Failed To Safeguard Tax Returns or Return Information, 6829-6831 [E9-2827]
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Federal Register / Vol. 74, No. 27 / Wednesday, February 11, 2009 / Rules and Regulations
FOR FURTHER INFORMATION CONTACT:
Frances Kelly, (202) 622–7770 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are the
subject of this document are under
section 1502 of the Internal Revenue
Code.
Need for Correction
As published, final regulations (TD
9442) contains errors that may prove to
be misleading and are in need of
clarification.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Example 4. * * *
(ii) No deemed satisfaction and reissuance.
Because the assignment of the B note is an
exchange to which section 351 applies and
neither S nor B recognize gain or loss, the
transaction is not a triggering transaction
under paragraph (g)(3)(i)(B)(1) of this section,
and the note is not treated as satisfied and
reissued under paragraph (g)(3)(ii) of this
section.
Correction of Publication
Accordingly, 26 CFR part 1 is
corrected by making the following
correcting amendments:
■
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. Section 1.1502–13 is amended
as follows:
1. The second sentence of paragraph
(g)(3)(i)(B) is revised.
2. Paragraph (g)(3)(i)(B)(1)(vi) is
revised.
3. Paragraph (g)(7)(ii) Example 4. (ii)
is revised.
4. The paragraph title for paragraph
(g)(7)(ii) Example 4. (iv) is added.
5. The sixth sentence of paragraph
(g)(7)(ii) Example 5. (i) is revised.
■
§ 1.1502–13
Intercompany transactions.
dwashington3 on PRODPC68 with RULES
*
*
*
*
*
(g) * * *
(3) * * *
(i) * * *
(B) * * * In making this
determination, if a creditor or debtor
realizes an amount in a transaction in
which a creditor assigns all or part of its
rights under an intercompany obligation
to the debtor, or a debtor assigns all or
part of its obligations under an
intercompany obligation to the creditor,
the transaction will be treated as an
extinguishment and will be excepted
from the definition of ‘‘triggering
transaction’’ only if either of the
exceptions in paragraphs (g)(3)(i)(B)(5)
or (6) of this section apply. * * *
(1) * * *
(vi) The stock of the transferee
member (or a higher-tier member other
than a higher-tier member of an 80percent chain that includes the
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transferor and transferee) is disposed of
within 12 months from the assignment
of the intercompany obligation, unless
at the time of the assignment, the
transferor member, transferee member
(or in the case of successive section 351
exchanges, each transferor and
transferee member) and the debtor
member are all in the same 80-percent
chain; and all of the stock of the
transferee (or in the case of successive
section 351 exchanges, the lowest-tier
transferee) held by members of the
group is disposed of as part of the same
plan or arrangement, either directly or
indirectly, to persons that are not
members of the group.
*
*
*
*
*
(7) * * *
(ii) * * *
*
*
*
*
(iv) Transferee loss subject to limitation.
* * *
*
*
*
*
*
Example 5. * * *
(i) * * * The terms and conditions of the
note are not modified in connection with the
sales transaction, the transaction does not
result in a change in payment expectations,
and no amount of income, gain, deduction,
or loss is recognized by S, B, or T with
respect to the note.
*
*
*
*
*
Guy Traynor,
Acting Chief, Publications and Regulations
Branch, Legal Processing Division, Associate
Chief Counsel, (Procedure and
Administration).
[FR Doc. E9–2828 Filed 2–10–09; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 301
[TD 9445]
RIN 1545–BF21
Procedures for Administrative Review
of a Determination That an Authorized
Recipient Has Failed To Safeguard Tax
Returns or Return Information
AGENCY: Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations and removal of
temporary regulations.
PO 00000
Frm 00007
Fmt 4700
Sfmt 4700
6829
SUMMARY: This document contains final
regulations regarding administrative
review procedures for certain
government agencies and other
authorized recipients of returns or
return information whose receipt of
returns and return information may be
suspended or terminated because they
do not maintain proper safeguards. The
regulations provide guidance to
responsible IRS personnel and
authorized recipients as to these
administrative procedures.
DATES: Effective Date: These regulations
are effective on February 11, 2009.
Applicability Date: These regulations
apply to all authorized recipients of
returns and return information that are
subject to the safeguard requirements set
forth in section 6103(p)(4) on or after
February 11, 2009.
FOR FURTHER INFORMATION CONTACT:
Wendy L. Kribell, (202) 622–4570 (not
a toll-free number).
Background
This document contains final
regulations amending the Procedure and
Administration Regulations (26 CFR
Part 301) under section 6103(p)(4),
(p)(7), and (q) of the Internal Revenue
Code (Code). Section 6103 protects
returns and return information from
disclosure except to certain government
agencies and other authorized
recipients, including State tax agencies
as provided in section 6103(d). Section
6103(p)(4) provides that certain
authorized recipients must establish
procedures satisfactory to the IRS for
safeguarding the returns and return
information. The IRS reviews, on a
regular basis, safeguards established by
these authorized recipients. If the IRS
determines that an authorized recipient
has failed to maintain adequate
safeguards or has made any
unauthorized inspections or disclosures
of returns or return information, section
6103(p)(4) authorizes the IRS to
terminate or suspend disclosure of
returns and return information to the
authorized recipient until the IRS is
satisfied that adequate steps have been
taken to ensure adequate safeguards or
prevent additional unauthorized
inspections or disclosures.
Section 6103(p)(7) requires the
Secretary to prescribe regulations
providing for administrative review of
an IRS determination that a State tax
agency has failed to meet the
safeguarding requirements. Former
§ 301.6103(p)(7)-1 contained procedures
to allow State tax agencies, prior to a
suspension or termination of disclosure,
to appeal a preliminary finding by the
IRS of inadequate safeguards or
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6830
Federal Register / Vol. 74, No. 27 / Wednesday, February 11, 2009 / Rules and Regulations
dwashington3 on PRODPC68 with RULES
unauthorized disclosure, or to establish
that the agency had taken steps to
prevent a recurrence of the violation.
Section 6103(q) further authorizes the
Secretary to prescribe such other
regulations as are necessary to carry out
the provisions of section 6103 generally.
On February 24, 2006, the Treasury
Department and IRS published in the
Federal Register proposed regulations
(REG–157271–05, 71 FR 9487) and
temporary regulations (TD 9252, 71 FR
9449) to extend the administrative
review procedure for State tax agencies
to ‘‘any’’ authorized recipient specified
in section 6103(p)(4), and to include
unauthorized inspection within the
IRS’s scope of review (in addition to
inadequate safeguards and unauthorized
disclosure). Two written comments
were received, and no public hearing
was requested or held. After
consideration of the comments received,
the proposed regulations are adopted as
final regulations, and the corresponding
temporary regulations are removed. See
§ 601.601(d)(2)(ii)(b).
Explanation and Summary of
Comments
The first commentator suggested that
the final regulations expressly provide
that the IRS may give written notice of
its intention to terminate or suspend
disclosure via facsimile or electronic
mail. This suggestion was not adopted
because nothing in the regulations
precludes a written notice from being
delivered electronically. Not specifying
the means by which written notice is
conveyed would also afford greater
flexibility in providing notice as other
means might evolve.
The second commentator suggested
that the proposed regulations would
legalize the misuse of returns and return
information and thereby discourage
taxpayers from seeking tax advice. This
suggestion is unwarranted. Section 6103
protects returns and return information
from disclosure except to authorized
recipients. Section 6103(p)(4) requires
certain authorized recipients to
establish procedures for safeguarding
returns and return information. If the
authorized recipient fails to maintain
adequate safeguards or has made any
unauthorized inspections or disclosures,
additional disclosures to that recipient
may be suspended or terminated until
the IRS is satisfied that adequate steps
have been taken to ensure adequate
safeguards or prevent additional
unauthorized inspections or disclosures.
Prior to these final regulations,
procedures were available pursuant to
section 6103(p)(7) to allow State tax
agencies, prior to a suspension or
termination of disclosure, to appeal a
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14:15 Feb 10, 2009
Jkt 217001
preliminary finding of inadequate
safeguards or unauthorized disclosure,
or to establish that the agency had taken
steps to prevent a recurrence of the
violation. The purpose of these final
regulations is to extend these
administrative review procedures from
State tax agencies to all authorized
recipients described in section
6103(p)(4) and to include a preliminary
finding of unauthorized inspection
within the scope of review. The
extension of these provisions to all
authorized recipients enhances the
protections afforded to returns and
return information.
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 determined that section
553(b) of the Administrative Procedure
Act (5 U.S.C. chapter 5) does not apply
to these regulations. 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) of the Internal Revenue
Code, the notice of proposed rulemaking
preceding these regulations was
submitted to the Chief Counsel for
Advocacy of the Small Business
Administration for comment on its
impact on small businesses.
Drafting Information
The principal author of these
regulations is Wendy L. Kribell, Office
of the Associate Chief Counsel
(Procedure & Administration).
List of Subjects in 26 CFR Part 301
Employment taxes, Estate taxes,
Excise taxes, Gift taxes, Income taxes,
Penalties, Reporting and recordkeeping
requirements.
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 continues to read in part as
follows:
■
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 301.6103(p)(4)–1 is
added to read as follows:
■
PO 00000
Frm 00008
Fmt 4700
Sfmt 4700
§ 301.6103(p)(4)–1 Procedures relating to
safeguards for returns or return
information.
For security guidelines and other
safeguards for protecting returns and
return information, see guidance
published by the Internal Revenue
Service. For procedures for
administrative review of a
determination that an authorized
recipient has failed to safeguard returns
or return information, see
§ 301.6103(p)(7)–1.
§ 301.6103(p)(4)–1T
[Removed]
Par. 3. Section 301.6103(p)(4)–1T is
removed.
■ Par. 4. 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 returns or return information.
(a) In general. Notwithstanding any
section of the Internal Revenue Code
(Code), the Internal Revenue Service
(IRS) may terminate or suspend
disclosure of returns and return
information to any authorized recipient
specified in section (p)(4) of section
6103, if the IRS determines that:
(1) The authorized recipient has
allowed an unauthorized inspection or
disclosure of returns or return
information and that the authorized
recipient has not taken adequate
corrective action to prevent the
recurrence of an unauthorized
inspection or disclosure; or
(2) The authorized recipient does not
satisfactorily maintain the safeguards
prescribed by section 6103(p)(4), and
has made no adequate plan to improve
its system to maintain the safeguards
satisfactorily.
(b) Notice of IRS’s intention to
terminate or suspend disclosure. Prior
to terminating or suspending authorized
disclosures, the IRS will notify the
authorized recipient in writing of the
IRS’s preliminary determination and of
the IRS’s intention to discontinue
disclosure of returns and return
information to the authorized recipient.
Upon so notifying the authorized
recipient, the IRS, if it determines that
tax administration otherwise would be
seriously impaired, may suspend further
disclosures of returns and return
information to the authorized recipient
pending a final determination by the
Commissioner or a Deputy
Commissioner described in paragraph
(d)(2) of this section.
(c) Authorized recipient’s right to
appeal. An authorized recipient shall
have 30 days from the date of receipt of
a notice described in paragraph (b) of
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Federal Register / Vol. 74, No. 27 / Wednesday, February 11, 2009 / Rules and Regulations
this section to appeal the preliminary
determination described in paragraph
(b) of this section. The appeal shall be
made directly to the Commissioner.
(d) Procedures for administrative
review. (1) To appeal a preliminary
determination described in paragraph
(b) of this section, the authorized
recipient shall send a written request for
a conference to: Commissioner of
Internal Revenue (Attention:
SE:S:CLD:GLD), 1111 Constitution
Avenue, NW., Washington, DC 20224.
The request must include a complete
description of the authorized recipient’s
present system of safeguarding returns
or return information received by the
authorized recipient (and its authorized
contractors or agents, if any). The
request must state the reason or reasons
the authorized recipient believes that
such system or practice (including
improvements, if any, to such system or
practice expected to be made in the near
future) is or will be adequate to
safeguard returns or return information.
(2) Within 45 days of the receipt of
the request made in accordance with the
provisions of paragraph (d)(1) of this
section, the Commissioner or Deputy
Commissioner personally shall hold a
conference with representatives of the
authorized recipient, after which the
Commissioner or Deputy Commissioner
shall make a final determination with
respect to the appeal.
(e) Effective/applicability date. This
section applies to all authorized
recipients of returns and return
information that are subject to the
safeguard requirements set forth in
section 6103(p)(4) on or after February
11, 2009.
§ 301.6103(p)(7)–1T
[Removed]
Par. 5. Section 301.6103(p)(7)–1T is
removed.
■
Linda E. Stiff,
Deputy Commissioner for Services and
Enforcement.
Approved: January 13, 2009.
Eric Solomon,
Assistant Secretary of the Treasury (Tax
Policy).
[FR Doc. E9–2827 Filed 2–10–09; 8:45 am]
FOR FURTHER INFORMATION CONTACT:
Thomas J. Schlageter, Assistant Legal
Counsel, or Kathleen Oram, Senior
Attorney, at (202) 663–4640 (voice) or
(202) 663–7026 (TTY). Copies of this
final rule are also available in the
following alternate formats: large print,
Braille, audiotape and electronic file on
computer disk. Requests for this notice
in an alternative format should be made
to EEOC’s Publication Center at 1–800–
669–3362 (voice) or 1–800–800–3302
(TTY).
The Equal
Employment Opportunity Commission
is adding a new section 1611.15 to its
Privacy Act regulations to exempt
records contained in EEOC–22, EEOC
Personnel Security Files, from the
accounting and disclosure provisions of
the Privacy Act in accordance with
section k(5) of the Act, but only to the
extent that an accounting of disclosures
or a disclosure itself identifies witnesses
promised confidentiality as a condition
of providing information during the
course of a background investigation.
The Commission is also amending
sections 1611.5(a)(5) and 1611.5(b) to
conform them to the addition of the new
exemption.
The Commission published these
proposed changes in a Proposed Rule on
March 31, 2008. 73 FR 16806. EEOC did
not receive any comments on the
proposed rule. This final rule, therefore,
adopts the amendments proposed
without change.
SUPPLEMENTARY INFORMATION:
Regulatory Procedures
29 CFR Part 1611
Pursuant to Executive Order 12866,
EEOC has determined that the
regulation will not have an annual effect
on the economy of $100 million or more
or adversely affect in a material way the
economy, a sector of the economy,
productivity, competition, jobs, the
environment, public health or safety, or
State, local, or tribal governments or
communities. Therefore, a detailed costbenefit assessment of the regulation is
not required.
Privacy Act Regulations
Paperwork Reduction Act
AGENCY: Equal Employment
Opportunity Commission.
ACTION: Final rule.
This rule contains no new
information collection requirements
subject to review by the Office of
Management and Budget under the
EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION
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14:15 Feb 10, 2009
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PO 00000
Frm 00009
Fmt 4700
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Paperwork Reduction Act (44 U.S.C.
Chapter 35).
Regulatory Flexibility Act
The Commission, in accordance with
the Regulatory Flexibility Act (5 U.S.C.
606(b)), has reviewed this regulation
and by approving it certifies that this
regulation will not have a significant
economic impact on a substantial
number of small entities.
Unfunded Mandates Reform Act of 1995
This rule will not result in the
expenditure by State, local, or tribal
governments, in the aggregate, or by the
private sector, of $100 million or more
in any one year, and it will not
significantly or uniquely affect small
governments. Therefore, no actions were
deemed necessary under the provisions
of the Unfunded Mandates Reform Act
of 1995.
Congressional Review Act
This action concerns agency
organization, procedure or practice that
does not substantially affect the rights or
obligations of non-agency parties and,
accordingly, is not a ‘‘rule’’ as that term
is used by the Congressional Review Act
(Subtitle E of the Small Business
Regulatory Enforcement Fairness Act of
1996 (SBREFA)). Therefore, the
reporting requirement of 5 U.S.C. 801
does not apply.
List of Subjects in 29 CFR Part 1611
Privacy Act.
Dated: February 4, 2009.
For the Commission.
Stuart J. Ishimaru,
Acting Chairman.
Accordingly, chapter XIV of title 29 of
the Code of Federal Regulations is
amended as follows:
■
PART 1611—PRIVACY ACT
REGULATIONS
Executive Order 12866
BILLING CODE 4830–01–P
dwashington3 on PRODPC68 with RULES
SUMMARY: The Equal Employment
Opportunity Commission is revising its
regulations at 29 CFR Part 1611, which
implement the Privacy Act of 1974, to
exempt one of its systems of records
from one of the Act’s requirements.
DATES: Effective Date: February 11,
2009.
6831
1. The authority citation for Part 1611
continues to read as follows:
■
Authority: 5 U.S.C. 552a.
2. In section 1611.5 revise paragraphs
(a)(5) and (b) to read as follows:
■
§ 1611.5 Disclosure of requested
information to individuals.
(a) * * *
*
*
*
*
(5) The Commission shall not deny
any request under § 1611.3 concerning
the existence of records about the
requester in any system of records it
maintains, or any request for access to
such records, unless that system is
exempted from the requirements of 5
*
E:\FR\FM\11FER1.SGM
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]]>Agencies
[Federal Register Volume 74, Number 27 (Wednesday, February 11, 2009)]
[Rules and Regulations]
[Pages 6829-6831]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-2827]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 301
[TD 9445]
RIN 1545-BF21
Procedures for Administrative Review of a Determination That an
Authorized Recipient Has Failed To Safeguard Tax Returns or Return
Information
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations and removal of temporary regulations.
-----------------------------------------------------------------------
SUMMARY: This document contains final regulations regarding
administrative review procedures for certain government agencies and
other authorized recipients of returns or return information whose
receipt of returns and return information may be suspended or
terminated because they do not maintain proper safeguards. The
regulations provide guidance to responsible IRS personnel and
authorized recipients as to these administrative procedures.
DATES: Effective Date: These regulations are effective on February 11,
2009.
Applicability Date: These regulations apply to all authorized
recipients of returns and return information that are subject to the
safeguard requirements set forth in section 6103(p)(4) on or after
February 11, 2009.
FOR FURTHER INFORMATION CONTACT: Wendy L. Kribell, (202) 622-4570 (not
a toll-free number).
Background
This document contains final regulations amending the Procedure and
Administration Regulations (26 CFR Part 301) under section 6103(p)(4),
(p)(7), and (q) of the Internal Revenue Code (Code). Section 6103
protects returns and return information from disclosure except to
certain government agencies and other authorized recipients, including
State tax agencies as provided in section 6103(d). Section 6103(p)(4)
provides that certain authorized recipients must establish procedures
satisfactory to the IRS for safeguarding the returns and return
information. The IRS reviews, on a regular basis, safeguards
established by these authorized recipients. If the IRS determines that
an authorized recipient has failed to maintain adequate safeguards or
has made any unauthorized inspections or disclosures of returns or
return information, section 6103(p)(4) authorizes the IRS to terminate
or suspend disclosure of returns and return information to the
authorized recipient until the IRS is satisfied that adequate steps
have been taken to ensure adequate safeguards or prevent additional
unauthorized inspections or disclosures.
Section 6103(p)(7) requires the Secretary to prescribe regulations
providing for administrative review of an IRS determination that a
State tax agency has failed to meet the safeguarding requirements.
Former Sec. 301.6103(p)(7)-1 contained procedures to allow State tax
agencies, prior to a suspension or termination of disclosure, to appeal
a preliminary finding by the IRS of inadequate safeguards or
[[Page 6830]]
unauthorized disclosure, or to establish that the agency had taken
steps to prevent a recurrence of the violation. Section 6103(q) further
authorizes the Secretary to prescribe such other regulations as are
necessary to carry out the provisions of section 6103 generally.
On February 24, 2006, the Treasury Department and IRS published in
the Federal Register proposed regulations (REG-157271-05, 71 FR 9487)
and temporary regulations (TD 9252, 71 FR 9449) to extend the
administrative review procedure for State tax agencies to ``any''
authorized recipient specified in section 6103(p)(4), and to include
unauthorized inspection within the IRS's scope of review (in addition
to inadequate safeguards and unauthorized disclosure). Two written
comments were received, and no public hearing was requested or held.
After consideration of the comments received, the proposed regulations
are adopted as final regulations, and the corresponding temporary
regulations are removed. See Sec. 601.601(d)(2)(ii)(b).
Explanation and Summary of Comments
The first commentator suggested that the final regulations
expressly provide that the IRS may give written notice of its intention
to terminate or suspend disclosure via facsimile or electronic mail.
This suggestion was not adopted because nothing in the regulations
precludes a written notice from being delivered electronically. Not
specifying the means by which written notice is conveyed would also
afford greater flexibility in providing notice as other means might
evolve.
The second commentator suggested that the proposed regulations
would legalize the misuse of returns and return information and thereby
discourage taxpayers from seeking tax advice. This suggestion is
unwarranted. Section 6103 protects returns and return information from
disclosure except to authorized recipients. Section 6103(p)(4) requires
certain authorized recipients to establish procedures for safeguarding
returns and return information. If the authorized recipient fails to
maintain adequate safeguards or has made any unauthorized inspections
or disclosures, additional disclosures to that recipient may be
suspended or terminated until the IRS is satisfied that adequate steps
have been taken to ensure adequate safeguards or prevent additional
unauthorized inspections or disclosures. Prior to these final
regulations, procedures were available pursuant to section 6103(p)(7)
to allow State tax agencies, prior to a suspension or termination of
disclosure, to appeal a preliminary finding of inadequate safeguards or
unauthorized disclosure, or to establish that the agency had taken
steps to prevent a recurrence of the violation. The purpose of these
final regulations is to extend these administrative review procedures
from State tax agencies to all authorized recipients described in
section 6103(p)(4) and to include a preliminary finding of unauthorized
inspection within the scope of review. The extension of these
provisions to all authorized recipients enhances the protections
afforded to returns and return information.
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
determined that section 553(b) of the Administrative Procedure Act (5
U.S.C. chapter 5) does not apply to these regulations. 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) of the Internal Revenue Code, the
notice of proposed rulemaking preceding these regulations was submitted
to the Chief Counsel for Advocacy of the Small Business Administration
for comment on its impact on small businesses.
Drafting Information
The principal author of these regulations is Wendy L. Kribell,
Office of the Associate Chief Counsel (Procedure & Administration).
List of Subjects in 26 CFR Part 301
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income
taxes, Penalties, Reporting and recordkeeping requirements.
Adoption of Amendments to the Regulations
0
Accordingly, 26 CFR Part 301 is amended as follows:
PART 301--PROCEDURE AND ADMINISTRATION
0
Paragraph 1. The authority citation for part 301 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 2. Section 301.6103(p)(4)-1 is added to read as follows:
Sec. 301.6103(p)(4)-1 Procedures relating to safeguards for returns
or return information.
For security guidelines and other safeguards for protecting returns
and return information, see guidance published by the Internal Revenue
Service. For procedures for administrative review of a determination
that an authorized recipient has failed to safeguard returns or return
information, see Sec. 301.6103(p)(7)-1.
Sec. 301.6103(p)(4)-1T [Removed]
0
Par. 3. Section 301.6103(p)(4)-1T is removed.
0
Par. 4. Section 301.6103(p)(7)-1 is added to read as follows:
Sec. 301.6103(p)(7)-1 Procedures for administrative review of a
determination that an authorized recipient has failed to safeguard
returns or return information.
(a) In general. Notwithstanding any section of the Internal Revenue
Code (Code), the Internal Revenue Service (IRS) may terminate or
suspend disclosure of returns and return information to any authorized
recipient specified in section (p)(4) of section 6103, if the IRS
determines that:
(1) The authorized recipient has allowed an unauthorized inspection
or disclosure of returns or return information and that the authorized
recipient has not taken adequate corrective action to prevent the
recurrence of an unauthorized inspection or disclosure; or
(2) The authorized recipient does not satisfactorily maintain the
safeguards prescribed by section 6103(p)(4), and has made no adequate
plan to improve its system to maintain the safeguards satisfactorily.
(b) Notice of IRS's intention to terminate or suspend disclosure.
Prior to terminating or suspending authorized disclosures, the IRS will
notify the authorized recipient in writing of the IRS's preliminary
determination and of the IRS's intention to discontinue disclosure of
returns and return information to the authorized recipient. Upon so
notifying the authorized recipient, the IRS, if it determines that tax
administration otherwise would be seriously impaired, may suspend
further disclosures of returns and return information to the authorized
recipient pending a final determination by the Commissioner or a Deputy
Commissioner described in paragraph (d)(2) of this section.
(c) Authorized recipient's right to appeal. An authorized recipient
shall have 30 days from the date of receipt of a notice described in
paragraph (b) of
[[Page 6831]]
this section to appeal the preliminary determination described in
paragraph (b) of this section. The appeal shall be made directly to the
Commissioner.
(d) Procedures for administrative review. (1) To appeal a
preliminary determination described in paragraph (b) of this section,
the authorized recipient shall send a written request for a conference
to: Commissioner of Internal Revenue (Attention: SE:S:CLD:GLD), 1111
Constitution Avenue, NW., Washington, DC 20224. The request must
include a complete description of the authorized recipient's present
system of safeguarding returns or return information received by the
authorized recipient (and its authorized contractors or agents, if
any). The request must state the reason or reasons the authorized
recipient believes that such system or practice (including
improvements, if any, to such system or practice expected to be made in
the near future) is or will be adequate to safeguard returns or return
information.
(2) Within 45 days of the receipt of the request made in accordance
with the provisions of paragraph (d)(1) of this section, the
Commissioner or Deputy Commissioner personally shall hold a conference
with representatives of the authorized recipient, after which the
Commissioner or Deputy Commissioner shall make a final determination
with respect to the appeal.
(e) Effective/applicability date. This section applies to all
authorized recipients of returns and return information that are
subject to the safeguard requirements set forth in section 6103(p)(4)
on or after February 11, 2009.
Sec. 301.6103(p)(7)-1T [Removed]
0
Par. 5. Section 301.6103(p)(7)-1T is removed.
Linda E. Stiff,
Deputy Commissioner for Services and Enforcement.
Approved: January 13, 2009.
Eric Solomon,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. E9-2827 Filed 2-10-09; 8:45 am]
BILLING CODE 4830-01-P
