Federal Register / Vol. 66, No. 31 / Wednesday, February 14, 2001 / Rules and Regulations 10191

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1, 31, 301, and 602

[TD 8942]

RIN 1545–AY00

Electronic Payee Statements

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Temporary regulations.

SUMMARY: This document contains

temporary regulations under sections

6041 and 6051 relating to the voluntary

electronic furnishing of payee

statements on Forms W–2, ‘‘Wage and

Tax Statement,’’ and under section

6050S relating to the voluntary

electronic furnishing of statements to

individuals for whom Forms 1098–T,

‘‘Tuition Payments Statement,’’ and

Forms 1098–E, ‘‘Student Loan Interest

Statement,’’ are filed. The regulations

will affect persons required by the

foregoing Internal Revenue Code

sections to furnish these statements

(furnishers) who wish to furnish these

statements electronically. The

regulations will also affect individuals,

principally employees, students, and

borrowers (recipients), who consent to

receive these statements electronically.

The text of the temporary regulations

also serves as the text of the proposed

regulations set forth in the notice of

proposed rulemaking on this subject in

the Proposed Rules section of this issue

of the Federal Register. The temporary

regulations do not affect the

requirement to file copy A of Forms W–

2 with the Social Security

Administration or the requirement to

file Forms 1098–T or Forms 1098–E

with the IRS.

DATES: Effective Date: These regulations

are effective February 14, 2001.

Applicability Date: These regulations

apply to statements to recipients

required to be furnished under sections

6041(d), 6050S(d), and 6051 after

December 31, 2000.

FOR FURTHER INFORMATION CONTACT:

Laura C. Nash at (202) 622–4910 (not a

toll free number).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

These temporary regulations are being

issued without prior notice and public

procedure pursuant to the

Administrative Procedure Act (5 U.S.C.

553). For this reason, the collection of

information contained in these

regulations has been reviewed, and

pending receipt and evaluation of

public comments, approved by the

Office of Management and Budget

(OMB) under control number 1545–

1729. Responses to this collection of

information are required if a person

required by section 6050S(d) to furnish

statements to recipients for whom

Forms 1098–T or Forms 1098–E are

filed, or a person required by sections

6041(d) and 6051 to furnish payee

statements on Forms W–2, wishes to

furnish the statements electronically

using website technology.

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.

For further information concerning

this collection of information, and

where to submit comments on the

collection of information and the

accuracy of the estimated burden, and

suggestions for reducing this burden,

please refer to the preamble to the crossreferencing notice of proposed

rulemaking published in the Proposed

Rules section of this issue of the Federal

Register.

Books and records relating to a

collection of information must be

retained as long as their contents may

become material in the administration

of any internal revenue law. Generally,

tax returns and tax return information

are confidential, as required by 26

U.S.C. 6103.

Background

This document contains amendments

to the Income Tax Regulations (26 CFR

part 1) relating to sections 6041(d) and

6050S(d), to the Regulations on

Employment Taxes and Collection of

Income Tax at Source (26 CFR part 31)

relating to section 6051, and to the

Regulations on Procedure and

Administration (26 CFR Part 301)

relating to section 6724. Sections

6041(d) and 6050S(d) generally require

certain persons to furnish a statement to

a person with respect to whom an

information return is required to be filed

with the Federal government under

sections 6041(a) and 6050S(a). Section

6051 requires certain persons to furnish

a written statement to an employee

regarding remuneration paid by such

person to the employee. The foregoing

statements (specified statements) are

generally required to be furnished to

recipients on or before January 31 of the

year following the calendar year for

which the related information returns

are required to be filed or in which the

wages or other compensation was paid.

These temporary regulations state that

furnishers may provide the written

statements required by sections 6041(d),

6050S(d), and 6051 in an electronic

format in lieu of a paper format. In

addition, the temporary regulations

provide furnishers with a method of

furnishing these statements

electronically using website technology.

Furnishers who use this website

technology and satisfy the requirements

of the temporary regulations are treated

as timely furnishing the statements

under sections 6041(d), 6050S(d), and

6051.

The objective of the temporary

regulations is to facilitate the voluntary

electronic furnishing of these

statements. This objective is consistent

with the general goals of (i) section 2001

of the Internal Revenue Service

Restructuring and Reform Act of 1998 to

eliminate barriers, provide incentives,

and use competitive forces to increase

electronic filing over the next ten years

and (ii) the Electronic Signatures in

Global and National Commerce Act (E–

SIGN Act) to facilitate voluntary use of

certain electronic records. However,

furnishers are not required to use the

website technology described in the

temporary regulations if they wish to

continue to provide paper statements.

Thus, the temporary regulations do not

require a furnisher to invest in new

delivery systems or to meet any new

legal requirements to furnish a

statement.

A major impetus for publishing these

temporary regulations was the large

number of requests for published

guidance from lenders, educational

institutions, employers and other

furnishers who want the option of

delivering statements to recipients in an

electronic format. In addition, the

Information Reporting Program

Advisory Committee of the Internal

Revenue Service (IRPAC) and the

Electronic Tax Administration Advisory

Committee (ETAAC) also strongly

support providing furnishers with the

option of furnishing statements

electronically.

At its May 11, 2000, public meeting,

IRPAC advocated issuance of guidance

permitting furnishers to use website

technology to furnish statements

electronically. The IRS consulted with

IRPAC representatives to ensure that the

temporary regulations provide

furnishers with clear, practical, and

administrable procedures for the

voluntary electronic furnishing of the

specified statements. The temporary

regulations incorporate many of

IRPAC’s suggestions and those of other

furnishers.

10192 Federal Register / Vol. 66, No. 31 / Wednesday, February 14, 2001 / Rules and Regulations

These temporary regulations also

strike a balance between furnishers’

desires to reduce costs and modernize

business processes by furnishing

statements electronically and the tax

administration concern that employees,

students, and borrowers must be able to

access electronic statements so that they

can timely file accurate income tax

returns. The consumer consent

provisions of section 101(c)(1) of the E–

SIGN Act strike a similar balance

between businesses’ desire to transmit

records electronically and concerns

about consumers’ abilities to access and

use those records. Therefore, these

temporary regulations include

disclosure provisions that are consistent

with the Congressionally-approved

consent provisions of the E–SIGN Act.

These disclosure provisions will ensure

that recipients will obtain the

information they need to make an

informed choice to receive the

statements electronically and to access

them timely.

The IRS and the Treasury Department

invite comments about whether the

provisions of these temporary

regulations should apply to statements

required to be furnished to recipients

under other sections of the Internal

Revenue Code. In addition, comments

are invited about whether furnishers

will use other technologies (such as email) to furnish statements

electronically and whether they need

guidance on the conditions under which

those statements will be considered

timely furnished. Finally, comments are

invited on whether the final regulations

should prescribe standards to ensure

confidentiality of taxpayer information

posted on a website. Until final

regulations are issued, the Treasury

Department and the IRS expect that

furnishers will take reasonable

precautions to ensure confidentiality of

taxpayer information.

Explanation of Provisions

This temporary regulation provides

guidance under §§ 1.6041–2T(a)(5) (by

cross-reference to the regulations under

section 6051), 1.6050S–1T(a), 1.6050S–

2T(a), and 31.6051–1T(j) regarding the

electronic furnishing of specified

statements. The temporary regulations

provide that the written statements

required by sections 6041(d), 6050S(d),

and 6051 may be furnished in an

electronic format. In addition, the

temporary regulations provide that a

furnisher that complies with the

consent, required disclosures, format,

posting, notice, and retention provisions

of the temporary regulations is treated

as timely furnishing the specified

statements under sections 6041(d),

6050S(d), and 6051.

Consent

The temporary regulations provide

that a recipient must have affirmatively

consented to receive the statement

electronically and must not have

withdrawn that consent before the

statement is furnished. The consent or,

alternatively, its confirmation must be

made electronically in a manner that

reasonably demonstrates that the

recipient can access the statement in the

electronic format in which it will be

furnished to the recipient. A furnisher

must take certain actions, including

obtaining from the recipient a new

electronic consent or confirmation of

consent to receive the statement

electronically, if a change in the

hardware or software needed to access

a statement creates a material risk that

the recipient will not be able to access

the statement.

Required Disclosures

Prior to or at the time a recipient

consents to receive a statement

electronically, the furnisher must

provide a clear and conspicuous

statement to the recipient containing

certain disclosures. These required

disclosures are similar to the consumer

consent provisions in the E–SIGN Act

and, like those provisions, require a

furnisher to inform a recipient about, for

example, the scope and duration of a

consent to receive an electronic

statement, the ability to revoke that

consent, the hardware and software

required to access, print, and retain an

electronic statement, and the ability to

obtain a paper statement.

Format

The temporary regulations require

that the electronic version of a statement

furnished to a recipient contain all

required information and comply with

applicable revenue procedures relating

to substitute statements.

Posting

The temporary regulations generally

require that the furnisher post the

statements on a website accessible to

recipients on or before January 31 of the

year following the calendar year to

which the statements relate.

Notice

The temporary regulations generally

require the furnisher to notify a

recipient that the statement is posted on

a website on or before January 31 of the

year following the calendar year to

which the statement relates. The notice

may be delivered by mail, electronic

mail, or in person and must provide

instructions to the recipient on how to

access and print the statement. If a

furnisher later posts corrected

statements on the website, the furnisher

must notify the recipients of that

posting within 30 days after the posting.

Retention

The temporary regulations generally

require the furnisher to maintain access

to the statements on the website through

October 15 of the year following the

calendar year to which the statements

relate. In addition, the furnisher

generally must maintain access to

corrected statements that are posted on

the website through October 15 of the

year following the calendar year to

which the statements relate or for 90

days after that posting, whichever is

later.

Special Analyses

It has been determined that this

temporary regulation is not a significant

regulatory action as defined in

Executive Order 12866. Therefore, a

regulatory assessment is not required. It

has also been determined that section

553(b) of the Administrative Procedure

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

to these regulations.

Because no preceding notice of

proposed rulemaking is required for this

temporary regulation, the provisions of

the Regulatory Flexibility Act do not

apply. However, an initial Regulatory

Flexibility Analysis was prepared for

the proposed regulations published

elsewhere in this issue of the Federal

Register. Pursuant to section 7805(f) of

the Internal Revenue Code, that notice

of proposed rulemaking will be

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

temporary regulations is Eric Lucas,

formerly of the Office of Associate Chief

Counsel (Procedure and

Administration). However, other

personnel from the IRS and Treasury

Department participated in their

development.

List of Subjects

26 CFR Part 1

Income taxes, Reporting and

recordkeeping requirements.

26 CFR Part 31

Employment taxes, Income taxes,

Penalties, Pensions, Railroad retirement,

Reporting and recordkeeping

Federal Register / Vol. 66, No. 31 / Wednesday, February 14, 2001 / Rules and Regulations 10193

requirements, Social security,

Unemployment compensation.

26 CFR Part 301

Employment taxes, Estate taxes,

Excise taxes, Gift taxes, Income taxes,

Penalties, Reporting and recordkeeping

requirements.

26 CFR Part 602

Reporting and recordkeeping

requirements.

Amendments to the Regulations

Accordingly, 26 CFR parts 1, 31, 301,

and 602 are amended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation

for part 1 is amended by adding entries

in numerical order to read in part as

follows:

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

Section 1.6041–2T also issued under 26

U.S.C. 6041(d). * * *

Section 1.6050S–1T also issued under 26

U.S.C. 6050S(g).

Section 1.6050S–2T also issued under 26

U.S.C. 6050S(g). * * *

Par. 2. Section 1.6041–2T is added to

read as follows:

§ 1.6041–2T Return of information as to

payments to employees (temporary).

(a)(1) through (4) [Reserved]

(5) Statement for employees. An

employer that is required under

§ 1.6041–2(a) to file Form W–2 with

respect to an employee is also required

under section 6041(d) and 6051 to

furnish a written statement to the

employee. This written statement must

be furnished on Form W–2 in

accordance with section 6051 and the

regulations.

(b) and (c). For further guidance, see

§ 1.6041–2(b) and (c).

Par. 3. Sections 1.6050S–1T and

1.6050S–2T are added to read as

follows:

§ 1.6050S–1T Information reporting for

payments and reimbursements or refunds

of qualified tuition and related expenses

(temporary).

(a) Electronic furnishing of

statements—(1) In general. A person

required by section 6050S(d) to furnish

a written statement (furnisher) to the

individual to whom it is required to be

furnished (recipient) may furnish the

statement in an electronic format in lieu

of a paper format. A furnisher who

meets the requirements of paragraphs

(a)(2) through (7) of this section is

treated as furnishing the statement in a

timely manner.

(2) Consent—(i) In general. The

recipient must have affirmatively

consented to receive the statement in an

electronic format and must not have

withdrawn that consent before the

statement is furnished. The consent

must be made electronically in a

manner that reasonably demonstrates

that the recipient can access the

statement in the electronic format in

which it will be furnished to the

recipient. Alternatively, the consent

may be made in a different manner (for

example, in an e-mail or in a paper

document) if it is confirmed

electronically in the manner described

in the preceding sentence.

(ii) Change in hardware or software

requirements. If a change in the

hardware or software required to access

the statement creates a material risk that

the recipient will not be able to access

the statement, the furnisher must, prior

to changing the hardware or software,

provide the recipient with a notice. The

notice must describe the revised

hardware and software required to

access the statement and inform the

recipient that a new consent to receive

the statement in the revised electronic

format must be provided to the

furnisher. After implementing the

revised hardware and software, the

furnisher must obtain from the

recipient, in the manner described in

paragraph (a)(2)(i) of this section, a new

consent or confirmation of consent to

receive the statement electronically.

(iii) Example. The following example

illustrates the rules of this paragraph

(a)(2):

Example. Furnisher F sends Recipient R an

e-mail stating that R may consent to receive

statements required by section 6050S(d)

electronically on a website instead of in a

paper format. The e-mail contains an

attachment instructing R how to consent to

receive the statements electronically. The email attachment uses the same electronic

format that F will use for the electronically

furnished statements. R opens the

attachment, reads the instructions, and

submits the consent in the manner provided

in the instructions. R has consented to

receive the statements electronically in the

manner described in paragraph (a)(2)(i) of

this section.

(3) Required disclosures—(i) In

general. Prior to, or at the time of, a

recipient’s consent, the furnisher must

provide to the recipient a clear and

conspicuous disclosure statement

containing each of the disclosures

described in paragraphs (a)(3)(ii)

through (viii) of this section.

(ii) Paper statement. The recipient

must be informed that the statement

will be furnished on paper if the

recipient does not consent to receive it

electronically.

(iii) Scope and duration of consent.

The recipient must be informed of the

scope and duration of the consent. For

example, the recipient must be informed

whether the consent applies to

statements furnished every year after the

consent is given until it is withdrawn in

the manner described in paragraph

(a)(3)(v)(A) of this section or only to the

statement required to be furnished on or

before the January 31 immediately

following the date on which the consent

is given.

(iv) Post-consent request for a paper

statement. The recipient must be

informed of any procedure for obtaining

a paper copy of the recipient’s statement

after giving the consent described in

paragraph (a)(2)(i) of this section.

(v) Withdrawal of consent. The

recipient must be informed that—

(A) The recipient may withdraw a

consent at any time by furnishing the

withdrawal in writing (electronically or

on paper) to the person whose name,

mailing address, telephone number, and

e-mail address is provided in the

disclosure statement;

(B) The furnisher will confirm the

withdrawal in writing (either

electronically or on paper); and

(C) A withdrawal of consent does not

apply to a statement that was furnished

electronically in the manner described

in this paragraph (a) before the

withdrawal of consent is furnished.

(vi) Notice of termination. The

recipient must be informed of the

conditions under which a furnisher will

cease furnishing statements

electronically to the recipient.

(vii) Updating information. The

recipient must be informed of the

procedures for updating the information

needed by the furnisher to contact the

recipient.

(viii) Hardware and software

requirements. The recipient must be

provided with a description of the

hardware and software required to

access, print, and retain the statement,

and the date when the statement will no

longer be available on the website.

(4) Format. The electronic version of

the statement must contain all required

information and comply with applicable

revenue procedures relating to

substitute statements to recipients.

(5) Posting. The furnisher must on or

before January 31 of the year following

the calendar year to which the statement

relates (or such other date permitted or

required for furnishing the statement)

post it on a website accessible to the

recipient.

(6) Notice—(i) In general. The

furnisher must on or before January 31

of the year following the calendar year

to which the statement relates (or such

other date permitted or required for

furnishing the statement) notify the

10194 Federal Register / Vol. 66, No. 31 / Wednesday, February 14, 2001 / Rules and Regulations

recipient that the statement is posted on

a website. The notice may be delivered

by mail, electronic mail, or in person.

The notice must provide instructions on

how to access and print the statement.

The notice must include the following

statement in capital letters,

‘‘IMPORTANT TAX RETURN

DOCUMENT AVAILABLE.’’ If the

notice is provided by electronic mail,

the foregoing statement should be on the

subject line of the electronic mail and

sent with high importance.

(ii) Undeliverable electronic address.

If an electronic notice described in

paragraph (a)(6)(i) of this section is

returned as undeliverable, and the

correct electronic address cannot be

obtained from the furnisher’s records or

from the recipient, then the furnisher

must furnish the notice by mail or in

person within 30 days after the

electronic notice is returned.

(iii) Corrected statements. A furnisher

must notify a recipient that it has posted

corrected statements on a website

within 30 days of such posting in the

manner described in paragraph (a)(6)(i)

of this section. This notice must be

furnished by mail or in person if—

(A) An electronic notice of the

website posting of an original statement

was returned as undeliverable; and

(B) The recipient has not provided a

new e-mail address.

(7) Retention. The furnisher must

maintain access to the statements on the

website through October 15 of the year

following the calendar year to which the

statements relate (or the first business

day after such October 15, if October 15

falls on a Saturday, Sunday, or legal

holiday). The furnisher must maintain

access to corrected statements that are

posted on the website through October

15 of the year following the calendar

year to which the statements relate (or

the first business day after such October

15, if October 15 falls on a Saturday,

Sunday, or legal holiday) or the date 90

days after the corrected statements are

posted, whichever is later.

(b) Effective date. This section applies

to statements required to be furnished

under section 6050S(d) after December

31, 2000.

§ 1.6050S–2T Information reporting for

payments of interest on qualified education

loans (temporary).

(a) Electronic furnishing of

statements—(1) In general. A person

required by section 6050S(d) to furnish

a written statement (furnisher) to the

individual to whom it is required to be

furnished (recipient) may furnish the

statement in an electronic format in lieu

of a paper format. A furnisher who

meets the requirements of paragraphs

(a)(2) through (7) of this section is

treated as furnishing the statement in a

timely manner.

(2) Consent—(i) In general. The

recipient must have affirmatively

consented to receive the statement in an

electronic format and must not have

withdrawn that consent before the

statement is furnished. The consent

must be made electronically in a

manner that reasonably demonstrates

that the recipient can access the

statement in the electronic format in

which it will be furnished to the

recipient. Alternatively, the consent

may be made in a different manner (for

example, in an e-mail or in a paper

document) if it is confirmed

electronically in the manner described

in the preceding sentence.

(ii) Change in hardware or software

requirements. If a change in the

hardware or software required to access

the statement creates a material risk that

the recipient will not be able to access

the statement, the furnisher must, prior

to changing the hardware or software,

provide the recipient with a notice. The

notice must describe the revised

hardware and software required to

access the statement and inform the

recipient that a new consent to receive

the statement in the revised electronic

format must be provided to the

furnisher. After implementing the

revised hardware and software, the

furnisher must obtain from the

recipient, in the manner described in

paragraph (a)(2)(i) of this section, a new

consent or confirmation of consent to

receive the statement electronically.

(iii) Example. The following example

illustrates the rules of this paragraph

(a)(2):

Example. Furnisher F sends Recipient R an

e-mail stating that R may consent to receive

statements required by section 6050S(d)

electronically on a website instead of in a

paper format. The e-mail contains an

attachment instructing R how to consent to

receive the statements electronically. The email attachment uses the same electronic

format that F will use for the electronically

furnished statements. R opens the

attachment, reads the instructions, and

submits the consent in the manner provided

in the instructions. R has consented to

receive the statements electronically in the

manner described in paragraph (a)(2)(i) of

this section.

(3) Required disclosures—(i) In

general. Prior to, or at the time of, a

recipient’s consent, the furnisher must

provide to the recipient a clear and

conspicuous disclosure statement

containing each of the disclosures

described in paragraphs (a)(3)(ii)

through (viii) of this section.

(ii) Paper statement. The recipient

must be informed that the statement

will be furnished on paper if the

recipient does not consent to receive it

electronically.

(iii) Scope and duration of consent.

The recipient must be informed of the

scope and duration of the consent. For

example, the recipient must be informed

whether the consent applies to

statements furnished every year after the

consent is given until it is withdrawn in

the manner described in paragraph

(a)(3)(v)(A) of this section or only to the

statement required to be furnished on or

before the January 31 immediately

following the date on which the consent

is given.

(iv) Post-consent request for a paper

statement. The recipient must be

informed of any procedure for obtaining

a paper copy of the recipient’s statement

after giving the consent described in

paragraph (a)(2)(i) of this section.

(v) Withdrawal of consent. The

recipient must be informed that—

(A) The recipient may withdraw a

consent at any time by furnishing the

withdrawal in writing (electronically or

on paper) to the person whose name,

mailing address, telephone number, and

e-mail address is provided in the

disclosure statement;

(B) The furnisher will confirm the

withdrawal in writing (either

electronically or on paper); and

(C) A withdrawal of consent does not

apply to a statement that was furnished

electronically in the manner described

in this paragraph (a) before the

withdrawal of consent is furnished.

(vi) Notice of termination. The

recipient must be informed of the

conditions under which a furnisher will

cease furnishing statements

electronically to the recipient.

(vii) Updating information. The

recipient must be informed of the

procedures for updating the information

needed by the furnisher to contact the

recipient.

(viii) Hardware and software

requirements. The recipient must be

provided with a description of the

hardware and software required to

access, print, and retain the statement,

and the date when the statement will no

longer be available on the website.

(4) Format. The electronic version of

the statement must contain all required

information and comply with applicable

revenue procedures relating to

substitute statements to recipients.

(5) Posting. The furnisher must on or

before January 31 of the year following

the calendar year to which the statement

relates (or such other date permitted or

required for furnishing the statement)

post it on a website accessible to the

recipient.

Federal Register / Vol. 66, No. 31 / Wednesday, February 14, 2001 / Rules and Regulations 10195

(6) Notice—(i) In general. The

furnisher must on or before January 31

of the year following the calendar year

to which the statement relates (or such

other date permitted or required for

furnishing the statement) notify the

recipient that the statement is posted on

a website. The notice may be delivered

by mail, electronic mail, or in person.

The notice must provide instructions on

how to access and print the statement.

The notice must include the following

statement in capital letters,

‘‘IMPORTANT TAX DOCUMENT

RETURN AVAILABLE.’’ If the notice is

provided by electronic mail, the

foregoing statement should be on the

subject line of the electronic mail and

sent with high importance.

(ii) Undeliverable electronic address.

If an electronic notice described in

paragraph (a)(6)(i) of this section is

returned as undeliverable, and the

correct electronic address cannot be

obtained from the furnisher’s records or

from the recipient, then the furnisher

must furnish the notice by mail or in

person within 30 days after the

electronic notice is returned.

(iii) Corrected statements. A furnisher

must notify a recipient that it has posted

corrected statements on a website

within 30 days of such posting in the

manner described in paragraph (a)(6)(i)

of this section. This notice must be

furnished by mail or in person if—

(A) An electronic notice of the

website posting of an original statement

was returned as undeliverable; and

(B) The recipient has not provided a

new e-mail address.

(7) Retention. The furnisher must

maintain access to the statements on the

website through October 15 of the year

following the calendar year to which the

statements relate (or the first business

day after such October 15, if October 15

falls on a Saturday, Sunday, or legal

holiday). The furnisher must maintain

access to corrected statements that are

posted on the website through October

15 of the year following the calendar

year to which the statements relate (or

the first business day after such October

15, if October 15 falls on a Saturday,

Sunday, or legal holiday) or the date 90

days after the corrected statements are

posted, whichever is later.

(b) Effective date. This section applies

to statements required to be furnished

under section 6050S(d) after December

31, 2000.

PART 31—EMPLOYMENT TAXES AND

COLLECTION OF INCOME TAX AT

SOURCE

Par. 4. The authority citation for part

31 is amended to read in part as follows:

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

Section 31.6051–1T also issued under 26

U.S.C. 6051. * * *

Par. 5. Section 31.6051–1T is added

to read as follows:

§ 31.6051–1T Statements for employees

(temporary).

(a) through (i) [Reserved]. For further

guidance, see § 31.6051–1(a) through (i).

(j) Electronic furnishing of

statements—(1) In general. A person

required by section 6051 to furnish a

written statement on Form W–2

(furnisher) to the individual to whom it

is required to be furnished (recipient)

may furnish the Form W–2 in an

electronic format in lieu of a paper

format. A furnisher who meets the

requirements of paragraphs (j)(2)

through (7) of this section is treated as

furnishing the Form W–2 in a timely

manner.

(2) Consent—(i) In general. The

recipient must have affirmatively

consented to receive the Form W–2 in

an electronic format and must not have

withdrawn that consent before the Form

W–2 is furnished. The consent must be

made electronically in a manner that

reasonably demonstrates that the

recipient can access the Form W–2 in

the electronic format in which it will be

furnished to the recipient. Alternatively,

the consent may be made in a different

manner (for example, in an e-mail or in

a paper document) if it is confirmed

electronically in the manner described

in the preceding sentence.

(ii) Change in hardware or software

requirements. If a change in hardware or

software required to access the Form W–

2 creates a material risk that the

recipient will not be able to access the

Form W–2, the furnisher must, prior to

changing the hardware or software,

provide the recipient with a notice. The

notice must describe the revised

hardware and software required to

access the Form W–2 and inform the

recipient that a new consent to receive

the Form W–2 in the revised electronic

format must be provided to the

furnisher. After implementing the

revised hardware and software, the

furnisher must obtain from the

recipient, in the manner described in

paragraph (j)(2)(i) of this section, a new

consent or confirmation of consent to

receive the Form W–2 electronically.

(iii) Example. The following example

illustrates the rules of this paragraph

(j)(2):

Example. Furnisher F sends Recipient R an

e-mail stating that R may consent to receive

Forms W–2 electronically on a website

instead of in a paper format. The e-mail

contains an attachment instructing R how to

consent to receive Forms W–2 electronically.

The e-mail attachment uses the same

electronic format that F will use for its

electronically furnished Forms W–2. R opens

the attachment, reads the instructions, and

submits the consent in the manner provided

in the instructions. R has consented to

receive Forms W–2 electronically in the

manner described in paragraph (j)(2)(i) of this

section.

(3) Required disclosures—(i) In

general. Prior to, or at the time of, a

recipient’s consent, the furnisher must

provide to the recipient a clear and

conspicuous disclosure statement

containing each of the disclosures

described in paragraphs (j)(3)(ii) through

(viii) of this section.

(ii) Paper statement. The recipient

must be informed that the Form W–2

will be furnished on paper if the

recipient does not consent to receive it

electronically.

(iii) Scope and duration of consent.

The recipient must be informed of the

scope and duration of the consent. For

example, the recipient must be informed

whether the consent applies to Forms

W–2 furnished every year after the

consent is given until it is withdrawn in

the manner described in paragraph

(j)(3)(v)(A) of this section or only to the

Form W–2 required to be furnished on

or before the January 31 immediately

following the date on which the consent

is given.

(iv) Post-consent request for a paper

statement. The recipient must be

informed of any procedure for obtaining

a paper copy of the recipient’s Form W–

2 after giving the consent described in

paragraph (j)(2)(i) of this section.

(v) Withdrawal of consent. The

recipient must be informed that—

(A) The recipient may withdraw a

consent at any time by furnishing the

withdrawal in writing (electronically or

on paper) to the person whose name,

mailing address, telephone number, and

e-mail address is provided in the

disclosure statement;

(B) The furnisher will confirm the

withdrawal in writing (either

electronically or on paper); and

(C) A withdrawal of consent does not

apply to a Form W–2 that was furnished

electronically in the manner described

in this paragraph (j) before the

withdrawal of consent is furnished.

(vi) Notice of termination. The

recipient must be informed of the

conditions under which a furnisher will

cease furnishing statements

electronically to the recipient (for

example, termination of the recipient’s

employment with furnisher-employer).

(vii) Updating information. The

recipient must be informed of the

procedures for updating the information

needed by the furnisher to contact the

recipient.

10196 Federal Register / Vol. 66, No. 31 / Wednesday, February 14, 2001 / Rules and Regulations

(viii) Hardware and software

requirements. The recipient must be

provided with a description of the

hardware and software required to

access, print, and retain the Form W–2,

and the date when the Form W–2 will

no longer be available on the website.

The recipient must be informed that the

Form W–2 may be required to be

printed and attached to a Federal, State,

or local income tax return.

(4) Format. The electronic version of

the Form W–2 must contain all required

information and comply with applicable

revenue procedures relating to

substitute statements to recipients.

(5) Posting. The furnisher must on or

before January 31 of the year following

the calendar year to which the Form W–

2 relates (or such other date permitted

or required for furnishing the Forms W–

2) post it on a website accessible to the

recipient.

(6) Notice—(i) In general. The

furnisher must on or before January 31

of the year following the calendar year

to which the Form W–2 relates (or such

other date permitted or required for

furnishing the Form W–2) notify the

recipient that the Form W–2 is posted

on a website. The notice may be

delivered by mail, electronic mail, or in

person. The notice must provide

instructions on how to access and print

the statement. The notice must include

the following statement in capital

letters, ‘‘IMPORTANT TAX RETURN

DOCUMENT AVAILABLE.’’ If the

notice is provided by electronic mail,

the foregoing statement should be on the

subject line of the electronic mail and

sent with high importance.

(ii) Undeliverable electronic address.

If an electronic notice described in

paragraph (j)(6)(i) of this section is

returned as undeliverable, and the

correct electronic address cannot be

obtained from the furnisher’s records or

from the recipient, then the furnisher

must furnish the notice by mail or in

person within 30 days after the

electronic notice is returned.

(iii) Corrected Forms W–2. A furnisher

must notify a recipient that it has posted

corrected Forms W–2 on a website

within 30 days of such posting in the

manner described in paragraph (j)(6)(i)

of this section. This notice must be

furnished by mail or in person if—

(A) An electronic notice of the

website posting of an original Form W–

2 was returned as undeliverable; and

(B) The recipient has not provided a

new e-mail address.

(7) Retention. The furnisher must

maintain access to the Forms W–2 on

the website through October 15 of the

year following the calendar year to

which the Forms W–2 relate (or the first

business day after October 15, if October

15 falls on a Saturday, Sunday, or legal

holiday). The furnisher must maintain

access to corrected Forms W–2 that are

posted on the website through October

15 of the year following the calendar

year to which the Forms W–2 relate (or

the first business day after such October

15, if October 15 falls on a Saturday,

Sunday, or legal holiday) or the date 90

days after the corrected forms are

posted, whichever is later.

(k) Effective date. Paragraph (j) of this

section applies to Forms W–2 required

to be furnished under section 6051 after

December 31, 2000.

PART 301—PROCEDURE AND

ADMINISTRATION

Par. 6. The authority citation for part

301 continues to read in part as follows:

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

Par. 7. Section 301.6724–1T is added

to read as follows:

§ 301.6724–1T Reasonable cause

(temporary).

(a) through (d)(2) [Reserved]. For

further information, see § 301.6724–1 (a)

through (d)(2).

(d)(3) Special rule for furnishers of

electronic statements. A filer may seek

a waiver for reasonable cause pursuant

to § 301.6724–1(c)(6), for failing to

timely furnish a statement in the

following situation. If the recipient of

the statement withdraws a consent to

receive the statement in an electronic

format, the filer will be deemed to have

acted in a responsible manner under

§ 301.6724–1(d) if the filer furnishes a

paper statement on or before the date 30

days after the date the withdrawal of

consent is received.

(e) through (n) [Reserved]. For further

guidance, see § 301.6724–1(e) through

(n).

PART 602—OMB CONTROL NUMBERS

UNDER THE PAPERWORK

REDUCTION ACT

Par. 8. The authority citation for part

602 continues to read as follows:

Authority: 26 U.S.C. 7805.

Par. 9. In § 602.101, paragraph (b) is

amended by adding entries to the table

in numerical order to read as follows:

§ 602.101 OMB Control numbers.

* * * * *

(b) * * *

CFR part or section where

identified and described

Current OMB

control No.

*****

1.6041–2T ............................. 1545–1729

*****

1.6050S–1T .......................... 1545–1729

1.6050S–2T .......................... 1545–1729

*****

31.6051–1T ........................... 1545–1729

*****

Robert E. Wenzel,

Deputy Commissioner of Internal Revenue.

Approved: January 10, 2001.

Jonathan Talisman,

Assistant Secretary of the Treasury.

[FR Doc. 01–1292 Filed 2–13–01; 8:45 am]

BILLING CODE 4830–01–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 180

[OPP–301101; FRL–6764–2]

RIN 2070–AB78]

Clomazone; Pesticide Tolerance

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Final rule.

SUMMARY: This regulation establishes

tolerances for residues of clomazone in

or on tuberous and corm vegetable

(except potato) subgroup crop and

cucurbit vegetable crop group.

Interregional Research Project Number 4

(IR—4) requested these tolerances under

the Federal Food, Drug, and Cosmetic

Act, as amended by the Food Quality

Protection Act of 1996.

DATES: This regulation is effective

February 14, 2001. Objections and

requests for hearings, identified by

docket control number OPP–301101,

must be received by EPA on or before

April 16, 2001.

ADDRESSES: Written objections and

hearing requests may be submitted by

mail, in person, or by courier. Please

follow the detailed instructions for each

method as provided in Unit VI. of the

SUPPLEMENTARY INFORMATION. To ensure

proper receipt by EPA, your objections

and hearing requests must identify

docket control number OPP–301101 in

the subject line on the first page of your

response.

FOR FURTHER INFORMATION CONTACT: By

mail: Shaja R. Brothers, Registration

Division (7505C), Office of Pesticide

Programs, Environmental Protection