Retention of Income Tax Return Preparers' Signatures

DEPARTMENT OF THE TREASURY
Internal Revenue Service 26 CFR Part 1 [REG-106386-98] RIN 1545-AW52

TITLE: Retention of Income Tax Return Preparers' Signatures

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to
temporary regulations.

SUMMARY: In the Rules and Regulations section of this issue of the
Federal Register, the IRS is issuing temporary regulations relating
to the retention of income tax return preparers' signatures. The
text of those temporary regulations also serves as the text of these
proposed regulations.

DATES: Written comments and requests for a public hearing must be
received by March 31, 1999. The IRS and Treasury Department request
comments on the clarity of the proposed rules and how they can be
made easier to understand.

ADDRESSES: Send submissions to: CC:DOM:CORP:R (REG-106386-98), 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:DOM:CORP:R (REG-106386-98), 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 Regs" option on the IRS Home Page, or
by submitting comments directly to the IRS Internet site at
http://www.irs.ustreas.gov/prod/tax_regs/comments.html.

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Marc C.
Porter, (202) 622-4940; concerning submissions, LaNita Van Dyke,
(202) 622-7190 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

Temporary regulations in the Rules and Regulations section of this
issue of the Federal Register amend Income Tax Regulations (26 CFR
part 1) under section 6695(b) of the Internal Revenue Code. These
regulations require an income tax return preparer to keep a manually
signed (by the preparer) copy of a return or claim for refund if the
preparer presented to the taxpayer for signature a return or claim
with a copy of the preparer's manual signature.

The text of those temporary regulations also serves as the text of
these proposed regulations. The preamble to the temporary
regulations explains the temporary regulations.

Special Analyses

It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in EO 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, and because the regulations do not impose a
collection of information on small entities, the Regulatory
Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to
section 7805(f) of the Internal Revenue Code, 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.

Proposed Effective Date

The proposed regulations are proposed to be effective for returns or
claims for refund presented to a taxpayer for signature after
December 31, 1998 and for returns or claims retained on or before
that date.

Comments and Requests for a Public Hearing

Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments (a signed
original and 8 copies) that are submitted timely to the IRS. All
comments will be available for public inspection and copying. A
public hearing may be scheduled if requested in writing by any
person that timely submits written comments. If a public hearing is
scheduled, notice of the date, time, and place for the hearing will
be published in the Federal Register.

Drafting Information

The principal author of these regulations is Marc C. Porter, Office
of Assistant Chief Counsel (Income Tax & Accounting).

However, other personnel from the IRS and Treasury Department
participated in its development.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements. Proposed
Amendments to the Regulations

Accordingly, 26 CFR part 1 is proposed to be amended as follows:

PART 1--INCOME TAXES

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

Authority: 26 U.S.C. 7805 * * * Par. 2. Section 1.6695-1 is amended
by:

1. Revising paragraph (b)(4)(i).

2. Adding paragraph (g).

The revision and addition read as follows:

§1.6695-1 Other assessable penalties with respect to the preparation
of income tax returns for other persons.

* * * * *

(b) * * *

(4)(i) [The text of proposed paragraph (b)(4)(i) is the same as the
text of §1.6695-1T(b)(4)(i) published elsewhere in this issue of the
Federal Register].

* * * * *

(g) [The text proposed paragraph (g) is the same as the text of
§1.6695-1T(g) published elsewhere in this issue of the Federal
Register].

Robert E. Wenzel
Deputy Commissioner of Internal Revenue

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