Federal Register / Vol. 79, No. 127 / Wednesday, July 2, 2014 / Rules and Regulations 37623 

1As discussed in a memorandum of 

understanding entered into by the Food and Drug 

Administration (FDA) and the National Institute on 

Drug Abuse (NIDA), the FDA acts as the lead agency 

within the HHS in carrying out the Secretary’s 

scheduling responsibilities under the CSA, with the 

concurrence of NIDA. 50 FR 9518, Mar. 8, 1985. 

The Secretary of the HHS has delegated to the 

Assistant Secretary for Health of the HHS the 

authority to make domestic drug scheduling 

recommendations. 58 FR 35460, July 1, 1993. 2See infra note 3. 3For simplicity, from this point forward in the 

document, ‘‘tramadol’’ is used to refer to 

2-[(dimethylamino)methyl]-1-(3- 

methoxyphenyl)cyclohexanol, its salts, isomers, 

salts of isomers, and all isomeric configurations of 

possible forms. 

(ii) Indications for use. For reduction 

of the incidence of cervical abscesses; 

treatment of bacterial swine enteritis 

(salmonellosis or necrotic enteritis 

caused by Salmonella choleraesuis and 

vibrionic dysentery); prevention of these 

diseases during times of stress; and 

maintenance of weight gains in the 

presence of atrophic rhinitis. 

(iii) Limitations. Feed as the sole 

ration. Withdraw 15 days prior to 

slaughter. 

§ 558.145 [Amended] 

■ 3. In § 558.145, in paragraph (a)(2), 

remove ‘‘Nos. 048164 and 054771’’ and 

in its place add ‘‘No. 048164’’. 

Dated: June 25, 2014. 

Bernadette Dunham, 

Director, Center for Veterinary Medicine. 

[FR Doc. 2014–15274 Filed 6–30–14; 11:15 am] 

BILLING CODE 4164–01–P 

DEPARTMENT OF JUSTICE 

Drug Enforcement Administration 

21 CFR Part 1308 

[Docket No. DEA–351] 

Schedules of Controlled Substances: 

Placement of Tramadol Into Schedule 

IV 

AGENCY: Drug Enforcement 

Administration, Department of Justice. 

ACTION: Final rule. 

SUMMARY: With the issuance of this final 

rule, the Deputy Administrator of the 

Drug Enforcement Administration 

places the substance 

2-[(dimethylamino)methyl]-1-(3- 

methoxyphenyl)cyclohexanol 

(tramadol), including its salts, isomers, 

and salts of isomers, into schedule IV of 

the Controlled Substances Act. This 

scheduling action is pursuant to the 

Controlled Substances Act which 

requires that such actions be made on 

the record after opportunity for a 

hearing through formal rulemaking. 

This action imposes the regulatory 

controls and administrative, civil, and 

criminal sanctions applicable to 

schedule IV controlled substances on 

persons who handle (manufacture, 

distribute, dispense, import, export, 

engage in research, conduct 

instructional activities with, or possess) 

or propose to handle tramadol. 

DATES: Effective August 18, 2014. 

FOR FURTHER INFORMATION CONTACT: 

Erika Gehrmann, Office of Diversion 

Control, Drug Enforcement 

Administration; Mailing Address: 8701 

Morrissette Drive, Springfield, Virginia 

22152; Telephone: (202) 598–6812. 

SUPPLEMENTARY INFORMATION: 

Legal Authority 

The Drug Enforcement 

Administration (DEA) implements and 

enforces titles II and III of the 

Comprehensive Drug Abuse Prevention 

and Control Act of 1970, as amended. 

Titles II and III are referred to as the 

‘‘Controlled Substances Act’’ and the 

‘‘Controlled Substances Import and 

Export Act,’’ respectively, but they are 

collectively referred to as the 

‘‘Controlled Substances Act’’ or the 

‘‘CSA’’ for the purposes of this action. 

21 U.S.C. 801–971. The DEA publishes 

the implementing regulations for these 

statutes in title 21 of the Code of Federal 

Regulations (CFR), parts 1300 to 1321. 

The CSA and its implementing 

regulations are designed to prevent, 

detect, and eliminate the diversion of 

controlled substances and listed 

chemicals into the illicit market while 

providing for the legitimate medical, 

scientific, research, and industrial needs 

of the United States. Controlled 

substances have the potential for abuse 

and dependence and are controlled to 

protect the public health and safety. 

Under the CSA, every controlled 

substance is classified in one of five 

schedules based upon its potential for 

abuse, currently accepted medical use, 

and the degree of dependence the drug 

or other substance may cause. 21 U.S.C. 

812. The initial schedules of controlled 

substances established by Congress are 

found at 21 U.S.C. 812(c) and the 

current list of scheduled substances is 

published at 21 CFR part 1308. 

Pursuant to 21 U.S.C. 811(a)(1), the 

Attorney General may, by rule, ‘‘add to 

such a schedule or transfer between 

such schedules any drug or other 

substance if he (A) finds that such drug 

or other substance has a potential for 

abuse, and (B) makes with respect to 

such drug or other substance the 

findings prescribed by [21 U.S.C. 812(b)] 

for the schedule in which such drug is 

to be placed * * *.’’ The Attorney 

General has delegated scheduling 

authority under 21 U.S.C. 811 to the 

Administrator of the DEA, 28 CFR 

0.100, who in turn has redelegated that 

authority to the Deputy Administrator of 

the DEA, 28 CFR part 0, appendix to 

subpart R. 

The CSA provides that scheduling of 

any drug or other substance may be 

initiated by the Attorney General (1) on 

his own motion, (2) at the request of the 

Secretary of the Department of Health 

and Human Services (HHS),1 or (3) on 

the petition of any interested party. 21 

U.S.C. 811(a). This action was initiated 

by four petitions to schedule tramadol 

under the CSA, and is supported by, 

inter alia, a recommendation from the 

Assistant Secretary of the HHS and an 

evaluation of all relevant data by the 

DEA. This action imposes the regulatory 

controls and administrative, civil, and 

criminal sanctions applicable to 

schedule IV controlled substances on 

persons who handle or propose to 

handle tramadol.2

Background 

Tramadol is a centrally acting opioid 

analgesic that produces its primary 

opioid-like action through an active 

metabolite, referred to as the ‘‘M1’’ 

metabolite (O-desmethyltramadol). It 

was first approved for use in the United 

States by the U.S. Food and Drug 

Administration (FDA) in 1995 under the 

trade name ULTRAM®. Subsequently, 

the FDA approved for marketing 

generic, combination, and extended 

release tramadol products. 

Because of its chemical structure, 

2-[(dimethylamino)methyl]-1-(3- 

methoxyphenyl) cyclohexanol can exist 

as different isomeric forms. Thus, 

various prefixes can be associated with 

the name. Some examples of these 

prefixes include dextro, levo, d, l, R, S, 

cis, trans, erythro, threo, (+), (¥), 

racemic, and may include combinations 

of these prefixes sometimes with 

numerical designations. Any such 

isomer is, in fact, 

2-[(dimethylamino)methyl]-1-(3- 

methoxyphenyl)cyclohexanol. Tramadol 

is typically formulated as a racemic 

mixture identified as (±)-cis-2- 

[(dimethylamino)methyl]-1-(3- 

methoxyphenyl)cyclohexanol 

hydrochloride.3

HHS and DEA Eight-Factor Analyses 

On September 16, 2010, the Assistant 

Secretary of the HHS provided to the 

DEA a scientific and medical evaluation 

and scheduling recommendation 

entitled ‘‘Basis for the Recommendation 

to Schedule Tramadol in Schedule IV of 

the Controlled Substances Act.’’ After 

considering the eight factors in 21 


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37624 Federal Register / Vol. 79, No. 127 / Wednesday, July 2, 2014 / Rules and Regulations 

U.S.C. 811(c), as well as the substance’s 

abuse potential, legitimate medical use, 

and dependence liability, the Assistant 

Secretary of the HHS recommended that 

tramadol be controlled in schedule IV of 

the CSA under 21 U.S.C. 812(b). The 

DEA conducted its own eight-factor 

analysis of tramadol pursuant to 21 

U.S.C. 811(c). Both the DEA and HHS 

analyses are available in their entirety in 

the public docket for this rule (Docket 

No. DEA–351) at http://

www.regulations.gov under ‘‘Supporting 

and Related Material.’’ 

Determination To Schedule Tramadol 

After a review of the available data, 

including the scientific and medical 

evaluation and the scheduling 

recommendation from the HHS, the 

Deputy Administrator of the DEA 

published in the Federal Register a 

notice of proposed rulemaking (NPRM) 

entitled ‘‘Schedules of Controlled 

Substances: Placement of Tramadol Into 

Schedule IV’’ which proposed to place 

tramadol in schedule IV of the CSA. 78 

FR 65923, Nov. 4, 2013. The proposed 

rule provided an opportunity for 

interested persons to file a request for 

hearing in accordance with DEA 

regulations by December 4, 2013. No 

requests for such a hearing were 

received by the DEA. The NPRM also 

provided an opportunity for interested 

persons to submit written comments on 

the proposed rule on or before January 

3, 2014. 

Comments Received 

The DEA received 27 comments on 

the proposed rule to schedule tramadol. 

Sixteen commenters expressed support 

for controlling tramadol as a schedule 

IV controlled substance, nine 

commenters were opposed to tramadol 

being placed into schedule IV of the 

CSA, and two commenters did not take 

a position. 

Support of the Proposed Rule 

Sixteen commenters supported 

controlling tramadol as a schedule IV 

controlled substance. Among those 16 

commenters expressing support were 

two State Boards of Pharmacy. One 

veterinary distributor’s association 

stated that it supports the DEA 

designating tramadol as a schedule IV 

controlled substance because it will 

enable distributors to operate with 

efficiency and consistency across the 

United States along with requiring an 

increased level of due diligence and 

monitoring. A national veterinary 

medical association, a national 

healthcare association, and a national 

pharmacy association were also among 

those who expressed support for the 

rule. 

Several commenters supporting the 

rule expressed their concern regarding 

the abuse potential and resulting threat 

to public health posed by tramadol. 

Writing in support of scheduling 

tramadol, a local multi-agency 

prescription drug abuse task force 

described tramadol as a ‘‘ ‘loop hole’ 

drug which is addictive, abused, and 

diverted,’’ but which is not yet realized 

as such by many patients and 

prescribers due to its current noncontrolled status. One commenter stated 

that given the abuse potential of 

tramadol (which according to the 

commenter is often abused in 

combination with other controlled 

substances), scheduling this drug will 

ensure that it is subject to the same 

controls as other similarly addictive 

controlled substances. Yet another 

commenter noted that although 

analgesics are addictive to a very small 

percentage of people that use them, 

scheduling this drug would reduce the 

number of emergency room visits and 

number of overdose deaths. 

A certified pharmacy technician 

described her experiences of witnessing 

the abuse of tramadol by patients on a 

daily basis. She stated the stricter 

controlled substance laws of the State of 

Mississippi have seemed to lessen the 

abuse. A group of pharmacy students 

noted that tramadol, marketed as 

ULTRAM®, is currently the only 

uncontrolled opioid on the market. 

Another commenter who supported the 

rule stated: ‘‘In the field of pharmacy, 

some patients have expressed concern 

about the reclassification of tramadol, 

believing that new regulations could 

complicate or impede new and chronic 

patients from receiving their 

prescriptions.’’ This commenter noted 

that this is a common misconception 

since schedule IV controlled 

medications are in fact readily available 

for those with a valid prescription and 

the appropriate medical condition. In 

addition, the commenter noted that 

these types of prescriptions also have 

the added convenience of being easily 

transferrable between pharmacies, 

phoned-in by prescribers, and refilled 

five times over a six month period. 

DEA Response: The DEA appreciates 

the support for the rule. 

Opposition to the Proposed Rule 

1. Access to Pain Medication by the 

Elderly 

An association for consulting 

pharmacists stated that controlling 

tramadol would limit access to needed 

pain medications for elderly patients 

and opposed the proposed scheduling 

until a workable solution to ensure 

timely access for patients in long-term 

care facilities (LTCFs) can be reached. 

Specifically, the commenter expressed 

concern that, should tramadol become a 

controlled substance, LTCF nurses 

would no longer be able to call-in or fax 

a chart order directly to the pharmacy. 

According to the commenter, in LTCFs, 

prescribers must call, hand deliver, or 

fax controlled substance prescriptions to 

pharmacies, and this in turn involves 

LTCF employees having to track down 

the (often non-employee) prescriber. 

This practice, according to the 

commenter, can severely impede 

delivery of prescription medications to 

LTCF patients. 

DEA Response: The processes and 

procedures associated with dispensing a 

controlled substance are not relevant 

factors to the determination whether a 

substance should be controlled or under 

what schedule a substance should be 

placed if it is controlled. See 21 U.S.C. 

811 and 812. Nonetheless, controlling 

tramadol as a schedule IV controlled 

substance should not hinder legitimate 

access to the medicine, whether within 

the LTCF setting or elsewhere. As 

summarized by a State Board of 

Pharmacy who wrote in support of 

controlling tramadol: ‘‘Scheduling a 

medication does not make it impossible 

to prescribe, dispense and administer 

the medication. However, it does alert 

practitioners, dispensers and perhaps 

even some patients that the medication 

has some potential dangers for addiction 

and misuse, and frequent monitoring 

and evaluation by practitioners and 

dispensers of such drugs is necessary for 

appropriate patient care.’’ 

Currently, tramadol is a noncontrolled medication that the FDA has 

approved only for prescription use. 

Tramadol, as a schedule IV controlled 

substance, will continue to require a 

prescription, either orally or in writing. 

21 U.S.C. 829(b). The CSA allows for the 

legitimate prescribing and use of 

controlled substances; therefore, the 

control of tramadol should not hinder 

patient access to the medication. The 

prescription for tramadol, as a 

controlled substance, may only be 

issued by an individual practitioner 

who is either registered with the DEA or 

exempt from registration. 21 CFR 

1306.03. A prescription for a controlled 

substance must also be issued for a 

legitimate medical purpose by an 

individual practitioner acting in the 

course of his professional practice. 21 

CFR 1306.04(a). Upon the effective date 

of this rule, tramadol prescriptions may 

be filled up to six months after the date 

prescribed, and may be refilled up to 


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Federal Register / Vol. 79, No. 127 / Wednesday, July 2, 2014 / Rules and Regulations 37625 

4E.g., ‘‘Preventing the Accumulation of Surplus 

Controlled Substances at Long Term Care 

Facilities,’’ 66 FR 20833, Apr. 25, 2001; ‘‘Role of 

Authorized Agents in Communicating Controlled 

Substance Prescriptions to Pharmacies,’’ 75 FR 

61613, Oct. 6, 2010. 

five times within six months after the 

date on which such prescription was 

issued. 21 U.S.C. 829(b); 21 CFR 

1306.22 (a) and (e); see also 21 CFR 

1306.23 (b) and (c). In addition, there 

are no dosage unit limitations for 

prescriptions for schedule III, IV, or V 

controlled substances unless the 

controlled substance is prescribed for 

administration to an ultimate user who 

is institutionalized. 21 CFR 1306.24(c). 

The substantive requirement that a 

practitioner acting in the usual course of 

professional practice determine that 

tramadol is medically necessary to treat 

the patient does not hinder legitimate 

access; the procedural requirements 

relating to transmission of a legitimate 

prescription do not hinder legitimate 

access either. Once an individual 

practitioner makes a medical 

determination to prescribe a schedule III 

through V controlled substance, a 

prescriber’s agent may call-in or fax a 

prescription for it. See 21 CFR 

1306.03(b), 1306.21(a). The DEA 

recognizes the unique challenges 

pertaining to handling and using 

controlled substances at LTCFs and has 

previously addressed related concerns.4

A DEA registered practitioner may not 

delegate to a nurse, a pharmacist, or 

anyone else his or her authority to make 

a medical determination whether to 

prescribe a particular controlled 

substance. However, oral prescriptions 

for controlled substances in schedules 

III–V may be communicated to a 

pharmacy by an employee or agent of 

the prescribing practitioner, 21 CFR 

1306.03(b). Note that the prescribing 

practitioner remains responsible for 

ensuring that the prescription conforms 

‘‘in all essential respects to the law and 

regulations,’’ 21 CFR 1306.05(f). 75 FR 

61613, 61614, Oct. 6, 2010. This 

requires the practitioner alone to 

determine—on a prescription by 

prescription basis—whether the 

prescription is supported by a legitimate 

medical purpose and that all the 

essential elements of the prescription 

are met. 

2. Fear of Criminal Action 

Some commenters expressed concern 

that scheduling tramadol would deter 

prescribers from properly treating pain 

for fear of facing criminal action. 

DEA Response: One of the most 

important principles underlying the 

CSA is that every prescription for a 

controlled substance must be issued for 

a legitimate medical purpose by an 

individual practitioner acting in the 

usual course of his professional 

practice. 21 CFR 1306.04(a); U.S. v. 

Moore, 423 U.S. 122 (1975) (holding 

registered physicians may be prosecuted 

for violation of the CSA when their 

activities fall outside the usual course of 

professional practice). The DEA Policy 

Statement entitled ‘‘Dispensing 

Controlled Substances for the Treatment 

of Pain,’’ 71 FR 52715 (Sept. 6, 2006), 

makes clear that this longstanding 

requirement should in no way interfere 

with the legitimate practice of medicine 

or cause any practitioner to be reluctant 

to provide legitimate pain treatment. 

Providers (as well as ultimate users) 

become subject to administrative, civil, 

and/or criminal proceedings when their 

activity involving controlled substances 

is not authorized by, or in violation of, 

the CSA. 

3. Shift to the Black-Market 

Several commenters stated that 

scheduling tramadol would limit their 

access to tramadol, causing them to 

have to buy tramadol on the street. 

DEA Response: As discussed above, 

schedule IV controlled medications are 

readily available for legitimate medical 

use. 

4. Scientific Data Not Sufficient 

One commenter reviewed selected 

published literature and submitted a 

short review document with a 

conclusion that ‘‘the current available 

scientific evidence supports the 

continuation of a non-controlled 

classification’’ of tramadol. 

DEA Response: The CSA mandates 

that both the HHS and DEA conduct a 

review of the drug or other substance as 

related to the eight factors enumerated 

in 21 U.S.C. 811(c): (1) Its actual or 

relative potential for abuse; (2) scientific 

evidence of its pharmacological effect, if 

known; (3) the state of current scientific 

knowledge regarding the drug or other 

substance; (4) its history and current 

pattern of abuse; (5) the scope, duration, 

and significant of abuse; (6) what, if any, 

risk there is to the public health; (7) its 

psychic or physiological dependence 

liability; and (8) whether the substance 

is an immediate precursor of a 

substance already controlled. The 

Assistant Secretary of the HHS provided 

a scientific and medical evaluation and 

a scheduling recommendation to control 

tramadol as a schedule IV controlled 

substance. In accordance with 21 U.S.C. 

811(c), the DEA conducted its own 

analysis of the eight factors 

determinative of control. Besides 

published literature, various other data 

as detailed in the supporting documents 

were considered in making the 

scheduling determination for tramadol. 

Thus, the scheduling determination is 

based on a comprehensive evaluation of 

all available data as related to the above 

mentioned eight factors. The summary 

of each factor as analyzed by the HHS 

and the DEA, and as considered by the 

DEA in this scheduling action, was 

provided in the proposed rule. Both the 

DEA and the HHS analyses have been 

made available in their entirety under 

‘‘Supporting and Related Material’’ of 

the public docket for this rule at 

http://www.regulations.gov under 

Docket No. DEA–351. 

As discussed in detail in the DEA’s 

eight-factor analysis, collectively, the 

available information regarding 

tramadol supports an abuse potential 

that is less than that of schedule III and 

similar to that for schedule IV. 

Preclinical self-administration studies 

show that tramadol produces limited 

reinforcing effects, consistent with 

schedule IV. At supra-therapeutic doses, 

tramadol can produce subjective 

reinforcing effects similar to that of 

morphine (C–II) and approaching that of 

oxycodone (C–II). At high doses (but not 

therapeutic doses), tramadol can 

produce subjective reinforcing effects 

similar to propoxyphene (C–IV). For 

both tramadol and propoxyphene, the 

doses required to produce significant 

subjective reinforcing effects are in a 

range causing sufficient adverse effects. 

These observations indicate that the 

subjective reinforcing effects, a 

reflection of abuse potential, of tramadol 

are less than that of morphine or 

oxycodone, but similar to that of 

propoxyphene. 

Based on the review of the HHS 

evaluation and scheduling 

recommendation and all other relevant 

data, the DEA has found that tramadol 

has an abuse potential and meets the 

requirements for schedule IV controls 

under the CSA. 

5. Disagreement With Tramadol 

Classification as an Opioid 

One commenter who supported the 

rule stated that tramadol should not be 

compared to hydrocodone because 

hydrocodone is an opioid and tramadol 

is psychotropic in nature and very 

similar to, if not the same as, a 

serotonin-norepinephrine reuptake 

inhibitor (SNRI). 

DEA Response: In the NPRM and 

supporting documents, the DEA 

compared tramadol mainly to 

propoxyphene (narcotic schedule IV). 

Based on both the HHS and the DEA 

analyses, there is strong scientific 

evidence that tramadol and 

propoxyphene are similar regarding 


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37626 Federal Register / Vol. 79, No. 127 / Wednesday, July 2, 2014 / Rules and Regulations 

5 Including their isomers, esters, ethers, salts, and 

salts of isomers, whenever the existence of such 

isomers, esters, ethers, and salts is possible within 

the specific chemical designation; however, does 

not include the isoquinoline alkaloids of opium. 

6Pursuant to 5 U.S.C. 553(d) and in accordance 

with 21 CFR 1308.45, a final rule scheduling a 

substance shall not be effective less than 30 days 

from the date of its publication in the Federal 

Register unless the Administrator finds that 

conditions of public health or safety necessitate an 

earlier effective date. 

their behavioral pharmacology and 

abuse potential pattern, thus suggesting 

that it is appropriate to control tramadol 

as a schedule IV controlled substance. 

In addition, as stated in the 

supporting scientific documents, both 

the HHS and the DEA deem tramadol to 

be an opioid because tramadol shares 

similar pharmacological activities with 

opioids that are controlled under the 

CSA (schedules II–IV). (The labeling for 

FDA approved tramadol products states 

that tramadol is a centrally acting opioid 

analgesic.) An examination of the 

general pharmacology (including 

behavioral pharmacology) of tramadol 

reveals that tramadol produces many 

pharmacological effects similar to those 

of other opioids. These pharmacological 

effects include, but are not limited to, 

analgesia, respiratory depression, 

miosis, cough suppression, and 

inhibition of bowel mobility, and as 

such, tramadol is considered an opioid. 

The opioid pharmacology of tramadol 

primarily resides with its metabolite, 

O-desmethyltramadol, designated ‘‘M1,’’ 

and to a much lesser extent with 

tramadol, the parent drug. In addition, 

tramadol resembles some opioids 

insofar as it has the additional 

pharmacological effects of blocking the 

reuptake of norepinephrine and 

serotonin. 

The CSA defines an ‘‘opiate’’ as ‘‘any 

drug or other substance having an 

addiction-forming or addictionsustaining liability similar to morphine 

or being capable of conversion into a 

drug having such addiction-forming or 

addiction-sustaining liability.’’ 21 

U.S.C. 802(18). Opium, opiates, 

derivatives of opium and opiates, 

including their isomers, whether 

produced directly or indirectly by 

extraction from substances of vegetable 

origin, or independently by means of 

chemical synthesis, are ‘‘narcotic drugs’’ 

as defined by the CSA, 21 U.S.C. 

802(17).5 As discussed in the supporting 

eight-factor documentation, preclinical 

studies demonstrate that tramadol, as 

other opioids in schedules I through IV, 

exhibits complete generalization to 

morphine and is able to produce some 

reinforcing effects. Repeated 

administration of tramadol in animals 

caused dependence development, 

evidenced by a withdrawal syndrome 

similar in intensity to pentazocine 

(schedule IV) or propoxyphene (narcotic 

schedule IV). 

Although, generally, the controls 

imposed by the CSA on drugs and other 

substances depend on the schedule into 

which they are placed, there are certain 

additional requirements and restrictions 

for narcotic drugs. For example, narcotic 

drugs in schedule III, IV, or V may not 

be imported into the United States 

unless it is found that such importation 

is needed to provide for the legitimate 

medical, scientific, or other legitimate 

purposes under the specified, limited 

circumstances described in 21 U.S.C. 

952(a). Narcotic controlled substances 

may not be exported unless the 

conditions imposed by 21 U.S.C. 953(a) 

are satisfied. 

6. Never-Ending Practice of Drug 

Scheduling 

Two commenters raised concerns 

that, despite the scheduling of drugs 

such as tramadol, individuals will 

always find substances to abuse, thus 

creating ‘‘a never ending story of 

scheduling drugs.’’ 

DEA Response: Pursuant to 21 U.S.C. 

811(a), the CSA authorizes the DEA, 

under authority delegated by the 

Attorney General, to add to such a 

schedule any drug or other substance if 

it is found that the drug or other 

substance has a potential for abuse, and 

makes with respect to such drug or 

other substance the findings prescribed 

by 21 U.S.C. 812(b). As such, the 

scheduling authority established by 

Congress specifically allows new 

substances to be added to the list of 

controlled substances without regard to 

the number of substances already 

controlled. See also 21 U.S.C. 812(a) 

(‘‘Such schedules shall initially consist 

of * * *’’ (emphasis added)). 

Requests for Staggered Implementation 

of Various Portions of the Rule 

A national association that represents 

primary healthcare distributors 

commented that although they 

recognized the underlying reasons for 

scheduling tramadol and agreed with 

the reasoning and basis for controlling 

tramadol, the DEA should provide an 

extended time period before 

implementation to allow registrants to 

become compliant with portions of the 

rule regarding security, labeling and 

packaging, and reporting.6 The 

association requested that the 

requirement for conducting inventory of 

tramadol products within wholesale 

distribution centers take place as of the 

effective date of the final scheduling 

decision. The association’s concerns (as 

well as the DEA’s responses) are 

outlined and discussed below. 

1. Request for Staggered Effective Dates, 

Generally 

The association requested that the 

DEA implement handling requirements 

for tramadol in stages. For example, 

they requested that the requirement for 

conducting inventory of tramadol 

products within wholesale distribution 

centers take place as of the effective date 

of the final scheduling decision but 

delaying the requirements for 

compliance with the security provisions 

of 21 CFR 1301.71–1301.93. 

DEA Response: Generally, scheduling 

actions for drugs and other substances 

currently marketed in the United States 

are effective 30 days from the date of 

publication of the final rule in the 

Federal Register. In order to ensure the 

continued availability of tramadol for 

legitimate medical use, while also 

ensuring it is not subject to misuse, 

abuse, and diversion, the DEA is 

establishing an effective date of this 

final rule for all handling requirements 

45 days from the date of publication. 

This 45-day period will provide a 

reasonable time for registrants to 

comply with the handling requirements 

for a schedule IV controlled substance 

and was established upon a full 

consideration of the totality of 

circumstances specific to tramadol. 

Although the DEA has in the past, for 

some scheduling actions, allowed for 

additional time for compliance with 

certain handling requirements beyond 

the general effective date, the DEA has 

specifically chosen to forgo staggered 

implementation dates of handling 

requirements as different 

implementation dates leads to confusion 

and inconsistent application of the law. 

2. Security 

The association recommended a 

minimum of 120 days from the date of 

the final rule to allow for compliance in 

order to provide storage, revise 

operating procedures, train staff, and 

amend monitoring systems. 

DEA Response: In order to ensure the 

continued availability of tramadol for 

legitimate medical use, while also 

ensuring it is not subject to misuse, 

abuse, and diversion, the DEA is 

establishing an effective date of this 

final rule, including security 

requirements, 45 days from the date of 

publication. Upon promulgation, 

registrants must comply with the 

applicable security provisions of 21 CFR 

1301.71–1301.93. This 45-day period 

will provide a reasonable time for 

registrants to comply with the security 


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Federal Register / Vol. 79, No. 127 / Wednesday, July 2, 2014 / Rules and Regulations 37627 

7NAICS 424210—Drugs and druggists’ sundries 

merchant wholesalers; Merchant wholesalers, 

except manufacturers’ sales branches and offices. 

8The inventory turnover ratio of 11.3 was 

calculated by dividing the 2007 ‘‘cost of goods 

sold’’ for the industry of $280,481,051,000 by the 

average end-of-year 2006 total inventories of 

$24,782,835,000. 

9 IMS Health, National Sales PerspectiveTM (NSP). 

requirements for a schedule IV 

controlled substance. As noted by the 

association, it is believed that 

distributors of tramadol already have 

adequate space within their warehouse 

cages to store the anticipated volume of 

tramadol and ‘‘thus construction or 

expansion of cage space is unlikely to 

result * * *.’’ Accordingly, it is 

reasonably likely that handlers and 

proposed handlers of tramadol have 

already instituted or made plans to 

institute the necessary modifications 

regarding security, including 

amendments to their suspicious orders 

monitoring systems to include tramadol 

orders. In order to provide handlers of 

tramadol a reasonable time period to 

comply with schedule IV handling 

requirements, including those for 

security, the DEA is allowing an 

additional 15 days, as compared to the 

generally allotted 30 days, from 

publication in the Federal Register 

before this rule becomes effective. After 

45 days from the date of the final rule, 

tramadol will be subject to schedule III– 

V security requirements. 

The DEA has carefully considered the 

security requirements for compliance 

with this rule. As confirmed by the 

association, current distributors of 

tramadol are DEA registrants with 

existing controlled substance storage 

that complies with DEA regulations. 

The DEA understands that handlers of 

tramadol may need to make 

modifications to their current security 

procedures for compliance. These 

modifications necessary for security 

compliance will be a one-time 

modification to provide for the 

appropriate storage, revision of 

operating procedures, training of staff, 

and amendments to suspicious order 

monitoring systems to include customer 

verifications. The DEA believes that a 

45-day period will provide handlers of 

tramadol adequate time to implement 

these one-time modifications in 

compliance with the DEA security 

regulations. Registrants are familiar with 

the applicable security regulations, and 

already have systems in place with 

respect to other controlled substances. 

Accordingly, revising operating 

procedures, amending monitoring 

systems, and training staff with respect 

to tramadol should be easily 

accomplished within the 45-day 

compliance timeframe. The DEA 

strongly advises current registrants (and 

those entities that may seek registration 

as a result of this action) to work closely 

with their local DEA office regarding the 

applicable security requirements and 

any necessary modifications due to 

compliance with this rule. 21 CFR 

1301.71(d). 

3. Distribution of Products With the PreControl Label 

The association stated that in 

accordance with 21 CFR 1302.05, the 

DEA has the authority to set a date on 

which labeling and packaging 

requirements will become effective, and 

requested clarification of when the 

distribution of products with the prescheduling label should cease. The 

association also requested clarification 

as to whether the cessation of the 

manufacture of products for commercial 

containers with the pre-scheduling 

labeling will also mean that 

manufacturers would be required to 

cease distribution to wholesale 

distributors of products they might have 

in stock bearing the pre-scheduling 

label. The association stated that the 

ambiguity of the compliance period 

poses a dilemma for those in the 

tramadol supply chain, and requested 

the DEA to act to meet healthcare needs 

and avoid waste by allowing products 

bearing the pre-scheduling label to 

move through the supply chain until the 

inventory is depleted. Alternatively, the 

association suggested that the DEA 

allow distributors to continue to sell 

pre-scheduling labeled product for at 

least 180 days after the effective date of 

the final rule. 

DEA Response: As of the effective 

date of the final rule, pursuant to 21 

U.S.C. 821, 825, and 958(e) and in 

accordance with 21 CFR 1302.03, 

manufacturers are required to print 

upon the labeling of each commercial 

container of tramadol they distribute the 

designation of tramadol as ‘‘C–IV.’’ It 

shall be unlawful for commercial 

containers of tramadol to be distributed 

without bearing the label properly 

identifying it as a schedule IV 

controlled substance in accordance with 

21 CFR part 1302. As clearly stated in 

21 CFR 1302.05, ‘‘[a]ll labels on 

commercial containers of, and all 

labeling of, a controlled substance 

which either is transferred to another 

schedule or is added to any schedule 

shall comply with the requirements of 

§ 1302.03, on or before the effective date 

established in the final order for the 

transfer or addition.’’ Accordingly, the 

DEA is requiring that commercial 

containers of tramadol distributed on or 

after 45 days from the date of 

publication of the final rule be labeled 

as ‘‘C–IV’’ and be packaged in 

accordance with 21 CFR part 1302. 

From the 2007 Economic Census, the 

DEA estimates that the inventory 

turnover ratio for the industry 7 is 

approximately 11.3.8 The inventory 

turnover ratio represents the number of 

times the inventory sells (turns) in a 

year. The 11.3 inventory turnover ratio 

equates to an average of 32 days to sell 

inventory. The 11.3 turnover ratio is 

consistent with that of large distributors 

where financial information was 

publicly available and reviewed. 

Publicly reviewed data reports that 

about 85% of all revenues (an indirect 

indicator of dosage units moved) from 

drug distribution in the United States 

come from three public wholesalers, 

each with annual revenue in the 

billions. The DEA additionally notes 

that many regional and specialist 

pharmaceutical wholesalers have been 

acquired by the largest three 

distribution companies. The inventory 

turnover ratio is a reasonable estimate 

for the entire industry and all products 

under the circumstances. Because the 32 

days to sell inventory is an average 

based on industry-wide census data, it 

is possible for an individual company 

and/or product line to have shorter or 

longer time to sell. 

Since tramadol is a widely prescribed 

drug, with nearly 40 million 

prescriptions written in 2012,9 the DEA 

expects distributors to receive and 

distribute tramadol at high volume and 

with regularity; thus, anticipating 

shorter than average days to sell 

tramadol than overall industry average 

inventory. However, to accommodate 

those distributors that have lower than 

average industry turnover ratio, the DEA 

is establishing an effective date of this 

final rule, including labeling and 

packaging requirements, 45 days from 

the date of publication. The DEA 

believes this will provide a reasonable 

time for distributors to sell existing 

stock with pre-control labeling and 

packaging and to stock inventory with 

post-control labeling and packaging. 

Additionally, the DEA believes that 

any distributor that requires more than 

45 days to sell tramadol inventory under 

normal circumstances can make minor 

modifications to ordering and stocking 

procedure for a transitional period to 

meet the established effective date at 

minimal cost. Distributors also have the 

option of returning excess stock of 

tramadol product without the ‘‘C–IV’’ 


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37628 Federal Register / Vol. 79, No. 127 / Wednesday, July 2, 2014 / Rules and Regulations 

label to the manufacturer, as authorized 

by 21 CFR 1307.12. 

The DEA takes this opportunity to 

clarify that the regulation pertaining to 

labeling of commercial containers 

applies only to distributions by 

manufacturers and distributors. The 

DEA does not regulate the labeling and 

packing of commercial containers of 

controlled substances downstream of 

distributors. 

As summarized in the NPRM, and 

discussed in detail in the supporting 

eight factor analyses, tramadol meets the 

statutory requirements for control and 

for placement in schedule IV. Based 

upon the reasons discussed above, the 

DEA believes that 45 days is a 

reasonable amount of time for 

registrants to modify their operations so 

that the necessary safeguards are in 

place to prevent the abuse and diversion 

of tramadol. 

4. Automation of Reports and 

Consolidated Orders System (‘‘ARCOS’’) 

Reporting 

The association stated that only 

schedule I and II (and some schedule III) 

products are subject to reporting under 

the DEA’s Automation of Reports and 

Consolidated Orders System 

(‘‘ARCOS’’), so it would be an error to 

require distributors to report tramadol (a 

schedule IV narcotic) to ARCOS. 

DEA Response: DEA regulations do 

not require distributors to file ARCOS 

reports for schedule IV narcotics. 

Scheduling Conclusion 

Based on consideration of all 

comments, the scientific and medical 

evaluation and accompanying 

recommendation of the HHS, and based 

on the DEA’s consideration of its own 

eight-factor analysis, the DEA finds that 

these facts and all other relevant data 

constitute substantial evidence of 

potential for abuse of tramadol. As such, 

the DEA is scheduling tramadol as a 

controlled substance under the CSA. 

Determination of Appropriate Schedule 

The CSA establishes five schedules of 

controlled substances known as 

schedules I, II, III, IV, and V. The CSA 

outlines the findings required for 

placing a drug or other substance in any 

particular schedule. 21 U.S.C. 812(b). 

After consideration of the analysis and 

recommendation of the Assistant 

Secretary for Health of the HHS and 

review of all relevant and available data, 

the Deputy Administrator of the DEA, 

pursuant to 21 U.S.C. 812(b)(4), finds 

that: 

1. Tramadol has a low potential for 

abuse relative to the drugs or substances 

in schedule III. The abuse potential of 

tramadol is comparable to the schedule 

IV controlled substance propoxyphene; 

2. Tramadol has a currently accepted 

medical use in treatment in the United 

States. Tramadol and other tramadolcontaining products are approved for 

marketing by the FDA to manage 

moderate to moderately severe pain; and 

3. Abuse of tramadol may lead to 

limited physical dependence or 

psychological dependence relative to 

the drugs or other substances in 

schedule III. 

Based on these findings, the Deputy 

Administrator of the DEA concludes 

that tramadol, including its salts, 

isomers, and salts of isomers, warrants 

control in schedule IV of the CSA. 21 

U.S.C. 812(b)(4). 

Requirements for Handling Tramadol 

Upon the effective date of this final 

rule, any person who handles tramadol 

is subject to the CSA’s schedule IV 

regulatory controls and administrative, 

civil, and criminal sanctions applicable 

to the manufacture, distribution, 

dispensing, importing, exporting, 

engagement in research, and conduct of 

instructional activities, of schedule IV 

controlled substances including the 

following: 

Registration. Any person who handles 

(manufactures, distributes, dispenses, 

imports, exports, engages in research, or 

conducts instructional activities with) 

tramadol, or who desires to handle 

tramadol, must be registered with the 

DEA to conduct such activities, 

pursuant to 21 U.S.C. 822, 823, 957, and 

958, and in accordance with 21 CFR 

parts 1301 and 1312 as of August 18, 

2014. Any person who currently 

handles tramadol and is not registered 

with the DEA must submit an 

application for registration and may not 

continue to handle tramadol as of 

August 18, 2014 unless the DEA has 

approved that application, pursuant to 

21 U.S.C. 822, 823, 957, and 958, and 

in accordance with 21 CFR parts 1301 

and 1312. 

Disposal of stocks. Any person who 

does not desire or is not able to obtain 

a schedule IV registration must 

surrender all quantities of currently 

held tramadol in accordance with the 

procedures outlined in 21 CFR 1307.21 

on or before August 18, 2014, or may 

transfer all quantities of currently held 

tramadol to a person registered with the 

DEA on or before August 18, 2014. 

Security. Tramadol is subject to 

schedule III–V security requirements 

and must be handled and stored 

pursuant to 21 U.S.C. 821 and 823, and 

in accordance with 21 CFR 1301.71– 

1301.93 as of August 18, 2014. 

Labeling and Packaging. All labels 

and labeling for commercial containers 

of tramadol must comply with 21 U.S.C. 

825 and 958(e), and be in accordance 

with 21 CFR part 1302 as of August 18, 

2014. 

Inventory. Every DEA registrant who 

possesses any quantity of tramadol on 

the effective date of this final rule must 

take an inventory of all stocks of 

tramadol on hand as of August 18, 2014, 

pursuant to 21 U.S.C. 827 and 958, and 

in accordance with 21 CFR 1304.03, 

1304.04, and 1304.11 (a) and (d). 

Any person who becomes registered 

with the DEA after August 18, 2014 

must take an initial inventory of all 

stocks of controlled substances 

(including tramadol) on hand on the 

date the registrant first engages in the 

handling of controlled substances, 

pursuant to 21 U.S.C. 827 and 958, and 

in accordance with 21 CFR 1304.03, 

1304.04, and 1304.11 (a) and (b). 

After the initial inventory, every DEA 

registrant must take a new inventory of 

all stocks of controlled substances 

(including tramadol) on hand every two 

years, pursuant to 21 U.S.C. 827 and 

958, and in accordance with 21 CFR 

1304.03, 1304.04, and 1304.11. 

Records and Reports. All DEA 

registrants must maintain records with 

respect to tramadol pursuant to 21 

U.S.C. 827 and 958 and in accordance 

with 21 CFR parts 1304 and 1312 as of 

August 18, 2014. 

Prescriptions. All prescriptions for 

tramadol or products containing 

tramadol must comply with 21 U.S.C. 

829, and be issued in accordance with 

21 CFR part 1306 and subpart C of 21 

CFR part 1311 as of August 18, 2014. 

Importation and Exportation. All 

importation and exportation of tramadol 

must be in compliance with 21 U.S.C. 

952, 953, 957, and 958, and be in 

accordance with 21 CFR part 1312 as of 

August 18, 2014. 

Liability. Any activity involving 

tramadol not authorized by, or in 

violation of, the CSA, occurring as of 

August 18, 2014 is unlawful, and may 

subject the person to administrative, 

civil, and/or criminal action. 

Regulatory Analyses 

Executive Orders 12866 and 13563 

In accordance with 21 U.S.C. 811(a), 

this scheduling action is subject to 

formal rulemaking procedures done ‘‘on 

the record after opportunity for a 

hearing,’’ which are conducted pursuant 

to the provisions of 5 U.S.C. 556 and 

557. The CSA sets forth the criteria for 

scheduling a drug or other substance. 

Such actions are exempt from review by 

the Office of Management and Budget 


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Federal Register / Vol. 79, No. 127 / Wednesday, July 2, 2014 / Rules and Regulations 37629 

(OMB) pursuant to section 3(d)(1) of 

Executive Order 12866 and the 

principles reaffirmed in Executive Order 

13563. 

Executive Order 12988 

This regulation meets the applicable 

standards set forth in sections 3(a) and 

3(b)(2) of Executive Order 12988 Civil 

Justice Reform to eliminate drafting 

errors and ambiguity, minimize 

litigation, provide a clear legal standard 

for affected conduct, and promote 

simplification and burden reduction. 

Executive Order 13132 

This rulemaking does not have 

federalism implications warranting the 

application of Executive Order 13132. 

The rule does not have substantial 

direct effects on the States, on the 

relationship between the national 

government and the States, or the 

distribution of power and 

responsibilities among the various 

levels of government. 

Executive Order 13175 

This rule does not have tribal 

implications warranting the application 

of Executive Order 13175. This rule 

does not have substantial direct effects 

on one or more Indian tribes, on the 

relationship between the Federal 

Government and Indian tribes, or on the 

distribution of power and 

responsibilities between the Federal 

Government and Indian tribes. 

Regulatory Flexibility Act 

The Deputy Administrator, in 

accordance with the Regulatory 

Flexibility Act (RFA) (5 U.S.C. 601– 

612), has reviewed this final rule and by 

approving it certifies that it will not 

have a significant economic impact on 

a substantial number of small entities. 

The purpose of this final rule is to place 

tramadol, including its salts, isomers, 

and salts of isomers, into schedule IV of 

the CSA. By this final rule, tramadol 

will remain in schedule IV unless and 

until additional scheduling action is 

taken to either transfer it between the 

schedules or to remove it from the list 

of schedules. See 21 U.S.C. 811 and 812. 

No less restrictive measures (i.e., noncontrol or control in schedule V) enable 

the DEA to meet its statutory obligations 

under the CSA. 

This rule affects approximately 1.5 

million DEA registrations, representing 

approximately 376,904 entities. The 

DEA estimates that 367,046 (97%) of 

these entities are ‘‘small entities’’ in 

accordance with the RFA and SBA size 

standards. 5 U.S.C. 601(6) and 15 U.S.C. 

632. 

In accordance with the RFA, the DEA 

evaluated the impact of this rule on 

small entities. Specifically, the DEA 

examined the registration, storage, 

inventory and recordkeeping, and 

disposal requirements for the 367,046 

small entities estimated to be affected by 

the rule: 55 manufacturers; 1,418 

distributors/importers/exporters; 50,032 

pharmacies; and 315,541 entities 

employing or holding registrations as 

individual practitioners/mid-level 

practitioners/hospitals/clinics. Ten 

States currently control tramadol as a 

schedule IV controlled substance under 

State law, with requirements that meet 

or exceed the DEA’s requirements for 

schedule IV controlled substances 

discussed in the NPRM. Entities in these 

States are not economically impacted by 

this rule. 

Based on the DEA’s understanding of 

its registrants’ operations and facilities, 

the DEA estimates a non-recurring 

expense for system modification and 

initial inventory cost of $245.01 for all 

entities and an additional $10,000 for 

secure storage for 50% of distributors, 

importers, and exporters. As discussed 

in the EIA prepared in association with 

the development of this final rule, 

manufacturers, pharmacies, physician 

offices/hospitals/clinics/other health 

care facilities, and 50% of distributors, 

importers, and exporters are assumed to 

meet the requirement of the rule 

without the need to expand secure 

storage area. The DEA estimates these 

costs, on an annualized basis, will have 

significant economic impact (cost 

greater than 1% of annual revenue) on 

0 of 55 (0%) of small manufacturers; 50 

of 1,418 (3.5%) of small distributors; 

107 of 50,032 (0.2%) small business 

pharmacies; and 661 of 315,541 (0.2%) 

of individual practitioners/mid-level 

practitioners/hospitals/clinics, totaling 

818 of 367,046 (0.2%) of all small 

entities. The percentage of small entities 

with significant economic impact is not 

substantial, and therefore, this rule will 

not result in significant economic 

impact on a substantial number of small 

entities. 

Unfunded Mandates Reform Act of 1995 

In accordance with the Unfunded 

Mandates Reform Act (UMRA) of 1995 

(2 U.S.C. 1501 et seq.), the DEA has 

determined and certifies pursuant to 

UMRA that this action would not result 

in any Federal mandate that may result 

‘‘in the expenditure by State, local, and 

tribal governments, in the aggregate, or 

by the private sector, of $100 million or 

more (adjusted for inflation) in any one 

year * * *.’’ Therefore, neither a Small 

Government Agency Plan nor any other 

action is required under provisions of 

UMRA of 1995. 

Paperwork Reduction Act of 1995 

This action does not impose a new 

collection of information requirement 

under the Paperwork Reduction Act of 

1995 (44 U.S.C. 3501–3521). This action 

would not impose recordkeeping or 

reporting requirements on State or local 

governments, individuals, businesses, or 

organizations. An agency may not 

conduct or sponsor, and a person is not 

required to respond to, a collection of 

information unless it displays a 

currently valid OMB control number. 

Congressional Review Act 

This rule is not a major rule as 

defined by section 804 of the Small 

Business Regulatory Enforcement 

Fairness Act of 1996 (Congressional 

Review Act (CRA)). This rule will not 

result in: an annual effect on the 

economy of $100 million or more; a 

major increase in costs or prices for 

consumers, individual industries, 

Federal, State, or local government 

agencies, or geographic regions; or 

significant adverse effects on 

competition, employment, investment, 

productivity, innovation, or on the 

ability of United States-based 

companies to compete with foreignbased companies in domestic and 

export markets. However, pursuant to 

the CRA, the DEA has submitted a copy 

of this final rule to both Houses of 

Congress and to the Comptroller 

General. 

List of Subjects in 21 CFR Part 1308 

Administrative practice and 

procedure, Drug traffic control, 

Reporting and recordkeeping 

requirements. 

For the reasons set out above, 21 CFR 

part 1308 is amended as follows: 

PART 1308—SCHEDULES OF 

CONTROLLED SUBSTANCES 

■ 1. The authority citation for 21 CFR 

part 1308 continues to read as follows: 

Authority: 21 U.S.C. 811, 812, 871(b), 

unless otherwise noted. 

■ 2. Amend § 1308.14 by adding a new 

paragraph (b)(3) to read as follows: 

§ 1308.14 Schedule IV. 

* * * * * 

(b) * * * 

(3) 2-[(dimethylamino)methyl]-1-(3- 

methoxyphenyl)cyclohexanol, its salts, 

optical and geometric isomers and salts 

of these isomers (including tramadol)— 

9752 

* * * * * 


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37630 Federal Register / Vol. 79, No. 127 / Wednesday, July 2, 2014 / Rules and Regulations 

Dated: June 27, 2014. 

Thomas M. Harrigan, 

Deputy Administrator. 

[FR Doc. 2014–15548 Filed 7–1–14; 8:45 am] 

BILLING CODE 4410–09–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[TD 9674] 

RIN 1545–BM07 

Guidelines for the Streamlined Process 

of Applying for Recognition of Section 

501(c)(3) Status 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final and temporary 

regulations. 

SUMMARY: This document contains final 

and temporary regulations that provide 

guidance to eligible organizations 

seeking recognition of tax-exempt status 

under section 501(c)(3) of the Internal 

Revenue Code (Code). The final and 

temporary regulations amend current 

regulations to allow the Commissioner 

of Internal Revenue to adopt a 

streamlined application process that 

eligible organizations may use to apply 

for recognition of tax-exempt status 

under section 501(c)(3). The text of the 

temporary regulations also serves as the 

text of the proposed regulations (REG– 

110948–14) 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 July 1, 2014. 

Applicability date: For dates of 

applicability, see §§ 1.501(a)–1T(f)(1), 

1.501(c)(3)–1T(h)(1), 1.508–1T(c)(1). 

FOR FURTHER INFORMATION CONTACT: 

James R. Martin or Robin Ehrenberg at 

(202) 317–5800 (not a toll-free number). 

SUPPLEMENTARY INFORMATION: 

Background 

Section 508 requires an organization 

seeking tax-exempt status under section 

501(c)(3), as a condition of its 

exemption, to notify the Secretary of the 

Treasury (or his delegate) that it is 

applying for recognition of exempt 

status in the manner prescribed in the 

Treasury Regulations, unless it is 

specifically excepted from the 

requirement. Section 1.508–1(a) 

describes the process for giving notice, 

and requires that an organization 

‘‘submit[ ] a properly completed and 

executed Form 1023, exemption 

application.’’ Section 1.501(c)(3)– 

1(b)(1)(v) states that an organization 

must, to establish its exemption, submit 

a detailed statement of its proposed 

activities with and as a part of its 

application for exemption. Similarly, 

§ 1.501(a)–1(b)(1)(iii) provides that an 

organization described in section 

501(c)(3) shall submit with, and as part 

of, an application, a detailed statement 

of its proposed activities. Section 

1.501(a)–1(b)(2) states that the 

Commissioner may require any 

additional information deemed 

necessary for a proper determination of 

whether a particular organization is 

exempt, and when deemed advisable in 

the interest of an efficient 

administration of the internal revenue 

laws, the Commissioner may, in the 

cases of particular types of 

organizations, prescribe the form in 

which the proof of exemption shall be 

furnished. 

Detailed procedures for applying for 

recognition of exemption are set out in 

Rev. Proc. 2014–9, 2014–2 IRB 281, and 

in the instructions to Form 1023, 

‘‘Application for Recognition of 

Exemption Under Section 501(c)(3) of 

the Internal Revenue Code.’’ See 

§ 601.601(d)(2)(ii)(b) of this chapter. 

Explanation of Provisions 

The Treasury Department and the IRS 

have considered how the process of 

meeting the notice requirement of 

section 508 can be made more efficient 

for certain smaller organizations. The 

IRS is developing a streamlined form 

and process for these organizations. 

Accordingly, this Treasury decision 

amends §§ 1.501(a)–1, 1.501(c)(3)–1, 

and 1.508–1 to permit eligible 

organizations to use a streamlined 

process, described in guidance 

published in the Internal Revenue 

Bulletin, to meet the notice 

requirements of section 508. 

Specifically, this Treasury decision 

amends §§ 1.501(a)–1 and 1.501(c)(3)–1 

to authorize the Treasury Department 

and the IRS to prescribe, in applicable 

regulations or other guidance published 

in the Internal Revenue Bulletin, an 

exception to the requirement that an 

organization applying for tax-exempt 

status provide a detailed statement of its 

proposed activities. This document also 

amends the § 1.501(a)–1 provisions 

relating to the Commissioner’s ability to 

revoke a determination because of a 

change in the law or regulations, or for 

other good cause, to reference the 

Commissioner’s authority to 

retroactively revoke a determination 

under section 7805(b). No substantive 

change is intended by this amendment. 

This Treasury decision also amends the 

requirement in § 1.501(a)–1(b)(3) that an 

organization claiming to be exempted 

from filing annual returns file a 

statement supporting its claim with and 

as a part of its application. This 

amendment would provide flexibility 

for the Treasury Department and the IRS 

to prescribe in published guidance other 

methods of notifying the IRS that the 

organization is claiming an annual filing 

exemption. 

In addition, this document amends 

§ 1.508–1 to provide that eligible 

organizations may use Form 1023–EZ, 

‘‘Streamlined Application for 

Recognition of Exemption Under 

Section 501(c)(3) of the Internal 

Revenue Code,’’ to notify the 

Commissioner of their applications for 

tax-exempt status under section 

501(c)(3). This Treasury decision also 

amends §§ 1.501(a)–1 and 1.508–1 to 

state that the office to which 

applications should be submitted will 

be published in the Internal Revenue 

Bulletin or instructions to the Form 

1023 or Form 1023–EZ. 

Finally, this Treasury decision makes 

certain technical revisions to the 

regulations. In § 1.501(a)–1, the 

reference to ‘‘internal revenue district’’ 

is removed because such reference has 

been made obsolete by the enactment of 

the Internal Revenue Service 

Restructuring and Reform Act of 1998, 

Public Law 105–206, 112 Stat. 685. 

References to a district director in 

§§ 1.501(a)–1, 1.501(c)(3)–1, and 1.508– 

1 are also modified, as those positions 

no longer exist within the IRS. Proposed 

regulations in the Rules and Regulations 

section of this issue of the Federal 

Register use the text of these temporary 

regulations as the text of the proposed 

regulations. Treasury and the IRS seek 

comments on all aspects of the proposed 

rules, including whether additional 

technical revisions are necessary. 

Simultaneously with the publication of 

this Treasury decision, the Treasury 

Department and the IRS will release for 

publication a Revenue Procedure that 

provides procedures for applying for 

recognition of exemption using Form 

1023–EZ. 

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. 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. For the applicability of the 


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