Federal Register / Vol. 65, No. 92 / Thursday, May 11, 2000 / Proposed Rules 30375

§ 706.44 What happens to business

information contained in OPIC records

transferred to the National Archives of the

United States?

Pursuant to the Federal Records Act,

44 U.S.C. 2901, et seq., OPIC transfers

legal custody and control of records

with permanent historical value to the

National Archives. These records are

transferred in accordance with OPIC’s

records retention schedules, which are

approved by the Archivist of the United

States. Transfers of project records

generally occur five years after closeout

of the project (e.g., most records are not

transferred to the National Archives

until they are at least 25 years old). If

a FOIA request is made for records that

have been transferred, the National

Archives has the sole authority to

review the records and determine

whether or not to apply FOIA

exemptions. The National Archives is

not required to inform OPIC about the

FOIA request or to seek OPIC’s opinion

on disclosure of the records.

Dated: May 3, 2000.

Laura A. Naide,

FOIA Director and Senior Administrative

Counsel.

[FR Doc. 00–11504 Filed 5–10–00; 8:45 am]

BILLING CODE 3210–01–P

DEPARTMENT OF THE TREASURY

Office of the Secretary

31 CFR Part 10

[REG–111835–99]

RIN 1545–AY05

Regulations Governing Practice Before

the Internal Revenue Service

AGENCY: Office of the Secretary,

Treasury.

ACTION: Advance notice of proposed

rulemaking.

SUMMARY: This document provides

advance notice of proposed rulemaking

to amend the regulations governing

practice before the Internal Revenue

Service (IRS), which appear in the Code

of Federal Regulations and in pamphlet

form as Treasury Department Circular

No. 230, Regulations Governing the

Practice of Attorneys, Certified Public

Accountants, Enrolled Agents, Enrolled

Actuaries, and Appraisers before the

IRS. This document also invites

individuals and organizations to submit

comments on revising Circular No. 230

to address general standards of practice

and standards of practice relating to tax

shelters.

DATES: Submit comments on or before

July 5, 2000.

ADDRESSES: Send submissions to:

CC:DOM:CORP:R (REG–111835–99),

room 5226, Internal Revenue Service,

POB 7604, Ben Franklin Station,

Washington, DC 20044. Submissions

may be hand delivered Monday through

Friday between the hours of 8 a.m. and

5 p.m. to: CC:DOM:CORP:R (REG–

111835–99), Courier’s Desk, Internal

Revenue Service, 1111 Constitution

Avenue NW., Washington, DC. Submit

comments and data via electronic mail

(email) to http://www.irs.gov/taxlregs/

regslist.html.

FOR FURTHER INFORMATION CONTACT:

Concerning issues for comment, Richard

Goldstein at (202) 622–7880; concerning

submissions of comments and

delivering comments, Guy Traynor,

(202) 622–7180; (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

I. Background

Section 330 of title 31 of the United

States Code authorizes the Secretary of

the Treasury to regulate the practice of

representatives before the Department

and, after notice and an opportunity for

a proceeding, to suspend or disbar from

practice before the Department those

representatives who are incompetent,

disreputable, or who violate regulations

prescribed under section 330. Pursuant

to section 330, the Secretary has

published the regulations in Circular

No. 230 (31 CFR part 10). These

regulations authorize the Director of

Practice to act upon applications for

enrollment to practice before the IRS, to

institute proceedings for suspension or

disbarment from practice before the IRS,

to make inquiries with respect to

matters under the Director’s

jurisdiction, and to perform such other

duties as are necessary to carry out these

functions.

The regulations have been amended

from time to time to address various

specific issues in need of resolution. For

example, on February 23, 1984, the

regulations were amended to provide

standards for providing opinions used

in tax shelter offerings (49 FR 6719). On

October 17, 1985, the regulations were

amended to conform to legislative

changes requiring the disqualification of

an appraiser who is assessed a penalty

under section 6701 for aiding and

abetting the understatement of a tax

liability (50 FR 42014). The regulations

were most recently amended on June 20,

1994 (59 FR 31523) to provide standards

for tax return preparation, to limit the

use of contingent fees in return or

refund claim preparation, to provide

expedited rules for suspension, and to

clarify or amend certain other items.

On June 15, 1999, the Director of

Practice published an advance notice of

proposed rulemaking (64 FR 31994)

requesting comments on amendments to

the regulations that would take into

account legal developments,

professional integrity and fairness to

practitioners, taxpayer service, and

sound tax administration. The Treasury

Department received several comments

and is currently reviewing them. The

1999 advance notice of proposed

rulemaking contemplated a notice of

proposed rulemaking that would make

general revisions to Circular No. 230.

II. Tax Shelters

Following the release of the advance

notice of proposed rulemaking, the

Treasury Department issued a report on

the proliferation of corporate tax

shelters. See ‘‘The Problem of Corporate

Tax Shelters: Discussion, Analysis and

Legislative Proposals,’’ Department of

the Treasury, July 1999. In February of

this year, the Treasury Department and

the IRS took steps to deter abusive

shelters by publishing temporary

regulations requiring disclosure of

certain transactions by corporate

taxpayers (TD 8877, 65 FR 11205),

registration of confidential corporate tax

shelters (TD 8876, 65 FR 11215), and

maintenance of lists of investors in

certain tax shelters (TD 8875, 65 FR

11211).

In addition, practitioners and

organizations, such as the Section of

Taxation of the ABA, have

recommended that the Treasury

Department revise Circular No. 230 to

raise the standards for providing advice

with respect to corporate tax shelters.

The Treasury Department and the IRS

agree that it is appropriate to review the

standards that should be followed by

practitioners who provide advice with

respect to such transactions.

III. Request for Comments

The Treasury Department and the IRS

invite comments relating to standards of

practice governing tax shelters and other

general matters. The Treasury

Department and the IRS are particularly

interested in receiving comments on the

following matters.

A. Opinion Standards of Circular No.

230

1. Whether the opinion standards in

§ 10.33 (relating to tax opinions

provided for the marketing of tax

shelters) should be revised.

2. Whether Circular No. 230 should

establish standards for tax opinions

other than those provided for in § 10.33

30376 Federal Register / Vol. 65, No. 92 / Thursday, May 11, 2000 / Proposed Rules

or § 10.51 (relating to false opinions).

Particularly, whether Circular No. 230

should establish standards for opinions

intended to provide legal justification

for the treatment of an item for purposes

of § 1.6664–4(e) of the Regulations on

Procedure and Administration (relating

to the reasonable cause exception).

3. Whether an opinion provided for

legal justification for purposes of

§ 1.6664–4(e) of the regulations should

specifically state that it is provided for

this purpose.

4. For purposes of the foregoing:

a. Whether the factual due diligence

standards set forth in § 10.33(a)(1)

should be applied to tax shelter

opinions other than those provided for

the marketing of tax shelters.

b. Whether the factual due diligence

standards should be modified to further

limit the circumstances under which a

practitioner may rely on factual

assertions of other persons and to

require a practitioner to specify the

measures taken to confirm the facts.

c. Under what circumstances, if any,

Circular No. 230 should permit a

practitioner to base an opinion upon

hypothetical facts or factual

assumptions and conclusions, including

assumptions regarding the existence of

a business purpose and the significance

of such purpose relative to the intended

tax benefits.

d. Whether Circular No. 230 should

require that the opinion state that the

transaction in question was analyzed

under all applicable judicial doctrines

(including the step transaction, business

purpose, economic substance, substance

over form, and sham transaction

doctrines).

e. Whether Circular No. 230 should

require that an opinion state

unambiguously that there is a greater

than 50 percent likelihood that the

taxpayer will prevail with respect to

each material tax issue and with respect

to the material tax benefits in the

aggregate.

B. Contingent Fees

1. Whether § 10.28 should prohibit a

practitioner from charging a fee for an

opinion or advice relating to a position

taken or to be taken by a taxpayer in an

original return where such fee is

contingent upon whether the tax

treatment of the transaction is sustained,

and whether § 10.28 should prohibit a

practitioner from providing an

indemnity to a taxpayer with respect to

a position taken or to be taken in an

original return.

2. Whether § 10.28 should continue to

permit a practitioner to charge a

contingent fee for assisting a client in

filing an amended return or claim for

refund when the practitioner reasonably

anticipates at the time the fee

arrangement is entered into that the

amended return or claim will receive

substantive review from the Service.

C. Conditions of Confidentiality

1. Whether there are circumstances in

which Circular No. 230 should prohibit

a practitioner from agreeing to

conditions of confidentiality other than

conditions of confidentiality imposed

by reasons of privilege. If so, how

should confidentiality be defined?

2. Whether Circular No. 230 should

prohibit a practitioner from asking a

client to agree to conditions of

confidentiality.

D. Sanctions

1. Whether § 10.24 should be

modified to clarify what types of

relationships with suspended persons

are prohibited.

2. Whether there are circumstances in

which a practitioner’s failure to comply

with the rules under Circular No. 230

should be attributed to the firm with

which the practitioner is associated so

that the practitioner and the firm (or all

practitioners in the firm) may be subject

to discipline under Circular No. 230.

3. Whether Circular No. 230 can or

should provide a broader array of

sanctions, such as censure, for violation

of its provisions.

4. Whether the identities of those who

are disciplined under Circular No. 230

should be exposed to greater publicity.

If so, how should greater publicity be

achieved?

E. General Issues

1. Whether § 10.7(c)(1) should be

modified to permit, under limited

circumstances, an individual who is not

authorized to practice before the IRS to

represent a taxpayer without obtaining

authorization for a special appearance

from the Director of Practice under

§ 10.7(d).

2. Whether and to what extent § 10.21

should be modified regarding the

actions a practitioner must take when he

or she discovers that there is an error or

omission on a return or other document.

3. Whether § 10.22 should be

modified to define what constitutes due

diligence.

4. Whether § 10.29 should be

expanded to define conflicting interests

and to delineate what constitutes

informed consent permitting a

practitioner to represent clients with

conflicting interests.

5. How the provisions of § 10.30(a)(2),

regarding uninvited solicitations,

should be modified in light of Edenfield

v. Fane, 507 U.S. 761 (1993).

6. Whether the definition of

communication in § 10.30(c) should be

expanded specifically to include certain

forms of electronic communications and

whether there are any special

considerations that should be addressed

regarding these forms of communication

for purposes of § 10.30.

7. Whether the § 10.51 definition of

disreputable conduct should be

expanded to include conviction of any

felony.

In addition to the foregoing issues, the

Treasury Department and the IRS invite

comments on any other changes that are

necessary or appropriate to carry out the

purposes of Circular No. 230.

Dated: May 5, 2000.

Neal Wolin,

General Counsel.

[FR Doc. 00–11702 Filed 5–5–00; 3:35 pm]

BILLING CODE 4830–01–P

DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Part 165

[CGD01–00–004]

RIN 2115–AA97

Safety Zone: New York Harbor,

Western Long Island Sound, East and

Hudson Rivers Fireworks.

AGENCY: Coast Guard, DOT.

ACTION: Notice of proposed rulemaking.

SUMMARY: The Coast Guard proposes to

establish 20 permanent safety zones for

fireworks displays located on New York

Harbor, western Long Island Sound, the

East River, and the Hudson River. This

action is necessary to provide for the

safety of life on navigable waters during

the events. This action establishes

permanent exclusion areas that are only

active prior to the start of the fireworks

display until shortly after the fireworks

display is completed, and is intended to

restrict vessel traffic in a portion of New

York Harbor, western Long Island

Sound, the East and Hudson Rivers.

DATES: Comments and related material

must reach the Coast Guard on or before

June 12, 2000.

ADDRESSES: You may mail comments

and related material to Waterways

Oversight Branch (CGD01–00–004),

Coast Guard Activities New York, 212

Coast Guard Drive, room 205, Staten

Island, New York 10305. The

Waterways Oversight Branch of Coast

Guard Activities New York maintains

the public docket for this rulemaking.

Comments and material received from