[Federal Register Volume 64, Number 139 (Wednesday, July 21, 1999)]
[Proposed Rules]
[Pages 39106-39107]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18457]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 301
[REG-116991-98]
RIN 1545-AW88
Compromises
AGENCY: Internal Revenue Service (IRS), Treasury.
[[Page 39107]]
ACTION: Notice of proposed rulemaking by cross-reference to temporary
regulations.
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SUMMARY: In the Rules and Regulations section of this issue of the
Federal Register, the IRS is issuing temporary regulations relating to
the compromise of tax liabilities. These regulations provide additional
guidance regarding the compromise of internal revenue taxes. The
temporary regulations reflect changes to the law made by the Internal
Revenue Service Restructuring and Reform Act of 1998 and the Taxpayer
bill of Rights II. The text of the temporary regulations also serves as
the text of these proposed regulations.
DATES: Written or electronically generated comments and requests for a
public hearing must be received by October 19, 1999.
ADDRESSES: Send submissions to: CC:DOM:CORP:R (REG-116991-98), 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-116991-98), 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.gov/prod/tax__regs/comments.html.
FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Carol A.
Campbell, (202) 622-3620 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
Temporary regulations in the Rules and Regulations section of this
issue of the Federal Register amend the Procedure and Administration
Regulations (26 CFR part 301) under section 7122 of the Internal
Revenue Code. The temporary regulations reflect the amendment of
section 7122 by section 3462 of the Internal Revenue Service
Restructuring and Reform Act of 1998 (``RRA 1998'') Public Law, 105-
206, (112 Stat. 685, 764) and by section 503(a) of Taxpayer Bill of
Rights II Public Law 104-168, (110 Stat. 1452, 1461).
The text of the 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 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. 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.
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 eight (8) copies) or electronically generated comments that are
submitted timely to the IRS. The IRS generally requests any comments on
the clarity of the proposed rule and how it may be made easier to
understand.
Section 3462 of RRA 1998 and its legislative history provide for
the consideration of factors such as equity, hardship, and public
policy in the compromise of tax cases, if such consideration would
promote effective tax administration. The legislative history also
states that the IRS should use this new compromise authority ``to
resolve longstanding cases by forgoing penalties and interest which
have accumulated as a result of delay in determining the taxpayer's
liability.'' H. Conf. Rep. 599, 105th Cong., 2d Sess. 289 (1998). The
text of the temporary regulation provides the authority to compromise
cases involving issues of equity, hardship, and public policy, if such
a compromise would promote effective tax administration. The temporary
regulation provides factors to be considered and examples of cases that
could be compromised under this authority when collection of the full
amount of the tax liability would create economic hardship. The
temporary regulation also provides limited examples of cases that could
be compromised when the facts and circumstances presented indicate that
collection of the full tax liability would be detrimental to voluntary
compliance. The temporary regulation does not contain examples of
longstanding cases that could be compromised to promote effective tax
administration when penalties and interest have accumulated as the
result of delay by the Service in determining the tax liability.
The public is specifically encouraged to make comments or provide
examples regarding the particular types of cases or situations in which
the Secretary's authority to compromise should be used because: (1)
collection of the full amount of tax liability would be detrimental to
voluntary compliance or (2) IRS delay in determining the tax liability
has resulted in the accumulation of significant interest and penalties.
In formulating comments regarding delay in interest and penalty cases,
consideration should be given to the possible interplay between cases
compromised under this provision and the relief accorded taxpayers
under I.R.C. section 6404(e).
All comments will be available for public inspection and copying.
A public hearing may be scheduled if requested in writing by a
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
Carol A. Campbell, Office of the Assistant Chief Counsel (General
Litigation) CC:EL:GL, IRS. However, other personnel from the IRS and
Treasury Department participated in their development.
List of Subjects in 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 Part 301 is proposed to be amended as follows:
PART 301--PROCEDURE AND ADMINISTRATION
Paragraph 1. The authority citation for part 301 continues to read
in part as follows:
Authority: 26 U.S.C. 7805 * * *
Paragraph 2. Section 301.7122-1 is added to read as follows:
Sec. 301.7122-1 Compromises.
[The text of this proposed section is the same as the text of
Sec. 301.7122-IT published elsewhere in this issue of the Federal
Register.]
Charles O. Rossotti,
Commissioner of Internal Revenue.
[FR Doc. 99-18457 Filed 7-19-99; 8:45 am]
BILLING CODE 4830-01-U
