Disclosure of Return Information in Connection With Written Contracts Among the IRS, Whistleblowers, and Legal Representatives of Whistleblowers, 13880-13882 [2011-6111]
Download as PDF
<![CDATA[
13880
Federal Register / Vol. 76, No. 50 / Tuesday, March 15, 2011 / Rules and Regulations
List of Subjects in 19 CFR Part 12
Cultural property, Customs duties and
inspection, Imports, Prohibited
merchandise.
Amendment to CBP Regulations
For the reasons set forth above, part
12 of Title 19 of the Code of Federal
Regulations (19 CFR part 12), is
amended as set forth below:
PART 12—SPECIAL CLASSES OF
MERCHANDISE
1. The general authority citation for
part 12 and the specific authority
citation for § 12.104g continue to read as
follows:
■
Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202
(General Note 3(i), Harmonized Tariff
Schedule of the United States (HTSUS)),
1624;
*
*
*
*
*
Sections 12.104 through 12.104i also
issued under 19 U.S.C. 2612;
*
*
*
§ 12.104g
*
*
[Amended]
2. In § 12.104g, paragraph (a), the table
is amended in the entry for Colombia by
adding, after the reference to ‘‘CBP Dec.
06–09’’, the words ‘‘extended by CBP
Dec. 11–06’’.
■
action is being taken to ensure accuracy
and clarity in the Agency’s regulations.
DATES: This rule is effective March 15,
2011.
FOR FURTHER INFORMATION CONTACT:
Olivia A. Pritzlaff, Center for Drug
Evaluation and Research, Food and
Drug Administration, Bldg. 51, Rm.
6308, 10903 New Hampshire Ave.,
Silver Spring, MD 20993–0002, 301–
796–3506.
SUPPLEMENTARY INFORMATION: FDA is
amending its regulation in 21 CFR
312.83 to correct an inaccurate crossreference to other sections of the IND
regulations. FDA is amending its
regulation in 21 CFR 314.94 to correct
an inaccurate cross-reference to a
section of the FD&C Act.
Publication of this document
constitutes final action on these changes
under the Administrative Procedure Act
(5 U.S.C. 553). FDA has determined that
notice and public comment are
unnecessary because this amendment to
the regulations provides only technical
changes to correct inaccurate crossreferences to the IND regulations and
the FD&C Act.
Authority: 21 U.S.C. 321, 331, 351, 352,
353, 355, 356, 356a, 356b, 356c, 371, 374,
379e.
List of Subjects
AGENCY:
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
PART 312—INVESTIGATIONAL NEW
DRUG APPLICATION
[Docket No. FDA–2011–N–0130]
Investigational New Drug Applications
and Abbreviated New Drug
Applications; Technical Amendment
Food and Drug Administration,
HHS.
erowe on DSK5CLS3C1PROD with RULES
1. The authority citation for 21 CFR
part 312 continues to read as follows:
■
Authority: 21 U.S.C. 321, 331, 351, 352,
353, 355, 360bbb, 371; 42 U.S.C. 262.
§ 312.83
Final rule; technical
amendment.
ACTION:
[Amended]
2. Section 312.83 is amended by
removing ‘‘312.34 and 312.35’’ and by
adding in its place ‘‘312.305 and
312.320’’.
■
The Food and Drug
Administration (FDA) is amending its
investigational new drug application
(IND) regulations and abbreviated new
drug application regulations to correct
inaccurate cross-references to the IND
regulations and the Federal Food, Drug,
and Cosmetic Act (the FD&C Act). This
Jkt 223001
BILLING CODE 4160–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 301
[TD 9516]
RIN 1545–BG73
Disclosure of Return Information in
Connection With Written Contracts
Among the IRS, Whistleblowers, and
Legal Representatives of
Whistleblowers
SUMMARY:
21 CFR Parts 312 and 314
13:15 Mar 14, 2011
[FR Doc. 2011–5946 Filed 3–14–11; 8:45 am]
21 CFR Part 312
Administrative practice and
procedure, Confidential business
information, Drugs, Reporting and
recordkeeping requirements.
Therefore, under the Federal Food,
Drug, and Cosmetic Act and under
authority delegated to the Commissioner
of Food and Drugs, 21 CFR parts 312
and 314 are amended as follows:
BILLING CODE 9111–14–P
VerDate Mar<15>2010
Dated: March 9, 2011.
Leslie Kux,
Acting Assistant Commissioner for Policy.
Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations and removal of
temporary regulations.
21 CFR Part 314
[FR Doc. 2011–5879 Filed 3–14–11; 8:45 am]
SUMMARY:
[Amended]
4. Section 314.94 is amended in
paragraph (a)(8)(iv) by removing
‘‘505(j)(4)(D)’’ and by adding in its place
‘‘505(j)(5)(F)’’.
■
Drugs, Exports, Imports,
Investigations, Labeling, Medical
research, Reporting and recordkeeping
requirements, Safety.
Alan Bersin,
Commissioner, U.S. Customs and Border
Protection.
Approved: March 9, 2011.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
AGENCY:
§ 314.94
PART 314—APPLICATIONS FOR FDA
APPROVAL TO MARKET A NEW DRUG
3. The authority citation for 21 CFR
part 314 continues to read as follows:
■
PO 00000
Frm 00002
Fmt 4700
Sfmt 4700
This document contains final
regulations relating to the disclosure of
return information by an officer or
employee of the Treasury Department,
to a whistleblower and, if applicable,
the legal representative of the
whistleblower, to the extent necessary
in connection with a written contract
among the IRS, the whistleblower and,
if applicable, the legal representative of
the whistleblower, for services relating
to the detection of violations of the
internal revenue laws or related statutes.
The final regulations will affect officers
and employees of the Treasury
Department who disclose return
information to whistleblowers or their
legal representatives in connection with
written contracts among the IRS,
whistleblowers and, if applicable, their
legal representatives, for services
relating to the detection of violations of
the internal revenue laws or related
statutes. The final regulations will also
affect any whistleblower or legal
representative of a whistleblower who
receives return information in
connection with a written contract
among the IRS, the whistleblower and,
if applicable, the legal representative of
the whistleblower, for services relating
to the detection of violations of the
internal revenue laws or related statutes.
E:\FR\FM\15MRR1.SGM
15MRR1
Federal Register / Vol. 76, No. 50 / Tuesday, March 15, 2011 / Rules and Regulations
Effective Date: These final
regulations are effective on March 15,
2011.
Applicability Date: For dates of
applicability, see § 301.6103(n)–2(f).
FOR FURTHER INFORMATION CONTACT:
Helene R. Newsome, 202–622–7950 (not
a toll-free number).
SUPPLEMENTARY INFORMATION:
DATES:
erowe on DSK5CLS3C1PROD with RULES
Background
This document contains final
regulations implementing amendments
to the Procedure and Administration
Regulations (26 CFR part 301) under
section 6103(n) relating to the
disclosure of return information in
connection with written contracts
among the IRS, whistleblowers and, if
applicable, their legal representatives.
The Tax Relief and Health Care Act of
2006, Public Law 109–432 (120 Stat.
2958), (the Act) was enacted on
December 20, 2006. Section 406 of the
Act amends section 7623, concerning
the payment of awards to
whistleblowers, and establishes a
Whistleblower Office within the IRS
that has responsibility for the
administration of a whistleblower
program. In connection with analyzing
information provided by a
whistleblower, or investigating a matter,
the IRS may determine that it requires
the assistance of the whistleblower, or
the legal representative of the
whistleblower. The Joint Committee on
Taxation (the JCT) has noted that ‘‘[t]o
the extent the disclosure of returns or
return information is required [for the
whistleblower or his or her legal
representative] to render such
assistance, the disclosure must be
pursuant to an IRS tax administration
contract.’’ Joint Committee on Taxation,
Technical Explanation of H.R. 6408,
The ‘‘Tax Relief and Health Care Act of
2006,’’ as Introduced in the House on
December 7, 2006, at 89 (JCX–50–06),
December 7, 2006. The JCT has further
noted that ‘‘[i]t is expected that such
disclosures will be infrequent and will
be made only when the assigned task
cannot be properly or timely completed
without the return information to be
disclosed.’’ Id.
Under section 6103(a), returns and
return information are confidential
unless the Internal Revenue Code
authorizes disclosure. Section 6103(n) is
the authority by which returns and
return information may be disclosed
pursuant to a tax administration
contract. Section 6103(n) authorizes,
pursuant to regulations prescribed by
the Secretary, returns and return
information to be disclosed to any
person, for purposes of tax
VerDate Mar<15>2010
13:15 Mar 14, 2011
Jkt 223001
administration, to the extent necessary
in connection with: (1) The processing,
storage, transmission, and reproduction
of returns and return information; (2)
the programming, maintenance, repair,
testing, and procurement of equipment;
and (3) the providing of other services.
On March 25, 2008, temporary
regulations (TD 9389) under section
6103(n) were published in the Federal
Register (73 FR 15668) describing the
circumstances under which officers and
employees of the Treasury Department
may disclose return information to
whistleblowers and, if applicable, their
legal representatives, in connection with
written contracts for services relating to
the detection of violations of the
internal revenue laws or related statutes.
A notice of proposed rulemaking (REG–
114942–07) cross-referencing the
temporary regulations was published in
the Federal Register for the same day
(73 FR 15687).
One written comment responding to
the notice of proposed rulemaking was
received. No public hearing was
requested or held. After consideration of
the comment, the regulations are
adopted as proposed with only minor
technical changes made.
The limitations applicable to section
6103(n) contracts as outlined in these
regulations are not a limitation on the
use of return information that may be
disclosed to a whistleblower or the legal
representative of a whistleblower during
an award determination administrative
proceeding and in an award
determination appeal to the U.S. Tax
Court.
Summary of Comment
The commentator recommended that
§ 301.6103(n)–2(b)(3) of the proposed
regulations be revised to eliminate any
requirement that a written contract be in
place for a whistleblower to be provided
with basic status information about the
whistleblower’s claim for award under
section 7623. The commentator drew a
comparison with whistleblower claims
under the False Claims Act and argued
that the standard for the IRS to share
status information with a whistleblower
should not be the same as that required
to share information from the actual
returns of taxpayers. Unlike other
statutory schemes, however,
information regarding the status of a
whistleblower’s claim with the IRS is
‘‘return information’’ as defined in
section 6103(b)(2). Like returns (defined
in section 6103(b)(1)), return
information is confidential under
section 6103(a) and may only be
disclosed if authorized by a specific
provision of the Code. In order to
disclose status information to a
PO 00000
Frm 00003
Fmt 4700
Sfmt 4700
13881
whistleblower, an exception to section
6103 must be applicable. Section
6103(n) provides authority for the IRS to
make status information disclosures to a
whistleblower. Because disclosures
pursuant to section 6103(n) require a
written tax administration contract, the
final regulations do not adopt the
commentator’s recommendation.
The commentator also recommended
that § 301.6103(n)–2(d)(3) of the
proposed regulations be revised to
eliminate the inspection requirement.
The commentator asserted that, by
contrast, § 301.6103(n)–1, ‘‘Disclosure of
returns and return information in
connection with written contracts or
agreements for the acquisition of
property or services for tax
administration purposes,’’ does not
include such a requirement and argued
that the requirement is unnecessary in
that the regulations already provide for
severe sanctions for any failure to
comply with the terms of written
contracts for services. In fact,
§ 301.6103(n)–1(e)(1) does indeed
contain an inspection requirement. The
final regulations retain the inspection
requirement as consistent with the
longstanding safeguard procedures that
incorporate inspection as an integral
part of the contracting process under
section 6103(n).
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, and 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 Code, the
proposed regulations preceding these
regulations were 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 Helene R. Newsome,
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.
E:\FR\FM\15MRR1.SGM
15MRR1
13882
Federal Register / Vol. 76, No. 50 / Tuesday, March 15, 2011 / Rules and Regulations
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 is amended by adding
entries in numerical order to read as
follows:
■
Authority: 26 U.S.C. 7805 * * *
Section 301.6103(n)–2 also issued under 26
U.S.C. 6103(n). * * *
Section 301.6103(n)–2 also issued under 26
U.S.C. 6103(q). * * *
Par. 2. Section 301.6103(n)–2 is added
to read as follows:
■
erowe on DSK5CLS3C1PROD with RULES
§ 301.6103(n)–2 Disclosure of return
information in connection with written
contracts among the IRS, whistleblowers,
and legal representatives of whistleblowers.
(a) General rule. (1) Pursuant to the
provisions of sections 6103(n) and 7623
of the Internal Revenue Code and
subject to the conditions of this section,
an officer or employee of the Treasury
Department is authorized to disclose
return information (as defined in section
6103(b)(2)) to a whistleblower and, if
applicable, the legal representative of
the whistleblower, to the extent
necessary in connection with a written
contract among the Internal Revenue
Service (IRS), the whistleblower and, if
applicable, the legal representative of
the whistleblower, for services relating
to the detection of violations of the
internal revenue laws or related statutes.
(2) The IRS shall have the discretion
to determine whether to enter into a
written contract pursuant to section
7623 with the whistleblower and, if
applicable, the legal representative of
the whistleblower, for services
described in paragraph (a)(1) of this
section.
(b) Limitations. (1) Disclosure of
return information in connection with a
written contract for services described
in paragraph (a)(1) of this section shall
be made only to the extent the IRS
deems it necessary in connection with
the reasonable or proper performance of
the contract. Disclosures may include,
but are not limited to, disclosures to
accomplish properly any purpose or
activity of the nature described in
section 6103(k)(6) and the regulations
thereunder.
(2) If the IRS determines that the
services of a whistleblower and, if
applicable, the legal representative of
the whistleblower, as described in
paragraph (a)(1) of this section, can be
performed reasonably or properly by
disclosure of only parts or portions of
VerDate Mar<15>2010
13:15 Mar 14, 2011
Jkt 223001
return information, then only the parts
or portions of the return information
shall be disclosed.
(3) Upon written request by a
whistleblower, or a legal representative
of a whistleblower, with whom the IRS
has entered into a written contract for
services as described in paragraph (a)(1)
of this section, the Director of the
Whistleblower Office, or designee of the
Director, may inform the whistleblower
and, if applicable, the legal
representative of the whistleblower, of
the status of the whistleblower’s claim
for award under section 7623, including
whether the claim is being evaluated for
potential investigative action, or is
pending due to an ongoing examination,
appeal, collection action, or litigation.
The information may be disclosed only
if the IRS determines that the disclosure
would not seriously impair Federal tax
administration.
(4) Return information disclosed to a
whistleblower and, if applicable, a legal
representative of a whistleblower, under
this section, shall not be further
disclosed or otherwise used by the
whistleblower or a legal representative
of a whistleblower, except as expressly
authorized in writing by the IRS.
(c) Penalties. Any whistleblower, or
legal representative of a whistleblower,
who receives return information under
this section, is subject to the civil and
criminal penalty provisions of sections
7431, 7213, and 7213A for the
unauthorized inspection or disclosure of
the return information.
(d) Safeguards. (1) Any
whistleblower, or the legal
representative of a whistleblower, who
receives return information under this
section, shall comply with all applicable
conditions and requirements as the IRS
may prescribe from time to time for the
purposes of protecting the
confidentiality of the return information
and preventing any disclosure or
inspection of the return information in
a manner not authorized by this section
(prescribed requirements).
(2) Any written contract for services
as described in paragraph (a)(1) of this
section shall provide that any
whistleblower and, if applicable, the
legal representative of a whistleblower,
who has access to return information
under this section, shall comply with
the prescribed requirements.
(3) Any whistleblower, or the legal
representative of a whistleblower, who
may receive return information under
this section, shall agree in writing,
before any disclosure of return
information is made, to permit an
inspection of the whistleblower’s or the
legal representative’s premises by the
IRS relative to the maintenance of the
PO 00000
Frm 00004
Fmt 4700
Sfmt 9990
return information disclosed under
these regulations and, upon completion
of services as described in the written
contract with the IRS, to dispose of all
return information by returning the
return information, including any and
all copies or notes made, to the IRS, or
to the extent that it cannot be returned,
by destroying the information in a
manner consistent with prescribed
requirements.
(4) If the IRS determines that any
whistleblower, or the legal
representative of a whistleblower, who
has access to return information under
this section, has failed to, or does not,
satisfy the prescribed requirements, the
IRS, using the procedures described in
the regulations under section 6103(p)(7),
may take any action it deems necessary
to ensure that the prescribed
requirements are or will be satisfied,
including—
(i) Suspension of further disclosures
of return information by the IRS to the
whistleblower and, if applicable, the
legal representative of the
whistleblower, until the IRS determines
that the conditions and requirements
have been or will be satisfied; and
(ii) Suspension or termination of any
duty or obligation arising under the
contract with the IRS.
(e) Definitions. For purposes of this
section—
(1) The term Treasury Department
includes the IRS and the Office of the
Chief Counsel for the IRS.
(2) The term whistleblower means an
individual who provides information to
the IRS regarding violations of the tax
laws or related statutes and submits a
claim for an award under section 7623
with respect to the information.
(3) The term legal representative
means any individual who is a member
in good standing in the bar of the
highest court of any state, possession,
territory, commonwealth, or the District
of Columbia, and who has a written
power of attorney executed by the
whistleblower.
(f) Effective/applicability date. This
section is applicable on March 15, 2011.
§ 301.6103(n)–2T
[Removed]
Par. 3. Section 301.6103(n)-2T is
removed.
■
Steven T. Miller,
Deputy Commissioner for Services and
Enforcement.
Approved: March 9, 2011.
Michael Mundaca,
Assistant Secretary of the Treasury (Tax
Policy).
[FR Doc. 2011–6111 Filed 3–14–11; 8:45 am]
BILLING CODE 4830–01–P
E:\FR\FM\15MRR1.SGM
15MRR1
]]>Agencies
[Federal Register Volume 76, Number 50 (Tuesday, March 15, 2011)]
[Rules and Regulations]
[Pages 13880-13882]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-6111]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 301
[TD 9516]
RIN 1545-BG73
Disclosure of Return Information in Connection With Written
Contracts Among the IRS, Whistleblowers, and Legal Representatives of
Whistleblowers
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations and removal of temporary regulations.
-----------------------------------------------------------------------
SUMMARY: This document contains final regulations relating to the
disclosure of return information by an officer or employee of the
Treasury Department, to a whistleblower and, if applicable, the legal
representative of the whistleblower, to the extent necessary in
connection with a written contract among the IRS, the whistleblower
and, if applicable, the legal representative of the whistleblower, for
services relating to the detection of violations of the internal
revenue laws or related statutes. The final regulations will affect
officers and employees of the Treasury Department who disclose return
information to whistleblowers or their legal representatives in
connection with written contracts among the IRS, whistleblowers and, if
applicable, their legal representatives, for services relating to the
detection of violations of the internal revenue laws or related
statutes. The final regulations will also affect any whistleblower or
legal representative of a whistleblower who receives return information
in connection with a written contract among the IRS, the whistleblower
and, if applicable, the legal representative of the whistleblower, for
services relating to the detection of violations of the internal
revenue laws or related statutes.
[[Page 13881]]
DATES: Effective Date: These final regulations are effective on March
15, 2011.
Applicability Date: For dates of applicability, see Sec.
301.6103(n)-2(f).
FOR FURTHER INFORMATION CONTACT: Helene R. Newsome, 202-622-7950 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document contains final regulations implementing amendments to
the Procedure and Administration Regulations (26 CFR part 301) under
section 6103(n) relating to the disclosure of return information in
connection with written contracts among the IRS, whistleblowers and, if
applicable, their legal representatives.
The Tax Relief and Health Care Act of 2006, Public Law 109-432 (120
Stat. 2958), (the Act) was enacted on December 20, 2006. Section 406 of
the Act amends section 7623, concerning the payment of awards to
whistleblowers, and establishes a Whistleblower Office within the IRS
that has responsibility for the administration of a whistleblower
program. In connection with analyzing information provided by a
whistleblower, or investigating a matter, the IRS may determine that it
requires the assistance of the whistleblower, or the legal
representative of the whistleblower. The Joint Committee on Taxation
(the JCT) has noted that ``[t]o the extent the disclosure of returns or
return information is required [for the whistleblower or his or her
legal representative] to render such assistance, the disclosure must be
pursuant to an IRS tax administration contract.'' Joint Committee on
Taxation, Technical Explanation of H.R. 6408, The ``Tax Relief and
Health Care Act of 2006,'' as Introduced in the House on December 7,
2006, at 89 (JCX-50-06), December 7, 2006. The JCT has further noted
that ``[i]t is expected that such disclosures will be infrequent and
will be made only when the assigned task cannot be properly or timely
completed without the return information to be disclosed.'' Id.
Under section 6103(a), returns and return information are
confidential unless the Internal Revenue Code authorizes disclosure.
Section 6103(n) is the authority by which returns and return
information may be disclosed pursuant to a tax administration contract.
Section 6103(n) authorizes, pursuant to regulations prescribed by the
Secretary, returns and return information to be disclosed to any
person, for purposes of tax administration, to the extent necessary in
connection with: (1) The processing, storage, transmission, and
reproduction of returns and return information; (2) the programming,
maintenance, repair, testing, and procurement of equipment; and (3) the
providing of other services.
On March 25, 2008, temporary regulations (TD 9389) under section
6103(n) were published in the Federal Register (73 FR 15668) describing
the circumstances under which officers and employees of the Treasury
Department may disclose return information to whistleblowers and, if
applicable, their legal representatives, in connection with written
contracts for services relating to the detection of violations of the
internal revenue laws or related statutes. A notice of proposed
rulemaking (REG-114942-07) cross-referencing the temporary regulations
was published in the Federal Register for the same day (73 FR 15687).
One written comment responding to the notice of proposed rulemaking
was received. No public hearing was requested or held. After
consideration of the comment, the regulations are adopted as proposed
with only minor technical changes made.
The limitations applicable to section 6103(n) contracts as outlined
in these regulations are not a limitation on the use of return
information that may be disclosed to a whistleblower or the legal
representative of a whistleblower during an award determination
administrative proceeding and in an award determination appeal to the
U.S. Tax Court.
Summary of Comment
The commentator recommended that Sec. 301.6103(n)-2(b)(3) of the
proposed regulations be revised to eliminate any requirement that a
written contract be in place for a whistleblower to be provided with
basic status information about the whistleblower's claim for award
under section 7623. The commentator drew a comparison with
whistleblower claims under the False Claims Act and argued that the
standard for the IRS to share status information with a whistleblower
should not be the same as that required to share information from the
actual returns of taxpayers. Unlike other statutory schemes, however,
information regarding the status of a whistleblower's claim with the
IRS is ``return information'' as defined in section 6103(b)(2). Like
returns (defined in section 6103(b)(1)), return information is
confidential under section 6103(a) and may only be disclosed if
authorized by a specific provision of the Code. In order to disclose
status information to a whistleblower, an exception to section 6103
must be applicable. Section 6103(n) provides authority for the IRS to
make status information disclosures to a whistleblower. Because
disclosures pursuant to section 6103(n) require a written tax
administration contract, the final regulations do not adopt the
commentator's recommendation.
The commentator also recommended that Sec. 301.6103(n)-2(d)(3) of
the proposed regulations be revised to eliminate the inspection
requirement. The commentator asserted that, by contrast, Sec.
301.6103(n)-1, ``Disclosure of returns and return information in
connection with written contracts or agreements for the acquisition of
property or services for tax administration purposes,'' does not
include such a requirement and argued that the requirement is
unnecessary in that the regulations already provide for severe
sanctions for any failure to comply with the terms of written contracts
for services. In fact, Sec. 301.6103(n)-1(e)(1) does indeed contain an
inspection requirement. The final regulations retain the inspection
requirement as consistent with the longstanding safeguard procedures
that incorporate inspection as an integral part of the contracting
process under section 6103(n).
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, and 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 Code, the proposed
regulations preceding these regulations were 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 Helene R. Newsome,
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.
[[Page 13882]]
Adoption of Amendments to the Regulations
Accordingly, 26 CFR part 301 is amended as follows:
PART 301--PROCEDURE AND ADMINISTRATION
0
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 301.6103(n)-2 also issued under 26 U.S.C. 6103(n). * * *
Section 301.6103(n)-2 also issued under 26 U.S.C. 6103(q). * * *
0
Par. 2. Section 301.6103(n)-2 is added to read as follows:
Sec. 301.6103(n)-2 Disclosure of return information in connection
with written contracts among the IRS, whistleblowers, and legal
representatives of whistleblowers.
(a) General rule. (1) Pursuant to the provisions of sections
6103(n) and 7623 of the Internal Revenue Code and subject to the
conditions of this section, an officer or employee of the Treasury
Department is authorized to disclose return information (as defined in
section 6103(b)(2)) to a whistleblower and, if applicable, the legal
representative of the whistleblower, to the extent necessary in
connection with a written contract among the Internal Revenue Service
(IRS), the whistleblower and, if applicable, the legal representative
of the whistleblower, for services relating to the detection of
violations of the internal revenue laws or related statutes.
(2) The IRS shall have the discretion to determine whether to enter
into a written contract pursuant to section 7623 with the whistleblower
and, if applicable, the legal representative of the whistleblower, for
services described in paragraph (a)(1) of this section.
(b) Limitations. (1) Disclosure of return information in connection
with a written contract for services described in paragraph (a)(1) of
this section shall be made only to the extent the IRS deems it
necessary in connection with the reasonable or proper performance of
the contract. Disclosures may include, but are not limited to,
disclosures to accomplish properly any purpose or activity of the
nature described in section 6103(k)(6) and the regulations thereunder.
(2) If the IRS determines that the services of a whistleblower and,
if applicable, the legal representative of the whistleblower, as
described in paragraph (a)(1) of this section, can be performed
reasonably or properly by disclosure of only parts or portions of
return information, then only the parts or portions of the return
information shall be disclosed.
(3) Upon written request by a whistleblower, or a legal
representative of a whistleblower, with whom the IRS has entered into a
written contract for services as described in paragraph (a)(1) of this
section, the Director of the Whistleblower Office, or designee of the
Director, may inform the whistleblower and, if applicable, the legal
representative of the whistleblower, of the status of the
whistleblower's claim for award under section 7623, including whether
the claim is being evaluated for potential investigative action, or is
pending due to an ongoing examination, appeal, collection action, or
litigation. The information may be disclosed only if the IRS determines
that the disclosure would not seriously impair Federal tax
administration.
(4) Return information disclosed to a whistleblower and, if
applicable, a legal representative of a whistleblower, under this
section, shall not be further disclosed or otherwise used by the
whistleblower or a legal representative of a whistleblower, except as
expressly authorized in writing by the IRS.
(c) Penalties. Any whistleblower, or legal representative of a
whistleblower, who receives return information under this section, is
subject to the civil and criminal penalty provisions of sections 7431,
7213, and 7213A for the unauthorized inspection or disclosure of the
return information.
(d) Safeguards. (1) Any whistleblower, or the legal representative
of a whistleblower, who receives return information under this section,
shall comply with all applicable conditions and requirements as the IRS
may prescribe from time to time for the purposes of protecting the
confidentiality of the return information and preventing any disclosure
or inspection of the return information in a manner not authorized by
this section (prescribed requirements).
(2) Any written contract for services as described in paragraph
(a)(1) of this section shall provide that any whistleblower and, if
applicable, the legal representative of a whistleblower, who has access
to return information under this section, shall comply with the
prescribed requirements.
(3) Any whistleblower, or the legal representative of a
whistleblower, who may receive return information under this section,
shall agree in writing, before any disclosure of return information is
made, to permit an inspection of the whistleblower's or the legal
representative's premises by the IRS relative to the maintenance of the
return information disclosed under these regulations and, upon
completion of services as described in the written contract with the
IRS, to dispose of all return information by returning the return
information, including any and all copies or notes made, to the IRS, or
to the extent that it cannot be returned, by destroying the information
in a manner consistent with prescribed requirements.
(4) If the IRS determines that any whistleblower, or the legal
representative of a whistleblower, who has access to return information
under this section, has failed to, or does not, satisfy the prescribed
requirements, the IRS, using the procedures described in the
regulations under section 6103(p)(7), may take any action it deems
necessary to ensure that the prescribed requirements are or will be
satisfied, including--
(i) Suspension of further disclosures of return information by the
IRS to the whistleblower and, if applicable, the legal representative
of the whistleblower, until the IRS determines that the conditions and
requirements have been or will be satisfied; and
(ii) Suspension or termination of any duty or obligation arising
under the contract with the IRS.
(e) Definitions. For purposes of this section--
(1) The term Treasury Department includes the IRS and the Office of
the Chief Counsel for the IRS.
(2) The term whistleblower means an individual who provides
information to the IRS regarding violations of the tax laws or related
statutes and submits a claim for an award under section 7623 with
respect to the information.
(3) The term legal representative means any individual who is a
member in good standing in the bar of the highest court of any state,
possession, territory, commonwealth, or the District of Columbia, and
who has a written power of attorney executed by the whistleblower.
(f) Effective/applicability date. This section is applicable on
March 15, 2011.
Sec. 301.6103(n)-2T [Removed]
0
Par. 3. Section 301.6103(n)-2T is removed.
Steven T. Miller,
Deputy Commissioner for Services and Enforcement.
Approved: March 9, 2011.
Michael Mundaca,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2011-6111 Filed 3-14-11; 8:45 am]
BILLING CODE 4830-01-P
