[Federal Register Volume 62, Number 226 (Monday, November 24, 1997)]
[Rules and Regulations]
[Pages 62518-62521]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30550]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 301 and 602
[TD 8739]
RIN 1545-AV09
IRS Adoption Taxpayer Identification Numbers
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final and temporary regulations.
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SUMMARY: This document contains final and temporary regulations under
section 6109 relating to taxpayer identifying numbers. The final
regulations include a cross reference to the temporary regulations,
which provide rules for obtaining and using IRS adoption taxpayer
identification numbers. The temporary regulations assist individuals
who are in the process of adopting children and wish to claim certain
tax benefits with respect to those children. The text of these
temporary regulations also serves as the text of the proposed
regulations set forth in the notice of proposed rulemaking on this
subject in
[[Page 62519]]
the Proposed Rules section of this issue of the Federal Register.
DATES: These regulations are effective November 24, 1997.
FOR FURTHER INFORMATION CONTACT: Michael L. Gompertz, (202) 622-4910
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
These final and temporary regulations are being issued without
prior notice and public procedure pursuant to the Administrative
Procedure Act (5 U.S.C. 553). For this reason, the collection of
information contained in these regulations has been reviewed and,
pending receipt and evaluation of public comments, approved by the
Office of Management and Budget under control number 1545-1564.
Responses to this collection of information are required to obtain a
taxpayer identification number.
For further information concerning this collection of information,
and where to submit comments on the collection of information and the
accuracy of the estimated burden, and suggestions for reducing this
burden, please refer to the preamble to the cross-referencing notice of
proposed rulemaking published in the Proposed Rules section of this
issue of the Federal Register.
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 control number.
Books or records relating to this 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
This document contains amendments to the Regulations on Procedure
and Administration (26 CFR part 301) relating to identifying numbers
under section 6109. Section 6109(a)(1) provides that any person
required to make a return, statement, or other document must include in
the document such identifying number as may be prescribed for securing
proper identification of the person. Section 6109(a)(2) provides that
any person with respect to whom a return, statement, or other document
is required to be made by another person or whose identifying number
must be shown on a return of another person, must furnish to the other
person such identifying number as may be prescribed for securing the
person's proper identification. Section 6109(d) provides that an
individual must use a social security number as the individual's
taxpayer identification number unless the Secretary prescribes
otherwise by regulations.
Currently, there are three types of taxpayer identification numbers
(TINs) assigned to individuals: (1) a social security number (SSN), (2)
an IRS individual taxpayer identification number (ITIN) assigned to an
alien individual who is ineligible to obtain an SSN, and (3) an
employer identification number (EIN) assigned to an individual who is
engaged in a trade or business as a sole proprietor. An SSN is assigned
by the Social Security Administration. An ITIN or an EIN is assigned by
the IRS.
Section 1615 of the Small Business Job Protection Act of 1996
(Public Law 104-188, 110 Stat. 1755, 1853 (1996)) added sections
21(e)(10) and 151(e) to deny the dependent care credit and the
deduction for the dependency exemption if the TIN (as defined by
section 6109 and the regulations thereunder) of the dependent is not
included on the return claiming the credit or deduction. Sections
21(e)(10) and 151(e) generally are effective for tax returns due
(without regard to extensions) after September 18, 1996.
In addition, section 101 of the Taxpayer Relief Act of 1997 (Pub.
L. 105-34, 111 Stat. 788, 796 (1997)) added section 24 to the Code to
provide a child tax credit for each qualifying child, effective for
taxable years beginning after December 31, 1997. Pursuant to section
24(e), the taxpayer will be denied the credit if the qualifying child's
TIN is not included on the return claiming the credit.
In most cases, taxpayers can meet the TIN requirements of sections
21, 24, and 151 by including a child's SSN on the return claiming the
credit or deduction. In the case of adoption, however, a child may not
have an SSN or, if the child does have an SSN, the taxpayer adopting
the child (the prospective adoptive parent) may be unable to obtain the
SSN because of confidentiality laws. See H.R. Rep. No. 542, 104th
Cong., 2d Sess. 20 (1996); S. Rep. No. 412, 103d Cong., 2d Sess. 163
(1994).
Explanation of Provisions
These temporary regulations authorize the IRS to assign a new form
of taxpayer identification number, the IRS adoption taxpayer
identification number (ATIN), to a child who is in the process of being
adopted (a prospective adoptive child). The regulations are effective
for income tax returns due (without regard to extension) on or after
April 15, 1998.
The temporary regulations provide that an ATIN is a temporary
taxpayer identification number that expires two years after the date of
issuance. However, upon application, the IRS may grant an extension of
the ATIN. A prospective adoptive parent may apply for an ATIN for a
child if: (1) The prospective adoptive parent is eligible to claim a
personal exemption under section 151 with respect to the child; (2) the
child is placed with the prospective adoptive parent for legal adoption
by an authorized placement agency (as defined in Sec. 1.152-2(c)); (3)
the Social Security Administration will not assign the prospective
adoptive parent an SSN for the child (for example, because the adoption
is not final); and (4) the prospective adoptive parent has used all
reasonable means to obtain the child's assigned SSN, if any, but has
been unsuccessful in obtaining this number (for example, because the
birth parent who obtained the number is not legally required to
disclose the number to the prospective adoptive parent).
The temporary regulations provide that an application for an ATIN
must be made on the Form W-7A, Application for Taxpayer Identification
Number for Pending Adoptions, or such other form prescribed by the IRS.
The ATIN application must be accompanied by documentary evidence to
establish that an authorized placement agency placed the child in the
prospective adoptive parent's household for legal adoption by the
parent. Such documentary evidence may include: a copy of a placement
agreement entered into between the prospective adoptive parent and an
authorized placement agency; an affidavit signed by the adoption
attorney or government official who placed the child for legal adoption
pursuant to state law; a document authorizing the release of a newborn
child from a hospital to a prospective adoptive parent for adoption; or
a court document ordering or approving the placement of a child for
adoption.
When an adoption becomes final, the adoptive parent must apply for
an SSN for the child. Once obtained, the SSN, rather than the ATIN,
must be used as the child's TIN on all future returns, statements, or
other documents required by the Code.
An ATIN may be used by the prospective adoptive parents to meet the
TIN requirements of sections 21(e)(10), 24(e), and 151(e), relating to
the dependent care credit, the child tax credit, and the dependency
exemption, respectively. Also, as may be prescribed by forms,
instructions, or otherwise, an
[[Page 62520]]
ATIN may be used to meet the TIN requirements under sections 23(f) and
137(e), relating to qualified adoption expenses. The ATIN may not be
used to meet the TIN requirement of section 32. See section 32(l).
The ATIN procedures do not apply to adoptions involving alien
children. Generally, the Social Security Administration will assign an
SSN to an alien child if all the requirements for assigning a number
are met. When the Social Security Administration cannot assign an SSN,
the child generally will be eligible for an ITIN.
In addition to adoptions involving alien children, there are two
other types of adoptions to which the ATIN procedures may not apply. If
the child placed for adoption is a foster child or is otherwise in the
custody of a government agency or court (because, for example, the
birth parents' rights were previously terminated for abuse or neglect),
the government agency or court will generally obtain an SSN for the
child and can make the SSN available to the prospective adoptive
parent. Also, the prospective adoptive parent may be able to obtain the
child's SSN from the birth parents (or other person) in the case of an
adoption by the child's relatives or an adoption in which the adoptive
parent and birth parent share information about the child and
themselves.
Taxpayers are invited to comment on two issues partially addressed
by the temporary regulations. First, comments are requested regarding
what types of documents are available to establish that a child has
been placed in the prospective adoptive parent's household for legal
adoption. Also, comments are requested as to whether certain types of
adoptions (in addition to foreign adoptions) should be completely
excluded from the ATIN process. In particular, comments are requested
regarding whether a prospective adoptive parent is always able to
obtain a prospective adoptive child's SSN if the child is a foster
child or is otherwise in the custody of a government agency or court.
Special Analyses
It has been determined that this Treasury decision is not a
significant regulatory action as defined in EO 12866. Therefore, a
regulatory assessment is not required. It also has 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 regulation does
not impose a collection of information on small entities, the
Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Only
individuals may receive ATINs under this Treasury decision, and an
individual is not a small entity as defined in the Regulatory
Flexibility Act. See 5 U.S.C. 601(6).
Pursuant to section 7805(f) of the Internal Revenue Code, these
regulations will be submitted to the Chief Counsel for Advocacy of the
Small Business Administration for comment on their impact on small
business.
Drafting Information
The principal author of these regulations is Michael L. Gompertz of
the Office of Assistant Chief Counsel (Income Tax and Accounting).
However, other personnel from the IRS and Treasury Department
participated in their development.
List of Subjects
26 CFR Part 301
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income
taxes, Penalties, Reporting and recordkeeping requirements.
26 CFR Part 602
Reporting and recordkeeping requirements.
Adoption of Amendments to the Regulations
Accordingly, 26 CFR parts 301 and 602 are amended as follows:
PART 301--PROCEDURE AND ADMINISTRATION
Paragraph 1. The authority citation for part 301 is amended by
adding entries in numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
Section 301.6109-1T also issued under 26 U.S.C. 6109;
Section 301.6109-3T also issued under 26 U.S.C. 6109; * * *
Par. 2. Section 301.6109-1 is amended by adding paragraph
(h)(2)(iii) to read as follows:
Sec. 301.6109-1 Identifying numbers.
* * * * *
(h) * * *
(2) * * *
(iii) Paragraphs (a)(1)(i), (a)(1)(ii)(A), and (a)(1)(ii)(B) of
this section do not apply after November 24, 1997. For further guidance
after November 24, 1997, see Sec. 301.6109-1T(a)(1)(i), (a)(1)(ii)
introductory text, and (a)(1)(ii)(A) and (B).
Par. 3. Section 301.6109-1T is added to read as follows:
Sec. 301.6109-1T Identifying numbers (temporary).
(a) In general--(1) Taxpayer identifying numbers--(i) Principal
types. There are four principal types of taxpayer identifying numbers:
social security numbers, Internal Revenue Service (IRS) individual
taxpayer identification numbers, employer identification numbers, and
IRS adoption taxpayer identification numbers. Social security numbers
take the form 000-00-0000. IRS individual taxpayer identification
numbers and IRS adoption taxpayer identification numbers also take the
form 000-00-0000 but include a specific number or specific numbers
designated by the IRS. Employer identification numbers take the form
00-0000000.
(ii) Uses. Social security numbers, IRS individual taxpayer
identification numbers, and IRS adoption taxpayer identification
numbers are used to identify individual persons. For the definition of
social security number and employer identification number, see
Secs. 301.7701-11 and 301.7701-12, respectively. For the definition of
IRS individual taxpayer identification number, see Sec. 301.6109-
1(d)(3). For the definition of IRS adoption taxpayer identification
number, see Sec. 301.6109-3T. Except as otherwise provided in
applicable regulations under this title or on a return, statement, or
other document, and related instructions, taxpayer identifying numbers
must be used as follows--
(A) Except as otherwise provided in Sec. 301.6109-1(a)(1)(ii)(D),
paragraph (a)(1)(ii)(B) of this section, and Sec. 301.6109-3T, an
individual required to furnish a taxpayer identifying number must use a
social security number.
(B) Except as otherwise provided in Sec. 301.6109-1(a)(1)(ii)(D)
and Sec. 301.6109-3T, an individual required to furnish a taxpayer
identifying number but who is not eligible to obtain a social security
number must use an IRS individual taxpayer identification number.
(a)(1)(ii)(C) through (g) [Reserved]. For further guidance, see
Sec. 301.6109-1(a)(1)(ii)(C) through (g).
(h) Effective date. Paragraphs (a)(1)(i), (a)(1)(ii) introductory
text, (a)(1)(ii)(A), and (a)(1)(ii)(B) of this section are applicable
after November 24, 1997. For further guidance prior to November 24,
1997, see Sec. 301.6109-1(a)(1)(i), (a)(1)(ii)(A) and (a)(1)(ii)(B).
Par. 4. Section 301.6109-3T is added to read as follows:
[[Page 62521]]
Sec. 301.6109-3T IRS adoption taxpayer identification numbers
(temporary).
(a) In general--(1) Definition. An IRS adoption taxpayer
identification number (ATIN) is a temporary taxpayer identifying number
assigned by the Internal Revenue Service (IRS) to a child (other than
an alien individual as defined in Sec. 301.6109-1(d)(3)(i)) who has
been placed, by an authorized placement agency, in the household of a
prospective adoptive parent for legal adoption. An ATIN is assigned to
the child upon application for use in connection with filing
requirements under this title. When an adoption becomes final, the
adoptive parent must apply for a social security number for the child.
After the social security number is assigned, that number, rather than
the ATIN, must be used as the child's taxpayer identification number on
all returns, statements, or other documents required under this title.
(2) Expiration and extension. An ATIN automatically expires two
years after the number is assigned. However, upon request, the IRS may
grant an extension if the IRS determines the extension is warranted.
(b) Definitions. The following definitions apply for purposes of
this section--
(1) Authorized placement agency has the same meaning as in
Sec. 1.152-2(c) of this chapter;
(2) Prospective adoptive child or child refers to a child who has
not been adopted, but who has been placed in the household of a
prospective adoptive parent for legal adoption by an authorized
placement agency; and
(3) Prospective adoptive parent or parent refers to an individual
in whose household a prospective adoptive child is placed by an
authorized placement agency for legal adoption.
(c) General rule for obtaining a number--(1) Who may apply. A
prospective adoptive parent may apply for an ATIN for a child if--
(i) The prospective adoptive parent is eligible to claim a personal
exemption under section 151 with respect to the child;
(ii) An authorized placement agency places the child with the
prospective adoptive parent for legal adoption;
(iii) The Social Security Administration will not process an
application for an SSN by the prospective adoptive parent on behalf of
the child (for example, because the adoption is not final); and
(iv) The prospective adoptive parent has used all reasonable means
to obtain the child's assigned social security number, if any, but has
been unsuccessful in obtaining this number (for example, because the
birth parent who obtained the number is not legally required to
disclose the number to the prospective adoptive parent).
(2) Procedure for obtaining an ATIN. If the requirements of
paragraph (c)(1) of this section are satisfied, the prospective
adoptive parent may apply for an ATIN for a child on Form W-7A,
Application for Taxpayer Identification Number for Pending Adoptions
(or such other form as may be prescribed by the IRS). An application
for an ATIN should be made far enough in advance of the first intended
use of the ATIN to permit issuance of the ATIN in time for such use. An
application for an ATIN must include the information required by the
form and accompanying instructions, including the name and address of
each prospective adoptive parent and the child's name and date of
birth. In addition, the application must include such documentary
evidence as the IRS may prescribe to establish that a child was placed
in the prospective adoptive parent's household by an authorized
placement agency for legal adoption. Examples of acceptable documentary
evidence establishing placement for legal adoption by an authorized
placement agency may include--
(i) A copy of a placement agreement entered into between the
prospective adoptive parent and an authorized placement agency;
(ii) An affidavit signed by the adoption attorney or government
official who placed the child for legal adoption pursuant to state law;
(iii) A document authorizing the release of a newborn child from a
hospital to a prospective adoptive parent for adoption; and
(iv) A court document ordering or approving the placement of a
child for adoption.
(d) Effective date. The provisions of this section apply to income
tax returns due (without regard to extension) on or after April 15,
1998.
PART 602--OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT
Par. 5. The authority citation for part 602 continues to read as
follows:
Authority: 26 U.S.C. 7805.
Par. 6. Section 602.101(c) is amended by adding an entry in
numerical order to the table to read as follows:
Sec. 602.101 OMB Control numbers.
* * * * *
(c) * * *
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Current OMB
CFR part or section where identified and described control No.
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* * * * *
301.6109-3T................................................ 1545-1564
* * * * *
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Michael P. Dolan,
Acting Commissioner of Internal Revenue.
Approved: October 24, 1997.
Donald C. Lubick,
Acting Assistant Secretary of the Treasury.
[FR Doc. 97-30550 Filed 11-21-97; 8:45 am]
BILLING CODE 4830-01-P
