81 FR 78908 - Removal of the 36-Month Non-Payment Testing Period Rule
DEPARTMENT OF THE TREASURY
Internal Revenue Service Federal Register Volume 81, Issue 218 (November 10, 2016)
Internal Revenue Service
Federal Register Volume 81, Issue 218 (November 10, 2016)
| Page Range | 78908-78911 | |
| FR Document | 2016-27160 |
[Federal Register Volume 81, Number 218 (Thursday, November 10, 2016)] [Rules and Regulations] [Pages 78908-78911] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-27160] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9793] RIN 1545-BM01 Removal of the 36-Month Non-Payment Testing Period Rule AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final regulation. ----------------------------------------------------------------------- SUMMARY: This document contains final regulations that remove the rule that a deemed discharge of indebtedness for which a Form 1099-C, ``Cancellation of Debt,'' must be filed occurs at the expiration of a 36-month non-payment testing period. The Treasury Department and the IRS are concerned that the rule creates confusion for taxpayers and does not increase tax compliance by debtors or provide the IRS with valuable third-party information that may be used to ensure taxpayer compliance. The final regulations affect certain financial institutions and governmental entities. DATES: Effective Date: These regulations are effective on November 10, 2016. Applicability Date: For dates of applicability, see Sec. 1.6050P- 1(h). FOR FURTHER INFORMATION CONTACT: Eliezer Mishory at (202) 317-6844 (not a toll-free call). SUPPLEMENTARY INFORMATION: Background This document contains amendments to the Income Tax Regulations (26 CFR part 1) under section 6050P of the Internal Revenue Code (Code), relating to the rule in Sec. 1.6050P-1(b)(2)(iv) that the 36-month non-payment testing period is an identifiable event triggering an information reporting obligation on Form 1099-C for discharge of indebtedness by certain entities. On October 15, 2014, a notice of proposed rulemaking (REG-136676-13) was published in the Federal Register (79 FR 61791). The notice of proposed rulemaking proposed to remove the 36-month non-payment testing period. Written comments responding to the proposed regulations were received. The comments have been considered in connection with these final regulations and are available for public inspection at www.regulations.gov or on request. No public hearing was requested or held. After consideration of all the comments, the proposed regulations are adopted as final regulations without significant modification by this Treasury decision. Statutory Provisions Section 61(a)(12) provides that income from discharge of indebtedness is includible in gross income. Section 6050P was added to the Code by section 13252 of the Omnibus Budget Reconciliation Act of 1993, Public Law 103-66 (107 Stat. 312, 531-532 (1993)). Section 6050P was enacted in part ``to encourage taxpayer compliance with respect to discharged indebtedness'' and to ``enhance the ability of the IRS to enforce the discharge of indebtedness rules.'' H.R. Rep. No. 103-111, at 758 (1993). As originally enacted, section 6050P generally required applicable financial entities (generally financial institutions, credit unions, and federal executive agencies) that discharge (in whole or in part) indebtedness of $600 or more during a calendar year to file information returns with the IRS and to furnish information statements to the persons whose indebtedness was discharged. In addition to other information prescribed by regulations, an applicable financial entity is required to include on the information return the debtor's name, taxpayer identification number, the date of the discharge, and the amount discharged. See 26 U.S.C. 6050P(a) (1994). The Debt Collection Improvement Act of 1996 (1996 Act), Public Law 104-134 (110 Stat. 1321, 1321-368 through 1321-369 (1996)) was enacted on April 26, 1996. Section 31001(m)(2)(B)(i) and (ii) of the 1996 Act amended section 6050P to expand the reporting requirement to cover ``applicable entities,'' which includes any executive, judicial, or legislative agency, not just federal executive agencies, and any previously covered applicable financial entity. Effective for discharges of indebtedness occurring after December 31, 1999, section 533(a) of the Ticket to Work and Work Incentives Improvement Act of 1999 (1999 Act), Public Law 106-170 (113 Stat. 1860, 1931 (1999)), added subparagraph (c)(2)(D) to section 6050P, to further expand entities covered by the reporting requirements to include any organization the ``significant trade or business of which is the lending of money.'' On April 4, 2000, the IRS released Notice 2000-22 (2000-1 CB 902) to provide penalty relief to organizations that were newly made subject to section 6050P by the 1999 Act (organizations with a significant trade or business of lending money). The relief applied to penalties for failure to file information returns or furnish payee statements for discharges of indebtedness occurring before January 1, 2001. On December 26, [[Page 78909]] 2000, the IRS released Notice 2001-8 (2001-1 CB 374) to extend the penalty relief for organizations described in Notice 2000-22 for discharges of indebtedness that occurred prior to the first calendar year beginning at least two months after the date that appropriate guidance is issued. Regulatory History On December 27, 1993, temporary regulations under section 6050P relating to the reporting of discharge of indebtedness by applicable financial entities were published in the Federal Register (TD 8506; 58 FR 68301). The temporary regulations provided that an applicable financial entity must report a discharge of indebtedness upon the occurrence of an identifiable event that, considering all the facts and circumstances, indicated the debt would never have to be repaid. The temporary regulations provided a non-exhaustive list of three identifiable events that would give rise to the reporting requirement under section 6050P: (1) A discharge of indebtedness under title 11 of the United States Code (Bankruptcy Code); (2) an agreement between the applicable financial entity and the debtor to discharge the indebtedness, provided that the last event to effectuate the agreement has occurred; and (3) a cancellation or extinguishment of the indebtedness by operation of law. These regulations were effective for discharges of indebtedness occurring after December 31, 1993. A concurrently published notice of proposed rulemaking (IA-63-93; 58 FR 68337) proposed to adopt those and other rules in the temporary regulations. Written comments were received in response to the notice of proposed rulemaking, and testimony was given at a public hearing held on March 30, 1994. In response to the comments and testimony, the IRS provided, in Notice 94-73 (1994-2 CB 553), interim relief from penalties for failure to comply with certain of the reporting requirements of the temporary regulations for discharges of indebtedness occurring before the later of January 1, 1995, or the effective date of final regulations under section 6050P. On January 4, 1996, prior to the amendments made by the 1996 Act, final regulations relating to the information reporting requirements of applicable financial entities for discharges of indebtedness were published in the Federal Register (TD 8654; 61 FR 262) (the 1996 final regulations). The 1996 final regulations were generally effective for discharges of indebtedness occurring after December 21, 1996, although applicable financial entities at their discretion could apply the 1996 final regulations to any discharge of indebtedness occurring on or after January 1, 1996, and before December 22, 1996. Finally, the preamble to these regulations provided that the temporary regulations and the interim relief provided in Notice 94-73 remained in effect until December 21, 1996. In response to objections by commenters, the 1996 final regulations did not adopt the facts and circumstances test to determine whether a discharge of indebtedness had occurred and information reporting was required. Instead, the 1996 final regulations provided that a person's indebtedness is deemed to be discharged for information reporting purposes only upon the occurrence of an identifiable event specified in an exhaustive list under Sec. 1.6050P-1(b)(2), whether or not an actual discharge has occurred on or before the date of the identifiable event. See Sec. 1.6050P-1(a)(1). Section 1.6050P-1(b)(2) of the 1996 final regulations listed eight identifiable events that trigger information reporting obligations on the part of an applicable financial entity: (1) A discharge of indebtedness under the Bankruptcy Code; (2) a cancellation or extinguishment of an indebtedness that renders the debt unenforceable in a receivership, foreclosure, or similar proceeding in a federal or state court, as described in section 368(a)(3)(A)(ii) (other than a discharge under the Bankruptcy Code); (3) a cancellation or extinguishment of an indebtedness upon the expiration of the statute of limitations for collection (but only if, and only when, the debtor's statute of limitations affirmative defense has been upheld in a final judgment or decision in a judicial proceeding, and the period for appealing it has expired) or upon the expiration of a statutory period for filing a claim or commencing a deficiency judgment proceeding; (4) a cancellation or extinguishment of an indebtedness pursuant to an election of foreclosure remedies by a creditor that statutorily extinguishes or bars the creditor's right to pursue collection of the indebtedness; (5) a cancellation or extinguishment of an indebtedness that renders a debt unenforceable pursuant to a probate or similar proceeding; (6) a discharge of indebtedness pursuant to an agreement between an applicable entity and a debtor to discharge indebtedness at less than full consideration; (7) a discharge of indebtedness pursuant to a decision by the creditor, or the application of a defined policy of the creditor, to discontinue collection activity and discharge debt; and (8) the expiration of a 36-month non-payment testing period. The first seven identifiable events are specific occurrences that typically result from an actual discharge of indebtedness. The eighth identifiable event, the expiration of a 36-month non-payment testing period, may not result from an actual discharge of indebtedness. The 36-month non-payment testing period was added to the 1996 final regulations as an additional identifiable event in response to concerns of creditors that the facts and circumstances approach taken in the temporary and proposed regulations was unclear regarding the effect of continuing collection activity. Creditors proposed (among other things) that the final regulations require reporting after a fixed time period during which there had been no collection efforts. Section 1.6050P-1(b)(2)(iv) of the 1996 regulations sets forth the 36-month non-payment testing period rule (the 36-month rule). Under that rule, a rebuttable presumption arises that an identifiable event has occurred if a creditor does not receive a payment within a 36-month testing period. The creditor may rebut the presumption if the creditor engaged in significant bona fide collection activity at any time within the 12-month period ending at the close of the calendar year or if the facts and circumstances existing as of January 31 of the calendar year following the expiration of the non-payment testing period indicate that the indebtedness has not been discharged. A creditor's decision not to rebut the presumption that an identifiable event has occurred pursuant to the 36-month rule is not an indication that it has discharged the debt, but the creditor is nonetheless required, for information reporting purposes, to report amounts on a Form 1099-C to the debtor taxpayer. Taxpayers receiving Forms 1099-C may conclude that the debts have, in fact, been discharged, causing the taxpayers to erroneously include in income the amounts reported on Forms 1099-C even though creditors may continue to attempt to collect the debt after issuing a Form 1099-C as required by the 36-month rule. See Sec. 1.6050P-1(a)(1) and (b)(2)(iv). Finally, the 1996 final regulations provided that an identifiable event with respect to the 36-month non- payment testing period in Sec. 1.6050P-1(b)(2)(i)(H) and (b)(2)(iv) could not occur prior to December 31, 1997. See Sec. 1.6050P- 1(b)(2)(iv)(C) of the 1996 regulations. On October 25, 2004, final regulations reflecting the amendments to section 6050P(c) made by the 1999 Act were published in the Federal Register (TD [[Page 78910]] 9160; 69 FR 62181). These regulations describe circumstances in which an organization has a significant trade or business of lending money and provide three safe harbors under which organizations will not be considered to have a significant trade or business of lending money. On November 10, 2008, final and temporary regulations were published in the Federal Register (TD 9430; 73 FR 66539) (the 2008 regulations) to amend the regulations under section 6050P to exempt from the 36-month rule entities that were not within the scope of section 6050P as originally enacted (organizations with a significant trade or business of lending money and agencies other than federal executive agencies). The changes made by the 2008 regulations reduced the burden on these entities and protected debtors from receiving information returns that reported discharges of indebtedness from these entities before a discharge had occurred. The 2008 regulations also added Sec. 1.6050P-1(b)(2)(v), which provided that, for organizations with a significant trade or business of lending money and agencies other than federal executive agencies that were required to file information returns pursuant to the 36-month rule in a tax year prior to 2008 and failed to file them, the date of discharge would be the first identifiable event, if any, described in Sec. 1.6050P- 1(b)(2)(i)(A) through (G) that occurs after 2007. On September 17, 2009, final regulations were published in the Federal Register (TD 9461; 74 FR 47728-01) adopting the 2008 regulations without change. Notice 2012-65 Even after the amendments to the regulations in 2008 and 2009, concerns continued to arise about the 36-month rule, and taxpayers remained confused regarding whether the receipt of a Form 1099-C represents cancellation of indebtedness that must be included in gross income. To address those concerns, in Notice 2012-65 (2012-52 IRB 773 (Dec. 27, 2012)), the Treasury Department and the IRS requested comments from the public regarding whether to remove or modify the 36- month rule as an identifiable event for purposes of information reporting under section 6050P. Ten comments were received, all recommending removal or revision of the 36-month rule. Several commenters generally expressed concerns that the expiration of a 36- month non-payment testing period does not necessarily coincide with an actual discharge of the indebtedness, leading to confusion on the part of the debtor and, in some instances, uncertainty on the part of the creditor regarding whether it may lawfully continue to pursue the debt. Additionally, commenters noted that the IRS's ability to collect tax on discharge of indebtedness income may be undermined if the actual discharge occurs in a different year than the year of information reporting. Proposed Regulations In response to the comments received, on October 15, 2014, a notice of proposed rulemaking (REG-136676-13) proposing removing the 36-month rule was published in the Federal Register (79 FR 61791). The Treasury Department and the IRS agreed that information reporting under section 6050P should generally coincide with the actual discharge of a debt. Because reporting under the 36-month rule may not reflect a discharge of indebtedness, a debtor may conclude that the debtor has taxable income even though the creditor has not discharged the debt and continues to pursue collection. Issuing a Form 1099-C before a debt has been discharged may also cause the IRS to initiate compliance actions even though a discharge has not occurred. Additionally, Sec. 1.6050P- 1(e)(9) provides that no additional reporting is required if a subsequent identifiable event occurs. Therefore, in cases in which the Form 1099-C is issued because of the 36-month rule but before the debt is discharged, the IRS does not subsequently receive third-party reporting when the debt is discharged. The IRS's ability to enforce collection of tax for discharge of indebtedness income may, thus, be diminished when the information reporting does not reflect an actual cancellation of indebtedness. Section 1.6050P-1(b)(2)(i)(H), (b)(2)(iv), and (b)(2)(v) were proposed to be removed on the date final regulations are published in the Federal Register. The proposed regulations also proposed conforming amendments to the effective/applicability date provision, Sec. 1.6050P-1(h). Explanation and Summary of Comments The notice of proposed rulemaking invited comments on the proposed removal of the 36-month rule. A public hearing was not requested and none was held. Four comments were received. All commenters supported the proposal and agreed that the 36-month rule did not increase compliance and caused confusion, and supported its removal. Accordingly, these final regulations adopt the proposed regulations without change (except as described in the Applicability Date section of this preamble), remove the 36-month rule from the list of identifiable events, and remove related provisions. Applicability Date The notice of proposed rulemaking proposed to amend the effective/ applicability date paragraph in Sec. 1.6050P-1(h) to remove references to the 36-month rule that were added along with the 36-month rule in TD 9461, 74 FR 47728-01, and such amendments would have been both effective and applicable as of the date of publication of these final regulations in the Federal Register. The Treasury Department and the IRS have determined that it is not in the interest of sound tax administration to have the removal of the 36-month rule apply for a portion of a calendar year. Therefore, these final regulations do not adopt the effective/applicability date provision of the proposed regulations. Information returns required to be filed under section 6050P must be filed on or before February 28 (March 31 if filed electronically) of the year following the calendar year in which the identifiable event occurs and payee statements must be furnished on or before January 31 of the year following the calendar year in which the identifiable event occurs. The final regulations are applicable to information returns required to be filed, and payee statements required to be furnished, after December 31, 2016. Because the deadline for filing information returns and furnishing payee statements for calendar year 2016 would be after December 31, 2016, the expiration of the 36- month testing period during 2016 does not create a requirement to file information returns and furnish payee statements. However, Sec. 1.6050P-1 (as contained in 26 CFR part 1, revised April 2016) continues to apply to information returns required to be filed, and payee statements required to be furnished, on or before December 31, 2016. Special Analyses Certain IRS regulations, including this one, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory impact assessment is not required. 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 Code, the notice of proposed rulemaking that preceded these final regulations was submitted to the Chief Counsel for Advocacy of the Small Business [[Page 78911]] Administration for comment on its impact on small business, and no comments were received. Drafting Information The principal author of these final regulations is Eliezer Mishory of the Office of Associate Chief Counsel (Procedure and Administration). 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 amended as follows: PART 1--INCOME TAXES 0 Paragraph 1. The authority citation for part 1 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * 0 Par. 2. Section 1.6050P-1 is amended by: 0 1. Removing paragraphs (b)(2)(i)(H), (b)(2)(iv), and (b)(2)(v). 0 2. Adding the word ``or'' at the end of paragraph (b)(2)(i)(F). 0 3. Removing the semicolon and adding a period in its place at the end of paragraph (b)(2)(i)(G). 0 4. Revising paragraph (h). The revision reads as follows: Sec. 1.6050P-1 Information reporting for discharge of indebtedness by certain entities. * * * * * (h) Applicability dates. This section applies to information returns required to be filed, and payee statements required to be furnished, after December 31, 2016. Section 1.6050P-1 (as contained in 26 CFR part 1, revised April 2016) applies to information returns required to be filed, and payee statements required to be furnished, on or before December 31, 2016. John Dalrymple, Deputy Commissioner for Services and Enforcement. Approved: October 17, 2016. Mark J. Mazur, Assistant Secretary of the Treasury (Tax Policy). [FR Doc. 2016-27160 Filed 11-9-16; 8:45 am] BILLING CODE 4830-01-P
![78908 Federal Register / Vol. 81, No. 218 / Thursday, November 10, 2016 / Rules and Regulations
PART 71—DESIGNATION OF CLASS A, DEPARTMENT OF THE TREASURY Statutory Provisions
B, C, D, AND E AIRSPACE AREAS; AIR Section 61(a)(12) provides that
TRAFFIC SERVICE ROUTES; AND Internal Revenue Service income from discharge of indebtedness
REPORTING POINTS is includible in gross income. Section
26 CFR Part 1 6050P was added to the Code by section
■ 1. The authority citation for part 71 [TD 9793] 13252 of the Omnibus Budget
continues to read as follows: Reconciliation Act of 1993, Public Law
RIN 1545–BM01
Authority: 49 U.S.C. 106(f), 106(g); 40103, 103–66 (107 Stat. 312, 531–532 (1993)).
40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, Removal of the 36-Month Non-Payment Section 6050P was enacted in part ‘‘to
1959–1963 Comp., p. 389. Testing Period Rule encourage taxpayer compliance with
respect to discharged indebtedness’’ and
§ 71.1 [Amended] AGENCY: Internal Revenue Service (IRS), to ‘‘enhance the ability of the IRS to
Treasury. enforce the discharge of indebtedness
■ 2. The incorporation by reference in ACTION: Final regulation. rules.’’ H.R. Rep. No. 103–111, at 758
14 CFR 71.1 of FAA Order 7400.11A,
(1993). As originally enacted, section
Airspace Designations and Reporting SUMMARY: This document contains final 6050P generally required applicable
Points, dated August 3, 2016, and regulations that remove the rule that a financial entities (generally financial
effective September 15, 2016, is deemed discharge of indebtedness for institutions, credit unions, and federal
amended as follows: which a Form 1099–C, ‘‘Cancellation of executive agencies) that discharge (in
Debt,’’ must be filed occurs at the whole or in part) indebtedness of $600
Paragraph 6005 Class E Airspace Areas expiration of a 36-month non-payment
Extending Upward From 700 Feet or More or more during a calendar year to file
testing period. The Treasury Department information returns with the IRS and to
Above the Surface of the Earth.
and the IRS are concerned that the rule furnish information statements to the
* * * * * creates confusion for taxpayers and does persons whose indebtedness was
ASW AR E5 Blytheville, AR [Amended] not increase tax compliance by debtors discharged. In addition to other
or provide the IRS with valuable third- information prescribed by regulations,
Blytheville, Arkansas International Airport,
AR
party information that may be used to an applicable financial entity is required
(Lat. 35°57′52″ N., long. 89°56′38″ W.) ensure taxpayer compliance. The final to include on the information return the
Blytheville Municipal Airport, AR regulations affect certain financial debtor’s name, taxpayer identification
(Lat. 35°56′26″ N., long. 89°49′51″ W.) institutions and governmental entities. number, the date of the discharge, and
That airspace extending upward from 700 DATES: Effective Date: These regulations the amount discharged. See 26 U.S.C.
feet above the surface within a 7-mile radius are effective on November 10, 2016. 6050P(a) (1994).
of Arkansas International Airport and within Applicability Date: For dates of The Debt Collection Improvement Act
a 6.5-mile radius of Blytheville Municipal applicability, see § 1.6050P–1(h). of 1996 (1996 Act), Public Law 104–134
Airport. FOR FURTHER INFORMATION CONTACT: (110 Stat. 1321, 1321–368 through
ASW AR E5 Brinkley, AR [Amended]
Eliezer Mishory at (202) 317–6844 (not 1321–369 (1996)) was enacted on April
a toll-free call). 26, 1996. Section 31001(m)(2)(B)(i) and
Brinkley, Frank Federer Memorial Airport, (ii) of the 1996 Act amended section
SUPPLEMENTARY INFORMATION:
AR
6050P to expand the reporting
(Lat. 34°52′49″ N., long. 91°10′35″ W.) Background requirement to cover ‘‘applicable
That airspace extending upward from 700 This document contains amendments entities,’’ which includes any executive,
feet above the surface within a 6.4-mile to the Income Tax Regulations (26 CFR judicial, or legislative agency, not just
radius of Frank Federer Memorial Airport. part 1) under section 6050P of the federal executive agencies, and any
* * * * * Internal Revenue Code (Code), relating previously covered applicable financial
ASW AR E5 Clarksville, AR [Amended] to the rule in § 1.6050P–1(b)(2)(iv) that entity. Effective for discharges of
the 36-month non-payment testing indebtedness occurring after December
Clarksville Municipal Airport, AR
period is an identifiable event triggering 31, 1999, section 533(a) of the Ticket to
(Lat. 35°28′15″ N., long. 93°25′38″ W.)
an information reporting obligation on Work and Work Incentives
That airspace extending upward from 700 Form 1099–C for discharge of Improvement Act of 1999 (1999 Act),
feet above the surface within a 7.3-mile indebtedness by certain entities. On Public Law 106–170 (113 Stat. 1860,
radius of Clarksville Municipal Airport.
October 15, 2014, a notice of proposed 1931 (1999)), added subparagraph
* * * * * rulemaking (REG–136676–13) was (c)(2)(D) to section 6050P, to further
ASW AR E5 De Queen, AR [Amended] published in the Federal Register (79 expand entities covered by the reporting
FR 61791). The notice of proposed requirements to include any
De Queen, J. Lynn Helms Sevier County
Airport, AR
rulemaking proposed to remove the 36- organization the ‘‘significant trade or
(Lat. 34°02′49″ N., long. 94°23′58″ W.) month non-payment testing period. business of which is the lending of
Written comments responding to the money.’’
That airspace extending upward from 700
feet above the surface within a 6.5-mile
proposed regulations were received. The On April 4, 2000, the IRS released
radius of J. Lynn Helms Sevier County comments have been considered in Notice 2000–22 (2000–1 CB 902) to
Airport. connection with these final regulations provide penalty relief to organizations
asabaliauskas on DSK3SPTVN1PROD with RULES
and are available for public inspection that were newly made subject to section
Issued in Fort Worth, Texas, on November at www.regulations.gov or on request. 6050P by the 1999 Act (organizations
2, 2016.
No public hearing was requested or with a significant trade or business of
Walter Tweedy, held. After consideration of all the lending money). The relief applied to
Acting Manager, Operations Support Group, comments, the proposed regulations are penalties for failure to file information
ATO Central Service Center. adopted as final regulations without returns or furnish payee statements for
[FR Doc. 2016–27093 Filed 11–9–16; 8:45 am] significant modification by this discharges of indebtedness occurring
BILLING CODE 4910–13–P Treasury decision. before January 1, 2001. On December 26,
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![Federal Register / Vol. 81, No. 218 / Thursday, November 10, 2016 / Rules and Regulations 78911
Administration for comment on its DEPARTMENT OF DEFENSE because it involves a change that
impact on small business, and no clarifies language for contractors who
comments were received. Department of the Army are required to register as sex offenders
on Army installations per the
Drafting Information 32 CFR Part 635 requirements of their contracts. DoD
The principal author of these final RIN 0702–AA75 expects no opposition to the changes
and no significant adverse comments.
regulations is Eliezer Mishory of the [Docket No. USA–2016–HQ–0033] However, if DoD receives a significant
Office of Associate Chief Counsel
adverse comment, the Department will
(Procedure and Administration). Law Enforcement Reporting withdraw this direct final rule by
List of Subjects in 26 CFR Part 1 AGENCY: Department of the Army, DoD. publishing a notice in the Federal
ACTION: Direct final rule. Register. A significant adverse comment
Income Taxes, Reporting and is one that explains: (1) Why the direct
recordkeeping requirements. SUMMARY: The Department of the Army final rule is inappropriate, including
is amending its Law Enforcement challenges to the rule’s underlying
Proposed Amendments to the Regulation. Specifically, Army is premise or approach; or (2) why the
Regulations clarifying language for contractors who direct final rule will be ineffective or
Accordingly, 26 CFR part 1 is are required to register as sex offenders unacceptable without a change. In
on Army installations. This change will determining whether a comment
amended as follows:
allow the Department to collect necessitates withdrawal of this direct
PART 1—INCOME TAXES information from registered sex final rule, DoD will consider whether it
offenders in accordance with their warrants a substantive response in a
contract requirements. This ensures notice and comment process.
■ Paragraph 1. The authority citation
contractors meet the government
for part 1 continues to read in part as requirements under the terms and Executive Summary
follows: conditions of the contract. This rule provides policies and
Authority: 26 U.S.C. 7805 * * * DATES: The rule will be effective on procedures for Army’s implementation
December 15, 2016 unless comments are of Law Enforcement Reporting. The
■ Par. 2. Section 1.6050P–1 is amended authority citation is 28 U.S.C. 534, 42
received that would result in a contrary
by: U.S.C. 10601, 18 U.S.C. 922, 10 U.S.C.
determination. Comments will be
■ 1. Removing paragraphs (b)(2)(i)(H), accepted on or before December 12, 1562, 10 U.S.C. Chap. 47, 42 U.S.C.
(b)(2)(iv), and (b)(2)(v). 2016. 16901 et seq., 10 U.S.C. 1565, 42 U.S.C.
■ 2. Adding the word ‘‘or’’ at the end of
14135a.
ADDRESSES: You may submit comments, The Army is clarifying language for
paragraph (b)(2)(i)(F). identified by docket number and/or RIN contractors who are required to register
■ 3. Removing the semicolon and number and title, by any of the as sex offenders on Army installations.
adding a period in its place at the end following methods: This regulatory action imposes no
of paragraph (b)(2)(i)(G). • Federal Rulemaking Portal: http:// monetary costs to the Agency or public.
www.regulations.gov. Follow the The benefit to the public is the Army
■ 4. Revising paragraph (h). instructions for submitting comments. law enforcement community is ensuring
The revision reads as follows: • Mail: Department of Defense, Office the safety and security of the Army
of the Deputy Chief Management installations by ensuring sex offenders
§ 1.6050P–1 Information reporting for Officer, Directorate for Oversight and
discharge of indebtedness by certain required to register are complying with
Compliance, 4800 Mark Center Drive, their registration requirements.
entities. Mailbox #24, Alexandria, VA 22350–
* * * * * 1700. Regulatory Procedures
(h) Applicability dates. This section Instructions: All submissions received A. Regulatory Flexibility Act
applies to information returns required must include the agency name and
docket number or Regulatory The Department of the Army has
to be filed, and payee statements certified that the Regulatory Flexibility
required to be furnished, after December Information Number (RIN) for this
Federal Register document. The general Act does not apply because the rule
31, 2016. Section 1.6050P–1 (as does not have a significant economic
policy for comments and other
contained in 26 CFR part 1, revised impact on a substantial number of small
submissions from members of the public
April 2016) applies to information is to make these submissions available entities within the meaning of the
returns required to be filed, and payee for public viewing on the Internet at Regulatory Flexibility Act, 5 U.S.C. 601–
statements required to be furnished, on http://www.regulations.gov as they are 612.
or before December 31, 2016. received without change, including any B. Unfunded Mandates Reform Act
John Dalrymple, personal identifiers or contact
information. The Department of the Army has
Deputy Commissioner for Services and determined that the Unfunded
Enforcement. FOR FURTHER INFORMATION CONTACT: Ms. Mandates Reform Act does not apply
Approved: October 17, 2016. Katherine Brennan, (703) 692–6721. because the rule does not include a
asabaliauskas on DSK3SPTVN1PROD with RULES
Mark J. Mazur, SUPPLEMENTARY INFORMATION: This mandate that may result in estimated
direct final rule makes changes to the costs to State, local or tribal
Assistant Secretary of the Treasury (Tax
Policy).
Department of the Army’s Law governments in the aggregate, or the
Enforcement Reporting rule which private sector, of $100 million or more.
[FR Doc. 2016–27160 Filed 11–9–16; 8:45 am]
published in the Federal Register on
BILLING CODE 4830–01–P March 29, 2016 (81 FR 17385). C. National Environmental Policy Act
DoD has determined this rulemaking The Department of the Army has
meets the criteria for a direct final rule determined that the National
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Document Created: 2016-11-10 01:43:47
Document Modified: 2016-11-10 01:43:47
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final regulation. | |
| Contact | Eliezer Mishory at (202) 317-6844 (not a toll-free call). | |
| FR Citation | 81 FR 78908 | |
| RIN Number | 1545-BM01 | |
| CFR Associated | Income Taxes and Reporting and Recordkeeping Requirements |
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