704 Federal Register / Vol. 70, No. 3 / Wednesday, January 5, 2005 / Rules and Regulations 

DEPARTMENT OF THE TREASURY

Internal Revenue Service 

26 CFR Parts 1 and 602 

[TD 9174] 

RIN 1545–BD75 

Substantial Understatement of Income 

Tax Liability

AGENCY: Internal Revenue Service (IRS), 

Treasury.

ACTION: Final regulations.

SUMMARY: This document removes 

regulations relating to the addition to 

tax in the case of a substantial 

understatement of income tax liability 

and corrects an obsolete cross reference. 

The Internal Revenue Code (Code) 

provision imposing the addition to tax 

and cited in the cross reference was 

repealed in 1989. The changes made by 

this document will not affect taxpayers 

because the addition to tax does not 

apply to returns with a due date after 

December 31, 1989 (determined without 

regard to extensions).

DATES: The changes made by this 

document are effective January 5, 2005.

FOR FURTHER INFORMATION CONTACT:

Audra M. Dineen, (202) 622–4940 (not 

a toll-free number).

SUPPLEMENTARY INFORMATION: 

Background and Explanation of 

Provisions 

Section 6661 of the Code, as in effect 

before its repeal in 1989, imposed an 

addition to tax equal to 25 percent of the 

amount of the underpayment of tax 

attributable to any substantial 

understatement of income tax liability 

for a taxable year. Sections 1.6661–1 

through 1.6661–6 of the Income Tax 

Regulations (26 CFR part 1) provided 

rules for determining whether an 

addition to tax should be imposed and 

for computing the amount of any such 

addition. 

The Omnibus Budget Reconciliation 

Act of 1989, Public Law 101–239 (103 

Stat. 2106), repealed section 6661 

effective for tax returns due after 

December 31, 1989 (determined without 

regard to extensions) and substituted, in 

section 6662, an accuracy-related 

penalty applicable to those returns. The 

repeal of section 6661 has rendered 

§§ 1.6661–1 through 1.6661–6 obsolete. 

This Treasury decision removes those 

provisions and corrects an obsolete 

cross reference to section 6661 in the 

regulations under section 448 (relating 

to the limitation on the use of the cash 

method of accounting). 

Special Analyses 

It has been determined that this 

Treasury decision is 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. In addition, 

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, 

this document has been submitted to the 

Small Business Administration for 

comment on its impact on small 

business. 

Drafting Information 

The principal author of this document 

is Audra M. Dineen of the Office of 

Associate Chief Counsel, Procedure and 

Administration (Administrative 

Provisions and Judicial Practice 

Division).

List of Subjects 

26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

26 CFR Part 602 

Reporting and recordkeeping 

requirements.

Adoption of Amendments to the 

Regulations

■ Accordingly, 26 CFR parts 1 and 602 

are amended as follows:

PART 1—INCOME TAXES

■ Paragraph 1. The authority citation for 

part 1 continues to read, in part, as 

follows:

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

■ Par. 2. In § 1.448–1T, paragraph 

(b)(1)(iii) is revised to read as follows:

§ 1.448–1T Limitation on the use of the 

cash receipts and disbursements method of 

accounting (temporary).

* * * * *

(b) * * * 

(1) * * * 

(iii) Tax shelter within the meaning of 

section 6662(d)(2)(C).

* * * * *

§§ 1.6661–1 through 1.6661–6 [Removed]

■ Par. 3. Sections 1.6661–1 through 

1.6661–6 are removed.

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 removing the entries for 

‘‘1.6661–3’’ and ‘‘1.6661–4’’ from the 

table.

Approved: December 9, 2004. 

Mark Matthews, 

Deputy Commissioner for Services and 

Enforcement. 

Gregory Jenner, 

Acting Assistant Secretary of the Treasury 

(Tax Policy).

[FR Doc. 05–200 Filed 1–4–05; 8:45 am] 

BILLING CODE 4830–01–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service 

26 CFR Part 301 

[TD 9173] 

RIN 1545–BB22 

Authority To Charge Fees for 

Furnishing Copies of Exempt 

Organizations’ Material Open to Public 

Inspection

AGENCY: Internal Revenue Service (IRS), 

Treasury.

ACTION: Final regulations.

SUMMARY: These final regulations adopt 

as final without change the temporary 

regulations published in the Federal 

Register on July 9, 2003, which 

amended the then-existing regulations 

regarding fees for copies of exempt 

organizations’ material the IRS must 

make available to the public under 

section 6104 of the Internal Revenue 

Code (Code). These final regulations 

also adopt as final without change the 

conforming amendment included in the 

temporary regulations concerning the 

fees that an exempt organization may 

charge for furnishing copies of such 

material when required to do so.

DATES: These final regulations are 

effective January 5, 2005.

FOR FURTHER INFORMATION CONTACT:

Sarah Tate, 202–622–4560 (not a tollfree number).

SUPPLEMENTARY INFORMATION: 

Background 

The temporary regulations published 

at 68 FR 40768, July 9, 2003, amended 

the then-existing regulations to make 

clear that any fee assessed by the IRS for

Federal Register / Vol. 70, No. 3 / Wednesday, January 5, 2005 / Rules and Regulations 705

furnishing copies of documents required 

to be made publicly available under 

section 6104 of the Code shall be no 

more than the fee under the IRS’

Freedom of Information Act (FOIA) fee 

schedule. Those temporary regulations 

also amended the then-existing 

regulations to make clear that that an 

exempt organization may charge the 

applicable per-page copying fee under 

the IRS’ FOIA fee schedule for any 

number of pages, without regard to the 

fee exclusion applicable to the IRS for 

the first 100 pages. 

The IRS simultaneously published a 

notice of proposed rulemaking at 68 FR 

40849, July 9, 2003, with a crossreference to the text of the temporary 

regulations. The notice of proposed 

rulemaking invited public comment on 

the temporary regulations. The IRS has 

not received any public comments or 

any request for a public hearing. The 

IRS has not identified any reason that 

the text of the temporary regulations 

should be altered. The text of the 

temporary rule, now adopted as final, is 

identical to the text of that proposed 

rule. 

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 

has also been determined that section 

553(b) of the Administrative Procedure 

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

to these final regulations, and because 

these final 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 (SBA) for comment on 

their impact on small businesses. 

Drafting Information 

The principal author of these final 

regulations is Sarah Tate, Office of the 

Associate Chief Counsel (Procedure and 

Administration), Disclosure and Privacy 

Law Division. However, other personnel 

from the IRS and Treasury Department 

participated in their development.

PART 301—PROCEDURE AND 

ADMINISTRATION

■ Accordingly, the IRS and the 

Department of the Treasury adopt as 

final without change the temporary 

regulations, amending 26 CFR part 301, 

which were published July 9, 2003.

Approved: December 28, 2004. 

Mark E. Matthews, 

Deputy Commissioner for Services and 

Enforcement. 

Eric Solomon, 

Acting Deputy Assistant Secretary of the 

Treasury.

[FR Doc. 05–199 Filed 1–4–05; 8:45 am] 

BILLING CODE 4830–01–P

POSTAL SERVICE

39 CFR Part 501

Authorization to Manufacturer and 

Distribute Postage Meters

AGENCY: Postal Service.

ACTION: Final rule.

SUMMARY: This rule clarifies and 

enhances cautionary label markings 

required by Postal Service regulation to 

be placed on all postage meters to 

provide meter users with basic 

reminders on leasing, meter movement, 

and misuse. It also removes the obsolete 

requirement for the placement of a 

barcode label containing representation 

of meter serial numbers. 

The meter manufacturer must 

promptly develop and implement a plan 

to change out the labels on existing 

meters leased or rented, including 

rebuilding, manufacturing, servicing, 

and inspection programs to expedite 

application of the new label. These 

plans must be approved by the Postage 

Technology Management office.

DATES: This rule is effective January 5, 

2005.

FOR FURTHER INFORMATION CONTACT:

Wayne Wilkerson, manager of Postage 

Technology Management, at 1735 N. 

Lynn Street, Rosslyn, VA 22209 or by 

telephone at 703–292–3691 or fax at 

703–292–4073.

SUPPLEMENTARY INFORMATION: Title 39, 

Code of Federal Regulations (CFR) Part 

501.23, Distribution Controls, section (r) 

requires postage meter manufacturers to 

affix a cautionary label to all postage 

meters to provide meter users with basic 

reminders on leasing, meter movement, 

and misuse. Further, section (r)(1) 

illustrates specific markings to be 

placed on cautionary labels. Experience 

with inadvertent use of the U.S. Postal 

Inspection Service telephone number to 

obtain general information has led to the 

need to clarify the label in order to 

emphasize manufacturer information 

and enhance direction to the customer. 

Section (2) currently requires a barcode 

label that is no longer relevant as a 

Postal Service requirement because of 

technology advances. The Postal Service 

has determined to remove the barcode 

label as an explicit requirement and 

leave it to the manufacturers’ discretion 

depending on independent use of the 

barcode label.

List of Subjects in 39 CFR Part 501

Administrative practice and 

procedure, Postal Service.

The Amendment

■ For the reasons set out in this 

document, the Postal Service is 

amending 39 CFR part 501 as follows:

PART 501—AUTHORIZATION TO 

MANUFACTURE AND DISTRIBUTE 

POSTAGE METERS

■ 1. The authority citation for Part 501 

continues to read as follows:

Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 

401, 403, 404, 410, 2601, 2605; Inspector 

General Act of 1978, as amended (Pub. L. 

95’452, as amended); 5 U.S.C. App. 3.

■ 2. Revise § 501.23(r) to read as follows:

§ 501.23 Distribution controls.

* * * * *

(r) Affix to all meters a cautionary 

label providing the meter user with 

basic reminders on leasing and meter 

movement. 

(1) The cautionary label must be 

placed on all meters in a conspicuous 

and highly visible location. 

‘‘PROPERTY OF [NAME OF 

MANUFACTURER]’’ as well as the 

manufacturer’s toll-free number must be 

emphasized by capitalized bold type 

and preferably printed in red. The 

minimum width of the label should be 

3.25 inches, and the minimum height 

should be 1.75 inches. The label should 

read as follows:

RENTED POSTAGE METER—NOT FOR 

SALE 

PROPERTY OF [NAME OF 

MANUFACTURER] 

(800) ###-#### 

Use of this meter is permissible only under 

U.S. Postal Service authorization. Call [Name 

of Manufacturer] at (800) ###- #### to 

relocate/return this meter. 

WARNING! METER TAMPERING IS A 

FEDERAL OFFENSE. 

IF YOU SUSPECT METER TAMPERING, 

CALL POSTAL INSPECTORS AT 1–800–

372–8347

REWARD UP TO $50,000 for information 

leading to the conviction of any person who 

misuses postage meters resulting in the 

Postal Service not receiving correct postage 

payments.

(2) Exceptions to the formatting of 

required labeling are determined on a 

case-by-case basis. Any deviation from 

standardized meter labeling