| REG-107186-00 |
February 15, 2001 |
Electronic Payee Statements
DEPARTMENT OF THE TREASURY
Internal Revenue Service 26 CFR Parts 1, 31 and 301 [REG-107186-00]
RIN 1545-AY50
TITLE: 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.
SUMMARY: The IRS is issuing proposed 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 the temporary regulations also 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 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 §§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 §§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 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: §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 §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:
§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 §1.6050S-1T
published elsewhere in this issue of the Federal Register].
§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 §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 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:
§31.6051-1 Statements for employees.
* * * * *
(i) [The text of proposed paragraph (i) is the same as the text
of §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. 5. Section 301.6724-1 is amended by adding a new paragraph
(d)(3) to read as follows:
§301.6724-1 Reasonable cause.
* * * * *
(d) * * *
(3) [The text of proposed paragraph (d)(3) is the same as the
text of §301.6724-1T(d)(3) published elsewhere in this issue of the
Federal Register].
* * * * *
Robert E. Wenzel
Deputy Commissioner of Internal Revenue
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