This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

52218 

Vol. 73, No. 175 

Tuesday, September 9, 2008 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–142333–07] 

RIN 1545–BH28 

Implementation of Form 990 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of proposed rulemaking 

by cross-reference to temporary 

regulations. 

SUMMARY: In the Rules and Regulations 

section of this issue of the Federal 

Register, the IRS and the Treasury 

Department are issuing temporary 

regulations necessary to implement the 

redesigned Form 990, ‘‘Return of 

Organization Exempt From Income 

Tax.’’ The temporary regulations make 

revisions to the regulations under 

section 6033 and section 6043 to allow 

for new threshold amounts for reporting 

compensation, to require that 

compensation be reported on a calendar 

year basis, and to modify the scope of 

organizations subject to information 

reporting requirements upon a 

substantial contraction. The temporary 

regulations also eliminate the advance 

ruling process for new organizations, 

change the public support computation 

period for organizations described in 

sections 170(b)(1)(A)(vi) and 509(a)(1) 

and in section 509(a)(2) to five years, 

consistent with the revised Form 990, 

and clarify that support must be 

reported using the organization’s overall 

method of accounting. All tax exempt 

organizations required under section 

6033 of the Internal Revenue Code 

(Code) to file annual information returns 

are affected by the temporary 

regulations. The text of the temporary 

regulations also serves as the text of 

these proposed regulations. 

DATES: Written or electronic comments 

and requests for a public hearing must 

be received by November 10, 2008. 

ADDRESSES: Send submissions to: 

CC:PA:LPD:PR (REG–142333–07), Room 

5203, Internal Revenue Service, P.O. 

Box 7604, Ben Franklin Station, 

Washington, DC 20044. Submissions 

may be hand-delivered Monday through 

Friday between the hours of 8 a.m. and 

4 p.m. to: CC:PA:LPD:PR (REG–142333– 

07), Courier’s Desk, Internal Revenue 

Service, 1111 Constitution Avenue, 

NW., Washington, DC, or sent 

electronically, via the Federal 

eRulemaking Portal at http:// 

www.regulations.gov (IRS REG–142333– 

07). 

FOR FURTHER INFORMATION CONTACT: 

Concerning the proposed regulations, 

Terri Harris, at (202) 622–6070; 

concerning submissions of comments or 

requests for a hearing, Oluwafunmilayo 

Taylor, at (202) 622–3401 (not toll-free 

numbers). 

SUPPLEMENTARY INFORMATION: 

Paperwork Reduction Act 

The collection of information 

contained in this notice of proposed 

rulemaking has been reviewed and 

approved by the Office of Management 

and Budget in accordance with the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3507(d)) under control number 

1545–2117. Comments on the collection 

of information should be sent to the 

Office of Management and Budget, Attn: 

Desk Officer for the Department of the 

Treasury, Office of Information and 

Regulatory Affairs, Washington, DC 

20503, with copies to the Internal 

Revenue Service, Attn: IRS Reports 

Clearance Officer, SE:W:CAR: 

MP:T:T:SP, Washington, DC 20224. 

Comments on the collection of 

information should be received by 

November 10, 2008. Comments are 

specifically requested concerning: 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

Internal Revenue Service, including 

whether the information will have 

practical utility; 

The accuracy of the estimated burden 

associated with the proposed collection 

of information; 

How the quality, utility and clarity of 

the information to be collected may be 

enhanced; 

How the burden of complying with 

the proposed collection of information 

may be minimized, including through 

the application of automated collection 

techniques or other forms of information 

technology; and 

Estimates of capital or start-up costs 

and costs of operation, maintenance and 

purchase of service to provide 

information. 

The collection of information in this 

proposed regulation is in § 1.6033–2T. 

The information collected under 

§ 1.6033–2T relates to compensation 

reporting by tax exempt organizations. 

The information that is required to be 

collected for purposes of § 1.6033–2T is 

required to be submitted on Form 990, 

‘‘Return of Organization Exempt From 

Income Tax.’’ The estimated number of 

recordkeepers that will submit Form 

990 is approximately 105,000. 

Estimated total annual reporting 

burden: One hour. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a valid control 

number assigned by the Office of 

Management and Budget. 

Books or 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 and Explanation of 

Provision 

Temporary regulations in the Rules 

and Regulations section of this issue of 

the Federal Register amend the Income 

Tax Regulations (26 CFR part 1) relating 

to sections 170(b), 507, 509(a), 6033, 

and 6043. The amendments to 

§§ 1.170A–9, 1.507–2 and 1.509(a)–3 

eliminate the advance ruling process, 

clarify that support must be reported 

using the organization’s overall method 

of accounting, eliminate the exception 

for material changes in sources of 

support, and change the public support 

computation period for organizations 

described in sections 170(b)(1)(A)(vi) 

and 509(a)(1) and in section 509(a)(2) to 

five years, consistent with the revised 

Schedule A to the redesigned Form 990, 

‘‘Return of Organization Exempt From 

Income Tax.’’ The amendments to 

§§ 1.6033–2(a)(2)(ii)(g) and (h) allow for 

new threshold amounts for reporting 

compensation and require that 

organizations use a calendar year basis 

or a basis that is prescribed by 

publication, form or instruction when 


yshivers on PROD1PC62 with PROPOSALS
Federal Register / Vol. 73, No. 175 / Tuesday, September 9, 2008 / Proposed Rules 52219 

reporting listed officer, director, trustee, 

key employee and independent 

contractor compensation. The 

amendments to §§ 1.6043–3(b)(8) and 

(d) expand the scope of organizations 

subject to information reporting 

requirements upon a substantial 

contraction. The text of those temporary 

regulations also serves as the text of 

these proposed regulations. The 

preamble to the temporary regulations 

explains the temporary regulations and 

these proposed regulations. 

Special Analyses 

It has been determined that this notice 

of proposed rulemaking 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. 

It is hereby certified that the collection 

of information in this regulation will not 

have a significant economic impact on 

a substantial number of small entities. 

This certification is based on the fact 

that burden on tax-exempt entities will 

be reduced by (1) eliminating the 

separate advance ruling process and the 

additional process for subsequently 

seeking a definitive ruling, (2) clarifying 

rules regarding the method of 

accounting and period for reporting 

certain items, and (3) providing 

discretion for the IRS to narrow or 

clarify circumstances under which 

reporting is required. Accordingly, a 

Regulatory Flexibility Analysis under 

the Regulatory Flexibility Act (5 U.S.C. 

chapter 6) is not required. Pursuant to 

section 7805(f) of the Code, these 

regulations have been submitted to the 

Chief Counsel for Advocacy of the Small 

Business Administration for comment 

on their impact on small business. 

Comments and Requests for Public 

Hearing 

Before these proposed regulations are 

adopted as final regulations, 

consideration will be given to any 

written comments (a signed original and 

eight (8) copies) or electronic comments 

that are submitted timely to the IRS. 

Comments are requested on all aspects 

of the proposed regulations. The IRS 

and the Treasury Department request 

comments on the clarity of the proposed 

rules and how they can be made easier 

to understand. All comments will be 

available for public inspection and 

copying. 

A public hearing will be scheduled if 

requested in writing by any person that 

timely submits written comments. If a 

public hearing is scheduled, notice of 

the date, time, and place for the public 

hearing will be published in the Federal 

Register. 

Drafting Information 

The principal author of this regulation 

is Terri Harris of the Office of Division 

Counsel/Associate Chief Counsel (Tax 

Exempt and Government Entities). 

However, other personnel from the IRS 

and the Treasury Department 

participated in their development. 

List of Subjects for 26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

Proposed Amendments to the 

Regulations 

Accordingly, 26 CFR part 1 is 

proposed to be 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. Section 1.170A–9 is amended 

by revising paragraphs (f) and (k) to read 

as follows: 

§ 1.170A–9 Definition of section 

170(b)(1)(A) organization. 

* * * * * 

(f) [The text of this proposed 

amendment to § 1.170A–9(f) is the same 

as the text of § 1.170A–9T(f) published 

elsewhere in this issue of the Federal 

Register.] 

* * * * * 

(k) [The text of this proposed 

amendment to § 1.170A–9(k) is the same 

as the text of § 1.170A–9T(k)(1) and 

(k)(2) published elsewhere in this issue 

of the Federal Register.] 

Par. 3. Section 1.507–2 is revised to 

read as follows: 

§ 1.507–2 Special rules; transfer to, or 

operation as, public charity. 

[The text of this proposed amendment 

to § 1.507–2 is the same as the text of 

§ 1.507–2T(a) through (f)(2) published 

elsewhere in this issue of the Federal 

Register.] 

Par. 4. Section 1.509(a)–3 is amended 

by revising paragraphs (a)(2), (a)(3)(i), 

(c), (d), (e), (k), and (n) and adding 

paragraph (o) to read as follows: 

§ 1.509(a)–3 Broadly, publicly supported 

organizations. 

(a) * * * 

(2) [The text of this proposed 

amendment to § 1.509(a)–3(a)(2) is the 

same as the text of § 1.509(a)–3T(a)(2) 

published elsewhere in this issue of the 

Federal Register.] 

(3) * * * 

(i) [The text of this proposed 

amendment to § 1.509(a)–3(a)(3)(i) is the 

same as the text of § 1.509(a)–3T(a)(3)(i) 

published elsewhere in this issue of the 

Federal Register.] 

* * * * * 

(c) [The text of this proposed 

amendment to § 1.509(a)–3(c) is the 

same as the text of § 1.509(a)–3T(c) 

published elsewhere in this issue of the 

Federal Register.] 

(d) [The text of this proposed 

amendment to § 1.509(a)–3(d) is the 

same as the text of § 1.509(a)–3T(d) 

published elsewhere in this issue of the 

Federal Register.] 

(e) [The text of this proposed 

amendment to § 1.509(a)–3(e) is the 

same as the text of § 1.509(a)–3T(e) 

published elsewhere in this issue of the 

Federal Register.] 

* * * * * 

(k) [The text of this proposed 

amendment to § 1.509(a)–3(k) is the 

same as the text of § 1.509(a)–3T(k) 

published elsewhere in this issue of the 

Federal Register.] 

* * * * * 

(n) [The text of this proposed 

amendment to § 1.509(a)–3(n) is the 

same as the text of § 1.509(a)–3T(n) 

published elsewhere in this issue of the 

Federal Register.] 

(o) [The text of this proposed 

§ 1.509(a)–3(o) is the same as the text of 

§ 1.509(a)–3T(o)(1) and (o)(2) published 

elsewhere in this issue of the Federal 

Register.] 

Par. 5. Section 1.6033–2 is amended 

by revising paragraphs (a)(2)(ii)(g), 

(a)(2)(ii)(h) and (k) to read as follows: 

§ 1.6033–2 Returns by exempt 

organizations (taxable years beginning after 

December 31, 1969) and returns by certain 

nonexempt organizations (taxable years 

beginning after December 31, 1980). 

(a) * * * 

(2) * * * 

(ii) * * * 

(g) [The text of this proposed 

amendment to § 1.6033–2(a)(2)(ii)(g) is 

the same as the text of § 1.6033–

2T(a)(2)(ii)(g) published elsewhere in 

this issue of the Federal Register.] 

(h) [The text of this proposed 

amendment to § 1.6033–2(a)(2)(ii)(h) is 

the same as the text of § 1.6033–

2T(a)(2)(ii)(h) published elsewhere in 

this issue of the Federal Register.] 

* * * * * 

(k) [The text of this proposed 

amendment to § 1.6033–2(k) is the same 

as the text of § 1.6033–2T(k)(1) and 

(k)(2) published elsewhere in this issue 

of the Federal Register.] 

Par. 6. Section 1.6043–3 is amended 

by revising paragraphs (b)(8) and (d) and 

adding paragraph (e) to read as follows: 


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52220 Federal Register / Vol. 73, No. 175 / Tuesday, September 9, 2008 / Proposed Rules 

§ 1.6043–3 Returns regarding liquidation, 

dissolution, termination, or substantial 

contraction of organizations exempt from 

taxation under section 501(a). 

* * * * * 

(b) * * * 

(8) [The text of this proposed 

amendment to § 1.6043–3(b)(8) is the 

same as the text of § 1.6043–3T(b)(8) 

published elsewhere in this issue of the 

Federal Register.] 

* * * * * 

(d) [The text of this proposed 

amendment to § 1.6043–3(d) is the same 

as the text of § 1.6043–3T(d) published 

elsewhere in this issue of the Federal 

Register.] 

(e) [The text of this proposed 

amendment to § 1.6043–3(e) is the same 

as the text of § 1.6043–3T(e)(1) and 

(e)(2) published elsewhere in this issue 

of the Federal Register.] 

Linda E. Stiff, 

Deputy Commissioner for Services and 

Enforcement. 

[FR Doc. E8–20556 Filed 9–8–08; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–128841–07] 

RIN 1545–BG91 

Public Approval Guidance for TaxExempt Bonds 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of proposed rulemaking 

and notice of public hearing. 

SUMMARY: This document contains 

proposed regulations on the public 

approval requirements under section 

147(f) of the Internal Revenue Code 

(Code) applicable to tax-exempt private 

activity bonds issued by State and local 

governments. The proposed regulations 

affect State and local governmental 

issuers of tax-exempt private activity 

bonds. This document also provides 

notice of a public hearing on these 

proposed regulations. 

DATES: Written or electronic comments 

must be received by December 8, 2008. 

Outlines of topic to be discussed at the 

public hearing scheduled for January 26, 

2009, at 10 a.m., must be received by 

December 29, 2008. 

ADDRESSES: Send submissions to 

CC:PA:LPD:PR (REG–128841–07), room 

5203, Internal Revenue Service, P.O. 

Box 7604, Ben Franklin Station, 

Washington, DC 20044. Submissions 

may be hand-delivered Monday through 

Friday between the hours of 8 a.m. and 

4 p.m. to CC:PA:LPD:PR (REG–128841–

07), Courier’s Desk, Internal Revenue 

Service, 1111 Constitution Avenue, 

NW., Washington, DC or sent 

electronically, via the Federal 

eRulemaking Portal at 

www.regulations.gov (IRS REG–128841–

07). The public hearing will be held in 

the auditorium beginning at 10 a.m. at 

the Internal Revenue Building, 1111 

Constitution Avenue, NW., Washington, 

DC. 

FOR FURTHER INFORMATION CONTACT: 

Concerning the proposed regulations, 

David White, (202) 622–3980; 

concerning submissions of comments 

and the hearing, contact Fumni Taylor 

at (202) 622–7180 (not toll-free 

numbers). 

SUPPLEMENTARY INFORMATION: 

Paperwork Reduction Act 

The collection of information 

contained in the proposed regulations 

has been submitted to the Office of 

Management and Budget in accordance 

with the Paperwork Reduction Act of 

1995 (44 U.S.C. 3507(d)). Comments on 

the collection of information should be 

sent to the Office of Management and 

Budget, Attn: Desk Officer for the 

Department of the Treasury, Office of 

Information and Regulatory Affairs, 

Washington, DC 20503, with copies to 

the Internal Revenue Service, Attn: IRS 

Reports Clearance Officer, 

SE:W:CAR:MP:T:T:SP, Washington, DC 

20224. Comments on the collection of 

information should be received by 

November 10, 2008. Comments are 

specifically requested concerning: 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the IRS, 

including whether the information will 

have practical utility; 

The accuracy of the estimated burden 

associated with the proposed collection 

of information; 

How the quality, utility, and clarity of 

the information to be collected may be 

enhanced; 

How the burden of complying with 

the proposed collection of information 

may be minimized, including through 

the application of automated collection 

techniques or other forms of information 

technology; and 

Estimates of capital or start-up costs 

and costs of operation, maintenance, 

and purchase of services to provide 

information. 

The collection of information in this 

proposed regulation is in § 1.147(f)–1(b). 

This information is required to meet the 

public approval requirement under 

section 147(f). The likely respondents 

are issuers of qualified private activity 

bonds. 

Estimated total annual reporting 

burden: 2,600 hours. 

Estimated average annual burden per 

respondent: 1.3 hours. 

Estimated number of respondents: 

2,000. 

Estimated frequency of responses: Not 

applicable (this is a third-party 

disclosure requirement). 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a valid control 

number assigned by the Office of 

Management and Budget. 

Books or 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 proposed 

amendments to the Income Tax 

Regulations (26 CFR part 1) to add new 

§ 1.147(f)–1 (the ‘‘Proposed 

Regulations’’) relating to the public 

approval requirement for tax-exempt 

private activity bonds under section 

147(f) of the Internal Revenue Code. 

Explanation of Provisions 

I. Introduction 

In general, interest on State and local 

bonds is excludable from gross income 

under section 103 of the Internal 

Revenue Code of 1986 (the ‘‘Code’’). 

Interest on a private activity bond is 

excludable from gross income under 

section 103 only if the bond meets the 

requirements for a ‘‘qualified bond’’

under section 141(e) and other 

applicable requirements under section 

103. Section 141(e) requires that a bond 

meet the public approval requirement of 

section 147(f), among other 

requirements, to be a qualified bond. 

II. Statutory Predecessor and Existing 

Regulations 

The predecessor to section 147(f) was 

section 103(k) of the Internal Revenue 

Code of 1954 (‘‘1954 Code’’), which was 

added by the Tax Equity and Fiscal 

Responsibility Act of 1982, Public Law 

97–248, 96 Stat. 324 (1982). Section 

103(k) of the 1954 Code imposed a 

public approval requirement on 

industrial development bonds. 

Temporary Income Tax Regulations 

§ 5f.103–2 were published under section 


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