[Federal Register Volume 79, Number 117 (Wednesday, June 18, 2014)]
[Rules and Regulations]
[Pages 34625-34626]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-14265]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[TD 9669]
RIN 1545-BM25


Participation of a Person Described in Section 6103(n) in a 
Summons Interview Under Section 7602(a)(2) of the Internal Revenue Code

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Temporary regulations.

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SUMMARY: This document contains temporary regulations modifying 
regulations promulgated under section 7602(a) of the Internal Revenue 
Code relating to administrative summonses. Specifically, these 
temporary regulations clarify that persons with whom the IRS or the 
Office of Chief Counsel (Chief Counsel) contracts for services 
described in section 6103(n) and its implementing regulations may be 
included as persons designated to receive summoned books, papers, 
records, or other data and to take summoned testimony under oath. These 
temporary regulations may affect taxpayers, a taxpayer's officers or 
employees, and any third party who is served with a summons, as well as 
any other person entitled to notice of a summons. The text of these 
temporary regulations serves as the text of the proposed regulations 
(REG-121542-14) set forth in the notice of proposed rulemaking on this 
subject in the Proposed Rules section in this issue of the Federal 
Register.

DATES: Effective Date: These regulations are effective on June 18, 
2014.
    Applicability Date: For date of applicability, see paragraph (d) of 
this temporary regulation.

FOR FURTHER INFORMATION CONTACT: A M Gulas at (202) 317-6834 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION: 

Background and Explanation of Provisions

    These temporary regulations amend Procedure and Administration 
Regulations (26 CFR part 301) promulgated under section 7602 of the 
Internal Revenue Code. These temporary regulations make clear that 
persons described in section 6103(n) and Treas. Reg. Sec.  301.6103(n)-
1(a) with whom the IRS or Chief Counsel contracts for services may 
receive books, papers, records, or other data summoned by the IRS and 
take testimony of a person who the IRS has summoned as a witness to 
provide testimony under oath. While IRS officers and employees remain 
responsible for issuing summonses and developing and conducting 
examinations, the temporary regulations clarify that contractors are 
permitted to participate fully in a summons interview. Full 
participation includes, but is not limited to, receipt, review, and use 
of summoned books, papers, records, or other data, being present during 
summons interviews, questioning the person providing testimony under 
oath, and asking a summoned person's representative to clarify an 
objection or an assertion of privilege.

[[Page 34626]]

    The assistance of persons from outside the IRS or Chief Counsel 
promotes efficient administration and enforcement of laws administered 
by the IRS, by providing specialized knowledge, skills, or abilities 
that the IRS officers or employees assigned to the case may not 
possess. For example, outside persons often assist the IRS in matters 
involving transfer pricing. To clarify the role of these outside 
persons, these temporary regulations expressly provide that when an IRS 
officer or employee summons a taxpayer or other witness to produce 
books, papers, records, or other data and/or to give testimony, an 
outside person hired by the IRS or Chief Counsel authorized to receive 
returns or return information pursuant to section 6103(n) may receive 
the summoned books, papers, records, or other data and take the 
testimony of the witness under oath.
    When the IRS hires an outside person to assist an IRS officer or 
employee to review books and papers, analyze data, or take testimony 
from a summoned witness, the IRS will ensure that the inherently 
governmental functions associated with section 7602, for example, 
deciding whether to issue a summons, deciding whom to summon, what 
information must be produced or who will be required to testify, and 
issuing the summons, will still be performed by an IRS officer or 
employee. The contractors' role will be limited to functions that are 
not inherently governmental, such as taking testimony by asking 
questions, reviewing books or papers, or analyzing other data. As a 
further safeguard, the temporary regulations expressly provide that any 
contractor that the IRS authorizes to ask questions of a summoned 
witness testifying under oath must do so in the presence and under the 
guidance of an IRS officer or employee.
    The conclusion that contractors may receive summoned books and 
papers, analyze data, and question summoned witnesses is consistent 
with Treas. Reg. Sec.  301.7602-2(c)(1)(i)(B) and (c)(1)(ii) Example 2. 
Under those rules, which implement the provision requiring notice to 
the taxpayer of contacts by IRS officers or employees with third 
parties, contractors (in this case appraisers) are treated in the same 
manner as IRS officers or employees when they contact industry experts 
to discuss a taxpayer's business.
    The temporary regulations are effective for summons interviews 
conducted on or after June 18, 2014. The applicability of the temporary 
regulations will expire on June 16, 2017.

Special Analyses

    It has been determined that this Treasury Decision is not a 
significant regulatory action as defined in Executive Order 12866, as 
supplemented by Executive Order 13563. Therefore, a regulatory 
assessment is not required. The IRS has determined that sections 553(b) 
and (d) of the Administrative Procedure Act (5 U.S.C. chapter 5) do not 
apply to these regulations and because the regulations do not impose a 
collection of information on small entities, the Regulatory Flexibility 
Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of 
the Internal Revenue Code, the IRS will submit these temporary 
regulations to the Chief Counsel for Advocacy of the Small Business 
Administration for comments about the regulations' impact on small 
business.

Drafting Information

    The principal author of these regulations is A M Gulas of the 
Office of Associate Chief Counsel (Procedure and Administration).

List of Subjects in 26 CFR Part 301

    Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income 
taxes, Penalties, Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR part 301 is amended as follows:

PART 301--PROCEDURE AND ADMINISTRATION

0
Paragraph 1.
    The authority citation for part 301 continues to read in part as 
follows:

    Authority: 26 U.S.C. 7805 * * *


0
Par. 2. Section 301.7602-1T is added to read as follows:


Sec.  301.7602-1T  Examination of books and witnesses (temporary).

    (a) [Reserved]. For further guidance, see Sec.  301.7602-1(a).
    (b) through (b)(2) [Reserved]. For further guidance, see Sec.  
301.7602-1(b) through (b)(2).
    (b)(3) Participation of a person described in section 6103(n). For 
purposes of this paragraph (b), a person authorized to receive returns 
or return information under section 6103(n) and Sec.  301.6103(n)-1(a) 
of the regulations may receive and examine books, papers, records, or 
other data produced in compliance with the summons and, in the presence 
and under the guidance of an IRS officer or employee, participate fully 
in the interview of the witness summoned by the IRS to provide 
testimony under oath. Fully participating in an interview includes, but 
is not limited to, receipt, review, and use of summoned books, papers, 
records, or other data; being present during summons interviews; 
questioning the person providing testimony under oath; and asking a 
summoned person's representative to clarify an objection or assertion 
of privilege.
    (c) [Reserved]. For further guidance, see Sec.  301.7602-1(c).
    (d) Effective/applicability date. This section applies to summons 
interviews conducted on or after June 18, 2014.
    (e) Expiration date. The applicability of this section expires on 
or before June 16, 2017.

Heather C. Maloy,
Acting Deputy Commissioner for Services and Enforcement.
    Approved: June 9, 2014
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2014-14265 Filed 6-17-14; 8:45 am]
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