Federal Register / Vol. 65, No. 242 / Friday, December 15, 2000 / Rules and Regulations 78409

§ 0.14 Office of the Administrative Law

Judges.

Administrative law judges are

officials to whom the Commission, in

accordance with law, delegates the

initial performance of statutory factfinding functions and initial rulings on

conclusions of law, to be exercised in

conformity with Commission decisions

and policy directives and with its Rules

of Practice.

* * * * *

11. Revise § 0.16 to read as follows:

§ 0.16 Bureau of Competition.

The Bureau is responsible for

enforcing Federal antitrust and trade

regulation laws under section 5 of the

Federal Trade Commission Act, the

Clayton Act, and a number of other

special statutes that the Commission is

charged with enforcing. The Bureau’s

work aims to preserve the free market

system and assure the unfettered

operation of the forces of supply and

demand. Its activities seek to ensure

price competition, quality products and

services and efficient operation of the

national economy. The Bureau carries

out its responsibilities by investigating

alleged law violations, and

recommending to the Commission such

further action as may be appropriate.

Such action may include injunctive and

other equitable relief in Federal district

court, complaint and litigation before

the agency’s administrative law judges,

formal nonadjudicative settlement of

complaints, trade regulation rules, or

reports. The Bureau also conducts

compliance investigations and initiates

proceedings for civil penalties to assure

compliance with final Commission

orders dealing with competition and

trade restraint matters. The Bureau’s

activities also include business and

consumer education and staff advice on

competition laws and compliance, and

liaison functions with respect to foreign

antitrust and competition law

enforcement agencies and organizations,

including requests for international

enforcement assistance.

12. Revise § 0.17 to read as follows:

§ 0.17 Bureau of Consumer Protection.

The Bureau investigates unfair or

deceptive acts or practices under section

5 of the Federal Trade Commission Act

as well as potential violations of

numerous special statutes which the

Commission is charged with enforcing.

It prosecutes before the agency’s

administrative law judges alleged

violations of law after issuance of a

complaint by the Commission or obtains

through negotiation consented-to orders,

which must be accepted and issued by

the Commission. In consultation with

the General Counsel, the Bureau may

also seek injunctive or other equitable

relief under section 13(b) of the Federal

Trade Commission Act. The Bureau

participates in trade regulation

rulemaking proceedings under section

18(a)(1)(B) of the Federal Trade

Commission Act and other rulemaking

proceedings under statutory authority. It

investigates compliance with final

orders and trade regulation rules and

seeks civil penalties or consumer

redress for their violation, as well as

injunctive and other equitable relief

under section 13(b) of the Act. In

addition, the Bureau seeks to educate

both consumers and the business

community about the laws it enforces,

and to assist and cooperate with other

state, local, foreign, and international

agencies and organizations in consumer

protection enforcement and regulatory

matters. The Bureau also maintains the

agency’s public reference facilities,

where the public may inspect and copy

a current index of opinions, orders,

statements of policy and interpretations,

staff manuals and instructions that

affect any member of the public, and

other public records of the Commission.

13. Amend § 0.19 by revising

paragraph (a) to read as follows:

§ 0.19 The Regional Offices.

(a) These offices are investigatory

arms of the Commission, and have

responsibility for investigational, trial,

compliance, and consumer educational

activities as delegated by the

Commission. They are under the general

supervision of the Office of the

Executive Director, and clear their

activities through the appropriate

operating Bureaus.

* * * * *

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 00–31775 Filed 12–14–00; 8:45 am]

BILLING CODE 6750–01–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[TD 8911]

RIN 1545–AV92

Relief for Service in Combat Zone and

for Presidentially Declared Disaster

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Final regulations.

SUMMARY: This document contains final

regulations relating to the postponement

of certain tax-related deadlines due

either to service in a combat zone or a

Presidentially declared disaster. The

regulations reflect changes to the law

made by the Taxpayer Relief Act of

1997. The regulations affect taxpayers

serving in a combat zone and taxpayers

affected by a Presidentially declared

disaster.

DATES: Effective Date: These regulations

are effective December 30, 1999.

Applicability Dates: For dates of

applicability, see §§ 301.7508–1(b) and

301.7508A–1(h).

FOR FURTHER INFORMATION CONTACT:

Bridget E. Finkenaur, (202) 622–4940

(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

This document contains amendments

to the Regulations on Procedure and

Administration (26 CFR part 301) under

section 7508 of the Internal Revenue

Code (Code), relating to postponement

of certain acts by reason of service in a

combat zone, and section 7508A,

relating to postponement of certain taxrelated deadlines by reason of a

Presidentially declared disaster. Section

7508A was added to the Code by section

911 of the Taxpayer Relief Act of 1997,

Public Law 105–34 (111 Stat. 788),

effective for any period for performing

an act that has not expired before

August 5, 1997.

A notice of proposed rulemaking

(REG–101492–98) was published in the

Federal Register (64 FR 73444) on

December 30, 1999. No public hearing

was requested or held. One comment

letter was received. After consideration

of the comments, the proposed

regulations are adopted as modified by

this Treasury decision. The comments

are discussed below.

Summary of Comments

1. IRA and Pension Contribution

Deadlines

Section 301.7508A–1(c)(1) of the

proposed regulations lists various taxrelated deadlines that may be

postponed. The commentator

recommends that deadlines for

contributions to an individual

retirement account (IRA) or a pension

plan be added to the list. The final

regulations adopt this recommendation

and also add the deadline for rollover

contributions.

2. Notification of IRS When Taxpayer

Moves Out of Disaster Area

The commentator suggests that the

IRS develop a simple procedure for

78410 Federal Register / Vol. 65, No. 242 / Friday, December 15, 2000 / Rules and Regulations

taxpayers to notify the IRS when they

move out of a Presidentially declared

disaster area. The commentator believes

that the notification would ensure that

relief under section 7508A will

automatically apply to a taxpayer who

has moved out of a Presidentially

declared disaster area. Such taxpayers

could also be advised of any further

relevant filing guidance regarding the

disaster.

The final regulations do not adopt this

suggestion because it is not necessary

for taxpayers moving out of a disaster

area to notify the IRS to obtain relief

under section 7508A. When a

Presidentially declared disaster occurs,

the IRS makes a decision whether to

grant relief to taxpayers affected by the

disaster. If a decision is made to grant

relief, the IRS identifies most affected

taxpayers located in the disaster area

and places a marker on the affected tax

accounts. A subsequent change of

address will not remove the marker

from the tax account. Thus, an affected

taxpayer who relocates outside a

disaster area will still automatically

receive disaster relief.

Because the IRS may not be able to

identify all taxpayers potentially

affected by a Presidentially declared

disaster, some taxpayers may have to

identify themselves to the IRS to receive

relief. To ensure that they receive the

relief for which they are eligible, the IRS

typically issues public guidance, such

as a news release, that describes how to

claim relief. The guidance instructs

taxpayers how to note on their tax

return that they are affected taxpayers,

and what, if any, additional information

should be attached. When the IRS

processes these tax returns, it manually

places the disaster relief marker on the

tax account. Subsequent changes of

address will not affect the grant of relief.

3. Definition of Affected Taxpayer

The regulations list seven types of

affected taxpayers, including ‘‘any

business whose principal place of

business is located in a covered disaster

area.’’ The commentator recommends

that this definition be expanded to

include all owners of a business.

The final regulations do not adopt this

recommendation. The IRS and Treasury

Department believe that the definition

of affected taxpayer in the proposed

regulations is sufficiently broad to cover

all taxpayers within the intended scope

of section 7508A. Although the final

regulations do not provide a specific

rule for business owners (other than sole

proprietors), the IRS may nonetheless

make a determination based on the facts

and circumstances in a particular case

that a business owner is an affected

taxpayer under either § 301.7508A–

1(d)(1)(iv), which applies to an

individual whose principal residence is

not located in a disaster area, but whose

records necessary to meet the deadline

for a specified act are maintained in a

covered disaster area, or under

§ 301.7508A–1(d)(1)(vii), which applies

to any other person determined by the

IRS to be affected by a Presidentially

declared disaster. For example, in the

case of a partnership, it is expected that

partners whose ability to meet a

deadline is significantly affected by a

Presidentially declared disaster will be

granted relief.

4. Deadline for Tax Deposits

The commentator also recommends

that the deadline for tax deposits under

section 6302 be added to the list. The

commentator states that no distinction

should be drawn between tax payments

and tax deposits and that allowing a

postponement of deposits would be less

cumbersome than waiving the section

6656 deposit penalties for reasonable

cause. To the contrary, due to the

frequency with which tax deposits are

due, the IRS believes it would be more

administratively cumbersome to defer

those deadlines. However, in cases

where taxpayers are unable to make

timely tax deposits under section 6302

because of a Presidentially declared

disaster, the IRS will consider a

reasonable cause waiver of the section

6656 failure to deposit penalty on a case

by case basis. The IRS believes such a

system is more administrable. Thus, this

comment has not been adopted by the

final regulations.

Explanation of Other Revisions

Section 301.7508A–1(c)(1) of the final

regulations expands the acts for which

disaster relief is available to include: the

filing of generation-skipping transfer tax

returns; the payment of generationskipping transfer tax; and the filing of

any petition with the Tax Court.

Sections 301.7508A–1(d)(1)(ii) and

(iv) of the final regulations have been

revised to clarify that affected taxpayer

includes any business entity or sole

proprietor whose principal place of

business is located in a covered disaster

area.

Example 5 of the final regulations

clarifies the application of section

7508A to the lookback period in section

6511(b)(2)(A). This period limits the

amount that may be refunded to the

taxpayer when a timely claim is filed

under section 6511(a). In Example 5, H

and W timely file their 2001 income tax

return on April 15, 2002. Example 5

states that an amended return for 2001

will be timely if it is filed on or before

July 14, 2005. As clarified by the final

regulations, Example 5 further states

that the section 6511(b)(2)(A) lookback

period runs from July 14, 2005, back to

April 15, 2002. Thus, the taxpayers are

allowed a refund of estimated tax and

tax withheld from wages for 2001,

deemed paid on April 15, 2002, under

section 6513(b).

The final regulations also clarify

Examples 6 and 7. Under § 301.7508A–

1(f) of the final regulations, if there is an

extension of time to file income tax

returns under section 6081 and to pay

income tax with respect to such returns

under section 6161, and a postponement

of tax-related deadlines under section

7508A, interest on an underpayment

that arises during such period is abated

under section 6404(h) for the period of

time disregarded under section 7508A.

This is illustrated by Example 8. By

contrast, in Examples 6 and 7,

extensions were not granted under

sections 6081 and 6161 and interest was

not abated under section 6404(h).

Therefore, in Examples 6 and 7, no

interest abatement would be permitted

regardless of whether the underpayment

arose before or during the extension

period. Therefore, Examples 6 and 7 are

amended by removing the statement

that interest is not abated ‘‘because the

underpayment arose prior to the

extension period’’ and clarifying that

because no extensions under sections

6081 and 6161 were granted, interest

was not abated under section 6404(h).

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, and because these

regulations do not impose a collection

of information on small entities, the

Regulatory Flexibility Act (5 U.S.C.

chapter 6) does not apply. Pursuant to

section 7805(f) of the Code, the notice

of proposed rulemaking preceding these

final regulations was 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 Bridget E. Finkenaur,

Office of Associate Chief Counsel,

Procedure and Administration

(Administrative Provisions and Judicial

Practice Division). However, other

personnel from the IRS and Treasury

Federal Register / Vol. 65, No. 242 / Friday, December 15, 2000 / Rules and Regulations 78411

Department participated in their

development.

List of Subjects in 26 CFR Part 301

Employment taxes, Estate taxes,

Excise taxes, Gift taxes, Income taxes,

Penalties, Reporting and recordkeeping

requirements.

Amendments to the Regulations

Accordingly, 26 CFR part 301 is

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 in

part as follows:

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

Section 301.7508–1 also issued under 26

U.S.C. 7508(a)(1)(K);

Section 301.7508A–1 also issued under 26

U.S.C. 7508(a)(1)(K) and 7508A(a); * * *

Par. 2. Section 301.7508–1 is added to

read as follows:

§ 301.7508–1 Time for performing certain

acts postponed by reason of service in a

combat zone.

(a) General rule. The period of time

that may be disregarded for performing

certain acts under section 7508 applies

to acts described in section 7508(a)(1)

and to other acts specified in a revenue

ruling, revenue procedure, notice, or

other guidance published in the Internal

Revenue Bulletin (see § 601.601(d)(2) of

this chapter).

(b) Effective date. This section applies

to any period for performing an act that

has not expired before December 30,

1999.

Par. 3. Section 301.7508A–1 is added

to read as follows:

§ 301.7508A–1 Postponement of certain

tax-related deadlines by reason of

Presidentially declared disaster.

(a) Scope. This section provides rules

by which the Internal Revenue Service

(IRS) may postpone deadlines for

performing certain acts with respect to

taxes other than taxes not administered

by the IRS such as firearms tax (chapter

32, section 4181); harbor maintenance

tax (chapter 36, section 4461); and

alcohol and tobacco taxes (subtitle E).

(b) Postponed deadlines. For any tax,

penalty, additional amount, or addition

to the tax of an affected taxpayer (as

defined in paragraph (d)(1) of this

section), the IRS may disregard a period

of up to 90 days in determining, under

the internal revenue laws—

(1) Whether any or all of the acts

described in paragraph (c) of this

section were performed within the time

prescribed; and

(2) The amount of any credit or

refund.

(c) Acts for which a period may be

disregarded—(1) Acts performed by

taxpayers. Paragraph (b) of this section

applies to the following acts performed

by affected taxpayers (as defined in

paragraph (d)(1) of this section)— (i) Filing any return of income tax,

estate tax, gift tax, generation-skipping

transfer tax, excise tax (other than

firearms tax (chapter 32, section 4181);

harbor maintenance tax (chapter 36,

section 4461); and alcohol and tobacco

taxes (subtitle E)), or employment tax

(including income tax withheld at

source and income tax imposed by

subtitle C or any law superseded

thereby); (ii) Paying any income tax, estate tax,

gift tax, generation-skipping transfer tax,

excise tax (other than firearms tax

(chapter 32, section 4181); harbor

maintenance tax (chapter 36, section

4461); and alcohol and tobacco taxes

(subtitle E)), employment tax (including

income tax withheld at source and

income tax imposed by subtitle C or any

law superseded thereby), any

installment of those taxes (including

payment under section 6159 relating to

installment agreements), or of any other

liability to the United States in respect

thereof, but not including deposits of

taxes pursuant to section 6302 and the

regulations under section 6302;

(iii) Making contributions to a

qualified retirement plan (within the

meaning of section 4974(c)) under

section 219(f)(3), 404(a)(6), 404(h)(1)(B),

or 404(m)(2); making distributions

under section 408(d)(4); recharacterizing

contributions under section 408A(d)(6);

or making a rollover under section

402(c), 403(a)(4), 403(b)(8), or 408(d)(3);

(iv) Filing a petition with the Tax

Court, or for review of a decision

rendered by the Tax Court;

(v) Filing a claim for credit or refund

of any tax;

(vi) Bringing suit upon a claim for

credit or refund of any tax; and

(vii) Any other act specified in a

revenue ruling, revenue procedure,

notice, announcement, news release, or

other guidance published in the Internal

Revenue Bulletin (see § 601.601(d)(2) of

this chapter).

(2) Acts performed by the government.

Paragraph (b) of this section applies to

the following acts performed by the

government—

(i) Assessing any tax;

(ii) Giving or making any notice or

demand for the payment of any tax, or

with respect to any liability to the

United States in respect of any tax;

(iii) Collecting by the Secretary, by

levy or otherwise, of the amount of any

liability in respect of any tax;

(iv) Bringing suit by the United States,

or any officer on its behalf, in respect of

any liability in respect of any tax;

(v) Allowing a credit or refund of any

tax; and

(vi) Any other act specified in a

revenue ruling, revenue procedure,

notice, or other guidance published in

the Internal Revenue Bulletin (see

§ 601.601(d)(2) of this chapter).

(d) Definitions—(1) Affected taxpayer

means—

(i) Any individual whose principal

residence (for purposes of section

1033(h)(4)) is located in a covered

disaster area;

(ii) Any business entity or sole

proprietor whose principal place of

business is located in a covered disaster

area;

(iii) Any individual who is a relief

worker affiliated with a recognized

government or philanthropic

organization and who is assisting in a

covered disaster area;

(iv) Any individual whose principal

residence (for purposes of section

1033(h)(4)), or any business entity or

sole proprietor whose principal place of

business is not located in a covered

disaster area, but whose records

necessary to meet a deadline for an act

specified in paragraph (c) of this section

are maintained in a covered disaster

area;

(v) Any estate or trust that has tax

records necessary to meet a deadline for

an act specified in paragraph (c) of this

section and that are maintained in a

covered disaster area;

(vi) The spouse of an affected

taxpayer, solely with regard to a joint

return of the husband and wife; or

(vii) Any other person determined by

the IRS to be affected by a Presidentially

declared disaster (within the meaning of

section 1033(h)(3)).

(2) Covered disaster area means an

area of a Presidentially declared disaster

(within the meaning of section

1033(h)(3)) to which the IRS has

determined paragraph (b) of this section

applies.

(e) Notice of postponement of certain

acts. If any tax-related deadline is

postponed under section 7508A and this

section, the IRS will publish a revenue

ruling, revenue procedure, notice,

announcement, news release, or other

guidance published in the Internal

Revenue Bulletin (see § 601.601(d)(2) of

this chapter) describing the acts

postponed, the number of days

disregarded with respect to each act, the

time period to which the postponement

applies, and the location of the covered

disaster area. Guidance under this

78412 Federal Register / Vol. 65, No. 242 / Friday, December 15, 2000 / Rules and Regulations

paragraph (e) will be published as soon

as practicable after the declaration of a

Presidentially declared disaster.

(f) Abatement of interest under

section 6404(h). In the case of a

Presidentially declared disaster, if there

is an extension of time to file income tax

returns under section 6081 and to pay

income tax with respect to such returns

under section 6161, and, in addition, a

postponement of tax-related deadlines

under section 7508A, interest on an

underpayment of income tax that arises

during such period will be abated under

section 6404(h) for the period of time

disregarded under section 7508A in

addition to the period of time covered

by the extension of time to file and the

extension of time to pay.

(g) Examples. The rules of this section

are illustrated by the following

examples:

Example 1. (i) Corporation M, a calendar

year taxpayer, has its principal place of

business in County A in State X. Pursuant to

a timely filed request for extension of time

to file, Corporation M’s 1999 Form 1120,

‘‘U.S. Corporation Income Tax Return,’’ is

due on September 15, 2000. Also due on

September 15, 2000, is Corporation M’s third

quarter estimated tax payment for 2000.

Corporation M’s 2000 third quarter Form 720,

‘‘Quarterly Federal Excise Tax Return,’’ and

third quarter Form 941, ‘‘Employer’s

Quarterly Federal Tax Return,’’ are due on

October 31, 2000. In addition, Corporation M

has an employment tax deposit due on

September 15, 2000.

(ii) On September 1, 2000, a hurricane

strikes County A. On September 6, 2000, the

President declares a disaster within the

meaning of section 1033(h)(3). The Internal

Revenue Service determines that County A in

State X is a covered disaster area and

publishes guidance informing taxpayers that

for acts described in paragraph (c) of this

section that are required to be performed

within the period beginning on September 1,

2000, and ending on November 6, 2000, 90

days will be disregarded in determining

whether the acts are performed timely.

(iii) Because Corporation M’s principal

place of business is in County A, Corporation

M is an affected taxpayer. Accordingly,

Corporation M’s 1999 Form 1120 will be filed

timely if filed on or before December 14,

2000. Corporation M’s 2000 third quarter

estimated tax payment will be made timely

if paid on or before December 14, 2000. In

addition, because excise and employment tax

returns are described in paragraph (c) of this

section, Corporation M’s 2000 third quarter

Form 720 and third quarter Form 941 will be

filed timely if filed on or before January 29,

2001. However, because deposits of taxes are

excluded from the scope of paragraph (c) of

this section, Corporation M’s employment tax

deposit is due on September 15, 2000. In

addition, Corporation M’s deposits relating to

the third quarter Form 720 are due without

extension.

Example 2. The facts are the same as in

Example 1, except that during 2000,

Corporation M’s 1996 Form 1120 is being

examined by the IRS. Pursuant to a timely

filed request for extension of time to file,

Corporation M timely filed its 1996 Form

1120 on September 15, 1997. Without

application of this section, the statute of

limitations on assessment for 1996 income

tax will expire on September 15, 2000.

However, pursuant to paragraph (c) of this

section, assessment of tax is one of the

government acts for which up to 90 days may

be disregarded. The IRS determines that an

extension of the statute of limitations is

necessary and appropriate under these

circumstances. Because the September 15,

2000, expiration date of the statute of

limitations on assessment falls within the

period of the disaster as described in the

IRS’s published guidance, the 90 day period

disregarded under paragraph (b) of this

section begins on September 16, 2000, and

ends on December 14, 2000. Accordingly, the

statute of limitations on assessment for

Corporation M’s 1996 income tax will expire

on December 14, 2000.

Example 3. The facts are the same as in

Example 2, except that the examination of

the 1996 taxable year was completed earlier

in 2000, and on July 28, 2000, the IRS mailed

a statutory notice of deficiency to

Corporation M. Without application of this

section, Corporation M has 90 days (or until

October 26, 2000) to file a petition with the

Tax Court. However, pursuant to paragraph

(c) of this section, filing a petition with the

Tax Court is one of the taxpayer acts for

which up to 90 days may be disregarded.

Because Corporation M is an affected

taxpayer, Corporation M’s petition to the Tax

Court will be filed timely if filed on or before

January 24, 2001.

Example 4. (i) H and W, individual

calendar year taxpayers, intend to file a joint

Form 1040, ‘‘U.S. Individual Income Tax

Return,’’ for the 2001 taxable year and are

required to file a Schedule H, ‘‘Household

Employment Taxes.’’ The joint return is due

on April 15, 2002. H and W fully and timely

paid all taxes for the 2001 taxable year,

including domestic service employment

taxes, through withholding and estimated tax

payments. H and W’s principal residence is

in County B in State Y.

(ii) On April 2, 2002, a severe ice storm

strikes County B. On April 5, 2002, the

President declares a disaster within the

meaning of section 1033(h)(3). The IRS

determines that County B in State Y is a

covered disaster area and publishes guidance

informing taxpayers that for acts described in

paragraph (c) of this section that are required

to be performed within the period beginning

on April 2, 2002, and ending on April 19,

2002, 90 days will be disregarded in

determining whether the acts are performed

timely.

(iii) Because H and W’s principal residence

is in County B, H and W are affected

taxpayers. Because April 15, 2002, the due

date of H and W’s 2001 Form 1040 and

Schedule H, falls within the period of the

disaster as described in the IRS published

guidance, the 90 day period disregarded

under paragraph (b) of this section begins on

April 16, 2002, and ends on July 14, 2002,

a Sunday. Pursuant to section 7503, if the last

day for performing an act falls on Saturday,

Sunday, or a legal holiday, the performance

of the act shall be considered timely if it is

performed on the next succeeding day that is

not a Saturday, Sunday, or legal holiday.

Accordingly, H and W’s 2001 Form 1040 and

Schedule H will be filed timely if filed on or

before July 15, 2002.

Example 5. (i) H and W, residents of

County C in State Z, want to file an amended

return to request a refund of 2001 taxes. H

and W timely filed their 2001 income tax

return on April 15, 2002. Without application

of section 7508A, under section 6511(a), H

and W’s amended 2001 tax return must be

filed on or before April 15, 2005.

(ii) On April 1, 2005, an earthquake strikes

County C. On April 5, 2005, the President

declares a disaster within the meaning of

section 1033(h)(3). The Internal Revenue

Service determines that County C in State Z

is a covered disaster area and publishes

guidance informing taxpayers that for acts

described in paragraph (c) of this section that

are required to be performed within the

period beginning on April 1, 2005, and

ending on April 19, 2005, 90 days will be

disregarded in determining whether the acts

are performed timely.

(iii) Under paragraph (c) of this section,

filing a claim for refund of tax is one of the

taxpayer acts for which up to 90 days may

be disregarded. Ninety days are disregarded

under paragraph (b)(1) of this section

beginning on April 16, 2005, and ending on

July 14, 2005. Accordingly, H’s and W’s

claim for refund for 2001 taxes will be timely

if filed on or before July 14, 2005. Moreover,

in applying the lookback period in section

6511(b)(2)(A), which limits the amount of the

allowable refund, the period from July 14,

2005, back to April 16, 2005, is disregarded

under paragraph (b)(2) of this section. Thus,

if the claim is filed on or before July 14, 2005,

amounts deemed paid on April 15, 2002,

under section 6513(b), such as estimated tax

and tax withheld from wages, will have been

paid within the lookback period of section

6511(b)(2)(A).

Example 6. (i) L is an unmarried, calendar

year taxpayer whose principal residence is

located in County R in State T. L does not

timely file a 2001 Form 1040, ‘‘U.S.

Individual Income Tax Return,’’ which is due

on April 15, 2002, and does not timely pay

tax owed on that return. Absent reasonable

cause, L is subject to the failure to file and

failure to pay penalties under section 6651

beginning on April 16, 2002.

(ii) On May 10, 2002, a tornado strikes

County R. On May 14, 2002, the President

declares a disaster within the meaning of

section 1033(h)(3). The Internal Revenue

Service determines that County R in State T

is a covered disaster area and publishes

guidance informing taxpayers that for acts

described in paragraph (c) of this section that

are required to be performed within the

period beginning on May 10, 2002, and

ending on June 27, 2002, 90 days will be

disregarded in determining whether the acts

are timely.

(iii) On May 31, 2002, L files a 2001 Form

1040, ‘‘U.S. Individual Income Tax Return,’’

and pays the tax owed for 2001.

(iv) Because L’s principal residence is in

County R, L is an affected taxpayer. For

Federal Register / Vol. 65, No. 242 / Friday, December 15, 2000 / Rules and Regulations 78413

purposes of penalties under section 6651, 90

days are disregarded under paragraph (b) of

this section beginning on May 10, 2002.

Because L files the return on May 31, 2002,

the penalties under section 6651 will run

from April 16, 2002, until May 10, 2002.

Because there is no extension of time to file

returns under section 6081 and no extension

of time to pay under section 6161, interest is

not abated under section 6404(h), and L is

liable for the underpayment interest for the

entire period of April 16, 2002, through May

31, 2002.

Example 7. The facts are the same as in

Example 6, except L does not file the 2001

Form 1040 until November 25, 2002. Ninety

days are disregarded under paragraph (b) of

this section beginning on May 10, 2002, and

ending on August 8, 2002. Therefore, the

section 6651 penalties will run from April

16, 2002, until May 10, 2002, and from

August 9, 2002, until November 25, 2002.

Because there is no extension of time to file

returns under section 6081 and no extension

of time to pay under section 6161, interest is

not abated under section 6404(h), and L will

remain liable for underpayment interest for

the entire period of April 16, 2002, through

November 25, 2002.

Example 8. (i) H and W, individual

calendar year taxpayers, intend to file a joint

Form 1040, ‘‘U.S. Individual Income Tax

Return,’’ for the 2001 taxable year. The joint

return is due on April 15, 2002. After credits

for withholding under section 31 and

estimated tax payments, H and W owe tax for

the 2001 taxable year. H and W’s principal

residence is in County D in State Q.

(ii) On March 1, 2002, severe flooding

strikes County D. On March 5, 2002, the

President declares a disaster within the

meaning of section 1033(h)(3). The Internal

Revenue Service determines that County D in

State Q is a covered disaster area and

publishes guidance informing taxpayers that

for acts described in paragraph (c) of this

section that are required to be performed

within the period beginning on March 1,

2002, and ending on April 25, 2002, 90 days

will be disregarded in determining whether

the acts are performed timely. The guidance

also grants affected taxpayers an additional 6-

month extension of time to file returns under

section 6081 and an additional 6-month

extension of time to pay under section 6161.

(iii) Because H and W’s principal residence

is in County D, H and W are affected

taxpayers. Pursuant to the published

guidance, H and W have until January 13,

2003, to file their return and pay the tax. This

date is computed as follows: Under sections

6081 and 6161, H and W will have an

additional 6 months, until October 15, 2002,

to file and pay the tax. Further, under

paragraph (f) of this section, 90 days are

disregarded in determining the period of the

extension. Therefore, H and W’s return and

payment of tax will be timely if filed and

paid on or before January 13, 2003. In

addition, under section 6404(h),

underpayment interest under section 6601 is

abated for the entire period, from April 16,

2002, until January 13, 2003.

(h) Effective date. This section applies

to disasters declared after December 30,

1999.

Robert E. Wenzel,

Deputy Commissioner of Internal Revenue.

Approved: November 30, 2000.

Jonathan Talisman,

Acting Assistant Secretary of the Treasury.

[FR Doc. 00–31500 Filed 12–14–00; 8:45 am]

BILLING CODE 4830–01–P

DEPARTMENT OF JUSTICE

28 CFR Part 0

[AG Order No. 2343–2000]

Authority To Compromise and Close

Civil Claims

AGENCY: Department of Justice, Civil

Division.

ACTION: Final rule.

SUMMARY: This rule restores to the Code

of Federal Regulations language

regarding the definition of ‘‘gross

amount of the original claim’’ that

appears to have been omitted through

clerical error when the regulation was

previously amended. This amendment

added language relating to the

settlement of certain customs penalty

cases but inadvertently replaced, rather

than supplemented, the then existing

language.

EFFECTIVE DATE: December 15, 2000.

FOR FURTHER INFORMATION CONTACT:

Stephen Altman, Assistant Director,

Commercial Litigation Branch, Civil

Division, Department of Justice, Room

6540, 601 D Street, NW., Washington,

DC 20004; (202) 307–0188.

SUPPLEMENTARY INFORMATION:

Why Is the Department Publishing This

Rule?

This rule corrects the regulations

governing authority to compromise civil

claims. This amendment restores the

exact language of 28 CFR 0.169 that was

deleted when a prior amendment

published on September 8, 1986,

inadvertently substituted rather than

added language defining that term as

applied to the settlement of certain

customs penalty cases. 51 FR 31939.

To What Situations Does the Regulation

Being Amended Apply?

The regulation at 28 CFR 0.169, which

this rule amends, is included in subpart

Y of Title 28 of the Code of Federal

Regulations. Subpart Y deals with the

authority of the Assistant Attorneys

General of the various litigating

divisions of the Department of Justice to

compromise and close civil claims, and

the responsibility for collecting and

enforcing judgments, fines, penalties,

and forfeitures. Throughout subpart Y,

various levels of authority are defined

by reference to the term ‘‘gross amount

of the original claim.’’ This definition is

important in setting the scope of

authority in fraud cases where a

demand may be made for multiples of

single damages and forfeitures or civil

penalties.

How Does This Rule Affect Persons

Outside the Department?

This rule has no effect on the rights

or obligations of persons outside the

Department. It only pertains to case

settlement authorities delegated to

certain Department personnel.

Administrative Procedure Act 5 U.S.C.

553

Because this rule relates to agency

organization and pertains to a matter of

internal Department of Justice

management and procedures, the rule

does not need to be published for public

comment, 5 U.S.C. 553(a)(2). The rule is

effective upon issuance.

Regulatory Flexibility Act

The Attorney General, in accordance

with the Regulatory Flexibility Act (5

U.S.C. 605(b)), has reviewed this

regulation and by approving it certifies

that this regulation will not have a

significant economic impact on a

substantial number of small entities

because it pertains to administrative and

organizational matters affecting the

Department. Further, a Regulatory

Flexibility Analysis was not required to

be prepared for this final rule since the

Department was not required to publish

a general notice of proposed rulemaking

for this matter.

Executive Order 12866

This action has been drafted and

reviewed in accordance with Executive

Order 12866, ‘‘Regulatory Planning and

Review,’’ section 1(b), Principles of

Regulation. This rule is limited to

agency organization, management, and

personnel as described by section

3(d)(3) of Executive Order 12866 and,

therefore, is not a ‘‘regulation’’ or ‘‘rule’’

as defined by this Executive Order.

Accordingly, this action has not been

reviewed by the Office of Management

and Budget.

Executive Order 13132

This regulation will not have

substantial direct effects on the States,

on the relationship between the national

government and the States, or on

distribution of power and