- 32.1.2.1 The Legal File
- 32.1.2.2 Opening a Regulation Project
- 32.1.2.3 Overview of Relevant Federal Administrative Law
- 32.1.2.4 OMB Notice of Planned Regulatory Action (7-Point Memo)
- 32.1.2.5 Applicability of Paperwork Reduction Act
- 32.1.2.6 Procedural Updates during the Life of Regulation Project
- Exhibit 32.1.2-1 Regulatory Information Service Center Regulatory Information Data Form
- Exhibit 32.1.2-2 Instructions for Completing the Regulatory Information Data Form
- Exhibit 32.1.2-3 Sample 7-Point Memo
- Exhibit 32.1.2-4 OMB Form 83-I, Paperwork Reduction Act Submission
- Exhibit 32.1.2-5 Instructions for Completing OMB Form 83-I
- Exhibit 32.1.2-6 Supporting Statement for Paperwork Reduction Act Submissions
- Exhibit 32.1.2-7 Model Language for NPRM with a Collection of Information
- Exhibit 32.1.2-8 Model Language for Temp With a Collection of Information
- Exhibit 32.1.2-9 Model Language for Final with a Collection of Information
- Exhibit 32.1.2-10 Model Language for "No-Change" Memo
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The drafting team is responsible for creating the legal file and should begin compiling the file as soon as the regulation project is opened. The legal file consists of several folders (Form 7881A , Chief Counsel File) that contain all documents related to the publication of the regulation. The documents are assembled in accordance with Form 9506, Treasury Decision File Closing Information Sheet and Assembly Checklist. Each folder should be numbered and labeled with the title of the project and the project number.
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The legal file should contain:
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Requests received from either internal or external sources for the published guidance
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A copy of the CASE-MIS control screen
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All initialed copies of the regulation
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All significant drafts of the regulation
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Briefing memoranda, briefing confirmation, and Conference Reports
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IRS and Treasury memos, transmittal and policy memos, and internal comments
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Pertinent handwritten notes and email communications (in reverse chronological order)
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Public comment letters
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Articles about the subject matter of the regulation
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Administrative memos and forms — CASE-MIS form, 7-point memo, completed Regulatory Flexibility Act checklist, closing memo, plain language summaries, Executive Summary, Background Memorandum, and material prepared pursuant to the Paperwork Reduction Act and Small Business Regulatory Fairness Enforcement Act
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Final Congressional Review Act material
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Federal Register reprint
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A regulation project may be opened only with the approval of the Associate Chief Counsel and Treasury. Each Associate’s office will determine the personnel that may open a regulation project on CASE-MIS.
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Regulation projects are tracked on the Technical Management Information System (TECHMIS, which is part of Counsel’s Automated System Environment (CASE-MIS), under the PUBGUID category and the REG subcategory (and in limited situations, the PGP subtype, see CCDM 32.1.2.2.1). CASE-MIS is designed to track the progress of a regulation project throughout the entire life of the project. The drafting attorney must ensure that TECHMIS is updated to reflect the interim milestones during the development of the regulation. See CCDM 32.1.2.6.2 for a further discussion of interim milestones.
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Open only one regulation project for a temporary regulation with a cross-referencing NPRM. When the IRS publishes a temporary regulation and a cross-referencing NPRM, the project ID remains open until the IRS publishes the NPRM as a final regulation or withdraws it.
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Occasionally, Counsel and Treasury will decide to issue several final regulations with respect to one NPRM. The first final regulation retains the original project ID. After publishing the first final regulation, close that project ID. Open a new project ID for each subsequent final regulation project.
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See CCDM 32.1.8 and CCDM 32.1.9 for further discussions of procedures for tracking and closing regulation projects.
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Published Guidance/Proposals and Studies (PGP) is a CASE-MIS subcategory (under the Published Guidance category). Counsel opens a project as a PGP when the IRS, Counsel, and Treasury have not determined what form of published guidance should be issued. PGP projects may be included on the GPL.
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Counsel also opens a PGP project for work (preparation and review) on special studies of technical issues requiring extensive research. For example, Counsel may open a PGP for: (1) study to determine the need for legislation or regulation on a particular tax issue, (2) review of an IRS position to determine whether action is necessary, and (3) Congressionally mandated studies.
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PGP projects may result in a regulation project. When that occurs, the drafting attorney should close the PGP project and open a REG project on CASE-MIS.
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PGP projects are not included in the Semiannual Agenda ( see CCDM 32.1.2.6.4).
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When a regulation project is opened, CASE-MIS assigns the project a unique identifying (project ID) number. The project ID number has three elements.
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The first is the letters "REG" , to identify the project as a regulation project (or "PGP" , to identify it as a Published Guidance Project).
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The second is a sequentially assigned number that represents the order in which the project was opened during the calendar year.
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The third identifies the calendar year in which the project was opened.
Example:
REG-134026-02
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Continue using the project ID for all stages of the project until a final regulation is published or the project is closed without regulations. See CCDM 32.1.8 and CCDM 32.1.9 for further discussions of procedures for tracking and closing regulation projects.
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Once the drafting attorney begins working on the regulation project, the drafting attorney or branch reviewer should coordinate the project with the Division Counsel and other Associate offices through their publication coordinators (or other person specifically designated as the contact person for the project). Each Division Counsel is responsible for further coordination within their respective office and with their respective Operating Divisions. See CCDM 32.1.6.1 for a further discussion of coordination with Division Counsel and IRS Offices.
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After a regulation project is opened, a FRL will be assigned to the project. The person assigning the FRL enters the FRL assignment on CASE-MIS.
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The FRLs are experts on the Federal Register formatting and stylistic requirements. The drafting attorney should consult with the FRL assigned to the project when drafting the regulation to ensure that the regulation complies with the format and stylistic requirements for Federal Register documents. The FRL serves as the IRS’s representative with the OFR for the regulation project.
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After the first working draft of the regulation is completed and has been approved by the branch reviewer, and prior to the Assistant/Associate Chief Counsel review, the drafting attorney must provide a copy to the assigned FRL for review. The FRL should review and provide comments on the green circulation draft and the signature package draft regulation prior to those circulations. The drafting team should not send the regulation forward in green circulation and in signature package until the regulation has been reviewed by the FRL and the FRL’s changes have been made to the regulation. The FRL reviews the regulation again before it is submitted to the OFR.
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In emergency situations, when the assigned FRL is absent, the drafting attorney should contact another FRL to review the regulation project at any stage of the project.
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The Regulatory Information Service Center (RISC) of the General Services Administration (GSA) uses a Regulation Identifier Number (RIN) to track every regulation project under development in all agencies of the Federal government. The Office of Management and Budget (OMB) requests that agencies include RINs in the heading of regulations published in the Federal Register.
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Shortly after opening a regulation project, the drafting attorney should request a RIN. The drafting attorney should contact the Publications and Regulations Branch to obtain a RIN Data Form. Return the completed Regulatory Information Service Center Regulatory Information Data Form (Exhibit 32.1.2-1 or www.reginfo.gov) to the Publications and Regulations Branch, and a specialist in the Publications and Regulations Branch will obtain the RIN from OMB. If a RIN is requested, the project will be included on the Semiannual Agenda, which is available to the public.
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A final regulation uses the same RIN as the underlying NPRM. If an NPRM is followed by multiple final regulations, the drafting attorney should obtain a new RIN for the second and any other subsequent final regulation. In the case of a temporary regulation cross-referencing an NPRM, the TEMP and NPRM each have a separate RIN.
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The RIN consists of two elements: "1545-" , which identifies the project as an IRS project, followed by an alphanumeric element composed of two capital letters and two numeric digits.
Example:
1545-AQ23
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See Exhibit 32.1.2-1 Regulatory Information Service Center Regulatory Information Data Form and Exhibit 32.1.2-2 Instructions.
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Each part in Title 26 of the CFR deals with a particular subject matter, some broad, some narrow. For example, part 1 pertains to income tax, while part 41 pertains to excise tax on use of certain highway motor vehicles. The drafting attorney must determine to which CFR part the regulation belongs.
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The OFR sometimes allows a regulation to be keyed to a specific paragraph within a section of the Code, rather than to the section itself (for example, §1.401(k)-1 is keyed to paragraph 401(k) of the Code). This numbering system offers advantages in identifying regulations under an especially lengthy or complex section of the Code. However, the OFR severely restricts its use because variations in the standard numbering system introduce further complexity into the CFR citation system.
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Although a -0 section, if used, usually contains a table of contents, it may also include an overview, effective date, or any other information that is more conveniently presented at the very beginning of the regulation. The section heading must clearly identify what material is covered in the section.
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Temporary regulations are designated with "T" as the final character in the section number and "(temporary)" at the end of the section heading (for example, §1.280F-4T Special rules for listed property (temporary)).
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Several Federal administrative laws and procedures apply to the regulatory process. IRS/Treasury regulations are also subject to section 7805 of the Code. The drafting team must include a description of IRS compliance with these requirements in the Supplementary Information section of the Preamble.
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Paperwork Reduction Act. The Paperwork Reduction Act (PRA) requires Federal agencies to obtain OMB approval before enforcing any "collection of information" requirement. Generally, the term "collection of information" includes reporting, recordkeeping, or disclosure requirements imposed on ten or more persons. A collection of information in a regulation is presumed to involve 10 or more persons. See CCDM 32.1.2.5 for further discussion of the PRA.
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Administrative Procedure Act. The Administrative Procedure Act (APA) requires agencies to publish Notices of Proposed Rulemaking (NPRMs) in the Federal Register and permit the public to submit comments. The APA also requires that regulations be published at least 30 days prior to their effective date. Interpretative regulations are generally not subject to the APA provisions on rulemaking, including its notice and comment requirements. However, although most IRS/Treasury regulations are interpretative, the IRS usually publishes its NPRMs in the Federal Register and solicits public comments.
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Executive Order 12866. Executive Order 12866 (E.O. 12866) requires agencies to notify OMB of all planned regulatory actions by preparing the 7-Point memorandum. Executive Order 12866 also requires a regulatory assessment of all regulations characterized as "significant. " Generally, IRS/Treasury regulations are not "significant " as defined in the Order. See CCDM 32.1.5.4.7.5.3 for further discussion of E.O. 12866.
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Regulatory Flexibility Act. Congress enacted the Regulatory Flexibility Act (RFA) to ensure that agency regulations and information requirements are appropriate in scope for the businesses, organizations, and governmental jurisdiction regulated. RFA applies to interpretative regulations containing an information reporting requirement and to all legislative regulations. If the regulation is subject to RFA, the drafting team must prepare a "reg flex" analysis to determine whether the collection of information requirement (or, in the case of a legislative regulation, the rule itself) will have a "significant economic effect" on a substantial number of small entities. If the collection of information requirement/rule will not impose this adverse effect, an agency may certify that RFA does not apply. The drafting attorney must include a RFA checklist in the signature package. See CCDM 32.1.5.4.7.5.4 for further discussion on RFA.
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Sections 7805(e) and (f). Section 7805(e)(1) of the Code provides that a temporary regulation must be published also as an NPRM. Section 7805(e)(2) provides that temporary regulations expire within three years of the date issued. Section 7805(f) of the Code provides that a final regulation, not superseding an NPRM, must be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment at least four weeks before the date of publication. Sections 7805(f)(1) and (2) require that, after publication, proposed and temporary regulations must be sent to the Small Business Administration for its comments on the regulation’s effect on small businesses. If the IRS receives comments, the preamble to the final regulations must discuss the comments. The Publications and Regulations Branch sends the regulation to the Small Business Administration after it is published in the Federal Register.
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Small Business Regulatory Enforcement Fairness Act. The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) added chapter 8 to title 5, United States Code (Congressional Review Act). The Congressional Review Act (CRA) provides that temporary and final rules cannot become effective until the issuing agency submits a report to the House of Representatives, the Senate, and the Comptroller General of the General Accounting Office. The IRS meets this requirement by submitting a SBREFA form (also known as a Congressional Review Act form or CRA form), the regulation, the plain language summary, and other supporting documents. Note that, unlike other requirements, the preamble to the regulations does not discuss compliance with SBREFA. See CCDM 32.1.6.11.2.5 for further discussion of Congressional Review of rules.
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Pursuant to E.O. 12866, OMB reviews all regulatory actions prior to publication. Regulatory actions are any substantive action normally published in the FR that are expected to lead to a final regulation (for example, ANPRMs and NPRMs). The Notice of Planned Regulatory Action (7-point memo) is the Service’s notification to OMB of its intent to publish a regulation.
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The 7-point memo (that actually contains 8 points) provides the following information:
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Title and CASE-MIS ID number of the regulation,
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Whether the regulatory action is significant, as defined in E.O. 12866. State the significance of the regulation (i.e., economically significant; significant; not significant). A significant regulatory action is a regulatory action that is likely to result in a rule that may:
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Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities,
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Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency,
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Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof, or
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Raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in E.O. 12866. In the rare case that an IRS/Treasury regulatory action is determined to be significant, submit to OMB a cost-benefit analysis and a regulatory assessment. OMB has issued guidance on what is required for an effective cost-benefit analysis. See www.whitehouse.gov/omb/inforeg/riaguide.html.
Note:
IRS/Treasury regulations are rarely significant regulatory actions because the effect of the rule is usually due to the underlying statute, rather than to the regulation.
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Upcoming Action (ANPRM, NPRM, etc.),
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Expected date of publication in the Federal Register, or expected date of submission to OMB for review, as applicable,
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RIN,
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Statutory/Judicial Deadline, if applicable,
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Brief plain language description of the regulation, and
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Agency Contact (name and telephone number of Chief Counsel attorney who can respond to questions about the regulation).
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The drafting attorney must prepare and submit the 7-point memo regarding the regulation as early in the drafting process as possible, but no later than two months before the planned publication date.
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If the IRS plans to issue a temporary regulation (TEMP) with a cross-referencing NPRM, the drafting attorney prepares only one 7-point memo. The drafting attorney should include the RINs (see CCDM 32.1.2.2.5) for both the TEMP and the cross-referencing NPRM on the 7-point memo.
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The drafting attorney must prepare a new 7-point memo for a final regulation.
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The drafting attorney must email the 7-point memo to the Priority Guidance Plan Administrator (Management Analyst, Office of the Associate Chief Counsel, Financial Institutions and Products) as an email attachment. The Priority Guidance Plan Administrator will forward it to the Senior Advisor to the General Counsel for Regulatory Affairs at Treasury for submission to OMB. The Priority Guidance Plan Administrator maintains a status report of 7-point memos that are due and that have been submitted, which are periodically distributed to each Associate office for updating. If a regulation has not been published within a year of submission of the 7-point memo, a new 7-point memo should be submitted, which will be reflected on the status report.
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If a regulation must be published within 12 working days of when the 7-point memo was submitted or if the IRS plans to publish a regulation within two months of opening the project, the drafting attorney must notify the Senior Advisor to the General Counsel for Regulatory Affairs. See Exhibit 32.1.2-3, Sample 7-Point Memo.
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The Paperwork Reduction Act (44 U.S.C. 3501-3520) requires that, before any information collection request in a regulation may be enforced, the agency must:
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Request and obtain OMB approval for the information collection request,
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Explain in the information collection request how the information is to be used,
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State in the information collection request whether responses to the request are voluntary, required to obtain a benefit, or mandatory, and
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Display the OMB assigned control number on the information collection request.
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In general, the term "collection of information" means a reporting, recordkeeping, or disclosure requirement that is imposed on ten or more persons. A collection of information in an IRS/Treasury regulation is presumed to be imposed on 10 or more persons. It does not matter whether the requirement is voluntary or mandatory, or if the requirement is imposed by statute.
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The term "reporting requirement" means a requirement that persons provide information to an entity of the Federal government. For example, a regulation that requires a separate statement to be attached to a tax return imposes a paperwork burden subject to the PRA. However, a regulation that requires a form to be filed does not impose a paperwork requirement subject to the PRA because the form, and not the regulation, is the " instrument of collection" that is subject to the PRA.
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The term "recordkeeping requirement" means that a person must maintain specified records, whether or not an entity of the federal government or any other person actually seeks access to the records or is provided those records. The mandate to maintain specified records is a requirement in addition to the general books and records requirement of section 6001 of the Code. Thus, because a recordkeeping requirement is one that requires specified records, a regulation that does not require that particular records be maintained, but nonetheless prompts some taxpayers to maintain records consistent with the provisions of section 6001, does not impose a recordkeeping requirement. This is an important distinction for purposes of determining whether the Regulatory Flexibility Act applies to the regulation. See CCDM 32.1.5.4.7.5.4 for further discussion of the Regulatory Flexibility Act.
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The term "disclosure requirement" means that a person must disclose information to another person, the Federal government, or to the public.
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A regulation contains a collection of information if it requires:
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Partnerships to provide annual statements to partners that list the amount of each partner’s share of the partnership&rsquos adjusted bases of depreciable property,
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Taxpayers to attach a prescribed statement to their federal income tax return if they want to make an election, or
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Employers to keep a copy of employee reimbursement requests for seven years.
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A regulation contains a collection of information if it imposes a new requirement or if it removes, increases, or decreases an existing requirement. The collection of information can be on paper or in electronic format.
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If the regulation contains a collection of information, the drafting team must estimate the number of taxpayers affected and the time needed to comply with the collection of information. The drafting team must also include the burden estimates in the OMB submission.
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If the drafting attorney is unsure whether the regulation contains a collection of information requirement, or to obtain assistance in determining the estimates specified in the preceding paragraph, he or she should consult with the IRS Reports Clearance Officer or the Paperwork Reduction Act contact person in the Special Programs Branch of the IRS Tax Forms and Publications division, SE:W:CAR:MP:T:T:SP.
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The PRA is available at http://www.archives.gov/federal_register/public_laws/acts.html - pra. Additional information about PRA compliance is available at www.whitehouse.gov/omb/inforeg/infocoll.html
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If an NPRM contains a collection of information requirement, the drafting attorney must complete OMB Form 83-I, "Paperwork Reduction Act Submission, and a Supporting Statement." As soon in the drafting process as final decisions are made with respect to a regulation’s collection of information requirements, the drafting attorney must provide the Paperwork Reduction Act contact person with:
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OMB Form 83-I
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Supporting Statement
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Copy of the regulation
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Copy of the underlying statute
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The drafting attorney should submit hard copies of these documents and send an email attaching any electronic versions. The drafting attorney should contact the Paperwork Reduction Act contact person for questions regarding the OMB Form 83-I or the Supporting Statement. See Exhibit 32.1.2-4, OMB Form 83-I, Paperwork Reduction Act Submission; Exhibit 32.1.2-5, Instructions For Completing OMB Form 83-I; Exhibit 32.1.2-6, Supporting Statement For Paperwork Reduction Act Submissions; and Exhibit 32.1.2-7, Model Language For NPRM With A Collection Of Information.
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For NPRMs, OMB must receive the OMB Form 83-I package by the date of publication. OMB has 60 days to either submit comments or approve the collection of information. If approved, OMB will assign the regulation an OMB control number.
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For a temporary regulation with a cross-referencing NPRM, the drafting attorney prepares only one OMB Form 83-I package. The drafting attorney should submit the OMB Form 83-I package to the Paperwork Reduction Act contact person at the time the signature package is circulated. OMB approval of the regulation is required before publication. OMB has at least 60 days to review the collection of information requirements in the temporary regulation. The drafting attorney should contact the Paperwork Reduction Act contact person if the regulation is "fast track" so that OMB approval may be requested on an expedited basis. See Exhibit 32.1.2-8, Model Language for Temp with a Collection of Information.
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If a final regulation was preceded by an NPRM, the collection of information in the NPRM was approved by OMB, and the collection of information requirements are not changed in the final regulation, the drafting attorney prepares a "no-change" memo. The drafting attorney should provide the Paperwork Reduction Act contact person with four copies of the memo and four copies of the regulation. See Exhibit 32.1.2-9, Model Language For Final With A Collection Of Information and Exhibit 32.1.2-10, Model Language For "No-Change" Memo.
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If the collection of information requirements in the NPRM changes in the final regulation (increased, decreased, removed) or if the regulation has a new collection of information, a new OMB Form 83-I package may be necessary. The drafting attorney should submit the new OMB Form 83-I package to the Paperwork Reduction Act contact person at the time the signature package is circulated.
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When OMB assigns a control number, it also assigns an expiration date for the number. The expiration date varies but is usually three years from the approval date. The Paperwork Reduction Act contact person will contact the drafting attorney when a control number is about to expire. To renew the control number, a revised OMB Form 83-I package is prepared to reflect changes in the collection of information burden.
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During the life of a regulation project, the drafting team or Associate office must provide periodic updates regarding the regulation.
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The drafting attorney is responsible for ensuring that a regulation project is opened, updated to reflect milestones during the development of the regulation, and closed in accordance with the CASE-MIS handbook.
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In a report dated March 31, 2003, the Office of Chief Counsel agreed to consider formalizing certain aspects of how it manages the published guidance process. The Office of Chief Counsel concluded that establishing formal interim milestones will assist in identifying whether a published guidance project is on track to be issued by its target publication date. In reaching this decision, it was recognized that interim milestones are a basic management tool that was already in use.
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The formal interim milestones set forth below, are not intended to be used as an inflexible deadline, however. Rather, the executives involved in the published guidance process understand that target dates are changed for a variety of reasons inherent in that process. Therefore, the Office of Chief Counsel believes that it is more important for the Associate offices to meet the target publication dates of the individual projects than the interim milestones, and that an annual measurement is a more accurate reflection of the relative success of the Associate office in publishing guidance than a measurement of whether interim milestones have been met.
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Each Associate office may use one or more of the following interim milestones to track the progress of published guidance projects:
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Issues memorandum approved
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Coordination with other offices before initial "green" circulation draft
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Initial "green" circulation draft
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Coordination with Treasury on material issues
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Chief Counsel or Joint briefing
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Associate offices should identify which of these milestones may be appropriate for each project and establish target dates for completion. Whether any specific interim milestone, or a substitute, is appropriate for a project is within the judgment and discretion of the Associate office. Also, there is no prescribed order for completion of the milestones. The milestones established and the order in which they are completed will be governed by factors such as the complexity of the project and type of guidance to be issued, as well as the relationship a particular office has with Treasury and the participating Operating Divisions. It is anticipated that the need for particular milestones will be revisited throughout the plan year as published guidance projects progress towards completion and as new developments arise.
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These interim milestones, in conjunction with the target publication date, should provide an early warning of whether delays are being encountered with respect to a project, without imposing an undue administrative burden on the Associate office. Progress on these milestones, specifically, whether and which of the interim milestones have been completed, when viewed in relation to the target publication date, will assist in determining which projects are subject to delay.
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The preparation of an issues memorandum is strongly encouraged for virtually all published guidance projects. Ideally, an issues memorandum will be prepared at a relatively early stage in the process, preferably before any significant drafting has been done. For certain more complex projects, it may be desirable to prepare additional issues memoranda as the project progresses to reflect newly identified issues and recommendations or significant revisions to the previously identified issues and recommendations. This may be appropriate, for example, in advance of a Chief Counsel or Joint briefing.
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There is no prescribed format for the issues memorandum and the level of detail is left to the discretion of the Associate office. In general, however, the issues memorandum should identify the significant issues raised in the project and should include an analysis and recommended resolution. The issues memorandum should present alternative and opposing positions, as well as whether coordination with specific offices is needed to prepare a " green" circulation draft.
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Preparation of an issues memorandum will assist the Associate office in determining which other milestones would be appropriate for the project, such as whether coordination should occur prior to circulation of a draft or whether a Chief Counsel or Joint briefing will be needed.
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This milestone will be considered to have been completed when the initial issues memorandum is approved by the Associate Chief Counsel. In general, the target date to accomplish this milestone should be well before the target publication date.
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This milestone is designed to ensure that the Associate office coordinates with other Associate offices, Division Counsel, or IRS functions that are either directly affected by an issue in the project or with subject matter jurisdiction over an issue in the project. This coordination may be formal or informal and should be prior to any widespread circulation of a draft. It is expected that the coordination contemplated by this milestone will ordinarily occur at the developmental stage of the process, such as during the preliminary draft or precirculation stage.
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It is recognized, however, that this milestone may be appropriate more than once during the course of the project, since the need for additional coordination with other offices may arise as the project progresses. In this regard, the circulation of preliminary drafts to a wider audience is strongly encouraged. Required coordination with other offices is discussed in CCDM 32.1.1.4.5, CCDM 32.1.2.2.3, CCDM 32.1.6.1, CCDM 32.1.6.2, and CCDM 32.1.6.4.
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This milestone will be considered to have been completed when responses have been received from the relevant offices or functions and any disagreements have been resolved, using the reconciliation procedures described in CCDM 32.1.6.3, if necessary. In general, the target date to accomplish this milestone should be several months prior to the target publication date.
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This milestone is mandatory for all published guidance projects. The "green" circulation draft is discussed in CCDM 32.1.6.7. This milestone is intended to provide offices that are not involved in the development of a project with a meaningful opportunity for comment.
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The existing practice in some offices has been to only do a general "green" circulation shortly before the expected publication of the project. This practice tends to minimize any meaningful opportunity for comment by functions that were not previously involved in the drafting process and frequently results in consternation and resistance on the part of the initiating Associate office when comments are received late in the game that may delay or derail the project. Consequently, the circulation of preliminary drafts to a wider audience is strongly encouraged. Moreover, the "green" circulation draft should ordinarily be circulated several months prior to the date the Associate office anticipates beginning the formal approval process for the "pink" signature package. Depending on the nature and extent of the comments received, it is sometimes appropriate to circulate additional drafts prior to beginning the "pink " signature package approval process.
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This milestone will be considered to have been completed when a draft is widely circulated outside the Associate office responsible for the project. In general, the target date for this milestone should be about 2 to 4 months prior to the target publication date.
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This milestone entails soliciting input from Treasury regarding material issues in the project. Material issues are those issues requiring direction from Treasury in order to meaningfully move the project towards completion. Ideally, this coordination will occur at a relatively early stage in the process. It is recognized, however, that this milestone may be appropriate more than once during the course of the project, since the need for additional coordination with Treasury may arise as the project progresses and additional issues are identified and developed.
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This milestone differs from the Joint briefing milestone described in CCDM 32.1.2.6.2.5 in that the coordination contemplated in this milestone is generally informal and is at a level below the Assistant Secretary for Tax Policy.
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This milestone will be considered to have been completed when a response is received from Treasury.
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This milestone is appropriate when a decision is needed by the Chief Counsel or Assistant Secretary for Tax Policy regarding policy or other significant issues in the project. A Chief Counsel or Joint briefing is often used to resolve conflicts. In some complex projects, more than one Chief Counsel or Joint briefing may be needed.
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A Chief Counsel or Joint briefing is a formal briefing at which all interested offices or functions will be represented. Accordingly, a briefing package normally will be distributed ahead of time to the participants and a conference memorandum will be prepared after the briefing summarizing the decisions that were made at the briefing.
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This milestone will be considered to have been completed when the first Chief Counsel or Joint briefing is held.
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A supplemental screen has been added to the TECHMIS business plan screen to track the interim milestones. The milestone screen contains a field to enter a target date for each of the milestones, as well as a check box to indicate that a milestone has been completed. It is expected that target dates for the interim milestones that are considered appropriate for the project will be established near the beginning of the business plan year or shortly after a project is opened, for projects that are begun during the business plan year. If a need for an additional interim milestone is identified during the development of the project, a target date for that milestone may be entered at that time. This could occur, for example, if an unexpected conflict arises with another Associate office concerning an issue in the project at the "green" circulation draft stage and the Associate office determines that a Chief Counsel briefing is needed to resolve the matter.
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Since the interim milestones are intended to be a management tool, not an evaluative tool, the target dates for the milestones may be changed by the Associate office as appropriate. In addition, there is only one target date field per interim milestone, which will be overridden whenever a new target date is entered for that milestone.
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Each Associate office enters status report and progress updates into CASE-MIS. The Guidance Priority List Plan Administrator (Management Analyst, Office of the Associate Chief Counsel, Financial Institutions and Products) distributes a report providing periodic updates.
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Pursuant to the Regulatory Flexibility Act and section 4(b) of E.O. 12866, each April and October OMB publishes a government-wide Unified Agenda of Federal Regulatory and Deregulatory Actions (Semiannual Agenda). Semiannual Agendas describe all regulations under development or review during the upcoming 12 months following publication of the Semiannual Agenda in the Federal Register. This includes, at a minimum, any plans to publish or otherwise implement an ANPRM, NPRM, or TD. Inclusion of activities that will have a next action beyond 12 months is optional.
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A regulation with a RIN is automatically included in subsequent Semiannual Agendas until the RIN is closed or the regulation is published as a rule (TEMP or Final Regulation). This information is available to the public.
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During July and January of each year, the Publications and Regulations Branch prepares the IRS portion of the Semiannual Agenda. The Publications and Regulations Branch sends instructions to the Associate offices to provide the information and updates needed to prepare the Semiannual Agenda. The Publications and Regulations Branch also sends copies of Regulatory Information Service Center (RISC) Update Documents (UDs) for the regulation projects assigned to each Associate office. Deadlines set by the Publications and Regulations Branch for the Associate offices to submit all required information and updates are generally firm because the Publications and Regulations Branch’s deadlines for submitting information to RISC are firm.
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The Semiannual Agenda is available at www.reginfo.gov (click on Unified Agenda and Regulatory Plan).
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Pursuant to section 4(c) of E.O. 12866, an annual Regulatory Plan is prepared for the October – September fiscal year. The Regulatory Plan is a single Government-wide document that OMB publishes in the Federal Register during October. The Regulatory Plan describes the most important significant regulatory and deregulatory actions that will help implement the Administration’s policies and priorities that each agency reasonably expects to issue in proposed or final form during the upcoming fiscal year. IRS/Treasury regulations are rarely considered significant regulatory actions. However, each department or agency’s section of the Regulatory Plan contains a narrative statement of its regulatory priorities. Included in IRS/Treasury’s narrative statement are descriptions of regulatory projects to which the IRS will accord priority during the upcoming fiscal year.
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Each summer (usually July or August), each Associate office is asked to identify and describe two or more of its most important regulatory actions (priority projects) from the current Guidance Priority List that the office reasonably expects to issue in proposed or final form during the upcoming Regulatory Plan fiscal year. The description for each priority project includes the need for the project, any past actions related to it, the problem/issue the regulations will address, and whether the project will be a TD or NPRM. The combined list is reviewed by the Chief Counsel’s office, which selects and prioritizes the proposed IRS list. The IRS list is then reviewed and cleared by various Treasury officials and approved by (or on behalf of) the Secretary of the Treasury.
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The Regulatory Plan is published with the October Semiannual Agenda, and is available at http://www.reginfo.gov/ (click on Unified Agenda and Regulatory Plan).
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The drafting team must prepare a plain language summary (PLS) of the regulation that is included in the signature package. The PLS explains the issue addressed in the regulation in a manner easily understood by taxpayers with little or no knowledge of the tax laws. Ideally, the PLS should be six lines or less. Its purpose is to notify taxpayers (particularly individuals and small businesses) of the new regulations, explain how to get more information, and help taxpayers to determine whether they may be affected and whether to consult a tax advisor. Despite its title, the PLS is not intended to explain or summarize the substance of the regulation.
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The PLS is posted on the IRS Tax Regulations web site and on the government-wide regulations web site (www.regulations.gov) when the regulations are posted.
| Notice of Planned Regulatory Action |
| Pursuant to Executive Order 12866 |
| DEPARTMENT OF THE TREASURY |
| Agency: Internal Revenue Service |
| Title: REG-1 03694-99 Rental Agreements With Payments of $2,000,000 or Less |
| Significance: Not Significant |
| Upcoming Action: NPRM |
| Planned Publication Date: March 31, 1999 |
| RIN 1545-AW75 |
| Statutory/Judicial Deadline: Not Applicable |
| Description: The section 467 final regulations, which will appear in the same issue of the Federal Register as this Notice of Proposed Rulemaking, provide that the amount of fixed rent that must be taken into account by a lessor and lessee for a rental period is either the amount of fixed rent allocated to the period under the agreement, the proportional rental amount, or the constant rental amount (constant rental accrual). The constant rental amount is to be used only where the section 467 rental agreement is a disqualified leaseback or long-term agreement. Under the section 467 final regulations, a rental agreement will not be a disqualified leaseback or long-term agreement, and, consequently, will not be subject to constant rental accrual, if it requires $2,000,000 or less in rental payments and other consideration. |
| The IRS and Treasury Department have reconsidered the $2,000,000 constant rental accrual exception and determined that it should be eliminated from the section 467 final regulations. Accordingly, this Notice of Proposed Rulemaking will make rental agreements involving payments of $2,000,000 or less subject to constant rental accrual. |
| Agency Contact: Forest Boone (202) 622-4960 |
| SUPPORTING STATEMENT | |
| 1. | CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATI0N |
| Explain the circumstances that make the collection of information necessary. Include any legal or administrative requirements that necessitate the collection. | |
| A copy of the appropriate section of each statute and of each regulation mandating or authorizing the collection of information should be attached to the supporting statement. | |
| 2. | USE OF DATA |
| Indicate how, by whom, and for what purpose the information is to be used. | |
| 3. | USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN |
| There are no plans to provide electronic filing because electronic filing is not appropriate for the collection of information in this submission. | |
| or | |
| We have no plans to offer electronic filing. IRS publication, regulations, notices and letters are to be electronically enabled on an as practicable basis in accordance with the IRS Reform and Restructuring Act of 1998. | |
| 4. | EFFORTS TO IDENTIFY DUPLICATION |
| We have attempted to eliminate duplication within the agency wherever possible. | |
| 5. | METHODS TO MINIMIZE BURDEN ON SMALL BUSiNESSES OR OTHER SMALL ENTITIES |
| If the collection of information has a significant impact on substantial number of small businesses or other small entities (Item 5 of OMB Form 83-I), describe any methods used to minimize burden. Otherwise: Not applicable. | |
| 6 | CONSEOUENCES OF LESS FREOUENT COLLECTION ON FEDERAL PROGRAMS OR POLICY ACTIVITIES |
| Not applicable. | |
| 7. | SPECIAL CIRCUMSTANCES REQUIRING DATA COLLECTION TO BE INCONSISTENT WITH GUIDELINES IN 5 CFR 1320.5(d)(2) |
| Not applicable. | |
| 8. | CONSULTATION WITH INDIVIDUALS OUTSIDE OF THE AGENCY ON AVAILABILITY OF DATA, FREQUENCY OF COLLECTION, CLARITY OF INSTRUCTIONS AND FORMS, AND DATA ELEMENTS |
| NPRM and temporary regulations: | |
| A notice of proposed rulemaking is being published simultaneously with temporary regulations which will afford the public a 60-day period in which to review and provide public comments relating to any aspect of the regulations. A public hearing will be held with respect to the notice of proposed rulemaking if any person who has submitted written comments requests one. | |
| NPRM: | |
| This notice of proposed rulemaking will be published in the Federal Register to provide the public a 60-day period in which to review and provide public comments relating to any aspect of the proposed regulation. A public hearing will be held with respect to this NPRM if any person who has submitted written comments requests one. | |
| Notices, Revenue Procedures, and Announcements | |
| We will publish a notice in the Federal Register in the near future to solicit public comments on this (notice, revenue procedure, or announcement). | |
| NOTE: For regulations whose OMB approval is being renewed, summarize the comments received in response to the Federal Register notice published prior to submission to OMB and indicate actions taken in response to these comments. | |
| If no comments add the following: We received no comments during the comment period in response to the Federal Register notice dated March XX, 2001. | |
| 9. | EXPLANATION OF DECISION TO PROVIDE ANY PAYMENT OR GIFT TO RESPONDENTS |
| Not applicable. | |
| 10. | ASSURANCE OF CONFIDENTIALITY OF RESPONSES |
| Generally, tax returns and tax return information are confidential as required by 26 USC 6103. | |
| 11. | JUSTIFICATION OF SENSITIVE QUESTIONS |
| Not applicable. | |
| 12. | ESTIMATED BURDEN OF INFORMATION COLLECTION |
| Citation followed by discussion of the reporting or recordkeeping requirement and the burden estimate. | |
| Please add the following: Estimates of the annualized cost to respondents for the hour burdens shown are not available at this time. | |
| 13. | ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS |
| For new NPRM, temporary, final regulations, other published guidance only: | |
| Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information are not available at this time. | |
| For renewals: | |
| As suggested by OMB, our Federal Register notice dated March xx, 2001, requested public comments on estimates of cost burden that are not captured in the estimates of burden hours, i.e., estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information. However, we did not receive any response from taxpayers on this subject. As a result, estimates of the cost burdens are not available at this time. | |
| 14. | ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT |
| Not applicable. | |
| 15. | REASONS FOR CHANGE IN BURDEN |
| For existing regulations whose OMB approval is being renewed, explain the reasons for any burden change. If there is no change in burden: There is no change in the paperwork burden previously approved by OMB. We are making this submission to renew the OMB approval. | |
| For new regulations: Not applicable. | |
| 16. | PLANS FOR TABULATION, STATISTICAL ANALYSIS AND PUBLICATION |
| Not applicable. | |
| 17. | REASONS WHY DISPLAYING THE OMB EXPIRATION DATE IS INAPPROPRIATE |
| We believe that displaying the OMB expiration date is inappropriate because it could cause confusion by leading taxpayers to believe that the regulations sunset as of the expiration date. Taxpayers are not likely to be aware that the Service intends to request renewal of the OMB approval and obtain a new expiration date before the old one expires. | |
| 18. | EXCEPTIONS TO THE CERTIFICATION STATEMENT ON 0MB FORM 83-I |
| Not applicable. | |
| Note: The following paragraph applies to all of the collections of information in this submission: | |
| An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103. | |
| Note *If this is an emergency submission, please give a reason for the emergency at the end of the supporting statement. | |