Excise Tax on Designated Drugs; Procedural Requirements, 67690-67694 [2023-21586]
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Federal Register / Vol. 88, No. 189 / Monday, October 2, 2023 / Proposed Rules
TABLE 1—CHANGES TO THE SCHEDULE OF FEES
Proposed
fee
Item No.
Current
fee
Change in
fee
Percentage
decrease
Projected
annual
number of
applications 1
Change in
state
retained
fees
Estimated
change in
annual fees
collected 2
Change in
remittance to
Treasury
SCHEDULE OF FEES FOR CONSULAR SERVICES
*
*
*
*
*
*
*
PASSPORT AND CITIZENSHIP SERVICES
8. Administrative Processing of Request for Certificate of Loss of
Nationality ...................................
1 Based
2 Using
$450
$2,350
($1,900)
(80)
4,661
($8,855,900)
$0
($8,855,900)
on estimated FY 2022 workload calculated with FY2021 actual demand.
FY 2021 workload to generate collections. This will be a reduction in total annual remittance to Treasury.
Executive Orders 12372 and 13132
This rulemaking will not have
substantial direct effects on the states,
on the relationship between the
National Government and the states, or
on the distribution of power and
responsibilities among the various
levels of government. Therefore, in
accordance with section 6 of Executive
Order 13132, it is determined that this
proposed rule does not have sufficient
federalism implications to require
consultations or warrant the preparation
of a federalism summary impact
statement. The regulations
implementing Executive Order 12372
regarding intergovernmental
consultation on Federal programs and
activities do not apply to this regulation.
implications, will not impose
substantial direct compliance costs on
Indian Tribal Governments, and will not
preempt tribal law. Accordingly, the
requirements of Executive Order 13175
do not apply to this rulemaking.
Paperwork Reduction Act
This rulemaking does not impose any
new reporting or recordkeeping
requirements subject to the Paperwork
Reduction Act.
List of Subjects in 22 CFR Part 22
Consular services, Fees.
Accordingly, for the reasons stated in
the preamble, 22 CFR part 22 is
proposed to be amended as follows:
PART 22—SCHEDULE OF FEES FOR
CONSULAR SERVICES—
DEPARTMENT OF STATE AND
FOREIGN SERVICE
1. The authority citation for part 22
continues to read as follows:
■
Authority: 8 U.S.C. 1101 note, 1153 note,
1157 note, 1183a note, 1184(c)(12), 1201(c),
1351, 1351 note, 1713, 1714, 1714 note; 10
U.S.C. 2602(c); 22 U.S.C. 214, 214 note,
1475e, 2504(h), 2651a, 4206, 4215, 4219,
6551; 31 U.S.C. 9701; E.O. 10718, 22 FR
4632, 3 CFR, 1954–1958 Comp., p. 382; E.O.
11295, 31 FR 10603, 3 CFR, 1966–1970
Comp., p. 570.
2. In § 22.1, amend the table by
revising Item 8 to read as follows:
■
§ 22.1
Schedule of Fees.
The following table sets forth the fees
for the following categories listed on the
U.S. Department of State’s Schedule of
Fees for Consular Services:
Executive Order 13175
The Department has determined that
this rulemaking will not have tribal
SCHEDULE OF FEES FOR CONSULAR SERVICES
Item No.
Fee
Passport and Citizenship Services
*
*
*
*
*
*
*
8. Administrative Processing of Request for Certificate of Loss of Nationality ...........................................................................................
$450
*
*
*
Hugo Rodriguez,
Acting Assistant Secretary for Consular
Affairs, Department of State.
[FR Doc. 2023–21559 Filed 9–29–23; 8:45 am]
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BILLING CODE 4710–06–P
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ACTION:
Internal Revenue Service
SUMMARY:
26 CFR Parts 40 and 47
RIN 1545–BQ93
Excise Tax on Designated Drugs;
Procedural Requirements
Internal Revenue Service (IRS),
Treasury.
AGENCY:
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Notice of proposed rulemaking.
DEPARTMENT OF THE TREASURY
[REG–115559–23]
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*
This document contains
proposed regulations that would
provide guidance on how taxpayers will
report liability for the excise tax
imposed on manufacturers, producers,
or importers of certain designated drugs.
The proposed regulations affect
manufacturers, producers, and
importers of designated drugs that sell
such drugs during certain statutory
periods. The proposed regulations also
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Federal Register / Vol. 88, No. 189 / Monday, October 2, 2023 / Proposed Rules
would except such tax from
semimonthly deposit requirements.
DATES: Written or electronic comments
and requests for a public hearing must
be received by December 1, 2023.
Requests for a public hearing must be
submitted as prescribed in the
‘‘Comments and Requests for a Public
Hearing’’ section.
ADDRESSES: Commenters are strongly
encouraged to submit public comments
electronically via the Federal
eRulemaking Portal at https://
www.regulations.gov (indicate IRS and
REG–115559–23) by following the
online instructions for submitting
comments. Requests for a public hearing
must be submitted as prescribed in the
‘‘Comments and Requests for a Public
Hearing’’ section. Once submitted to the
Federal eRulemaking Portal, comments
cannot be edited or withdrawn. The
Department of the Treasury (Treasury
Department) and the IRS will publish
for public availability any comments
submitted to the IRS’s public docket.
Send paper submissions to:
CC:PA:LPD:PR (REG–115559–23), Room
5203, Internal Revenue Service, P.O.
Box 7604, Ben Franklin Station,
Washington, DC 20044.
FOR FURTHER INFORMATION CONTACT:
Concerning the proposed regulations,
contact Jacob W. Peeples, James S.
Williford, or Michael H. Beker at (202)
317–6855 (not a toll-free number);
concerning the submission of comments
and/or requests for a public hearing,
contact Vivian Hayes by phone at (202)
317–5306 (not a toll-free number) or by
email at publichearings@irs.gov
(preferred).
SUPPLEMENTARY INFORMATION:
Code, the existing regulations that
prescribe the procedural rules
applicable to most excise taxes do not
apply to chapter 50A.
Notice 2023–52 (2023–35 I.R.B. 650)
announces that the Treasury
Department and the IRS intend to
propose regulations addressing
substantive and procedural issues
related to the section 5000D tax. These
proposed regulations address return
filing and other procedural
requirements related to the section
5000D tax as set forth in Notice 2023–
52. The Treasury Department and the
IRS will issue a separate notice of
proposed rulemaking to address
substantive issues related to the section
5000D tax.
Background
This document contains proposed
regulations that would amend the
Excise Tax Procedural Regulations (26
CFR part 40) and add a new part 47 to
26 CFR chapter 1 to contain the
‘‘Designated Drugs Excise Tax
Regulations’’ related to the excise tax
imposed by section 5000D of the
Internal Revenue Code (Code) on certain
sales by manufacturers, producers, or
importers of designated drugs (section
5000D tax).
Section 5000D, added to chapter 50A
of the Code by section 11003 of Public
Law 117–169, 136 Stat. 1818 (August
16, 2022), commonly known as the
Inflation Reduction Act of 2022 (IRA),
imposes an excise tax on the sale by the
manufacturer, producer, or importer
(taxpayer) of any designated drug during
a day that falls within a period
described in section 5000D(b). Because
chapter 50A is a new chapter of the
Section 40.6011(a)–1(a)(1) provides
that the return of tax to which part 40
applies must be made on Form 720,
Quarterly Federal Excise Tax Return,
according to the instructions applicable
to the form. Section 40.6011(a)–1(a)(2)
provides, in part, that a return must be
filed for the first calendar quarter in
which liability for tax is incurred (or tax
must be collected and paid over) and for
each subsequent calendar quarter,
whether or not liability is incurred (or
tax must be collected and paid over)
during that subsequent quarter, until a
final return under § 40.6011(a)–2 is
filed.
Proposed § 40.6011(a)–1(d) would
provide that a return that reports
liability imposed by section 5000D must
be made for a period of one calendar
quarter, and that a return must be filed
for each calendar quarter in which
liability for the section 5000D tax is
incurred. Therefore, under these
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Explanation of Provisions
I. Proposed Amendments to 26 CFR Part
40
These proposed regulations would
apply the Excise Tax Procedural
Regulations in 26 CFR part 40 to excise
taxes imposed by chapter 50A of the
Code (and thus to the section 5000D
tax), with some limited exceptions.
A. Proposed Amendments to § 40.0–1
Section 40.0–1(a) provides generally
that the regulations in part 40 set forth
administrative rules relating to the
excise taxes imposed by chapters 31
through 34, 36, 38, 39, and 49 of the
Code. Proposed § 40.0–1(a) would
amend that provision by adding chapter
50A of the Code to the list of Code
chapters subject to the part 40
regulations.
B. Proposed Amendments to
§ 40.6011(a)–1
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proposed regulations, taxpayers would
be required to report any section 5000D
tax liability on Form 720; however,
taxpayers would not be required to file
subsequent returns for quarters in which
they incur no section 5000D tax
liability.
C. Proposed Amendments to
§ 40.6302(c)–1
Section 40.6302(c)–1(a) provides that
except as provided by statute or by
§ 40.6302(c)–1(e), each person required
under § 40.6011(a)–1(a)(2) to file a
quarterly return must make a deposit of
tax for each semimonthly period (as
defined in § 40.0–1(c)) in which tax
liability is incurred. Section 40.6302(c)–
1(e) provides a list of taxes that are
excepted from the semimonthly deposit
requirement.
Proposed § 40.6302(c)–1(e)(1)(vi)
would add the section 5000D tax to the
list of taxes that are excepted from the
semimonthly deposit requirement.
Therefore, under these proposed
regulations, taxpayers with section
5000D tax liability would not be
required to make semimonthly deposits
of the section 5000D tax.
II. Proposed Addition of 26 CFR Part 47
In addition to proposing the addition
of a new part 47 to 26 CFR chapter 1,
proposed § 47.5000D–1 would provide
an introductory provision under part 47
that would designate 26 CFR part 47 as
the ‘‘Designated Drugs Excise Tax
Regulations.’’
Proposed Applicability Dates
These proposed regulations, once
adopted as final regulations in a
Treasury Decision published in the
Federal Register, are proposed to apply
to calendar quarters beginning on or
after October 1, 2023. Taxpayers may
rely on these proposed regulations for
such returns beginning on October 1,
2023, and before the date that a
Treasury Decision published in the
Federal Register adopts these
regulations as final regulations.
Special Analyses
I. Regulatory Planning and Review—
Economic Analysis
Pursuant to the Memorandum of
Agreement, Review of Treasury
Regulations under Executive Order
12866 (June 9, 2023), tax regulatory
actions issued by the IRS are not subject
to the requirements of section 6 of
Executive Order 12866, as amended.
Therefore, a regulatory impact
assessment is not required.
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II. Paperwork Reduction Act
The collections of information
contained within these proposed
regulations will be submitted to the
Office of Management and Budget
(OMB) for review in accordance with
the Paperwork Reduction Act (PRA) (44
U.S.C. 3507(d)). See 5 CFR 1320.11. The
Treasury Department and the IRS
request comments on the information
collection burdens related to the
proposed regulations. Commenters are
strongly encouraged to submit public
comments electronically. Written
comments and recommendations for the
proposed information collection should
be sent to https://www.reginfo.gov/
public/do/PRAMain, with copies to the
IRS. To find this particular information
collection, select ‘‘Currently under
Review—Open for Public Comments’’
and then use the search function.
Submit electronic submissions for the
proposed information collection to the
IRS via email at pra.comments@irs.gov
(indicate REG–115559–23 in the subject
line). Comments on the collection of
information must be received by
December 1, 2023. Comments are
specifically requested concerning:
Whether the proposed collections of
information are necessary for the proper
performance of the functions of the IRS,
including whether the information will
have practical utility;
The accuracy of the estimated burden
associated with the proposed collections
of information (see below);
How the quality, utility, and clarity of
the information to be collected may be
enhanced;
How the burden of complying with
the proposed collections of information
may be minimized, including through
the application of automated collection
techniques or other forms of information
technology; and
Estimates of capital or start-up costs
and costs of operation, maintenance,
and purchase of services to provide
information.
The collections of information in
these proposed regulations relate to
reporting and recordkeeping
requirements that will allow section
5000D taxpayers to meet their tax
reporting obligations. The collections of
information would generally be used by
the IRS for tax compliance purposes and
by taxpayers to facilitate proper tax
reporting and compliance. The reporting
and recordkeeping requirements are
covered within the form and
instructions for Form 720. IRS is seeking
OMB approval on the statutorily
required revisions to the form.
Therefore, collection requirements will
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be submitted to OMB under control
number 1545–0023.
Because the section 5000D tax is a
new tax that has never been reported to
the IRS, the Treasury Department and
the IRS do not have historical data on
the number of affected taxpayers. The
Centers for Medicare and Medicaid
Services (CMS) has selected 10 drugs for
price negotiation for initial price
applicability year 2026. CMS will select
for negotiation a limited number of
drugs for each initial price applicability
year after that, as outlined in the IRA.
Further, manufacturers, producers, and
importers of such drugs may or may not
become subject to section 5000D tax
liability. Based on the foregoing, the IRS
estimates that there will be between 0
and 50 taxpayers during the next 3
years.
If a taxpayer has a section 5000D tax
liability, it would be required to file
Form 720 to report such liability. Form
720 is a quarterly return. A taxpayer
would only be required to file Form 720
during calendar quarters in which the
taxpayer has a section 5000D tax
liability. Therefore, a taxpayer that has
a section 5000D tax liability in one
calendar quarter but not in subsequent
calendar quarters would only be
required to file one Form 720.
The respondents with regard to the
section 5000D tax are manufacturers,
producers, and importers of certain
drugs. The Treasury Department and the
IRS estimate the annual burden of the
collections of information as follows
(these estimates, which are for PRA
purposes only, are based on the high
end of the range of possible taxpayers
and the high end of the range of the
frequency of responses, in which a
taxpayer would have tax liability in all
four calendar quarters):
Estimated frequency of responses:
Quarterly.
Estimated number of responses: 50.
Estimated burden time per
respondent: 6.9 hours.
Estimated total annual reporting
burden: 1,380 hours.
A Federal agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless the collection of information
displays a valid control number
assigned by OMB. Books or records
relating to a collection of information
must be retained if their contents may
become material in the administration
of any internal revenue law. Generally,
tax returns and tax return information
are confidential, as required by section
6103.
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III. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility
Act (5 U.S.C. chapter 6), it is hereby
certified that these proposed regulations
will not have a significant economic
impact on a substantial number of small
entities. This certification is based on
the fact that the section 5000D tax is
imposed only when certain drug
manufacturers, producers, and
importers sell certain drugs during
periods described in section 5000D(b).
The periods described in section
5000D(b) relate to benchmarks in the
Medicare Drug Price Negotiation
Program, which involves only certain
drugs with high Medicare expenditures.
If any section 5000D tax liability arises,
the taxpayers will primarily not be
small entities. As noted earlier, data is
not readily available about the number
of taxpayers affected, but the number is
likely to be limited, in part due to the
limited number of drugs selected for the
Drug Price Negotiation Program in any
particular year. In addition, these
proposed regulations will assist
taxpayers in meeting their tax reporting
obligations by providing clarity on how
to report section 5000D tax liability,
which will make it easier for taxpayers
to comply with section 5000D.
Therefore, these proposed regulations
will not create additional obligations
for, or impose a significant economic
impact on, small entities, and a
regulatory flexibility analysis under the
Regulatory Flexibility Act is not
required. Notwithstanding this
certification, the Treasury Department
and the IRS welcome comments on the
impact of these proposed regulations on
small entities.
IV. Section 7805(f)
Pursuant to section 7805(f) of the
Code, these proposed regulations have
been submitted to the Chief Counsel for
the Office of Advocacy of the Small
Business Administration for comment
on its impact on small business.
V. Unfunded Mandates Reform Act
Section 202 of the Unfunded
Mandates Reform Act of 1995 requires
that agencies assess anticipated costs
and benefits and take certain other
actions before issuing a final rule that
includes any Federal mandate that may
result in expenditures in any one year
by a State, local, or Tribal government,
in the aggregate, or by the private sector,
of $100 million in 1995 dollars, updated
annually for inflation. These proposed
regulations do not include any Federal
mandate that may result in expenditures
by State, local, or Tribal governments, or
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by the private sector, in excess of that
threshold.
26 CFR Part 47
V. Executive Order 13132: Federalism
Executive Order 13132 (Federalism)
prohibits an agency from publishing any
rule that has federalism implications if
the rule either imposes substantial,
direct compliance costs on State and
local governments, and is not required
by statute, or preempts State law, unless
the agency meets the consultation and
funding requirements of section 6 of the
Executive order. These proposed
regulations do not have federalism
implications, do not impose substantial
direct compliance costs on State and
local governments, and do not preempt
State law within the meaning of the
Executive order.
Proposed Amendments to the
Regulations
Excise taxes.
Statement of Availability of IRS
Documents
The IRS Notice cited in this preamble
is published in the Internal Revenue
Bulletin (or Cumulative Bulletin) and is
available from the Superintendent of
Documents, U.S. Government
Publishing Office, Washington, DC
20402, or by visiting the IRS website at
https://www.irs.gov.
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Comments and Requests for a Public
Hearing
Before these proposed amendments to
the regulations are adopted as final
regulations, consideration will be given
to comments that are submitted timely
to the IRS as prescribed in the preamble
under the ADDRESSES heading. The
Treasury Department and the IRS
request comments on all aspects of the
proposed regulations. Any comments
submitted will be made available at
https://www.regulations.gov or upon
request.
A public hearing will be scheduled if
requested in writing by any person who
timely submits electronic or written
comments. Requests for a public hearing
are also encouraged to be made
electronically. If a public hearing is
scheduled, notice of the date and time
for the public hearing will be published
in the Federal Register.
Drafting Information
The principal author of these
regulations is Jacob W. Peeples of the
Office of the Associate Chief Counsel
(Passthroughs & Special Industries).
However, other personnel from the
Treasury Department and the IRS
participated in their development.
List of Subjects
26 CFR Part 40
Excise taxes, Reporting and
recordkeeping requirements.
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Accordingly, the Treasury Department
and the IRS propose to amend 26 CFR
chapter I, subchapter D, as follows:
PART 40—EXCISE TAX PROCEDURAL
REGULATIONS
Paragraph 1. The authority citation
for part 40 continues to read in part as
follows:
■
Authority: 26 U.S.C. 7805.
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Par. 2. Section 40.0–1 is amended by
revising paragraphs (a) and (e) to read as
follows:
67693
after March 31, 2013. For rules that
apply before March 31, 2013, see 26
CFR part 40, revised as of April 1, 2012.
(3) Paragraph (d). Paragraph (d) of
this section applies to returns for
calendar quarters beginning on or after
January 19, 2021. For rules that apply
before January 19, 2021, see 26 CFR part
40, revised as of April 1, 2020.
■ Par. 3. Section 40.6011(a)–1 is
amended by:
■ 1. Revising the first sentence of
paragraph (a)(2)(i).
■ 2. Adding paragraphs (d) and (e).
The revision and additions read as
follows:
*
§ 40.6011(a)–1
■
(a) * * *
(2) * * *
(i) * * * Except as provided in
paragraphs (b) through (d) of this
section, the return must be made for a
period of one calendar quarter. * * *
*
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*
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(d) Tax on designated drugs. A return
that reports liability imposed by section
5000D must be made for a period of one
calendar quarter. A return must be filed
for each calendar quarter in which
liability for the tax imposed by section
5000D is incurred. There is no
requirement that a return be filed for a
calendar quarter in which there is no
liability imposed by section 5000D.
(e) Applicability dates—(1) Paragraph
(a)(2)(i). Paragraph (a)(2)(i) of this
section applies to returns filed for
calendar quarters beginning on or after
October 1, 2023. For rules that apply
before October 1, 2023, see 26 CFR part
40, revised as of April 1, 2023.
(2) Paragraph (c). See paragraph (c)(2)
of this section.
(3) Paragraph (d). Paragraph (d) of
this section applies to returns filed for
calendar quarters beginning on and after
October 1, 2023.
■ Par. 4. Section 40.6302(c)–1 is
amended by:
■ 1. Revising paragraphs (e)(1)(iv) and
(v).
■ 2. Adding paragraph (e)(1)(vi).
■ 3. Revising paragraph (f).
The revisions and addition read as
follows:
§ 40.0–1
Introduction.
(a) In general. The regulations in this
part are designated the Excise Tax
Procedural Regulations. The regulations
in this part set forth administrative
provisions relating to the excise taxes
imposed by chapters 31 through 34, 36,
38, 39, 49, and 50A of the Internal
Revenue Code (Code) (except for the
chapter 32 tax imposed by section 4181
(firearms tax) and the chapter 36 taxes
imposed by sections 4461 (harbor
maintenance tax) and 4481 (heavy
vehicle use tax)), and to floor stocks
taxes imposed on articles subject to any
of these taxes. Chapter 31 relates to
retail excise taxes; chapter 32 to
manufacturers’ excise taxes; chapter 33
to taxes imposed on communications
services and air transportation services;
chapter 34 to taxes imposed on certain
insurance policies; chapter 36 to taxes
imposed on transportation by water;
chapter 38 to environmental taxes;
chapter 39 to taxes imposed on
registration-required obligations;
chapter 49 to taxes imposed on indoor
tanning services; and chapter 50A to
taxes imposed on designated drugs.
References in this part to taxes also
include references to the fees imposed
by sections 4375 and 4376 of the Code.
See parts 43, 46 through 49, and 52 of
this chapter for regulations related to
the imposition of tax.
*
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(e) Applicability dates—(1) Paragraph
(a). Paragraph (a) of this section applies
to returns required to be filed under
§ 40.6011(a)–1 for calendar quarters
beginning on or after October 1, 2023.
For rules that apply before October 1,
2023, see 26 CFR part 40, revised as of
April 1, 2023.
(2) Paragraphs (b) and (c). Paragraphs
(b) and (c) of this section apply to
returns for calendar quarters beginning
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§ 40.6302(c)–1
*
Returns.
Deposits.
*
*
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(e) * * *
(1) * * *
(iv) Sections 4375 and 4376 (relating
to fees on health insurance policies and
self-insured insurance plans);
(v) Section 5000B (relating to indoor
tanning services); and
(vi) Section 5000D (relating to
designated drugs).
*
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*
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*
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(f) Applicability dates—(1)
Paragraphs (a) through (d). Paragraphs
(a) through (d) of this section apply to
deposits and payments made after
March 31, 2013. For rules that apply
before March 31, 2013, see 26 CFR part
40, revised as of April 1, 2012.
(2) Paragraph (e). Paragraph (e) of this
section applies to calendar quarters
beginning on or after October 1, 2023.
For rules that apply before October 1,
2023, see 26 CFR part 40, revised as of
April 1, 2023.
■ Par. 5. Add part 47 to read as follows:
Sec.
47.5000D–0 Table of contents.
47.5000D–1 Introduction.
47.5000D–2–47.5000D–3 [Reserved]
Authority: 26 U.S.C. 7805.
Section 47.5000D–1 also issued under 26
U.S.C. 5000D.
Table of contents.
This section lists the table of contents
for §§ 47.5000D–1 through 47.5000D–3.
§ 47.5000D–1
Introduction.
(a) In general.
(b) Applicability date.
§§ 47.5000D–2 and 47.5000D–3
§ 47.5000D–1
[Reserved]
Introduction.
(a) In general. The regulations in this
part are designated the Designated
Drugs Excise Tax Regulations. The
regulations in this part relate to the tax
imposed by section 5000D of the
Internal Revenue Code. See part 40 of
this chapter for regulations relating to
returns, payments, and other procedural
rules applicable to this part.
(b) Applicability date. This section
applies to returns filed for calendar
quarters beginning on or after October 1,
2023.
§§ 47.5000D–2–47.5000D–3
[Reserved]
Douglas W. O’Donnell,
Deputy Commissioner for Services and
Enforcement.
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Forest Service
36 CFR Parts 214 and 251
RIN 0596–AD56
Special Uses; Land Use Fees;
Temporary Land Use Fee Reductions
for Recreation Residence Permits
AGENCY:
Forest Service, Agriculture
(USDA).
Proposed rule; request for
public comment.
ACTION:
The Forest Service (Forest
Service or Agency), United States
Department of Agriculture, is proposing
to update its special uses regulations,
consistent with the requirement in the
Cabin Fee Act, to provide for
suspension or temporary reduction of
the land use fee for a recreation
residence permit if access to, or
occupancy of, the recreation residence
is significantly restricted.
DATES: Comments on the proposed rule
must be received in writing by
December 1, 2023.
ADDRESSES: Comments, identified by
RIN 0596–AD56, may be submitted via
one of the following methods:
• Federal eRulemaking Portal:
https://www.regulations.gov. Follow the
instructions for sending comments.
• Mail: Director, Lands Staff, 201 14th
Street SW, Washington, DC 20250–1124.
• Hand Delivery: Director, Lands,
Minerals, and Geology Management
Staff, 1st Floor Southeast, 201 14th
Street SW, Washington, DC 20250–1124.
Comments should be confined to
issues pertinent to the proposed rule;
should explain the reasons for any
recommended changes; and should
reference the specific section and
wording being addressed, where
possible. All timely comments,
including names and addresses when
provided, will be placed in the record
and will be available for public review
and copying. The public may review
comments at the Office of the Director,
Lands, Minerals, and Geology
Management Staff, Sidney R. Yates
Federal Building, 1st Floor Southeast,
201 14th Street SW, Washington, DC, on
business days between 8:30 a.m. and
4:00 p.m. Visitors are encouraged to call
ahead at (202) 205–3563 to facilitate
entry into the building. Comments may
also be viewed on the Federal
eRulemaking Portal at https://
www.regulations.gov. In the search box,
enter ‘‘RIN 0596–AD56’’ and click the
‘‘Search’’ button.
FOR FURTHER INFORMATION CONTACT:
Brandon Smith, Lands, Minerals, and
SUMMARY:
PART 47—DESIGNATED DRUGS
EXCISE TAX REGULATIONS
§ 47.5000D–0
DEPARTMENT OF AGRICULTURE
PO 00000
Frm 00013
Fmt 4702
Sfmt 4702
Geology Management Staff, (406) 491–
1605 or brandon.c.smith@usda.gov.
Individuals who use telecommunication
devices for the hearing impaired may
call the Federal Relay Service at (800)
877–8339 between 8:00 a.m. and 8:00
p.m., Eastern Time, Monday through
Friday.
SUPPLEMENTARY INFORMATION:
Background
The Forest Service administers the
use and occupancy of National Forest
System lands through issuance of
special use authorizations. The Forest
Service administers approximately
74,000 special use authorizations,
including nearly 14,000 recreation
residence permits on National Forest
System lands spread across 24 states
and 114 national forests. Recreation
residences are privately owned cabins
that have been authorized on National
Forest System lands since 1915. Like
other types of special use
authorizations, permits for recreation
residences are subject to an annual land
use fee, payable in advance at the
beginning of the calendar year.
Need for the Proposed Rule
The Cabin Fee Act of 2014 (16 U.S.C.
6214) establishes a tiered fee structure
for the use and occupancy of recreation
residences on National Forest System
lands. Section 2(f)(3)(A) of the Cabin
Fee Act requires the Forest Service to
establish criteria by which the annual
land use fee for a recreation residence
permit may be suspended or
temporarily reduced if access to, or
occupancy of, the recreation residence
is significantly restricted. Section
2(f)(3)(B) of the Cabin Fee Act requires
the determination of whether to
suspend or temporarily reduce the
annual land use fee for a recreation
residence permit to be administratively
appealable.
Proposed Revisions to 36 CFR Part 214
The proposed rule would amend 36
CFR 214.4(c) by adding paragraph (6) to
provide for appeal of a decision of
whether to temporarily reduce the
annual land use fee for a recreation
residence permit during significantly
restricted access to, or occupancy of, the
recreation residence.
Proposed Revisions to 36 CFR Part 251,
Subpart B
The proposed rule would add a
definition to 36 CFR 251.51 for the term
‘‘significantly restricted access to, or
occupancy of, a recreation residence,’’
which would be defined as when access
to, or occupancy of, a recreation
residence is prohibited by law for a
E:\FR\FM\02OCP1.SGM
02OCP1
]]>Agencies
[Federal Register Volume 88, Number 189 (Monday, October 2, 2023)]
[Proposed Rules]
[Pages 67690-67694]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-21586]
=======================================================================
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 40 and 47
[REG-115559-23]
RIN 1545-BQ93
Excise Tax on Designated Drugs; Procedural Requirements
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This document contains proposed regulations that would provide
guidance on how taxpayers will report liability for the excise tax
imposed on manufacturers, producers, or importers of certain designated
drugs. The proposed regulations affect manufacturers, producers, and
importers of designated drugs that sell such drugs during certain
statutory periods. The proposed regulations also
[[Page 67691]]
would except such tax from semimonthly deposit requirements.
DATES: Written or electronic comments and requests for a public hearing
must be received by December 1, 2023. Requests for a public hearing
must be submitted as prescribed in the ``Comments and Requests for a
Public Hearing'' section.
ADDRESSES: Commenters are strongly encouraged to submit public comments
electronically via the Federal eRulemaking Portal at https://www.regulations.gov (indicate IRS and REG-115559-23) by following the
online instructions for submitting comments. Requests for a public
hearing must be submitted as prescribed in the ``Comments and Requests
for a Public Hearing'' section. Once submitted to the Federal
eRulemaking Portal, comments cannot be edited or withdrawn. The
Department of the Treasury (Treasury Department) and the IRS will
publish for public availability any comments submitted to the IRS's
public docket. Send paper submissions to: CC:PA:LPD:PR (REG-115559-23),
Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin
Station, Washington, DC 20044.
FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations,
contact Jacob W. Peeples, James S. Williford, or Michael H. Beker at
(202) 317-6855 (not a toll-free number); concerning the submission of
comments and/or requests for a public hearing, contact Vivian Hayes by
phone at (202) 317-5306 (not a toll-free number) or by email at
[email protected] (preferred).
SUPPLEMENTARY INFORMATION:
Background
This document contains proposed regulations that would amend the
Excise Tax Procedural Regulations (26 CFR part 40) and add a new part
47 to 26 CFR chapter 1 to contain the ``Designated Drugs Excise Tax
Regulations'' related to the excise tax imposed by section 5000D of the
Internal Revenue Code (Code) on certain sales by manufacturers,
producers, or importers of designated drugs (section 5000D tax).
Section 5000D, added to chapter 50A of the Code by section 11003 of
Public Law 117-169, 136 Stat. 1818 (August 16, 2022), commonly known as
the Inflation Reduction Act of 2022 (IRA), imposes an excise tax on the
sale by the manufacturer, producer, or importer (taxpayer) of any
designated drug during a day that falls within a period described in
section 5000D(b). Because chapter 50A is a new chapter of the Code, the
existing regulations that prescribe the procedural rules applicable to
most excise taxes do not apply to chapter 50A.
Notice 2023-52 (2023-35 I.R.B. 650) announces that the Treasury
Department and the IRS intend to propose regulations addressing
substantive and procedural issues related to the section 5000D tax.
These proposed regulations address return filing and other procedural
requirements related to the section 5000D tax as set forth in Notice
2023-52. The Treasury Department and the IRS will issue a separate
notice of proposed rulemaking to address substantive issues related to
the section 5000D tax.
Explanation of Provisions
I. Proposed Amendments to 26 CFR Part 40
These proposed regulations would apply the Excise Tax Procedural
Regulations in 26 CFR part 40 to excise taxes imposed by chapter 50A of
the Code (and thus to the section 5000D tax), with some limited
exceptions.
A. Proposed Amendments to Sec. 40.0-1
Section 40.0-1(a) provides generally that the regulations in part
40 set forth administrative rules relating to the excise taxes imposed
by chapters 31 through 34, 36, 38, 39, and 49 of the Code. Proposed
Sec. 40.0-1(a) would amend that provision by adding chapter 50A of the
Code to the list of Code chapters subject to the part 40 regulations.
B. Proposed Amendments to Sec. 40.6011(a)-1
Section 40.6011(a)-1(a)(1) provides that the return of tax to which
part 40 applies must be made on Form 720, Quarterly Federal Excise Tax
Return, according to the instructions applicable to the form. Section
40.6011(a)-1(a)(2) provides, in part, that a return must be filed for
the first calendar quarter in which liability for tax is incurred (or
tax must be collected and paid over) and for each subsequent calendar
quarter, whether or not liability is incurred (or tax must be collected
and paid over) during that subsequent quarter, until a final return
under Sec. 40.6011(a)-2 is filed.
Proposed Sec. 40.6011(a)-1(d) would provide that a return that
reports liability imposed by section 5000D must be made for a period of
one calendar quarter, and that a return must be filed for each calendar
quarter in which liability for the section 5000D tax is incurred.
Therefore, under these proposed regulations, taxpayers would be
required to report any section 5000D tax liability on Form 720;
however, taxpayers would not be required to file subsequent returns for
quarters in which they incur no section 5000D tax liability.
C. Proposed Amendments to Sec. 40.6302(c)-1
Section 40.6302(c)-1(a) provides that except as provided by statute
or by Sec. 40.6302(c)-1(e), each person required under Sec.
40.6011(a)-1(a)(2) to file a quarterly return must make a deposit of
tax for each semimonthly period (as defined in Sec. 40.0-1(c)) in
which tax liability is incurred. Section 40.6302(c)-1(e) provides a
list of taxes that are excepted from the semimonthly deposit
requirement.
Proposed Sec. 40.6302(c)-1(e)(1)(vi) would add the section 5000D
tax to the list of taxes that are excepted from the semimonthly deposit
requirement. Therefore, under these proposed regulations, taxpayers
with section 5000D tax liability would not be required to make
semimonthly deposits of the section 5000D tax.
II. Proposed Addition of 26 CFR Part 47
In addition to proposing the addition of a new part 47 to 26 CFR
chapter 1, proposed Sec. 47.5000D-1 would provide an introductory
provision under part 47 that would designate 26 CFR part 47 as the
``Designated Drugs Excise Tax Regulations.''
Proposed Applicability Dates
These proposed regulations, once adopted as final regulations in a
Treasury Decision published in the Federal Register, are proposed to
apply to calendar quarters beginning on or after October 1, 2023.
Taxpayers may rely on these proposed regulations for such returns
beginning on October 1, 2023, and before the date that a Treasury
Decision published in the Federal Register adopts these regulations as
final regulations.
Special Analyses
I. Regulatory Planning and Review--Economic Analysis
Pursuant to the Memorandum of Agreement, Review of Treasury
Regulations under Executive Order 12866 (June 9, 2023), tax regulatory
actions issued by the IRS are not subject to the requirements of
section 6 of Executive Order 12866, as amended. Therefore, a regulatory
impact assessment is not required.
[[Page 67692]]
II. Paperwork Reduction Act
The collections of information contained within these proposed
regulations will be submitted to the Office of Management and Budget
(OMB) for review in accordance with the Paperwork Reduction Act (PRA)
(44 U.S.C. 3507(d)). See 5 CFR 1320.11. The Treasury Department and the
IRS request comments on the information collection burdens related to
the proposed regulations. Commenters are strongly encouraged to submit
public comments electronically. Written comments and recommendations
for the proposed information collection should be sent to https://www.reginfo.gov/public/do/PRAMain, with copies to the IRS. To find this
particular information collection, select ``Currently under Review--
Open for Public Comments'' and then use the search function. Submit
electronic submissions for the proposed information collection to the
IRS via email at [email protected] (indicate REG-115559-23 in the
subject line). Comments on the collection of information must be
received by December 1, 2023. Comments are specifically requested
concerning:
Whether the proposed collections of information are necessary for
the proper performance of the functions of the IRS, including whether
the information will have practical utility;
The accuracy of the estimated burden associated with the proposed
collections of information (see below);
How the quality, utility, and clarity of the information to be
collected may be enhanced;
How the burden of complying with the proposed collections of
information may be minimized, including through the application of
automated collection techniques or other forms of information
technology; and
Estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of services to provide information.
The collections of information in these proposed regulations relate
to reporting and recordkeeping requirements that will allow section
5000D taxpayers to meet their tax reporting obligations. The
collections of information would generally be used by the IRS for tax
compliance purposes and by taxpayers to facilitate proper tax reporting
and compliance. The reporting and recordkeeping requirements are
covered within the form and instructions for Form 720. IRS is seeking
OMB approval on the statutorily required revisions to the form.
Therefore, collection requirements will be submitted to OMB under
control number 1545-0023.
Because the section 5000D tax is a new tax that has never been
reported to the IRS, the Treasury Department and the IRS do not have
historical data on the number of affected taxpayers. The Centers for
Medicare and Medicaid Services (CMS) has selected 10 drugs for price
negotiation for initial price applicability year 2026. CMS will select
for negotiation a limited number of drugs for each initial price
applicability year after that, as outlined in the IRA. Further,
manufacturers, producers, and importers of such drugs may or may not
become subject to section 5000D tax liability. Based on the foregoing,
the IRS estimates that there will be between 0 and 50 taxpayers during
the next 3 years.
If a taxpayer has a section 5000D tax liability, it would be
required to file Form 720 to report such liability. Form 720 is a
quarterly return. A taxpayer would only be required to file Form 720
during calendar quarters in which the taxpayer has a section 5000D tax
liability. Therefore, a taxpayer that has a section 5000D tax liability
in one calendar quarter but not in subsequent calendar quarters would
only be required to file one Form 720.
The respondents with regard to the section 5000D tax are
manufacturers, producers, and importers of certain drugs. The Treasury
Department and the IRS estimate the annual burden of the collections of
information as follows (these estimates, which are for PRA purposes
only, are based on the high end of the range of possible taxpayers and
the high end of the range of the frequency of responses, in which a
taxpayer would have tax liability in all four calendar quarters):
Estimated frequency of responses: Quarterly.
Estimated number of responses: 50.
Estimated burden time per respondent: 6.9 hours.
Estimated total annual reporting burden: 1,380 hours.
A Federal agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless the
collection of information displays a valid control number assigned by
OMB. Books or records relating to a collection of information must be
retained if their contents may become material in the administration of
any internal revenue law. Generally, tax returns and tax return
information are confidential, as required by section 6103.
III. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it
is hereby certified that these proposed regulations will not have a
significant economic impact on a substantial number of small entities.
This certification is based on the fact that the section 5000D tax is
imposed only when certain drug manufacturers, producers, and importers
sell certain drugs during periods described in section 5000D(b). The
periods described in section 5000D(b) relate to benchmarks in the
Medicare Drug Price Negotiation Program, which involves only certain
drugs with high Medicare expenditures. If any section 5000D tax
liability arises, the taxpayers will primarily not be small entities.
As noted earlier, data is not readily available about the number of
taxpayers affected, but the number is likely to be limited, in part due
to the limited number of drugs selected for the Drug Price Negotiation
Program in any particular year. In addition, these proposed regulations
will assist taxpayers in meeting their tax reporting obligations by
providing clarity on how to report section 5000D tax liability, which
will make it easier for taxpayers to comply with section 5000D.
Therefore, these proposed regulations will not create additional
obligations for, or impose a significant economic impact on, small
entities, and a regulatory flexibility analysis under the Regulatory
Flexibility Act is not required. Notwithstanding this certification,
the Treasury Department and the IRS welcome comments on the impact of
these proposed regulations on small entities.
IV. Section 7805(f)
Pursuant to section 7805(f) of the Code, these proposed regulations
have been submitted to the Chief Counsel for the Office of Advocacy of
the Small Business Administration for comment on its impact on small
business.
V. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act of 1995 requires
that agencies assess anticipated costs and benefits and take certain
other actions before issuing a final rule that includes any Federal
mandate that may result in expenditures in any one year by a State,
local, or Tribal government, in the aggregate, or by the private
sector, of $100 million in 1995 dollars, updated annually for
inflation. These proposed regulations do not include any Federal
mandate that may result in expenditures by State, local, or Tribal
governments, or
[[Page 67693]]
by the private sector, in excess of that threshold.
V. Executive Order 13132: Federalism
Executive Order 13132 (Federalism) prohibits an agency from
publishing any rule that has federalism implications if the rule either
imposes substantial, direct compliance costs on State and local
governments, and is not required by statute, or preempts State law,
unless the agency meets the consultation and funding requirements of
section 6 of the Executive order. These proposed regulations do not
have federalism implications, do not impose substantial direct
compliance costs on State and local governments, and do not preempt
State law within the meaning of the Executive order.
Statement of Availability of IRS Documents
The IRS Notice cited in this preamble is published in the Internal
Revenue Bulletin (or Cumulative Bulletin) and is available from the
Superintendent of Documents, U.S. Government Publishing Office,
Washington, DC 20402, or by visiting the IRS website at https://www.irs.gov.
Comments and Requests for a Public Hearing
Before these proposed amendments to the regulations are adopted as
final regulations, consideration will be given to comments that are
submitted timely to the IRS as prescribed in the preamble under the
ADDRESSES heading. The Treasury Department and the IRS request comments
on all aspects of the proposed regulations. Any comments submitted will
be made available at https://www.regulations.gov or upon request.
A public hearing will be scheduled if requested in writing by any
person who timely submits electronic or written comments. Requests for
a public hearing are also encouraged to be made electronically. If a
public hearing is scheduled, notice of the date and time for the public
hearing will be published in the Federal Register.
Drafting Information
The principal author of these regulations is Jacob W. Peeples of
the Office of the Associate Chief Counsel (Passthroughs & Special
Industries). However, other personnel from the Treasury Department and
the IRS participated in their development.
List of Subjects
26 CFR Part 40
Excise taxes, Reporting and recordkeeping requirements.
26 CFR Part 47
Excise taxes.
Proposed Amendments to the Regulations
Accordingly, the Treasury Department and the IRS propose to amend
26 CFR chapter I, subchapter D, as follows:
PART 40--EXCISE TAX PROCEDURAL REGULATIONS
0
Paragraph 1. The authority citation for part 40 continues to read in
part as follows:
Authority: 26 U.S.C. 7805.
* * * * *
0
Par. 2. Section 40.0-1 is amended by revising paragraphs (a) and (e) to
read as follows:
Sec. 40.0-1 Introduction.
(a) In general. The regulations in this part are designated the
Excise Tax Procedural Regulations. The regulations in this part set
forth administrative provisions relating to the excise taxes imposed by
chapters 31 through 34, 36, 38, 39, 49, and 50A of the Internal Revenue
Code (Code) (except for the chapter 32 tax imposed by section 4181
(firearms tax) and the chapter 36 taxes imposed by sections 4461
(harbor maintenance tax) and 4481 (heavy vehicle use tax)), and to
floor stocks taxes imposed on articles subject to any of these taxes.
Chapter 31 relates to retail excise taxes; chapter 32 to manufacturers'
excise taxes; chapter 33 to taxes imposed on communications services
and air transportation services; chapter 34 to taxes imposed on certain
insurance policies; chapter 36 to taxes imposed on transportation by
water; chapter 38 to environmental taxes; chapter 39 to taxes imposed
on registration-required obligations; chapter 49 to taxes imposed on
indoor tanning services; and chapter 50A to taxes imposed on designated
drugs. References in this part to taxes also include references to the
fees imposed by sections 4375 and 4376 of the Code. See parts 43, 46
through 49, and 52 of this chapter for regulations related to the
imposition of tax.
* * * * *
(e) Applicability dates--(1) Paragraph (a). Paragraph (a) of this
section applies to returns required to be filed under Sec. 40.6011(a)-
1 for calendar quarters beginning on or after October 1, 2023. For
rules that apply before October 1, 2023, see 26 CFR part 40, revised as
of April 1, 2023.
(2) Paragraphs (b) and (c). Paragraphs (b) and (c) of this section
apply to returns for calendar quarters beginning after March 31, 2013.
For rules that apply before March 31, 2013, see 26 CFR part 40, revised
as of April 1, 2012.
(3) Paragraph (d). Paragraph (d) of this section applies to returns
for calendar quarters beginning on or after January 19, 2021. For rules
that apply before January 19, 2021, see 26 CFR part 40, revised as of
April 1, 2020.
0
Par. 3. Section 40.6011(a)-1 is amended by:
0
1. Revising the first sentence of paragraph (a)(2)(i).
0
2. Adding paragraphs (d) and (e).
The revision and additions read as follows:
Sec. 40.6011(a)-1 Returns.
(a) * * *
(2) * * *
(i) * * * Except as provided in paragraphs (b) through (d) of this
section, the return must be made for a period of one calendar quarter.
* * *
* * * * *
(d) Tax on designated drugs. A return that reports liability
imposed by section 5000D must be made for a period of one calendar
quarter. A return must be filed for each calendar quarter in which
liability for the tax imposed by section 5000D is incurred. There is no
requirement that a return be filed for a calendar quarter in which
there is no liability imposed by section 5000D.
(e) Applicability dates--(1) Paragraph (a)(2)(i). Paragraph
(a)(2)(i) of this section applies to returns filed for calendar
quarters beginning on or after October 1, 2023. For rules that apply
before October 1, 2023, see 26 CFR part 40, revised as of April 1,
2023.
(2) Paragraph (c). See paragraph (c)(2) of this section.
(3) Paragraph (d). Paragraph (d) of this section applies to returns
filed for calendar quarters beginning on and after October 1, 2023.
0
Par. 4. Section 40.6302(c)-1 is amended by:
0
1. Revising paragraphs (e)(1)(iv) and (v).
0
2. Adding paragraph (e)(1)(vi).
0
3. Revising paragraph (f).
The revisions and addition read as follows:
Sec. 40.6302(c)-1 Deposits.
* * * * *
(e) * * *
(1) * * *
(iv) Sections 4375 and 4376 (relating to fees on health insurance
policies and self-insured insurance plans);
(v) Section 5000B (relating to indoor tanning services); and
(vi) Section 5000D (relating to designated drugs).
* * * * *
[[Page 67694]]
(f) Applicability dates--(1) Paragraphs (a) through (d). Paragraphs
(a) through (d) of this section apply to deposits and payments made
after March 31, 2013. For rules that apply before March 31, 2013, see
26 CFR part 40, revised as of April 1, 2012.
(2) Paragraph (e). Paragraph (e) of this section applies to
calendar quarters beginning on or after October 1, 2023. For rules that
apply before October 1, 2023, see 26 CFR part 40, revised as of April
1, 2023.
0
Par. 5. Add part 47 to read as follows:
PART 47--DESIGNATED DRUGS EXCISE TAX REGULATIONS
Sec.
47.5000D-0 Table of contents.
47.5000D-1 Introduction.
47.5000D-2-47.5000D-3 [Reserved]
Authority: 26 U.S.C. 7805.
Section 47.5000D-1 also issued under 26 U.S.C. 5000D.
Sec. 47.5000D-0 Table of contents.
This section lists the table of contents for Sec. Sec. 47.5000D-1
through 47.5000D-3.
Sec. 47.5000D-1 Introduction.
(a) In general.
(b) Applicability date.
Sec. Sec. 47.5000D-2 and 47.5000D-3 [Reserved]
Sec. 47.5000D-1 Introduction.
(a) In general. The regulations in this part are designated the
Designated Drugs Excise Tax Regulations. The regulations in this part
relate to the tax imposed by section 5000D of the Internal Revenue
Code. See part 40 of this chapter for regulations relating to returns,
payments, and other procedural rules applicable to this part.
(b) Applicability date. This section applies to returns filed for
calendar quarters beginning on or after October 1, 2023.
Sec. Sec. 47.5000D-2-47.5000D-3 [Reserved]
Douglas W. O'Donnell,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2023-21586 Filed 9-27-23; 11:15 am]
BILLING CODE 4830-01-P
