Department of Treasury January 2005 – Federal Register Recent Federal Regulation Documents

An Open Meeting of the Area 1 Taxpayer Advocacy Panel will be conducted (via teleconference). The Taxpayer Advocacy Panel is soliciting public comments, ideas and suggestions on improving customer service at the Internal Revenue Service.

This document contains proposed regulations relating to the disclosure of returns and return information pursuant to section 6103(n) of the Internal Revenue Code (Code). The proposed regulations describe the circumstances under which officers or employees of the Treasury Department, a State tax agency, the Social Security Administration, or the Department of Justice may disclose returns and return information to obtain property or services for tax administration purposes, pursuant to a written contract or agreement. The proposed regulations clarify the existing regulations with respect to redisclosures of returns or return information by contractors, especially with regard to redisclosures by contractors to agents or subcontractors, and clarify that the civil and criminal penalties of sections 7431, 7213, and 7213A apply to the agents or subcontractors. The proposed regulations also clarify that section 6103(n) applies to written contracts or agreements that are entered into to obtain property or services for purposes of tax administration, including contracts that are not awarded under the Federal Acquisition Regulations (FAR), 48 CFR pts. 1 through 53. The proposed regulations will affect officers and employees of the Treasury Department, a State tax agency, the Social Security Administration, or the Department of Justice who disclose returns or return information in connection with a written contract or agreement for the acquisition of property or services for tax administration purposes. The proposed regulations will also affect any person, or officer, employee, agent, or subcontractor of the person, or officer or employee of the agent or subcontractor, who receives returns or return information in connection with a written contract or agreement for the acquisition of property or services.

This document provides cancellation of a public hearing for proposed regulations that provide rules under section 752 for taking into account certain obligations of a business entity that is disregarded as separate from its owner under section 856(i), 1361(b)(3), or Sec. Sec. 301.7701-1 through 301.7701-3 (disregarded entity) for purposes of characterizing and allocating partnership liabilities.

On December 10, 2004, the President issued Presidential Determination 2005-12. Presidential Determination 2005-12 waives the application of section 901(j)(1) of the Internal Revenue Code with respect to Libya. Section 901(j)(1) imposes restrictions in the case of income and taxes attributable to certain countries. Pursuant to section 901(j)(5), the President may waive the restrictions of section 901(j)(1) if the President determines that such a waiver is in the national interest of the United States and will expand trade and investment opportunities for U.S. companies in such country, and the President reports to Congress his intention to grant the waiver and the reason for the determination. These statutory conditions were fulfilled by Presidential Determination 2004-48 and the report to Congress issued on October 6, 2004. See 69 FR 61703.

This document contains proposed regulations amending the regulations that provide for the flat rate of withholding applicable to calculating the amount of income tax withholding on supplemental wages. The proposed amendment to the regulations reflects changes in the law made by the Revenue Reconciliation Act of 1993, the Economic Growth and Tax Relief Reconciliation Act of 2001, the Jobs and Growth Tax Relief Reconciliation Act of 2003, and the American Jobs Creation Act of 2004. Under the American Jobs Creation Act of 2004, the optional flat rate for withholding on supplemental wages will generally remain at 25 percent for payments made after December 31, 2004, but may change if income tax rates change. However, the 2004 Act also provides that, after 2004, if an employee receives supplemental wages in excess of one million dollars from an employer in a calendar year, the excess of the supplemental wages over one million dollars is subject to mandatory income tax withholding at the highest income tax rate. The highest income tax rate is currently 35 percent. In determining whether an employer has reached the one million dollar threshold for an employee, supplemental wage payments from all businesses under common control and from agents will be taken into account.

This document contains proposed regulations amending the income tax regulations under various provisions of the Internal Revenue Code (Code) to account for statutory mergers and consolidations under section 368(a)(1)(A) (including reorganizations described in section 368(a)(2)(D) and (E)) involving one or more foreign corporations. These proposed regulations are issued concurrently with proposed regulations (REG-117969-00) that would amend the definition of a reorganization under section 368(a)(1)(A) to include certain statutory mergers or consolidations effected pursuant to foreign law.

These final regulations adopt as final without change the temporary regulations published in the Federal Register on July 9, 2003, which amended the then-existing regulations regarding fees for copies of exempt organizations' material the IRS must make available to the public under section 6104 of the Internal Revenue Code (Code). These final regulations also adopt as final without change the conforming amendment included in the temporary regulations concerning the fees that an exempt organization may charge for furnishing copies of such material when required to do so.

This is Supplement No. 6 to the Treasury Department Circular 570; 2004 Revision, published July 1, 2004, at 69 FR 40224.

This document contains final regulations that amend Sec. 20.2032-1(b) to reflect the change made to section 2032 of the Internal Revenue Code by the Deficit Reduction Act of 1984 and the technical change to that section made by the Tax Reform Act of 1986. In addition, the final regulations remove temporary regulation Sec. 301.9100-6T(b) of the Procedure and Administration Regulations so that estates that fail to make the alternate valuation election on the last estate tax return filed before the due date of the return, or on the first estate tax return filed after the due date of the return may request an extension of time to make the election under the provisions of Sec. Sec. 301.9100-1 and 301.9100-3. The final regulations affect estates that are required to file Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return.

An open meeting of the Area 3 Taxpayer Advocacy Panel will be conducted (via teleconference). The Taxpayer Advocacy Panel is soliciting public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service.

The Department of the Treasury and its Alcohol and Tobacco Tax and Trade Bureau adopt as a final rule certain proposed changes to the regulations concerning the production, taxation, composition, labeling, and advertising of beer and malt beverages. This final rule permits the addition of flavors and other nonbeverage materials containing alcohol to beers and malt beverages, but, in general, limits the alcohol contribution from such flavors and other nonbeverage materials to not more than 49% of the alcohol content of the product. However, if a malt beverage contains more than 6% alcohol by volume, not more than 1.5% of the volume of the finished product may consist of alcohol derived from flavors and other nonbeverage ingredients that contain alcohol. This final rule also amends the regulations relating to the labeling and advertising of malt beverages, and adopts a formula requirement for beers. We issue this final rule to clarify the status of flavored malt beverages under the provisions of the Internal Revenue Code of 1986 and the Federal Alcohol Administration Act related to the production, composition, taxation, labeling, and advertising of alcohol beverages. This final rule also will ensure that consumers are adequately informed about the identity of flavored malt beverages.