77818 Federal Register / Vol. 65, No. 240 / Wednesday, December 13, 2000 / Rules and Regulations

For example, lamb meat subject to the

export-certificate program that is

exported on July 20, 2000, and entered

for consumption on July 25, 2000,

would be entitled to the in-quota rate of

9% ad valorem, if it is covered by a

valid export certificate, because this is

the in-quota rate in effect for the yearly

(quota) period running from July 22,

1999, through July 21, 2000, inclusive,

during which the product is exported to

the United States.

It is noted that the USTR final rule in

this case is governed by the Annex to

Presidential Proclamation No. 7214 (64

FR 42265, at 42267) which plainly

applies the tariff-rate quota for lamb

meat based upon its date of exportation,

as described above. To this effect, the

Annex so modified subchapter III of

chapter 99 of the Harmonized Tariff

Schedule of the United States (HTSUS).

It is further noted that textile quotas,

which are usually absolute in nature,

are also similarly determined based

upon the date of export, as opposed to

the date of entry or withdrawal for

consumption.

Conclusion

For these reasons, and after careful

consideration of the comment and

further review of the matter, Customs

concludes that the amendments

regarding parts 132 and 163, Customs

Regulations (19 CFR parts 132 and 163)

that appeared in the interim rule

published in the Federal Register (64

FR 67481) on December 2, 1999, as T.D.

99–87, should be adopted as a final rule

without change.

Inapplicability of Notice and Delayed

Effective Date Requirements, the

Regulatory Flexibility Act, and

Executive Order 12866

Pursuant to the provisions of 5 U.S.C.

553(a), public notice is inapplicable to

this final rule because it is within the

foreign affairs function of the United

States. Also, for the above reason, there

is no need for a delayed effective date

under 5 U.S.C. 553(d). Because this

document is not subject to the

requirements of 5 U.S.C. 553, as noted,

the provisions of the Regulatory

Flexibility Act (5 U.S.C. 601 et seq.) do

not apply; and because this document

involves a foreign affairs function of the

United States, it is not subject to the

provisions of E.O. 12866.

Paperwork Reduction Act

The collections of information

involved in this final rule have already

been approved by the Office of

Management and Budget (OMB) in

accordance with the Paperwork

Reduction Act of 1995 (44 U.S.C. 3507)

and assigned OMB Control Numbers

1515–0065 (Entry summary and

continuation sheet) and 1515–0214

(General recordkeeping and record

production requirements). This rule

does not substantively change the

existing approved information

collections.

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

assigned by OMB.

List of Subjects

19 CFR Part 132

Agriculture and agricultural products,

Customs duties and inspection, Quotas,

Reporting and recordkeeping

requirements.

19 CFR Part 163

Administrative practice and

procedure, Customs duties and

inspection, Imports, Reporting and

recordkeeping requirements.

Amendments to the Regulations

Accordingly, the amendments relating

to parts 132 and 163 that appeared in

the interim rule that was published at

64 FR 67481 on December 2, 1999, are

adopted as a final rule without change.

Raymond W. Kelly,

Commissioner of Customs.

Approved: October 6, 2000.

John P. Simpson,

Deputy Assistant Secretary of the Treasury.

[FR Doc. 00–31700 Filed 12–12–00; 8:45 am]

BILLING CODE 4820–02–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 31 and 602

[TD 8910]

RIN 1545–AV28

Electronic Tip Reports

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Final regulations.

SUMMARY: This document amends the

regulations dealing with the

requirement that tipped employees

report their tips to their employer.

These final regulations permit

employers to establish electronic

systems for use by their tipped

employees in reporting tips to the

employer. These final regulations also

address substantiation requirements for

employees using the electronic system.

DATES: Effective Date: These regulations

are effective December 13, 2000.

Applicability Dates: For dates of

applicability, see § 31.6053–1(d)(6) of

these regulations.

FOR FURTHER INFORMATION CONTACT:

Karin Loverud at 202–622–6080 (not a

toll-free number).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The collection of information

contained in these final regulations has

been reviewed and approved by the

Office of Management and Budget in

accordance with the Paperwork

Reduction Act (44 U.S.C. 3507) under

control number 1545–1603. Responses

to this collection of information are

mandatory.

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

assigned by the Office of Management

and Budget.

The estimated annual burden per

respondent varies from 1 hour to 3

hours, depending on individual

circumstances, with an estimated

average of 2 hours.

Comments concerning the accuracy of

this burden estimate and suggestions for

reducing this burden should be sent to

the Internal Revenue Service, Attn: IRS

Reports Clearance Officer,

W:CAR:MP:FP, Washington, DC 20224,

and to the Office of Management and

Budget, Attn: Desk Officer for the

Department of the Treasury, Office of

Information and Regulatory Affairs,

Washington, DC 20503.

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

On January 26, 1998, the IRS

published in the Federal Register (63

FR 3681) a notice of proposed

rulemaking (REG–104691–97) under

section 6053 of the Internal Revenue

Code relating to electronic tip reports.

The notice proposed to amend

§ 31.6053–1 and § 31.6053–4 of the

employment tax regulations.

No written comments responding to

the notice of proposed rulemaking were

received. No public hearing was

requested or held. Accordingly, the

proposed regulations are adopted as

final regulations.

Federal Register / Vol. 65, No. 240 / Wednesday, December 13, 2000 / Rules and Regulations 77819

The final regulations are consistent

with the provisions of the Electronic

Signatures in Global and National

Commerce Act.

Special Analyses

It has been determined that these final

regulations are not a significant

regulatory action as defined in

Executive Order 12866. Therefore, a

regulatory assessment is not required. It

also has been determined that section

553(b) of the Administrative Procedure

Act (5 U.S.C. chapter 5) does not apply

to these regulations. Further, it is hereby

certified, pursuant to sections 603(a)

and 605(b) of the Regulatory Flexibility

Act (5 U.S.C. chapter 6), that the

collection of information contained in

these regulations will not have a

significant economic impact on a

substantial number of small entities.

The collection of information in

§ 31.6053–1 is imposed solely on

individuals, not on any small entities,

and the regulations provide flexibility to

employees who must provide the

information required by statute, thereby

reducing burden. With respect to the

collection of information in § 31.6053–

4, the certification is based on the

expectation of the IRS that most

businesses that choose to implement the

electronic tip reporting provisions will

be larger businesses with many

employees and sophisticated computer

systems. Moreover, because the

provision is wholly elective, any small

business that would be adversely

impacted may choose not to use

electronic tip reporting. Finally, the

Service expects that for those small

entities that choose to implement the

provision, the use of electronic tip

reporting will reduce overall burden by

reducing paper collections. Therefore, a

regulatory flexibility analysis under the

Regulatory Flexibility Act is not

required. Pursuant to section 7805(f) of

the Internal Revenue Code, the notice of

proposed rulemaking preceding these

regulations was submitted to the Chief

Counsel for Advocacy of the Small

Business Administration for comment

on its impact on small business.

Drafting Information

The principal author of these

regulations is Karin Loverud, Office of

Division Counsel/Associate Chief

Counsel (Tax Exempt and Government

Entities). However, other personnel

from the IRS and the Treasury

Department participated in their

development.

List of Subjects

26 CFR Part 31

Employment taxes, Reporting and

recordkeeping requirements.

26 CFR Part 602

Reporting and recordkeeping

requirements.

Adoption of Amendments to the

Regulations

Accordingly, 26 CFR parts 31 and 602

are amended as follows:

PART 31—EMPLOYMENT TAXES AND

COLLECTION OF INCOME TAX AT

SOURCE

Paragraph 1. The authority citation

for part 31 continues to read in part as

follows:

Authority: 26 U.S.C. 7805. * * *

Par. 2. Section 31.6053–1 is amended

as follows:

1. Paragraph (a) is revised.

2. The introductory text of paragraph

(b)(1) is revised.

3. The last sentence of paragraph

(b)(1)(iii) is revised.

4. Paragraph (b)(2) is revised.

5. Paragraph (c) is revised.

6. Paragraph (d) is added.

The revisions and additions read as

follows:

§ 31.6053–1 Report of tips by employee to

employer.

(a) Requirement that tips be

reported—(1) In general. An employee

who receives, in the course of

employment by an employer, tips that

constitute wages as defined in section

3121(a) or section 3401, or

compensation as defined in section

3231(e), must furnish to the employer a

statement, or statements, disclosing the

total amount of the tips received by the

employee in the course of employment

by the employer. Tips received by an

employee in a calendar month in the

course of employment by an employer

that are required to be reported to the

employer must be reported on or before

the 10th day of the following month. For

example, tips received by an employee

in January 2000 are required to be

reported by the employee to the

employer on or before February 10,

2000.

(2) Cross references. For provisions

relating to the treatment of tips as wages

for purposes of the Federal Insurance

Contributions Act (FICA) tax under

sections 3101 and 3111, see sections

3102(c), 3121(a)(12), and 3121(q) and

§§ 31.3102–3 and 31.3121(a)(12)–1. For

provisions relating to the treatment of

tips as wages for purposes of the tax

under section 3402 (income tax

withholding), see sections 3401(a)(16),

3401(f), and 3402(k) and

§§ 31.3401(a)(16)–1, 31.3401(f)–1, and

31.3402(k)–1. For provisions relating to

the treatment of tips as compensation

for purposes of the Railroad Retirement

Tax Act (RRTA) tax under sections 3201

and 3201, see section 3231(e) and

§ 31.3231(e)–1(a).

(b) * * * (1) In general. The

statement described in paragraph (a) of

this section can be provided on paper or

transmitted electronically. The

statement must be signed by the

employee and must disclose:

* * * * *

(iii) * * * If the statement is for a

period of less than 1 calendar month,

the beginning and ending dates of the

period must be included (for example,

January 1 through January 8, 1998).

* * * * *

(2) Form of statement—(i) In general.

No particular form is prescribed for use

in furnishing the statement required by

this section. The statement may be

furnished on paper or transmitted

electronically. An electronic system and

all tip statements generated by that

system must meet the requirements of

paragraph (d) of this section. If the

employer does not provide any other

means for the employee to report tips,

the employee may use Form 4070,

‘‘Employee’s Report of Tips to

Employer.’’

(ii) Single-purpose forms. A statement

may be furnished on an employerprovided form. The form may be on

paper or in electronic form. An

employer that provides a paper form

must make blank copies of the form

readily available to all tipped

employees. Any form, whether paper or

electronic, provided by an employer for

use by its tipped employees solely to

report tips must meet all the

requirements of paragraph (b)(1) of this

section.

(iii) Regularly used forms. Instead of

requiring that tips be reported as

described in paragraph (b)(2)(ii) of this

section on a special form used solely for

tip reporting, an employer may

prescribe regularly used forms for use

by employees in reporting tips. A

regularly used form may be on paper or

in electronic form (such as a time card

or report), must meet the requirements

of paragraph (b)(1) (iii) and (iv) of this

section, must contain identifying

information that will ensure accurate

identification of the employee by the

employer, and is permitted to be used

only if the employer furnishes the

employee a statement suitable for

retention showing the amount of tips

77820 Federal Register / Vol. 65, No. 240 / Wednesday, December 13, 2000 / Rules and Regulations

reported by the employee for the period.

The employer statement may be

furnished when the employee reports

the tips, when wages are first paid

following the reporting of tips by the

employee, or within a short time after

the wages are paid. The employer may

meet this requirement, for example,

through the use of a payroll check stub

or other payroll document regularly

furnished (if not less frequent than

monthly) by the employer to the

employee showing gross pay and

deductions.

(c) Period covered by, and due date of,

tip statement—(1) In general. A tip

statement furnished by an employee to

an employer may not cover a period

greater than 1 calendar month. An

employer may, however, require the

submission of a statement in respect of

a specified period of time, for example,

on a weekly or biweekly basis, regular

payroll period, etc. An employer may

specify, subject to the limitation in

paragraph (a) of this section, the time

within which, or the date on which, the

statement for a specified period of time

should be submitted by the employee.

For example, a statement covering a

payroll period may be required to be

submitted on the first (or second) day

following the close of the payroll

period. A statement submitted by an

employee after the date specified by the

employer for its submission

nevertheless is a statement furnished

pursuant to section 6053(a) and this

section if it is submitted to the employer

on or before the 10th day following the

month in which the tips were received.

(2) Termination of employment. If an

employee’s employment terminates, the

employee must furnish a tip statement

to the employer when the employee

ceases to perform services for the

employer. A statement submitted by an

employee after the date on which the

employee ceases to perform services for

the employer is a statement furnished

pursuant to section 6053(a) and this

section if the statement is submitted to

the employer on or before the earlier of

the day on which the final wage

payment is made by the employer to the

employee or the 10th day following the

month in which the tips were received.

(d) Requirements for electronic

systems—(1) In general. The electronic

system must ensure that the information

received is the information transmitted

by the employee and must document all

occasions of access that result in the

transmission of a tip statement. In

addition, the design and operation of

the electronic system, including access

procedures, must make it reasonably

certain that the person accessing the

system and transmitting the statement is

the employee identified in the statement

transmitted.

(2) Same information as on paper

statement. The electronic tip statement

must provide the employer with all the

information required by paragraph (b)(1)

of this section.

(3) Signature. The electronic tip

statement must be signed by the

employee. The electronic signature must

identify the employee transmitting the

electronic tip statement and must

authenticate and verify the

transmission. For this purpose, the

terms authenticate and verify have the

same meanings as they do when applied

to a written signature on a paper tip

statement. Any form of electronic

signature that satisfies the foregoing

requirements is permissible.

(4) Copies of electronic tip statements.

Upon request by the Internal Revenue

Service (IRS), the employer must supply

the IRS with a hard copy of the

electronic tip statement and a statement

that, to the best of the employer’s

knowledge, the electronic tip statement

was filed by the named employee. The

hard copy of the electronic tip statement

must provide the information required

by paragraph (b)(1) of this section, but

need not be a facsimile of Form 4070 or

any employer-designed form.

(5) Record retention. The record

retention requirements applicable to

automatic data processing systems also

apply to electronic tip reporting

systems.

(6) Effective date. The provisions

pertaining to electronic systems and

electronic tip reports are applicable as

of December 13, 2000. However,

employers may apply these provisions

to earlier periods.

Par. 3. Section 31.6053–4 is amended

as follows:

1. A sentence is added to paragraph

(a)(1) after the third sentence.

2. A sentence is added to paragraph

(a)(2) after the fourth sentence.

The additions read as follows:

§ 31.6053–4 Substantiation requirements

for tipped employees.

(a) * * * (1) * * * The

Commissioner may by revenue ruling,

procedure or other guidance of general

applicability provide for other methods

of demonstrating evidence of tip

income. * * *

(2) * * * In addition, an electronic

system maintained by the employer that

collects substantially similar

information as Form 4070A may be used

to maintain such daily record, provided

the employee receives and maintains a

paper copy of the daily record. * * *

* * * * *

PART 602—OMB CONTROL NUMBERS

UNDER THE PAPERWORK

REDUCTION ACT

Par. 4. The authority citation for part

602 continues to read as follows:

Authority: 26 U.S.C. 7805.

Par. 5. In § 602.101, paragraph (b) is

amended by revising the entries for

31.6053–1 and 31.6053–4 to read as

follows:

§ 602.101 OMB Control numbers.

* * * * *

(b) * * *

CFR part or section where identified and described

Current

OMB control No.

*****

31.6053–1 ................................... 1545–0029

1545–0062

1545–0064

1545–0065

1545–1603

*****

31.6053–4 ................................... 1545–0065

1545–1603

*****

Robert E. Wenzel,

Deputy Commissioner of Internal Revenue.

Approved: August 25, 2000.

Jonathan Talisman,

Acting Assistant Secretary of the Treasury.

[FR Doc. 00–31499 Filed 12–12–00; 8:45 am]

BILLING CODE 4830–01–P

CORPORATION FOR NATIONAL AND

COMMUNITY SERVICE

45 CFR Part 2525

RIN 3045–AA09

AmeriCorps Education Awards

AGENCY: Corporation for National and

Community Service.

ACTION: Final rule.

SUMMARY: We are amending a provision

of our National Service Trust

regulations relating to the permitted

uses of the AmeriCorps education

award. This change will expand the

definition of ‘‘current’’ educational

expenses to include expenses incurred

after an individual enrolls in a term of

service as an AmeriCorps member.

DATES: This final rule is effective

February 12, 2001.

FOR FURTHER INFORMATION CONTACT: Gary

Kowalczyk, Coordinator of National

Service Programs, Corporation for

National and Community Service, (202)

606–5000, ext. 340. T.D.D. (202) 565–

2799.