[Federal Register Volume 62, Number 226 (Monday, November 24, 1997)]
[Rules and Regulations]
[Pages 62518-62521]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30550]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 301 and 602

[TD 8739]
RIN 1545-AV09


IRS Adoption Taxpayer Identification Numbers

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final and temporary regulations.

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SUMMARY: This document contains final and temporary regulations under 
section 6109 relating to taxpayer identifying numbers. The final 
regulations include a cross reference to the temporary regulations, 
which provide rules for obtaining and using IRS adoption taxpayer 
identification numbers. The temporary regulations assist individuals 
who are in the process of adopting children and wish to claim certain 
tax benefits with respect to those children. The text of these 
temporary regulations also serves as the text of the proposed 
regulations set forth in the notice of proposed rulemaking on this 
subject in

[[Page 62519]]

the Proposed Rules section of this issue of the Federal Register.

DATES: These regulations are effective November 24, 1997.

FOR FURTHER INFORMATION CONTACT: Michael L. Gompertz, (202) 622-4910 
(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    These final and temporary regulations are being issued without 
prior notice and public procedure pursuant to the Administrative 
Procedure Act (5 U.S.C. 553). For this reason, the collection of 
information contained in these regulations has been reviewed and, 
pending receipt and evaluation of public comments, approved by the 
Office of Management and Budget under control number 1545-1564. 
Responses to this collection of information are required to obtain a 
taxpayer identification number.
    For further information concerning this collection of information, 
and where to submit comments on the collection of information and the 
accuracy of the estimated burden, and suggestions for reducing this 
burden, please refer to the preamble to the cross-referencing notice of 
proposed rulemaking published in the Proposed Rules section of this 
issue of the Federal Register.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless the collection of 
information displays a valid control number.
    Books or records relating to this collection of information must be 
retained as long as their contents may become material in the 
administration of any internal revenue law. Generally, tax returns and 
tax return information are confidential, as required by 26 U.S.C. 6103.

Background

    This document contains amendments to the Regulations on Procedure 
and Administration (26 CFR part 301) relating to identifying numbers 
under section 6109. Section 6109(a)(1) provides that any person 
required to make a return, statement, or other document must include in 
the document such identifying number as may be prescribed for securing 
proper identification of the person. Section 6109(a)(2) provides that 
any person with respect to whom a return, statement, or other document 
is required to be made by another person or whose identifying number 
must be shown on a return of another person, must furnish to the other 
person such identifying number as may be prescribed for securing the 
person's proper identification. Section 6109(d) provides that an 
individual must use a social security number as the individual's 
taxpayer identification number unless the Secretary prescribes 
otherwise by regulations.
    Currently, there are three types of taxpayer identification numbers 
(TINs) assigned to individuals: (1) a social security number (SSN), (2) 
an IRS individual taxpayer identification number (ITIN) assigned to an 
alien individual who is ineligible to obtain an SSN, and (3) an 
employer identification number (EIN) assigned to an individual who is 
engaged in a trade or business as a sole proprietor. An SSN is assigned 
by the Social Security Administration. An ITIN or an EIN is assigned by 
the IRS.
    Section 1615 of the Small Business Job Protection Act of 1996 
(Public Law 104-188, 110 Stat. 1755, 1853 (1996)) added sections 
21(e)(10) and 151(e) to deny the dependent care credit and the 
deduction for the dependency exemption if the TIN (as defined by 
section 6109 and the regulations thereunder) of the dependent is not 
included on the return claiming the credit or deduction. Sections 
21(e)(10) and 151(e) generally are effective for tax returns due 
(without regard to extensions) after September 18, 1996.
    In addition, section 101 of the Taxpayer Relief Act of 1997 (Pub. 
L. 105-34, 111 Stat. 788, 796 (1997)) added section 24 to the Code to 
provide a child tax credit for each qualifying child, effective for 
taxable years beginning after December 31, 1997. Pursuant to section 
24(e), the taxpayer will be denied the credit if the qualifying child's 
TIN is not included on the return claiming the credit.
    In most cases, taxpayers can meet the TIN requirements of sections 
21, 24, and 151 by including a child's SSN on the return claiming the 
credit or deduction. In the case of adoption, however, a child may not 
have an SSN or, if the child does have an SSN, the taxpayer adopting 
the child (the prospective adoptive parent) may be unable to obtain the 
SSN because of confidentiality laws. See H.R. Rep. No. 542, 104th 
Cong., 2d Sess. 20 (1996); S. Rep. No. 412, 103d Cong., 2d Sess. 163 
(1994).

Explanation of Provisions

    These temporary regulations authorize the IRS to assign a new form 
of taxpayer identification number, the IRS adoption taxpayer 
identification number (ATIN), to a child who is in the process of being 
adopted (a prospective adoptive child). The regulations are effective 
for income tax returns due (without regard to extension) on or after 
April 15, 1998.
    The temporary regulations provide that an ATIN is a temporary 
taxpayer identification number that expires two years after the date of 
issuance. However, upon application, the IRS may grant an extension of 
the ATIN. A prospective adoptive parent may apply for an ATIN for a 
child if: (1) The prospective adoptive parent is eligible to claim a 
personal exemption under section 151 with respect to the child; (2) the 
child is placed with the prospective adoptive parent for legal adoption 
by an authorized placement agency (as defined in Sec. 1.152-2(c)); (3) 
the Social Security Administration will not assign the prospective 
adoptive parent an SSN for the child (for example, because the adoption 
is not final); and (4) the prospective adoptive parent has used all 
reasonable means to obtain the child's assigned SSN, if any, but has 
been unsuccessful in obtaining this number (for example, because the 
birth parent who obtained the number is not legally required to 
disclose the number to the prospective adoptive parent).
    The temporary regulations provide that an application for an ATIN 
must be made on the Form W-7A, Application for Taxpayer Identification 
Number for Pending Adoptions, or such other form prescribed by the IRS. 
The ATIN application must be accompanied by documentary evidence to 
establish that an authorized placement agency placed the child in the 
prospective adoptive parent's household for legal adoption by the 
parent. Such documentary evidence may include: a copy of a placement 
agreement entered into between the prospective adoptive parent and an 
authorized placement agency; an affidavit signed by the adoption 
attorney or government official who placed the child for legal adoption 
pursuant to state law; a document authorizing the release of a newborn 
child from a hospital to a prospective adoptive parent for adoption; or 
a court document ordering or approving the placement of a child for 
adoption.
    When an adoption becomes final, the adoptive parent must apply for 
an SSN for the child. Once obtained, the SSN, rather than the ATIN, 
must be used as the child's TIN on all future returns, statements, or 
other documents required by the Code.
    An ATIN may be used by the prospective adoptive parents to meet the 
TIN requirements of sections 21(e)(10), 24(e), and 151(e), relating to 
the dependent care credit, the child tax credit, and the dependency 
exemption, respectively. Also, as may be prescribed by forms, 
instructions, or otherwise, an

[[Page 62520]]

ATIN may be used to meet the TIN requirements under sections 23(f) and 
137(e), relating to qualified adoption expenses. The ATIN may not be 
used to meet the TIN requirement of section 32. See section 32(l).
    The ATIN procedures do not apply to adoptions involving alien 
children. Generally, the Social Security Administration will assign an 
SSN to an alien child if all the requirements for assigning a number 
are met. When the Social Security Administration cannot assign an SSN, 
the child generally will be eligible for an ITIN.
    In addition to adoptions involving alien children, there are two 
other types of adoptions to which the ATIN procedures may not apply. If 
the child placed for adoption is a foster child or is otherwise in the 
custody of a government agency or court (because, for example, the 
birth parents' rights were previously terminated for abuse or neglect), 
the government agency or court will generally obtain an SSN for the 
child and can make the SSN available to the prospective adoptive 
parent. Also, the prospective adoptive parent may be able to obtain the 
child's SSN from the birth parents (or other person) in the case of an 
adoption by the child's relatives or an adoption in which the adoptive 
parent and birth parent share information about the child and 
themselves.
    Taxpayers are invited to comment on two issues partially addressed 
by the temporary regulations. First, comments are requested regarding 
what types of documents are available to establish that a child has 
been placed in the prospective adoptive parent's household for legal 
adoption. Also, comments are requested as to whether certain types of 
adoptions (in addition to foreign adoptions) should be completely 
excluded from the ATIN process. In particular, comments are requested 
regarding whether a prospective adoptive parent is always able to 
obtain a prospective adoptive child's SSN if the child is a foster 
child or is otherwise in the custody of a government agency or court.

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in EO 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 regulation does 
not impose a collection of information on small entities, the 
Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Only 
individuals may receive ATINs under this Treasury decision, and an 
individual is not a small entity as defined in the Regulatory 
Flexibility Act. See 5 U.S.C. 601(6).
    Pursuant to section 7805(f) of the Internal Revenue Code, these 
regulations will be submitted to the Chief Counsel for Advocacy of the 
Small Business Administration for comment on their impact on small 
business.

Drafting Information

    The principal author of these regulations is Michael L. Gompertz of 
the Office of Assistant Chief Counsel (Income Tax and Accounting). 
However, other personnel from the IRS and Treasury Department 
participated in their development.

List of Subjects

26 CFR Part 301

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

26 CFR Part 602

    Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR parts 301 and 602 are amended as follows:

PART 301--PROCEDURE AND ADMINISTRATION

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

    Authority: 26 U.S.C. 7805 * * *
    Section 301.6109-1T also issued under 26 U.S.C. 6109;
    Section 301.6109-3T also issued under 26 U.S.C. 6109; * * *

    Par. 2. Section 301.6109-1 is amended by adding paragraph 
(h)(2)(iii) to read as follows:


Sec. 301.6109-1  Identifying numbers.

* * * * *
    (h) * * *
    (2) * * *
    (iii) Paragraphs (a)(1)(i), (a)(1)(ii)(A), and (a)(1)(ii)(B) of 
this section do not apply after November 24, 1997. For further guidance 
after November 24, 1997, see Sec. 301.6109-1T(a)(1)(i), (a)(1)(ii) 
introductory text, and (a)(1)(ii)(A) and (B).
    Par. 3. Section 301.6109-1T is added to read as follows:


Sec. 301.6109-1T  Identifying numbers (temporary).

    (a) In general--(1) Taxpayer identifying numbers--(i) Principal 
types. There are four principal types of taxpayer identifying numbers: 
social security numbers, Internal Revenue Service (IRS) individual 
taxpayer identification numbers, employer identification numbers, and 
IRS adoption taxpayer identification numbers. Social security numbers 
take the form 000-00-0000. IRS individual taxpayer identification 
numbers and IRS adoption taxpayer identification numbers also take the 
form 000-00-0000 but include a specific number or specific numbers 
designated by the IRS. Employer identification numbers take the form 
00-0000000.
    (ii) Uses. Social security numbers, IRS individual taxpayer 
identification numbers, and IRS adoption taxpayer identification 
numbers are used to identify individual persons. For the definition of 
social security number and employer identification number, see 
Secs. 301.7701-11 and 301.7701-12, respectively. For the definition of 
IRS individual taxpayer identification number, see Sec. 301.6109-
1(d)(3). For the definition of IRS adoption taxpayer identification 
number, see Sec. 301.6109-3T. Except as otherwise provided in 
applicable regulations under this title or on a return, statement, or 
other document, and related instructions, taxpayer identifying numbers 
must be used as follows--
    (A) Except as otherwise provided in Sec. 301.6109-1(a)(1)(ii)(D), 
paragraph (a)(1)(ii)(B) of this section, and Sec. 301.6109-3T, an 
individual required to furnish a taxpayer identifying number must use a 
social security number.
    (B) Except as otherwise provided in Sec. 301.6109-1(a)(1)(ii)(D) 
and Sec. 301.6109-3T, an individual required to furnish a taxpayer 
identifying number but who is not eligible to obtain a social security 
number must use an IRS individual taxpayer identification number.
    (a)(1)(ii)(C) through (g) [Reserved]. For further guidance, see 
Sec. 301.6109-1(a)(1)(ii)(C) through (g).
    (h) Effective date. Paragraphs (a)(1)(i), (a)(1)(ii) introductory 
text, (a)(1)(ii)(A), and (a)(1)(ii)(B) of this section are applicable 
after November 24, 1997. For further guidance prior to November 24, 
1997, see Sec. 301.6109-1(a)(1)(i), (a)(1)(ii)(A) and (a)(1)(ii)(B).
    Par. 4. Section 301.6109-3T is added to read as follows:

[[Page 62521]]

Sec. 301.6109-3T  IRS adoption taxpayer identification numbers 
(temporary).

    (a) In general--(1) Definition. An IRS adoption taxpayer 
identification number (ATIN) is a temporary taxpayer identifying number 
assigned by the Internal Revenue Service (IRS) to a child (other than 
an alien individual as defined in Sec. 301.6109-1(d)(3)(i)) who has 
been placed, by an authorized placement agency, in the household of a 
prospective adoptive parent for legal adoption. An ATIN is assigned to 
the child upon application for use in connection with filing 
requirements under this title. When an adoption becomes final, the 
adoptive parent must apply for a social security number for the child. 
After the social security number is assigned, that number, rather than 
the ATIN, must be used as the child's taxpayer identification number on 
all returns, statements, or other documents required under this title.
    (2) Expiration and extension. An ATIN automatically expires two 
years after the number is assigned. However, upon request, the IRS may 
grant an extension if the IRS determines the extension is warranted.
    (b) Definitions. The following definitions apply for purposes of 
this section--
    (1) Authorized placement agency has the same meaning as in 
Sec. 1.152-2(c) of this chapter;
    (2) Prospective adoptive child or child refers to a child who has 
not been adopted, but who has been placed in the household of a 
prospective adoptive parent for legal adoption by an authorized 
placement agency; and
    (3) Prospective adoptive parent or parent refers to an individual 
in whose household a prospective adoptive child is placed by an 
authorized placement agency for legal adoption.
    (c) General rule for obtaining a number--(1) Who may apply. A 
prospective adoptive parent may apply for an ATIN for a child if--
    (i) The prospective adoptive parent is eligible to claim a personal 
exemption under section 151 with respect to the child;
    (ii) An authorized placement agency places the child with the 
prospective adoptive parent for legal adoption;
    (iii) The Social Security Administration will not process an 
application for an SSN by the prospective adoptive parent on behalf of 
the child (for example, because the adoption is not final); and
    (iv) The prospective adoptive parent has used all reasonable means 
to obtain the child's assigned social security number, if any, but has 
been unsuccessful in obtaining this number (for example, because the 
birth parent who obtained the number is not legally required to 
disclose the number to the prospective adoptive parent).
    (2) Procedure for obtaining an ATIN. If the requirements of 
paragraph (c)(1) of this section are satisfied, the prospective 
adoptive parent may apply for an ATIN for a child on Form W-7A, 
Application for Taxpayer Identification Number for Pending Adoptions 
(or such other form as may be prescribed by the IRS). An application 
for an ATIN should be made far enough in advance of the first intended 
use of the ATIN to permit issuance of the ATIN in time for such use. An 
application for an ATIN must include the information required by the 
form and accompanying instructions, including the name and address of 
each prospective adoptive parent and the child's name and date of 
birth. In addition, the application must include such documentary 
evidence as the IRS may prescribe to establish that a child was placed 
in the prospective adoptive parent's household by an authorized 
placement agency for legal adoption. Examples of acceptable documentary 
evidence establishing placement for legal adoption by an authorized 
placement agency may include--
    (i) A copy of a placement agreement entered into between the 
prospective adoptive parent and an authorized placement agency;
    (ii) An affidavit signed by the adoption attorney or government 
official who placed the child for legal adoption pursuant to state law;
    (iii) A document authorizing the release of a newborn child from a 
hospital to a prospective adoptive parent for adoption; and
    (iv) A court document ordering or approving the placement of a 
child for adoption.
    (d) Effective date. The provisions of this section apply to income 
tax returns due (without regard to extension) on or after April 15, 
1998.

PART 602--OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT

    Par. 5. The authority citation for part 602 continues to read as 
follows:

    Authority: 26 U.S.C. 7805.

    Par. 6. Section 602.101(c) is amended by adding an entry in 
numerical order to the table to read as follows:


Sec. 602.101  OMB Control numbers.

* * * * *
    (c) * * *

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                                                             Current OMB
     CFR part or section where identified and described      control No.
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301.6109-3T................................................    1545-1564
                  *        *        *        *        *                 
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Michael P. Dolan,
Acting Commissioner of Internal Revenue.
    Approved: October 24, 1997.
Donald C. Lubick,
Acting Assistant Secretary of the Treasury.
[FR Doc. 97-30550 Filed 11-21-97; 8:45 am]
BILLING CODE 4830-01-P