Department of the Treasury

Plan for Retrospective Analysis of Existing Rules

August 22, 2011

I. Executive Summary of Plan and Compliance with Executive Order 13563

Background: Executive Order 13563 (“Improving Regulation and Regulatory Review”)

sets forth principles and requirements designed to promote public participation, improve 

integration and innovation, increase flexibility, ensure scientific integrity, and increase 

retrospective analysis of existing rules. Section 6 of the Executive Order emphasizes the 

importance of retrospective analysis of rules and requires agencies to 

develop and submit to the Office of Information and Regulatory Affairs a 

preliminary plan, consistent with law and its resources and regulatory 

priorities, under which the agency will periodically review its existing 

significant regulations to determine whether any such regulations should be 

modified, expanded, streamlined, or repealed so as to make the agency's

regulatory program more effective or less burdensome in achieving the 

regulatory objectives.

The Treasury Department’s plan is designed to create a defined method and schedule for 

identifying certain significant rules that are obsolete, unnecessary, excessively 

burdensome, or ineffective. Its review processes are intended to facilitate the 

identification of rules that warrant repeal or modification, or strengthening, 

complementing, or modernizing rules where necessary or appropriate.

As described below, the reforms here, already achieved or proposed, promise significant 

savings in terms of costs and burden-hours. One example is a paperwork reduction 

initiative from the Internal Revenue Service (IRS) that will eliminate 55 million annual 

hours in reporting burdens as early as 2011. Another example, with an anticipated 

savings of approximately $120 million each year (by eliminating paper checks, effective 

May 1, 2011), is a reform to ensure that all individuals who apply for federal benefits will 

receive their payments electronically – by direct deposit to a bank or credit union account 

or to a Direct Express® Debit MasterCard® card account. 

The Treasury Department emphasizes that Executive Order 13563 calls not for a single 

exercise, but for “periodic review of existing significant regulations,” with close 

reference to empirical evidence. It explicitly states that “retrospective analyses, including 

supporting data, should be released online wherever possible.” Consistent with the 

commitment to periodic review and to public participation, the Treasury Department will 

continue to assess its existing significant regulations in accordance with the requirements 

of Executive Order 13563. The Treasury Department welcomes public suggestions about 

appropriate reforms. If, at any time, members of the public identify possible reforms to 

streamline requirements and to reduce existing burdens, the Department will give those 

suggestions careful consideration.
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The Department of the Treasury is organized into components including the 

Departmental Offices and the operating bureaus. The Departmental Offices are primarily 

responsible for the formulation of policy and management of the Department as a whole, 

while the operating bureaus carry out the specific operations assigned to the Department. 

U.S. Customs and Border Protection (CBP) is considered part of the Departmental 

Offices for purposes of the regulations pertaining to the Treasury-retained, customs 

revenue functions. Rulemakings of all of these components are part of the Treasury 

Department’s plan.

Summary of Plan: On an annual basis, members of the public will be provided with an 

opportunity to suggest to each bureau the specific regulations or other guidance that 

should be updated or amended as part of a targeted revision. The regulatory staff at each 

bureau will evaluate the public suggestions as well as projects recommended by 

personnel, and each bureau will consult with the appropriate policy official within 

Departmental Offices about significant targeted regulatory projects that should be 

prioritized for review. As part of the Department’s evaluation process, the public may be 

provided with the opportunity to provide additional input on the prioritization of 

regulatory review projects. The Department, in close consultation with each bureau, will 

select and publicly announce the priority regulatory review projects and provide an 

explanation of the bases of those selections. To the extent practicable, the selected 

priority projects will be placed on a separate “fast track” review workflow.

II. Scope of Plan

a. Bureaus and Offices within the Treasury Department that are included in this 

plan:

 Departmental Offices (DO)

 Alcohol and Tobacco Tax and Trade Bureau (TTB)

 Bureau of Engraving and Printing (BEP)

 Bureau of the Public Debt (BPD)

 Financial Crimes Enforcement Network (FinCEN)

 Financial Management Service (FMS)

 Internal Revenue Service (IRS)

 U.S. Mint (Mint)

b. The types of documents covered under this plan include:

• Existing significant regulations

• Pending significant proposed rules 

When determined appropriate by a Treasury bureau or office, the provisions of this plan 

may be applied to existing regulations that have not been designated as significant regulatory 

actions, as that term is defined by Executive Order 12866 (“Regulatory Planning and Review”), 

guidance documents, and to information collections under the Paperwork Reduction Act.
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III. Public Access and Participation

a. Notice in the Federal Register seeking public input on developing plans.

- The Department published a request for information in the Federal Register on 

March 28, 2011 (76 FR 17572). The Department published a notice of 

availability of the preliminary plan in the Federal Register on July 6, 2011 (76 FR 

39315). Both documents are available at: 

http://www.regulations.gov/#!docketDetail;dct=FR+PR+N+O+SR;rpp=10;po=0;

D=TREAS-DO-2011-0003

- The Department released its preliminary plan on its Open Gov website and began 

accepting comments via www.regulations.gov on June 1, 2011. 

b. Brief summary of public comments.

The Department received eleven comments in response to the initial March 28, 2011 

Federal Register notice. The Department received three comments on the preliminary 

plan. All comments received are summarized briefly in the Appendix to this plan.

The Department appreciates the efforts of the commenters in providing thoughtful 

suggestions and recommendations. Several of the comments have been incorporated 

in this plan including many of the factors recommended for identifying rules for 

review. The comments are available in the electronic docket on 

www.regulations.gov. 

IV. Current Agency Efforts Already Underway Independent of E.O. 13563

 The IRS recently issued regulations and is revising Form 1099B, Schedule D and 

Form 1040 to implement a 2008 change in the law that, beginning in 2011, requires 

brokers to report the basis of any equity security acquired after 2010 that is sold 

during the year. The IRS also chose to require brokers to report the date acquired, so 

that taxpayers would have all the information they need to report these transactions 

on Schedule D for 2011. Brokers may also choose to report basis for equity securities 

acquired before 2011 if the broker has the correct basis information. The revised 

Form 1099-B includes a field for the taxpayer’s basis and date acquired. 

Additionally, the IRS is no longer requiring taxpayers to separately report gain or loss 

for each transaction, but rather these transactions will now be reported in the 

aggregate. These revisions are expected to produce a reduction of 55 million burden 

hours in 2011 (OMB Control Number 1545-0074).

 In 1992, the IRS created an annual Guidance Priority List (“GPL”) that identifies 

issues that it intends to address in public guidance that year. Public guidance includes 

regulations, revenue rulings, revenue procedures, Internal Revenue Bulletin (IRB) 
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notices, and announcements. The public is invited to suggest items that should be 

included in the GPL through an invitation published in the IRB and the tax press.1

http://www.irs.gov/foia/article/0,,id=181687,00.html

The GPL is available on the IRS website at

. 

 The IRS recently reviewed its procedures regarding the issuance of regulations to 

ensure compliance with Executive Orders 12866 and 13563 , the Regulatory 

Flexibility Act 5 U.S.C. § 601 et seq.), the Administrative Procedure Act (5 U.S.C. 

chapter 5), and the Congressional Review Act (5 U.S.C. § 801 et seq.), which resulted 

in expanded and clarified instructions and information for IRS regulation drafters.

 TTB conducted a thorough review of its regulations in 2005 as part of its Regulations 

Modernization Project, which has resulted in the updating of some of its regulations, 

including Parts 9 (American Viticultural Areas) and 19 (Distilled Spirits Plants) of 

Title 27, Code of Federal Regulations, with additional modernization projects 

ongoing. The revisions of Parts 9 and 19 offer examples of some of the earliest gains 

from the Regulations Modernization Project. American viticultural areas (AVAs) are 

established through rulemaking, and Part 9 was updated to clarify TTB’s position 

regarding the establishment of AVAs established within other AVAs and provide 

greater detail to the public concerning the AVA approval process, including the 

submission and rejection of petitions for rulemaking to establish or change AVAs. 

The revised Part 9 rules provide a greater understanding of the AVA process to the 

public and have resulted in a more efficient AVA program. The final rule for Part 9 

was published in the Federal Register on January 20, 2011. For the Part 19

rulemaking, TTB revised the entirety of the Distilled Spirits Plant (DSP) regulations, 

which govern the production, processing, storage, and removal of all distilled spirits 

within the United States. Federal law prohibits the manufacture or production of 

distilled spirits in the United States other than at a registered DSP that has received a 

permit from TTB. The Part 19 regulations govern the production of taxable distilled 

spirits, from which TTB collected $4.9 billion in 2010, and denatured distilled spirits 

that are exempt from taxes, of which 1.7 billion wine gallons were produced in 2010. 

The Part 19 regulations (1) were reorganized to eliminate redundancy and to provide 

easier reference of applicable provisions to industry members, (2) were rewritten in 

plain language, (3) incorporated policies and procedures developed and established 

since the last revision, and (4) were generally revised to reduce the burden on 

industry, where feasible. The final rule for Part 19 was published in the Federal 

Register on February 16, 2011.

 FinCEN established a program whereby each new or significantly amended 

regulation is reviewed to assess clarity and effectiveness within 18 months of its 

effective date. FinCEN makes its regulatory assessment publicly available to the 

affected industries. Each assessment is targeted to the specific new regulation, or 

significant change to existing regulations, and a determination is made how best to 

 1 In response to Executive Order 13563, the IRS has added to the next annual solicitation notice a request for 

recommendations with respect to regulations that may be outmoded, ineffective, insufficient, or excessively 

burdensome and whether they should be modified, streamlined, expanded, or repealed. 
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evaluate its effectiveness. A particular assessment may include analysis of Bank 

Secrecy Act (BSA) data, review and analysis of calls to the FinCEN BSA Resource 

Center helpline, discussions with and feedback from the federal functional regulators 

and the IRS to whom FinCEN has delegated examining authority. Based on the 

specific findings of the assessment, FinCEN would consider whether to publish 

guidance or whether additional rulemaking is required. For example, in August 2009, 

FinCEN issued guidance (FIN-2009-G003) to help banks determine whether a 

customer is eligible for exemption from currency transaction reporting (CTR) 

requirements. The guidance resulted from questions received regarding a final rule 

amending the CTR exemption requirements (see 73 FR 74010) that FinCEN issued in 

December 2008.

 BPD, FinCEN, IRS, and TTB engage in extensive public outreach initiatives, which 

include meetings with industry representatives, external consultative bodies, and/or 

advisory committees to engage with and obtain information from the public 

throughout the regulatory process in a manner consistent with the Administrative 

Procedure Act and the Federal Advisory Committee Act (5 U.S.C. App. 2).

 On an ongoing basis, FinCEN utilizes the Unified Agenda entries to monitor pending 

proposed rules that are unlikely to be acted upon in the near future. In 2008, this 

effort resulted in the withdrawal of five proposed rules. FinCEN also regularly 

reviews its published guidance to ensure that it is up to date and accurate. In response 

to public comments in 2009, FinCEN amended its regulations regarding reports of 

foreign financial accounts (FBAR) in early 2011. The amendments to the FBAR 

reporting requirements were finalized following an NPRM issued in February 2010, 

which was in turn informed by feedback from a prior notice issued by Treasury 

(FBAR Notice 2009-62) in August 2009, in which Treasury solicited comments on a 

number of issues affecting a person’s FBAR filing obligation. 

 The Community Development Financial Institution (CDFI Fund) within DO revised 

the Bank Enterprise Award Program regulations in 2009 and provided multiple 

opportunities for public comment prior to publishing the Capital Magnet Fund 

regulations in 2010.

 FMS has been and is continually modernizing its regulations to respond to changes in 

legal and operational environments, including recent revisions to 31 CFR Parts 208, 

210, and 240 in conjunction with the “all-electronic” Treasury initiative.

 BPD has revised some of its regulations to incorporate plain language and interacts 

with the public to receive comments on and resolve problems with its regulations, 

including through its customer service staff, industry gatherings, and workshops for 

market participants.

 Each recordkeeping, disclosure, and reporting requirement contained in a rule must 

be reviewed on a three year basis under the Paperwork Reduction Act (44 U.S.C. § 

3501 et seq.) and certain regulations that have a significant economic impact on a 
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substantial number of small entities must be reviewed on a ten year basis under the 

Regulatory Flexibility Act (5 U.S.C. § 610). These reviews are ongoing throughout 

the Department.

V. Elements of Plan/Compliance with E.O. 13563

a. Plan to develop a strong, ongoing culture of retrospective analysis.

The procedures outlined below describe the Department’s plan for creating a strong, 

ongoing culture of retrospective analysis by implementing a process for annually 

soliciting recommendations for retrospective review projects from both inside and 

outside the Department and then assessing and prioritizing those projects for 

completion according to the factors described below in section V.b. The plan largely 

relies upon those entities most familiar with the benefits and costs associated with 

various regulations – the public, the regulated industries, and the regulatory and 

enforcement groups at each bureau – to identify the specific portions of regulations 

that should be subjected to a prioritized and targeted retrospective review and revision 

process. In addition, the plan provides a mechanism for the regular review of entire 

parts of the Code of Federal Regulations to ensure that all regulations are reviewed on 

a regular basis.

On an annual basis, members of the public will be provided with an opportunity to 

suggest to each bureau the specific regulations or other guidance that should be 

updated or amended as part of a targeted revision. Subject to Department review and 

approval, the means for soliciting public input may be specifically tailored by each 

bureau to account for their current methods of interaction with and receiving input 

from the public.

Using the factors described below in a weighted analysis as described in section V.b.,

the regulatory review staff at each bureau will evaluate the public suggestions as well 

as projects recommended by various bureau personnel, and each bureau will consult 

with the appropriate policy official within DO about significant targeted regulatory 

projects that should be prioritized for completion within a specific timeframe (e.g., 1-

2 years). 

The appropriate DO policy officials will evaluate bureau recommendations to 

determine the retrospective review projects that should be prioritized for completion 

that year based on the factors described below. As part of the Department’s

evaluation process, the public may be provided with the opportunity to provide 

additional input on the priority regulatory review projects.

The Department will select and publicly announce on its website the priority 

regulatory projects and provide an explanation of the bases of those selections. To 

the extent practicable, the selected projects will be placed on a separate “fast track” 

review workflow for the priority projects identified through the above processes.
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In addition, all parts of the Code of Federal Regulations within the jurisdiction of the 

Department should be subjected to an overarching retrospective review for 

modernization on a regular basis consistent with the Regulatory Flexibility Act to: (1) 

ensure consistency across each bureau’s regulations as well the regulations of other 

agencies; (2) make any remaining needed statutory and technical corrections; and (3) 

assess the efficiency and effectiveness of the overall regulatory scheme. Given the 

timeframe needed to complete the revision of an entire part, and to ensure compliance 

with the Regulatory Flexibility Act, entire parts should be reviewed on a periodic

basis following the date of the last substantial revision, and a decision would then be 

made regarding the extent, if any, of the revisions needed for that part. If practicable, 

regulations will be reviewed within five years following the date of promulgation or 

substantial revision, but not more than ten years from that date. 

Every year, each bureau will conduct a retrospective review of ten percent of its 

regulations subject to this plan. This ten percent review will continue on an annual 

basis in order for all Treasury regulations to be reviewed at least every ten years. 

To engage stakeholders, Treasury bureaus are encouraged to hold “town hall” 

meetings, listening sessions, roundtables or other similar events that provide inperson or real-time opportunities to share information. 

To the extent that a Treasury bureau is already achieving the Executive Order 13563 

policy goals and the goals of this plan through its established procedures, no 

duplicative coordination with DO policy offices is necessary. In such cases, bureaus 

will work with the appropriate DO policy office and the Office of General Counsel to 

make this determination. It may be necessary for a bureau to supplement its existing 

procedures in order to comply with this plan. 

b. Prioritization: Factors and processes used in setting priorities.

The following list includes the factors to be used in setting priorities for retrospective 

review projects. The list of factors not only takes into account whether a regulation 

is significant for the purposes of E.O. 12866, but it also includes factors that directly 

relate to the policy considerations underlying the need for a “consistent culture of 

retrospective review and analysis,” as described in E.O. 13563. Given the relative 

importance of some of these factors as compared to other factors, however, the 

Department may employ a weighted analysis, whereby a greater weight is given to 

certain factors in prioritizing regulatory review projects.

 Economic impact of the regulatory project on the public or industry using an ex 

post analysis, including increased revenues or costs, greater efficiency, decreased 

illegal activities, increased compliance, and number of industry members and 

people affected.
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 Economic impact of the regulatory project on the government based on net 

benefits or reduction in net costs using an ex post analysis, including increased 

efficiencies and decreased costs.

 Reduced burden or intrusiveness on the public, small businesses, and industry, 

including greater efficiency, reducing record keeping requirements, 

harmonization with other agencies’ regulations, and the number of industry 

members and/or people affected by the regulation.

 Extent and content of feedback from public outreach initiatives and external 

consultative bodies, including survey responses and petitions received from the 

public.

 Public attention related to the regulation.

 Level of complexity and prescriptive nature of the regulation.

 Opportunity to employ plain language principles.

 Time elapsed since the last review of the regulation/guidance.

 Updating outmoded or obsolete regulations or guidance.

 Potential for savings to the taxpayer.

 Potential for reduction in burden hours for recordkeeping and reporting.

 Significance of the regulation under Executive Order 12866.

 Bureau and Department resources.

 Administration and Department priorities.

c. Specific rules that are already under consideration for retrospective analysis and 

initial list of candidate rules for review over the next two years:

The following include significant regulatory actions and other rulemaking projects 

that are already under consideration for retrospective analysis and review or are 

expected to be reviewed during the next two years. 

 IRS:

 Proposed regulations on the 2010-11 GPL (Guidance Priority List) making 

corrections to the section 6402 regulations to reflect the proper place for filing 

claims for refund or credit. The proposed regulations are necessary because the 
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regulations in effect are outdated and do not provide the necessary information for 

filing a refund claim. 

 Proposed regulations on the 2010-2011 GPL regarding lifetime income from 

retirement plans. Treasury and the IRS are reviewing certain regulations 

pertaining to retirement plans to determine whether any modifications could better 

achieve the objective of promoting retirement security by facilitating the offering 

of benefit distribution options in the form of retirement income. This initiative is 

expected to include projects that would facilitate the delivery of lifetime income 

in qualified plans and, to some extent, IRAs, and would reduce administrative 

burdens for retirement plan sponsors that would like to expand employees’ 

retirement income options. 

 Proposed regulations under sections 6662, 6662A and 6664 on the 2010-2011 

GPL regarding accuracy-related penalties. Section 6662 has been amended 

several times, and the revisions to the regulations will address issues that have 

arisen as a result of the statutory amendments. In addition, section 6662A was 

enacted in 2004 and among other issues, the regulations will specify the dates for 

amended returns affecting the calculation of the accuracy-related penalty on 

reportable transactions.

 Final regulations on the 2010-2011 GPL that would update the regulations under 

section 7611 to reflect changes in the IRS organizational structure. 

 Final regulations on the 2010-2011 GPL that would provide relief to employers 

facing financial difficulty from certain requirements under the existing regulations 

on safe harbor contributions to section 401(k) and (m) plans. The regulations are 

in response to concerns raised by employers experiencing a business hardship 

who are unable to meet their obligation of paying certain safe harbor contributions 

under their plans. The regulations would provide new flexibility to employers 

sponsoring certain safe harbor 401(k) plans by allowing these plan sponsors to 

respond to changes in their financial health by suspending required contributions. 

 Final regulations on the 2010-2011 GPL that would update various existing 

regulations as a result of the IRS’s redesign of Form 990, “Return of Organization 

Exempt From Income Tax.” The redesign was initiated because the form had not 

been significantly revised since 1979 and both the IRS and stakeholders regarded 

the form as needing major revision to keep pace with changes in the law and with 

the increasing size, diversity, and complexity of the exempt sector. The new form 

incorporates many recommendations made in public comments on the discussion 

draft of the form released in June 2007. Among other things, the regulations 

reduce taxpayer burden by eliminating the advance ruling process for new 

organizations.

 Proposed regulations on the 2010-2011 GPL that would amend the Federal 

Insurance Contributions Act and Federal Unemployment Tax Act regulations to 
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extend certain exceptions to these taxes to disregarded entities. The regulations 

are in response to recent changes made to the entity classification regulations to 

ensure that the exceptions continue to be available. 

 Proposed regulations on the 2010-2011 GPL regarding the dependency exemption 

under section 152 that incorporate the uniform definition of a qualifying child, 

provide or clarify other applicable rules, and make coordinating changes in the 

regulations under sections 2 (head of household), 63 (standard deduction), and 

151 (personal exemptions), thereby complying with changes in the law made by 

the Working Families Tax Relief Act of 2004 and the Gulf Opportunity Zone Act 

of 2005. 

 Final regulations under section 170 on the 2010-2011 GPL concerning the 

substantiation and reporting requirements for cash and noncash charitable 

contributions to reflect amendments made by the American Jobs Creation Act of 

2004 and the Pension Protection Act of 2006. 

 Proposed regulations on the 2010-2011 GPL on the deductibility of certain 

investment advisory and other expenses of trusts and estates, specifically whether 

such expenses are subject to the 2% floor for miscellaneous itemized expenses 

under section 67(a) or are fully deductible under the section 67(e) exception for 

administration expenses that would not have been incurred if the property was not 

held in the trust or estate. The IRS issued proposed regulations in this area to 

resolve conflicts among the Federal Circuit Courts, but those regulations are now 

being revised to be consistent with a subsequent Supreme Court opinion. 

 Proposed regulations on the 2010-2011 GPL providing guidance on the 

manufacturers excise tax on truck tires under section 4071 and the retail tax on 

highway tractors, trucks, and trailers under section 4051. The proposed 

regulations reflect statutory changes and revisions in light of recent court 

opinions.

 Final regulations on the 2010-2011 GPL under sections 381(c)(4) and (c)(5) to 

provide consistency in the methods of accounting used by a corporation that 

acquires the assets of another corporation in a section 381(a) transaction. Both 

regulatory sections address these issues but provide disparate treatment depending 

on whether the method change is subject to section 381(c)(4) or section 381(c)(5).

 Proposed regulations on the 2010-2011 GPL under section 460 regarding the long 

term contract method of accounting to reduce existing controversies and reduce 

compliance burden. The regulations will provide more specific guidance on the 

types of contracts eligible for the home construction contract exemption and 

address various issues specific to home construction contracts accounted for using 

the completed contract method.
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 Proposed regulations under section 280A on the 2010-2011 GPL regarding the 

home office deduction. Proposed regulations that were published in 1980 and 

1983, partially withdrawn in 1994, and never finalized are being reviewed. 

Treasury and the IRS are considering whether re-propose the regulations to reflect 

statutory amendments or to address issues that have arisen administratively.

 Proposed regulations incorporating the 1997 and 1998 amendments to section 

7430 relating to awards of administrative costs and attorney fees. The proposed 

regulations update the existing regulations to conform to those statutory changes 

and provide guidance on the proper interpretation of those provisions based, in 

part, on review of real cases.

 BEP: Reviewing its regulations relating to the exchange of mutilated paper currency 

(31 CFR Part 100, subpart B). The current regulations specify the procedures that a 

claimant must follow in order to submit a claim for mutilated currency to the Bureau 

of Engraving and Printing. The regulations also describe the standards for 

adjudicating mutilated currency for redemption. The regulations are a good candidate 

for lookback because they were promulgated in 1982 and have not been modified 

since 1991.

 DO: 

 Revising Treasury’s Freedom of Information Act regulations as well as the 

Employee Rules of Conduct. In accordance with E.O. 13563, DO is also 

reviewing rules in title 31 in order to update references to Treasury bureaus that

have been transferred to other agencies and other housekeeping and 

organizational changes. 

 Reviewing 31 CFR Part 25 relating to prepayment of Foreign Military Sales loans

to determine whether prepayments under the rule continue to be authorized. 

 The Office of Financial Stability is finalizing an interim rule concerning conflicts 

of interest under the Troubled Asset Relief Program. 

 The Office of DC Pensions is streamlining its regulations at 31 CFR Part 29 by 

eliminating overlap with Treasury’s 31 CFR Part 5 debt collection rules. 

 The Office of Foreign Assets Control has reviewed its regulations and is planning 

to remove Parts 500, 505, 545, 585, 586, and 587 of 31 CFR Chapter V in order to 

streamline its regulations and remove outdated material. These parts relate to old 

economic sanctions against North Korea, the Taliban, and the Former Yugoslavia 

that have been terminated and, in some cases, replaced by new sanctions 

programs.

 Customs and Border Protection (CBP) and Treasury are finalizing a proposal 

regarding eliminating the mailing of paper “courtesy” notices of liquidation which 
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provide informal, advanced notice of the liquidation date to the importers of 

record whose entry summaries are electronically filed in the Automated Broker 

Interface (ABI), while maintaining paper notices for all non-ABI filed entries. 

This effort to proceed only electronically will streamline the notification process 

and reduce printing and mailing costs for CBP. The ABI filer is already provided 

an electronic courtesy notice. All importers will be able to view their liquidation 

reports electronically through the enhanced Automated Commercial Environment 

(ACE) portal. 

 CBP and Treasury has reviewed Part 24 of 19 CFR and further propose to expand 

the number of ways that CBP will accept the payment of duties, taxes, fees, 

interest and other charges by the importing public. Currently, the regulations 

provide that credit or charge cards, which have been authorized by the 

Commissioner of CBP, may be used for the payment of non-commercial entries. 

CBP would like to expand this for certain commercial entries and also for the 

non-entry related fees, such as but not limited to, transponders, decals, broker 

examination, intellectual property and quarterly harbor maintenance fees. Under 

the proposal, CBP will also set the maximum amounts for charge or credit card 

transactions on commercial entries so that it aligns with section 920(b)(3) of the 

Consumer Financial Protection Act of 2010. The proposal would assist CBP in 

improving customer service and financial management and facilitate the overall 

entry process. 

 FinCEN: 

 Identified regulations in need of amendment to adapt to evolving industry 

practice, such as redefining the money services business definitions; received 

comments in response to its 31 CFR Chapter X proposal to identify unclear or 

inconsistent rules; currently reviewing and updating all FAQs relating to currency 

transaction reporting. FinCEN anticipates that this effort will provide it with 

insights needed to amend certain of its regulations so that they are more in line 

with current business practices, which could, in turn, lead to a more efficient 

application of BSA obligations. Consequently, any resulting rulemakings, 

informed as they would be by a more nuanced understanding of how specific 

industries operate, would have the potential to reduce compliance costs and 

burden hours. 31 CFR Chapter X refers to the transfer and reorganization of the 

Bank Secrecy Act regulations that appeared at 31 CFR Part 103 to a new chapter, 

31 CFR Chapter X.

 FinCEN will work to finalize interim rules (pending the availability of resources). 

Initially, FinCEN intends to finalize its anti-money laundering (AML) program 

rules for mutual funds and AML program regulations for dealers in precious 

metals, stones and jewels. There were three other rules issued in 2002 following 

the USA PATRIOT Act that were issued as interim final rules for expediency 

sake: the AML program rules for financial institutions, money services 

businesses, and operators of a credit card system. The USA PATRIOT Act 
13

amended the Bank Secrecy Act and mandated that a specific list of financial 

institutions (including these entities) be required to establish anti-money 

laundering programs. At the same time, FinCEN exercised its delegated authority 

and exempted other entities that the BSA defines as financial institutions – e.g., 

travel agencies, pawn brokers, car dealers -- in order to be judicious and not 

unduly burden industries unless and until there was sufficient evidence to support 

imposing an AML program requirement upon them. Since the issuance of the 

interim final rules, due to limited resources, FinCEN has not prioritized finalizing

rules as these requirements are congressionally mandated and the interim final 

rules have the effect of final rules. FinCEN anticipates making these three rules 

and the program rule for mutual funds final with minimal or no change to their 

current form. Given that industry has a clear understanding of the requirements 

under these rules, their interim final status is not an impediment to FinCEN’s 

mission or industry compliance. While FinCEN intends to make changes to the 

AML program rule for dealers in precious metals, stones and jewels as part of the 

finalization of the rule, FinCEN anticipates that such changes will reflect 

previously issued administrative rulings and does not anticipate that the 

finalization will result in any increase in burden hours or costs to industry to 

comply. 

 FMS: 

 With an anticipated savings of approximately $120 million each year by 

eliminating paper checks, effective May 1, 2011, all individuals who apply for 

federal benefits will receive their payments electronically – by direct deposit to a 

bank or credit union account or to a Direct Express® Debit MasterCard® card 

account. Those who already receive paper checks will need to switch to 

electronic payment by March 1, 2013. This new rule revises 31 CFR Part 208.

 Currently revising 31 CFR Part 223, which addresses surety companies doing 

business with the U.S. The update will strengthen the procedures and standards 

governing the adjudication by FMS of any agency complaint requesting that a 

surety's certificate be revoked for nonperformance. 

 Reviewing 31 CFR Parts 202 and 203 as part of its Cash Collection and 

Management Modernization initiative. Part 202 addresses depositaries and 

financial agents of the federal government and Part 203 concerns payments of 

federal taxes and the Treasury tax and loan (TT&L) program. The revisions will 

modernize the regulations to reflect changes in the use of TT&L banks and the 

use of new investment mechanisms.

 Revising and finalizing 31 CFR Part 240 to allow for the use of direct debit for 

payment reclamations, as part of the All-Electronic Treasury initiative. The move 

to an electronic process allows a payment to be reclaimed within half the time of a 

paper process, and it eliminates the need to use either the Treasury Offset 

Program for administrative offset or Treasury Check Offset to collect check 
14

reclamations, thereby reducing the FTE costs and administrative resources 

required in reclamation.

 Reviewing 31 CFR Part 210, which periodically is influenced by the NACHA 

Operating Rules and Guidelines, to ensure that the regulations governing the 

Federal government’s participation in the ACH network remains consistent with 

technological innovations and allows the government to realize any associated 

cost savings.

 Updating 31 CFR Part 245, which governs the issuance of replacement and 

settlement payments on lost, stolen, damaged, defaced, or forged checks, to 

implement provision in the Debt Collection Improvement Act and the Check 

Forgery Insurance Fund.

 Mint: Reviewing its mutilated coin redemption program regulations (31 CFR Part 

100, subpart C). This review will permit the bureau to clarify certain ambiguities in 

the regulations, prepare necessary updates to reflect redemption values for new coins 

issued since the regulation was last amended (such as the Sacagawea Golden Dollar, 

Presidential and Native American $1 Coins), and reevaluate existing redemption 

processes. 

 TTB (all references to parts in TTB projects are to Title 27 of the Code of Federal 

Regulations): 

 Revision to Specially Denatured and Completely Denatured Alcohol Regulations: 

TTB plans to propose changes to regulations for specially denatured alcohol 

(SDA) and completely denatured alcohol (CDA) that would result in cost savings 

for both TTB and regulated industry members. Under the authority of the Internal 

Revenue Code of 1986, TTB regulates denatured alcohol that is unfit for beverage 

use, and which may be removed from a regulated distilled spirits plant without 

payment of tax. SDA and CDA are widely used in the American fuel, medical, 

and manufacturing sectors. The industrial alcohol industry far exceeds the 

beverage alcohol industry in size and scope, and it is a rapidly growing industry in 

the United States. Some concerns have been raised that the current regulations 

may create significant roadblocks for industry members in getting products to the 

marketplace quickly and efficiently. TTB is proposing to reclassify certain SDA 

formulas as CDA and to issue new general-use formulas for articles made with 

SDA so that industry members would less frequently need to seek formula 

approval from TTB and in turn decrease the dedication of TTB resources to 

formula review. TTB estimates that these proposed changes would result in an 80 

percent reduction in the formula approval submissions currently required from 

industry members and would reduce total annual paperwork burden hours on 

affected industry members from 2,415 to 517 hours. The reduction in formula 

submissions will enable TTB to redirect its resources to address backlogs that 

exist in other areas of TTB’s mission activities, such as analyses of compliance 

samples for industrial/fuel alcohol to protect the revenue and working with 
15

industry to test and approve new and more environmentally friendly denaturants. 

Other proposed changes would remove unnecessary regulatory burdens and 

update the regulations to align them with current industry practice. 

 Serving Facts: The Federal Alcohol Administration Act and the Internal Revenue 

Code authorize regulations for the labeling of wine, distilled spirits, and malt 

beverages, which should, among other things, ensure that labels provide the 

consumer with adequate information as to the identity and quality of the product. 

In July 2007, in response to a petition for rulemaking from a consumer advocacy 

group and comments received in response to a 2005 advance notice of proposed 

rulemaking, TTB published a proposed rule concerning the inclusion of a 

statement of calories, carbohydrates, fat, and protein per serving in a serving facts 

panel on wine, beer, and distilled spirits labels. The proposed rule also invited 

public comments on the extension of alcohol content labeling requirements to all 

alcohol beverages, which currently apply only to some alcohol beverages. TTB is 

continuing to evaluate the cost burden to industry and benefits to consumers. 

 CHIPRA Final Rule: The rulemaking will finalize the temporary rule to amend 

regulations promulgated under the Children’s Health Insurance Program 

Reauthorization Act of 2009 (CHIPRA), which included provisions to help 

prevent the diversion of tobacco products and to collect the tobacco excise taxes 

rightfully due. Congress mandated the regulation of processed tobacco to 

strengthen the enforcement authority for the Federal excise tax on tobacco 

products, which significantly increased under the Act. The Act provides 

enforcement mechanisms to assist in preventing the diversion of tobacco materials 

to illegal manufacturers, and the regulations implement these enforcement 

mechanisms. A three year temporary rule was published in June of 2009; to 

continue the implementation of these CHIPRA provisions, a final rule must be 

published by June 2012 consistent with 26 U.S.C. 7805 regarding the expiration 

of temporary rules.

 Revisions to the Labeling Requirements (Parts 4 (Wine), 5 (Distilled Spirits), and 

7 (Malt Beverages)): The Federal Alcohol Administration Act requires that 

alcohol beverages introduced in interstate or foreign commerce have a label 

issued and approved under regulations prescribed by the Secretary of the 

Treasury. In connection with E.O. 13563, TTB has near-term plans to revise the 

regulations concerning the approval of labels for distilled spirits, wine, and malt 

beverages to reduce the cost to TTB of reviewing and approving an everincreasing number of applications for label approval (well over 130,000 per year). 

Currently, the review and approval process requires a staff of at least 13 people 

for the pre-approval of labels in addition to management review. These 

regulatory changes, to be developed with industry input, also have the intent of 

accelerating the approval process, which will result in the regulated industries 

being able to bring products to market without undue delay.
16

 Selected Revisions of Export Regulations (Part 28): TTB has identified sections 

of the regulations that should be amended to assist industry members in

complying with the regulations. Current regulations require industry members to 

obtain documents and follow procedures that are outdated and not entirely 

consistent with current industry practices regarding exportation and, under its 

regulatory authority, TTB routinely provides exceptions to these regulatory 

provisions. Revising these regulations will provide industry members with clear 

and up to date procedures for removal of alcohol for exportation without having 

to pay excise taxes (under the Internal Revenue Code, beverage alcohol may be 

removed from the premises of a distilled spirits plant for exportation without 

payment of tax), thus increasing their willingness and ability to export their 

products. Increasing American exports benefits the American economy and is 

consistent with Treasury and Administration priorities. 

 Revisions to the Alcohol Fuel Plant Regulations: TTB’s alcohol fuel plant 

regulations need to be revised to reflect the current state of the alcohol fuel 

industry. Alcohol produced at a TTB-approved alcohol fuel plant may be 

removed from the plant without payment of tax if properly denatured and used 

only for fuel. The alcohol fuel plant regulations were initially drafted to promote 

growth in the industry, primarily focused on the development of smaller capacity 

plants, and to provide minimal permitting, recordkeeping, reporting, and bonding 

requirements. In the United States, there are currently over 1,400 permitted 

ethanol fuel plants that produced over 9 billion gallons of ethanol for fuel use in 

2010. Less than 200 of the largest fuel ethanol plants produce 8 billion gallons of 

fuel ethanol. The significant growth of the industry, especially the largest 

capacity plants, since the previous issuance of the applicable regulations has 

resulted in potential risks to the revenue not currently addressed in the 

regulations. If just one percent of this alcohol was diverted for beverage use, the 

tax loss would approximate $2.4 billion. Current reporting requirements for 

certain plants are not sufficient to provide adequate information to TTB to 

monitor industry compliance and to identify removals of alcohol that should be 

subject to tax. For example, alcohol removed for beverage purposes or without 

proper denaturation may go unnoticed. TTB is also considering other changes, 

such as the addition of provisions regarding the disposition of by-products of the 

production process, which would update the regulations to reflect current industry 

practice.

 Revision of the Part 17 Regulations, “Drawback on Taxpaid Distilled Spirits Used 

in Manufacturing Nonbeverage Products,” to Allow Self-Certification of 

Nonbeverage Product Formulas: TTB is considering revisions to regulations 

governing nonbeverage products made with taxpaid distilled spirits. These 

nonbeverage products include foods, medicines, and flavors. The revisions would 

practically eliminate the need for TTB to formally approve nonbeverage product 

formulas. The changes would result in significant cost savings for an important 

industry, which currently must obtain formula approval from TTB, and some 

savings for TTB, which must review and take action to approve or disapprove 
17

each formula. Estimating the specific savings to TTB is premature as this 

rulemaking project is in the early stages of internal deliberation. 

 Revisions to the Beer Regulations (Part 25): Under the authority of the Internal 

Revenue Code, TTB regulates activities at breweries. The regulations of Title 27 

of the Code of Federal Regulations, Part 25, address the qualification of 

breweries, bonds and taxation, removals without payment of tax, and records and 

reporting. Brewery regulations were last revised in 1986 and need to be updated 

to reflect changes to the industry, including the increased number of small

(“craft”) brewers. In an advance notice of proposed rulemaking, TTB plans to 

solicit comments regarding potential ways to decrease the regulatory burden on 

industry members (including but not limited to streamlining and/or reducing the 

reporting and recordkeeping requirements for the industry, including small 

business members) and increase efficiency for both the industry and TTB. Upon 

consideration of comments received, TTB intends to develop and propose specific 

regulatory changes.

 Revisions to Distilled Spirits Plant Reporting Requirements: TTB will propose to 

revise regulations in Part 19 and replace the current four report forms used by 

distilled spirits plants to report their operations on a monthly basis with two new 

report forms that would be submitted on a monthly basis (plants that qualify to 

file taxes on a quarterly basis would submit the new reports on a quarterly basis). 

This project, which was included in the President’s FY 2012 budget for TTB as a 

cost saving item, will address numerous concerns and desires for improved 

reporting by the affected distilled spirits industry and result in cost savings to the 

industry and TTB by significantly reducing the number of monthly plant 

operations reports that must be completed and filed by industry members and 

processed by TTB. TTB preliminarily estimates that this project will result in an 

annual savings of approximately 23,218 paperwork burden hours (or 11.6 staff 

years) for industry members and 629 processing hours (or 0.3 staff years) and 

$12,442 per year for TTB in contractor time. In addition, TTB estimates that this 

project will result in additional savings in staff time (approximately 3 staff years) 

equaling $300,000 annually based on the more efficient and effective processing 

of reports and the use of report data to reconcile industry member tax accounts.

 BPD: Finalization of an interim rule relating to the regulations governing book-entry 

Treasury securities held in the commercial book-entry system (the “TRADES 

regulations”) (Part 357, Subpart B) so that they conform to certain provisions in 

Revised Article 9 of the Uniform Commercial Code (U.C.C.) – Secured Transactions. 

In 1996, Treasury issued the Treasury/Reserve Automated Debt-Entry System 

(TRADES) rules. The TRADES rules generally are based on the 1994 U.C.C. Article 

8 – Investment Securities (Revised Article 8). The rules specify which jurisdiction’s 

law governs certain matters related to Treasury securities held in TRADES or the 

commercial book-entry system. U.C.C. Revised Article 9 – Secured Transactions 

substantially revised the law on secured transactions. Revised Article 9 (with 

conforming amendments) amends certain provisions of Revised Article 8 (with 
18

conforming amendments). All 50 states and the District of Columbia adopted it. The 

Uniform Commercial Code § 1-201(38) defines “state” as a state of the United 

States, the District of Columbia, Puerto Rico, the US Virgin Islands and any territory 

or insular possession subject to the jurisdiction of the United States. Prior to the 

Interim rule, § 357.11(b) was closely based on the choice of law rules in U.C.C. § 8-

110, which was amended by Revised Article 9. (§ 9-305(a)(3) and § 8-110(e)(1)) 

These provisions provide that an agreement between a securities intermediary and its 

entitlement holder may expressly specify a jurisdiction for purposes of Revised 

Article 8. The Interim TRADES rule, 31 CFR § 357.11(b)(1) conforms to this 

provision. The change allows Treasury securities transactions to continue to be 

subject to the same rules that are applicable to other securities. The Interim TRADES 

rule also clarifies that the debtor location rule in Revised Article 9 may be applied in 

31 CFR § 357.11(c). If a state has enacted either the U.C.C. Revised Article 8 (with 

Conforming and Miscellaneous Amendments) 1994 Official Text, or the current 

version of Article 8, (as amended by 1999 Revised Article 9) then federal law as 

prescribed in 31 CFR §§ 357.10(c) and 357.11(e) does not apply. Once all the states, 

territories, and possessions adopt Revised Article 9, and are no longer subject to 

Article 8 preemption, the sections will be deleted. Part 357 of title 31, Appendix B 

will be updated to account for the changes.

d. Treasury official responsible for retrospective review. 

George W. Madison, General Counsel

202-622-2000

e. Plan to ensure that the Department’s retrospective review team and process 

maintains sufficient independence from the offices responsible for writing and 

implementing regulations.

Although the input for the retrospective review process will derive from and be 

reviewed by multiple sources, including the specific regulatory groups responsible for 

writing and implementing the regulations, the final determination about priority 

projects will include input from personnel outside of the regulatory and enforcement 

groups, including senior managers and policy officials. In addition, individuals at the 

Department Offices, who are separate from and oversee the regulatory and 

enforcement groups at each bureau and make policy decisions on a Department-wide 

basis, will be consulted for prioritization. 

f. Treasury’s actions to strengthen internal review expertise. 

When appropriate, the Department will seek assistance from the Office of the 

Assistant Secretary for Economic Policy in analyzing the economic costs and benefits 

of its regulations. In addition, the Office of General Counsel, General Law, Ethics,

and Regulation, will provide periodic training.

g. Plan for retrospective analysis over the next two years, and beyond.
19

The plan outlined above in response to sections V.a. and V.b. is intended to be 

conducted on an ongoing basis as part of a Department-wide annual regulatory review 

plan. Thus, the retrospective review of the Department’s regulations will be a 

continuing process that will take into account the various factors outlined above.

h. What actions will be taken in relation to the analyses?

See section V.a.

i. Plans for revising rules.

As described in section V.a., entire parts of the Code of Federal Regulations will be 

reviewed at a minimum of every five to ten years to ensure that each regulation is 

revisited on a regular basis, with the advance publication to solicit public comments 

on potential revisions, although smaller regulatory provisions and agency guidance 

may be reviewed and revised more often through the annual retrospective review 

project prioritization process described above.

j. Coordination with other federal agencies that have jurisdiction or similar 

interests.

Through the retrospective review plan described above in section V.a., other federal 

agencies may nominate regulatory projects as part of the annual retrospective review 

project prioritization process. In addition, the bureau and DO officials responsible for 

implementing and coordinating the retrospective review process will be designated as 

contact people for the purpose of coordinating regulatory projects with other 

agencies, to the extent necessary.

k. Plans for peer review.

The plan has been reviewed by OMB’s Office of Information and Regulatory Affairs

and is now being published in the Federal Register and on Treasury’s website. The 

Department has taken into account any public feedback and comments on the plan 

prior to its finalization and implementation.

VI. Components of Retrospective Cost-Benefit Analysis

a. Metrics used to evaluate regulations after they have been implemented.

The Department will evaluate the effectiveness of the regulations reviewed through 

the retrospective review process using both quantitative and qualitative methods.

Quantitatively, in evaluating the effectiveness of a regulation identified for 

retrospective review, each bureau will determine the regulation’s net cost to the 
20

bureau and/or the public and the net benefit to be derived from the proposed revision 

or elimination of the regulation. This information will be solicited from the public 

during the retrospective review project nomination/prioritization process and, to the 

extent available, it will be provided to the public from the bureau during the review 

and rulemaking process. In determining the net benefits/cost of a regulation, the 

bureau will consider its monetary benefits/costs as well as any burden or efficiencyrelated benefits/costs that may not have a direct monetary value. In addition, for

significant regulations, the bureau will perform another quantitative analysis to assess 

the effectiveness of the regulation 18-24 months following the implementation of the 

revised regulation. Quantitative methods should be used only if determined necessary 

during the retrospective review process and to the extent that the bureau has adequate 

resources and expertise to perform a quantitative analysis. 

Qualitatively, the bureaus will solicit feedback from the public relating to the 

effectiveness, burden, and equity of its regulations through various public outreach 

initiatives, including online fora, meetings with affected entities and individuals,

advisory councils, and public events. This information will be taken into account in 

prioritizing retrospective review projects as well as in evaluating the effectiveness of 

regulatory revisions resulting from the retrospective review process.

b. Steps taken to ensure that Treasury has the data available with which to conduct 

a robust retrospective analysis.

For many regulatory programs, ongoing monitoring provides data to support 

retrospective analysis. For some programs, while dependent on available resources, 

the Department will take appropriate steps to obtain reliable data on a case-by-case 

basis. 

c. Experimental designs.

The Department will work with the Office of Information and Regulatory Affairs to 

develop and incorporate experimental designs into retrospective analysis, when 

appropriate. 

d. Publication of the Department’s retrospective review plan 

The Department’s plan and available data will be available on its Open 

Government website (www.treasury.gov/open). Contact the Office of Privacy, 

Transparency, and Records, 1500 Pennsylvania Avenue, NW, Washington, D.C. 

20220; (202) 622-2000; open@treasury.gov for more information. 
21

APPENDIX

Summary of Public Comments Received in Response to the 

March 29, 2011 Federal Register Notice and the June 1, 2011 release of the Preliminary Plan

• One commenter recommended that Treasury focus review efforts on minimizing 

burdens on small businesses. Citing a recent regulatory change in federal tax deposit 

coupons, the commenter advised the Department that changes in information 

technology may produce new burdens for small businesses. In addition, the 

commenter encouraged the provision of additional information about new regulatory 

changes. This commenter also encouraged the Department to utilize the Small 

Business Administration’s Office of Advocacy guidance on the Regulatory Flexibility 

Act and to increase outreach to small businesses. 

• Another commenter encouraged retrospective review of revenue rulings. According 

to the commenter, because revenue rulings influence taxpayer behavior and are often 

granted deference by federal courts, revenue rulings should fall within the scope of 

Treasury’s request for comments and retrospective review procedures. In particular, 

the commenter raised concerns about Revenue Rulings 2009-13 and 2009-14. 

• Commenters provided input on which factors the Department should use in reviewing 

retrospectively its regulations. Recommended factors included reducing burden 

generally, reducing burdens on small businesses, balancing burdens and benefits, 

reviewing detailed and prescriptive regulations, and ensuring rules are consistent with 

statute and sound public policy. One commenter suggested that if a rule requires 

extensive guidance, the program should be reexamined. 

• Two commenters suggested that a way to eliminate overlapping requirements is to 

examine jointly issued rules in order to consolidate reporting and other requirements.

• Commenters provided input on Treasury regulations that are working well and could 

serve as a model. One commenter identified the process used by the IRS to 

implement the Health Coverage Tax Credit program as a good model for 

collaboration between the Treasury Department and the private sector to accomplish a 

regulatory initiative. Two commenters suggested that the Employee Plans 

Compliance Resolution System is working well and should also be greatly expanded 

to permit self correction in a much broader range of circumstances. Another 

commenter suggested the Department should consider issuing EPCRS-like rules for 

welfare plans.

• Commenters recommended that specific rules be prioritized for retrospective review. 

Below is a sampling of the suggestions for retrospective review.

- Rules governing “retroactive annuity starting dates.”

- Rules that affect workplace wellness programs.
22

- Two commenters suggested a comprehensive review of the employee benefits 

guidance in order to simplify and minimize compliance costs.

- Finalize the rules with respect to the establishment of Internal Revenue Code §

125 cafeteria plans by group health plan sponsors and the requirements for 

valuing COBRA continuation coverage costs.

- Review and modernize the existing nondiscrimination rules for self-insured 

arrangements under Internal Revenue Code § 105(h),

- Issue a request for information related to the August 2007 proposed regulations on 

cafeteria plans in order to provide additional opportunity for public comment 

before they are published in final form.

- Mid-year changes to a safe harbor 401(k) plan be permitted (and updated notices 

provided), to the extent that the changes would not be expected to significantly 

impact a participant’s deferral decision.

- One commenter recommended that all elections that affect the funding for a plan 

year be formalized in an attachment to the Schedule SB for the year and that 

elections regarding credit balances be permitted in all instances to specify a 

determinable formula in lieu of stating a specific dollar amount.

- Review the June 2010 interim final rule implementing the grandfathered plan 

status provision of the Patient Protection and Affordable Care Act. 

- Review all notice requirements for plan sponsors and participants under its 

jurisdiction and determine where such notices can be modified or streamlined.

- One commenter recommended “an immediate moratorium” on the assessment and 

collection of the Internal Revenue Code § 6707A penalty pending retrospective 

review. 

- Revise the regulations under Internal Revenue Code § 409A to address practical 

concerns, particularly with respect to benefits payable upon death, disability, or an 

involuntary separation from service.

- Review and modify the regulations under Internal Revenue Code § 416 to 

eliminate unnecessary complexities and burdens.

- Update the life-nonlife consolidated return rules in § 1.1502-47 to eliminate 

additional unnecessary complexity.

- Revise the correction procedures applicable to inadvertent failures under Internal 

Revenue Code § 817(h) in order to be consistent with recently enacted legislation. 

- The reporting requirements for controlled foreign corporations of U.S. life 

insurance companies are in need of modification as the burden imposed on them 

is not commensurate with the IRS’s compliance objective. The rules are outdated 

and should be made consistent with the Foreign Account Tax Compliance Act.

- Regulations for Dual Consolidated Losses, Internal Revenue Code § 1503(d), 

should be removed. 

- Proposed regulations for Internal Revenue Code § 987 should be modified.

• Three commenters suggested that the Department, working with other federal agency 

partners should work to incorporate information technology in order to streamline the 

requirements for the disclosure of information to group health plan enrollees and to 

permit the appropriate use of electronic media for such disclosures.
23

• One commenter suggested that the Department should expand access to and 

opportunities for public input on the IRS Priority Guidance Plan. Further, the 

commenter suggested that the Department should broaden its dissemination of the 

guidance document to a wider audience and encourage feed back through stakeholder 

and taxpayer meetings and outreach.

• In order to improve public outreach, two commenters suggested that the Department 

should expand use of the notice and comment process as outlined in the 

Administrative Procedure Act (APA) to provide opportunity for public input prior to 

releasing a final rule. Two commenters recommended that the Department 

incorporate in the final rule sufficient lead time for affected entities to come into 

compliance with the regulatory mandates. 

• One commenter recommended that FinCEN develop a more definite plan for 

addressing the interim final rules that are currently in place.

• One commenter requested additional time to comment on the preliminary plan.

• Resubmitting its comments previously submitted in response to the March 29, 2011 

notice, one commenter reiterated its suggestions for regulations related to qualified 

retirement plans. This commenter suggested priority consideration for the initiative 

regarding lifetime income distributions and relief for sponsors of safe harbor 401(k) 

plans who encounter financial difficulties.