81 FR 87444 - Tax Return Preparer Due Diligence Penalty Under Section 6695(g)
DEPARTMENT OF THE TREASURY
Internal Revenue Service Federal Register Volume 81, Issue 233 (December 5, 2016)
Internal Revenue Service
Federal Register Volume 81, Issue 233 (December 5, 2016)
| Page Range | 87444-87448 | |
| FR Document | 2016-28993 |
[Federal Register Volume 81, Number 233 (Monday, December 5, 2016)] [Rules and Regulations] [Pages 87444-87448] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-28993] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Parts 1 and 602 [TD 9799] RIN 1545-BN61 Tax Return Preparer Due Diligence Penalty Under Section 6695(g) AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final and temporary regulations. ----------------------------------------------------------------------- SUMMARY: This document contains temporary regulations that modify existing regulations related to the penalty under section 6695(g) of the Internal Revenue Code (Code) relating to [[Page 87445]] tax return preparer due diligence. These temporary regulations implement recent law changes that expand the tax return preparer due diligence penalty under section 6695(g) so that it applies to the child tax credit (CTC), additional child tax credit (ACTC), and the American Opportunity Tax Credit (AOTC), in addition to the earned income credit (EIC). The temporary regulations affect tax return preparers. The substance of the temporary regulations is included in the proposed regulations set forth in the notice of proposed rulemaking on this subject in the Proposed Rules section in this issue of the Federal Register. DATES: Effective Date: These regulations are effective on December 5, 2016. Applicability Date: For dates of applicability, see Sec. 1.6695- 2T(e). FOR FURTHER INFORMATION CONTACT: Rachel L. Gregory, 202-317-6845 (not a toll-free number). SUPPLEMENTARY INFORMATION: Paperwork Reduction Act The collection of information contained in these temporary and final regulations is in Sec. Sec. 1.6695-2(b) and 1.6695-2T(b) and is reported on Form 8867, ``Paid Preparer's Due Diligence Checklist.'' Responses to this collection of information are mandatory. The collection of information in current Sec. 1.6695-2 was previously reviewed and approved under control number 1545-1570. Control number 1545-1570 was discontinued in 2014, as the burden for the collection of information contained in Sec. 1.6695-2 is reflected in the burden on Form 8867 under control number 1545-1629. Background This document contains amendments to 26 CFR parts 1 and 602 under section 6695(g) of the Code, imposing a penalty on tax return preparers who fail to comply with the due diligence requirements imposed by the Secretary by regulations with respect to determining the eligibility for, or the amount of, the EIC. Section 6695(g) was added to the Code because Congress believed more thorough efforts by tax return preparers are important to improving EIC compliance. H.R. Rep. No. 105-148, 105th Cong. 1st Sess., p. 512 (June 24, 1997). Enacted by section 1085(a)(2) of the Taxpayer Relief Act of 1997, Public Law 105-34 (11 Stat. 788, 955 (1997)), and effective for taxable years beginning after December 31, 1996, section 6695(g) originally imposed a $100 penalty on an income tax return preparer who failed to meet the EIC due diligence requirements set forth in regulations prescribed by the Secretary. Section 8246 of the Small Business and Work Opportunity Tax Act of 2007, Public Law 110-28 (121 Stat. 112, 200 (2007)) amended the penalty to apply to all tax return preparers. Section 501(a) of the United States-Korea Free Trade Agreement Implementation Act, Public Law 112-41 (125 Stat. 428, 459 (2011)), amended section 6695(g) to increase the amount of the penalty to $500, effective for returns required to be filed after December 31, 2011. Section 208(c), Div. B of the Tax Increase Prevention Act of 2014, Public Law 113-295 (128 Stat. 4010, 4073 (2014)) (2014 Act), added section 6695(h), which indexes the penalty amount for inflation, effective for returns or claims for refund filed after December 31, 2014. Section 1.6695-2 implements section 6695(g) by imposing due diligence requirements on persons who are tax return preparers under section 7701(a)(36) with respect to determining eligibility for, or the amount of, the EIC. The due diligence requirements set forth in Sec. 1.6695-2(b) are that the preparer must: (1) Complete and submit Form 8867, ``Paid Preparer's Earned Income Credit Checklist;'' (2) complete the Earned Income Credit Worksheet (Worksheet), as contained in the Form 1040 instructions or record the preparer's computation of the credit, including the method and information used to make the computation; (3) not know or have reason to know that any information used by the preparer in determining eligibility for, and the amount of, the EIC is incorrect and make reasonable inquiries when required, documenting those inquiries and responses contemporaneously (knowledge requirement); and (4) retain, for three years from the applicable date, the Form 8867, the Worksheet (or alternative records), and the record of how and when the information used to determine eligibility for, and the amount of, the EIC was obtained by the preparer, including the identity of any person furnishing information and a copy of any document relied on by the preparer. To comply with the knowledge requirement under Sec. 1.6695- 2(b)(3), the tax return preparer may not ignore the implications of information furnished to, or known by, the tax return preparer, and must make reasonable inquiries if the information furnished to the tax return preparer appears to be incorrect, inconsistent, or incomplete. Examples in Sec. 1.6695-2(b)(3)(ii) illustrate this requirement. This knowledge requirement is consistent with the verification requirement imposed on all tax return preparers with respect to preparation of any tax return or claim for refund under the accuracy-related standards set forth in Sec. 1.6694-1(e). A tax return preparer is required to submit the Form 8867 to the IRS when the preparer electronically files the tax return. If a tax return preparer required to complete the Form 8867 is not electronically filing the taxpayer's return with the IRS, Sec. 1.6695- 2(b)(1) provides rules for submission of the form. If the tax return preparer required to complete the Form 8867 is not the signing tax return preparer, the preparer satisfies the submission requirement by providing a copy of the completed Form 8867 to the signing tax return preparer. If the tax return preparer required to complete the Form 8867 is the signing tax return preparer but the taxpayer is not electronically filing the return, the preparer must provide a copy of the completed Form 8867 to the taxpayer to be attached to the return being filed with the IRS. Section 1.6695-2(c) provides that a firm that employs a tax return preparer subject to a penalty under section 6695(g) is also subject to a penalty if certain conditions apply. Under this rule, a firm will be subject to a penalty if and only if one or more members of principal management (or principal officers) of the firm or branch participated in, or prior to the time the return was filed, knew of the failure to comply with the due diligence requirements; the firm failed to establish reasonable and appropriate procedures to ensure compliance with the due diligence requirements; or, through willfulness, recklessness, or gross indifference (including ignoring facts that would lead a person of reasonable prudence and competence to investigate or ascertain) the firm disregarded its own reasonable and appropriate compliance procedures. A firm subject to a section 6695(g) penalty under this section is not eligible for the exception to the penalty in Sec. 1.6695-2(d). Under this exception, the penalty will not be applied if the tax return preparer can demonstrate to the satisfaction of the IRS that, considering all of the facts and circumstances, the tax return preparer's normal office procedures are reasonably designed and routinely followed to ensure compliance with the due diligence requirements, and the failure to meet the due diligence requirements with respect to the particular tax return or claim for refund was isolated and inadvertent. Section 207, Div. Q of the Protecting Americans from Tax Hikes Act of 2015, Public Law 114-113 (129 Stat. 2242, 3082 (2015)) (PATH Act) amended section 6695(g) by expanding the scope [[Page 87446]] of the due diligence requirements to also include claims of the CTC/ ACTC under section 24 and the AOTC under section 25A(a)(1), effective for taxable years beginning after December 31, 2015. These temporary regulations reflect the changes made to section 6695(g) by the PATH Act by expanding the due diligence requirements to the CTC/ACTC and the AOTC. These temporary regulations also conform the regulation to the 2014 Act, reflecting that the penalty is to be adjusted for inflation. Explanation of Provisions The temporary regulations amend Sec. 1.6695-2 to implement the changes made by the PATH Act that extend the preparer due diligence requirements to returns or claims for refund including claims of the CTC/ACTC and/or AOTC in addition to the EIC. As a result of these changes, one return or claim for refund may contain claims for more than one credit subject to the due diligence requirements. Pursuant to the statute, each failure to comply with the due diligence requirements set forth in regulations prescribed by the Secretary results in a penalty. The section 6695(g) requirements apply to each credit claimed, meaning more than one penalty could apply to a single return or claim for refund. The temporary regulations provide examples to show how multiple penalties could apply when one return or claim for refund is filed. The Form 8867 has been revised for the 2016 tax year and is a single checklist to be used for all applicable credits (EIC, CTC/ACTC, and/or AOTC) on the return or claim for refund subject to the section 6695(g) due diligence requirements. The Form 8867 was streamlined to eliminate unnecessary redundancy with other forms and schedules. These changes were intended to reduce burden while increasing the utility of the Form 8867 as a checklist for tax return preparers to more accurately determine taxpayer eligibility for credits, thereby reducing errors and increasing compliance by preparers and taxpayers. The temporary regulations clarify Sec. 1.6695-2(b)(1)(ii) to illustrate that the completion of Form 8867 can be based on information provided by the taxpayer to the preparer or otherwise reasonably obtained or previously known by the preparer. The examples provided in Sec. 1.6695-2(b)(3)(ii) have been updated to provide more insight into when a tax return preparer has satisfied the due diligence knowledge requirement, including for purposes of the CTC and AOTC. The updates to the examples in Sec. 1.6695-2T(b)(3)(ii) illustrate that the knowledge requirement for purposes of due diligence can be satisfied in conjunction with a tax return preparer's information-gathering activities done for the purpose of accurately completing other aspects of a tax return or claim for refund. New examples, Example 2 and Example 4, have also been added to illustrate that in certain circumstances a tax return preparer may satisfy the knowledge requirement based on existing knowledge without having to make additional reasonable inquiries. Another new example, Example 7, provides an example of due diligence for purposes of the AOTC. Section 1.6695-2(a) is amended by the temporary regulations to reflect the changes made by section 208(c) of the 2014 Act, requiring the IRS to index the penalty for inflation for returns or claims for refund filed after December 31, 2014. In addition, Sec. 1.6695- 2T(c)(3) clarifies the parenthetical therein by removing the words ``or ascertained.'' 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 assessment is not required. For applicability of the Regulatory Flexibility Act, please refer to the cross-reference notice of proposed rulemaking published elsewhere in this issue of the Federal Register. Pursuant to section 7805(f) of the Code, these regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on the impact on small businesses. Drafting Information The principal author of this regulation is Rachel L. Gregory, Office of the Associate Chief Counsel (Procedure & Administration). List of Subjects 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. 26 CFR Part 602 Reporting and recordkeeping requirements. Adoption of Amendments to the Regulations Accordingly, 26 CFR parts 1 and 602 are amended as follows: PART 1--INCOME TAXES 0 Paragraph 1. The authority citation for part 1 is amended by adding a new entry in numerical order to read in part as follows: Authority: 26 U.S.C. 7805 * * * Section 1.6695-2T is also issued under 26 U.S.C. 6695(g). * * * * * 0 Par. 2. Section 1.6695-2 is amended by revising the section heading and paragraphs (a), (b)(1)(i) introductory text, (b)(1)(ii), (b)(2), (b)(3)(i) and (ii), (b)(4)(i)(B) and (C), and (c)(3) to read as follows: Sec. 1.6695-2 Tax return preparer due diligence requirements for certain credits. (a) [Reserved]. For further guidance regarding the penalty for failure to meet due diligence requirements with respect to certain credits, see Sec. 1.6695-2T(a). (b) * * * (1) * * * (i) [Reserved]. For further guidance regarding the completion of Form 8867, see Sec. 1.6695-2T(b)(1)(i). * * * * * (ii) [Reserved]. For further guidance regarding the information used to complete the Form 8867, see 1.6695-2T(b)(1)(ii). (2) [Reserved]. For further guidance regarding computation, see Sec. 1.6695-2T(b)(2). (3) * * * (i) [Reserved]. For further guidance regarding the knowledge requirement, see Sec. 1.6695-2T(b)(3)(i). (ii) [Reserved]. For current examples, see Sec. 1.6695- 2T(b)(3)(ii). (4) * * * (i) * * * (B) [Reserved]. For further guidance on the retention of records, see Sec. 1.6695-2T(b)(4)(i)(B). (C) [Reserved]. For further guidance on the retention of records, see Sec. 1.6695-2T(b)(4)(i)(C). * * * * * (c) * * * (3) [Reserved]. For further guidance on the special rule for firms, see Sec. 1.6695-2T(c)(3). * * * * * 0 Par. 3. Section 1.6695-2T is added to read as follows: Sec. 1.6695-2T Tax return preparer due diligence requirements for certain credits (Temporary). (a) Penalty for failure to meet due diligence requirements--(1) In general. A person who is a tax return preparer (as defined in section 7701(a)(36)) of a tax return or claim for refund under the Internal Revenue Code with respect to determining the eligibility for, or the amount of, the child tax credit (CTC) and additional child tax credit (ACTC) under section 24, the American [[Page 87447]] opportunity tax credit (AOTC) under section 25A(i), or the earned income credit (EIC) under section 32 and who fails to satisfy the due diligence requirements of paragraph (b) of this section will be subject to a penalty as prescribed in section 6695(g) (indexed for inflation under section 6695(h)) for each failure. A separate penalty applies with respect to each credit claimed on a return or claim for refund for which the due diligence requirements of this section are not satisfied and for which the exception to penalty provided by paragraph (d) of this section does not apply. (2) Examples. The provisions of paragraph (a)(1) of this section are illustrated by the following examples: Example 1. Preparer A prepares a federal income tax return for a taxpayer claiming the CTC and the AOTC. Preparer A did not meet the due diligence requirements under this section with respect to the CTC or the AOTC claimed on the taxpayer's return. Unless the exception to penalty provided by paragraph (d) of this section applies, Preparer A is subject to two penalties under section 6695(g): One for failure to meet the due diligence requirements for the CTC and a second penalty for failure to meet the due diligence requirements for the AOTC. Example 2. Preparer B prepares a federal income tax return for a taxpayer claiming the CTC and the AOTC. Preparer B did not meet the due diligence requirements under this section with respect to the CTC claimed on the taxpayer's return, but Preparer B did meet the due diligence requirements under this section with respect to the AOTC claimed on the taxpayer's return. Unless the exception to penalty provided by paragraph (d) of this section applies, Preparer B is subject to one penalty under section 6695(g) for the failure to meet the due diligence requirements for the CTC. Preparer B is not subject to a penalty under section 6695(g) for failure to meet the due diligence requirements for the AOTC. (b) [Reserved]. For further guidance, see Sec. 1.6695-2(b). (1) Completion and submission of Form 8867. (i) The tax return preparer must complete Form 8867, ``Paid Preparer's Due Diligence Checklist,'' or such other form and such other information as may be prescribed by the Internal Revenue Service (IRS), and-- (A) through (C) [Reserved]. For further guidance, see Sec. 1.6695- 2(b)(1)(i)(A) through (C). (ii) The tax return preparer's completion of Form 8867 must be based on information provided by the taxpayer to the tax return preparer or otherwise reasonably obtained or known by the tax return preparer. (2) Computation of credit or credits. (i) When computing the amount of a credit described in paragraph (a) of this section to be claimed on a return or claim for refund, the tax return preparer must either-- (A) Complete the worksheet in the Form 1040, 1040A, 1040EZ, and/or Form 8863 instructions or such other form including such other information as may be prescribed by the IRS applicable to each credit described in paragraph (a) of this section claimed on the return or claim for refund; or (B) Otherwise record in one or more documents in the tax return preparer's paper or electronic files the tax return preparer's computation of the credit or credits claimed on the return or claim for refund, including the method and information used to make the computations. (ii) The tax return preparer's completion of an applicable worksheet described in paragraph (b)(2)(i)(A) of this section (or other record of the tax return preparer's computation of the credit or credits permitted under paragraph (b)(2)(i)(B) of this section) must be based on information provided by the taxpayer to the tax return preparer or otherwise reasonably obtained or known by the tax return preparer. (3) Knowledge--(i) In general. The tax return preparer must not know, or have reason to know, that any information used by the tax return preparer in determining the taxpayer's eligibility for, or the amount of, any credit described in paragraph (a) of this section and claimed on the return or claim for refund is incorrect. The tax return preparer may not ignore the implications of information furnished to, or known by, the tax return preparer, and must make reasonable inquiries if a reasonable and well-informed tax return preparer knowledgeable in the law would conclude that the information furnished to the tax return preparer appears to be incorrect, inconsistent, or incomplete. The tax return preparer must also contemporaneously document in the files any inquiries made and the responses to those inquiries. (ii) Examples. The provisions of paragraph (b)(3)(i) of this section are illustrated by the following examples: Example 1. In 2018, Q, a 22 year-old taxpayer, engages Preparer C to prepare Q's 2017 federal income tax return. Q completes Preparer C's standard intake questionnaire and states that she has never been married and has two sons, ages 10 and 11. Based on the intake sheet and other information that Q provides, including information that shows that the boys lived with Q throughout 2017, Preparer C believes that Q may be eligible to claim each boy as a qualifying child for purposes of the EIC and the CTC. However, Q provides no information to Preparer C, and Preparer C does not have any information from other sources, to verify the relationship between Q and the boys. To meet the knowledge requirement in paragraph (b)(3) of this section, Preparer C must make reasonable inquiries to determine whether each boy is a qualifying child of Q for purposes of the EIC and the CTC, including reasonable inquiries to verify Q's relationship to the boys, and Preparer C must contemporaneously document these inquiries and the responses. Example 2. Assume the same facts as in Example 1 of this paragraph (b)(3)(ii). In addition, as part of preparing Q's 2017 federal income tax return, Preparer C made sufficient reasonable inquiries to verify that the boys were Q's legally adopted children. In 2019, Q engages Preparer C to prepare her 2018 federal income tax return. When preparing Q's 2018 federal income tax return, Preparer C is not required to make additional inquiries to determine the boys relationship to Q for purposes of the knowledge requirement in paragraph (b)(3) of this section. Example 3. In 2018, R, an 18 year-old taxpayer, engages Preparer D to prepare R's 2017 federal income tax return. R completes Preparer D's standard intake questionnaire and states that she has never been married, has one child, an infant, and that she and her infant lived with R's parents during part of the 2017 tax year. R also provides Preparer D with a Form W-2 showing that she earned $10,000 during 2017. R provides no other documents or information showing that R earned any other income during the tax year. Based on the intake sheet and other information that R provides, Preparer D believes that R may be eligible to claim the infant as a qualifying child for the EIC and the CTC. To meet the knowledge requirement in paragraph (b)(3) of this section, Preparer D must make reasonable inquiries to determine whether R is eligible to claim these credits, including reasonable inquiries to verify that R is not a qualifying child of her parents (which would make R ineligible to claim the EIC) or a dependent of her parents (which would make R ineligible to claim the CTC), and Preparer D must contemporaneously document these inquiries and the responses. Example 4. The facts are the same as the facts in Example 3 of this paragraph (b)(3)(ii). In addition, Preparer D previously prepared the 2017 joint federal income tax return for R's parents. Based on information provided by R's parents, Preparer D has determined that R is not eligible to be claimed as a dependent or as a qualifying child for purposes of the EIC or CTC on R's parents' return. Therefore, for purposes of the knowledge requirement in paragraph (b)(3) of this section, Preparer D is not required to make additional inquiries to determine that R is not her parents' qualifying child or dependent. Example 5. In 2018, S engages Preparer E to prepare his 2017 federal income tax return. During Preparer E's standard intake interview, S states that he has never been married and his niece and nephew lived with him for part of the 2017 tax year. Preparer E believes S may be eligible to claim each of these children as a qualifying child for purposes of the EIC and the CTC. To meet the [[Page 87448]] knowledge requirement in paragraph (b)(3) of this section, Preparer E must make reasonable inquiries to determine whether each child is a qualifying child for purposes of the EIC and the CTC, including reasonable inquiries about the children's parents and the children's residency, and Preparer E must contemporaneously document these inquiries and the responses. Example 6. W engages Preparer F to prepare her federal income tax return. During Preparer F's standard intake interview, W states that she is 50 years old, has never been married, and has no children. W further states to Preparer F that during the tax year she was self-employed, earned $10,000 from her business, and had no business expenses or other income. Preparer F believes W may be eligible for the EIC. To meet the knowledge requirement in paragraph (b)(3) of this section, Preparer F must make reasonable inquiries to determine whether W is eligible for the EIC, including reasonable inquiries to determine whether W's business income and expenses are correct, and Preparer F must contemporaneously document these inquiries and the responses. Example 7. Y, who is 32 years old, engages Preparer G to prepare his federal income tax return. Y completes Preparer G's standard intake questionnaire and states that he has never been married. As part of Preparer G's client intake process, Y provides Preparer G with a copy of the Form 1098-T Y received showing that University M billed $4,000 of qualified tuition and related expenses for Y's enrollment or attendance at the university and that Y was at least a half-time undergraduate student. Preparer G believes that Y may be eligible for the AOTC. To meet the knowledge requirements in paragraph (b)(3) of this section, Preparer G must make reasonable inquiries to determine whether Y is eligible for the AOTC, as Form 1098-T does not contain all the information needed to determine eligibility for the AOTC or to calculate the amount of the credit if Y is eligible, and contemporaneously document these inquiries and the responses. (4) Retention of records. (i) [Reserved]. For further guidance, see Sec. 1.6695-2(b)(4)(i). (A) [Reserved]. For further guidance, see Sec. 1.6695- 2(b)(4)(i)(A). (B) A copy of each completed worksheet required under paragraph (b)(2)(i)(A) of this section (or other record of the tax return preparer's computation permitted under paragraph (b)(2)(i)(B) of this section); and (C) A record of how and when the information used to complete Form 8867 and the applicable worksheets required under paragraph (b)(2)(i)(A) of this section (or other record of the tax return preparer's computation permitted under paragraph (b)(2)(i)(B) of this section) was obtained by the tax return preparer, including the identity of any person furnishing the information, as well as a copy of any document that was provided by the taxpayer and on which the tax return preparer relied to complete Form 8867 and/or an applicable worksheet required under paragraph (b)(2)(i)(A) of this section (or other record of the tax return preparer's computation permitted under paragraph (b)(2)(i)(B) of this section). (ii) through (iii) [Reserved]. For further guidance, see Sec. 1.6695-2(b)(4)(ii) through (iii). (c) [Reserved]. For further guidance, see Sec. 1.6695-2(c). (1) through (2) [Reserved]. For further guidance, see Sec. 1.6695- 2(c)(1) through (2). (3) The firm disregarded its reasonable and appropriate compliance procedures through willfulness, recklessness, or gross indifference (including ignoring facts that would lead a person of reasonable prudence and competence to investigate) in the preparation of the tax return or claim for refund with respect to which the penalty is imposed. (d) [Reserved]. For further guidance, see Sec. 1.6695-2(d). (e) Applicability date. This section applies to tax returns and claims for refund prepared on or after December 5, 2016 with respect to tax years beginning after December 31, 2015. For returns and claims for refund prepared before December 5, 2016 with respect to tax years beginning before January 1, 2016, the rules that apply are contained in Sec. 1.6695-2 in effect prior to December 5, 2016. (See 26 CFR part 1 revised as of April 2016). (f) Expiration date. This section will expire on December 5, 2019. PART 602--OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT 0 Par. 4. The authority citation for part 602 continues to read as follows: Authority: 26 U.S.C. 7805. Sec. 602.101 [Amended] 0 Par. 5. In Sec. 602.101, paragraph (b) is amended by removing the entry for Sec. 1.6695-2 from the table. John M. Dalrymple, Deputy Commissioner for Services and Enforcement. Approved: November 21, 2016. Mark J. Mazur, Assistant Secretary of the Treasury (Tax Policy). [FR Doc. 2016-28993 Filed 12-2-16; 8:45 am] BILLING CODE 4830-01-P
![87444 Federal Register / Vol. 81, No. 233 / Monday, December 5, 2016 / Rules and Regulations
FONSI is also available to view online appurtenances (e.g., community ■ 4. In § 966.4, revise paragraphs
at www.regulations.gov. facilities, public housing offices, day (f)(12)(i) and (ii) to read as follows:
care centers, and laundry rooms)
Executive Order 13132, Federalism § 966.4 Lease requirements.
thereto, assisted under the U.S. Housing
Executive Order 13132 (entitled Act of 1937 (the 1937 Act), other than * * * * *
‘‘Federalism’’) prohibits an agency from assistance under section 8 of the 1937 (f) * * *
publishing any rule that has federalism Act. (12) * * *
implications if the rule either imposes (i) To assure that no tenant, member
substantial direct compliance costs on § 965.653 Smoke-free public housing. of the tenant’s household, or guest
state and local governments or is not (a) In general. PHAs must design and engages in:
required by statute, or the rule preempts implement a policy prohibiting the use (A) Criminal activity. (1) Any criminal
state law, unless the agency meets the of prohibited tobacco products in all activity that threatens the health, safety
consultation and funding requirements public housing living units and interior or right to peaceful enjoyment of the
of section 6 of the Executive Order. This areas (including but not limited to premises by other residents;
final rule does not have federalism hallways, rental and administrative (2) Any drug-related criminal activity
implications and does not impose offices, community centers, day care on or off the premises; or
substantial direct compliance costs on centers, laundry centers, and similar (B) Civil activity. For any units
state and local governments nor structures), as well as in outdoor areas covered by 24 CFR part 965, subpart G,
preempt state law within the meaning of within 25 feet from public housing and any smoking of prohibited tobacco
the Executive Order. administrative office buildings products in restricted areas, as defined
(collectively, ‘‘restricted areas’’) in by 24 CFR 965.653(a), or in other
Catalog of Federal Domestic Assistance
which public housing is located. outdoor areas that the PHA has
The Catalog of Federal Domestic (b) Designated smoking areas. PHAs designated as smoke-free.
Assistance number for the Public may limit smoking to designated (ii) To assure that no other person
Housing program is 14.872. smoking areas on the grounds of the under the tenant’s control engages in:
List of Subjects public housing or administrative office (A) Criminal activity. (1) Any criminal
buildings in order to accommodate activity that threatens the health, safety
24 CFR Part 965 residents who smoke. These areas must or right to peaceful enjoyment of the
Government procurement, Grant be outside of any restricted areas, as premises by other residents;
programs-housing and community defined in paragraph (a) of this section, (2) Any drug-related criminal activity
development, Lead poisoning, Loan and may include partially enclosed on the premises; or
programs-housing and community structures. Alternatively, PHAs may (B) Civil activity. For any units
development, Public housing, Reporting choose to create additional smoke-free covered by 24 CFR part 965, subpart G,
and recordkeeping requirements, areas outside the restricted areas or to any smoking of prohibited tobacco
Utilities. make their entire grounds smoke-free. products in restricted areas, as defined
(c) Prohibited tobacco products. A by 24 CFR 965.653(a), or in other
24 CFR Part 966 outdoor areas that the PHA has
PHA’s smoke-free policy must, at a
Grant programs-housing and minimum, ban the use of all prohibited designated as smoke-free.
community development, Public tobacco products. Prohibited tobacco * * * * *
housing, Reporting and recordkeeping products are defined as:
requirements. Dated: November 28, 2016.
(1) Items that involve the ignition and Julián Castro,
Accordingly, for the reasons stated in burning of tobacco leaves, such as (but
the preamble, HUD amends 24 CFR Secretary.
not limited to) cigarettes, cigars, and
parts 965 and 966 as follows: [FR Doc. 2016–28986 Filed 12–2–16; 8:45 am]
pipes.
BILLING CODE 4210–67–P
PART 965—PHA-OWNED OR LEASED (2) To the extent not covered by
PROJECTS—GENERAL PROVISIONS paragraph (c)(1) of this section,
waterpipes (hookahs).
■ 1. The authority citation for 24 CFR DEPARTMENT OF THE TREASURY
§ 965.655 Implementation.
part 965 continues to read as follows: Internal Revenue Service
(a) Amendments. PHAs are required
Authority: 42 U.S.C. 1547, 1437a, 1437d,
1437g, and 3535(d). Subpart H is also issued
to implement the requirements of this
subpart by amending each of the 26 CFR Parts 1 and 602
under 42 U.S.C. 4821–4846.
■ 2. Add subpart G to read as follows: following: [TD 9799]
(1) All applicable PHA plans,
Subpart G—Smoke-Free Public Housing according to the provisions in 24 CFR RIN 1545–BN61
Sec. part 903.
965.651 Applicability. Tax Return Preparer Due Diligence
(2) Tenant leases, according to the
965.653 Smoke-free public housing. Penalty Under Section 6695(g)
provisions of 24 CFR 966.4.
965.655 Implementation.
(b) Deadline. All PHAs must be in full AGENCY: Internal Revenue Service (IRS),
Subpart G—Smoke-Free Public compliance, with effective policy Treasury.
Housing amendments, by July 30, 2018. ACTION: Final and temporary
sradovich on DSK3GMQ082PROD with RULES
regulations.
§ 965.651 Applicability. PART 966—PUBLIC HOUSING LEASE
This subpart applies to public AND GRIEVANCE PROCEDURE SUMMARY: This document contains
housing units, except for dwelling units temporary regulations that modify
in a mixed-finance project. Public ■ 3. The authority section for 24 CFR existing regulations related to the
housing is defined as low-income part 966 continues to read as follows: penalty under section 6695(g) of the
housing, and all necessary Authority: 42 U.S.C. 1437d and 3535(d). Internal Revenue Code (Code) relating to
VerDate Sep<11>2014 15:57 Dec 02, 2016 Jkt 241001 PO 00000 Frm 00036 Fmt 4700 Sfmt 4700 E:\FR\FM\05DER1.SGM 05DER1](https://thefederalregister.org/doc/81_FR_87677/page/1.svg)
![87446 Federal Register / Vol. 81, No. 233 / Monday, December 5, 2016 / Rules and Regulations
of the due diligence requirements to 2T(b)(3)(ii) illustrate that the knowledge entry in numerical order to read in part
also include claims of the CTC/ACTC requirement for purposes of due as follows:
under section 24 and the AOTC under diligence can be satisfied in conjunction Authority: 26 U.S.C. 7805 * * *
section 25A(a)(1), effective for taxable with a tax return preparer’s information- Section 1.6695–2T is also issued under 26
years beginning after December 31, gathering activities done for the purpose U.S.C. 6695(g).
2015. of accurately completing other aspects * * * * *
These temporary regulations reflect of a tax return or claim for refund. New
the changes made to section 6695(g) by ■ Par. 2. Section 1.6695–2 is amended
examples, Example 2 and Example 4,
the PATH Act by expanding the due by revising the section heading and
have also been added to illustrate that
diligence requirements to the CTC/ paragraphs (a), (b)(1)(i) introductory
in certain circumstances a tax return
ACTC and the AOTC. These temporary text, (b)(1)(ii), (b)(2), (b)(3)(i) and (ii),
preparer may satisfy the knowledge
regulations also conform the regulation (b)(4)(i)(B) and (C), and (c)(3) to read as
requirement based on existing
to the 2014 Act, reflecting that the follows:
knowledge without having to make
penalty is to be adjusted for inflation. additional reasonable inquiries. Another § 1.6695–2 Tax return preparer due
Explanation of Provisions new example, Example 7, provides an diligence requirements for certain credits.
example of due diligence for purposes (a) [Reserved]. For further guidance
The temporary regulations amend of the AOTC.
§ 1.6695–2 to implement the changes regarding the penalty for failure to meet
Section 1.6695–2(a) is amended by due diligence requirements with respect
made by the PATH Act that extend the the temporary regulations to reflect the
preparer due diligence requirements to to certain credits, see § 1.6695–2T(a).
changes made by section 208(c) of the (b) * * *
returns or claims for refund including 2014 Act, requiring the IRS to index the (1) * * *
claims of the CTC/ACTC and/or AOTC penalty for inflation for returns or (i) [Reserved]. For further guidance
in addition to the EIC. As a result of claims for refund filed after December regarding the completion of Form 8867,
these changes, one return or claim for 31, 2014. In addition, § 1.6695–2T(c)(3) see § 1.6695–2T(b)(1)(i).
refund may contain claims for more clarifies the parenthetical therein by
than one credit subject to the due * * * * *
removing the words ‘‘or ascertained.’’ (ii) [Reserved]. For further guidance
diligence requirements. Pursuant to the
statute, each failure to comply with the Special Analyses regarding the information used to
due diligence requirements set forth in complete the Form 8867, see 1.6695–
Certain IRS regulations, including this
regulations prescribed by the Secretary 2T(b)(1)(ii).
one, are exempt from the requirements (2) [Reserved]. For further guidance
results in a penalty. The section 6695(g) of Executive Order 12866, as
requirements apply to each credit regarding computation, see § 1.6695–
supplemented and reaffirmed by 2T(b)(2).
claimed, meaning more than one Executive Order 13563. Therefore, a
penalty could apply to a single return or (3) * * *
regulatory assessment is not required. (i) [Reserved]. For further guidance
claim for refund. The temporary For applicability of the Regulatory
regulations provide examples to show regarding the knowledge requirement,
Flexibility Act, please refer to the cross- see § 1.6695–2T(b)(3)(i).
how multiple penalties could apply reference notice of proposed rulemaking
when one return or claim for refund is (ii) [Reserved]. For current examples,
published elsewhere in this issue of the see § 1.6695–2T(b)(3)(ii).
filed. Federal Register. Pursuant to section
The Form 8867 has been revised for (4) * * *
7805(f) of the Code, these regulations (i) * * *
the 2016 tax year and is a single
have been submitted to the Chief (B) [Reserved]. For further guidance
checklist to be used for all applicable
Counsel for Advocacy of the Small on the retention of records, see
credits (EIC, CTC/ACTC, and/or AOTC)
Business Administration for comment § 1.6695–2T(b)(4)(i)(B).
on the return or claim for refund subject
on the impact on small businesses. (C) [Reserved]. For further guidance
to the section 6695(g) due diligence
requirements. The Form 8867 was Drafting Information on the retention of records, see
streamlined to eliminate unnecessary § 1.6695–2T(b)(4)(i)(C).
The principal author of this regulation
redundancy with other forms and is Rachel L. Gregory, Office of the * * * * *
schedules. These changes were intended Associate Chief Counsel (Procedure & (c) * * *
to reduce burden while increasing the Administration). (3) [Reserved]. For further guidance
utility of the Form 8867 as a checklist on the special rule for firms, see
for tax return preparers to more List of Subjects § 1.6695–2T(c)(3).
accurately determine taxpayer eligibility 26 CFR Part 1 * * * * *
for credits, thereby reducing errors and ■ Par. 3. Section 1.6695–2T is added to
increasing compliance by preparers and Income taxes, Reporting and
recordkeeping requirements. read as follows:
taxpayers. The temporary regulations
clarify § 1.6695–2(b)(1)(ii) to illustrate 26 CFR Part 602 § 1.6695–2T Tax return preparer due
that the completion of Form 8867 can be diligence requirements for certain credits
Reporting and recordkeeping (Temporary).
based on information provided by the
requirements. (a) Penalty for failure to meet due
taxpayer to the preparer or otherwise
reasonably obtained or previously Adoption of Amendments to the diligence requirements—(1) In general.
known by the preparer. Regulations A person who is a tax return preparer
sradovich on DSK3GMQ082PROD with RULES
The examples provided in § 1.6695– Accordingly, 26 CFR parts 1 and 602 (as defined in section 7701(a)(36)) of a
2(b)(3)(ii) have been updated to provide are amended as follows: tax return or claim for refund under the
more insight into when a tax return Internal Revenue Code with respect to
preparer has satisfied the due diligence PART 1—INCOME TAXES determining the eligibility for, or the
knowledge requirement, including for amount of, the child tax credit (CTC)
purposes of the CTC and AOTC. The ■ Paragraph 1. The authority citation and additional child tax credit (ACTC)
updates to the examples in § 1.6695– for part 1 is amended by adding a new under section 24, the American
VerDate Sep<11>2014 15:57 Dec 02, 2016 Jkt 241001 PO 00000 Frm 00038 Fmt 4700 Sfmt 4700 E:\FR\FM\05DER1.SGM 05DER1](https://thefederalregister.org/doc/81_FR_87677/page/3.svg)
![Federal Register / Vol. 81, No. 233 / Monday, December 5, 2016 / Rules and Regulations 87447
opportunity tax credit (AOTC) under claim for refund, the tax return preparer between Q and the boys. To meet the
section 25A(i), or the earned income must either— knowledge requirement in paragraph (b)(3) of
credit (EIC) under section 32 and who (A) Complete the worksheet in the this section, Preparer C must make
Form 1040, 1040A, 1040EZ, and/or reasonable inquiries to determine whether
fails to satisfy the due diligence
each boy is a qualifying child of Q for
requirements of paragraph (b) of this Form 8863 instructions or such other purposes of the EIC and the CTC, including
section will be subject to a penalty as form including such other information reasonable inquiries to verify Q’s relationship
prescribed in section 6695(g) (indexed as may be prescribed by the IRS to the boys, and Preparer C must
for inflation under section 6695(h)) for applicable to each credit described in contemporaneously document these inquiries
each failure. A separate penalty applies paragraph (a) of this section claimed on and the responses.
with respect to each credit claimed on the return or claim for refund; or Example 2. Assume the same facts as in
a return or claim for refund for which (B) Otherwise record in one or more Example 1 of this paragraph (b)(3)(ii). In
documents in the tax return preparer’s addition, as part of preparing Q’s 2017
the due diligence requirements of this
paper or electronic files the tax return federal income tax return, Preparer C made
section are not satisfied and for which sufficient reasonable inquiries to verify that
the exception to penalty provided by preparer’s computation of the credit or the boys were Q’s legally adopted children.
paragraph (d) of this section does not credits claimed on the return or claim In 2019, Q engages Preparer C to prepare her
apply. for refund, including the method and 2018 federal income tax return. When
(2) Examples. The provisions of information used to make the preparing Q’s 2018 federal income tax return,
paragraph (a)(1) of this section are computations. Preparer C is not required to make additional
illustrated by the following examples: (ii) The tax return preparer’s inquiries to determine the boys relationship
completion of an applicable worksheet to Q for purposes of the knowledge
Example 1. Preparer A prepares a federal requirement in paragraph (b)(3) of this
income tax return for a taxpayer claiming the described in paragraph (b)(2)(i)(A) of
this section (or other record of the tax section.
CTC and the AOTC. Preparer A did not meet Example 3. In 2018, R, an 18 year-old
the due diligence requirements under this return preparer’s computation of the taxpayer, engages Preparer D to prepare R’s
section with respect to the CTC or the AOTC credit or credits permitted under 2017 federal income tax return. R completes
claimed on the taxpayer’s return. Unless the paragraph (b)(2)(i)(B) of this section) Preparer D’s standard intake questionnaire
exception to penalty provided by paragraph must be based on information provided and states that she has never been married,
(d) of this section applies, Preparer A is by the taxpayer to the tax return has one child, an infant, and that she and her
subject to two penalties under section
preparer or otherwise reasonably infant lived with R’s parents during part of
6695(g): One for failure to meet the due the 2017 tax year. R also provides Preparer
diligence requirements for the CTC and a obtained or known by the tax return
preparer. D with a Form W–2 showing that she earned
second penalty for failure to meet the due $10,000 during 2017. R provides no other
diligence requirements for the AOTC. (3) Knowledge—(i) In general. The tax
return preparer must not know, or have documents or information showing that R
Example 2. Preparer B prepares a federal earned any other income during the tax year.
income tax return for a taxpayer claiming the reason to know, that any information Based on the intake sheet and other
CTC and the AOTC. Preparer B did not meet used by the tax return preparer in information that R provides, Preparer D
the due diligence requirements under this determining the taxpayer’s eligibility believes that R may be eligible to claim the
section with respect to the CTC claimed on for, or the amount of, any credit infant as a qualifying child for the EIC and
the taxpayer’s return, but Preparer B did meet described in paragraph (a) of this the CTC. To meet the knowledge requirement
the due diligence requirements under this in paragraph (b)(3) of this section, Preparer
section with respect to the AOTC claimed on
section and claimed on the return or
claim for refund is incorrect. The tax D must make reasonable inquiries to
the taxpayer’s return. Unless the exception to determine whether R is eligible to claim
penalty provided by paragraph (d) of this return preparer may not ignore the
implications of information furnished these credits, including reasonable inquiries
section applies, Preparer B is subject to one to verify that R is not a qualifying child of
penalty under section 6695(g) for the failure to, or known by, the tax return preparer, her parents (which would make R ineligible
to meet the due diligence requirements for and must make reasonable inquiries if a to claim the EIC) or a dependent of her
the CTC. Preparer B is not subject to a reasonable and well-informed tax return parents (which would make R ineligible to
penalty under section 6695(g) for failure to preparer knowledgeable in the law claim the CTC), and Preparer D must
meet the due diligence requirements for the would conclude that the information contemporaneously document these inquiries
AOTC. and the responses.
furnished to the tax return preparer
(b) [Reserved]. For further guidance, appears to be incorrect, inconsistent, or Example 4. The facts are the same as the
see § 1.6695–2(b). incomplete. The tax return preparer facts in Example 3 of this paragraph (b)(3)(ii).
(1) Completion and submission of must also contemporaneously document In addition, Preparer D previously prepared
Form 8867. (i) The tax return preparer the 2017 joint federal income tax return for
in the files any inquiries made and the R’s parents. Based on information provided
must complete Form 8867, ‘‘Paid responses to those inquiries. by R’s parents, Preparer D has determined
Preparer’s Due Diligence Checklist,’’ or (ii) Examples. The provisions of that R is not eligible to be claimed as a
such other form and such other paragraph (b)(3)(i) of this section are dependent or as a qualifying child for
information as may be prescribed by the illustrated by the following examples: purposes of the EIC or CTC on R’s parents’
Internal Revenue Service (IRS), and— Example 1. In 2018, Q, a 22 year-old return. Therefore, for purposes of the
(A) through (C) [Reserved]. For further taxpayer, engages Preparer C to prepare Q’s knowledge requirement in paragraph (b)(3) of
guidance, see § 1.6695–2(b)(1)(i)(A) 2017 federal income tax return. Q completes this section, Preparer D is not required to
through (C). Preparer C’s standard intake questionnaire make additional inquiries to determine that
(ii) The tax return preparer’s and states that she has never been married R is not her parents’ qualifying child or
completion of Form 8867 must be based and has two sons, ages 10 and 11. Based on dependent.
on information provided by the taxpayer the intake sheet and other information that Q Example 5. In 2018, S engages Preparer E
sradovich on DSK3GMQ082PROD with RULES
to the tax return preparer or otherwise provides, including information that shows to prepare his 2017 federal income tax return.
that the boys lived with Q throughout 2017, During Preparer E’s standard intake
reasonably obtained or known by the tax interview, S states that he has never been
Preparer C believes that Q may be eligible to
return preparer. claim each boy as a qualifying child for married and his niece and nephew lived with
(2) Computation of credit or credits. purposes of the EIC and the CTC. However, him for part of the 2017 tax year. Preparer E
(i) When computing the amount of a Q provides no information to Preparer C, and believes S may be eligible to claim each of
credit described in paragraph (a) of this Preparer C does not have any information these children as a qualifying child for
section to be claimed on a return or from other sources, to verify the relationship purposes of the EIC and the CTC. To meet the
VerDate Sep<11>2014 15:57 Dec 02, 2016 Jkt 241001 PO 00000 Frm 00039 Fmt 4700 Sfmt 4700 E:\FR\FM\05DER1.SGM 05DER1](https://thefederalregister.org/doc/81_FR_87677/page/4.svg)
![87448 Federal Register / Vol. 81, No. 233 / Monday, December 5, 2016 / Rules and Regulations
knowledge requirement in paragraph (b)(3) of complete Form 8867 and/or an DEPARTMENT OF DEFENSE
this section, Preparer E must make applicable worksheet required under
reasonable inquiries to determine whether paragraph (b)(2)(i)(A) of this section (or Office of the Secretary
each child is a qualifying child for purposes
of the EIC and the CTC, including reasonable other record of the tax return preparer’s
computation permitted under paragraph 32 CFR Part 208
inquiries about the children’s parents and the
children’s residency, and Preparer E must (b)(2)(i)(B) of this section). [Docket ID: DOD–2013–OS–0021]
contemporaneously document these inquiries (ii) through (iii) [Reserved]. For
and the responses. RIN 0790–AJ01
Example 6. W engages Preparer F to
further guidance, see § 1.6695–2(b)(4)(ii)
prepare her federal income tax return. During through (iii). National Security Education Program
Preparer F’s standard intake interview, W (c) [Reserved]. For further guidance, (NSEP) and NSEP Service Agreement
states that she is 50 years old, has never been see § 1.6695–2(c). AGENCY: Under Secretary of Defense for
married, and has no children. W further
states to Preparer F that during the tax year (1) through (2) [Reserved]. For further Personnel and Readiness, DoD.
she was self-employed, earned $10,000 from guidance, see § 1.6695–2(c)(1) through ACTION: Final rule.
her business, and had no business expenses (2).
or other income. Preparer F believes W may SUMMARY: This final rule implements
be eligible for the EIC. To meet the
(3) The firm disregarded its the responsibilities of the Secretary of
knowledge requirement in paragraph (b)(3) of reasonable and appropriate compliance Defense for administering the National
this section, Preparer F must make procedures through willfulness, Security Education Program (NSEP) and
reasonable inquiries to determine whether W recklessness, or gross indifference explains the responsibilities of the
is eligible for the EIC, including reasonable (including ignoring facts that would Under Secretary of Defense for
inquiries to determine whether W’s business lead a person of reasonable prudence Personnel and Readiness (USD(P&R)) for
income and expenses are correct, and
and competence to investigate) in the policy and funding oversight for NSEP.
Preparer F must contemporaneously
document these inquiries and the responses. preparation of the tax return or claim for It discusses requirements for
Example 7. Y, who is 32 years old, engages refund with respect to which the administering and executing the NSEP
Preparer G to prepare his federal income tax penalty is imposed. service agreement and; and assigns
return. Y completes Preparer G’s standard (d) [Reserved]. For further guidance, oversight of NSEP to the Defense
intake questionnaire and states that he has
see § 1.6695–2(d). Language and National Security
never been married. As part of Preparer G’s Education Office (DLNSEO).
client intake process, Y provides Preparer G (e) Applicability date. This section DATES: This final rule is effective on
with a copy of the Form 1098–T Y received applies to tax returns and claims for
showing that University M billed $4,000 of January 4, 2017.
refund prepared on or after December 5,
qualified tuition and related expenses for Y’s FOR FURTHER INFORMATION CONTACT:
2016 with respect to tax years beginning Alison Patz, 571–256–0771.
enrollment or attendance at the university
and that Y was at least a half-time after December 31, 2015. For returns
SUPPLEMENTARY INFORMATION: On
undergraduate student. Preparer G believes and claims for refund prepared before
November 9, 2015, the Department of
that Y may be eligible for the AOTC. To meet December 5, 2016 with respect to tax
Defense published a proposed rule
the knowledge requirements in paragraph years beginning before January 1, 2016,
(b)(3) of this section, Preparer G must make titled, ‘‘National Security Education
the rules that apply are contained in Program (NSEP) and NSEP Service
reasonable inquiries to determine whether Y § 1.6695–2 in effect prior to December 5,
is eligible for the AOTC, as Form 1098–T Agreement,’’ (80 FR 69166–69171) for a
does not contain all the information needed 2016. (See 26 CFR part 1 revised as of 60-day public comment period. The
to determine eligibility for the AOTC or to April 2016). public comment period closed on
calculate the amount of the credit if Y is (f) Expiration date. This section will January 8, 2016. No public comments
eligible, and contemporaneously document expire on December 5, 2019. were received.
these inquiries and the responses. After the 60-day public comment
(4) Retention of records. (i) PART 602—OMB CONTROL NUMBERS period for the proposed rule, minor
[Reserved]. For further guidance, see UNDER THE PAPERWORK administrative edits were made to
§ 1.6695–2(b)(4)(i). REDUCTION ACT provide clarity or remove outdated,
(A) [Reserved]. For further guidance, unnecessary, or confusing language in
see § 1.6695–2(b)(4)(i)(A). ■ Par. 4. The authority citation for part the regulatory text due to an internal
(B) A copy of each completed 602 continues to read as follows: DoD re-organization. Offices and
worksheet required under paragraph symbols have been updated to reflect
(b)(2)(i)(A) of this section (or other Authority: 26 U.S.C. 7805. the most current organizational
record of the tax return preparer’s § 602.101 [Amended] structure.
computation permitted under paragraph
(b)(2)(i)(B) of this section); and Background
■ Par. 5. In § 602.101, paragraph (b) is
(C) A record of how and when the amended by removing the entry for The David L. Boren National Security
information used to complete Form § 1.6695–2 from the table. Education Act of 1991 (Title VIII, Pub.
8867 and the applicable worksheets L. 102–183), as amended, codified at 50
required under paragraph (b)(2)(i)(A) of John M. Dalrymple, U.S.C. 1901 et seq. (NSEA), mandated
this section (or other record of the tax Deputy Commissioner for Services and that the Secretary of Defense create and
return preparer’s computation permitted Enforcement. sustain a program to award scholarships
sradovich on DSK3GMQ082PROD with RULES
under paragraph (b)(2)(i)(B) of this Approved: November 21, 2016. to U.S. undergraduate students,
section) was obtained by the tax return Mark J. Mazur, fellowships to U.S. graduate students,
preparer, including the identity of any and grants to U.S. institutions of higher
Assistant Secretary of the Treasury (Tax
person furnishing the information, as education.
Policy).
well as a copy of any document that was The NSEP is authorized through 50
[FR Doc. 2016–28993 Filed 12–2–16; 8:45 am]
provided by the taxpayer and on which U.S.C. 1901–1912 to award
the tax return preparer relied to BILLING CODE 4830–01–P scholarships, fellowships, and grants to
VerDate Sep<11>2014 15:57 Dec 02, 2016 Jkt 241001 PO 00000 Frm 00040 Fmt 4700 Sfmt 4700 E:\FR\FM\05DER1.SGM 05DER1](https://thefederalregister.org/doc/81_FR_87677/page/5.svg)
Document Created: 2016-12-03 00:25:58
Document Modified: 2016-12-03 00:25:58
| 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 and temporary regulations. | |
| Contact | Rachel L. Gregory, 202-317-6845 (not a toll-free number). | |
| FR Citation | 81 FR 87444 | |
| RIN Number | 1545-BN61 | |
| CFR Citation | 26
CFR
1 26 CFR 602 | |
| CFR Associated | Income Taxes and Reporting and Recordkeeping Requirements |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR