[Title 31 CFR ]
[Code of Federal Regulations (annual edition) - July 1, 2000 Edition]
[From the U.S. Government Printing Office]



[[Page i]]

          

                    31


          Parts 0 to 199

                         Revised as of July 1, 2000

Money and Finance: Treasury





          Containing A Codification of documents of general 
          applicability and future effect
          As of July 1, 2000
          With Ancillaries
          Published by
          Office of the Federal Register
          National Archives and Records
          Administration

As a Special Edition of the Federal Register



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                     U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2000



               For sale by U.S. Government Printing Office
 Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20402-9328



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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 31:
          Subtitle A--Office of the Secretary of the Treasury        3
    Subtitle B--Regulations Relating to Money and Finance:
          Chapter I--Monetary Offices, Department of the 
          Treasury                                                 303
  Finding Aids:
      Material Approved for Incorporation by Reference........     381
      Table of CFR Titles and Chapters........................     383
      Alphabetical List of Agencies Appearing in the CFR......     401
      Redesignation Table.....................................     411
      List of CFR Sections Affected...........................     413



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                     ----------------------------

                     Cite this Code:  CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus,  31 CFR 0.101 refers 
                       to title 31, part 0, 
                       section 101.

                     ----------------------------

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                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, July 1, 2000), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
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instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 1986, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, or 1973-1985, published in seven separate volumes. For 
the period beginning January 1, 1986, a ``List of CFR Sections 
Affected'' is published at the end of each CFR volume.

INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
requirement to publish regulations in the Federal Register by referring 
to materials already published elsewhere. For an incorporation to be 
valid, the Director of the Federal Register must approve it. The legal 
effect of incorporation by reference is that the material is treated as 
if it were published in full in the Federal Register (5 U.S.C. 552(a)). 
This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
process.
    (c) The incorporating document is drafted and submitted for 
publication in accordance with 1 CFR part 51.
    Properly approved incorporations by reference in this volume are 
listed in the Finding Aids at the end of this volume.
    What if the material incorporated by reference cannot be found? If 
you have any problem locating or obtaining a copy of material listed in 
the Finding Aids of this volume as an approved incorporation by 
reference, please contact the agency that issued the regulation 
containing that incorporation. If, after contacting the agency, you find 
the material is not available, please notify the Director of the Federal 
Register, National Archives and Records Administration, Washington DC 
20408, or call (202) 523-4534.

CFR INDEXES AND TABULAR GUIDES

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separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Statutory 
Authorities and Agency Rules (Table I). A list of CFR titles, chapters, 
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also included in this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

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REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of material appearing 
in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-523-5227 
or write to the Director, Office of the Federal Register, National 
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                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

July 1, 2000.



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                               THIS TITLE

    Title 31--Money and Finance: Treasury is composed of two volumes. 
The parts in these volumes are arranged in the following order: parts 0-
199, and part 200 to end. The contents of these volumes represent all 
current regulations codified under this title of the CFR as of July 1, 
2000.

    A redesignation table for subtitle A--Office of the Secretary of the 
Treasury appears in the Finding Aids section of the first volume.

    For this volume, Shelley C. Featherson was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Frances D. McDonald, assisted by Alomha S. Morris.

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[[Page 1]]



                  TITLE 31--MONEY AND FINANCE: TREASURY




                   (This book contains parts 0 to 199)

  --------------------------------------------------------------------



  Editorial Note: Other regulations issued by Department of the Treasury 
appear in Title 12, Chapter I; Title 19, Chapter I; Title 26, Chapter I; 
Title 27, Chapter I; Title 31, Chapters II, IV, V, VI, and VII, and 
Title 48, Chapter 10.
                                                                    Part

SUBTITLE A--Office of the Secretary of the Treasury.........           0

         SUBTITLE B--Regulations Relating to Money and Finance:

chapter i--Monetary Offices, Department of the Treasury.....          56

Cross Reference: General Accounting Office: See 4 CFR Chapter I.

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                        Subtitle A--Office of the

                        Secretary of the Treasury

  --------------------------------------------------------------------

Part                                                                Page
0               Department of the Treasury Employee Rules of 
                    Conduct.................................           5
1               Disclosure of records.......................          10
2               National security information...............         117
3               Claims regulations and indemnification of 
                    Department of Treasury employees........         143
4               Employees' personal property claims.........         146
5               Claims collection...........................         147
6               Applications for awards under the Equal 
                    Access to Justice Act...................         162
7               Employee inventions.........................         166
8               Practice before the Bureau of Alcohol, 
                    Tobacco and Firearms....................         167
9               Effects of imported articles on the national 
                    security................................         181
10              Practice before the Internal Revenue Service         184
11              Operation of vending facilities by the blind 
                    on Federal property under the control of 
                    the Department of the Treasury..........         216
12              Restriction of sale and distribution of 
                    tobacco products........................         217
13              Procedures for providing assistance to State 
                    and local governments in protecting 
                    foreign diplomatic missions.............         218
14              Right to Financial Privacy Act..............         223
15              Post employment conflict of interest........         224
16              Regulations implementing the Program Fraud 
                    Civil Remedies Act of 1986..............         230
17              Enforcement of nondiscrimination on the 
                    basis of handicap in programs or 
                    activities conducted by the Department 
                    of the Treasury.........................         246

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18              Officials designated to perform the 
                    functions and duties of certain offices 
                    in case of absence, disability, or 
                    vacancy.................................         252
19              Governmentwide debarment and suspension 
                    (nonprocurement) and governmentwide 
                    requirements for drug-free workplace 
                    (grants)................................         253
21              New restrictions on lobbying................         271
25              Prepayment of foreign military sales loans 
                    made by the Defense Security Assistance 
                    Agency and foreign military sales loans 
                    made by the Federal Financing Bank and 
                    guaranteed by the Defense Security 
                    Assistance Agency.......................         283
26              Environmental Review of Actions by 
                    Multilateral Development Bands (MDBs)...         293
27              Civil penalty assessment for misuse of 
                    Department of the Treasury names, 
                    symbols, etc............................         296

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PART 0--DEPARTMENT OF THE TREASURY EMPLOYEE RULES OF CONDUCT--Table of Contents




                      Subpart A--General Provisions

Sec.
0.101  Purpose.
0.102  Policy.
0.103  Definitions.

                            Responsibilities

0.104  Designated Agency Ethics Official and Alternate Designated Agency 
          Ethics Official.
0.105  Deputy Ethics Official.
0.106  Bureau Heads.
0.107  Employees.

                       Subpart B--Rules of Conduct

0.201  Political activity.
0.202  Strikes.
0.203  Gifts or gratuities from foreign governments.
0.204  Use of controlled substances and intoxicants.
0.205  Care of documents and data.
0.206  Disclosure of information.
0.207  Cooperation with official inquiries.
0.208  Falsification of official records.
0.209  Use of Government vehicles.
0.210  Conduct while on official duty or on Government property.
0.211  Soliciting, selling and canvassing.
0.212  Influencing legislation or petitioning Congress.
0.213  General conduct prejudicial to the Government.
0.214  Nondiscrimination.
0.215  Possession of weapons and explosives.
0.216  Privacy Act.
0.217  Personal financial interests.

                 Subpart C--Special Government Employees

0.301  Applicability of subpart B.
0.302  Service with other Federal agencies.

                  Subpart D--Advisers to the Department

0.401  Advisers to the Department.

    Authority: 5 U.S.C. 301.

    Source: 60 FR 28535, June 1, 1995, unless otherwise noted.



                      Subpart A--General Provisions



Sec. 0.101  Purpose.

    (a) The Department of the Treasury Employee Rules of Conduct (Rules) 
are separate from and additional to the Standards of Ethical Conduct for 
Employees of the Executive Branch (Executive Branch-wide Standards) (5 
CFR part 2635) and the Supplemental Standards of Ethical Conduct for 
Employees of the Department of the Treasury (Treasury Supplemental 
Standards) (to be codified at 5 CFR part 3101). The Rules prescribe 
employee rules of conduct and procedure and provide for disciplinary 
action for the violation of the Rules, the Treasury Supplemental 
Standards, the Executive Branch-wide Standards, and any other rule, 
regulation or law governing Department employees.
    (b) The Rules are not all-inclusive and may be modified by 
interpretive guidelines and procedures issued by the Department's 
bureaus. The absence of a specific published rule of conduct covering an 
action does not constitute a condonation of that action or indicate that 
the action would not result in corrective or disciplinary action.



Sec. 0.102  Policy.

    (a) All employees and officials of the Department are required to 
follow the rules of conduct and procedure contained in the Rules, the 
Treasury Supplemental Standards, the Executive Branch-wide Standards of 
Ethical Conduct, the Employee Responsibilities and Conduct (5 CFR part 
735), and any bureau issued rules.
    (b) Employees found in violation of the Rules, the Treasury 
Supplemental Standards, the Executive Branch-wide Standards or any 
applicable bureau rule may be instructed to take remedial or corrective 
action to eliminate the conflict. Remedial action may include, but is 
not limited to:
    (1) Reassignment of work duties;
    (2) Disqualification from a particular assignment;
    (3) Divestment of a conflicting interest; or
    (4) Other appropriate action.
    (c) Employees found in violation of the Rules, the Treasury 
Supplemental Standards, the Executive Branch-wide Standards or any 
applicable bureau rule may be disciplined in proportion to the gravity 
of the offense committed, including removal. Disciplinary action will be 
taken in accordance with applicable laws and regulations

[[Page 6]]

and after consideration of the employee's explanation and any mitigating 
factors. Further, disciplinary action may include any additional penalty 
prescribed by law.



Sec. 0.103  Definitions.

    The following definitions are used throughout this part:
    (a) Adviser means a person who provides advice to the Department as 
a representative of an outside group and is not an employee or special 
Government employee as those terms are defined in Sec. 0.103.
    (b) Bureau means:
    (1) Bureau of Alcohol, Tobacco and Firearms;
    (2) Bureau of Engraving and Printing;
    (3) Bureau of the Public Debt;
    (4) Departmental Offices;
    (5) Federal Law Enforcement Training Center;
    (6) Financial Management Service;
    (7) Internal Revenue Service;
    (8) Legal Division;
    (9) Office of the Comptroller of the Currency;
    (10) Office of the Inspector General;
    (11) Office of Thrift Supervision;
    (12) United States Customs Service;
    (13) United States Mint;
    (14) United States Secret Service; and
    (15) Any organization designated as a bureau by the Secretary 
pursuant to appropriate authority.
    (c) Person means an individual, corporation and subsidiaries it 
controls, company, association, firm, partnership, society, joint stock 
company, or any other organization or institution as specified in 5 CFR 
2635.102(k).
    (d) Regular employee or employee means an officer or employee of the 
Department of the Treasury but does not include a special Government 
employee.
    (e) Special Government employee means an officer or employee who is 
retained, designated, appointed, or employed to perform temporary duties 
either on a full-time or intermittent basis, with or without 
compensation, for a period not to exceed 130 days during any consecutive 
365-day period. See 18 U.S.C. 202(a).

                            Responsibilities



Sec. 0.104  Designated Agency Ethics Official and Alternate Designated Agency Ethics Official.

    The Deputy General Counsel is the Department's Designated Agency 
Ethics Official (DAEO). The DAEO is responsible for managing the 
Department's ethics program, including coordinating ethics counseling 
and interpreting questions of conflicts of interest and other matters 
that arise under the Executive Branch-wide Standards and Treasury 
Supplemental Standards and Rules. See 5 CFR 2638.203. The Senior Counsel 
for Ethics is the Alternate Designated Agency Ethics Official.



Sec. 0.105  Deputy Ethics Official.

    The Chief Counsel or Legal Counsel for a bureau, or a designee, is 
the Deputy Ethics Official for that bureau. The Legal Counsel for the 
Financial Crimes Enforcement Network is the Deputy Ethics Official for 
that organization. It is the responsibility of the Deputy Ethics 
Official to give authoritative advice and guidance on conflicts of 
interest and other matters arising under the Executive Branch-wide 
Standards, Treasury Supplemental Standards, and the Rules.



Sec. 0.106  Bureau Heads.

    Bureau heads or designees are required to:
    (a) Provide all employees with a copy of Executive Order 12674, as 
amended by Executive Order 12731, the Executive Branch-wide Standards, 
the Treasury Supplemental Standards and the Rules; provide all new 
employees with an explanation of the contents and application of the 
Executive Branch-wide Standards, Treasury Supplemental Standards and the 
Rules; and provide all departing employees with an explanation of the 
applicable post-employment restrictions contained in 18 U.S.C. 207 and 5 
CFR part 2641 and any other applicable law or regulation.
    (b) Provide guidance and assistance to supervisors and employees in 
implementing and adhering to the rules and procedures included in the 
Executive Branch-wide Standards and Treasury

[[Page 7]]

Supplemental Standards and Rules; obtain any necessary legal advice or 
interpretation from the Designated Agency Ethics Official or a Deputy 
Ethics Official; and inform employees as to how and from whom they may 
obtain additional clarification or interpretation of the Executive 
Branch-wide Standards, Treasury Supplemental Standards, Rules, and any 
other relevant law, rule or regulation.
    (c) Take appropriate corrective or disciplinary action against an 
employee who violates the Executive Branch-wide Standards, Treasury 
Supplemental Standards or Rules, or any other applicable law, rule or 
regulation, and against a supervisor who fails to carry out his 
responsibilities in taking or recommending corrective or disciplinary 
action when appropriate against an employee who has committed an 
offense.



Sec. 0.107  Employees.

    (a) Employees are required to:
    (1) Read and follow the rules and procedures contained in the 
Executive Branch-wide Standards, Treasury Supplemental Standards, and 
Rules;
    (2) Request clarification or interpretation from a supervisor or 
ethics official if the application of a rule contained in the Executive 
Branch-wide Standards, Treasury Supplemental Standards, or Rules is not 
clear;
    (3) Report to the Inspector General or to the appropriate internal 
affairs office of the Bureau of Alcohol, Tobacco and Firearms, Customs 
Service, Internal Revenue Service, or Secret Service, any information 
indicating that an employee, former employee, contractor, subcontractor, 
or potential contractor engaged in criminal conduct or that an employee 
or former employee violated the Executive Branch-wide Standards or the 
Treasury Supplemental Standards or Rules. Legal Division attorneys 
acquiring this type of information during the representation of a bureau 
shall report it to the appropriate Chief or Legal Counsel or the Deputy 
General Counsel, who shall report such information to the Inspector 
General or appropriate internal affairs office; and
    (4) Report to the Inspector General information defined in paragraph 
(a)(3) of this section relating to foreign intelligence or national 
security, as covered in Executive Order 12356. Legal Division attorneys 
acquiring this type of information during the representation of a bureau 
shall report it to the Deputy General Counsel, who shall report such 
information to the Inspector General.
    (b) The confidentiality of the source of the information reported to 
the Inspector General or the internal affairs office under this section 
will be maintained to the extent appropriate under the circumstances.



                       Subpart B--Rules of Conduct



Sec. 0.201  Political activity.

    (a) Employees may:
    (1) Take an active part in political management or in political 
campaigns to the extent permitted by law (5 U.S.C. 7321-7326); and
    (2) Vote as they choose and express their opinions on political 
subjects and candidates.
    (b) Employees may not use their official authority or influence to 
interfere with or affect election results.
    (c) Employees may be disqualified from employment for knowingly 
supporting or advocating the violent overthrow of our constitutional 
form of government.
    Note: The Hatch Act Reform Amendments of 1993 significantly reduced 
the statutory restrictions on the political activity of most Department 
employees. However, career members of the Senior Executive Service and 
employees of the Secret Service, the Internal Revenue Service, Office of 
Criminal Investigation, the Customs Service, Office of Investigative 
Programs, and the Bureau of Alcohol, Tobacco and Firearms, Office of Law 
Enforcement, remain subject to significant restrictions on their 
political activities.



Sec. 0.202  Strikes.

    Employees shall not strike against the Government.



Sec. 0.203  Gifts or gratuities from foreign governments.

    (a) The United States Constitution prohibits employees from 
accepting gifts, emoluments, offices, or titles from a foreign 
government without the consent of the Congress. Congress has consented 
to an employee accepting

[[Page 8]]

and retaining a gift from a foreign government that is of minimal value 
and offered as a souvenir or mark of courtesy, unless otherwise 
prohibited by bureau regulation (5 U.S.C. 7342). Minimal value is 
prescribed in 41 CFR part 101-49 and was set at $225.00 on the date that 
the Rules became effective.
    (b) All gifts exceeding minimal value, the refusal of which would 
likely cause offense or embarrassment or otherwise adversely affect the 
foreign relations of the United States, shall be accepted and deposited 
with the Department within sixty days of acceptance. If the gift is 
travel or expenses for travel taking place entirely outside the United 
States, it shall be reported within thirty days (see 5 U.S.C. 
7342(c)(1)(B)(ii)).
    (c) As used in paragraph (b) of this section, Deposit with the 
Department means delivery to the Department Gift Unit or other 
depository as authorized by the Treasury Directive on Foreign Gifts 
(Treasury Directive 61-04).
    (d) All foreign gifts must be reported as prescribed in the Treasury 
Directive on Foreign Gifts (Treasury Directive 61-04).



Sec. 0.204  Use of controlled substances and intoxicants.

    Employees shall not sell, use or possess controlled substances or 
intoxicants in violation of the law while on Department property or 
official duty, or use a controlled substance or intoxicant in a manner 
that adversely affects their work performance.



Sec. 0.205  Care of documents and data.

    (a) Employees shall not conceal, remove, alter, destroy, mutilate or 
access documents or data in the custody of the Federal Government 
without proper authority.
    (b) Employees are required to care for documents according to 
Federal law and regulation, and Department procedure (18 U.S.C. 2071, 5 
U.S.C. 552, 552a).
    (c) The term documents includes, but is not limited to, any writing, 
recording, computer tape or disk, blueprint, photograph, or other 
physical object on which information is recorded.



Sec. 0.206  Disclosure of information.

    Employees shall not disclose official information without proper 
authority, pursuant to Department or bureau regulation. Employees 
authorized to make disclosures should respond promptly and courteously 
to requests from the public for information when permitted to do so by 
law (31 CFR 1.9, 1.10, and 1.28(b)).



Sec. 0.207  Cooperation with official inquiries.

    Employees shall respond to questions truthfully and under oath when 
required, whether orally or in writing, and must provide documents and 
other materials concerning matters of official interest when directed to 
do so by competent Treasury authority.



Sec. 0.208  Falsification of official records.

    Employees shall not intentionally make false, misleading or 
ambiguous statements, orally or in writing, in connection with any 
matter of official interest. Matters of official interest include among 
other things: Transactions with the public, government agencies or 
fellow employees; application forms and other forms that serve as a 
basis for appointment, reassignment, promotion or other personnel 
action; vouchers; leave records and time and attendance records; work 
reports of any nature or accounts of any kind; affidavits; entry or 
record of any matter relating to or connected with an employee's duties; 
and reports of any moneys or securities received, held or paid to, for 
or on behalf of the United States.



Sec. 0.209  Use of Government vehicles.

    Employees shall not use Government vehicles for unofficial purposes, 
including to transport unauthorized passengers. The use of Government 
vehicles for transporting employees between their domiciles and places 
of employment must be authorized by statute (See, e.g., 31 U.S.C. 1344).



Sec. 0.210  Conduct while on official duty or on Government property.

    Employees must adhere to the regulations controlling conduct when 
they are on official duty or in or on Government property, including the 
Treasury Building, Treasury Annex Building and grounds; the Bureau of 
Engraving and Printing buildings and grounds; the

[[Page 9]]

United States Mint buildings and grounds; the grounds of the Federal Law 
Enforcement Training Center; and Treasury-occupied General Services 
Administration buildings and grounds (see 31 CFR parts 91, 407, 605, 
700).



Sec. 0.211  Soliciting, selling and canvassing.

    Employees shall not solicit, make collections, canvass for the sale 
of any article, or distribute literature or advertising in any space 
occupied by the Department without appropriate authority.



Sec. 0.212  Influencing legislation or petitioning Congress.

    (a) Employees shall not use Government time, money, or property to 
petition a Member of Congress to favor or oppose any legislation. This 
prohibition does not apply to the official handling, through the proper 
channels, of matters relating to legislation in which the Department of 
the Treasury has an interest.
    (b) Employees, individually or collectively, may petition Congress 
or Members of Congress or furnish information to either House of 
Congress when not using Government time, money or property (5 U.S.C. 
7211).



Sec. 0.213  General conduct prejudicial to the Government.

    Employees shall not engage in criminal, infamous, dishonest, or 
notoriously disgraceful conduct, or any other conduct prejudicial to the 
Government.



Sec. 0.214  Nondiscrimination.

    (a) Employees shall not discriminate against or harass any other 
employee, applicant for employment or person dealing with the Department 
on official business on the basis of race, color, religion, national 
origin, sex, sexual orientation, age, or disability. Sexual harassment 
is a form of sex discrimination and is prohibited by this section.
    (b) An employee who engages in discriminatory conduct may be 
disciplined under these rules. However, this section does not create any 
enforceable legal rights in any person.



Sec. 0.215  Possession of weapons and explosives.

    (a) Employees shall not possess firearms, explosives, or other 
dangerous or deadly weapons, either openly or concealed, while on 
Government property or official duty.
    (b) The prohibition in paragraph (a) of this section does not apply 
to employees who are required to possess weapons or explosives in the 
performance of their official duties.



Sec. 0.216  Privacy Act.

    Employees involved in the design, development, operation, or 
maintenance of any system of records or in maintaining records subject 
to the Privacy Act of 1974, as amended (5 U.S.C. 552a), shall comply 
with the conduct regulations delineated in 31 CFR 1.28(b).



Sec. 0.217  Personal financial interests.

    (a) Employees may hold the following financial interests without 
violating 18 U.S.C. 208(a):
    (1) The stocks or bonds of a publicly traded corporation with a 
value of $1000 or less; and
    (2) The stocks or bonds in the investment portfolio of a diversified 
mutual fund in which an employee has invested.
    (b) The Department has found that the financial interests listed in 
paragraph (a) of this section are too remote and inconsequential to 
affect the integrity of an employee's service.



                 Subpart C--Special Government Employees



Sec. 0.301  Applicability of subpart B.

    The rules of conduct contained in subpart B of this part apply to 
special Government employees employed with the Treasury Department. The 
regulations contained in Sec. 0.201 of subpart B, concerning political 
activity, apply to special Government employees only on the days that 
they serve the Department. Treasury bureaus are responsible for 
informing special Government employees employed with them of the 
applicability of bureau specific statutes or regulations.

[[Page 10]]



Sec. 0.302  Service with other Federal agencies.

    A special Government employee serving concurrently in the Department 
and in a Federal agency other than the Department is required to inform 
the Department and the agency in which he serves of the arrangement so 
that appropriate administrative measures may be taken.



                  Subpart D--Advisers to the Department



Sec. 0.401  Advisers to the Department.

    (a) An adviser or advisory committee member includes an individual 
who provides advice to the Department as a representative of an outside 
group and is not an employee or special Government employee of the 
Department. Questions concerning whether an individual serves the 
Department in the capacity of an adviser, employee, or special 
Government employee shall be addressed to the Designated Agency Ethics 
Official or a Deputy Ethics Official.
    (b) Advisers or advisory committee members are not required to 
follow the Rules and are not generally required by the Department to 
file financial disclosure statements; nevertheless, they should be 
guided by the regulations in this part covering such issues as public 
disclosure of official information (Sec. 0.206), conduct (Sec. 0.211 and 
Sec. 0.213), and gifts or gratuities from Foreign governments 
(Sec. 0.203).



PART 1--DISCLOSURE OF RECORDS--Table of Contents




                  Subpart A--Freedom of Information Act

Sec.
1.1   General.
1.2   Information made available.
1.3   Publication in the Federal Register.
1.4   Public inspection and copying.
1.5   Specific requests for other records.
1.6   Business information.
1.7   Fees for services.

                         Appendices to Subpart A

Appendix A--Departmental Offices
Appendix B--Internal Revenue Service
Appendix C--United States Customs Service
Appendix D--United States Secret Service
Appendix E--Bureau of Alcohol, Tobacco and Firearms
Appendix F--Bureau of Engraving and Printing
Appendix G--Financial Management Service
Appendix H--United States Mint
Appendix I--Bureau of the Public Debt
Appendix J--Office of the Comptroller of the Currency
Appendix K--Federal Law Enforcement Training Center
Appendix L--Office of Thrift Supervision

                 Subpart B--Other Disclosure Provisions

1.8  Scope.
1.9  Records not to be otherwise withdrawn or disclosed.
1.10  Oral information.
1.11  Testimony or the production of records in a court or other 
          proceeding.
1.12  Regulations not applicable to official request.

                         Subpart C--Privacy Act

1.20  Purpose and scope of regulations.
1.21  Definitions.
1.22  Requirements relating to systems of records.
1.23  Publication in the Federal Register--Notices of systems of 
          records, general exemptions, specific exemptions, review of 
          all systems.
1.24  Disclosure of records to person other than the individual to whom 
          they pertain.
1.25  Accounting of disclosures.
1.26  Procedures for notification and access to records pertaining to 
          individuals--format and fees for request for access.
1.27  Procedures for amendment of records pertaining to individuals--
          format, agency review and appeal from initial adverse agency 
          determination.

[[Page 11]]

1.28  Training, rules of conduct, penalties for non-compliance.
1.29  Records transferred to Federal Records Center or National Archives 
          of the United States.
1.30  Application to system of records maintained by Government 
          contractors.
1.31  Sale or rental of mailing lists.
1.32  Use and disclosure of social security numbers.
1.34  Guardianship.
1.35  Information forms.
1.36  Systems exempt in whole or in part from provisions of 5 U.S.C. 
          552a and this part.

                         Appendices to Subpart C

Appendix A--Departmental Offices
Appendix B--Internal Revenue Service
Appendix C--United States Customs Service
Appendix D--United States Secret Service
Appendix E--Bureau of Alcohol, Tobacco and Firearms
Appendix F--Bureau of Engraving and Printing
Appendix G--Financial Management Service
Appendix H--United States Mint
Appendix I--Bureau of the Public Debt
Appendix J--Office of the Comptroller of the Currency
Appendix K--Federal Law Enforcement Training Center
Appendix L--Office of Thrift Supervision

    Authority: 5 U.S.C. 301 and 31 U.S.C. 321. Subpart A also issued 
under 5 U.S.C. 552, as amended. Subpart C also issued under 5 U.S.C. 
552a.

    Source: 52 FR 26305, July 14, 1987, unless otherwise noted.



                  Subpart A--Freedom of Information Act

    Source: 65 FR 40504, June 30, 2000, unless otherwise noted.



Sec. 1.1  General.

    (a) Purpose and scope. (1) This subpart contains the regulations of 
the Department of the Treasury implementing the Freedom of Information 
Act (FOIA), 5 U.S.C. 552, as amended by the Electronic Freedom of 
Information Act Amendments of 1996. The regulations set forth procedures 
for requesting access to records maintained by the Department of the 
Treasury. These regulations apply to all bureaus of the Department of 
the Treasury. Any reference in this subpart to the Department or its 
officials, employees, or records shall be deemed to refer also to the 
bureaus or their officials, employees, or records. Persons interested in 
the records of a particular bureau should also consult the appendix to 
this subpart that pertains to that bureau. The head of each bureau is 
hereby authorized to substitute the officials designated and change the 
addresses specified in the appendix to this subpart applicable to the 
bureau. The bureaus of the Department of the Treasury for the purposes 
of this subpart are:
    (i) The Departmental Offices, which include the offices of:
    (A) The Secretary of the Treasury, including immediate staff;
    (B) The Deputy Secretary of the Treasury, including immediate staff;
    (C) The Chief of Staff, including immediate staff;
    (D) The Executive Secretary and all offices reporting to such 
official, including immediate staff;
    (E) The Under Secretary of the Treasury for International Affairs 
and all offices reporting to such official, including immediate staff;
    (F) The Under Secretary of the Treasury for Domestic Finance and all 
offices reporting to such official, including immediate staff;
    (G) The Under Secretary for Enforcement and all offices reporting to 
such official, including immediate staff;
    (H) The Assistant Secretary of the Treasury for Financial 
Institutions and all offices reporting to such official, including 
immediate staff;
    (I) The Assistant Secretary of the Treasury for Economic Policy and 
all offices reporting to such official, including immediate staff;
    (J) The Fiscal Assistant Secretary and all offices reporting to such 
official, including immediate staff;
    (K) The General Counsel and all offices reporting to such official, 
including immediate staff; except legal counsel to the components listed 
in paragraphs (a)(1)(i)(L), and (a)(1)(i)(S), and (a)((1)(ii) through 
(xii) of this section;
    (L) The Inspector General and all offices reporting to such 
official, including immediate staff;
    (M) The Assistant Secretary of the Treasury for International 
Affairs and

[[Page 12]]

all offices reporting to such official, including immediate staff;
    (N) The Assistant Secretary of the Treasury for Legislative Affairs 
and Public Liaison and all offices reporting to such official, including 
immediate staff;
    (O) The Assistant Secretary of the Treasury for Management and Chief 
Financial Officer and all offices reporting to such official, including 
immediate staff;
    (P) The Assistant Secretary of the Treasury for Public Affairs and 
all offices reporting to such official, including immediate staff;
    (Q) The Assistant Secretary of the Treasury for Tax Policy and all 
offices reporting to such official, including immediate staff;
    (R) The Treasurer of the United States, including immediate staff;
    (S) The Treasury Inspector General for Tax Administration and all 
offices reporting to such official, including immediate staff.
    (ii) The Bureau of Alcohol, Tobacco and Firearms.
    (iii) The Office of the Comptroller of the Currency.
    (iv) The United States Customs Service.
    (v) The Bureau of Engraving and Printing.
    (vi) The Federal Law Enforcement Training Center.
    (vii) The Financial Management Service.
    (viii) The Internal Revenue Service.
    (ix) The United States Mint.
    (x) The Bureau of the Public Debt.
    (xi) The United States Secret Service.
    (xii) The Office of Thrift Supervision.
    (2) For purposes of this subpart, the office of the legal counsel 
for the components listed in paragraphs (a)(1)(ii) through (xii) of this 
section are to be considered a part of their respective bureaus. Any 
office which is now in existence or may hereafter be established, which 
is not specifically listed or known to be a component of any of those 
listed in paragraphs (a)(1)(i) through (xii) of this section, shall be 
deemed a part of the Departmental Offices for the purpose of making 
requests for records under this subpart.
    (b) Definitions. As used in this subpart, the following terms shall 
have the following meanings:
    (1) Agency has the meaning given in 5 U.S.C. 551(1) and 5 U.S.C. 
552(f).
    (2) Appeal means a request for a review of an agency's determination 
with regard to a fee waiver, category of requester, expedited 
processing, or denial in whole or in part of a request for access to a 
record or records.
    (3) Bureau means an entity of the Department of the Treasury that is 
authorized to act independently in disclosure matters.
    (4) Business information means trade secrets or other commercial or 
financial information.
    (5) Business submitter means any entity which provides business 
information to the Department of the Treasury or its bureaus and which 
has a proprietary interest in the information. (6) Computer 
software means tools by which records are created, stored, and 
retrieved. Normally, computer software, including source code, object 
code, and listings of source and object codes, regardless of medium, are 
not agency records. However, when data are embedded within the software 
and cannot be extracted without the software, the software may have to 
be treated as an agency record. Proprietary (or copyrighted) software is 
not an agency record.
    (7) Confidential commercial information means records provided to 
the government by a submitter that arguably contain material exempt from 
release under Exemption 4 of the Freedom of Information Act, 5 U.S.C. 
552(b)(4), because disclosure could reasonably be expected to cause 
substantial competitive harm.
    (8) Duplication refers to the process of making a copy of a record 
in order to respond to a FOIA request. Such copies can take the form of 
paper copy, microform, audio-visual materials, or machine readable 
documentation (e.g., magnetic tape or disk), among others.
    (9) Electronic records means those records and information which are 
created, stored, and retrievable by electronic means. This ordinarily 
does not include computer software, which is a tool by which to create, 
store, or retrieve electronic records.

[[Page 13]]

    (10) Request means any request for records made pursuant to 5 U.S.C. 
552(a)(3).
    (11) Requester means any person who makes a request for access to 
records.
    (12) Responsible official means a disclosure officer or the head of 
the organizational unit having immediate custody of the records 
requested, or an official designated by the head of the organizational 
unit.
    (13) Review, for fee purposes, refers to the process of examining 
records located in response to a commercial use request to determine 
whether any portion of any record located is permitted to be withheld. 
It also includes processing any records for disclosure; e.g., doing all 
that is necessary to excise them and otherwise prepare them for release.
    (14) Search includes all time spent looking for material that is 
responsive to a request, including page-by-page or line-by-line 
identification of material within records. Searches may be done manually 
or by automated means.



Sec. 1.2  Information made available.

    (a) General. The FOIA (5 U.S.C. 552) provides for access to 
information and records developed or maintained by Federal agencies. The 
provisions of section 552 are intended to assure the right of the public 
to information. Generally, this section divides agency information into 
three major categories and provides methods by which each category of 
information is to be made available to the public. The three major 
categories of information are as follows:
    (1) Information required to be published in the Federal Register 
(see Sec. 1.3);
    (2) Information required to be made available for public inspection 
and copying or, in the alternative, to be published and offered for sale 
(see Sec. 1.4); and
    (3) Information required to be made available to any member of the 
public upon specific request (see Sec. 1.5).
    (b) Subject only to the exemptions and exclusions set forth in 5 
U.S.C. 552(b) and (c), any person shall be afforded access to 
information or records in the possession of any bureau of the Department 
of the Treasury, subject to the regulations in this subpart and any 
regulations of a bureau implementing or supplementing them.
    (c) Exemptions. (1) The disclosure requirements of 5 U.S.C. 552(a) 
do not apply to certain matters which are exempt under 5 U.S.C. 552(b); 
nor do the disclosure requirements apply to certain matters which are 
excluded under 5 U.S.C. 552(c).
    (2) Even though an exemption described in 5 U.S.C. 552(b) may be 
applicable to the information or records requested, a Treasury bureau 
may, if not precluded by law, elect under the circumstances of that 
request not to apply the exemption. The fact that the exemption is not 
applied by a bureau in response to a particular request shall have no 
precedential significance in processing other requests, but is merely an 
indication that, in the processing of the particular request, the bureau 
finds no necessity for applying the exemption.



Sec. 1.3  Publication in the Federal Register.

    (a) Requirement. Subject to the application of the exemptions and 
exclusions in 5 U.S.C. 552(b) and (c) and subject to the limitations 
provided in 5 U.S.C. 552(a)(1), each Treasury bureau shall, in 
conformance with 5 U.S.C. 552(a)(1), separately state, publish and 
maintain current in the Federal Register for the guidance of the public 
the following information with respect to that bureau:
    (1) Descriptions of its central and field organization and the 
established places at which, the persons from whom, and the methods 
whereby, the public may obtain information, make submittals or requests, 
or obtain decisions;
    (2) Statements of the general course and method by which its 
functions are channeled and determined, including the nature and 
requirements of all formal and informal procedures available;
    (3) Rules of procedure, descriptions of forms available or the 
places at which forms may be obtained, and instructions as to the scope 
and contents of all papers, reports, or examinations;
    (4) Substantive rules of general applicability adopted as authorized 
by law,

[[Page 14]]

and statements of general policy or interpretations of general 
applicability formulated and adopted by the bureau; and
    (5) Each amendment, revision, or repeal of matters referred to in 
paragraphs (a)(1) through (4) of this section.
    (b) The United States Government Manual. The functions of each 
bureau are summarized in the description of the Department and its 
bureaus in the United States Government Manual, which is issued annually 
by the Office of the Federal Register.



Sec. 1.4  Public inspection and copying.

    (a) In general. Subject to the application of the exemptions and 
exclusions described in 5 U.S.C. 552(b) and (c), each Treasury bureau 
shall, in conformance with 5 U.S.C. 552(a)(2), make available for public 
inspection and copying, or, in the alternative, promptly publish and 
offer for sale the following information with respect to the bureau:
    (1) Final opinions, including concurring and dissenting opinions, 
and orders, made in the adjudication of cases;
    (2) Those statements of policy and interpretations which have been 
adopted by the bureau but are not published in the Federal Register;
    (3) Its administrative staff manuals and instructions to staff that 
affect a member of the public;
    (4) Copies of all records, regardless of form or format, which have 
been released to any person under 5 U.S.C. 552(a)(3), and which the 
bureau determines have become or are likely to become the subject of 
subsequent requests for substantially the same records because they are 
clearly of interest to the public at large. The determination that 
records have become or may become the subject of subsequent requests 
shall be made by the Responsible Official (as defined at 
Sec. 1.1(b)(12)).
    (5) A general index of the records referred to in paragraph (a)(4) 
of this section.
    (b) Information made available by computer telecommunications. For 
records required to be made available for public inspection and copying 
pursuant to 5 U.S.C. 552(a)(2) (paragraphs (a)(1) through (4) of this 
section) which are created on or after November 1, 1996, as soon as 
practicable but no later than one year after such records are created, 
each bureau shall make such records available on the Internet.
    (c) Deletion of identifying details. To prevent a clearly 
unwarranted invasion of personal privacy, or pursuant to an exemption in 
5 U.S.C. 552(b), a Treasury bureau may delete information contained in 
any matter described in paragraphs (a)(1) through (4) of this section 
before making such matters available for inspection or publishing it. 
The justification for the deletion shall be explained fully in writing, 
and the extent of such deletion shall be indicated on the portion of the 
record which is made available or published, unless including that 
indication would harm an interest protected by the exemption in 5 U.S.C. 
552(b) under which the deletion is made. If technically feasible, the 
extent of the deletion shall be indicated at the place in the record 
where the deletion was made.
    (d) Public reading rooms. Each bureau of the Department of the 
Treasury shall make available for public inspection and copying, in a 
reading room or otherwise, the material described in paragraphs (a)(1) 
through (5) of this section. Fees for duplication shall be charged in 
accordance with Sec. 1.7. See the appendices to this subpart for the 
location of established bureau reading rooms.
    (e) Indexes. (1) Each bureau of the Department of the Treasury shall 
maintain and make available for public inspection and copying current 
indexes identifying any material described in paragraphs (a)(1) through 
(3) of this section. In addition, each bureau shall promptly publish, 
quarterly or more frequently, and distribute (by sale or otherwise) 
copies of each index or supplement unless the head of each bureau (or a 
delegate) determines by order published in the Federal Register that the 
publication would be unnecessary and impractical, in which case the 
bureau shall nonetheless provide copies of the index on request at a 
cost not to exceed the direct cost of duplication.
    (2) Each bureau shall make the index referred to in paragraph (a)(5) 
of this section available on the Internet by December 31, 1999.

[[Page 15]]



Sec. 1.5  Specific requests for other records.

    (a) In general. (1) Except for records made available under 5 U.S.C. 
552(a)(1) and (a)(2), but subject to the application of the exemptions 
and exclusions described in 5 U.S.C. 552(b) and (c), each bureau of the 
Department of the Treasury shall promptly make the requested records 
available to any person in conformance with 5 U.S.C. 552(a)(3). The 
request must conform in every respect with the rules and procedures of 
this subpart and the applicable bureau's appendix to this subpart. Any 
request or appeal from the initial denial of a request that does not 
comply with the requirements in this subpart will not be considered 
subject to the time constraints of paragraphs (h), (i), and (j) of this 
section, unless and until the request is amended to comply. Bureaus 
shall promptly advise the requester in what respect the request or 
appeal is deficient so that it may be amended and resubmitted for 
consideration in accordance with this subpart. If a requester does not 
respond within 30 days to a communication from a bureau to amend the 
request in order for it to be in conformance with this subpart, the 
request file will be considered closed. When the request conforms with 
the requirements of this subpart, bureaus shall make every reasonable 
effort to comply with the request within the time constraints. If the 
description of the record requested is of a type that is not maintained 
by the bureau, the requester shall be so advised and the request shall 
be returned to the requester.
    (2) This subpart applies only to records in the possession or 
control of the bureau at the time of the request. Records considered to 
be responsive to the request are those in existence on or before the 
date of receipt of the request by the appropriate bureau official. 
Requests for the continuing production of records created after the date 
of the appropriate bureau official's receipt of the request shall not be 
honored. Bureaus shall provide the responsive record or records in the 
form or format requested if the record or records are readily 
reproducible by the bureau in that form or format. Bureaus shall make 
reasonable efforts to maintain their records in forms or formats that 
are reproducible for the purpose of disclosure. For purposes of this 
section, readily reproducible means, with respect to electronic format, 
a record or records that can be downloaded or transferred intact to a 
floppy disk, compact disk (CD), tape, or other electronic medium using 
equipment currently in use by the office or offices processing the 
request. Even though some records may initially be readily reproducible, 
the need to segregate exempt from nonexempt records may cause the 
releasable material to not be readily reproducible.
    (3) Requests for information classified pursuant to Executive Order 
12958, ``Classified National Security Information,'' require the 
responsible bureau to review the information to determine whether it 
continues to warrant classification. Information which no longer 
warrants classification under the Executive Order's criteria shall be 
declassified and made available to the requester, unless the information 
is otherwise exempt from disclosure.
    (4) When a bureau receives five or more requests for substantially 
the same records, it shall place those requests in front of an existing 
request backlog that the responsible official may have. Upon completion 
of processing, the released records shall be made available in the 
bureau's public reading room, and if created on or after November 1, 
1996, shall be made available in the electronic reading room of the 
bureau's web site.
    (b) Form of request. In order to be subject to the provisions of 
this section, the following must be satisfied.
    (1) The request for records shall be made in writing, signed by the 
person making the request, and state that it is made pursuant to the 
Freedom of Information Act, 5 U.S.C. 552, or this subpart.
    (2) The request shall indicate whether the requester is a commercial 
user, an educational institution, non-commercial scientific institution, 
representative of the news media, or ``other'' requester, subject to the 
fee provisions described in Sec. 1.7. In order for the Department to 
determine the proper category for fee purposes as defined in this 
section, a request for

[[Page 16]]

records shall also state how the records released will be used. This 
information shall not be used to determine the releasibility of any 
record or records. A determination of the proper category of requester 
shall be based upon a review of the requester's submission and the 
bureau's own records. Where a bureau has reasonable cause to doubt the 
use to which a requester will put the records sought, or where that use 
is not clear from the request itself, bureaus should seek additional 
clarification before assigning the request to a specific category. The 
categories of requesters are defined as follows:
    (i) Commercial. A commercial use request refers to a request from or 
on behalf of one who seeks information for a use or purpose that 
furthers the commercial, trade, or profit interests of the requester or 
the person on whose behalf the request is made, which can include 
furthering those interests through litigation. The bureaus may determine 
from the use specified in the request that the requester is a commercial 
user.
    (ii) Educational institution. This refers to a preschool, a public 
or private elementary or secondary school, an institution of graduate 
higher education, an institution of undergraduate higher education, an 
institution of professional education, and an institution of vocational 
education, which operates a program or programs of scholarly research. 
This category does not include requesters wanting records for use in 
meeting individual academic research or study requirements.
    (iii) Non-commercial scientific institution. This refers to an 
institution that is not operated on a ``commercial'' basis as that term 
is defined in paragraph (b)(2)(i) of this section, and which is operated 
solely for the purpose of conducting scientific research, the results of 
which are not intended to promote any particular product or industry.
    (iv) Representative of the news media. This refers to any person 
actively gathering news for an entity that is organized and operated to 
publish or broadcast news to the public. The term news means information 
that is about current events or that would be of current interest to the 
public. Examples of news media entities include television or radio 
stations broadcasting to the public at large, and publishers of 
periodicals (but only in those instances when they can qualify as 
disseminators of ``news'') who make their products available for 
purchase or subscription by the general public. These examples are not 
intended to be all-inclusive. In the case of ``freelance'' journalists, 
they may be regarded as working for a news organization if they can 
demonstrate a solid basis for expecting publication through that 
organization, even though not actually employed by it. A publication 
contract would be the clearest proof, but bureaus may also look to the 
past publication record of a requester in making this determination.
    (v) ``Other'' Requester. This refers to a requester who does not 
fall within any of the previously described categories.
    (3) The request must be properly addressed to the bureau that 
maintains the record. The functions of each bureau are summarized in The 
United States Government Manual which is issued annually and is 
available from the Superintendent of Documents. Both the envelope and 
the request itself should be clearly marked ``Freedom of Information Act 
Request.'' See the appendices to this subpart for the office or officer 
to which requests shall be addressed for each bureau. A requester in 
need of guidance in defining a request or determining the proper bureau 
to which a request should be sent may contact Disclosure Services at 
202/622-0930, or may write to Disclosure Services, Department of the 
Treasury, 1500 Pennsylvania Avenue, NW, Washington, DC 20220. Requesters 
may access the ``FOIA Home Page'' at the Department of the Treasury 
World Wide Web site at: http://www.treas.gov.
    (4) The request must reasonably describe the records in accordance 
with paragraph (d) of this section.
    (5) The request must set forth the address where the person making 
the request wants to be notified about whether or not the request will 
be granted.
    (6) The request must state whether the requester wishes to inspect 
the records or desires to have a copy made

[[Page 17]]

and furnished without first inspecting them.
    (7) The request must state the firm agreement of the requester to 
pay the fees for search, duplication, and review as may ultimately be 
determined in accordance with Sec. 1.7. The agreement may state the 
upper limit (but not less than $25) that the requester is willing to pay 
for processing the request. A request that fees be waived or reduced may 
accompany the agreement to pay fees and shall be considered to the 
extent that such request is made in accordance with Sec. 1.7(d) and 
provides supporting information to be measured against the fee waiver 
standard set forth in Sec. 1.7(d)(1). The requester shall be notified in 
writing of the decision to grant or deny the fee waiver. A requester 
shall be asked to provide an agreement to pay fees when the request for 
a fee waiver or reduction is denied and the initial request for records 
does not include such agreement. If a requester has an outstanding 
balance of search, review, or duplication fees due for FOIA request 
processing, the requirements of this paragraph are not met until the 
requester has remitted the outstanding balance due.
    (c) Requests for records not in control of bureau; referrals; 
consultations. (1) When a requested record is in the possession or under 
the control of a bureau of the Department other than the office to which 
the request is addressed, the request for the record shall be 
transferred to the appropriate bureau and the requester notified. This 
referral shall not be considered a denial of access within the meaning 
of these regulations. The bureau of the Department to which this 
referral is made shall treat this request as a new request addressed to 
it and the time limits for response set forth by paragraph (h)(1) of 
this section shall begin when the referral is received by the designated 
office or officer of the bureau.
    (2) When a requested record has been created by an agency or 
Treasury bureau other than the Treasury bureau possessing the record, 
the bureau having custody of the record shall refer the record to the 
originating agency or Treasury bureau for a direct response to the 
requester. The requester shall be informed of the referral unless 
otherwise instructed by the originating agency. This is not a denial of 
a FOIA request; thus no appeal rights accrue to the requester.
    (3) When a FOIA request is received for a record created by a 
Treasury bureau that includes information originated by another bureau 
of the Department of the Treasury or another agency, the record shall be 
referred to the originating agency or bureau for review and 
recommendation on disclosure. The agency or bureau shall respond to the 
referring office. The Treasury bureau shall not release any such records 
without prior consultation with the originating bureau or agency.
    (4) In certain instances and at the discretion of the Departmental 
Offices, requests having impact on two or more bureaus of the Department 
may be coordinated by the Departmental Offices.
    (d) Reasonable description of records. The request for records must 
describe the records in reasonably sufficient detail to enable employees 
who are familiar with the subject area of the request to locate the 
records without placing an unreasonable burden upon the Department. 
Whenever possible, a request should include specific information about 
each record sought, such as the date, title or name, author, recipients, 
and subject matter of the record. If the Department determines that the 
request does not reasonably describe the records sought, the requester 
shall be given an opportunity to provide additional information. Such 
opportunity may, when necessary, involve a discussion with knowledgeable 
Department of the Treasury personnel. The reasonable description 
requirement shall not be used by officers or employees of the Department 
of the Treasury to improperly withhold records from the public.
    (e) Requests for expedited processing. (1) When a request for 
records includes a request for expedited processing, both the envelope 
and the request itself must be clearly marked, ``Expedited Processing 
Requested.''
    (2) Records will be processed as soon as practicable when a 
requester asks for expedited processing in writing and is granted such 
expedited treatment by the Department. The requester must

[[Page 18]]

demonstrate a compelling need for expedited processing of the requested 
records. A compelling need is defined as follows:
    (i) Failure to obtain the requested records on an expedited basis 
could reasonably be expected to pose an imminent threat to the life or 
physical safety of an individual. The requester shall fully explain the 
circumstances warranting such an expected threat so that the Department 
may make a reasoned determination that a delay in obtaining the 
requested records could pose such a threat; or
    (ii) With respect to a request made by a person primarily engaged in 
disseminating information, urgency to inform the public concerning 
actual or alleged Federal Government activity. A person ``primarily 
engaged in disseminating information'' does not include individuals who 
are engaged only incidentally in the dissemination of information. The 
standard of ``urgency to inform'' requires that the records requested 
pertain to a matter of current exigency to the American public and that 
delaying a response to a request for records would compromise a 
significant recognized interest to and throughout the American general 
public. The requester must adequately explain the matter or activity and 
why the records sought are necessary to be provided on an expedited 
basis.
    (3) A demonstration of a compelling need by a person making a 
request for expedited processing shall be made by a statement certified 
by the requester to be true and correct to the best of his or her 
knowledge and belief. The statement must be in the form prescribed by 28 
U.S.C. 1746, ``I declare under penalty of perjury that the foregoing is 
true and correct to the best of my knowledge and belief. Executed on 
[date].''
    (4) Upon receipt by the appropriate bureau official, a request for 
expedited processing shall be considered and a determination as to 
whether to grant or deny the request for expedited processing shall be 
made, and the requester notified, within 10 calendar days of the date of 
the request. However, in no event shall the bureau have fewer than five 
days (excluding Saturdays, Sundays, and legal public holidays) from the 
date of receipt of the request for such processing. The determination to 
grant or deny a request for expedited processing may be made solely on 
the information contained in the initial letter requesting expedited 
treatment.
    (5) Appeals of initial determinations to deny expedited processing 
must be made within 10 calendar days of the date of the initial letter 
of determination denying expedited processing. Both the envelope and the 
appeal itself shall be clearly marked, ``Appeal for Expedited 
Processing.''
    (6) An appeal determination regarding expedited processing shall be 
made, and the requester notified, within 10 days (excluding Saturdays, 
Sundays, and legal public holidays) from the date of receipt of the 
appeal.
    (f) Date of receipt of request. A request for records shall be 
considered to have been received on the date on which a complete request 
containing the information required by paragraph (b) of this section has 
been received. A determination that a request is deficient in any 
respect is not a denial of access, and such determinations are not 
subject to administrative appeal. Requests shall be stamped with the 
date of receipt by the office prescribed in the appropriate appendix. As 
soon as the date of receipt has been established, the requester shall be 
so informed and shall also be advised when to expect a response. The 
acknowledgment of receipt requirement shall not apply if a disclosure 
determination will be issued prior to the end of the 20-day time limit.
    (g) Search for record requested. Department of the Treasury 
employees shall search to identify and locate requested records, 
including records stored at Federal Records Centers. Searches for 
records maintained in electronic form or format may require the 
application of codes, queries, or other minor forms of programming to 
retrieve the requested records. Wherever reasonable, searches shall be 
done by electronic means. However, searches of electronic records are 
not required when such searches would significantly interfere with the 
operation of a Treasury automated information system or would require 
unreasonable effort to conduct. The Department of the Treasury is not 
required under 5 U.S.C. 552 to tabulate or compile information for the 
purpose

[[Page 19]]

of creating a record or records that do not exist.
    (h) Initial determination. (1) In general. The officers designated 
in the appendices to this part shall make initial determinations either 
to grant or to deny in whole or in part requests for records. Such 
officers shall respond in the approximate order of receipt of the 
requests, to the extent consistent with sound administrative practice. 
These determinations shall be made and the requester notified within 20 
days (excepting Saturdays, Sundays, and legal public holidays) after the 
date of receipt of the request, as determined in accordance with 
paragraph (f) of this section, unless the designated officer invokes an 
extension pursuant to paragraph (j)(1) of this section or the requester 
otherwise agrees to an extension of the 20-day time limitation.
    (2) Granting of request. If the request is granted in full or in 
part, and if the requester wants a copy of the records, a copy of the 
records shall be mailed to the requester, together with a statement of 
the applicable fees, either at the time of the determination or shortly 
thereafter.
    (3) Inspection of records. In the case of a request for inspection, 
the requester shall be notified in writing of the determination, when 
and where the requested records may be inspected, and of the fees 
incurred in complying with the request. The records shall then promptly 
be made available for inspection at the time and place stated, in a 
manner that will not interfere with Department of the Treasury 
operations and will not exclude other persons from making inspections. 
The requester shall not be permitted to remove the records from the room 
where inspection is made. If, after making inspection, the requester 
desires copies of all or a portion of the requested records, copies 
shall be furnished upon payment of the established fees prescribed by 
Sec. 1.7. Fees may be charged for search and review time as stated in 
Sec. 1.7.
    (4) Denial of request. If it is determined that the request for 
records should be denied in whole or in part, the requester shall be 
notified by mail. The letter of notification shall:
    (i) State the exemptions relied on in not granting the request;
    (ii) If technically feasible, indicate the amount of information 
deleted at the place in the record where such deletion is made (unless 
providing such indication would harm an interest protected by the 
exemption relied upon to deny such material);
    (iii) Set forth the name and title or position of the responsible 
official;
    (iv) Advise the requester of the right to administrative appeal in 
accordance with paragraph (i) of this section; and
    (v) Specify the official or office to which such appeal shall be 
submitted.
    (5) No records found. If it is determined, after a thorough search 
for records by the responsible official or his delegate, that no records 
have been found to exist, the responsible official will so notify the 
requester in writing. The letter of notification will advise the 
requester of the right to administratively appeal the Department's 
determination that no records exist (i.e., to challenge the adequacy of 
the Department's search for responsive records) in accordance with 
paragraph (i) of this section. The response shall specify the official 
or office to which the appeal shall be submitted for review.
    (i) Administrative appeal. (1)(i) A requester may appeal a 
Department of the Treasury initial determination when:
    (A) Access to records has been denied in whole or in part;
    (B) There has been an adverse determination of the requester's 
category as provided in Sec. 1.7(d)(4);
    (C) A request for fee waiver or reduction has been denied;
    (D) It has been determined that no responsive records exist; or
    (E) A request for expedited processing has been denied.
    (ii) An appeal, other than an appeal for expedited processing, must 
be submitted within 35 days of the date of the initial determination or 
the date of the letter transmitting the last records released, whichever 
is later, except in the case of a denial for expedited processing. An 
appeal of a denial for expedited processing must be made within 10 days 
of the date of the initial determination to deny expedited processing 
(see Sec. 1.5(e)(5)). All appeals must be submitted to the official 
specified in the

[[Page 20]]

appropriate appendix to this subpart whose title and address should also 
have been included in the initial determination. An appeal that is 
improperly addressed shall be considered not to have been received by 
the Department until the office specified in the appropriate appendix 
receives the appeal.
    (2) The appeal shall--
    (i) Be made in writing and signed by the requester or his or her 
representative;
    (ii) Be addressed to and mailed or hand delivered within 35 days (or 
within 10 days when expedited processing has been denied) of the date of 
the initial determination, or the date of the letter transmitting the 
last records released, whichever is later, to the office or officer 
specified in the appropriate appendix to this subpart and also in the 
initial determination. (See the appendices to this subpart for the 
address to which appeals made by mail should be addressed);
    (iii) Set forth the address where the requester desires to be 
notified of the determination on appeal;
    (iv) Specify the date of the initial request and date of the letter 
of initial determination, and, where possible, enclose a copy of the 
initial request and the initial determination being appealed.
    (3)(i) Appeals shall be stamped with the date of their receipt by 
the office to which addressed, and shall be processed in the approximate 
order of their receipt. The receipt of the appeal shall be acknowledged 
by the office or officer specified in the appropriate appendix to this 
subpart and the requester advised of the date the appeal was received 
and the expected date of response. The decision to affirm the initial 
determination (in whole or in part) or to grant the request for records 
shall be made and notification of the determination mailed within 20 
days (exclusive of Saturdays, Sundays, and legal public holidays) after 
the date of receipt of the appeal, unless extended pursuant to paragraph 
(j)(1) of this section. If it is decided that the initial determination 
is to be upheld (in whole or in part) the requester shall be--
    (A) Notified in writing of the denial;
    (B) Notified of the reasons for the denial, including the FOIA 
exemptions relied upon;
    (C) Notified of the name and title or position of the official 
responsible for the determination on appeal; and
    (D) Provided with a statement that judicial review of the denial is 
available in the United States District Court for the judicial district 
in which the requester resides or has a principal place of business, the 
judicial district in which the requested records are located, or the 
District of Columbia in accordance with 5 U.S.C. 552(a)(4)(B).
    (ii) If the initial determination is reversed on appeal, the 
requester shall be so notified and the request shall be processed 
promptly in accordance with the decision on appeal.
    (4) If a determination cannot be made within the 20-day period (or 
within a period of extension pursuant to paragraph (j)(1) of this 
section), the requester may be invited to agree to a voluntary extension 
of the 20-day appeal period. This voluntary extension shall not 
constitute a waiver of the right of the requester ultimately to commence 
an action in a United States district court.
    (j) Time extensions; unusual circumstances. (1) In unusual 
circumstances, the time limitations specified in paragraphs (h) and (i) 
of this section may be extended by written notice from the official 
charged with the duty of making the determination to the person making 
the request or appeal setting forth the reasons for this extension and 
the date on which the determination is expected to be sent. As used in 
this paragraph, unusual circumstances means, but only to the extent 
reasonably necessary to the proper processing of the particular 
requests:
    (i) The need to search for and collect the requested records from 
field facilities or other establishments that are separate from the 
office processing the request;
    (ii) The need to search for, collect, and appropriately examine a 
voluminous amount of separate and distinct records which are demanded in 
a single request; or
    (iii) The need for consultation, which shall be conducted with all 
practicable

[[Page 21]]

speed, with another agency having a substantial interest in the 
determination of the request, or among two or more bureaus or components 
of bureaus of the Department of the Treasury having substantial subject 
matter interest therein.
    (2) Any extension or extensions of time shall not cumulatively total 
more than 10 days (exclusive of Saturdays, Sundays, and legal public 
holidays). However, if additional time is needed to process the request, 
the bureau shall notify the requester and provide the requester an 
opportunity to limit the scope of the request or arrange for an 
alternative time frame for processing the request or a modified request. 
The requester shall retain the right to define the desired scope of the 
request, as long as it meets the requirements contained in this subpart.
    (3) Bureaus may establish multitrack processing of requests based on 
the amount of work or time, or both, involved in processing requests.
    (4) If more than one request is received from the same requester, or 
from a group of requesters acting in concert, and the Department 
believes that such requests constitute a single request which would 
otherwise satisfy the unusual circumstances specified in paragraph 
(j)(1) of this section, and the requests involve clearly related 
matters, the Department may aggregate these requests for processing 
purposes.
    (k) Failure to comply. If a bureau of the Department of the Treasury 
fails to comply with the time limits specified in paragraphs (h) or (i) 
of this section , or the time extensions of paragraph (j) of this 
section, any person making a request for records in accordance with 
Sec. 1.5 shall be considered to have exhausted administrative remedies 
with respect to the request. Accordingly, the person making the request 
may initiate suit as set forth in paragraph (l) of this section.
    (l) Judicial review. If an adverse determination is made upon appeal 
pursuant to paragraph (i) of this section, or if no determination is 
made within the time limits specified in paragraphs (h) and (i) of this 
section, together with any extension pursuant to paragraph (j)(1) of 
this section or within the time otherwise agreed to by the requester, 
the requester may commence an action in a United States district court 
in the district in which he resides, in which his principal place of 
business is located, in which the records are situated, or in the 
District of Columbia, pursuant to 5 U.S.C. 552(a)(4).
    (m) Preservation of records. Under no circumstances shall records be 
destroyed while they are the subject of a pending request, appeal, or 
lawsuit under the FOIA.
    (n) Processing requests that are not properly addressed. A request 
that is not properly addressed as specified in the appropriate appendix 
to this subpart shall be forwarded to the appropriate bureau or bureaus 
for processing. If the recipient of the request does not know the 
appropriate bureau to forward it to, the request shall be forwarded to 
the Departmental Disclosure Officer (Disclosure Services, DO), who will 
determine the appropriate bureau. A request not addressed to the 
appropriate bureau will be considered to have been received for purposes 
of paragraph (f) of this section when the request has been received by 
the appropriate bureau office as designated in the appropriate appendix 
to this subpart. An improperly addressed request, when received by the 
appropriate bureau office, shall be acknowledged by that bureau.



Sec. 1.6  Business information.

    (a) In general. Business information provided to the Department of 
the Treasury by a business submitter shall not be disclosed pursuant to 
a Freedom of Information Act request except in accordance with this 
section.
    (b) Notice to business submitters. A bureau shall provide a business 
submitter with prompt written notice of receipt of a request or appeal 
encompassing its business information whenever required in accordance 
with paragraph (c) of this section, and except as is provided in 
paragraph (g) of this section. Such written notice shall either describe 
the exact nature of the business information requested or provide copies 
of the records or portions of records containing the business 
information.
    (c) When notice is required. The bureau shall provide a business 
submitter with

[[Page 22]]

notice of receipt of a request or appeal whenever:
    (1) The business submitter has in good faith designated the 
information as commercially or financially sensitive information, or
    (2) The bureau has reason to believe that disclosure of the 
information could reasonably be expected to cause substantial 
competitive harm.
    (3) Notice of a request for business information falling within 
paragraph (c)(1) or (2) of this section shall be required for a period 
of not more than ten years after the date of submission unless the 
business submitter requests, and provides acceptable justification for, 
a specific notice period of greater duration.
    (4) The submitter's claim of confidentiality should be supported by 
a statement by an authorized representative of the company providing 
specific justification that the information in question is in fact 
confidential commercial or financial information and has not been 
disclosed to the public.
    (d) Opportunity to object to disclosure. (1) Through the notice 
described in paragraph (b) of this section, a bureau shall afford a 
business submitter ten days from the date of the notice (exclusive of 
Saturdays, Sundays, and legal public holidays) to provide the bureau 
with a detailed statement of any objection to disclosure. Such statement 
shall specify all grounds for withholding any of the information under 
any exemption of the Freedom of Information Act and, in the case of 
Exemption 4, shall demonstrate why the information is considered to be a 
trade secret or commercial or financial information that is privileged 
or confidential. Information provided by a business submitter pursuant 
to this paragraph may itself be subject to disclosure under the FOIA.
    (2) When notice is given to a submitter under this section, the 
requester shall be advised that such notice has been given to the 
submitter. The requester shall be further advised that a delay in 
responding to the request may be considered a denial of access to 
records and that the requester may proceed with an administrative appeal 
or seek judicial review, if appropriate. However, the requester will be 
invited to agree to a voluntary extension of time so that the bureau may 
review the business submitter's objection to disclose.
    (e) Notice of intent to disclose. A bureau shall consider carefully 
a business submitter's objections and specific grounds for nondisclosure 
prior to determining whether to disclose business information. Whenever 
a bureau decides to disclose business information over the objection of 
a business submitter, the bureau shall forward to the business submitter 
a written notice which shall include:
    (1) A statement of the reasons for which the business submitter's 
disclosure objections were not sustained;
    (2) A description of the business information to be disclosed; and
    (3) A specified disclosure date which is not less than ten days 
(exclusive of Saturdays, Sundays, and legal public holidays) after the 
notice of the final decision to release the requested information has 
been mailed to the submitter. Except as otherwise prohibited by law, a 
copy of the disclosure notice shall be forwarded to the requester at the 
same time.
    (f) Notice of FOIA lawsuit. Whenever a requester brings suit seeking 
to compel disclosure of business information covered by paragraph (c) of 
this section, the bureau shall promptly notify the business submitter.
    (g) Exception to notice requirement. The notice requirements of this 
section shall not apply if:
    (1) The bureau determines that the information shall not be 
disclosed;
    (2) The information lawfully has been published or otherwise made 
available to the public; or
    (3) Disclosure of the information is required by law (other than 5 
U.S.C. 552).



Sec. 1.7  Fees for services.

    (a) In general. This fee schedule is applicable uniformly throughout 
the Department of the Treasury and pertains to requests processed under 
the Freedom of Information Act. Specific levels of fees are prescribed 
for each of the following categories of requesters. Requesters are asked 
to identify the applicable fee category they belong to in

[[Page 23]]

their initial request in accordance with Sec. 1.5(b).
    (1) Commercial use requesters. These requesters are assessed charges 
which recover the full direct costs of searching for, reviewing, and 
duplicating the records sought. Commercial use requesters are not 
entitled to two hours of free search time or 100 free pages of 
duplication of documents. Moreover, when a request is received for 
disclosure that is primarily in the commercial interest of the 
requester, the Department is not required to consider a request for a 
waiver or reduction of fees based upon the assertion that disclosure 
would be in the public interest. The Department may recover the cost of 
searching for and reviewing records even if there is ultimately no 
disclosure of records, or no records are located.
    (2) Educational and Non-Commercial Scientific Institution 
Requesters. Records shall be provided to requesters in these categories 
for the cost of duplication alone, excluding charges for the first 100 
pages. To be eligible, requesters must show that the request is made 
under the auspices of a qualifying institution and that the records are 
not sought for a commercial use, but are sought in furtherance of 
scholarly (if the request is from an educational institution) or 
scientific (if the request is from a non-commercial scientific 
institution) research. These categories do not include requesters who 
want records for use in meeting individual academic research or study 
requirements.
    (3) Requesters who are Representatives of the News Media. Records 
shall be provided to requesters in this category for the cost of 
duplication alone, excluding charges for the first 100 pages.
    (4) All Other Requesters. Requesters who do not fit any of the 
categories described above shall be charged fees that will recover the 
full direct cost of searching for and duplicating records that are 
responsive to the request, except that the first 100 pages of 
duplication and the first two hours of search time shall be furnished 
without charge. The Department may recover the cost of searching for 
records even if there is ultimately no disclosure of records, or no 
records are located. Requests from persons for records about themselves 
filed in the Department's systems of records shall continue to be 
treated under the fee provisions of the Privacy Act of 1974 which permit 
fees only for duplication, after the first 100 pages are furnished free 
of charge.
    (b) Fee waiver determination. Where the initial request includes a 
request for reduction or waiver of fees, the responsible official shall 
determine whether to grant the request for reduction or waiver before 
processing the request and notify the requester of this decision. If the 
decision does not waive all fees, the responsible official shall advise 
the requester of the fact that fees shall be assessed and, if 
applicable, payment must be made in advance pursuant to Sec. 1.7(e)(2).
    (c) When fees are not charged. (1) No fee shall be charged for 
monitoring a requester's inspection of records.
    (2) Fees shall be charged in accordance with the schedule contained 
in paragraph (g) of this section for services rendered in responding to 
requests for records, unless any one of the following applies:
    (i) Services were performed without charge;
    (ii) The cost of collecting a fee would be equal to or greater than 
the fee itself; or,
    (iii) The fees were waived or reduced in accordance with paragraph 
(d) of this section.
    (d) Waiver or reduction of fees. (1) Fees may be waived or reduced 
on a case-by-case basis in accordance with this paragraph by the 
official who determines the availability of the records, provided such 
waiver or reduction has been requested in writing. Fees shall be waived 
or reduced by this official when it is determined, based upon the 
submission of the requester, that a waiver or reduction of the fees is 
in the public interest because furnishing the information is likely to 
contribute significantly to public understanding of the operations or 
activities of the government and is not primarily in the commercial 
interest of the requester. Fee waiver/reduction requests shall be 
evaluated against the fee waiver policy guidance issued by the 
Department of Justice on April 2, 1987.

[[Page 24]]

    (2) Normally no charge shall be made for providing records to state 
or foreign governments, international governmental organizations, or 
local government agencies or offices.
    (3) Appeals from denials of requests for waiver or reduction of fees 
shall be decided in accordance with the criteria set forth in paragraph 
(d)(1) of this section by the official authorized to decide appeals from 
denials of access to records. Appeals shall be addressed in writing to 
the office or officer specified in the appropriate appendix to this 
subpart within 35 days of the denial of the initial request for waiver 
or reduction and shall be decided within 20 days (excluding Saturdays, 
Sundays, and legal public holidays).
    (4) Appeals from an adverse determination of the requester's 
category as described in Sec. 1.5(b)(2) and provided in Sec. 1.5(i)(1) 
shall be decided by the official authorized to decide appeals from 
denials of access to records and shall be based upon a review of the 
requester's submission and the bureau's own records. Appeals shall be 
addressed in writing to the office or officer specified in the 
appropriate appendix to this subpart within 35 days of the date of the 
bureau's determination of the requester's category and shall be decided 
within 20 days (excluding Saturdays, Sundays, and legal public 
holidays).
    (e) Advance notice of fees. (1) When the fees for processing the 
request are estimated to exceed the limit set by the requester, and that 
amount is less than $250, the requester shall be notified of the 
estimated costs. The requester must provide an agreement to pay the 
estimated costs; however, the requester shall also be given an 
opportunity to reformulate the request in an attempt to reduce fees.
    (2) If the requester has failed to state a limit and the costs are 
estimated to exceed $250.00, the requester shall be notified of the 
estimated costs and must pre-pay such amount prior to the processing of 
the request, or provide satisfactory assurance of full payment if the 
requester has a history of prompt payment of FOIA fees. The requester 
shall also be given an opportunity to reformulate the request in such a 
way as to constitute a request for responsive records at a reduced fee.
    (3) When the Department or a bureau of the Department acts under 
paragraphs (e)(1) or (2) of this section, the administrative time limits 
of 20 days (excluding Saturdays, Sundays, and legal public holidays) 
from receipt of initial requests or appeals, plus extensions of these 
time limits, shall begin only after fees have been paid, a written 
agreement to pay fees has been provided, or a request has been 
reformulated.
    (f) Form of payment. (1) Payment may be made by check or money order 
payable to the Treasury of the United States or the relevant bureau of 
the Department of the Treasury.
    (2) The Department of the Treasury reserves the right to request 
prepayment after a request is processed and before documents are 
released.
    (3) When costs are estimated or determined to exceed $250, the 
Department shall either obtain satisfactory assurance of full payment of 
the estimated cost where the requester has a history of prompt payment 
of FOIA fees or require a requester to make an advance payment of the 
entire estimated or determined fee before continuing to process the 
request.
    (4) If a requester has previously failed to pay a fee within 30 days 
of the date of the billing, the requester shall be required to pay the 
full amount owed plus any applicable interest, and to make an advance 
payment of the full amount of the estimated fee before the Department 
begins to process a new request or the pending request. Whenever 
interest is charged, the Department shall begin assessing interest on 
the 31st day following the day on which billing was sent. Interest shall 
be at the rate prescribed in 31 U.S.C. 3717. In addition, the Department 
shall take all steps authorized by the Debt Collection Act of 1982, as 
amended by the Debt Collection Improvement Act of 1996, including 
administrative offset pursuant to 31 CFR Part 5, disclosure to consumer 
reporting agencies and use of collection agencies, to effect payment.
    (g) Amounts to be charged for specific services. The fees for 
services performed by a bureau of the Department of the Treasury shall 
be imposed and collected as set forth in this paragraph.

[[Page 25]]

    (1) Duplicating records. All requesters, except commercial 
requesters, shall receive the first 100 pages duplicated without charge. 
Absent a determination to waive fees, a bureau shall charge requesters 
as follows:
    (i) $.20 per page, up to 8\1/2\  x  14", made by photocopy or 
similar process.
    (ii) Photographs, films, and other materials--actual cost of 
duplication.
    (iii) Other types of duplication services not mentioned above--
actual cost.
    (iv) Material provided to a private contractor for copying shall be 
charged to the requester at the actual cost charged by the private 
contractor.
    (2) Search services. Bureaus shall charge for search services 
consistent with the following:
    (i) Searches for other than electronic records. The Department shall 
charge for search time at the salary rate(s) (basic pay plus 16 percent) 
of the employee(s) making the search. However, where a single class of 
personnel is used exclusively (e.g., all administrative/clerical, or all 
professional/executive), an average rate for the range of grades 
typically involved may be established. This charge shall include 
transportation of personnel and records necessary to the search at 
actual cost. Fees may be charged for search time as prescribed in 
Sec. 1.7, even if the search does not yield any responsive records, or 
if records are denied.
    (ii) Searches for electronic records. The Department shall charge 
for actual direct cost of the search, including computer search time, 
runs, and the operator's salary. The fee for computer output shall be 
actual direct costs. For requesters in the ``all other'' category, when 
the cost of the search (including the operator time and the cost of 
operating the computer to process a request) equals the equivalent 
dollar amount of two hours of the salary of the person performing the 
search (i.e., the operator), the charge for the computer search will 
begin.
    (3) Review of records. The Department shall charge commercial use 
requesters for review of records at the salary rate(s) (i.e., basic pay 
plus 16 percent) of the employee(s) making the review. However, when a 
single class of personnel is used exclusively (e.g., all administrative/
clerical, or all professional/executive), an average rate for the range 
of grades typically involved may be established. Fees may be charged for 
review time as prescribed in Sec. 1.7, even if records ultimately are 
not disclosed.
    (4) Inspection of records. Fees for all services provided shall be 
charged whether or not copies are made available to the requester for 
inspection.
    (5) Other services. Other services and materials requested which are 
not covered by this part nor required by the FOIA are chargeable at the 
actual cost to the Department. This includes, but is not limited to:
    (i) Certifying that records are true copies;
    (ii) Sending records by special methods such as express mail, etc.
    (h) Aggregating requests. When the Department or a bureau of the 
Department reasonably believes that a requester or group of requesters 
is attempting to break a request down into a series of requests for the 
purpose of evading the assessment of fees, the agency shall aggregate 
any such requests and charge accordingly.

                         Appendices to Subpart A

                    Appendix A--Departmental Offices

    1. In general. This appendix applies to the Departmental Offices as 
defined in 31 CFR 1.1(a)(1).
    2. Public reading room. The public reading room for the Departmental 
Offices is the Treasury Library. The Library is located in the Main 
Treasury Building, 1500 Pennsylvania Avenue, NW., Washington, DC 20220. 
For building security purposes, visitors are required to make an 
appointment by calling 202-622-0990.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h) 
as to whether to grant requests for records of the Departmental Offices 
will be made by the head of the organizational unit having immediate 
custody of the records requested or the delegate of such official. 
Requests for records should be addressed to: Freedom of Information 
Request, DO, Assistant Director, Disclosure Services, Department of the 
Treasury, 1500 Pennsylvania Avenue, NW, Washington, DC 20220.
    4. Administrative appeal of initial determination to deny records.
    (i) Appellate determinations under 31 CFR 1.5(i) with respect to 
records of the Departmental Offices will be made by the Secretary, 
Deputy Secretary, Under Secretary,

[[Page 26]]

General Counsel, Inspector General, Treasury Inspector General for Tax 
Administration, Treasurer of the United States, or Assistant Secretary 
having jurisdiction over the organizational unit which has immediate 
custody of the records requested, or the delegate of such officer.
    (ii) Appellate determinations with respect to requests for expedited 
processing shall be made by the Deputy Assistant Secretary 
(Administration).
    (iii) Appeals should be addressed to:

Freedom of Information Appeal, DO, Assistant Director, Disclosure 
Services, Department of the Treasury, 1500 Pennsylvania Avenue, NW., 
Washington, DC 20220.

    5. Delivery of process. Service of process will be received by the 
General Counsel of the Department of the Treasury or the delegate of 
such officer and shall be delivered to the following location: General 
Counsel, Department of the Treasury, Room 3000, Main Treasury Building, 
1500 Pennsylvania Avenue, NW., Washington, DC 20220.

                  Appendix B--Internal Revenue Service

    1. In general. This appendix applies to the Internal Revenue 
Service. See also 26 CFR 601.702.
    2. Public reading room. The public reading rooms for the Internal 
Revenue Service are maintained at the following location:

                             National Office

                             Mailing Address

Freedom of Information Reading Room, PO Box 795, Ben Franklin Station, 
Washington, DC 20044

                             Walk-In Address

Room 1621, 1111 Constitution Avenue, NW., Washington, DC

                            Northeast Region

                             Mailing Address

Freedom of Information Reading Room, PO Box 5138, E:QMS:D, New York, NY 
10163

                             Walk-In Address

11th Floor, 110 W. 44th Street, New York, NY

                            Midstates Region

                             Mailing Address

Freedom of Information Reading Room, Mail Code 7000 DAL, 1100 Commerce 
Street, Dallas, TX 75242

                             Walk-In Address

10th Floor, Rm. 10B37, 1100 Commerce Street, Dallas, TX

                            Southeast Region

                             Mailing Address

401 W. Peachtree Street, NW., Stop 601D, Room 868, Atlanta, GA 30365

                             Walk-In Address

Same as mailing address

                             Western Region

                             Mailing Address

1301 Clay Street, Stop 800-S, Oakland, CA 94612

                             Walk-In Address

8th Floor, 1301 Clay Street, Oakland, CA

    3. Requests for records. Initial determinations under 31 CFR 1.5(h) 
as to whether to grant requests for records of the Internal Revenue 
Service, grant expedited processing, grant a fee waiver, or determine 
requester category will be made by those officials specified in 26 CFR 
601.702.
    4. Administrative appeal of initial determination to deny records. 
Appellate eterminations under 31 CFR 1.5(i) with respect to records of 
the Internal Revenue Service will be made by the Commissioner of 
Internal Revenue or the delegate of such officer. Appeals made by mail 
should be addressed to: Freedom of Information Appeal, Commissioner of 
Internal Revenue Service, c/o Ben Franklin Station, PO Box 929, 
Washington, DC 20044.
    Appeals may be delivered personally to the Assistant Chief Counsel 
(Disclosure Litigation) CC:EL:D, Office of the Chief Counsel, Internal 
Revenue Building, 1111 Constitution Avenue NW., Washington, D.C.
    5. Delivery of process. Service of process shall be effected 
consistent with Rule 4 of the Federal Rule of Civil Procedure, and 
directed to the Commissioner of Internal Revenue at the following 
address: Commissioner, Internal Revenue Service, 1111 Constitution 
Avenue NW., Washington, DC 20224. Attention: CC:EL:D.

                Appendix C--United States Customs Service

    1. In general. This appendix applies to the United States Customs 
Service.
    2. Public reading room. The public reading room for the United 
States Customs Service is maintained at the following location: United 
States Customs Service, 1300 Pennsylvania Avenue NW., Washington, DC 
20229.
    3. Requests for records. 
    (a) Headquarters--Initial determinations under 31 CFR 1.5(h) as to 
whether to grant requests for records will be made by the appropriate 
Division Director at Customs Service Headquarters having custody of or 
functional jurisdiction over the subject matter of the requested 
records. If the request relates

[[Page 27]]

to records maintained in an office which is not within a division, the 
initial determination shall be made by the individual designated for 
that purpose by the Assistant Commissioner having responsibility for 
that office. Requests may be mailed or delivered in person to: Freedom 
of Information Act, Chief, Disclosure Law Branch, U.S. Customs Service, 
1300 Pennsylvania Avenue, NW., Washington, DC 20229.
    (b) Field Offices--Initial determinations under 31 CFR 1.5(h) as to 
whether to grant requests for records maintained by the Office of 
Investigations will be made by the Special Agent in Charge in whose 
office the records are maintained. Initial determinations of records 
maintained in Customs Ports of Entry as to whether or not to grant 
requests for records will be made by the Port Director of the Customs 
Service Port having jurisdiction over the Port of Entry in which the 
records are maintained. Requests may be mailed or faxed to or delivered 
personally to the respective Special Agents in Charge or Port Directors 
of the Customs Service Ports at the following locations:

               Offices of Special Agents in Charge (SACS)

                              Atlanta--SAC

1691 Phoenix Blvd., Suite 250, Atlanta, Georgia 30349, Phone (770) 994-
2230, FAX (770) 994-2262

                              Detroit--SAC

McNamara Federal Building, 477 Michigan Avenue, Room 350, Detroit, 
Michigan 48226-2568, Phone (313) 226-3166, FAX (313) 226-6282

                             Baltimore--SAC

40 South Gay Street, 3rd Floor Baltimore, Maryland 21202, Phone (410) 
962-2620, FAX (410) 962-3469

                              El Paso--SAC

9400 Viscount Blvd., Suite 200, El Paso, Texas 79925, Phone (915) 540-
5700, FAX (915) 540-5754

                               Boston--SAC

10 Causeway Street, Room 722, Boston, MA 02222-1054, Phone (617) 565-
7400, FAX (617) 565-7422

                              Houston--SAC

4141 N. Sam Houston Pkwy, E., Houston, Texas 77032, Phone (281) 985-
0500, FAX (281) 985-0505

                              Buffalo--SAC

111 West Huron Street, Room 416, Buffalo, New York 14202, Phone (716) 
551-4375, FAX (716) 551-4379

                            Los Angeles--SAC

300 South Ferry St., Room 2037, Terminal Island, CA 90731, Phone (310) 
514-6231, FAX (310) 514-6280

                              Chicago--SAC

610 South Canal Street, Room 1001, Chicago, Illinois 60607, Phone (312) 
353-8450, FAX (312) 353-8455

                               Miami--SAC

8075 NW 53rd Street, Scranton Building, Miami, Florida 33166, Phone 
(305) 597-6030, FAX (305) 597-6227

                               Denver--SAC

115 Inverness Drive, East, Suite 300, Englewood, CO 80112-5131, Phone 
(303) 784-6480, FAX (303) 784-6490

                            New Orleans--SAC

423 Canal Street, Room 207, New Orleans, LA 70130, Phone (504) 670-2416, 
FAX (504) 589-2059

                              New York--SAC

6 World Trade Center, New York, New York 10048-0945, Phone (212) 466-
2900, FAX (212) 466-2903

                              San Juan--SAC

1, La Puntilla Street, Room 110, San Juan, PR 00901, Phone (787) 729-
6975 FAX (787) 729-6646

                            San Antonio--SAC

10127 Morocco, Suite 180, San Antonio, Texas 78216, Phone (210) 229-
4561, FAX (210) 229-4582

                              Seattle--SAC

1000--2nd Avenue, Suite 2300, Seattle, Washington, 98104, Phone (206) 
553-7531, FAX (206) 553-0826

                             San Diego--SAC

185 West ``F'' Street, Suite 600, San Diego, CA 92101, Phone (619) 557-
6850, FAX (619) 557-5109

                               Tampa--SAC

2203 North Lois Avenue, Suite 600, Tampa, Florida 33607, Phone (813) 
348-1881, FAX (813) 348-1871

                           San Francisco--SAC

1700 Montgomery Street, Suite 445, San Francisco, CA 94111, Phone (415) 
705-4070, FAX (415) 705-4065

                               Tucson--SAC

555 East River Road, Tucson, Arizona 85704, Phone (520) 670-6026, FAX 
(520) 670-6233

[[Page 28]]

                          Customs Service Ports

    Anchorage: 605 West Fourth Avenue Anchorage, AK 99501. Phone: (907) 
271-2675; FAX: (907) 271-2684.
    Minneapolis: 110 South Street Minneapolis, MN 55401. Phone: (612) 
348-1690; FAX: (612) 348-1630.
    Baltimore: 200 St. Paul Place Baltimore, MD 21202. Phone: (410) 962-
2666; FAX: (410) 962-9335.
    Mobile: 150 North Royal Street Mobile, AL 36602. Phone: (205) 441-
5106; FAX: (205) 441-6061.
    Blaine: 9901 Pacific Highway Blaine, WA 98230. Phone: (360) 332-
5771; FAX: (360) 332-4701.
    New Orleans: 423 Canal Street New Orleans, LA 70130. Phone: (504) 
589-6353; FAX: (504) 589-7305.
    Boston: 10 Causeway Street Boston, MA 02222-1059. Phone: (617) 565-
6147; FAX: (617) 565-6137.
    New York: 6 World Trade Center New York, NY 10048. Phone: (212) 466-
4444; FAX: (212) 455-2097.
    Buffalo: 111 West Huron Street Buffalo, NY 14202-22378. Phone: (716) 
551-4373; FAX: (716) 551-5011.
    New York-JFK Area: Building 77 Jamaica, NY 11430. Phone: (718) 553-
1542; FAX: (718) 553-0077.
    Champlain: 35 West Service Road Rts. 1 & 9 South Champlain, NY 
12919. Phone: (518) 298-8347; FAX: (518) 298-8314.
    New York-NY/Newark Area: Hemisphere Center, Newark, NJ 07114. Phone: 
(201) 645-3760; FAX: (201) 645-6634.
    Charleston: 200 East Bay Street Charleston, SC 29401. Phone: (803) 
727-4296; FAX: (803) 727-4043.
    Nogales: 9 North Grand Avenue Nogales, AZ 85621. Phone: (520) 287-
1410; FAX: (520) 287-1421.
    Charlotte: 1801-K Cross Beam Drive Charlotte, NC 28217. Phone: (704) 
329-6101; FAX: (704) 329-6103.
    Norfolk: 200 Granby Street Norfolk, VA 23510. Phone: (804) 441-3400; 
FAX: (804) 441-6630.
    Charlotte/Amalie: Main Post OFC-Sugar Estate St. Thomas, VI 00801. 
Phone: (809) 774-2511; FAX: (809) 776-3489.
    Pembina: PO Box 610 Pembina, ND 58271. Phone: (701) 825-6201; FAX: 
(701) 825-6473.
    Chicago: 610 South Canal Street Chicago, IL 60607. Phone: (312) 353-
6100; FAX: (312) 353-2337.
    Philadelphia: 2nd & Chestnut Streets Philadelphia, PA 19106. Phone: 
(215) 597-4605; FAX: (215) 597-2103.
    Cleveland: 56 Erieview Plaza Cleveland, OH 44114. Phone: (216) 891-
3804; FAX: (216) 891-3836.
    Portland, Oregon: 511 NW Broadway Portland, OR 97209. Phone: (503) 
326-2865; FAX: (503) 326-3511.
    Dallas/Fort Worth: PO Box 61905 Dallas/Fort Worth Airport, TX 75261. 
Phone: (972) 574-2170; FAX: (972) 574-4818.
    Providence: 49 Pavilion Avenue Providence, RI 02905. Phone: (401) 
941-6326; FAX: (401) 941-6628.
    Denver: 4735 Oakland Street Denver, CO 80239. Phone: (303) 361-0715; 
FAX: (303) 361-0722.
    San Diego: 610 West Ash Street San Diego, CA 92188. Phone: (619) 
557-6758; FAX: (619) 557-5314.
    Detroit: 477 Michigan Avenue Detroit, MI 48226. Phone: (313) 226-
3178; FAX: (313) 226-3179.
    San Francisco: 555 Battery Avenue San Francisco, CA 94111. Phone: 
(415) 744-7700; FAX: (415) 744-7710.
    Duluth: 515 West 1st Street Duluth, MN 55802-1390. Phone: (218) 720-
5201; FAX: (218) 720-5216.
    San Juan: 1 La Puntilla San Juan, PR 00901. Phone: (809) 729-6965; 
FAX: (809) 729-6978.
    El Paso: 9400 Viscount Boulevard El Paso, TX 79925. Phone: (915) 
540-5800; FAX: (915) 540-3011.
    Savannah: 1 East Bay Street Savannah, GA 31401. Phone: (912) 652-
4256; FAX: (912) 652-4435.
    Great Falls: 300 2nd Avenue South Great Falls, MT 59403. Phone: 
(406) 453-7631; FAX: (406) 453-7069.
    Seattle: 1000 2nd Avenue Seattle, WA 98104-1049. Phone: (206) 553-
0770; FAX: (206) 553-2970.
    Honolulu: 335 Merchant Street Honolulu, HI 96813. Phone: (808) 522-
8060; FAX: (808) 522-8060.
    St. Albans: P.O. Box 1490 St. Albans, VT 05478. Phone: (802) 524-
7352; FAX: (802) 527-1338.
    Houston/Galveston: 1717 East Loop Houston, TX 77029. Phone: (713) 
985-6712; FAX: (713) 985-6705.
    St. Louis: 4477 Woodson Road St. Louis, MO 63134-3716. Phone: (314) 
428-2662; FAX: (314) 428-2889.
    Laredo/Colombia: P.O. Box 3130 Laredo, TX 78044. Phone: (210) 726-
2267; FAX: (210) 726-2948.
    Tacoma: 2202 Port of Tacoma Road, Tacoma, WA 98421. Phone: (206) 
593-6336; FAX: (206) 593-6351.
    Los Angeles: 300 South Ferry Street Terminal Island, CA 90731. 
Phone: (310) 514-6001; FAX: (310) 514-6769.
    Tampa: 4430 East Adamo Drive Tampa, FL 33605. Phone: (813) 228-2381; 
FAX: (813) 225-7309.
    Miami Airport: 6601 West 25th Street Miami, FL 33102-5280. Phone: 
(305) 869-2800; FAX: (305) 869-2822.
    Washington, DC: P.O. Box 17423 Washington, DC. 20041. Phone: (703) 
318-5900; FAX: (703) 318-6706.

[[Page 29]]

    Milwaukee: P.O. Box 37260 Milwaukee, WI 53237-0260. Phone: (414) 
571-2860; FAX: (414) 762-0253.
    (c) All such requests should be conspicuously labeled on the face of 
the envelope, ``Freedom of Information Act Request'' or ``FOIA 
Request''.
    4. Administrative appeal of initial determination to deny records. 
Appellate determinations under 31 CFR 1.5(i) will be made by the 
Assistant Commissioner of Customs (Office of Regulations and Rulings), 
or his designee, and all such appeals should be mailed, faxed (202/927-
1873) or personally delivered to the United States Customs Service, 1300 
Pennsylvania Avenue, NW., Washington, DC 20229. If possible, a copy of 
the initial letter of determination should be attached to the appeal.
    5. Delivery of process. Service of process will be received by the 
Chief Counsel, United States Customs Service, 1300 Pennsylvania Avenue, 
NW., Washington, DC 20229.

                Appendix D--United States Secret Service

    1. In general. This appendix applies to the United States Secret 
Service.
    2. Public reading room. The United States Secret Service will 
provide a room on an ad hoc basis when necessary. Contact the Disclosure 
Officer, Room 720, 1800 G Street, NW., Washington, DC 20223 to make 
appointments.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h) 
as to whether to grant requests for records of the United States Secret 
Service will be made by the Freedom of Information and Privacy Acts 
Officer, United States Secret Service. Requests may be mailed or 
delivered in person to: Freedom of Information Act Request, FOIA and 
Privacy Acts Officer, U.S. Secret Service, Room 720, 1800 G Street, NW., 
Washington, DC 20223.
    4. Administrative appeal of initial determination to deny records. 
Appellate determinations under 31 CFR 1.5(i) with respect to records of 
the United States Secret Service will be made by the Deputy Director, 
United States Secret Service. Appeals should be addressed to: Freedom of 
Information Appeal, Deputy Director, U.S. Secret Service, Room 800, 1800 
G Street, NW., Washington, DC 20223.
    5. Delivery of Process. Service of process will be received by the 
United States Secret Service Chief Counsel at the following address: 
Chief Counsel, U.S. Secret Service, Room 842, 1800 G Street, NW., 
Washington, DC 20223.

           Appendix E--Bureau of Alcohol, Tobacco and Firearms

    1. In general. This appendix applies to the Bureau of Alcohol, 
Tobacco and Firearms.
    2. Public reading room. The Bureau of Alcohol, Tobacco and Firearms 
will make materials available for review on an ad hoc basis when 
necessary. Contact the Chief, Disclosure Division, Bureau of Alcohol, 
Tobacco, and Firearms, 650 Massachusetts Avenue, NW., Washington, DC 
20226.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h) 
as to whether to grant requests for records of the Bureau of Alcohol, 
Tobacco, and Firearms will be made by the Chief, Disclosure Division, 
Office of Assistant Director (Liaison and Public Information) or the 
delegate of such officer. Requests may be mailed or delivered in person 
to: Freedom of Information Act Request, Chief, Disclosure Division, 
Bureau of Alcohol, Tobacco, and Firearms, 650 Massachusetts Avenue, NW., 
Washington, DC 20226.
    4. Administrative appeal of initial determination to deny records. 
Appellate determinations under 31 CFR 1.5(i) with respect to records of 
the Bureau of Alcohol, Tobacco and Firearms will be made by the 
Assistant Director, Liaison and Public Information, Bureau of Alcohol, 
Tobacco, and Firearms or the delegate of such officer.
    Appeals may be mailed or delivered in person to: Freedom of 
Information Appeal, Assistant Director, Liaison and Public Information, 
Bureau of Alcohol, Tobacco, and Firearms, 650 Massachusetts Avenue, NW., 
Washington, DC 20226.
    5. Delivery of process. Service of process will be received by the 
Director of the Bureau of Alcohol, Tobacco, and Firearms at the 
following location: Bureau of Alcohol, Tobacco, and Firearms, 650 
Massachusetts Avenue, NW., Washington, DC 20226, Attention: Chief 
Counsel.

              Appendix F--Bureau of Engraving and Printing

    1. In general. This appendix applies to the Bureau of Engraving and 
Printing.
    2. Public reading room. Contact the Disclosure Officer, 14th and C 
Streets, SW., Washington, DC 20228, to make an appointment.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h) 
as to whether to grant requests for records of the Bureau of Engraving 
and Printing will be made by the Assistant to the Director. Requests may 
be mailed or delivered in person to: Freedom of Information Act Request, 
Disclosure Officer, (Assistant to the Director), Room 112-M, Bureau of 
Engraving and Printing, Washington, DC 20228.
    4. Administrative appeal of initial determination to deny records. 
Appellate determinations under 31 CFR 1.5(i) with respect to records of 
the Bureau of Engraving and Printing will be made by the Director of the 
Bureau of Engraving and Printing or the delegate of the Director. 
Appeals may be mailed

[[Page 30]]

or delivered in person to: Freedom of Information Appeal, Director, 
Bureau of Engraving and Printing, 14th and C Streets, SW., Room 119-M, 
Washington, DC 20228.
    5. Delivery of process. Service of process will be received by the 
Chief Counsel or the delegate of such officer at the following location: 
Chief Counsel, Bureau of Engraving and Printing, 14th and C Streets, 
SW., Room 104-24 M, Washington, DC 20228.

                Appendix G--Financial Management Service

    1. In general. This appendix applies to the Financial Management 
Service.
    2. Public reading room. The public reading room for the Financial 
Management Service is maintained at the following location: Library, 
Main Treasury Building, 1500 Pennsylvania Avenue NW., Washington, DC 
20220. For building security purposes, visitors are required to make an 
appointment by calling 202/622-0990.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h) 
whether to grant requests for records will be made by the Disclosure 
Officer, Financial Management Service. Requests may be mailed or 
delivered in person to: Freedom of Information Request, Disclosure 
Officer, Financial Management Service, 401 14th Street, SW., Washington, 
DC 20227.
    4. Administrative appeal of initial determination to deny records. 
Appellate determinations under 31 CFR 1.5(i) will be made by the 
Commissioner, Financial Management Service. Appeals may be mailed to: 
Freedom of Information Appeal (FOIA), Commissioner, Financial Management 
Service, 401 14th Street, SW., Washington, DC 20227.
    Appeals may be delivered personally to the Office of the 
Commissioner, Financial Management Service, 401 14th Street, SW., 
Washington, DC.
    5. Delivery of process. Service of process will be received by the 
Commissioner, Financial Management Service, and shall be delivered to: 
Commissioner, Financial Management Service, Department of the Treasury, 
401 14th Street, SW., Washington, DC 20227.

                     Appendix H--United States Mint

    1. In general. This appendix applies to the United States Mint.
    2. Public reading room. The U.S. Mint will provide a room on an ad 
hoc basis when necessary. Contact the Freedom of Information/Privacy Act 
Officer, United States Mint, Judiciary Square Building, 7th floor, 633 
3rd Street, NW., Washington, DC 20220.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h) 
as to whether to grant requests for records of the United States Mint 
will be made by the Freedom of Information/Privacy Act Officer, United 
States Mint. Requests may be mailed or delivered in person to: Freedom 
of Information Act Request, Freedom of Information/Privacy Act Officer, 
United States Mint, Judiciary Square Building, 7th Floor, 633 3rd 
Street, NW., Washington, DC 20220.
    4. Administrative appeal of initial determination to deny records. 
Appellate determinations under 31 CFR 1.5(i) with respect to records of 
the United States Mint will be made by the Director of the Mint. Appeals 
made by mail should be addressed to: Freedom of Information Appeal, 
Director, United States Mint, Judiciary Square Building, 7th Floor, 633 
3rd Street, NW., Washington, DC 20220.
    5. Delivery of process. Service of process will be received by the 
Director of the Mint and shall be delivered to: Chief Counsel, United 
States Mint, Judiciary Square Building, 7th Floor, 633 3rd Street, NW., 
Washington, D.C. 20220.

                  Appendix I--Bureau of the Public Debt

    1. In general. This appendix applies to the Bureau of the Public 
Debt.
    2. Public reading room. The public reading room for the Bureau of 
the Public Debt is maintained at the following location: Library, Main 
Treasury Building, 1500 Pennsylvania Avenue, NW, Washington, DC 20220. 
For building security purposes, visitors are required to make an 
appointment by calling 202/622-0990.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h) 
as to whether to grant requests for records will be made by the 
Disclosure Officer of the Bureau of the Public Debt. Requests may be 
sent to: Freedom of Information Act Request, Disclosure Officer, Bureau 
of the Public Debt, Department of the Treasury, 999 E Street, NW., Room 
500, Washington, D.C. 20239-0001.
    4. Administrative appeal of initial determination to deny records. 
Appellate determinations under 31 CFR 1.5(i) with respect to records of 
the Bureau of the Public Debt will be made by the Commissioner of the 
Public Debt. Appeals may be sent to: Freedom of Information Appeal, 
Commissioner of the Public Debt, Department of the Treasury, 999 E 
Street, NW., Room 500, Washington, DC 20239-0001.
    5. Delivery of process. Service of process will be received by the 
Chief Counsel, Bureau of the Public Debt, or the delegate of such 
officer, and shall be delivered to the following location: Chief 
Counsel's Office, Bureau of the Public Debt, Room 501, 999 E Street, 
NW., Washington, DC 20239-0001, or Bureau of the Public Debt, 200 Third 
Street, Room G-15, Parkersburg, WV 26106-1328.

[[Page 31]]

          Appendix J--Office of the Comptroller of the Currency

    1. In general. This appendix applies to the Office of the 
Comptroller of the Currency.
    2. Public reading room. The Office of the Comptroller of the 
Currency will make materials available through its Public Information 
Room at 250 E Street, SW., Washington, DC 20219.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h) 
as to whether to grant requests for records of the Office of the 
Comptroller of the Currency will be made by the Disclosure Officer or 
the official so designated. Requests may be mailed or delivered in 
person to: Freedom of Information Act Request, Disclosure Officer, 
Communications Division, 3rd Floor, Comptroller of the Currency, 250 E 
Street, SW., Washington, DC 20219.
    4. Administrative appeal of initial determination to deny records. 
Appellate determinations under 31 CFR 1.5(i) with respect to records of 
the Office of the Comptroller of the Currency will be made by the Chief 
Counsel or delegates of such person. Appeals made by mail should be 
addressed to: Communications Division, Comptroller of the Currency, 250 
E Street, SW., Washington, DC 20219.
    Appeals may be delivered personally to the Communications Division, 
Comptroller of the Currency, 250 E Street, SW., Washington, DC.
    5. Delivery of process. Service of process will be received by the 
Director, Litigation Division, Comptroller of the Currency, and shall be 
delivered to such officer at the following location: Litigation 
Division, Comptroller of the Currency, 250 E Street, SW., Washington, DC 
20219.

           Appendix K--Federal Law Enforcement Training Center

    1. In general. This apppendix applies to the Federal Law Enforcement 
Training Center.
    2. Public reading room. The public reading room for the Federal Law 
Enforcement Training Center is maintained at the following location: 
Library, Building 262, Federal Law Enforcement Training Center, Glynco, 
GA 31524.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h) 
as to whether to grant requests for records will be made by the Chief, 
Management Analysis Division, Federal Law Enforcement Training Center. 
Requests made by mail should be addressed to: Freedom of Information Act 
Request, Freedom of Information Act Officer, Federal Law Enforcement 
Training Center, Department of the Treasury, Building 94, Glynco, GA 
31524.
    Requests may be delivered personally to the Management Analysis 
Division, Federal Law Enforcement Training Center, Building 94, Glynco, 
GA.
    4. Administrative appeal of initial determination to deny records. 
Appellate determinations under 31 CFR 1.5(i) with respect to records of 
the consolidated Federal Law Enforcement Training Center will be made by 
the Director, Federal Law Enforcement Training Center. Appeals may be 
mailed to: Freedom of Information Appeal, Federal Law Enforcement 
Training Center, Department of the Treasury, Building 94, Glynco, GA 
31524.
    5. Delivery of process. Service of process will be received by the 
Legal Counsel of the Federal Law Enforcement Training Center, or his 
delegate, and shall be delivered to such officer at the following 
location: Legal Counsel, Federal Law Enforcement Training Center, 
Department of the Treasury, Building 94, Glynco, GA 31524.

                Appendix L--Office of Thrift Supervision

    1. In general. This appendix applies to the Office of Thrift 
Supervision (OTS). OTS regulatory handbooks and other publications are 
available for sale. Information may be obtained by calling the OTS Order 
Department at 301/645-6264. OTS regulatory handbooks and other 
publications may be purchased by forwarding a request, along with a 
check to: OTS Order Department, PO Box 753, Waldorf, MD 20604 or by 
calling 301/645-6264 to pay by VISA or MASTERCARD.
    2. Public reading room. The public reading room for the Office of 
Thrift Supervision is maintained at the following location: 1700 G 
Street, NW., Washington, DC 20552.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h) 
as to whether to grant requests for records of the Office of Thrift 
Supervision will be made by the Director, OTS Dissemination Branch. 
Requests for records should be addressed to: Freedom of Information 
Request, Manager, Dissemination Branch, Records Management & Information 
Policy Division, Office of Thrift Supervision, 1700 G Street, NW., 
Washington, DC 20552.
    Requests for records may be delivered in person to: Public Reference 
Room, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC.
    4. Administrative appeal of initial determination to deny records. 
Appellate determinations under 31 CFR 1.5(i) with respect to records of 
the Office of Thrift Supervision will be made by the Director, Records 
Management & Information Policy, Office of Thrift Supervision, or their 
designee. Appeals made by mail should be addressed to: Freedom of 
Information Appeal, Director, Records Management & Information Policy 
Division, Office of Thrift Supervision, 1700 G Street, NW., Washington, 
DC 20552.

[[Page 32]]

    Appeals may be delivered in person to: Public Reference Room, Office 
of Thrift Supervision, 1700 G Street, NW., Washington, DC.
    5. Delivery of process. Service of process will be received by the 
Corporate Secretary of the Office of Thrift Supervision or their 
designee and shall be delivered to the following location: Corporate 
Secretary, Office of Thrift Supervision, 1700 G Street, NW., Washington, 
DC 20552.



                 Subpart B--Other Disclosure Provisions



Sec. 1.8  Scope.

    The regulations in this subpart concern access to information and 
records other than under 5 U.S.C. 552. This subpart is applicable only 
to the Departmental Offices as defined in Sec. 1.1(a) of this part and 
the United States Savings Bonds Division and the United States Secret 
Service.



Sec. 1.9  Records not to be otherwise withdrawn or disclosed.

    Except in accordance with this part, or as otherwise authorized, 
Treasury Department officers and employees are prohibited from making 
records or duplicates available to any person, not an officer or 
employee of the Department, and are prohibited from withdrawing any such 
records or duplicates from the files, possession or control of the 
Department.



Sec. 1.10  Oral information.

    (a) Officers and employees of the Department may, in response to 
requests, provide orally information contained in records of the 
Department which are determined to be available to the public. If the 
obtaining of such information requires search of the records, a written 
request and the payment of the fee for record search set forth in 
Sec. 1.6 will be required.
    (b) Information with respect to activities of the Department not a 
matter of record shall not be disclosed if the information involves 
matters exempt from disclosure under 5 U.S.C. 552 or the regulations in 
this part, or if the disclosure of such information would give the 
person requesting the information advantages not accorded to other 
citizens;



Sec. 1.11  Testimony or the production of records in a court or other proceeding.

    (a) Treasury Department officers and employees are prohibited from 
testifying or otherwise furnishing information obtained as a result of 
their official capacities or in connection with the transaction of 
public business, in compliance with a subpoena or other order or demand 
of any court or other authority without the prior approval of an officer 
authorized to determine the availability of records under these 
regulations.
    (b) Treasury Department officers and employees are prohibited from 
furnishing any record in compliance with subpoenas duces tecum or other 
order or demand of any court or other authority, without the prior 
approval of an officer authorized to determine the availability of 
records under the regulations in this part.
    (c) In court cases in which the United States or the Treasury 
Department is not a party, where the giving of testimony is desired, an 
affidavit by the litigant or the litigant's attorney, setting forth the 
information with respect to which the testimony of such officer or 
employee is desired, must be submitted before permission to testify will 
be granted. Permission to testify will, in all cases, be limited to the 
information set forth in the affidavit or to such portions thereof as 
may be deemed proper.
    (d) Where approval to testify or to furnish records in compliance 
with a subpoena, order or demand is not given the person to whom it is 
directed shall, if possible, appear in court or before the other 
authority and respectfully state his inability to comply in full with 
the subpoena, order or demand, relying for his action upon this section.



Sec. 1.12  Regulations not applicable to official request.

    The regulations in this part shall not be applicable to official 
requests of other governmental agencies or officers thereof acting in 
their official capacities, unless it appears that granting a particular 
request would be in violation of law or inimical to the public interest. 
Cases of doubt should be

[[Page 33]]

referred for decision to the supervisory official designated in 
Sec. 1.8.



                         Subpart C--Privacy Act



Sec. 1.20  Purpose and scope of regulations.

    The regulations in this subpart are issued to implement the 
provisions of the Privacy Act of 1974 (5 U.S.C. 552a). The regulations 
apply to all records which are contained in systems of records 
maintained by the Department of the Treasury and which are retrieved by 
an individual's name or personal identifier. They do not relate to those 
personnel records of Government employees, which are under the 
jurisdiction of the Office of Personnel Management to the extent such 
records are subject to regulations issued by such OPM. The regulations 
apply to all components of the Department of the Treasury. Any reference 
in this subpart to the Department or its officials, employees, or 
records shall be deemed to refer also to the components or their 
officials, employees, or records. The regulations set forth the 
requirements applicable to Department of the Treasury employees 
maintaining, collecting, using or disseminating records pertaining to 
individuals. They also set forth the procedures by which individuals may 
request notification of whether the Department of the Treasury maintains 
or has disclosed a record pertaining to them or may seek access to such 
records maintained in any nonexempt system of records, request 
correction of such records, appeal any initial adverse determination of 
any request for amendment, or may seek an accounting of disclosures of 
such records. For the convenience of interested persons, the components 
of the Department of the Treasury may reprint these regulations in their 
entirety (less any appendices not applicable to the component in 
question) in those titles of the Code of Federal Regulations which 
normally contain regulations applicable to such components. In 
connection with such republication, and at other appropriate times, 
components may issue supplementary regulations applicable only to the 
component in question, which are consistent with these regulations. In 
the event of any actual or apparent inconsistency, these Departmental 
regulations shall govern. Persons interested in the records of a 
particular component should, therefore, also consult the Code of Federal 
Regulations for any rules or regulations promulgated specifically with 
respect to that component (see Appendices to this subpart for cross 
references). The head of each component is hereby also authorized to 
substitute other appropriate officials for those designated and correct 
addresses specified in the appendix to this subpart applicable to the 
component. The components of the Department of the Treasury for the 
purposes of this subpart are:
    (a) The Departmental Offices, which include the offices of:
    (1) The Secretary of the Treasury, including immediate staff;
    (2) The Deputy Secretary of the Treasury, including immediate staff;
    (3) The Chief of Staff, including immediate staff;
    (4) The Executive Secretary and all offices reporting to such 
official, including immediate staff;
    (5) The Under Secretary of the Treasury for International Affairs 
and all offices reporting to such official, including immediate staff;
    (6) The Under Secretary of the Treasury for Domestic Finance and all 
offices reporting to such official, including immediate staff;
    (7) The Under Secretary for Enforcement and all offices reporting to 
such official, including immediate staff;
    (8) The Assistant Secretary of the Treasury for Financial 
Institutions and all offices reporting to such official, including 
immediate staff;
    (9) The Assistant Secretary of the Treasury for Economic Policy and 
all offices reporting to such official, including immediate staff;
    (10) The Fiscal Assistant Secretary and all offices reporting to 
such official, including immediate staff;
    (11) The General Counsel and all offices reporting to such official, 
including immediate staff; except legal counsel to the components listed 
in paragraphs (a)(17) and (b) through (l) of this section;
    (12) The Inspector General and all offices reporting to such 
official, including immediate staff;

[[Page 34]]

    (13) The Assistant Secretary of the Treasury for International 
Affairs and all offices reporting to such official, including immediate 
staff;
    (14) The Assistant Secretary of the Treasury for Legislative Affairs 
and Public Liaison and all offices reporting to such official, including 
immediate staff;
    (15) The Assistant Secretary of the Treasury for Management and 
Chief Financial Officer and all offices reporting to such official, 
including immediate staff;
    (16) The Assistant Secretary of the Treasury for Public Affairs and 
all offices reporting to such official, including immediate staff;
    (17) The Assistant Secretary of the Treasury for Tax Policy and all 
offices reporting to such official, including immediate staff;
    (18) The Treasurer of the United States, including immediate staff;
    (19) The Treasury Inspector General for Tax Administration and all 
offices reporting to such official, including immediate staff.
    (b) The Bureau of Alcohol, Tobacco and Firearms.
    (c) The Office of the Comptroller of the Currency.
    (d) The United States Customs Service.
    (e) The Bureau of Engraving and Printing.
    (f) The Federal Law Enforcement Training Center.
    (g) The Financial Management Service.
    (h) The Internal Revenue Service.
    (i) The United States Mint.
    (j) The Bureau of the Public Debt.
    (k) The United States Secret Service.
    (l) The Office of Thrift Supervision.
    (m) The Office of Thrift Supervision.

For purposes of this subpart, the office of the legal counsel for the 
components listed in paragraphs (b), (c), (d), (e), (f), (g), (h), (i), 
and (j) of this section are to be considered a part of such component. 
Any office, which is now in existence or may hereafter be established, 
which is not specifically listed or known to be a component of any of 
those listed above, shall be deemed a part of the Departmental Offices 
for the purpose of these regulations.

[52 FR 26305, July 14, 1987, as amended at 60 FR 31633, June 16, 1995; 
65 FR 2333, Jan. 14, 2000]



Sec. 1.21  Definitions.

    (a) The term agency means agency as defined in 5 U.S.C. 552(e);
    (b) The term individual means a citizen of the United States or an 
alien lawfully admitted for permanent residence;
    (c) The term maintain includes maintain, collect, use, or 
disseminate;
    (d) The term record means any item, collection, or grouping of 
information about an individual that is maintained by the Department of 
the Treasury or component of the Department. This includes, but is not 
limited to, the individual's education, financial transactions, medical 
history, and criminal or employment history and that contains the name, 
or an identifying number, symbol, or other identifying particular 
assigned to the individual, such as a finger or voice print or a 
photograph;
    (e) The term system of records means a group of any records under 
the control of the Department of the Treasury or any component from 
which information is retrieved by the name of the individual or by some 
identifying number, symbol, or other identifying particular assigned to 
the individual;
    (f) The term statistical record means a record in a system of 
records maintained for statistical research or reporting purposes only 
and not used in whole or part in making any determination about an 
identifiable individual, except as provided by 13 U.S.C. 8.
    (g) The term routine use means the disclosure of a record that is 
compatible with the purpose for which the record was collected;
    (h) The term component means a bureau or office of the Department of 
the Treasury as set forth in Sec. 1.20 and in the appendices to these 
regulations. (See 5 U.S.C. 552a(a).)
    (i) The term request for access means a request made pursuant to 5 
U.S.C. 552a(d)(1).

[[Page 35]]

    (j) The term request for amendment means a request made pursuant to 
5 U.S.C. 552a(d)(2).
    (k) The term request for accounting means a request made pursuant to 
5 U.S.C. 552a(c)(3).



Sec. 1.22  Requirements relating to systems of records.

    (a) In general. Subject to 5 U.S.C. 552a (j) and (k) and 
Sec. 1.23(c), each component shall, in conformance with 5 U.S.C. 552a:
    (1) Maintain in its records only such information about an 
individual as is relevant and necessary to accomplish a purpose of the 
agency required to be accomplished by the statute or by Executive order 
of the President (See 5 U.S.C. 552a(e)(1)).
    (2) Collect information to the greatest extent practicable directly 
from the subject individual when the information may result in adverse 
determinations about an individual's rights, benefits, and privileges 
under Federal programs. (See 5 U.S.C. 552a(e)(2)).
    (b) Requests for information from individuals. Subject to 5 U.S.C. 
552a(j) and Sec. 1.23(c)(1), each component of the Treasury shall inform 
each individual whom it asks to supply information, on the form which it 
uses to collect the information or on a separate form that can be 
retained by the individual:
    (1) The authority (whether granted by statute, or by Executive order 
of the President) which authorizes the solicitation of the information 
and whether disclosure of such information is mandatory or voluntary;
    (2) The principal purpose or purposes for which the information is 
intended to be used;
    (3) The routine uses which may be made of the information, as 
published pursuant to 5 U.S.C. 552a(e)(4)(D); and
    (4) The effects on such individual, if any, of not providing all or 
any part of the requested information. (See 5 U.S.C. 552a(e)(3)).
    (c) Report on new systems. Each component of the Treasury shall 
provide adequate advance notice to Congress and the Office of Management 
and Budget through the Disclosure Branch and Administration Section of 
the Office of the General Counsel of any proposal to establish or alter 
any system of records in order to permit an evaluation of the probable 
or potential effect of such proposal on the privacy and other personal 
or property rights of individuals or the disclosure of information 
relating to such individuals, and its effect on the preservation of the 
constitutional principles of federalism and separation of powers. (See 5 
U.S.C. 552a(o)).
    (d) Accurate and secure maintenance of records. Each component 
shall:
    (1) Subject to 5 U.S.C. 552a(j) and Sec. 1.23(c)(1), maintain all 
records which are used in making any determination about any individual 
with such accuracy, relevance, timeliness, and completeness as is 
reasonably necessary to assure fairness to the individual in the 
determination (see 5 U.S.C. 552a(e)(5);
    (2) Prior to disseminating any record about an individual to any 
person other than an agency, unless the dissemination is made pursuant 
to 5 U.S.C. 552 (see 31 CFR part 1, subpart A), make reasonable efforts 
to assure that such records are accurate, complete, timely, and relevant 
for Department of the Treasury purposes (see 5 U.S.C. 552a(e)(6)) and
    (3) Establish appropriate administrative, technical, and physical 
safeguards to insure the security and confidentiality of records and to 
protect against any anticipated threats or hazards to their security or 
integrity which could result in substantial harm, embarrassment, 
inconvenience, or unfairness to any individual on whom information is 
maintained. (See 5 U.S.C. 552a(e)(10)).
    (i) System managers, with the approval of the head of their offices 
within a component, shall establish administrative and physical 
controls, consistent with Department regulations, to insure the 
protection of records systems from unauthorized access or disclosure and 
from physical damage or destruction. The controls instituted shall be 
proportional to the degree of sensitivity of the records but at a 
minimum must insure that records other than those available to the 
general public under the Freedom of Information Act (5 U.S.C. 552), are 
protected from public view, that the area in which the records are 
stored is supervised during all business hours and

[[Page 36]]

physically secure during nonbusiness hours to prevent unauthorized 
personnel from obtaining access to the records. Automated systems shall 
comply with the security standards promulgated by the National Bureau of 
Standards.
    (ii) System managers, with the approval of the head of their offices 
within a component, shall adopt access restrictions to insure that only 
those individuals within the agency who have a need to have access to 
the records for the performance of their duties have access to them. 
Procedures shall also be adopted to prevent accidental access to, or 
dissemination of, records.
    (e) Prohibition against maintenance of records concerning First 
Amendment rights. No component shall maintain a record describing how 
any individual exercises rights guaranteed by the First Amendment (e.g. 
speech), unless the maintenance of such record is:
    (1) Expressly authorized by statute, or
    (2) Expressly authorized by the individual about whom the record is 
maintained, or
    (3) Pertinent to and within the scope of an authorized law 
enforcement activity. (See 5 U.S.C. 552a (e)(7))
    (f) Notification of disclosure under compulsory legal process. 
Subject to 5 U.S.C. 552a(j) and Sec. 1.23(c)(1), when records concerning 
an individual are subpoenaed by a Grand Jury, Court, or quasi-judicial 
agency, or disclosed in accordance with an ex parte court order pursuant 
to 26 U.S.C. 6103(i), the official served with the subpoena or court 
order shall make reasonable efforts to assure that notice of any 
disclosure is provided to the individual. Notice shall be provided 
within five working days of making the records available under 
compulsory legal process or, in the case of a Grand Jury subpoena or an 
ex parte order, within five days of its becoming a matter of public 
record. Notice shall be mailed to the last known address of the 
individual and shall contain the following information: the date and 
authority to which the subpoena is, or was returnable, or the date of 
and court issuing the ex parte order, the name and number of the case or 
proceeding, and the nature of the information sought and provided. 
Notice of the issuance of a subpoena or an ex parte order is not 
required if the system of records has been exempted from the notice 
requirement of 5 U.S.C. 552a (e)(8) and this section, pursuant to 5 
U.S.C. 552a (j) and Sec. 1.23 (c)(1), by a Notice of Exemption published 
in the Federal Register. (See 5 U.S.C. 552a (e)(8)).
    (g) Emergency disclosure. If information concerning an individual 
has been disclosed to any person under compelling circumstances 
affecting health or safety, the individual shall be notified at the last 
known address within 5 days of the disclosure (excluding Saturdays, 
Sundays, and legal public holidays). Notification shall include the 
following information: The nature of the information disclosed, the 
person or agency to whom it was disclosed, the date of disclosure, and 
the compelling circumstances justifying the disclosure. Notification 
shall be given by the officer who made or authorized the disclosure. 
(See 5 U.S.C. 552a (b)(8)).



Sec. 1.23  Publication in the Federal Register--Notices of systems of records, general exemptions, specific exemptions, review of all systems.

    (a) Notices of systems of records to be published in the Federal 
Register. (1) The Department shall publish a notice of the existence and 
character of all systems of records every 3 years in the Federal 
Register. An annual notice of systems of records is required to be 
published by the Office of the Federal Register in the publication 
entitled ``Privacy Act Issuances'', as specified in 5 U.S.C. 552a(f).
    (2) Minor changes to systems of records shall be published annually. 
(See paragraph (d)(8) of this section)
    (3) In addition, the Department shall publish in the Federal 
Register upon establishment or revision a notice of the existence and 
character of any new or revised systems of records. Unless otherwise 
instructed, each notice shall include:
    (i) The name and location of the system;
    (ii) The categories of individuals on whom records are maintained in 
the system;
    (iii) The categories of records maintained in the system;

[[Page 37]]

    (iv) Each routine use of the records contained in the system, 
including the categories of users and the purpose of such use;
    (v) The policies and practices of the component regarding storage, 
retrievability, access controls, retention, and disposal of the records;
    (vi) The title and business address of the Treasury official who is 
responsible for the system of records;
    (vii) The procedures of the component whereby an individual can be 
notified if the system of records contain a record pertaining to the 
individual, including reasonable times, places, and identification 
requirements.
    (viii) The procedures of the component whereby an individual can be 
notified on how to gain access to any record pertaining to such 
individual that may be contained in the system of records, and how to 
contest its content; and
    (ix) The categories of sources of records in the system. (See 5 
U.S.C. 552a(e)(4))
    (b) Notice of new or modified routine uses to be published in the 
Federal Register. At least 30 days prior to a new use or modification of 
a routine use, as published under paragraph (a)(3)(iv) of this section, 
each component shall publish in the Federal Register notice of such new 
or modified use of the information in the system and provide an 
opportunity for interested persons to submit written data, views, or 
arguments to the components. (See 5 U.S.C. 552a(e)(11))
    (c) Promulgation of rules exempting systems from certain 
requirements--(1) General exemptions. In accordance with existing 
procedures applicable to a Treasury component's issuance of regulations, 
the head of each such component may adopt rules, in accordance with the 
requirements (including general notice) of 5 U.S.C. 553 (b) (1), (2), 
and (3), (c) and (e), to exempt any system of records within the 
component from any part of 5 U.S.C. 552a and these regulations except 
subsections (b) (sec. 1.24, conditions of disclosure), (c)(1) (sec. 
1.25, keep accurate accounting of disclosures), (c)(2) (sec. 1.25, 
retain accounting for five years or life of record), (e)(4) (A) through 
(F) (paragraph (a) of this section, publication of annual notice of 
systems of records), (e)(6) (sec. 1.22(d), accuracy of records prior to 
dissemination), (e)(7) (sec. 1.22(e), maintenance of records on First 
Amendment rights), (e)(9) (sec. 1.28, establish rules of conduct), 
(e)(10) (sec. 1.22(d)(3), establish safeguards for records), (e)(11) 
(paragraph (c) of this section, publish new intended use), and (i) (sec. 
1.28(c), criminal penalties) if the systems of records maintained by the 
component which performs as its principal function any activity 
pertaining to the enforcement of criminal laws, including police efforts 
to prevent, control, or reduce crime or to apprehend criminals, and the 
activities of prosecutors, courts, correctional, probation, pardon, or 
parole authorities, and which consists of:
    (i) Information compiled for the purpose of identifying individual 
criminal offenders and alleged offenders and consisting only of 
identifying data and notations of arrests, the nature and disposition of 
criminal charges, sentencing, confinement, release, and parole, and 
probation status;
    (ii) Information compiled for the purpose of a criminal 
investigation, including reports of informants and investigators, and 
associated with an identifiable individual; or
    (iii) Reports identifiable to an individual compiled at any stage of 
the process of enforcement of the criminal laws from arrest or 
indictment through release from supervision. (See 5 U.S.C. 552a(j))
    (2) Specific exemptions. In accordance with existing procedures 
applicable to a Treasury component's issuance of regulations, the head 
of each such component may adopt rules, in accordance with the 
requirements (including general notice) of 5 U.S.C. 553 (b) (1), (2), 
and (3), (c), and (e), to exempt any system of records within the 
component from 5 U.S.C. 552a(c)(3) (sec. 1.25(c)(2), accounting of 
certain disclosures available to the individual), (d) (sec. 1.26(a), 
access to records), (e)(1) (sec. 1.22(a)(1), maintenance of information 
to accomplish purposes authorized by statute or executive order only), 
(e)(4)(G) (paragraph (a)(7) of this section, publication of procedures 
for notification), (e)(4)(H)

[[Page 38]]

(paragraph (a)(8) of this section, publication of procedures for access 
and contest), (e)(4)(I) (paragraph (a)(9) of this section, publication 
of sources of records), and (f) (sec. 1.26, promulgate rules for 
notification, access and contest), if the system of records is:
    (i) Subject to the provisions of 5 U.S.C. 552(b)(1);
    (ii) Investigatory material compiled for law enforcement purposes, 
other than material within the scope of subsection (j)(2) of 5 U.S.C. 
552a and paragraph (a)(1) of this section. If any individual is denied 
any right, privilege, or benefit that such individual would otherwise be 
entitled to by Federal law, or for which such individual would otherwise 
be eligible, as a result of the maintenance of this material, such 
material shall be provided to the individual, except to the extent that 
the disclosure of the material would reveal the identity of a source who 
furnished information to the Government under an express promise that 
the identity of the source would be held in confidence, or prior to 
September 27, 1975, under an implied promise that the identity of the 
source would be held in confidence;
    (iii) Maintained in connection with providing protective services to 
the President of the United States or other individuals pursuant to 18 
U.S.C. 3056;
    (iv) Required by statute to be maintained and used solely as 
statistical records;
    (v) Investigatory material compiled solely for the purpose of 
determining suitability, eligibility, or qualifications for Federal 
civilian employment, military service, Federal contracts, or access to 
classified information, but only to the extent that the disclosure of 
such material would reveal the identity of a source who furnished 
information to the Government under an express promise that the identity 
of the source would be held in confidence, or, prior to September 27, 
1975, under an implied promise that the identity of the source would be 
held in confidence;
    (vi) Testing or examination material used solely to determine 
individual qualifications for appointment or promotion in the Federal 
service the disclosure of which would compromise the objectivity or 
fairness of the testing or examination process; or
    (vii) Evaluation material used to determine potential for promotion 
in the armed services, but only to the extent that the disclosure of 
such material would reveal the identity of a source who furnished 
information to the Government under an express promise that the identity 
of the source would be held in confidence, or, prior to September 27, 
1975, under an implied promise that the identity of the source would be 
held in confidence.
    (3) At the time that rules under this subsection are adopted, the 
head of the component shall include in the statement required under 5 
U.S.C. 553(c) the reasons why the system of records is to be exempted 
from a provision of 5 U.S.C. 552a and this part. (See 5 U.S.C. 552a (j) 
and (k))
    (d) Review and report to OMB. The Department shall ensure that the 
following reviews are conducted as often as specified below by each of 
the components who shall be prepared to report to the Departmental 
Disclosure Branch upon request the results of such reviews and any 
corrective action taken to resolve problems uncovered. Each component 
shall:
    (1) Review every two years a random sample of the component's 
contracts that provide for the maintenance of a system of records on 
behalf of the component to accomplish a function of the component, in 
order to ensure that the working of each contract makes the provisions 
of the Act apply. (5 U.S.C. 552a(m)(1))
    (2) Review annually component's recordkeeping and disposal policies 
and practices in order to assure compliance with the Act.
    (3) Review routine use disclosures every 3 years, that are 
associated with each system of records in order to ensure that the 
recipient's use of such records continues to be compatible with the 
purpose for which the disclosing agency originally collected the 
information.
    (4) Review every three years each system of records for which the 
component has issued exemption rules pursuant to section (j) or (k) of 
the Privacy Act in order to determine whether the exemption is needed.

[[Page 39]]

    (5) Review annually each ongoing matching program in which the 
component has participated during the year, either as a source or as a 
matching agency in order to assure that the requirements of the Act, the 
OMB Matching Guidelines, and the OMB Model Control System and checklist 
have been met.
    (6) Review component's training practices annually to ensure that 
all component personnel are familiar with the requirements of the Act, 
these regulations and Departmental directives.
    (7) Review annually the actions of component personnel that have 
resulted either in the agency being found civilly liable under section 
(g) of the Act, or an employee being found criminally liable under the 
provisions of section (i) of the Act, in order to determine the extent 
of the problem and to prevent future recurrences.
    (8) Review annually each system of records notice to ensure that it 
accurately describes the system. Where minor changes are needed, publish 
an amended notice in the Federal Register. Minor changes shall be 
consolidated in one annual comprehensive publication. The term ``minor 
change to a system of records'' means a change that does not 
significantly change the system. More specifically, a minor change does 
not affect the character or purpose of the system and does not affect 
the ability of an individual to gain access to a record about the 
individual or to any information pertaining to such individual which is 
contained in the system; for example, changing the title of the system 
manager or the location of the system.



Sec. 1.24  Disclosure of records to person other than the individual to whom they pertain.

    (a) Conditions of disclosure. No component of Treasury shall 
disclose any record which is contained in a system of records maintained 
by it by any means of communication to any person, or to another agency, 
except pursuant to a written request by, or with the prior written 
consent of, the individual to whom the record pertains, or the parent, 
if a minor, or legal guardian, if incompetent, of such individual, 
unless disclosure of the record would be:
    (1) To those offices and employees of the Department of the Treasury 
who have a need for the record in the performance of their duties;
    (2) Retired under 5 U.S.C. 552 (subpart A of this part);
    (3) For a routine use as defined in 5 U.S.C. 552a(a)(7) and 
Sec. 1.21(g) and as described under 5 U.S.C. 552a(e)(4)(D) and 
Sec. 1.23(a)(4);
    (4) To the Bureau of the Census for purposes of planning or carrying 
out a census or survey or related activity pursuant to the provisions of 
title 13 of the U.S. Code;
    (5) To a recipient who has provided the component with advance 
adequate written assurance that the record will be used solely as a 
statistical research or reporting record, and the record is to be 
transferred in a form that is not individually identifiable;
    (6) To the National Archives of the United States as a record which 
has sufficient historical or other value to warrant its continued 
preservation by the United States Government, or for evaluation by the 
Administrator of General Services or the designee of such official to 
determine whether the record has such value;
    (7) To another agency or to an instrumentality of any governmental 
jurisdiction within or under the control of the United States for a 
civil or criminal law enforcement activity.
    (i) If the activity is authorized by law; and
    (ii) If the head of the agency or instrumentality has made a written 
request to the Department of the Treasury specifying the particular 
portion desired and the law enforcement activities for which the record 
is sought;
    (8) To a person pursuant to a showing of compelling circumstances 
affecting the health or safety of an individual, if upon such 
disclosure, notification is transmitted to the last known address of 
such individual;
    (9) To either House of Congress, or, to the extent of matter within 
its jurisdiction, any committee or subcommittee thereof, any joint 
committee of Congress or subcommittee of any such joint committee.

[[Page 40]]

    (10) To the Comptroller General, or the authorized representatives 
of such official, in the course of the performance of the duties of the 
General Accounting Office; or
    (11) Pursuant to the order of a court of competent jurisdiction. 
(See 5 U.S.C. 552a(b))



Sec. 1.25  Accounting of disclosures.

    (a) Accounting of certain disclosures. Each component, with respect 
to each system of records under its control, shall:
    (1) Keep an accurate accounting of: (i) The date, nature, and 
purpose of each disclosure of a record to any person or to an agency 
made under 5 U.S.C. 552a (b) and Sec. 1.24; and (ii) the name and 
address of the person or agency to whom the disclosure is made;
    (2) Retain the accounting made under paragraph (a)(1) of this 
section for at least five years or the life of the record, whichever is 
longer, after the disclosure for which the accounting is made; and
    (3) Inform any person or other agency about any correction or 
notation of dispute made by the constitutent unit in accordance with 5 
U.S.C. 552a (d) and Sec. 1.28 of any record that has been disclosed to 
the person or agency if an accounting of the disclosure was made. (See 5 
U.S.C. 552(c).)
    (b) Accounting systems. To permit the accounting required by 
paragraph (a) of this section, system managers, with the approval of the 
head of their offices within a component, shall establish or implement, 
a system of accounting for all disclosures of records, either orally or 
in writing, made outside the Department of the Treasury. Accounting 
records shall:
    (1) Be established in the least expensive and most convenient form 
that will permit the system manager to advise individuals, promptly upon 
request, what records concerning them have been disclosed and to whom:
    (2) Provide, as a minimum, the identification of the particular 
record disclosed, the name and address of the person or agency to whom 
or to whom or to which disclosed, and the date, nature and purpose of 
the disclosure; and
    (3) Be maintained for 5 years or until the record is destroyed or 
transferred to the National Archives and Records Service for storage in 
records centers, in which event, the accounting pertaining to those 
records, unless maintained separately, shall be transferred with the 
records themselves.
    (c) Exemptions from accounting requirements. No accounting is 
required for disclosure of records:
    (1) To those officers and employees of the Department of the 
Treasury who have a need for the record in the performance of their 
duties; or
    (2) If disclosure would be required under 5 U.S.C. 552 and Subpart A 
of this part.
    (d) Access to accounting by individual. (1) Subject to paragraphs 
(c) and (d)(2) of this section, each component shall establish and set 
forth in the appendix to this subpart applicable to the component, 
procedures for making the accounting required under paragraph (a) of 
this section available to the individual to whom the record pertains and 
shall thereafter make such accounting available in accordance therewith 
at the request of the individual. The procedures may require the 
requester to provide reasonable identification.
    (2) Access accountings of disclosure may be withheld from the 
individual named in the record only if the disclosures were (i) made 
under 5 U.S.C. 552a (b)(7) and Sec. 1.24 (a)(7), or (ii) under a system 
of records exempted from the requirements of 5 U.S.C. 552a(c)(3) in 
accordance with 5 U.S.C. 552 (j) or (k) and Sec. 1.23(c). (See 5 U.S.C. 
552a(c))



Sec. 1.26  Procedures for notification and access to records pertaining to individuals--format and fees for request for access.

    (a) Procedures for notification and access. Each component shall 
establish, in accordance with the requirements of 5 U.S.C. 553, and set 
forth in the appendix to this subpart applicable to such component 
procedures whereby an individual can be notified, in response to a 
request, if any system of records named by the individual contains a 
record pertaining to that individual. In addition, such procedures shall 
set forth the requirements for access to such records. As a minimum such 
procedures shall specify the times during, and the places at which 
access will be

[[Page 41]]

accorded, together with such identification as may be required of the 
individual before access. (See 5 U.S.C. 552a(f) (1), (2) and (3))
    (b) Access. Each component in accordance with the procedures 
prescribed under paragraph (a) of this section, shall allow an 
individual to gain access to records or to any information pertaining to 
such individual which is contained in the system of records upon 
request. The individual shall be permitted to review the record and have 
a copy made of all or any portion of the record in a form that is 
comprehensible. The individual will also be permitted to be accompanied 
by any person of the individual's choosing to review the record, except 
that the agency may require the individual to furnish a written 
statement authorizing discussion of that individual's record in the 
accompanying person's presence. (See 5 U.S.C. 552a(d)(1))
    (c) Exceptions. Neither the procedures prescribed under paragraph 
(a) of this section nor the requirements for access under paragraph (b) 
of this section shall be applicable to--(1) systems of records exempted 
pursuant to 5 U.S.C. 552a (j) and (k) and Sec. 1.23(c); (2) information 
compiled in reasonable anticipation of a civil action or proceeding (See 
5 U.S.C. 552(d)(5)); or (3) information pertaining to an individual 
which is contained in, and inseparable from, another individual's 
record.
    (d) Format of request. (1) A record for notification of whether a 
record exists shall:
    (i) Be made in writing and signed by the person making the request, 
who must be the individual about whom the record is maintained, or such 
individual's duly authorized representative (See Sec. 1.34);
    (ii) State that it is made pursuant to the Privacy Act, 5 U.S.C. 
552a or these regulations, have marked ``Privacy Act Request'' on the 
request and on the envelope;
    (iii) Give the name of the system or subsystem or categories of 
records to which access is sought, as specified in ``Privacy Act 
Issuances'' published by the Office of the Federal Register and 
referenced in the appendices to this subpart;
    (iv) Describe the nature of the record(s) sought in sufficient 
detail to enable Department personnel to locate the system of records 
containing the record with a reasonable amount of effort. Whenever 
possible, a request for access should describe the nature of the record 
sought, the date of the record or the period in which the record was 
compiled.
    (v) Provide such identification of the requester as may be specified 
in the appropriate appendix to this subpart; and
    (vi) Be addressed or delivered in person to the office or officer of 
the component indicated for the particular system or subsystem or 
categories of records the individual wishes access to, as specified in 
``Privacy Act Issuances'' published by the Office of the Federal 
Register and referenced in the appendices to this subpart. Assistance in 
ascertaining the appropriate component or in preparing a request for 
notification may be obtained by a written request to this effect 
addressed as specified in Appendix A of this part, as the address for 
the Departmental Offices for ``Request for notification and access to 
records and accountings of disclosures''.
    (2) A request for access to records shall, in addition to complying 
with paragraph (a)(1)(i) through (vi) of this section:
    (i) State whether the requester wishes to inspect the records or 
desires to have a copy made and furnished without first inspecting them;
    (ii) If the requester desires to have a copy made, state the firm 
agreement of the requester to pay the fees for duplication ultimately 
determined in accordance with (31 CFR 1.6) Subpart A of this title, 
unless such fees are waived pursuant to that section by the system 
manager or other appropriate official as indicated in the appropriate 
appendix to these regulations; and
    (iii) Comply with any other requirement set forth in the applicable 
appendix to this subpart or the ``Notice of Records Systems'' applicable 
to the system in question. Requesters are hereby advised that any 
request for access which does not comply with the foregoing requirements 
and those set forth elsewhere in this Subpart C, will

[[Page 42]]

not be deemed subject to the time constraints of this section, unless 
and until amended so as to comply. However, components shall advise the 
requester in what respect the request is deficient so that it may be 
processed. This section applies only to records which are contained in a 
system of records and which are in the possession or control of the 
component. (See 5 U.S.C. 552a (d) and (f))
    (e) Requests for records not in control of component. (1) Treasury 
employees shall make reasonable efforts to assist an oral requester to 
ascertain to which office or officer a written request should be sent. 
When the request is for a record which is not in the possession or 
control of any component of the Department of the Treasury, the 
requester shall be so advised.
    (2) Where the record requested was created by a Department or agency 
other than the Department of the Treasury or a component of the 
Department and has been classified (e.g. National Defense or 
Intelligence Information) or otherwise restrictively endorsed (e.g. 
Office of Personnel Management records of FBI reports) by such other 
Department or agency, and a copy is in the possession of a component of 
the Department of the Treasury, that portion of the request shall be 
referred to the originating agency for determination as to all issues in 
accordance with the Privacy Act. In the case of a referral to another 
agency under this paragraph, the requester shall be notified that such 
portion of the request has been so referred and that the requester may 
expect to hear from that agency.
    (3) When information sought from a system manager or other 
appropriate official in the Department of the Treasury includes 
information furnished by other Federal agencies not classified or 
otherwise restrictively endorsed, the system manager or other 
appropriate official receiving the request shall consult with the 
appropriate agency prior to making a decision to disclose or not to 
disclose the record. The decision as to whether the record shall be 
disclosed shall be made, in the first instance by the system manager or 
other appropriate official maintaining the record. (See 5 U.S.C. 552a 
(d) and (f))
    (f) Date of receipt of request. A request for notification or access 
to records shall be considered to have been received for purposes of 
this subpart on the date on which the requirements of paragraph (d) of 
this section have been satisfied. Requests for notification or access to 
records and any separate agreement to pay shall be stamped or endorsed 
with the date of receipt by the receiving office. The latest of such 
stamped dates will be deemed to be the date of receipt of the request 
for the purposes of this subpart. (See 5 U.S.C. 552a (d) and (f))
    (g) Notification of determination--(1) In general. Notification of 
determinations as to notification of whether a record exists or as to 
whether to grant access to records requested will be made by the 
officers designated in the appendices to this subpart. The notification 
of the determination shall be mailed within 30 days (excluding 
Saturdays, Sundays and legal public holidays) after the date of receipt 
of the request, as determined in accordance with paragraph (f) of this 
section. If it is not possible to respond within 30 days, the designated 
officer shall inform the requester, stating the reason for the delay 
(e.g. volume of records requested, scattered location of the records, 
need to consult other agencies, or the difficulty of the legal issues 
involved) and when a response will be dispatched. (See 5 U.S.C. 552a (d) 
and (f))
    (2) Granting of access. When it has been determined that the request 
for access will be granted--(i) and a copy requested; such copy in a 
form comprehensible to the requester shall be furnished promptly, 
together with a statement of the applicable fees for duplication; and 
(ii) and the right to inspect has been requested, the requester shall be 
promptly notified in writing of the determination, and when and where 
the requested records may be inspected. An individual seeking to inspect 
such records may be accompanied by another person of such individual's 
choosing. The individual seeking access shall be required to sign the 
required form indicating that the Department of the Treasury is 
authorized to discuss the contents of the subject

[[Page 43]]

record in the accompanying person's presence. If, after making the 
inspection, the individual making the request desires a copy of all or a 
portion of the requested records, such copy in a form comprehensible to 
the individual shall be furnished upon payment of the applicable fees 
for duplication. Fees to be charged are as prescribed by 31 CFR part 1, 
Subpart A, Sec. 1.6 Fees shall not be charged where they would amount, 
in the aggregate, to less than $3.00. (See 5 U.S.C. 552a (d) and (f))
    (3) Requirements for access to medical records. When access is 
requested to medical records, including psychological records, the 
responsible official may determine that such release could have an 
adverse effect on the individual and that release will be made only to a 
physician authorized in writing to have access to such records by the 
individual making the request. Upon receipt of the authorization the 
physician will be permitted to review the records or to receive copies 
of the records by mail, upon proper verification of identity. (See 5 
U.S.C. 552a (f) (3))
    (4) Denial of request. When it is determined that the request for 
notification of whether a record exists or access to records will be 
denied (whether in whole or part or subject to conditions or 
exceptions), the person making the request shall be so notified by mail 
in accordance with paragraph (g)(1) of this section. The letter of 
notification shall specify the city or other location where the 
requested records are situated (if known), contain a statement of the 
reasons for not granting the request as made, set forth the name and 
title or position of the responsible official and advise the individual 
making the request of the right to file suit in accordance with 5 U.S.C. 
552a (g)(1)(B).
    (5) Prohibition against the use of 5 U.S.C. 552 (b) exemptions. 
Exemptions from disclosure under 5 U.S.C. 552 (b) (31 CFR part 1, 
Subpart A, Sec. 1.2 (c)), may not be invoked for the purpose of 
withholding from an individual any record which is otherwise accessible 
to such individual under the Privacy Act, 5 U.S.C. 552a and this 
subpart. (See 5 U.S.C. 552a (q))
    (6) Records exempt in whole or in part. (i) When an individual 
requests notification as to whether a record exists or access to records 
concerning the individual which have been exempted from individual 
access pursuant to 5 U.S.C. 552a (j) or which have been compiled in 
reasonable anticipation of a civil action or proceeding in either a 
court or before an administrative tribunal and the assertion of the 
exemption is deemed necessary, the Department of the Treasury will 
neither confirm nor deny the existence of the record but shall advise 
the individual only that no record available to the individual pursuant 
to the Privacy Act of 1974 has been identified.
    (ii) Requests from individuals for access to records which have been 
exempted from access pursuant to 5 U.S.C. 552a (k) shall be processed as 
follows:
    (A) Requests for information classified pursuant to Executive Order 
11652 require the responsible component of the Department to review the 
information to determine whether it continues to warrant classification 
under the criteria of sections 1 and 5 (B), (C), (D) and (E) of the 
Executive order. Information which no longer warrants classification 
under these criteria shall be declassified and made available to the 
individual. If the information continues to warrant classification, the 
individual shall be advised that the information sought is classified, 
that it has been reviewed and continues to warrant classification, and 
that it has been exempted from access pursuant to 5 U.S.C. 552 (b)(1) 
and 5 U.S.C. 552a (k)(1). Information which has been exempted pursuant 
to 5 U.S.C. 552a (j) and which is also classified shall be reviewed as 
required by this paragraph but the response to the individual shall be 
in the form prescribed by paragraph (g)(6)(i) of this section.
    (B) Requests for information which has been exempted from disclosure 
pursuant to 5 U.S.C. 552a (k)(2) shall be responded to in the manner 
provided in paragraph (g)(6)(i) of this section unless the requester 
shows that the information has been used or is being used to deny the 
individual any right, privilege or benefit for which he is eligible or 
to which he would otherwise be entitled under federal law. In that 
event, the individual shall be advised of the

[[Page 44]]

existence of the information but such information as would identify a 
confidential source shall be extracted or summarized in a manner which 
protects the source to the maximum degree possible and the summary 
extract shall be provided to the requesting individual.
    (C) Information compiled as part of an employee background 
investigation which has been exempted pursuant to 5 U.S.C. 552a (k)(5) 
shall be made available to an individual upon request except to the 
extent that it identifies the confidential source. Material identifying 
the confidential sources shall be extracted or summarized in a manner 
which protects the source to the maximum degree possible and the summary 
or extract shall be provided to the requesting individual.
    (D) Testing or examination material which has been exempted pursuant 
to 5 U.S.C. 552a (k)(6) shall not be made available to an individual if 
disclosure would compromise the objectivity or fairness of the testing 
or examination process; but may be made available if no such compromise 
possibility exists. (See 5 U.S.C. 552a (d)(5), (j) and (k)).



Sec. 1.27  Procedures for amendment of records pertaining to individuals--format, agency review and appeal from initial adverse agency determination.

    (a) In general. Subject to the application of exemptions promulgated 
by the head of each component, in accordance with Sec. 1.23(c), and 
subject to Sec. 1.27(f), each component of the Department of the 
Treasury, shall in conformance with 5 U.S.C. 552a(d)(2), permit an 
individual to request amendment of a record pertaining to such 
individual. Any request for amendment of records or any appeal that does 
not fully comply with the requirements of this section and any 
additional specific requirements imposed by the component in the 
applicable appendix to this subpart will not be deemed subject to the 
time constraints of paragraph (e) of this section, unless and until 
amended so as to comply. However, components shall advise the requester 
in what respect the request or appeal is deficient so that it may be 
resubmitted or amended. (See 5 U.S.C. 552a (d) and (f))
    (b) Form of request to amend records. In order to be subject to the 
provisions of this section, a request to amend records shall:
    (1) Be made in writing and signed by the person making the request, 
who must be the individual about whom the record is maintained, or the 
duly authorized representative of such individual;
    (2) State that it is made pursuant to the Privacy Act, 5 U.S.C. 552a 
or these regulations, have marked ``Privacy Act Amendment Request'' on 
the request and on the envelope;
    (3) Be addressed to the office or officer of the component specified 
for such purposes in ``Privacy Act Issuances'' published by the Office 
of the Federal Register and referenced in the appendices to this subpart 
for that purpose; and
    (4) Reasonably describe the records which the individual desires to 
have amended, including, to the best of the requester's knowledge, dates 
of letters requesting access to such records previously and dates of 
letters in which notification concerning access was made, if any, and 
the individual's documentation justifying the correction. (See U.S.C. 
552a (d) and (f))
    (c) Date of receipt of request. A request for amendment of records 
pertaining to an individual shall be deemed to have been received for 
purposes of this subpart when the requirements of paragraph (b) of this 
section have been satisfied. The receiving office or officer shall stamp 
or otherwise endorse the date of receipt of the request. (See 5 U.S.C. 
552a (d) and (f))
    (d) Review of requests to amend records. Officials responsible for 
review of requests to amend records pertaining to an individual, as 
specified in the appropriate appendix to this subpart, shall:
    (1) Not later than 10 days (excluding Saturdays, Sundays, and legal 
public holidays) after the date of receipt of such request, acknowledge 
in writing such receipt; and
    (2) Promptly, either--(i) Make any correction of any portion which 
the individual believes and the official agrees is not accurate, 
relevant, timely, or complete; or

[[Page 45]]

    (ii) Inform the individual of the refusal to amend the record in 
accordance with the individual's request, the reason for the refusal, 
and the name and business address of the officer designated in the 
applicable appendix to this subpart, as the person who is to review such 
refusal. (See 5 U.S.C. 552a (d) and (f))
    (e) Administrative appeal--(1) In general. Each component shall 
permit individuals to request a review of initial decisions made under 
paragraph (d) of this section, when an individual disagrees with a 
refusal to amend this record. (See 5 U.S.C. 552a (d), (f), and (g)(1))
    (2) Form of request for administrative review of refusal to amend 
record. At any time within 35 days after the date of the notification of 
the initial decision described in paragraph (d)(2)(ii) of this section, 
the requester may submit an administrative appeal from such refusal to 
the official specified in the notification of the initial decision and 
the appropriate appendix to this subpart. The appeal shall:
    (i) Be made in writing stating any arguments in support thereof and 
be signed by the person to whom the record pertains, or the duly 
authorized representative of such official;
    (ii) Be addressed to and mailed or hand delivered within 35 days of 
the date of the initial decision, to the office or officer specified in 
the appropriate appendix to this subpart and in the notification. (See 
the appendices to this subpart for the address to which appeals made by 
mail should be addressed);
    (iii) Have clearly marked on the appeal and on the envelope, 
``Privacy Act Amendment Appeal'';
    (iv) Reasonably describe the records requested to be amended; and
    (v) Specify the date of the initial request, to amend records, and 
the date of the letter giving notification that the request was denied. 
(See 5 U.S.C. 552a (d) and (f))
    (3) Date of receipt. Appeals shall be promptly stamped with the date 
of their receipt by the office to which addressed and such stamped date 
will be deemed to be the date of receipt for all purposes of this 
subpart. The receipt of the appeal shall be acknowledged within 10 days 
(excluding Saturdays, Sundays, and legal public holidays) from the date 
of the receipt (unless the determination on appeal is dispatched in 10 
days, in which case, no acknowledgement is required) by the responsible 
official and the requester advised of the date of receipt established by 
the foregoing and when a response is due in accordance with this 
paragraph. (See 5 U.S.C. 552a (d) and (f))
    (4) Review of administrative appeals from denial of requests to 
amend records. Officials responsible for deciding administrative appeals 
from denials of requests to amend records pertaining to an individual, 
as specified in the appendices to this subpart shall: Complete the 
review, and notify the requester of the final agency decision within 30 
days (exclusive of Saturdays, Sundays and legal public holidays) after 
the date of receipt of such appeal, unless the time is extended by the 
head of the agency or the delegate of such official, for good cause 
shown. If such final agency decision is to refuse to amend the record, 
in whole or in part, the requester shall also be advised of the right--
(i) to file a concise ``Statement of Disagreement'' setting forth the 
reasons for his disagreement with the decision which shall be filed 
within 35 days of the date of the notification of the final agency 
decision and (ii) to judicial review of the final agency decision under 
5 U.S.C. 552a(g)(1)(A). (See 5 U.S.C. 552a (d), (f) and (g)(1))
    (5) Notation on record and distribution of statements of 
disagreement. The system manager is responsible, in any disclosure 
containing information about which an individual has filed a ``Statement 
of Disagreement'', occurring after the filing of the statement under 
paragraph (e)(4) of this section, for clearly noting any portion of the 
record which is disputed and providing copies of the statement and, if 
deemed appropriate, a concise statement of the component's reasons for 
not making the amendments requested to persons or other agencies to whom 
the disputed record has been disclosed. (See 5 U.S.C. 552a(d)(4))
    (f) Records not subject to correction under the Privacy Act. The 
following records are not subject to correction or amendment by 
individuals:

[[Page 46]]

    (1) Transcripts or written statements made under oath; and
    (2) Transcripts of Grand Jury proceedings, judicial or quasi-
judicial proceedings which form the official record of those 
proceedings; and
    (3) Pre-sentence reports comprising the property of the courts but 
maintained in agency files; and
    (4) Records pertaining to the determination, the collection and the 
payment of the Federal taxes; and
    (5) Records duly exempted from correction by notice published in the 
Federal Register; and
    (6) Records compiled in reasonable anticipation of a civil action or 
proceeding.



Sec. 1.28  Training, rules of conduct, penalties for non-compliance.

    (a) Training. Subject to policy guidance and regulations issued by 
the Deputy Secretary, who has Departmentwide responsibility therefor, 
each component shall institute a training program to instruct employees 
and employees of Government contractors covered by 5 U.S.C. 552a(m), who 
are involved in the design, development, operation or maintenance of any 
system of records, on a continuing basis with respect to the duties and 
responsibilities imposed on them and the rights conferred on individuals 
by the Privacy Act, the regulations in this subpart, including the 
appendices thereto, and any other related regulations. Such training 
shall provide suitable emphasis on the civil and criminal penalties 
imposed on the Department and the individual employees by the Privacy 
Act for non-compliance with specified requirements of the Act as 
implemented by the regulations in this subpart. (See 5 U.S.C. 
552a(e)(9))
    (b) Rules of conduct. In addition, to the Standards of Conduct 
published in part O of this title, particularly 31 CFR 0.735-44, the 
following are applicable to employees of the Department of the Treasury 
(including, to the extent required by the contract or 5 U.S.C. 552a(m), 
Government contractors and employees of such contractors), who are 
involved in the design, development, operation or maintenance of any 
system of records, or in maintaining any records, for or on behalf of 
the Department, including any component thereof.
    (1) The head of each office of a component of the Department shall 
be responsible for assuring that employees subject to such official's 
supervision are advised of the provisions of the Privacy Act, including 
the criminal penalties and civil liabilities provided therein, and the 
regulations in this subpart, and that such employees are made aware of 
their individual and collective responsibilities to protect the security 
of personal information, to assure its accuracy, relevance, timeliness 
and completeness, to avoid unauthorized disclosure either orally or in 
writing, and to insure that no information system concerning 
individuals, no matter how small or specialized is maintained without 
public notice.
    (2) Employees of the Department of the Treasury involved in the 
design, development, operation, or maintenance of any system of records, 
or in maintaining any record shall:
    (i) Collect no information of a personal nature from individuals 
unless authorized to collect it to achieve a function or carry out a 
responsibility of the Department;
    (ii) Collect from individuals only that information which is 
necessary to Department functions or responsibilities, unless related to 
a system exempted under 5 U.S.C. 552a (j) or (k):
    (iii) Collect information, wherever possible, directly from the 
individual to whom it relates, unless related to a system exempted under 
5 U.S.C. 552a(j);
    (iv) Inform individuals from whom information is collected about 
themselves of the authority for collection, the purposes thereof, the 
use that will be made of the information, and the effects, both legal 
and practical, of not furnishing the information. (While this provision 
does not explicitly require it, where feasible, third party sources 
should be informed of the purposes for which information they are asked 
to provide will be used.);
    (v) Neither collect, maintain, use nor disseminate information 
concerning an individual's religious or political beliefs or activities 
or membership in associations or organizations, unless (A)

[[Page 47]]

the individual has volunteered such information for the individual's own 
benefits; (B) the information is expressly authorized by statute to be 
collected, maintained, used or disseminated; or (C) the activities 
involved are pertinent to and within the scope of an authorized 
investigation, adjudication or correctional activity;
    (vi) Advise their supervisors of the existence or contemplated 
development of any record system which is capable of retrieving 
information about individuals by individual identifier;
    (vii) Disseminate no information concerning individuals outside the 
Department except when authorized by 5 U.S.C. 552a or pursuant to a 
routine use published in the Federal Register;
    (viii) Assure that an accounting is kept in the prescribed form, of 
all dissemination of personal information outside the Department, 
whether made orally or in writing, unless disclosed under 5 U.S.C. 552 
and subpart A of this part;
    (ix) Maintain and process information concerning individuals with 
care in order to insure that no inadvertent disclosure of the 
information is made either within or without the Department; and
    (x) Assure that the proper Department authorities are aware of any 
information in a system maintained by the Department which is not 
authorized to be maintained under the provisions of the Privacy Act of 
1974, including information on First Amendment Activities, information 
that is inaccurate, irrelevant or so incomplete as to risk unfairness to 
the individual concerned.
    (3) Heads of components within the Department or their delegates 
shall, at least annually, review the record systems subject to their 
supervision to insure compliance with the provisions of the Privacy Act 
of 1974 and the regulations in this subpart. (See 5 U.S.C. 552a (e)(9), 
(i) and (m))
    (c) Criminal penalties. (1) The Privacy Act imposes criminal 
penalties on the conduct of Government officers or employees as follows: 
Any officer or employee of an agency (which term includes the Department 
of the Treasury):
    (i) Who by virtue of the official's employment or official position, 
has possession of, or access to, agency records which contain 
individually identifiable information the disclosure of which is 
prohibited by this section (5 U.S.C. 552a) or regulations established 
thereunder, and who knowing that disclosure of the specific material is 
so prohibited, willfully discloses the material in any manner to any 
person or agency not entitled to receive it, or
    (ii) Who willfully maintains a system of records without meeting the 
notice requirements of paragraph (e)(4) of this section (5 U.S.C. 
552a)--shall be guilty of a misdemeanor and fined not more than $5,000.
    (2) The Act also imposes a collateral criminal penalty on the 
conduct of any person as follows:

    ``Any person who knowingly and willfully requests or obtains any 
record concerning an individual from an agency under false pretenses 
shall be guilty of a misdemeanor and fined not more than $5,000.''

    (3) For the purposes of 5 U.S.C. 552a (i), the provisions of 
paragraph (c)(1) of this section are applicable to Government 
contractors and employees of such contractors who by contract, operate 
by or on behalf of the Department of the Treasury a system of records to 
accomplish a Departmental function. Such contractor and employees are 
considered employees of the Department of the Treasury for the purposes 
of 5 U.S.C. 552a(i). (See 5 U.S.C. 552a (i) and (m).)



Sec. 1.29  Records transferred to Federal Records Center or National Archives of the United States.

    (a) Records transferred to the Administrator of General Services for 
storage in the Federal Records Center. Records pertaining to an 
identifiable individual which are transferred to the Federal Records 
Center in accordance with 44 U.S.C. 3103 shall, for the purposes of the 
Privacy Act, 5 U.S.C. 552a, be considered to be maintained by the 
component which deposited the record and shall be subject to the 
provisions of the Privacy Act and this subpart. The Administrator of 
General Services shall not disclose such records except to the

[[Page 48]]

Department of the Treasury or to others under rules consistent with the 
Privacy Act which may be established by the Department of the Treasury 
or a component. If such records are retrieved for the purpose of making 
a determination about an individual, they must be reviewed for accuracy, 
relevance, timeliness, and completeness.
    (b) Records transferred to the National Archives of the United 
States. (1) Records transferred to National Archives prior to September 
27, 1975. Records pertaining to an identifiable individual transferred 
to the National Archives prior to September 27, 1975, as a record which 
has sufficient historical or other value to warrant its continued 
preservation by the United States Government shall be considered to be 
maintained by the National Archives, and
    (i) Shall not be subject to 5 U.S.C. 552a,
    (ii) Except, that a statement describing such records [modeled after 
5 U.S.C. 552a (e)(4) (A) through (G)] shall be published in the Federal 
Register.
    (2) Records transferred to National Archives on or after September 
27, 1975. Records pertaining to an identifiable individual transferred 
to the National Archives as a record which has sufficient historical or 
other value to warrant its continued preservation by the United States 
Government, on or after September 27, 1975, shall be considered to be 
maintained by the National Archives, and
    (i) Shall not be subject to 5 U.S.C. 552a,
    (ii) Except, that a statement describing such records in accordance 
with 5 U.S.C. 552a (e)(4) (A) through (G) shall be published in the 
Federal Register and rules of conduct and training in accordance with 5 
U.S.C. 552 (e) (9) are to be established by the National Archives. (See 
5 U.S.C. 552a (e))



Sec. 1.30  Application to system of records maintained by Government contractors.

    When a component contracts for the operation of a system of records, 
to accomplish a Departmental function, the provisions of the Privacy 
Act, 5 U.S.C. 552a, and this subpart shall be applicable to such system. 
The component shall have responsibility for insuring that the contractor 
complies with the contract requirements relating to privacy.



Sec. 1.31  Sale or rental of mailing lists.

    (a) In general. An individual's name and address shall not be sold 
or rented by a component unless such action is specifically authorized 
by law.
    (b) Withholding of names and addresses. This section shall not be 
construed to require the withholding of names and addresses otherwise 
permitted to be made public. (See 5 U.S.C. 552a (n)).



Sec. 1.32  Use and disclosure of social security numbers.

    (a) In general. An individual shall not be denied any right, 
benefit, or privilege provided by law by a component because of such 
individual's refusal to disclose his social security number.
    (b) Exceptions. The provisions of paragraph (a) of this section 
shall not apply with respect to:
    (1) Any disclosure which is required by Federal statute, or
    (2) The disclosure of a social security number to any Federal, 
State, or local agency maintaining a system of records in existence and 
operating before January 1, 1975, if such disclosure was required under 
statute or regulation adopted prior to such date to verify the identity 
of an individual.
    (c) Requests for disclosure of social security number. Any component 
which requests an individual to disclose his or her social security 
account number shall inform that individual whether:
    (1) Disclosure is mandatory or voluntary.
    (2) By what statutory or other authority such number is solicited, 
and
    (3) What uses will be made of it. (See section 7 of the Privacy Act 
of 1974 set forth at 5 U.S.C. 552a, note.)



Sec. 1.34  Guardianship.

    The parent or guardian of a minor or a person judicially determined 
to be incompetent shall, in addition to establishing the identity of the 
minor or other person represented, establish parentage or guardianship 
by furnishing a copy of a birth certificate showing parentage or a court 
order establishing the guardianship and may thereafter,

[[Page 49]]

act on behalf of such individual. (See 5 U.S.C. 552a (h))



Sec. 1.35  Information forms.

    (a) Review of forms. Except for forms developed and used by 
constituent units, the Deputy Assistant Secretary for Administration 
shall be responsible for reviewing all forms developed and used by the 
Department of the Treasury to collect information from and about 
individuals. The heads of components shall each be responsible for the 
review of forms used by such component to collect information from and 
about individuals.
    (b) Scope of review. The responsible officers shall review each form 
for the purpose of eliminating any requirement for information that is 
not relevant and necessary to carry out an agency function and to 
accomplish the following objectives;
    (1) To insure that no information concerning religion, political 
beliefs or activities, association memberships (other than those 
required for a professional license), or the exercise of First Amendment 
rights is required to be disclosed unless such requirement of disclosure 
is expressly authorized by statute or is pertinent to, and within the 
scope of, any authorized law enforcement activity;
    (2) To insure that the form or a separate form that can be retained 
by the individual makes clear to the individual which information he is 
required by law to disclose and the authority for that requirement and 
which information is voluntary;
    (3) To insure that the form or a separate form that can be retained 
by the individual states clearly the principal purpose or purposes for 
which the information is being collected, and summarizes concisely the 
routine uses that will be made of the information;
    (4) To insure that the form or a separate form that can be retained 
by the individual clearly indicates to the individual the effect in 
terms of rights, benefits or privileges of not providing all or part of 
the requested information; and
    (5) To insure that any form requesting disclosure of a Social 
Security Number, or a separate form that can be retained by the 
individual, clearly advises the individual of the statute or regulation 
requiring disclosure of the number or clearly advises the individual 
that disclosure is voluntary and that no consequence will follow from 
the refusal to disclose it, and the uses that will be made of the number 
whether disclosed mandatorily and voluntarily.
    (c) Revision of forms. Any form which does not meet the objectives 
specified in the Privacy Act and in this section, shall be revised to 
conform thereto. A separate statement may be used in instances when a 
form does not conform. This statement will accompany a form and shall 
include all the information necessary to accomplish the objectives 
specified in the Privacy Act and this section.



Sec. 1.36  Systems exempt in whole or in part from provisions of 5 U.S.C. 552a and this part.

    In accordance with 5 U.S.C. 552a (j) and (k) and Sec. 1.23(c), 
constituent units of the Department of the Treasury exempt the following 
systems of records from certain provisions of the Privacy Act for the 
reasons indicated:

                         Office of the Secretary

                      office of the general counsel

 Notice exempting a system of records from requirements of the Privacy 
                                   Act

    (a) In general. The General Counsel of the Treasury exempts the 
system of records entitled ``Treasury Interagency Automated Litigation 
System (TRIALS)'' from the provisions of subsections (c)(3), (d), 
(e)(1), (e)(4)(G), (H) and (I), and (f) of 5 U.S.C. 552a. The manual 
part of this system of records contains information or documents 
relating to litigation or administrative proceedings involving or 
concerning the Department or its officials, and includes pending, active 
and closed files. The manual records consist of copies of pleadings, 
investigative reports, information compiled in reasonable anticipation 
of a civil action or proceeding, legal memoranda, and related 
correspondence. Pleadings which have been filed with a court or 
administrative tribunal are matters of public record and no exemption is 
claimed as

[[Page 50]]

to them. The computerized part of the system contains summary data on 
Treasury Department non-tax litigation and administrative proceedings, 
e.g., plaintiff, defendant, attorney, witness, judge and/or hearing 
officer names, type of case, relief sought, date, docket number, 
pertinent dates, and issues. The purpose of the exemptions is to 
maintain the confidentiality of investigatory materials compiled for law 
enforcement purposes; information compiled in reasonable anticipation of 
a civil action a proceeding is exempt from access under section (d)(5) 
until the file is closed; thereafter section (k)(2) may apply in part to 
the information. Legal memorandum and related correspondence contain no 
personal information and are not subject to disclosure under section 
552a. Determinations concerning whether particular information contained 
in this system is exempt from disclosure will be made at the time a 
request is received from an individual to gain access to information 
pertaining to him.
    (b) Authority. These rules are promulgated pursuant to the authority 
vested in the Secretary of the Treasury by 5 U.S.C. 552a(k), and 
pursuant to the authority vested in the General Counsel by 31 CFR 
1.23(c).
    (c) Name of system. Treasury Interagency Automated Litigation System 
(TRIALS).
    (d) Provisions from which exempted. This system contains records 
described in 5 U.S.C. 552a(k), the Privacy Act of 1974. Exemption will 
be claimed for such records only where appropriate from the following 
provisions, subsections (c)(3), (d), (e)(1), (e)(4)(G), (H), and (I), 
and (f) of 5 U.S.C. 552a.
    (e) Reasons for claimed exemptions. Those sections would otherwise 
require the Department to notify an individual of investigatory 
materials maintained in a record pertaining to him, permit access to 
such record, permit requests for its correction (section 552a(d), 
(e)(4)(G), (H), and (f)); make available to him any required accounting 
of disclosures made of the record (section 552a(c)(3)), publish the 
sources of records in the system (section 552a(e)(4)(I)); and screen 
records to insure that there is maintained only such information about 
an individual as is relevant to accomplish a required purpose of the 
Department (section 552a(e)(1)). The records compiled for the 
prosecution or defense of civil litigation on behalf of the Department 
or its officials contain investigatory materials compiled for litigation 
purposes, together with memoranda concerning the applicable law, and 
related correspondence. The use of investigatory material in court 
proceedings is governed by due process and statutory procedural 
requirements. Informing individuals that they are on record in a 
particular system enables such individuals to learn the nature of the 
investigatory material and the evidentiary basis for prosecuting or 
defending legal proceedings to which they are a party; furthermore, the 
disclosure of certain investigatory material compiled for law 
enforcement purposes may disclose investigative techniques and 
procedures so that future law enforcement efforts would be hindered. 
Access to an accounting of disclosures of such records would have a 
similar detrimental effort upon the successful prosecution of legal 
claims. In addition, screening for relevancy to Department purposes, and 
correction or attempted correction of such materials could require 
excessive amounts of time and effort on the part of all concerned. 
Accordingly, the General Counsel finds that the public interest and 
public policy in maintaining an effective legal services program 
requires exemption from the stated sections of the Act to the extent 
that they are applicable to appropriate materials in this system.

                     office of the inspector general

Notice exempting a system of records from the disclosure requirements of 
                         the Privacy Act of 1974

    (a) In general. The Office of the Inspector General, Department of 
the Treasury exempts the system of records entitled, ``General 
Allegations and Investigative Records'' from certain provisions of the 
Privacy Act of 1974. The purpose of the exemption is to maintain 
confidentiality of data obtained from various sources that may 
ultimately accomplish a statutory or executively ordered purpose.

[[Page 51]]

    (b) Authority: The authority to issue exemptions is vested in the 
Office of the Inspector General, as a constituent unit of the Treasury 
Department by 31 CFR 1.20.
    (c) Exemptions under 5 U.S.C. 552a(j)(2): (1) Under 5 U.S.C. 
552a(j)(2), the head of any agency may exempt any system of records 
within the agency from certain provisions of the Privacy Act of 1974, if 
the agency or component that maintains the system performs as its 
principal function any activities pertaining to the enforcement of 
criminal laws. The Office of the Inspector General is authorized under 
Treasury Department Order No. 256 to initiate, organize, direct, and 
control investigations of any allegations of illegal acts, violations, 
and any other misconduct, concerning any official or employee of any 
Treasury Office or Bureau.
    (2) To the extent that the exemption under 5 U.S.C. 552a(j)(2) does 
not apply to the above named system of records, then the exemption under 
5 U.S.C. 552a(k)(2) relating to investigatory material compiled for law 
enforcement purposes is claimed for this system.
    (3) The provisions of the Privacy Act of 1974 from which exemptions 
are claimed under 5 U.S.C. 552a(j)(2) are as follows:

5 U.S.C. 552a(c)(3) and (4)
5 U.S.C. 552a(d)(1), (2), (3), (4)
5 U.S.C. 552a(e)(1)(2) and (3)
5 U.S.C. 552a(e)(4)(G), (H), and (I)
5 U.S.C. 552a(e)(5) and (8)
5 U.S.C. 552a(f)
5 U.S.C. 552a(g)

    (d) Exemptions under 5 U.S.C. 552a(k)(2): (1) Under 5 U.S.C. 
552a(k)(2), the head of any agency may exempt any system of records 
within the agency from certain provisions of the Privacy Act of 1974 if 
the system is investigatory material compiled for law enforcement 
purposes.
    (2) To the extent that information contained in the above named 
system has as its principal purpose the enforcement of criminal laws, 
the exemption for such information under 5 U.S.C. 552a(j)(2) is claimed.
    (3) Provisions of the Privacy Act of 1974 from which exemptions are 
claimed under 5 U.S.C. 552a(k)(2) are as follows:

5 U.S.C. 552a(c)(3)
5 U.S.C. 552a(d)(1), (2), (3), and (4)
5 U.S.C. 552a(e)(1)
5 U.S.C. 552a(e)(4)(G), (H), and (I)
5 U.S.C. 552a(f)

    (e) Reasons for exemptions under 5 U.S.C. 552a(j)(2) and (k)(2): (1) 
5 U.S.C. 552a(c)(3) requires that an agency make accountings of 
disclosures of records available to individuals named in the records at 
their request. These accountings must state the date, nature and purpose 
of each disclosure of the record and the name and address of the 
recipient. The application of this provision would alert subjects of an 
investigation to the existence of the investigation and that such 
persons are subjects of that investigation. Since release of such 
information to subjects of an investigation would provide the subjects 
with significant information concerning the nature of the investigation, 
it could result in the altering or destruction of documentary evidence, 
improper influencing of witnesses, and other activities that could 
impede or compromise the investigation.
    (2) 5 U.S.C. 552a(c)(4), (d)(1), (2), (3), and (4), (e)(4)(G) and 
(H), (f) and (g) relate to an individual's right to be notified of the 
existence of records pertaining to such individual; requirements for 
identifying an individual who requests access to records; the agency 
procedures relating to access to records and the contest of information 
contained in such records; and the civil remedies available to the 
individual in the event of adverse determinations by an agency 
concerning access to or amendment of information contained in record 
systems. This system is exempt from the foregoing provisions for the 
following reasons: To notify an individual at the individual's request 
of the existence of records in an investigative file pertaining to such 
individual or to grant access to an investigative file could interfere 
with investigative and enforcement proceedings; co-defendants of a right 
to a fair trial; constitute an unwarranted invasion of the personal 
privacy of others, disclose the identity of confidential sources and 
reveal confidential information supplied by these sources; and disclose 
investigative techniques and procedures.

[[Page 52]]

    (3) 5 U.S.C. 552a(e)(4)(I) requires the publication of the 
categories of sources of records in each system of records. The 
application of this provision could disclose investigative techniques 
and procedures and cause sources to refrain from giving such information 
because of fear of reprisal, or fear of breach of promises of anonymity 
and confidentiality. This would compromise the ability to conduct 
investigations, and to identify, detect, and apprehend violators.
    (4) 5 U.S.C. 552a(e)(1) requires each agency to maintain in its 
records only such information about an individual that is relevant and 
necessary to accomplish a purpose of the agency required by statute or 
Executive Order. An exemption from the foregoing is needed:
    (A) Because it is not possible to detect relevance or necessity of 
specific information in the early stages of a criminal or other 
investigation.
    (B) Relevance and necessity are questions of judgment and timing. 
What appears relevant and necessary when collected may ultimately be 
determined to be unnecessary. It is only after the information is 
evaluated that the relevance and necessity of such information can be 
established.
    (C) In any investigation the Inspector General may obtain 
information concerning the violations of laws other than those within 
the scope of his jurisdiction. In the interest of effective law 
enforcement, the Inspector General should retain this information as it 
may aid in establishing patterns of criminal activity, and provide leads 
for those law enforcement agencies charged with enforcing other segments 
of criminal or civil law.
    (D) In interviewing persons, or obtaining other forms of evidence 
during an investigation, information may be supplied to the investigator 
which relate to matters incidental to the main purpose of the 
investigation but which may relate to matters under the investigative 
jurisdiction of another agency. Such information cannot readily be 
segregated.
    (5) 5 U.S.C. 552a(e)(2) requires an agency to collect information to 
the greatest extent practicable directly from the subject individual 
when the information may result in adverse determinations about an 
individual's rights, benefits, and privilege under Federal programs. The 
application of the provision would impair investigations of illegal 
acts, violations of the rules of conduct, merit system and any other 
misconduct for the following reasons:
    (A) In certain instances the subject of an investigation cannot be 
required to supply information to investigators. In those instances, 
information relating to a subject's illegal acts, violations of rules of 
conduct, or any other misconduct, etc., must be obtained from other 
sources.
    (B) Most information collected about an individual under 
investigation is obtained from third parties such as witnesses and 
informers. It is not feasible to rely upon the subject of the 
investigation as a source for information regarding his activities.
    (C) The subject of an investigation will be alerted to the existence 
of an investigation if an attempt is made to obtain information from the 
subject. This would afford the individual the opportunity to conceal any 
criminal activities to avoid apprehension.
    (D) In any investigation it is necessary to obtain evidence from a 
variety of sources other than the subject of the investigation in order 
to verify the evidence necessary for successful litigation.
    (6) 5 U.S.C. 552a(e)(3) requires that an agency must inform the 
subject of an investigation who is asked to supply information of:
    (A) The authority under which the information is sought and whether 
disclosure of the information is mandatory or voluntary.
    (B) The purposes for which the information is intended to be used,
    (C) The routine uses which may be made of the information, and
    (D) The effects on the subject, if any of not providing the 
requested information. The reasons for exempting this system of records 
from the foregoing provision are as follows:
    (i) The disclosure to the subject of the investigation as stated in 
(B) above

[[Page 53]]

would provide the subject with substantial information relating to the 
nature of the investigation and could impede or compromise the 
investigation.
    (ii) If the subject were informed of the information required by 
this provision, it could seriously interfere with undercover activities 
by requiring disclosure of undercover agents identity and impairing 
their safety, as well as impairing the successful conclusion of the 
investigation.
    (iii) Individuals may be contacted during preliminary information 
gathering in investigations authorized by Treasury Department Order No. 
256 before any individual is identified as the subject of an 
investigation. Informing the individual of the matters required by this 
provision would hinder or adversely affect any present or subsequent 
investigations.
    (7) 5 U.S.C. 552a(e)(5) requires that records be maintained with 
such accuracy, relevance, timeliness, and completeness as is reasonably 
necessary to assure fairness to the individual in making any 
determination about an individual. Since the law defines ``maintain'' to 
include the collection of information, complying with this provision 
would prevent the collection of any data not shown to be accurate, 
relevant, timely, and complete at the moment of its collection. In 
gathering information during the course of an investigation it is not 
possible to determine this prior to collection of the information. Facts 
are first gathered and then placed into a logical order which 
objectively proves or disproves criminal behavior on the part of the 
suspect. Material which may seem unrelated, irrelevant, incomplete, 
untimely, etc., may take on added meaning as an investigation 
progresses. The restrictions in this provision could interfere with the 
preparation of a complete investigative report.
    (8) 5 U.S.C. 552a(e)(8) requires an agency to make reasonable 
efforts to serve notice on an individual when any record on such 
individual is made available to any person under compulsory legal 
process when such process becomes a matter of public record. The notice 
requirement of this provision could prematurely reveal an ongoing 
criminal investigation to the subject of the investigation.
    (f) Exempt information included in another system. Any information 
from a system of records for which an exemption is claimed under 5 
U.S.C. 552a(j) or (k) which also is included in another system of 
records retains the same exempt status as in the system for which an 
exemption is claimed.

                 Assistant Secretary for Administration

    The Assistant Secretary for Administration exempts under section (k) 
of the Privacy Act of 1974, 5 U.S.C. 552a, the Department's Personnel 
Security Files and Personnel Security Files and Indices from sections 
(c)(3), (d), (e)(1), (e)(4)(G) through (e)(4)(I), and (f) of the Act. 
The records maintained in the exempt systems of records are of the type 
described in section (k)(5) of the Act:

investigatory material compiled solely for the purpose of determining 
suitability, eligibility, or qualifications for Federal civilian 
employment, military service, Federal contracts, or access to classified 
information, but only to the extent that the disclosure of such material 
would reveal the identity of a source who furnished information to the 
Government under an express promise that the identity of the source 
would be held in confidence, or, prior to the effective date of this 
section, under an implied promise that the identity of the source would 
be held in confidence.


Thus to the extent that the records in this system can be disclosed 
without revealing the identity of a confidential source, they are not 
within the scope of this exemption and are subject to all the 
requirements of the Privacy Act.
    The sections of the Act from which this system of records are exempt 
are in general those providing for individual access to records. When 
such access would cause the identity of a confidential source to be 
revealed, it would impair the future ability of the Treasury Department 
to compile investigatory material for the purpose of determining 
suitability, eligibility, or qualifications for Federal civilian 
employment, Federal contracts, or access to classified information.
    In addition, the systems are exempt from section (e)(1) which 
requires that the agency maintain in its records only such information 
about an individual

[[Page 54]]

as is relevant and necessary to accomplish a statutory or executively 
ordered purpose. The Director finds that to fulfill the requirements of 
section (e)(1) would unduly restrict the agency in its information 
gathering inasmuch as it is often not until well after the investigation 
that it is possible to determine the relevance and necessity of 
particular information.
    If any investigations within the scope of section (k)(5) become 
involved with civil or criminal matters, exemptions from the Act could 
also be asserted under sections (k)(2) or (j)(2).

  Exemption of foreign assets control enforcement records from certain 
  provisions of the Privacy Act of 1974 (pub. l. 93-579, 5 U.S.C. 552a)

    The new regulations promulgated by the Office of Foreign Assets 
Control (as amendments to its Foreign Assets Control Regulations; 
Transaction Control Regulations; Cuban Assets Control Regulations; and, 
Rhodesian Sanction Regulations) read as follows:
    Pursuant to subsection (k)(2) of 5 U.S.C. 552a, the Privacy Act of 
1974, the Enforcement Records of the Office of Foreign Assets Control 
are hereby exempted from the requirements of subsections (c)(3), (d), 
(e)(1), (e)(4)(G-I), and (f) of 5 U.S.C. 552a, as materials which are 
compiled and maintained for the purpose of conducting and recording 
investigations of criminal violations of relevant statutes and 
regulations administered by the Office of Foreign Assets Control. These 
records contain, among other things, information and evidence which was 
furnished in confidence by individuals, corporations, partnerships and 
other entities, Federal, State and local agencies, and by foreign 
individuals, corporations, partnerships and other entities, and foreign 
government sources. If it should appear that the individual concerning 
whom a record is maintained has been or will be denied any right, 
privilege, or benefit to which he would otherwise be entitled by Federal 
law, or for which he would otherwise be eligible, except for the 
maintenance of such material, such material shall be disclosed to such 
individual, except: (1) To the extent that disclosure would reveal the 
identity of a source who furnished information to the government under 
an express promise that the identity of the source would be held in 
confidence; or (2) to the extent that disclosure would reveal the 
identity of a source who furnished information prior to the effective 
date of the Privacy Act (September 27, 1975) under an implied promise 
that the identity of the source would be held in confidence.

                    Assistant Secretary (Enforcement)

                  Financial Crimes Enforcement Network

                         Notice of Exempt System

    (a) In general. The Assistant Secretary of the Treasury for 
Enforcement exempts the system of records entitled ``FinCEN Data Base'' 
(Treasury/DO .200) from certain provisions of the Privacy Act of 1974, 
as amended, 5 U.S.C. 552a.
    (b) Authority: 5 U.S.C. 552a (j) and (k); 31 CFR 1.23(c).
    (c) General exemptions under 5 U.S.C. 552a(j)(2). Pursuant to 5 
U.S.C. 552a(j)(2), the Assistant Secretary for Enforcement hereby 
exempts the FinCEN Data Base system of records, maintained by the 
Financial Crimes Enforcement Network (``FinCEN''), an office reporting 
to the Assistant Secretary for Enforcement, from the following 
provisions of the Privacy Act of 1974:

5 U.S.C. 552a(c) (3) and (4);
5 U.S.C. 552a(d) (1), (2), (3) and (4);
5 U.S.C. 552a (e) (1), (2) and (3);
5 U.S.C. 552a(e)(4) (G), (H) and (I);
5 U.S.C. 552a(e) (5) and (8);
5 U.S.C. 552a(f); and
5 U.S.C. 552a(g).

    (d) Specific exemptions under 5 U.S.C. 552a(k)(1). To the extent 
that the system of records may contain information subject to the 
provisions of 5 U.S.C. 552(b)(1), regarding national defense and foreign 
policy information classified pursuant to Executive order, the Assistant 
Secretary for Enforcement hereby exempts the FinCEN Data Base system of 
records from the following provisions of 5 U.S.C. 552a, pursuant to 5 
U.S.C. 552a(k)(1):

5 U.S.C. 552a(c)(3);
5 U.S.C. 552a(d) (1), (2), (3), and (4);
5 U.S.C. 552a(e)(1);

[[Page 55]]

5 U.S.C. 552a(e)(4) (G), (H), and (I); and
5 U.S.C. 552a(f).

    (e) Specific exemptions under 5 U.S.C. 552a(k)(2). To the extent 
that the exemption under 5 U.S.C. 552a(j)(2) does not apply to the 
FinCEN Data Base, the Assistant Secretary for Enforcement hereby exempts 
the FinCEN Data Base system of records from the following provisions of 
5 U.S.C. 552a, pursuant to 5 U.S.C. 552a(k)(2):

5 U.S.C. 552a(c)(3);
5 U.S.C. 552a(d) (1), (2), (3), and (4);
5 U.S.C. 552a(e)(1);
5 U.S.C. 552a(e)(4) (G), (H), and (I); and
5 U.S.C. 552a(f).

    (f) Reasons for exemptions under 5 U.S.C. 552a (j)(2) and (k)(2). 
(1) 5 U.S.C. 552a (e)(4)(G) and (f)(1) enable individuals to inquire 
whether a system of records contains records pertaining to them. 
Application of these provisions to the FinCEN Data Base would allow 
individuals to learn whether they have been identified as suspects or 
subjects of investigation. As further described in the following 
paragraph, access to such knowledge would impair FinCEN's ability to 
carry out its mission, since individuals could (i) take steps to avoid 
detection, (ii) inform associates that an investigation is in progress, 
(iii) learn the nature of the investigation, (iv) learn whether they are 
only suspects or identified as law violators, (v) begin, continue, or 
resume illegal conduct upon learning that they are not identified in the 
system of records, or (vi) destroy evidence needed to prove the 
violation.
    (2) 5 U.S.C. 552a (d)(1), (e)(4)(H) and (f)(2), (3) and (5) grant 
individuals access to records pertaining to them. The application of 
these provisions to the FinCEN Data Base would compromise FinCEN's 
ability to provide useful tactical and strategic information to law 
enforcement agencies.
    (i) Permitting access to records contained in the FinCEN Data Base 
would provide individuals with information concerning the nature of any 
current investigations and would enable them to avoid detection or 
apprehension by (A) discovering the facts that would form the basis for 
their arrest, (B) enabling them to destroy or alter evidence of criminal 
conduct that would form the basis for their arrest, and (C) using 
knowledge that criminal investigators had reason to believe that a crime 
was about to be committed, to delay the commission of the crime or 
commit it at a location that might not be under surveillance.
    (ii) Permitting access to either on-going or closed investigative 
files would also reveal investigative techniques and procedures, the 
knowledge of which could enable individuals planning crimes to structure 
their operations so as to avoid detection or apprehension.
    (iii) Permitting access to investigative files and records could, 
moreover, disclose the identity of confidential sources and informers 
and the nature of the information supplied and thereby endanger the 
physical safety of those sources by exposing them to possible reprisals 
for having provided the information. Confidential sources and informers 
might refuse to provide criminal investigators with valuable information 
unless they believed that their identities would not be revealed through 
disclosure of their names or the nature of the information they 
supplied. Loss of access to such sources would seriously impair FinCEN's 
ability to carry out its mandate.
    (iv) Furthermore, providing access to records contained in the 
FinCEN Data Base could reveal the identities of undercover law 
enforcement officers who compiled information regarding the individual's 
criminal activities and thereby endanger the physical safety of those 
undercover officers or their families by exposing them to possible 
reprisals.
    (v) By compromising the law enforcement value of the FinCEN Data 
Base for the reasons outlined in paragraphs (f)(2) through (iv) of this 
paragraph, permitting access in keeping with these provisions would 
discourage other law enforcement and regulatory agencies, foreign and 
domestic, from freely sharing information with FinCEN and thus would 
restrict FinCEN's access to information necessary to accomplish its 
mission most effectively.
    (vi) Finally, the dissemination of certain information that FinCEN 
may maintain in the FinCEN Data Base is restricted by law.

[[Page 56]]

    (3) 5 U.S.C. 552a (d) (2), (3) and (4), (e)(4)(H), and (f)(4) permit 
an individual to request amendment of a record pertaining to him or her 
and require the agency either to amend the record, or to note the 
disputed portion of the record and to provide a copy of the individual's 
statement of disagreement with the agency's refusal to amend a record to 
persons or other agencies to whom the record is thereafter disclosed. 
Since these provisions depend on the individual's having access to his 
or her records, and since these rules propose to exempt the FinCEN Data 
Base from the provisions of 5 U.S.C. 552a relating to access to records, 
for the reasons set out in paragraph (f)(2) of this section, these 
provisions should not apply to the FinCEN Data Base.
    (4) 5 U.S.C. 552(c)(4) requires an agency to inform any person or 
other agency about any correction or notation of dispute that the agency 
made in accordance with 5 U.S.C. 552a(d) to any record that the agency 
disclosed to the person or agency if an accounting of the disclosure was 
made. Since this provision depends on an individual's having access to 
and an opportunity to request amendment of records pertaining to him or 
her, and since these rules proposed to exempt the FinCEN Data Base from 
the provisions of 5 U.S.C. 552a relating to access to and amendment of 
records, for the reeasons set out in paragraph (f)(3) of this section, 
this provision ought not apply to the FinCEN Data Base.
    (5) 5 U.S.C. 552a(3) requires an agency to make accountings of 
disclosures of a record available to the individual named in the record 
upon his or her request. The accountings must state the date, nature, 
and purpose of each disclosure of the record and the name and address of 
the recipient.
    (i) The application of this provision would impair the ability of 
law enforcement agencies outside the Department of the Treasury to make 
effective use of information provided by FinCEN. Making accountings of 
disclosures available to the subjects of an investigation would alter 
them to the fact that another agency is conducting an investigation into 
their criminal activities and could reveal the geographic location of 
the other agency's investigation, the nature and purpose of that 
investigation, and the dates on which that investigation was active. 
Violators possessing such knowledge would be able to take measures to 
avoid detection or apprehension by altering their operations, by 
transferring their criminal activities to other geographical areas, or 
by destroying or concealing evidence that would form the basis for 
arrest.
    (ii) Moreover, providing accountings to the subjects of 
investigations would alert them to the fact that FinCEN has information 
regarding their criminal activities and could inform them of the general 
nature of that information. Access to such information could reveal the 
operation of FinCEN's information-gathering and analysis systems and 
permit violators to take steps to avoid detection or apprehension.
    (6) 5 U.S.C. 552a(e)(4)(I) requires an agency to publish a general 
notice listing the categories of sources for information contained in a 
system of records. The application of this provision to the FinCEN Data 
Base could compromise FinCEN's ability to provide useful information to 
law enforcement agencies, since revealing sources for the information 
could (i) disclose investigative techniques and procedures, (ii) result 
in threats or reprisals against informers by the subjects of 
investigations, and (iii) cause informers to refuse to give full 
information to criminal investigators for fear of having their 
identities as sources disclosed.
    (7) 5 U.S.C. 552a(e)(1) requires an agency to maintain in its 
records only such information about an individual as is relevant and 
necessary to accomplish a purpose of the agency required to be 
accomplished by statute or executive order. The term ``maintain,'' as 
defined in 5 U.S.C. 552a(a)(3), includes ``collect'' and 
``disseminate.'' The application of this provision to the FinCEN Data 
Base could impair FinCEN's ability to collect and disseminate valuable 
law enforcement information.
    (i) At the time that FinCEN collects information, it often lacks 
sufficient time to determine whether the information is relevant and 
necessary to accomplish a FinCEN purpose.

[[Page 57]]

    (ii) In many cases, especially in the early stages of investigation, 
it may be impossible immediately to determine whether information 
collected is relevant and necessary, and information that initially 
appears irrelevent and unnecessary often may, upon further evaluation or 
upon collation with information developed subsequently, prove 
particularly relevant to a law enforcement program.
    (iii) Not all violations of law discovered by FinCEN analysts fall 
within the investigative jurisdiction of the Department of the Treasury. 
To promote effective law enforcement, FinCEN will have to disclose such 
violations to other law enforcement agencies, including State, local and 
foreign agencies, that have jurisdiction over the offenses to which the 
information relates. Otherwise, FinCEN might be placed in the position 
of having to ignore information relating to violations of law not within 
the jurisdiction of the Department of the Treasury when that information 
comes to FinCEN's attention during the collation and analysis of 
information in its records.
    (8) 5 U.S.C. 552a(e)(2) requires an agency to collect information to 
the greatest extent practicable directly from the subject individual 
when the information may result in adverse determinations about an 
individual's rights, benefits, and privileges under Federal programs. 
The application of this provision to the FinCEN Data Base would impair 
FinCEN's ability to collate, analyze, and disseminate investigative, 
intelligence, and enforcement information.
    (i) Most information collected about an individual under criminal 
investigation is obtained from third parties, such as witnesses and 
informants. It is usually not feasible to rely upon the subject of the 
investigation as a source for information regarding his criminal 
activities.
    (ii) An attempt to obtain information from the subject of a criminal 
investigation will often alert that individual to the existence of an 
investigation, thereby affording the individual an opportunity to 
attempt to conceal his criminal activities so as to avoid apprehension.
    (iii) In certain instances, the subject of a criminal investigation 
is not required to supply information to criminal investigators as a 
matter of legal duty.
    (iv) During criminal investigations it is often a matter of sound 
investigative procedure to obtain information from a variety of sources 
to verify information already obtained.
    (9) 5 U.S.C. 552a(e)(3) requires an agency to inform each individual 
whom it asks to supply information, on the form that it uses to collect 
the information or on a separate form that the individual can retain, of 
the agency's authority for soliciting the information; whether 
disclosure of information is voluntary or mandatory; the principal 
purposes for which the agency will use the information; the routine uses 
that may be made of the information; and the effects on the individual 
of not providing all or part of the information. The FinCEN Data Base 
should be exempted from this provision to avoid impairing FinCEN's 
ability to collect and collate investigative, intelligence, and 
enforcement data.
    (i) Confidential sources or undercover law enforcement officers 
often obtain information under circumstances in which it is necessary to 
keep the true purpose of their actions secret so as not to let the 
subject of the investigation or his or her associates know that a 
criminal investigation is in progress.
    (ii) If it became known that the undercover officer was assisting in 
a criminal investigation, that officer's physical safety could be 
endangered through reprisal, and that officer may not be able to 
continue working on the investigation.
    (iii) Individuals often feel inhibited in talking to a person 
representing a criminal law enforcement agency but are willing to talk 
to a confidential source or undercover officer whom they believe not to 
be involved in law enforcement activities.
    (iv) Providing a confidential source of information with written 
evidence that he or she was a source, as required by this provision, 
could increase the likelihood that the source of information would be 
subject to retaliation by the subject of the investigation.

[[Page 58]]

    (v) Finally, application of this provision could result in an 
unwarranted invasion of the personal privacy of the subject of the 
criminal investigation, particularly where further investigation reveals 
that the subject was not involved in any criminal activity.
    (10) 5 U.S.C. 552a(e)(5) requires an agency to maintain all records 
it uses in making any determination about any individual with such 
accuracy, relevance, timeliness, and completeness as is reasonably 
necessary to assure fairness to the individual in the determination.
    (i) Since 5 U.S.C. 552a(a)(3) defines ``maintain'' to include 
``collect'' and ``disseminate,'' application of this provision to the 
FinCEN Data Base would hinder the initial collection of any information 
that could not, at the moment of collection, be determined to be 
accurate, relevant, timely, and complete. Similarly, application of this 
provision would seriously restrict FinCEN's ability to disseminate 
information pertaining to a possible violation of law to law enforcement 
and regulatory agencies. In collecting information during a criminal 
investigation, it is often impossible or unfeasible to determine 
accuracy, relevance, timeliness, or completeness prior to collection of 
the information. In disseminating information to law enforcement and 
regulatory agencies, it is often impossible to determine accuracy, 
relevance, timeliness, or completeness prior to dissemination, because 
FinCEN may not have the expertise with which to make such 
determinations.
    (ii) Information that may initially appear inaccurate, irrelevant, 
untimely, or incomplete may, when collated and analyzed with other 
available information, become more pertinent as an investigation 
progresses. In addition, application of this provision could seriously 
impede criminal investigators and intelligence analysts in the exercise 
of their judgment in reporting results obtained during criminal 
investigations.
    (11) 5 U.S.C. 552a(e)(8) requires an agency to make reasonable 
efforts to serve notice on an individual when the agency makes any 
record on the individual available to any person under compulsory legal 
process, when such process becomes a matter of public record. The FinCEN 
Data Base should be exempted from this provision to avoid revealing 
investigative techniques and procedures outlined in those records and to 
prevent revelation of the existence of an ongoing investigation where 
there is need to keep the existence of the investigation secret.
    (12) 5 U.S.C. 552a(g) provides for civil remedies to an individual 
when an agency wrongfully refuses to amend a record or to review a 
request for amendment, when an agency wrongfully refuses to grant access 
to a record, when an agency fails to maintain accurate, relevant, 
timely, and complete records which are used to make a determination 
adverse to the individual, and when an agency fails to comply with any 
other provision of 5 U.S.C. 552a so as to adversely affect the 
individual. The FinCEN Data Base should be exempted from this provision 
to the extent that the civil remedies may relate to provisions of 5 
U.S.C. 552a from which these rules propose to exempt the FinCEN Data 
Base, since there should be no civil remedies for failure to comply with 
provisions from which FinCEN is exempted. Exemption from this provision 
will also protect FinCEN from baseless civil court actions that might 
hamper its ability to collate, analyze, and disseminate investigative, 
intelligence, and law enforcement data.
    (g) In general. The Assistant Secretary (Enforcement) exempts the 
system of records entitled ``Suspicious Activity Reporting System'' 
(Treasury/DO .212) from certain provisions of the Privacy Act of 1974, 
as amended, 5 U.S.C. 552a.
    (h) Authority. 5 U.S.C. 552a(j) and (k); 31 CFR 1.23(c).
    (i) General exemptions under 5 U.S.C. 552a(j)(2). Pursuant to 5 
U.S.C. 552a(j)(2), the Assistant Secretary (Enforcement) hereby exempts 
the Suspicious Activity Reporting System (SAR System) of records, 
maintained by FinCEN, an office reporting to the Assistant Secretary 
(Enforcement), from the following provisions of the Privacy Act of 1974:

5 U.S.C. 552a(c)(3) and (4);
5 U.S.C. 552a(d)(1), (2), (3), and (4);

[[Page 59]]

5 U.S.C. 552a(e)(1), (2), and (3);
5 U.S.C. 552a(e)(4)(G), (H), and (I):
5 U.S.C. 552a(e)(5) and (8);
5 U.S.C. 552a(f); and
5 U.S.C. 552a(g).

    (j) Specific exemptions under 5 U.S.C. 552a(k)(2). To the extent 
that the exemption under 5 U.S.C. 552a(j)(2) does not apply to the SAR 
System of records, the Assistant Secretary (Enforcement) hereby exempts 
the SAR System of records from the following provisions of 5 U.S.C. 552a 
pursuant to 5 U.S.C. 552a(k)(2):

5 U.S.C. 552a(c)(3);
5 U.S.C. 552a(d)(1), (2), (3), and (4)
5 U.S.C. 552a(e)(1)
5 U.S.C. 552a(e)(4)(G), (H), and (I); and
5 U.S.C. 552a(f).

    (k) Reasons for exemptions under 5 U.S.C. 552a(j)(2) and (k)(2). (1) 
5 U.S.C. 552a(e)(4)(G) and (f)(1) enable individuals to inquire whether 
a system of records contains records pertaining to them. Application of 
these provisions to the SAR System would allow individuals to learn 
whether they have been identified as suspects or possible subjects of 
investigation. Access by individuals to such knowledge would seriously 
hinder the law enforcement purposes that the SAR System is created to 
serve, because individuals involved in activities that are violations of 
law could:
    (i) Take steps to avoid detection;
    (ii) Inform associates that an investigation is in progress;
    (iii) Learn the nature of the investigation;
    (iv) Learn whether they are only suspects or identified as violators 
of law;
    (v) Begin, continue, or resume illegal conduct upon learning that 
they are not identified in the system of records, or
    (vi) Destroy evidence needed to prove the violation.
    (2) 5 U.S.C. 552a(d)(1), (e)(4)(H) and (f)(2), (f)(3) and (f)(5) 
grant individuals access to records containing information about them. 
The application of these provisions to the SAR System would compromise 
the ability of the component agencies of the SAR System to use the 
information effectively for purposes of law enforcement.
    (i) Permitting access to records contained in the SAR System would 
provide individuals with information concerning the nature of any 
current investigations and would enable them to avoid detection or 
apprehension, because they could;
    (A) Discover the facts that would form the basis of an arrest;
    (B) Destroy or alter evidence of criminal conduct that would form 
the basis of their arrest, and
    (C) Delay or change the commission of a crime that was about to be 
discovered by investigators.
    (ii) Permitting access to either on-going or closed investigative 
files would also reveal investigative techniques and procedures, the 
knowledge of which could enable individuals planning crimes to structure 
their operations so as to avoid detection or apprehension.
    (3) 5 U.S.C. 552a(d)(2), (d)(3) and (d)(4), (e)(4)(H) and (f)(4) 
permit an individual to request amendment of a record pertaining to him 
or her and require the agency either to amend the record or note the 
disputed portion of the record and, if the agency refuses to amend the 
record, to provide a copy of the individual's statement of disagreement 
with the agency's refusal, to persons or other agencies to whom the 
record is thereafter disclosed. Because these provisions depend on the 
individual's having access to his or her records, and since these rules 
exempt the SAR System from the provisions of 5 U.S.C. 552a relating to 
access to records, for the reasons set out in paragraph (k)(2), these 
provisions do not apply to the SAR System.
    (4) 5 U.S.C. 552a(c)(4) requires an agency to inform any person or 
other agency about any correction or notation of dispute that the agency 
made in accordance with 5 U.S.C. 552a(d) to any record that the agency 
disclosed to the person or agency, if an accounting of the disclosure 
was made. Because this provision depends on an individual's having 
access to and an opportunity to request amendment of records pertaining 
to him or her, and because these rules exempt the SAR System from the 
provisions of 5 U.S.C. 552a relating to access to and amendment of 
records, for the reasons set forth in paragraphs (k)(2) and (3), this 
provision does not apply to the SAR System.

[[Page 60]]

    (5) 5 U.S.C. 552a(c)(3) requires an agency to make the accounting of 
any disclosures of records required by 5 U.S.C. 552a(c)(1) available to 
the individual named in the record upon his or her request. The 
accounting must state the date, nature, and purpose of each disclosure 
of the record and the name and address of the recipient.
    (i) The application of this provision would impair the effective use 
of information collected in the SAR System. Making an accounting of 
disclosures available to the subjects of an investigation would alert 
them to the fact that another agency is conducting an investigation into 
their criminal activities and could reveal the geographic location of 
the other agency's investigation, the nature and purpose of that 
investigation, and the dates on which that investigation was active. 
Violators possessing such knowledge would be able to take measures to 
avoid detection or apprehension by altering their operations, by 
transferring their criminal activities to other geographical areas, or 
by destroying or concealing evidence that would form the basis for 
arrest.
    (ii) Moreover, providing an accounting to the subjects of 
investigations would alert them to the fact that FinCEN has information 
regarding possible criminal activities and could inform them of the 
general nature of that information. Access to such information could 
reveal the operation of the information-gathering and analysis systems 
of FinCEN, the Federal Supervisory Agencies and other SAR System Users 
and permit violators to take steps to avoid detection or apprehension.
    (6) 5 U.S. C. 552a(e)(4)(I) requires an agency to publish a general 
notice listing the categories of sources for information contained in a 
system of records. The application of this provision to the SAR System 
could compromise FinCEN's and the Federal Supervisory Agencies' ability 
to provide useful information to law enforcement agencies, because 
revealing sources for the information could:
    (i) Disclose investigative techniques and procedures,
    (ii) Result in threats or reprisals against informers by the 
subjects of investigations, and
    (iii) Cause informers to refuse to give full information to criminal 
investigators for fear of having their identities as sources disclosed.
    (7) 5 U.S.C. 552a(e)(1) requires an agency to maintain in its 
records only such information about an individual as is relevant and 
necessary to accomplish a purpose of the agency required to be 
accomplished by statute or executive order. The application of this 
provision to the SAR System could impair the effectiveness of law 
enforcement because in many cases, especially in the early stages of 
investigation, it may be impossible immediately to determine whether 
information collected is relevant and necessary, and information that 
initially appears irrelevant and unnecessary, upon further evaluation or 
upon collation with information developed subsequently, often may prove 
helpful to an investigation.
    (8) 5 U.S.C. 552a(e)(2) requires an agency to collect information to 
the greatest extent practicable directly from the subject individual 
when the information may result in adverse determinations about an 
individual's rights, benefits, and privileges under Federal programs. 
The application of this provision to the SAR System would impair 
FinCEN's ability to collect, analyze and disseminate to System Users 
investigative or enforcement information. The SAR System is designed to 
house information about known or suspected criminal activities or 
suspicious transactions that has been collected and reported by 
financial institutions, or their examiners or other enforcement or 
supervisory officials. It is not feasible to rely upon the subject of an 
investigation to supply information. An attempt to obtain information 
from the subject of any investigation would alert that individual to the 
existence of an investigation, providing an opportunity to conceal 
criminal activity and avoid apprehension. Further, with respect to the 
initial SAR, 31 U.S.C. Sec. 5318(g)(2) specifically prohibits financial 
institutions making such reports from notifying any participant in the 
transaction that a report has been made.

[[Page 61]]

    (9) 5 U.S.C. 552a(e)(3) requires an agency to inform each individual 
whom it asks to supply information, on the form that it uses to collect 
the information or on a separate form that the individual can retain, 
the agency's authority for soliciting the information; whether 
disclosure of information is voluntary or mandatory; the principal 
purposes for which the agency will use the information; the routine uses 
that may be made of the information; and the effects on the individual 
of not providing all or part of the information. The application of 
these provisions to the SAR System would compromise the ability of the 
component agencies of the SAR System to use the information effectively 
for purposes of law enforcement.
    (10) 5 U.S.C. 552a(e)(5) requires an agency to maintain all records 
it uses in making any determination about any individual with such 
accuracy, relevance, timeliness, and completeness as is reasonably 
necessary to assure fairness to the individual in the determination. 
Application of this provision to the SAR System would hinder the 
collection and dissemination of information. Because Suspicious Activity 
Reports are filed by financial institutions with respect to known or 
suspected violations of law or suspicious activities, it is not possible 
at the time of collection for the agencies that use the SAR System to 
determine that the information in such records is accurate, relevant, 
timely and complete.
    (11) 5 U.S.C. 552a(e)(8) requires an agency to make reasonable 
efforts to serve notice on an individual when the agency makes any 
record on the individual available to any person under compulsory legal 
process, when such process becomes a matter of public record. 
Application of these requirements to the SAR System would prematurely 
reveal the existence of an ongoing investigation to the subject of 
investigation where there is need to keep the existence of the 
investigation secret. It would render ineffective 31 U.S.C. 
Sec. 5318(g)(2), which prohibits financial institutions and their 
officers, employees and agents from disclosing to any person involved in 
a transaction that a SAR has been filed.
    (12) 5 U.S.C. 552a(g) provides an individual with civil remedies 
when an agency wrongfully refuses to amend a record or to review a 
request for amendment, when an agency wrongfully refuses to grant access 
to a record, when any determination relating to an individual is based 
on records that are not accurate, relevant, timely and complete, and 
when an agency fails to comply with any other provision of 5 U.S.C. 552a 
so as to adversely affect the individual. Because the SAR System is 
exempt from these provisions it follows that civil remedies for failure 
to comply with these provisions are not appropriate.
    (l) Exempt information included in another system. Any information 
from a system of records for which an exemption is claimed under 5 
U.S.C. 552a (j) or (k) which is also included in another system of 
records retains the same exempt status such information has in the 
system for which such exemption is claimed.

                      The Internal Revenue Service

                        notice of exempt systems

    The Commissioner of Internal Revenue finds that the orderly and 
efficient administration of the internal revenue laws necessitates that 
certain systems of records maintained by the Internal Revenue Service be 
exempted from certain sections of the Privacy Act of 1974 (88 Stat. 
1986).
    (a) Exemptions under 5 U.S.C. 552a (j) (2). (1) This paragraph 
applies to the following systems of records maintained by the Internal 
Revenue Service, for which exemptions are claimed under 5 U.S.C. 552a(j) 
(2).

------------------------------------------------------------------------
                         Name of system                            No.
------------------------------------------------------------------------
Case Management and Time Reporting System, Criminal               46.002
 Investigation Division........................................
Confidential Informants, Criminal Investigation Division.......   46.003
Electronic Surveillance Files, Criminal Investigation Division.   46.005
Centralized Evaluation and Processing of Information Items        46.009
 (CEPIIs), Criminal Investigation Division.....................
Relocated Witnesses, Criminal Investigation Division...........   46.015
Secret Service Details, Criminal Investigation Division........   46.016
Treasury Enforcement Communications System (TECS)..............   46.022
Automated Information Analysis System..........................   46.050
Assault and Threat Investigation Files.........................   60.001

[[Page 62]]

 
Bribery Investigation Files....................................   60.002
Disclosure Investigation Files.................................   60.004
Internal Security Management Information System (ISMIS)........   60.011
Chief Counsel Criminal Tax Case Files..........................   90.001
------------------------------------------------------------------------

    (2) Under 5 U.S.C. 552a(j)(2), the head of any agency may promulgate 
rules to exempt any system of records within the agency from certain 
provisions of the Privacy Act of 1974 if the agency or component thereof 
that maintains the system performs as its principal function any 
activities pertaining to the enforcement of criminal laws. Certain 
components of the Internal Revenue Service have as their principal 
function activities pertaining to the enforcement of criminal laws.
    (3) To the extent the exemption under 5 U.S.C. 552a(j)(2) does not 
apply to any of the above-named systems, then exemptions under 5 U.S.C. 
552a(k)(2), relating to investigatory material compiled for law 
enforcement purposes, are hereby claimed for such systems.
    (4) The provisions of the Privacy Act of 1974 from which exemptions 
are claimed under 5 U.S.C. 552a(j)(2) are as follows:

5 U.S.C. 552a(c) (3) and (4)
5 U.S.C. 552a(d) (1), (2), (3), and (4)
5 U.S.C. 552a(e) (1), (2), and (3)
5 U.S.C. 552a(e) (4) (G), (H), and (I)
5 U.S.C. 552a(e) (5) and (8)
5 U.S.C. 552a(f)
5 U.S.C. 552a(g)

    (5) See paragraph (c) for reasons for the exemptions.
    (b) Exemptions under 5 U.S.C. 552a (k)(2). (1) This paragraph 
applies to the following systems of records maintained by the Internal 
Revenue Service, for which exemptions are claimed under 5 U.S.C. 
552a(k)(2):

------------------------------------------------------------------------
                         Name of system                            No.
------------------------------------------------------------------------
Wage and Information Returns Processing (IRP)..................   22.061
Acquired Property Records......................................   26.001
Form 2209, Courtesy Investigations.............................   26.006
IRS and Treasury Employee Delinquency..........................   26.008
Litigation Case Files..........................................   26.011
Offer in Compromise (OIC) Files................................   26.012
One-hundred Per Cent Penalty Cases.............................   26.013
Returns Compliance Programs (RCP)..............................   26.016
TDA (Taxpayer Delinquent Accounts).............................   26.019
TDI (Taxpayer Delinquency Investigations) Files................   26.020
Transferee Files...............................................   26.021
Delinquency Prevention Programs................................   26.022
Audit Trail Lead Analysis System...............................   34.020
Applicant Appeal Files.........................................   37.002
Closed Files containing Derogatory Information about              37.003
 Individuals' practice before the IRS and Files of attorneys
 and certified public accountants formerly enrolled to Practice
Derogatory Information (No Action).............................   37.004
Present Suspensions and Disbarments Resulting from                37.005
 Administrative Proceeding.....................................
Inventory......................................................   37.007
Resigned Enrolled Agents (action pursuant to 31 CFR Section       37.009
 10.55(b)).....................................................
Present Suspensions from Practice Before the Internal Revenue     37.011
 Service.......................................................
Examination Administrative File................................   42.001
Audit Information Management System (AIMS).....................   42.008
Classification and Examination Selection Files.................   42.016
Compliance Programs and Projects Files.........................   42.021
International Enforcement Program Files........................   42.017
Combined Case Control Files....................................   42.012
Audit Underreporter Case Files.................................   42.029
Discriminant Function File (DIF)...............................   42.030
Appeals Case Files.............................................   44.001
Automated Information Analysis System..........................   46.050
Disclosure Records.............................................   48.001
Collateral and Information Requests System.....................   49.001
Component Authority and Index Card Mircofilm Retrieval System..   49.002
Overseas Compliance Projects System............................   49.007
Conduct Investigation Files....................................   60.003
Enrollee Charge Investigation Files............................   60.006
Miscellaneous Information File.................................   60.007
Special Inquiry Investigation Files............................   60.009
Chief Counsel Disclosure Litigation Division Case Files........   90.002
Chief Counsel General Legal Services Case Files................   90.004
Chief Counsel General Litigation Case Files....................   90.005
Chief Counsel Tax Litigation Case Files........................   90.009
File Digest Room Files containing briefs, Legal opinions,         90.010
 Digests of Documents generated internally or by the Department
 of Justice relating to the Administration of the Revenue Laws.
Legal Case Files of the Chief Counsel, Deputy Chief Counsel,      90.013
 Associate Chief Counsels (Litigation) and (Technical).........
Reports and Information Retrieval Activity Computer and           90.016
 Microfilm Records.............................................
Correspondence File--Inquiries about Enforcement Activities....   00.002
------------------------------------------------------------------------

    (2) Under 5 U.S.C. 552a (k)(2), the head of any agency may 
promulgate rules to exempt any system of records within the agency from 
certain provisions of the Privacy Act of 1974 if the system is 
investigatory material compiled for law enforcement purposes. To the 
extent that information contained in the above-named systems has as its 
principal purpose the enforcement of criminal laws, exemption for such 
information under 5 U.S.C. 552a (j)(2) is hereby claimed.
    (3) The provisions of the Privacy Act of 1974 from which exemptions 
are claimed under 5 U.S.C. 552a(k)(2) are as follows:

5 U.S.C. 552a(c)(3)
5 U.S.C. 552a(d) (1), (2), (3), and (4)

[[Page 63]]

5 U.S.C. 552a (e)(1)
5 U.S.C. 552a(e)(4) (G), (H), and (I)
5 U.S.C. 552a(f)

    (4) See paragraph (c) for reasons for the exemptions.
    (c) Reasons for exemptions. The following are the reasons for 
exempting systems of records maintained by the Internal Revenue Service 
pursuant to 5 U.S.C. 552a (j)(2) and (k)(2) of the Privacy Act of 1974.
    (1) 5 U.S.C. 552a(c)(3). This provision of the Privacy Act provides 
for the release of the disclosure accounting required by 5 U.S.C. 
552a(c) (1) and (2) to the individual named in the record at his 
request. The reasons for exempting systems of records from the foregoing 
provision are as follows:
    (i) The release of disclosure accounting would put the subject of an 
investigation on notice of the existence of an investigation and that 
such person is the subject of that investigation;
    (ii) Such release would provide the subject of an investigation with 
an accurate accounting of the date, nature, and purpose of each 
disclosure and the name and address of the person or agency to whom the 
disclosure is made. The release of such information to the subject of an 
investigation would provide the subject with significant information 
concerning the nature of the investigation and could result in the 
altering or destruction of documentary evidence, the improper 
influencing of witnesses, and other activities that could impede or 
compromise the investigation. In the case of a delinquent account, such 
release might enable the subject of the investigation to dissipate 
assets before levy;
    (iii) Release to the individual of the disclosure accounting would 
alert the individual as to which agencies were investigating this person 
and the scope of the investigation, and could aid the individual in 
impeding or compromising investigations by those agencies.
    (2) 5 U.S.C. 552a (c)(4), (d)(1), (2), (3), and (4), (e)(4) (G) and 
(H), (f), and (g). These provisions of the Privacy Act relate to an 
individual's right to notification of the existence of records 
pertaining to such individual; requirements for identifying an 
individual who requests access to records; the agency procedures 
relating to access to records and the contest of the information 
contained in such records; and the civil remedies available to the 
individual in the event of adverse determinations by an agency 
concerning access to or amendment of information contained in record 
systems. The reasons for exempting systems of records from the foregoing 
provisions are as follows: To notify an individual at the individual's 
request of the existence of records in an investigative file pertaining 
to such individual or to grant access to an investigative file could 
interfere with investigative and enforcement proceedings; deprive co-
defendants of a right to a fair trial or an impartial adjudication; 
constitute an unwarranted invasion of the personal privacy of others; 
disclose the identity of confidential sources and reveal confidential 
information supplied by such sources; and disclose investigative 
techniques and procedures.
    (3) 5 U.S.C. 552a(e)(4)(I). This provision of the Privacy Act 
requires the publication of the categories of sources of records in each 
system of records. In cases where an exemption from this provision has 
been claimed, the reasons are as follows:
    (i) Revealing categories of sources of information could disclose 
investigative techniques and procedures;
    (ii) Revealing categories of sources of information could cause 
sources who supply information to investigators to refrain from giving 
such information because of fear of reprisal, or fear of breach of 
promises of anonymity and confidentiality.
    (4) 5 U.S.C. 552a(e)(1). This provision of the Privacy Act requires 
each agency to maintain in its records only such information about an 
individual as is relevant and necessary to accomplish a purpose of the 
agency required to be accomplished by statute or executive order. The 
reasons for exempting systems of records from the foregoing provision 
are as follows:
    (i) The Internal Revenue Service will limit its inquiries to 
information which is necessary for the enforcement and administration of 
tax laws. However, an exemption from the foregoing provision is needed 
because, particularly in the early stages of a tax audit

[[Page 64]]

or other investigation, it is not possible to determine the relevance or 
necessity of specific information.
    (ii) Relevance and necessity are questions of judgment and timing. 
What appears relevant and necessary when collected may subsequently be 
determined to be irrelevant or unnecessary. It is only after the 
information is evaluated that the relevance and necessity of such 
information can be established with certainty.
    (iii) When information is received by the Internal Revenue Service 
relating to violations of law within the jurisdiction of other agencies, 
the Service processes this information through Service systems in order 
to forward the material to the appropriate agencies.
    (5) 5 U.S.C. 552a(e)(2). This provision of the Privacy Act requires 
an agency to collect information to the greatest extent practicable 
directly from the subject individual when the information may result in 
adverse determinations about an individual's rights, benefits, and 
privileges under Federal programs. The reasons for exempting systems of 
records from the foregoing provisions are as follows:
    (i) In certain instances the subject of a criminal investigation 
cannot be required to supply information to investigators. In those 
instances, information relating to a subject's criminal activities must 
be obtained from other sources;
    (ii) In a criminal investigation it is necessary to obtain evidence 
from a variety of sources other than the subject of the investigation in 
order to accumulate and verify the evidence necessary for the successful 
prosecution of persons suspected of violating the criminal laws.
    (6) 5 U.S.C. 552a(e)(3). This provision of the Privacy Act requires 
that an agency must inform the subject of an investigation who is asked 
to supply information of (A) the authority under which the information 
is sought and whether disclosure of the information is mandatory or 
voluntary, (B) the purposes for which the information is intended to be 
used, (C) the routine uses which may be made of the information, and (D) 
the effects on the subject, if any, of not providing the requested 
information. The reasons for exempting systems of records from the 
foregoing provision are as follows:
    (i) The disclosure to the subject of an investigation of the 
purposes for which the requested information is intended to be used 
would provide the subject with significant information concerning the 
nature of the investigation and could result in impeding or compromising 
the investigation.
    (ii) Informing the subject of an investigation of the matters 
required by this provision could seriously undermine the actions of 
undercover officers, requiring them to disclose their identity and 
impairing their safety, as well as impairing the successful conclusion 
of the investigation.
    (iii) Individuals may be contacted during preliminary information 
gathering, surveys, or compliance projects concerning the administration 
of the internal revenue laws before any individual is identified as the 
subject of an investigation. Informing the individual of the matters 
required by this provision would impede or compromise subsequent 
investigations.
    (7) 5 U.S.C. 552a(e)(5). This provision of the Privacy Act requires 
an agency to maintain all records which are used in making any 
determination about an individual with such accuracy, relevance, 
timeliness, and completeness as is reasonably necessary to assure 
fairness to the individual in the determination. The reasons for 
exempting systems of records from the foregoing provision are as 
follows: Since the law defines ``maintain'' to include the collection of 
information, compliance with the foregoing provision would prohibit the 
initial collection of any data not shown to be accurate, relevant, 
timely, and complete at the moment of its collection. In gathering 
information during the course of a criminal investigation, it is not 
feasible or possible to determine completeness, accuracy, timeliness, or 
relevancy prior to collection of the information. Facts are first 
gathered and then placed into a cohesive order which objectively proves 
or disproves criminal behavior on the part of a suspect. Seemingly 
nonrelevant, untimely, or incomplete information

[[Page 65]]

when gathered may acquire new significance as an investigation 
progresses. The restrictions of the foregoing provision could impede 
investigators in the preparation of a complete investigative report.
    (8) 5 U.S.C. 552a(e)(8). This provision of the Privacy Act requires 
an agency to make reasonable efforts to serve notice on an individual 
when any record on such individual is made available to any person under 
compulsory legal process when such process becomes a matter of public 
record. The reasons for exempting systems of records from the foregoing 
provision are as follows: The notice requirement of the foregoing 
provision could prematurely reveal the existence of criminal 
investigations to individuals who are the subject of such 
investigations.
    (d) Exemption under 5 U.S.C. 552a (k)(4). (1) This paragraph applies 
to the following system of records maintained by the Internal Revenue 
Service, for which exemption is claimed under 5 U.S.C. 552a(k)(4): 
Statistics of Income--Individual Tax Returns 70.001.
    (2) Under 5 U.S.C. 552a(k)(4), the head of any agency may promulgate 
rules to exempt any system of records within the agency from certain 
provisions of the Privacy Act of 1974 if the system is required by 
statute to be maintained and used solely as statistical records.
    (3) The above-named system is maintained under section 6108 of the 
Internal Revenue Code, which provides that ``the Secretary or his 
delegate shall prepare and publish annually statistics reasonably 
available with respect to the operation of the income tax laws, 
including classifications of taxpayers and of income, the amounts 
allowed as deductions, exemptions, and credits, and any other facts 
deemed pertinent and valuable''.
    (4) The reason for exempting the above-named system of records is 
that disclosure of statistical records (including release of accounting 
for disclosures) would in most instances be of no benefit to a 
particular individual since the records do not have a direct effect on a 
given individual.
    (5) The provisions of the Privacy Act of 1974 from which exemption 
is claimed under 5 U.S.C. 552a(k)(4) are as follows:

5 U.S.C. 552a(c)(3)
5 U.S.C. 552a(d) (1), (2), (3), and (4)
5 U.S.C. 552a(e)(1)
5 U.S.C. 552a(e)(4) (G), (H), and (I)
5 U.S.C. 552a(f)

    (e) Exemptions under 5 U.S.C. 552a (k)(5). (1) This paragraph 
applies to the following systems of records maintained by the Internal 
Revenue Service, for which exemptions are claimed under 5 U.S.C. 
552a(k)(5):

------------------------------------------------------------------------
                         Name of system                            No.
------------------------------------------------------------------------
Recruiting, Examining and Placement Records....................   36.008
Security, Background, and Character Investigations Files.......   60.008
Chief Counsel General Administrative Systems...................   90.003
Employee Recruiting Files Maintained by the Operations Division   90.011
Management Files Maintained by Operations Division and the        90.014
 Deputy Chief Counsel other than the Office of Personnel
 Management's Official Personnel Files.........................
------------------------------------------------------------------------

    (2) Under 5 U.S.C. 552a(k)(5), the head of any agency may promulgate 
rules to exempt any system of records within the agency from certain 
provisions of the Privacy Act of 1974 if the system is investigatory 
material compiled solely for the purpose of determining suitability, 
eligibility, and qualifications for Federal civilian employment or 
access to classified information, but only to the extent that the 
disclosure of such material would reveal the identity of a source who 
furnished information to the Government under an express promise that 
the identity of the source would be held in confidence, or, prior to 
September 27, 1975, under an implied promise that the identity of the 
source would be held in confidence. Thus, to the extent that records in 
the above-named systems can be disclosed without revealing the identity 
of a confidential source, they are not within the scope of this 
exemption and are subject to all the requirements of the Privacy Act.
    (3) The provisions of the Act from which exemptions are claimed for 
the above-named systems of records are in general those providing for 
individual access to records. When such access would cause the identity 
of a confidential source to be revealed, it would impair the future 
ability of the Service to compile investigatory material for the purpose 
of determining suitability, eligibility, or qualifications for Federal

[[Page 66]]

civilian employment, Federal contracts, or access to classified 
information. In addition, the systems are to be exempt from 5 U.S.C. 
552a(e)(1), which requires that the agency maintain in its records only 
such information about an individual as is relevant and necessary to 
accomplish a statutory or executively ordered purpose. The Service finds 
that to fulfill the requirements of 5 U.S.C. 552a(e)(1) would unduly 
restrict the agency in its information gathering inasmuch as it is often 
not until well after the investigation that it is possible to determine 
the relevance and necessity of particular information.
    (4) If any investigatory material contained in the above-named 
systems becomes involved in criminal or civil matters, exemptions of 
such material under 5 U.S.C. 552a (j)(2) or (k)(2) is hereby claimed.
    (5) The provisions of the Privacy Act of 1974 from which exemptions 
are claimed under 5 U.S.C. 552a(k)(5) are as follows:

5 U.S.C. 552a(c)(3)
5 U.S.C. 552a (d) (1), (2), (3), and (4)
5 U.S.C. 552a(e)(1)
5 U.S.C. 552a(e)(4) (G), (H), and (I)
5 U.S.C. 552a (f)

    (f) Exemption under 5 U.S.C. 552a(k)(6). (1) This paragraph applies 
to the following system of records maintained by the Internal Revenue 
Service, for which exemption is claimed under 5 U.S.C. 552a(k)(6): 
Recruiting, Examining and Placement Records 36.008
    (2) Under 5 U.S.C. 552a(k)(6), the head of any agency may promulgate 
rules to exempt any system of records that is testing or examination 
material used solely to determine individual qualifications for 
appointment or promotion in the Federal service the disclosure of which 
would compromise the objectivity or fairness of the testing or 
examination process.
    (3) The reason for exempting the above-named system is that 
disclosure of the material in the system would compromise the 
objectivity or fairness of the examination process.
    (4) The provisions of the Privacy Act of 1974 from which exemptions 
are claimed under 5 U.S.C. 552a(k)(6) are as follows:

5 U.S.C. 552a(c)(3)
5 U.S.C. 552a(d)(1), (2), (3), and (4)
5 U.S.C. 552a(e)(1)
5 U.S.C. 552a(e)(4) (G), (H), and (I)
5 U.S.C. 552a (f)

    (g) Exempt information included in another system. Any information 
from a system of records for which an exemption is claimed under 5 
U.S.C. 552a (j) or (k) which also is included in another system of 
records retains the same exempt status such information has in the 
system for which such exemption is claimed.

                      United States Customs Service

                        notice of exempt systems

    In accordance with 5 U.S.C. 552a (j) and (k), general notice is 
hereby given of rulemaking pursuant to the Privacy Act of 1974 by the 
Commissioner, United States Customs Service, under authority delegated 
to him by the Secretary of the Treasury. The Commissioner, United States 
Customs Service, exempts the systems of records identified in the 
paragraphs below from certain provisions of the Privacy Act of 1974 as 
set forth in such paragraphs.
    a. General exemptions under 5 U.S.C. 552a(j)(2). Pursuant to the 
provisions of 5 U.S.C. 552a(j)(2), the Commissioner, United States 
Customs Service, hereby exempts certain systems of records, maintained 
by the United States Customs Service, from the provisions of 5 U.S.C. 
552a(c) (3) and (4), (d) (1), (2), (3) and (4), (e)(1), (2), (3), 
(4)(G), (H) and (I), (5) and (8), (f) and (g).
    1. Exempt systems. The following systems of records, which contain 
information of the type described in 5 U.S.C. 552a(j)(2), shall be 
exempt from the provisions of 5 U.S.C. 552a listed in paragraph a. above 
except as otherwise indicated below and in the general notice of the 
existence and character of systems of records which appears elsewhere in 
the Federal Register:

00.285--Automated Index to Central Enforcement Files
00.270--Background--Record File of Non-Customs Employees
00.067--Bank Secrecy Act Reports File
00.037--Cargo Security Record System
00.053--Confidential Source Identification File
00.287--Customs Automated Licensing Information System (CALIS) 
[Proposed]
00.127--Internal Security Records System
00.129--Investigations Record System

[[Page 67]]

00.171--Pacific Basin Reporting Network
00.213--Seized Asset and Case Tracking System (SEACATS)
00.244--Treasury Enforcement Communications System (TECS)

    2. Reasons for exemptions, (a) 5 U.S.C. 552a (e)(4)(G) and (f)(1) 
enable individuals to be notified whether a system of records contains 
records pertaining to them. The Customs Service believes that 
application of these provisions to the above-listed systems of records 
would give individuals an opportunity to learn whether they are of 
record either as suspects or as subjects of a criminal investigation; 
this would compromise the ability of the Customs Service to complete 
investigations and to detect and apprehend violators of the Customs and 
related laws in that individuals would thus be able (1) to take steps to 
avoid detection, (2) to inform co-conspirators of the fact that an 
investigation is being conducted, (3) to learn the nature of the 
investigation to which they are being subjected, (4) to learn the type 
of surveillance being utilized, (5) to learn whether they are only 
suspects or identified law violators, (6) to continue or resume their 
illegal conduct without fear of detection upon learning that they are 
not in a particular system of records, and (7) to destroy evidence 
needed to prove the violation.
    (b) 5 U.S.C. 552a (d)(1), (e)(4)(H) and (f) (2), (3) and (5) enable 
individuals to gain access to records pertaining to them. The Customs 
Service believes that application of these provisions to the above-
listed systems of records would compromise its ability to complete or 
continue criminal investigations and to detect and apprehend violators 
of the Customs and related criminal laws. Permitting access to records 
contained in the above-listed systems of records would provide 
individuals with significant information concerning the nature of the 
investigation, and this could enable them to avoid detection or 
apprehension in the following ways: (1) By discovering the collection of 
facts which would form the basis for their arrest, (2) by enabling them 
to destroy contraband or other evidence of criminal conduct which would 
form the basis for their arrest and, (3) by learning that the criminal 
investigators had reason to believe that a crime was about to be 
committed, they could delay the commission of the crime or change the 
scene of the crime to a location which might not be under surveillance. 
Granting access to on-going or closed investigative files would also 
reveal investigative techniques and procedures, the knowledge of which 
could enable individuals planning criminal activity to structure their 
future operations in such a way as to avoid detection or apprehension, 
thereby neutralizing law enforcement officer's established investigative 
tools and procedures. Further, granting access to investigative files 
and records could disclose the identity of confidential sources and 
other informers and the nature of the information which they supplied, 
thereby endangering the life or physical safety of those sources of 
information by exposing them to possible reprisals for having provided 
information relating to the criminal activities of those individuals who 
are the subjects of the investigative files and records; confidential 
sources and other informers might refuse to provide criminal 
investigators with valuable information if they could not be secure in 
the knowledge that their identities would not be revealed through 
disclosure of either their names or the nature of the information they 
supplied, and this would seriously impair the ability of the Customs 
Service to carry out its mandate to enforce the Customs criminal and 
related laws. Additionally, providing access to records contained in the 
above-listed systems of records could reveal the identities of 
undercover law enforcement officers who compiled information regarding 
individual's criminal activities, thereby endangering the life or 
physical safety of those undercover officers or their families by 
exposing them to possible reprisals.
    (c) 5 U.S.C. 552a(d) (2), (3) and (4), (e)(4)(H) and (f)(4), which 
are dependent upon access having been granted to records pursuant to the 
provisions cited in paragraph (b) above, enable individuals to contest 
(seek amendment to) the content of records contained in a system of 
records and require an agency to note an amended record and to provide a 
copy of an individual's

[[Page 68]]

statement (of disagreement with the agency's refusal to amend a record) 
to persons or other agencies to whom the record has been disclosed. The 
Customs Service believes that the reasons set forth in paragraph (b) 
above are equally applicable to this subparagraph and, accordingly, 
those reasons are hereby incorporated herein by reference.
    (d) 5 U.S.C. 552a(c)(3) requires that an agency make accountings of 
disclosures of records available to individuals named in the records at 
their request; such accountings must state the date, nature and purpose 
of each disclosure of a record and the name and address of the 
recipient. The Customs Service believes that application of this 
provision to the above-listed systems of records would impair the 
ability of other law enforcement agencies to make effective use of 
information provided by the Customs Service in connection with the 
investigation, detection and apprehension of violators of the criminal 
laws enforced by those other law enforcement agencies. Making 
accountings of disclosure available to violators would alert those 
individuals to the fact that another agency is conducting an 
investigation into their criminal activities, and this could reveal the 
geographic location of the other agency's investigation, the nature and 
purpose of that investigation, and the dates on which that investigation 
was active. Violators possessing such knowledge would thereby be able to 
take appropriate measures to avoid detection or apprehension by altering 
their operations, by transferring their criminal activities to other 
geographical areas or by destroying or concealing evidence which would 
form the basis for their arrest. In addition, providing violators with 
accountings of disclosure would alert those individuals to the fact that 
the Customs Service has information regarding their criminal activities 
and could inform those individuals of the general nature of that 
information; this, in turn, would afford those individuals a better 
opportunity to take appropriate steps to avoid detection or apprehension 
for violations of the Customs and related criminal laws.
    (e) 5 U.S.C. 552a(c)(4) requires that an agency inform any person or 
other agency about any correction or notation of dispute made by the 
agency in accordance with 5 U.S.C. 552a(d) of any record that has been 
disclosed to the person or agency if an accounting of the disclosure was 
made. Since this provision is dependent on an individual's having been 
provided an opportunity to contest (seek amendment to) records 
pertaining to him, and since the above-listed systems of records are 
proposed to be exempted from those provisions of 5 U.S.C. 552a relating 
to amendments of records as indicated in paragraph (c) above, the 
Customs Service believes that this provision should not be applicable to 
the above-listed systems of records.
    (f) 5 U.S.C. 552a(e)(4)(I) requires that an agency publish a public 
notice listing the categories of sources for information contained in a 
system of records. The Customs Service believes that application of this 
provision to the above-listed systems of records could compromise its 
ability to conduct investigations and to identify, detect and apprehend 
violators of the Customs and related criminal laws for the reasons that 
revealing sources for information could 1) disclose investigative 
techniques and procedures, 2) result in threatened or actual reprisal 
directed to informers by the subject under investigation, and 3) result 
in the refusal of informers to give information or to be candid with 
criminal investigators because of the knowledge that their identities as 
sources might be disclosed.
    (g) 5 U.S.C. 552a(e)(1) requires that an agency maintain in its 
records only such information about an individual as is relevant and 
necessary to accomplish a purpose of the agency required to be 
accomplished by statute or executive order. The term ``maintain'' as 
defined in 5 U.S.C. 552a(a)(3) includes ``collect'' and ``disseminate.'' 
At the time that information is collected by the Customs Service, there 
is often insufficient time to determine whether the information is 
relevant and necessary to accomplish a purpose of the Customs Service; 
in many cases information collected may not be immediately susceptible 
to a determination of whether the information is relevant and necessary, 
particularly in the early

[[Page 69]]

stages of investigation, and in many cases information which initially 
appears to be irrelevant and unnecessary may, upon further evaluation or 
upon continuation of the investigation, prove to have particular 
relevance to an enforcement program of the Customs Service. Further, not 
all violations of law discovered during a Customs Service criminal 
investigation fall within the investigative jurisdiction of the Customs 
Service; in order to promote effective law enforcement, it often becomes 
necessary and desirable to disseminate information pertaining to such 
violations to other law enforcement agencies which have jurisdiction 
over the offense to which the information relates. The Customs Service 
should not be placed in a position of having to ignore information 
relating to violations of law not within its jurisdiction where that 
information comes to the attention of the Customs Service through the 
conduct of a lawful Customs Service investigation. The Customs Service 
therefore believes that it is appropriate to exempt the above-listed 
systems of records from the provisions of 5 U.S.C. 552a(e)(1).
    (h) 5 U.S.C. 552a(e)(2) requires that an agency collect information 
to the greatest extent practicable directly from the subject individual 
when the information may result in adverse determinations about an 
individual's rights, benefits, and privileges under Federal programs. 
The Customs Service believes that application of this provision to the 
above-listed systems of records would impair the ability of the Customs 
Service to conduct investigations and to identify, detect and apprehend 
violators of the Customs and related criminal laws for the following 
reasons: (1) most information collected about an individual under 
criminal investigation is obtained from third parties such as witnesses 
and informers, and it is usually not feasible to rely upon the subject 
of the investigation as a source for information regarding his criminal 
activities, (2) an attempt to obtain information from the subject of a 
criminal investigation will often alert that individual to the existence 
of an investigation, thereby affording the individual an opportunity to 
attempt to conceal his criminal activities so as to avoid apprehension, 
(3) in certain instances the subject of a criminal investigation is not 
required to supply information to criminal investigators as a matter of 
legal duty, and (4) during criminal investigations it is often a matter 
of sound investigative procedure to obtain information from a variety of 
sources in order to verify information already obtained.
    (i) 5 U.S.C. 552a(e)(3) requires that an agency inform each 
individual whom it asks to supply information, on the form which it uses 
to collect the information or on a separate form that can be retained by 
the individual: the authority which authorizes the solicitation of the 
information and whether disclosure of such information is mandatory or 
voluntary; the principal purposes for which the information is intended 
to be used; the routine uses which may be made of the information; and 
the effects on the individual of not providing all or part of the 
requested information. The Customs Service believes that the above-
listed systems of records should be exempted from this provision in 
order to avoid adverse effects on its ability to identify, detect and 
apprehend violators of the Customs and related criminal laws. In many 
cases information is obtained by confidential sources or other informers 
or by undercover law enforcement officers under circumstances where it 
is necessary that the true purpose of their actions be kept secret so as 
to not let it be known by the subject of the investigation or his 
associates that a criminal investigation is in progress. Further, if it 
became known that the undercover officer was assisting in a criminal 
investigation, that officer's life or physical safety could be 
endangered through reprisal, and, further, under such circumstances it 
may not be possible to continue to utilize that officer in the 
investigation. In many cases individuals for personal reasons would feel 
inhibited in talking to a person representing a criminal law enforcement 
agency but would be willing to talk to a confidential source or 
undercover officer who they believed was not involved in law enforcement 
activities. In addition, providing a source of information with written 
evidence that he was a source, as required by this

[[Page 70]]

provision, could increase the likelihood that the source of information 
would be the subject of retaliatory action by the subject of the 
investigation. Further, application of this provision could result in an 
unwarranted invasion of the personal privacy of the subject of the 
criminal investigation, particularly where further investigation would 
result in a finding that the subject was not involved in any criminal 
activity.
    (j) 5 U.S.C. 552a(e)(5) requires that an agency maintain all records 
used by the agency in making any determination about any individual with 
such accuracy, relevance, timeliness and completeness as is reasonably 
necessary to assure fairness to the individual in the determination. 
Since 5 U.S.C. 552a(a)(3) defines ``maintain'' to include ``collect'' 
and ``disseminate,'' application of this provision to the above-listed 
systems of records would hinder the initial collection of any 
information which could not, at the moment of collection, be determined 
to be accurate, relevant, timely and complete. Similarly, application of 
this provision would seriously restrict the necessary flow of 
information from the Customs Service to other law enforcement agencies 
where a Customs Service investigation revealed information pertaining to 
a violation of law which was under the investigative jurisdiction of 
another agency. In collecting information during the course of a 
criminal investigation, it is not possible or feasible to determine 
accuracy, relevance, timeliness or completeness prior to collection of 
the information; in disseminating information to other law enforcement 
agencies it is often not possible to determine accuracy, relevance, 
timeliness or completeness prior to dissemination because the 
disseminating agency may not have the expertise with which to make such 
determinations. Further, information which may initially appear to be 
inaccurate, irrelevant, untimely or incomplete may, when gathered, 
grouped, and evaluated with other available information, become more 
pertinent as an investigation progresses. In addition, application of 
this provision could seriously impede criminal investigators and 
intelligence analysts in the exercise of their judgment in reporting on 
results obtained during criminal investigations. The Customs Service 
therefore believes that it is appropriate to exempt the above-listed 
systems of records from the provisions of 5 U.S.C. 552a(e)(5).
    (k) 5 U.S.C. 552a(e)(8) requires that an agency make reasonable 
efforts to serve notice on an individual when any record on the 
individual is made available to any person under compulsory legal 
process when such process becomes a matter of public record. The Customs 
Service believes that the above-listed systems of records should be 
exempt from this provision in order to avoid revealing investigative 
techniques and procedures outlined in those records and in order to 
prevent revelation of the existence of an on-going investigation where 
there is a need to keep the existence of the investigation secret.
    (l) 5 U.S.C. 552a(g) provides civil remedies to an individual for an 
agency refusal to amend a record or to make a review of a request for 
amendment, for an agency refusal to grant access to a record, for an 
agency failure to maintain accurate, relevant, timely and complete 
records which are used to make a determination which is adverse to the 
individual, and for an agency failure to comply with any other provision 
of 5 U.S.C. 552a in such a way as to have an adverse effect on an 
individual. The Customs Service believes that the above-listed systems 
of records should be exempted from this provision to the extent that the 
civil remedies provided therein may relate to provisions of 5 U.S.C. 
552a from which the above-listed systems of records are proposed to be 
exempt. Since the provisions of 5 U.S.C. 552a enumerated in paragraphs 
(a) through (k) above are proposed to be inapplicable to the above-
listed systems of records for the reasons stated therein, there should 
be no corresponding civil remedies for failure to comply with the 
requirements of those provisions to which the exemption is proposed to 
apply. Further, the Customs Service believes that application of this 
provision to the above-listed systems of records would adversely affect 
its ability to conduct criminal investigations by exposing to civil 
court

[[Page 71]]

action every stage of the criminal investigative process in which 
information is compiled or used in order to identify, detect, apprehend 
and otherwise investigate persons suspected or known to be engaged in 
criminal conduct in violation of the Customs and related laws.
    b. Specific exemptions under 5 U.S.C. 552a(k) (2). Pursuant to the 
provisions of 5 U.S.C. 552a(k)(2), the Commissioner, United States 
Customs Service, hereby exempts certain systems of records, maintained 
by the United States Customs Service, from the provisions of 5 U.S.C. 
552a(c)(3), (d) (1), (2), (3) and (4), (e) (1) and (4) (G), (H) and (I) 
and (f).
    1. Exempt systems. The following systems of records, which contain 
information of the type described in 5 U.S.C. 552a(k)(2), shall be 
exempt from the provisions of 5 U.S.C. 552a listed in paragraph b. above 
except as otherwise indicated below and in the general notice of the 
existence and character of systems of records which appears elsewhere in 
the Federal Register:

00.014--Advice Requests (Legal) (Pacific Region)
00.021--Arrest/Seizure/Search Report and Notice of Penalty File
00.022--Attorney Case File
00.285--Automated Index to Central Enforcement Files
00.270--Background--Record File of Non-Customs Employees
00.067--Bank Secrecy Act Reports File
00.037--Cargo Security File
00.271--Cargo Security Record System
00.041--Cartmen or Lightermen
00.043--Case Files (Regional Counsel--South Central Region)
 00.046--Claims Case File
00.053--Confidential Source Identification File
 00.057--Container Station Operator Files
00.058--Cooperating Individual Files
00.061--Court Case File
00.069--Customhouse Brokers File (Chief Counsel)
00.287--Customs Automated Licensing Information System (CALIS)
00.077--Disciplinary Action and Resulting Grievances or Appeal Case 
Files
00.078--Disclosure of Information File
00.098--Fines, Penalties, and Forfeitures Records 
00.099--Fines, Penalties, and Forfeiture Files (Supplemental Petitions)
00.100--Fines, Penalties, and Forfeiture Records (Headquarters)
00.122--Information Received File
00.125--Intelligence Log
00.127--Internal Security Records System
00.129--Investigations Record System
00.133--Justice Department Case File
00.138--Litigation Issue Files
00.140--Lookout Notice
00.155--Narcotics Suspect File
00.159--Notification of Personnel Management Division when an employee 
is placed under investigation by the Office of Internal Affairs.
00.171--Pacific Basin Reporting Network
00.182--Penalty Case File
00.186--Personal Search
00.190--Personal Case File
00.197--Private Aircraft/Vessel Inspection Reporting System
00.206--Regulatory Audits of Customhouse Brokers
00.212--Search/Arrest/Seizure Report
00.13--Seized Asset and Case Tracking Sytem (SEACATS)
00.214--Seizure File
00.224--Suspect Persons Index
00.232--Tort Claims Act File
00.244--Treasury Enforcement Communications System (TECS)
00.258--Violator's Case Files
00.260--Warehouse Proprietor Files

    2. Reasons for exemptions. (a) 5 U.S.C. 552a (e)(4)(G) and (f)(1) 
enable individuals to be notified whether a system of records contains 
records pertaining to them. The Customs Service believes that 
application of these provisions (to those of the above-listed systems of 
records for which no notification procedures have been provided in the 
general notice of the existence and character of systems of records 
which appears elsewhere in the Federal Register) would impair the 
ability of the Customs Service to successfully complete investigations 
and inquires of suspected violators of civil and criminal laws and 
regulations under its jurisdiction. In many cases investigations and 
inquiries into violations of civil and criminal laws and regulations 
involve complex and continuing patterns of behavior. Individuals, if 
informed that they have been identified as suspected violators of civil 
or criminal laws and regulations, would have an opportunity to take 
measures to prevent detection of illegal action so as to avoid 
prosecution or the imposition of civil sanctions. They would also be 
able to learn the nature and location of the investigation or inquiry 
and the type of surveillance being utilized, and they would be able to 
transmit this knowledge to co-conspirators. Finally, violators might be 
given the opportunity to destroy evidence needed to prove the

[[Page 72]]

violation under investigation or inquiry.
    (b) 5 U.S.C. 552a (d)(1), (e)(4)(H) and (f) (2), (3) and (5) enable 
individuals to gain access to records pertaining to them. The Customs 
Service believes that application of these provisions to the above-
listed systems of records would impair its ability to complete or 
continue civil or criminal investigations and inquiries and to detect 
and apprehend violators of the Customs and related laws. Permitting 
access to records contained in the above-listed systems of records would 
provide violators with significant information concerning the nature of 
the civil or criminal investigation or inquiry. Knowledge of the facts 
developed during an investigation or inquiry would enable violators of 
criminal and civil laws and regulations to learn the extent to which the 
investigation or inquiry has progressed, and this could provide them 
with an opportunity to destroy evidence that would form the basis for 
prosecution or the imposition of civil sanctions. In addition, knowledge 
gained through access to investigatory material could alert a violator 
to the need to temporarily postpone commission of the violation or to 
change the intended point where the violation is to be committed so as 
to avoid detection or apprehension. Further, access to investigatory 
material would disclose investigative techniques and procedures which, 
if known, could enable violators to structure their future operations in 
such a way as to avoid detection or apprehension, thereby neutralizing 
investigators' established and effective investigative tools and 
procedures. In addition, investigatory material may contain the identity 
of a confidential source of information or other informer who would not 
want his identity to be disclosed for reasons of personal privacy or for 
fear of reprisal at the hands of the individual about whom he supplied 
information. In some cases mere disclosure of the information provided 
by an informer would reveal the identity of the informer either through 
the process of elimination or by virtue of the nature of the information 
supplied. If informers cannot be assured that their identities (as 
sources for information) will remain confidential, they would be very 
reluctant in the future to provide information pertaining to violations 
of criminal and civil laws and regulations, and this would seriously 
compromise the ability of the Customs Service to carry out its mission. 
Further, application of 5 U.S.C. 552a (d)(1), (e)(4)(H) and (f) (2), (3) 
and (5) to the above-listed systems of records would make available 
attorney's work product and other documents which contain evaluations, 
recommendations, and discussions of ongoing civil and criminal legal 
proceedings; the availability of such documents could have a chilling 
effect on the free flow of information and ideas within the Customs 
Service which is vital to the agency's predecisional deliberative 
process, could seriously prejudice the agency's or the Government's 
position in a civil or criminal litigation, and could result in the 
disclosure of investigatory material which should not be disclosed for 
the reasons stated above. It is the belief of the Customs Service that, 
in both civil actions and criminal prosecutions, due process will assure 
that individuals have a reasonable opportunity to learn of the existence 
of, and to challenge, investigatory records and related materials which 
are to be used in legal proceedings.
    (c) 5 U.S.C. 552a(d) (2), (3) and (4), (e)(4)(H) and (f)(4), which 
are dependent upon access having been granted to records pursuant to the 
provisions cited in subparagraph (b) above, enable individuals to 
contest (seek amendment to) the content of records contained in a system 
of records and require an agency to note an amended record and to 
provide a copy of an individual's statement (of disagreement with the 
agency's refusal to amend a record) to persons or other agencies to whom 
the record has been disclosed. The Customs Service believes that the 
reasons set forth in subparagraph (b) above are equally applicable to 
this subparagraph, and, accordingly, those reasons are hereby 
incorporated herein by reference.
    (d) 5 U.S.C. 552a(c)(3) requires that an agency make accountings of 
disclosures of records available to individuals named in the records at 
their request; such accountings must state the

[[Page 73]]

date, nature and purpose of each disclosure of a record and the name and 
address of the recipient. The Customs Service believes that application 
of this provision to the above-listed systems of records would impair 
the ability of the Customs Service and other law enforcement agencies to 
conduct investigations and inquiries into civil and criminal violations 
under their respective jurisdictions. Making accountings available to 
violators would alert those individuals to the fact that the Customs 
Service or another law enforcement authority is conducting an 
investigation or inquiry into their activities, and such accountings 
could reveal the geographic location of the investigation or inquiry, 
the nature and purpose of the investigation or inquiry and the nature of 
the information disclosed, and the dates on which that investigation or 
inquiry was active. Violators possessing such knowledge would thereby be 
able to take appropriate measures to avoid detection or apprehension by 
altering their operations, transferring their activities to other 
locations or destroying or concealing evidence which would form the 
basis for prosecution or the imposition of civil sanctions.
    (e) 5 U.S.C. 552a(e)(1) requires that an agency maintain in its 
records only such information about an individual as is relevant and 
necessary to accomplish a purpose of the agency required to be 
accomplished by statute or executive order. The term ``maintain'' as 
defined in 5 U.S.C. 552a(a)(3) includes ``collect'' and ``disseminate.'' 
At the time that information is collected by the Customs Service there 
is often insufficient time to determine whether the information is 
relevant and necessary to accomplish a purpose of the Customs Service; 
in many cases information collected may not be immediately susceptible 
to a determination of whether the information is relevant and necessary, 
particularly in the early stages of investigation or inquiry, and in 
many cases information which initially appears to be irrelevant and 
unnecessary may, upon further evaluation or upon continuation of the 
investigation or inquiry, prove to have particular relevance to an 
enforcement program of the Customs Service. Further, not all violations 
of law uncovered during a Customs Service investigation or inquiry fall 
within the civil or criminal jurisdiction of the Customs Service; in 
order to promote effective law enforcement it often becomes necessary 
and desirable to disseminate information pertaining to such violations 
to other law enforcement agencies which have jurisdiction over the 
offense to which the information relates. The Customs Service should not 
be placed in a position of having to ignore information relating to 
violations of law not within its jurisdiction where that information 
comes to the attention of the Customs Service through the conduct of a 
lawful Customs Service civil or criminal investigation or inquiry. The 
Customs Service therefore believes that it is appropriate to exempt the 
above-listed systems of records from the provisions of 5 U.S.C. 
552a(e)(1).
    c. Specific exemptions under 5 U.S.C. 552a(k)(5). Pursuant to the 
provisions of 5 U.S.C. 552a(k)(5), the Commissioner, United States 
Customs Service, hereby exempts the Internal Security Records System 
from the provisions of 5 U.S.C. 552a (c)(3), (d) (1), (2), (3) and (4), 
(e) (1) and (4) (G), (H) and (I) and (f). The records maintained in the 
exempt system of records are of the type described in 5 U.S.C. 
552a(k)(5): ``investigatory material compiled solely for the purpose of 
determining suitability, eligibility, or qualifications for Federal 
civilian employment, military service, Federal contracts, or access to 
classified information, but only to the extent that disclosure of such 
material would reveal the identity of a source who furnished information 
to the Government under an express promise that the identity of the 
source would be held in confidence, or, prior to the effective date of 
this section, under an implied promise that the identity of the source 
would be held in confidence.''

Thus to the extent that the records in this system can be disclosed 
without revealing the identity of a confidential source, they are not 
within the scope of this exemption and are subject to all the 
requirements of 5 U.S.C. 552a, except where those records contain other 
information which is exempt under the

[[Page 74]]

provisions of 5 U.S.C. 552a(k)(2) for the reasons stated under paragraph 
b. above.

The sections of 5 U.S.C. 552a from which this system of records is 
exempt include in general those providing for individuals' access to or 
amendment of records. When such access or amendment would cause the 
identity of a confidential source to be revealed, it would impair the 
future ability of the Customs Service to compile investigatory material 
for the purpose of determining suitability, eligibility, or 
qualifications for Federal civilian employment, Federal contracts, or 
access to classified information.

In addition, the systems shall be exempt from 5 U.S.C. 552a(e)(1) which 
requires that an agency maintain in its records only such information 
about an individual as is relevant and necessary to accomplish a purpose 
of the agency required to be accomplished by statute or executive order. 
The Customs Service believes that to fulfill the requirements of 5 
U.S.C. 552a(e)(1) would unduly restrict the agency in its information 
gathering inasmuch as it is often not until well after the investigation 
that it is possible to determine the relevance and necessity of 
particular information.

If any investigations within the scope of 5 U.S.C. 552a(k)(5) become 
involved with civil or criminal matters, exemptions from 5 U.S.C. 552a 
could also be asserted under 5 U.S.C. 552a (k)(2) or (j)(2).

                      United States Secret Service

Notice of rules exempting certain systems from requirements of the 
    Privacy Act

    (a) In general. The Director of the U.S. Secret Service hereby 
issues rules exempting the Criminal Investigation Information System of 
records, the Non-Criminal Investigation Information System of records, 
and the Protection Information System of records from the provisions of 
certain subsections of 5 U.S.C. 552a, the Privacy Act of 1974. The 
purpose of the exemptions is to maintain the confidentiality of 
information compiled for the purpose of criminal, non-criminal, and 
protective investigations.
    (b) Authority. These rules are promulgated pursuant to the authority 
vested in the Secretary of the Treasury by 5 U.S.C. 552a (j) and (k) and 
pursuant to the authority vested in the Director, U.S. Secret Service by 
paragraph 123(c) of subpart C of part 1 of subtitle A of title 31 of the 
Code of Federal Regulations.
    (c) Exempted Systems.

    I. U.S. Secret Service Criminal Investigation Information System

The Criminal Investigation Information System is further described in 
``Notices of Records Systems'' published by the General Services 
Administration.
    (1) Provisions from which exempted. The Criminal Investigation 
Information System maintained by the Secret Service contains records 
described in 5 U.S.C. 552a(j) and (k), the Privacy Act of 1974. 
Exemptions are claimed for such described records only where appropriate 
from the following provisions of the Privacy Act of 1974 subsections (c) 
(3) and (4); (d) (1), (2), (3) and (4); (e) (1), (2), and (3); (e) (4) 
(G), (H) and (I); (e) (5) and (8); (f) and (g) of 5 U.S.C. 552a.
    (2) Reasons for claimed exemptions. a. 5 U.S.C. 552a(c)(3): This 
provision of the Privacy Act provides for the release of the disclosure 
accounting required by 5 U.S.C. 552a(c) (1) and (2) to the individual 
named in the record at his request. The reasons why the Criminal 
Investigation Information System is exempted from the foregoing 
provision are as follows:
    (i) The release of accounting disclosures would put the subject of a 
criminal investigation on notice of the existence of an investigation 
and that he is the subject of that investigation;
    (ii) It would provide the subject of a criminal investigation with 
an accurate accounting of the date, nature, and purpose of each 
disclosure and the name and address of the person or agency to whom the 
disclosure is made. Obviously, the release of such information to the 
subject of a criminal investigation would provide him with significant 
information concerning the nature of the investigation and could result 
in impeding or compromising

[[Page 75]]

the efforts of law enforcement personnel to detect and arrest persons 
suspected of criminal activity;
    (iii) Disclosure to the individual of the disclosure accounting 
after the investigation is closed would alert the individual as to which 
agencies were investigating him and would put him on notice concerning 
the scope of his suspected criminal activities and could aid him in 
avoiding detection and apprehension.
    b. 5 U.S.C. 552a (c)(4); (d); (e)(4) (G) and (H); (f) and (g): The 
foregoing provisions of the Privacy Act relate to an individual's right 
to notification of the existence of records pertaining to him and access 
to such records; the agency procedures relating to notification, access 
and contest of the information contained in such records; and the civil 
remedies available to the individual in the event of adverse 
determinations by an agency concerning access to or amendment of 
information contained in record systems. The reasons why the Criminal 
Investigation Information System of records is exempted from the 
foregoing provisions are as follows:
    (i) To notify an individual at his request of the existence of 
records pertaining to him in the Criminal Investigation Information 
System would inform the individual of the existence of an investigation 
and that he is the subject of that investigation. This would enable the 
individual to avoid detection and would further enable him to inform co-
conspirators of the fact that an investigation is being conducted;
    (ii) To permit access to the records contained in the Criminal 
Investigation Information System would not only inform an individual 
that he is or was the subject of a criminal investigation, but would 
also provide him with significant information concerning the nature of 
the investigation which might enable him to avoid detection or 
apprehension;
    (iii) To grant access to an on-going or closed criminal 
investigative file could interfere with Secret Service investigative and 
enforcement proceedings, deprive co-defendants of a right to a fair 
trial or an impartial adjudication, constitute an unwarranted invasion 
of the personal privacy of others, disclose the identity of confidential 
sources and reveal confidential information supplied by such sources, 
and disclose investigative techniques and procedures, or endanger the 
life or physical safety of law enforcement personnel, informants, 
witnesses, and other persons supplying information to investigators.
    c. 5 U.S.C. 552a(e)(4)(I). This provision of the Privacy Act 
requires the publication of the categories of sources of records, in 
each system of records. The reasons why the Criminal Investigation 
Information System of records is exempted from the foregoing provision 
are as follows:
    (i) Revealing sources of information could disclose investigative 
techniques and procedures;
    (ii) Revealing sources of information could result in retaliation 
and threat of reprisal by the subject under investigation against such 
sources;
    (iii) Revealing sources of information could cause witnesses, 
informants and others who supply information to criminal investigators 
to refrain from giving such information because of fear of reprisal, or 
fear of breach of promises of anonymity and confidentiality;
    (iv) Revealing sources of information could result in the refusal of 
some sources to give full and complete information or to be candid with 
investigators because of the knowledge that the identity of such sources 
may be disclosed.
    d. 5 U.S.C. 552a(e)(1): This provision of the Privacy Act requires 
each agency to maintain in its records only such information about an 
individual as is relevant and necessary to accomplish a purpose of the 
agency. The reasons why the Criminal Investigation Information System of 
records is exempted from the foregoing provisions are as follows:
    (i) In a criminal investigation it is difficult to accurately 
determine the relevancy and necessity of information during the process 
of information gathering. Only after the information is evaluated can 
the relevancy and necessity of such information be ascertained;
    (ii) In a criminal investigation, the Secret Service often obtains 
information concerning the violations of laws other than those within 
the scope of its criminal investigative jurisdiction. In

[[Page 76]]

the interest of effective law enforcement, the Secret Service should 
retain this information as it may aid in establishing patterns of 
criminal activity, and provide valuable leads for those law enforcement 
agencies charged with enforcing other segments of the criminal law;
    (iii) In interviewing persons, or obtaining other forms of evidence 
during a criminal investigation, information will be supplied to the 
investigator which relates to matters which are ancillary to the main 
purpose of the investigation but which may relate to matters under the 
investigative jurisdiction of another agency. Such information is not 
readily susceptible to segregation.
    e. 5 U.S.C. 552a(e)(2): This provision of the Privacy Act requires 
an agency to collect information to the greatest extent practicable 
directly from the subject individual when the information may result in 
adverse determinations about an individual's right, benefits and 
privileges under Federal programs. The reasons why the Criminal 
Investigation Information System is exempted from the foregoing 
provision are as follows:
    (i) In certain instances, the subject of a criminal investigation is 
not required to supply information to investigators as a matter of legal 
right. In those instances, information relating to a subject's criminal 
activities must be obtained from other sources;
    (ii) A requirement that information be collected from an individual 
who is the subject of a criminal investigation would put the individual 
on notice of the existence of the investigation and could enable him to 
avoid detection or apprehension;
    (iii) In a criminal investigation it is necessary to obtain evidence 
from a variety of sources other than the subject of the investigation in 
order to accumulate and verify the evidence necessary for the successful 
prosecution of persons suspected of violating the criminal laws.
    f. 5 U.S.C. 552a(e)(3): This provision of the Privacy Act requires 
an agency to inform each individual whom it asks to supply information 
of the authority which authorizes the solicitation of the information 
and whether disclosure of such information is mandatory or voluntary; 
the principal purposes for which the information is intended to be used; 
the routine uses which may be made of the information; and the effect on 
the individual of not providing the requested information. The reasons 
why the Criminal Investigation Information System is exempted from the 
foregoing provision are as follows:
    (i) Informing each individual who is asked to supply information in 
a criminal investigation of the information required under the foregoing 
provision could inform the individual of the existence of a confidential 
investigation; reveal the identity of confidential sources of 
information; and endanger the life or physical safety of confidential 
informants;
    (ii) Informing each individual who is asked to supply information in 
a criminal investigation of the information required under the foregoing 
provision could result in an unwarranted invasion of the privacy of 
individuals who may be the subject of a criminal investigation or who 
are suspected of engaging in criminal activity;
    (iii) Informing each individual who is asked to supply information 
in a criminal investigation of the information required under the 
foregoing provision would inhibit such individuals from supplying the 
requested information and thereby present a serious impediment to the 
successful investigation and prosecution of violations of the criminal 
law.
    g. 5 U.S.C. 552a(e)(5): This provision of the Privacy Act requires 
an agency to maintain all records which are used in making any 
determination about an individual with such accuracy, relevance, 
timeliness, and completeness as is reasonably necessary to assure 
fairness to the individual in the determination. The reasons why the 
Criminal Investigation Information System is exempted from the foregoing 
provisions are as follows:
    (i) In gathering information during the course of a criminal 
investigation it is usually not possible to determine in advance what 
information is accurate, relevant, timely, and complete. Seemingly 
nonrelevant or untimely information may acquire new significance as an 
investigation progresses;

[[Page 77]]

    (ii) The restrictions on the maintenance of the records contained in 
the foregoing provision could impede investigators and intelligence 
analysts in the exercise of their judgment and discretion in reporting 
on criminal investigations;
    (iii) Compliance with the records maintenance criteria listed in the 
foregoing provision could require the periodic up-dating of Secret 
Service criminal investigations to insure that the records maintained in 
the system remain timely and complete.
    h. 5 U.S.C. 552a(e)(8): This provision of the Privacy Act requires 
an agency to make reasonable efforts to serve notice to an individual 
when any record on such individual is made available to any person under 
compulsory legal process becomes a matter of public record. The reasons 
why the Criminal Investigation Information System is exempted from the 
foregoing provision are as follows:
    (i) The notice requirement of the foregoing provision could impede 
law enforcement by revealing investigative techniques and procedures;
    (ii) The notice requirement of the foregoing provision could reveal 
the existence of confidential investigations to individuals who are the 
subjects of such investigations.
    i. The foregoing exemptions are claimed for materials maintained in 
the Criminal Investigation Information System to the extent that such 
materials contain information and reports described in 5 U.S.C. 552a(j) 
(2). Further, records maintained in the Criminal Investigation 
Information System described in 5 U.S.C. 552a(k) are exempted from 
subsections (c)(3), (d) (1), (2), (3) and (4), (e)(1), (e)(4) (G), (H) 
and (I) and (f) of 5 U.S.C. 552a for the reasons previously stated.

  II. U.S. Secret Service Non-Criminal Investigation Information System

The Non-Criminal Investigation Information System is further described 
in ``Notices of Records Systems'' published by the General Services 
Administration.
    (1) Provisions from which exempted: The Non-Criminal Investigation 
Information System maintained by the Secret Service contains records 
similar to those described in 5 U.S.C. 552a(k), the Privacy Act of 1974. 
Exemptions are claimed for such described records where appropriate from 
the following provisions of the Privacy Act of 1974: subsections (c)(3), 
(d) (1), (2), (3) and (4), (e)(1), (e)(4) (G), (H) and (I) and (f) of 5 
U.S.C. 552a.
    (2) Reasons for claimed exemptions. a. 5 U.S.C. 552a(c)(3): This 
provision of the Privacy Act provides for the release of the disclosure 
accounting required by 5 U.S.C. 552a(c) (1) and (2) to the individual 
named in the record at his request. The reasons why the Non-Criminal 
Investigation Information System is exempted from the foregoing 
provision are as follows;
    (i) The release of accounting disclosures would put the subject of 
an investigation on notice of the existence of an investigation and that 
he is the subject of that investigation;
    (ii) It would provide the subject of an investigation with an 
accurate accounting of the date, nature, and purpose of each disclosure 
and the name and address of the person or agency to whom the disclosure 
is made. Obviously, the release of such information to the subject of an 
investigation would provide him with significant information concerning 
the nature of the investigation and could result in impeding or 
compromising the efforts of law enforcement personnel to obtain 
information essential to the successful conclusion of the investigation;
    (iii) Disclosure to the individual of the disclosure accounting 
after the investigation is closed would alert the individual as to which 
agencies were investigating him; put him on notice concerning the scope 
of his suspected activities and reveal investigatory techniques and the 
identity of confidential informants. It could result in an invasion of 
privacy of private citizens who provide information in connection with a 
particular investigation.
    b. 5 U.S.C. 552a; (d), (e)(4) (G), (H) and (f): The foregoing 
provisions of the Privacy Act relate to an individual's right to 
notification of the existence of records pertaining to him and access to 
such records and the agency procedures relating to notification, access 
and contest of the information contained in

[[Page 78]]

such records. The reasons why the Non-Criminal Investigation Information 
System of records is exempted from the foregoing provisions are as 
follows:
    (i) To notify an individual at his request of the existence of 
records pertaining to him in the Non-Criminal Investigation Information 
System would inform the individual of the existence of an investigation 
and that he is the subject of that investigation. This could enable the 
individual to secrete or destroy evidence essential to the successful 
completion of the investigation;
    (ii) To permit access to the records contained in the Non-Criminal 
Investigation System would not only inform an individual that he is or 
was the subject of an investigation, but would also provide him with 
significant information concerning the nature of the investigation which 
might enable him to avoid detection or apprehension;
    (iii) To grant access to an on-going or closed non-criminal 
investigative file would interfere with Secret Service investigative and 
enforcement proceedings; deprive other parties involved in the 
investigations of a right to a fair trial or an impartial adjudication; 
constitute an unwarranted invasion of the personal privacy of others; 
disclose the identity of confidential sources and reveal confidential 
information supplied by such sources; and disclose investigative 
techniques and procedures.
    c. 5 U.S.C. 552a 3 (e)(4)(I). This provision of the Privacy Act 
requires the publication of the categories of sources of records in each 
system of records. The reasons why the Non-Criminal Investigation 
Information System of records is exempted from the foregoing provision 
are as follows:
    (i) Revealing sources of information would disclose investigative 
techniques and procedures;
    (ii) Revealing sources of information would result in retaliation 
and threat of reprisal by the subject under investigation against such 
sources;
    (iii) Revealing sources of information could cause witnesses, 
informants and others who supply information to investigators to refrain 
from giving such information because of fear of reprisal, or fear of 
breach of promises of anonymity and confidentiality;
    (iv) Revealing sources of information could result in the refusal of 
some sources to give full and complete information or to be candid with 
investigators because of the knowledge that the identity of such sources 
may be disclosed.
    d. 5 U.S.C. 552a(e)(1): This provision of the Privacy Act requires 
each agency to maintain in its records only such information about an 
individual as is relevant and necessary to accomplish a purpose of the 
agency. The reasons why the Criminal Investigation Information System of 
records is exempted from the foregoing provision are as follows:
    (i) In a non-criminal investigation it is difficult to determine 
accurately the relevancy and necessity of information during the process 
of information gathering. It is only after the information is evaluated 
that the relevancy and necessity of such information can be ascertained;
    (ii) In a non-criminal investigative case, the Secret Service often 
obtains information concerning the violation of laws other than those 
within the scope of its jurisdiction. In the interest of effective law 
enforcement, it is desirable that the Secret Service retain this 
information since it can aid in establishing patterns of unlawful 
activity and provide valuable leads for those law enforcement agencies 
that are charged with enforcing other segments of the criminal, 
regulatory and civil laws;
    (iii) In interviewing persons, or obtaining other forms of evidence 
during an investigation, information will be supplied to the 
investigator which relates to matters which are ancillary to the main 
purpose of the investigation but which may relate to matters under the 
investigative jurisdiction of another agency. Such information is not 
readily susceptible to segregation.
    e. The foregoing exemptions are claimed for records maintained in 
the Non-Criminal Investigation Information System only to the extent 
that such records contain materials described in subsection (k) of 5 
U.S.C. 552a, the Privacy Act of 1974.

[[Page 79]]

         III. U.S. Secret Service Protection Information System

The Protection Information System is further described in ``Notices of 
Records Systems'' published by the General Services Administration.
    (1) Provisions from which exempted. The Protection Information 
System maintained by the Secret Service contains records similar to 
those described in 5 U.S.C. 552a (j) and (k), the Privacy Act of 1974. 
The Protection Information System contains material relating to criminal 
investigations concerned with the enforcement of criminal statutes 
involving the security of persons and property. Further, this system 
contains records described in 5 U.S.C. 552a(k) including, but not 
limited to, classified materials and investigatory material compiled for 
law enforcement purposes. There are maintained in the Protection 
Information System, in addition to the categories of records described 
above, records which are considered necessary to assuring the safety of 
individuals protected by the Secret Service Pursuant to the provisions 
of 18 U.S.C. 3056 and Pub. L. 90-331 (5 U.S.C. 522a(k)(3)). Exemptions 
are claimed for the above described records only where appropriate from 
the following provisions of the Privacy Act of 1974: subsections (c)(3) 
and (d) (1), (2), (3) and (4); (e) (1), (2) and (3); (e)(4) (G), (H) and 
(I); (e) (5) and (8); (f) and (g) of 5 U.S.C. 552a.
    (2) Reasons for claimed exemptions. a. 5 U.S.C. 552a(c)(3): This 
provision of the Privacy Act provides for the release of the disclosure 
accounting required by 5 U.S.C. 552a(c) (1) and (2) to the individual 
named in the record at his request. The reasons why the Protection 
Information System is exempted from the foregoing provision are as 
follows:
    (i) The release of accounting disclosures would put the subject of a 
protective intelligence file on notice of the existence of an 
investigation and that he is the subject of that investigation;
    (ii) It would provide the subject of a protective intelligence file 
with an accurate accounting of the date, nature, and purpose of each 
disclosure and the name and address of the person or agency to whom the 
disclosure is made. Obviously, the release of such information to the 
subject of a protective intelligence file would provide him with 
significant information concerning the nature of the investigation, and 
could result in impeding or compromising the efforts of Secret Service 
personnel to detect persons suspected of criminal activities or to 
collect information necessary for the proper evaluation of persons 
considered to be of protective interest;
    (iii) Disclosures of the disclosure accounting after the protective 
intelligence file is closed would alert the individual as to which 
agencies were investigating him and would put him on notice concerning 
the scope of the protective intelligence investigation and could aid him 
in avoiding detection.
    b. 5 U.S.C. 552a (c)(4); (d); (e)(4) (G) and (H); (f) and (g): The 
foregoing provisions of the Privacy Act relate to an individual's right 
to notification of the existence of records pertaining to him and access 
to such records; the agency procedures relating to notification; access 
and contest of the information contained in such records; and the civil 
remedies available to the individual in the event of adverse 
determinations by an agency concerning access to or amendment of 
information contained in record systems. The reasons why the Protection 
Information System of records is exempted from the foregoing provisions 
are as follows:
    (i) To notify an individual at his request of the existence of 
records pertaining to him in the Protection Information System would be 
injurious to the protective intelligence activities of the Secret 
Service if the existence of files on the subject were even acknowledged. 
Granting access to the criminal and the unstable person would 
necessarily lead to knowledge of the sources of Secret Service 
information and could endanger other enforcement and intelligence 
operations and confidential sources including co-workers, friends and 
relatives of the subjects of such records;
    (ii) Limitation on access to the materials contained in the 
Protection Information System is considered necessary to the 
preservation of the utility of intelligence files and in safeguarding

[[Page 80]]

those persons the Secret Service is authorized to protect. Without such 
denial of access the Protection Information System could adversely 
effect in the poor quality of information available; in compromised 
confidential sources; in the inability to keep track of persons of 
protective interest; and from interference with Secret Service 
protective intelligence activities by individuals gaining access to 
protective intelligence files. Many of the persons on whom records are 
maintained in the Protection Information System suffer from mental 
aberrations. Knowledge of their condition and progress comes from 
authorities, family members and witnesses. Many times this information 
comes to the Secret Service as a result of two party conversations where 
it would be impossible to hide the identity of informants. Sources of 
information must be developed, questions asked and answers recorded. 
Trust must be extended and guarantees of confidentiality and anonymity 
must be maintained. Allowing access of information of this kind to 
individuals who are the subjects of protective interest may well lead to 
violence directed against an informant by a mentally disturbed 
individual;
    (iii) Permitting access to protective intelligence files would 
reveal techniques and procedures, not only of Secret Service protective 
investigations but could reveal the criteria by which protective 
intelligence subjects are evaluated;
    (iv) To notify an individual at his request of the existence of 
records pertaining to him in the Protection Information System would 
inform the individual of the existence of an investigation and that he 
is the subject of protective interest. This would enable the individual 
to avoid detection and would further enable him to inform co-
conspirators of the fact that an investigation is being conducted;
    (v) To permit access to the records contained in the Protection 
Information System would not only inform an individual that he is or was 
the subject of protective interest, but would also provide him with 
significant information concerning the nature of any investigation 
concerning his activities;
    (vi) To grant access to current or closed protective intelligence 
files would interfere with Secret Service investigative and enforcement 
proceedings; deprive co-defendants of a right to a fair trial or an 
impartial adjudication; constitute an unwarranted invasion of the 
personal privacy of others; disclose the identity of confidential 
sources; reveal confidential information supplied by such sources; and 
disclose investigative techniques and procedures, and endanger the life 
or physical safety of law enforcement personnel, informants, witnesses, 
and other persons suppling information to investigators.
    c. 5 U.S.C. 552a(e)(4)(I). This provision of the Privacy Act 
requires the publication of the categories of sources of records in each 
system of records. The reasons why the Protection Information System of 
records is exempted from the foregoing provision are as follows:
    (i) Revealing sources of information would disclose investigative 
techniques and procedures;
    (ii) Revealing sources of information would result in retaliation 
and threat of reprisal by the subject of a protective intelligence file;
    (iii) Revealing sources of information would cause witnesses, 
informants and others who supply information to Secret Service 
investigators to refrain from giving such information because of fear of 
reprisal, or fear of breach of promises of anonymity and 
confidentiality;
    (iv) Revealing sources of information would result in the refusal of 
some sources to give full and complete information or to be candid with 
investigators because of the knowledge that the identity of such sources 
may be disclosed.
    d. 5 U.S.C. 552a(e)(1): This provision of the Privacy Act requires 
each agency to maintain in its records only such information about an 
individual as is relevant and necessary to accomplish a purpose of the 
agency. The reasons why the Protection Information System of records is 
exempted from the foregoing provisions are as follows:
    (i) In gathering protective intelligence information it is difficult 
to determine accurately the relevancy and

[[Page 81]]

necessity of information during the process of information gathering. It 
is only after the information is evaluated that the relevancy and 
necessity of such information can be ascertained;
    (ii) In carrying out protective intelligence responsibilities the 
Secret Service often obtains information concerning the violation of 
laws other than those within the scope of its protective intelligence 
jurisdiction. In the interest of effective law enforcement, it is 
desirable that the Secret Service retain this information since it can 
aid in establishing patterns of criminal activity and provide valuable 
leads for those law enforcement agencies that are charged with enforcing 
other segments of the criminal law;
    (iii) During protective intelligence investigations, information 
will be supplied to the investigator which relates to matters which are 
ancillary to the main purpose of the investigation but which may relate 
to matters under the investigative jurisdiction of another agency. Such 
information is not readily susceptible to segregation.
    e. 5 U.S.C. 552a(c)(2): This provision of the Privacy Act requires 
an agency to collect information to the greatest extent practicable 
directly from the subject individual when the information may result in 
adverse determinations about an individual's rights, benefits and 
privileges under Federal programs. The reasons why the Protection 
Information System is exempted from the foregoing provision are as 
follows:
    (i) In certain instances, where the protective intelligence subject 
is suspected of criminal activity, he is not required to supply 
information to investigators as a matter of legal right. In those 
instances, information relating to a subject's criminal activities must 
be obtained from other sources;
    (ii) A requirement that information be collected from an individual 
who is of protective interest would put the individual on notice of the 
existence of the intelligence investigation and such knowledge would 
enable him to avoid detection in the event that the individual attempted 
to physically harm persons protected by the Secret Service;
    (iii) In a protective intelligence investigation where the subject 
of the investigation is suspected of engaging in criminal activities it 
is necessary to obtain evidence from a variety of sources other than the 
subject of the investigation in order to accumulate and verify the 
evidence necessary for the successful prosecution of persons suspected 
of violating the criminal laws.
    f. 5 U.S.C. 552a(e)(3): This provision of the Privacy Act requires 
an agency to inform each individual whom it asks to supply information 
of the authority which authorizes the solicitation of the information 
and whether disclosure of such information is mandatory or voluntary; 
the principle purposes for which the information is intended to be used; 
the routine uses which may be made of the information; and the effect on 
the individual of not providing the requested information. The reasons 
why the Protection Information System is exempted from the foregoing 
provision are as follows:
    (i) Informing each individual who is asked to supply information in 
a protective intelligence investigation of the information required 
under the foregoing provision would inform the individual of the 
existence of a confidential investigation; reveal the identity of 
confidential sources of information; and endanger the life or physical 
safety of confidential informants;
    (ii) Informing each individual who is asked to supply information in 
a protective intelligence investigation of the information required 
under the foregoing provision would result in an unwarranted invasion of 
the privacy of individuals who may be the subject of a criminal 
investigation or who are suspected of engaging in criminal activity;
    (iii) Informing each individual who is asked to supply information 
in a protective intelligence investigation of the information required 
under the foregoing provision would inhibit such individuals from 
supplying the requested information and thereby present a serious 
impediment to the success of the Secret Service in carrying out its 
protective intelligence activities.
    g. 5 U.S.C. 552a(e)(5): This provision of the Privacy Act requires 
an agency to maintain all records which are used

[[Page 82]]

in making any determination about an individual with such accuracy, 
relevance, timeliness, and completeness as is reasonably necessary to 
assure fairness to the individual in the determination. The reasons why 
the Protection Information System is exempted from the foregoing 
provisions are as follows:
    (i) In gathering information during the course of a protective 
intelligence investigation it is usually not possible to determine in 
advance what information is accurate, relevant, timely, and complete. 
Seemingly nonrelevant or untimely information may acquire new 
significance as an investigation progresses;
    (ii) The restrictions on the maintenance of the records contained in 
the foregoing provision would impede investigators and intelligence 
analysts in the exercise of their judgment and discretion in reporting 
on protective intelligence subjects;
    (iii) Compliance with the records maintenance criteria listed in the 
foregoing provision would require the periodic up-dating of Secret 
Service protective intelligence files to insure that the records 
maintained in the system remain timely and complete.
    h. 5 U.S.C. 552a(e)(8): This provision of the Privacy Act requires 
an agency to make reasonable efforts to serve notice to an individual 
when any record on such individual is made available to any person under 
compulsory legal process becomes a matter of public record. The reasons 
why the Protection Information System is exempted from the foregoing 
provision are as follows:
    (i) The notice requirement of the foregoing provision could impede 
Secret Service protective efforts by revealing techniques and 
procedures;
    (ii) The notice requirements of the foregoing provision could reveal 
the existence of confidential investigations to individuals who are the 
subjects of such investigations.
    i. The foregoing exemptions are claimed for materials maintained in 
the Protection Information System to the extent that such materials 
contain information and reports described in 5 U.S.C. 552a(j)(2). 
Further, records maintained in the Protection Information System 
described in 5 U.S.C. 552a(k) are to be exempted from subsections 
(c)(3), (d) (1), (2), (3) and (4); (e)(1), (e)(4) (G), (H) and (I) and 
(f) of 5 U.S.C. 552a for the reasons previously stated.

                 Bureau of Alcohol, Tobacco and Firearms

 notice of systems exempt from certain provisions of the privacy act of 
                                  1974

    In accordance with 5 U.S.C. 552a (j) and (k), general notice is 
hereby given of rulemaking under the Privacy Act of 1974 by the 
Director, Bureau of Alcohol, Tobacco and Firearms. The Director, Bureau 
of Alcohol, Tobacco and Firearms, exempts the systems of records 
identified in paragraphs (a), (b) and (c) of this section from certain 
provisions of the Privacy Act of 1974 as set forth in such paragraphs.

                               exemptions

    (a) General exemptions. Under the provisions of 5 U.S.C. 552a(j), 
the Director, Bureau of Alcohol, Tobacco and Firearms, hereby determines 
that certain provisions of the Privacy Act of 1974 shall not apply to 
the Treasury--ATF Criminal Investigation Report System.
    (1) The Privacy Act of 1974 creates several methods by which 
individuals who are of record in this system of records may discover 
information collected about their criminal activities. These methods are 
as follows: subsections (e)(4)(G) and (f)(1) allow individuals to 
ascertain whether their criminal activities have been recorded; 
subsections (d)(1), (e)(4)(H), and (f) (2), (3) and (5) establish the 
ability of individuals to gain access into the investigatory files 
maintained on their criminal activities; subsections (d) (2), (3) and 
(4), (e)(4)(H), and (f)(4) presuppose access and further enable 
individuals to contest the contents of their criminal files; subsection 
(c)(3) allows individuals to discover if other law enforcement agencies 
are investigating their criminal activities and subsection (e)(4)(I) 
discloses the categories of sources of records in the system. Since 
these subsections are variations upon the criminal subjects' ability to 
ascertain whether a Federal law enforcement agency has uncovered their 
criminal misdeeds, these subsections

[[Page 83]]

have been grouped together for purposes of this notice.
    (A) With respect to subsections (e)(4)(G) and (f)(1), the Bureau of 
Alcohol, Tobacco and Firearms believes that imposition of these 
requirements would identify to individuals the fact that they are of 
record, and in so doing, compromise the ability of ATF to successfully 
complete an investigation into violations of law. Where individuals have 
the ability to discover the location and specific character of their 
investigative records in this system, they will be able to determine the 
nature of the investigation, the type of surveillance utilized and the 
precise stage of the investigation into their criminal activities. When 
individuals can determine that the investigation into their criminal 
activities has been closed, they are placed on notice that they may 
safely resume their illegal conduct. For these reasons, ATF seeks 
exemption of this system from subsections (e)(4)(G) and (f)(1).
    (B) With respect to subsections (d)(1), (e)(4)(H) and (f) (2), (3) 
and (5), the Bureau of Alcohol, Tobacco and Firearms believes that 
access into criminal investigative files poses present and future 
dangers on the ability of this agency to effectively enforce the 
criminal laws committed to its administration. Where individuals may 
break into an ongoing criminal investigative file they discover the 
collection of facts which will form the basis of their arrests. 
Knowledge of these facts enables them to destroy valuable contraband or 
other evidence of their activities prior to lawful seizure and thereby 
prevent enforcement proceedings. The ongoing investigative file may 
reveal that reasonable cause exists to believe that a crime is about to 
be committed. Disclosure of these facts enable individuals with criminal 
intent to either postpone the commission of their criminal acts or 
relocate the scene of the crime to an alternatively acceptable location 
where Federal agents will not be anticipated. After a criminal 
investigation has been closed, information in the file nevertheless 
reveals to the investigated subjects the techniques and procedures 
utilized by a law enforcement agency. Knowledge of these investigative 
techniques and procedures by individuals and groups devoted to crime 
enables them to structure their future operations in such a way as to 
place these activities beyond discovery until after the crime has been 
committed. Thus, the ability of Federal agents to prevent crime by 
apprehension of the criminals at the precise moment of commission of the 
criminal act is seriously jeopardized.

Disclosure of investigative techniques and procedures could further 
render the commission of the criminal act itself not susceptible to 
reconstruction and tracing to its originator. Armed with a knowledge of 
forensic science and the applied technology of criminal investigation 
contained in their own files, individuals and groups of individuals 
devoted to crime have the necessary information to develop counter-
techniques which may effectively neutralize established investigative 
tools and procedures. Additionally, a closed criminal file reveals the 
identities of informers and undercover agents who have possibly risked 
their lives and the lives of their families by contributing information 
concerning the criminal activities of individuals and groups. 
Oftentimes, friends, family, neighbors and business associates of the 
subject under investigation, secure in the assured anonymity of a 
Federal criminal investigation, are not afraid to furnish valuable 
information relating to the criminal activities of the subjects of 
investigation. Where criminal subjects have access to the confidential 
information in their criminal files (with or without the identities of 
the sources) they can determine from the nature of the information and 
by process of elimination the identity of those individuals against whom 
to retaliate. This legitimate fear of reprisal exists in the minds of 
neighbors, relatives, and co-workers, especially with regard to 
individuals who are violence-prone or emotionally unstable. As a direct 
result of this fear of discovery through access to the investigative 
file, sources close to the criminal subject would decline to be 
interviewed or otherwise refrain from contact with the Bureau. This 
absence of information would render the Bureau unable to comply 
effectively with the mandates of the statutes committed to its 
administration. For these

[[Page 84]]

reasons, ATF seeks exemption of this system from subsections (d)(1), 
(e)(4)(H) and (f) (2), (3) and (5).
    (C) With respect to subsections (d) (2), (3) and (4), (e)(4)(H), and 
(f)(4), which presuppose access and provide for contest of the content 
of records contained in this system, the Bureau of Alcohol, Tobacco and 
Firearms believes that the reasons set forth in subparagraph (B) of 
paragraph (1) of this subsection are equally applicable to this 
subparagraph, and are hereby incorporated by reference. For these 
reasons, ATF seeks exemption of this system from subsections (d) (2), 
(3) and (4), (e)(4)(H) and (f)(4).
    (D) With respect to subsection (c)(3) which provides for making the 
accounting of disclosures available to the requester, the Bureau of 
Alcohol, Tobacco and Firearms believes that access to this accounting by 
a subject under investigation would impair the ability of other law 
enforcement agencies to utilize information developed by ATF for their 
investigations into violations of criminal laws not enforced by ATF. 
Where the interstate criminal activities of individuals or groups span 
the jurisdictions of several law enforcement agencies, information will 
be shared by these agencies in their attempts to bring these violators 
to justice. Disclosure of the accounting will alert such individuals to 
which agencies are conducting investigations, the geographic locations 
of such investigations, the nature and purpose of the investigations, 
and the date during which the investigation received information 
maintained by ATF. Supplied with this information, individuals or groups 
may ascertain which of their criminal activities have been discovered 
and the law enforcement agencies which are in current pursuit. For these 
reasons, ATF seeks exemption of this system from subsection (c)(3).
    (E) With respect to subsection (e)(4)(I), which requires publication 
of the categories of sources for a record system, the Bureau of Alcohol, 
Tobacco and Firearms believes that imposition of subsection (e)(4)(I) 
upon this system would reveal investigative techniques and procedures. 
For this reason, ATF seeks exemption of this system from subsection 
(e)(4)(I).
    (2) The Privacy Act of 1974 provides, at subsection (e)(1), that an 
agency may maintain only such information about an individual as is 
relevant and necessary to accomplish a purpose of the agency required to 
be accomplished by a statute or executive order of the President. The 
term ``maintain'' is defined in the Privacy Act to include the initial 
collection of information. The Bureau of Alcohol, Tobacco and Firearms 
believes that exemption of this system from subsection (e)(1) is 
appropriate because not all violations uncovered in an investigation are 
capable of enforcement by ATF. Where individuals or groups are engaged 
in a multiplicity of criminal violations, this evidence should be 
recorded by ATF and transferred to the appropriate law enforcement 
agencies. This Bureau should not and cannot legally ignore violations of 
law uncovered in a lawful ATF investigation merely because ATF has no 
authority to bring the criminal to justice for these non-ATF violations. 
Where other agencies uncover evidence of ATF violations, this 
information must be susceptible to collection and preservation by that 
agency for subsequent use by ATF. Where an investigation by ATF uncovers 
only ATF violations, information may initially appear irrelevant and 
unnecessary when collected. However, a later stage of the investigation 
may uncover additional facts which when placed together with the 
initially collected irrelevant information, form the basis for 
reasonable cause to believe that additional suspects are involved or 
additional crimes have been or are being committed. Until all facts have 
been gathered and evaluated at the conclusion of the investigation it 
may not be possible to determine relevancy and necessity. For these 
reasons, ATF seeks exemption of this system from subsection (e)(1).
    (3) The Privacy Act of 1974 provides at subsection (e)(2) that an 
agency must collect information to the greatest extent practicable 
directly from the subject individual. The Bureau of Alcohol, Tobacco and 
Firearms believes that this system should be exempted from subsection 
(e)(2) because most information gathered upon a subject under 
investigation is obtained

[[Page 85]]

from third parties and witnesses. There is a minimal degree of 
practicability in contacting a criminal subject for purposes of seeking 
information as to his criminal activities. Such contact alerts the 
individual that he is under investigation and affords him opportunity to 
conceal his criminal activities or otherwise avoid detection or 
apprehension. In certain instances, the subject of a criminal 
investigation is not required to supply information to investigators as 
a matter of legal right. Law violators seldom give self-incriminatory 
information about their involvement in criminal activities. In those 
instances, information relating to the subject's criminal activities 
must be obtained from other sources. For these reasons, ATF seeks 
exemption of this system from subsection (e)(2).
    (4) The Privacy Act of 1974 provides at subsection (e)(3) that each 
individual must be informed of the authority, principle purposes, and 
routine uses and effects on the individual when requested to provide 
information. The Bureau of Alcohol, Tobacco and Firearms believes that 
this system should be exempted from subsection (e)(3). When information 
is obtained by undercover officers, conformity to (e)(3) discloses their 
identity as agents of a law enforcement authority and thereby impairs 
their physical safety as well as the successful conclusion of the 
investigation. When presented with a written statement complying with 
(e)(3) by special agents acting in undercover capacity, the individual 
may not thereafter be completely open with such agents. For these 
reasons, ATF seeks exemption of this system from subsection (e)(3).
    (5) The Privacy Act of 1974 provides at subsection (e)(5) that an 
agency maintain all records which are used in making any determination 
about an individual with such accuracy, relevance, timeliness, and 
completeness as is reasonably necessary to assure fairness to the 
individual in the determination. Since the law defines ``maintain'' to 
include collection of information, the Bureau of Alcohol, Tobacco and 
Firearms believes that this system should be exempt from subsection 
(e)(5) because it would prohibit the initial collection of any data not 
shown to be accurate, relevant, timely or complete at the moment of its 
collection. In gathering information during the course of a criminal 
investigation it is not feasible or possible to determine completeness, 
accuracy, timeliness or relevancy prior to collection of the 
information. Facts are first gathered then placed into a cohesive order 
which objectively proves or disproves criminal behavior on the part of a 
suspect. Seemingly irrelevant, untimely and incomplete information when 
gathered may acquire new significance as an investigation progresses. 
The restrictions of (e)(5) could impede special agents in the 
preparation of a complete investigative report. For these reasons, ATF 
seeks exemption of this system from subsection (e)(5).
    (6) The Privacy Act of 1974 provides, at subsection (e)(8), that an 
agency must make reasonable efforts to serve notice on an individual 
when his records are made available pursuant to compulsory legal 
process, when such process becomes a matter of public record. Such a 
requirement would impose unnecessary and unusual administrative demands 
on the Bureau of Alcohol, Tobacco and Firearms by requiring a record 
system to follow up on legal process emanating from court proceedings to 
which ATF is not a party. The Bureau of Alcohol, Tobacco and Firearms 
believes the duty of serving notice in such a case properly rests with 
the moving party who seeks disclosure by utilization of the court's 
compulsory legal process. Further, in most cases where an individual's 
criminal records have been disclosed pursuant to compulsory legal 
process, the individual who is the subject of the records will be a 
party to the proceedings and will have actual notice of the disclosure. 
For these reasons, ATF seeks exemption of this system from subsection 
(e)(8).
    (7) The Privacy Act of 1974 provides, at subsection (g), civil 
remedies for agency failure to grant access, agency failure to amend 
records, agency failure to maintain accurate, relevant, timely and 
complete records and agency failure to comply with provisions of the 
Privacy Act which have an adverse effect on an individual. The Bureau of

[[Page 86]]

Alcohol, Tobacco and Firearms believes that this system should be 
exempted from subsection (g) because the civil remedies provided in this 
subsection apply to provisions in the Privacy Act which have been 
exempted from application to this system by virtue of this notice. Since 
these provisions are not intended to apply to this system, there should 
be no corresponding civil penalty for failure to comply with the 
requirements of these sections due to exercise of the exemption 
authority. ATF believes that application of this subsection to this 
system of records would impair ATF's ability to conduct investigations 
into the criminal behavior of suspects because every step in the 
investigation process in which information is compiled for prosecution 
purposes would be susceptible to civil action under this subsection. For 
these reasons, ATF seeks exemption of this system from subsection (g).
    (b) Specific exemptions under section 552a(k)(2). Under the 
provisions of 5 U.S.C. 552a(k)(2), the Director, Bureau of Alcohol, 
Tobacco and Firearms, hereby determines that certain provisions of the 
Privacy Act of 1974 shall not apply to the Treasury--ATF--Regulatory 
Enforcement Record System, the Treasury--ATF--Technical and Scientific 
Services Record System, and that portion of the Treasury--ATF--Internal 
Security Record System relating to ``conduct of employees'' and 
``integrity of employees'' records.
    (1) The Privacy Act of 1974 creates several methods by which 
individuals may discover records containing information on such 
individuals and consisting of investigatory material compiled for law 
enforcement purposes. These methods are as follows: subsection (c)(3) 
allows individuals to discover if other agencies are investigating such 
individuals; subsections (d)(1), (e)(4)(H), and (f) (2), (3) and (5) 
establish the ability of individuals to gain access to investigatory 
material compiled on such individuals; subsections (d) (2), (3) and (4), 
(e)(4)(H) and (f)(4) presuppose access and enable individuals to contest 
the contents of investigatory material compiled on these individuals; 
and subsections (e)(4)(G) and (f)(1) allow individuals to determine 
whether or not they are under investigation. Since these subsections are 
variations upon the individuals' ability to ascertain whether their 
civil or criminal misdeeds have been discovered, these subsections have 
been grouped together for purposes of this notice.
    (A) The Bureau of Alcohol, Tobacco and Firearms believes that 
imposition of the requirements of subsection (c) (3), requiring 
accounting of disclosures be made available to individuals, would impair 
the ability of ATF and other investigative entities to conduct 
investigations of alleged or suspected violations of civil or criminal 
laws. Making the accounting of disclosures available identifies to 
individuals which investigative entities are investigating the 
individuals, the nature of the violations of which they are suspected, 
and the purpose for the exchange of information. Supplied with this 
information, the individuals concerned would be able to alter their 
ongoing and future illegal activities, conceal or destroy evidentiary 
materials and documents, and otherwise seriously impair the successful 
completion of investigations. Further, where individuals learn the 
geographic location and identity of the investigative entities which are 
interested in them, such individuals are able to move the site of their 
illegal activities or become secure in the knowledge that their illegal 
activities have not been detected in particular geographic locations. 
For these reasons, ATF seeks an exemption from the requirements of 
subsection (c)(3).
    (B) With respect to subsections (d) (1), (e)(4)(H), and (f) (2), (3) 
and (5), the Bureau of Alcohol, Tobacco and Firearms believes that 
access into investigatory material would prevent the successful 
completion of ongoing investigations. Individuals who gain access to 
investigatory material compiled on them discover the nature and extent 
of the violations of civil or criminal laws which they are suspected or 
alleged to have committed. By gaining access, such individuals also 
learn the facts developed during an investigation. Knowledge of the 
facts and the nature and extent of the suspected or alleged violations 
enables these individuals to destroy materials or documents which

[[Page 87]]

would have been used as evidence against them. In addition, knowledge of 
the facts and the suspected violations gives individuals, who are 
committing ongoing violations or who are about to commit violations of 
civil or criminal laws, the opportunity to temporarily postpone the 
commission of the violations or to effectively disguise the commission 
of these violations. Access to material compiled on investigated 
individuals reveals investigative techniques and the procedures followed 
in conducting investigations. Disclosure of these techniques and 
procedures enables individuals who intend to violate civil or criminal 
laws to structure their future illegal activities in such a way that 
they escape detection. Investigative material may contain the identity 
of confidential sources of information. Individuals who gain access to 
investigatory material compiled on them learn the identity of these 
confidential sources. Even where the name of the source is not revealed, 
investigated individuals may learn the identity of confidential sources 
by the process of elimination or by the very nature of the information 
contained in the files. Where the identity of confidential sources has 
been revealed, they may be subject to various forms of reprisal. If 
confidential sources of information are subjected to reprisals or the 
fear of reprisals, they would become reluctant to provide information 
necessary to identify or prove the guilt of individuals who violate 
civil or criminal laws. Without the information that is often supplied 
by confidential sources, the ability of investigative entities would be 
seriously impaired. For the reasons stated in this paragraph, ATF seeks 
exemption from the requirements of subsections (d)(1), (e)(4)(H), and 
(f) (2), (3) and (5).
    (C) With respect to subsections (d) (2), (3) and (4), (e) (4) (H), 
and (f) (4), the Bureau of Alcohol, Tobacco and Firearms believes that 
the imposition of these requirements, which presuppose access and 
provide for amending records, would impair ATF's ability to conduct 
investigations for the same reasons stated in the preceding paragraph 
(b)(1)(B), and are incorporated by reference herein. Therefore, ATF 
seeks exemption from the requirements of subsections (d) (2), (3) and 
(4), (e)(4)(H), and (f)(4).
    (D) With respect to subsections (e) (4)(G) and (f)(1), the Bureau of 
Alcohol, Tobacco and Firearms believes that informing individuals that 
they are of record would impair the ability of ATF to successfully 
complete the investigations of suspected or alleged violators of civil 
or criminal laws. Individuals, who are informed that they have been 
identified as suspected violators of civil or criminal laws, are given 
the opportunity to destroy evidence or other material needed to prove 
the alleged violations. Such individuals would also be able to impair 
investigations by temporarily suspending ongoing illegal activities or 
by restructuring intended illegal activities. Informing individuals that 
they are of record in a particular system of records enables such 
individuals to learn the nature of the investigation, the character of 
the investigatory material and the specific civil or criminal laws they 
are suspected of violating. For these reasons, ATF seeks exemption from 
the requirements of subsections (e)(4)(G) and (f)(1).
    (2) Subsection (e)(1) of the Privacy Act of 1974 requires that ATF 
maintain in its records only information that is relevant and necessary 
to accomplish a purpose of ATF required to be accomplished by statute or 
by executive order of the President. The Bureau of Alcohol, Tobacco and 
Firearms believes that imposition of such requirement would seriously 
impair the ability of ATF and other investigative entities to 
effectively investigate suspected or alleged violations of civil or 
criminal laws. Where individuals are engaged in a broad variety of 
violations, if ATF were only to collect information necessary and 
relevant to laws under ATF's jurisdiction, ATF would be unable to 
perform one of its functions, i.e., working with other governmental 
agencies which have similar jurisdictional concerns. Additionally, it is 
often impossible to determine whether or not information is relevant and 
necessary until the investigation is completed. When initially 
collected, information may appear irrelevant or immaterial. However, 
when this information is placed together with additional data gathered 
at a later stage of

[[Page 88]]

the investigation, the initially collected irrelevant information may 
form the basis for reasonable cause to believe additional violations of 
law are present or additional suspects are involved. Until all facts 
have been gathered and evaluated it may not be possible to determine 
relevancy and materiality. For these reasons, ATF seeks an exemption 
from the requirement of subsection (e)(1).
    (c) Specific exemptions under section 552a (k)(5). The Director, 
Bureau of Alcohol, Tobacco and Firearms exempts under section (k) of the 
Privacy Act of 1974, 5 U.S.C. 552a, that portion of the Treasury--ATF--
Internal Security Record System relating to ``security clearances for 
employees'' records, and the Treasury--ATF--Personnel Record System from 
sections (c)(3), (d) (1) through (4), (e)(1), (e)(4)(G) through 
(e)(4)(I), and (f) of the Act. The records maintained in the exempt 
systems of records are of the type described in section (k)(5) of the 
Act: Investigatory material compiled solely for the purpose of 
determining suitability, eligibility, or qualifications for Federal 
civilian employment, military service, Federal contracts, or access to 
classified information, but only to the extent that the disclosure of 
such material would reveal the identity of a source who furnished 
information to the Government under an express promise that the identity 
of the source would be held in confidence, or, prior to the effective 
date of this section, under an implied promise that the identity of the 
source would be held in confidence.
    Thus to the extent that the records in this system can be disclosed 
without revealing the identity of a confidential source, they are not 
within the scope of this proposed exemption and are subject to all the 
requirements of the Privacy Act.
    The sections of the Act from which this system of records are exempt 
are in general those providing for individual access to records. When 
such access would cause the identity of a confidential source to be 
revealed, it would impair the future ability of the Treasury Department 
to compile investigatory material for the purpose of determining 
suitability, eligibility, or qualifications for Federal civilian 
employment, Federal contracts, or access to classified information.
    In addition, the systems are exempt from section (e)(1) which 
requires that the agency maintain in its records only such information 
about an individual as is relevant and necessary to accomplish a 
statutory or executively ordered purpose. The Director finds that to 
fulfill the requirements of section (e) (1) would unduly restrict the 
agency in its information gathering inasmuch as it is often not until 
well after the investigation that it is possible to determine the 
relevance and necessity of particular information.
    If any investigations within the scope of section (k)(5) become 
involved with civil or criminal matters, exemptions from the Act could 
also be asserted under sections (k)(2) or (j)(2).
    (d) Application of exemptions to records exempt in whole or in part. 
(1) When an individual requests records about himself which have been 
exempted from individual access pursuant to 5 U.S.C. 552a(j) or which 
have been compiled in reasonable anticipation of a civil action or 
proceeding in either a court or before an administrative tribunal, the 
Bureau of Alcohol, Tobacco and Firearms will neither confirm nor deny 
the existence of the record but shall advise the individual only that no 
record available to him pursuant to the Privacy Act of 1974 has been 
identified.
    (2) When there is a request for information which has been 
classified by ATF pursuant to Executive Order 11652 and Treasury Order 
160, ATF will review the information to determine whether it continues 
to warrant classification under the criteria of sections 1 and 5 (B), 
(C), (D), and (E) of the Executive Order. Information which no longer 
warrants classification under these criteria shall be declassified. 
After declassification, the information shall be made available to the 
individual, unless an exemption is claimed. If the information continues 
to warrant classification, the provisions of EO 11652 shall apply.
    (3) Requests for information which have been exempted from 
disclosure pursuant to 5 U.S.C. 552a(k)(2) shall be responded to in the 
manner provided in paragraph (d)(1) of this section unless a review of 
the information indicates

[[Page 89]]

that the information has been used to deny the individual any right, 
privilege, or benefit for which he is eligible or to which he would 
otherwise be entitled under federal law. In that event, the individual 
shall be advised of the existence of the information and shall be 
provided the information except to the extent it would reveal the 
identity of a source who furnished information to the Government under 
an express promise that the identity of the source would be held in 
confidence, or, prior to September 27, 1975, under an implied promise 
that the identity of the source would be held in confidence.
    (4) Information compiled as part of an employee background 
investigation which has been exempted pursuant to 5 U.S.C. 552a(k)(5) 
shall be made available to an individual upon request except to the 
extent it would reveal the identity of a source who furnished 
information to the Government under an express promise that the identity 
of the source would be held in confidence, or, prior to September 27, 
1975, under an implied promise that the identity of the source would be 
held in confidence.
    (5) Even though the exemptions described in paragraphs (a), (b) and 
(c) of this section may be fully applicable, the Bureau may, if not 
precluded by law, elect under the circumstances of a particular case not 
to apply the exemption; or to exempt only a part. The fact that the 
exemption is not applied by the Bureau in a particular case has no 
precedential significance as to the application of the exemption to such 
matter in other cases. It is merely an indication that in the particular 
case involved, the Bureau finds no compelling necessity for applying the 
exemption to such matter. Where the Bureau has elected not to apply an 
exemption, in whole or in part, Appendix E of 31 CFR part 1, subpart C, 
relating to ATF's notice, access and amendment procedures shall apply to 
the records requested only to the extent that the exemption was not 
asserted.

      Bureau of Engraving and Printing, Department of the Treasury

   Notice of rules exempting certain systems from requirements of the 
                               Privacy Act

    (a) In general. The Director of the Bureau of Engraving and Printing 
exempts the Office of Security Investigative Files from the provisions 
of certain subsections of 5 U.S.C. 552a, the Privacy Act of 1974. The 
purpose of the exemptions is to maintain the confidentiality of 
information compiled for the purpose of criminal, non-criminal, employee 
suitability and security investigations.
    (b) Authority. These rules are promulgated pursuant to the authority 
vested in the Secretary of the Treasury by 5 U.S.C. 552a(k) and pursuant 
to the authority vested in the Director, Bureau of Engraving and 
Printing.
    (c) Exempted system. Bureau of Engraving and Printing, Office of 
Security, Investigative Files.
    (1) Provisions from which exempted. The Investigative Files 
maintained by the Office of Security contain records described in 5 
U.S.C. 552a(k)(2), the Privacy Act of 1974. Exemptions will be claimed 
for such described records only where appropriate from the following 
provisions of the Privacy Act of 1974: Subsections (c)(3); (d) (1), (2), 
(3), (4); (e)(1); (e)(4) (G), (H), and (I); and (f) of 5 U.S.C. 552a.
    (2) Reasons for claimed exemptions. a. 5 U.S.C. 552a(c)(3): This 
provision of the Privacy Act provides for the release of the disclosure 
accounting required by 5 U.S.C. 552a(c) (1) and (2) to the individual 
named in the Investigative Files. The reasons why these files are 
exempted from the foregoing provision are as follows:
    (i) The release of accounting disclosures would put the subject of a 
security investigation on notice of the existence of an investigation 
and that he is the subject of that investigation;

[[Page 90]]

    (ii) It would provide the subject of an investigation with an 
accurate accounting of the date, nature, and purpose of each disclosure 
and the name and address of the person or agency to whom the disclosure 
is made. Obviously, the release of such information to the subject of a 
security investigation would provide him with significant information 
concerning the nature of the investigation and could result in impeding 
or compromising the efforts of Bureau Security personnel to detect and 
report persons suspected of illegal, unlawful, or unauthorized activity;
    (iii) Disclosure to the individual of the disclosure accounting 
after the investigation is closed would alert the individual as to which 
agencies were investigating him and would put him on notice concerning 
the scope of his suspected improper activities and could aid him in 
avoiding detection and apprehension.
    b. 5 U.S.C. 552a(d) (1), (2), (3), (4); (e)(4) (G) and (H); and (f): 
The foregoing provisions of the Privacy Act relate to an individual's 
right to notification of the existence of records pertaining to him and 
access to such records; the agency procedures relating to notification, 
access and contest of the information continued in such records. The 
reasons why the Investigative Files are exempted from the foregoing 
provisions are as follows:
    (i) To notify an individual at his request of the existence of 
records pertaining to him in the Investigative Files would inform the 
individual of the existence of an investigation and that he is the 
subject of that investigation. This would enable the individual to avoid 
detection and would further enable him to inform co-conspirators of the 
fact that an investigation is being conducted;
    (ii) To permit access to the records contained in the Investigative 
Files would not only inform an individual that he is or was the subject 
of a security investigation, but would also provide him with significant 
information concerning the nature of the investigation which might 
enable him to avoid detection or apprehension;
    (iii) To grant access to an on-going or closed investigative file 
could interfere with Office of Security investigative proceedings, 
disclose the identity of confidential sources and reveal confidential 
information supplied by such sources, and disclose investigative 
techniques and procedures, or endanger the life or physical safety of 
Office of Security personnel, informants, witnesses, and other persons 
supplying information to investigators.
    c. 5 U.S.C. 552a(e)(4)(I). This provision of the Privacy Act 
requires the publication of the categories of sources of records in each 
system of records. The reasons why the Investigative Files are exempted 
from the foregoing provision are as follows:
    (i) Revealing sources of information could disclose investigative 
techniques and procedures;
    (ii) Revealing sources of information could result in retaliation 
and threat of reprisal by the subject under investigation against such 
sources;
    (iii) Revealing sources of information could cause witnesses, 
informants and others who supply information to Office of Security 
investigators to refrain from giving such information because of fear of 
reprisal, or fear of breach of promises of anonymity and 
confidentiality;
    (iv) Revealing sources of information could result in the refusal of 
some sources to give full and complete information or to be candid with 
investigators because of the knowledge that the identity of such sources 
may be disclosed.
    d. 5 U.S.C. 552a(e)(1): This provision of the Privacy Act requires 
each agency to maintain in its records only such information about an 
individual as is relevant and necessary to accomplish a purpose of the 
agency. The reasons why the Investigative Files are exempted from the 
foregoing provision are as follows:
    (i) In a security investigation it is difficult to determine 
accurately the relevancy and necessity of information during the process 
of information gathering. It is only after the information is evaluated 
that the relevancy and necessity of such information can be ascertained;
    (ii) In a security investigation, the Office of Security often 
obtains information concerning the violation of

[[Page 91]]

laws other than those within the scope of its responsibilities. In the 
interest of effective law enforcement, it is desirable that the Office 
of Security retain this information since it can aid in establishing 
patterns of criminal activity and provide valuable leads for those law 
enforcement agencies that are charged with enforcing other segments of 
the criminal law;
    (iii) In interviewing persons, or obtaining other forms of evidence 
during a criminal investigation, information will be supplied to the 
investigator which relates to matters which are ancillary to the main 
purpose of the investigation but which may relate to matters under the 
investigative jurisdiction of another agency. Such information is not 
readily susceptible to segregation.
    e. The foregoing exemptions are claimed for materials maintained in 
the Investigative Files to the extent that such materials contain 
information and reports described in 5 U.S.C. 552a(k)(2).
    The Bureau of Engraving and Printing exempts under section (k) of 
the Privacy Act of 1974, 5 U.S.C. 552a, the Bureau's Personnel Security 
Files and Personnel Security Files and Indices from sections (c)(3), 
(d), (e)(1), (e)(4)(G) through (e)(4)(I), and (f) of the Act. The 
records maintained in the exempt systems of records are of the type 
described in section (k)(5) of the Act:

investigatory material compiled solely for the purpose of determining 
suitability, eligibility, or qualifications for Federal civilian 
employment, military service, Federal contracts, or access to classified 
information, but only to the extent that the disclosure of such material 
would reveal the identity of a source who furnished the information to 
the Government under an express promise that the identity of the source 
would be held in confidence, or, prior to the effective date of this 
section, under an implied promise that the identity of the source would 
be held in confidence.


Thus to the extent that the records in this system can be disclosed 
without revealing the identity of a confidential source, they are not 
within the scope of this exemption and are subject to all the 
requirements of the Privacy Act.
    The sections of the Act from which this system of records are exempt 
are in general those providing for individual access to records. When 
such access would cause the identity of a confidential source to be 
revealed, it would impair the future ability of the Treasury Department 
to compile investigatory material for the purpose of determining 
suitability, eligibility, or qualifications for Federal civilian 
employment, Federal contracts, or access to classified information.
    In addition, the systems are exempt from section (e)(1) which 
requires that the agency maintain in its records only such information 
about an individual as is relevant and necessary to accomplish a 
statutory or executively ordered purpose. The Director finds that to 
fulfill the requirements of section (e)(1) would unduly restrict the 
agency in its information gathering inasmuch as it is often not until 
well after the investigation that it is possible to determine the 
relevance and necessity of particular information.
    If any investigations within the scope of section (k)(5) become 
involved with civil and criminal matters, exemptions from the Act should 
also be asserted under sections (k) (2) or (j) (2).

                           Bureau of the Mint

   Notice of rules exempting certain systems from requirements of the 
                               Privacy Act

    (a) In general. The Director of the Mint exempts investigatory files 
on theft of Mint property and examination reports of coins forwarded to 
the Mint by the U.S. Secret Service from certain subsections of 5 U.S.C. 
552a, the Privacy Act of 1974. The purpose of the exemption is to 
maintain the confidentiality of investigatory material compiled for law 
enforcement purposes.
    (b) Authority. These rules are promulgated pursuant to the authority 
vested in the Secretary of the Treasury by 5 U.S.C. 552(a)(k)(2), and 
pursuant to the authority vested in the Director of the Mint by 
paragraph 1.23(c) of subpart C of part 1 of subtitle A of title 31 of 
the Code of Federal Regulations.
    (c) Name of systems. Examination Reports of Coins Forwarded to Mint 
from U.S. Secret Service and Investigatory Files on Theft of Mint 
Property.
    (d) Provisions from which exempted. These two systems consist in 
large part

[[Page 92]]

of records generated by the U.S. Secret Service in connection with its 
responsibilities to enforce various criminal laws. Those records are 
described in 5 U.S.C. 552a(j) and are exempted from various provisions 
of the Privacy Act of 1974 by the Director of the U.S. Secret Service. 
To a lesser extent, these two systems also contain records generated and 
compiled by the Bureau of the Mint in assisting the U.S. Secret Service 
in its law enforcement efforts. Those records are described in 5 U.S.C. 
552a(k)(2), the Privacy Act of 1974. Exemptions will be claimed for such 
records only where appropriate from the following provisions, 
subsections (c)(3), (d), (e)(1), (e)(4) (G), (H), and (I) and (f) of 5 
U.S.C. 552a.
    (e) Reasons for claimed exemptions. Those provisions of the Privacy 
Act would otherwise require the Bureau of the Mint to notify an 
individual of investigatory material maintained in a record pertaining 
to him, permit access to such record, permit request for its correction 
(section 552a(d), (e)(4) (G), (H) and (f)); make available to him any 
required accounting of disclosures made of the record (section 
552a(c)(3)), publish the sources of records in the system (section 
552a(e)(4) (I)); and screen records to insure that there is maintained 
only such information about an individual as is relevant to accomplish a 
required purpose of the Bureau (section 52a(e)(1)). Disclosure to an 
individual of investigatory material pertaining to him would hamper law 
enforcement by prematurely disclosing the knowledge of illegal 
activities and the evidentiary bases for possible enforcement actions. 
Furthermore, the disclosure of certain investigatory material compiled 
for law enforcement purposes may disclose investigative techniques and 
procedures, so that future law enforcement efforts would be hindered. 
Access to an accounting of disclosures of such records would have a 
similar detrimental effect on law enforcement. Accordingly, the Director 
of the Mint finds that the public interest and public policy in 
protecting the coinage and property of the United States require 
exemption from the stated sections of the Act to the extent that they 
are applicable to appropriate materials in these two systems.

                       Comptroller of the Currency

     Notice of rules exempting certain systems of records from the 
                     requirements of the Privacy Act

    (a) In general. The Office of the Comptroller of the Currency 
exempts the following systems of records from certain provisions of the 
Privacy Act:
    (1) Enforcement and Compliance Information;
    (2) Federal Bureau of Investigation Report Card index;
    (3) Chief Counsel's Management Information System.

The purpose of the exemption is to maintain confidentiality of data 
obtained from various sources that may ultimately accomplish a statutory 
or executively-ordered purpose.
    (b) Authority. The authority to issue exemptions is vested in the 
Office of the Comptroller of the Currency, as a constituent unit of the 
Treasury Department, by 31 CFR 1.20 and 1.23(c).
    (c) Exemptions under 5 U.S.C. 552a(j)(2). (1) Under 5 U.S.C. 
552a(j)(2), the head of any agency may issue rules to exempt any system 
of records within the agency from certain provisions of the Privacy Act 
of 1974, if the agency or component that maintains the system performs 
as its principal function any activities pertaining to the enforcement 
of criminal laws. Components of the Office of the Comptroller of the 
Currency are involved in the investigation of fraudulent or other 
illegal activities as well as other sensitive matters, in order to carry 
out their bank supervisory function. Exemptions will be claimed for such 
records only where appropriate.
    (2) To the extent that the exemption under 5 U.S.C. 552a(j)(2) does 
not apply to the above named systems of records, then the exemption 
under 5 U.S.C. 552a(k)(2) relating to investigatory material compiled 
for law enforcement purposes is claimed for certain records in the 
systems. Exemptions will be claimed for such records only where 
appropriate.
    (3) The provisions of the Privacy Act of 1974 from which exemptions 
are claimed under 5 U.S.C. 552a(j)(2) are as follows:

5 U.S.C. 552a(c)(3) and (4)

[[Page 93]]

5 U.S.C. 552a(d)(1), (2), (3), (4)
5 U.S.C. 552a(e)(1), (2), and (3)
5 U.S.C. 552a(e)(4)(G), (H), and (I)
5 U.S.C. 552a(e)(5) and (8)
5 U.S.C. 552a(f)
5 U.S.C. 552a(g)

    (d) Exemptions under 5 U.S.C. 552a(k)(2). (1) Under 5 U.S.C. 
552a(k)(2), the head of any agency may issue rules to exempt any system 
of records within the agency from certain provisions of the Privacy Act 
of 1974 if the system is investigatory material compiled or law 
enforcement purposes.
    (2) To the extent that information contained in the above-named 
systems has as its principal purpose the enforcement of criminal laws, 
the exemption for such information under 5 U.S.C. 552a(j)(2) is claimed.
    (3) Provisions of the Privacy Act of 1974 from which exemptions are 
claimed under 5 U.S.C. 552a(k)(2) are as follows:

5 U.S.C. 552a(c)(3)
5 U.S.C. 552a(d)(1), (2), (3), and (4)
5 U.S.C. 552a(e)(1)
5 U.S.C. 552a(e)(4)(G), (H), and (I)
5 U.S.C. 552a(f)

    (e) Reasons for exemptions under 5 U.S.C. 552a(j)(2) and (k)(2). (1) 
5 U.S.C. 552a(c)(3) requires that an agency make accountings of 
disclosures of records available to individuals named in the records at 
their request. These accountings must state the date, nature and purpose 
of each disclosure of the record and the name and address of the 
recipient. The application of this provision would alert subjects of an 
investigation to the existence of the investigation and that such 
persons are the subjects of that investigation. Since release of such 
information to subjects of an investigation would provide the subjects 
with significant information concerning the nature of the investigation, 
it could result in the altering or destruction of documentary evidence, 
improper influencing of witnesses, and other activities that could 
impede or compromise the investigation.
    (2) 5 U.S.C. 552a(c)(4), (d)(1), (2), (3), and (4), (e)(4)(G) and 
(H), (f), and (g) relate to an individual's right to be notified of the 
existence of records pertaining to such individual; requirements for 
identifying an individual who requests access to records; the agency 
procedures relating to access to records and the content of information 
contained in such records; and the civil remedies available to the 
individual in the event of adverse determinations by an agency 
concerning access to or amendment of information contained in record 
systems. These systems are exempt from the foregoing provisions for the 
following reasons: To notify an individual at the individual's request 
of the existence of records in an investigative file pertaining to such 
individual or to grant access to an investigative file could: interfere 
with investigative and enforcement proceedings; interfere with co-
defendants' rights to a fair trial; constitute an unwarranted invasion 
of the personal privacy of others; disclose the identity of confidential 
sources and reveal confidential information supplied by these sources; 
or disclose investigative techniques and procedures.
    (3) 5 U.S.C. 552a(e)(4)(I) requires the publication of the 
categories of sources of records in each system of records. The 
application of this provision could disclose investigative techniques 
and procedures and cause sources to refrain from giving such information 
because of fear of reprisal, or fear of breach of promises of anonymity 
and confidentiality. This would compromise the ability to conduct 
investigations, and to identify, detect, and apprehend violators.
    (4) 5 U.S.C. 552a(e)(1) requires each agency to maintain in its 
records only such information about an individual that is relevant and 
necessary to accomplish a purpose of the agency required by statute or 
Executive order. An exemption from the foregoing is needed:
    (i) Because it is not possible to detect relevance or necessity of 
specific information in the early stages of a criminal or other 
investigation.
    (ii) Relevance and necessity are questions of judgment and timing. 
What appears relevant and necessary when collected may ultimately be 
determined to be unnecessary. It is only after the information is 
evaluated that the relevance can be established.
    (iii) In any investigation the Comptroller of the Currency may 
obtain information concerning violations of

[[Page 94]]

laws other than those within the scope of its jurisdiction. In the 
interest of effective law enforcement, the Comptroller of the Currency 
should retain this information as it may aid in establishing patterns of 
criminal activity, and provide leads for those law enforcement agencies 
charged with enforcing other segments of criminal or civil law.
    (iv) In interviewing persons, or obtaining other forms of evidence 
during an investigation, information may be supplied to the investigator 
which relates to matters incidental to the main purpose of the 
investigation but which may relate to matters under the investigative 
jurisdiction of another agency. Such information cannot readily be 
segregated.
    (5) 5 U.S.C. 552a(e)(2) requires an agency to collect information to 
the greatest extent practicable directly from the subject individual 
when the information may result in adverse determinations about an 
individual's rights, benefits, and privileges under Federal programs. 
The application of the provision would impair investigations for the 
following reasons:
    (i) In certain instances the subject of an investigation cannot be 
required to supply information to investigators. In those instances, 
information relating to a subject's illegal acts, violations of rules of 
conduct, or any other misconduct, etc., must be obtained from other 
sources.
    (ii) Most information collected about an individual under 
investigation is obtained from third parties such as witnesses and 
informers. It is not feasible to rely upon the subject of the 
investigation as a source for information regarding his activities.
    (iii) The subject of an investigation will be alerted to the 
existence of an investigation if an attempt is made to obtain 
information from the subject. This would afford the individual the 
opportunity to conceal any criminal activities in order to avoid 
apprehension.
    (iv) In any investigation it is necessary to obtain evidence from a 
variety of sources other than the subject of the investigation in order 
to verify the evidence necessary for successful litigation.
    (6)(i) 5 U.S.C. 552a(e)(3) requires that an agency must inform the 
subject of an investigation who is asked to supply information of:
    (A) The authority under which the information is sought and whether 
disclosure of the information is mandatory or voluntary,
    (B) The purposes for which the information is intended to be used,
    (C) The routine uses which may be made of the information, and
    (D) The effects on the subject, if any, of not providing the 
requested information.
    (ii) The reasons for exempting these systems of records from the 
foregoing provision are as follows:
    (A) The disclosure to the subject of the investigation as stated in 
paragraph (e)(6)(i)(B) would provide the subject with substantial 
information relating to the nature of the investigation and could impede 
or compromise the investigation.
    (B) If the subject were informed as required by this provision, it 
could seriously interfere with information-gathering activities by 
requiring disclosure of sources of information and, therefore, impairing 
the successful conclusion of the investigation.
    (C) Individuals may be contacted during preliminary information-
gathering in investigations before any individual is identified as the 
subject of an investigation. Informing the individual of the matters 
required by this provision would hinder or adversely affect any present 
or subsequent investigations.
    (7) 5 U.S.C. 552a(e)(5) requires that records be maintained with 
such accuracy, relevance, timeliness, and completeness as is reasonably 
necessary to assure fairness to the individual in making any 
determination about an individual. Since the law defines ``maintain'' to 
include the collection of information, complying with this provision 
would prevent the collection of any data not shown to be accurate, 
relevant, timely, and complete at the moment of its collection. In 
gathering information during the course of an investigation it is not 
possible to determine this prior to collection of the information. Facts 
are first gathered and then placed in a logical order which objectively 
proves or disproves suspected

[[Page 95]]

behavior on the part of the suspect. Material which may seem unrelated, 
irrelevant, incomplete, untimely, etc., may take on added meaning as an 
investigation progresses. The restrictions in this provision could 
interfere with the preparation of a complete investigative report.
    (8) 5 U.S.C. 552a(e)(8) requires an agency to make reasonable 
efforts to serve notice on an individual when any record on such 
individual is made available to any person under compulsory legal 
process when such process becomes a matter of public record. The notice 
requirement of this provision could prematurely reveal an ongoing 
investigation to the subject of the investigation.
    (f) Documents exempted. Exemption will be claimed for certain 
records only where appropriate under the above provisions.

                      OFFICE OF THRIFT SUPERVISION

                        NOTICE OF EXEMPT SYSTEMS

    In accordance with 5 U.S.C. 552a (j) and (k), general notice is 
hereby given of rulemaking pursuant to the Privacy Act of 1974 by the 
Director, Office of Thrift Supervision, under authority delegated to him 
by the Secretary of the Treasury. The Director, Office of Thrift 
Supervision, exempts the systems of records identified in the paragraphs 
below from certain provisions of the Privacy Act of 1974 as set forth in 
such paragraphs.
    a. General exemptions under 5 U.S.C. 552a(j)(2). Pursuant to the 
provisions of 5 U.S.C. 552a(j)(2), the Director, Office of Thrift 
Supervision, hereby exempts certain systems of records, maintained by 
the Office of Thrift Supervision, from the provisions of 5 U.S.C. 
552a(c) (3) and (4), (d) (1), (2), (3) and (4), (e) (1), (2), (3), 
(4)(G), (H) and (I), (5) and (8), (f) and (g).
    1. Exempt Systems. The following systems of records, which contain 
information of the type described in 5 U.S.C. 552a(j)(2), shall be 
exempt from the provisions of 5 U.S.C. 552a listed in paragraph a. above 
except as otherwise indicated below and in the general notice of the 
existence and character of systems of records which appears elsewhere in 
the Federal Register
.001 -- Confidential Individual Information System
.004 -- Criminal Referral Database
    2. Reasons for exemptions. (a) 5 U.S.C. 552a (e)(4)(G) and (f)(1) 
enable individuals to be notified whether a system of records contains 
records pertaining to them. The OTS believes that application of these 
provisions to the above-listed systems of records would give individuals 
an opportunity to learn whether they are the subject of an 
administrative investigation; this would compromise the ability of the 
OTS to complete investigations and to detect and apprehend violators of 
applicable laws in that individuals would thus be able (1) to take steps 
to avoid detection, (2) to inform co-conspirators of the fact that an 
investigation is being conducted, (3) to learn the nature of the 
investigation to which they are being subjected, (4) to learn the type 
of surveillance being utilized, (5) to learn whether they are the 
subject of investigation or identified law violators, (6) to continue or 
resume their illegal conduct without fear of detection upon learning 
that they are not in a particular system of records, and (7) to destroy 
evidence needed to prove a violation.
    (b) 5 U.S.C. 552a (d)(1), (e)(4)(H) and (f)(2), (3) and (5) enable 
individuals to gain access to records pertaining to them. The OTS 
believes that application of these provisions to the above-listed 
systems of records would compromise its ability to complete or continue 
administrative investigations and to detect and apprehend violators of 
applicable laws. Permitting access to records contained in the above-
listed systems of records would provide individuals with significant 
information concerning the nature of the investigation, and this could 
enable them to avoid detection or apprehension in the following ways: 
(1) by discovering the collection of facts which would form the basis of 
an enforcement action, and (2) by enabling them to destroy evidence of 
wrongful conduct which would form the basis of an enforcement action. 
Granting access to on-going or closed investigative files would also 
reveal investigative techniques and procedures, the knowledge of which 
could

[[Page 96]]

enable individuals planning illegal activity to structure their future 
operations in such a way as to avoid detection or apprehension, thereby 
neutralizing established investigative techniques and procedures. 
Further, granting access to investigative files and records could 
disclose the identities of confidential sources and other informers and 
the nature of the information which they supplied, thereby exposing them 
to possible reprisals for having provided information related to the 
activities of those individuals who are subjects of the investigative 
files and records; confidential sources and other informers might refuse 
to provide investigators with valuable information if they could not be 
secure in the knowledge that their identities would not be revealed 
through disclosure of either their names or the nature of the 
information they supplied, and this would seriously impair the ability 
of the OTS to carry out its mandate to enforce the applicable laws. 
Additionally, providing access to records contained in the above-listed 
systems of records could reveal the identities of individuals who 
compiled information regarding illegal activities, thereby exposing them 
to possible reprisals.
    (c) 5 U.S.C. 552a(d) (2), (3) and (4), (e)(4)(H) and (f)(4), which 
are dependent upon access having been granted to records pursuant to the 
provisions cited in paragraph (b) above, enable individuals to contest 
(seek amendment to) the content of records contained in a system of 
records and require an agency to note an amended record and to provide a 
copy of an individual's statement (of disagreement with the agency's 
refusal to amend a record) to persons or other agencies to whom the 
record has been disclosed. The OTS believes that the reasons set forth 
in paragraph (b) above are equally applicable to this subparagraph and, 
accordingly, those reasons are hereby incorporated herein by reference.
    (d) 5 U.S.C. 552a(c)(3) requires that an agency make accountings of 
disclosures of records available to individuals named in the records at 
their request; such accountings must state the date, nature and purpose 
of each disclosure of a record and the name and address of the 
recipient. The OTS believes that application of this provision to the 
above-listed systems of records would impair the ability of other law 
enforcement agencies to make effective use of information provided by 
the OTS in connection with the investigation, detection and apprehension 
of violators of the laws enforced by those other law enforcement 
agencies. Making accountings of disclosure available to subjects would 
alert those individuals to the fact that another agency is conducting an 
investigation into their activities, and this could reveal the nature 
and purpose of that investigation, and the dates on which that 
investigation was active. Subjects possessing such knowledge would 
thereby be able to take appropriate measures to avoid detection or other 
apprehension by altering their operations, or by destroying or 
concealing evidence which would form the basis of an enforcement action. 
In addition, providing subjects with accountings of disclosure would 
inform those individuals of general information, and alert them that the 
OTS has information regarding their activities; this, in turn, would 
afford those individuals a better opportunity to take appropriate steps 
to avoid detection or apprehension.
    (e) 5 U.S.C. 552a(c)(4) requires that an agency inform any person or 
other agency about any correction or notation of dispute made by the 
agency in accordance with 5 U.S.C. 552(d) of any record that has been 
disclosed to the person or agency if an accounting of the record was 
made. Since this provision is dependent on an individual's having been 
provided an opportunity to contest (seek amendment to) records 
pertaining to him, and since the above-listed systems of records are 
proposed to be exempted from those provisions of 5 U.S.C. 552a relating 
to amendments of records as indicated in paragraph (c) above, the OTS 
believes that this provision should not be applicable to the above-
listed systems of records.
    (f) 5 U.S.C. 552a(e)(4)(I) requires that an agency publish a public 
notice listing the categories of sources for information contained in a 
system of

[[Page 97]]

records. The OTS believes that application of this provision to the 
above-listed systems of records could compromise its ability to conduct 
investigations and to identify, detect and apprehend violators of the 
applicable laws for the reasons that revealing sources for information 
could 1) disclose investigative techniques and procedures, 2) result in 
possible reprisal directed to informers by the subject under 
investigation, and 3) result in the refusal of informers to give 
information or to be candid with investigators because of the knowledge 
that their identities as sources might be disclosed.
    (g) 5 U.S.C. 552a(e)(1) requires that an agency maintain in its 
records only such information about an individual as is relevant and 
necessary to accomplish a purpose of the agency required to be 
accomplished by statute or executive order. The term ``maintain'' as 
defined in 5 U.S.C. 552a(a)(3) includes ``collect'' and ``disseminate.'' 
At the time that information is collected by the OTS, there is often 
insufficient time to determine whether the information is relevant and 
necessary to accomplish a purpose of the OTS; in many cases information 
collected may not be immediately susceptible to a determination whether 
the information is relevant and necessary, particularly in the early 
stages of an investigation, and in many cases information which 
initially appears to be irrelevant and unnecessary may, upon further 
evaluation or upon continuation of the investigation, prove to have 
particular relevance to an enforcement program of OTS. Further, not all 
violations of law discovered during an OTS administrative investigation 
fall within the investigative jurisdiction of OTS; in order to promote 
effective law enforcement, OTS is often required to disseminate 
information pertaining to such violations to other law enforcement 
agencies which have jurisdiction over the offense to which the 
information relates. The OTS therefore believes that it is appropriate 
to exempt the above-listed systems of records from the provisions of 5 
U.S.C. 552a(e)(1).
    (h) 5 U.S.C. 552a(e)(2) requires that an agency collect information 
to the greatest extent practicable directly from the subject individual 
when the information may result in adverse determinations about an 
individual's rights, benefits, and privileges under Federal programs. 
The OTS believes that application of this provision to the above-listed 
systems of records would impair the ability of OTS to conduct 
investigations and to identify, detect and apprehend violators of 
applicable laws for the following reasons: (1) most information 
collected about an individual under investigation is obtained from third 
parties such as witnesses and informers, and it is usually not feasible 
to rely upon the subject of the investigation as a source for 
information regarding his activities, (2) an attempt to obtain 
information from the subject regarding an investigation will often alert 
the subject to the existence of such an investigation, thereby affording 
him an opportunity to conceal his activities so as to avoid 
apprehension, (3) in certain instances individuals are not required to 
supply information to investigators as a matter of legal duty, and (4) 
during investigations it is often a matter of sound investigative 
procedures to obtain information from a variety of sources in order to 
verify information already obtained.
    (i) 5 U.S.C. 552a(e)(3) requires that an agency inform each 
individual whom it asks to supply information, on the form which it uses 
to collect the information or on a separate form that can be retained by 
the individual, of the authority which authorizes the solicitation of 
the information and whether disclosure of such information is mandatory 
or voluntary; the principal purposes for which the information is 
intended to be used; the routine uses which may be made of the 
information; and the effects on the individual of not providing all or 
part of the requested information. The OTS believes that the above-
listed systems of records should be exempted from this provision in 
order to avoid adverse effects on its ability to identify, detect and 
apprehend violators of applicable laws. In many cases, information is 
obtained from confidential sources and other individuals under 
circumstances where it is necessary that the true purpose of their 
actions be kept secret so as not

[[Page 98]]

to alert the subject of the investigation or his associates that an 
investigation is in progress. In many cases, individuals for personal 
reasons would feel inhibited in talking to a person representing a law 
enforcement agency but would be willing to talk to a confidential source 
or a person who they believed was not involved in enforcement activity. 
In addition, providing information in this system with written evidence 
of who was the source, as required by this provision, could increase the 
likelihood that the source of information would be the subject of 
retaliatory action by the subject of the investigation. Further, 
application of this provision could result in an unwarranted invasion of 
the personal privacy of the subject of the investigation, particularly 
where further investigation would result in a finding that he was not 
involved in unlawful activity.
    (j) 5 U.S.C. 552a(e)(5) requires that an agency maintain all records 
used by the agency in making any determination about any individual with 
such accuracy, relevance, timeliness, and completeness as is reasonably 
necessary to assure fairness to the individual in the determination. 
Since 5 U.S.C. 552a(a)(3) defines ``maintain'' to include ``collect'' 
and ``disseminate,'' application of this provision to the above-listed 
systems of records would hinder the initial collection of any 
information which could not, at the moment of collection, be determined 
to be accurate, relevant, timely and complete. Similarly, application of 
this provision would seriously restrict the necessary flow of 
information from the OTS to other law enforcement agencies where an OTS 
investigation revealed information pertaining to a violation of law 
which was under the investigative jurisdiction of another agency. In 
collecting information during the course of an administrative 
investigation, it is not possible or feasible to determine accuracy, 
relevance, timeliness or completeness prior to collection of the 
information; in disseminating information to other law enforcement 
agencies it is often not possible to determine accuracy, relevance, 
timeliness or completeness prior to dissemination because the 
disseminating agency may not have the expertise with which to make such 
determinations. Further, information which may initially appear 
inaccurate, irrelevant, untimely or incomplete may, when gathered, 
grouped, and evaluated with other available information, become more 
pertinent as an investigation progresses. The OTS therefore believes 
that it is appropriate to exempt the above-listed systems of records 
from the provisions of 5 U.S.C. 552a(e)(5).
    (k) 5 U.S.C. 552a(e)(8) requires that an agency make reasonable 
efforts to serve notice on an individual when any record on the 
individual is made available to any person under compulsory legal 
process when such process becomes a matter of public record. The OTS 
believes that the above-listed systems of records should be exempt from 
this provision in order to avoid revealing investigative techniques and 
procedures outlined in those records and in order to prevent revelation 
of the existence of an on-going investigation where there is a need to 
keep the existence of the investigation secret.
    (l) 5 U.S.C. 552a(g) provides civil remedies to an individual for an 
agency refusal to amend a record or to make a review of a request for 
amendment, for an agency refusal to grant access to a record, for an 
agency failure to maintain accurate, relevant, timely and complete 
records which are used to make a determination which is adverse to the 
individual, and for an agency failure to comply with any other provision 
of 5 U.S.C. 552a in such a way as to have an adverse effect on an 
individual. The OTS believes that the above-listed systems of records 
should be exempted from this provision to the extent that the civil 
remedies provided therein may be related to provisions of 5 U.S.C. 552a 
from which the above-listed systems of records are proposed to be 
exempt. Since the provisions of 5 U.S.C. 552a enumerated in paragraphs 
(a) through (k) above are proposed to be inapplicable to the above-
listed systems of records for the reasons stated therein, there should 
be no corresponding civil remedies for failure to comply with the 
requirements of those provisions to which the exemption is proposed to 
apply. Further, the OTS believes that the application of this provision 
to the above-listed systems

[[Page 99]]

of records would adversely affect its ability to conduct investigations 
by exposing to civil court actions every stage of the investigative 
process in which information is compiled or used in order to identify, 
detect, apprehend and otherwise investigate persons suspected or known 
to be engaged in conduct in violation of applicable laws.
    b. Specific exemptions under 5 U.S.C. 552a(k)(2). Pursuant to the 
provisions of 5 U.S.C. 552a(k)(2), the OTS hereby exempts certain 
systems of records, maintained by the OTS from the provisions of 5 
U.S.C. 552a(c)(3), (d)(1), (2), (3) and (4), (e)(1) and (4)(G), (H) and 
(I) and (f).
    1. Exempt Systems. The following systems of records, which contain 
information of the type described in 5 U.S.C. 552a(k)(2), shall be 
exempt from the provisions of 5 U.S.C. 552a listed in paragraph b. above 
except as otherwise indicated below and in the general notice of the 
existence and character of systems of records which appears elsewhere in 
the Federal Register:
.001 -- Confidential Individual Information System
.004 -- Criminal Referral Database
    2. Reasons for exemptions. (a) 5 U.S.C. 552a (e)(4)(G) and (f)(1) 
enable individuals to be notified whether a system of records contains 
records pertaining to them. The OTS believes that application of these 
provisions to the above-listed systems of records would impair the 
ability of the OTS to successfully complete investigations and inquiries 
of suspected violators of laws and regulations under its jurisdiction. 
In many cases investigations and inquiries into violations of laws and 
regulations involve complex and continuing patterns of behavior. 
Individuals, if informed that they have been identified as the subject 
of an investigation, would have an opportunity to take measures to 
prevent detection of illegal action so as to avoid prosecution or the 
imposition of civil sanctions. They would also be able to learn the 
nature and location of the investigation and the type of inquiry being 
made, and they would be able to transmit this knowledge to co-
conspirators. Finally, subjects might be given the opportunity to 
destroy evidence needed to prove the violation under investigation or 
inquiry.
    (b) 5 U.S.C. 552a (d)(1), (e)(4)(H) and (f)(2), (3) and (5) enable 
individuals to gain access to records pertaining to them. The OTS 
believes that application of these provisions to the above-listed 
systems of records would impair its ability to complete or continue 
investigations and inquiries and to detect and apprehend violators of 
the applicable laws. Permitting access to records contained in the 
above-listed systems of records would provide subjects with significant 
information concerning the nature of the investigation or inquiry. 
Knowledge of the facts developed during an investigation or inquiry 
would enable violators of laws and regulations to learn the extent to 
which the investigation or inquiry has progressed, and this could 
provide them with an opportunity to destroy evidence that would form the 
basis for the imposition of civil sanctions. In addition, knowledge 
gained through access to investigatory material could alert a subject to 
the need to temporarily postpone commission of the violation or to 
change the intended point where the violation is to be committed so as 
to avoid detection or apprehension. Further, access to investigatory 
material would disclose investigative techniques and procedures which, 
if known, could enable individuals to structure their future operations 
in such a way as to avoid detection or apprehension, thereby 
neutralizing investigators' established and effective investigative 
tools and procedures. In addition, investigatory material may contain 
the identity of confidential sources who would not want their identity 
to be disclosed for reasons of personal privacy or for fear of reprisal 
at the hands of the individual about whom they supplied information. In 
some cases mere disclosure of the information provided by a source would 
reveal the identity of the source either through the process of 
elimination or by virtue of the nature of the information supplied. If 
sources could not be assured that their identities (as sources for 
information) would remain confidential, they would be very reluctant in 
the future to provide information pertaining to violations of laws and 
regulations, and this would seriously compromise the ability of the

[[Page 100]]

OTS to carry out its mission. Further, application of 5 U.S.C. 552a 
(d)(1), (e)(4)(H) and (f)(2), (3) and (5) to the above-listed systems of 
records would make available attorney's work product and other documents 
which contain evaluations, recommendations, and discussions of ongoing 
legal proceedings; the availability of such documents could have a 
chilling effect on the free flow of information and ideas within the OTS 
which is vital to the agency's predecisional deliberative process, could 
seriously prejudice the agency's or the Government's position in 
litigation, and could result in the disclosure of investigatory material 
which should not be disclosed for the reasons stated above. It is the 
belief of the OTS that due process will assure that individuals have a 
reasonable opportunity to learn of the existence of, and to challenge, 
investigatory records and related materials which are to be used in 
legal proceedings.
    (c) 5 U.S.C. 552a(d) (2), (3) and (4), (e)(4)(H) and (f)(4), which 
are dependent upon access having been granted to records pursuant to the 
provisions cited in subparagraph (b) above, enable individuals to 
contest (seek amendment to) the content of records contained in a system 
of records and require an agency to note an amended record and to 
provide a copy of an individual's statement (of disagreement with the 
agency's refusal to amend a record) to persons or other agencies to whom 
the record has been disclosed. The OTS believes that the reasons set 
forth in subparagraph (b) above are equally applicable to this 
subparagraph, and, accordingly, those reasons are hereby incorporated 
herein by reference.
    (d) 5 U.S.C. 552a(c)(3) requires that an agency make accountings of 
disclosures of records available to individuals named in the records at 
their request; such accountings must state the date, nature and purpose 
of each disclosure of a record and the name and address of the 
recipient. The OTS believes that application of this provision to the 
above-listed systems of records would impair the ability of the OTS and 
other law enforcement agencies to conduct investigations and inquiries 
into potential violations under their respective jurisdictions. Making 
accountings available to subjects would alert those individuals to the 
fact that the OTS or another law enforcement authority is conducting an 
investigation or inquiry into their activities, and such accountings 
could reveal the geographic location of the investigation or inquiry, 
the nature and purpose of the investigation or inquiry and the nature of 
the information disclosed, and dates on which that investigation or 
inquiry was active. Subjects possessing such knowledge would thereby be 
able to take appropriate measures to avoid detection or apprehension by 
altering their operations, transferring their activities to other 
locations or destroying or concealing evidence which would form the 
basis for prosecution or the imposition of civil sanctions.
    (e) 5 U.S.C. 552a(e)(1) requires that an agency maintain in its 
records only such information about an individual as is relevant and 
necessary to accomplish a purpose of the agency required to be 
accomplished by statute or executive order. The term ``maintain'' as 
defined in 5 U.S.C. 552a(a)(3) includes ``collect'' and ``disseminate.'' 
At the time that information is collected by the OTS there is often 
insufficient time to determine whether the information is relevant and 
necessary to accomplish a purpose of the OTS; in many cases information 
collected may not be immediately susceptible to a determination of 
whether the information is relevant and necessary, particularly in the 
early stages of investigation or inquiry; and in many cases information 
which initially appears to be irrelevant and unnecessary may, upon 
further evaluation or upon continuation of the investigation or inquiry, 
prove to have particular relevance to an enforcement program of the OTS. 
Further, not all violations of law uncovered during an OTS investigation 
or inquiry fall within the jurisdiction of the OTS; in order to promote 
effective law enforcement it often becomes necessary and desirable to 
disseminate information pertaining to such violations to other law 
enforcement agencies which have jurisdiction over the offense to which 
the information relates. The OTS therefore

[[Page 101]]

believes that it is appropriate to exempt the above-listed systems of 
records from provisions of 5 U.S.C. 552a(e)(1).

[40 FR 45692, Oct 2, 1975, as amended at 44 FR 7141, Feb. 6, 1979; 44 FR 
42189, July 19, 1979; 45 FR 13455, Feb. 29, 1980; 48 FR 21945, May 16, 
1983; 48 FR 48460, Oct. 19, 1983; 52 FR 11990, Apr. 14, 1987; 56 FR 
12447, Mar. 26, 1991; 59 FR 47538, Sept. 16, 1994; 61 FR 387, Jan. 5, 
1996; 62 FR 19505, Apr. 22, 1997; 62 FR 26939, May 16, 1997; 62 FR 
58908, Oct. 31, 1997; 62 FR 60782, Nov. 13, 1997; 64 FR 62586, Nov. 17, 
1999]

                         Appendices to subpart C

                    Appendix A--Departmental Offices

    1. In general. This appendix applies to the Departmental Offices as 
defined in 31 CFR part 1, subpart C, Sec. 1.20. It sets forth specific 
notification and access procedures with respect to particular systems of 
records, identifies the officers designated to make the initial 
determinations with respect to notification and access to records, the 
officers designated to make the initial and appellate determinations 
with respect to requests for amendment of records, the officers 
designated to grant extensions of time on appeal, the officers with whom 
``Statement of Disagreement'' may be filed, the officer designated to 
receive service of process and the addresses for delivery of requests, 
appeals, and service of process. In addition, it references the notice 
of systems of records and notices of the routine uses of the information 
in the system required by 5 U.S.C. 552a(e)(4) and (11) and published 
annually by the Office of the Federal Register in ``Privacy Act 
Issuances''.
    2. Requests for notification and access to records and accountings 
of disclosures. Initial determinations under 31 CFR 1.26, whether to 
grant requests for notification and access to records and accountings of 
disclosures for the Departmental Offices, will be made by the head of 
the organizational unit having immediate custody of the records 
requested, or the delegate of such official. This information is 
contained in the appropriate system notice in the ``Privacy Act 
Issuances'', published annually by the Office of the Federal Register. 
Requests for information and specific guidance on where to send requests 
for records should be addressed to:
    Privacy Act Request, DO, Department of the Treasury, 1500 
Pennsylvania Avenue, NW., Washington, DC 20220.
    Requests may be delivered personally to the Main Treasury Building, 
Room 5030, 1500 Pennsylvania Avenue NW., Washington, DC.
    3. Requests for amendments of records. Initial determinations under 
31 CFR 1.27(a) through (d) with respect to requests to amend records for 
records maintained by the Departmental Offices will be made by the head 
of the organization or unit having immediate custody of the records or 
the delegate of such official. Requests for amendment of records should 
be addressed as indicated in the appropriate system notice in ``Privacy 
Act Issuances'' published by the Office of the Federal Register. 
Requests for information and specific guidance on where to send these 
requests should be addressed to: Privacy Act Amendment Request, DO, 
Department of the Treasury, 1500 Pennsylvania Avenue, NW., Washington, 
DC 20220.
    4. Administrative appeal of initial determination refusing to amend 
record. Appellate determinations under 31 CFR 1.27(e) with respect to 
records of the Departmental Offices, including extensions of time on 
appeal, will be made by the Secretary, Deputy Secretary, Under 
Secretary, General Counsel, or Assistant Secretary having jurisdiction 
over the organizational unit which has immediate custody of the records, 
or the delegate of such official, as limited by 5 U.S.C. 552a(d) (2) and 
(3). Appeals made by mail should be addressed as indicated in the letter 
of initial decision or to:
    Privacy Act Amendment Request, DO Department of the Treasury, 1500 
Pennsylvania Avenue, NW., Washington, DC 20220. Appeals may be delivered 
personally to the Library, Room 5030, Main Treasury Building, 1500 
Pennsylvania Avenue, NW., Washington, DC.
    5. Statements of disagreement. ``Statements of Disagreement'' as 
described in 31 CFR 1.27(e)(4) shall be filed with the official signing 
the notification of refusal to amend at the address indicated in the 
letter of notification within 35 days of the date of notification and 
should be limited to one page.
    6. Service of process. Service of process will be received by the 
General Counsel of the Department of the Treasury or the delegate of 
such official and shall be delivered to the following location:
    General Counsel, Department of the Treasury, Room 3000, Main 
Treasury Building, 1500 Pennsylvania Avenue, NW., Washington, DC 20220.
    7. Annual notice of systems of records. The annual notice of systems 
of records required to be published by the Office of the Federal 
Register in the publication entitled ``Privacy Act Issuances'', as 
specified in 5 U.S.C. 552a (f). Any specific requirements for access, 
including identification requirements, in addition to the requirements 
set forth in 31 CFR 1.26 and 1.27 and 8 of this appendix, and locations 
for access are indicated in the notice for the pertinent system.
    8. Verification of identity. An individual seeking notification or 
access to records, or seeking to amend a record, must satisfy one of the 
following identification requirements before action will be taken by the 
Departmental Offices on any such request:

[[Page 102]]

    (i) An individual seeking notification or access to records in 
person, or seeking to amend a record in person, may establish identity 
by the presentation of a single official document bearing a photograph 
(such as a passport or identification badge) or by the presentation of 
two items of identification which do not bear a photograph but do bear 
both a name and signature (such as a driver's license or credit card).
    (ii) An individual seeking notification or access to records by 
mail, or seeking to amend a record by mail, may establish identity by a 
signature, address, and one other identifier such as a photocopy of a 
driver's license or other official document bearing the individual's 
signature.
    (iii) Notwithstanding subdivisions (i) and (ii) of this 
subparagraph, an individual seeking notification or access to records by 
mail or in person, or seeking to amend a record by mail or in person, 
who so desires, may establish identity by providing a notarized 
statement, swearing or affirming to such individual's identity and to 
the fact that the individual understands the penalties provided in 5 
U.S.C. 552a(i)(3) for requesting or obtaining access to records under 
false pretenses.
Notwithstanding subdivision (i), (ii), or (iii) of this subparagraph, a 
designated official may require additional proof of an individual's 
identity before action will be taken on any request, if such official 
determines that it is necessary to protect against unauthorized 
disclosure of information in a particular case. In addition, a parent of 
any minor or a legal guardian of any individual will be required to 
provide adequate proof of legal relationship before such person may act 
on behalf of such minor or such individual.

                  Appendix B--Internal Revenue Service

    1. Purpose. The purpose of this section is to set forth the 
procedures that have been established by the Internal Revenue Service 
for individuals to exercise their rights under the Privacy Act of 1974 
(88 Stat. 1896) with respect to systems of records maintained by the 
Internal Revenue Service, including the Office of the Chief Counsel. The 
procedures contained in this section are to be promulgated under the 
authority of 5 U.S.C. 552a(f). The procedures contained in this section 
relate to the following:
    (a) The procedures whereby an individual can be notified in response 
to a request if a system of records named by the individual contains a 
record pertaining to such individual (5 U.S.C. 552a(f)(1)).
    (b) The procedures governing reasonable times, places, and 
requirements for identifying an individual who requests a record of 
information pertaining to such individual before the Internal Revenue 
Service will make the record or information available to the individual 
(5 U.S.C. 552a (f)(2)).
    (c) The procedures for the disclosure to an individual upon a 
request of a record of information pertaining to such individual, 
including special procedures for the disclosure to an individual of 
medical records, including psychological records. (5 U.S.C. 552a 
(f)(3)).
    (d) The procedures for reviewing a request from an individual 
concerning the amendment of any record or information pertaining to the 
individual, for making a determination on the request, for an appeal 
within the Internal Revenue Service of an initial adverse agency 
determination, and for whatever additional means may be necessary for 
individuals to be able to exercise fully their right under 5 U.S.C. 552a 
(5 U.S.C. 552a (f)(4)).
    Any individual seeking to determine whether a system of records 
maintained by any office of the Internal Revenue Service contains a 
record or information pertaining to such individual, or seeking access 
to, or amendment of, such a record, must comply fully with the 
applicable procedure contained in paragraph (3) or (4) of this section 
before the Internal Revenue Service will act on the request. Neither the 
notification and access (or accounting of disclosures) procedures under 
paragraph (3) of this section nor the amendment procedures under 
paragraph (4) of this section are applicable to (i) systems of records 
exempted pursuant to 5 U.S.C. 552a (j) and (k), (ii) information 
compiled in reasonable anticipation of a civil action or proceeding (see 
5 U.S.C. 552a (d)(5)), or (iii) information pertaining to an individual 
which is contained in, and inseparable from, another individual's 
record.
    2. Access to and amendment of tax records. The provisions of the 
Privacy Act of 1974 may not be used by an individual to amend or correct 
any tax record. The determination of liability for taxes imposed by the 
Internal Revenue Service Code, the collection of such taxes, and the 
payment (including credits or refunds of overpayments) of such taxes are 
governed by the provisions of the Internal Revenue Service Code and by 
the procedural rules of the Internal Revenue Service. These provisions 
set forth the established procedures governing the determination of 
liability for tax, the collection of such taxes, and the payment 
(including credits or refunds of overpayments) of such taxes. In 
addition, these provisions set forth the procedures (including 
procedures for judicial review) for resolving disputes between taxpayers 
and the Internal Revenue Service involving the amount of tax owed, or 
the payment or collection of such tax. These procedures are the 
exclusive means available to an individual to contest the amount of any 
liability for tax or the payment or collection thereof. See, for 
example, 26 CFR 601.103 for summary of general tax procedures. 
Individuals are advised

[[Page 103]]

that Internal Revenue Service procedures permit the examination of tax 
records during the course of an investigation, audit, or collection 
activity. Accordingly, individuals should contact the Internal Revenue 
Service employee conducting an audit or effecting the collection of tax 
liabilities to gain access to such records, rather than seeking access 
under the provisions of the Privacy Act. Where, on the other hand, an 
individual desires information or records not in connection with an 
investigation, audit, or collection activity, the individual may follow 
these procedures.
    3. Procedures for access to records--(a) In general. This paragraph 
sets forth the procedure whereby an individual can be notified in 
response to a request if a system of records named by the individual 
which is maintained by the Internal Revenue Service contains a record 
pertaining to such individual. In addition, this paragraph sets forth 
the procedure for the disclosure to an individual upon a request of a 
record or information pertaining to such individual, including the 
procedures for verifying the identity of the individual before the 
Internal Revenue Service will make a record available, and the procedure 
for requesting an accounting of disclosures of such records. An 
individual seeking to determine whether a particular system of records 
contains a record or records pertaining to such individual and seeking 
access to such records (or seeking an accounting of disclosures of such 
records) shall make a request for notification and access (or a request 
for an accounting of disclosures) in accordance with the rules provided 
in paragraph 3(b) of this section.
    (b) Form of request for notification and access or request for an 
accounting of disclosures. (i) A request for notification and access (or 
request for an accounting of disclosures) shall be made in writing and 
shall be signed by the person making the request.
    (ii) Such request shall be clearly marked, ``Request for 
notification and access,'' or ``Request for accounting of disclosures.''
    (iii) Such a request shall contain a statement that it is being made 
under the provisions of the Privacy Act of 1974.
    (iv) Such request shall contain the name and address of the 
individual making the request. In addition, if a particular system 
employs an individual's social security number as an essential means of 
accessing the system, the request must include the individual's social 
security number. In the case of a record maintained in the name of two 
or more individuals (e.g., husband and wife), the request shall contain 
the names, addresses, and social security numbers (if necessary) of both 
individuals.
    (v) Such request shall specify the name and location of the 
particular system of records (as set forth in the Notice of Systems) for 
which the individual is seeking notification and access (or an 
accounting of disclosures), and the title and business address of the 
official designated in the access section for the particular system (as 
set forth in the Notice of Systems). In the case of two or more systems 
of records which are under the control of the same designated official 
at the same systems location, a single request may be made for such 
systems. In the case of two or more systems of records which are not in 
the control of the same designated official at the same systems 
location, a separate request must be made for each such system.
    (vi) If an individual wishes to limit a request for notification and 
access to a particular record or records, the request should identify 
the particular record. In the absence of a statement to the contrary, a 
request for notification and access for a particular system of records 
shall be considered to be limited to records which are currently 
maintained by the designated official at the systems location specified 
in the request.
    (vii) If such request is seeking notification and access to material 
maintained in a system of records which is exempt from disclosure and 
access under 5 U.S.C. 552a (k)(2), the individual making the request 
must establish that such individual has been denied a right, privilege, 
or benefit that such individual would otherwise be entitled to under 
Federal law as a result of the maintenance of such material.
    (viii) Such request shall state whether the individual wishes to 
inspect the record in person, or desires to have a copy made and 
furnished without first inspecting it. If the individual desires to have 
a copy made, the request must include an agreement to pay the fee for 
duplication ultimately determined to be due. If the individual does not 
wish to inspect a record, but merely wishes to be notified whether a 
particular system or records contains a record pertaining to such 
individual, the request should so state.
    (c) Time and place for making a request. A request for notification 
and access to records under the Privacy Act (or a request for accounting 
of disclosures) shall be addressed to or delivered in person to the 
office of the official designated in the access section for the 
particular system of records for which the individual is seeking 
notification and access (or an accounting of disclosures). The title and 
office address of such official is set forth for each system of records 
in the Notice of Systems of Records. A request delivered to an office in 
person must be delivered during the regular office hours of that office.
    (d) Sample request for notification and access to records. The 
following are sample requests for notification and access to records 
which will satisfy the requirements of this paragraph:

[[Page 104]]

         Request for Notification and Access to Records by Mail

    I, John Doe, of 100 Main Street, Boston, MA 02108 (soc. sec. num. 
000-00-0000) request under the Privacy Act of 1974 that the following 
system of records be examined and that I be furnished with a copy of any 
record (or a specified record) contained therein pertaining to me. I 
agree that I will pay the fees ultimately determined to be due for 
duplication of such record. I have enclosed the necessary information.

System Name:
System Location:
Designated Official:

_______________________________________________________________________
                                                             John Doe   

        Request for Notification and Access to Records in Person

    I, John Doe, of 100 Main Street, Boston, MA 02108 (soc. sec. num. 
000-00-0000) request under the provisions of the Privacy Act of 1974, 
that the following system of records be examined and that I be granted 
access in person to inspect any record (or a specified record) contained 
therein pertaining to me. I have enclosed the necessary identification.

System Name:
System Location:
Designated Official:

_______________________________________________________________________
                                                            John Doe    

    (e) Processing a request for notification and access to records or a 
request for an accounting of disclosures. (i) If a request for 
notification and access (or request for an accounting of disclosures) 
omits any information which is essential to processing the request, the 
request will not be acted upon and the individual making the request 
will be promptly advised of the additional information which must be 
submitted before the request can be processed.
    (ii) Within 30 days (not including Saturdays, Sundays, and legal 
public holidays) after the receipt of a request for notification and 
access (or a request for an accounting of disclosures), to a particular 
system of records by the designated official for such system, a 
determination will be made as to whether the particular system of 
records is exempt from the notification and access provisions of the 
Privacy Act, and if such system is not exempt, whether it does or does 
not contain a record pertaining to the individual making the request. If 
a determination cannot be made within 30 days, the individual will be 
notified of the delay, the reasons therefor, and the approximate time 
required to make a determination. If it is determined by the designated 
official that the particular system of records is exempt from the 
notification and access provisions of the Privacy Act, the individual 
making the request will be notified of the provisions of the Privacy Act 
under which the exemption is claimed. On the other hand, if it is 
determined by the designated official that the particular system of 
records is not exempted from the notification and access provisions of 
the Privacy Act and that such system contains a record pertaining to the 
individual making the request, the individual will be notified of the 
time and place where inspection may be made. If an individual has not 
requested that access be granted to inspect the record in person, but 
merely requests that a copy of the record be furnished, or if it is 
determined by the designated official that the granting of access to 
inspect a record in person is not feasible in a particular case, then 
the designated official will furnish a copy of the record with the 
notification, or if a copy cannot be furnished at such time, a statement 
indicating the approximate time such copy will be furnished. If the 
request is for an accounting of disclosures from a system of records 
which is not exempt from the accounting of disclosure provisions of the 
Privacy Act, the individual will be furnished with an accounting of such 
disclosures.
    (f) Granting of access. Normally, an individual will be granted 
access to inspect a record in person within 30 days (excluding 
Saturdays, Sundays, and legal public holidays) after the receipt for a 
request for notification and access by the designated official. If 
access cannot be granted within 30 days, the notification will state the 
reasons for the delay and the approximate time such access will be 
granted. An individual wishing to inspect a record may be accompanied by 
another person of his choosing. Both the individual seeking access and 
the individual accompanying him may be required to sign a form supplied 
by the IRS indicating that the Service is authorized to disclose or 
discuss the contents of the record in the presence of both individuals. 
See 26 CFR 601.502 for requirements to be met by taxpayer's 
representatives in order to discuss the contents of any tax records.
    (g) Medical records. When access is requested to medical records 
(including psychological records), the designated official may determine 
that release of such records will be made only to a physician designated 
by the individual to have access to such records.
    (h) Verification of identity. An individual seeking notification or 
access to records, or seeking to amend a record, must satisfy one of the 
following identification requirements before action will be taken by the 
IRS on any such request:
    (i) An individual seeking notification or access to records in 
person, or seeking to amend a record in person, may establish

[[Page 105]]

identity by the presentation of a single document bearing a photograph 
(such as a passport or identification badge) or by the presentation of 
two items of identification which do not bear a photograph but do bear 
both a name and signature (such as a driver's license or credit card).
    (ii) An individual seeking notification or access to records by 
mail, or seeking to amend a record by mail, may establish identity by a 
signature, address, and one other identifier such as a photocopy of a 
driver's license or other document bearing the individual's signature.
    (iii) Notwithstanding subdivisions (i) and (ii) of this 
subparagraph, an individual seeking notification or access to records by 
mail or in person, or seeking to amend a record by mail or in person, 
who so desires, may establish identity by providing a notarized 
statement, swearing or affirming to such individual's identity and to 
the fact that the individual understands the penalties provided in 5 
U.S.C. 552a(i)(3) for requesting or obtaining access to records under 
false pretenses.
    (iv) Notwithstanding subdivisions (i), (ii), or (iii) of this 
subparagraph, a designated official may require additional proof of an 
individual's identity before action will be taken on any request if such 
official determines that it is necessary to protect unauthorized 
disclosure of information in a particular case. In addition, a parent of 
any minor or a legal guardian of any individual will be required to 
provide adequate proof of legal relationship before such person may act 
on behalf of such minor or such individual.
    (i) Fees. The fee for costs required of the IRS in copying records 
pursuant to this paragraph is $0.15 per page. However, no fee will be 
charged if the aggregate costs required of the IRS in copying records is 
less than $3.00. If an individual who has requested access to inspect a 
record in person is denied such access by the designated official 
because it would not be feasible in a particular case, copies of such 
record will be furnished to the individual without payment of the fees 
otherwise required under this subparagraph. If the IRS estimates that 
the total fees for costs incurred in complying with a request for copies 
of records will amount to $50 or more, the individual making the request 
may be required to enter into a contract for the payment of the actual 
fees with respect to the request before the Service will furnish the 
copies requested. Payment of fees for copies of records should be made 
by check or money order payable to the Internal Revenue Service.
    4. Procedures for amendment of records. (a) In general. This 
paragraph sets forth the procedures for reviewing a request from an 
individual concerning the amendment of any record or information 
pertaining to such individual, for making a determination on the 
request, for making an appeal within the IRS of an initial adverse 
determination, and for judicial review of a final determination.
    (b) Amendment of record. Under 5 U.S.C. 552a(d)(2), an individual 
who has been granted access to a record pertaining to such individual 
may, after inspecting the record, request that the record be amended to 
make any correction of any portion thereof which the individual believes 
is not accurate, relevant, timely, or complete. An individual may seek 
to amend a record in accordance with the rules provided in paragraph 
(d)(3) of this section. See paragraph (b) of this section for 
prohibition against amendment of tax records.
    (c) Form of request for amendment of record. (i) A request for 
amendment of a record shall be in writing and shall be signed by the 
individual making the request.
    (ii) Such request shall be clearly marked ``Request for amendment of 
record.''
    (iii) Such request shall contain a statement that it is being made 
under the provisions of the Privacy Act of 1974.
    (iv) Such request shall contain the name and address of the 
individual making the request. In addition, if a particular system 
employs an individual's social security number as an essential means of 
accessing the system, the request must include the individual's social 
security number. In the case of a record maintained in the name of two 
or more individuals (e.g., husband and wife), the request shall contain 
the names, addresses, and social security numbers (if necessary) of both 
individuals.
    (v) Such request shall specify the name and location of the system 
of records (as set forth in the Notice of Systems) in which such record 
is maintained, and the title and business address of the official 
designated in the access section for such system (as set forth in the 
Notice of Systems).
    (vi) Such request shall specify the particular record in the system 
which the individual is seeking to amend.
    (vii) Such request shall clearly state the specific changes which 
the individual wishes to make in the record and a concise explanation of 
the reasons for the changes. If the individual wishes to correct or add 
any information, the request shall contain specific language making the 
desired correction or addition.
    (d) Time and place for making request. A request to amend a record 
under the Privacy Act shall be addressed to or delivered in person to 
the office of the official designated in the access section for the 
particular system of records. The title and office address of such 
official is set forth for each system of records in the Notice of 
Systems of Records. A request delivered to an office in person must be 
delivered during the regular office hours of that office.

[[Page 106]]

    (e) Processing a request for amendment of a record. (i) Within 10 
days (not including Saturdays, Sundays, and legal public holidays) after 
the receipt of a request to amend a record by the designated official, 
the individual will be sent a written acknowledgement that will state 
that the request has been received, that action is being taken thereon, 
and that the individual will be notified within 30 days (not including 
Saturdays, Sundays, and legal public holidays) after the receipt of the 
request whether the requested amendments will or will not be made. If a 
request for amendment of a record omits any information which is 
essential to processing the request, the request will not be acted upon 
and the individual making the request will be promptly advised on the 
additional information which must be submitted before the request can be 
processed.
    (ii) Within 30 days (not including Saturdays, Sundays, and legal 
public holidays) after the receipt of a request to amend a record by the 
designated official, a determination will be made as to whether to grant 
the request in whole or part. The individual will then be notified in 
writing of the determination. If a determination cannot be made within 
30 days, the individual will be notified in writing within such time of 
the reasons for the delay and the approximate time required to make a 
determination. If it is determined by the designated official that the 
request will be granted, the requested changes will be made in the 
record and the individual will be notified of the changes. In addition, 
to the extent an accounting was maintained, all prior recipients of such 
record will be notified of the changes. Upon request, an individual will 
be furnished with a copy of the record, as amended, subject to the 
payment of the appropriate fees. On the other hand, if it is determined 
by the designated official that the request, or any portion thereof, 
will not be granted, the individual will be notified in writing of the 
adverse determination. The notification of an adverse determination will 
set forth the reasons for refusal to amend the record. In addition, the 
notification will contain a statement informing the individual of such 
individual's right to request an independent review of the adverse 
determination by a reviewing officer in the national office of the IRS 
and the procedures for requesting such a review.
    (f) Administrative review of adverse determination. Under 5 U.S.C. 
552a (d)(3), an individual who disagrees with the refusal of the agency 
to amend a record may, within 35 days of being notified of the adverse 
determination, request an independent review of such refusal by a 
reviewing officer in the national office of the IRS. The reviewing 
officer for the IRS is the Commission of Internal Revenue, the Deputy 
Commissioner, or an Assistant Commissioner. In the case of an adverse 
determination relating to a system of records maintained by the Office 
of General Counsel for the IRS, the reviewing officer is the Chief 
Counsel or his delegate. An individual seeking a review of an adverse 
determination shall make a request for review in accordance with the 
rules provided in paragraph (d)(7) of this section.
    (g) Form of request for review. (i) A request for review of an 
adverse determination shall be in writing and shall be signed by the 
individual making the request.
    (ii) Such request shall be clearly marked ``Request for review of 
adverse determination''.
    (iii) Such request shall contain a statement that it is being made 
under the provisions of the Privacy Act of 1974.
    (iv) Such request shall contain the name and address of the 
individual making the request. In addition, if a particular system 
employs an individual's social security number as an essential means of 
accessing the system, the request must include the individual's social 
security number. In the case of a record maintained in the name of two 
or more individuals (e.g. husband and wife), the request shall contain 
the names, addresses, and social security numbers (if necessary) of both 
individuals.
    (v) Such request shall specify the particular record which the 
individual is seeking to amend, the name and location of the system of 
records (as set forth in the Notice of Systems) in which such record is 
maintained, and the title and business address of the designated 
official for such system (as set forth in the Notice of Systems).
    (vi) Such request shall include the date of the initial request for 
amendment of the record, and the date of the letter notifying the 
individual of the initial adverse determination with respect to such 
request.
    (vii) such request shall clearly state the specific changes which 
the individual wishes to make in the record and a concise explanation of 
the reasons for the changes. If the individual wishes to correct or add 
any information, the request shall contain specific language making the 
desired correction or addition.
    (h) Time and place for making the request. A request for review of 
an adverse determination under the Privacy Act shall be addressed to or 
delivered in person to the Director, Office of Disclosure, Attention: 
OP:EX:D Internal Revenue Service, 1111 Constitution Avenue, NW, 
Washington, DC 20224. A request for review of an adverse determination 
will be promptly referred by the Director, Office of Disclosure to the 
appropriate reviewing officer for his review and final determination.
    (i) Processing a request for review of adverse determination. Within 
30 days (not including Saturdays, Sundays, and legal public holidays) 
after the receipt of a request for review

[[Page 107]]

of an adverse determination by the appropriate reviewing officer, the 
reviewing officer will review the initial adverse determination, make a 
final determination whether to grant the request to amend the record in 
whole or in part, and notify the individual in writing of the final 
determination. If a final determination cannot be made within 30 days, 
the Commissioner of Internal Revenue may extend such 30-day period. The 
individual will be notified in writing within the 30 day period of the 
cause for the delay and the approximate time required to make a final 
determination. If it is determined by the reviewing officer that the 
request to amend the record will be granted, the reviewing officer will 
cause the requested changes to be made and the individual will be so 
notified. Upon request, an individual will be furnished with a copy of 
the record as amended subject to the payment of appropriate fees. On the 
other hand, if it is determined by the reviewing officer that the 
request to amend the record, or any portion thereof, will not be 
granted, the individual will be notified in writing of the final adverse 
determination. The notification of a final adverse determination will 
set forth the reasons for the refusal of the reviewing officer to amend 
the record. The notification shall include a statement informing the 
individual of the right to submit a concise statement for insertion in 
the record setting forth the reasons for the disagreement with the 
refusal of the reviewing officer to amend the record. In addition, the 
notification will contain a statement informing the individual of the 
right to seek judicial review by a United States district court of a 
final adverse determination.
    (j) Statement of disagreement. Under 5 U.S.C. 552a (d)(3), an 
individual who disagrees with a final adverse determination not to amend 
a record subject to amendment under the Privacy Act may submit a concise 
statement for insertion in the record setting forth the reasons for 
disagreement with the refusal of the reviewing officer to amend the 
record. A statement of disagreement should be addressed to or delivered 
in person to the Director, Office of Disclosure, Attention: OP:EX:D, 
Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC 
20224. The Director, Office of Disclosure will foward the statement of 
disagreement to the appropriate designated official who will cause the 
statement to be inserted in the individual's record. Any such statement 
will be available to anyone to whom the record is subsequently disclosed 
and the prior recipients of the record will be provided with a copy of 
the statement of disagreement, to the extent an accounting of 
disclosures was maintained.
    (k) Judicial review. If, after a review and final determination on a 
request to amend a record by the appropriate reviewing officer, the 
individual is notified that the request will not be granted, or if, 
after the expiration of 30 days (not including Sundays, Saturdays, and 
legal public holidays) from the receipt of such request by the Director, 
Disclosure Operations Division, action is not taken thereon in 
accordance with the requirements of paragraph (d)(9) of this section, an 
individual may commence an action within the time prescribed by law in a 
U.S. District Court pursuant to 5 U.S.C. 552a (g)(1). The statute 
authorizes an action only against the agency. With respect to records 
maintained by the IRS, the agency is the Internal Revenue Service, not 
an officer or employee thereof. Service of process in such an action 
shall be in accordance with the Federal Rules of Civil Procedure (28 
U.S.C. App.) applicable to actions against an agency of the United 
States. Where provided in such Rules, delivery of process upon the IRS 
must be directed to the Commissioner of Internal Revenue, Attention: 
CC:GLS, 1111 Constitution Avenue, NW, Washington, DC 20224. The district 
court will determine the matter de novo.
    5. Records transferred to Federal Records Centers. Records 
transferred to the Administrator of General Services for storage in a 
Federal Records Center are not used by the Internal Revenue Service in 
making any determination about any individual while stored at such 
location and therefore are not subject to the provisions of 5 U.S.C. 
552a (e)(5) during such time.

                Appendix C--United States Customs Service

    1. In general. This appendix applies to the United States Customs 
Service. It sets forth specific notification and access procedures with 
respect to particular systems of records, identifies the officer 
designated to make the initial determinations with respect to 
notification and access to records and accountings of disclosures of 
records. This appendix also sets forth the specific procedures for 
requesting amendment of records and identifies the officers designated 
to make the initial and appellate determinations with respect to 
requests for amendment of records. It identifies the officers designated 
to grant extensions of time on appeal, the officers with whom 
``Statements of Disagreement may be filed, the officer designated to 
receive service of process and the addresses for delivery of requests, 
appeals, and service of process. In addition, it references the notice 
of systems of records and notices of the routine uses of the information 
in the system required by 5 U.S.C. 552a(e) (4) and (11) and published 
annually by the Office of the Federal Register in ``Privacy Act 
Issuances''.
    2. Requests for notification and access to records and accounting of 
disclosures. (a) For records which are maintained at the United

[[Page 108]]

States Customs Service Headquarters, initial requests for notification 
and access to records and accountings of disclosures under 31 CFR 1.26, 
should be mailed or personally delivered to the Director, Office of 
Regulations & Rulings, U.S. Customs Service, 1301 Constitution Avenue 
NW., Washington, DC 20229. The official who has authority over the 
maintenance of the file will have the authority to grant or deny the 
request.
    (b) For records maintained at Regional Offices, initial requests for 
notification and access to records and accountings of disclosures under 
31 CFR 1.26, should be mailed or personally delivered to the Regional 
Commissioner of Customs in whose region the records are located. This 
official shall have the authority to grant the request or deny the 
request. The appropriate location of the regional offices is specified 
in Customs Appendix A in ``Privacy Act Issuances'' published annually by 
the Office of the Federal Register.
    (c) Each request shall comply with the identification and other 
requirements set forth in 31 CFR 1.26, and in the appropriate system 
notice in the ``Privacy Act Issuances'' published annually by the Office 
of the Federal Register. Each request should be conspicuously labeled on 
the face of the envelope ``Privacy Act Request''.
    3. Request for amendment of records. (a) For records which are 
maintained at Customs Service Headquarters, initial requests for 
amendment of records under 31 CFR 1.27 (a) through (d) should be mailed 
or personally delivered to the Director, Office of Regulations & 
Rulings, U.S. Customs Service, 1301 Constitution Avenue NW., Washington, 
DC 20229. The official who has authority over the maintenance of the 
file will have the authority to grant or deny the request.
    (b) For records not maintained at Customs Service Headquarters, 
initial requests for amendment of records under 31 CFR 1.27 (a) through 
(d) should be mailed or personally delivered to the Regional 
Commissioner of Customs in whose region the records are located. This 
official shall have the authority to grant or deny the request. A 
request directed to a Regional Commissioner should be mailed to or 
personally delivered at the appropriate location specified in Customs 
Appendix A in ``Privacy Act Issuances'' published annually by the Office 
of the Federal Register.
    (c) Each request shall comply with the identification and other 
requirements set forth in 31 CFR 1.27, and in the appropriate system 
notice in ``Privacy Act Issuance published by the Office of the Federal 
Register. Each request should be conspicuously labeled on the face of 
the envelope ``Privacy Act Amendment Request''.
    4. Administrative appeal of initial determination refusing to amend 
records. Appellate determinations (including extensions of time on 
appeal under 31 CFR 1.27 (e) with respect to all Customs Service records 
will be made by the Director, Office of Regulations & Rulings or the 
delegate of such official. All such appeals should be mailed or 
personally delivered to the United States Customs Service, Office of 
Regulations & Rulings, 1301 Constitution Avenue NW., Washington, DC 
20229. Each appeal should be conspicuously labeled on the face of the 
envelope ``Privacy Act Amendment Appeal''.
    5. Statements of disagreement. ``Statements of Disagreement'' 
pursuant to 31 CFR 1.27 (e)(4)(i) shall be filed with the official 
signing the notification of refusal to amend at the address indicated in 
the letter of notification within 35 days of the date of such 
notification and should be limited to one page.
    6. Service of process. Service of process will be received by the 
Chief Counsel, United States Customs Service, 1301 Constitution Avenue 
NW., Washington, DC 20229.
    7. Annual notice of systems of records. The annual notice of the 
United States Customs Service systems of records required to be 
published by the Office of the Federal Register, as specified in 5 
U.S.C. 552a(f), is included in the publication entitled ``Privacy Act 
Issuances''.
    8. Verification of identity. Each request shall comply with the 
identification and other requirements set forth in 31 CFR 1.26 and in 
the appropriate system notice published by the Office of the Federal 
Register. Each request should be conspicuously labeled on the face of 
the envelope ``Privacy Act Request''.

                Appendix D--United States Secret Service

    1. In general. This appendix applies to the United States Secret 
Service. It sets forth specific notification and access procedures with 
respect to particular systems of records including identification 
requirements, and time and places where records may be reviewed; 
identifies the officers designated to make the initial determinations 
with respect to notification and access to records and accountings of 
disclosures of records. This appendix also sets forth the specific 
procedures for requesting amendment of records and identifies the 
officers designated to make the initial and appellate determinations 
with respect to requests for amendment of records. It identifies the 
officers designated to grant extensions of time on appeal, the officers 
with whom ``Statements of Disagreement may be filed, the officer 
designated to receive service of process and the addresses for delivery 
of requests, appeals, and service of process. In addition, it references 
the notice of systems of records and notices of the routine uses of the 
information in the system required by 5 U.S.C. 552a(e) (4) and (11) and 
published annually by the Office of the Federal Register in ``Privacy 
Act Issuances''.

[[Page 109]]

    2. Requests for notification and access to records and accountings 
of disclosures. Initial determinations under 31 CFR 1.26, whether to 
grant requests for notification and access to records and accountings of 
disclosures for the United States Secret Service, will be made by the 
Freedom of Information and Privacy Act Officer, United States Secret 
Service. Requests for notification should be made by mail or delivered 
personally between the hours of 9:00 a.m. and 5:30 of any day excluding 
Saturdays, Sundays, and legal holidays to: Privacy Act Request, Freedom 
of Information and Privacy Act Officer, United States Secret Service, 
Room 720, 1800 G Street NW., Washington, DC 20223.
    a. Identification requirements. In addition to the requirements 
specified in 31 CFR 1.26, each request for notification, access or 
amendment of records made by mail shall contain the requesting 
individual's date and place of birth and a duly notarized statement 
signed by the requester asserting his or her identity and stipulating 
that the requesting individual understands that knowingly or willfully 
seeking or obtaining access to records about another person under false 
pretences is punishable by a fine of up to $5,000.
    b. Individuals making requests in person. Individuals making 
requests in person will be required to exhibit acceptable identifying 
documents such as employee identification numbers, drivers licenses, 
medical cards or other documents sufficient to verify the identity of 
the requester.
    c. Physical inspection of records. Upon determining that a request 
for the physical inspection of records is to be granted, the requester 
shall be notified in writing of the determination, and when and where 
the requested records may be inspected. The inspection of records will 
be conducted at the Secret Service field office or other facility 
located nearest to the residence of the individual making the request. 
Such inspection shall be conducted during the regular business hours of 
the Secret Service Field Office or other facility where the disclosure 
is made. A person of his or her own choosing may accompany the 
individual making the request provided the individual furnishes a 
written statement authorizing the disclosure of that individual's record 
in the accompanying person's presence. Any disclosure of a record will 
be made in the presence of a representative of the United States Secret 
Service.
    3. Requests for amendment of records. Initial determination under 31 
CFR part 1, whether to grant requests to amend records will be made by 
the Freedom of Information and Privacy Act Officer. Requests should be 
mailed or delivered personally between the hours of 9:00 a.m. and 5:30 
p.m. to: Privacy Act Amendment Request, Freedom of Information and 
Privacy Acts Officer, United States Secret Service, Room 720, 1800 G 
Street NW., Washington, DC 20223.
    4. Administrative appeal of initial determinations refusing 
amendment of records. Appellate determinations refusing amendment of 
records under 31 CFR 1.27 including extensions of time on appeal, with 
respect to records of the United States Secret Service will be made by 
the Assistant Secretary of the Treasury for Enforcement. Appeals made by 
mail should be addressed to, or delivered personally to: Privacy Act 
Amendment Appeal, Assistant Secretary of the Treasury for Enforcement, 
Department of the Treasury, 1500 Pennsylvania Avenue NW., Washington, DC 
20220.
    5. Statements of disagreement. ``Statements of Disagreements'' under 
31 CFR 1.27 (e)(4)(i) shall be filed with the official signing of the 
notification of refusal to amend at the address indicated in the letter 
of notification within 35 days of the date of such notification and 
should be limited to one page.
    6. Service of process. Service of process will be received by the 
United States Secret Service General Counsel and shall be delivered to 
the following location: General Counsel, United States Secret Service, 
Room 843, 1800 G Street NW., Washington, DC 20223.
    7. Annual notice of systems of records. The annual notice of systems 
of records is published by the Office of the Federal Register, as 
specified in 5 U.S.C. 552a(f). The publication is entitled ``Privacy Act 
Issuances''. Any specific requirements for access, including 
identification requirements, in addition to the requirements set forth 
in 31 CFR 1.26 and 1.27 are indicated in the notice for the pertinent 
system.

           Appendix E--Bureau of Alcohol, Tobacco and Firearms

    1. In general. This appendix applies to the Bureau of Alcohol, 
Tobacco and Firearms. It sets forth specific notification and access 
procedures with respect to particular systems of records, identifies the 
officers designated to make the initial determinations with respect to 
notification and access to records and accountings of disclosures of 
records. This appendix also sets forth the specific procedures for 
requesting amendment of records and identifies the officers designated 
to make the initial and appellate determinations with respect to 
requests for amendment of records. It identifies the officers designated 
to grant extensions of time on appeal, the officers with whom 
``Statements of Disagreement'' may be filed, the officer designated to 
receive service of process and the addresses for delivery of requests, 
appeals, and service of process. In addition, it references the notice 
of systems of records and notices of the routine uses of the information 
in the system required by 5 U.S.C. 552a (3) (4) and (11) and published 
annually by

[[Page 110]]

the Office of the Federal Register in ``Privacy Act Issuances''.
    2. Requests for notification and access to records and accountings 
of disclosures. Initial determination under 31 CFR 1.26, whether to 
grant requests for notification and access to records and accountings of 
disclosures for the Bureau of Alcohol, Tobacco, and Firearms, will be 
made by the Chief, Disclosure Branch, Office of the Assistant to the 
Director or the delegate of such officer. Requests may be mailed or 
delivered in person to: Privacy Act Request, Chief, Disclosure Branch, 
Room 4406, Bureau of Alcohol, Tobacco and Firearms, 1200 Pennsylvania 
Avenue, NW., Washington, DC 20226.
    3. Requests for amendment of record. Initial determinations under 31 
CFR 1.27 (a) through (d) with respect to requests to amend records 
maintained by the Bureau of Alcohol, Tobacco and Firearms will be made 
by the Chief, Disclosure Branch, Office of the Assistant to the 
Director. Requests for amendment of records may be mailed or delivered 
in person to: Privacy Act Request, Chief, Disclosure Branch, Room 4406, 
Bureau of Alcohol, Tobacco and Firearms, 1200 Pennsylvania Avenue, NW., 
Washington, DC 20226.
    4. Verification of identity. (a) In addition to the requirements 
specified in 31 CFR 1.26(d) of this appendix, each request for 
notification, access or amendment of records made by mail shall contain 
the requesting individual's date and place of birth and a statement 
signed by the requester asserting his or her identity and stipulating 
that the requester understands that knowingly or willfully seeking or 
obtaining access to records about another person under false pretenses 
is a misdemeanor and punishable by a fine of up to $5,000 provided, that 
the Bureau of Alcohol, Tobacco and Firearms may require a signed 
notarized statement verifying the identity of the requester.
    (b) Individuals making requests in person will be required to 
exhibit at least two acceptable identifying documents such as employee 
identification cards, driver's license, medical cards, or other 
documents sufficient to verify the identity of the requester.
    (c) The parent or guardian of a minor or a person judicially 
determined to be incompetent, shall in addition to establishing the 
identity of the minor or other person he represents as required in (a) 
and (b), establish his own parentage or guardianship by furnishing a 
copy of a birth certificate showing parentage (or other satisfactory 
documentation) or a court order establishing the guardianship.
    5. Request for physical inspection of records. Upon determining that 
a request for the physical inspection of records is to be granted, the 
requester shall be notified in writing of the determination, and when 
and where the records may be inspected. The inspection of records will 
be made at the Bureau of Alcohol, Tobacco and Firearms Field Office or 
other facility located nearest to the residence of the individual making 
the request. Such inspection shall be conducted during the regular 
business hours of the field office or other facility where the 
disclosure is made. A person of the requester's own choosing may 
accompany the requester provided the requester furnishes a written 
statement authorizing the disclosure of the requester's record in the 
accompanying person's presence. The record inspection will be made in 
the presence of a representative of the Bureau. Following the inspection 
of the record, the individual will acknowledge in writing the fact that 
he or she had an opportunity to inspect the requested record.
    6. Requests for copies of records without prior physical inspection. 
Upon determining that an individual's request for copies of his or her 
records without prior physical inspection is to be granted, the 
requester shall be notified in writing of the determination, and the 
location and time for his or her receipt of the requested copies. The 
copies will be made available at the Bureau of Alcohol, Tobacco and 
Firearms field office or other facility located nearest to the residence 
of the individual making the request. Copies shall be received by the 
requester during the regular business hours of the field office or other 
facility where the disclosure is made. Transfer of the copies to the 
individual shall be conditioned upon payment of copying costs and his 
presentation of at least two acceptable identifying documents such as 
employee identification cards, driver's license, medical cards, or other 
documents sufficient to verify the identity of the requester. Following 
the receipt of the copies, the individual will acknowledge receipt in 
writing.
    7. Administrative appeal of initial determination refusing to amend 
record. Appellate determinations under 31 CFR 1.27(e) with respect to 
records of the Bureau of Alcohol, Tobacco and Firearms, including 
extensions of time on appeal, will be made by the Director or the 
delegate of such officer. Appeals should be addressed to, or delivered 
in person to: Privacy Act Amendment Appeal, Director, Bureau of Alcohol, 
Tobacco and Firearms, Room 4406, 1200 Pennsylvania Avenue, NW., 
Washington, DC 20226.
    8. Statements of disagreement. ``Statements of Disagreement'' as 
described in 31 CFR 1.27(e) (4) shall be filed with the official signing 
the notification within 35 days of the date of such notification and 
should be limited to one page.
    9. Service of process. Service of process will be received by the 
Director of the Bureau of Alcohol, Tobacco and Firearms or the delegate 
of such official and shall be delivered to the following location: 
Director, Bureau of Alcohol, Tobacco and Firearms, 1200 Pennsylvania 
Avenue, NW., Washington, DC 20226, Attention: Chief Counsel.

[[Page 111]]

    10. Annual notice of systems of records. The annual notice of 
systems of records is published by the Office of the Federal Register, 
as specified in 5 U.S.C. 552a(f). The publication is entitled ``Privacy 
Act Issuances''. Any specific requirements for access, including 
identification requirements, in addition to the requirements set forth 
in 31 CFR 1.26 and 1.27 are indicated in the notice for each pertinent 
system.

              Appendix F--Bureau of Engraving and Printing

    1. In general. This appendix applies to the Bureau of Engraving and 
Printing. It sets forth specific notification and access procedures with 
respect to particular systems of records including identification 
requirements, identifies the officers designated to make the initial 
determinations with respect to notification and access to records and 
accountings of disclosures of records. This appendix also sets forth the 
specific procedures for requesting amendment of records and identifies 
the officers designated to make the initial and appellate determinations 
with respect to requests for amendment of records. It identifies the 
officers designated to grant extensions of time on appeal, the officers 
with whom ``Statements of Disagreement may be filed, the officer 
designated to receive service of process and the addresses for delivery 
of requests, appeals, and service of process. In addition, it references 
the notice of systems of records and notices of the routine uses of the 
information in the system required by 5 U.S.C. 552a (e) (4) and (11) and 
published annually by the Office of the Federal Register in ``Privacy 
Act Issuances.''
    2. Requests for notification and access to records and accountings 
of disclosures. Initial determinations under 31 CFR 1.26, whether to 
grant requests for notification and access to records and accountings of 
disclosures for the Bureau of Engraving and Printing, will be made by 
the head of the organizational unit having immediate custody of the 
records requested, or the delegate of such official. Requests for access 
to records contained within a particular system of records should be 
submitted to the address indicated for that system in the access section 
of the notices published by the Office of the Federal Register in 
``Privacy Act Issuances.'' Requests for information and specific 
guidance should be addressed to: Privacy Act Request, Disclosure Officer 
(Executive Assistant to the Director), Room 104--18M, Bureau of 
Engraving and Printing, Washington, DC 20228.
    3. Requests for amendment of records. Initial determination under 31 
CFR 1.27 (a) through (d), whether to grant request to amend records will 
be made by the head of the organizational unit having immediate custody 
of the records or the delegate of such official. Requests for amendment 
should be addressed as indicated in the appropriate system notice in 
``Privacy Act Issuances'' published by the Office of the Federal 
Register. Requests for information and specific guidance on where to 
send requests for amendment should be addressed to: Privacy Act 
Amendment Request, Disclosure Officer (Executive Assistant to the 
Director), Bureau of Engraving and Printing, Room 104-18M, Washington, 
DC 20228.
    4. Administrative appeal of initial determinations refusing 
amendment of records. Appellate determinations refusing amendment of 
records under 31 CFR 1.27(e) including extensions of time on appeal, 
with respect to records of the Bureau of Engraving and Printing will be 
made by the Director of the Bureau or the delegate of such officer. 
Appeals made by mail should be addressed to, or delivered personally to: 
Privacy Act Amendment Appeal, Disclosure Officer (Executive Assistant to 
the Director), Room 104-18M, Bureau of Engraving and Printing, 
Washington, DC 20228.
    5. Statements of disagreement. ``Statements of Disagreement'' under 
31 CFR 1.27(e)(4)(8) shall be filed with the official signing the 
notification of refusal to amend at the address indicated in the letter 
of notification within 35 days of the date of such notification and 
should be limited to one page.
    6. Service of process. Service of process will be received by the 
Chief Counsel of the Bureau of Engraving and Printing and shall be 
delivered to the following location: Chief Counsel, Bureau of Engraving 
and Printing, Room 109-M, 14th and C Streets, SW., Washington, DC 20228.
    7. Verification of identity. An individual seeking notification or 
access to records, or seeking to amend a record, or seeking an 
accounting of disclosures, must satisfy one of the following 
identification requirements before action will be taken by the Bureau of 
Engraving and Printing on any such request:
    (i) An individual appearing in person may establish identity by the 
presentation of a single document bearing a photograph (such as a 
passport or identification badge) or by the presentation of two items of 
identification which do not bear a photograph, but do bear both a name 
and signature (such as a credit card).
    (ii) An individual may establish identity through the mail by a 
signature, address, and one other identifier such as a photocopy of a 
driver's license or other document bearing the individual's signature.
    (iii) Notwithstanding subdivisions (i) and (ii) of this 
subparagraph, an individual who so desires, may establish identity by 
providing a notarized statement, swearing or affirming to such 
individual's identity and to the fact that the individual understands 
the penalties provided in 5 U.S.C. 552a(1)(3) for

[[Page 112]]

requesting or obtaining access to records under false pretenses.
    Notwithstanding subdivision (i), (ii), or (iii) of this 
subparagraph, the Executive Assistant or other designated official may 
require additional proof of an individual's identity before action will 
be taken on any request if such official determines that it is necessary 
to protect against unauthorized disclosure of information in a 
particular case. In addition, a parent of any minor or a legal guardian 
of any individual will be required to provide adequate proof of legal 
relationship before such person may act on behalf of such minor or such 
individual.
    8. Annual notice of systems of records. The annual notice of systems 
of records is published by the Office of the Federal Register, as 
specified in 5 U.S.C. 522a(f). The publication is entitled ``Privacy Act 
Issuances''. Any specific requirements for access, including 
identification requirements, in addition to the requirements set forth 
in 31 CFR 1.26 and 1.27 are indicated in the notice for the pertinent 
system.

                Appendix G--Financial Management Service

    1. In general. This appendix applies to the Financial Management 
Service. It sets forth specific notification and access procedures with 
respect to particular systems of records, identifies the officers 
designated to make the initial determinations with respect to 
notification and access to records and accountings of disclosures of 
records. This appendix also sets forth the specific procedures for 
requesting amendment of records and identifies the officers designated 
to make the initial and appellate determinations with respect to 
requests for amendment of records. It identifies the officers designated 
to grant extensions of time on appeal, the officers with whom 
``Statements of Disagreement'' may be filed, the officer designated to 
receive service of process and the addresses for delivery of requests, 
appeals, and service of process. In addition, it references the notice 
of systems of records and notices of the routine uses of the information 
in the system required by 5 U.S.C. 552a(e) (4) and (11) and published 
annually by the Office of the Federal Register in ``Privacy Act 
Issuances''.
    2. Requests for notification and access to records and accountings 
of disclosures. Initial determinations under 31 CFR 1.26, whether to 
grant requests for notification and access to records and accountings of 
disclosures for the Financial Management Service, will be made by the 
head of the organizational unit having immediate custody of the records 
requested or an official designated by this official. This is indicated 
in the appropriate system notice in ``Privacy Act Issuances'' published 
annually by the Office of the Federal Register. Requests for information 
and specific guidance on where to send requests for records may be 
mailed or delivered personally to: Privacy Act Request, Disclosure 
Officer, Financial Management Service, Room 108, Treasury Department 
Annex No. 1, Pennsylvania Avenue and Madison Place, NW., Washington, DC 
20226.
    3. Requests for amendment of records. Initial determination under 31 
CFR 1.27(a) through (d), whether to grant requests to amend records will 
be made by the head of the organzational unit having immediate custody 
of the records or the delegate of such official. Requests for amendment 
should be addressed as indicated in the appropriate system notice in 
``Privacy Act Issuances'' published by the Office of the Federal 
Register. Requests for information and specific guidance on where to 
send requests for amendment should be addressed to: Privacy Act 
Amendment Request, Disclosure Officer, Financial Management Service, 
Department of the Treasury, Treasury Annex No. 1, Washington, DC 20226.
    4. Administrative appeal of initial determinations refusing 
amendment of records. Appellate determinations refusing amendment of 
records under 31 CFR 1.27(e) incuding extensions of time on appeal, with 
respect to records of the Financial Management Service will be made by 
the Commissioner or the delegate of such official. Appeals made by mail 
should be addressed to, or delivered personally to: Privacy Act 
Amendment Appeal Commissioner, Financial Management Service (Privacy), 
Department of the Treasury, Room 618, Treasury Annex No. 1, Pennsylvania 
Avenue and Madison Place, NW., Washington, DC 20226.
    5. Statements of disagreement. ``Statements of Disagreement'' under 
31 CFR 1.27(e)(4)(i) shall be filed with the official signing the 
notification of refusal to amend at the address indicated in the letter 
of notification within 35 days of the date of such notification and 
should be limited to one page.
    6. Service of process. Service of process will be received by the 
Commissioner, Financial Management Service or the delegate of such 
official and shall be delivered to the following location: Commissioner, 
Financial Management Service (Privacy), Department of the Treasury, Room 
618, Treasury Annex No. 1, Pennsylvania Avenue and Madison Place, NW, 
Washington, DC 20226.
    7. Annual notice of systems of records. The annual notice of systems 
of records is published by the Office of the Federal Register, as 
specified in 5 U.S.C. 552a(f). The publication is entitled ``Privacy Act 
Issuances''. Any specific requirements for access, including 
identification requirements, in addition to the requirements set forth 
in 31 CFR 1.26 and 1.27 are indicated in the notice for the pertinent 
system.

[[Page 113]]

                     Appendix H--United States Mint

    1. In general. This appendix applies to the United States Mint. It 
sets forth specific notification and access procedures with respect to 
particluar systems of records, identifies the officers designated to 
make the initial determinations with respect to notification and access 
to records and accountings of disclosures of records. This appendix also 
sets forth the specific procedures for requesting amendment of records 
and identifies the officers designated to make the initial and appellate 
determinations with respect to requests for amendment of records. It 
identifies the officers designated to grant extensions of time on 
appeal, the officers with whom ``Statements of Disagreement'' may be 
filed, the officer designated to receive service of process and the 
addresses for delivery of requests, appeals, and service of process. In 
addition, it references the notice of systems of records and notices of 
the routine uses of the information in the system required by 5 U.S.C. 
552a(e) (4) and (11) and published annually by the Office of the Federal 
Register in ``Privacy Act Issuances''.
    2. Requests for notification and access to records and accountings 
of disclosures. Initial determinations under 31 CFR 1.26, whether to 
grant requests for notification and access to records and accountings of 
disclosures for the United States Mint will be made by the head of the 
organizational unit having immediate custody of the records requested or 
an official designated by this official. This is indicated in the 
appropriate system notice in ``Privacy Act Issuances'' published 
annually by the Office of the Federal Register. Requests should be 
directed to the Superintendent or Officer in charge of the facility in 
which the records are located or to the Chief, Administrative Programs 
Division. Requests for information and specific guidance on where to 
send requests for records may be mailed or delivered personally to: 
Privacy Act Request, Chief, Administrative Programs Division, United 
States Mint, Judiciary Square Building, 633 3rd Street, N.W, Washington, 
DC 20220.
    3. Requests for amendment of records. Initial determination under 31 
CFR 1.27 (a) through (d), whether to grant requests to amend records 
will be made by the head of the Mint installation having immediate 
custody of the records or the delegated official. Requests should be 
mailed or delivered personally to: Privacy Act Amendment Request, 
Freedom of Information and Privacy Acts Officer, United States Mint, 
Judiciary Square Building, 633 3rd Street, Washington, DC 20220.
    4. Administrative appeal of initial determinations refusing 
amendment of records. Appellate determinations refusing amendment of 
records under 31 CFR 1.27 including extensions of time on appeal, with 
respect to records of the United States Mint will be made by the 
Director of the Mint or the delegate of the Director. Appeals made by 
mail should be addressed to, or delivered personally to: Privacy Act 
Amendment Appeal, United States Mint, Judiciary Square Building, 633 3rd 
Street, NW, Washington, DC 20220.
    5. Statements of disagreement. ``Statements of Disagreement'' under 
31 CFR 1.27 (e)(4)(i) shall be filed with the official signing the 
notification of refusal to amend at the address indicated in the letter 
of notification within 35 days of the date of such notification and 
should be limited to one page.
    6. Service of process. Service of process will be received by the 
Director of the Mint and shall be delivered to the following location: 
Director of the Mint, Judiciary Square Building, 633 3rd street, NW., 
Washington, DC 20220.
    7. Annual notice of systems of records. The annual notice of systems 
of records is published by the Office of the Federal Register, as 
specified in 5 U.S.C. 552a(f). The publication is entitled ``Privacy Act 
Issuances''. Any specific requirements for access, including 
identification requirements, in addition to the requirements set forth 
in 31 CFR 1.26 and 1.27 are indicated in the notice for the pertinent 
system.

                  Appendix I--Bureau of the Public Debt

    1. In general. This appendix applies to the Bureau of the Public 
Debt. It sets forth specific notification and access procedures with 
respect to particular systems of records, identifies the officers 
designated to make the initial determinations with respect to 
notification and access to records and accountings of disclosures of 
records. This appendix also sets forth the specific procedures for 
requesting amendment of records and identifies the officers designated 
to make the initial and appellate determinations with respect to 
requests for amendment of records. It identifies the officer designated 
to grant extension of time on appeal, the officers with whom 
``Statements of Disagreement'' may be filed, the officer designated to 
receive service of process and the addresses for delivery of requests, 
appeals, and service of process. In addition, it references the notice 
of systems of records and notices of the routine uses of the information 
in the system required by 5 U.S.C. 552a(e) (4) and (11) and published 
annually by the Office of the Federal Register in ``Privacy Act 
Issuances''.
    2. Requests for notification and access to records and accountings 
of disclosures. Initial determinations under 31 CFR 1.26, whether to 
grant requests for notification and access to records and accountings of 
disclosures for the Bureau of Public Debt, will be made by the head of 
the organizational unit having

[[Page 114]]

immediate custody of the records requested or an official designated by 
this official. This is indicated in the appropriate system notice in 
``Privacy Act Issuances'' published annually by the Office of the 
Federal Register. Requests for information and specific guidance on 
where to send requests for records may be mailed or delivered personnaly 
to: Privacy Act Request, Information Officer, Bureau of the Public Debt, 
Department of the Treasury, 999 E Street NW. Room 553, Washington, DC 
20239.
    3. Requests for amendment of records. Initial determination under 31 
CFR 1.27 (a) through (d), whether to grant requests to amend records 
will be made by the head of the organizational unit having immediate 
custody of the records or the delegate of such official. Requests for 
amendment should be addressed as indicated in the appropriate system 
notice in ``Privacy Act Issuances'' published by the Office of the 
Federal Register. Requests for information and specific guidance on 
where to send requests for amendment should be addressed to: Privacy Act 
Amendment Request, Information Officer, Bureau of the Public Debt, 
Department of the Treasury, 999 E Street NW., Room 553, Washington, DC 
20239.
    4. Administrative appeal of initial determinations refusing 
amendment of records. Appellate determinations refusing amendment of 
records under 31 CFR 1.27(e) including extensions of time on appeal, 
with respect to records of the Bureau of the Public Debt will be made by 
the Commissioner of the Public Debt or the delegate of such officer. 
Appeals made by mail should be addressed to, or delivered personally to: 
Privacy Act Amendment Appeal, Chief Counsel, Bureau of the Public Debt, 
Department of the Treasury, 999 E Street NW., Room 503, Washington, DC 
20239.
    5. Statements of disagreement. ``Statements of Disagreement'' under 
31 CFR 1.27 (e)(4)(i) shall be filed with the official signing the 
notification of refusal to amend at the address indicated in the letter 
of notification within 35 days of the date of such notification and 
should be limited to one page.
    6. Service of process. Service of process will be received by the 
Chief Counsel of the Bureau of the Public Debt and shall be delivered to 
the following location: Chief Counsel, Bureau of the Public Debt, 
Department of the Treasury, 999 E Street, NW., Room 503, Washington, DC 
20239.
    7. Annual notice of systems of records. The annual notice of systems 
of records is published by the Office of the Federal Register, as 
specified in 5 U.S.C. 552a(f). The publication is entitled ``Privacy Act 
Issuances''. Any specific requirements for access, including 
identification requirements, in addition to the requirements set forth 
in 31 CFR 1.26 and 1.27 are indicated in the notice for the pertinent 
system.

          Appendix J--Office of the Comptroller of the Currency

    1. In general. This appendix applies to the Office of the 
Comptroller of the Currency. It sets forth specific notification and 
access procedures with respect to particular systems of records, 
identifies the officers designated to make the initial determinations 
with respect to notification and access to records and accountings of 
disclosures of records. This appendix also sets forth the specific 
procedures for requesting amendment of records and identifies the 
officers designated to make the intial and appellate determinations with 
respect to requests for amendment of records. It identifies the officers 
designated to grant extensions of time on appeal, the officers with whom 
``Statements of Disagreement'' may be filed, the officer designated to 
receive service of process and the addresses for delivery of requests, 
appeals, and service of process. In addition, it references the notice 
of systems of records and notices of the routine uses of the information 
in the system required by 5 U.S.C. 552a(e) (4) and (11) and published 
annually by the Office of the Federal Register in ``Privacy Act 
Issuances''.
    2. Requests for notification and access to records and accountings 
of disclosures. Initial determinations under 31 CFR 1.26 whether to 
grant requests for notification and access to records and accountings of 
disclosures for the Office of the Comptroller of the Currency will be 
made by the head of the organizational unit having immediate custody of 
the records requested or the delegate of that official. This is 
indicated in the appropriate system notice in ``Privacy Act Issuances'' 
published biennially by the Office of the Federal Register. Requests for 
information and specific guidance on where to send requests for records 
shall be mailed or delivered personally to: Disclosure Officer, 
Communications Division, Office of the Comptroller of the Currency, 250 
E Street, SW, Washington, DC 20219.
    3. Requests for amendment of records. Initial determinations under 
31 CFR 1.27 (a) through (d) whether to grant requests to amend records 
will be made by the Comptroller's delegate or the head of the 
organizational unit having immediate custody of the records or the 
delegate of that official. Requests for amendment shall be mailed or 
delivered personally to: Disclosure Officer, Communications Division, 
Office of the Comptroller of the Currency, 250 E Street, SW., 
Washington, DC 20219.
    4. Administrative appeal of initial determinations refusing 
amendment of records. Appellate determinations refusing amendment of 
records under 31 CFR 1.27(e) including extensions of time on appeal, 
with respect to records of the Office of the Comptroller of

[[Page 115]]

the Currency will be made by the Comptroller of the Currency or the 
Comptroller's delegate. Appeals shall be mailed or delivered personally 
to: Disclosure Officer, Communications Division, Office of the 
Comptroller of the Currency, 250 E Street, SW., Washington, DC 20219.
    5. Statements of disagreement. ``Statements of Disagreement'' under 
31 CFR 1.27(e)(4)(i) shall be filed with the OCC's Director of 
Communications at the address indicated in the letter of notification 
within 35 days of the date of such notification and should be limited to 
one page.
    6. Service of process. Service of process shall be delivered to the 
Chief Counsel or the Chief Counsel's delegate at the following location: 
Office of the Comptroller of the Currency, 250 E Street, SW., 
Washington, DC 20219.
    7. Annual notice of systems of records. The annual notice of systems 
of records is published by the Office of the Federal Register, as 
specified in 5 U.S.C. 552a(f). The publication is entitled ``Privacy Act 
Issuances''. Any specific requirements for access, including 
identification requirements, in addition to the requirements set forth 
in 31 CFR 1.26 and 1.27 are indicated in the notice for the pertinent 
system.

[52 FR 26305, July 14, 1987, as amended at 60 FR 57333, Nov. 15, 1995]

           Appendix L--Federal Law Enforcement Training Center

    1. In general. This appendix applies to the Federal Law Enforcement 
Training Center. It sets forth specific notification and access 
procedures with respect to particular systems of records, identifies the 
officers designated to make the initial determinations with respect to 
notification and access to records and accountings of disclosure of 
records. This appendix also sets forth the specific procedures for 
requesting amendment of records and identifies the officers designated 
to make the initial and appellate determinations with respect to 
requests for amendment of records. It identifies the officers designated 
to grant extensions of time on appeal, the officers with whom 
``Statements of Disagreement'' may be filed, the officer designated to 
receive service of process and the addresses for delivery of requests, 
appeals, and service of process. In addition, it references the notice 
of systems of records and notices of the routine uses of the information 
in the system required by 5 U.S.C. 552a(e) (4) and (11) and published 
annually by the Office of the Federal Register, in ``Privacy Act 
Issuances''.
    2. Requests for notification and access to records and accounting of 
disclosures. Initial determinations under 31 CFR 1.26, whether to grant 
requests for notification and acesss to records and accounting of 
disclosures for the Federal Law Enforcement Training Center, will be 
made by the head of the organizational unit having immediate custody of 
the records requested or an official designated by this official. This 
is indicated in the appropriate system notice in ``Privacy Act 
Issuances'' published annually by the Office of the Federal Register. 
Requests for information and specific guidance on where to send requests 
for records may be mailed or delivered personally to: Privacy Act 
Request, Library Building 262, Federal Law Enforcement Training Center, 
Glynco, Georgia 31524.
    3. Requests for amendment of records. Initial determinations under 
31 CFR 1.27 (a) through (d), whether to grant requests to amend records 
will be made by the head of the organizational unit having immediate 
custody of the records or the delegate of such official. Requests for 
amendment should be addressed as indicated in the appropriate system 
notice in ``Privacy Act Issuances'' published by the Office of the 
Federal Register. Requests for information and specific guidance on 
where to send requests for amendment should be addressed to: Privacy Act 
Amendment Request, Federal Law Enforcement Training Center, Glynco, 
Georgia 31524.
    4. Administrative appeal of initial determinations refusing 
amendment of records. Appellate determinations refusing amendment of 
records under 31 CFR 1.27(e) including extensions of time on appeal, 
with respect to records of the Federal Law Enforcement Training Center 
will be made by the Assistant Secretary (Enforcement), Department of the 
Treasury or the delegate of such officer. Appeals made by mail should be 
addressed to, or delivered personally to: Privacy Act Amendment Appeal, 
FLETC, Assistant Secretary (Enforcement), Department of the Treasury, 
1500 Pennsylvania Avenue, NW., Room 4312, Washington, DC 20220.
    5. Statements of disagreement. ``Statements of Disagreement'' under 
31 CFR 1.27(e)(4)(i) shall be filed with the official signing the 
notification of refusal to amend at the address indicated in the letter 
of notification within 35 days of the date of such notification and 
should be limited to one page.
    6. Service of process. Service of process will be received by the 
General Counsel of the Department of the Treasury or the delegate of 
such official and shall be delivered to the following location: General 
Counsel, Department of the Treasury, Room 3000, Main Treasury Building, 
1500 Pennsylvania Avenue, NW., Washington, DC 20220.
    7. Annual notice of systems of records. The annual notice of systems 
of records is published by the Office of the Federal Register, as 
specified in 5 U.S.C. 552a(f). The publication is entitled ``Privacy Act 
Issuances''. Any specific requirements for access, including 
identification requirements, in addition to the requirements set forth 
in 31 CFR 1.26

[[Page 116]]

and 1.27 are indicated in the notice for the pertinent system.

[52 FR 26305, July 14, 1987. Redesignated at 65 FR 2334, Jan. 14, 2000]

                Appendix M--Office of Thrift Supervision

    1. In general. This appendix applies to the Office of Thrift 
Supervision. It sets forth specific notification and access procedures 
with respect to particular systems of records, and identifies the 
officers designated to make the initial determinations with respect to 
notification and access to records, the officers designated to make the 
initial and appellate determinations with respect to requests for 
amendment of records, the officers designated to grant extensions of 
time on appeal, the officers with whom ``Statement of Disagreement'' may 
be filed, the officer designated to receive services of process and the 
addresses for delivery of requests, appeals, and service of process. In 
addition, it references the notice of systems of records and notices of 
the routine uses of the information in the system required by 5 U.S.C. 
552a(e) (4) and (11) and published biennially by the Office of the 
Federal Register in ``Privacy Act Issuances.''
    2. Requests for notification and access to records and accounting of 
disclosures. Initial determinations under 31 CFR 1.26, whether to grant 
requests for notification and access to records and accountings of 
disclosures for the Office of Thrift Supervision, will be made by the 
head of the organizational unit having immediate custody of the records 
requested, or the delegate of such official. This information is 
contained in the appropriate system notice in the ``Privacy Act 
Issuances,'' published biennially by the Office of the Federal Register. 
Requests for information and specific guidance on where to send requests 
for records should be addressed to: Privacy Act Request, Chief, 
Disclosure Branch, Information Services Division, Office of Thrift 
Supervision, 1700 G Street, NW., Washington, DC 20552.
    Requests may be delivered in person to: Office of Thrift 
Supervision, Information Services Division, 1700 G Street, NW., 
Washington, DC.
    3. Requests for amendments of records. Initial determinations under 
31 CFR 1.27 (a) through (d) with respect to requests to amend records 
maintained by the Office of Thrift Supervision will be made by the head 
of the organization or unit having immediate custody of the records or 
the delegates of such official. Requests for amendment of records should 
be addressed as indicated in the appropriate system notice in ``Privacy 
Act Issuances'' published by the Office of the Federal Register. 
Requests for information and specific guidance on where to send these 
requests should be addressed to: Privacy Act Amendment Request, Chief, 
Disclosure Branch, Information Services Division, Office of Thrift 
Supervision, 1700 G Street, NW., Washington, DC 20552.
    Privacy Act Amendment Requests may be delivered in person to: Office 
of Thrift Supervision, Information Services Division, 1700 G Street, 
NW., Washington, DC.
    4. Administrative appeal of initial determination refusing to amend 
record. Appellate determination under 31 CFR 1.27(e) with respect to 
records of the Office of Thrift Supervision, including extensions of 
time on appeal, will be made by the Director, Public Affairs, Office of 
Thrift Supervision, or the delegate of such official, as limited by 5 
U.S.C. 552a(d) (2) and (3). Appeals made by mail should be addressed as 
indicated in the letter of initial decision or to: Privacy Act Amendment 
Request, Chief, Disclosure Branch, Information Services Division, Office 
of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.
    Appeals may be delivered in person to: Office of Thrift Supervision, 
Information Services Division, 1700 G Street, NW., Washington, DC.
    5. Statements of Disagreement. ``Statements of Disagreement'' as 
described in 31 CFR 1.27(e)(4) shall be filed with the official signing 
the notification of refusal to amend at the address indicated in the 
letter of notification within 35 days of the date of notification and 
should be limited to one page.
    6. Service of process. Service of process will be received by the 
Corporate Secretary of the Office of Thrift Supervision or the delegate 
of such official and shall be delivered to the following location: 
Corporate Secretary, Office of Thrift Supervision, 1700 G Street, NW., 
Washington, DC 20552.
    7. Annual notice of systems of record. The annual notice of systems 
of records required to be published by the Office of the Federal 
Register is included in the publication entitled ``Privacy Act 
Issuances,'' as specified in 5 U.S.C. 552a(f). Any specific requirements 
for access, including identification requirements, in addition to the 
requirements set forth in 31 CFR 1.26 and 1.27 and (8) below, and 
locations for access are indicated in the notice for the pertinent 
system.
    8. Verification of identity. An individual seeking notification or 
access to records, or seeking to amend a record, must satisfy one of the 
following identification requirements before action will be taken by the 
Office of Thrift Supervision on any such request:
    (i) An individual seeking notification or access to records in 
person, or seeking to amend a record in person, may establish identity 
by the presentation of a single official document bearing a photograph 
(such as a passport or identification badge) or by the presentation of 
two items of identification which do not bear a photograph but do bear

[[Page 117]]

both a name and signature (such as a driver's license or credit card).
    (ii) An individual seeking notification or access to records by 
mail, or seeking to amend a record by mail, may establish identity by a 
signature, address, and one other identifier such as a photocopy of a 
driver's license or other official document bearing the individual's 
signature.
    (iii) Notwithstanding subdivisions (i) and (ii) of this 
subparagraph, an individual seeking notification or access to records by 
mail or in person, or seeking to amend a record by mail or in person, 
who so desires, may establish identity by providing a notarized 
statement, swearing or affirming to such individual's identity and to 
the fact that the individual understands the penalties provided in 5 
U.S.C. 552a(i)(3) for requesting or obtaining access to records under 
false pretenses. Alternatively, an individual may provide a statement 
that the individual understands the penalties provided in 5 U.S.C. 
552a(i)(3) for requesting or obtaining access to records under false 
pretenses which is subscribed by the individual as true and correct 
under penalty of perjury pursuant to 28 U.S.C. 1746. Notwithstanding 
subdivision (i), (ii), or (iii) of this subparagraph, a designated 
official may require additional proof of an individual's identity before 
action will be taken on any request, if such official determines that it 
is necessary to protect against unauthorized disclosure of information 
in a particular case. In addition, a parent of any minor or a legal 
guardian of any individual will be required to provide adequate proof of 
legal relationship before such person may act on behalf of such minor or 
such individual.

[60 FR 31633, June 16, 1995. Redesignated at 65 FR 2334, Jan. 14, 2000]



PART 2--NATIONAL SECURITY INFORMATION--Table of Contents




                   Subpart A--Original Classification

Sec.
2.1  Classification levels [1.1(a)].
2.2  Classification Authority.
2.3  Listing of original classification authorities.
2.4  Record requirements.
2.5  Classification categories.
2.6  Duration of classification.
2.7  Identification and markings [1.5(a), (b) (c)].
2.8  Limitations on classification [1.6(c)].

                  Subpart B--Derivative Classification

2.9  Derivative Classification Authority.
2.10  Listing derivative classification authorities.
2.11  Use of derivative classification [2.1].
2.12  Classification guides.
2.13  Derivative identification and markings [1.5(c) and 2.1(b)].

               Subpart C--Downgrading and Declassification

2.14  Listing downgrading and declassification authorities [3.1(b)].
2.15  Declassification policy [3.1].
2.16  Downgrading and declassification markings.
2.17  Systematic review for declassification [3.3].
2.18  Mandatory declassification review [3.4].
2.19  Assistance to the Department of State [3.3(b)].
2.20  Freedom of Information/Privacy Act requests [3.4].

                         Subpart D--Safeguarding

2.21  General [4.1].
2.22  General restrictions on access [4.1].
2.23  Access by historical researchers and former presidential 
          appointees [4.3].
2.24  Dissemination [4.1(d)].
2.25  Standards for security equipment [4.1(b) and 5.1(b)].
2.26  Accountability procedures [4.1(b)].
2.27  Storage [4.1(b)].
2.28  Transmittal [4.1(b)].
2.29  Telecommunications and computer transmissions.
2.30  Special access programs [1.2(a) and 4.2(a)].
2.31  Reproduction controls [4.1(b)].
2.32  Loss or possible compromise [4.1(b)].
2.33  Responsibilities of holders [4.1(b)].
2.34  Inspections [4.1(b)].
2.35  Security violations.
2.36  Disposition and destruction [4.1(b)].
2.37  National Security Decision Directive 197.

                  Subpart E--Implementation and Review

2.38  Departmental management.
2.39  Bureau administration.
2.40  Emergency planning [4.1(b)].
2.41  Emergency authority [4.1(b)].
2.42  Security education [5.3(a)].

                      Subpart F--General Provisions

2.43  Definitions [6.1].

    Authority: 31 U.S.C. 321; E.O. 12958, 60 FR 19825, 3 CFR, 1995 
Comp., p. 333.

    Source: 55 FR 1644, Jan. 17, 1990, unless otherwise noted.

[[Page 118]]



                   Subpart A--Original Classification



Sec. 2.1  Classification levels [1.1(a)].\1\
---------------------------------------------------------------------------

    \1\ Related references are related to sections of Executive Order 
12356, 47 FR 14874, April 6, 1982.
---------------------------------------------------------------------------

    (a) National security information (hereinafter also referred to as 
``classified information'') shall be classified at one of the following 
three levels:
    (1) Top Secret shall be applied to information, the unauthorized 
disclosure of which reasonably could be expected to cause exceptionally 
grave damage to the national security.
    (2) Secret shall be applied to information, the unauthorized 
disclosure of which reasonably could be expected to cause serious damage 
to the national security.
    (3) Confidential shall be applied to information, the unauthorized 
disclosure of which reasonably could be expected to cause damage to the 
national security.
    (b) Limitations [1.1(b)]. Markings other than ``Top Secret,'' 
``Secret,'' and ``Confidential,'' shall not be used to identify national 
security information. No other terms or phrases are to be used in 
conjunction with these markings to identify national security 
information, such as ``Secret/Sensitive'' or ``Agency Confidential''. 
The terms ``Top Secret,'' ``Secret,'' and ``Confidential'' are not to be 
used to identify non-classified Executive Branch information. The 
administrative control legend, ``Limited Official Use'', is authorized 
in Treasury Directive 71-02, ``Safeguarding Officially Limited 
Information,'' which requires that information so marked is to be 
handled, safeguarded and stored in a manner equivalent to national 
security information classified Confidential.
    (c) Reasonable Doubt [1.1(c)]. When there is reasonable doubt about 
the need to classify information, the information shall be safeguarded 
as if it were ``Confidential'' information in accordance with subpart D 
of this regulation, pending a determination about its classification. 
Upon a final determination of a need for classification, the information 
that is classified shall be marked as provided in Sec. 2.7. When there 
is reasonable doubt about the appropriate classification level, the 
information shall be safeguarded at the higher level in accordance with 
subpart D, pending a determination of its classification level. Upon a 
final determination of its classification level, the information shall 
be marked as provided in Sec. 2.7.



Sec. 2.2  Classification Authority.

    Designations of original classification authority for national 
security information are contained in Treasury Order (TO) 102-19 (or 
successor order), which is published in the Federal Register. The 
authority to classify inheres within the office and may be exercised by 
a person acting in that capacity. There may be additional redelegations 
of original classification authority made pursuant to TO 102-19 (or 
successor order). Officials with original classification authority may 
derivatively classify at the same classification level.

[63 FR 14357, Mar. 25, 1998]



Sec. 2.3  Listing of original classification authorities.

    Delegations of original Top Secret, Secret and Confidential 
classification authority shall be in writing and be reported annually to 
the Departmental Director of Security, who shall maintain such 
information on behalf of the Assistant Secretary (Management). These 
delegations are to be limited to the minimum number absolutely required 
for efficient administration. Periodic reviews and evaluations of such 
delegations shall be made by the Departmental Director of Security to 
ensure that the officials so designated have demonstrated a continuing 
need to exercise such authority. If, after reviewing and evaluating the 
information, the Departmental Director of Security determines that such 
officials have not demonstrated a continuing need to exercise such 
authority, the Departmental Director of Security shall recommend to the 
Assistant Secretary (Management), as warranted, the reduction or 
elimination of such authority. The Assistant Secretary (Management) 
shall take appropriate action in consultation with the affected 
official(s) and the Departmental Director of Security. Such action may

[[Page 119]]

include relinquishment of this authority where the Assistant Secretary 
(Management) determines that a firm basis for retention does not exist.



Sec. 2.4  Record requirements.

    The Departmental Director of Security shall maintain a listing by 
name, position title and delegated classification level, of all 
officials in the Departmental Offices who are authorized under this 
regulation to originally classify information as Top Secret, Secret or 
Confidential. Officials within the Departmental Offices with Top Secret 
classification authority shall report in writing on TD F 71-01.14 
(Report of Authorized Classifiers) to the Departmental Director of 
Security, the names, position titles and authorized classification 
levels of the officials designated by them in writing to have original 
Secret or Confidential classification authority. The head of each bureau 
shall maintain a similar listing of all officials in his or her bureau 
authorized to apply original Secret and Confidential classification and 
shall provide a copy of TD F 71-01.14, reflecting the list of officials 
so authorized, to the Departmental Director of Security. These listings 
shall be compiled and reported no less than annually each October 15th 
as required by Treasury Directive 71-01, ``Agency Information Security 
Program Data''.



Sec. 2.5  Classification categories.

    (a) Classification in Context of Related Information [1.3(b)]. 
Certain information which would otherwise be unclassified may require 
classification when combined or associated with other unclassified or 
classified information. Such classification on an aggregate basis shall 
be supported by a written explanation that, at a minimum, shall be 
maintained with the file or referenced on the record copy of the 
information.
    (b) Unofficial Publication or Disclosure [1.3(d)]. Following an 
inadvertent or unauthorized publication or disclosure of information 
identical or similar to information that has been classified in 
accordance with the Order or predecessor Orders, the agency of primary 
interest shall determine the degree of damage to the national security, 
the need for continued classification, and, in coordination with the 
agency in which the disclosure occurred, what action must be taken to 
prevent similar occurrences under procedures contained in Sec. 2.32.



Sec. 2.6  Duration of classification.

    (a) Information Not Marked for Declassification [1.4]. Information 
classified under predecessor orders that is not subject to automatic 
declassification shall remain classified until reviewed for possible 
declassification.
    (b) Authority to Extend Automatic Declassification Determinations 
[1.4(b)]. The authority to extend classification of information subject 
to automatic declassification under any predecessor Executive Order to 
the Order is limited to those officials who have classification 
authority over the information and are designated in writing to have 
original classification authority at the level of the information to 
remain classified. Any decision to extend the classification on other 
than a document-by-document basis shall be reported to the Assistant 
Secretary (Management) who shall, in turn, report this fact to the 
Director of the Information Security Oversight Office.



Sec. 2.7  Identification and markings [1.5(a), (b) and (c)].

    The information security system requires that standard markings be 
applied to classified information. Except in extraordinary circumstances 
as provided in section 1.5(a) of the Order, or as indicated herein, the 
marking of paper and electronically created documents shall not deviate 
from the following prescribed formats. These markings shall also be 
affixed to material other than paper and electronically created 
documents, including file folders, film, tape, etc., or the originator 
shall provide holders or recipients of the information with written 
instructions for protecting the information.
    (a) Classification Level. The markings ``Top Secret,'' ``Secret,'' 
and ``Confidential'' are used to indicate: information that requires 
protection as classified information under the Order;

[[Page 120]]

the highest level of classification contained in a document; the 
classification level of each page and, in abbreviated form, the 
classification of each portion of a document.
    (1) Overall Marking. The highest level of classification of 
information in a document shall be marked in such a way as to 
distinguish it clearly from the informational text. Markings shall 
appear at the top and bottom of the outside of the front cover (if any), 
on the title page (if any), on the first and last pages bearing text, 
and on the outside of the back cover (if any).
    (2) Page Marking. Each interior page of a classified document is to 
be marked at the top and bottom, either according to the highest 
classification of the content of the page, including the designation 
``UNCLASSIFIED'' when it is applicable, or with the highest overall 
classification of the document.
    (3) Portion Marking. Only the Secretary of the Treasury may waive 
the portion marking requirement for specified classes of documents or 
information upon a written determination that:
    (i) There will be minimal circulation of the specified documents or 
information and minimal potential usage of the documents or information 
as a source for derivative classification determinations; or
    (ii) There is some other basis to conclude that the potential 
benefits of portion marking are clearly outweighed by the increased 
administrative burdens.
    (b) Unless the portion marking requirement has been waived as 
authorized, each portion of a document, including subjects and titles, 
shall be marked by placing a parenthetical designation either 
immediately preceding or following the text to which it applies. The 
symbols, ``(TS)'' for Top Secret, ``(S)'' for Secret, ``(C)'' for 
Confidential, and ``(U)'' for Unclassified shall be used for this 
purpose. The symbol, ``(LOU)'' shall be used for Limited Official Use 
information. If the application of parenthetical designations is not 
practicable, the document shall contain a statement sufficient to 
identify the information that is classified and the level of such 
classification, as well as the information that is not classified. If 
all portions of a document are classified at the same level, this fact 
may be indicated by a statement to that effect, e.g. ``Entire Text is 
Classified Confidential.'' If a subject or title requires 
classification, an unclassified identifier may be applied to facilitate 
reference.
    (c) Classification Authority. If the original classifier is other 
than the signer or approver of the document, his or her indentity shall 
be shown at the bottom of the first and last pages as follows: 
``CLASSIFIED BY (identification of original classification authority)''.
    (d) Bureau and Office of Origin. If the identity of the originating 
bureau or office is not apparent on the face of the document, it shall 
be clearly indicated below the ``CLASSIFIED BY'' line.
    (e) Downgrading and Declassification Instructions. Downgrading and, 
as applicable, declassification instructions shall be shown as follows:
    (1) For information to be declassified automatically on a specific 
date:

Classified by___________________________________________________________
Office__________________________________________________________________
Declassify on (date)____________________________________________________

    (2) For information to be declassified automatically upon the 
occurrence of a specific event:

Classified by __________________________________________________________
Office _________________________________________________________________
Declassify on (description of event) ___________________________________
    (3) For information not to be declassified automatically:

Classified by __________________________________________________________
Office _________________________________________________________________
Declassify on Origination Agency's Determination Required or ``OADR''

    (4) For information to be downgraded automatically on a specific 
date or upon occurrence of a specific event:

Classified by __________________________________________________________
Office _________________________________________________________________
Downgrade to ___________________________________________________________
on (date or description of event) ______________________________________
    (f) Special Markings--(1) Transmittal Documents [1.5(c)]. A 
transmittal document shall indicate on its first page and last page, if 
any, the highest classification of any information transmitted by it. It 
shall also include on the first and last pages the following or similar 
instruction:

[[Page 121]]

    (i) For an unclassified transmittal document:

Unclassified When Classified
Enclosure(s) Detached.

    (ii) For a classified transmittal document:

Upon Removal of Attachment(s)
this Document is _______________________________________________________


(classification level of the transmittal document alone), or:

This Document is Classified ____________________________________________
with Unclassified Attachment(s).

    (2) Restricted Data or Formerly Restricted Data [6.2(a)]. Restricted 
Data or Formerly Restricted Data shall be marked in accordance with 
regulations issued under the Atomic Energy Act of 1954, as amended. 
Restricted Data is information dealing with the design, manufacture, or 
utilization of atomic weapons, production of special nuclear material or 
use of special nuclear material in the production of energy. Formerly 
Restricted Data is classified information that has been removed from the 
``restricted data'' category but still remains classified. It relates 
primarily to the military utilization of atomic weapons.
    (3) Intelligence Sources or Methods [1.5(c)]. Documents that contain 
information relating to intelligence sources or methods shall include 
the following marking unless otherwise prescribed by the Director of 
Central Intelligence: ``WARNING NOTICE--INTELLIGENCE SOURCES OR METHODS 
INVOLVED'' To avoid confusion as to the extent of dissemination and use 
restrictions governing the information involved, this marking may not be 
used in conjunction with special access or sensitive compartmented 
information controls.
    (4) Foreign Government Information (FGI) [1.5(c)]. Documents that 
contain FGI shall include either the marking ``FOREIGN GOVERNMENT 
INFORMATION,'' or a marking that otherwise indicates that the 
information is foreign government information. If the information is 
foreign government information that must be concealed, given the 
relationship or understanding with the foreign government providing the 
information, the marking shall not be used and the document shall be 
marked as if it were wholly of United States origin. However, such a 
marking must be supported by a written explanation that, at a minimum, 
shall be maintained with the file or referenced on the original or 
record copy of the document or information.
    (5) National Security Information [4.1(c)]. Classified information 
furnished outside the Executive Branch shall show the following marking:

NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to
Administrative and Criminal Sanctions

    (6) Automated Data Processing (ADP) and Computer Output [1.5(c)]. 
(i) Documents that are generated via ADP or as computer output may be 
marked automatically by systems software. If automatic marking is not 
practicable, such documents must be marked manually.
    (ii) Removable information storage media, however, will bear 
external labels indicating the security classification of the 
information and associated security markings, as applicable, such as 
handling caveats and dissemination controls. Examples of such media 
include magnetic tape reels, cartridges, and cassettes; removable disks, 
disk cartridges, disk packs, and diskettes, including ``floppy'' or 
flexible disks; paper tape reels; and magnetic and punched cards. Two 
labels may be required on each medium: a color coded security 
classification label, i.e., orange Standard Form 706 (Top Secret label), 
red SF 707 (Secret label), blue SF 708 (Confidential label), purple SF 
709 (Classified label), green SF 710 (Unclassified label); and a white 
SF 711 (Data Descriptor label). National stock numbers of the labels, 
which are available through normal Federal Supply channels, are as 
follows: SF 706, 7540-01-207-5536; SF 707, 7450-01-207-5537; SF 708, 
7450-01-207-5538; SF 709, 7540-01-207-5540; SF 710, 7540-01-207-5539 and 
SF 711, 7540-01-207-5541. Treasury Directive 71-02 provides for the use 
of a green ``Officially Limited Information'' label, TD F 71-05.2, to 
identify information so marked.
    (iii) In a mixed environment in which classified and unclassified 
information in processed or stored, the ``Unclassified'' label must be 
used to identify the media containing unclassified information. In 
environments in which only

[[Page 122]]

unclassified information is processed or stored, the use of the 
``Unclassified'' label is not required. Unclassified media, however, 
that are on loan from (and must be returned to) vendors do not require 
the ``Unclassified'' label, but each requires a Data Descriptor label 
with the words, ``Unclassified Vendor Medium'' entered on it.
    (iv) Each medium shall be appropriately affixed with a 
classification label and, as applicable, with a Data Descriptor label at 
the earliest practicable time as soon as the proper security 
classification or control has been established. Labels shall be 
conspicuously placed on media in a manner that will not adversely affect 
operation of the equipment in which the media is used. Once applied, the 
label is not to be removed. A label to identify a higher level of 
classification may, however, be applied on top of a lower classification 
level in the event that the content of the media changes, e.g., from 
Confidential to Secret. A lower classification label may not be applied 
to media already bearing a higher classification label. Personnel shall 
be responsible for appropriately labeling and controlling ADP and 
computer storage media within their possession.
    (g) Electronically Transmitted Information (Messages) [1.5(c)]. 
Classified information that is transmitted electronically shall be 
marked as follows:
    (1) The highest level of classification shall appear before the 
first line of text;
    (2) A ``CLASSIFIED BY'' line is not required;
    (3) The duration of classification shall appear as follows:
    (i) For information to be declassified automatically on a specific 
date: ``DECL: (date)'';
    (ii) For information to be declassified upon occurrence of a 
specific event: ``DECL: (description of event)'';
    (iii) For information not to be automatically declassified which 
requires the originating agency's determination (see also 
Sec. 2.7(e)(3)): ``DECL: OADR'';
    (iv) For information to be automatically downgraded: ``DOWNGRADE TO 
(classification level to which the information is to be downgraded) ON 
(date or description of event on which downgrading is to occur)''.
    (4) Portion marking shall be as prescribed in Sec. 2.7(a)(3);
    (5) Specially designated markings as prescribed in Sec. 2.7(f) (2), 
(3), and (4) shall appear after the marking for the highest level of 
classification. These include:
    (i) Restricted Data or Formerly Restricted Data;
    (ii) Information concerning intelligence sources or methods: 
``WNINTEL,'' unless otherwise prescribed by the Director of Central 
Intelligence; and
    (iii) Foreign Government Information (FGI).
    (6) Paper copies of electronically transmitted messages shall be 
marked as provided in Sec. 2.7(a) (1), (2), and (3).
    (h) Changes in Classification Markings [4.1(b)]. When a change is 
made in the duration of classified information, all holders of record 
shall be promptly notified. If practicable, holders of record shall also 
be notified of a change in the level of classification. Holders shall 
alter the markings on their copy of the information to conform to the 
change, citing the authority for it. If the remarking of large 
quantities of information is unduly burdensome, the holder may attach a 
change of classification notice to the storage unit in lieu of the 
marking action otherwise required. Items withdrawn from the collection 
for purposes other than transfer for storage shall be marked promptly in 
accordance with the change notice.



Sec. 2.8  Limitations on classification [1.6(c)].

    (a) Before reclassifying information as provided in section 1.6(c) 
of the Order, authorized officials, who must have original 
classification authority and jurisdiction over the information involved, 
shall consider the following factors which shall be addressed in a 
report to the Assistant Secretary (Management) who shall in turn forward 
a report to the Director of the Information Security Oversight Office:
    (1) The elapsed time following disclosure;
    (2) The nature and extent of disclosure;

[[Page 123]]

    (3) The ability to bring the fact of reclassification to the 
attention of persons to whom the information was disclosed;
    (4) The ability to prevent further disclosure; and
    (5) The ability to retrieve the information voluntarily from persons 
not authorized access in its reclassified state.
    (b) Information may be classified or reclassified after it has been 
requested under the Freedom of Information Act (5 U.S.C. 552), the 
Privacy Act of 1974 (5 U.S.C. 552a), or the mandatory declassification 
review provisions of the Order if such classification meets the 
requirements of the Order and is accomplished personally and on a 
document-by-document basis by the Secretary of the Treasury, the Deputy 
Secretary, the Assistant Secretary (Management) or an official with 
original Top Secret classification authority. Such reclassification 
actions shall be reported in writing to the Departmental Director of 
Security.
    (c) In no case may information be classified or reclassified in 
order to conceal violations of law, inefficiency, or administrative 
error; to prevent embarrassment to a person, organization, or agency; to 
restrain competition; or to prevent or delay the release of information 
that does not require protection in the interest of national security.



                  Subpart B--Derivative Classification



Sec. 2.9  Derivative Classification Authority.

    Designations of derivative classification authority for national 
security information are contained in Treasury Order 102-19 (or 
successor order). The authority to derivatively classify inheres within 
the office and may be exercised by a person acting in that capacity. 
There may be additional redelegations of derivative classification 
authority made pursuant to TO 102-19 (or successor order). Officials 
identified in Treasury Order 102-19 (or successor order) may also 
administratively control and decontrol sensitive but unclassified 
information using the legend ``Limited Official Use'' and may redelegate 
their authority to control and decontrol. Such redelegations shall be in 
writing on TD F 71-01.20 ``Designation of Controlling/Decontrolling 
Officials'' (or successor form).

[63 FR 14357, Mar. 25, 1998]



Sec. 2.10  Listing derivative classification authorities.

    Delegations of derivative classification authority to officials not 
otherwise identified in Sec. 2.9, shall be in writing and reported 
annually each October 15th to the Departmental Director of Security on 
TD F 71-01.18 (Report of Authorized Derivative Classifiers). Such 
delegations shall be limited to the minimum number absolutely required 
for efficient administration. Periodic reviews and evaluations of such 
delegations shall be made by the Departmental Director of Security to 
ensure that officials so designated have demonstrated a continuing need 
to exercise such authority. If after reviewing and evaluating the 
information the Departmental Director of Security determines that such 
officials have not demonstrated a continuing need to exercise such 
authority, the Departmental Director of Security shall recommend to the 
Assistant Secretary (Management), as warranted, the reduction or 
elimination of such authority. The Assistant Secretary (Management) 
shall take appropriate action in consultation with the affected 
official(s) and the Departmental Director of Security. Such action may 
include relinquishment of this authority where the Assistant Secretary 
(Management) determines that a firm basis for retention does not exist.



Sec. 2.11  Use of derivative classification [2.1].

    The application of derivative classification markings is a 
responsibility of those who incorporate, paraphrase, restate, or 
generate in new form information that is already classified, and of 
those who apply markings in accordance with instructions from an 
authorized original classifier or in accordance with an approved 
classification guide. If an individual who applies derivative 
classification markings believes that the paraphrasing, restating or 
summarizing of classified information has

[[Page 124]]

changed the level of or removed the basis for classification, that 
person must consult an appropriate official of the originating agency or 
office of origin who has the authority to upgrade, downgrade or 
declassify the information for a final determination. A sample marking 
of derivatively classified documents is set forth in Sec. 2.13.



Sec. 2.12  Classification guides.

    (a) General [2.2(a)]. A classification guide is a reference manual 
which assists document drafters and document classifiers in determining 
what types or categories of material have already been classified. The 
classification guide shall, at a minimum:
    (1) Identify and categorize the elements of information to be 
protected;
    (2) State which classification level applies to each element or 
category of information; and
    (3) Prescribe declassification instructions for each element or 
category of information in terms of:
    (i) A period of time,
    (ii) The occurrence of an event, or
    (iii) A notation that the information shall not be declassified 
automatically without the approval of the originating agency i.e., 
``OADR''.
    (b) Review and Record Requirements [2.2(a)]. (1) Each classification 
guide shall be kept current and shall be reviewed at least once every 
two years and updated as necessary. Each office within the Departmental 
Offices and the respective offices of each Treasury bureau possessing 
original classification authority for national security information 
shall maintain a list of all classification guides in current use by 
them. A copy of each such classification guide in current use shall be 
furnished to the Departmental Director of Security who shall maintain 
them on behalf of the Assistant Secretary (Management).
    (2) Each office and bureau that prepares and maintains a 
classification guide shall also maintain a record of individuals 
authorized to apply derivative classification markings in accordance 
with a classification guide. This record shall be maintained on TD F 71-
01.18 (Report of Authorized Derivative Classifiers) which shall be 
reported annually each October 15th to the Departmental Director of 
Security.
    (c) Waivers [2.2(c)]. Any authorized official desiring a waiver of 
the requirement to issue a classification guide shall submit in writing 
to the Assistant Secretary (Management) a request for approval of such a 
waiver. Any request for a waiver shall contain, at a minimum, an 
evaluation of the following factors:
    (1) The ability to segregate and describe the elements of 
information;
    (2) The practicality of producing or disseminating the guide because 
of the nature of the information;
    (3) The anticipated usage of the guide as a basis for derivative 
classification; and
    (4) The availability of alternative sources for derivatively 
classifying the information in a uniform manner.



Sec. 2.13  Derivative identification and markings [1.5(c) and 2.1(b)].

    Information classified derivatively on the basis of source documents 
or classification guides shall bear all markings prescribed in Sec. 2.7 
(a) through (f), as are applicable. Information for these markings shall 
be taken from the source document or instructions in the appropriate 
classification guide.
    (a) Classification Authority. The authority for classification shall 
be shown as follows:

Derivatively Classified by _____________________________________________
Office _________________________________________________________________
Derived from____________________________________________________________
Declassify on___________________________________________________________


If a document is classified on the basis of more than one source 
document or classification guide, the authority for classification shall 
be shown on the ``DERIVED FROM'' line as follows: ``MULTIPLE CLASSIFIED 
SOURCES''. In these cases, the derivative classifier must maintain the 
identification of each source with the file or record copy of the 
derivatively classified document. A document derivatively classified on 
the basis of a source document that is marked ``MULTIPLE CLASSIFIED 
SOURCES'' shall cite the source document on its ``DERIVED FROM'' line 
rather than the term: ``MULTIPLE CLASSIFIED

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SOURCES''. Preparers of such documentation shall ensure that the 
identification of the derivative classifier is indicated. Use of the 
term ``MULTIPLE CLASSIFIED SOURCES,'' is not to be a substitute for the 
identity of the derivative classification authority.
    (b) Downgrading and Declassification Instructions. Dates or events 
for automatic downgrading or declassification shall be carried forward 
from the source document. This includes the notation ``ORIGINATING 
AGENCY'S DETERMINATION REQUIRED'' to indicate that the document is not 
to be downgraded or declassified automatically, or instructions as 
directed by a classification guide, which shall be shown on a 
``DOWNGRADE TO'' or ``DECLASSIFY ON'' line as follows:

DOWNGRADE TO____________________________________________________________
ON (date, description of event, or OADR) or,
DECLASSIFY ON (date, description of event, or OADR)



               Subpart C--Downgrading and Declassification



Sec. 2.14  Listing downgrading and declassification authorities 3.1(b)].

    Downgrading and declassification authority may be exercised by the 
official authorizing the original classification, if that official is 
still serving in the same position; a successor in that capacity; a 
supervisory official of either; or officials delegated such authority in 
writing by the Secretary of the Treasury or the Assistant Secretary 
(Management). Such officials may not downgrade or declassify information 
which is classified at a level exceeding their own designated 
classification authority. A listing of officials delegated such 
authority, in writing, shall be identified on TD F 71-01.11 (Report of 
Authorized Downgrading and Declassification Officials) and reported 
annually each October 15th to the Departmental Director of Security who 
shall maintain them on behalf of the Assistant Secretary (Management). 
Current listings of officials so designated shall be maintained by 
Treasury bureaus and offices within the Departmental Offices.

[55 FR 1644, Jan. 17, 1990; 55 FR 13134, Apr. 9, 1990]



Sec. 2.15  Declassification policy [3.1].

    In making determinations under section 3.1(a) of the Order, 
officials shall respect the intent of the Order to protect foreign 
government information and confidential foreign sources.



Sec. 2.16  Downgrading and declassification markings.

    Whenever a change is made in the original classification or in the 
dates of downgrading or declassification of any classified information, 
it shall be promptly and conspicuously marked to indicate the change, 
the authority for the action, the date of the action, and the identity 
of the person taking the action. Earlier classification markings shall 
be cancelled or otherwise obliterated when practicable. See also 
Sec. 2.7(h).



Sec. 2.17  Systematic review for declassification [3.3].

    (a) Permanent Records. Systematic review is applicable only to those 
classified records and presidential papers or records that the Archivist 
of the United States, acting under the Federal Records Act, has 
determined to be of sufficient historical or other value to warrant 
permanent retention.
    (b) Non-Permanent Classified Records. Non-permanent classified 
records shall be disposed of in accordance with schedules approved by 
the Administrator of General Services under the Records Disposal Act. 
These schedules shall provide for the continued retention of records 
subject to an ongoing mandatory declassification review request.
    (c) Systematic Declassification Review Guidelines [3.3(a)]. As 
appropriate, guidelines for systematic declassification review shall be 
issued by the Assistant Secretary (Management) in consultation with the 
Archivist of the United States, the Director of the Information Security 
Oversight Office and Department officials, to assist the Archivist in 
the conduct of systematic reviews. Such guidelines shall be reviewed and 
updated at least every five years unless earlier review is requested by 
the Archivist.
    (d) Foreign Government Systematic Declassification Review Guidelines 
[3.3(a)]. As appropriate, guidelines for systematic declassification 
review of foreign

[[Page 126]]

government information shall be issued by the Assistant Secretary 
(Management) in consultation with the Archivist of the United States, 
the Director of the Information Security Oversight Office, Department 
officials and other agencies having declassification authority over the 
information. These guidelines shall be reviewed and updated every five 
years unless earlier review is requested by the Archivist.
    (e) Special Procedures. The Department shall be bound by the special 
procedures for systematic review of classified cryptologic records and 
classified records pertaining to intelligence activities (including 
special activities), or intelligence sources or methods issued by the 
Secretary of Defense and the Director of Central Intelligence, 
respectively.



Sec. 2.18  Mandatory declassification review [3.4].

    (a) Except as provided by section 3.4 (b) of the Order, all 
information classified by the Department under the Order or any 
predecessor Executive Order shall be subject to declassification review 
by the Department, if:
    (1) The request is made by a United States citizen or permanent 
resident alien, a Federal agency, or a state or local government;
    (2) The request describes the document or material containing the 
information with sufficient specificity to enable the Department to 
locate it with a reasonable amount of effort; and
    (3) The requester provides substantial proof as to his or her United 
States citizenship or status as a permanent resident alien, e.g., a copy 
of a birth certificate, a certificate of naturalization, official 
passport or some other means of identity which sufficiently describes 
the requester's status. A permanent resident alien is any individual, 
who is not a citizen or national of the United States, who has been 
lawfully accorded the privilege of residing permanently in the United 
States as an immigrant in accordance with the immigration laws, such 
status not having changed. Permanent means a relationship of continuing 
or lasting nature, as distinguished from temporary, but a relationship 
may be permanent even though it is one that may be dissolved eventually 
at the instance either of the United States or of the individual, in 
accordance with law.
    (b) Processing--(1) Initial Requests for Classified Records 
Originated by the Department. Requests for mandatory declassification 
review shall be directed to the Departmental Office of Security, 1500 
Pennsylvania Avenue, NW., Washington, DC 20220. Upon receipt of each 
request for declassification, pursuant to section 3.4 of the Order, the 
following procedures shall apply:
    (i) The Departmental Office of Security shall acknowledge the 
receipt of the request in writing.
    (ii) A valid mandatory declassification review request need not 
identify the requested information by date or title of the responsive 
records, but must be of sufficient particularity to allow Treasury 
personnel to locate the records containing the information sought with a 
reasonable amount of effort. Whenever a request does not reasonably 
describe the information sought, the requester shall be notified by the 
Departmental Office of Security that unless additional information is 
provided or the scope of the request is narrowed, no further action will 
be undertaken.
    (iii) The Departmental Office of Security shall determine the 
appropriate office or bureau to take action on the request and shall 
forward the request to that office or bureau.
    (iv) In responding to mandatory declassification review requests, 
the appropriate reviewing officials shall make a prompt declassification 
determination. The Departmental Office of Security shall notify the 
requester if additional time is needed to process the request. Reviewing 
officials shall also identify the amount of search and/or review time 
required to process the request. The Department shall make a final 
determination within one year from the date of receipt except in unusual 
circumstances. When information cannot be declassified in its entirety, 
reasonable efforts, consistent with other applicable laws, will be made 
to release those declassified portions of the requested information 
which constitute a coherent segment. Upon the denial or partial denial 
of an

[[Page 127]]

initial request, the Departmental Office of Security shall also notify 
the requester of the right of an administrative appeal which must be 
filed with the Assistant Secretary (Management) within 60 days of 
receipt of the denial.
    (v) When the Department receives a mandatory declassification review 
request for records in its possession that were originated by another 
agency, the Departmental Office of Security shall forward the request to 
that agency. The Departmental Office of Security shall include a copy of 
the records requested together with the Department's recommendations for 
action. Upon receipt, the originating agency shall process the request 
in accordance with the Directive 32 CFR 2001.32(a)(2)(i). The 
originating agency shall also be requested to communicate its 
declassification determination to Treasury.
    (vi) When another agency forwards to the Department a request for 
information in that agency's custody that has been classified by 
Treasury, the Departmental Office of Security shall:
    (A) Advise the other agency as to whether it can notify the 
requester of the referral;
    (B) Review the classified information in coordination with other 
agencies that have a direct interest in the subject matter; and
    (C) Respond to the requester in accordance with the procedures in 
Sec. 2.18(b)(1)(iv). If requested, Treasury's determination shall be 
communicated to the referring agency.
    (vii) Appeals of denials of a request for declassification shall be 
referred to the Assistant Secretary (Management) who shall normally make 
a determination within 30 working days following the receipt of an 
appeal. If additional time is required to make a determination, the 
Assistant Secretary (Management) shall notify the requester of the 
additional time needed and provide the requester with the reason for the 
extension. The Assistant Secretary (Management) shall notify the 
requester in writing of the final determination and, as applicable, the 
reasons for any denial.
    (viii) Except as provided in this paragraph, the Department shall 
process mandatory declassification review requests for classified 
records containing foreign government information in accordance with 
Sec. 2.18(a). The agency that initially received or classified the 
foreign government information shall be responsible for making a 
declassification determination after consultation with concerned 
agencies. If upon receipt of the request, the Department determines that 
Treasury is not the agency that received or classified the foreign 
government information, it shall refer the request to the appropriate 
agency for action. Consultation with the foreign originator through 
appropriate channels may be necessary prior to final action on the 
request.
    (ix) Mandatory declassification review requests for cryptologic 
information and/or information concerning intelligence activities 
(including special activities) or intelligence sources or methods shall 
be processed solely in accordance with special procedures issued by the 
Secretary of Defense and the Director of Central Intelligence, 
respectively.
    (x) The fees to be charged for mandatory declassification review 
requests shall be for search and/or review and duplication. The fee 
charges for services of Treasury personnel involved in locating and/or 
reviewing records shall be at the rate of a GS-10, Step 1, for each hour 
or fraction thereof, except that no charge shall be imposed for search 
and/or review consuming less than one hour.
    (A) Photocopies per page up to 8\1/2\" by 14" shall be charged at 
the rate of 10 cents each except that no charge will be imposed for 
reproducing ten (10) pages or less when search and/or review time 
requires less than one hour.
    (B) When it is estimated that the costs associated with the 
mandatory declassification review request will exceed $100.00, the 
Departmental Office of Security shall notify the requester of the likely 
cost and obtain satisfactory written assurance of full payment or may 
require the requester to make an advance payment of the entire fee 
before continuing to process the request. The Department reserves the 
right to request prepayment after a mandatory declassification review 
request is processed and before documents are released. In the event the 
requester does

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not agree to pay the actual charges, he or she shall advise how to 
proceed with the mandatory declassification review request. Failure of a 
requester to pay charges after billing will result in future requests 
not being honored.
    (C) In order for a requester's initial request to be processed it 
shall be accompanied by a statement that he or she is agreeable to 
paying fees for search and/or review and copying. In the event the 
initial request does not include this statement, processing of the 
request will be held in abeyance until such time as the required 
statement is received. Failure to provide a response within a reasonable 
amount of time will serve as the basis for administratively terminating 
the mandatory declassification review request.
    (D) Payment of fees shall be made by check or money order payable to 
the Treasurer of the United States. Fees levied by the Department of the 
Treasury for mandatory declassification review requests are separate and 
distinct from any other fees which might be imposed by a Presidential 
Library, the National Archives and Records Administration or another 
agency or department.



Sec. 2.19  Assistance to the Department of State [3.3(b)].

    The Secretary of the Treasury shall assist the Department of State 
in its preparation of the ``Foreign Relations of the United States'' 
series by facilitating access to appropriate classified material in 
Treasury custody and by expediting declassification review of documents 
proposed for inclusion in the series.



Sec. 2.20  Freedom of Information/Privacy Act requests [3.4].

    The Department of the Treasury shall process requests for records 
containing classified national security information that are submitted 
under the provisions of the Freedom of Information Act, as amended, or 
the Privacy Act of 1974, as amended, in accordance with the provisions 
of those Acts.



                         Subpart D--Safeguarding



Sec. 2.21  General [4.1].

    Information classified pursuant to this Order or predecessor Orders 
shall be afforded a level of protection against unauthorized disclosure 
commensurate with its level of classification.



Sec. 2.22  General restrictions on access [4.1].

    (a) Determination of Need-To-Know. Classified information shall be 
made available to a person only when the possessor of the classified 
information establishes in each instance, except as provided in section 
4.3 of the Order, that access is essential to the accomplishment of 
official United States Government duties or contractual obligations.
    (b) Determination of Trustworthiness. A person is eligible for 
access to classified information only after a showing of trustworthiness 
as determined by the Secretary of the Treasury based upon appropriate 
investigations in accordance with applicable standards and criteria.
    (c) Classified Information Nondisclosure Agreement. Standard Form 
312 (Classified Information Nondisclosure Agreement) or the prior SF 
189, bearing the same title, are nondisclosure agreements between the 
United States and an individual. The execution of either the SF 312 or 
SF 189 agreement by an individual is necessary before the United States 
Government may grant the individual access to classified information. 
Bureaus and the Departmental Offices must retain executed copies of the 
SF 312 or prior SF 189 in file systems from which the agreements can be 
expeditiously retrieved in the event the United States must seek their 
enforcement. Copies or legally enforceable facsimiles of the SF 312 or 
SF 189 must be retained for 50 years following their date of execution. 
The national stock number for the SF 312 is 7540-01-280-5499.

[[Page 129]]



Sec. 2.23  Access by historical researchers and former presidential appointees [4.3].

    (a) Access to classified information may be granted only as is 
essential to the accomplishment of authorized and lawful United States 
Government purposes. This requirement may be waived, however, for 
persons who:
    (1) Are engaged in historical research projects, or
    (2) Previously have occupied policymaking positions to which they 
were appointed by the President.
    (b) Access to classified information may be granted to historical 
researchers and to former Presidential appointees upon a determination 
of trustworthiness; a written determination that such access is 
consistent with the interests of national security; the requestor's 
written agreement to safeguard classified information; and the 
requestor's written consent to have his or her notes and manuscripts 
reviewed to ensure that no classified information is contained therein. 
The conferring of historial researcher status does not include 
authorization to release foreign government information or other 
agencies' classified information per Sec. 2.24 of this part. By the 
terms of section 4.3(b)(3) of the Order, former Presidential appointees 
not engaged in historical research may only be granted access to 
classified documents which they ``originated, reviewed, signed or 
received while serving as a Presidential appointee.'' Coordination shall 
be made with the Departmental Director of Security with respect to the 
required written agreements to be signed by the Department and such 
historical researchers or former Presidential appointees, as a condition 
of such access and to ensure the safeguarding of classified information.
    (c) If the access requested by historical researchers and former 
Presidential appointees requires the rendering of services for which 
fair and equitable fees may be charged pursuant to 31 U.S.C. 9701, the 
requestor shall be so notified and the fees may be imposed. Treasury's 
fee schedule identified in Sec. 2.18(b)(1)(x), applicable to mandatory 
declassification review, shall also apply to fees charged for services 
provided to historical researchers and former Presidential appointees 
for search and/or review and copying.



Sec. 2.24  Dissemination [4.1(d)].

    Except as otherwise provided by section 102 of the National Security 
Act of 1947, 61 Stat. 495, 50 U.S.C. 403, classified information 
originating in another agency may not be disseminated outside the 
Department without the consent of the originating agency.



Sec. 2.25  Standards for security equipment [4.1(b) and 5.1(b)].

    The Administrator of General Services issues (in coordination with 
agencies originating classified information), establishes and publishes 
uniform standards, specifications, and supply schedules for security 
equipment designed to provide for secure storage and to destroy 
classified information. Treasury bureaus and the Departmental Offices 
may establish more stringent standards for their own use. Whenever new 
security equipment is procured, it shall be in conformance with the 
standards and specifications referred to above and shall, to the maximum 
extent practicable, be of the type available through the Federal Supply 
System.



Sec. 2.26  Accountability procedures [4.1(b)].

    (a) Top Secret Control Officers. Each Treasury bureau and the 
Departmental Offices shall designate a primary and alternate Top Secret 
Control Officer. Within the Departmental Offices, the Top Secret Control 
Officer function will be established in the Office of the Executive 
Secretary for collateral Top Secret information and in the Office of the 
Special Assistant to the Secretary (National Security) with respect to 
sensitive compartmented information. The term ``collateral'' refers to 
national security information classified Confidential, Secret, or Top 
Secret under the provisions of Executive Order 12356 or prior Orders, 
for which special intelligence community systems of compartmentation 
(such as sensitive compartmented information) or special access programs 
are not formally established. Top Secret Control Officers so designated 
must have a Top Secret security clearance and shall:

[[Page 130]]

    (1) Initially receive all Top Secret information entering their 
respective bureau, including the Departmental Offices. Any Top Secret 
information received by a Treasury bureau or Departmental Offices 
employee shall be immediately hand carried to the designated Top Secret 
Control Officer for proper accountability.
    (2) Maintain current accountability records of Top Secret 
information received within their bureau or office.
    (3) Ensure that Top Secret information is properly stored and that 
Top Secret information under their control is personally destroyed, when 
required. Top Secret information must be destroyed in the presence of an 
appropriately cleared official who shall actually witness such 
destruction. Accordingly, the use of burnbags to store Top Secret 
information, pending final destruction at a later date, is not 
authorized.
    (4) Ensure that prohibitions against reproduction of Top Secret 
information are strictly followed.
    (5) Conduct annual physical inventories of Top Secret information. 
An inventory shall be conducted in the presence of an individual with an 
appropriate security clearance. The inventory shall be completed 
annually and signed by the Top Secret Control Officer and the witnessing 
individual.
    (6) Ensure that Top Secret documents are downgraded, declassified, 
retired or destroyed as required by regulations or other markings.
    (7) Attach a TD F 71-01.7 (Top Secret Document Record) to the first 
page or cover of each copy of Top Secret information. The Top Secret 
Document Record shall be completed by the Top Secret Control Officer and 
shall serve as a permanent record.
    (8) Ensure that all persons having access to Top Secret information 
sign the Top Secret Document Record. This also includes persons to whom 
oral disclosure of the contents is made.
    (9) Maintain receipts concerning the transfer and destruction of Top 
Secret information. Record all such actions on the Top Secret Document 
Record which shall be retained for a minimum of three years.
    (10) As received, number in sequence each Top Secret document in a 
calendar year series (e.g. TS 89-001). This number shall be posted on 
the face of the document and on all forms required for control of Top 
Secret information.
    (11) Attach a properly executed TD F 71-01.5 (Classified Document 
Record of Transmittal) when a Top Secret document is transmitted 
internally or externally.
    (12) Verify, prior to releasing Top Secret information, that the 
recipient has both a security clearance and is authorized access to such 
information.
    (13) Report, in writing, all Top Secret documents unaccounted for to 
the Assistant Secretary (Management) who shall take appropriate action 
in conjunction with the Departmental Director of Security.
    (14) Assure that no individual within his or her office or bureau 
transmits Top Secret information to another individual or office without 
the knowledge and consent of the Top Secret Control Officer.
    (15) Ensure upon receipt that a Standard Form 703 (Top Secret Cover 
Sheet) is affixed to such information.
    (16) Notify office and/or bureau employees annually in writing of 
the designated control point for all incoming and outgoing Top Secret 
information.
    (17) Be notified as to the transmission, per Sec. 2.28(b), whenever 
Top Secret information is sent outside of a Treasury bureau or office 
within the Departmental Offices.
    (b) Top Secret Control Officer Listings. In order for the 
Departmental Director of Security to maintain a current listing of Top 
Secret Control Officers within the Department, each Treasury bureau and 
the Departmental Offices shall annually report each October 15th in 
writing to the Departmental Office of Security, the identities of the 
office(s) and names of the officials designated as their primary and 
alternate Top Secret Control Officers. Any changes in these designations 
shall be reported to the Departmental Director of Security within thirty 
days.
    (c) Top Secret Document Record. Upon receipt in the Department a 
green, color coded, TD F 71-01.7 (Top Secret Document Record) shall be 
attached by the Top Secret Control Officer to the first page or cover of 
the original and each copy of Top Secret information.

[[Page 131]]

The Top Secret Document Record shall remain attached to the Top Secret 
information until it is either transferred to another United States 
Government agency, downgraded, declassified or destroyed. The Top Secret 
Document Record, which shall initially be completed by the Top Secret 
Control Officer, shall identify the Top Secret information attached, and 
shall serve as a permanent record of the information. All persons, 
including stenographic and clerical personnel, having access to the 
information attached to the Top Secret Document Record must list their 
name and the date on the TD F 71-01.7 prior to accepting responsibility 
for its custody. The TD F 71-01.7 shall also indicate those individuals 
to whom only oral disclosure of the contents is made. Whenever any Top 
Secret information is transferred to another United States Government 
agency, downgraded, declassified or destroyed, the Top Secret Control 
Officer shall record the action on the Top Secret Document Record and 
retain it for a minimum or three years after which time it may be 
destroyed. In order to maintain the integrity of the color coding 
process the photocopying and use of non-color coded Top Secret Document 
Record forms is prohibited.
    (d) Classified Document Record of Transmittal. TD F 71-01.5 
(Classified Document Record of Transmittal) shall be the exclusive 
classified document accountability record for use within the Department 
of the Treasury. No other logs or records shall be required except for 
the use of TD F 71-01.7 which is applicable to Top Secret information. 
TD F 71-01.5 shall be used for single or multiple document receipting 
and for internal and external routing. The inclusion of classified 
information on TD F 71-01.5 is to be avoided. In the event the subject 
title is classified, a recognizable short title shall be used, e.g., 
first letter of each word in the subject title. Several items may be 
transmitted to the same addressee with one TD F 71-01.5. TD F's 71-01.5 
shall be maintained for a three year period after which the form may be 
destroyed. No record of the actual destruction of the TD F 71-01.5 is 
necessary.
    (1) Top Secret Information. Top Secret information shall be subject 
to a continuous receipt system regardless of how brief the period of 
custody. TD F 71-01.5 shall be used for this purpose. Top Secret 
accountability records shall be maintained by Top Secret Control 
Officers separately from the accountability records of other classified 
information.
    (2) Secret Information. Receipt on TD F 71-01.5 shall be required 
for transmission of Secret information between bureaus, offices and 
separate agencies. Responsible office heads shall determine 
administrative procedures required for the internal control within their 
respective offices. The volume of classified information handled and 
personnel resources available must be considered in determining the 
level of adequate security measures while at the same time maintaining 
operational efficiency.
    (3) Confidential and Limited Official Use Information. Receipts for 
Confidential and Limited Official Use information shall not be required 
unless the originator indicates that receipting is necessary.

[55 FR 1644, Jan. 17, 1990; 55 FR 13134, Apr. 9, 1990]



Sec. 2.27  Storage [4.1(b)].

    Classified information shall be stored only in facilities or under 
conditions designed to prevent unauthorized persons from gaining access 
to it.
    (a) Minimum Requirements for Physical Barriers--(1) Top Secret. Top 
Secret information shall be stored in a GSA-approved security container 
with an approved, built-in, three-position, dial-type, changeable, 
combination lock; in a vault protected by an alarm system and response 
force; or in other types of storage facilities that meet the standards 
for Top Secret information established under the provisions of 
Sec. 2.25. Top Secret information stored outside the United States must 
be in a facility afforded diplomatic status. One or more of the 
following supplementary controls is required:
    (i) The area that houses the security container or vault shall be 
subject to the continuous protection of U.S. guard or duty personnel;
    (ii) U.S. Guard or duty personnel shall inspect the security 
container or vault at least once every two hours; or

[[Page 132]]

    (iii) The security container or vault shall be controlled by an 
alarm system to which a force will respond in person within 15 minutes.

Within the United States, the designated security officer in each 
Treasury bureau and the Department Offices shall prescribe those 
supplementary controls deemed necessary to restrict unauthorized access 
to areas in which such information is stored. Any vault used for the 
storage of sensitive compartmented information shall be configured to 
the specifications of the Director of Central Intelligence. Prior to an 
office or bureau operating such a vault, formal written certification 
for its use must first be obtained from the Special Assistant to the 
Secretary (National Security) as the senior Treasury official of the 
Intelligence Community.
    (2) Secret and Confidential. Secret and Confidential information 
shall be stored in a manner and under the conditions prescribed for Top 
Secret information, or in a container, vault, or alarmed area that meets 
the standards for Secret or Confidential information established under 
the provisions of Sec. 2.25. Secret and Confidential information may 
also be stored in a safe-type filing cabinet having a built-in, three-
position, dial-type, changeable, combination lock, and may continue to 
be stored in a steel filing cabinet equipped with a steel lock-bar 
secured by a GSA-approved three-position, dial-type, changeable, 
combination padlock. The modification, however, of steel filing cabinets 
to barlock-type as storage equipment for classified information and 
material is prohibited and efforts are to be made to selectively phase 
out the use of such barlock cabinets for storage of Secret information. 
Exceptions may be authorized only by the Departmental Director of 
Security upon written request from the designated bureau security 
officer. The designated security officer in each Treasury bureau and the 
Departmental Offices shall prescribe those supplementary controls deemed 
necessary to restrict unauthorized access to areas in which such 
information is stored. Access to bulky Secret and Confidential material 
in weapons storage areas, strong rooms, evidence vaults, closed areas or 
similar facilities shall be controlled in accordance with requirements 
approved by the Department. At a minimum, such requirements shall 
prescribe the use of GSA-approved, key-operated, high-security padlocks. 
For Secret and Confidential information stored outside the United 
States, it shall be stored in the manner authorized for Top Secret, in a 
GSA-approved safe file, or in a barlick cabinet equipped with a 
security-approved combination padlock if the cabinet is located in a 
security-approved vault and/or in a restricted area to which access is 
controlled by United States citizen personnel on a 24-hour basis.
    (b) Combinations--(1) Equipment in Service. Combinations to dial-
type, changeable, combination locks shall be changed only by persons 
having an appropriate security clearance, and shall be changed,
    (i) Whenever such equipment is placed in use;
    (ii) Whenever a person knowing the combination no longer requires 
access to it;
    (iii) Whenever a combination has been subjected to possible 
compromise;
    (iv) Whenever the equipment is taken out of service: or
    (v) At least once each year.

Knowledge of combinations shall be limited to the minimum number of 
persons necessary for operating purposes. Records of combinations shall 
be classified no lower than the highest level of classified information 
that is protected by the combination lock. When securing a combination 
lock, the dial must be turned at least four (4) complete times in the 
same direction after closing. Defects in or malfunctioning of storage 
equipment protecting classified national security or officially limited 
information must be reported immediately to the designated office or 
bureau security official for appropriate action.
    (2) Equipment Out of Service. When security equipment, used for the 
storage of classified national security or officially limited 
information, is taken out of service, it shall be physically inspected 
to ensure that no classified information or officialy limited 
information remains therein. Built-in, three-position, dial-type, 
changeable, combination locks shall be reset to the

[[Page 133]]

standard combination 50-25-50 and combination padlocks shall be reset to 
the standard combination 10-20-30. The designated security officer in 
each Treasury bureau and the Departmental Offices shall prescribe such 
supplementary controls deemed necessary to fulfill their individual 
needs to be consistent with Sec. 2.27.
    (3) Security Container Check Sheet. Each piece of security equipment 
used for the storage of classified information will have attached 
conspicuously to the outside a Standard Form 702 (Security Container 
Check Sheet) on which an authorized person will record the date and 
actual time each business day that they initially unlock and finally 
lock the security equipment, followed by their initials. Users of this 
form are to avoid citations which reflect the opening, locking and 
checking of the security equipment at standardized (non-actual) times, 
e.g., opened at 8:00 a.m. and closed/checked at 4:00 p.m. Bureaus and 
the Departmental Offices may continue to use Optional Form 62 (Safe or 
Cabinet Security Record) in lieu of the SF 702 until September 30, 1990, 
or such time as their supplies of Optional Form 62 are exhausted. The 
reprinting or photostatic reproduction and use of Optional Form 62 is 
not authorized. On each normal workday, regardless of whether the 
security equipment was opened on that particular day, the security 
equipment shall be checked by authorized personnel to assure that no 
surreptitious attempt has been made to penetrate the security equipment. 
Such examinations normally consist of a quick or casual visual check to 
note either any obvious marks or gashes, or defects or malfunction of 
the security equipment which are different from their prior observations 
or experience in operating the equipment concerned. Any such 
discrepancies in the appearance of or functioning of the security 
equipment, based upon this visual check, should be reported to 
appropriate security officials. The ``Checked By'' column of the SF 702 
or Optional Form 62 shall be annotated to reflect the date and time of 
this action followed by that person's initials. Security equipment used 
for the storage of classified information that has been opened on a 
particular day shall not be left unattended at the end of that day until 
it has been locked by an authorized person and checked by a second 
person. In the event a second person is not available within the office, 
the individual who locked the equipment shall also annotate the 
``Checked By'' column of the SF 702 or Optional Form 62. Reversible 
``OPEN-CLOSED'' or ``LOCKED-UNLOCKED'' signs, available through normal 
supply channels, shall also be used on such security equipment. The 
respective side of the sign shall be displayed to indicate when the 
container is open or closed. Except for the SF 702 or Optional Form 62, 
the top surface area of security equipment is not to be used for storage 
and must be kept free of extraneous material. SF 702 and/or Optional 
Form 62 shall be utilized on all security equipment used for storing 
information bearing the control legend ``Limited Official Use''. The 
designated security officer in each Treasury bureau and the Department 
Offices may, as warranted, prescribe supplementary use of the SF 702 or 
Optional Form 62 to apply to other authorized legends approved by the 
Department for officially limited information.
    (4) Safe Combination Records. Combinations to security equipment 
containing classified information shall be recorded on Standard Form 700 
(Security Container Information), national stock number 7540-01-214-
5372. Bureaus and the Departmental Offices may continue to use Treasury 
Form 4032 (Security Container Information) in lieu of the SF 700 until 
September 30, 1990, or such time as their supplies of Treasury Form 4032 
are exhausted. The reprinting of Treasury Form 4032 is not authorized. 
Each part of the SF 700 shall be completed in its entirety. The names, 
addresses and home telephone numbers of personnel responsible for the 
combination, and the classified information stored therein, must be 
indicated on part 1 of the SF 700. The completed part 1 shall be posted 
in the front interior of the top, control or locking drawer of the 
security equipment concerned. Part 2 shall be inserted in the envelop 
(part 2A) provided, and forwarded via appropriate secure means to the 
designated bureau

[[Page 134]]

or Departmental Offices central repository for security combinations. 
Part 2 shall have the highest level of classified information, stored in 
the security equipment concerned, annotated in both the top and bottom 
border areas of the completed SF 700. Part 2A shall have the highest 
level of classified information, stored in the security equipment 
concerned, annotated in the blank space immediately above the word, 
``WARNING'' which appears on the SF 700. The completion of the SF 700 or 
Treasury Form 4032 does not constitute a classification action but 
serves as an administrative requirement to ensure the protection of 
classified information stored in such security equipment. SF 700 shall 
be utilized on all security equipment used for storing information 
bearing the control legend ``Limited Official Use''. The designated 
security officer in each Treasury bureau and the Departmental Offices 
may prescribe supplementary use of the SF 700 to apply to other 
authorized legends approved by the Department for officially limited 
information, as warranted.
    (c) Keys. The designated security officer in each Treasury bureau 
and the Departmental Offices shall establish administrative procedures 
for the control and accountability of keys and locks whenever key-
operated, high-security padlocks are utilized. The level of protection 
provided such keys shall be equivalent to that afforded the information 
being protected by the padlock.
    (d) Classified Document Cover Sheets. Classified document cover 
sheets alert personnel that documents or folders are classified and 
require protection from unauthorized scrutiny. Individuals who prepare 
or package classified documents are responsible for affixing the 
appropriate document cover sheet. Orange Standard Form 703 (Top Secret 
Cover Sheet), red SF 704 (Secret Cover Sheet) and blue SF 706 
(Confidential Cover Sheet) are the only authorized cover sheets for 
collateral classified information. The national stock numbers of these 
cover sheets are as follows: SF 703, 7540-01-213-7901; SF 704, 7540-01-
213-7902; and SF 705, 7540-01-213-7903. In order to maintain the 
integrity of the color coding process the photocopying and use of non-
color coded classified document cover sheets is prohibited. Bureaus and 
offices shall maintain a supply of classified document cover sheets 
appropriate for their needs. Classified document cover sheets are 
designed to be reused and will be removed before classified information 
is filed to conserve filing space and prior to the destruction of 
classified information. Document cover sheets are to be used to shield 
classified documents while in use and particularly when the transmission 
is made internally within a headquarters by courier, messenger or by 
personal contact. File folders containing classified information should 
be otherwise marked, e.g., at the top and bottom of the front and back 
covers, to indicate the overall classification of the contents rather 
than permanently affixing the respective classified document cover 
sheet. Treasury Directive 71-02 provides for the use of a green cover 
sheet, TD F 71-01.6 (Limited Official Use Document Cover Sheet) for 
information bearing the control legend ``Limited Official Use''. Bureaus 
or offices electing to create and use other cover sheets for officially 
limited information must obtain prior written approval from the 
Departmental Director of Security.
    (e) Activity Security Checklist. Standard Form 701 (Activity 
Security Checklist) provides a systematic means to make a thorough end-
of-day security inspection for a particular work area and to allow for 
employee accountability in the event that irregularities are discovered. 
Bureaus and the Departmental Offices may include additional information 
on the SF 701 to suit their unique needs. The SF 701, available through 
normal supply channels has a national stock number of 7540-01-213-7900. 
It shall be the only form used in situations that call for use of an 
activity security checklist. Completion, storage and disposition of SF 
701 will be determined by each bureau and the Departmental Offices.



Sec. 2.28  Transmittal [4.1(b)].

    (a) Preparation. Classified information to be transmitted outside of 
a Treasury facility shall be enclosed in opaque inner and outer covers. 
The inner cover shall be a sealed wrapper or

[[Page 135]]

envelope plainly marked with the assigned security classification and 
addresses of both sender and addressee. The outer cover shall be sealed 
and addressed with no identification of the classification of its 
contents. Whenever classified material is to be transmitted and the size 
of the material is not suitable for use of envelopes or similar 
wrappings, it shall be enclosed in two opaque sealed containers, such as 
boxes or heavy wrappings. Material used for packaging such bulk 
classified information shall be of sufficient strength and durability as 
to provide security protection while in transit, to prevent items from 
breaking out of the container, and to facilitate detection of any 
tampering therewith.
    (b) Receipting. A receipt, Treasury Department Form 71-01.5 
(Classified Document Record of Transmittal), shall be enclosed in the 
inner cover, except that Confidential and Limited Official Use 
information shall require a receipt only if the sender deems it 
necessary. The receipt shall identify the sender, addressee and describe 
the document, but shall contain no classified information. It shall be 
immediately signed by the recipient and returned to the sender. Within a 
Treasury facility, such information may be transmitted between offices 
by direct contact of the officials concerned in a single sealed opaque 
envelope with no security classification category being shown on the 
outside of the envelope. Classified information shall never be delivered 
to unoccupied offices or rooms. Senders of classified information should 
maintain appropriate records of outstanding receipts for which return of 
the original signed copy is still pending. TD F's 71-01.5 shall be 
maintained for a three year period after which they may be destroyed. No 
record of the actual destruction of the TD F 71-01.5 is required.
    (c) Transmittal of Top Secret. The transmittal of Top Secret 
information outside of a Treasury facility shall be by specifically 
designated personnel, by State Department diplomatic pouch, by a 
messenger-courier system authorized for that purpose, e.g., Defense 
Courier Service, or over authorized secure communications circuits. Top 
Secret information may not be sent via registered mail.
    (d) Transmittal of Secret. The transmittal of Secret information 
shall be effected in the following manner:
    (1) The 50 States, District of Columbia and Puerto Rico. Secret 
information may be transmitted within and between the 50 States, the 
District of Columbia, and the Commonwealth of Puerto Rico by one of the 
means authorized for Top Secret information, by the United States Postal 
Service registered mail or express mail service; or by protective 
services provided by United States air or surface commercial carriers 
under such conditions as may be prescribed by the Departmental Director 
of Security. United States Postal Service express mail service shall be 
used only when it is the most effective means to accomplish a mission 
within security, time, cost and accountability constraints. To ensure 
direct delivery to the addressee, the ``Waiver of Signature and 
Indemnity'' block on the United States Postal Service Express Mail Label 
11-B may not be executed under any circumstances. All Secret express 
mail shipments are to be processed through mail distribution centers or 
delivered directly to a United States Postal Service facility or 
representative. The use of external (street side) express mail 
collection boxes is prohibited. Only the express mail services of the 
United States Postal Service are authorized.
    (2) Other Areas. Secret information may be transmitted from, to, or 
within areas other than those specified in Sec. 2.28(d)(1) by one of the 
means established for Top Secret information, or by United States 
registered mail through Military Postal Service facilities provided that 
the information does not at any time pass out of United States citizen 
control and does not pass through a foreign postal system. Transmittal 
outside such areas may also be accomplished under escort of 
appropriately cleared personnel aboard United States Government owned 
and United States Government contract vehicles or aircraft, ships of the 
United States Navy, civil service manned United States Naval ships, and 
ships of United States Registry. Operators of

[[Page 136]]

vehicles, captains or masters of vessels, and pilots of aircraft who are 
United States citizens, and who are appropriately cleared, may be 
designated as escorts. Secret information may not be sent via certified 
mail.
    (e) Transmittal of Confidential and Limited Official Use 
Information. Confidential and Limited Official Use information shall be 
transmitted within and between the 50 States, the District of Columbia, 
the Commonwealth of Puerto Rico, and United States territories or 
possessions by one of the means established for higher classifications, 
or by the United States Postal Service registered mail. Outside these 
areas, confidential and Limited Official Use information shall be 
transmitted only as is authorized for higher classifications. 
Confidential and Limited Official Use information may not be sent via 
certified mail.
    (f) Hand Carrying of Classified Information in Travel Status--(1) 
General Provisions. Personnel in travel status shall physically 
transport classified information across international boundaries only 
when absolutely essential. Whenever possible, and when time permits, the 
most desirable way to transmit classified information to the location 
being visited is by other authorized means identified in Sec. 2.28 (c), 
(d) and (e). The physical transportation of classified information on 
non-United States flag aircraft should be avoided if possible. Treaury 
Directive 71-03, ``Screening of Airline Passengers Carrying Classified 
Information or Material'' provides specifics on the requirements for 
transporting classified information.
    (2) Specific Safeguards. If it is determined that the transportation 
of classified information by an individual in travel status is in the 
best interest of the United States Government, the following specific 
safeguards shall be fulfilled:
    (i) Classified information shall be in the physical possession of 
the individual and shall have adequate safeguards at all times if proper 
storage at a United States Government facility is not available. Under 
no circumstances shall classified information be stored in a hotel safe 
or room, locked in automobiles, private residences, train compartments, 
or any vehicular detachable storage compartments.
    (ii) An inventory of all Top Secret classified information, 
including teletype messages, shall be made prior to departure and a copy 
of same shall be retained by the traveller's office until the 
traveller's return at which time all Top Secret classified information 
shall be accounted for. These same procedures are recommended for 
information classified Secret, Confidential or Limited Official Use.
    (iii) Classified information shall never be displayed or used in any 
manner in public conveyances or rooms. First class or business travel is 
not authorized when the justification for commercially available 
transportation is based on the need for reviewing classified materials 
while enroute. Travelers are responsible for reviewing and familiarizing 
themselves with required classified materials, under appropriately 
secure circumstances, in advance of their travel and not during such 
travel.
    (iv) In order to avoid unnecessary delays in the screening process 
prior to boarding commercial air carriers, the traveler shall have in 
his or her possession written authorization, on Treasury or bureau 
letterhead, to transport classified information and either an 
identification card or credential bearing both a photograph and 
descriptive data. Courier authorizations shall be signed by an 
appropriate security representative authorized to direct official 
travel. This courier authorization, along with official travel orders, 
shall, in most instances, permit the individual to exempt the classified 
information from inspection. If difficulty is encountered, the traveler 
should tactfully refuse to exhibit or disclose the classified 
information to inspection and should insist on the assistance of the 
local United States diplomatic representative at the port of entry or 
departure.
    (v) Upon completion of the visit, the traveler shall have the 
information returned to his or her office by approved means. All Top 
Secret and Secret classified information, including teletype messages 
transported for the purpose of the visit shall be accounted for. It is 
highly recommended that Confidential

[[Page 137]]

and Limited Official Use information also be accounted for. If any Top 
Secret or Secret classified items are left with the office being visited 
for its retention and use, the individual shall obtain a receipt.

[55 FR 1644, Jan. 17, 1990, as amended at 55 FR 50321, Dec. 6, 1990]



Sec. 2.29  Telecommunications and computer transmissions.

    Classified information shall not be communicated by 
telecommunications or computer transmissions except as may be authorized 
with respect to the transmission of classified information over 
authorized secure communications circuits or systems.



Sec. 2.30  Special access programs [1.2(a) and 4.2(a)].

    Only the Secretary of the Treasury may create or continue a special 
access program if:
    (a) Normal management and safeguarding procedures do not limit 
access sufficiently; and
    (b) The number of persons with access is limited to the minimum 
necessary to meet the objective of providing extra protection for the 
information.



Sec. 2.31  Reproduction controls [4.1(b)].

    (a) Top Secret documents, except for the controlled initial 
distribution of information processed or received electronically, shall 
not be reproduced without the consent of the originator.
    (b) Unless restricted by the originating agency, Secret, 
Confidential and Limited Official Use documents may be reproduced to the 
extent required by operational needs.
    (c) Reproductions of classified documents shall be subject to the 
same accountability and controls as the original documents.
    (d) Paragraphs (a) and (b) of this section shall not restrict the 
reproduction of documents to facilitate review for possible 
declassification.



Sec. 2.32  Loss or possible compromise [4.1(b)].

    (a) Report of Loss or Possible Compromise. Any Treasury employee who 
has knowledge of the loss or possible compromise or classified 
information shall immediately report the circumstances to their 
designated office or bureau security officer who shall take appropriate 
action to assess the degree of damage. In turn, the Departmental 
Director of Security shall be immediately notified by the affected 
office or bureau security officer of such reported loss or possible 
compromise. The Departmental Director of Security shall also notify the 
department or agency which originated the information and any other 
interested department or agency so that a damage assessment may be 
conducted and appropriate measures taken to negate or minimize any 
adverse effect of the loss or possible compromise. Compromises may occur 
through espionage, unauthorized disclosures to the press or other 
members of the public, publication of books and treatises, the known 
loss of classified information or equipment to foreign powers, or 
through various other circumstances.
    (b) Inquiry. The Departmental Director of Security shall notify the 
Assistant Secretary (Management) who shall then direct an immediate 
inquiry to be conducted for the purpose of taking corrective measures 
and assessing damages. Based on the results of this inquiry, it may be 
deemed appropriate to notify the Inspector General who shall determine 
whether the Office of the Inspector General or a Treasury bureau will 
conduct any additional investigation. Upon completion of the 
investigation by the Inspector General, the Inspector General shall 
recommend to the Assistant Secretary (Management) and concurrently to 
the Departmental Director of Security, the appropriate administrative, 
disciplinary, or legal action to be taken based upon jurisdictional 
authority of the Treasury components involved.
    (c) Content of Damage Assessments. At a minimum, damage assessments 
shall be in writing and contain the following:
    (1) Identification of the source, date and circumstances of the 
compromise.
    (2) Classification and description of the specific information which 
has been lost.

[[Page 138]]

    (3) An analysis and statement of the known or probable damage to the 
national security that has resulted or may result.
    (4) An assessment of the possible advantage to foreign powers 
resulting from the compromise.
    (5) An assessment of whether,
    (i) The classification of the information involved should be 
continued without change;
    (ii) The specific information, or parts thereof, shall be modified 
to minimize or nullify the effects of the reported compromise and the 
classification retained;
    (iii) Downgrading, declassification, or upgrading is warranted, and 
if so, confirmation of prompt notification to holders of any change, and
    (6) An assessment of whether countermeasures are appropriate and 
feasible to negate or minimize the effect of the compromise.
    (d) System for Control of Damage Assessments. Each Treasury bureau 
and the Departmental Offices shall establish a system of control and 
internal procedures to ensure that damage assessments are performed in 
all cases described in Sec. 2.32(a) and that records are maintained in a 
manner that facilitates their retrieval and use within the Department.
    (e) Cases Involving More Than One Agency. (1) Whenever a compromise 
involves the classified information or interests of more than one 
agency, the Departmental Director of Security shall advise the other 
affected agencies of the circumstances and findings that affect their 
information or interests. Whenever a damage assessment, incorporating 
the product of two or more agencies is needed, the affected agencies 
shall agree upon the assignment of responsibility for the assessment and 
Treasury components will provide all data pertinent to the compromise to 
the agency responsible for conducting the assessment.
    (2) Whenever a compromise of United States classified information is 
the result of actions taken by foreign nationals, by foreign government 
officials, or by United States nationals in the employ of international 
organizations, the agency performing the damage assessment shall 
endeavor to ensure through appropriate intergovernmental liaison 
channels, that information pertinent to the assessment is obtained. 
Whenever more than one agency is responsible for the assessment, those 
agencies shall coordinate the request prior to transmittal through 
appropriate channels.
    (3) Whenever an action is contemplated against any person believed 
responsible for the loss or compromise of classified information, damage 
assessments shall be coordinated with appropriate legal counsel. 
Whenever a violation of criminal law appears to have occured and a 
criminal prosecution is contemplated, coordination shall be made with 
the Department of Justice.
    (4) The designated representative of the Director of Central 
Intelligence, or other appropriate officials with responsibility for the 
information involved, will be consulted whenever a compromise of 
sensitive compartmented information has occurred.



Sec. 2.33  Responsibilities of holders [4.1(b)].

    Any person having access to and possession of classified information 
is responsible for protecting it from persons not authorized access, 
i.e., persons who do not possess an appropriate security clearance, and 
who do not possess the required need-to-know. This includes keeping 
classified documents under constant observation and turned face-down or 
covered when not in use and securing such information in approved 
security equipment or facilities whenever it is not under the direct 
supervision of authorized persons. In all instances, such protective 
means must meet accountability requirements prescribed by the 
Department.



Sec. 2.34  Inspections [4.1(b)].

    Individuals charged with the custody of classified information shall 
conduct the necessary inspections within their areas to ensure adherence 
to procedural safeguards prescribed to protect classified information. 
Security officers shall ensure that periodic inspections are made to 
determine whether procedural safeguards prescribed by this regulation 
and any bureau implementing regulation are in effect at all

[[Page 139]]

times. At a minimum such checks shall ensure that all classified 
information is stored in approved security containers, including 
removable storage media, e.g., floppy disks used by word processors that 
contain classified information; burn bags, if utilized, are either 
stored in approved security containers or destroyed; and classified 
shorthand notes, carbon paper, carbon and plastic typewriter ribbons, 
rough drafts and similar papers have been properly stored or destroyed.



Sec. 2.35  Security violations.

    Any individual, at any level of employment, determined to have been 
responsible for the unauthorized release or disclosure or potential 
release or disclosure of classified national security information, 
whether it be knowingly, willfully or through negligence, shall be 
notified on TD F 71-21.1 (Record of Security Violation) that his or her 
action is in violation of this regulation, the Order, the Directive, and 
Executive Order 10450, as amended. Treasury Directive 71-04, entitled, 
``Administration of Security Violations'' sets forth provisions 
concerning security violations which shall apply to each Treasury 
employee and persons under contract or subcontract to the Department 
authorized access to Treasury classified national security information.
    (a) Repeated abuse of the classification process, either by 
unnecessary or over-classification, or repeated failure, neglect or 
disregard of established requirements for safeguarding classified 
information by any employee shall be grounds for appropriate adverse or 
disciplinary action. Such actions may include, but are not necessarily 
limited to, a letter of warning, a letter of reprimand, suspension 
without pay, or dismissal, as appropriate in the particular case, under 
applicable personnel rules, regulations and procedures. Where a 
violation of criminal statutes may be involved, any such case shall be 
promptly referred to the Department of Justice.
    (b) After an affirmative adjudication of a security violation, and 
as the occasion demands, reports of accountable security violations 
shall be placed in the employee's personnel security file, and as 
appropriate, in the employee's official personnel folder. The security 
official of the office or bureau concerned shall recommend to the 
respective management official or bureau head that disciplinary action 
be taken when such action is indicated.



Sec. 2.36  Disposition and destruction [4.1(b)].

    Classified information no longer needed in current working files or 
for reference or record purposes shall be processed for appropriate 
disposition in accordance with the provisions of Title 44, United States 
Code, Chapters 21 and 33, which govern disposition of Federal records. 
Classified information approved for destruction shall be destroyed by 
either burning, melting, chemical decomposition, pulping, mulching, 
pulverizing, cross-cut shredding or other mutilation in the presence of 
appropriately cleared and authorized persons. The method of destruction 
must preclude recognition or reconstruction of the classified 
information. The residue from cross-cut shredding of Top Secret, Secret, 
and Confidential classified, non-Communications Security (COMSEC), 
information contained in paper media may not exceed \3/32\" by \1/2\" 
with a \1/64\" tolerance.
    (a) Diskettes or Floppy Disks. Diskettes or floppy disks containing 
information or data classified up to and including Top Secret may be 
destroyed by the use of an approved degausser, burning, pulverizing, and 
chemical decomposition, or by first reformatting or reinitializing the 
diskette then physically removing the magnetic disk from its protective 
sleeve and using an approved cross-cut shredder to destroy the magnetic 
media. Care must be exercised to ensure that the destruction of magnetic 
disks does not damage the cross-cut shredder. The residue from such 
destruction, however, may not exceed \1/32\" by \1/2\" with a \1/64\" 
tolerance. The destruction of classified COMSEC information on diskettes 
or floppy disks may only be effected by burning followed by crushing of 
the ash residue.
    (b) Hard Disks. Hard disks, including removable hard disks, disk 
packs, drums or single disk platters that contain classified information 
must first

[[Page 140]]

be degaussed prior to physical destruction. The media must be destroyed 
by incineration, chemical decomposition or the entire magnetic disk 
pack, drum, or platter recording surface must be obliterated by use of 
an emery wheel or disk sander.
    (c) Approval of Use of Mulching and Cross-cut Shredding Equipment. 
Prior to obtaining mulching or cross-cut shredding equipment, the 
Departmental Director of Security shall approve the use of such 
equipment.
    (d) Use of Burnbags. Any classified information to be destroyed by 
burning shall be torn and placed in opaque containers, commonly 
designated as burnbags, which shall be clearly and distinctly labeled 
``BURN'' or ``CLASSIFIED WASTE''. Burnbags awaiting destruction are to 
be protected by security safeguards commensurate with the classification 
or control designation of the information involved.
    (e) Records of Destruction. Appropriate accountability records shall 
be maintained on TD F 71-01.17 (Classified Document Certificate of 
Destruction) to reflect the destruction of all Top Secret and Secret 
information. As deemed necessary by the originator, or as required by 
special regulations, the TD F 71-01.17 shall be executed for the 
destruction of information classified Confidential or marked Limited 
Official Use. TD F's 71-01.17 shall be maintained for a three-year 
period after which the form may be destroyed. No record of the actual 
destruction of the TD F 71-01.17 is required.
    (f) Destruction of non-record Classified Information. Non-record 
classified information such as extra copies and duplicates, including 
shorthand notes, preliminary drafts, used carbon paper and other 
material of similar temporary nature, shall also be destroyed by 
burning, mulching, or cross-cut shredding as soon as it has served its 
purpose, but no records of such destruction need be maintained.

[55 FR 1644, Jan. 17, 1990; 55 FR 5118, Feb. 13, 1990]



Sec. 2.37  National Security Decision Directive 197.

    National Security Decision Directive 197, Reporting Hostile Contacts 
and Security Awareness, provides that United States Government employees 
are responsible for reporting to their designated security officer:
    (a) Any suspected or apparent attempt by persons, regardless of 
nationality, to obtain unauthorized access to classified national 
security information, sensitive or proprietary information or technology 
and/or;
    (b) Instances in which they feel they are being targeted for 
possible exploitation. Contacts with representatives of designated 
countries of concern identified in Sec. 2.43(f) which involve requests 
for information which are not ordinarily provided in the course of an 
employee's job, regular or daily activity, and/or which might possibly 
lead to further requests for access to sensitive, proprietary or 
classified information or technology, are to be reported to designated 
security officers. Reports of such contacts are to be forwarded by the 
designated security officer to the Departmental Director of Security for 
appropriate action and coordination.



                  Subpart E--Implementation and Review



Sec. 2.38  Departmental management.

    (a) The Assistant Secretary (Management) shall:
    (1) Enforce the Order, the Directive and this regulation, and 
establish, coordinate and maintain active training, orientation and 
inspection programs for employees concerned with classified information.
    (2) Review suggestions and complaints regarding the administration 
of this regulation.
    (b) Pursuant to Treasury Directive 71-08, ``Delegation of Authority 
Concerning Physical Security Programs'', the Departmental Director of 
Security shall:
    (1) Review all bureau implementing regulations prior to publication 
and shall require any regulation to be changed, if it is not consistent 
with the Order, the Directive or this regulation.
    (2) Have the authority to conduct on-site reviews of bureau physical 
security programs and information security programs as they pertain to 
each Treasury bureau and to require such

[[Page 141]]

reports, information and assistance as may be necessary, and
    (3) Serve as the principal advisor to the Assistant Secretary 
(Management) with respect to Treasury physical and information security 
programs.



Sec. 2.39  Bureau administration.

    Each Treasury bureau and the Departmental Offices shall designate, 
in writing to the Departmental Director of Security, an officer or 
official to direct, coordinate and administer its physical security and 
information security programs which shall include active oversight to 
ensure effective implementation of the Order, the Directive, this 
regulation. Bureaus and the Departmental Offices shall revise their 
existing implementing regulation on national security information to 
ensure conformance with this regulation. Time frames for bureau and 
Departmental Offices implementation shall be established by the 
Departmental Director of Security.



Sec. 2.40  Emergency planning [4.1(b)].

    Each Treasury bureau and the Departmental Offices shall develop 
plans for the protection, removal, or destruction of classified 
information in case of fire, natural disaster, civil disturbance, or 
possible enemy action. These plans shall include the disposition of 
classified information located in foreign countries.



Sec. 2.41  Emergency authority [4.1(b)].

    The Secretary of the Treasury may prescribe by regulation special 
provisions for the dissemination, transmittal, destruction, and 
safeguarding of national security information during combat or other 
emergency situations which pose an imminent threat to national security 
information.



Sec. 2.42  Security education [5.3(a)].

    Each Treasury bureau that creates, processes or handles national 
secutity information, including the Departmental Offices, is required to 
establish a security education program. The program shall be sufficient 
to familiarize all necessary personnel with the provisions of the Order, 
the Directive, this regulation and any other implementing directives and 
regulations to impress upon them their individual security 
responsibilities. The program shall also provide for initial, refresher, 
and termination briefings.
    (a) Briefing of Employees. All new employees concerned with 
classified information shall be afforded a security briefing regarding 
the Order, the Directive and this regulation and sign a security 
agreement as required in Sec. 2.22(c). Employees concerned with 
sensitive compartmented information shall be required to read and also 
sign a security agreement. Copies of applicable laws and pertinent 
security regulations setting forth the procedures for the protection and 
disclosure of classified information shall be available for all new 
employees afforded a security briefing. All employees given a security 
briefing shall be required to sign a TD F 71-01.16 (Physical Security 
Orientation Acknowledgment) which shall be maintained on file as 
determined by respective office or bureau security officials.
    (b) [Reserved]



                      Subpart F--General Provisions



Sec. 2.43  Definitions [6.1].

    (a) Authorized Person. Those individuals who have a ``need-to-know'' 
the classified information involved and have been cleared for the 
receipt of such information. Responsibility for determining whether 
individuals' duties require that they possess, or have access to, any 
classified information and whether they are authorized to receive it 
rests on the individual who has possession, knowledge, or control of the 
information involved, and not on the prospective recipients.
    (b) Compromise. The loss of security enabling unauthorized access to 
classified information. Affected information or material is not 
automatically declassified.
    (c) Confidential Source. Any individual or organization that has 
provided, or that may reasonably be expected to provide, information to 
the United States on matters pertaining to the national security with 
the expectation, expressed or implied, that the information or 
relationship, or both, be held in confidence.

[[Page 142]]

    (d) Declassification. The determination that particular classified 
information no longer requires protection against unauthorized 
disclosure in the interest of national security. Such determination 
shall be by specific action or occur automatically after the lapse of a 
requisite period of time or the occurrence of a specified event. If such 
determination is by specific action, the information or material shall 
be so marked with the new designation.
    (e) Derivative Classification. A determination that information is, 
in substance, the same as informaiton that is currently classified and a 
designation of the level of classification.
    (f) Designated Countries of Concern. For purposes of National 
Security Decision Directive 197 reporting: Afghanistan, Albania, Angola, 
Bulgaria, Cambodia (Kampuchea), the People's Republic of China 
(Communist China), Cuba, Czechoslovakia, Ethiopia, East Germany (German 
Democratic Republic including the Soviet sector of Berlin), Hungary, 
Iran, Iraq, Laos, Libya, Mongolian People's Republic (Outer Mongolia), 
Nicaragua, North Korea, Palestine Liberation Organization, Poland, 
Romania, South Africa, South Yemen, Syria, Taiwan, Union of Soviet 
Socialist Republics (Russia), Vietnam and Yugoslavia.
    (g) Document. Any recorded information regardless of its physical 
form or characteristics, including, without limitation, written or 
printed material; data processing cards and tapes; maps, charts; 
painting; drawings; engravings; sketches; working notes and papers; 
reproductions of such things by any means or process; and sound, voice, 
or electronic recordings in any form.
    (h) Foreign Government Information. (1) Information provided by a 
foreign government or governments, an international organization of 
governments, or any elements thereof with the expectation, expressed or 
implied, that the information, the source of the information, or both, 
are to be held in confidence; or
    (2) Information produced by the United States Government pursuant to 
or as a result of a joint arrangement with a foreign government or 
governments or an international organization of governments, or any 
element thereof, requiring that the information, the arrangement, or 
both, are to be held in confidence.
    (i) Information. Any data or material, regardless of its physical 
form or characteristics, that is owned by, produced by or for, or is 
under the control of the United States Government.
    (j) Information Security. The administrative policies and procedures 
for identifying, controlling, and safeguarding from unauthorized 
disclosure, information the protection of which is authorized by 
Executive Order or statute.
    (k) Intelligence Activity. An activity that an agency within the 
Intelligence Community is authorized to conduct pursuant to Executive 
Order 12333.
    (l) Intelligence Sources and Methods. A person, organization, or 
technical means or method which provides foreign intelligence or foreign 
counterintelligence to the United States and which, if its identity or 
capability is disclosed, is vulnerable to counteraction that could 
nullify or significantly reduce its effectiveness in providing foreign 
intelligence or foreign counterintelligence to the United States. An 
intelligence source also means a person or organization which provides 
foreign intelligence or foreign counterintelligence to the United States 
only on the condition that its identity remains undisclosed. 
Intelligence methods are that which, if disclosed, reasonably could lead 
to the disclosure of an intelligence source or operation.
    (m) Limited Official Use. The legend authorized for ``Officially 
Limited Information'' which provides that it be handled, safeguarded and 
stored in a manner equivalent to national security information 
classified Confidential.
    (n) Multiple Classified Sources. The term used to indicate that a 
document is derivatively classified when it contains classified 
information derived from other than one source.
    (o) National Security. The national defense or foreign relations of 
the United States.
    (p) National Security Information. Information that has been 
determined

[[Page 143]]

pursuant to the Order or any predecessor Executive Order to require 
protection against unauthorized disclosure and that is so designated.
    (q) Need-to-Know. A determination made by the possessor of 
classified information that a prospective recipient, in the interest of 
national security, has a requirement for access to, knowledge of, or 
possession of the classified information in order to perform tasks or 
services essential to the fulfillment of particular work, including 
performance on contracts for which such access is required.
    (r) Officially Limited Information. Information which does not meet 
the criterion that unauthorized disclosure would at least cause damage 
to the national security under the Order or a predecessor Executive 
Order, but which concerns important, delicate, sensitive or proprietary 
information which is utilized in the development of Treasury policy. 
This includes the enforcement of criminal and civil laws relating to 
Treasury operations, the making of decisions on personnel matters and 
the consideration of financial information provided in confidence.
    (s) Original Classification. An initial determination that 
information requires, in the interest of national security, protection 
against unauthorized disclosure, together with a classification 
designation signifying the level of protection required.
    (t) Original Classification Authority. The authority vested in an 
Executive Branch official to make an initial determination that 
information requires protection against unauthorized disclosure in the 
interest of national security.
    (u) Originating Agency. The agency responsible for the initial 
determination that particular information is classified.
    (v) Portion. A segment of a document for purposes of expressing a 
unified theme; ordinarily a paragraph.
    (w) Sensitive Compartmented Information. Information and material 
concerning or derived from intelligence sources, methods, or analytical 
processes, that requires special controls for restricting handling 
within compartmented intelligence systems established by the Director of 
Central Intelligence and for which compartmentation is established.
    (x) Special Access Program. Any program imposing ``need-to-know'' or 
access controls beyond those normally provided for access to 
Confidential, Secret, or Top Secret information. Such a program may 
include, but is not limited to, special clearance, adjudication, or 
investigative requirements, special designations of officials authorized 
to determine ``need-to-know'' or special lists of persons determined to 
have a ``need-to-know''.
    (y) Special Activity. An activity conducted in support of national 
foreign policy objectives abroad which is planned and executed so that 
the role of the United States Government is not apparent or acknowledged 
publicly, and functions in support of such activity, but which is not 
intended to influence United States political processes, public opinion, 
policies or media and does not include diplomatic activities or the 
collection and production of intelligence or related support functions.
    (z) Unauthorized Disclosure. A communication or physical transfer of 
classified information to an unauthorized recipient. It includes the 
unauthorized disclosure of classified information in a newspaper, 
journal, or other publication where such information is traceable due to 
a direct quotation or other uniquely identifiable fact.



PART 3--CLAIMS REGULATIONS AND INDEMNIFICATION OF DEPARTMENT OF TREASURY EMPLOYEES--Table of Contents




           Subpart A--Claims Under the Federal Tort Claims Act

Sec.
3.1  Scope of regulations.
3.2  Filing of claims.
3.3  Legal review.
3.4  Approval of claims not in excess of $25,000.
3.5  Limitations on authority to approve claims.
3.6  Final denial of a claim.
3.7  Action on approved claims.
3.8  Statute of limitations.

              Subpart B--Claims Under the Small Claims Act

3.20  General.

[[Page 144]]

3.21  Action by claimant.
3.22  Legal review.
3.23  Approval of claims.
3.24  Statute of limitations.

     Subpart C--Indemnification of Department of Treasury Employees

3.30  Policy.

    Authority: 28 U.S.C. 2672; 28 CFR part 14; 5 U.S.C. 301.

    Source: 35 FR 6429, Apr. 22, 1970, unless otherwise noted.



           Subpart A--Claims Under the Federal Tort Claims Act



Sec. 3.1  Scope of regulations.

    (a) The regulations in this part shall apply to claims asserted 
under the Federal Tort Claims Act, as amended, 28 U.S.C. 2672, accruing 
on or after January 18, 1967, for money damages against the United 
States for injury to or loss of property or personal injury or death 
caused by the negligent or wrongful act or omission of an employee of 
the Department while acting within the scope of his office or 
employment, under circumstances where the United States if a private 
person, would be liable to the claimant for such damage, loss, injury, 
or death, in accordance with the law of the place where the act or 
omission occurred. The regulations in this subpart do not apply to any 
tort claims excluded from the Federal Tort Claims Act, as amended, under 
28 U.S.C. 2680.
    (b) Unless specifically modified by the regulations in this part, 
procedures and requirements for filing and handling claims under the 
Federal Tort Claims Act shall be in accordance with the regulations 
issued by the Department of Justice, at 28 CFR part 14, as amended.



Sec. 3.2  Filing of claims.

    (a) When presented. A claim shall be deemed to have been presented 
upon the receipt from a claimant, his duly authorized agent or legal 
representative of an executed Standard Form 95 or other written 
notification of an incident, accompanied by a claim for money damages in 
a sum certain for injury to or loss of property, or personal injury, or 
death alleged to have occurred by reason of the incident.
    (b) Place of filing claim. Claims shall be submitted directly or 
through the local field headquarters to the head of the bureau or office 
of the Department out of whose activities the incident occurred, if 
known; or if not known, to the General Counsel, Treasury Department, 
Washington, DC 20220.
    (c) Contents of claim. The evidence and information to be submitted 
with the claim shall conform to the requirements of 28 CFR 14.4.



Sec. 3.3  Legal review.

    Any claim that exceeds $500, involves personal injuries or 
automobile damage, or arises out of an incident that is likely to result 
in multiple claimants, shall be forwarded to the legal division of the 
bureau or office out of whose activities the claim arose. The claim, 
together with the reports of the employee and the investigation, shall 
be reviewed in the legal division which shall thereupon make a 
recommendation that the claim be approved, disapproved, or compromised, 
and shall advise on the need for referral of the claim to the Department 
of Justice. This recommendation and advice, together with the file, 
shall be forwarded to the head of the bureau or office or his designee.

[35 FR 6429, Apr. 22, 1970, as amended at 48 FR 16253, Apr. 15, 1983]



Sec. 3.4  Approval of claims not in excess of $25,000.

    (a) Claims not exceeding $25,000 and not otherwise requiring 
consultation with the Department of Justice pursuant to 28 CFR 14.6(b) 
shall be approved, disapproved, or compromised by the head of the bureau 
or office or his designee, taking into consideration the recommendation 
of the legal division.



Sec. 3.5  Limitations on authority to approve claims.

    (a) All proposed awards, compromises or settlements in excess of 
$25,000 require the prior written approval of the Attorney General.
    (b) All claims which fall within the provisions of 28 CFR 14.6(b) 
require referral to and consultation with the Department of Justice.
    (c) Any claim which falls within paragraph (a) or (b) of this 
section

[[Page 145]]

shall be reviewed by the General Counsel. If the claim, award, 
compromise, or settlement receives the approval of the General Counsel 
and the head of the bureau or office or his designee, a letter shall be 
prepared for the signature of the General Counsel transmitting to the 
Assistant Attorney General, Civil Division, Department of Justice, the 
case for approval or consultation as required by 28 CFR 14.6. Such 
letter shall conform with the requirements set forth in 28 CFR 14.7.



Sec. 3.6  Final denial of a claim.

    The final denial of an administrative claim shall conform with the 
requirements of 28 CFR 14.9 and shall be signed by the head of the 
bureau or office, or his designee.



Sec. 3.7  Action on approved claims.

    (a) Any award, compromise, or settlement in an amount of $2,500 or 
less shall be processed for payment from the appropriations of the 
bureau or office out of whose activity the claim arose.
    (b) Payment of an award, compromise, or settlement in excess of 
$2,500 and not more than $100,000 shall be obtained by the bureau or 
office by forwarding Standard Form 1145 to the Claims Division, General 
Accounting Office.
    (c) Payment of an award, compromise, or settlement in excess of 
$100,000 shall be obtained by the bureau by forwarding Standard Form 
1145 to the Bureau of Government Financial Operations, Department of the 
Treasury, which will be responsible for transmitting the award, 
compromise, or settlement to the Bureau of the Budget for inclusion in a 
deficiency appropriation bill.
    (d) When an award is in excess of $25,000, Standard Form 1145 must 
be accompanied by evidence that the award, compromise, or settlement has 
been approved by the Attorney General or his designee.
    (e) When the use of Standard Form 1145 is required, it shall be 
executed by the claimant. When a claimant is represented by an attorney, 
the voucher for payment shall designate both the claimant and his 
attorney as payees; the check shall be delivered to the attorney, whose 
address shall appear on the voucher.
    (f) Acceptance by the claimant, his agent, or legal representative, 
of any award, compromise or settlement made pursuant to the provisions 
of section 2672 or 2677 of title 28, United States Code, shall be final 
and conclusive on the claimant, his agent or legal representative and 
any other person on whose behalf or for whose benefit the claim has been 
presented, and shall constitute a complete release of any claim against 
the United States and against any employee of the Government whose act 
or omission gave rise to the claim, by reason of the same subject 
matter.

[35 FR 6429, Apr. 22, 1970, as amended at 39 FR 19470, June 3, 1974]



Sec. 3.8  Statute of limitations.

    Claims under this subpart must be presented in writing to the 
Department within 2 years after the claim accrued.



              Subpart B--Claims Under the Small Claims Act



Sec. 3.20  General.

    The Act of December 28, 1922, 42 Stat. 1066, the Small Claims Act, 
authorized the head of each department and establishment to consider, 
ascertain, adjust, and determine claims of $1,000 or less for damage to, 
or loss of, privately owned property caused by the negligence of any 
officer or employee of the Government acting within the scope of his 
employment. The Federal Tort Claims Act superseded the Small Claims Act 
with respect to claims that are allowable under the former act. 
Therefore, claims that are not allowable under the Federal Tort Claims 
Act, for example, claims arising abroad, may be allowable under the 
Small Claims Act.



Sec. 3.21  Action by claimant.

    Procedures and requirements for filing claims under this section 
shall be the same as required for filing claims under the Federal Tort 
Claims Act as set forth in Subpart A of this part.

[[Page 146]]



Sec. 3.22  Legal review.

    Claims filed under this subpart shall be forwarded to the legal 
division of the bureau or office out of whose activities the claim 
arose. The claim, together with the reports of the employee and the 
investigation, shall be reviewed in the legal division which shall 
thereupon make a recommendation that the claim be approved, disapproved 
or compromised.



Sec. 3.23  Approval of claims.

    Claims shall be approved, disapproved, or compromised by the head of 
the bureau or office or his designee, taking into consideration the 
recommendation of the legal division.



Sec. 3.24  Statute of limitations.

    No claim will be considered under this subpart unless filed within 1 
year from the date of the accrual of said claim.



     Subpart C--Indemnification of Department of Treasury Employees

    Source: 56 FR 42938, Aug. 30, 1991, unless otherwise noted.



Sec. 3.30  Policy.

    (a) The Department of the Treasury may indemnify, in whole or in 
part, a Department employee (which for purposes of this regulation shall 
include a former employee) for any verdict, judgment or other monetary 
award rendered against such employee, provided the Secretary or his or 
her designee determines that (1) the conduct giving rise to such 
verdict, judgment or award was within the scope of his or her employment 
and (2) such indemnification is in the interest of the Department of the 
Treasury.
    (b) The Department of the Treasury may pay for the settlement or 
compromise of a claim against a Department employee at any time, 
provided the Secretary or his or her designee determines that (1) the 
alleged conduct giving rise to the claim was within the scope of the 
employee's employment and (2) such settlement or compromise is in the 
interest of the Department of the Treasury.
    (c) Absent exceptional circumstances, as determined by the Secretary 
or his or her designee, the Department will not entertain a request to 
indemnify or to pay for settlement of a claim before entry of an adverse 
judgment, verdict or other determination.
    (d) When a Department employee becomes aware that he or she has been 
named as a party in a proceeding in his or her individual capacity as a 
result of conduct within the scope of his or her employment, the 
employee should immediately notify his or her supervisor that such an 
action is pending. The supervisor shall promptly thereafter notify the 
chief legal officer of the employee's employing component. The employee 
shall immediately apprise the chief legal officer of his or her 
employing component of any offer to settle the proceeding.
    (e) A Department employee may request indemnification to satisfy a 
verdict, judgment or monetary award entered against the employee or to 
compromise a claim pending against the employee. The employee shall 
submit a written request, with appropriate documentation including a 
copy of the verdict, judgment, award or other order or settlement 
proposal, in a timely manner to the Secretary or his or her designee for 
decision.
    (f) Any payment under this section either to indemnify a Department 
employee or to settle a claim shall be contingent upon the availability 
of appropriated funds for the payment of salaries and expenses of the 
employing component.



PART 4--EMPLOYEES' PERSONAL PROPERTY CLAIMS--Table of Contents




    Authority: 31 U.S.C. 3721(j).

    Source: 62 FR 18518, Apr. 16, 1997, unless otherwise noted.



Sec. 4.1  Procedures.

    The procedures for filing a claim with the Treasury Department for 
personal property that is lost or damaged incident to service are 
contained in Treasury Directive 32-13, ``Claims for Loss or Damage to 
Personal Property,'' and Treasury Department Publication

[[Page 147]]

32-13, ``Policies and Procedures For Employees' Claim for Loss or Damage 
to Personal Property Incident to Service.''



PART 5--CLAIMS COLLECTION--Table of Contents




   Subpart A--Administrative Collection, Compromise, Termination and 
                           Referral of Claims

Sec.
5.1  Authority.
5.2  Incorporation by reference; scope.
5.3  Designation.
5.4  Application to other statutes.

                        Subpart B--Salary Offset

5.5  Purpose.
5.6  Scope.
5.7  Designation.
5.8  Definitions.
5.9  Applicability of regulations.
5.10  Waiver requests and claims to the General Accounting Office.
5.11  Notice requirements before offset.
5.12  Hearing.
5.13  Certification.
5.14  Voluntary repayment agreements as alternative to salary offset.
5.15  Special review.
5.16  Notice of salary offset.
5.17  Procedures for salary offset.
5.18  Coordinating salary offset with other agencies.
5.19  Interest, penalties and administrative costs.
5.20  Refunds.
5.21  Request for the services of a hearing official from the creditor 
          agency.
5.22  Non-waiver of rights by payments.

                      Subpart C--Tax Refund Offset

5.23  Applicability and scope.
5.24  Designation.
5.25  Definitions.
5.26  Preconditions for Department participation.
5.27  Procedures.
5.28  Referral of debts for offset.
5.29  Notice requirements before offset.

                    Subpart D--Administrative Offset

5.30  Scope of regulations.
5.31  Designation.
5.32  Definitions.
5.33  General.
5.34  Notification procedures.
5.35  Agency review.
5.36  Written agreement for repayment.
5.37  Administrative offset.
5.38  Jeopardy procedure.



   Subpart A--Administrative Collection, Compromise, Termination and 
                           Referral of Claims

    Authority: 31 U.S.C. 3711.

    Source: 32 FR 452, Jan. 17, 1967, unless otherwise noted.



Sec. 5.1  Authority.

    The regulations of this part are issued under section 3 of the 
Federal Claims Collection Act of 1966, Pub. L. 89-508, 80 Stat. 308, 
309, and in conformity with the Joint Regulations issued under that Act 
by the General Accounting Office and the Department of Justice 
prescribing standards for administrative collection, compromise, 
termination of agency collection action, and referral to the General 
Accounting Office and to the Department of Justice for litigation, of 
civil claims by the Government for money or property, 4 CFR Chapter II.



Sec. 5.2  Incorporation by reference; scope.

    The regulations of this part incorporate by this reference all 
provisions of the Joint Regulations of the General Accounting Office and 
the Department of Justice, and supplement those regulations by the 
prescription of procedures and directives necessary and appropriate for 
Treasury operations. The Joint Regulations and this part do not apply to 
tax claims nor to any claim as to which there is an indication of fraud 
or misrepresentation, as described in Sec. 101.3 of the Joint 
Regulations, unless returned by the Justice Department to the Treasury 
Department for handling.



Sec. 5.3  Designation.

    The heads of bureaus and offices and their delegates are designated 
as designees of the Secretary of the Treasury authorized to perform all 
the duties for which the Secretary is responsible under the foregoing 
Act and Joint Regulations: Provided, however, That no compromise of a 
claim shall be effected or collection action terminated, except upon the 
recommendation of the General Counsel, the Chief Counsel of the bureau 
or office concerned, or the designee of either. Notwithstanding the

[[Page 148]]

foregoing proviso, no such recommendation shall be required with respect 
to the termination of collection activity on any claim in which the 
unpaid amount of the debt is $300 or less.

(Sec. 3, 80 Stat. 309; 31 U.S.C. 951-953, 4 CFR Chap. II; 31 U.S.C. 
3711, 96 Stat. 971 (1982))

[34 FR 5159, Mar. 13, 1969, as amended at 49 FR 45579, Nov. 19, 1984]



Sec. 5.4  Application to other statutes.

    (a) The authority of the Secretary of the Treasury or the head of a 
bureau or office within the Treasury Department to compromise claims of 
the United States shall be exercised with respect to claims not 
exceeding $20,000, exclusive of interest, in conformity with the Federal 
Claims Collection Act, the Joint Regulations thereunder, and this part, 
except where standards are established by other statutes or authorized 
regulations issued pursuant thereto.
    (b) The authority of the Secretary of the Treasury or the head of a 
bureau or office within the Treasury Department to remit or mitigate a 
fine, penalty or forfeiture shall be exercised in accordance with the 
standards for remission or mitigation established in the governing 
statute or in Departmental enforcement policies. In the absence of such 
standards, the standards of the Joint Regulations shall be followed to 
the extent applicable.



                        Subpart B--Salary Offset

    Authority: 5 U.S.C. 5514; 5 CFR part 550, subpart K.

    Source: 52 FR 39514, Oct. 22, 1987, unless otherwise noted.



Sec. 5.5  Purpose.

    The purpose of the Debt Collection Act of 1982, (Pub. L. 97-365), is 
to provide a comprehensive statutory approach to the collection of debts 
due the Federal Government. These regulations implement section 5 of the 
Act which authorizes the collection of debts owed by Federal employees 
to the Federal Government by means of salary offsets, except that no 
claim may be collected by such means if outstanding for more than 10 
years after the agency's right to collect the debt first accrued, unless 
facts material to the Government's right to collect were not known and 
could not reasonably have been known by the official or officials who 
were charged with the responsibility for discovery and collection of 
such debts. These regulations are consistent with the regulations on 
salary offset published by the Office of Personnel Management (OPM) on 
July 3, 1984, codified in Subpart K of part 550 of title 5 of the Code 
of Federal Regulations.



Sec. 5.6  Scope.

    (a) These regulations provide Departmental procedures for the 
collection by salary offset of a Federal employee's pay to satisfy 
certain debts owed the Government.
    (b) These regulations apply to collections by the Secretary of the 
Treasury from:
    (1) Federal employees who owe debts to the Department; and
    (2) Employees of the Department who owe debts to other agencies.
    (c) These regulations do not apply to debts or claims arising under 
the Internal Revenue Code of 1954, as amended (26 U.S.C. 1 et seq.); the 
Social Security Act (42 U.S.C. 301 et seq.); the tariff laws of the 
United States; or to any case where collection of a debt by salary 
offset is explicitly provided for or prohibited by another statute 
(e.g., travel advances in 5 U.S.C. 5705 and employee training expenses 
in 5 U.S.C. 4108).
    (d) These regulations do not apply to any adjustment to pay arising 
out of an employee's election of coverage or a change in coverage under 
a Federal benefits program requiring periodic deductions from pay, if 
the amount to be recovered was accumulated over four pay periods or 
less.
    (e) Nothing in these regulations precludes the compromise, 
suspension, or termination of collection actions where appropriate under 
the standards implementing the Federal Claims Collection Act (31 U.S.C. 
3711 et seq., 4 CFR parts 101-105, 38 CFR 1.1900 et seq.).



Sec. 5.7  Designation.

    The heads of bureaus and offices and their delegates are designated 
as designees of the Secretary of the Treasury authorized to perform all 
the duties for

[[Page 149]]

which the Secretary is responsible under the foregoing act and Office of 
Personnel Management Regulations: Provided, however, That no compromise 
of a claim shall be effected or collection action terminated, except 
upon the recommendation of the General Counsel, the Chief Counsel of the 
bureau or office concerned, or the designee of either. Notwithstanding 
the foregoing provision, no such recommendation shall be required with 
respect to the termination of collection activity on any claim in which 
the unpaid amount of the debt is $300 or less.



Sec. 5.8  Definitions.

    As used in this part (except where the context clearly indicates, or 
where the term is otherwise defined elsewhere in this part) the 
following definitions shall apply:
    (a) Agency means:
    (1) An Executive Agency as defined by section 105 of Title 5, United 
States Code, including the U.S. Postal Service and the U.S. Postal Rate 
Commission;
    (2) A military department as defined by section 102 of Title 5, 
United States Code;
    (3) An agency or court of the judicial branch including a court as 
defined in section 610 of Title 28, United States Code, the District 
Court for the Northern Mariana Islands and the Judicial Panel on 
Multidistrict Litigation;
    (4) An agency of the legislative branch, including the U.S. Senate 
and the U.S. House of Representatives; and
    (5) Other independent establishments that are entities of the 
Federal Government.
    (b) Bureau Salary Offset Coordination Officer means an official 
designated by the head of each bureau who is responsible for 
coordinating debt collection activities for the bureau. The Secretary 
shall designate a bureau salary offset coordinator for the Departmental 
offices.
    (c) Certification means a written debt claim form received from a 
creditor agency which requests the paying agency to offset the salary of 
an employee.
    (d) Creditor agency means an agency of the Federal Government to 
which the debt is owed.
    (e) Debt or claim means money owed by an employee of the Federal 
Government to an agency of the Federal Government from sources which 
include loans insured or guaranteed by the United States and all other 
amounts due the Government from fees, leases, rents, royalties, 
services, sales of real or personal property, overpayments, penalties, 
damages, interests, fines and forfeitures (except those arising under 
the Uniform Code of Military Justice) and all other similar sources.
    (f) Department or Treasury Department means the Departmental Offices 
of the Department of the Treasury and each bureau of the Department.
    (g) Disposable pay means that part of current basic pay, special 
pay, incentive pay, retired pay, retainer pay, or, in the case of an 
employee not entitled to basic pay, other authorized pay remaining after 
the deduction of any amount required by law to be withheld. The 
Department shall allow the following deductions in determining 
disposable pay subject to salary offset:
    (1) Federal employment taxes;
    (2) Amounts deducted for the U.S. Soldiers' and Airmen's Home;
    (3) Fines and forfeiture ordered by a court martial or by a 
commanding officer;
    (4) Federal, state or local income taxes no greater than would be 
the case if the employee claimed all dependents to which he or she is 
entitled and such additional amounts for which the employee presents 
evidence of a tax obligation supporting the additional withholding;
    (5) Health insurance premiums;
    (6) Normal retirement contributions (e.g., Civil Service Retirement 
deductions, Survivor Benefit Plan or Retired Serviceman's Family 
Protection Plan); and
    (7) Normal life insurance premiums, exclusive of optional life 
insurance premiums (e.g., Serviceman's Group Life Insurance and 
``basic'' Federal Employee's Group Life Insurance premiums).
    (h) Employee means a current employee of the Treasury Department or 
other agency, including a current member of the Armed Forces or Reserve 
of the Armed Forces of the United States.

[[Page 150]]

    (i) Federal Claims Collection Standards, ``FCCS,'' jointly published 
by the Department of Justice and the General Accounting Office at 4 CFR 
101.1 et seq.
    (j) Hearing official means an individual responsible for conducting 
any hearing with respect to the existence or amount of a debt claimed, 
and rendering a decision on the basis of such hearing. A hearing 
official may not be under the supervision or control of the Secretary of 
the Department of the Treasury when Treasury is the creditor agency.
    (k) Paying agency means the agency of the Federal Government which 
employs the individual who owes a debt to an agency of the Federal 
Government. In some cases, the Department may be both the creditor and 
the paying agency.
    (l) Notice of intent to offset or notice of intent means a written 
notice from a creditor agency to an employee which alleges that the 
employee owes a debt to the creditor agency and apprising the employee 
of certain administrative rights.
    (m) Notice of salary offset means a written notice from the paying 
agency to an employee after a certification has been issued by a 
creditor agency, informing the employee that salary offset will begin at 
the next officially established pay interval.
    (n) Payroll office means the payroll office in the paying agency 
which is primarily responsible for the payroll records and the 
coordination of pay matters with the appropriate personnel office with 
respect to an employee. Payroll office, with respect to the Department 
of the Treasury means the payroll offices of each bureau and the Office 
of the Assistant Secretary of the Treasury for Management for the 
Departmental Offices.
    (o) Salary offset means an administrative offset to collect a debt 
under 5 U.S.C. 5514 by deduction(s) at one or more officially 
established pay intervals from the current pay account of an employee, 
without his or her consent.
    (p) Secretary means the Secretary of the Treasury or his or her 
designee.
    (q) Waiver means the cancellation, remission, forgiveness, or non-
recovery of a debt allegedly owed by an employee to the Department or 
another agency as permitted or required by 5 U.S.C. 5584 or 8346(b), 10 
U.S.C. 2774, 32 U.S.C. 716, or any other law.



Sec. 5.9  Applicability of regulations.

    These regulations are to be followed in instances where:
    (a) The Department is owed a debt by an individual currently 
employed by another agency;
    (b) Where the Department is owed a debt by an individual who is a 
current employee of the Department; or
    (c) Where the Department currently employs an individual who owes a 
debt to another Federal Agency. Upon receipt of proper certification 
from the creditor agency, the Department will offset the debtor-
employee's salary in accordance with these regulations.



Sec. 5.10  Waiver requests and claims to the General Accounting Office.

    These regulations do not preclude an employee from requesting waiver 
of an overpayment under 5 U.S.C. 5584 or 8346(b), 10 U.S.C. 2774, 32 
U.S.C. 716, or in any way questioning the amount or validity of a debt 
by submitting a subsequent claim to the General Accounting Office in 
accordance with the procedures prescribed by the General Accounting 
Office. These regulations also do not preclude an employee from 
requesting a waiver pursuant to other statutory provisions pertaining to 
the particular debts being collected.



Sec. 5.11  Notice requirements before offset.

    (a) Deductions under the authority of 5 U.S.C. 5514 shall not be 
made unless the creditor agency provides the employee with written 
notice that he/she owes a debt to the Federal Government, a minimum of 
30 calendar days before salary offset is initiated. When Treasury is the 
creditor agency this notice of intent to offset an employee's salary 
shall be hand-delivered or sent by certified mail to the most current 
address that is available to the Department and will state:
    (1) That the Secretary has reviewed the records relating to the 
claim and has determined that a debt is owed, the amount of the debt, 
and the facts giving rise to the debt;

[[Page 151]]

    (2) The Secretary's intention to collect the debt by means of 
deduction from the employee's current disposable pay account until the 
debt and all accumulated interest is paid in full;
    (3) The amount, frequency, approximate beginning date, and duration 
of the intended deductions;
    (4) An explanation of the Department's policy concerning interest, 
penalties and administrative costs including a statement that such 
assessments must be made unless excused in accordance with the Federal 
Claims Collection Standards, 4 CFR 101.1 et seq.;
    (5) The employee's right to inspect and copy all records of the 
Department pertaining to the debt claimed or to receive copies of such 
records if personal inspection is impractical;
    (6) The right to a hearing conducted by an impartial hearing 
official (an administrative law judge, or alternatively, a hearing 
official not under the supervision or control of the Secretary) with 
respect to the existence and amount of the debt claimed, or the 
repayment schedule (i.e., the percentage of disposable pay to be 
deducted each pay period), so long as a petition is filed by the 
employee as prescribed in Sec. 5.12;
    (7) If not previously provided, the opportunity (under terms 
agreeable to the Department) to establish a schedule for the voluntary 
repayment of the debt or to enter into a written agreement to establish 
a schedule for repayment of the debt in lieu of offset. The agreement 
must be in writing, signed by both the employee and the creditor agency 
(4 CFR 102.2(e));
    (8) The name, address and phone number of an officer or employee of 
the Department who may be contacted concerning procedures for requesting 
a hearing;
    (9) The method and time period for requesting a hearing;
    (10) That the timely filing of a petition for a hearing on or before 
the fifteenth calendar day following receipt of such notice of intent 
will stay the commencement of collection proceedings;
    (11) The name and address of the office to which the petition should 
be sent;
    (12) That the Department will initiate certification procedures to 
implement a salary offset, as appropriate, (which may not exceed 15 
percent of the employee's disposable pay) not less than thirty (30) days 
from the date of receipt of the notice of debt, unless the employee 
files a timely petition for a hearing;
    (13) That a final decision on the hearing (if one is requested) will 
be issued at the earliest practical date, but not later than sixty (60) 
days after the filing of the petition requesting the hearing, unless the 
employee requests and the hearing official grants a delay in the 
proceedings;
    (14) That any knowingly false or frivolous statements, 
representations, or evidence may subject the employee to:
    (i) Disciplinary procedures appropriate under Chapter 75 of Title 5, 
United States Code, part 752 of title 5, Code of Federal Regulations, or 
any other applicable statute or regulations;
    (ii) Penalties under the False Claims Act, sections 3729-3731 of 
Title 31, United States Code or any other applicable statutory 
authority; and
    (iii) Criminal penalties under sections 286, 287, 1001, and 1002 of 
Title 18, United States Code or any other applicable statutory 
authority;
    (15) Any other rights and remedies available to the employee under 
statutes or regulations governing the program for which the collection 
is being made;
    (16) That unless there are applicable contractual or statutory 
provisions to the contrary, that amounts paid on or deducted for the 
debt which are later waived or found not owed to the United States will 
be promptly refunded to the employee (5 U.S.C. 5514); and
    (17) Proceedings with respect to such debt are governed by section 5 
of the Debt Collection Act of 1982 (5 U.S.C. 5514).
    (b) The Department is not required to comply with paragraph (a) of 
this section for any adjustment to pay arising out of an employee's 
election of coverage or a change in coverage under a Federal benefits 
program requiring periodic deductions from pay if the amount to be 
recovered was accumulated over four pay periods or less.

[[Page 152]]



Sec. 5.12  Hearing.

    (a) Request for hearing. Except as provided in paragraph (b) of this 
section, an employee who desires a hearing concerning the existence or 
amount of the debt or the proposed offset schedule must send such a 
request to the office designated in the notice of intent. See 
Sec. 5.11(a)(8). The request (or petition) for hearing must be received 
by the designated office on or before the fifteenth (15) calendar day 
following receipt of the notice. The employee must also specify whether 
an oral or paper hearing is requested. If an oral hearing is desired, 
the request should explain why the matter cannot be resolved by review 
of the documentary evidence alone.
    (b) Failure to timely submit. If the employee files a petition for a 
hearing after the expiration of the fifteen (15) calendar day period 
provided for in paragraph (a) of this section, the Department should 
accept the request if the employee can show that the delay was the 
result of circumstances beyond his or her control or because of a 
failure to receive actual notice of the filing deadline (unless the 
employee had actual notice of the filing deadline).
    (1) An employee waives the right to a hearing, and will have his or 
her disposable pay offset in accordance with the Department's offset 
schedule, if the employee:
    (i) Fails to file a request for a hearing unless such failure is 
excused; or
    (ii) Fails to appear at an oral hearing of which he or she was 
notified unless the hearing official determines failure to appear was 
due to circumstances beyond the employee's control (5 U.S.C. 5514).
    (c) Representation at the hearing. The creditor agency may be 
represented by legal counsel. The employee may represent himself or 
herself or may be represented by an individual of his or her choice and 
at his or her own expense.
    (d) Review of departmental records related to the debt. (1) In 
accordance with 5.11(a)(5), an employee who intends to inspect or copy 
creditor agency records related to the debt must send a letter to the 
official designated in the notice of intent to offset stating his or her 
intention. The letter must be received within fifteen (15) calendar days 
after receipt of the notice.
    (2) In response to a timely request submitted by the debtor, the 
designated official will notify the employee of the location and time 
when the employee may inspect and copy records related to the debt.
    (3) If personal inspection is impractical, arrangements shall be 
made to send copies of such records to the employee.
    (e) Hearing official. Unless the Department appoints an 
administrative law judge to conduct the hearing, the Department must 
obtain a hearing official who is not under the supervision or control of 
the Secretary of the Treasury.
    (f) Obtaining the services of a hearing official when the Department 
is the creditor agency. (1) When the debtor is not a Department 
employee, and in the event that the Department cannot provide a prompt 
and appropriate hearing before an administrative law judge or before a 
hearing official furnished pursuant to another lawful arrangement, the 
Department may contact an agent of the paying agency designated in 
Appendix A to part 581 of title 5, Code of Federal Regulations or as 
otherwise designated by the agency, and request a hearing official.
    (2) When the debtor is a Department employee, the Department may 
contact any agent of another agency designated in Appendix A to part 581 
of title 5, Code of Federal Regulations or otherwise designated by that 
agency, to request a hearing official.
    (g) Procedure. (1) After the employee requests a hearing, the 
hearing official or administrative law judge shall notify the employee 
of the form of the hearing to be provided. If the hearing will be oral, 
notice shall set forth the date, time and location of the hearing. If 
the hearing will be paper, the employee shall be notified that he or she 
should submit arguments in writing to the hearing official or 
administrative law judge by a specified date after which the record 
shall be closed. This date shall give the employee reasonable time to 
submit documentation.

[[Page 153]]

    (2) Oral hearing. An employee who requests an oral hearing shall be 
provided an oral hearing if the hearing official or administrative law 
judge determines that the matter cannot be resolved by review of 
documentary evidence alone (e.g., when an issue of credibility or 
veracity is involved). The hearing is not an adversarial adjudication, 
and need not take the form of an evidentiary hearing. Oral hearings may 
take the form of, but are not limited to:
    (i) Informal conferences with the hearing official or administrative 
law judge, in which the employee and agency representative will be given 
full opportunity to present evidence, witnesses and argument;
    (ii) Informal meetings with an interview of the employee; or
    (iii) Formal written submissions, with an opportunity for oral 
presentation.
    (3) Paper hearing. If the hearing official or administrative law 
judge determines that an oral hearing is not necessary, he or she will 
make the determination based upon a review of the available written 
record (5 U.S.C. 5514).
    (4) Record. The hearing official must maintain a summary record of 
any hearing provided by this subpart. See 4 CFR 102.3. Witnesses who 
testify in oral hearings will do so under oath or affirmation.
    (h) Date of decision. The hearing official or administrative law 
judge shall issue a written opinion stating his or her decision, based 
upon documentary evidence and information developed at the hearing, as 
soon as practicable after the hearing, but not later than sixty (60) 
days after the date on which the petition was received by the creditor 
agency, unless the employee requests a delay in the proceedings. In such 
case the sixty (60) day decision period shall be extended by the number 
of days by which the hearing was postponed.
    (i) Content of decision. The written decision shall include:
    (1) A statement of the facts presented to support the origin, 
nature, and amount of the debt;
    (2) The hearing official's findings, analysis and conclusions; and
    (3) The terms of any repayment schedules, if applicable.
    (j) Failure to appear. In the absence of good cause shown (e.g., 
excused illness), an employee who fails to appear at a hearing shall be 
deemed, for the purpose of this subpart, to admit the existence and 
amount of the debt as described in the notice of intent. If the 
representative of the creditor agency fails to appear, the hearing 
official shall proceed with the hearing as scheduled, and make his/her 
determination based upon the oral testimony presented and the 
documentary documentation submitted by both parties. At the request of 
both parties, the hearing official shall schedule a new hearing date. 
Both parties shall be given reasonable notice of the time and place of 
this new hearing.



Sec. 5.13  Certification.

    (a) The bureau salary offset coordination officer shall provide a 
certification to the paying agency in all cases where:
    (1) The hearing official determines that a debt exists;
    (2) The employee admits the existence and amount of the debt by 
failing to request a hearing; or
    (3) The employee admits the existence of the debt by failing to 
appear at a hearing.
    (b) The certification must be in writing and must state:
    (1) The employee owes the debt;
    (2) The amount and basis of the debt;
    (3) The date the Government's right to collect the debt first 
accrued;
    (4) The Department's regulations have been approved by OPM pursuant 
to 5 CFR part 550, subpart K;
    (5) The amount and date of the lump sum payment;
    (6) If the collection is to be made in installments, the number of 
installments to be collected, the amount of each installment, and the 
commencing date of the first installment, if a date other than the next 
officially established pay period is required; and
    (7) The dates the action(s) was taken and that it was taken pursuant 
to 5 U.S.C. 5514.

[[Page 154]]



Sec. 5.14  Voluntary repayment agreements as alternative to salary offset.

    (a) In response to a notice of intent to an employee may propose to 
repay the debt as an alternative to salary offset. Any employee who 
wishes to repay a debt without salary offset shall submit in writing a 
proposed agreement to repay the debt. The proposal shall admit the 
existence of the debt and set forth a proposed repayment schedule. Any 
proposal under this subsection must be received by the official 
designated in that notice within fifteen (15) calendar days after 
receipt of the notice of intent.
    (b) When the Department is the creditor agency and in response to a 
timely proposal by the debtor, the Secretary will notify the employee 
whether the employee's proposed written agreement for repayment is 
acceptable. It is within the Secretary's discretion to accept a 
repayment agreement instead of proceeding by offset.
    (c) If the Secretary decides that the proposed repayment agreement 
is unacceptable, the employee will have fifteen (15) days from the date 
he or she received notice of the decision to file a petition for a 
hearing.
    (d) If the Secretary decides that the proposed repayment agreement 
is acceptable, the alternative arrangement must be in writing and signed 
by both the employee and the Secretary.



Sec. 5.15  Special review.

    (a) An employee subject to salary offset or a voluntary repayment 
agreement, may, at any time, request a special review by the creditor 
agency of the amount of the salary offset or voluntary payment, based on 
materially changed circumstances such as, but not limited to 
catastrophic illness, divorce, death, or disability.
    (b) In determining whether an offset would prevent the employee from 
meeting essential subsistence expenses (costs incurred for food, 
housing, clothing, transportation and medical care), the employee shall 
submit a detailed statement and supporting documents for the employee, 
his or her spouse and dependents indicating:
    (1) Income from all sources;
    (2) Assets;
    (3) Liabilities;
    (4) Number of dependents;
    (5) Expenses for food, housing, clothing and transportation;
    (6) Medical expenses; and
    (7) Exceptional expenses, if any.
    (c) If the employee requests a special review under this section, 
the employee shall file an alternative proposed offset or payment 
schedule and a statement, with supporting documents, showing why the 
current salary offset or payments result in an extreme financial 
hardship to the employee.
    (d) The Secretary shall evaluate the statement and supporting 
documents, and determine whether the original offset or repayment 
schedule imposes an extreme financial hardship on the employee. The 
Secretary shall notify the employee in writing of such determination, 
including, if appropriate, a revised offset or payment schedule.
    (e) If the special review results in a revised offset or repayment 
schedule, the bureau salary offset coordination officer shall provide a 
new certification to the paying agency.



Sec. 5.16  Notice of salary offset.

    (a) Upon receipt of proper certification of the creditor agency, the 
bureau payroll office will send the employee a written notice of salary 
offset. Such notice shall, at a minimum:
    (1) Contain a copy of the certification received from the creditor 
agency; and
    (2) Advise the employee that salary offset will be initiated at the 
next officially established pay interval.
    (b) The bureau payroll office shall provide a copy of the notice to 
the creditor agency and advise such agency of the dollar amount to be 
offset and the pay period when the offset will begin.



Sec. 5.17  Procedures for salary offset.

    (a) The Secretary shall coordinate salary deductions under this 
subpart.
    (b) The appropriate bureau payroll office shall determine the amount 
of an employee's disposable pay and will implement the salary offset.
    (c) Deductions shall begin within three official pay periods 
following receipt by the payroll office of certification.

[[Page 155]]

    (d) Types of collection--(1) Lump-sum payment. If the amount of the 
debt is equal to or less than 15 percent of disposable pay, such debt 
generally will be collected in one lump-sum payment.
    (2) Installment deductions. Installment deductions will be made over 
a period not greater than the anticipated period of employment. The size 
and frequency of installment deductions will bear a reasonable relation 
to the size of the debt and the employee's ability to pay. However, the 
amount deducted from any period will not exceed 15 percent of the 
disposable pay from which the deduction is made unless the employee has 
agreed in writing to the deduction of a greater amount.
    (3) Lump-sum deductions from final check. A lump-sum deduction 
exceeding the 15 percent disposable pay limitation may be made from any 
final salary payment pursuant to 31 U.S.C. 3716 in order to liquidate 
the debt, whether the employee is being separated voluntarily or 
involuntarily.
    (4) Lump-sum deductions from other sources. Whenever an employee 
subject to salary offset is separated from the Department, and the 
balance of the debt cannot be liquidated by offset of the final salary 
check, the Department, pursuant to 31 U.S.C. 3716, may offset any later 
payments of any kind against the balance of the debt.
    (e) Multiple debts. In instances where two or more creditor agencies 
are seeking salary offsets, or where two or more debts are owed to a 
single creditor agency, the bureau payroll office may, at its 
discretion, determine whether one or more debts should be offset 
simultaneously within the 15 percent limitation.
    (f) Precedence of debts owed to Treasury. For Treasury employees, 
debts owed to the Department generally take precedence over debts owed 
to other agencies. In the event that a debt to the Department is 
certified while an employee is subject to a salary offset to repay 
another agency, the bureau payroll office may decide whether to have 
that debt repaid in full before collecting its claim or whether changes 
should be made in the salary deduction being sent to the other agency. 
If debts owed the Department can be collected in one pay period, the 
bureau payroll office may suspend the salary offset to the other agency 
for that pay period in order to liquidate the Department's debt. When an 
employee owes two or more debts, the best interests of the Government 
shall be the primary consideration in the determination by the payroll 
office of the order of the debt collection.



Sec. 5.18  Coordinating salary offset with other agencies.

    (a) Responsibility of the Department as the creditor agency. (1) The 
Secretary shall coordinate debt collections and shall, as appropriate:
    (i) Arrange for a hearing upon proper petition by a Federal 
employee; and
    (ii) Prescribe, upon consultation with the General Counsel, such 
practices and procedures as may be necessary to carry out the intent of 
this regulation.
    (2) The head of each bureau shall designate a salary offset 
coordination officer who will be responsible for:
    (i) Ensuring that each notice of intent to offset is consistent with 
the requirements of Sec. 5.11;
    (ii) Ensuring that each certification of debt sent to a paying 
agency is consistent with the requirements of Sec. 5.13;
    (iii) Obtaining hearing officials from other agencies pursuant to 
Sec. 5.12(f); and
    (iv) Ensuring that hearings are properly scheduled.
    (3) Requesting recovery from current paying agency. Upon completion 
of the procedures established in these regulations and pursuant to 5 
U.S.C. 5514, the Department must:
    (i) Certify, in writing, that the employee owes the debt, the amount 
and basis of the debt, the date on which payment(s) is due, the date the 
Government's right to collect the debt first accrued, and that the 
Department's regulations implementing 5 U.S.C. 5514 have been approved 
by the Office of Personnel Management;
    (ii) Advise the paying agency of the action(s) taken under 5 U.S.C. 
5514(b) and give the date(s) the action(s) was taken (unless the 
employee has consented to the salary offset in writing or signed a 
statement acknowledging receipt of the required procedures and the 
written consent or statement is forwarded to the paying agency);

[[Page 156]]

    (iii) Except as otherwise provided in this paragraph, submit a debt 
claim containing the information specified in paragraphs (a)(3) (i) and 
(ii) of this section and an installment agreement (or other instruction 
on the payment schedule), if applicable, to the employee's paying 
agency;
    (iv) If the employee is in the process of separating, the Department 
must submit its debt claim to the employee's paying agency for 
collection as provided in Sec. 5.12. The paying agency must certify the 
total amount of its collection and notify the creditor agency and the 
employee as provided in paragraph (b)(4) of this section. If the paying 
agency is aware that the employee is entitled to payments from the Civil 
Service Retirement Fund and Disability Fund, or other similar payments, 
it must provide written notification to the agency responsible for 
making such payments that the debtor owes a debt (including the amount) 
and that the provisions of his section have been fully complied with. 
However, the Department must submit a properly certified claim to the 
agency responsible for making such payments before the collection can be 
made.
    (v) If the employee is already separated and all payments due from 
his or her former paying agency have been paid, the Department may 
request, unless otherwise prohibited, that money due and payable to the 
employee from the Civil Service Retirement Fund and Disability Fund (5 
CFR 831.1801 et seq.) or other similar funds, be administratively offset 
to collect the debt (See 31 U.S.C. 3716 and the FCCS).
    (4) When an employee transfers to another paying agency, the 
Department shall not repeat the due process procedures described in 5 
U.S.C. 5514 and this subpart to resume the collection. The Department 
must review the debt upon receiving the former paying agency's notice of 
the employee's transfer to make sure the collection is resumed by the 
paying agency.
    (b) Responsibility of the Department as the paying agency--(1) 
Complete claim. When the Department receives a certified claim from a 
creditor agency, deductions should be scheduled to begin at the next 
officially established pay interval. The employee must receive written 
notice that the Department has received a certified debt claim from the 
creditor agency (including the amount) and written notice of the date 
salary offset will begin and the amount of such deductions.
    (2) Incomplete claim. When the Department receives an incomplete 
certification of debt from a creditor agency, the Department must return 
the debt claim with notice that procedures under 5 U.S.C. 551 and this 
subpart must be provided and a properly certified debt claim received 
before action will be taken to collect from the employee's current pay 
account.
    (3) Review. The Department is not authorized to review the merits of 
the creditor agency's determination with respect to the amount or 
validity of the debt certified by the creditor agency.
    (4) Employees who transfer from one paying agency to another. If, 
after the creditor agency has submitted the debt claim to the 
Department, the employee transfers to a different agency before the debt 
is collected in full, the Department must certify the total amount 
collected on the debt. One copy of the certification must be furnished 
to the employee and one copy to the creditor agency along with notice of 
the employee's transfer.



Sec. 5.19  Interest, penalties and administrative costs.

    (a) The Department shall assess interest, penalties and 
administrative costs on debts owed pursuant to 31 U.S.C. 3717 and 4 CFR 
101.1 et seq.



Sec. 5.20  Refunds.

    (a) In instances where the Department is the creditor agency, it 
shall promptly refund any amount deducted under the authority of 5 
U.S.C. 5514 when:
    (1) The debt is waived or otherwise found not to be owing the United 
States; or
    (2) An administrative or judicial order directs the Department to 
make a refund.
    (b) Unless required or permitted by law or contract, refunds under 
this subsection shall not bear interest.

[[Page 157]]



Sec. 5.21  Request for the services of a hearing official from the creditor agency.

    (a) The Department will provide a hearing official upon request of 
the creditor agency when the debtor is employed by the Department and 
the creditor agency cannot provide a prompt and appropriate hearing 
before an administrative law judge or before a hearing official 
furnished pursuant to another lawful arrangement.
    (b) The Department will provide a hearing official upon request of a 
creditor agency when the debtor works for the creditor agency and that 
agency cannot arrange for a hearing official.
    (c) The bureau salary offset coordination officer will appoint 
qualified personnel to serve as hearing officials.
    (d) Services rendered under this section will be provided on a fully 
reimbursable basis pursuant to the Economy Act of 1932, as amended, 31 
U.S.C. 1535.



Sec. 5.22  Non-waiver of rights by payments.

    An employee's involuntary payment of all or any portion of a debt 
being collected under this Subpart must not be construed as a waiver of 
any rights which the employee may have under 5 U.S.C. 5514 or any other 
provisions of a written contract or law unless there are statutory or 
contractual provisions to the contrary.



                      Subpart C--Tax Refund Offset

    Authority: 31 U.S.C. 3720A; 26 CFR 301.6402-6T.

    Source: 52 FR 50, Jan. 2, 1987, unless otherwise noted.



Sec. 5.23  Applicability and scope.

    (a) These regulations implement 31 U.S.C. 3720A which authorizes the 
IRS to reduce a tax refund by the amount of a past-due legally 
enforceable debt owed to the United States.
    (b) For purposes of this section, a past-due legally enforceable 
debt referable to the IRS is a debt which is owed to the United States 
and:
    (1) Except in the case of a judgment debt, has been delinquent for 
at least three months and will not have been delinquent more than ten 
years at the time the offset is made;
    (2) Cannot be currently collected pursuant to the salary offset 
provisions of 5 U.S.C. 5514;
    (3) Is ineligible for administrative offset under 31 U.S.C. 3716(a) 
by reason of 31 U.S.C. 3716(c)(2) or cannot be collected by 
administrative offset under 31 U.S.C. 3716(a) by the referring agency 
against amounts payable to the debtor by the referring agency;
    (4) With respect to which the bureau has given the taxpayer at least 
sixty (60) days to present evidence that all or part of the debt is not 
past-due or legally enforceable, has considered evidence presented by 
such taxpayer, and determined that an amount of such debt is past-due 
and legally enforceable;
    (5) Which, in the case of a debt to be referred to the Service after 
June 30, 1986, has been disclosed by the bureau to a consumer reporting 
agency as authorized by 31 U.S.C. 3711(f), unless the consumer reporting 
agency would be prohibited from reporting information concerning the 
debt by reason of 15 U.S.C. 1681c;
    (6) With respect to which the Department has notified or has made a 
reasonable attempt to notify the taxpayer that:
    (i) The debt is past due, and
    (ii) Unless repaid within 60 days thereafter, the debt will be 
referred to the IRS for offset against any overpayment of tax; and
    (7) Is at least $25.



Sec. 5.24  Designation.

    The heads of bureaus and their delegates are designated as designees 
of the Secretary of the Treasury authorized to perform all the duties 
for which the Secretary is responsible under the foregoing statutes and 
IRS Regulations: Provided, however, That no compromise of a claim shall 
be effected or collection action terminated, except upon the 
recommendation of the bureau Chief Counsel or his or her designee. 
Notwithstanding the foregoing proviso, no such recommendation shall be 
required with respect to the termination of collection activity on any 
claim in which the unpaid amount of the debt is $300 or less.

[[Page 158]]



Sec. 5.25  Definitions.

    For purposes of this subpart:
    Commissioner means the Commissioner of the Internal Revenue Service.
    Debt means money owed by an individual from sources which include 
loans insured or guaranteed by the United States and all other amounts 
due the U.S. from fees, leases, rents, royalties, services, sales of 
real or personal property, overpayments, penalties, damages, interest, 
fines, forfeitures (except those arising under the Uniform Code of 
Military Justice), administrative costs and all other similar sources.
    Memorandum of Understanding (MOU or agreement) means the agreement 
between the IRS and the individual bureaus which prescribes the specific 
conditions the bureaus must meet before the IRS will accept referrals 
for tax refund offsets.



Sec. 5.26  Preconditions for Department participation.

    (a) The Department, through the individual bureaus, will provide 
information to the Service within the time frame prescribed by the 
Commissioner of the IRS to enable the Commissioner to make a final 
determination as to the each bureau's participation in the tax refund 
offset program. Such information shall include a description of:
    (1) The size and age of the bureau's inventory of delinquent debts;
    (2) The prior collection efforts that the inventory reflects; and
    (3) The quality controls the bureau maintains to assure that any 
debt the bureau may submit for tax refund offset will be valid and 
enforceable.
    (b) In accordance with the timetable specified by the Commissioner, 
the bureau will submit test magnetic media to the IRS, in such form and 
containing such data as the IRS shall specify.
    (c) The bureau shall establish a toll free telephone number that the 
IRS will furnish to individuals whose refunds have been offset to obtain 
information from the bureau concerning the offset.
    (d) The bureau shall enter into a separate agreement with the IRS to 
provide for reimbursement of the Service's cost of administering the 
pilot tax refund offset program in 1987.



Sec. 5.27  Procedures.

    (a) The bureau head or his or her designee shall be the point of 
contact with the IRS for administrative matters regarding the offset 
program.
    (b) The bureaus shall ensure that:
    (1) Only those past-due legally enforceable debts described in 
Sec. 5.23(b) are forwarded to the IRS for offset; and
    (2) The procedures prescribed in the MOU between the bureau and the 
IRS are followed in developing past-due debt information and submitting 
the debts to the IRS.
    (c) The bureau shall submit a notification of a taxpayer's liability 
for past-due legally enforceable debt to the IRS on magnetic media as 
prescribed by the IRS. Such notification shall contain:
    (1) The name and taxpayer identifying number (as defined in section 
6109 of the Internal Revenue Code) of the individual who is responsible 
for the debt;
    (2) The dollar amount of such past-due and legally enforceable debt;
    (3) The date on which the original debt became past-due;
    (4) The designation of the referring bureau submitting the 
notification of liability and identification of the referring agency 
program under which the debt was incurred;
    (5) A statement accompanying each magnetic tape by the referring 
bureau certifying that, with respect to each debt reported on the tape, 
all of the requirements of eligibility of the debt for referral for the 
refund offset have been satisfied. See Sec. 5.23(b).
    (d) A bureau shall promptly notify the IRS to correct Treasury data 
submitted when the bureau:
    (1) Determines that an error has been made with respect to a debt 
that has been referred;
    (2) Receives or credits a payment on such debt; or
    (3) Receives notification that the individual owing the debt has 
filed for bankruptcy under Title 11 of the United States Code or has 
been adjudicated bankrupt and the debt has been discharged.

[[Page 159]]

    (e) When advising debtors of an intent to refer a debt to the IRS 
for offset, the bureau shall also advise the debtors of all remedial 
actions available to defer or prevent the offset from taking place.



Sec. 5.28  Referral of debts for offset.

    (a) A bureau shall refer to the Service for collection by tax refund 
offset, from refunds otherwise payable in calendar year 1987, only such 
past-due legally enforceable debts owed to the Department:
    (1) That are eligible for offset under the terms of 31 U.S.C. 3720A, 
section 6402(d) of the Internal Revenue Code, 26 CFR 301.6402-6T, and 
the MOU; and
    (2) That information will be provided for each such debt as is 
required by the terms of the MOU.
    (b) Such referrals shall be made by submitting to the Service a 
magnetic tape pursuant to Sec. 5.27(c), together with an accompanying 
written certification to the Service by the bureau that the conditions 
or requirements specified in 26 CFR 301.6402-6T and the MOU have been 
satisfied with respect to each debt included in the referral on such 
tape. The bureaus certification shall be in the form specified in the 
MOU.



Sec. 5.29  Notice requirements before offset.

    (a) The bureau must notify, or make a reasonable attempt to notify, 
the individual that:
    (1) The debt is past due, and
    (2) Unless repaid within 60 days thereafter, the debt will be 
referred to the Service for offset against any refund of overpayment of 
tax;
    (b) The bureau shall provide a toll free telephone number for use in 
obtaining information from the bureau concerning the offset.
    (c) The bureau shall give the individual debtor at least sixty (60) 
days from the date of the notification to present evidence to the bureau 
that all or part of the debt is not past-due or legally enforceable. The 
bureau shall consider the evidence presented by the individual and shall 
make a determination whether an amount of such debt is past-due and 
legally enforceable. For purposes of this subsection, evidence that 
collection of the debt is affected by a bankruptcy proceeding involving 
the individual shall bar referral of the debt to the Service.
    (d) Notification given to a debtor pursuant to paragraphs (a), (b) 
and (c) of this section shall advise the debtor of how he or she may 
present evidence to the bureau that all or part of the debt is not past-
due or legally enforceable. Such evidence may not be referred to, or 
considered by, individuals who are not officials, employees, or agents 
of the United States in making the determination required under 
paragraph (c) of this section. Unless such evidence is directly 
considered by an official or employee of the bureau, and the 
determination required under paragraph (c) of this section has been made 
by an official or employee of the bureau, any unresolved dispute with 
the debtor as to whether all or part of the debt is past-due or legally 
enforceable must be referred to the bureau for ultimate administrative 
disposition, and the bureau must directly notify the debtor of its 
determination.



                    Subpart D--Administrative Offset

    Authority: 31 U.S.C. 3701; 31 U.S.C. 3711; 31 U.S.C. 3716.

    Source: 52 FR 52, Jan. 2, 1987, unless otherwise noted.



Sec. 5.30  Scope of regulations.

    These regulations apply to the collection of debts owed to the 
United States arising from transactions with the Department, or where a 
request for an offset is received by the Department from another agency. 
These regulations are consistent with the Federal Claims Collection 
Standards on administrative offset issued jointly by the Department of 
Justice and the General Accounting Office as set forth in 4 CFR 102.3.

[52 FR 52, Jan. 2, 1987, as amended at 53 FR 16703, May 11, 1988]



Sec. 5.31  Designation.

    The heads of bureaus and offices and their delegates are designated 
as designees of the Secretary of the Treasury authorized to perform all 
the duties for which the Secretary is responsible under the foregoing 
statutes: Provided, however, That no compromise of a

[[Page 160]]

claim shall be effected or collection action terminated except upon 
recommendation of the General Counsel or the appropriate bureau counsel 
or the designee of either. Notwithstanding the foregoing proviso, no 
such recommendation shall be required with respect to the termination of 
collection activity on any claim in which the unpaid amount of the debt 
is $300 or less.



Sec. 5.32  Definitions.

    (a) Administrative offset, as defined in 31 U.S.C. 3701(a)(1), means 
``withholding money payable by the United States Government to, or held 
by the Government for, a person to satisfy a debt the person owes the 
Government.
    (b) Person includes a natural person or persons, profit or non-
profit corporation, partnership, association, trust, estate, consortium, 
or other entity which is capable of owing a debt to the United States 
Government except that agencies of the United States, or of any State or 
local government shall be excluded.



Sec. 5.33  General.

    (a) The Secretary or his or her designee, after attempting to 
collect a debt from a person under section 3(a) of the Federal Claims 
Collection Act of 1966, as amended (31 U.S.C. 3711(a)), may collect the 
debt by administrative offset subject to the following:
    (1) The debt is certain in amount; and
    (2) It is in the best interests of the United States to collect the 
debt by administrative offset because of the decreased costs of 
collection and the acceleration in the payment of the debt;
    (b) The Secretary, or his or her designee, may initiate 
administrative offset with regard to debts owed by a person to another 
agency of the United States Government, upon receipt of a request from 
the head of another agency or his or her designee, and a certification 
that the debt exists and that the person has been afforded the necessary 
due process rights.
    (c) The Secretary, or his or her designee, may request another 
agency that holds funds payable to a Treasury debtor to offset the debt 
against the funds held and will provide certification that:
    (1) The debt exists; and
    (2) The person has been afforded the necessary due process rights.
    (d) If the six-year period for bringing action on a debt provided in 
28 U.S.C. 2415 has expired, then administrative offset may be used to 
collect the debt only if the costs of bringing such action are likely to 
be less than the amount of the debt.
    (e) No collection by administrative offset shall be made on any debt 
that has been outstanding for more than 10 years unless facts material 
to the Government's right to collect the debt were not known, and 
reasonably could not have been known, by the official or officials 
responsible for discovering and collecting such debt.
    (f) These regulations do not apply to:
    (1) A case in which administrative offset of the type of debt 
involved is explicitly provided for or prohibited by another statute; or
    (2) Debts owed by other agencies of the United States or by any 
State or local government.



Sec. 5.34  Notification procedures.

    Before collecting any debt through administrative offset, a notice 
of intent to offset shall be sent to the debtor by certified mail, 
return receipt requested, at the most current address that is available 
to the Department. The notice shall provide:
    (a) A description of the nature and amount of the debt and the 
intention of the Department to collect the debt through administrative 
offset;
    (b) An opportunity to inspect and copy the records of the Department 
with respect to the debt;
    (c) An opportunity for review within the Department of the 
determination of the Department with respect to the debt; and
    (d) An opportunity to enter into a written agreement for the 
repayment of the amount of the debt.



Sec. 5.35  Agency review.

    (a) A debtor may dispute the existence of the debt, the amount of 
debt, or the terms of repayment. A request to review a disputed debt 
must be submitted to the Treasury official who provided notification 
within 30 calendar days of the receipt of the written notice described 
in Sec. 5.34.

[[Page 161]]

    (b) If the debtor requests an opportunity to inspect or copy the 
Department's records concerning the disputed claim, 10 business days 
will be granted for the review. The time period will be measured from 
the time the request for inspection is granted or from the time the copy 
of the records is received by the debtor.
    (c) Pending the resolution of a dispute by the debtor, transactions 
in any of the debtor's account(s) maintained in the Department may be 
temporarily suspended. Depending on the type of transaction the 
suspension could preclude its payment, removal, or transfer, as well as 
prevent the payment of interest or discount due thereon. Should the 
dispute be resolved in the debtor's favor, the suspension will be 
immediately lifted.
    (d) During the review period, interest, penalties, and 
administrative costs authorized under the Federal Claims Collection Act 
of 1966, as amended, will continue to accrue.



Sec. 5.36  Written agreement for repayment.

    A debtor who admits liability but elects not to have the debt 
collected by administrative offset will be afforded an opportunity to 
negotiate a written agreement for the repayment of the debt. If the 
financial condition of the debtor does not support the ability to pay in 
one lump-sum, reasonable installments may be considered. No installment 
arrangement will be considered unless the debtor submits a financial 
statement, executed under penalty of perjury, reflecting the debtor's 
assets, liabilities, income, and expenses. The financial statement must 
be submitted within 10 business days of the Department's request for the 
statement. At the Department's option, a confess-judgment note or bond 
of indemnity with surety may be required for installment agreements. 
Notwithstanding the provisions of this section, any reduction or 
compromise of a claim will be governed by 4 CFR part 103 and 31 CFR 5.3.



Sec. 5.37  Administrative offset.

    (a) If the debtor does not exercise the right to request a review 
within the time specified in Sec. 5.35 or if as a result of the review, 
it is determined that the debt is due and no written agreement is 
executed, then administrative offset shall be ordered in accordance with 
these regulations without further notice.
    (b) Requests for offset to other Federal agencies. The Secretary or 
his or her designee may request that funds due and payable to a debtor 
by another Federal agency be administratively offset in order to collect 
a debt owed to the Department by that debtor. In requesting 
administrative offset, the Department, as creditor, will certify in 
writing to the Federal agency holding funds of the debtor:
    (1) That the debtor owes the debt;
    (2) The amount and basis of the debt; and
    (3) That the agency has complied with the requirements of 31 U.S.C. 
3716, its own administrative offset regulations and the applicable 
provisions of 4 CFR part 102 with respect to providing the debtor with 
due process.
    (c) Requests for offset from other Federal agencies. Any Federal 
agency may request that funds due and payable to its debtor by the 
Department be administratively offset in order to collect a debt owed to 
such Federal agency by the debtor. The Department shall initiate the 
requested offset only upon:
    (1) Receipt of written certification from the creditor agency:
    (i) That the debtor owes the debt;
    (ii) The amount and basis of the debt;
    (iii) That the agency has prescribed regulations for the exercise of 
administrative offset; and
    (iv) That the agency has complied with its own administrative offset 
regulations and with the applicable provisions of 4 CFR part 102, 
including providing any required hearing or review.
    (2) A determination by the Department that collection by offset 
against funds payable by the Department would be in the best interest of 
the United States as determined by the facts and circumstances of the 
particular case, and that such offset would not otherwise be contrary to 
law.



Sec. 5.38  Jeopardy procedure.

    The Department may effect an administrative offset against a payment 
to be made to the debtor prior to the

[[Page 162]]

completion of the procedures required by Secs. 5.34 and 5.34 of this 
part if failure to take the offset would substantially jeopardize the 
Department's ability to collect the debt, and the time before the 
payment is to be made does not reasonably permit the completion of those 
procedures. Such prior offset shall be promptly followed by the 
completion of those procedures. Amounts recovered by offset but later 
found not to be owed to the Department shall be promptly refunded.



PART 6--APPLICATIONS FOR AWARDS UNDER THE EQUAL ACCESS TO JUSTICE ACT--Table of Contents




                      Subpart A--General Provisions

Sec.
6.1  Purpose of these rules.
6.2  When the Act applies.
6.3  Proceedings covered.
6.4  Eligibility of applicants.
6.5  Standards for awards.
6.6  Allowable fees and other expenses.
6.7  Delegations of authority.

             Subpart B--Information Required From Applicants

6.8  Contents of application.
6.9  Net worth exhibit.
6.10  Documentation of fees and expenses.
6.11  When an application may be filed.

           Subpart C--Procedures for Considering Applications

6.12  Filing and service of documents.
6.13  Answer to application.
6.14  Decision.
6.15  Agency review.
6.16  Judicial review.
6.17  Payment of award.

    Authority: Sec. 203(a)(1), Pub. L. 96-481, 94 Stat. 2325 (5 U.S.C. 
504(c)(1)).

    Source: 47 FR 20765, May 14, 1982, unless otherwise noted.



                      Subpart A--General Provisions



Sec. 6.1  Purpose of these rules.

    The Equal Access to Justice Act, 5 U.S.C. 504 (called ``the Act'' in 
this part), provides for the award of attorney fees and other expenses 
to eligible individuals and entities who are parties to certain 
administrative proceedings (called ``adversary adjudications'') before 
agencies of the Government of the United States. An eligible party may 
receive an award when it prevails over an agency, unless the agency's 
position in the proceeding was substantially justified or special 
circumstances make an award unjust. The rules in this part describe the 
parties eligible for awards and the proceedings that are covered. They 
also explain how to apply for awards, and the procedures and standards 
that the Treasury Department will use to make them.



Sec. 6.2  When the Act applies.

    The Act applies to any adversary adjudication pending before an 
agency at any time between October 1, 1981 and September 30, 1984. This 
includes proceedings begun before October 1, 1981, if final agency 
action has not been taken before that date, and proceedings pending on 
September 30, 1984, regardless of when they were initiated or when final 
agency action occurs.



Sec. 6.3  Proceedings covered.

    The Act applies to adversary adjudications required to be conducted 
by the Treasury Department under 5 U.S.C. 554. Within the Treasury 
Department, these proceedings are:
    (a) Bureau of Alcohol, Tobacco and Firearms: (1) Permit proceedings 
under the Federal Alcohol Administration Act (27 U.S.C. 204); (2) Permit 
proceedings under the Internal Revenue Code of 1954 (26 U.S.C. 5171, 
5271, 5713); (3) License and permit proceedings under the Federal 
Explosives Laws (18 U.S.C. 843).
    (b) Comptroller of the Currency:

All proceedings conducted under 12 CFR part 19, subpart A.



Sec. 6.4  Eligibility of applicants.

    (a) To be eligible for an award of attorney fees and other expenses 
under the Act, the applicant must be a party to the adversary 
adjudication for which it seeks an award. The term ``party'' is defined 
in 5 U.S.C. 551(3). The applicant must show that it meets all conditions 
of eligibility set out in this subpart and has complied with the 
requirements in Subpart B of this part.
    (b) The types of eligible applicants are as follows:
    (1) An individual with a net worth of not more than $1 million;

[[Page 163]]

    (2) The sole owner of an unincorporated business who has a net worth 
of not more than $5 million, including both personal and business 
interests, and not more than 500 employees;
    (3) A charitable or other tax-exempt organization described in 
section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)) 
with not more than 500 employees;
    (4) A cooperative association as defined in section 15(a) of the 
Agricultural Marketing Act (12 U.S.C. 1141(a)) with not more than 500 
employees, or
    (5) Any other partnership, corporation, association, or public or 
private organization with a net worth of not more than $5 million and 
not more than 500 employees.
    (c) For the purpose of eligibility, the net worth and number of 
employees of an applicant shall be determined as of the date the 
proceeding was initiated.
    (d) An applicant who owns an unincorporated business will be 
considered as an ``individual'' rather than a ``sole owner of an 
unincorporated business'' if the matter in controversy is primarily 
related to personal interests rather than to business interests.
    (e) The employees of an applicant include all persons who regularly 
perform services for remuneration for the applicant, under the 
applicant's direction and control. Part-time employees shall be 
included.
    (f) The net worth and number of employees of the applicant and all 
of its affiliates shall be aggregated to determine eligibility. Any 
individual or group of individuals, corporation or other entity that 
directly or indirectly controls or owns a majority of the voting shares 
of another business, or controls in any manner the election of a 
majority of that business's board of directors, trustees, or other 
persons exercising similar functions, will be considered an affiliate of 
that business for purposes of this part, unless the adjudicative officer 
determines that such treatment would be unjust and contrary to the 
purposes of the Act in light of the actual relationship between the 
afffiliated entities. In addition, the adjudicative officer may 
determine that financial relationships of the applicant other than those 
described in this paragraph constitute special circumstances that would 
make an award unjust.
    (g) An applicant that participates in a proceeding primarily on 
behalf of one or more other persons or entities that would be ineligible 
is not itself eligible for an award.



Sec. 6.5  Standards for awards.

    (a) A prevailing applicant may receive an award for fees and 
expenses incurred in connection with the final disposition of a 
proceeding, unless (1) the position of the agency was substantially 
justified, or (2) special circumstances make the award unjust. No 
presumption arises that the agency's position was not substantially 
justified simply because the agency did not prevail.
    (b) An award will be reduced or denied if the applicant has unduly 
or unreasonably protracted the proceeding or if special circumstances 
make the award sought unjust.



Sec. 6.6  Allowable fees and other expenses.

    (a) The following fees and other expenses are allowable under the 
Act:
    (1) Reasonable expenses of expert witnesses;
    (2) Reasonable cost of any study, analysis, engineering report, 
test, or project which the agency finds necessary for the preparation of 
the party's case;
    (3) Reasonable attorney or agent fees.
    (b) The amount of fees awarded will be based upon the prevailing 
market rates for the kind and quality of services furnished, except that
    (1) Compensation for an expert witness will not exceed the highest 
rate paid by the agency for expert witnesses; and
    (2) Attorney or agent fees will not be in excess of $75 per hour.



Sec. 6.7  Delegations of authority.

    The Director, Bureau of Alcohol, Tobacco and Firearms and the 
Comptroller of the Currency are authorized to take final action on 
matters pertaining to the Equal Access to Justice Act, 5 U.S.C. 504, in 
proceedings listed in Sec. 6.3 under the respective bureau or office. 
The Secretary of the Treasury may by order delegate authority to

[[Page 164]]

take final action on matters pertaining to the Equal Access to Justice 
Act in particular cases to other subordinate officials.



             Subpart B--Information Required From Applicants



Sec. 6.8  Contents of application.

    (a) An application for an award of fees and expenses under the Act 
shall identify the applicant and the proceeding for which an award is 
sought. The application shall show that the applicant has prevailed and 
identify the position of the agency in the proceeding that the applicant 
alleges was not substantially justified. The application shall state the 
basis for the applicant's belief that the position was not substantially 
justified. Unless the applicant is an individual, the application shall 
also state the number of employees of the applicant and describe briefly 
the type and purpose of its organization or business.
    (b) The application shall also include a statement that the 
applicant's net worth does not exceed $1 million (if an individual) or 
$5 million (for all other applicants, including their affiliates). 
However, an applicant may omit this statement if:
    (1) It attaches a copy of a ruling by the Internal Revenue Service 
that it qualifies as an organization described in section 501(c)(3) of 
the Internal Revenue Code (26 U.S.C. 501(c)(3)) or, in the case of a 
tax-exempt organization not required to obtain a ruling from the 
Internal Revenue Service on its exempt status, a statement that 
describes the basis for the applicant's belief that it qualifies under 
such section; or
    (2) It states that it is a cooperative association as defined in 
section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)).
    (c) The application shall itemize the amount of fees and expenses 
for which an award is sought.
    (d) The application may also include any other matters that the 
applicant wishes the agency to consider in determining whether and in 
what amount an award should be made.
    (e) The application shall be signed by the applicant or an 
authorized officer with respect to the eligibility of the applicant and 
by the attorney of the applicant with respect to fees and expenses 
sought. It shall also contain or be accompanied by a written 
verification under oath or under penalty of perjury that the information 
provided in the application is true and correct.

(Approved by the Office of Management and Budget under control number 
1512-0444, for applications filed with the Bureau of Alcohol, Tobacco 
and Firearms)

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[47 FR 20765, May 14, 1982, as amended at 49 FR 14944, Apr. 16, 1984]



Sec. 6.9  Net worth exhibit.

    (a) Each applicant except a qualified tax-exempt organization, or 
cooperative association must provide with its application a detailed 
exhibit showing the net worth of the applicant and any affiliates (as 
defined in Sec. 6.4(f)) when the proceeding was initiated. In the case 
of national banking associations, ``net worth'' shall be considered to 
be the total capital and surplus as reported, in conformity with the 
applicable instructions and guidelines, on the bank's last Consolidated 
Report of Condition filed before the initiation of the underlying 
proceeding.
    (b) The exhibit may be in any form convenient to the applicant that 
provides full disclosure of the applicant's and its affiliates assets 
and liabilities and is sufficient to determine whether the applicant 
qualifies under the standards in this part. The adjudicative officer may 
require an applicant to file additional information to determine its 
eligibility for an award.



Sec. 6.10  Documentation of fees and expenses.

    (a) The application shall be accompanied by full documentation of 
the fees and expenses, including the cost of any study, engineering 
report, test, or project, for which an award is sought.
    (b) The documentation shall include an affidavit from any attorney, 
agent, or expert witness representing or appearing in behalf of the 
party, stating the actual time expended and the rate at which fees and 
other expenses were computed and describing the specific services 
performed.

[[Page 165]]

    (1) The affidavit shall state the services performed. In order to 
establish the hourly rate, the affidavit shall state the hourly rate 
which is billed and paid by the majority of clients during the relevant 
time periods.
    (2) If not hourly rate is paid by the majority of clients because, 
for instance, the attorney or agent represents most clients on a 
contingency basis, the attorney or agent shall provide information about 
two attorneys or agents with similar experience, who perform similar 
work, stating their hourly rate.
    (c) The documentation shall also include a description of any 
expenses for which reimbursement is sought and a statement of the 
amounts paid and payable by the applicant or by any other person or 
entity for the services provided.
    (d) The adjudicative officer may require the applicant to provide 
vouchers, receipts, or other substantiation for any expenses claimed.



Sec. 6.11  When an application may be filed.

    (a) An application may be filed whenever the applicant has prevailed 
in the proceeding but in no case later than 30 days after the agency's 
final disposition of the proceeding.
    (b) If review or reconsideration is sought or taken of a decision as 
to which an appplicant believes it has prevailed, proceedings for the 
award of fees shall be stayed pending final disposition of the 
underlying controversy.



           Subpart C--Procedures for Considering Applications



Sec. 6.12  Filing and service of documents.

    Any application for an award or other pleading or document related 
to an application shall be filed and served on all parties to the 
proceeding in the same manner as other pleadings in the proceeding.



Sec. 6.13  Answer to application.

    (a) Within 30 days after service of an application, counsel 
representing the agency against which an award is sought shall file an 
answer to the application.
    (b) If agency counsel and the applicant believe that the issues in 
the fee application can be settled, they may jointly file a statement of 
their intent to negotiate a settlement. The filing of this statement 
shall extend the time for filing an answer for an additional 60 days and 
further extensions may be granted by the adjudicative officer upon 
request by agency counsel and the applicant.
    (c) The answer shall explain any objections to the award requested 
and identify the facts relied on in support of agency counsel's 
position. If the answer is based on any alleged facts not already in the 
record of the proceeding, agency counsel shall include with the answer 
supporting affidavits.



Sec. 6.14  Decision.

    The adjudicative officer shall issue an initial decision on the 
application within 60 days after completion of proceedings on the 
application. The decision shall include written findings and conclusions 
on the applicant's eligibility and status as a prevailing party, and an 
explanation of the reasons for any difference between the amount 
requested and the amount awarded. The decision shall also include, if at 
issue, findings on whether the agency's position was substantially 
justified, whether the applicant unduly protracted the proceedings, or 
whether special circumstances make an award unjust.



Sec. 6.15  Agency review.

    Either the applicant or agency counsel may seek review of the 
initial decision on the fee application, or the agency may decide to 
review the decision on its own initiative. If neither the applicant nor 
agency counsel seeks a review and the agncy does not take review on its 
own initiative, the initial decision on the application shall become a 
final decision of the agency 30 days after it is issued. Whether to 
review a decision is a matter within the discretion of the agency. If 
review is taken, the agency will issue a final decision on the 
application or remand the application to the adjudicative officer for 
further proceedings.

[[Page 166]]



Sec. 6.16  Judicial review.

    Judicial review of final agency decisions on awards may be sought as 
provided in 5 U.S.C. 504(c)(2).



Sec. 6.17  Payment of award.

    An applicant seeking payment of an award shall submit to the agency 
a copy of the agency's final decision granting the award, accompanied by 
a statement that the applicant will not seek review of the decision in 
the United States courts. An applicant shall be paid the amount awarded 
unless judicial review of the award or of the underlying decision of the 
adversary adjudication has been sought by the applicant or any other 
party to the proceeding.



PART 7--EMPLOYEE INVENTIONS--Table of Contents




Sec.
7.1  Purpose.
7.2  Responsibilities of the Department.
7.3  Responsibilities of heads of offices.
7.4  Responsibilities of the General Counsel.
7.5  Responsibilities of employees.
7.6  Effect of awards.
7.7  Appeals.
7.8  Delegation.

    Authority: 80 Stat. 379; 5 U.S.C. 301, sec. 6, E.O. 10096; 3 CFR, 
1949-1953 Comp., p. 292, as amended by E.O. 10930; 3 CFR, 1959-1963 
Comp., p. 456.

    Source: 33 FR 10088, July 13, 1968, unless otherwise noted.



Sec. 7.1  Purpose.

    Provisions defining the right, title, and interest of the Government 
in and to an invention made by a Government employee under various 
circumstances and the duties of Government agencies with respect thereto 
are set forth in Executive Order 10096, 15 FR 389, as amended (35 U.S.C. 
266 note). Further definition of the circumstances under which the 
Government will acquire the right to a patent in such an invention or a 
nonexclusive, irrevocable, royalty-free license in the invention, and 
the procedures for the determination of these interests, are set forth 
in the regulations issued under that Executive order by the Patent 
Office, 37 CFR part 100. The purpose of this part 7 is to implement for 
the Treasury Department the foregoing Executive order and regulations of 
the Patent Office by (a) bringing to the attention of Treasury employees 
the law and procedure governing their rights to, and interest in, 
inventions made by them, (b) defining responsibility within the 
Department for making the necessary determinations, and, (c) 
establishing internal procedures for action in conformity with the 
Executive order and the Patent Office regulations.



Sec. 7.2  Responsibilities of the Department.

    The responsibilities of the Treasury Department are to determine 
initially (a) the occurrence of an invention by an employee, (b) his 
rights in the invention and the rights of the Government therein, and 
(c) whether patent protection will be sought in the United States by the 
Department, and to furnish the required reports to the Patent Office.



Sec. 7.3  Responsibilities of heads of offices.

    (a) Heads of bureaus or offices in the Department shall be 
responsible for determining initially whether the results of research, 
development, or other activity of an employee within that bureau or 
office constitute an invention which falls within the purview of 
Executive Order 10096, as amended, and is to be handled in accordance 
with the regulations in this part.
    (b) Heads of bureaus or offices are responsible for obtaining from 
the employee the necessary information and, if the determination under 
paragraph (a) of this section is affirmative, preparing on behalf of the 
bureau or office a description of the invention and its relationship to 
the employee's duties and work assignments.
    (c) Heads of bureaus or offices, after such examination and 
investigation as may be necessary, shall refer to the General Counsel 
all information obtained concerning the invention and such determination 
as the head of the bureau or office has made with respect to the 
character of the activity as an invention. These reports shall include 
any determination as to the giving of a cash award to the employee for 
his performance relating to that invention.

[[Page 167]]



Sec. 7.4  Responsibilities of the General Counsel.

    (a) The General Counsel shall be responsible for determining, 
subject to review by the Commissioner of Patents, the respective rights 
of the Government and of the inventor in and to any invention made by an 
employee of the Department.
    (b) On the basis of the foregoing determination, the General Counsel 
shall determine whether patent protection will be sought by the 
Department for such an invention.
    (c) The General Counsel will prepare and furnish to the Patent 
Office the reports required by the regulations of that Office and will 
serve as the liaison officer between the Department and the Commissioner 
of Patents.



Sec. 7.5  Responsibilities of employees.

    All employees are required to report to the heads of their bureaus 
or offices any result of research, development, or other activity on 
their part which may constitute an invention and the circumstances under 
which this possible invention came into being.



Sec. 7.6  Effect of awards.

    The acceptance by an employee of a cash award for performance which 
constitutes an invention shall, in accordance with 5 U.S.C. 4502(c), 
constitute an agreement that the use by the Government of the idea, 
method, or device for which the award is made does not form the basis of 
any further claim against the Government by the employee, his heirs or 
assigns.



Sec. 7.7  Appeals.

    (a) Any employee who is aggrieved by a determination made by the 
head of his bureau or office under this part may obtain a review of the 
determination by filing an appeal with the General Counsel within 30 
days after receiving the notice of the determination complained of.
    (b) Any employee who is aggrieved by a determination made by the 
General Counsel under this part may obtain a review of the determination 
by filing a written appeal with the Commissioner of Patents within 30 
days after receiving notice of the determination complained of, or 
within such longer period as the Commissioner may provide. The appeal to 
the Commissioner shall be processed in accordance with the provisions in 
the regulations of the Patent Office for an appeal from an agency 
determination.



Sec. 7.8  Delegation.

    The heads of bureaus or offices and the General Counsel may 
delegate, as appropriate, the performance of the responsibilities 
assigned to them under this part.



PART 8--PRACTICE BEFORE THE BUREAU OF ALCOHOL, TOBACCO AND FIREARMS--Table of Contents




                     Subpart A--General Requirements

Sec.
8.1  Scope.
8.2  Persons who may practice.
8.3  Conference and practice requirements.
8.4  Director of Practice.
8.5  Records.
8.6  Special orders.

                         Subpart B--Definitions

8.11  Meaning of terms.

                    Subpart C--Enrollment Procedures

8.21  Eligibility for enrollment.
8.22  Application for enrollment.
8.23  Denial of enrollment; appeal.
8.24  Enrollment cards.
8.25  Renewal of enrollment card.
8.26  Change in enrollment.
8.27  Enrollment registers.
8.28  Termination of enrollment.
8.29  Limited practice without enrollment.

         Subpart D--Duties and Restrictions Relating to Practice

8.31  Furnishing of information.
8.32  Prompt disposition of pending matters.
8.33  Accuracy.
8.34  Knowledge of client's omission.
8.35  Assistance from disbarred or suspended persons and former Treasury 
          employees.
8.36  Practice by partners of Government employees.
8.37  Practice by former Government employees.
8.38  Notaries.
8.39  Fees.
8.40  Conflicting interests.
8.41  Solicitation.
8.42  Practice of law.

[[Page 168]]

                   Subpart E--Disciplinary Proceedings

8.51  Authority to disbar or suspend.
8.52  Disreputable conduct.
8.53  Initiation of disciplinary proceedings.
8.54  Conferences.
8.55  Contents of complaint.
8.56  Service of complaint and other papers.
8.57  Answer.
8.58  Supplemental charges.
8.59  Proof; variance; amendment of pleadings.
8.60  Motions and requests.
8.61  Representation.
8.62  Administrative Law Judge.
8.63  Hearings.
8.64  Evidence.
8.65  Depositions.
8.66  Transcript.
8.67  Proposed findings and conclusions.
8.68  Decision of Administrative Law Judge.
8.69  Appeal to the Secretary.
8.70  Decision of the Secretary.
8.71  Effect of disbarment or suspension.
8.72  Petition for reinstatement.

    Authority: Sec. 3, 23 Stat. 258 (31 U.S.C. 1026); 5 U.S.C. 301, 500, 
551-559; and Reorganization Plan No. 26 of 1950, 15 FR 4935, 64 Stat. 
1280, as amended.

    Source: 42 FR 33026, June 29, 1977, unless otherwise noted.



                     Subpart A--General Requirements



Sec. 8.1  Scope.

    This part contains rules governing the recognition of attorneys, 
certified public accountants, enrolled practitioners, and other persons 
representing clients before the Bureau of Alcohol, Tobacco and Firearms.



Sec. 8.2  Persons who may practice.

    (a) Attorneys. Any attorney who is not currently under suspension or 
disbarment from practice before the Bureau of Alcohol, Tobacco and 
Firearms, may practice before the Bureau upon filing a written 
declaration with the Bureau, that he or she is currently qualified as an 
attorney and is authorized to represent the particular party on whose 
behalf he or she acts.
    (b) Certified public accountants. Any certified public accountant 
who is not currently under suspension or disbarment before the Bureau of 
Alcohol, Tobacco and Firearms, may practice before the Bureau upon 
filing a written declaration with the Bureau, that he or she is 
currently qualified as a certified public accountant and is authorized 
to represent the particular party on whose behalf he or she acts.
    (c) Enrollment practitioners. Any person enrolled as a practitioner 
under the provisions of subpart C of this part and who is not under 
suspension or disbarment from enrollment may practice before the Bureau.
    (d) Limited practitioners. Any person qualified for limited practice 
without enrollment under the provisions of Sec. 8.29 may practice before 
the Bureau.
    (e) Restrictions on Government officers and employees. Any officer 
or employee of the United States in the executive, legislative, or 
judicial branch of the Government, or in any agency of the United 
States, including the District of Columbia, who is otherwise eligible to 
practice under the provisions of this part, may represent parties before 
the Bureau when doing so in the conduct of his or her official duties. A 
Government officer or employee may not otherwise practice before the 
Bureau except that, subject to the requirements of 18 U.S.C. 205, he or 
she may represent a member of his or her immediate family or a person or 
estate for which he or she serves as guardian, executor, administrator, 
trustee or other personal fiduciary. Member of Congress or Resident 
Commissioners (elect or serving) may not practice before the Bureau in 
connection with any matter for which they directly or indirectly seek 
any compensation.
    (f) Restrictions on State officers and employees. No officer or 
employee of any State, or subdivision thereof, whose official 
responsibilities require him or her to pass upon, investigate, or deal 
with any State law or regulation concerning alcohol, tobacco, firearms, 
explosives matters or wagering, may practice before the Bureau if his or 
her official responsibility may disclose pertinent facts or information 
relating to matters administered by the Bureau.
    (g) Customhouse brokers. Customhouse brokers, licensed by the 
Commissioner of Customs according to 19 CFR part 111, may represent a 
party for whom they have acted as a customhouse broker before the Bureau 
with respect to matters relating to the importation

[[Page 169]]

or exportation of merchandise under customs or intenal revenue laws.

(Approved by the Office of Management and Budget under control number 
1512-0418)
(18 U.S.C. 203, 205; 5 U.S.C. 552(a) (80 Stat. 383, as amended))

[42 FR 33026, June 29, 1977, as amended at 49 FR 14944, Apr. 16, 1984]



Sec. 8.3  Conference and practice requirements.

    Conference and practice requrements of the Bureau of Alcohol, 
Tobacco and Firearms, including requirements for powers of attorney are 
set forth in:
    (a) 26 CFR part 601, subpart E (or those regulations as recodified 
in 27 CFR part 71 subsequent to the effective date of these regulations, 
31 CFR part 8) with respect to all representations before the Bureau 
except those concerning license or permit proceedings;
    (b) 27 CFR part 200 with respect to proceedings concerning permits 
issued under the Federal Alcohol Administration Act or the Internal 
Revenue Code;
    (c) 27 CFR 47.44 with respect to proceedings concerning licenses 
issued under the Arms Export Control Act (22 U.S.C. 2778);
    (d) 27 CFR part 178, subpart E, with respect to proceedings 
concerning licenses issued under the Gun Control Act of 1968 (18 U.S.C. 
Chapter 44); and
    (e) 27 CFR part 181, subpart E, with respect to proceedings 
concerning licenses or permits issued under the Organized Crime Control 
Act of 1970 (18 U.S.C. Chapter 40).



Sec. 8.4  Director of Practice.

    (a) Appointment. The Secretary shall appoint the Director of 
Practice. In the event of the absence of the Director of Practice or a 
vacancy in that office, the Secretary shall designate an officer or 
employee of the Treasury Department to act as Director of Practice.
    (b) Duties. The Director of Practice, Office of the Secretary of the 
Treasury, shall: Act upon appeals from decisions of the Director denying 
applications for enrollment to practice before the Bureau; institute and 
provide for the conduct of disciplinary proceedings relating to 
attorneys, certified public accountants, and enrolled practitioners; 
make inquiries with respect to matters under his or her jurisdiction; 
and perform other duties as are necessary or appropriate to carry out 
his or her functions under this part or as are prescribed by the 
Secretary.



Sec. 8.5  Records.

    (a) Availability. Registers of all persons admitted to practice 
before the Bureau, and of all persons disbarred or suspended from 
practice, which are required to be maintained by the director under the 
provisions of Sec. 8.27, will be available for public inspection at the 
Office of the Director. Other records may be disclosed upon specific 
request in accordance with the disclosure regulations of the Bureau (27 
CFR part 71) and the Office of the Secretary.
    (b) Disciplinary proceedings. The Director, may grant a request by 
an attorney, certified public accountant, or enrolled practitioner to 
make public a hearing in a disciplinary proceeding, conducted under the 
provisions of subpart E of this part concerning the attorney, certified 
public accountant or enrolled practioner, and to make the record of the 
proceeding available for public inspection by interested persons, if an 
agreement is reached by stipulation in advance to prevent disclosure of 
any information which is confidential, in accordance with applicable 
laws and regulations.



Sec. 8.6  Special orders.

    The secretary reserves the power to issue special orders as he or 
she may deem proper in any cases within the scope of this part.



                         Subpart B--Definitions



Sec. 8.11  Meaning of terms.

    As used in this part, terms shall have the meaning given in this 
section. Words in the plural shall include the singular, and vice versa. 
The terms include and including do not exclude things not enumerated 
which are in the same general class.
    Administrative Law Judge. The person appointed pursuant to 5 U.S.C. 
3105, designated to preside over any administrative proceedings under 
this part.

[[Page 170]]

    Attorney. A person who is a member in good standing of the bar of 
the highest court of any State, possession, territory, Commonwealth, or 
the District of Columbia.
    Bureau. The Bureau of Alcohol, Tobacco and Firearms, the Department 
of the Treasury, Washington, DC 20226.
    Certified public accountant. Any person who is qualified to practice 
as a certified public accountant in any State, possession, territory, 
Commonwealth, or the District of Columbia.
    CFR. The Code of Federal Regulations.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Enrolled practitioner. Any person enrolled to practice before the 
Bureau of Alcohol, Tobacco and Firearms pursuant to Subpart C of this 
part.
    Practice before the Bureau. This comprehends all matters connected 
with presentation to the Bureau or any of its officers or employees 
relating to a client's rights, privileges or liabilities under laws or 
regulations administered by the Bureau. Presentations include the 
preparation and filing of necessary documents, correspondence with and 
communications to the Bureau, and the representation of a client at 
conferences, hearings, and meetings. Preparation of a tax return, 
appearance of an individual as a witness for any party, or furnishing 
information at the request of the Bureau of any of its officers or 
employees is not considered practice before the Bureau.
    Secretary. The Secretary of the Treasury.
    U.S.C. The United States Code.



                    Subpart C--Enrollment Procedures



Sec. 8.21  Eligibility for enrollment.

    (a) General qualifications. The Director may grant enrollment to 
practice to any person who has not engaged in conduct which would 
justify the disbarment or suspension of any attorney, certified public 
accountant, or enrolled practioner. Each person shall demonstrate to the 
satisfaction of the Director that he or she possesses the necessary 
technical qualifications to enable him or her to render valuable service 
before the Bureau, and that he or she is otherwise competent to advise 
and assists in the presentation of matters before the Bureau.
    (b) Technical qualifications. The Director may grant enrollment to 
practice only to persons possessing technical knowledge of the laws and 
regulations administered by the Bureau.
    (1) Minimum criteria required of an enrolled practioner will consist 
of: 5 years employment with the Treasury Department in a responsible 
position which would familiarize the person with applicable laws and 
regualtions; or 5 years employment in a regulated industry in a 
responsible position which would familiarize the person with applicable 
laws and regulations; or possession of a law degree; or other 
significant experience such as the prior respresentation of persons 
before the Internal Revenue Service or the Bureau of Alcohol, Tobacco 
and Firearms.
    (2) An enrolled paractioner may demonstrate technical knowledge in 
one or more of the several areas of laws and regulations administered by 
the Bureau (alcohol, tobacco firearms, or explosives matters).
    (c) Natural persons. Enrollment to practice may only be granted to 
natural persons who have become 18 years of age.
    (d) Attorneys, certified public accountants. Enrollment if not 
available to persons who are attorneys or certified public accountants 
who qualify to practice without enrollment under Sec. 8.2 (a) or (b).

[42 FR 33026, June 29, 1977; 42 FR 36455, July 15, 1977]



Sec. 8.22  Application for enrollment.

    (a) Information to be furnished. An applicant for enrollment to 
practice shall state his or her name, address, and business address, 
citizenship, and age on the application. The applicant shall also state 
if he or she has ever been suspended or disbarred as an attorney or 
certified public accountant, or if the applicant's right to practice has 
ever been revoked by any court, commission, or administrative agency in 
any jurisdiction. The applicant shall set forth his or her technical 
qualifications as required by Sec. 8.21(b) which enable him or her to 
render valuable service

[[Page 171]]

before the Bureau. The applicant shall indicate which area or areas of 
Bureau matters in which he or she desires to practice (alcohol, tobacco, 
firearms, or explosives matters).
    (b) Fee. Each application for enrollment will be accompanied by a 
check or money order in the amount of $25, payable to the Bureau of 
Alcohol, Tobacco and Firearms. This fee will be retained by the United 
States whether or not the applicant is granted enrollment. Agents who 
are enrolled to practice before the Internal Revenue Service prior to 
September 27, 1977, need not include this fee and should indicate their 
enrollment number on the application.
    (c) Execution under oath. All applications for enrollment will be 
executed under oath or affirmation.
    (d) Filing. Applications for enrollment will be filed with the 
Assistant Director, Regulatory Enforcement, Bureau of Alcohol, Tobacco 
and Firearms, 1200 Pensylvania Avenue NW., Washington, DC 20226.
    (e) Additional information. The Director, as a condition to 
consideration for enrollment, may require the applicant to file 
additional information as necessary to determine if the applicant is 
qualified. The Director shall, upon written request, afford an applicant 
the opportunity to be heard with respect to his or her application for 
enrollment.

(Approved by the Office of Management and Budget under control number 
1512-0418)

(Sec. 501, Pub. L. 82-137, 65 Stat. 290 (31 U.S.C. 483a); 5 U.S.C. 
552(a) (80 Stat. 383, as amended))

[42 FR 33026, June 29, 1977; 42 FR 36455, July 15, 1977, as amended at 
49 FR 14944, Apr. 16, 1984]



Sec. 8.23  Denial of enrollment; appeal.

    (a) The Director, in denying an application for enrollment, shall 
inform the applicant as to the reasons. The applicant may, within 30 
days after receipt of the notice of denial, file a written appeal 
together with reasons in support thereof, with the Director of Practice. 
The Director of Practice shall render a decision on the appeal as soon 
as practicable.
    (b) An applicant may, within 30 days after receipt of the decision 
of the Director of Practice in sustaining a denial of enrollment, appeal 
the decision to the Secretary.



Sec. 8.24  Enrollment cards.

    The Director shall issue an enrollment card to each practitioner who 
is enrolled to practice before the Bureau. Each enrollment card is valid 
for a period of 5 years as long as the holder remains enrolled and in 
good standing before the Bureau. Unless advised to the contrary by the 
Director, any officer or employee of the Bureau may consider the holder 
of an unexpired enrollment card to be authorized to practice before the 
Bureau in the subject area or areas indicated upon the card (alcohol, 
tobacco, firearms, or explosives matters).



Sec. 8.25  Renewal of enrollment card.

    (a) Period of renewal. An enrolled practitioner may apply for 
renewal of his or her enrollment card during a 12-month period prior to 
the expiration of the enrollment card.
    (b) Application. Each enrolled practitioner applying for a renewal 
of enrollment shall apply to the Director. The enrolled practitioner 
shall include in the application all information required by Sec. 8.22 
except information relating to technical qualifications unless the 
enrolled practitioner is applying for enrollment in a subject area or 
areas in which he or she was not previously qualified to practice.
    (c) Fee. Each application for renewal of enrollment will be 
accompanied by a check or money order in the amount of $5, payable to 
the Bureau of Alcohol, Tobacco and Firearms.

(Approved by the Office of Management and Budget under control number 
1512-0418)

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[42 FR 33026, June 29, 1977, as amended at 49 FR 14944, Apr. 16, 1984]



Sec. 8.26  Change in enrollment.

    (a) Change in area of practice. At any time during a period of 
enrollment, an enrolled practitioner may apply to practice in a subject 
area or areas in which he or she was not previously qualified to 
practice (alcohol, tobacco, firearms, or explosives matters).

[[Page 172]]

    (b) Application. Each enrolled practitioner applying for a change in 
enrollment shall apply to the Director. The enrolled practitioner shall 
include in the application all information required by Sec. 8.22 but 
shall include information relating to technical qualifications only in 
those additional subject areas in which he or she is applying to 
practice.
    (c) Fee. Each application for change in enrollment will be 
accompanied by a check or money order in the amount of $5, payable to 
the Bureau of Alcohol, Tobacco and Firearms.

(Approved by the Office of Management and Budget under control number 
1512-0418)

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[42 FR 33026, June 29, 1977, as amended at 49 FR 14944, Apr. 16, 1984]



Sec. 8.27  Enrollment registers.

    The Director shall maintain, for public inspection, a register of 
all persons enrolled to practice before the Bureau and the subject areas 
in which each person is enrolled to practice, a register of all persons 
disbarred or suspended from practice, and a register of all persons 
whose applications for enrollment before the Bureau have been denied.



Sec. 8.28  Termination of enrollment.

    (a) Attorneys, certified public accountants. The enrollment of a 
practitioner to whom an enrollment card has been issued will terminate 
when that person becomes eligible to practice without enrollment under 
Sec. 8.2 (a) or (b), and that person shall surrender his or her 
enrollment card to the Director for cancellation.
    (b) Expiration of enrollment. The enrollment of any person will 
automatically terminate after the date indicated on the enrollment card 
unless, during the 12-month period prior to the expiration date, that 
person applies for renewal of enrollment with the Director as provided 
in Sec. 8.25. In this case, the person may continue to practice before 
the Bureau until his or her application has been finally determined.



Sec. 8.29  Limited practice without enrollment.

    (a) General. Individuals may appear on their own behalf and may 
otherwise appear without enrollment, providing they present satisfactory 
identification, in the following classes of cases:
    (1) An individual may represent another individual who is his or her 
regular full-time employer, may represent a partnership of which he or 
she is a member or a regular full-time employee, of may represent 
without compensation a member of his or her immediate family.
    (2) Corporations (including parent corporations, subsidiaries or 
affiliated corporations), trusts, estates, associations, or organized 
groups may be represented by bona fide officers or regular full-time 
employees.
    (3) Trusts, receiverships, guardianships, or estates may be 
represented by their trustees, receivers, guardians, administrators, 
executors, or their regular full-time employees.
    (4) Any government unit, agency, or authority may be represented by 
an officer or regular employee in the course of his or her official 
duties.
    (5) Unenrolled persons may participate in rulemaking as provided in 
5 U.S.C. 553.
    (b) Special appearances. The Director, subject to conditions he or 
she deems appropriate, may authorize any person to represent a party 
without enrollment, for the purpose of a particular matter.



         Subpart D--Duties and Restrictions Relating to Practice



Sec. 8.31  Furnishing of information.

    (a) To the Bureau. No attorney, certified public accountant, or 
enrolled practitioner may neglect or refuse promptly to submit records 
or information in any matter before the Bureau, upon proper and lawful 
request by an authorized officer or employee of the Bureau, or may 
interfere, or attempt to interfere, with any proper and lawful effort by 
the Bureau or its officers or employees, to obtain the requested record 
or information, unless he or she

[[Page 173]]

believes in good faith and on reasonable grounds that the record or 
information is privileged or that the request for, or effort to obtain, 
that record or information is of doubtful legality.
    (b) To the Director of Practice. It is the duty of an attorney or 
certified public accountant, who practices before the Bureau, or 
enrolled practitioner when requested by the Director of Practice, to 
provide the Director of Practice with any information he or she may have 
concerning violation of the regulations in this part by any person, and 
to testify thereto in any proceeding instituted under this part for the 
disbarment or suspension of an attorney, certified public accountant, or 
enrolled practitioner, unless he or she believes in good faith and on 
reasonable grounds that that information is privileged or that the 
request is of doubtful legality.



Sec. 8.32  Prompt disposition of pending matters.

    No attorney, certified public accountant, or enrolled practitioner 
may unreasonably delay the prompt disposition of any matter before the 
Bureau.



Sec. 8.33  Accuracy.

    Each attorney, certified public accountant, and enrolled 
practitioner shall exercise due diligence in:
    (a) Preparing or assisting in the preparation of, approving, and 
filing returns, documents, affidavits, and other papers relating to 
Bureau matters;
    (b) Determining the correctness of any representations made by him 
or her to the Bureau; and
    (c) Determining the correctness of any information which he or she 
imparts to a client with reference to any matter administered by the 
Bureau.



Sec. 8.34  Knowledge of client's omission.

    Each attorney, certified public accountant, or enrolled practitioner 
who knows that a client has not complied with applicable law, or has 
made an error in or omission from any document, affidavit, or other 
paper which the law requires the client to execute, shall advise the 
client promptly of the fact of such noncompliance, error, or omission.



Sec. 8.35  Assistance from disbarred or suspended persons and former Treasury employees.

    No attorney, certified public accountant or enrolled practitioner 
shall, in practice before the Bureau, knowingly and directly or 
indirectly:
    (a) Employ or accept assistance from any person who is under 
disbarment or suspension from practice before any agency of the Treasury 
Department;
    (b) Accept employment as associate, correspondent, or subagent from, 
or share fees with, any such person;
    (c) Accept assistance in a specific matter from any person who 
participated personally and substantially in the matter as an employee 
of the Treasury Department.

[44 FR 47059, Aug. 10, 1979]



Sec. 8.36  Practice by partners of Government employees.

    No partner of an officer or employee of the executive branch of the 
U.S. Government, of any independent agency of the United States, or of 
the District of Columbia, may represent anyone in any matter 
administered by the Bureau in which the Government employee participates 
or has participated personally and substantially as a Government 
employee, or which is the subject of that employee's official 
responsibility.



Sec. 8.37  Practice by former Government employees.

    (a) Violation of law. No former officer or employee of the U.S. 
Government, of any independent agency of the United States, or of the 
District of Columbia, may represent anyone in any matter administered by 
the Bureau if the representation would violate any of the laws of the 
United States.
    (b) Personal and substantial participation. No former officer or 
employee of the executive branch of the U.S. Goverment, of any 
independent agency of the United States, or of the District of Columbia, 
may represent anyone with repect to any matter under the administration 
of the Bureau, if he or she participated personally and substantially in 
that matter a a Government employee.
    (c) Official responsibility. No former officer or employee of the 
executive

[[Page 174]]

branch of the U.S. Government, of any indepenednt agency of the United 
States, or of the District of Columbia, may within one year after his or 
her employment has ceased, appear personally as a practitioner before 
the Bureau with respect to any matter administered by the Bureau if that 
representation involves a specific matter under the former employee's 
official responsibility as a Government employee, within a one-year 
period prior to the termination of that responsibility.
    (d) Aid or assistance. No former officer or employee of the Bureau, 
who is eligible to practice before the Bureau, may aid or assist any 
person in the representation of a specific matter in which the former 
officer or employee participated personally and substantially as an 
officer or employee of the Bureau.

(18 U.S.C. 207)



Sec. 8.38  Notaries.

    No attorney, certified public accountant, or enrolled practitioner 
may, with respect to any matter administered by the Bureau, take 
acknowledgements, administer oaths, certify papers, or perform any 
official act in connection with matters in which he or she is employed 
as counsel, attorney, or practioner, or in which he or she may be in any 
way interested before the Bureau.

(26 Op. Atty. Gen. 236)



Sec. 8.39  Fees.

    No attorney, certified public accountant, or enrolled practitioner 
may charge an unconscionable fee for representing a client in any matter 
before the Bureau.



Sec. 8.40  Conflicting interests.

    No attorney, certified public accountant, or enrolled practitioner 
may represent conflicting interests in practice before the Bureau, 
except by express consent of all directly interested parties after full 
disclosure has been made.



Sec. 8.41  Solicitation.

    (a) Advertising and solicitation restrictions. (1) No attorney, 
certified public accountant or enrolled practitioner shall, with respect 
to any Bureau matter, in any way use or participate in the use of any 
form of public communication containing a false, fraudulent, misleading, 
deceptive, unduly influencing, coercive or unfair statement or claim. 
For the purposes of this subsection, the prohibition includes, but is 
not limited to, statements pertaining to the quality of services 
rendered unless subject to factual verification, claims of specialized 
expertise not authorized by State or Federal agencies having 
jurisdiction over the practitioner, and statements or suggestions that 
the ingenuity and/or prior record of a representative rather than the 
merit of the matter are principal factors likely to determine the result 
of the matter.
    (2) No attorney, certified public accountant or enrolled 
practitioner shall make, directly or indirectly, an uninvited 
solicitation of employment, in matters related to the Bureau. 
Solicitation includes, but is not limited to, in-person contacts, 
telephone communications, and personal mailings directed to the specific 
circumstances unique to the recipient. This restriction does not apply 
to: (i) Seeking new business from an existing or former client in a 
related matter; (ii) solicitation by mailings, the contents of which are 
designed for the general public; or (iii) non-coercive in-person 
solicitation by those eligible to practice before the Bureau while 
acting as an employee, member, or officer of an exempt organization 
listed in sections 501(c) (3) or (4) of the Internal Revenue Code of 
1954 (26 U.S.C.).
    (b) Permissible advertising. (1) Attorneys, certified public 
accountants and enrolled practitioners may publish, broadcast, or use in 
a dignified manner through any means of communication set forth in 
paragraph (d) of this section:
    (i) The name, address, telephone number, and office hours of the 
practitioner or firm.
    (ii) The names of individuals associated with the firm.
    (iii) A factual description of the services offered.
    (iv) Acceptable credit cards and other credit arrangements.
    (v) Foreign language ability.

[[Page 175]]

    (vi) Membership in pertinent, professional organizations.
    (vii) Pertinent professional licenses.
    (viii) A statement that an individual's or firm's practice is 
limited to certain areas.
    (ix) In the case of an enrolled practitioner, the phrase ``enrolled 
to practice before the Bureau of Alcohol, Tobacco and Firearms.''
    (x) Other facts relevant to the selection of a practitioner in 
matters related to the Bureau which are not prohibited by these 
regulations.
    (2) Attorneys, certified public accountants and enrolled 
practitioners may use, to the extent they are consistent with the 
regulations in this section, customary biographical insertions in 
approved law lists and reputable professional journals and directories, 
as well as professional cards, letterheads and announcements: Provided, 
That (i) attorneys do not violate applicable standards of ethical 
conduct adopted by the American Bar Association, (ii) certified public 
accountants do not violate applicable standards of ethical conduct 
adopted by the American Institute of Certified Public Accountants, and 
(iii) enrolled practitioners do not violate applicable standards of 
ethical conduct adopted by the National Society of Public Accountants.
    (c) Fee information. (1) Attorneys, certified public accountants and 
enrolled practitioners may disseminate the following fee information:
    (i) Fixed fees for specific routine services.
    (ii) Hourly rates.
    (iii) Range of fees for particular services.
    (iv) Fee charged for an initial consultation.
    (2) Attorneys, certified public accountants and enrolled 
practitioners may also publish the availability of a written schedule of 
fees.
    (3) Attorneys, certified public accountants and enrolled 
practitioners shall be bound to charge the hourly rate, the fixed fee 
for specific routine services, the range of fees for particular 
services, or the fee for an initial consultation published for a 
reasonable period of time, but no less than thirty days from the last 
publication of such hourly rate or fees.
    (d) Communications. Communications, including fee information, shall 
be limited to professional lists, telephone directories, print media, 
permissible mailings as provided in these regulations, radio and 
television. In the case of radio and television broadcasting, the 
broadcast shall be pre-recorded and the practitioner shall retain a 
recording of the actual audio transmission.
    (e) Improper associations. An attorney, certified public accountant 
or enrolled practitioner may, in matters related to the Bureau, employ 
or accept employment or assistance as an associate, correspondent, or 
subagent from, or share fees with, any person or entity who, to the 
knowledge of the practitioner, obtains clients or otherwise practices in 
a manner forbidden under this section: Provided, That an attorney, 
certified public accountant or enrolled practitioner does not, directly 
or indirectly, act or hold himself out as authorized to practice before 
the Bureau in connection with that relationship. Nothing herein shall 
prohibit an attorney, certified public accountant, or enrolled 
practitioner from practice before the Bureau in a capacity other than 
that described above.

[44 FR 47060, Aug. 10, 1979]



Sec. 8.42  Practice of law.

    Nothing in the regulations in this part may be construed as 
authorizing persons not members of the bar to practice law.



                   Subpart E--Disciplinary Proceedings



Sec. 8.51  Authority to disbar or suspend.

    The Secretary, after due notice and opportunity for hearing, may 
suspend or disbar from practice before the Bureau any attorney, 
certified public accountant, or enrolled practitioner shown to be 
incompetent, disreputable or who refuses to comply with the rules and 
regulations in this part or who shall, with intent to defraud, in any 
manner willfully and knowingly deceive, mislead, or threaten any client

[[Page 176]]

or prospective client, by word, circular, letter, or by advertisement.

(Sec. 3, 23 Stat. 258 (31 U.S.C. 1026))



Sec. 8.52  Disreputable conduct.

    Disreputable conduct for which an attorney, certified public 
accountant, or enrolled practitioner may be disbarred or suspended from 
practice before the Bureau includes, but is not limited to:
    (a) Conviction of any criminal offense under the revenue laws of the 
United States; under any other law of the United States which the Bureau 
enforces pursuant to Treasury Department Order No. 221 (37 FR 11696) 
effective July 1, 1972; or for any offense involving dishonesty or 
breach of trust.
    (b) Giving false or misleading information, or participating in any 
way in the giving of false or misleading information, to the Bureau or 
any officer or employee thereof, or to any tribunal authorized to pass 
upon matters administered by the Bureau in connection with any matter 
pending or likely to be pending before them, knowing the information to 
be false or misleading. Facts or other matters contained in testimony, 
Federal tax returns, financial statements, applications for enrollment, 
affidavits, declarations, or any other document or statement, written or 
oral, are included in the term ``information''.
    (c) Solicitation of employment as prohibited under Sec. 8.41, the 
use of false or misleading representations with intent to deceive a 
client or a prospective client in order to procure employment, or 
intimating that the practitioner is able improperly to obtain special 
consideration or action from the Bureau or an officer or employee 
thereof.
    (d) Willfully failing to make a Federal tax return in violation of 
the revenue laws of the United States, or evading, attempting to evade, 
or participating in any way in evading or attempting to evade any 
Federal tax or payment thereof; knowingly counseling or suggesting to a 
client or prospective client an illegal plan to evade Federal taxes or 
payment thereof, or concealing assets of himself or herself, or of 
another in order to evade Federal taxes or payment thereof.
    (e) Misappropriation of, or failure properly and promptly to remit 
funds received from a client for the purpose of payment of taxes or 
other obligations due the United States.
    (f) Directly or indirectly attempting to influence, or offering or 
agreeing to attempt to influence, the official action of any officer or 
employee of the Bureau by the use of threats, false accusations, duress 
or coercion, by the offer of any special inducement or promise of 
advantage or by the bestowing of any gift, favor, or thing of value.
    (g) Disbarment or suspension from practice as an attorney or 
certified public accountant by any duly constituted authority of any 
State, possession, Commonwealth, the District of Columbia, or by any 
Federal court of record.
    (h) Disbarment or suspension from practice as an attorney, certified 
public accountant, or other person admitted to practice before the 
Internal Revenue Service.
    (i) Knowingly aiding and abetting another person to practice before 
the Bureau during a period of suspension, disbarment, or ineligibility 
of the other person. Maintaining a partnership for the practice of law, 
accountancy, or other related professional service with a person who is 
under disbarment from practice before the Bureau or the Intenal Revenue 
Service is presumed to be a violation of this provision.
    (j) Contemptuous conduct in connection with practice before the 
Bureau, including the use of abusive language, making false accusations 
and statements knowing them to be false, or circulating or publishing 
malicious or libelous matter.
    (k) Willful violatin of any of the regulations contained in this 
part.

[42 FR 33026, June 29, 1977; 42 FR 36455, July 15, 1977]



Sec. 8.53  Initiation of disciplinary proceedings.

    (a) Receipt of information. If an officer or employee of the Bureau 
has reason to believe that an attorney, certified public accountant, or 
enrolled practitioner has violated any of the provisions of this part or 
engaged in any disreputable conduct as defined in Sec. 8.52, the 
employee shall promptly make a

[[Page 177]]

report thereof which will be forwarded to the Director of Practice. Any 
other person possessing information concerning violations or 
disreputable conduct may make a report thereof to the Director of 
Practice or to any officer or employee of the Bureau.
    (b) Institution of proceeding. When the Director of Practice has 
reason to believe that any attorney, certified public accountant, or 
enrolled practitioner has violated any provisions of the laws or 
regulations governing practice before the Bureau, he or she may 
reprimand the person or institute a proceeding for the disbarment or 
suspension of that person. The proceeding will be instituted by a 
complaint which names the respondent and is signed by the Director of 
Practice and filed in his or her office. Except in cases of willfulness, 
or when time, the nature of the proceeding, or the public interest does 
not permit, the Director of Practice may not institute a proceeding 
until he or she has called to the attention of the proposed respondent, 
in writing, facts or conduct which warrant institution of a proceeding, 
and has accorded the proposed respondent the opportuity to demonstrate 
or achieve compliance with all lawful requirements.



Sec. 8.54  Conferences.

    (a) General. The Director of Practice may confer with an attorney, 
certified public accountant, or enrolled practioner concerning 
allegations of misconduct whether or not a proceeding for disbarment or 
suspension has been instituted. If a conference results in a stipulation 
in connection with a proceeding in which that person is the respondent, 
the stipulaton may be entered in the record at the instance of either 
party to the proceeding.
    (b) Resignation or voluntary suspension. An attorney, certified 
public accountant, or enrolled practitioner, in order to avoid the 
institution or conclusion of a disbarment or suspension proceeding, may 
offer his or her consent to suspension from practice before the Bureau. 
An enrolled practitioner may also offer a resignation. The Director of 
Practice, at his or her discretion, may accept the offered resignation 
of an enrolled practitioner and may suspend an attorney, certified 
public accountant, or enrolled practitioner in accordance with the 
consent offered.



Sec. 8.55  Contents of complaint.

    (a) Charges. A complaint will give a plain and concise description 
of the allegations which constitute the basis for the proceeding. A 
complaint will be deemed sufficient if it fairly informs the respondent 
of the charges to that he or she is able to prepare a defense.
    (b) Demand for answer. The complaint will give notification of the 
place and time prescribed for the filing of an answer by the respondent; 
that time will be not less than 15 days from the date of service of the 
complaint. Notice will be given that a decision by default may be 
rendered against the respondent if the complaint is not answered as 
required.



Sec. 8.56  Service of complaint and other papers.

    (a) Complaint. A copy of the complaint may be served upon the 
respondent by certified mail or by first-class mail. The copy of the 
complaint may be delivered to the respondent or the respondent's 
attorney or agent of record either in person or by leaving it at the 
office or place of business of the respondent, attorney or agent, or the 
complaint may be delivered in any manner which has been agreed to by the 
respondent. If the service is by certified mail, the post office receipt 
signed by or on behalf of the respondent will be proof of service. If 
the certified matter is not claimed or accepted by the respondent and is 
returned undelivered, complete service may be made upon the respondent 
by mailing the complaint to him or her by first-class mail, addressed to 
the respondent at the address under which he or she is enrolled or at 
the last address known to the Director of Practice. If service is made 
upon the respondent or the respondent's attorney or agent in person, or 
by leaving the complaint at the office or place of business of the 
respondent, attorney or agent, the verified return by the person making 
service, setting forth the manner of service, will be proof of service.
    (b) Service of other papers. Any paper other than the complaint may 
be

[[Page 178]]

served upon an attorney, certified public accountant, or enrolled 
practitioner as provided in paragraph (a) of this section, or by mailing 
the paper by first-class mail to the respondent at the last address 
known to the Director of Practice, or by mailing the paper by first-
class mail to the respondent's attorney or agent of record. This mailing 
will constitute complete service. Notices may be served upon the 
respondent or his attorney or agent by telegram.
    (c) Filing of papers. When the filing of a paper is required or 
permitted in connection with a disbarment or suspension proceeding, and 
the place of filing is not specified by this subpart or by rule or order 
of the Administrative Law Judge, the papers will be filed with the 
Director of Practice, Treasury Department, Washington, DC 20220. All 
papers will be filed in duplicate.



Sec. 8.57  Answer.

    (a) Filing. The respondent shall file the answer in writing within 
the time specified in the complaint or notice of institution of the 
proceeding, unless on application the time is extended by the Director 
of Practice or the Administrative Law Judge. The respondent shall file 
the answer in duplicate with the director of Practice.
    (b) Contents. The respondent shall include in the answer a statement 
of facts which constitute the grounds of defense, and shall specifically 
admit or deny each allegation set forth in the complaint, except that 
the respondent shall not deny a material allegation in the complaint 
which he or she knows to be true, or state that he or she is without 
sufficient information to form a belief when in fact the respondent 
possesses that information. The respondent may also state affirmatively 
special matters of defense.
    (c) Failure to deny or answer allegations in the complaint. Every 
allegation in the complaint which is not denied in the answer is deemed 
to be admitted and may be considered as proven, and no further evidence 
in respect of that allegation need be adduced at a hearing. Failure to 
file an answer within the time prescribed in the notice to the 
respondent, except as the time for answer is extended by the Director of 
Practice or the Administrative Law Judge, will constitute an admission 
of the allegations of the complaint and a waiver of hearing, and the 
Administrative Law Judge may make a decision by default without a 
hearing or further procedure.
    (d) Reply by Director of Practice. No reply to the respondent's 
answer is required, and new matter in the answer will be deemed to be 
denied, but the Director of Practice may file a reply at his or her 
discretion or at the request of the Administrative Law Judge.



Sec. 8.58  Supplemental charges.

    If it appears that the respondent in his or her answer, falsely and 
in bad faith, denies a material allegation of fact in the complaint or 
states that the respondent has no knowledge sufficient to form a belief, 
when he or she in fact possesses that information, or if it appears that 
the respondent has knowingly introduced false testimony during 
proceedings for his or her disbarment or suspension, the Director of 
Practice may file supplemental charges against the respondent. These 
supplemental charges may be tried with other charges in the case, 
provided the respondent is given due notice and is afforded an 
opportunity to prepare to a defense to them.



Sec. 8.59  Proof; variance; amendment of pleadings.

    In the case of a variance between the allegations in a pleading, the 
Administrative Law Judge may order or authorize amendment of the 
pleading to conform to the evidence. The party who would otherwise be 
prejudiced by the amendment will be given reasonable opportunty to meet 
the allegation of the pleading as amended, and the Administrative Law 
Judge shall make findings on an issue presented by the pleadings as so 
amended.



Sec. 8.60  Motions and requests.

    Motions and requests may be filed with the Director of Practice or 
with the Administrative Law Judge.



Sec. 8.61  Representation.

    A respondent or proposed respondent may appear in person or be 
represented by counsel or other representative who need not be enrolled 
to practice before

[[Page 179]]

the Bureau. The Director of Practice may be represented by an Attorney 
or other employee of the Treasury Department.



Sec. 8.62  Administrative Law Judge.

    (a) Appointment. An Administrative Law Judge, appointed as provided 
by 5 U.S.C. 3105, shall conduct proceedings upon complaints for the 
disbarment or suspension of attorneys, certified public accountants, or 
enrolled practitioners.
    (b) Responsibilities. The Administrative Law Judge in connection 
with any disbarment or suspension proceeding shall have authority to:
    (1) Administer oaths and affirmation;
    (2) Make rulings upon motions and requests; these rulings may not be 
appealed prior to the close of the hearing except at the discretion of 
the Administrative Law Judge in extraordinary circumstances;
    (3) Rule upon offers of proof, receive relevant evidence, and 
examine witnesses;
    (4) Take or authorize to the taking of depositions;
    (5) Determine the time and place of hearing and regulate its course 
and conduct;
    (6) Hold or provide for the holding of conferences to settle or 
simplify the issues by consent of the parties;
    (7) Receive and consider oral or written arguments on facts or law;
    (8) Make initial decisions;
    (9) Adopt rules of procedure and modify them from time to time as 
occasion requires for the orderly disposition of proceedings; and
    (10) Perform acts and take measures as necessary to promote the 
efficient conduct of any proceeding.



Sec. 8.63  Hearings.

    (a) Conduct. The Administrative Law Judge shall preside at the 
hearing on a complaint for the disbarment or suspension of an attorney, 
certified public accountant, or enrolled practitioner. Hearings will be 
stenographically recorded and transcribed and the testimony of witnesses 
will be received under oath or affirmation. The Administrative Law Judge 
shall conduct hearings pursuant to 5 U.S.C. 556.
    (b) Failure to appear. If either party to the proceedings fails to 
appear at the hearing, after due notice has been sent, the 
Administrative Law Judge may deem them to have waived the right to a 
hearing and may make a decision against the absent party by default.



Sec. 8.64  Evidence.

    (a) Rules of evidence. The rules of evidence prevailing in courts of 
law and equity are not controlling in hearings. However, the 
Administrative Law Judge shall exclude evidence which is irrelevant, 
immaterial, or unduly repetitious.
    (b) Depositions. Depositions of witnesses taken pursuant to Sec.  
8.65 may be admitted as evidence.
    (c) Government documents. Official documents, records, and papers of 
the Bureau of Alcohol, Tobacco and Firearms and the Office of the 
Director of Practice are admissible in evidence without the prouction of 
an officer or employee to authenticate them. These documents, records 
and papers may be evidenced by a copy attested or identified by an 
officer or employee of the Bureau or the Treasury Department.
    (d) Exhibits. If any document, record, or other paper is introduced 
in evidence as an exhibit, the Administrative Law Judge may authorize 
the withdrawal of the exhibit subject to any conditions he or she deems 
proper.
    (e) Objections. Objections to evidence will be in short form, 
stating the grounds of objection and the record may not include 
arguments thereon, except as ordered by the Administrative Law Judge. 
Rulings on objections will be a part of the record. No exception to the 
ruling is necessary to preserve the rights of the parties.



Sec. 8.65  Depositions.

    Depositions for use at a hearing may, with the written approval of 
the Administrative Law Judge, be taken by either the Director of 
Practice or the respondent or their authorized representatives. 
Depositions may be taken upon oral or written questioning, upon not less 
than 10 days' written notice to the other party before any officer 
authorized to administer an oath for general purposes or before an 
officer or

[[Page 180]]

employee of the Bureau authorized to administer an oath pursuant to 27 
CFR 70.35. The written notice will state the names of the witnesses and 
the time and place where the depositions are to be taken. The 
requirement of 10 days' notice may be waived by the parties in writing, 
and depositions may then be taken from the persons and at the times and 
places mutually agreed to by the parties. When a deposition is taken 
upon written questioning, any cross-examination will be upon written 
questioning. Copies of the written questioning will be served upon the 
other party with the notice, and copies of any written cross-
interrogation will be mailed or delivered to the opposing party at least 
5 days before the date of taking the depositions, unless the parties 
mutually agree otherwise. A party on whose behalf a deposition is taken 
must file it with the Administrative Law Judge and serve one copy upon 
the opposing party. Expenses in the reproduction of depositions will be 
borne by the party at whose instance the deposition is taken.



Sec. 8.66  Transcript.

    In cases in which the hearing is stenographically reported by a 
Government contract reporter, copies of the transcript may be obtained 
from the reporter at rates not to exceed the maximum rates fixed by 
contract between the Government and the reporter. If the hearing is 
stenographically reported by a regular employee of the Bureau, a copy of 
the hearing will be supplied to the respondent either without charge or 
upon the payment of a reasonable fee. Copies of exhibits introduced at 
the hearing or at the taking of depositions will be supplied to the 
parties upon the payment of a reasonable fee.

(Sec. 501, Pub. L. 82-137, 65 Stat. 290 (31 U.S.C. 483a))



Sec. 8.67  Proposed findings and conclusions.

    Except in cases when the respondent has failed to answer the 
complaint or when a party has failed to appear at the hearing, the 
Administrative Law Judge, prior to making his or her decision, shall 
afford the parties a reasonable opportunity to submit proposed findings 
and conclusions and their supporting reasons.



Sec. 8.68  Decision of Administrative Law Judge.

    As soon as practicable after the conclusion of a hearing and the 
receipt of any proposed findings and conclusions timely submitted by the 
parties, the Administrative Law Judge shall make the initial decision in 
the case. The decision will include (a) a statement of findings and 
conclusions, as well as the reasons or basis therefor, upon all the 
material issues of fact, law, or discretion presented on the record, and 
(b) an order of disbarment, suspension, or reprimand or an order of 
dismissal of the complaint. The Administrative Law Judge shall file the 
decision with the Director of Practice and shall transmit a copy to the 
respondent or the respondent's attorney of record. In the absence of an 
appeal to the Secretary, or review of the decision upon motion of the 
Secretary, the decision of the Administrative Law Judge will, without 
further proceedings, become the decision of the Secretary of the 
Treasury 30 days from the date of the Administrative Law Judge's 
decision.



Sec. 8.69  Appeal to the Secretary.

    Within 30 days from the date of the Administrative Law Judge's 
decision, either party may appeal to the Secretary. The appeal will be 
filed with the Director of Practice in duplicate and will include 
exceptions to the decision of the Administrative Law Judge and 
supporting reasons for those exceptions. If the Director of Practice 
files the appeal, he or she shall transmit a copy of it to the 
respondent. Within 30 days after receipt of an appeal or copy thereof, 
the other party may file a reply brief in duplicate with the Director of 
Practice. If the Director of Practice files the reply brief, he or she 
shall transmit a copy of it to the respondent. Upon the filing of an 
appeal and a reply brief, if any, the Director of Practice shall 
transmit the entire record to the Secretary.



Sec. 8.70  Decision of the Secretary.

    On appeal from or review of the intial decision of the 
Administrative Law Judge, the Secretary shall make the

[[Page 181]]

agency decision. In making this decision, the Secretary shall review the 
record or those portions of the records as may be cited by the parties 
in order to limit the issues. The Director of Prasctice shall transmit a 
copy of the Secretary's decision to the respondent.



Sec. 8.71  Effect of disbarment or suspension.

    (a) Disbarment. If the final order against the respondent is for 
disbarment, the respondent will not thereafter be permitted to practice 
before the Bureau unless authorized to do so by the Director of Practice 
pursuant to Sec. 8.72.
    (b) Suspension. If the final order against the respondent is for 
suspension, the respondent will not thereafter be permitted to practice 
before the Bureau during the period of suspension.
    (c) Surrender of enrollment card. If an enrolled practitioner is 
disbarred or suspended, he or she shall surrender the enrollment card to 
the Director of Practice for cancellation, in the case of disbarment, or 
for retention during the period of suspension.
    (d) Notice of disbarment or suspension. Upon the issuance of a final 
order for suspension or disbarment, the Director of Practice shall give 
notice of the order to appropriate officers and employees of the Bureau 
of Alcohol, Tobacco and Firearms and to interested departments and 
agencies of the Federal Government. The Director of Practice may also 
give notice as he or she may determine to the proper authorities of the 
State in which the disbarred or suspended person was licensed to 
practice as an attorney or certified public accountant.



Sec. 8.72  Petition for reinstatement.

    The Director of Practice may entertain a petition for reinstatement 
from any person disbarred from practice before the Bureau after the 
expiration of 5 years following disbarment. The director of Practice may 
not grant reinstatement unless he or she is satisfied that the 
petitioner is not likely to conduct himself or herself contrary to the 
regulations in this part, and that granting reinstatement would not be 
contrary to the public interest.



PART 9--EFFECTS OF IMPORTED ARTICLES ON THE NATIONAL SECURITY--Table of Contents




Sec.
9.2  Definitions.
9.3  General.
9.4  Criteria for determining effects of imports on national security.
9.5  Applications for investigation.
9.6  Confidential information.
9.7  Conduct of investigation.
9.8  Emergency action.
9.9  Report.

    Authority: Sec. 232, as amended, 76 Stat. 877, 80 Stat. 369 (19 
U.S.C. 1862); 5 U.S.C. 301; Reorg. Plan No. 1 of 1973; and E.O. 11725, 
June 27, 1973 (38 FR 17175).



Sec. 9.2  Definitions.

    As used herein, Secretary means the Secretary of the Treasury and 
Assistant Secretary means the Assistant Secretary of the Treasury 
(Enforcement, Operations, and Tariff Affairs).

[40 FR 50717, Oct. 31, 1975]



Sec. 9.3  General.

    (a) Upon request of the head of any Government department or agency, 
upon application of an interested party, or upon his own motion, the 
Assistant Secretary shall set in motion an immediate investigation to 
determine the effects on the national security of imports of any 
article.
    (b) The Secretary shall report the findings of his investigation 
under paragraph (a) of this section with respect to the effect of the 
importation of such article in such quantities or under such 
circumstances upon the national security and, based on such findings, 
his recommendation for action or inaction to the President within one 
year after receiving an application from an interested party or 
otherwise beginning an investigation under this section.

[39 FR 10898, Mar. 22, 1974, as amended at 40 FR 50717, Oct. 31, 1975]



Sec. 9.4  Criteria for determining effects of imports on national security.

    (a) In determining the effect on the national security of imports of 
the article which is the subject of the investigation, the Secretary is 
required to take into consideration the following:

[[Page 182]]

    (1) Domestic production needed for projected national defense 
requirements including restoration and rehabilitation.
    (2) The capacity of domestic industries to meet such projected 
requirements, including existing and anticipated availabilities of:
    (i) Human resources.
    (ii) Products.
    (iii) Raw materials.
    (iv) Production equipment and facilities.
    (v) Other supplies and services essential to the national defense.
    (3) The requirement of growth of such industries and such supplies 
and services including the investment, exploration and development 
necessary to assure capacity to meet projected defense requirements.
    (4) The effect which the quantities, availabilities, character and 
uses of imported goods have or will have on such industries and the 
capacity of the United States to meet national security requirements.
    (5) The economic welfare of the Nation as it is related to our 
national security, including the impact of foreign competition on the 
economic welfare of individual domestic industries. In determining 
whether such impact may impair the national security, any substantial 
unemployment, decrease in revenues of government, loss of skills or 
investment, or other serious effects shall be considered.
    (b) The Secretary shall also consider other relevant factors in 
determining whether the national security is affected by imports of the 
article.

[39 FR 10898, Mar. 22, 1974]



Sec. 9.5  Applications for investigation.

    (a) Applications shall be in writing. Twenty-five copies shall be 
filed by mail with the Assistant Secretary (Enforcement, Operations, and 
Tariff Affairs), Department of the Treasury, Washington, DC 20220.
    (b) Applications shall describe how the quantities or circumstances 
of imports of the particular article affect the national security and 
shall contain the following information:
    (1) Identification of the person, partnership, association, 
corporation, or other entity on whose behalf the application is filed.
    (2) A precise description of the article.
    (3) Description of the applicant and the domestic industry 
concerned, including pertinent information regarding companies and their 
plants, locations, capacity and current output of the domestic industry 
concerned with the article in question.
    (4) Pertinent statistics showing the quantities and values of both 
imports and production in the United States.
    (5) Nature, sources, and degree of the competition created by 
imports of the article in question.
    (6) The effect, if any, of imports of the article in question upon 
the restoration of domestic production capacity in an emergency.
    (7) Employment and special skills involved in the domestic 
production of the article.
    (8) Extent to which investment and specialized productive capacity 
is or will be adversely affected.
    (9) Revenues of Federal, State, or local Governments which are or 
may be affected by the volume or circumstances of imports of the 
article.
    (10) Defense or defense supporting uses of the article including 
data on defense contracts or sub-contracts, both past and current.
    (c) Statistical material presented should be on a calendar-year 
basis for sufficient periods of time to indicate trends and afford the 
greatest possible assistance to the Assistant Secretary. Monthly or 
quarterly data for the latest complete years should be included as well 
as any other breakdowns which may be pertinent to show seasonal or 
short-term factors.

[39 FR 10898, Mar. 22, 1974, as amended at 40 FR 50717, Oct. 31, 1975]



Sec. 9.6  Confidential information.

    Information submitted in confidence which the Assistant Secretary 
determines would disclose trade secrets and commercial or financial 
information obtained from a person and privileged, within the meaning of 
5 U.S.C. 552 and 31 CFR part 1, will be accorded confidential treatment. 
All information submitted in confidence must be on

[[Page 183]]

separate pages marked ``Business Confidential.''

[40 FR 50717, Oct. 31, 1975]



Sec. 9.7  Conduct of investigation.

    (a) The investigation by the Assistant Secretary or by such official 
or agency as he may designate, shall be such as to enable the Secretary 
to arrive at a fully informed opinion as to the effect on the national 
security of imports of the article in question.
    (b) If the Assistant Secretary determines that it is appropriate to 
hold public hearings or otherwise afford interested parties an 
opportunity to present information and advice relevant to an 
investigation, he shall issue a public notice which shall be published 
in the Federal Register. Such notice shall include a statement of the 
time, place and nature of any public hearing or shall solicit from any 
interested party written comments, opinions, or data relative to the 
investigation, to be submitted to the Assistant Secretary within the 
time period specified in the notice. Rebuttal to material so submitted 
may be filed with the Assistant Secretary within such time as is 
specified in the public notice. All data, comments and opinions shall be 
submitted with 25 copies.
    (c) All applications filed and all comments, opinions, and data 
submitted pursuant to paragraph (b) of this section, except information 
determined to be confidential as provided in Sec. 9.6, will be available 
for inspection and copying at the Office of the Assistant Secretary 
(Enforcement, Operations, and Tariff Affairs), Department of the 
Treasury, in Washington, DC. The Assistant Secretary will maintain a 
roster of persons who have submitted materials.
    (d) The Assistant Secretary or his designee may also request further 
data from other sources through the use of questionnaires, 
correspondence, or other means.
    (e) The Assistant Secretary or his delegate shall, in the course of 
the investigation, seek information or advice from, and consult with, 
the Secretary of Defense, the Secretary of Commerce, or their delegates, 
and any other appropriate officer of the United States as the Assistant 
Secretary shall determine.
    (f) In addition, the Assistant Secretary, or his designee, may, when 
he deems it appropriate, hold public hearings to elicit further 
information. If a hearing is held:
    (1) The time and place thereof will be published in the Federal 
Register.
    (2) It will be conducted by the Assistant Secretary or his designee, 
and the full record will be considered by the Secretary in arriving at 
his determination.
    (3) Interested parties may appear, either in person or by 
representation, and produce oral or written evidence relevant and 
material to the subject matter of the investigation.
    (4) After a witness has testified the Assistant Secretary or his 
designee may question the witness. Questions submitted to the Assistant 
Secretary or his designee in writing by any interested party may, at the 
discretion of the Assistant Secretary or his designee, be posed to the 
witness for reply for the purpose of assisting the Assistant Secretary 
in obtaining the material facts with respect to the subject matter of 
the investigation.
    (5) The hearing will be stenographically reported. The Assistant 
Secretary will not cause transcripts of the record of the hearing to be 
distributed to the interested parties, but a transcript may be inspected 
at the Office of the Assistant Secretary (Enforcement, Operations, and 
Tariff Affairs), Department of the Treasury, in Washington, DC, or 
purchased from the reporter.

[39 FR 10898, Mar. 22, 1974, as amended at 40 FR 50717, Oct. 31, 1975]



Sec. 9.8  Emergency action.

    In emergency situations or when in his judgment national security 
interests require it, the Secretary may vary or dispense with any of the 
procedures set forth above and may formulate his views without following 
such procedures.

[39 FR 10898, Mar. 22, 1974]



Sec. 9.9  Report.

    A report will be made and published in the Federal Register upon the 
disposition of each request, application or motion under Sec. 9.3. 
Copies of the report will be available at the Office of the

[[Page 184]]

Assistant Secretary (Enforcement, Operations, and Tariff Affairs), 
Department of the Treasury.

[40 FR 50718, Oct. 31, 1975]



PART 10--PRACTICE BEFORE THE INTERNAL REVENUE SERVICE--Table of Contents




Sec.
10.0  Scope of part.

            Subpart A--Rules Governing Authority to Practice

10.1  Director of Practice.
10.2  Definitions.
10.3  Who may practice.
10.4  Eligibility for enrollment.
10.5  Application for enrollment.
10.6  Enrollment.
10.7  Representing oneself; participating in rulemaking; limited 
          practice; special appearances; and return preparation.
10.8  Customhouse brokers.

   Subpart B--Duties and Restrictions Relating to Practice Before the 
                        Internal Revenue Service

10.20  Information to be furnished.
10.21  Knowledge of client's omission.
10.22  Diligence as to accuracy.
10.23  Prompt disposition of pending matters.
10.24  Assistance from disbarred or suspended persons and former 
          Internal Revenue Service employees.
10.25  Practice by partners of Government employees.
10.26  Practice by former Government employees, their partners and their 
          associates.
10.27  Notaries.
10.28  Fees.
10.29  Conflicting interests.
10.30  Solicitation.
10.31  Negotiation of taxpayer refund checks.
10.32  Practice of law.
10.33  Tax shelter opinions.
10.34  Standards for advising with respect to tax return positions and 
          for preparing or signing returns.

         Subpart C--Rules Applicable to Disciplinary Proceedings

10.50  Authority to disbar or suspend.
10.51  Disreputable conduct.
10.52  Violation of regulations.
10.53  Receipt of information concerning attorney, certified public 
          accountant, enrolled agent, or enrolled actuary.
10.54  Institution of proceeding.
10.55  Conferences.
10.56  Contents of complaint.
10.57  Service of complaint and other papers.
10.58  Answer.
10.59  Supplemental charges.
10.60  Reply to answer.
10.61  Proof; variance; amendment of pleadings.
10.62  Motions and requests.
10.63  Representation.
10.64  Administrative Law Judge.
10.65  Hearings.
10.66  Evidence.
10.67  Depositions.
10.68  Transcript.
10.69  Proposed findings and conclusions.
10.70  Decision of the Administrative Law Judge.
10.71  Appeal to the Secretary.
10.72  Decision of the Secretary.
10.73  Effect of disbarment or suspension; surrender of card.
10.74  Notice of disbarment or suspension.
10.75  Petition for reinstatement.
10.76  Expedited suspension upon criminal conviction or loss of license 
          for cause.

      Subpart D--Rules Applicable to Disqualification of Appraisers

10.77  Authority to disqualify; effect of disqualification.
10.78  Institution of proceeding.
10.79  Contents of complaint.
10.80  Service of complaint and other papers.
10.81  Answer.
10.82  Supplemental charges.
10.83  Reply to answer.
10.84  Proof, variance, amendment of pleadings.
10.85  Motions and requests.
10.86  Representation.
10.87  Administrative Law Judge.
10.88  Hearings.
10.89  Evidence.
10.90  Depositions.
10.91  Transcript.
10.92  Proposed findings and conclusions.
10.93  Decision of the Administrative Law Judge.
10.94  Appeal to the Secretary.
10.95  Decision of the Secretary.
10.96  Final order.
10.97  Petition for reinstatement.

                      Subpart E--General Provisions

10.98  Records.
10.100  Saving clause.
10.101  Special orders.

    Authority: Sec. 3, 23 Stat. 258, secs. 2-12, 60 Stat. 237 et seq.; 5 
U.S.C. 301, 500, 551-559, 31 U.S.C. 1026; Reorg. Plan No. 26 of 1950, 15 
FR 4935, 64 Stat. 1280, 3 CFR, 1949-1953 Comp., p. 1017.

    Source: Department Circular 230, Revised, 31 FR 10773, Aug. 13, 
1966, unless otherwise noted.

[[Page 185]]


    Editorial Note: Nomenclature changes affecting this part appear at 
57 FR 41095, Sept. 9, 1992.



Sec. 10.0  Scope of part.

    This part contains rules governing the recognition of attorneys, 
certified public accountants, enrolled agents, and other persons 
representing clients before the Internal Revenue Service. Subpart A of 
this part sets forth rules relating to authority to practice before the 
Internal Revenue Service; subpart B of this part prescribes the duties 
and restrictions relating to such practice; subpart C of this part 
contains rules relating to disciplinary proceedings; subpart D of this 
part contains rules applicable to disqualification of appraisers; and 
Subpart E of this part contains general provisions, including provisions 
relating to the availability of official records.

[59 FR 31526, June 20, 1994]



            Subpart A--Rules Governing Authority To Practice



Sec. 10.1  Director of Practice.

    (a) Establishment of office. There is established in the Office of 
the Secretary of the Treasury the office of Director of Practice. The 
Director of Practice shall be appointed by the Secretary of the 
Treasury.
    (b) Duties. The Director of Practice shall act upon applications for 
enrollment to practice before the Internal Revenue Service; institute 
and provide for the conduct of disciplinary proceedings relating to 
attorneys, certified public accountants, enrolled agents, enrolled 
actuaries and appraisers; make inquiries with respect to matters under 
his jurisdiction; and perform such other duties as are necessary or 
appropriate to carry out his functions under this part or as are 
prescribed by the Secretary of the Treasury.
    (c) Acting Director. The Secretary of the Treasury will designate an 
officer or employee of the Treasury Department to act as Director of 
Practice in the event of the absence of the director or of a vacancy in 
that office.

[31 FR 10773, Aug. 13, 1966, as amended at 51 FR 2878, Jan. 22, 1986]



Sec. 10.2  Definitions.

    As used in this part, except where the context clearly indicates 
otherwise:
    (a) Attorney means any person who is a member in good standing of 
the bar of the highest court of any State, possession, territory, 
Commonwealth, or the District of Columbia.
    (b) Certified Public Accountant means any person who is duly 
qualified to practice as a certified public accountant in any State, 
possession, territory, Commonwealth, or the District of Columbia.
    (c) Commissioner refers to the Commissioner of Internal Revenue.
    (d) Director refers to the Director of Practice.
    (e) Practice before the Internal Revenue Service comprehends all 
matters connected with a presentation to the Internal Revenue Service or 
any of its officers or employees relating to a client's rights, 
privileges, or liabilities under laws or regulations administered by the 
Internal Revenue Service. Such presentations include preparing and 
filing necessary documents, corresponding and communicating with the 
Internal Revenue Service, and representing a client at conferences, 
hearings, and meetings.
    (f) Practitioner means any individual described in Sec. 10.3 (a), 
(b), (c), or (d) of this part.
    (g) A return includes an amended return and a claim for refund.
    (h) Service means the Internal Revenue Service.

[59 FR 31526, June 20, 1994]



Sec. 10.3  Who may practice.

    (a) Attorneys. Any attorney who is not currently under suspension or 
disbarment from practice before the Internal Revenue Service may 
practice before the Service upon filing with the Service a written 
declaration that he or she is currently qualified as an attorney and is 
authorized to represent the particular party on whose behalf he or she 
acts.
    (b) Certified public accountants. Any certified public accountant 
who is not currently under suspension or disbarment from practice before 
the Internal Revenue Service may practice before

[[Page 186]]

the Service upon filing with the Service a written declaration that he 
or she is currently qualified as a certified public accountant and is 
authorized to represent the particular party on whose behalf he or she 
acts.
    (c) Enrolled agents. Any person enrolled as an agent pursuant to 
this part may practice before the Internal Revenue Service.
    (d) Enrolled Actuaries. (1) Any individual who is enrolled as an 
actuary by the Joint Board for the Enrollment of Actuaries pursuant to 
29 U.S.C. 1242 may practice before the Internal Revenue Service upon 
filing with the Service a written declaration that he/she is currently 
qualified as an enrolled actuary and is authorized to represent the 
particular party on whose behalf he/she acts. Practice as an enrolled 
actuary is limited to representation with respect to issues involving 
the following statuatory provisions. Internal Revenue Code (Title 26 
U.S.C.) sections: 401 (qualification of employee plans), 403(a) 
(relating to whether an annuity plan meets the requirements of section 
404(a)(2)), 404 (deductibility of employer contributions), 405 
(qualification of bond purchase plans), 412 (funding requirements for 
certain employee plans), 413 (application of qualification requirements 
to collectively bargained plans and to plans maintained by more than one 
employer), 414 (containing definitions and special rules relating to the 
employee plan area), 4971 (relating to excise taxes payable as a result 
of an accumulated funding deficiency under section 412), 6057 (annual 
registration of plans), 6058 (information required in connection with 
certain plans of deferred compensation), 6059 (periodic report of 
actuary), 6652(e) (failure to file annual regustration and other 
notifications by pension plan), 6652(f) (failure to file information 
required in connection with certain plans of deferred compensation), 
6692 (failure to file acuarial report), 7805(b) (relating to the extent, 
if any, to which an Internal Revenue Service ruling or determination 
letter coming under the herein listed statutory provisions shall be 
applied without retroactive effect); and 29 U.S.C. 1083 (relating to 
waiver of funding for nonqualified plans).
    (2) An individual who practices before the Internal Revenue Service 
pursuant to this subsection shall be subject to the provisions of this 
part in the same manner as attorneys, certified public accountants and 
enrolled agents.
    (e) Others. Any individual qualifying under Sec. 10.5(c) or 
Sec. 10.7 is eligible to practice before the Internal Revenue Service to 
the extent provided in those sections.
    (f) Government officers and employees, and others. An individual, 
including an officer or employee of the executive, legislative, or 
judicial branch of the United States Government; officer or employee of 
the District of Columbia; Member of Congress; or Resident Commissioner, 
may not practice before the Service if such practice would violate 18 
U.S.C. 203 or 205.
    (g) State officers and employees. No officer or employee of any 
State, or subdivision thereof, whose duties require him to pass upon, 
investigate, or deal with tax matters of such State or subdivision, may 
practice before the Service, if such State employment may disclose facts 
or information applicable to Federal tax matters.

[31 FR 10773, Aug. 13, 1966, as amended at 35 FR 13205, Aug. 19, 1970; 
36 FR 8671, May 11, 1971; 44 FR 4946, Jan. 24, 1979; 59 FR 31526, June 
20, 1994]



Sec. 10.4  Eligibility for enrollment.

    (a) Enrollment upon examination. The Director of Practice may grant 
enrollment to an applicant who demonstrates special competence in tax 
matters by written examination administered by the Internal Revenue 
Service and who has not engaged in any conduct which would justify the 
suspension or disbarment of any attorney, certified public accountant, 
or enrolled agent under the provisions of this part.
    (b) Enrollment of former Internal Revenue Service employees. The 
Director of Practice may grant enrollment to an applicant who has not 
engaged in any conduct which would justify the suspension or disbarment 
of any attorney, certified public accountant, or enrolled agent under 
the provisions of this part and who, by virtue of his past service

[[Page 187]]

and technical experience in the Internal Revenue Service has qualified 
for such enrollment, as follows:
    (1) Application for enrollment on account of former employment in 
the Internal Revenue Service shall be made to the Director of Practice. 
Each applicant will be supplied a form by the Director of Practice, 
which shall indicate the information required respecting the applicant's 
qualifications. In addition to the applicant's name, address, 
citizenship, age, educational experience, etc., such information shall 
specifically include a detailed ascount of the applicant's employment in 
the Internal Revenue Service, which account shall show (i) positions 
held, (ii) date of each appointment and termination thereof, (iii) 
nature of services rendered in each position, with particular reference 
to the degree of technical experience involved, and (iv) name of 
supervisor in such positions, together with such other information 
regarding the experience and training of the applicant as may be 
relevant.
    (2) Upon receipt of each such application, it shall be transmitted 
to the appropriate officer of the Internal Revenue Service with the 
request that a detailed report of the nature and rating of the 
applicant's services in the Internal Revenue Service, accompanied by the 
recommendation of the superior officer in the particular unit or 
division of the Internal Revenue Service that such employment does or 
does not qualify the applicant technically or otherwise for the desired 
authorization, be furnished to the Director of Practice.
    (3) In examining the qualification of an applicant for enrollment on 
account of employment in the Internal Revenue Service, the Director of 
Practice will be governed by the following policies:
    (i) Enrollment on account of such employment may be of unlimited 
scope or may be limited to permit the presentation of matters only of 
the particular class or only before the particular unit or division of 
the Internal Revenue Service for which his former employment in the 
Internal Revenue Service has qualified the applicant.
    (ii) Application for enrollment on account of employment in the 
Internal Revenue Service must be made within 3 years from the date of 
separation from such employment.
    (iii) It shall be requisite for enrollment on account of such 
employment that the applicant shall have had a minimum of 5 years 
continuous employment in the Service during which he shall have been 
regularly engaged in applying and interpreting the provisions of the 
Internal Revenue Code and the regulations thereunder relating to income, 
estate, gift, employment, or excise taxes.
    (iv) For the purposes of paragraph (b)(3)(iii) of this section an 
aggregate of 10 or more years of employment, at least 3 of which 
occurred within the 5 years preceding the date of application, shall be 
deemed the equivalent of 5 years continuous employment.
    (c) Natural persons. Enrollment to practice may be granted only to 
natural persons.

[31 FR 10773, Aug. 13, 1966, as amended at 35 FR 13205, Aug. 19, 1970; 
42 FR 38352, July 28, 1977; 51 FR 2878, Jan. 22, 1986; 59 FR 31526, June 
20, 1994]



Sec. 10.5  Application for enrollment.

    (a) Form; fee. An applicant for enrollment shall file with the 
Director of Practice of Internal Revenue an application on Form 23, 
properly executed under oath or affirmation. Such application shall be 
accompanied by a check or money order in the amount set forth on Form 
23, payable to the Internal Revenue Service, which amount shall 
constitute a fee which shall be charged to each applicant for 
enrollment. The fee shall be retained by the United States whether or 
not the applicant is granted enrollment.
    (b) Additional information; examination. The Director of Practice, 
as a condition to consideration of an application for enrollment, may 
require the applicant to file additional information and to submit to 
any written or oral examination under oath or otherwise. The Director of 
Practice shall, upon written request, afford an applicant the 
opportunity to be heard with respect to his application for enrollment.
    (c) Temporary recognition. Upon receipt of a properly executed 
application, the Director of Practice may

[[Page 188]]

grant the applicant temporary recognition to practice pending a 
determination as to whether enrollment to practice should be granted. 
Such temporary recognition shall not be granted if the application is 
not regular on its face; if the information stated therein, if true, is 
not sufficient to warrant enrollment to practice; if there is any 
information before the Director of Practice which indicates that the 
statements in the application are untrue; or which indicates that the 
applicant would not otherwise qualify for enrollment. Issuance of 
temporary recognition shall not constitute enrollment to practice or a 
finding of eligibility for enrollment, and the temporary recognition may 
be withdrawn at any time by the Director of Practice.
    (d) Appeal from denial of application. The Director of Practice, in 
denying an application for enrollment, shall inform the applicant as to 
the reason(s) therefor. The applicant may, within 30 days after receipt 
of the notice of denial, file a written appeal therefrom, together with 
his/her reasons in support thereof, to the Secretary of the Treasury. A 
decision on the appeal will be rendered by the Secretary of the Treasury 
as soon as practicable.

(Sec. 501, Pub. L. 82-137, 65 Stat. 290; 31 U.S.C. 483a)

[31 FR 10773, Aug. 13, 1966, as amended at 42 FR 38352, July 28, 1977; 
51 FR 2878 Jan. 22, 1986]



Sec. 10.6  Enrollment.

    (a) Roster. The Director of Practice shall maintain rosters of all 
individuals:
    (1) Who have been granted active enrollment to practice before the 
Internal Revenue Service;
    (2) Whose enrollment has been placed in an inactive status for 
failure to meet the requirements for renewal of enrollment;
    (3) Whose enrollment has been placed in an inactive retirement 
status;
    (4) Who have been disbarred or suspended from practice before the 
Internal Revenue Service;
    (5) Whose offer of consent to resignation from enrollment to 
practice before the Internal Revenue Service has been accepted by the 
Director of Practice under Sec. 10.55 of this part; and
    (6) Whose application for enrollment has been denied.
    (b) Enrollment card. The Director of Practice will issue an 
enrollment card to each individual whose application for enrollment to 
practice before the Internal Revenue Service is approved after the 
effective date of this regulation. Each such enrollment card will be 
valid for the period stated thereon. Enrollment cards issued individuals 
before February 1, 1987 shall become invalid after March 31, 1987. An 
individual having an invalid enrollment card is not eligible to practice 
before the Internal Revenue Service.
    (c) Term of enrollment. Active enrollment to practice before the 
Internal Revenue Service is accorded each individual enrolled, so long 
as renewal of enrollment is effected as provided in this part.
    (d) Renewal of enrollment. To maintain active enrollment to practice 
before the Internal Revenue Service, each individual enrolled is 
required to have his/her enrollment renewed as set forth herein. Failure 
by an individual to receive notification from the Director of Practice 
of the renewal requirement will not be justification for circumvention 
of such requirement.
    (1) All individuals enrolled to practice before the Internal Revenue 
Service before November 1, 1986 shall apply for renewal of enrollment 
during the period between November 1, 1986 and January 31, 1987. Those 
who receive initial enrollment between November 1, 1986 and January 31, 
1987 shall apply for renewal of enrollment by March 1, 1987. The first 
effective date of renewal will be April 1, 1987.
    (2) Thereafter, applications for renewal will be required between 
November 1, 1989 and January 31, 1990, and between November 1 and 
January 31 of every third year subsequent thereto. Those who receive 
initial enrollment during the renewal application period shall apply for 
renewal of enrollment by March 1 of the renewal year. The effective date 
of renewed enrollment will be April 1, 1990, and April 1 of every third 
year subsequent thereto.
    (3) The Director of Practice will notify the individual of renewal 
of enrollment and will issue a card evidencing such renewal.

[[Page 189]]

    (4) A reasonable nonrefundable fee may be charged for each 
application for renewal of enrollment filed with the Director of 
Practice.
    (5) Forms required for renewal may be obtained from the Director of 
Practice, Internal Revenue Service, Washington, DC 20224.
    (e) Condition for renewal: Continuing Professional Education. In 
order to qualify for renewal of enrollment, an individual enrolled to 
practice before the Internal Revenue Service must certify, on the 
application for renewal form prescribed by the Director of Practice, 
that he/she has satisfied the following continuing professional 
education requirements.
    (1) For renewed enrollment effective April 1, 1987. (i) A minimum of 
24 hours of continuing education credit must be completed between 
January 1, 1986 and January 31, 1987.
    (ii) An individual who receives initial enrollment between January 
1, 1986 and January 31, 1987 is exempt from the continuing education 
requirement for the renewal of enrollment effective April 1, 1987, but 
is required to file a timely application for renewal of enrollment.
    (2) For renewed enrollment effective April 1, 1990 and every third 
year thereafter. (i) A minimum of 72 hours of continuing education 
credit must be completed between February 1, 1987 and January 31, 1990, 
and during each three year period subsequent thereto. Each such three 
year period is known as an enrollment cycle.
    (ii) A minimum of 16 hours of continuing education credit must be 
completed in each year of an enrollment cycle.
    (iii) An individual who receives initial enrollment during an 
enrollment cycle must complete two (2) hours of qualifying continuing 
education credit for each month enrolled during such enrollment cycle. 
Enrollment for any part of a month is considered enrollment for the 
entire month.
    (f) Qualifying continuing education--(1) General. To qualify for 
continuing education credit, a course of learning must:
    (i) Be a qualifying program designed to enhance the professional 
knowledge of an individual in Federal taxation or Federal tax related 
matters, i.e. programs comprised of current subject matter in Federal 
taxation or Federal tax related matters to include accounting, financial 
management, business computer science and taxation; and
    (ii) Be conducted by a qualifying sponsor.
    (2) Qualifying programs--(i) Formal programs. Formal programs 
qualify as continuing education programs if they:
    (A) Require attendance;
    (B) Require that the program be conducted by a qualified instructor, 
discussion leader or speaker, i.e. a person whose background, training, 
education and/or experience is appropriate for instructing or leading a 
discussion on the subject matter of the particular program; and
    (C) Require a written outline and/or textbook and certificate of 
attendance provided by the sponsor, all of which must be retained by the 
attendee for a three year period following renewal of enrollment.
    (ii) Correspondence or individual study programs (including taped 
programs). Qualifying continuing education programs include 
correspondence or individual study programs completed on an individual 
basis by the enrolled individual and conducted by qualifying sponsors. 
The allowable credit hours for such programs will be measured on a basis 
comparable to the measurement of a seminar or course for credit in an 
accredited educational institution. Such programs qualify as continuing 
education programs if they:
    (A) Require registration of the participants by the sponsor;
    (B) Provide a means for measuring completion by the participants 
(e.g., written examination); and
    (C) Require a written outline and/or textbook and certificate of 
completion provided by the sponsor which must be retained by the 
participant for a three year period following renewal of enrollment.
    (iii) Serving as an instructor, discussion leader or speaker.
    (A) One hour of continuing education credit will be awarded for each 
contact

[[Page 190]]

hour completed as an instructor, discussion leader or speaker at an 
educational program which meets the continuing education requirements of 
this part.
    (B) Two hours of continuing education credit will be awarded for 
actual subject preparation time for each contact hour completed as an 
instructor, discussion leader or speaker at such programs. It will be 
the responsibility of the individual claiming such credit to maintain 
records to verify preparation time.
    (C) The maximum credit for instruction and preparation may not 
exceed 50% of the continuing education requirement for an enrollment 
cycle.
    (D) Presentation of the same subject matter in an instructor, 
discussion leader or speaker capacity more than one time during an 
enrollment cycle will not qualify for continuing education credit.
    (iv) Credit for published articles, books, etc.
    (A) Continuing education credit will be awarded for publications on 
Federal taxation or Federal tax related matters to include accounting, 
financial management, business computer science, and taxation, provided 
the content of such publications is current and designed for the 
enhancement of the professional knowledge of an individual enrolled to 
practice before the Internal Revenue Service.
    (B) The credit allowed will be on the basis of one hour credit for 
each hour of preparation time for the material. It will be the 
responsibility of the person claiming the credit to maintain records to 
verify preparation time.
    (C) The maximum credit for publications may not exceed 25% of the 
continuing education requirement of any enrollment cycle.
    (3) Periodic examination. Individuals may establish eligibility for 
renewal of enrollment for any enrollment cycle by:
    (i) Achieving a passing score on each part of the Special Enrollment 
Examination administered under this part during the three year period 
prior to renewal; and
    (ii) Completing a minimum of 16 hours of qualifying continuing 
education during the last year of an enrollment cycle.
    (g) Sponsors. (1) Sponsors are those responsible for presenting 
programs.
    (2) To qualify as a sponsor, a program presenter must:
    (i) Be an accredited educational institution;
    (ii) Be recognized for continuing education purposes by the 
licensing body of any State, possession, territory, Commonwealth, or the 
District of Columbia responsible for the issuance of a license in the 
field of accounting or law;
    (iii) Be recognized by the Director of Practice as a professional 
organization or society whose programs include offering continuing 
professional education opportunities in subject matter within the scope 
of this part; or
    (iv) File a sponsor agreement with the Director of Practice to 
obtain approval of the program as a qualified continuing education 
program.
    (3) A qualifying sponsor must ensure the program complies with the 
following requirements:
    (i) Programs must be developed by individual(s) qualified in the 
subject matter;
    (ii) Program subject matter must be current;
    (iii) Instructors, discussion leaders, and speakers must be 
qualified with respect to program content;
    (iv) Programs must include some means for evaluation of technical 
content and presentation;
    (v) Certificates of completion must be provided those who have 
successfully completed the program; and
    (vi) Records must be maintained by the sponsor to verify completion 
of the program and attendance by each participant. Such records must be 
retained for a period of three years following completion of the 
program. In the case of continuous conferences, conventions, and the 
like, records must be maintained to verify completion of the program and 
attendance by each participant at each segment of the program.
    (4) Professional organizations or societies wishing to be considered 
as qualified sponsors shall request such status of the Director of 
Practice and furnish information in support of the request

[[Page 191]]

together with any further information deemed necessary by the Director 
of Practice.
    (5) Sponsor agreements and qualified professional organization or 
society sponsors approved by the Director of Practice shall remain in 
effect for one enrollment cycle. The names of such sponsors will be 
published on a periodic basis.
    (h) Measurement of continuing education coursework. (1) All 
continuing education programs will be measured in terms of contact 
hours. The shortest recognized program will be one contact hour.
    (2) A contact hour is 50 minutes of continuous participation in a 
program. Credit is granted only for a full contact hour, i.e. 50 minutes 
or multiples thereof. For example, a program lasting more than 50 
minutes but less than 100 minutes will count as one contact hour.
    (3) Individual segments at continuous conferences, conventions and 
the like will be considered one total program. For example, two 90-
minute segments (180 minutes) at a continuous conference will count as 
three contact hours.
    (4) For university or college courses, each semester hour credit 
will equal 15 contact hours and a quarter hour credit will equal 10 
contact hours.
    (i) Recordkeeping requirements. (1) Each individual applying for 
renewal shall retain for a period of three years following the date of 
renewal of enrollment the information required with regard to qualifying 
continuing professional education credit hours. Such information shall 
include:
    (i) The name of the sponsoring organization;
    (ii) The location of the program;
    (iii) The title of the program and description of its content e.g., 
course syllibi and/or textbook;
    (iv) The dates attended;
    (v) The credit hours claimed;
    (vi) The name(s) of the instructor(s), discussion leader(s), or 
speaker(s), if appropriate; and
    (vii) The certificate of completion and/or signed statement of the 
hours of attendance obtained from the sponsor.
    (2) To receive continuing education credit for service completed as 
an instructor, discussion leader, or speaker, the following information 
must be maintained for a period of three years following the date of 
renewal of enrollment:
    (i) The name of the sponsoring organization;
    (ii) The location of the program;
    (iii) The title of the program and description of its content;
    (iv) The dates of the program; and
    (v) The credit hours claimed.
    (3) To receive continuing education credit for publications, the 
following information must be maintained for a period of three years 
following the date of renewal of enrollment:
    (i) The publisher;
    (ii) The title of the publication;
    (iii) A copy of the publication; and
    (iv) The date of publication.
    (j) Waivers. (1) Waiver from the continuing education requirements 
for a given period may be granted by the Director of Practice for the 
following reasons:
    (i) Health, which prevented compliance with the continuing education 
requirements;
    (ii) Extended active military duty;
    (iii) Absence from the United States for an extended period of time 
due to employment or other reasons, provided the individual does not 
practice before the Internal Revenue Service during such absence; and
    (iv) Other compelling reasons, which will be considered on a case-
by-case basis.
    (2) A request for waiver must be accompanied by appropriate 
documentation. The individual will be required to furnish any additional 
documentation or explanation deemed necessary by the Director of 
Practice. Examples of appropriate documentation could be a medical 
certificate, military orders, etc.
    (3) A request for waiver must be filed no later than the last day of 
the renewal application period.
    (4) If a request for waiver is not approved, the individual will be 
so notified by the Director of Practice and placed on a roster of 
inactive enrolled individuals.
    (5) If a request for waiver is approved, the individual will be so 
notified and issued a card evidencing such renewal.

[[Page 192]]

    (6) Those who are granted waivers are required to file timely 
applications for renewal of enrollment.
    (k) Failure to comply. (1) Compliance by an individual with the 
requirements of this part shall be determined by the Director of 
Practice. An individual who fails to meet the requirements of 
eligibility for renewal of enrollment will be notified by the Director 
of Practice at his/her last known address by first class mail. The 
notice will state the basis for the non-compliance and will provide the 
individual an opportunity to furnish in writing information relating to 
the matter within 60 days of the date of the notice. Such information 
will be considered by the Director of Practice in making a final 
determination as to eligibility for renewal of enrollment.
    (2) The Director of Practice may require any individual, by first 
class mail to his/her last known mailing address, to provide copies of 
any records required to be maintained under this part. The Director of 
Practice may disallow any continuing professional education hours 
claimed if the individual concerned fails to comply with such 
requirement.
    (3) An individual who has not filed a timely application for renewal 
of enrollment, who has not made a timely response to the notice of non-
compliance with the renewal requirements, or who has not satisfied the 
requirements of eligibility for renewal will be placed on a roster of 
inactive enrolled individuals for a period of three years. During this 
time, the individual will be ineligible to practice before the Internal 
Revenue Service.
    (4) During inactive enrollment status or at any other time an 
individual is ineligible to practice before the Internal Revenue 
Service, such individual shall not in any manner, directly or 
indirectly, indicate he or she is enrolled to practice before the 
Internal Revenue Service, or use the term ``enrolled agent,'' the 
designation ``E. A.,'' or other form of reference to eligibility to 
practice before the Internal Revenue Service.
    (5) An individual placed in an inactive status may satisfy the 
requirements for renewal of enrollment during his/her period of inactive 
enrollment. If such satisfaction includes completing the continuing 
education requirement, a minimum of 16 hours of qualifying continuing 
education hours must be completed in the 12 month period preceding the 
date on which the renewal application is filed. Continuing education 
credit under this subsection may not be used to satisfy the requirements 
of the enrollment cycle in which the individual has been placed back on 
the active roster.
    (6) An individual placed in an inactive status must file an 
application for renewal of enrollment and satisfy the requirements for 
renewal as set forth in this section within three years of being placed 
in an inactive status. The name of such individual otherwise will be 
removed from the inactive enrollment roster and his/her enrollment will 
terminate. Eligibility for enrollment must then be reestablished by the 
individual as provided in this part.
    (7) Inactive enrollment status is not available to an individual who 
is the subject of a discipline matter in the Office of Director of 
Practice.
    (l) Inactive retirement status. An individual who no longer 
practices before the Internal Revenue Service may request being placed 
in an inactive status at any time and such individual will be placed in 
an inactive retirement status. The individual will be ineligible to 
practice before the Internal Revenue Service. Such individual must file 
a timely application for renewal of enrollment at each applicable 
renewal or enrollment as provided in this part. An individual who is 
placed in an inactive retirement status may be reinstated to an active 
enrollment status upon filing an application for renewal of enrollment 
and providing evidence of the completion of the required continuing 
professional education hours for the enrollment cycle. Inactive 
retirement status is not available to an individual who is the subject 
to a discipline matter in the Office of Director of Practice.
    (m) Renewal while under suspension or disbarment. An individual who 
is ineligible to practice before the Internal Revenue Service by virtue 
of disciplinary action is required to meet the requirements for renewal 
of enrollment during the period of ineligibility.

[[Page 193]]

    (n) Verification. The Director of Practice may review the continuing 
education records of an enrolled individual and/or qualified sponsor in 
a manner deemed appropriate to determine compliance with the 
requirements and standards for renewal of enrollment as provided in this 
part.

(Approved by the Office of Management and Budget under control number 
1545-0946)

[51 FR 2878, Jan. 22, 1986]



Sec. 10.7  Representing oneself; participating in rulemaking; limited practice; special appearances; and return preparation.

    (a) Representing oneself. Individuals may appear on their own behalf 
before the Internal Revenue Service provided they present satisfactory 
identification.
    (b) Participating in rulemaking. Individuals may participate in 
rulemaking as provided by the Administrative Procedure Act. See 5 U.S.C. 
553.
    (c) Limited practice--(1) In general. Subject to the limitations in 
paragraph (c)(2) of this section, an individual who is not a 
practitioner may represent a taxpayer before the Internal Revenue 
Service in the circumstances described in this paragraph (c)(1), even if 
the taxpayer is not present, provided the individual presents 
satisfactory identification and proof of his or her authority to 
represent the taxpayer. The circumstances described in this paragraph 
(c)(1) are as follows:
    (i) An individual may represent a member of his or her immediate 
family.
    (ii) A regular full-time employee of an individual employer may 
represent the employer.
    (iii) A general partner or a regular full-time employee of a 
partnership may represent the partnership.
    (iv) A bona fide officer or a regular full-time employee of a 
corporation (including a parent, subsidiary, or other affiliated 
corporation), association, or organized group may represent the 
corporation, association, or organized group.
    (v) A trustee, receiver, guardian, personal representative, 
administrator, executor, or regular full-time employee of a trust, 
receivership, guardianship, or estate may represent the trust, 
receivership, guardianship, or estate.
    (vi) An officer or a regular employee of a governmental unit, 
agency, or authority may represent the governmental unit, agency, or 
authority in the course of his or her official duties.
    (vii) An individual may represent any individual or entity before 
personnel of the Internal Revenue Service who are outside of the United 
States.
    (viii) An individual who prepares and signs a taxpayer's return as 
the preparer, or who prepares a return but is not required (by the 
instructions to the return or regulations) to sign the return, may 
represent the taxpayer before officers and employees of the Examination 
Division of the Internal Revenue Service with respect to the tax 
liability of the taxpayer for the taxable year or period covered by that 
return.
    (2) Limitations. (i) An individual who is under suspension or 
disbarment from practice before the Internal Revenue Service may not 
engage in limited practice before the Service under Sec. 10.7(c)(1).
    (ii) The Director, after notice and opportunity for a conference, 
may deny eligibility to engage in limited practice before the Internal 
Revenue Service under Sec. 10.7(c)(1) to any individual who has engaged 
in conduct that would justify suspending or disbarring a practitioner 
from practice before the Service.
    (iii) An individual who represents a taxpayer under the authority of 
Sec. 10.7(c)(1)(viii) is subject to such rules of general applicability 
regarding standards of conduct, the extent of his or her authority, and 
other matters as the Director prescribes.
    (d) Special appearances. The Director, subject to such conditions as 
he or she deems appropriate, may authorize an individual who is not 
otherwise eligible to practice before the Service to represent another 
person in a particular matter.
    (e) Preparing tax returns and furnishing information. An individual 
may prepare a tax return, appear as a witness for the taxpayer before 
the Internal Revenue Service, or furnish information at the request of 
the Service or any of its officers or employees.

[59 FR 31526, June 20, 1994]

[[Page 194]]



Sec. 10.8  Customhouse brokers.

    Nothing contained in the regulations in this part shall be deemed to 
affect or limit the right of a customhouse broker, licensed as such by 
the Commissioner of Customs in accordance with the regulations 
prescribed therefor, in any customs district in which he is so licensed, 
at the office of the District Director of Internal Revenue or before the 
National Office of the Internal Revenue Service, to act as a 
representative in respect to any matters relating specifically to the 
importation or exportation of merchandise under the customs or internal 
revenue laws, for any person for whom he has acted as a customhouse 
broker.



   Subpart B--Duties and Restrictions Relating to Practice Before the 
                        Internal Revenue Service



Sec. 10.20  Information to be furnished.

    (a) To the Internal Revenue Service. No attorney, certified public 
accountant, enrolled agent, or enrolled actuary shall neglect or refuse 
promptly to submit records or information in any matter before the 
Internal Revenue Service, upon proper and lawful request by a duly 
authorized officer or employee of the Internal Revenue Service, or shall 
interfere, or attempt to interfere, with any proper and lawful effort by 
the Internal Revenue Service or its officers or employees to obtain any 
such record or information, unless he believes in good faith and on 
reasonable grounds that such record or information is privileged or that 
the request for, or effort to obtain, such record or information is of 
doubtful legality.
    (b) To the Director of Practice. It shall be the duty of an attorney 
or certified public accountant, who practices before the Internal 
Revenue Service, or enrolled agent, when requested by the Director of 
Practice, to provide the Director with any information he may have 
concerning violation of the regulations in this part by any person, and 
to testify thereto in any proceeding instituted under this part for the 
disbarment or suspension of an attorney, certified public accountant, 
enrolled agent, or enrolled actuary, unless he believes in good faith 
and on reasonable grounds that such information is privileged or that 
the request therefor is of doubtful legality.

[31 FR 10773, Aug. 13, 1966, as amended at 57 FR 41095, Sept. 9, 1992]



Sec. 10.21  Knowledge of client's omission.

    Each attorney, certified public accountant, enrolled agent, or 
enrolled actuary who, having been retained by a client with respect to a 
matter administered by the Internal Revenue Service, knows that the 
client has not complied with the revenue laws of the United States or 
has made an error in or omission from any return, document, affidavit, 
or other paper which the client is required by the revenue laws of the 
United States to execute, shall advise the client promptly of the fact 
of such noncompliance, error, or omission.

[42 FR 38352, July 28, 1977, as amended at 57 FR 41095, Sept. 9, 1992]



Sec. 10.22  Diligence as to accuracy.

    Each attorney, certified public accountant, enrolled agent, or 
enrolled actuary shall exercise due diligence:
    (a) In preparing or assisting in the preparation of, approving, and 
filing returns, documents, affidavits, and other papers relating to 
Internal Revenue Service matters;
    (b) In determining the correctness of oral or written 
representations made by him to the Department of the Treasury; and
    (c) In determining the correctness of oral or written 
representations made by him to clients with reference to any matter 
administered by the Internal Revenue Service.

[35 FR 13205, Aug. 19, 1970, as amended at 42 FR 38352, July 28, 1977; 
57 FR 41095, Sept. 9, 1992]



Sec. 10.23  Prompt disposition of pending matters.

    No attorney, certified public accountant, enrolled agent, or 
enrolled actuary shall unreasonably delay the prompt disposition of any 
matter before the Internal Revenue Service.

[[Page 195]]



Sec. 10.24  Assistance from disbarred or suspended persons and former Internal Revenue Service employees.

    No attorney, certified public accountant, enrolled agent, or 
enrolled actuary shall, in practice before the Internal Revenue Service, 
knowingly and directly or indirectly:
    (a) Employ or accept assistance from any person who is under 
disbarment or suspension from practice before the Internal Revenue 
Service.
    (b) Accept employment as associate, correspondent, or subagent from, 
or share fees with, any such person.
    (c) Accept assistance from any former government employee where the 
provisions of Sec. 10.26 of these regulations or any Federal law would 
be violated.

[44 FR 4943, Jan. 24, 1979, as amended at 57 FR 41095, Sept. 9, 1992]



Sec. 10.25  Practice by partners of Government employees.

    No partner of an officer or employee of the executive branch of the 
U.S. Government, of any independent agency of the United States, or of 
the District of Columbia, shall represent anyone in any matter 
administered by the Internal Revenue Service in which such officer or 
employee of the Government participates or has participated personally 
and substantially as a Government employee or which is the subject of 
his official responsibility.

[31 FR 10773, Aug. 13, 1966, as amended at 35 FR 13205, Aug. 19, 1970]



Sec. 10.26  Practice by former Government employees, their partners and their associates.

    (a) Definitions. For purposes of Sec. 10.26. (1) Assist means to act 
in such a way as to advise, furnish information to or otherwise aid 
another person, directly of indirectly.
    (2) Government employee is an officer or employee of the United 
States or any agency of the United States, including a special 
government employee as defined in 18 U.S.C. 202(a), or of the District 
of Columbia, or of any State, or a member of Congress or of any State 
legislature.
    (3) Member of a firm is a sole practioner or an employee or 
associate thereof, or a partner, stockholder, associate, affiliate or 
employee of a partnership, joint venture, corporation, professional 
association or other affiliation of two or more practitioners who 
represent non-Government parties.
    (4) Practitioner includes any individual described in Sec. 10.3(e).
    (5) Official responsibility means the direct administrative or 
operating authority, whether intermediate or final, and either 
exercisable alone or with others, and either personally or through 
subordinates, to approve, disapprove, or otherwise direct Government 
action, with or without knowledge of the action.
    (6) Participate or participation means substantial involvement as a 
Government employee by making decisions, or preparing or reviewing 
documents with or without the right to exercise a judgment of approval 
or disapproval, or participating in conferences or investigations, or 
rendering advice of a substantial nature.
    (7) Rule includes Treasury Regulations, whether issued or under 
preparation for issuance as Notices of Proposed Rule Making or as 
Treasury Decisions, and revenue rulings and revenue procedures published 
in the Internal Revenue bulletin. Rule shall not include a transaction 
as defined in paragraph (a)(9) of this section.
    (8) Transaction means any decision, determination, finding, letter 
ruling, technical advice, contract or approval or disapproval thereof, 
relating to a particular factual situation or situations involving a 
specific party or parties whose rights, privileges, or liabilities under 
laws or regulations administered by the Internal Revenue Service, or 
other legal rights, are determined or immediately affected therein and 
to which the United States is a party or in which it has a direct and 
substantial interest, whether or not the same taxable periods are 
involved. Transaction does not include rule as defined in paragraph 
(a)(7) of this section.
    (b) General rules. (1) No former Government employee shall, 
subsequent to his Government employment, represent anyone in any matter 
administered by the Internal Revenue Service if the representation would 
violate 18 U.S.C.

[[Page 196]]

207 (a) or (b) of any other laws of the United States.
    (2) No former Government employee who participated in a transaction 
shall, subsequent to his Government employment, represent or knowingly 
assist, in that transaction, any person who is or was a specific party 
to that transaction.
    (3) No former Government employee who within a period of one year 
prior to the termination of his Government employment had official 
responsibility for a transaction shall, within one year after his 
Government employment is ended, represent or knowingly assist in that 
transaction any person who is or was a specific party to that 
transaction.
    (4) No former Government employee shall, within one year after his 
Government employment is ended, appear before any employee of the 
Treasury Department in connection with the publication, withdrawal, 
amendment, modification, or interpretation of a rule in the development 
of which the former Government employee participated or for which, 
within a period of one year prior to the termination of his Government 
employment, he had official responsibility. However, this subparagraph 
does not preclude such former employee for appearing on his own behalf 
or from representing a taxpayer before the Internal Revenue Service in 
connection with a transaction involving the application or 
interpretation of such a rule with respect to that transaction: 
Provided, That such former employee shall not utilize or disclose any 
confidential information acquired by the former employee in the 
development of the rule, and shall not contend that the rule is invalid 
or illegal. In addition, this subparagraph does not preclude such former 
employee from otherwise advising or acting for any person.
    (c) Firm representation. (1) No member of a firm of which a former 
Government employee is a member may represent or knowingly assist a 
person who was or is a specific party in any transaction with respect to 
which the restrictions of paragraph (b)(1) (other than 18 U.S.C. 207 
(b)) or (b)(2) of this section apply to the former Government employee, 
in that transaction, unless:
    (i) No member of the firm who had knowledge of the participation by 
the Government employee in the transaction initiated discussions with 
the Government employee concerning his becoming a member of the firm 
until his Government employment is ended or six months after the 
termination of his participation in the transaction, whichever is 
earlier;
    (ii) The former Government employee did not initiate any discussions 
concerning becoming a member of the firm while participating in the 
transaction or, if such discussions were intitiated, they conformed with 
the requirements of 18 U.S.C. 208(b); and
    (iii) The firm isolates the former Government employee in such a way 
that he does not assist in the representation.
    (2) No member of a firm of which a former Government employee is a 
member may represent or knowingly assist a person who was or is a 
specific party in any transaction with respect to which the restrictions 
of paragraph (b)(3) of this section apply to the former employee, in 
that transaction unless the firm isolates the former Government employee 
in such a way that he does not assist in the representation.
    (3) When isolation of the former Government employee is required 
under paragraph (c)(1) or (c)(2) of this section, a statement affirming 
the fact of such isolation shall be executed under oath by the former 
Government employee and by a member of the firm acting on behalf of the 
firm, and shall be filed with the Director of Practice and in such other 
place and in the manner prescribed by regulation. This statement shall 
clearly identify the firm, the former Government employee, and the 
transaction or transactions requiring such isolation.
    (d) Pending representation. Practice by former Government employees, 
their partners and associates with respect to representation in specific 
matters where actual representation commenced before publication of this 
regulation is governed by the regulations set forth in the June 1972 
amendments

[[Page 197]]

to the regulations of this part (published at 37 FR 11676): Provided, 
That the burden of showing that representation commenced before 
publication is with the former Government employees, their partners and 
associates.

[42 FR 38352, July 28, 1977, as amended at 57 FR 41095, Sept. 9, 1992; 
59 FR 31527, June 20, 1994]



Sec. 10.27  Notaries.

    No attorney, certified public accountant, enrolled agent, or 
enrolled actuary as notary public shall with respect to any matter 
administered by the Internal Revenue Service take acknowledgments, 
administer oaths, certify papers, or perform any official act in 
connection with matters in which he is employed as counsel, attorney, or 
agent, or in which he may be in any way interested before the Internal 
Revenue Service (26 Op. Atty. Gen. 236).

[31 FR 10773, Aug. 13, 1966, as amended at 57 FR 41095, Sept. 9, 1992]



Sec. 10.28  Fees.

    (a) Generally. A practitioner may not charge an unconscionable fee 
for representing a client in a matter before the Internal Revenue 
Service.
    (b) Contingent fees for return preparation. A practitioner may not 
charge a contingent fee for preparing an original return. A practitioner 
may charge a contingent fee for preparing an amended return or a claim 
for refund (other than a claim for refund made on an original return) if 
the practitioner reasonably anticipates at the time the fee arrangement 
is entered into that the amended return or claim will receive 
substantive review by the Service. A contingent fee includes a fee that 
is based on a percentage of the refund shown on a return or a percentage 
of the taxes saved, or that otherwise depends on the specific result 
attained.

[59 FR 31527, June 20, 1994]



Sec. 10.29  Conflicting interests.

    No attorney, certified public accountant, enrolled agent, or 
enrolled actuary shall represent conflicting interests in his practice 
before the Internal Revenue Service, except by express consent of all 
directly interested parties after full disclosure has been made.

[31 FR 10773, Aug. 13, 1966, as amended at 57 FR 41095, Sept. 9, 1992]



Sec. 10.30  Solicitation.

    (a) Advertising and solicitation restrictions. (1) No attorney, 
certified public accountant, enrolled agent, enrolled actuary, or other 
individual eligible to practice before the Internal Revenue Service 
shall, with respect to any Internal Revenue Service matter, in any way 
use or participate in the use of any form of public communication 
containing (i) A false, fraudulent, unduly influencing, coercive, or 
unfair statement or claim; or (ii) a misleading or deceptive statement 
or claim. Enrolled agents, in describing their professional designation, 
may not utilize the term of art ``certified'' or indicate an employer/
employee relationship with the Internal Revenue Service. Examples of 
acceptable descriptions are ``enrolled to represent taxpayers before the 
Internal Revenue Service,'' ``enrolled to practice before the Internal 
Revenue Service, and ``admitted to practice before the Internal Revenue 
Service.'' Enrolled agents and enrolled actuaries may abbreviate such 
designation to either EA or E.A.
    (2) No attorney, certified public accountant, enrolled agent, 
enrolled actuary, or other individual eligible to practice before the 
Internal Revenue Service shall make, directly or indirectly, an 
uninvited solicitation of employment in matters related to the Internal 
Revenue Service. Solicitation includes, but is not limited to, in-person 
contacts and telephone communications. This restriction does not apply 
to (i) Seeking new business from an existing or former client in a 
related matter; (ii) communications with family members; (iii) making 
the availability of professional services known to other practitioners, 
so long as the person or firm contacted is not a potential client; (iv) 
solicitation by mailings; or (v) non-coercive in-person solicitation by 
those eligible to practice before the Internal Revenue Service while 
acting as an employee, member, or officer of an exempt organization 
listed in sections 501(c)(3) or (4) of the

[[Page 198]]

Internal Revenue Code of 1954 (26 U.S.C.).

Any targeted direct mail solicitation, i.e. a mailing to those whose 
unique circumstances are the basis for the solicitation, distributed by 
or on behalf of an attorney, certified public accountant, enrolled 
agency, enrolled actuary, or other individual eligible to practice 
before the Internal Revenue Service shall be clearly marked as such in 
capital letters on the envelope and at the top of the first page of such 
mailing. In addition, all such solicitations must clearly identify the 
source of the information used in choosing the recipient.
    (b) Fee information. (1) Attorney, certified public accountant, 
enrolled agent, or enrolled actuary and other individuals eligible to 
practice before the Internal Revenue Service may disseminate the 
following fee information:
    (i) Fixed fees for specific routine services.
    (ii) Hourly rates.
    (iii) Range of fees for particular services.
    (iv) Fee charged for an initial consultation.

Any statement of fee information concerning matters in which costs may 
be incurred shall include a statement disclosing whether clients will be 
responsible for such costs.
    (2) Attorney, certified public accountant, enrolled agent, or 
enrolled actuary and other individuals eligible to practice before the 
Internal Revenue Service may also publish the availability of a written 
schedule of fees.
    (3) Attorney, certified public accountant, enrolled agent, or 
enrolled actuary and other individuals eligible to practice before the 
Internal Revenue Service shall be bound to charge the hourly rate, the 
fixed fee for specific routine services, the range of fees for 
particular services, or the fee for an initial consultation published 
for a reasonable period of time, but no less than thirty days from the 
last publication of such hourly rate or fees.
    (c) Communications. Communication, including fee information, may 
include professional lists, telephone directories, print media, 
mailings, radio and television, and any other method: Provided, that the 
method chosen does not cause the communication to become untruthful, 
deceptive, unduly influencing or otherwise in violation of these 
regulations. It shall be construed as a violation of these regulations 
for a practitioner to persist in attempting to contact a prospective 
client, if such client has made known to the practitioner a desire not 
to be solicited. In the case of radio and television broadcasting, the 
broadcast shall be pre-recorded and the practitioner shall retain a 
recording of the actual audio transmission. In the case of direct mail 
communications, the practitioner shall retain a copy of the actual 
mailing, along with a list or other description of persons to whom the 
communication was mailed or otherwise distributed. Such copy shall be 
retained by the practitioner for a period of at least 36 months from the 
date of the last transmission or use.
    (d) Improper associations. An attorney, certified public accountant, 
enrolled agent, or enrolled actuary may in matters related to the 
Internal Revenue Service, employ or accept employment or assistance as 
an associate, correspondent, or subagent from, or share fees with, any 
person or entity who, to the knowledge of the practitioner, obtains 
clients or otherwise practices in a manner forbidden under this section: 
Provided, That a practitioner does not, directly or indirectly, act or 
hold himself out as an Internal Revenue Service practitioner in 
connection with that relationship. Nothing herein shall prohibit an 
attorney, certified public accountant, or enrolled agent from practice 
before the Internal Revenue Service in a capacity other than that 
described above.

[44 FR 4943, Jan. 24, 1979, as amended at 57 FR 41095, Sept. 9, 1992]



Sec. 10.31  Negotiation of taxpayer refund checks.

    No attorney, certified public accountant, enrolled agent, or 
enrolled actuary who is an income tax return preparer shall endorse or 
otherwise negotiate any check made in respect of

[[Page 199]]

income taxes which is issued to a taxpayer other than the attorney, 
certified public accountant or enrolled agent.

[42 FR 38353, July 28, 1977, as amended at 57 FR 41095, Sept. 9, 1992]



Sec. 10.32  Practice of law.

    Nothing in the regulations in this part shall be construed as 
authorizing persons not members of the bar to practice law.

[31 FR 10773, Aug. 13, 1966. Redesignated at 42 FR 38353, July 28, 1977]



Sec. 10.33  Tax shelter opinions.

    (a) Tax shelter opinions and offering materials. A practitioner who 
provides a tax shelter opinion analyzing the Federal tax effects of a 
tax shelter investment shall comply with each of the following 
requirements:
    (1) Factual matters. (i) The practitioner must make inquiry as to 
all relevant facts, be satisfied that the material facts are accurately 
and completely described in the offering materials, and assure that any 
representations as to future activities are clearly identified, 
reasonable and complete.
    (ii) A practitioner may not accept as true asserted facts pertaining 
to the tax shelter which he/she should not, based on his/her background 
and knowledge, reasonably believe to be true. However, a practitioner 
need not conduct an audit or independent verification of the asserted 
facts, or assume that a client's statement of the facts cannot be relied 
upon, unless he/she has reason to believe that any relevant facts 
asserted to him/her are untrue.
    (iii) If the fair market value of property or the expected financial 
performance of an investment is relevant to the tax shelter, a 
practitioner may not accept an appraisal or financial projection as 
support for the matters claimed therein unless:
    (A) The appraisal or financial projection makes sense on its face;
    (B) The practitioner reasonably believes that the person making the 
appraisal or financial projection is competent to do so and is not of 
dubious reputation; and
    (C) The appraisal is based on the definition of fair market value 
prescribed under the relevant Federal tax provisions.
    (iv) If the fair market value of purchased property is to be 
established by reference to its stated purchase price, the practitioner 
must examine the terms and conditions upon which the property was (or is 
to be) purchased to determine whether the stated purchase price 
reasonably may be considered to be its fair market value.
    (2) Relate law to facts. The practitioner must relate the law to the 
actual facts and, when addressing issues based on future activities, 
clearly identify what facts are assumed.
    (3) Identification of material issues. The practitioner must 
ascertain that all material Federal tax issues have been considered, and 
that all of those issues which involve the reasonable possibility of a 
challenge by the Internal Revenue Service have been fully and fairly 
addressed in the offering materials.
    (4) Opinion on each material issue. Where possible, the practitioner 
must provide an opinion whether it is more likely than not that an 
investor will prevail on the merits of each material tax issue presented 
by the offering which involves a reasonable possibility of a challenge 
by the Internal Revenue Service. Where such an opinion cannot be given 
with respect to any material tax issue, the opinion should fully 
describe the reasons for the practitioner's inability to opine as to the 
likely outcome.
    (5) Overall evaluation. (i) Where possible, the practitioner must 
provide an overall evaluation whether the material tax benefits in the 
aggregate more likely than not will be realized. Where such an overall 
evaluation cannot be given, the opinion should fully describe the 
reasons for the practitioner's inability to make an overall evaluation. 
Opinions concluding that an overall evaluation cannot be provided will 
be given special scrutiny to determine if the stated reasons are 
adequate.
    (ii) A favorable overall evaluation may not be rendered unless it is 
based on a conclusion that substantially more than half of the material 
tax benefits, in terms of their financial impact

[[Page 200]]

on a typical investor, more likely than not will be realized if 
challenged by the Internal Revenue Service.
    (iii) If it is not possible to give an overall evaluation, or if the 
overall evaluation is that the material tax benefits in the aggregate 
will not be realized, the fact that the practitioner's opinion does not 
constitute a favorable overall evaluation, or that it is an unfavorable 
overall evaluation, must be clearly and prominently disclosed in the 
offering materials.
    (iv) The following examples illustrate the principles of this 
paragraph:

    Example (1). A limited partnership acquires real property in a sale-
leaseback transaction. The principal tax benefits offered to investing 
partners consist of depreciation and interest deductions. Lesser tax 
benefits are offered to investors by reason of several deductions under 
Internal Revenue Code section 162 (ordinary and necessary business 
expenses). If a practitioner concludes that it is more likely than not 
that the partnership will not be treated as the owner of the property 
for tax purposes (which is required to allow the interest and 
depreciation deductions), then he/she may not opine to the effect that 
it is more likely than not that the material tax benefits in the 
aggregate will be realized, regardless of whether favorable opinions may 
be given with respect to the deductions claimed under Code section 162.
    Example (2). A corporation electing under subchapter S of the 
Internal Revenue Code is formed to engage in research and development 
activities. The offering materials forecast that deductions for research 
and experimental expenditures equal to 75% of the total investment in 
the corporation will be available during the first two years of the 
corporation's operations, other expenses will account for another 15% of 
the total investment, and that little or no gross income will be 
received by the corporation during this period. The practitioner 
concludes that it is more likely than not that deductions for research 
and experimental expenditures will be allowable. The practitioner may 
render an opinion to the effect that based on this conclusion, it is 
more likely than not that the material tax benefits in the aggregate 
will be realized, regardless of whether he/she can opine that it is more 
likely than not that any of the other tax benefits will be achieved.
    Example (3). An investment program is established to acquire 
offsetting positions in commodities contracts. The objective of the 
program is to close the loss positions in year one and to close the 
profit positions in year two. The principal tax benefit offered by the 
program is a loss in the first year, coupled with the deferral of 
offsetting gain until the following year. The practitioner concludes 
that the losses will not be deductible in year one. Accordingly, he/she 
may not render an opinion to the effect that it is more likely than not 
that the material tax benefits in the aggregate will be realized, 
regardless of the fact that he/she is of the opinion that losses not 
allowable in year one will be allowable in year two, because the 
principal tax benefit offered is a one-year deferral of income.
    Example (4). A limited partnership is formed to acquire, own and 
operate residential rental real estate. The offering material forecasts 
gross income of $2,000,000 and total deductions of $10,000,000, 
resulting in net losses of $8,000,000 over the first six taxable years. 
Of the total deductions, depreciation and interest are projected to be 
$7,000,000, and other deductions $3,000,000. The practitioner concludes 
that it is more likely than not that all of the depreciation and 
interest deductions will be allowable, and that it is more likely than 
not that the other deductions will not be allowed. The practitioner may 
render an opinion to the efect that it is more likely than not that the 
material tax benefits in the aggregate will be realized.

    (6) Description of opinion. The practitioner must assure that the 
offering materials correctly and fairly represent the nature and extent 
of the tax shelter opinion.
    (b) Reliance on other opinions--(1) In general. A practitioner may 
provide an opinion on less than all of the material tax issues only if:
    (i) At least one other competent practitioner provides an opinion on 
the likely outcome with respect to all of the other material tax issues 
which involve a reasonable possibility of challenge by the Internal 
Revenue Service, and an overall evalution whether the material tax 
benefits in the aggregate more likely than not will be realized, which 
is disseminated in the same manner as the practitioner's opinion; and
    (ii) The practitioner, upon reviewing such other opinions and any 
offering materials, has no reason to believe that the standards of 
paragraph (a) of this section have not been complied with.

Notwithstanding the foregoing, a practitioner who has not been retained 
to provide an overall evaluation whether the material tax benefits in 
the aggregate more likely than not will be realized may issue an opinion 
on less than

[[Page 201]]

all the material tax issues only if he/she has no reason to believe, 
based on his/her knowledge and experience, that the overall evaluation 
given by the practitioner who furnishes the overall evaluation is 
incorrect on its face.
    (2) Forecasts and projections. A practitioner who is associated with 
forecasts or projections relating to or based upon the tax consequences 
of the tax shelter offering that are included in the offering materials, 
or are disseminated to potential investors other than the practitioner's 
clients, may rely on the opinion of another practitioner as to any or 
all material tax issues, provided that the practitioner who desires to 
rely on the other opinion has no reason to believe that the standards of 
paragraph (a) of this section have not been complied with by the 
practitioner rendering such other opinion, and the requirements of 
paragraph (b)(1) of this section are satisfied. The practitioner's 
report shall disclose any material tax issue not covered by, or 
incorrectly opined upon, by the other opinion, and shall set forth his/
her opinion with respect to each such issue in a manner that satisfies 
the requirements of paragraph (a) of this section.
    (c) Definitions. For purposes of this section:
    (1) Practitioner includes any individual described in Sec. 10.3(e).
    (2) A tax shelter, as the term is used in this section, is an 
investment which has as a significant and intended feature for Federal 
income or excise tax purposes either of the following attributes:
    (i) Deductions in excess of income from the investment being 
available in any year to reduce income from other sources in that year, 
or
    (ii) Credits in excess of the tax attributable to the income from 
the investment being available in any year to offset taxes on income 
from other sources in that year. Excluded from the term are municipal 
bonds; annuities; family trusts (but not including schemes or 
arrangements that are marketed to the public other than in a direct 
practitioner-client relationship); qualified retirement plans; 
individual retirement accounts; stock option plans; securities issued in 
a corporate reorganization; mineral development ventures, if the only 
tax benefit would be percentage depletion; and real estate where it is 
anticipated that in no year is it likely that deductions will exceed 
gross income from the investment in that year, or that tax credits will 
exceed the tax attributable to gross income from the investment in that 
year. Whether an investment is intended to have tax shelter features 
depends on the objective facts and circumstances of each case. 
Significant weight will be given to the features described in the 
offering materials to determine whether the investment is a tax shelter.
    (3) A tax shelter opinion, as the term is used in this section, is 
advice by a practitioner concerning the Federal tax aspects of a tax 
shelter either appearing or referred to in the offering materials, or 
used or referred to in connection with sales promotion efforts, and 
directed to persons other than the client who engaged the practitioner 
to give the advice. The term includes the tax aspects or tax risks 
portion of the offering materials prepared by or at the direction of a 
practitioner, whether or not a separate opinion letter is issued or 
whether or not the practitioner's name is referred to in the offering 
materials or in connection with the sales promotion efforts. In 
addition, a financial forcast or projection prepared by a practitioner 
is a tax shelter opinion if it is predicated on assumptions regarding 
Federal tax aspects of the investment, and it meets the other 
requirements of the first sentence of this paragraph. The term does not, 
however, include rendering advice solely to the offeror or reviewing 
parts of the offering materials, so long as neither the name of the 
practitioner, nor the fact that a practitioner has rendered advice 
concerning the tax aspects, is referred to in the offering materials or 
in connection with the sales promotion efforts.
    (4) A material tax issue as the term is used in this section is
    (i) Any Federal income or excise tax issue relating to a tax shelter 
that would make a significant contribution toward sheltering from 
Federal taxes income from other sources by providing deductions in 
excess of the income from the tax shelter investment

[[Page 202]]

in any year, or tax credits available to offset tax liabilities in 
excess of the tax attributable to the tax shelter investment in any 
year;
    (ii) Any other Federal income or excise tax issue relating to a tax 
shelter that could have a significant impact (either benefical or 
adverse) on a tax shelter investor under any reasonably foreseeable 
circumstances (e.g., depreciation or investment tax credit recapture, 
availability of long-term capital gain treatment, or realization of 
taxable income in excess of cash flow, upon sale or other disposition of 
the tax shelter investment); and
    (iii) The potential applicability of penalties, additions to tax, or 
interest charges that reasonably could be asserted against a tax shelter 
investor by the Internal Revenue Service with respect to the tax 
shelter. The determination of what is material is to be made in good 
faith by the practitioner, based on information available at the time 
the offering materials are circulated.
    (d) For purposes of advising the Director of Practice whether an 
individual may have violated Sec. 10.33, the Director of Practice is 
authorized to establish an Advisory Committee, composed of at least five 
individuals authorized to practice before the Internal Revenue Service. 
Under procedures established by the Director of Practice, such Advisory 
Committee shall, at the request of the Director of Practice, review and 
make recommendations with regard to alleged violations of Sec. 10.33.

(Sec. 3, 23 Stat. 258, secs. 2-12, 60 Stat. 237 et seq.; 5 U.S.C. 301; 
31 U.S.C. 330; 31 U.S.C. 321 (Reorg. Plan No. 26 of 1950, 15 FR 4935, 64 
Stat. 1280, 3 CFR, 1949-53 Comp., p. 1017))

[49 FR 6722, Feb. 23, 1984; 49 FR 7116, Feb. 27, 1984; 59 FR 31527, 
31528, June 20, 1994]



Sec. 10.34  Standards for advising with respect to tax return positions and for preparing or signing returns.

    (a) Standards of conduct--(1) Realistic possibility standard. A 
practitioner may not sign a return as a preparer if the practitioner 
determines that the return contains a position that does not have a 
realistic possibility of being sustained on its merits (the realistic 
possibility standard) unless the position is not frivolous and is 
adequately disclosed to the Service. A practitioner may not advise a 
client to take a position on a return, or prepare the portion of a 
return on which a position is taken, unless--
    (i) The practitioner determines that the position satisfies the 
realistic possibility standard; or
    (ii) The position is not frivolous and the practitioner advises the 
client of any opportunity to avoid the accuracy-related penalty in 
section 6662 of the Internal Revenue Code of 1986 by adequately 
disclosing the position and of the requirements for adequate disclosure.
    (2) Advising clients on potential penalties. A practitioner advising 
a client to take a position on a return, or preparing or signing a 
return as a preparer, must inform the client of the penalties reasonably 
likely to apply to the client with respect to the position advised, 
prepared, or reported. The practitioner also must inform the client of 
any opportunity to avoid any such penalty by disclosure, if relevant, 
and of the requirements for adequate disclosure. This paragraph (a)(2) 
applies even if the practitioner is not subject to a penalty with 
respect to the position.
    (3) Relying on information furnished by clients. A practitioner 
advising a client to take a position on a return, or preparing or 
signing a return as a preparer, generally may rely in good faith without 
verification upon information furnished by the client. However, the 
practitioner may not ignore the implications of information furnished 
to, or actually known by, the practitioner, and must make reasonable 
inquiries if the information as furnished appears to be incorrect, 
inconsistent, or incomplete.
    (4) Definitions. For purposes of this section:
    (i) Realistic possibility. A position is considered to have a 
realistic possibility of being sustained on its merits if a reasonable 
and well-informed analysis by a person knowledgeable in the tax law 
would lead such a person to conclude that the position has approximately 
a one in three, or greater, likelihood of being sustained on its merits. 
The authorities described in 26 CFR

[[Page 203]]

1.6662-4(d)(3)(iii), or any successor provision, of the substantial 
understatement penalty regulations may be taken into account for 
purposes of this analysis. The possibility that a position will not be 
challenged by the Service (e.g., because the taxpayer's return may not 
be audited or because the issue may not be raised on audit) may not be 
taken into account.
    (ii) Frivolous. A position is frivolous if it is patently improper.
    (b) Standard of discipline. As provided in Sec. 10.52, only 
violations of this section that are willful, reckless, or a result of 
gross incompetence will subject a practitioner to suspension or 
disbarment from practice before the Service.

[59 FR 31527, June 20, 1994]



         Subpart C--Rules Applicable to Disciplinary Proceedings



Sec. 10.50  Authority to disbar or suspend.

    Pursuant to 31 U.S.C. 330(b), the Secretary of the Treasury after 
notice and an opportunity for a proceeding, may suspend or disbar any 
practitioner from practice before the Internal Revenue Service. The 
Secretary may take such action against any practitioner who is shown to 
be incompetent or disreputable, who refuses to comply with any 
regulation in this part, or who, with intent to defraud, willfully and 
knowingly misleads or threatens a client or prospective client.

[59 FR 31528, June 20, 1994]



Sec. 10.51  Disreputable conduct.

    Disreputable conduct for which an attorney, certified public 
accountant, enrolled agent, or enrolled actuary may be disbarred or 
suspended from practice before the Internal Revenue Service includes, 
but is not limited to:
    (a) Conviction of any criminal offense under the revenue laws of the 
United States, or of any offense involving dishonesty, or breach of 
trust.
    (b) Giving false or misleading information, or participating in any 
way in the giving of false or misleading information to the Department 
of the Treasury or any officer or employee thereof, or to any tribunal 
authorized to pass upon Federal tax matters, in connection with any 
matter pending or likely to be pending before them, knowing such 
information to be false or misleading. Facts or other matters contained 
in testimony, Federal tax returns, financial statements, applications 
for enrollment, affidavits, declarations, or any other document or 
statement, written or oral, are included in the term ``information.''
    (c) Solicitation of employment as prohibited under Sec. 10.30, the 
use of false or misleading representations with intent to deceive a 
client or prospective client in order to procure employment, or 
intimating that the practitioner is able improperly to obtain special 
consideration or action from the Internal Revenue Service or officer or 
employee thereof.
    (d) Willfully failing to make Federal tax return in violation of the 
revenue laws of the United States, or evading, attempting to evade, or 
participating in any way in evading or attempting to evade any Federal 
tax or payment thereof, knowingly counseling or suggesting to a client 
or prospective client an illegal plan to evade Federal taxes or payment 
thereof, or concealing assets of himself or another to evade Federal 
taxes or payment thereof.
    (e) Misappropriation of, or failure properly and promptly to remit 
funds received from a client for the purpose of payment of taxes or 
other obligations due the United States.
    (f) Directly or indirectly attempting to influence, or offering or 
agreeing to attempt to influence, the official action of any officer or 
employee of the Internal Revenue Service by the use of threats, false 
accusations, duress or coercion, by the offer of any special inducement 
or promise of advantage or by the bestowing of any gift, favor or thing 
of value.
    (g) Disbarment or suspension from practice as an attorney, certified 
public accountant, public accountant, or actuary by any duly constituted 
authority of any State, possession, territory, Commonwealth, the 
District of Columbia, any Federal court of record or any Federal agency, 
body or board.
    (h) Knowingly aiding and abetting another person to practice before 
the

[[Page 204]]

Internal Revenue Service during a period of suspension, disbarment, or 
ineligibility of such other person. Maintaining a partnership for the 
practice of law, accountancy, or other related professional service with 
a person who is under disbarment from practice before the Service shall 
be presumed to be a violation of this provision.
    (i) Contemptuous conduct in connection with practice before the 
Internal Revenue Service, including the use of abusive language, making 
false accusations and statements knowing them to be false, or 
circulating or publishing malicious or libelous matter.
    (j) Giving a false opinion, knowingly, recklessly, or through gross 
incompetence, including an opinion which is intentionally or recklessly 
misleading, or a pattern of providing incompetent opinions on questions 
arising under the Federal tax laws. False opinions described in this 
paragraph include those which reflect or result from a knowing 
misstatement of fact or law; from an assertion of a position known to be 
unwarranted under existing law; from counseling or assisting in conduct 
known to be illegal or fraudulent; from concealment of matters required 
by law to be revealed; or from conscious disregard of information 
indicating that material facts expressed in the tax opinion or offering 
material are false or misleading. For purposes of this paragraph, 
reckless conduct is a highly unreasonable omission or misrepresentation 
involving an extreme departure from the standards of ordinary care that 
a practitioner should observe under the circumstances. A pattern of 
conduct is a factor that will be taken into account in determining 
whether a practitioner acted knowingly, recklessly, or through gross 
incompetence. Gross incompetence includes conduct that reflects gross 
indifference, preparation which is grossly inadequate under the 
circumstances, and a consistent failure to perform obligations to the 
client.

(Sec. 3, 23 Stat. 258, secs. 2-12, 60 Stat. 237 et seq.; 5 U.S.C. 301; 
31 U.S.C. 330; 31 U.S.C. 321 (Reorg. Plan No. 26 of 1950, 15 FR 4935, 64 
Stat. 1280, 3 CFR, 1949-53 Comp., p. 1017))

[31 FR 10773, Aug. 13, 1966, as amended at 35 FR 13205, Aug. 19, 1970; 
42 FR 38353, July 28, 1977; 44 FR 4946, Jan. 24, 1979; 49 FR 6723, Feb. 
23, 1984; 57 FR 41095, Sept. 9, 1992; 59 FR 31528, June 20, 1994]



Sec. 10.52  Violation of regulations.

    A practitioner may be disbarred or suspended from practice before 
the Internal Revenue Service for any of the following:
    (a) Willfully violating any of the regulations contained in this 
part.
    (b) Recklessly or through gross incompetence (within the meaning of 
Sec. 10.51(j)) violating Sec. 10.33 or Sec. 10.34 of this part.

[59 FR 31528, June 20, 1994]



Sec. 10.53  Receipt of information concerning attorney, certified public accountant, enrolled agent, or enrolled actuary.

    If an officer or employee of the Internal Revenue Service has reason 
to believe that an attorney, certified public accountant, enrolled 
agent, or enrolled actuary has violated any provision of this part, or 
if any such officer or employee receives information to that effect, he 
shall promptly make a written report thereof, which report or a copy 
thereof shall be forwarded to the Director of Practice. If any other 
person has information of such violations, he may make a report thereof 
to the Director of Practice or to any officer or employee of the 
Internal Revenue Service.

[31 FR 10773, Aug. 13, 1966, as amended at 57 FR 41095, Sept. 9, 1992]



Sec. 10.54  Institution of proceeding.

    Whenever the Director of Practice has reason to believe that any 
attorney, certified public accountant, enrolled agent, or enrolled 
actuary has violated any provision of the laws or

[[Page 205]]

regulations governing practice before the Internal Revenue Service, he 
may reprimand such person or institute a proceeding for disbarment or 
suspension of such person. The proceeding shall be instituted by a 
complaint which names the respondent and is signed by the Director of 
Practice and filed in his office. Except in cases of willfulness, or 
where time, the nature of the proceeding, or the public interest does 
not permit, a proceeding will not be instituted under this section until 
facts or conduct which may warrant such action have been called to the 
attention of the proposed respondent in writing and he has been accorded 
opportunity to demonstrate or achieve compliance with all lawful 
requirements.

[31 FR 10773, Aug. 13, 1966, as amended at 57 FR 41095, Sept. 9, 1992]



Sec. 10.55  Conferences.

    (a) In general. The Director of Practice may confer with an 
attorney, certified public accountant, enrolled agent, or enrolled 
actuary concerning allegations of misconduct irrespective of whether a 
proceeding for disbarment or suspension has been instituted against him. 
If such conference results in a stipulation in connection with a 
proceeding in which such person is the respondent, the stipulation may 
be entered in the record at the instance of either party to the 
proceeding.
    (b) Resignation or voluntary suspension. An attorney, certified 
public accountant, enrolled agent, or enrolled actuary, in order to 
avoid the institution or conclusion of a disbarment or suspension 
proceeding, may offer his consent to suspension from practice before the 
Internal Revenue Service. An enrolled agent may also offer his 
resignation. The Director of Practice, in his discretion, may accept the 
offered resignation of an enrolled agent and may suspend an attorney, 
certified public accountant, or enrolled agent in accordance with the 
consent offered.

[31 FR 10773, Aug. 13, 1966, as amended at 35 FR 13206, Aug. 19, 1970; 
57 FR 41095, Sept. 9, 1992]



Sec. 10.56  Contents of complaint.

    (a) Charges. A complaint shall give a plain and concise description 
of the allegations which constitute the basis for the proceeding. A 
complaint shall be deemed sufficient if it fairly informs the respondent 
of the charges against him so that he is able to prepare his defense.
    (b) Demand for answer. In the complaint, or in a separate paper 
attached to the complaint, notification shall be given of the place and 
time within which the respondent shall file his answer, which time shall 
not be less than 15 days from the date of service of the complaint, and 
notice shall be given that a decision by default may be rendered against 
the respondent in the event he fails to file his answer as required.

[31 FR 10773, Aug. 13, 1966, as amended at 42 FR 38353, July 28, 1977]



Sec. 10.57  Service of complaint and other papers.

    (a) Complaint. The complaint or a copy thereof may be served upon 
the respondent by certified mail, or first-class mail as hereinafter 
provided; by delivering it to the respondent or his attorney or agent of 
record either in person or by leaving it at the office or place of 
business of the respondent, attorney or agent; or in any other manner 
which has been agreed to by the respondent. Where the service is by 
certified mail, the return post office receipt duly signed by or on 
behalf of the respondent shall be proof of service. If the certified 
matter is not claimed or accepted by the respondent and is returned 
undelivered, complete service may be made upon the respondent by mailing 
the complaint to him by first-class mail, addressed to him at the 
address under which he is enrolled or at the last address known to the 
Director of Practice. If service is made upon the respondent or his 
attorney or agent of record in person or by leaving the complaint at the 
office or place of business of the respondent, attorney or agent, the 
verified return by the person making service, setting forth the manner 
of service, shall be proof of such service.

[[Page 206]]

    (b) Service of papers other than complaint. Any paper other than the 
complaint may be served upon an attorney, certified public accountant, 
or enrolled agent as provided in paragraph (a) of this section or by 
mailing the paper by first-class mail to the respondent at the last 
address known to the Director of Practice, or by mailing the paper by 
first-class mail to the respondent's attorney or agent of record. Such 
mailing shall constitute complete service. Notices may be served upon 
the respondent or his attorney or agent of record by telegraph.
    (c) Filing of papers. Whenever the filing of a paper is required or 
permitted in connection with a disbarment or suspension proceeding, and 
the place of filing is not specified by this subpart or by rule or order 
of the Administrative Law Judge, the paper shall be filed with the 
Director of Practice, Treasury Department, Washington, DC 20220. All 
papers shall be filed in duplicate.

[Dept. Circ. 230, Rev., 31 FR 10773, Aug. 13, 1966, as amended at 31 FR 
13992, Nov. 2, 1966; 42 FR 38354, July 28, 1977]



Sec. 10.58  Answer.

    (a) Filing. The respondent's answer shall be filed in writing within 
the time specified in the complaint or notice of institution of the 
proceeding, unless on application the time is extended by the Director 
of Practice or the Administrative Law Judge. The answer shall be filed 
in duplicate with the Director of Practice.
    (b) Contents. The answer shall contain a statement of facts which 
constitute the grounds of defense, and it shall specifically admit or 
deny each allegation set forth in the complaint, except that the 
respondent shall not deny a material allegation in the complaint which 
he knows to be true, or state that he is without sufficient information 
to form a belief when in fact he possesses such information. The 
respondent may also state affirmatively special matters of defense.
    (c) Failure to deny or answer allegations in the complaint. Every 
allegation in the complaint which is not denied in the answer shall be 
deemed to be admitted and may be considered as proved, and no further 
evidence in respect of such allegation need be adduced at a hearing. 
Failure to file an answer within the time prescribed in the notice to 
the respondent, except as the time for answer is extended by the 
Director of Practice or the Administrative Law Judge, shall constitute 
an admission of the allegations of the complaint and a waiver of 
hearing, and the Examiner may make his decision by default without a 
hearing or further procedure.

[31 FR 10773, Aug. 13, 1966, as amended at 42 FR 38354, July 28, 1977]



Sec. 10.59  Supplemental charges.

    If it appears that the respondent in his answer, falsely and in bad 
faith, denies a material allegation of fact in the complaint or states 
that the respondent has no knowledge sufficient to form a belief, when 
he in fact possesses such information, or if it appears that the 
respondent has knowingly introduced false testimony during proceedings 
for his disbarment or suspension, the Director of Practice may thereupon 
file supplemental charges against the respondent. Such supplemental 
charges may be tried with other charges in the case, provided the 
respondent is given due notice thereof and is afforded an opportunity to 
prepare a defense thereto.



Sec. 10.60  Reply to answer.

    No reply to the respondent's answer shall be required, and new 
matter in the answer shall be deemed to be denied, but the Director of 
Practice may file a reply in his discretion or at the request of the 
Administrative Law Judge.

[31 FR 10773, Aug. 13, 1966 as amended at 42 FR 38354, July 28, 1977]



Sec. 10.61  Proof; variance; amendment of pleadings.

    In the case of a variance between the allegations in a pleading and 
the evidence adduced in support of the pleading, the Examiner may order 
or authorize amendment of the pleading to conform to the evidence: 
Provided, That the party who would otherwise be prejudiced by the 
amendment is given reasonable opportunity to meet the allegations of the 
pleading as amended; and the Administrative Law Judge

[[Page 207]]

shall make findings on any issue presented by the pleadings as so 
amended.

[31 FR 10773, Aug. 13, 1966, as amended at 42 FR 38354, July 28, 1977]



Sec. 10.62  Motions and requests.

    Motions and requests may be filed with the Director of Practice or 
with the Administrative Law Judge.

[31 FR 10773, Aug. 13, 1966, as amended at 42 FR 38354, July 28, 1977]



Sec. 10.63  Representation.

    A respondent or proposed respondent may appear in person or he may 
be represented by counsel or other representative who need not be 
enrolled to practice before the Internal Revenue Service. The Director 
may be represented by an attorney or other employee of the Internal 
Revenue Service.



Sec. 10.64  Administrative Law Judge.

    (a) Appointment. An Administrative Law Judge appointed as provided 
by 5 U.S.C. 3105 (1966), shall conduct proceedings upon complaints for 
the disbarment or suspension of attorneys, certified public accountants, 
or enrolled agents.
    (b) Powers of Examiner. Among other powers, the Examiner shall have 
authority, in connection with any disbarment or suspension proceeding 
assigned or referred to him, to do the following:
    (1) Administer oaths and affirmations;
    (2) Make rulings upon motions and requests, which rulings may not be 
appealed from prior to the close of a hearing except, at the discretion 
of the Administrative Law Judge, in extraordinary circumstances;
    (3) Determine the time and place of hearing and regulate its course 
and conduct;
    (4) Adopt rules of procedure and modify the same from time to time 
as occasion requires for the orderly disposition of proceedings;
    (5) Rule upon offers of proof, receive relevant evidence, and 
examine witnesses;
    (6) Take or authorize the taking of depositions;
    (7) Receive and consider oral or written argument on facts or law;
    (8) Hold or provide for the holding of conferences for the 
settlement or simplification of the issues by consent of the parties;
    (9) Perform such acts and take such measures as are necessary or 
appropriate to the efficient conduct of any proceeding; and
    (10) Make initial decisions.

[31 FR 10773, Aug. 13, 1966, as amended at 42 FR 38353, 38354, July 28, 
1977]



Sec. 10.65  Hearings.

    (a) In general. An Administrative Law Judge will preside at the 
hearing on a complaint furnished under Sec. 10.54 for the disbarment or 
suspension of a practitioner. Hearings will be stenographically recorded 
and transcribed and the testimony of witnesses will be taken under oath 
or affirmation. Hearings will be conducted pursuant to 5 U.S.C. 556. A 
hearing in a proceeding requested under Sec. 10.76(g) will be conducted 
de novo.
    (b) Failure to appear. If either party to the proceeding fails to 
appear at the hearing, after due notice thereof has been sent to him, he 
shall be deemed to have waived the right to a hearing and the 
Administrative Law Judge may make his decision against the absent party 
by default.

[31 FR 10773, Aug. 13, 1966, as amended at 42 FR 38354, July 28, 1977; 
59 FR 31528, June 20, 1994]



Sec. 10.66  Evidence.

    (a) In general. The rules of evidence prevailing in courts of law 
and equity are not controlling in hearings on complaints for the 
disbarment or suspension of attorneys, certified public accountants, and 
enrolled agents. However, the Administrative Law Judge shall exclude 
evidence which is irrelevant, immaterial, or unduly repetitious.
    (b) Depositions. The deposition of any witness taken pursuant to 
Sec. 10.67 may be admitted.
    (c) Proof of documents. Official documents, records, and papers of 
the Internal Revenue Service and the Office of Director of Practice 
shall be admissible in evidence without the production of an officer or 
employee to authenticate them. Any such documents, records,

[[Page 208]]

and papers may be evidenced by a copy attested or identified by an 
officer or employee of the Internal Revenue Service or the Treasury 
Department, as the case may be.
    (d) Exhibits. If any document, record, or other paper is introduced 
in evidence as an exhibit, the Administrative Law Judge may authorize 
the withdrawal of the exhibit subject to any conditions which he deems 
proper.
    (e) Objections. Objections to evidence shall be in short form, 
stating the grounds of objection relied upon, and the record shall not 
include argument thereon, except as ordered by the Administrative Law 
Judge. Rulings on such objections shall be a part of the record. No 
exception to the ruling is necessary to preserve the rights of the 
parties.

[31 FR 10773, Aug. 13, 1966, as amended at 35 FR 13206, Aug. 19, 1970; 
42 FR 38354, July 28, 1977]



Sec. 10.67  Depositions.

    Depositions for use at a hearing may, with the written approval of 
the Administrative Law Judge be taken by either the Director of Practice 
or the respondent or their duly authorized representatives. Depositions 
may be taken upon oral or written interrogatories, upon not less than 10 
days' written notice to the other party before any officer duly 
authorized to administer an oath for general purposes or before an 
officer or employee of the Internal Revenue Service who is authorized to 
administer an oath in internal revenue matters. Such notice shall state 
the names of the witnesses and the time and place where the depositions 
are to be taken. The requirement of 10 days' notice may be waived by the 
parties in writing, and depositions may then be taken from the persons 
and at the times and places mutually agreed to by the parties. When a 
deposition is taken upon written interrogatories, any cross-examination 
shall be upon written interrogatories. Copies of such written 
interrogatories shall be served upon the other party with the notice, 
and copies of any written cross-interrogation shall be mailed or 
delivered to the opposing party at least 5 days before the date of 
taking the depositions, unless the parties mutually agree otherwise. A 
party upon whose behalf a deposition is taken must file it with the 
Administrative Law Judge and serve one copy upon the opposing party. 
Expenses in the reporting of depositions shall be borne by the party at 
whose instance the deposition is taken.

[31 FR 10773, Aug. 13, 1966, as amended at 42 FR 38354, July 28, 1977]



Sec. 10.68  Transcript.

    In cases where the hearing is stenographically reported by a 
Government contract reported, copies of the transcript may be obtained 
from the reporter at rates not to exceed the maximum rates fixed by 
contract between the Government and the reporter. Where the hearing is 
stenographically reported by a regular employee of the Internal Revenue 
Service, a copy thereof will be supplied to the respondent either 
without charge or upon the payment of a reasonable fee. Copies of 
exhibits introduced at the hearing or at the taking or depositions will 
be supplied to the parties upon the payment of a reasonable fee (Sec. 
501, Pub. L. 82-137, 65 Stat. 290 (31 U.S.C. 483a)).

[31 FR 10773, Aug. 13, 1966, as amended at 42 FR 38354, July 28, 1977]



Sec. 10.69  Proposed findings and conclusions.

    Except in cases where the respondent has failed to answer the 
complaint or where a party has failed to appear at the hearing, the 
Administrative Law Judge prior to making his decision, shall afford the 
parties a reasonable opportunity to submit proposed findings and 
conclusions and supporting reasons therefor.

[31 FR 10773, Aug. 13, 1966, as amended at 42 FR 38354, July 28, 1977]



Sec. 10.70  Decision of the Administrative Law Judge.

    As soon as practicable after the conclusion of a hearing and the 
receipt of any proposed findings and conclusions timely submitted by the 
parties, the Administrative Law Judge shall make the initial decision in 
the case. The decision shall include (a) a statement of findings and 
conclusions, as well as the reasons or basis therefor, upon all the

[[Page 209]]

material issues of fact, law, or discretion presented on the record, and 
(b) an order of disbarment, suspension, or reprimand or an order of 
dismissal of the complaint. The Administrative Law Judge shall file the 
decision with the Director of Practice and shall transmit a copy thereof 
to the respondent or his attorney of record. In the absence of an appeal 
to the Secretary of the Treasury, or review of the decision upon motion 
of the Secretary, the decision of the Administrative Law Judge shall 
without further proceedings become the decisions of the Secretary of the 
Treasury 30 days from the date of the Administrative Law Judge's 
decision.

[31 FR 10773, Aug. 13, 1966, as amended at 42 FR 38354, July 28, 1977]



Sec. 10.71  Appeal to the Secretary.

    Within 30 days from the date of the Administrative Law Judge's 
decision, either party may appeal to the Secretary of the Treasury. The 
appeal shall be filed with the Director of Practice in duplicate and 
shall include exceptions to the decision of the Administrative Law Judge 
and supporting reasons for such exceptions. If an appeal is filed by the 
Director of Practice, he shall transmit a copy thereof to the 
respondent. Within 30 days after receipt of an appeal or copy thereof, 
the other party may file a reply brief in duplicate with the Director of 
Practice. If the reply brief is filed by the Director, he shall transmit 
a copy of it to the respondent. Upon the filing of an appeal and a reply 
brief, if any, the Director of Practice shall transmit the entire record 
to the Secretary of the Treasury.

[31 FR 10773, Aug. 13, 1966, as amended at 42 FR 38354, July 28, 1977]



Sec. 10.72  Decision of the Secretary.

    On appeal from or review of the initial decision of the 
Administrative Law Judge, the Secretary of the Treasury will make the 
agency decision. In making his decision the Secretary of the Treasury 
will review the record or such portions thereof as may be cited by the 
parties to permit limiting of the issues. A copy of the Secretary's 
decision shall be transmitted to the respondent by the Director of 
Practice.

[31 FR 10773, Aug. 13, 1966, as amended at 42 FR 38354, July 28, 1977]



Sec. 10.73  Effect of disbarment or suspension; surrender of card.

    In case the final order against the respondent is for disbarment, 
the respondent shall not thereafter be permitted to practice before the 
Internal Revenue Service unless and until authorized to do so by the 
Director of Practice pursuant to Sec. 10.75. In case the final order 
against the respondent is for suspension, the respondent shall not 
thereafter be permitted to practice before the Internal Revenue Service 
during the period of suspension. If an enrolled agent is disbarred or 
suspended, he shall surrender his enrollment card to the Director of 
Practice for cancellation, in the case of disbarment, or for retention 
during the period of suspension.



Sec. 10.74  Notice of disbarment or suspension.

    Upon the issuance of a final order disbarring or suspending an 
attorney, certified public accountant, or enrolled agent, the Director 
of Practice shall give notice thereof to appropriate officers and 
employees of the Internal Revenue Service and to interested departments 
and agencies of the Federal Government. Notice in such manner as the 
Director of Practice may determine may be given to the proper 
authorities of the State by which the disbarred or suspended person was 
licensed to practice as an attorney or accountant.



Sec. 10.75  Petition for reinstatement.

    The Director of Practice may entertain a petition for reinstatement 
from any person disbarred from practice before the Internal Revenue 
Service after the expiration of 5 years following such disbarment. 
Reinstatement may not be granted unless the Director of Practice is 
satisfied that the petitioner, thereafter, is not likely to conduct 
himself contrary to the regulations in this

[[Page 210]]

part, and that granting such reinstatement would not be contrary to the 
public interest.

[31 FR 10773, Aug. 13, 1966, as amended at 35 FR 13206, Aug. 19, 1970]



Sec. 10.76  Expedited suspension upon criminal conviction or loss of license for cause.

    (a) When applicable. Whenever the Director has reason to believe 
that a practitioner is described in paragraph (b) of this section, the 
Director may institute a proceeding under this section to suspend the 
practitioner from practice before the Service.
    (b) To whom applicable. This section applies to any practitioner 
who, within 5 years of the date a complaint instituting a proceeding 
under this section is served--
    (1) Has had his or her license to practice as an attorney, certified 
public accountant, or actuary suspended or revoked for cause (not 
including a failure to pay a professional licensing fee) by any 
authority or court, agency, body, or board described in Sec. 10.51(g); 
or
    (2) Has been convicted of any crime under title 26 of the United 
States Code, or a felony under title 18 of the United States Code 
involving dishonesty or breach of trust.
    (c) Instituting a proceeding. A proceeding under this section will 
be instituted by a complaint that names the respondent, is signed by the 
Director, is filed in the Director's office, and is served according to 
the rules set forth in Sec. 10.57(a). The complaint must give a plain 
and concise description of the allegations that constitute the basis for 
the proceeding. The complaint, or a separate paper attached to the 
complaint, must notify the respondent--
    (1) Of the place and due date for filing an answer;
    (2) That a decision by default may be rendered if the respondent 
fails to file an answer as required;
    (3) That the respondent may request a conference with the Director 
to address the merits of the complaint and that any such request must be 
made in the answer; and
    (4) That the respondent may be suspended either immediately 
following the expiration of the period by which an answer must be filed 
or, if a conference is requested, immediately following the conference.
    (d) Answer. The answer to a complaint described in this section must 
be filed no later than 30 calendar days following the date the complaint 
is served, unless the Director extends the time for filing. The answer 
must be filed in accordance with the rules set forth in Sec. 10.58, 
except as otherwise provided in this section. A respondent is entitled 
to a conference with the Director only if the conference is requested in 
a timely filed answer. If a request for a conference is not made in the 
answer or the answer is not timely filed, the respondent will be deemed 
to have waived his or her right to a conference and the Director may 
suspend such respondent at any time following the date on which the 
answer was due.
    (e) Conference. The Director or his or her designee will preside at 
a conference described in this section. The conference will be held at a 
place and time selected by the Director, but no sooner than 14 calendar 
days after the date by which the answer must be filed with the Director, 
unless the respondent agrees to an earlier date. An authorized 
representative may represent the respondent at the conference. Following 
the conference, upon a finding that the respondent is described in 
paragraph (b) of this section, or upon the respondent's failure to 
appear at the conference either personally or through an authorized 
representative, the Director may immediately suspend the respondent from 
practice before the Service.
    (f) Duration of suspension. A suspension under this section will 
commence on the date that written notice of the suspension is issued. A 
practitioner's suspension will remain effective until the earlier of the 
following--
    (1) The Director lifts the suspension after determining that the 
practitioner is no longer described in paragraph (b) of this section or 
for any other reason; or
    (2) The suspension is lifted by an Administrative Law Judge or the 
Secretary of the Treasury in a proceeding referred to in paragraph (g) 
of this section and instituted under Sec. 10.54.
    (g) Proceeding instituted under Sec. 10.54. If the Director suspends 
a practitioner

[[Page 211]]

under this Sec. 10.76, the practitioner may ask the Director to issue a 
complaint under Sec. 10.54. The request must be made in writing within 2 
years from the date on which the practitioner's suspension commences. 
The Director must issue a complaint requested under this paragraph 
within 30 calendar days of receiving the request.

[59 FR 31528, June 20, 1994]



      Subpart D--Rules Applicable to Disqualification of Appraisers

    Source: 50 FR 42016, Oct. 17, 1985, unless otherwise noted.



Sec. 10.77  Authority to disqualify; effect of disqualification.

    (a) Authority to disqualify. Pursuant to section 156 of the Deficit 
Reduction Act of 1984, 98 Stat. 695, amending 31 U.S.C. 330, the 
Secretary of the Treasury, after due notice and opportunity for hearing 
may disqualify any appraiser with respect to whom a penalty has been 
assessed after July 18, 1984, under section 6701(a) of the Internal 
Revenue Code of 1954, as amended (26 U.S.C. 6701(a)).
    (b) Effect of disqualification. If any appraiser is disqualified 
pursuant to 31 U.S.C. 330 and this subpart:
    (1) Appraisals by such appraiser shall not have any probative effect 
in any administrative proceeding before the Department of the Treasury 
or the Internal Revenue Service; and
    (2) Such appraiser shall be barred from presenting evidence or 
testimony in any such administrative proceeding. Paragraph (b)(1) of 
this section shall apply to appraisals made by such appraiser after the 
effective date of disqualification, but shall not apply to appraisals 
made by the appraiser on or before such date. Notwithstanding the 
foregoing sentence, an appraisal otherwise barred from admission into 
evidence pursuant to paragraph (b)(1) of this section may be admitted 
into evidence solely for the purpose of determining the taxpayer's 
reliance in good faith on such appraisal. Paragraph (b)(2) of this 
section shall apply to the presentation of testimony or evidence in any 
administrative proceeding after the date of such disqualification, 
regardless of whether such testimony or evidence would pertain to an 
appraisal made prior to such date.



Sec. 10.78  Institution of proceeding.

    (a) In general. Whenever the Director of Practice is advised or 
becomes aware that a penalty has been assessed against an appraiser 
under 26 U.S.C. 6701(a), he/she may reprimand such person or institute a 
proceeding for disqualification of such appraiser through the filing of 
a complaint. Irrespective of whether a proceeding for disqualification 
has been instituted against an appraiser, the Director of Practice may 
confer with an appraiser against whom such a penalty has been assessed 
concerning such penalty.
    (b) Voluntary disqualification. In order to avoid the initiation or 
conclusion of a disqualification proceeding, an appraiser may offer his/
her consent to disqualification. The Director of Practice, in his/her 
discretion, may disqualify an appraiser in accordance with the consent 
offered.



Sec. 10.79  Contents of complaint.

    (a) Charges. A proceeding for disqualification of an appraiser shall 
be instituted through the filing of a complaint, which shall give a 
plain and concise description of the allegations that constitute the 
basis for the proceeding. A complaint shall be deemed sufficient if it 
refers to the penalty previously imposed on the respondent under section 
6701(a) of the Internal Revenue Code of 1954, as amended (26 U.S.C. 
6701(a)), and advises him/her of the institution of the proceeding.
    (b) Demand for answer. In the complaint, or in a separate paper 
attached to the complaint, notification shall be given of the place and 
time within which the respondent shall file his/her answer, which time 
shall not be less than 15 days from the date of service of the 
complaint, and notice shall be given that a decision by default may be 
rendered against the respondent in the event there is failure to file an 
answer.



Sec. 10.80  Service of complaint and other papers.

    (a) Complaint. The complaint or a copy thereof may be served upon 
the respondent by certified mail, or first-

[[Page 212]]

class mail as hereinafter provided, by delivering it to the respondent 
or his/her attorney or agent of record either in person or by leaving it 
at the office or place of business of the respondent, attorney or agent, 
or in any other manner that has been agreed to by the respondent. Where 
the service is by certified mail, the return post office receipt duly 
signed by or on behalf of the respondent shall be proof of service. If 
the certified mail is not claimed or accepted by the respondent and is 
returned undelivered, complete service may be made by mailing the 
complaint to the respondent by first-class mail, addressed to the 
respondent at the last address known to the Director of Practice. If 
service is made upon the respondent in person or by leaving the 
complaint at the office or place of business of the respondent, the 
verified return by the person making service, setting forth the manner 
of service, shall be proof of such service.
    (b) Service of papers other than complaint. Any paper other than the 
complaint may be served as provided in paragraph (a) of this section or 
by mailing the paper by first-class mail to the respondent at the last 
address known to the Director of Practice, or by mailing the paper by 
first-class mail to the respondent's attorney or agent of record. Such 
mailing shall constitute complete service. Notices may be served upon 
the respondent or his/her attorney or agent of record by telegraph.
    (c) Filing of papers. Whenever the filing of a paper is required or 
permitted in connection with a disqualification proceeding under this 
subpart or by rule or order of the Administrative Law Judge, the paper 
shall be filed with the Director of Practice, Treasury Department, 
Internal Revenue Service, Washington, DC 29224. All papers shall be 
filed in duplicate.



Sec. 10.81  Answer.

    (a) Filing. The respondent's answer shall be filed in writing within 
the time specified in the complaint or notice of institution of the 
proceeding, unless on application the time is extended by the Director 
of Practice or the Administrative Law Judge. The answer shall be filed 
in duplicate with the Director of Practice.
    (b) Contents. The answer shall contain a statement of facts that 
constitute the grounds of defense, and it shall specifically admit or 
deny each allegation set forth in the complaint, except that the 
respondent shall not deny a material allegation in the complaint that 
he/she knows to be true, or state that he/she is without sufficient 
information to form a belief when in fact he/she possesses such 
information.
    (c) Failure to deny or answer allegations in the complaint. Every 
allegation in the complaint which is not denied in the answer shall be 
deemed to be admitted and may be considered as proved, and no further 
evidence in respect of such allegation need be adduced at a hearing. 
Failure to file an answer within the time prescribed in the notice to 
the respondent, except as the time for answer is extended by the 
Director of Practice or the Administrative Law Judge, shall constitute 
an admission of the allegations of the complaint and a waiver of 
hearing, and the Administrative Law Judge may make his/her decision by 
default without a hearing or further procedure.



Sec. 10.82  Supplemental charges.

    If it appears that the respondent in his/her answer, falsely and in 
bad faith, denies a material allegation of fact in the complaint or 
states that the respondent has no knowledge sufficient to form a belief, 
when he/she in fact possesses such information, or if it appears that 
the respondent has knowingly introduced false testimony during 
proceedings for his/her disqualification, the Director of Practice may 
thereupon file supplemental charges against the respondent. Such 
supplemental charges may be tried with other charges in the case, 
provided the respondent is given due notice thereof and is afforded an 
opportunity to prepare a defense thereto.



Sec. 10.83  Reply to answer.

    No reply to the respondent's answer shall be required, and any new 
matter in the answer shall be deemed to be denied, but the Director of 
Practice may file a reply in his/her discretion or at

[[Page 213]]

the request of the Administrative Law Judge.



Sec. 10.84  Proof, variance, amendment of pleadings.

    In the case of a variance between the allegations in a pleading and 
the evidence adduced in support of the pleading, the Administrative Law 
Judge may order or authorize amendment of the pleading to conform to the 
evidence; provided, that the party who would otherwise be prejudiced by 
the amendment is given reasonable opportunity to meet the allegations of 
the pleading as amended, and the Administrative Law Judge shall make 
findings on any issue presented by the pleadings as so amended.



Sec. 10.85  Motions and requests.

    Motions and requests may be filed with the Director of Practice or 
with the Administrative Law Judge.



Sec. 10.86  Representation.

    A respondent may appear in person or may be represented by counsel 
or other representative. The Director of Practice may be represented by 
an attorney or other employee of the Department of the Treasury.



Sec. 10.87  Administrative Law Judge.

    (a) Appointment. An Administrative Law Judge appointed as provided 
by 5 U.S.C. 3105, shall conduct proceedings upon complaints for the 
disqualification of appraisers.
    (b) Powers of Administrative Law Judge. Among other powers, the 
Administrative Law Judge shall have authority, in connection with any 
disqualification proceeding assigned or referred to him/her, to do the 
following:
    (1) Administer oaths and affirmations;
    (2) Make rulings upon motions and requests, which rulings may not be 
appealed from prior to the close of a hearing except at the discretion 
of the Administrative Law Judge, in extraordinary circumstances;
    (3) Determine the time and place of hearing and regulate its course 
and conduct;
    (4) Adopt rules of procedure and modify the same from time to time 
as occasion requires for the orderly disposition of proceedings;
    (5) Rule upon offers of proof, receive relevant evidence, and 
examine witnesses;
    (6) Take or authorize the taking of depositions;
    (7) Receive and consider oral or written argument on facts or law;
    (8) Hold or provide for the holding of conferences for the 
settlement or simplification of the issues by consent of the parties;
    (9) Perform such acts and take such measures as are necessary or 
appropriate to the efficient conduct of any proceeding; and
    (10) Make initial decisions.



Sec. 10.88  Hearings.

    (a) In general. The Administrative Law Judge shall preside at the 
hearing on a complaint for the disqualification of an appraiser. 
Hearings shall be stenographically recorded and transcribed and the 
testimony of witnesses shall be taken under oath or affirmation. 
Hearings will be conducted pursuant to 5 U.S.C. 556.
    (b) Failure to appear. If either party to the proceeding fails to 
appear at the hearing after due notice thereof has been sent to him/her, 
the right to a hearing shall be deemed to have been waived and the 
Administrative Law Judge may make a decision by default against the 
absent party.



Sec. 10.89  Evidence.

    (a) In general. The rules of evidence prevailing in courts of law 
and equity are not controlling in hearings on complaints for the 
disqualification of appraisers. However, the Administrative Law Judge 
shall exclude evidence which is irrelevant, immaterial, or unduly 
repetitious.
    (b) Depositions. The deposition of any witness taken pursuant to 
Sec. 10.90 may be admitted.
    (c) Proof of documents. Official documents, records, and papers of 
the Internal Revenue Service or the Department of the Treasury shall be 
admissible in evidence without the production of an officer or employee 
to authenticate them. Any such documents, records, and papers may be 
evidenced by a copy attested or identified by an officer or

[[Page 214]]

employee of the Internal Revenue Service or the Department of the 
Treasury, as the case may be.
    (d) Exhibits. If any document, record, or other paper is introduced 
in evidence as an exhibit, the Administrative Law Judge may authorize 
the withdrawal of the exhibit subject to any conditions which he/she 
deems proper.
    (e) Objections. Objections to evidence shall be in short form, 
stating the grounds of objection relied upon, and the record shall not 
include argument thereon, except as ordered by the Administrative Law 
Judge. Rulings on such objections shall be a part of the record. No 
exception to the ruling is necessary to preserve the rights of the 
parties.



Sec. 10.90  Depositions.

    Depositions for use at a hearing may, with the written approval of 
the Administrative Law Judge, be taken either by the Director of 
Practice or the respondent or their duly authorized representatives. 
Depositions may be taken upon oral or written interrogatories, upon not 
less than 10 days' written notice to the other party before any officer 
duly authorized to administer an oath for general purposes or before an 
officer or employee of the Internal Revenue Service who is authorized to 
administer an oath in internal revenue matters. Such notice shall state 
the names of the witnesses and the time and place where the depositions 
are to be taken. The requirement of 10 days' notice may be waived by the 
parties in writing, and depositions may then be taken from the persons 
and at the times and places mutually agreed to by the parties. When a 
deposition is taken upon written interrogatories, any cross-examination 
shall be upon written interrogatories. Copies of such written 
interrogatories shall be served upon the other party with the notice, 
and copies of any written cross-interrogation shall be mailed or 
delivered to the opposing party at least 5 days before the date of 
taking the depositions, unless the parties mutually agree otherwise. A 
party upon whose behalf a deposition is taken must file it with the 
Administrative Law Judge and serve one copy upon the opposing party. 
Expenses in the reporting of depositions shall be borne by the party at 
whose instance the deposition is taken.



Sec. 10.91  Transcript.

    In cases where the hearing is stenographically reported by a 
Government contract reporter, copies of the transcript may be obtained 
from the reporter at rates not to exceed the maximum rates fixed by 
contract between the Government and the reporter. Where a hearing is 
stenographically reported by a regular employee of the Internal Revenue 
Service, a copy thereof will be supplied to the respondent either 
without charge or upon the payment of a reasonable fee. Copies of 
exhibits introduced at the hearing or at the taking of depositions will 
be supplied to the parties upon the payment of a reasonable fee (Sec. 
501, Pub. L. 82-137, 65 Stat. 290 (31 U.S.C. 483a)).



Sec. 10.92  Proposed findings and conclusions.

    Except in cases where the respondent has failed to answer the 
complaint or where a party has failed to appear at the hearing, the 
Administrative Law Judge, prior to making a decision, shall afford the 
parties a reasonable opportunity to submit proposed findings and 
conclusions and supporting reasons therefor.



Sec. 10.93  Decision of the Administrative Law Judge.

    As soon as practicable after the conclusion of a hearing and the 
receipt of any proposed findings and conclusions timely submitted by the 
parties, the Administrative Law Judge shall make the initial decision in 
the case. The decision shall include (a) a statement of findings and 
conclusions, as well as the reasons or basis therefor, upon all the 
material issues of fact, law, or discretion presented on the record, and 
(b) an order of disqualification or an order of dismissal of the 
complaint. The Administrative Law Judge shall file the decision with the 
Director of Practice and shall transmit a copy thereof to the respondent 
or his attorney of record. In the absence of an appeal to the Secretary 
of the Treasury, or review of the decision upon motion of the Secretary, 
the decision of the Administrative Law

[[Page 215]]

Judge shall without further proceedings become the decision of the 
Secretary of the Treasury 30 days from the date of the Administrative 
Law Judge's decision.



Sec. 10.94  Appeal to the Secretary.

    Within 30 days from the date of the Administrative Law Judge's 
decision, either party may appeal such decision to the Secretary of the 
Treasury. If an appeal is by the respondent, the appeal shall be filed 
with the Director of Practice in duplicate and shall include exceptions 
to the decision of the Administrative Law Judge and supporting reasons 
for such exceptions. If an appeal is filed by the Director of Practice, 
a copy thereof shall be transmitted to the respondent. Within 30 days 
after receipt of an appeal or copy thereof, the other party may file a 
reply brief in duplicate with the Director of Practice. If the reply 
brief is filed by the Director, a copy shall be transmitted to the 
respondent. Upon the filing of an appeal and a reply brief, if any, the 
Director of Practice shall transmit the entire record to the Secretary 
of the Treasury.



Sec. 10.95  Decision of the Secretary.

    On appeal from or review of the initial decision of the 
Administrative Law Judge, the Secretary of the Treasury shall make the 
agency decision. In making such decision, the Secretary of the Treasury 
will review the record or such portions thereof as may be cited by the 
parties. A copy of the Secretary's decision shall be transmitted to the 
respondent by the Director of Practice.



Sec. 10.96  Final order.

    Upon the issuance of a final order disqualifying an appraiser, the 
Director of Practice shall give notice thereof to appropriate officers 
and employees of the Internal Revenue Service and to interested 
departments and agencies of the Federal Government.



Sec. 10.97  Petition for reinstatement.

    The Director of Practice may entertain a petition for reinstatement 
from any disqualified appraiser after the expiration of 5 years 
following such disqualification. Reinstatement may not be granted unless 
the Director of Practice is satisfied that the petitioner, thereafter, 
is not likely to conduct himself/herself contrary to 26 U.S.C. 6701(a), 
and that granting such reinstatement would not be contrary to the public 
interest.



                      Subpart E--General Provisions



Sec. 10.98  Records.

    (a) Availability. There are made available to public inspection at 
the Office of Director of Practice the roster of all persons enrolled to 
practice, the roster of all persons disbarred or suspended from 
practice, and the roster of all disqualified appraisers. Other records 
may be disclosed upon specific request, in accordance with the 
disclosure regulations of the Internal Revenue Service and the Treasury 
Department.
    (b) Disciplinary procedures. A request by a practitioner that a 
hearing in a disciplinary proceeding concerning him be public, and that 
the record thereof be made available for inspection by interested 
persons may be granted if agreement is reached by stipulation in advance 
to protect from disclosure tax information which is confidential, in 
accordance with the applicable statutes and regulations.

[31 FR 10773, Aug. 13, 1966. Redesignated at 50 FR 42016, Oct. 17, 1985, 
and amended at 50 FR 42018, Oct. 17, 1985]



Sec. 10.100  Saving clause.

    Any proceeding for the disbarment or suspension of an attorney, 
certified public accountant, or enrolled agent, instituted but not 
closed prior to the effective date of these revised regulations, shall 
not be affected by such regulations. Any proceeding under this part 
based on conduct engaged in prior to the effective date of these 
regulations may be instituted subsequent to such effective date.

[50 FR 42019, Oct. 17, 1985]



Sec. 10.101  Special orders.

    The Secretary of the Treasury reserves the power to issue such 
special orders as he may deem proper in any cases within the purview of 
this part.

[31 FR 10773, Aug. 13, 1966. Redesignated at 50 FR 42016, Oct. 17, 1985]

[[Page 216]]



PART 11--OPERATION OF VENDING FACILITIES BY THE BLIND ON FEDERAL PROPERTY UNDER THE CONTROL OF THE DEPARTMENT OF THE TREASURY--Table of Contents




Sec.
11.1  Purpose.
11.2  Policy.
11.3  Definitions.
11.4  Establishing vending facilities.
11.5  Application for permit.
11.6  Terms of permit.
11.7  Enforcement procedures.
11.8  Reports.

    Authority: 49 Stat. 1559, as amended by Act of Aug. 3, 1954, Pub. L. 
83-565, 68 Stat. 663, as further amended by Pub. L. 93-516, 88 Stat. 
1622, (20 U.S.C. 107).

    Source: 58 FR 57560, Oct. 26, 1993, unless otherwise noted.



Sec. 11.1  Purpose.

    This part contains policy and procedures to ensure the priority of 
blind vendors in operating vending facilities on property controlled by 
the Department of the Treasury. The provisions of this part apply to all 
bureaus, the Departmental Offices and the Office of Inspector General.



Sec. 11.2  Policy.

    Blind vendors licensed by State licensing agencies designated by the 
Secretary of Education under the provisions of the Randolph-Sheppard Act 
(20 U.S.C. 107 et seq.) shall be given priority in the location and 
operation of vending facilities, including vending machines, on property 
controlled by the Department of the Treasury, provided the location or 
operation of such facility would not adversely affect the interests of 
the United States. Treasury bureaus shall ensure that the collection and 
distribution of vending machine income from vending machines on 
Treasury-controlled property shall be in compliance with the regulations 
set forth in 34 CFR 395.32. Blind vendors shall also be given priority 
on Treasury-controlled property in the operation of cafeterias according 
to 34 CFR 395.33.



Sec. 11.3  Definitions.

    Terms used are defined in 34 CFR 395.1, except that as used in this 
part, the following terms shall have the following meanings:
    (a) Department of the Treasury controlled property means any Federal 
building, land, or other real property owned, leased, or occupied by a 
bureau or office of the Department of the Treasury, of which the 
maintenance, operation, and protection is under the control of the 
Department of the Treasury.
    (b) The term bureau means any bureau or office of the Department of 
the Treasury and such comparable administrative units as may hereafter 
be created or made a part of the Department, and includes the 
Departmental Offices and the Office of Inspector General. The ``head of 
the bureau'' for the Departmental Offices is the Deputy Assistant 
Secretary (Administration).



Sec. 11.4  Establishing vending facilities.

    (a) Treasury bureaus shall not acquire a building by ownership, 
rent, or lease, or occupy a building to be constructed, substantially 
altered, or renovated unless it is determined that such buildings 
contain or will contain a ``satisfactory site,'' as defined in 34 CFR 
395.1(q), for the location and operation of a blind vending facility.
    (b) In accordance with 34 CFR 395.31, Treasury bureaus shall provide 
the appropriate State licensing agency with written notice of the 
intention to acquire or otherwise occupy such building. Providing 
notification shall be the responsibility of the bureau on-site property 
management official.



Sec. 11.5  Application for permit.

    Applications for permits for the operation of vending facilities 
other than cafeterias shall be made in writing and submitted for the 
review and approval of the head of the appropriate Treasury bureau or 
that official's designee.



Sec. 11.6  Terms of permit.

    Every permit shall describe the location of the vending facility, 
including any vending machines located on other than facility premises, 
and shall be subject to the following provisions:
    (a) The permit shall be issued in the name of the applicant State 
licensing agency which shall perform the responsibilities set forth in 
34 CFR 395.35 (a);

[[Page 217]]

    (b) The permit shall be issued for an indefinite period of time 
subject to suspension or termination on the basis of compliance or 
noncompliance with agreed upon terms.
    (c) The permit shall provide that:
    (1) No charge shall be made to the State licensing agency for normal 
cleaning, maintenance, and repair of the building structure in and 
adjacent to the vending facility areas;
    (2) Cleaning necessary for sanitation; the maintenance of vending 
facilities and vending machines in an orderly condition at all times; 
the installation, maintenance, repair, replacement, servicing, and 
removal of vending facility equipment shall be without cost to the 
Department of the Treasury; and
    (3) Articles sold at vending facilities operated by blind licensees 
may consist of newspapers, periodicals, publications, confections, 
tobacco products, foods, beverages, chances for any lottery authorized 
by State law and conducted by an agency of a State within such State, 
and other articles or services as are determined by the State licensing 
agency, in consultation with the appropriate Treasury bureau, to be 
suitable for a particular location. Such articles and services may be 
dispensed automatically or manually and may be prepared on or off the 
premises.
    (d) The permit shall further provide that vending facilities shall 
be operated in compliance with applicable health, sanitation, and 
building codes or ordinances.
    (e) The permit shall further provide that installation, 
modification, relocation, removal, and renovation of vending facilities 
shall be subject to the prior approval and supervision of the bureau on-
site property management officer of the appropriate Treasury bureau and 
the State licensing agency; that costs of relocations initiated by the 
State licensing agency shall be paid by the State licensing agency; that 
costs of relocations initiated by a Treasury bureau shall be paid by the 
Treasury bureau; and that all plumbing, electrical, and mechanical costs 
related to the renovation of existing facilities shall be paid by the 
appropriate Treasury bureau.
    (f) The operation of a cafeteria by a blind vendor shall be covered 
by a contractual agreement and not by a permit. The State licensing 
agency shall be expected to perform under the same contractual 
arrangement applicable to commercial cafeteria operators.



Sec. 11.7  Enforcement procedures.

    (a) The State licensing agency shall attempt to resolve day-to-day 
problems pertaining to the operation of the vending facility in an 
informal manner with the participation of the blind vendor and the on-
site property management officials of the respective Treasury bureaus 
who are responsible for the Treasury-controlled property.
    (b) Unresolved disagreements concerning the terms of the permit, the 
Act, or the regulations in this part and any other unresolved matters 
shall be reported in writing to the State licensing agency supervisory 
personnel by the bureau on-site supervisory property management official 
in an attempt to resolve the issue.



Sec. 11.8  Reports.

    This section establishes a Department of the Treasury reporting 
requirement to comply with 34 CFR 395.38. At the end of each fiscal 
year, each property managing bureau shall submit a report to the 
Director, Office of Management Support Systems, Departmental Offices, 
containing the elements set forth in 34 CFR 395.38. The Director, Office 
of Management Support Systems, shall submit a consolidated report to the 
Secretary of Education after the end of the fiscal year.



PART 12--RESTRICTION OF SALE AND DISTRIBUTION OF TOBACCO PRODUCTS--Table of Contents




Sec.
12.1  Purpose.
12.2  Definitions.
12.3  Sale of tobacco products in vending machines prohibited.
12.4  Distribution of free samples of tobacco products prohibited.
12.5  Prohibitions not applicable in areas designated by the Secretary 
          of the Treasury.

    Authority: Sec. 636, Pub. L. 104-52, 109 Stat. 507.

    Source: 61 FR 25396, May 21, 1996, unless otherwise noted.

[[Page 218]]



Sec. 12.1  Purpose.

    This part contains regulations implementing the ``Prohibition of 
Cigarette Sales to Minors in Federal Buildings Act,'' Public Law 104-52, 
Section 636, with respect to buildings under the jurisdiction of the 
Department of the Treasury.



Sec. 12.2  Definitions.

    As used in this part--
    (1) The term Federal building under the jurisdiction of the 
Secretary of the Treasury includes the real property on which such 
building is located;
    (2) The term minor means an individual under the age of 18 years; 
and
    (3) The term tobacco product means cigarettes, cigars, little 
cigars, pipe tobacco, smokeless tobacco, snuff, and chewing tobacco.



Sec. 12.3  Sale of tobacco products in vending machines prohibited.

    The sale of tobacco products in vending machines located in or 
around any Federal building under the jurisdiction of the Secretary of 
the Treasury is prohibited, except in areas designated pursuant to 
Sec. 12.5 of this part.



Sec. 12.4  Distribution of free samples of tobacco products prohibited.

    The distribution of free samples of tobacco products in or around 
any Federal building under the jurisdiction of the Secretary of the 
Treasury is prohibited, except in areas designated pursuant to Sec. 12.5 
of this part.



Sec. 12.5  Prohibitions not applicable in areas designated by the Secretary of the Treasury.

    The prohibitions set forth in this part shall not apply in areas 
designated by the Secretary as exempt from the prohibitions, but all 
designated areas must prohibit the presence of minors.



PART 13--PROCEDURES FOR PROVIDING ASSISTANCE TO STATE AND LOCAL GOVERNMENTS IN PROTECTING FOREIGN DIPLOMATIC MISSIONS--Table of Contents




Sec.
13.1  Purpose.
13.2  Definitions.
13.3  Eligibility to receive protection or reimbursement.
13.4  Requests for protection and advance notices of reimbursement 
          requests.
13.5  Utilization of the services, personnel, equipment, and facilities 
          of State and local govenments.
13.6  Reimbursement of State and local governments.
13.7  Reimbursement when the Assistant Secretary makes no determination 
          to utilize State and local government services, personnel, 
          equipment and facilities.
13.8  Protection for motorcades and other places associated with a visit 
          qualifying under section 202(7) of Title 3, U.S. Code.

Appendix I(F) to Part 13--Estimated Overhead and Administrative Costs
Appendix II(F) to Part 13--Overhead and Administrative Costs
Appendix I to Part 13--Form of Request for Assistance
Appendix II to Part 13--Form of Bill for Reimbursement

    Authority: Secs. 202 and 208, Title 3, U.S. Code, as amended and 
added, respectively by Pub. L. 94-196 (89 Stat. 1109); 5 U.S.C. 301.

    Source: 41 FR 55179, Dec. 17, 1976, unless otherwise noted.



Sec. 13.1  Purpose.

    This part prescribes the procedures governing protective and 
financial assistance to State and local governments when an 
extraordinary protective need requires the protection of foreign 
diplomatic missions as authorized by sections 202 and 208 of Title 3, 
U.S. Code, as amended and added, respectively, by Pub. L. 94-196 (89 
Stat. 1109).



Sec. 13.2  Definitions.

    As used in this part, these terms shall have the following meaning:
    (a) The term Assistant Secretary means the Assistant Secretary of 
the Treasury (Enforcement and Operations).
    (b) The term extraordinary protective need means a need for 
protection requiring measurable reinforcements of police personnel or 
equipment, or both, significantly beyond the ordinary deployment of the 
State or local government, arising out of actual or potential violence 
related to: (1) Confrontations between nationalist or other groups, (2) 
threats or acts of violence by terrorist or other groups, (3) a specific 
diplomatic event or visit, or (4) a specific international event.

[[Page 219]]

    (c) The term foreign diplomatic mission means a mission (including 
foreign consular offices) of a foreign country located in the United 
States.
    (d) The term full time officers means permanent officers whose 
duties as foreign diplomatic officers occupy their full time.
    (e) The term international organization means those international 
organizations designated by Presidential Executive Order as being 
entitled to the privileges, immunities, and exemptions accorded under 
the International Organization Immunities Act of December 29, 1945 (22 
U.S.C. 288).
    (f) The term metropolitan area means a city in the United States 
(other than the District of Columbia) and those areas contiguous to it.
    (g) The term observer mission means a mission invited to participate 
in the work of an international organization by that organization. The 
invitation to participate shall be extended by the international 
organization pursuant to the same internal rules of the international 
organization as are applicable to any permanent mission.
    (h) The term permanent mission means a fixed continuing mission 
staffed by full time officers and maintained by a member state of an 
international organization.
    (i) The term temporary domicile means a domicile of limited duration 
of a visiting foreign dignitary or officer in connection with a visit to 
a permanent or observer mission to an international organization in a 
metropolitan area.

[41 FR 55179, Dec. 17, 1976, as amended at 45 FR 30621, May 9, 1980]



Sec. 13.3  Eligibility to receive protection or reimbursement.

    (a) Protection, as determined by the Assistant Secretary, will be 
provided by the United States Secret Service Uniformed Division, 
pursuant to section 202 of Title 3, U.S. Code, as amended by Pub. L. 94-
196, only to foreign diplomatic missions located in metropolitan areas 
(other than the District of Columbia) where there are located twenty or 
more such missions, as determined by the Secretary of State, which are 
headed by full time officers. According to present State Department 
figures, the following metropolitan areas have 20 or more such foreign 
diplomatic missions: Chicago, Houston, Los Angeles, Miami, New York 
City, New Orleans and San Francisco. The protection provided by State or 
local governments rather than the United States Secret Service Uniformed 
Division will be reimbursed pursuant to section 208(a) of Title 3, U.S. 
Code and Secs. 13.6, 13.7 and 13.8 of this part.
    (b) Protection or reimbursement will be provided for the 
metropolitan areas described in paragraph (a) of this section only if:
    (1) The affected metropolitan area requests such protection or 
reimbursement;
    (2) The Assistant Secretary determines that an extraordinary 
protective need exists; and
    (3) The extraordinary need arises in association with a visit to or 
occurs at or, pursuant to Sec. 13.6, in the vicinity of: (i) A permanent 
mission to an international organization of which the United States is a 
member, (ii) an observer mission invited to participate in the work of 
an international organization of which the United States is a member, or 
(iii) in the case of a visit by a foreign official or dignitary to 
participate in an activity of an international organization of which the 
United States is a member, a foreign diplomatic mission, including a 
consular office of the same country as the visitor.
    (c) Protection (or reimbursement) may be extended at places of 
temporary domicile in connection with a visit under paragraph (b) of 
this section.
    (d) Where an extraordinary protective need exists, protection (or 
reimbursement) may be extended to missions as described in 
Secs. 13.3(b)(3) (i) and (ii) whether or not associated with a visit by 
a foreign dignitary.

[45 FR 30621, May 9, 1980]



Sec. 13.4  Requests for protection and advance notices of reimbursement requests.

    (a) In cases where they believe that an extraordinary protective 
need exists, the State or local governments may request that protection 
be provided by the United States Secret Service Uniformed Division; or 
they may

[[Page 220]]

give advance notice of their intention to provide, on a reimbursable 
basis, all or part of the protection themselves.
    (1) Requests for protection or advance notices of reimbursement 
requests shall be made to: Assistant Secretary (Enforcement and 
Operations), Department of the Treasury, Washington, DC 20220. Each 
government requesting the protection authorized pursuant to section 202 
of Title 3, U.S. Code, as amended by Pub. L. 94-196, or which intends to 
seek reimbursement pursuant to section 208(a) of Title 3, U.S. Code and 
Secs. 13.6 and 13.7 of this part, shall submit an application describing 
the extraordinary protective need. Applications made pursuant to this 
section shall be submitted to the Assistant Secretary 14 days before the 
extraordinary protective need arises. In association with a visit, the 
application shall include the name and title of the visiting foreign 
official or dignitary, the country he represents, and the name and 
location of the international organization or mission he will be 
visting. The application shall also include, if available, the temporary 
domicile of the visiting official or dignitary and his schedule, 
including dates and times of arrival and departure from the United 
States. If the extraordinary protective need occurs at a permanent 
mission to an international organization of which the United States is a 
member or an observer mission invited to participate in the work of such 
organization, or if another foreign diplomatic mission of the country 
qualifies under Sec. 13.3 (b) or (d), the application shall include the 
name and location of the mission.
    (b) State and local governments shall also indicate on the 
application whether they are requesting the use of the United States 
Secret Service Uniformed Division or whether they are giving advance 
notice of their intention to provide, on a reimbursable basis, all or 
part of the protection themselves. In order to assist the Assistant 
Secretary in determining whether to utilize the United States Secret 
Service Uniformed Division to meet all or part of the extraordinary 
protective need, or to utilize, with their consent, the services, 
personnel, equipment, and facilities of the State or local government, 
or both, the application must include an estimate of the approximate 
number of personnel by grade and rank, the services, equipment, and 
facilities required, along with an estimate of the cost of such 
personnel, services, equipment and facilities. This application must be 
submitted in a format consistent with that illustrated in Appendix I of 
this part.
    (1) Upon receipt of a request for protection pursuant to paragraph 
(a)(1) of this section and for the purposes of reimbursement pursuant to 
Secs. 13.6 and 13.7, the Assistant Secretary will determine whether an 
extraordinary protective need exists and whether the United States 
Secret Service Uniformed Division will be used for all, part or none of 
the protection. In making determinations, the Assistant Secretary may 
consult with appropriate Federal, State and local government agencies.

[45 FR 30621, May 9, 1980]



Sec. 13.5  Utilization of the services, personnel, equipment, and facilities of State and local governments.

    The Assistant Secretary may decide to utilize, on a reimbursable 
basis, the services, personnel, equipment, and facilities of State and 
local governments of the affected metropolitan area desiring to provide 
protection, or he may utilize the United States Secret Service Uniformed 
Division, or both. If the United States Secret Service Uniformed 
Division is utilized to meet all the extraordinary protective need, the 
governments of the affected metropolitan area will not be reimbursed. If 
the United States Secret Service Uniformed Division is utilized to meet 
part of the extraordinary protective needs, the governments of the 
affected metropolitan area will be reimbursed for that qualifying 
portion of the protection which is provided by State and local police 
authorities. If the Assistant Secretary decides to utilize, with their 
consent, the services, personnel, equipment, and facilities of such 
State and local governments to meet the extraordinary protective need, 
he will so

[[Page 221]]

notify the government as soon as possible after receipt of a request for 
protection or an advance notice of a reimbursement request made pursuant 
to Sec. 13.4.

[45 FR 30622, May 9, 1980]



Sec. 13.6  Reimbursement of State and local governments.

    (a) State and local governments providing services, personnel, 
equipment, or facilities to the affected metropolitan area pursuant to 
Sec. 13.5 may forward to the Assistant Secretary a bill for 
reimbursement for the personel, equipment, facilities, and services 
utilized in meeting the extraordinary protective need. The bill shall be 
in accordance with the format in Appendix II of this part. The Assistant 
Secretary will reimburse only those costs directly related to the 
extraordinary protective need including personnel and equipment costs 
resulting from assignments made to assist in providing security at an 
otherwise qualified location in connection with the arrival, departure, 
or during the visit of a foreign dignitary. Reimbursable costs will also 
include the costs for establishing both fixed posts at a qualified 
location and protective perimeters outside of a qualified location when 
it is clearly established to the satisfaction of the Assistant Secretary 
that such assignments were necessary to assure the safety of the 
qualified location. Overhead and administrative costs associated with an 
extraordinary protective need are reimbursable as either a flat 18 
percent of the total extraordinary protective need costs, or, if such 
costs can be clearly segregated from routine police costs, on a dollar-
for-dollar basis. The jurisdiction seeking such reimbursement may select 
either method but may not use both. For the purposes of reimbursement 
the Assistant Secretary will, in all cases, determine when the 
extraordinary protective need began and terminated.

[45 FR 30622, May 9, 1980]



Sec. 13.7  Reimbursement when the Assistant Secretary makes no determination to utilize State and local government services, personnel, equipment and 
          facilities.

    (a) Where events require the State or local governments of the 
affected metropolitan area to provide protection to meet an 
extraordinary protective need otherwise qualifying for reimbursement, 
such reimbursement may be made even if the provisions of Secs. 13.4 and 
13.5 have not been complied with fully. In such circumstances the 
provisions of Sec. 13.6 shall apply.
    (b) In cases where State or local governments, or both, utilized 
their own services, personnel, equipment, and facilities to provide 
protection for an extraordinary protective need, and no request for 
protective assistance pursuant to Sec.  13.4 was made because the 
extraordinary protective need occurred prior to the promulgation of this 
part but after July 1, 1974, an application by such government to the 
Assistant Secretary for reimbursement otherwise conforming to the 
requirements of this part will be considered.

[41 FR 55179, Dec. 17, 1976, as amended at 45 FR 30622, May 9, 1980]



Sec. 13.8  Protection for motorcades and other places associated with a visit qualifying under section 202(7) of Title 3, U.S. Code.

    (a) State and local governments furnishing services, personnel, 
equipment, and facilities to provide protection for motorcades and at 
other places associated with a visit qualifying under section 202(7) of 
Title 3, U.S. Code may forward to the Assistant Secretary a bill for 
reimbursement for the personnel, equipment, facilities, and services 
utilized in providing such protection.
    (b) Requests for payments under this section shall conform to the 
procedures established elsewhere in this part governing reimbursements 
arising out of an extraordinary protective need.

[45 FR 30622, May 9, 1980]

[[Page 222]]

 Appendix I (F) to Part 13--Estimated Overhead and Administrative Costs

Date:___________________________________________________________________

                         Select Only One Method

    ------ 1. Reimbursement for overhead and administrative costs will 
be requested as a flat 18 percent of the total extraordinary protective 
need cost as provided in section 13.6 of these regulations.
    ------ 2. Reimbursement for overhead and administrative costs will 
be requested on a dollar-for-dollar basis. Computation of these costs 
will be made using the below described method:

(Explain in detail how all of these costs can be directly and 
exclusively attributed to the extraordinary protective need.)

[45 FR 30622, May 9, 1980]

      Appendix II (F) to Part 13--Overhead and Administrative Costs

Date:___________________________________________________________________

                         Select Only One Method

    ------ 1. Reimbursement for overhead and administrative costs is 
requested as a flat 18 percent of the total extraordinary protective 
need costs as provided in section 13.6 of these regulations.
    ------ 2. Reimbursement for overhead and administrative costs is 
requested on a dollar-for-dollar basis. Computation of these costs has 
been made using the below described method:

(Explain and show in detail how all of these costs have been directly 
and exclusively attributed extraordinary protective need costs).

Dated:__________________________________________________________________

[45 FR 30622, May 9, 1980]

          Appendix I to Part 13--Form of Request for Assistance

    I hereby request assistance from the Department of the Treasury 
pursuant to Section 202 of Title 3, U.S. Code, as amended by Pub. L. 94-
196. This assistance is needed to enable the affected metropolitan area 
of ------------ to meet an extraordinary protective need, which is 
expected to arise on ------------ (date).
    The nature of the extraordinary protective need prompting this 
request is as follows:
    (If in association with a visit, include the name and title of the 
visiting foreign official or dignitary, the country represented and the 
name and location of the international organization involved and/or 
mission to be visited. The temporary domicile of the visiting official 
or dignitary and his schedule, including dates and times of arrival and 
departure from the United States, if available, must also be included. 
If the extraordinary protective need occurs at or, pursuant to Sec. 13.6 
of 31 CFR part 13, in the vicinity of, a permanent mission to an 
international organization of which the United States is a member or at 
an observer mission invited to participate in the work of the 
organization, the application shall include the name and location of the 
mission. If the extraordinary protective need occurs at a foreign 
diplomatic mission, including a consular office, in conjunction with a 
qualifying visit by a foreign official or dignitary of the same country 
as that mission, the application shall include the name and location of 
the mission or office. If, pursuant to Sec. 13.8, the visiting foreign 
official is to travel by motorcade and/or visit locations other than his 
foreign mission or temporary domicile, the application shall include a 
description of the anticipated motorcade routes and all stops on the 
routes as well as the name (or description) and location of any other 
places to be visited.
    The ------------ (Government entity) ------------ (is or is not) --
---------- prepared to provide ------------ (all or a portion of) the 
protection required to meet this need. Attached is an estimate of the 
appropriate number of personnel, by grade and rank, and the specific 
services, equipment and facilities which will be required to meet this 
extraordinary protective need, along with an estimate of the cost of 
such personnel, services, equipment, and facilities.
(Date)__________________________________________________________________
_______________________________________________________________________
(State or local government of the affected metropolitan area)
_______________________________________________________________________
(Signature)
_______________________________________________________________________
(Title)

[45 FR 30622, May 9, 1980]

         Appendix II to Part 13--Form of Bill for Reimbursement

    I hereby request that ------------ (Governmental entity) be 
reimbursed by the Department of the Treasury pursuant to sections 202 
and 208 of Title 3, U.S. Code, as amended and added, respectively, by 
Public Law 94-196 (89 Stat. 1109) (and/or pursuant to Public Law 96-74) 
for expenses incurred while providing an adequate level of protection 
during the extraordinary protective need arising in association with a 
visit of ------------ (Official or dignitary's name and title) of ------
------ (Country) to participate in the work of ------------ 
(International Organization) or occurring at the -------------- 
(Permanent or observer mission) to ------------ (International 
organization) during the period ------------ (Date) through ------------ 
(Date).

[[Page 223]]

    I certify that the level of protection provided was both reasonable 
and necessary; that the costs herein billed are only those direct costs 
associated with meeting the extraordinary protective need; and that the 
costs herein billed are not costs of an indirect nature such as 
administrative costs, overhead, and depreciation, except as provided in 
Sec. 13.6(a) of 31 CFR 13.
    Access to all records, accounts, receipts, etc., pertaining to the 
costs herein billed will be accorded to representatives of the Assistant 
Secretary (Enforcement and Operations) and the General Accounting Office 
at such reasonable times and places as may be mutually agreed upon by 
said representatives and ------------ (Governmental entity).
Date:___________________________________________________________________
_______________________________________________________________________
(Signature)
_______________________________________________________________________
(Title)

[45 FR 30623, May 9, 1980]



PART 14--RIGHT TO FINANCIAL PRIVACY ACT--Table of Contents




Sec.
14.1  Definitions.
14.2  Purpose.
14.3  Authorization.
14.4  Contents of request.
14.5  Certification.

    Authority: Sec. 1108, Right to Financial Privacy Act of 1978, 92 
Stat. 3697 et seq., 12 U.S.C. 3401 et seq.; (5 U.S.C. 301); and 
Reorganization Plan No. 26 of 1950.

    Source: 44 FR 16909, Mar. 20, 1979, unless otherwise noted.



Sec. 14.1  Definitions.

    For purposes of this regulation, the term:
    (a) Financial institution means any office of a bank, savings bank, 
card issuer as defined in section 103 of the Consumer Credit Protection 
Act (15 U.S.C. 1602(n)), industrial loan company, trust company, savings 
and loan, building and loan, or homestead association (including 
cooperative bank), credit union, or consumer financial institution, 
located in any State or territory of the United States, the District of 
Columbia, Puerto Rico, Guam, American Samoa, or the Virgin Islands.
    (b) Financial record means an original of, a copy of, or information 
known to have been derived from, any record held by a financial 
institution pertaining to a customer's relationship with the financial 
institution.
    (c) Person means an individual or a partnership of five or fewer 
individuals.
    (d) Customer means any person or authorized representative of that 
person who utilized or is utilizing any service of a financial 
institution, or for whom a financial institution is acting or has acted 
as a fiduciary, in relation to an account maintained in the person's 
name.
    (e) Law enforcement inquiry means a lawful investigation or official 
proceeding inquiring into a violation of or failure to comply with any 
criminal or civil statute or any regulation, rule, or order issued 
pursuant thereto.
    (f) Departmental unit means those offices, divisions, bureaus, or 
other components of the Department of the treasury authorized to conduct 
law enforcement inquiries.
    (g) Act means the Right to Financial Privacy Act of 1978.



Sec. 14.2  Purpose.

    The purpose of these regulations is to authorize Departmental units 
to request financial records from a financial institution pursuant to 
the formal written request procedure authorized by section 1108 of the 
Act, and to set forth the conditions under which such requests may be 
made.



Sec. 14.3  Authorization.

    Departmental units are hereby authorized to request financial 
records of any customer from a financial institution pursuant to a 
formal written request under the Act only if:
    (a) No administrative summons or subpoena authority reasonably 
appears to be available to the Departmental unit to obtain financial 
records for the purpose for which the records are sought;
    (b) There is reason to believe that the records sought are relevant 
to a legitimate law enforcement inquiry and will further that inquiry;
    (c) The request is issued by a supervisory official of a rank 
designated by the head of the requesting Departmental unit. Officials so 
designated shall not delegate this authority to others;

[[Page 224]]

    (d) The request adheres to the requirements set forth in Sec. 14.4; 
and
    (e) The notice requirements set forth in section 1108(4) of the Act, 
or the requirements pertaining to delay of notice in section 1109 of the 
Act are satisfied, except in situations where no notice is required. 
(e.g., section 1113(g))



Sec. 14.4  Contents of request.

    The formal written request shall be in the form of a letter or 
memorandum to an appropriate official of the financial institution from 
which financial records are requested. The request shall be signed by an 
issuing official of the requesting Department unit. It shall set forth 
that official's name, title, business address and business phone number. 
The request shall also contain the following:
    (a) The identity of the customer or customers to whom the records 
pertain;
    (b) A reasonable description of the records sought;
    (c) Any other information that the issuing official deems 
appropriate, e.g., the date on which the requesting Departmental unit 
expects to present a certificate of compliance with the applicable 
provisions of the Act, the name and title of the individual to whom 
disclosure is to be made, etc.

In cases where customer notice is delayed by a court order, a copy of 
the court order shall be attached to the formal written request.



Sec. 14.5  Certification.

    Prior to obtaining the requested records pursuant to a formal 
written request, an official of a rank designated by the head of the 
requesting Departmental unit shall certify in writing to the financial 
institution that the Departmental unit has complied with the applicable 
provisions of the Act.



PART 15--POST EMPLOYMENT CONFLICT OF INTEREST--Table of Contents




                      Subpart A--General Provisions

Sec.
15.737-1  Scope.
15.737-2  Definitions.
15.737-3  Director of Practice.
15.737-4  Other discipline.
15.737-5  Records.

Subpart B--Rules Applicable to Post Employment Practice by Officers and 
                       Employees of the Department

15.737-6  Interpretative standards.

            Subpart C--Administrative Enforcement Proceedings

15.737-7  Authority to prohibit practice.
15.737-8  Special orders.
15.737-9  Receipt of information concerning former Treasury employee.
15.737-10  Conferences.
15.737-11  Institution of proceeding.
15.737-12  Contents of complaint.
15.737-13  Service of complaint and other papers.
15.737-14  Answer.
15.737-15  Reply to answer.
15.737-16  Proof; variance; amendment of pleadings.
15.737-17  Motions and requests.
15.737-18  Representation.
15.737-19  Administrative Law Judge.
15.737-20  Hearings.
15.737-21  Evidence.
15.737-22  Depositions.
15.737-23  Transcript.
15.737-24  Proposed findings and conclusions.
15.737-25  Decision of the Administrative Law Judge.
15.737-26  Appeal to the General Counsel.
15.737-27  Decision of the General Counsel.
15.737-28  Notice of disciplinary action.

                Subpart D--Other Departmental Proceedings

15.737-29  Review by the General Counsel.

    Authority: 92 Stat. 1864 (18 U.S.C. 207), as amended.

    Source: 45 FR 39842, June 12, 1980, unless otherwise noted.



                      Subpart A--General Provisions



Sec. 15.737-1  Scope.

    This part contains rules governing discipline of a former officer or 
employee of the Department of the Treasury because of a post employment 
conflict of interest. Such discipline may include prohibition from 
practice before the Department or a separate statutory agency thereof as 
those terms are defined in this part.

[[Page 225]]



Sec. 15.737-2  Definitions.

    For the purpose of this part--(a) The term Department means the 
Department of the Treasury and includes the separate statutory agencies 
thereof.
    (b) The term Director means the Director of Practice.
    (c) The term General Counsel means the General Counsel of the 
Department.
    (d) The term practice means any informal or formal appearance 
before, or, with the intent to influence, any oral or written 
communication to the Department or, where applicable, to a separate 
statutory agency thereof on a pending matter of business on behalf of 
any other person (except the United States).
    (e) The term separate statutory agency thereof means an agency or 
bureau within the Department designated by rule by the Director, Office 
of Government Ethics, as a separate agency or bureau. The Internal 
Revenue Service, Bureau of Alcohol, Tobacco and Firearms, United States 
Secret Service, Bureau of the Mint, United States Customs Service, 
Bureau of Engraving and Printing, and Comptroller of the Currency were 
so designated effective July 1, 1979.



Sec. 15.737-3  Director of Practice.

    There is, in the Office of the Secretary of the Treasury, the Office 
of Director of Practice. The Director shall institute and provide for 
the conduct of disciplinary proceedings involving former employees of 
the Department as authorized by 18 U.S.C. 207(j), and perform such other 
duties as are necessary or appropriate to carry out his/her functions 
under this part.



Sec. 15.737-4  Other discipline.

    For activity alleged to violate 18 U.S.C. 207 (a), (b) or (c), the 
Director may also bring a disciplinary proceeding pursuant to the 
regulations governing practice before the Bureau of Alcohol, Tobacco and 
Firearms or the Internal Revenue Service as found in 31 CFR part 8 and 
31 CFR part 10, respectively. Such proceeding may be consolidated with 
any proceeding brought pursuant to this part.



Sec. 15.737-5  Records.

    There are made available to public inspection at the Office of 
Director of Practice the roster of all persons prohibited from practice 
before the Department. Other records may be disclosed upon specific 
request, in accordance with appropriate disclosure regulations of the 
Department.



Subpart B--Rules Applicable to Post Employment Practice by Officers and 
                       Employees of the Department



Sec. 15.737-6  Interpretative standards.

    A determination that a former officer or employee of the Department 
violated 18 U.S.C. 207 (a), (b) or (c) will be made in conformance with 
the standards established in the interpretative regulations promulgated 
by the Office of Government Ethics and published at 5 CFR part 737.



            Subpart C--Administrative Enforcement Proceedings



Sec. 15.737-7  Authority to prohibit practice.

    Pursuant to 18 U.S.C. 207(j), if the General Counsel finds, after 
notice and opportunity for a hearing, that a former officer or employee 
of the Department violated 18 U.S.C. 207 (a), (b) or (c), the General 
Counsel in his/her discretion may prohibit that person from engaging in 
practice before the Department or a separate statutory agency thereof 
for a period not to exceed five years, or may take other appropriate 
disciplinary action.



Sec. 15.737-8  Special orders.

    The General Counsel may issue special orders as he/she may consider 
proper in any case within the purview of this part.



Sec. 15.737-9  Receipt of information concerning former Treasury employee.

    If an officer or employee of the Department has reason to believe 
that a former officer or employee of the Department has violated 18 
U.S.C. 207 (a), (b) or (c), or if any such officer or employee receives 
information to that effect, he/she shall promptly make a

[[Page 226]]

written report thereof, which report or a copy thereof shall be 
forwarded to the Inspector General, Department of the Treasury. If any 
other person has information of such violations, he/she may make a 
report thereof to the Inspector General or to any officer or employee of 
the Department. The Inspector General shall refer any information he/she 
deems warranted to the Director.



Sec. 15.737-10  Conferences.

    (a) In general. The Director may confer with a former officer or 
employee concerning allegations of misconduct irrespective of whether an 
administrative disciplinary proceeding has been instituted against him/
her. If such conference results in a stipulation in connection with a 
proceeding in which such person is the respondent, the stipulation may 
be entered in the record at the instance of either party to the 
proceeding.
    (b) Voluntary suspension. A former officer or employee, in order to 
avoid the institution or conclusion of a proceeding, may offer his/her 
consent to suspension from practice before the Department or a separate 
statutory agency thereof. The Director in his/her discretion, may 
suspend a former officer or employee in accordance with the consent 
offered.



Sec. 15.737-11  Institution of proceeding.

    (a) Whenever the Director has reason to believe that any former 
officer or employee of the Department has violated 18 U.S.C. 207 (a), 
(b) or (c), he/she may reprimand such person or institute an 
administrative disciplinary proceeding for that person's suspension from 
practice before the Department or a separate statutory agency thereof. 
The proceeding shall be instituted by a complaint which names the 
respondent and is signed by the Director and filed in his/her office. 
Except in cases of willfulness, or where time, the nature of the 
proceeding, or the public interest does not permit, a proceeding will 
not be instituted under this section until facts or conduct which may 
warrant such action have been called to the attention of the proposed 
respondent in writing and he/she has been accorded the opportunity to 
provide his/her position on the matter.
    (b) The Director shall coordinate proceedings under this part with 
the Department of Justice in cases where it initiates criminal 
prosecution.



Sec. 15.737-12  Contents of complaint.

    (a) Charges. A complaint shall give a plain and concise description 
of the allegations which constitute the basis for the proceeding. A 
complaint shall be deemed sufficient if it fairly informs the respondent 
of the charges against him/her so that the respondent is able to prepare 
a defense.
    (b) Demand for answer. In the complaint, or in a separate paper 
attached to the complaint, notification shall be given of the place and 
time within which the respondent shall file his/her answer, which time 
shall not be less than 15 days from the date of service of the 
complaint, and notice shall be given that a decision by default may be 
rendered against the respondent in the event he/she fails to file an 
answer as required.



Sec. 15.737-13  Service of complaint and other papers.

    (a) Complaint. The complaint or a copy thereof may be served upon 
the respondent by certified mail, or first-class mail as hereinafter 
provided; by delivering it to the respondent or his/her attorney or 
agent of record either in person or by leaving it at the office or place 
of business of the respondent, attorney or agent; or in any other manner 
which has been agreed to by the respondent. Where the service is by 
certified mail, the return post office receipt duly signed by or on 
behalf of the respondent shall be proof of service. If the certified 
mail is not claimed or accepted by the respondent and is returned 
undelivered, complete service may be made upon the respondent by mailing 
the complaint to him/her by first-class mail, addressed to him/her at 
the last address known to the Director. If service is made upon the 
respondent or his/her attorney or agent of record in person or by 
leaving the complaint at the office or place of business of the 
respondent, attorney or agent, the verified return by the person

[[Page 227]]

making service, setting forth the manner of service, shall be proof of 
such service.
    (b) Service of papers other than complaint. Any paper other than the 
complaint may be served upon a respondent as provided in paragraph (a) 
of this section or by mailing the paper by first-class mail to the 
respondent at the last address known to the Director, or by mailing the 
paper by first-class mail to the respondent's attorney or agent of 
record. Such mailing shall constitute complete service. Notices may be 
served upon the respondent or his/her attorney or agent of record by 
telegraph.
    (c) Filing of papers. Whenever the filing of a paper is required or 
permitted in connection with a proceeding, and the place of filing is 
not specified by this subpart or by rule or order of the Administrative 
Law Judge, the paper shall be filed with the Director of Practice, 
Department of the Treasury, Washington, DC 20220. All papers shall be 
filed in duplicate.



Sec. 15.737-14  Answer.

    (a) Filing. The respondent's answer shall be filed in writing within 
the time specified in the complaint, unless on application the time is 
extended by the Director or the Administrative Law Judge. The answer 
shall be filed in duplicate with the Director.
    (b) Contents. The answer shall contain a statement of facts which 
constitute the grounds of defense, and it shall specifically admit or 
deny each allegation set forth in the complaint, except that the 
respondent shall not deny a material allegation in the complaint which 
he/she knows to be true, or state that he/she is without sufficient 
information to form a belief when in fact he/she possesses such 
information. The respondent may also state affirmatively special matters 
of defense.
    (c) Failure to deny or answer allegations in the complaint. Every 
allegation in the complaint which is not denied in the answer shall be 
deemed to be admitted and may be considered as proved, and no further 
evidence in respect of such allegation need be adduced at a hearing. 
Failure to file an answer within the time prescribed in the notice to 
the respondent, except as the time for answer is extended by the 
Director or the Administrative Law Judge, shall constitute an admission 
of the allegations of the complaint and a waiver of hearing, and the 
Administrative Law Judge may make his/her decision by default without a 
hearing or further procedure.



Sec. 15.737-15  Reply to answer.

    No reply to the respondent's answer shall be required, and new 
matter in the answer shall be deemed to be denied, but the Director may 
file a reply in his/her discretion or at the request of the 
Administrative Law Judge.



Sec. 15.737-16  Proof; variance; amendment of pleadings.

    In the case of a variance between the allegations in a pleading and 
the evidence adduced in support of the pleading, the Administrative Law 
Judge may order or authorize amendment of the pleading to conform to the 
evidence: Provided, That the party who would otherwise be prejudiced by 
the amendment is given reasonable opportunity to meet the allegations of 
the pleading as amended; and the Administrative Law Judge shall make 
findings on any issue presented by the pleadings as so amended.



Sec. 15.737-17  Motions and requests.

    Motions and requests may be filed with the Director or with the 
Administrative Law Judge.



Sec. 15.737-18  Representation.

    A respondent or proposed respondent may appear in person or he/she 
may be represented by counsel or other representative. The Director may 
be represented by an attorney or other employee of the Department.



Sec. 15.737-19  Administrative Law Judge.

    (a) Appointment. An Administrative Law Judge appointed as provided 
by 5 U.S.C. 3105 (1966), shall conduct proceedings upon complaints for 
the administrative disciplinary proceedings under this part.
    (b) Power of Administrative Law Judge. Among other powers, the 
Administrative Law Judge shall have authority, in

[[Page 228]]

connection with any proceeding assigned or referred to him/her, to do 
the following:
    (1) Administer oaths and affirmations;
    (2) Make rulings upon motions and requests, which rulings may not be 
appealed from prior to the close of a hearing except, at the discretion 
of the Administrative Law Judge, in extraordinary circumstances;
    (3) Determine the time and place of hearing and regulate its course 
and conduct;
    (4) Adopt rules of procedure and modify the same from time to time 
as occasion requires for the orderly disposition of proceedings;
    (5) Rule upon offers of proof, receive relevant evidence, and 
examine witnesses;
    (6) Take or authorize the taking of depositions;
    (7) Receive and consider oral or written argument on facts or law;
    (8) Hold or provide for the holding of conferences for the 
settlement or simplification of the issues by consent of the parties;
    (9) Assess the responsible party extraordinary costs attributable to 
the location of a hearing;
    (10) Perform such acts and take such measures as are necessary or 
appropriate to the efficient conduct of any proceeding; and
    (11) Make initial decisions.



Sec. 15.737-20  Hearings.

    (a) In general. The Administrative Law Judge shall preside at the 
hearing on a complaint for the suspension of a former officer or 
employee from practice before the Department. Hearings shall be 
stenographically recorded and transcribed and the testimony of witnesses 
shall be taken under oath or affirmation. Hearings will be conducted 
pursuant to 5 U.S.C. 556.
    (b) Public access to hearings. Hearings will be closed unless an 
open hearing is requested by the respondent, except that if classified 
information or protected information of third parties (such as tax 
information) is likely to be adduced at the hearing, it will remain 
closed. A request for an open hearing must be included in the answer to 
be considered.
    (c) Failure to appear. If either party to the proceeding fails to 
appear at the hearing, after due notice thereof has been sent to him/
her, he/she shall be deemed to have waived the right to a hearing and 
the Administrative Law Judge may make a decision against the absent 
party by default.



Sec. 15.737-21  Evidence.

    (a) In general. The rules of evidence prevailing in courts of law 
and equity are not controlling in hearings on complaints for the 
suspension of a former officer or employee from practice before the 
Department. However, the Administrative Law Judge shall exclude evidence 
which is irrelevant, immaterial, or unduly repetitious.
    (b) Depositions. The deposition of any witness taken pursuant to 
Sec. 15.737-22 of this part may be admitted.
    (c) Proof of documents. Official documents, records and papers of 
the Department shall be admissible in evidence without the production of 
an officer or employee to authenticate them. Any such documents, 
records, and papers may be evidenced by a copy attested or identified by 
an officer or employee of the Department.
    (d) Exhibits. If any document, record, or other paper is introduced 
in evidence as an exhibit, the Administrative Law Judge may authorize 
the withdrawal of the exhibit subject to any conditions which he/she 
deems proper.
    (e) Objections. Objections to evidence shall be in short form, 
stating the grounds of objection relied upon, and the record shall not 
include argument thereon, except as ordered by the Administrative Law 
Judge. Rulings on such objections shall be a part of the record. No 
exception to the ruling is necessary to preserve the rights of the 
parties.



Sec. 15.737-22  Depositions.

    Depositions for use at a hearing may, with the consent of the 
parties in writing or the written approval of the Administrative Law 
Judge, be taken by either the Director or the respondent or their duly 
authorized representatives. Depositions may be taken upon oral or 
written interrogatories, upon not less than 10 days' written notice to 
the other party before any officer duly

[[Page 229]]

authorized to administer an oath for general purposes or before an 
officer or employee of the Department who is authorized to administer an 
oath. Such notice shall state the names of the witnesses and the time 
and place where the depositions are to be taken. The requirement of 10 
days' notice may be waived by the parties in writing, and depositions 
may then be taken from the persons and at the times and places mutually 
agreed to by the parties. When a deposition is taken upon written 
interrogatories, any cross-examination shall be upon written 
interrogatories. Copies of such written interrogatories shall be served 
upon the other party with the notice, and copies of any written cross-
interrogation shall be mailed or delivered to the opposing party at 
least 5 days before the date of taking the depositions, unless the 
parties mutually agree otherwise. A party upon whose behalf a deposition 
is taken must file it with the Administrative Law Judge and serve one 
copy upon the opposing party. Expenses in the reporting of depositions 
shall be borne by the party at whose instance the deposition is taken.



Sec. 15.737-23  Transcript.

    In cases where the hearing is stenographically reported by a 
Government contract reporter, copies of the transcript may be obtained 
from the reporter at rates not to exceed the maximum rates fixed by 
contract between the Government and the reporter or from the Department 
at actual cost of duplication. Where the hearing is stenographically 
reported by a regular employee of the Department, a copy thereof will be 
supplied to the respondent either without charge or upon payment of a 
reasonable fee. Copies of exhibits introducted at the hearing or at the 
taking of depositions will be supplied to the parties upon the payment 
of a reasonable fee (Sec. 501, Pub. L. 82-137, 65 Stat. 290 (31 U.S.C. 
483a)).



Sec. 15.737-24  Proposed findings and conclusions.

    Except in cases where the respondent has failed to answer the 
complaint or where a party has failed to appear at the hearing, the 
Administrative Law Judge prior to making his/her decision, shall afford 
the parties a reasonable opportunity to submit proposed findings and 
conclusions and supporting reasons therefor.



Sec. 15.737-25  Decision of the Administrative Law Judge.

    As soon as practicable after the conclusion of a hearing and the 
receipt of any proposed findings and conclusions timely submitted by the 
parties, the Administrative Law Judge shall make the initial decision in 
the case. The decision shall include (a) a statement of findings and 
conclusions, as well as the reasons or basis therefor, upon all the 
material issues of fact, law, or discretion presented on the record, and 
(b) an order of suspension from practice before the Department or 
separate statutory agency thereof or other appropriate disciplinary 
action, or an order of dismissal of the complaint. The Administrative 
Law Judge shall file the decision with the Director and shall transmit a 
copy thereof to the respondent or his/her attorney of record. In the 
absence of an appeal to the General Counsel or review of the decision 
upon motion of the General Counsel, the decision of the Administrative 
Law Judge shall without further proceedings become the decision of the 
General Counsel 30 days from the date of the Administrative Law Judge's 
decision.



Sec. 15.737-26  Appeal to the General Counsel.

    Within 30 days from the date of the Administrative Law Judge's 
decision, either party may appeal to the General Counsel. The appeal 
shall be filed with the Director in duplicate and shall include 
exceptions to the decision of the Administrative Law Judge and 
supporting reasons for such exceptions. If an appeal is filed by the 
Director, he/she shall transmit a copy thereof to the respondent. Within 
30 days after receipt of an appeal or copy thereof, the other party may 
file a reply brief in duplicate with the Director. If the reply brief is 
filed by the Director, he/she shall transmit a copy of it to the 
respondent. Upon the filing of an appeal and a reply brief, if any, the 
Director shall transmit the entire record to the General Counsel.

[[Page 230]]



Sec. 15.737-27  Decision of the General Counsel.

    On appeal from or review of the initial decision of the 
Administrative Law Judge, the General Counsel will make the agency 
decision. In making his/her decision, the General Counsel will review 
the record or such portions thereof as may be cited by the parties to 
permit limiting of the issues. A copy of the General Counsel's decision 
shall be transmitted to the respondent by the Director.



Sec. 15.737-28  Notice of disciplinary action.

    (a) Upon the issuance of a final order suspending a former officer 
or employee from practice before the Department or a separate statutory 
agency thereof, the Director shall give notice thereof to appropriate 
officers and employees of the Department. Officers and employees of the 
Department shall refuse to participate in any appearance by such former 
officer or employee or to accept any communication which constitutes the 
prohibited practice before the Department or separate statutory agency 
thereof during the period of suspension.
    (b) The Director shall take other appropriate disciplinary action as 
may be required by the final order.



                Subpart D--Other Departmental Proceedings



Sec. 15.737-29  Review by the General Counsel.

    In my proceeding before the Department, if an initial decision is 
made with respect to the disqualification of a representative or 
attorney for a party on the grounds of 18 U.S.C. 207(a), (b) or (c), 
such decision may be appealed to the General Counsel, who will make the 
agency decision on the issue.



PART 16--REGULATIONS IMPLEMENTING THE PROGRAM FRAUD CIVIL REMEDIES ACT OF 1986--Table of Contents




Sec.
16.1  Basis and purpose.
16.2  Definitions.
16.3  Basis for civil penalties and assessments.
16.4  Investigation.
16.5  Review by the reviewing official.
16.6  Prerequisites for issuing a complaint.
16.7  Complaint.
16.8  Service of complaint.
16.9  Answer.
16.10  Default upon failure to file an answer.
16.11  Referral of complaint and answer to the ALJ.
16.12  Notice of hearing.
16.13  Parties to the hearing.
16.14  Separation of functions.
16.15  Ex parte contacts.
16.16  Disqualification of reviewing official or ALJ.
16.17  Rights of parties.
16.18  Authority of the ALJ.
16.19  Prehearing conferences.
16.20  Disclosure of documents.
16.21  Discovery.
16.22  Exchange of witness lists, statements, and exhibits.
16.23  Subpoenas for attendance at hearing.
16.24  Protective order.
16.25  Fees.
16.26  Form, filing and service of papers.
16.27  Computation of time.
16.28  Motions.
16.29  Sanctions.
16.30  The hearing and burden of proof.
16.31  Determining the amount of penalties and assessments.
16.32  Location of hearing.
16.33  Witnesses.
16.34  Evidence.
16.35  The record.
16.36  Post-hearing briefs.
16.37  Initial decision.
16.38  Reconsideration of initial decision.
16.39  Appeal to authority head.
16.40  Stays ordered by the Department of Justice.
16.41  Stay pending appeal.
16.42  Judicial review.
16.43  Collection of civil penalties and assessments.
16.44  Right to administrative offset.
16.45  Deposit in Treasury of United States.
16.46  Compromise or settlement.
16.47  Limitations.

    Authority: 31 U.S.C. 3801-3812.

    Source: 52 FR 35071, Sept. 17, 1987, unless otherwise noted.



Sec. 16.1  Basis and purpose.

    (a) Basis. This part implements the Program Fraud Civil Remedies Act 
of 1986, Pub. L. 99-509, sections 6101-6104, 100 Stat. 1874 (October 21, 
1986), to be codified at 31 U.S.C. 3801-3812. 31 U.S.C. 3809 requires 
each authority head to promulgate regulations necessary to implement the 
provisions of the statute.
    (b) Purpose. This part

[[Page 231]]

    (1) Establishes administrative procedures for imposing civil 
penalties and assessments against persons who make, submit, or present, 
or cause to be made, submitted, or presented, false, fictitious, or 
fraudulent claims or written statements to authorities or to their 
agents, and
    (2) Specifies the hearing and appeal rights of persons subject to 
allegations of liability for such penalties and assessments.



Sec. 16.2  Definitions.

    ALJ means an Administrative Law Judge in the authority appointed 
pursuant to 5 U.S.C. 3105 or detailed to the authority pursuant to 5 
U.S.C. 3344.
    Authority means the Department of the Treasury.
    Authority head means the Assistant Secretary of the Treasury for 
Management.
    Benefit, when used in the context of false statements made with 
respect to a benefit, means anything of value including but not limited 
to any advantage, preference, privilege, license, permit, favorable 
decision, ruling, status, or loan guarantee. This definition should be 
distinguished from the limitations on coverage of these regulations with 
respect to beneficiaries of specific benefit programs which are found in 
Sec. 16.3(c) of this part.
    Claim means any request, demand, or submission--
    (a) Made to the authority for property, services, or money 
(including money representing grants, loans, insurance, or benefits);
    (b) Made to a recipient of property, services, or money from the 
authority or to a party to a contract with the authority--
    (1) For property or services if the United States--
    (i) Provided such property or services;
    (ii) Provided any portion of the funds for the purchase of such 
property or services; or
    (iii) Will reimburse such recipient or party for the purchase of 
such property or services; or
    (2) For the payment of money (including money representing grants, 
loans, insurance, or benefits) if the United States--
    (i) Provided any portion of the money requested or demanded; or
    (ii) Will reimburse such recipient or party for any portion of the 
money paid on such request or demand; or
    (c) Made to the authority which has the effect of decreasing an 
obligation to pay or account for property, services, or money, except 
that such term does not include any claim made in any return of tax 
imposed by the Internal Revenue Code of 1954.
    Complaint means the administrative complaint served by the reviewing 
official on the defendant under Sec. 16.7 of this part.
    Defendant means any person alleged in a complaint under Sec. 16.7 to 
be liable for a civil penalty or assessment under Sec. 16.3.
    Department means the Department of the Treasury.
    Government means the United States Government.
    Individual means a natural person.
    Initial decision means the written decision of the ALJ required by 
Sec. 16.10 or Sec. 16.37, and includes a revised initial decision issued 
following a remand or a motion for reconsideration.
    Investigating official means the Inspector General of the Department 
of the Treasury.
    Knows or has reason to know, means that a person, with respect to a 
claim or statement--
    (a) Has actual knowledge that the claim or statement is false, 
fictitious, or fraudulent;
    (b) Acts in deliberate ignorance of the truth or falsity of the 
claim or statement; or
    (c) Acts in reckless disregard of the truth or falsity of the claim 
or statement.
    Makes, wherever it appears, shall include the terms ``presents,'' 
``submits,'' and ``causes to be made, presented,'' or ``submitted.'' As 
the context requires, making or made, shall likewise include the 
corresponding forms of such terms.
    Person means any individual, partnership, corporation, association, 
private organization, State, political subdivision of a State, 
municipality, county, district, and Indian tribe, and includes the 
plural of that term.

[[Page 232]]

    Presiding officer means an administrative law judge appointed in the 
authority pursuant to 5 U.S.C. 3105 or detailed to the authority 
pursuant to section 3344 of such title.
    Representative means an attorney designated in writing by a 
defendant to appear on his or her behalf in administrative hearings 
before the Department and to represent a defendant in all other legal 
matters regarding a complaint made pursuant to these regulations.
    Reviewing official means the General Counsel, or another individual 
in the Legal Division of the Department designated by the General 
Counsel, who is--
    (a) Serving in a position for which the rate of basic pay is not 
less than the minimum rate of basic pay for grade GS-16; and
    (b) Is not subject to supervision by, or required to report to, the 
investigating official; and
    (c) Is not employed in the organization unit of the authority in 
which the investigating official is employed.
    Statement means any representation, certification, affirmation, 
document, record, or accounting or bookkeeping entry made--
    (a) With respect to a claim or to obtain the approval or payment of 
a claim (including relating to eligibility to make a claim); or
    (b) With respect to (including relating to eligibility for)--
    (1) A contract with, or a bid or proposal for a contract with; or
    (2) A grant, loan, or benefit from, the authority, or any State, 
political subdivision of a State, or other party, if the United States 
Government provides any portion of the money or property under such 
contract or for such grant, loan, or benefit, or if the government will 
reimburse such State, political subdivision, or party of any portion of 
the money or property under such contract or for such grant, loan, or 
benefit, except that such term does not include any claim made in any 
return of tax imposed by the Internal Revenue Code of 1954.



Sec. 16.3  Basis for civil penalties and assessments.

    (a) Claims. (1) Except as provided in paragraph (c) of this section, 
any person who makes a claim that the person knows or has reason to 
know--
    (i) Is false, fictitious, or fraudulent;
    (ii) Includes or is supported by any written statement which asserts 
a material fact which is false, fictitious, or fraudulent;
    (iii) Includes or is supported by any written statement that--
    (A) Omits a material fact;
    (B) Is false, fictitious, or fraudulent as a result of such 
omission; and
    (C) Is a statement in which the person making such statement has a 
duty to include such material fact; or
    (iv) Is for payment for the provision of property or services which 
the person has not provided as claimed, shall be subject, in addition to 
any other remedy that may be prescribed by law, to a civil penalty of 
not more than $5,000 for each such claim.
    (2) Each voucher, invoice, claim form, or other individual request 
or demand for property, services, or money constitutes a separate claim.
    (3) A claim shall be considered made to an authority, recipient, or 
party when such claim is actually made to an agent, fiscal intermediary, 
or other entity, including any State or political subdivision thereof, 
acting for or on behalf of such authority, recipient, or party.
    (4) Each claim for property, services, or money is subject to a 
civil penalty under these regulations regardless of whether such 
property, services, or money is actually delivered or paid.
    (5) If the government has made any payment (including transferred 
property or provided services) on a claim, a person subject to a civil 
penalty under paragraph (a)(1) of this section shall also be subject to 
an assessment of not more than twice the amount of such claim or that 
portion thereof that is determined to be in violation of paragraph 
(a)(1) of this section. Such assessment shall be in lieu of damages 
sustained by the Government because of such claim.
    (b) Statements. (1) Except as provided in paragraph (c) of this 
section, any

[[Page 233]]

person who makes a written statement that--
    (i) The person knows or has reason to know--
    (A) Asserts a material fact which is false, fictitious, or 
fraudulent; or
    (B) Is false, fictitious, or fraudulent because it omits a material 
fact that the person making the statement has a duty to include in such 
statement; and
    (ii) Includes or is accompanied by an express certification or 
affirmation of the truthfulness and accuracy of the content of the 
statement,

shall be subject, in addition to any other remedy that may be prescribed 
by law, to a civil penalty of not more than $5,000 for each such 
statement.
    (2) Each written representation, certification, or affirmation 
constitutes a separate statement.
    (3) A statement shall be considered made to an authority when such 
statement is actually made to an agent, fiscal intermediary, or other 
entity, including any State or political subdivision thereof, acting for 
or on behalf of such authority.
    (c)(1) In the case of any claim or statement made by any individual 
relating to any of the benefits listed in paragraph (c)(2) of this 
section, received by such individual, such individual may be held liable 
for penalties and assessments under this section only if such claim or 
statement is made by such individual in making application for such 
benefits with respect to such individual's eligibility to receive such 
benefits.
    (2) For purposes of this paragraph, the term benefits means--
    (i) Benefits under the food stamp program (as defined in section 
3(h) of the Food Stamp Act of 1977);
    (ii) Benefits under Chapters 11, 13, 15, 17, and 21 of Title 38;
    (iii) Benefits under the Black Lung Benefits Act;
    (iv) Any authority or other benefit under the Railroad Retirement 
Act of 1974;
    (v) Benefits under the National School Lunch Act;
    (vi) Benefits under any housing assistance program for lower income 
families or elderly or handicapped persons which is administered by the 
Secretary of Housing and Urban Development or the Secretary of 
Agriculture;
    (vii) Benefits under the special supplemental food program for 
women, infants, and children established under section 17 of the Child 
Nutrition Act of 1966;
    (viii) Benefits under part A of the Energy Conservation in Existing 
Buildings Act of 1976;
    (ix) Benefits under the supplemental security income program under 
title XVI of the Social Security Act;
    (x) Old age, survivors, and disability insurance benefits under 
title II of the Social Security Act;
    (xi) Benefits under title XVIII of the Social Security Act;
    (xii) Aid to families with dependent children under a State plan 
approved under section 402(a) of the Social Security Act;
    (xiii) Medical assistance under a State plan approved under section 
1902(a) of the Social Security Act;
    (xiv) Benefits under title XX of the Social Security Act;
    (xv) Benefits under section 336 of the Older Americans Act; or
    (xvi) Benefits under the Low-Income Home Energy Assistance Act of 
1981, which are intended for the personal use of the individual who 
receives the benefits or for a member of the individual's family.
    (d) No proof of specific intent to defraud is required to establish 
liability under this section.
    (e) In any case in which it is determined that more than one person 
is liable for making a claim or statement under this section, each such 
person may be held liable for a civil penalty under this section.
    (f) In any case in which it is determined that more than one person 
is liable for making a claim under this section, and on which the 
Government has made payment (including transferred property or provided 
services), an assessment may be imposed against any such person or 
jointly and severally against any combination of such persons.



Sec. 16.4  Investigation.

    (a) If an investigating official concludes that a subpoena pursuant 
to the

[[Page 234]]

authority conferred by 31 U.S.C. 3804(a) is warranted--
    (1) The subpoena so issued shall notify the person to whom it is 
addressed of the authority under which the subpoena is issued and shall 
identify the information, records, or documents sought;
    (2) The investigating official may designate a person to act on his 
behalf to receive the information, records, or documents sought; and
    (3) The person receiving such subpoena shall be required to tender 
to the investigating official or to the person designated to receive the 
information, records, or documents, a certification that the 
information, records, or documents sought have been produced, or that 
such information, records, or documents are not available and the 
reasons therefor, or that such information, records, or documents, 
suitably identified, have been withheld based upon the assertion of an 
identified legal privilege.
    (b) If the investigating official concludes that an action under the 
Program Fraud Civil Remedies Act may be warranted, the investigating 
official shall report the findings and conclusions of such investigation 
to the reviewing official.
    (c) Nothing in this section shall preclude or limit the 
investigating official's discretion to refer allegations directly to the 
Department of Justice for suit under the False Claims Act, 31 U.S.C. 
3729-3731, or for other civil relief, or to preclude or limit such 
official's discretion to defer or postpone a report or referral to avoid 
interference with an investigation into criminal misconduct or a 
criminal prosecution.
    (d) Nothing in this section modifies any responsibility of the 
investigating official to report violations of criminal law to the 
Attorney General.



Sec. 16.5  Review by the reviewing official.

    (a) If, based on the report of the investigating official under 
Sec. 16.4(b), the reviewing official determines that there is adequate 
evidence to believe that a person is liable under Sec. 16.3 of this 
part, the reviewing official shall transmit to the Attorney General a 
written notice of the reviewing official's intention to issue a 
complaint under Sec. 16.7.
    (b) Such notice shall include--
    (1) A statement of the reviewing official's reasons for issuing a 
complaint;
    (2) A statement specifying the evidence that supports the 
allegations of liability;
    (3) A description of the claims or statements upon which the 
allegations of liability are based;
    (4) An estimate of the amount of money or the value, if any, of 
property, services, or other benefits requested or demanded in violation 
of Sec. 16.3 of this part; or, if no monetary value can be put on the 
property, service or benefit, a statement regarding the non-monetary 
consequences to the agency of a false statement.
    (5) A statement of any exculpatory or mitigating circumstances that 
may relate to the claims or statements known by the reviewing official 
or the investigating official; and
    (6) A statement that there is a reasonable prospect of collecting an 
appropriate amount of penalties and assessments. Such a statement may be 
based upon information then known or an absence of any information 
indicating that the person may be unable to pay such an amount.



Sec. 16.6  Prerequisites for issuing a complaint.

    (a) The reviewing official may issue a complaint under Sec. 16.7 
only if--
    (1) The Department of Justice approves the issuance of a complaint 
in a written statement described in 31 U.S.C. 3803(b)(l), and
    (2) In the case of allegations of liability under Sec. 16.3(a) with 
respect to a claim, the reviewing official determines that, with respect 
to such claim or a group of related claims submitted at the same time 
such claim is submitted (as defined in paragraph (b) of this section), 
the amount of money or the value of property or services demanded or 
requested in violation of Sec. 16.3(a) does not exceed $150,000.
    (b) For the purposes of this section, a related group of claims 
submitted at the same time shall include only those claims arising from 
the same transaction (e.g., grant, loan, application, or

[[Page 235]]

contract) that are submitted simultaneously as part of a single request, 
demand, or submission.
    (c) Nothing in this section shall be construed to limit the 
reviewing official's authority to join in a single complaint against a 
person, claims that are unrelated or were not submitted simultaneously, 
regardless of the amount of money or the value of property or services 
demanded or requested, as long as the total amount for each claim does 
not exceed $150,000.



Sec. 16.7  Complaint.

    (a) On or after the date the Attorney General or his designee 
approves the issuance of a complaint in accordance with 31 U.S.C. 
3803(b)(1), the reviewing official may serve a complaint on the 
defendant, as provided in Sec. 16.8.
    (b) The complaint shall state--
    (1) The allegations of liability against the defendant, including 
the statutory basis for liability, an identification of the claims or 
statements that are the basis for the alleged liability, and the reasons 
why liability allegedly arises from such claims or statements;
    (2) The maximum amount of penalties and assessments for which the 
defendant may be held liable;
    (3) Instructions for filing an answer to request a hearing, 
including a specific statement of the defendant's right to request a 
hearing by filing an answer and to be represented by an attorney;
    (4) That the defendant has a right to review and obtain certain 
information pursuant to Section 16.20 herein; and
    (5) That failure to file an answer within 30 days of service of the 
complaint will result in the imposition of the maximum amount of 
penalties and assessments without right to appeal.
    (c) At the same time the reviewing official serves the complaint on 
the defendant(s), he or she shall serve the defendant with a copy of 
these regulations.



Sec. 16.8  Service of complaint.

    (a) Service of a complaint must be made by a certified or registered 
mail or by delivery in any manner authorized by Rule 4(d) of the Federal 
Rules of Civil Procedure.
    (b) Proof of service, stating the name and address of the person on 
whom the complaint was served, and the manner and date of service, may 
be made by--
    (1) Affidavit of the individual making service;
    (2) An acknowledged United States Postal Service return receipt 
card; or
    (3) Written acknowledgement of the defendant or his representative.



Sec. 16.9  Answer.

    (a) The defendant may request a hearing by filing an answer with the 
reviewing official within 30 days of service of the complaint. An answer 
shall be deemed to be a request for hearing.
    (b) In the answer, the defendant--
    (1) Shall admit or deny each of the allegations of liability made in 
the complaint;
    (2) Shall state any defense on which the defendant intends to rely;
    (3) May state any reasons why the defendant contends that the 
penalties and assessments should be less than the statutory maximum; and
    (4) Shall state whether the defendant has authorized an attorney to 
act as defendant's representative, and shall state the name, address, 
and telephone number of the representative.



Sec. 16.10  Default upon failure to file an answer.

    (a) If the defendant does not file an answer within the time 
prescribed in Sec. 16.9(a), the reviewing official may refer the 
complaint to the ALJ for initial decision.
    (b) Upon the referral of the complaint, the ALJ shall promptly serve 
on defendant in the manner prescribed in Sec. 16.8, a notice that an 
initial decision will be issued under this section.
    (c) If the defendant fails to file a timely answer, the ALJ shall 
assume the facts alleged in the complaint to be true and, if such facts 
eatablish liability under Sec. 16.3, the ALJ shall issue an initial 
decision imposing the maximum amount of penalties and assessments 
allowed under the statute.
    (d) Except as otherwise provided in this section, by failing to file 
a timely answer, the defendant waives any right to further review of the 
penalties and assessments imposed under paragraph

[[Page 236]]

(c) of this section, and the initial decision shall become final and 
binding upon the parties 30 days after it is issued.
    (e) If, before such an initial decision becomes final, the defendant 
files a motion with the ALJ, and serves a copy on the agency, seeking to 
reopen on the grounds that extraordinary circumstances prevented the 
defendant from filing a timely answer, the initial decision shall be 
stayed pending the ALJ's decision on the motion. The ALJ shall permit 
the agency a reasonable amount of time, not less than 15 calendar days, 
to respond to the defendant's motion.
    (f) If, on such motion, the defendant can demonstrate extraordinary 
circumstances excusing the failure to file a timely answer, the ALJ 
shall withdraw the initial decision, if such a decision has been issued 
pursuant to paragraph (c) of this section, and shall grant the defendant 
an opportunity to answer the complaint.
    (g) A decision of the ALJ denying a defendant's motion under 
paragraph (e) of this section is not subject to reconsideration under 
Sec. 16.38.
    (h) The defendant may appeal to the authority head the decision 
denying a motion to reopen by filing a notice of appeal with the 
authority head within 15 days after the ALJ denies the motion. The 
timely filing of a notice of appeal shall stay the initial decision 
until the authority head decides the issue.
    (i) If the defendant files a timely notice of appeal with the 
authority head, the ALJ shall forward the record of the proceeding to 
the authority head.
    (j) The authority head shall decide expeditiously, and based solely 
on the record before the ALJ, whether extraordinary circumstances excuse 
the defendant's failure to file a timely answer.
    (k) If the authority head decides that extraordinary circumstances 
excuse the defendant's failure to file a timely answer, the authority 
head shall remand the case to the ALJ with instructions to grant the 
defendant an opportunity to file an answer.
    (l) If the authority head decides that the defendant's failure to 
file a timely answer is not excused, the authority head shall reinstate 
the initial decision of the ALJ, which shall become final and binding 
upon the parties 30 days after the authority head issues such decision.



Sec. 16.11  Referral of complaint and answer to the ALJ.

    Upon receipt of an answer, the reviewing official shall file the 
complaint and answer with the ALJ.



Sec. 16.12  Notice of hearing.

    (a) When the ALJ receives the complaint and answer, the ALJ shall 
promptly serve a notice of hearing upon the defendant and the agency 
representative in the manner prescribed by Sec. 16.8.
    (b) Such notice shall include--
    (1) The tentative time and place, and the nature of the hearing;
    (2) The legal authority and jurisdiction under which the hearing is 
to be held;
    (3) The matters of fact and law to be asserted;
    (4) A description of the procedures for the conduct of the hearing;
    (5) The names, addresses, and telephone numbers of the 
representatives of the Government and of the defendant, if any; and
    (6) Such other matters as the ALJ deems appropriate.



Sec. 16.13  Parties to the hearing.

    (a) The parties to the hearing shall be the defendant and the 
authority.
    (b) Pursuant to 31 U.S.C. 3730(c)(5), a private plaintiff under the 
False Claims Act may participate in these proceedings to the extent 
authorized by the provisions of that Act.



Sec. 16.14  Separation of functions.

    (a) The investigating official, the reviewing official, and any 
employee or agent of the authority who takes part in investigating, 
preparing, or presenting a particular case may not, in such case or a 
factually related case--
    (1) Participate in the hearing as the ALJ;
    (2) Participate or advise in the initial decision or the review of 
the initial decision by the authority head, except as a witness or a 
representative in public proceedings; or

[[Page 237]]

    (3) Make the collection of penalties and assessments under 31 U.S.C. 
3806.
    (b) The ALJ shall not be responsible to, or subject to the 
supervision or direction of the investigating official or the reviewing 
official.
    (c) Except as provided in paragraph (a) of this section, the 
representative for the Government may be an attorney employed anywhere 
in the Legal Division of the Department, or an attorney employed in the 
offices of either the investigating official or the reviewing official; 
however the representative of the Government may not participate or 
advise in the review of the initial decision by the authority head.



Sec. 16.15  Ex parte contacts.

    No party or person (except employees of the ALJ's office) shall 
communicate in any way with the ALJ on any matter at issue in a case, 
unless on notice and opportunity for all parties to participate. This 
provision does not prohibit a person or party from inquiring about the 
status of a case or asking routine questions concerning administrative 
functions or procedures.



Sec. 16.16  Disqualification of reviewing official or ALJ.

    (a) A reviewing official or ALJ in a particular case may disqualify 
himself or herself at any time.
    (b) A party may file with the ALJ a motion for disqualification of a 
reviewing official or an ALJ. Such motion shall be accompanied by an 
affidavit alleging personal bias or other reason for disqualification.
    (c) Such motion and affidavit shall be filed promptly upon the 
party's discovery of reasons requiring disqualification, or such 
objections shall be deemed waived.
    (d) Such affidavit shall state specific facts that support the 
party's assertion that personal bias or other reason for 
disqualification exists and the time and circumstances of the party's 
discovery of such facts. It shall be accompanied by a certificate of the 
representative of record that it is made in good faith.
    (e) Upon the filing of such a motion and affidavit, the ALJ shall 
proceed no further in the case until he or she resolves the matter of 
disqualification in accordance with paragrpah (f) of this section.
    (f)(1) If the ALJ determines that a reviewing official is 
disqualified, the ALJ shall dismiss the complaint without prejudice.
    (2) If the ALJ disqualifies himself or herself, the agency shall 
seek to have the case promptly reassigned to another ALJ.
    (3) If the ALJ denies a motion to disqualify, the authority head may 
determine the matter only as part of his or her review of the initial 
decision upon appeal, if any.



Sec. 16.17  Rights of parties.

    Except as otherwise limited by this part, all parties may--
    (a) Be accompanied, represented, and advised by an attorney;
    (b) Participate in any conference held by the ALJ;
    (c) Conduct discovery;
    (d) Agree to stipulations of fact or law, which shall be made part 
of the record;
    (e) Present evidence relevant to the issues at the hearing;
    (f) Present and cross-examine witnesses;
    (g) Present oral arguments at the hearing as permitted by the ALJ; 
and
    (h) Submit written beliefs and proposed findings of fact and 
conclusions of law after the hearing.



Sec. 16.18  Authority of the ALJ.

    (a) The ALJ shall conduct a fair and impartial hearing, avoid delay, 
maintain order, and assure that a record of the proceeding is made.
    (b) The ALJ has the authority to--
    (1) Set and change the date, time, and place of the hearing upon 
reasonable notice to the parties;
    (2) Continue or recess the hearing in whole or in part for a 
reasonable period of time;
    (3) Hold conferences to identify or simplify the issues, or to 
consider other matters that may aid in the expeditious disposition of 
the proceeding;
    (4) Administer oaths and affirmations;
    (5) Issue subpoenas requiring the attendance of witnesses and the 
production of documents at depositions or at hearings;

[[Page 238]]

    (6) Rule on motions and other procedural matters;
    (7) Regulate the scope and timing of discovery;
    (8) Regulate the course of the hearing and the conduct of 
representatives and parties;
    (9) Examine witnesses;
    (10) Receive, rule on, exclude, or limit evidence;
    (11) Upon motion of a party, take official notice of facts;
    (12) Upon motion of a party, decide cases, in whole or in part, by 
summary judgment where there is no disputed issue of material fact;
    (13) Conduct any conference, argument, or hearing on motions in 
person or by telephone; and
    (14) Exercise such other authority as is necessary to carry out the 
responsibilities of the ALJ under this part.
    (c) The ALJ does not have the authority to make any determinations 
regarding the validity of Federal statutes or regulations, or 
Departmental orders, Directives, or other published rules.



Sec. 16.19  Prehearing conferences.

    (a) The ALJ may schedule prehearing conferences as appropriate.
    (b) Upon the motion of any party, the ALJ shall schedule at least 
one prehearing conference at a reasonable time in advance of the 
hearing.
    (c) The ALJ may use prehearing conferences to discuss the following:
    (1) Simplification of the issues;
    (2) The necessity or desirability of amendments to the pleadings, 
including the need for a more definite statement;
    (3) Stipulations, admissions of fact or the content and authenticity 
of documents;
    (4) Whether the parties can agree to submission of the case on a 
stipulated record;
    (5) Whether a party chooses to waive appearance at an oral hearing 
and to submit only documentary evidence (subject to the objection of 
other parties) and written argument;
    (6) Limitation of the number of witnesses;
    (7) Scheduling dates for the exchange of witness lists and of 
proposed exhibits;
    (8) Discovery;
    (9) The time and place for the hearing; and
    (10) Such other matters as may tend to expedite the fair and just 
disposition of the proceedings.
    (d) The ALJ may issue an order containing all matters agreed upon by 
the parties or ordered by the ALJ at a prehearing conference.



Sec. 16.20  Disclosure of documents.

    (a) Upon written request to the reviewing official, the defendant 
may review any relevant and material documents, transcripts, records, 
and other material that relate to the allegations set out in the 
complaint and upon which the findings and conclusions of the 
investigating official under Sec. 16.4(b) are based unless such 
documents are subject to a privilege under Federal law. The Department 
shall schedule such review at a time and place convenient to it. Upon 
payment of fees for duplication, the defendant may obtain copies of such 
documents.
    (b) Upon written request to the reviewing official, the defendant 
also may obtian a copy of all exculpatory information in the possession 
of the reviewing official or investigating official relating to the 
allegations in the complaint, even if it is contained in a document that 
would otherwise be privileged. If the document would otherwise be 
privileged, only that portion containing exculpatory information must be 
disclosed.
    (c) The notice sent to the Attorney General from the reviewing 
official as described in Sec. 16.5 is not discoverable under any 
circumstances.
    (d) The defendant may file a motion to compel disclosure of the 
documents subject to the provisions of this section. Such a motion may 
only be filed with the ALJ following the filing of an answer pursuant to 
Sec. 16.9.



Sec. 16.21  Discovery.

    (a) The following types of discovery are authorized:
    (1) Requests for production of documents for inspection and copying;
    (2) Requests for admissions of the authenticity of any relevant 
document or of the truth of any relevant fact;
    (3) Written interrogatories; and

[[Page 239]]

    (4) Depositions.
    (b) For the purposes of this section and Secs. 16.22 and 16.23, the 
term ``documents'' includes information, documents, reports, answers, 
records, accounts, papers, and other data, either paper or electronic, 
and other documentary evidence. Nothing contained herein shall be 
interpreted to require the creation of a document.
    (c) Unless mutually agreed to by the parties, discovery is available 
only as ordered by the ALJ. The ALJ shall regulate the timing of 
discovery.
    (d) Motions for discovery. (1) A party seeking discovery may file a 
motion with the ALJ if it is not made available by another party on an 
informal basis. Such a motion shall be accompanied by a copy of the 
requested discovery, or in the case of depositions, a summary of the 
scope of the proposed deposition, and a description of the efforts which 
have been made by the party to obtain discovery.
    (2) Within ten days of service, a party may file an opposition to 
the motion and/or a motion for protective order as provided in 
Sec. 16.24.
    (3) The ALJ may grant a motion for discovery only if he or she finds 
that the discovery sought--
    (i) Is necessary for the expeditious, fair, and reasonable 
consideration of the issues;
    (ii) Is not unduly costly or burdensome;
    (iii) Will not unduly delay the proceeding; and
    (iv) Does not seek privileged information.
    (4) The burden of showing that discovery should be allowed is on the 
party seeking discovery.
    (5) The ALJ may grant discovery subject to a protective order under 
Sec. 16.24.
    (e) Depositions. (1) If a motion for deposition is granted, the ALJ 
shall issue a subpoena for the deponent, which may require the deponent 
to produce documents. The subpoena shall specify the time and place at 
which the deposition will be held.
    (2) The party seeking to depose shall serve the subpoena in the 
manner prescribed in Sec. 16.8.
    (3) The deponent may file with the ALJ a motion to quash the 
subpoena or a motion for a protective order within ten days of service.
    (4) The party seeking to depose shall provide for the taking of a 
verbatim transcript of the deposition, which it shall make available to 
all other parties for inspection and copying.
    (f) Each party shall bear its own costs of discovery.



Sec. 16.22  Exchange of witness lists, statements, and exhibits.

    (a) At least 15 days before the hearing or at such other time as may 
be ordered by the ALJ, the parties shall exchange witness lists, copies 
of prior statements of proposed witnesses, and copies of proposed 
hearing exhibits, including copies of any written statements that the 
party intends to offer in lieu of live testimony in accordance with 
Sec. 16.33(b). At the time the above documents are exchanged, any party 
that intends to rely on the transcript of deposition testimony in lieu 
of live testimony at the hearing, if permitted by the ALJ, shall provide 
each party with a copy of the specific pages of the transcript it 
intends to introduce into evidence.
    (b) If a party objects, the ALJ shall not admit into evidence the 
testimony of any witness whose name does not appear on the witness list 
or any exhibit not provided to the opposing party as provided above 
unless the ALJ finds good cause and that there is no prejudice to the 
objecting party.
    (c) Unless another party objects within the time set by the ALJ, 
documents exchanged in accordance with paragraph (a) of this section, 
shall be deemed to be authentic for the purpose of admissibility at the 
hearing.



Sec. 16.23  Subpoenas for attendance at hearing.

    (a) A party wishing to procure the appearance and testimony of any 
individual at the hearing may request that the ALJ issue a subpoena.
    (b) A subpoena requiring the attendance and testimony of an 
individual may also require the individual to produce documents at the 
hearing.
    (c) A party seeking a subpoena shall file a written request therefor 
not less than 15 days before the date fixed for the hearing unless 
otherwise allowed

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by the ALJ for good cause shown. Such request shall specify any 
documents to be produced and shall designate the witnesses and describe 
the address and location thereof with sufficient particularity to permit 
such witnesses to be found.
    (d) The subpoena shall specify the time and place at which the 
witness is to appear and any documents the witness is to bring with him 
or her.
    (e) The party seeking the subpoena shall serve it in the manner 
prescribed in Sec. 16.8. A subpoena on a party or upon an individual 
under the control of a party may be served by first class mail.
    (f) A party or the individual to whom the subpoena is directed may 
file with the ALJ a motion to quash the subpoena within ten days after 
service or on or before the time specified in the subpoena for 
compliance if it is less than ten days after service.



Sec. 16.24  Protective order.

    (a) A party or a prospective witness or deponent may file a motion 
for a protective order with respect to discovery sought by an opposing 
party or with respect to the hearing, seeking to limit the availability 
or disclosure of evidence.
    (b) In issuing a protective order, the ALJ may make any order which 
justice requires to protect a party or person from annoyance, 
embarrassment, oppression, or undue burden or expense, including one or 
more of the following:
    (1) That the discovery not be had;
    (2) That the discovery may be had only on specified terms and 
conditions, including a designation of the time or place;
    (3) That the discovery may be had only through a method of discovery 
other than that requested;
    (4) That certain matters not be inquired into, or that the scope of 
discovery be limited to certain matters;
    (5) That discovery be conducted with no one present except persons 
designated by the ALJ;
    (6) That the contents of discovery or evidence be sealed;
    (7) That a deposition after being sealed be opened only by order of 
the ALJ;
    (8) That a trade secret or other confidential research, development, 
commercial information, or facts pertaining to any criminal 
investigation, proceeding, or other administrative investigation not be 
disclosed or be disclosed only in a designated way; or
    (9) That the parties simultaneously file specified documents or 
information enclosed in sealed envelopes to be opened as directed by the 
ALJ.



Sec. 16.25  Fees.

    The party requesting a subpoena shall pay the cost of the fees and 
mileage of any witness subpoenaed in the amounts that would be payable 
to a witness in a proceeding in United States District Court. A check 
for witness fees and mileage shall accompany the subpoena when served, 
except that when a subpoena is issued on behalf of the authority, a 
check for witness fees and mileage need not accompany the subpoena.



Sec. 16.26  Form, filing and service of papers.

    (a) Form. (1) Documents filed with the ALJ shall include a original 
and two copies.
    (2) Every pleading and paper filed in the proceeding shall contain a 
caption setting forth the title of the action, the case number assigned 
by the ALJ, and a designation of the paper (e.g., motion to quash 
subpoena).
    (3) Every pleading and paper shall be signed by, and shall contain 
the address and telephone number of the party or the person on whose 
behalf the paper was filed, or his or her representative.
    (4) Papers are considered filed when they are mailed. Date of 
mailing may be etablished by a certificate from the party or its 
representative or by proof that the document was sent by certified or 
registered mail.
    (b) Service. A party filing a document with the ALJ shall, at the 
time of filing, serve a copy of such document on every other party. 
Service upon any party of any document other than the complaint or 
notice of hearing shall be made by delivering or mailing a copy to the 
party's last known address. When a party is represented by an attorney, 
service shall be made upon such representative in lieu of the actual 
party.

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    (c) Proof of service. A certificate of the individual serving the 
document by personal delivery or by mail, setting forth the manner of 
service, shall be proof of service.



Sec. 16.27  Computation of time.

    (a) In computing any period of time under this part or in an order 
issued thereunder, the time begins with the day following the act, 
event, or default, and includes the last day of the period, unless it is 
a Saturday, Sunday, or legal holiday observed by the Federal Government, 
in which event it includes the next business day.
    (b) When the period of time allowed is less than seven days, 
intermediate Saturdays, Sundays, and legal holidays observed by the 
Federal Government shall be excluded from the computation. When the 
period of time allowed is more than seven days, all intervening calendar 
days are included in the computation.
    (c) Where a document has been served or issued by mail, an 
additional five days will be added to the time permitted for any 
response.



Sec. 16.28  Motions.

    (a) Any application to the ALJ for an order or ruling shall be by 
motion. Motions shall state the relief sought, the authority relied 
upon, and the facts alleged, and shall be filed with the ALJ and served 
on all other parties.
    (b) Except for motions made during a prehearing conference or at the 
hearing, all motions shall be in writing. The ALJ may require that oral 
motions be reduced to writing.
    (c) Within 15 days after a written motion is served, or such other 
time as may be fixed by the ALJ, any party may file a response to such 
motion.
    (d) The ALJ may not grant a written motion before the time for 
filing responses thereto has expired, except upon consent of the parties 
or following a hearing on the motion, but may overrule or deny such 
motion without awaiting a response.
    (e) The ALJ shall make a reasonable effort to dispose of all 
outstanding motions prior to the beginning of the hearing.



Sec. 16.29  Sanctions.

    (a) The ALJ may sanction a person, including any party or 
representative for--
    (1) Failing to comply with an order, rule, or procedure governing 
the proceeding;
    (2) Failing to prosecute or defend an action; or
    (3) Engaging in other misconduct that interferes with the speedy, 
orderly, or fair conduct of the hearing.
    (b) Any such sanction, including but not limited to those listed in 
paragraphs (c), (d), and (e) of this section, shall reasonably relate to 
the nature of the failure or misconduct.
    (c) When a party fails to comply with an order, including an order 
for taking a deposition, the production of evidence within the party's 
control, or a request for admission, the ALJ may--
    (1) Draw an inference in favor of the requesting party with regard 
to the information sought;
    (2) In the case of requests for admission, deem each matter of which 
an admission is requested to be admitted;
    (3) Prohibit the party failing to comply with such order from 
introducing evidence concerning, or otherwise relying upon testimony 
relating to the information sought; and
    (4) Strike any part of the pleadings or other submissions of the 
party failing to comply with such request.
    (d) If a party fails to prosecute or defend an action under this 
part commenced by service of a notice of hearing, the ALJ may dismiss 
the action or may issue an initial decision imposing penalties and 
assessments.
    (e) The ALJ may refuse to consider any motion, request, response, 
brief or other document which is not filed in a timely fashion.



Sec. 16.30  The hearing and burden of proof.

    (a) The ALJ shall conduct a hearing on the record in order to 
determine whether the defendant is liable for a civil penalty or 
assessment under Sec. 16.3 and, if so, the appropriate amount of any 
such civil penalty or assessment considering any aggravating or 
mitigating factors.
    (b) The authority shall have the burden of proving defendant's 
liability and

[[Page 242]]

any aggravating factors by a preponderance of the evidence.
    (c) The defendant shall have the burden of proving any affirmative 
defenses and any mitigating factors by a preponderance of the evidence.
    (d) The hearing shall be open to the public unless otherwise ordered 
by the ALJ for good cause shown.



Sec. 16.31  Determining the amount of penalties and assessments.

    (a) In determining an appropriate amount of civil penalties and 
assessements, the ALJ and upon appeal, the authority head, should 
evaluate any circumstances that mitigate or aggravate the violation and 
should articulate in their opinions the reasons that support the 
penalties and assessments they impose. Because of the intangible costs 
of fraud, the expense of investigating such conduct, and the need to 
deter others who might be similarly tempted, double damages and a 
significant civil penalty ordinarily should be imposed.
    (b) Although not exhaustive, the following factors are among those 
that may influence the ALJ and the authority head in determining the 
amount of penalties and assessments to impose with respect to the 
misconduct (i.e., the false, fictitious, or fraudulent claims or 
statements) charged in the complaint:
    (1) The number of false, fictitious, or fraudulent claims or 
statements;
    (2) The time period over which such claims or statements were made;
    (3) The degree of the defendant's culpability with respect to the 
misconduct;
    (4) The amount of money or the value of the property, services, or 
benefit falsely claimed;
    (5) The value of the Government's actual loss as a result of the 
misconduct, including foreseeable consequential damages and the costs of 
investigation;
    (6) The relationship of the amount imposed as civil penalties to the 
amount of the Government's loss;
    (7) The potential or actual impact of the misconduct upon national 
defense, public health or safety, or public confidence in the management 
of Government programs and operations;
    (8) Whether the defendant has engaged in a pattern of the same or 
similar misconduct;
    (9) Whether the defendant attempted to conceal the misconduct;
    (10) The degree to which the defendant has involved others in the 
misconduct or in concealing it;
    (11) Where the misconduct of employees or agents is imputed to the 
defendant, the extent to which the defendant's practices fostered or 
attempted to preclude such misconduct;
    (12) Whether the defendant cooperated in or obstructed an 
investigation of the misconduct;
    (13) Whether the defendant assisted in identifying and prosecuting 
other wrongdoers;
    (14) The complexity of the program or transaction, and the degree of 
the defendant's sophistication with respect to it, including the extent 
of the defendant's prior participation in the program or in similar 
transactions;
    (15) Whether the defendant has been found, in any criminal, civil, 
or administrative proceeding to have engaged in similar misconduct or to 
have dealt dishonestly with the Government of the United States or of a 
State, directly or indirectly; and
    (16) The need to deter the defendant and others from engaging in the 
same or similar misconduct.
    (c) Nothing in this section shall be construed to limit the ALJ or 
the authority head from considering any other factors that in any given 
case may mitigate or aggravate the offense for which penalties and 
assessments are imposed.



Sec. 16.32  Location of hearing.

    (a) The hearing may be held--
    (1) In any judicial district of the United States in which the 
defendant resides or transacts business;
    (2) In any judicial district of the United States in which the claim 
or statement in issue was made; or
    (3) In such other place as may be agreed upon by the defendant and 
the ALJ.
    (b) Each party shall have the opportunity to present argument with 
respect to the location of the hearing.

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    (c) The hearing shall be held at the place and at the time ordered 
by the ALJ.



Sec. 16.33  Witnesses.

    (a) Except as provided in paragraph (b) of this section, testimony 
at the hearing shall be given orally by witnesses under oath or 
affirmation.
    (b) At the discretion of the ALJ, testimony may be admitted in the 
form of a written statement or deposition. Any such written statement 
must be provided to all other parties along with the last known address 
of such witness, in a manner which allows sufficient time for other 
parties to subpoena such witness for cross-examination at the hearing. 
Prior written statements of witnesses proposed to testify at the hearing 
and deposition transcripts shall be exchanged as provided in 
Sec. 16.22(a).
    (c) The ALJ shall exercise reasonable control over the mode and 
order of interrogating witnesses and presenting evidence so as to--
    (1) Make the interrogation and presentation effective for the 
ascertainment of the truth,
    (2) Avoid needless consumption of time, and
    (3) Protect witnesses from harassment or undue embarrassment.
    (d) The ALJ shall permit the parties to conduct such cross 
examination as may be required for a full and true disclosure of the 
facts.
    (e) At the discretion of the ALJ, a witness may be cross-examined on 
matters relevant to the proceeding without regard to the scope of his or 
her direct examination. To the extent permited by the ALJ, cross-
examination on matters outside the scope of direct examination shall be 
conducted in the manner of direct examination and may proceed by leading 
questions only if the witness is a hostile witness, an adverse party, or 
a witness identified with an adverse party.
    (f) Upon motion of any party, the ALJ shall order witnesses excluded 
so that they cannot hear the testimony of other witnesses. This rule 
does not authorize exclusion