[Federal Register Volume 79, Number 138 (Friday, July 18, 2014)]
[Rules and Regulations]
[Pages 41889-41891]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-16944]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[TD 9679]
RIN 1545-AJ93


Information Reporting by Passport Applicants

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

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SUMMARY: This document contains final regulations that provide 
information reporting rules for certain passport applicants. These 
final regulations apply to certain individuals applying for passports 
(including renewals) and provide guidance to such individuals about the 
information that must be included with their passport applications.

DATES: Effective Date: These regulations are effective on July 18, 
2014.
    Applicability Date: For dates of applicability, see Sec.  
301.6039E-1(d).

FOR FURTHER INFORMATION CONTACT: Rosy Lor at (202) 317-6933 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    On January 26, 2012, the Internal Revenue Service (IRS) and the 
Department of Treasury (Treasury Department) published in the Federal 
Register (77 FR 3964) a notice of proposed rulemaking (REG-208274-86) 
(the proposed regulations) that proposed amendments to 26 CFR part 301 
under section 6039E of the Internal Revenue Code (Code). Section 6039E 
provides rules concerning information reporting by U.S. passport and 
permanent resident applicants, and requires specified federal agencies 
to provide certain information to the IRS.
    The proposed regulations set forth the information a U.S. citizen 
applying for a U.S. passport (passport applicant),

[[Page 41890]]

other than a citizen who applies for an official passport, diplomatic 
passport, or passport for use on other official U.S. government 
business, must provide pursuant to section 6039E. They do not address 
information reporting by permanent resident applicants. The proposed 
regulations also withdrew a prior notice of proposed rulemaking (REG-
208274-86, 1993-1 CB 822) published in the Federal Register (57 FR 
61373) on December 24, 1992. The proposed regulations are proposed to 
be effective for applications submitted after the date final 
regulations are published in the Federal Register.
    Comments were received on the proposed regulations. No public 
hearing was requested or held. After consideration of the comments, 
this Treasury decision adopts the proposed regulations with minor 
revisions as described in this preamble.

Explanation and Summary of Comments

Scope of Information Reporting by Passport Applicants

    The proposed regulations require a passport applicant, other than 
an individual who applies for an official passport, diplomatic 
passport, or passport for use on other official U.S. government 
business, to provide certain information with his or her passport 
application pursuant to section 6039E. Specifically, the applicant must 
provide his or her full name and, if applicable, previous name; 
permanent address and, if different, the applicant's mailing address; 
taxpayer identifying number (TIN); and date of birth. A commentator 
requested that the scope of information be limited to the passport 
applicant's name, TIN, if any, and foreign country of residence, if 
any. The final regulations do not adopt this comment. Section 
6039E(b)(4) grants the Secretary the authority to require any 
additional information as he may prescribe. The Department of State 
(State Department) requires the items of information required by these 
final regulations as part of its application process. Accordingly, the 
IRS and the Treasury Department believe that requiring this information 
is not unduly burdensome to the applicant.

Penalty for Failure to Provide Information

    The proposed regulations provide guidance on the circumstances 
under which the IRS may impose a $500 penalty on a passport applicant 
who fails to provide the required information. Under the proposed 
regulations, before assessing the penalty, the IRS will provide to the 
passport applicant written notice of the potential assessment of the 
penalty, and the applicant has 60 days (90 days if the notice is 
addressed to an applicant outside of the United States) to respond to 
the notice. If the passport applicant demonstrates to the satisfaction 
of the Commissioner or the Commissioner's delegate that the failure to 
provide the required information is due to reasonable cause and not due 
to willful neglect, after considering all the surrounding 
circumstances, then the IRS will not assess the penalty.
    A commentator requested clarification with respect to when the 
period for responding begins to run. In response to the comment, the 
final regulations provide that a passport applicant has 60 days from 
the date of the notice of potential assessment of the penalty, or 90 
days from such date if the notice is addressed to an applicant outside 
the United States, to respond to the notice.
    A commentator requested that additional guidance be provided with 
respect to the factors that will be considered in determining whether a 
passport applicant has established reasonable cause for the failure to 
provide the required information. The comment was not adopted because 
this factual determination by the IRS is made on a case-by-case basis 
and involves consideration of all the surrounding circumstances.

Other Comments Received

    Commentators requested that the proposed regulations be withdrawn 
because they may unduly affect the right of U.S. citizens to travel and 
apply for a U.S. passport. The IRS and the Treasury Department 
coordinated with the State Department in promulgating the proposed and 
final regulations. These regulations do not affect the manner in which 
the State Department processes passport applications, and Code section 
6039E requires information reporting by passport applicants for tax 
administration purposes. Accordingly, the comments were not adopted.
    The proposed regulations provide that the rules would apply to 
passport applications submitted after the date of publication of the 
Treasury decision adopting these rules as final regulations. A 
commentator requested that the regulations be effective for 
applications submitted after January 1st of the year following the date 
the regulations are published, rather than for applications submitted 
after the date the final regulations are published, on grounds that 
section 7805(b) of the Code requires such a delay of the effective 
date. This comment was not adopted. Section 7805(b), as amended in 1996 
by the Taxpayer Bill of Rights 2, only applies with respect to 
regulations which relate to statutory provisions enacted on or after 
July 30, 1996. Because section 6039E was enacted in 1986, section 
7805(b) does not apply to these final regulations. Furthermore, even if 
the version of section 7805(b) cited by the commentator were to apply, 
section 7805(b) does not require the requested delay of the effective 
date. This is so because the final regulations apply to passport 
applications submitted after July 18, 2014, which is not before January 
26, 2012, the date of the proposed regulations. See section 
7805(b)(1)(B). Accordingly, these final regulations adopt the 
effective/applicability date included in the proposed regulations.

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in Executive Order 12866. 
Therefore, a regulatory assessment is not required. It also has been 
determined that section 553(b) of the Administrative Procedure Act (5 
U.S.C. chapter 5) does 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), this regulation has been submitted 
to the Chief Counsel for Advocacy of the Small Business Administration 
for comment on its impact on small business.

Drafting Information

    The principal author of this regulation is Rosy Lor of the Office 
of Associate Chief Counsel (International). However, other personnel 
from the IRS and the Treasury Department participated in their 
development.

List of Subjects in 26 CFR Part 301

    Administrative practice and procedure, Alimony, Bankruptcy, Child 
support, Continental shelf, Courts, Crime, Employment taxes, Estate 
taxes, Excise taxes, Gift taxes, Income taxes, Investigations, Law 
enforcement, Oil pollution, Penalties, Pensions, Reporting and 
recordkeeping requirements, Seals and insignia, Statistics, Taxes.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR part 301 is amended as follows:

[[Page 41891]]

PART 301--PROCEDURE AND ADMINISTRATION

0
Paragraph 1. The authority citation for part 301 is amended by adding 
an entry in numerical order to read in part as follows:

    Authority:  26 U.S.C. 7805 * * *
    Section 301.6039E-1 also issued under 26 U.S.C. 6039E.


0
Par. 2. Section 301.6039E-1 is added to read as follows:


Sec.  301.6039E-1  Information reporting by passport applicants.

    (a) In general. Every individual who applies for a U.S. passport or 
the renewal of a passport (passport applicant), other than a passport 
for use in diplomatic, military, or other official U.S. government 
business, shall include with his or her passport application the 
information described in paragraph (b)(1) of this section in the time 
and manner described in paragraph (b)(2) of this section.
    (b) Required information--(1) In general. The information required 
under paragraph (a) of this section shall include the following 
information:
    (i) The passport applicant's full name and, if applicable, previous 
name;
    (ii) The passport applicant's permanent address and, if different, 
mailing address;
    (iii) The passport applicant's taxpayer identifying number (TIN), 
if such a number has been issued to the passport applicant. A TIN means 
the individual's social security number (SSN) issued by the Social 
Security Administration. A passport applicant who does not have an SSN 
must enter zeros in the appropriate space on the passport application; 
and
    (iv) The passport applicant's date of birth.
    (2) Time and manner for furnishing information. A passport 
applicant must provide the information required by this section with 
his or her passport application, whether by personal appearance or 
mail, to the Department of State (including United States Embassies and 
Consular posts abroad).
    (c) Penalties--(1) In general. If the information required by 
paragraph (b)(1) of this section is incomplete or incorrect, or the 
information is not filed in the time and manner described in paragraph 
(b)(2) of this section, then the passport applicant may be subject to a 
penalty equal to $500 per application. Before assessing a penalty under 
this section, the IRS will provide to the passport applicant written 
notice of the potential assessment of the $500 penalty, requesting the 
information being sought, and offering the applicant an opportunity to 
explain why the information was not provided with the passport 
application. A passport applicant has 60 days from the date of the 
notice of the potential assessment of the penalty (90 days from such 
date if the notice is addressed to an applicant outside the United 
States) to respond to the notice. If the passport applicant 
demonstrates to the satisfaction of the Commissioner (or the 
Commissioner's delegate) that the failure is due to reasonable cause 
and not due to willful neglect, after considering all the surrounding 
circumstances, then the IRS will not assess the penalty.
    (2) Example. The following example illustrates the provisions of 
paragraph (c) of this section.

    Example. C, a citizen of the United States, makes an error in 
supplying information on his passport application. Based on the 
nature of the error and C's timely response to correct the error 
after being contacted by the IRS, the Commissioner concludes that 
the mistake is due to reasonable cause and not due to willful 
neglect. Accordingly, no penalty is assessed.

    (d) Effective/applicability date. This section applies to passport 
applications submitted after July 18, 2014.

John Dalrymple,
Deputy Commissioner for Services and Enforcement.
    Approved: June 26, 2014.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2014-16944 Filed 7-17-14; 8:45 am]
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