Special Enrollment Examination User Fee for Enrolled Agents, 33009-33012 [2017-15210]

Download as PDF Federal Register / Vol. 82, No. 137 / Wednesday, July 19, 2017 / Rules and Regulations not have been properly torqued. We are issuing this AD to detect and correct a protruding screw in the cover assembly of the heel rest of a rudder pedal. A protruding screw could restrict rudder pedal motion and reduce differential braking control during takeoff or landing, which could cause a high speed runway excursion. (f) Compliance Comply with this AD within the compliance times specified, unless already done. (g) Torque Check Within 21 months after the effective date of this AD: Do a one-time torque check of the screws in the cover assembly of the heel rest for both the Captain and the First Officer’s rudder pedals, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 737–25A1732, Revision 2, dated April 13, 2017. (h) Corrective Action If the results of the torque check required by paragraph (g) of this AD indicate that any screw does not hold torque to the required value, before further flight, replace the affected screw and associated nutplate, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 737–25A1732, Revision 2, dated April 13, 2017. mstockstill on DSK30JT082PROD with RULES (i) Credit for Actions Accomplished Previously This paragraph provides credit for the actions specified in paragraphs (g) and (h) of this AD, if those actions were performed before the effective date of this AD using Boeing Alert Service Bulletin 737–25A1732, Revision 1, dated August 15, 2016. (j) Alternative Methods of Compliance (AMOCs) (1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (k)(1) of this AD. Information may be emailed to: 9-ANM-Seattle-ACO-AMOCRequests@faa.gov. (2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/ certificate holding district office. (3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Seattle ACO, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD. VerDate Sep<11>2014 16:17 Jul 18, 2017 Jkt 241001 (4) For service information that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (j)(4)(i) and (j)(4)(ii) of this AD apply. (i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. If a step or sub-step is labeled ‘‘RC Exempt,’’ then the RC requirement is removed from that step or sub-step. An AMOC is required for any deviations to RC steps, including substeps and identified figures. (ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator’s maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition. (k) Related Information (1) For more information about this AD, contact Kelly McGuckin, Aerospace Engineer, Systems and Equipment Branch, ANM–130S, FAA, Seattle ACO, 1601 Lind Avenue SW., Renton, WA 98057–3356; phone: 425–917–6490; fax: 425–917–6590; email: Kelly.McGuckin@faa.gov. (2) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (l)(3) and (l)(4) of this AD. (l) Material Incorporated by Reference (1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51. (2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise. (i) Boeing Alert Service Bulletin 737– 25A1732, Revision 2, dated April 13, 2017. (ii) Reserved. (3) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P. O. Box 3707, MC 2H–65, Seattle, WA 98124–2207; telephone 206– 544–5000, extension 1; fax 206–766–5680; Internet https://www.myboeingfleet.com. (4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425–227–1221. (5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202–741–6030, or go to: http:// www.archives.gov/federal-register/cfr/ibrlocations.html. Issued in Renton, Washington, on June 29, 2017. Michael Kaszycki, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. 2017–14584 Filed 7–18–17; 8:45 am] BILLING CODE 4910–13–P PO 00000 Frm 00023 Fmt 4700 Sfmt 4700 33009 DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 300 [TD 9820] RIN 1545–BN09 Special Enrollment Examination User Fee for Enrolled Agents Internal Revenue Service (IRS), Treasury. ACTION: Final regulation. AGENCY: This document contains a final regulation changing the amount of the user fee for the special enrollment examination to become an enrolled agent. The charging of user fees is authorized by the Independent Offices Appropriations Act of 1952. The final regulation affects individuals taking the enrolled agent special enrollment examination. SUMMARY: DATES: Effective date: This regulation is effective August 18, 2017. Applicability date: For the date of applicability, see § 300.4(d). FOR FURTHER INFORMATION CONTACT: Jonathan R. Black, (202) 317–6845 (not a toll-free number). SUPPLEMENTARY INFORMATION: Background and Explanation of Provisions This document contains amendments to 26 CFR part 300 regarding user fees. On January 26, 2016, a notice of proposed rulemaking (REG–134122–15) proposing to change the amount of the Enrolled Agent Special Enrollment Examination (EA–SEE) user fee was published in the Federal Register (81 FR 4221) (January 26, 2016 proposed rule). On October 25, 2016, a second notice of proposed rulemaking (REG– 134122–15) withdrawing the January 26, 2016 proposed rule and proposing a smaller change to the EA–SEE user fee was published in the Federal Register (81 FR 73363) (October 25, 2016 proposed rule). Comments responding to each proposed rule were received, and a public hearing on the second proposed rule was held on December 29, 2016. After consideration of the comments, this Treasury decision adopts the regulations proposed by the October 25, 2016 proposed rule without change. A. Enrolled Agents and the Special Enrollment Examination Section 330 of title 31 of the United States Code authorizes the Secretary of the Treasury to regulate the practice of E:\FR\FM\19JYR1.SGM 19JYR1 33010 Federal Register / Vol. 82, No. 137 / Wednesday, July 19, 2017 / Rules and Regulations mstockstill on DSK30JT082PROD with RULES representatives before the Treasury Department. Pursuant to 31 U.S.C. 330, the Secretary has published regulations governing practice before the IRS in 31 CFR part 10 and reprinted the regulations as Treasury Department Circular No. 230 (Circular 230). Section 10.4(a) of Circular 230 authorizes the IRS to grant status as enrolled agents to individuals who demonstrate special competence in tax matters by passing a written examination (the EA–SEE) administered by, or under the oversight of, the IRS and who have not engaged in any conduct that would justify suspension or disbarment under Circular 230. There were a total of 51,755 active enrolled agents as of September 1, 2016. Beginning in 2006, the IRS engaged the services of a third-party contractor to develop and administer the EA–SEE. The EA–SEE is composed of three parts, which are offered in a testing period that begins each May 1 and ends the last day of the following February. The EA– SEE is not available in March and April, during which period it is updated to reflect recent changes in the relevant law. More information on the EA–SEE, including content, scoring, and how to register, can be found on the IRS Web site at www.irs.gov/tax-professionals/ enrolled-agents. The IRS Return Preparer Office (RPO) oversees the administration of the EA–SEE. B. User Fee Authority The Independent Offices Appropriations Act of 1952 (IOAA) (31 U.S.C. 9701) authorizes each agency to promulgate regulations establishing the charge for services provided by the agency (user fees). The IOAA provides that these user fee regulations are subject to policies prescribed by the President and shall be as uniform as practicable. Those policies are currently set forth in the Office of Management and Budget (OMB) Circular A–25 (OMB Circular), 58 FR 38142 (July 15, 1993). The IOAA states that the services provided by an agency should be selfsustaining to the extent possible. 31 U.S.C. 9701(a). The OMB Circular states that agencies that provide services that confer special benefits on identifiable recipients beyond those accruing to the general public are to establish user fees that recover the full cost of providing those services. The OMB Circular requires that agencies identify all services that confer special benefits and determine whether user fees should be assessed for those services. Agencies are to review user fees biennially and update them as necessary to reflect changes in the cost of providing the underlying services. VerDate Sep<11>2014 16:17 Jul 18, 2017 Jkt 241001 During this biennial review, an agency must calculate the full cost of providing each service, taking into account all direct and indirect costs to any part of the U.S. government. The full cost of providing a service includes, but is not limited to, salaries, retirement benefits, rents, utilities, travel, and management costs, as well as an appropriate allocation of overhead and other support costs associated with providing the service. An agency should set the user fee at an amount that recovers the full cost of providing the service unless the agency requests, and OMB grants, an exception to the full-cost requirement. OMB may grant exceptions only where the cost of collecting the fees would represent an unduly large part of the fee for the activity, or where any other condition exists that, in the opinion of the agency head, justifies an exception. When OMB grants an exception, the agency does not collect the full cost of providing the service that confers a special benefit on identifiable recipients rather than the public at large, and the agency therefore must fund the remaining cost of providing the service from other available funding sources. When OMB grants an exception, the agency, and by extension all taxpayers, subsidizes the cost of the service to the recipients who should otherwise be required to pay the full cost of providing the service as the IOAA and the OMB Circular direct. C. The EA–SEE User Fee As discussed earlier, Circular 230 section 10.4(a) provides that the IRS will grant enrolled agent status to an applicant if the applicant, among other things, demonstrates special competence in tax matters by written examination. The EA–SEE is the written examination that tests special competence in tax matters for purposes of that provision, and an applicant must pass all three parts of the EA–SEE to be granted enrolled agent status through written examination. The IRS confers a benefit on individuals who take the EA– SEE beyond those that accrue to the general public by providing them with an opportunity to demonstrate special competence in tax matters by passing a written examination and therefore satisfying one of the requirements for becoming an enrolled agent under Circular 230 section 10.4(a). Because the opportunity to take the EA–SEE is a special benefit, the IRS charges a user fee to take the examination. Pursuant to the guidelines in the OMB Circular, the IRS has calculated its cost of providing examination services under the enrolled agent program. The user fee is implemented under the authority of PO 00000 Frm 00024 Fmt 4700 Sfmt 4700 the IOAA and the OMB Circular and recovers the full cost of overseeing the program. The user fee was $11 to take each part of the EA–SEE and was set in 2006. The IRS does not intend to subsidize any of the cost of making the EA–SEE available to examinees and is not applying for an exception to the fullcost requirement from OMB. As a result, this regulation increases the user fee to the full cost to the IRS for overseeing the EA–SEE program, $81 per part, effective for examinees who register on or after March 1, 2018, to take the EA–SEE. The contractor who administers the EA–SEE also charges individuals taking the EA– SEE an additional fee for its services. For the May 2016 to February 2017 testing period, the contractor’s fee was $98 for each part of the EA–SEE. For the May 2017 to February 2019 testing periods, the contractor’s fee is $100.94. For the May 2019 to February 2020 testing period, the contractor’s fee will be $103.97. The contract was subject to public procurement procedures, and there were no tenders that were more competitive. Summary of Comments The comments submitted on the January 26, 2016 proposed rule and the October 25, 2016 proposed rule are available at www.regulations.gov or upon request. Comments that were submitted on the January 26, 2016 proposed rule, which was withdrawn by the October 25, 2016 proposed rule, are addressed to the extent relevant to the October 25, 2016 proposed rule. Certain comments on the January 26, 2016 proposed rule, such as those comments requesting additional details on the cost of background investigations and costing methodology, were addressed in the preamble to the October 25, 2016 proposed rule. All of the comments received opposed increasing the user fee for the EA–SEE. Specifically, comments expressed concern that the increased user fee would discourage individuals from becoming enrolled agents. The comments stated that discouraging individuals would be counterproductive considering that the IRS and taxpayers benefit from having more tax professionals who meet the standards required of an enrolled agent. Comments suggested that the IRS should work to increase the number of people taking the EA–SEE each year and focus its attention on encouraging unenrolled preparers, particularly those who participate in the Annual Filing Season Program in Rev. Proc. 2014–42, to become enrolled agents, which would result in a reduced user fee on a per-part basis when the IRS redetermines the E:\FR\FM\19JYR1.SGM 19JYR1 mstockstill on DSK30JT082PROD with RULES Federal Register / Vol. 82, No. 137 / Wednesday, July 19, 2017 / Rules and Regulations cost of the EA–SEE at the next biennial review of the user fee. The Treasury Department and the IRS do not intend the user fee to discourage individuals from becoming enrolled agents and have considered the possible impact of increasing the user fee on the number of individuals taking the EA– SEE. Enrolled agents play a valuable role in the tax administration process, and the IRS uses the EA–SEE to ensure their qualifications. The IRS welcomes a continuing dialogue on how it can attract more individuals to take the EA– SEE and thereby lower the cost per part by spreading the fixed costs of administration over a larger population of examinees. The Treasury Department and the IRS have considered the potential impact on the number of individuals if the full cost of the EA– SEE program is collected and concluded not to seek an exemption to the full-cost requirement. Additionally, efforts to improve unenrolled preparers’ knowledge of federal tax law, such as implementation of the Annual Filing Season Program, have not substantially affected the number of individuals taking the EA–SEE and have no direct relationship with the user fee. Some comments alternatively recommended that the fee remain the same for taking the EA–SEE the first time, but that subsequent attempts to take and pass the EA–SEE should be subject to a higher fee. Comments suggested that the fee for subsequent attempts could be rebated if the individual passed the EA–SEE. The comments explained that this would discourage all but the most serious candidates from taking the EA–SEE. Comments also suggested that the IRS could increase the fee gradually over a period of years, in order to encourage preparers to become enrolled agents sooner rather than later, and that the IRS should retain the $11 per part user fee for a two-year window so that everyone who passed at least one part of the EA– SEE (presumably prior to the announcement of the fee increase) would have an opportunity to complete all parts of the EA–SEE without an unexpected fee increase. The Treasury Department and the IRS considered these comments but have declined to implement them. The Treasury Department and the IRS do not have information to forecast how many examinees are likely to pass each part of the EA–SEE the first time versus on later attempts, and it therefore would not be able to adequately determine the cost allocation between first-time and repeat examinees. Additionally, the Treasury Department and the IRS think examinees should be charged the full VerDate Sep<11>2014 16:17 Jul 18, 2017 Jkt 241001 cost to the IRS of overseeing the administration of the EA–SEE, regardless of whether they have already taken one or two parts, given the absolute amount of the user fee ($81 per part). This final regulation increases the user fee to the full cost to the IRS, and the IRS has determined that it will not seek an exception to the full-cost requirement from OMB. Comments recommended the IRS consider alternative means to reduce costs after the existing agreement with the contractor who administers the EA– SEE expires in 2020. Contractor costs are unrelated to this user fee regulation, and any concerns related to such costs should be directed to the RPO. Comments also asked how it was possible that the IRS did not notice the increased costs over the course of the decade following the last user fee increase. Although the OMB Circular directs the IRS to set its fees every two years, the IRS was unable to obtain accurate estimates of its total costs until recently, because it had insufficient data to estimate the change in size of the testing population. Comments suggested that the IRS should not charge a user fee to register for the EA–SEE, because the IRS and the general public benefit from the existence of enrolled agents. Whether a benefit accrues to the IRS and the general public, however, is not relevant to whether a user fee is appropriate under the OMB Circular. As discussed in the October 25, 2016 proposed rule, it is appropriate under the OMB Circular to charge a user fee for taking the EA–SEE because taking the EA–SEE provides a benefit to examinees. See Seafarers Int’l Union of N. Am. v. U.S. Coast Guard, 81 F.3d 179, 183 (D.C. Cir. 1996). The IOAA permits the IRS to charge a user fee for providing a ‘‘service or thing of value.’’ See 31 U.S.C. 9701(b). A government activity constitutes a ‘‘service or thing of value’’ when it provides ‘‘special benefits to an identifiable recipient beyond those that accrue to the general public.’’ See OMB Circular section 6(a)(1). Among other things, a ‘‘special benefit’’ exists when a government service is performed at the request of the recipient and is beyond the services regularly received by other members of the same group or the general public. See OMB Circular section 6(a)(1)(c). It is permissible for a service for which an agency charges a user fee to generate an ‘‘incidental public benefit,’’ and there is no requirement that the agency weigh this public benefit against the specific benefit to the identifiable recipient. See Seafarers, 81 F.3d at 183–84 (D.C. Cir. 1996). The IRS confers a benefit on PO 00000 Frm 00025 Fmt 4700 Sfmt 4700 33011 individuals who take the EA–SEE beyond those that accrue to the general public by providing them with an opportunity to satisfy one of the requirements for becoming an enrolled agent under Circular 230 section 10.4(a). Comments observed that the IRS charges user fees inconsistently because, for example, the IRS does not charge user fees for toll-free telephone service, continuing-education webinars, walk-in service, notice letters, the annual filing season program record of completion, etc. This regulation deals only with the user fee for the EA–SEE, which, as discussed earlier, is compliant with the requirements of the OMB Circular, and the appropriateness of the EA–SEE user fee is not contingent on whether the IRS charges, or should charge, user fees for other activities. Comments further questioned the determination of the amount of the EA– SEE user fee. One comment assumed that the increase in revenue was allocable to ten full-time equivalent employees and questioned how so much time was involved in oversight of the EA–SEE—the comment noted that, after accounting for the cost of background investigations, the salary of a GS–12 step 1 employee in Washington, DC, when multiplied by the overhead rate and again multiplied by ten, equals approximately the expected increase in annual revenue to the IRS from the increased user fee. Comments also questioned how much time staff spent reviewing surveys and setting the annual cut score, among other things. The preamble to the October 25, 2016 proposed rule addresses most questions about costing methodology. As stated in that preamble, eight individuals spend approximately seventy-five percent of their time on the EA–SEE, and two individuals spend approximately tenpercent of their time on the EA–SEE. That amounts to just over six people working full time. The calculation in the comment on employee hours did not appear to account for the cost of benefits, which are calculated as 28.5 percent of salary, and the variance between the ten employee salaries, which range from GS–7 to GS–15, in calculating the number of employees involved. RPO employees do not track the time spent on each individual task associated with the EA–SEE, but—as stated in the preamble to the October 25, 2016 proposed rule—managers who are familiar with the employees’ work provided estimates of the total time involved, based on their knowledge and experience. Finally, comments asked the IRS to request an exception to the full-cost requirement from the OMB and E:\FR\FM\19JYR1.SGM 19JYR1 33012 Federal Register / Vol. 82, No. 137 / Wednesday, July 19, 2017 / Rules and Regulations questioned whether it is good public policy to charge a user fee when the public benefits from minimum competency standards for return preparers. The IRS has determined that an exception to the full-cost requirement is not justified, because subsidizing the cost of the EA–SEE program requires diverting resources from other activities that are in the public interest and that inure to the public generally, rather than to identifiable recipients requesting the specific benefit of taking the EA–SEE. Drafting Information The principal author of this regulation is Jonathan R. Black of the Office of the Associate Chief Counsel (Procedure and Administration). Statement of Availability of IRS Documents mstockstill on DSK30JT082PROD with RULES PART 300—USER FEES Paragraph 1. The authority citation for part 300 continues to read as follows: ■ Par. 2. Section 300.4 is amended by revising paragraphs (b) and (d) to read as follows: ■ Certain IRS regulations, including this one, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory assessment is not required. Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that this regulation will not have a significant economic impact on a substantial number of small entities. The user fee primarily affects individuals who take the enrolled agent examination, many of whom may not be classified as small entities under the Regulatory Flexibility Act. Therefore, a substantial number of small entities is not likely to be affected. Further, the economic impact on any small entities affected would be limited to paying the $70 difference in cost per part between the $81 user fee and the previous $11 user fee, which is unlikely to present a significant economic impact. Moreover, the total economic impact of this regulation is approximately $1.57 million, which is the product of the approximately 22,425 parts of the EA– SEE administered annually and the $70 increase in the fee. Accordingly, the rule is not expected to have a significant economic impact on a substantial number of small entities, and a regulatory flexibility analysis is not required. Rev. Proc. 2014–42, Annual Filing Season Program, is published in the Internal Revenue Bulletin and is available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS Web site at www.irs.gov. 16:17 Jul 18, 2017 Adoption of Amendments to the Regulations Accordingly, 26 CFR part 300 is amended as follows: Authority: 31 U.S.C. 9701. Special Analyses VerDate Sep<11>2014 List of Subjects in 26 CFR Part 300 Reporting and recordkeeping requirements, User fees. Jkt 241001 § 300.4 Enrolled agent special enrollment examination fee. * * * * * (b) Fee. The fee for taking the enrolled agent special enrollment examination is $81 per part, which is the cost to the government for overseeing the development and administration of the examination and does not include any fees charged by the administrator of the examination. * * * * * (d) Applicability date. This section applies to registrations that occur on or after March 1, 2018, for the enrolled agent special enrollment examination. Section 300.4 (as contained in 26 CFR part 300, revised April 2017) applies to registrations that occur before March 1, 2018. Kirsten Wielobob, Deputy Commissioner for Services and Enforcement. Approved: June 27, 2017. Tom West, Tax Legislative Counsel. [FR Doc. 2017–15210 Filed 7–18–17; 8:45 am] BILLING CODE 4830–01–P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA–R01–OAR–2015–0648; A–1–FRL– 9964–80–Region 1] Air Plan Approval; Maine; Motor Vehicle Fuel Requirements Environmental Protection Agency (EPA). ACTION: Final rule. AGENCY: The Environmental Protection Agency (EPA) is approving a State Implementation Plan (SIP) revision submitted by the State of Maine Department of Environmental Protection SUMMARY: PO 00000 Frm 00026 Fmt 4700 Sfmt 4700 (Maine DEP) on August 28, 2015. This SIP revision includes a revised motor vehicle fuel volatility regulation that has been updated to be consistent with existing Federal regulations which require retailers to sell reformulated gasoline (RFG) in the counties of York, Cumberland, Sagadahoc, Androscoggin, Kennebec, Knox, and Lincoln, as of June 1, 2015. The intended effect of this action is to approve of this amendment into the Maine SIP. This action is being taken under the Clean Air Act. DATES: This rule is effective on August 18, 2017. ADDRESSES: EPA has established a docket for this action under Docket Identification No. EPA–R01–OAR– 2015–0648. All documents in the docket are listed on the http:// www.regulations.gov Web site. Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available at http:// www.regulations.gov or at the U.S. Environmental Protection Agency, EPA New England Regional Office, Office of Ecosystem Protection, Air Quality Planning Unit, 5 Post Office Square— Suite 100, Boston, MA. EPA requests that if at all possible, you contact the contact listed in the FOR FURTHER INFORMATION CONTACT section to schedule your inspection. The Regional Office’s official hours of business are Monday through Friday, 8:30 a.m. to 4:30 p.m., excluding legal holidays. FOR FURTHER INFORMATION CONTACT: John Rogan, Air Quality Planning Unit, U.S. Environmental Protection Agency, New England Regional Office, 5 Post Office Square—Suite 100, (Mail Code OEP05– 2), Boston, MA 02109–3912, telephone (617) 918–1645, facsimile (617) 918– 0645, email rogan.john@epa.gov. SUPPLEMENTARY INFORMATION: Throughout this document whenever ‘‘we,’’ ‘‘us,’’ or ‘‘our’’ is used, we mean EPA. Table of Contents I. Background and Purpose II. Final Action III. Incorporation by Reference IV. Statutory and Executive Order Reviews I. Background and Purpose On May 8, 2017 (82 FR 21346), EPA published a Notice of Proposed Rulemaking (NPR) for the State of Maine. The NPR proposed approval of Maine’s revised Chapter 119, Motor E:\FR\FM\19JYR1.SGM 19JYR1

Agencies

[Federal Register Volume 82, Number 137 (Wednesday, July 19, 2017)]
[Rules and Regulations]
[Pages 33009-33012]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-15210]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 300

[TD 9820]
RIN 1545-BN09


Special Enrollment Examination User Fee for Enrolled Agents

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulation.

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SUMMARY: This document contains a final regulation changing the amount 
of the user fee for the special enrollment examination to become an 
enrolled agent. The charging of user fees is authorized by the 
Independent Offices Appropriations Act of 1952. The final regulation 
affects individuals taking the enrolled agent special enrollment 
examination.

DATES: 
    Effective date: This regulation is effective August 18, 2017.
    Applicability date: For the date of applicability, see Sec.  
300.4(d).

FOR FURTHER INFORMATION CONTACT: Jonathan R. Black, (202) 317-6845 (not 
a toll-free number).

SUPPLEMENTARY INFORMATION: 

Background and Explanation of Provisions

    This document contains amendments to 26 CFR part 300 regarding user 
fees. On January 26, 2016, a notice of proposed rulemaking (REG-134122-
15) proposing to change the amount of the Enrolled Agent Special 
Enrollment Examination (EA-SEE) user fee was published in the Federal 
Register (81 FR 4221) (January 26, 2016 proposed rule). On October 25, 
2016, a second notice of proposed rulemaking (REG-134122-15) 
withdrawing the January 26, 2016 proposed rule and proposing a smaller 
change to the EA-SEE user fee was published in the Federal Register (81 
FR 73363) (October 25, 2016 proposed rule). Comments responding to each 
proposed rule were received, and a public hearing on the second 
proposed rule was held on December 29, 2016. After consideration of the 
comments, this Treasury decision adopts the regulations proposed by the 
October 25, 2016 proposed rule without change.

A. Enrolled Agents and the Special Enrollment Examination

    Section 330 of title 31 of the United States Code authorizes the 
Secretary of the Treasury to regulate the practice of

[[Page 33010]]

representatives before the Treasury Department. Pursuant to 31 U.S.C. 
330, the Secretary has published regulations governing practice before 
the IRS in 31 CFR part 10 and reprinted the regulations as Treasury 
Department Circular No. 230 (Circular 230).
    Section 10.4(a) of Circular 230 authorizes the IRS to grant status 
as enrolled agents to individuals who demonstrate special competence in 
tax matters by passing a written examination (the EA-SEE) administered 
by, or under the oversight of, the IRS and who have not engaged in any 
conduct that would justify suspension or disbarment under Circular 230. 
There were a total of 51,755 active enrolled agents as of September 1, 
2016.
    Beginning in 2006, the IRS engaged the services of a third-party 
contractor to develop and administer the EA-SEE. The EA-SEE is composed 
of three parts, which are offered in a testing period that begins each 
May 1 and ends the last day of the following February. The EA-SEE is 
not available in March and April, during which period it is updated to 
reflect recent changes in the relevant law. More information on the EA-
SEE, including content, scoring, and how to register, can be found on 
the IRS Web site at www.irs.gov/tax-professionals/enrolled-agents. The 
IRS Return Preparer Office (RPO) oversees the administration of the EA-
SEE.

B. User Fee Authority

    The Independent Offices Appropriations Act of 1952 (IOAA) (31 
U.S.C. 9701) authorizes each agency to promulgate regulations 
establishing the charge for services provided by the agency (user 
fees). The IOAA provides that these user fee regulations are subject to 
policies prescribed by the President and shall be as uniform as 
practicable. Those policies are currently set forth in the Office of 
Management and Budget (OMB) Circular A-25 (OMB Circular), 58 FR 38142 
(July 15, 1993).
    The IOAA states that the services provided by an agency should be 
self-sustaining to the extent possible. 31 U.S.C. 9701(a). The OMB 
Circular states that agencies that provide services that confer special 
benefits on identifiable recipients beyond those accruing to the 
general public are to establish user fees that recover the full cost of 
providing those services. The OMB Circular requires that agencies 
identify all services that confer special benefits and determine 
whether user fees should be assessed for those services.
    Agencies are to review user fees biennially and update them as 
necessary to reflect changes in the cost of providing the underlying 
services. During this biennial review, an agency must calculate the 
full cost of providing each service, taking into account all direct and 
indirect costs to any part of the U.S. government. The full cost of 
providing a service includes, but is not limited to, salaries, 
retirement benefits, rents, utilities, travel, and management costs, as 
well as an appropriate allocation of overhead and other support costs 
associated with providing the service.
    An agency should set the user fee at an amount that recovers the 
full cost of providing the service unless the agency requests, and OMB 
grants, an exception to the full-cost requirement. OMB may grant 
exceptions only where the cost of collecting the fees would represent 
an unduly large part of the fee for the activity, or where any other 
condition exists that, in the opinion of the agency head, justifies an 
exception. When OMB grants an exception, the agency does not collect 
the full cost of providing the service that confers a special benefit 
on identifiable recipients rather than the public at large, and the 
agency therefore must fund the remaining cost of providing the service 
from other available funding sources. When OMB grants an exception, the 
agency, and by extension all taxpayers, subsidizes the cost of the 
service to the recipients who should otherwise be required to pay the 
full cost of providing the service as the IOAA and the OMB Circular 
direct.

C. The EA-SEE User Fee

    As discussed earlier, Circular 230 section 10.4(a) provides that 
the IRS will grant enrolled agent status to an applicant if the 
applicant, among other things, demonstrates special competence in tax 
matters by written examination. The EA-SEE is the written examination 
that tests special competence in tax matters for purposes of that 
provision, and an applicant must pass all three parts of the EA-SEE to 
be granted enrolled agent status through written examination. The IRS 
confers a benefit on individuals who take the EA-SEE beyond those that 
accrue to the general public by providing them with an opportunity to 
demonstrate special competence in tax matters by passing a written 
examination and therefore satisfying one of the requirements for 
becoming an enrolled agent under Circular 230 section 10.4(a). Because 
the opportunity to take the EA-SEE is a special benefit, the IRS 
charges a user fee to take the examination.
    Pursuant to the guidelines in the OMB Circular, the IRS has 
calculated its cost of providing examination services under the 
enrolled agent program. The user fee is implemented under the authority 
of the IOAA and the OMB Circular and recovers the full cost of 
overseeing the program. The user fee was $11 to take each part of the 
EA-SEE and was set in 2006. The IRS does not intend to subsidize any of 
the cost of making the EA-SEE available to examinees and is not 
applying for an exception to the full-cost requirement from OMB. As a 
result, this regulation increases the user fee to the full cost to the 
IRS for overseeing the EA-SEE program, $81 per part, effective for 
examinees who register on or after March 1, 2018, to take the EA-SEE. 
The contractor who administers the EA-SEE also charges individuals 
taking the EA-SEE an additional fee for its services. For the May 2016 
to February 2017 testing period, the contractor's fee was $98 for each 
part of the EA-SEE. For the May 2017 to February 2019 testing periods, 
the contractor's fee is $100.94. For the May 2019 to February 2020 
testing period, the contractor's fee will be $103.97. The contract was 
subject to public procurement procedures, and there were no tenders 
that were more competitive.

Summary of Comments

    The comments submitted on the January 26, 2016 proposed rule and 
the October 25, 2016 proposed rule are available at www.regulations.gov 
or upon request. Comments that were submitted on the January 26, 2016 
proposed rule, which was withdrawn by the October 25, 2016 proposed 
rule, are addressed to the extent relevant to the October 25, 2016 
proposed rule. Certain comments on the January 26, 2016 proposed rule, 
such as those comments requesting additional details on the cost of 
background investigations and costing methodology, were addressed in 
the preamble to the October 25, 2016 proposed rule.
    All of the comments received opposed increasing the user fee for 
the EA-SEE. Specifically, comments expressed concern that the increased 
user fee would discourage individuals from becoming enrolled agents. 
The comments stated that discouraging individuals would be counter-
productive considering that the IRS and taxpayers benefit from having 
more tax professionals who meet the standards required of an enrolled 
agent. Comments suggested that the IRS should work to increase the 
number of people taking the EA-SEE each year and focus its attention on 
encouraging unenrolled preparers, particularly those who participate in 
the Annual Filing Season Program in Rev. Proc. 2014-42, to become 
enrolled agents, which would result in a reduced user fee on a per-part 
basis when the IRS redetermines the

[[Page 33011]]

cost of the EA-SEE at the next biennial review of the user fee.
    The Treasury Department and the IRS do not intend the user fee to 
discourage individuals from becoming enrolled agents and have 
considered the possible impact of increasing the user fee on the number 
of individuals taking the EA-SEE. Enrolled agents play a valuable role 
in the tax administration process, and the IRS uses the EA-SEE to 
ensure their qualifications. The IRS welcomes a continuing dialogue on 
how it can attract more individuals to take the EA-SEE and thereby 
lower the cost per part by spreading the fixed costs of administration 
over a larger population of examinees. The Treasury Department and the 
IRS have considered the potential impact on the number of individuals 
if the full cost of the EA-SEE program is collected and concluded not 
to seek an exemption to the full-cost requirement. Additionally, 
efforts to improve unenrolled preparers' knowledge of federal tax law, 
such as implementation of the Annual Filing Season Program, have not 
substantially affected the number of individuals taking the EA-SEE and 
have no direct relationship with the user fee.
    Some comments alternatively recommended that the fee remain the 
same for taking the EA-SEE the first time, but that subsequent attempts 
to take and pass the EA-SEE should be subject to a higher fee. Comments 
suggested that the fee for subsequent attempts could be rebated if the 
individual passed the EA-SEE. The comments explained that this would 
discourage all but the most serious candidates from taking the EA-SEE. 
Comments also suggested that the IRS could increase the fee gradually 
over a period of years, in order to encourage preparers to become 
enrolled agents sooner rather than later, and that the IRS should 
retain the $11 per part user fee for a two-year window so that everyone 
who passed at least one part of the EA-SEE (presumably prior to the 
announcement of the fee increase) would have an opportunity to complete 
all parts of the EA-SEE without an unexpected fee increase.
    The Treasury Department and the IRS considered these comments but 
have declined to implement them. The Treasury Department and the IRS do 
not have information to forecast how many examinees are likely to pass 
each part of the EA-SEE the first time versus on later attempts, and it 
therefore would not be able to adequately determine the cost allocation 
between first-time and repeat examinees. Additionally, the Treasury 
Department and the IRS think examinees should be charged the full cost 
to the IRS of overseeing the administration of the EA-SEE, regardless 
of whether they have already taken one or two parts, given the absolute 
amount of the user fee ($81 per part). This final regulation increases 
the user fee to the full cost to the IRS, and the IRS has determined 
that it will not seek an exception to the full-cost requirement from 
OMB.
    Comments recommended the IRS consider alternative means to reduce 
costs after the existing agreement with the contractor who administers 
the EA-SEE expires in 2020. Contractor costs are unrelated to this user 
fee regulation, and any concerns related to such costs should be 
directed to the RPO.
    Comments also asked how it was possible that the IRS did not notice 
the increased costs over the course of the decade following the last 
user fee increase. Although the OMB Circular directs the IRS to set its 
fees every two years, the IRS was unable to obtain accurate estimates 
of its total costs until recently, because it had insufficient data to 
estimate the change in size of the testing population.
    Comments suggested that the IRS should not charge a user fee to 
register for the EA-SEE, because the IRS and the general public benefit 
from the existence of enrolled agents. Whether a benefit accrues to the 
IRS and the general public, however, is not relevant to whether a user 
fee is appropriate under the OMB Circular. As discussed in the October 
25, 2016 proposed rule, it is appropriate under the OMB Circular to 
charge a user fee for taking the EA-SEE because taking the EA-SEE 
provides a benefit to examinees. See Seafarers Int'l Union of N. Am. v. 
U.S. Coast Guard, 81 F.3d 179, 183 (D.C. Cir. 1996). The IOAA permits 
the IRS to charge a user fee for providing a ``service or thing of 
value.'' See 31 U.S.C. 9701(b). A government activity constitutes a 
``service or thing of value'' when it provides ``special benefits to an 
identifiable recipient beyond those that accrue to the general 
public.'' See OMB Circular section 6(a)(1). Among other things, a 
``special benefit'' exists when a government service is performed at 
the request of the recipient and is beyond the services regularly 
received by other members of the same group or the general public. See 
OMB Circular section 6(a)(1)(c). It is permissible for a service for 
which an agency charges a user fee to generate an ``incidental public 
benefit,'' and there is no requirement that the agency weigh this 
public benefit against the specific benefit to the identifiable 
recipient. See Seafarers, 81 F.3d at 183-84 (D.C. Cir. 1996). The IRS 
confers a benefit on individuals who take the EA-SEE beyond those that 
accrue to the general public by providing them with an opportunity to 
satisfy one of the requirements for becoming an enrolled agent under 
Circular 230 section 10.4(a).
    Comments observed that the IRS charges user fees inconsistently 
because, for example, the IRS does not charge user fees for toll-free 
telephone service, continuing-education webinars, walk-in service, 
notice letters, the annual filing season program record of completion, 
etc. This regulation deals only with the user fee for the EA-SEE, 
which, as discussed earlier, is compliant with the requirements of the 
OMB Circular, and the appropriateness of the EA-SEE user fee is not 
contingent on whether the IRS charges, or should charge, user fees for 
other activities.
    Comments further questioned the determination of the amount of the 
EA-SEE user fee. One comment assumed that the increase in revenue was 
allocable to ten full-time equivalent employees and questioned how so 
much time was involved in oversight of the EA-SEE--the comment noted 
that, after accounting for the cost of background investigations, the 
salary of a GS-12 step 1 employee in Washington, DC, when multiplied by 
the overhead rate and again multiplied by ten, equals approximately the 
expected increase in annual revenue to the IRS from the increased user 
fee. Comments also questioned how much time staff spent reviewing 
surveys and setting the annual cut score, among other things. The 
preamble to the October 25, 2016 proposed rule addresses most questions 
about costing methodology. As stated in that preamble, eight 
individuals spend approximately seventy-five percent of their time on 
the EA-SEE, and two individuals spend approximately ten-percent of 
their time on the EA-SEE. That amounts to just over six people working 
full time. The calculation in the comment on employee hours did not 
appear to account for the cost of benefits, which are calculated as 
28.5 percent of salary, and the variance between the ten employee 
salaries, which range from GS-7 to GS-15, in calculating the number of 
employees involved. RPO employees do not track the time spent on each 
individual task associated with the EA-SEE, but--as stated in the 
preamble to the October 25, 2016 proposed rule--managers who are 
familiar with the employees' work provided estimates of the total time 
involved, based on their knowledge and experience.
    Finally, comments asked the IRS to request an exception to the 
full-cost requirement from the OMB and

[[Page 33012]]

questioned whether it is good public policy to charge a user fee when 
the public benefits from minimum competency standards for return 
preparers. The IRS has determined that an exception to the full-cost 
requirement is not justified, because subsidizing the cost of the EA-
SEE program requires diverting resources from other activities that are 
in the public interest and that inure to the public generally, rather 
than to identifiable recipients requesting the specific benefit of 
taking the EA-SEE.

Special Analyses

    Certain IRS regulations, including this one, are exempt from the 
requirements of Executive Order 12866, as supplemented and reaffirmed 
by Executive Order 13563. Therefore, a regulatory assessment is not 
required. Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 
6), it is hereby certified that this regulation will not have a 
significant economic impact on a substantial number of small entities. 
The user fee primarily affects individuals who take the enrolled agent 
examination, many of whom may not be classified as small entities under 
the Regulatory Flexibility Act. Therefore, a substantial number of 
small entities is not likely to be affected. Further, the economic 
impact on any small entities affected would be limited to paying the 
$70 difference in cost per part between the $81 user fee and the 
previous $11 user fee, which is unlikely to present a significant 
economic impact. Moreover, the total economic impact of this regulation 
is approximately $1.57 million, which is the product of the 
approximately 22,425 parts of the EA-SEE administered annually and the 
$70 increase in the fee. Accordingly, the rule is not expected to have 
a significant economic impact on a substantial number of small 
entities, and a regulatory flexibility analysis is not required.

Drafting Information

    The principal author of this regulation is Jonathan R. Black of the 
Office of the Associate Chief Counsel (Procedure and Administration).

Statement of Availability of IRS Documents

    Rev. Proc. 2014-42, Annual Filing Season Program, is published in 
the Internal Revenue Bulletin and is available from the Superintendent 
of Documents, U.S. Government Publishing Office, Washington, DC 20402, 
or by visiting the IRS Web site at www.irs.gov.

List of Subjects in 26 CFR Part 300

    Reporting and recordkeeping requirements, User fees.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR part 300 is amended as follows:

PART 300--USER FEES

0
Paragraph 1. The authority citation for part 300 continues to read as 
follows:

    Authority:  31 U.S.C. 9701.

0
Par. 2. Section 300.4 is amended by revising paragraphs (b) and (d) to 
read as follows:


Sec.  300.4  Enrolled agent special enrollment examination fee.

* * * * *
    (b) Fee. The fee for taking the enrolled agent special enrollment 
examination is $81 per part, which is the cost to the government for 
overseeing the development and administration of the examination and 
does not include any fees charged by the administrator of the 
examination.
* * * * *
    (d) Applicability date. This section applies to registrations that 
occur on or after March 1, 2018, for the enrolled agent special 
enrollment examination. Section 300.4 (as contained in 26 CFR part 300, 
revised April 2017) applies to registrations that occur before March 1, 
2018.

Kirsten Wielobob,
Deputy Commissioner for Services and Enforcement.
    Approved: June 27, 2017.
Tom West,
Tax Legislative Counsel.
[FR Doc. 2017-15210 Filed 7-18-17; 8:45 am]
 BILLING CODE 4830-01-P