[Federal Register Volume 66, Number 31 (Wednesday, February 14, 2001)]
[Proposed Rules]
[Pages 10247-10249]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-1293]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1, 31 and 301
[REG-107186-00]
RIN 1545-AY50
Electronic Payee Statements
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking by cross reference to temporary
regulations and notice of public hearing.
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SUMMARY: The IRS is proposing regulations under sections 6041 and 6051
relating to the voluntary electronic furnishing of payee statements on
Forms W-2. The proposed regulations also provide rules under section
6050S relating to the voluntary electronic furnishing of statements to
individuals for whom Forms 1098-T, ``Tuition Payments Statement,'' and
Forms 1098-E, ``Student Loan Interest Statement,'' are filed. The
proposed regulations will affect persons required by the foregoing
Internal Revenue Code sections to furnish these statements (furnishers)
who wish to furnish these statements electronically. The proposed
regulations will also affect individuals, principally employees,
students, and borrowers (recipients), who consent to receive these
statements electronically. The text of temporary regulations published
in the Rules and Regulations section of this issue of the Federal
Register serves as the text of these proposed regulations. These
proposed regulations do not affect the requirement to file copy A of
Forms W-2 with the Social Security Administration or the requirement to
file Forms 1098-T or Forms 1098-E with the IRS.
DATES: Written or electronic comments and requests to speak (with
outlines of oral comments) at a public hearing scheduled for June 4,
2001, at 10 a.m. must be submitted by May 14, 2001.
ADDRESSES: Send submissions to: CC:M&SP:RU (REG-107186-00), room 5226,
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be hand delivered Monday through Friday
between the hours of 8 a.m. and 5 p.m. to: CC:M&SP:RU (REG-107186-00),
Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue,
NW., Washington, DC. Alternatively, taxpayers may submit comments
electronically via the Internet by selecting the ``Tax Regulations''
option on the IRS Home Page, or by submitting comments directly to the
IRS Internet
[[Page 10248]]
site at http://www.irs.gov/tax_regs/regslist.html. The public hearing
will be held in the IRS Auditorium, Seventh Floor, Internal Revenue
Service Building, 1111 Constitution Avenue, NW., Washington, DC.
FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Laura C.
Nash (202) 622-4910; concerning submission of comments, the hearing,
and/or to be placed on the building access list to attend the hearing,
Sonya Cruse (202) 622-7180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information contained in this notice of proposed
rulemaking has been submitted to the Office of Management and Budget
for review in accordance with the Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)). Comments on the collection of information should be
sent to the Office of Management and Budget, Attn: Desk Officer for the
Department of the Treasury, Office of Information and Regulatory
Affairs, Washington, DC 20503, with copies to the Internal Revenue
Service, Attn: IRS Reports Clearance Officer, W:CAR:MP:FP:S:O,
Washington, DC 20224. Comments on the collection of information should
be received by April 16, 2001. Comments are specifically requested
concerning:
Whether the proposed collection of information is necessary for the
proper performance of the functions of the Internal Revenue Service,
including whether the information will have practical utility;
The accuracy of the estimated burden associated with the proposed
collection 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 collection 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 are in
Secs. 1.6041-2(a)(5), 1.6050S-1(a), 1.6050S-2(a), and 31.6051-1(i).
These temporary regulations state that furnishers may provide the
written statements required by sections 6041(d), 6050S(d), and 6051 in
an electronic format in lieu of a paper format. In addition, the
proposed regulations provide furnishers with a method to furnish a
statement in connection with a Form 1098-T or Form 1098-E under section
6050S(d), or a Form W-2 under section 6041(d) or 6051, electronically
using website technology. In general, a furnisher may furnish the
statement electronically using the method described in the proposed
regulations if the recipient consents to receive the statement
electronically, and if the furnisher makes certain disclosures to the
recipient, annually notifies the recipient that the statement is
available on a website, and provides access to the statement on that
website for a prescribed period of time. This collection of information
is required only for persons who wish to furnish the statements
electronically using the method described in the proposed regulations.
The likely respondents are businesses, other for-profit institutions,
and eligible educational institutions.
Estimated total annual reporting/recordkeeping burden: 2,844,950
hours.
Estimated average annual burden hours per response: 6 minutes.
Estimated number of responses: 28,449,495.
Estimated annual frequency of responses: Once.
An 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 OMB control number assigned by the Office
of Management and Budget.
Books or records relating to a collection of information must be
retained as long as 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 26 U.S.C. 6103.
Background
Temporary regulations in the Rules and Regulations section of this
issue of the Federal Register amend the Regulations on Income Taxes (26
CFR part 1) relating to sections 6041 and 6050S(d), the Regulations on
Employment Taxes and Collection of Income Tax at Source (26 CFR part
31) relating to section 6051, and the Regulations on Procedure and
Administration (26 CFR part 301) relating to section 6724. The text of
those temporary regulations also serves as the text of these proposed
regulations. The preamble to the temporary regulations explains the
regulations.
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in Executive Order
12866. Therefore, a regulatory assessment is not required. It has also
been determined that section 553(b) of the Administrative Procedure Act
(5 U.S.C. Chapter 5) does not apply to these regulations. An initial
regulatory flexibility analysis has been prepared for this notice of
proposed rulemaking under 5 U.S.C. 603 and is set forth under the
heading ``Initial Regulatory Flexibility Act Analysis'' in this
preamble. Pursuant to section 7805(f), this notice of proposed
rulemaking will be submitted to the Chief Counsel for Advocacy of the
Small Business Administration for comment on its impact on small
business.
Initial Regulatory Flexibility Act Analysis
This initial analysis is required under the Regulatory Flexibility
Act. (5 U.S.C. chapter 6). The collection of information contained in
Secs. 1.6041-2(a)(5), 1.6050S-1(a), 1.6050S-2(a), and 31.6051-1(i) is
required if a furnisher implements the method described in the proposed
regulations to furnish statements electronically.
The types of small entities to which the proposed regulations may
apply are small eligible educational institutions (such as colleges and
universities), certain payees of interest on qualified education loans,
and small employers. It is estimated that furnishers will seek consents
from approximately 28,449,495 individuals to receive these statements
electronically. There are no known Federal rules that duplicate,
overlap, or conflict with these proposed regulations. The regulations
proposed are considered to have the least economic effect on small
entities of all alternatives considered.
Comments and Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any electronic or written comments (a
signed original and eight (8) copies) that are submitted timely to the
IRS. The IRS and Treasury Department request comments on the clarity of
the proposed rules and how they can be made easier to understand. All
comments will be available for public inspection and copying.
A public hearing has been scheduled for June 4, 2001, beginning at
10 a.m., in the IRS Auditorium of the Internal Revenue Building, 1111
Constitution Avenue, NW., Washington, DC. Due to
[[Page 10249]]
building security procedures, visitors must enter at the 10th Street
entrance, located between Constitution and Pennsylvania Avenues, NW. In
addition, all visitors must present photo identification to enter the
building. Because of access restrictions, visitors will not be admitted
beyond the immediate entrance area more than 15 minutes before the
hearing starts. For information about having your name placed on the
building access list to attend the hearing, see the FOR FURTHER
INFORMATION CONTACT section of this preamble.
The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who
wish to present oral comments at the hearing must submit written
comments and an outline of the topics to be discussed and the time to
be devoted to each topic (signed original and eight (8) copies) by May
14, 2001. A period of ten minutes will be allotted to each person for
making comments. An agenda showing the scheduling of speakers will be
prepared after the deadline for receiving outlines has passed. Copies
of the agenda will be available free of charge at the hearing.
Drafting Information
The principal author of these proposed regulations is Eric Lucas,
formerly of the Office of Associate Chief Counsel (Procedure and
Administration). However, other personnel from the IRS and Treasury
Department participated in their development.
List of Subjects
26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
26 CFR Part 31
Employment taxes, Income taxes, Penalties, Pensions, Railroad
retirement, Reporting and recordkeeping requirements, Social security,
Unemployment compensation.
26 CFR Part 301
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income
taxes, Penalties, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, 26 CFR parts 1, 31, and 301 are proposed to be amended
as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 is amended by adding
entries in numerical order to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.6041-2 also issued under 26 U.S.C. 6041(d). * * *
Section 1.6050S-1 also issued under 26 U.S.C. 6050S(g).
Section 1.6050S-2 also issued under 26 U.S.C. 6050S(g). * * *
Par. 2. Section 1.6041-2 is amended by adding a new paragraph
(a)(5) to read as follows:
Sec. 1.6041-2 Return of information as to payments to employees.
(a) * * *
(5) [The text of proposed paragraph (a)(5) is the same as the text
of Sec. 1.6041-2T(a)(5) published elsewhere in this issue of the
Federal Register].
* * * * *
Par. 3. Sections 1.6050S-1 and 1.6050S-2 are added to read as
follows:
Sec. 1.6050S-1 Information reporting for payments and reimbursements
or refunds of qualified tuition and related expenses.
[The text of these proposed regulations is the same as the text of
Sec. 1.6050S-1T published elsewhere in this issue of the Federal
Register].
Sec. 1.6050S-2 Information reporting for payments of interest on
qualified education loans.
[The text of these proposed regulations is the same as the text of
Sec. 1.6050S-2T published elsewhere in this issue of the Federal
Register].
PART 31--EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT SOURCE
Par. 4. The authority citation for part 31 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 5. Section 31.6051-1 is amended by:
1. Redesignating paragraph (i) as paragraph (j).
2. Adding a new paragraph (i).
The addition reads as follows:
Sec. 31.6051-1 Statements for employees.
* * * * *
(i) [The text of proposed paragraph (i) is the same as the text of
Sec. 31.6051-1T(j) published elsewhere in this issue of the Federal
Register].
* * * * *
PART 301--PROCEDURE AND ADMINISTRATION
Par. 6. The authority citation for part 301 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 7. Section 301.6724-1 is amended by adding a new paragraph
(d)(3) to read as follows:
Sec. 301.6724-1 Reasonable cause.
* * * * *
(d) * * *
(3) [The text of proposed paragraph (d)(3) is the same as the text
of Sec. 301.6724-1T(d)(3) published elsewhere in this issue of the
Federal Register].
* * * * *
Robert E. Wenzel,
Deputy Commissioner of Internal Revenue.
[FR Doc. 01-1293 Filed 2-13-01; 8:45 am]
BILLING CODE 4830-01-P