Part I. Rulings — Internal Revenue Bulletin 2001-13

The provisions of § 165(i) apply only to losses that are otherwise deductible under § 165(a). An individual taxpayer may deduct losses if they are incurred in a trade or business, if they are incurred in a transaction entered into for profit, or if they are casualty losses under § 165(c)(3).

The President has determined that during 2000 the areas listed below have been adversely affected by disasters of sufficient severity and magnitude to warrant assistance by the Federal Government under the Act.

FURTHER INFORMATION

For further information regarding this revenue ruling, contact Martin Scully Jr. at (202) 622-4960 (not a toll-free call).

Section 165.—Losses

26 CFR 1.165–11: Election in respect of losses attributable to a disaster.

Election in respect of losses attributable to a disaster. This ruling lists the areas declared by the President to qualify as major disaster or emergency areas during 2000 under the Disaster Relief and Emergency Assistance Act.

Rev. Rul. 2001–15

Under § 165(i) of the Internal Revenue Code, if a taxpayer suffers a loss attributable to a disaster occurring in an area subsequently determined by the President of the United States to warrant assistance by the Federal Government under the Disaster Relief and Emergency Assistance Act, 42 U.S.C. §§ 5121–5204c (1988 & Supp. V 1993) (the Act), the taxpayer may elect

to claim a deduction for that loss on the taxpayer’s federal income tax return for the taxable year immediately preceding the taxable year in which the disaster occurred. For purposes of § 165(i), a disaster includes an event declared a major disaster or an emergency under the Act.

Section 1.165–11(e) of the Income Tax Regulations provides that the election to deduct a disaster loss for the preceding year must be made by filing a return, an amended return, or a claim for refund on or before the later of (1) the due date of the taxpayer’s income tax return (determined without regard to any extension of time to file the return) for the taxable year in which the disaster actually occurred, or (2) the due date of the taxpayer’s income tax return (determined with regard to any extension of time to file the return) for the taxable year immediately preceding the taxable year in which the disaster actually occurred.

Disaster Area Disaster Description Disaster Date

Alabama

Counties of DeKalb, Cherokee, and Jackson FEMA-1317-DR January 20 - 29 Severe winter storm

Counties of Jefferson and Tuscaloosa FEMA-1322-DR March 10 - 11 Severe storms and flooding

Counties of Cherokee, Dale, Etowah, Geneva, Henry, FEMA-1352-DR December 16 - 22 Houston, Jefferson, Limestone, Macon, St. Clair, Severe storms and tornadoes and Tuscaloosa

Alaska

Municipality of Anchorage; Boroughs of Aleutians East, FEMA-1316-DR December 21, 1999Bristol Bay, Denali, Fairbanks North Star, Severe winter storms February 23, 2000 Kenai Peninsula, Kodia Island, Lake and Peninsula, and avalanches and Matanaska-Susitna; and Census Areas of Bethel, Dillingham, Southeast Fairbanks, Valdez-Cordova, and Wade Hampton

Arizona

Counties of Cochise, La Paz, Maricopa, Pinal, Santa Cruz, FEMA-1347-DR October 21 - November 8 and Yavapai Severe storms and flooding

Arkansas

Counties of Arkansas, Benton, Bradley, Calhoun, Clark, FEMA-3159-EM December 12 Cleveland, Columbia, Crawford, Crittenden, Cross, Dallas, Severe winter ice storm January 8, 2001 Desha, Drew, Faulkner, Franklin, Garland, Grant, Hempstead, Hot Spring, Howard, Jackson, Jefferson, Johnson, Lafayette, Lee, Lincoln, Little River, Logan, Lonoke, Madison, Miller, Mississippi, Monroe, Montgomery, Nevada, Ouachita, Perry, Pike, Polk,

March 26, 2001 922 2001–13 I.R.B.

Disaster Area Disaster Description Disaster Date

Poinsett, Prairie, Pulaski, St. Francis, Saline, Scott, Sebastian, Sevier, Washington, White, Woodruff, Union, and Yell

Counties of Arkansas, Baxter, Benton, Boone, FEMA-1354-DR December 12 Bradley, Calhoun, Clark, Cleburne, Cleveland, Severe winter ice storm January 8, 2001 Columbia, Conway, Crawford, Crittenden, Cross, Dallas, Desha, Drew, Faulkner, Franklin, Fulton, Garland, Grant, Hempstead, Hot Spring, Howard, Independence, Izard, Jackson, Jefferson, Johnson, Lafayette, Lee, Lincoln, Little River, Logan, Lonoke, Madison, Marion, Miller, Mississippi, Monroe, Montgomery, Nevada, Newton, Ouachita, Perry, Pike, Polk, Poinsett, Pope, Prairie, Pulaski, St. Francis, Saline, Scott, Searcy, Sebastian, Sevier, Sharp, Stone, Union, Van Buren, Washington, White, Woodroof, and Yell

California

Napa County FEMA-1342-DR September 3 Earthquake

District of Columbia

District of Columbia FEMA-1325-DR January 25 - 31 Severe winter storm

District of Columbia FEMA-1338-DR August 7 Severe thunderstorms

Florida

Counties of Bay, Calhoun, Escambia, Franklin, FEMA-1344-DR September 21 Gulf, Jefferson, Leon, Okaloosa, and Walkulla Tropical Storm Helene October 4

Counties of Broward, Collier, Miami-Dade, and Monroe FEMA-1345-DR October 3 - 11 Severe storms and flooding

Georgia

Counties of Banks, Barrow, Bartow, Butts, Carroll, FEMA-1311-DR January 22-February 1 Catossa, Chattooga, Cherokee, Clarke, Cobb, Severe winter storm Dawson, DeKalb, Douglas, Elbert, Fannin, Floyd, Forsyth, Franklin, Fulton, Gilmer, Gordon, Greene, Gwinnett, Habersham, Hall, Hart, Haralson, Henry, Jackson, Jasper, Jones, Lamar, Lumpkin, Monroe, Newton, Oconee, Oglethorpe, Paulding, Pickens, Pike, Rabun, Rockdale, Spalding, Stephens, Taliaferro, Union, Upson, Walker, Walton, White, and Wilkes

Counties of Colquitt, Decatur, Grady, Mitchell, FEMA-1315-DR February 14 Tift, and Turner Severe storms and tornadoes

Hawaii

Hawaii County FEMA-1348-DR October 28 - November 2 Severe storms and flooding

2001–13 I.R.B. 923 March 26, 2001

Disaster Area Disaster Description Disaster Date

Idaho

Counties of Ada, Bannock, Bingham, Blaine, Boise, FEMA-1341-DR July 27-September 26 Clearwater, Custer, Elmore, Idaho, Jerome, Lemhi, Wildfires Lewis, Lincoln, Power, and Valley; and the Fort Hall Indian Reservation

Illinois

Counties of Bureau, Cook, DeWitt, DuPage, Ford, FEMA-3161-EM December 10 - 31 Fulton, Grundy, Henderson, Henry, Iroquois, Kane, Record/near record snow Kankakee, Kendall, Lake, La Salle, Livingston, Marshall, McDonough, McHenry, McLean, Menard, Ogle, Peoria, Stark, Will, and Winnebago

Indiana

Counties of Allen, Carroll, Cass, Elkhart, Fulton, Howard, FEMA-3162-EM December 11 - 31 Huntington, Jasper, Kosciusko, Lagrange, Lake, Miami, Record/near record snow Noble, Pulaski, St. Joseph, Steuben, White, and Whitley

Kansas

Counties of Crawford, Labette, and Neosho FEMA-1327-DR April 19 - 20 Severe storms and tornadoes

Kentucky

Counties of Ballard, Breckinridge, Carlisle, Crittenden, FEMA-1310-DR January 3 - 4 Daviess, Hancock, Henderson, Hopkins, Livingston, Tornadoes, severe storms, Spencer, and Webster torrential rains and flash flooding

Counties of Bath, Bourbon, Boyd, Carter, Fleming, FEMA-1320-DR February 18-March 2 Greenup, Harrison, Johnson, Lawrence, Lewis, Mason, Severe storms and flooding Nicholas, Oldham, Pendleton, Robertson, and Rowan

Louisiana

Parishes of Bienville, Claiborne, Lincoln, Ouachita, FEMA-1314-DR January 27 - 30 Richland, Union, Webster, and West Carroll Severe winter storm

Parishes of Bienville, Bossier, Caddo, Claiborne, FEMA-1357-DR December 11 Lincoln, Ouachita, Union and Webster Severe winter ice storm January 3, 2001

Maine

Counties of Androscoggin, Aroostock, Franklin, FEMA-1326-DR March 28-April 26 Kennebec, Oxford, Piscataquis, Somerset, and Washington Severe storms, flooding, and ice jams

Maryland

Baltimore City; and Counties of Anne Arundel, FEMA-1324-DR January 25 - 30 Baltimore, Calvert, Caroline, Charles, Dorchester, Severe winter storm Frederick, Howard, Kent, Montgomery, Prince Georges, Queen Anne’s, St. Mary’s, and Talbot

Michigan

Counties of Oakland and Wayne FEMA-1346-DR September 10 - 11 Severe storms and flooding

March 26, 2001 924 2001–13 I.R.B.

Disaster Area Disaster Description Disaster Date

Minnesota

Counties of Becker, Chippewa, Clay, Clearwater, FEMA-1333-DR May 17- July 26 Dakota, Dodge, Faribault, Fillmore, Freeborn, Severe storms, flooding, Houston, Mahnomen, Mower, Norman, Ramsey, and tornadoes Roseau, Winona, and Yellow Medicine; and the White Earth Indian Reservation

Missouri

Counties of Crawford, Franklin, Gasconade, FEMA-1328-DR May 6 - 7 Jefferson, St. Charles, Ste. Genevieve, St. Francois, Severe thunderstorms St. Louis County, Warren, and Washington and flash flooding

Montana

Counties of Beaverhead, Big Horn, Blaine, FEMA-1340-DR July 13-September 25 Broadwater, Carbon, Carter, Cascade, Chouteau, Wildfires Custer, Deer Lodge, Fallon, Fergus, Flathead, Gallatin, Garfield, Glacier, Golden Valley, Granite, Hill, Jefferson, Judith Basin, Lake, Lewis and Clark, Liberty, Lincoln, Madison, Meagher, Mineral, Missoula, Musselshell, Park, Petroleum, Phillips, Pondera, Powder River, Powell, Prairie, Ravalli, Rosebud, Sanders, Silver Bow, Stillwater, Sweet Grass, Teton, Toole, Treasure, Wheatland, and Yellowstone; and Indian Reservations of the Blackfeet, Crow, Flathead, Fort Belknap, Northern Cheyenne, and Rocky Boy’s

Counties of Carter, Fallon, Richland, Roosevelt, FEMA-1350-DR October 31 - November 20 Sheridan, and Wibaux Severe winter storms

New Jersey

Counties of Morris and Sussex FEMA-1337-DR August 12 - 21 Severe storms, flooding and mudslides

Counties of Atlantic, Bergen, Burlington, Camden, FEMA-3156-EM May 30 - November 1 Cape May, Cumberland, Essex, Gloucester, Hudson, West Nile Virus Hunterdon, Mercer, Middlesex, Monmouth, Morries, Ocean, Passaic, Salem, Somerset, Sussex, Union, and Warren

New Mexico

Counties of Bernalillo, Catron, Chaves, Cibola, FEMA-3154-EM May 5 - July 7 Colfax, Curry, BeBaca, Dona Ana, Eddy, Grant, Severe fire threats Guadalupe, Harding, Hidalgo, Lea, Lincoln, Los Alamos, Luna, McKinley, Mora, Otero, Quay, Rio Arriba, Roosevelt, San Juan, San Miguel, Sandoval, Sante Fe, Sierra, Socorro, Taos, Torrance, Union, and Valencia.

Counties of Bernalillo, Chaves, Cibola, DeBaca, FEMA-1329-DR May 5 - June 9 Dona Ana, Eddy, Guadalupe, Lincoln, Los Alamos, Severe forest fire McKinley, Mora, Otero, Rio Arriba, Sandoval, San Juan, San Miguel, Santa Fe, Sierra, Socorro, Taos, and Torrance

2001–13 I.R.B. 925 March 26, 2001

Disaster Area Disaster Description Disaster Date

New York

Counties of Albany, Allegany, Cattaraugus, Chenango, FEMA-1335-DR May 3 - August 12 Columbia, Dutchess, Erie, Essex, Greene, Herkimer, Severe storms and flooding Lewis, Livingston, Madison, Montgomery, Niagara, Oneida, Onondaga, Orleans, Otsego, Rensselaer, Schenectady, Schoharie, Steuben, Sullivan, Tioga, Tompkins, Ulster, and Yates

New York City; and Counties of Albany, Allegany, Bronx, FEMA-3155-EM May 22 - November 1 Broome, Cattaraugus, Cayuga, Chautauqua, Chenango, West Nile Virus Chemung, Clinton, Columbia, Cortland, Delaware, Dutchess, Erie, Essex, Franklin, Fulton, Genesee, Greene, Hamilton, Herkimer, Jefferson, Kings, Lewis, Livingston, Madison, Monroe, Montgomery, Nassau, Niagara, Oneida, Onondaga, Ontario, Orange, Orleans, Oswego, Otsego, Putnam, Queens, Rensselaer, Richmond, Rockland, St. Lawrence, Saratoga, Schenectady, Schoharie, Schuyler, Seneca, Steuben, Suffolk, Sullivan, Tioga, Tompkins, Ulster, Warren, Washington, Wayne, Westchester, Wyoming, and Yates

Counties of Cattaraugus, Chautauqua, and Erie FEMA-3157-EM November 19 - 21 Near record snow

North Carolina

Counties of Alamance, Anson, Cabarrus, Caswell, FEMA-1312-DR January 24-February 1 Chatham, Davidson, Durham, Edgecombe, Franklin, Severe winter storm Granville, Guilford, Halifax, Harnett, Hoke, Johnston, Lee, Mecklenburg, Montgomery, Moore, Nash, Northampton, Orange, Person, Randolph, Richmond, Rockingham, Scotland, Stanly, Union, Vance, Wake, Warren, and Wilson

North Dakota

Counties of Barnes, Benson, Bottineau, Burke, Burleigh, FEMA-1334-DR April 5 - August 12 Cass, Cavalier, Dickey, Eddy, Emmons, Foster, Severe storms, flooding and Grand Forks, Griggs, Kidder, LaMoure, Logan, ground saturation McHenry, McIntosh, McLean, Morton, Mountrail, Nelson, Oliver, Pembina, Pierce, Ramsey, Ransom, Renville, Richland, Rolette, Sargent, Sheridan, Steele, Stutsman, Towner, Traill, Walsh, Ward, and Wells; and Indian Reservations of the Spirit Lake Tribal Reservation, the Three Affiliated Tribes, and the Turtle Mountain Band of the Chippewa.

Counties of Benson, Bowman, Cavalier, Divide, FEMA-1353-DR November 1 - 20 Golden Valley, McKenzie, Ramsey, Towner, and Williams Severe winter storms and tornadoes

Ohio

Counties of Adams, Gallia, Jackson, Lawrence, FEMA-1321-DR February 18-March 2 Meigs, Pike, and Scioto Severe storms and flooding

Lucas County FEMA-1339-DR July 29 - August 2 Severe storms and flooding

March 26, 2001 926 2001–13 I.R.B.

Disaster Area Disaster Description Disaster Date

Greene County FEMA-1343-DR September 20 Severe storms and a tornado

Oklahoma

Counties of Adair, Atoka, Bryan, Carter, Cherokee, FEMA-3158-EM December 25 Choctaw, Cleveland, Coal, Cotton, Creek, Garvin, Severe winter and ice storm January 10, 2001 Grady, Haskell, Hughes, Jefferson, Johnston, Latimer, LeFlore, Lincoln, Love, Marshall, McClain, McCurtain, McIntosh, Murray, Muskogee, Okfuskee, Oklahoma, Okmulgee, Pittsburg, Pontotoc, Pottawatomie, Pushmataha, Seminole, Sequoyah, Stephens, Tulsa, Wagoner, and Washington

Counties of Caddo, Carter, Comanche, Cotton, FEMA-1349-DR October 21 - 29 Grady, Jackson, Jefferson, Kiowa, McClain, Severe storms and flooding Oklahoma, and Tillman

Counties of Adair, Atoka, Beckham, Bryan, Caddo, FEMA-1355-DR December 25 Carter, Cherokee, Choctaw, Cleveland, Coal, Severe winter ice storm January 10, 2001 Comanche, Cotton, Craig, Creek, Delaware, Garvin, Grady, Greer, Harmon, Haskell, Hughes, Jackson, Jefferson, Johnston, Latimer, LeFlore, Lincoln, Love, Marshall, Mayes, McClain, McCurtain, McIntosh, Murray, Muskogee, Nowata, Okfuskee, Oklahoma, Okmulgee, Ottawa, Pittsburg, Pontotoc, Pottawatomie, Pushmataha, Rogers Seminole, Sequoyah, Stephens, Tillman, Tulsa, Wagoner, Washington, and Washita

South Carolina

Counties of Abbeville, Aiken, Allendale, Bamberg, FEMA-1313-DR January 22-February 1 Barnwell, Berkley, Calhoun, Clarendon, Charleston, Severe winter storm Collenton, Cherokee, Chester, Chesterfield, Darlington, Dillon, Dorchester, Edgefield, Fairfield, Florence, Georgetown, Greenwood, Kershaw, Lancaster, Laurens, Lee, Lexington, Marion, Marlboro, McCormick, Newberry, Orangeburg, Richland, Saluda, Spartanburg, Sumter, Union, Williamsburg, and York

South Dakota

Counties of Custer, Fall River, Jackson, Pennington, FEMA-1330-DR April 18 - 20 and Shannon Severe winter storm, flooding, landslides, and mudslides

Tennessee

Counties of Anderson, Benton, Cheatham, Davidson, FEMA-1331-DR May 23 - 31 Henry, Hickman, Houston, Jackson, Knox, Lake, Severe storms, tornadoes, Obion, Perry, Pickett, Stewart, Weakley and flooding

Texas

Tarrant County FEMA-1323-DR March 28 - 29 Severe storms, tornadoes, and flooding

2001–13 I.R.B. 927 March 26, 2001

Disaster Area Disaster Description Disaster Date

Counties of Borden, Bowie, Carson, Cass, Cherokee, FEMA-1356-DR December 12 Cooke, Dawson, Delta, Gains, Garza, Gray, Gregg, Severe winter ice storm January 15, 2001 Grayson, Fannin, Franklin, Harrison, Hopkins, Hunt, Lamar, Lynn, Marion, Montague, Morris, Panola, Rains, Red River, Rusk, Smith, Titus, Upshur, and Wood

Vermont

Counties of Addison, Bennington, Orange, Rutland, FEMA-1336-DR July 14 - 18 Windham, and Windsor Severe storms and flooding

Counties of Bennington and Rutland FEMA-1358-DR December 16 - 18 Severe storms and flooding

Virginia

Cities of Alexandria, Colonial Heights, Danville, FEMA-1318-DR January 25 - 30 Emporia, Fairfax, Franklin, Fredericksburg, Hopewell, Severe winter storm Lynchburg, Manassas, Newport News, Norton, Petersburg, Richmond, Suffolk, Williamsburg; and Counties of Accomack, Albermarle, Alleghany, Amelia, Amherst, Appomattox, Arlington, Augusta, Bath, Bedford, Bland, Botetourt, Brunswick, Buchanan, Buckingham, Campbell, Caroline, Carroll, Charles City, Charlotte, Chesterfield, Clarke, Craig, Culpeper, Cumberland, Dickenson, Dinwiddie, Essex, Fairfax, Fauquier, Floyd, Fluvanna, Franklin, Frederick, Giles, Goochland, Grayson, Greene, Greensville, Halifax, Hanover, Henrico, Henry, Highland, Isle of Wight, James City, King George, King William, King and Queen, Lancaster, Lee, Loudon, Louisa, Lunenburg, Madison, Mecklenburg, Middlesex, Montgomery, Nelson, New Kent, Northampton, Northumberland, Nottoway, Orange, Patrick, Pittsylvania, Powhatan, Prince Edward, Prince George, Prince William, Pulaski, Rappahannock, Richmond, Roanoke, Rockbridge, Rockingham, Russell, Scott, Shenandoah, Smyth, Southampton, Spotsylvania, Stafford, Surry, Sussex, Tazewell, Warren, Washington, Westmoreland, Wise, Wythe, and York

West Virginia

Counties of Barbour, Braxton, Cabell, Calhoun, Doddridge, FEMA-1319-DR February 18 - 22 Gilmer, Harrison, Jackson, Kanawha, Lewis, Lincoln, Flooding, severe storms, Marion, Mason, Monongalia, Pocohontas, Preston, Putnam, and landslides Randolph, Ritchie, Roane, Taylor, Tucker, Tyler, Upshur, Wetzel, and Wirt

Wisconsin

Counties of Adams, Ashland, Barron, Burnett, Columbia, FEMA-1332-DR May 26 - July 19 Crawford, Dane, Dodge, Forest, Grant, Green, Iowa, Iron, Severe storms, flooding, Jackson, Juneau, Kenosha, Lafayette, Milwaukee, Monroe, and tornadoes Oneida, Polk, Racine, Richland, Rusk, Sauk, Sawyer, Vernon, Walworth, Waukesha, and Washburn

Counties of Dane, Door, Green, Kenosha, Kewaunee, FEMA-3163-EM December 11 - 31 Manitowoc, Milwaukee, Racine, Rock, Sheboygan, Record/near record snow and Walworth

March 26, 2001 928 2001–13 I.R.B.

Disaster Area Disaster Description Disaster Date

Wyoming

Counties of Crook, Goshen, Platte, and Weston FEMA-1351-DR October 31 Severe winter storms November 20

Section 6041.—Information at Source

26 CFR 1.6041–2T: Return of information as to payments to employees (temporary).

T.D. 8942

DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Parts 1, 31, 301, and 602

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 (REG–107186–00) on this subject on page 973 of this Bulletin. 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.

Section 367.—Foreign Corporations

26 CFR 7.367(c)–1: Section 355 distribution treated as an exchange (temporary).

T.D. 8938

DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 7

Requirements Relating to Certain Exchanges Involving a Foreign Corporation

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Removal of temporary regulations.

SUMMARY: This document removes temporary regulations under section 367(c) that are no longer necessary and, as a result, may be misleading.

DATES: Effective January 12, 2001.

FOR FURTHER INFORMATION CONTACT: Mark D. Harris at (202) 622-3860 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

On December 30, 1977, the IRS and Treasury published in the Federal Regis- ter proposed regulations (42 FR 65204) and temporary regulations (42 FR 65152

[T.D. 7530, 1978–1 C.B. 92]) under section 367(c) of the Internal Revenue Code. The principal purpose of these regulations, §§7.367(c)–1 and 7.367(c)–2, was to distinguish between the treatment of transfers described in section 367(c) before and after the enactment of the Tax Reform Act of 1976 (the Act) (90 Stat. 1634). Before enactment of the Act, transfers described in section 367(c) were

subject to a ruling requirement. After enactment of the Act, transfers described in section 367(c) were within the scope of §§7.367(b)–1 through 7.367(b)–12. In light of the substantial time that has passed since enactment of the Act and, moreover, in light of the fact that §§1.367(b)–1 through 1.367(b)–6 have substantially superceded §§7.367(b)–1 through 7.367(b)–12, §§7.367(c)–1 and 7.367(c)–2 are no longer necessary and may be misleading.

Accordingly, this document removes §§7.367(c)–1 and 7.367(c)–2.

Removal of Temporary Regulations

Accordingly, under the authority of 26 U.S.C. 7805, 26 CFR part 7 is amended as follows:

PART 7—TEMPORARY INCOME TAX REGULATIONS UNDER THE TAX REFORM ACT OF 1976

Paragraph 1. The authority citation for part 7 continues to read in part as follows:

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

§§7.367(c)–1 and 7.367(c)–2

[Amended]

Par. 2. Sections 7.367(c)–1 and 7.367(c)–2 are removed.

Robert E. Wenzel, Deputy Commissioner

of Internal Revenue.

Approved December 28, 2000.

Jonathan Talisman, Acting Assistant Secretary

of the Treasury.

(Filed by the Office of the Federal Register on January 11, 2001, 8:45 a.m., and published in the issue of the Federal Register for January 12, 2001, 66 F.R. 2821)

2001–13 I.R.B. 929 March 26, 2001

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 cross-referencing notice of proposed rulemaking (REG–107186–00).

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

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.

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 e-mail) to furnish state

March 26, 2001 930 2001–13 I.R.B.

ments 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 calen

dar 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.

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:

2001–13 I.R.B. 931 March 26, 2001

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 require- ments . 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 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 para

§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 1.6050–2T 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.

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 e-mail 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 gen- eral . 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

March 26, 2001 932 2001–13 I.R.B.

graph (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 state- ments —(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 for

mat 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 re- quirements . 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):

(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.

(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.

(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.

2001–13 I.R.B. 933 March 26, 2001

(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.

(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.

(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 re- quirements . 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 fur

nisher 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.

(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—

(B) The furnisher will confirm the withdrawal in writing (either electronically or on paper); and

March 26, 2001 934 2001–13 I.R.B.

(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 furnisheremployer).

(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 require- ments . 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 sub

ject 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.

(b) 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) * * *

Robert E. Wenzel, Deputy Commissioner

of Internal Revenue.

Approved January 10, 2001.

Jonathan Talisman, Assistant Secretary of the Treasury.

(Filed by the Office of the Federal Register on February 13, 2001, 8:45 a.m., and published in the issue of the Federal Register for February 14, 2001, 66 F.R. 10191)

2001–13 I.R.B. 935 March 26, 2001

CFR part or section where Current OMB identified and described control No.

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

1.6050S–1T . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1545–1729 1.6050S–2T . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1545–1729

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

month of January 2001 is 5 percent. Accordingly, an overpayment rate of 8 percent (7 percent in the case of a corporation) and an underpayment rate of 8 percent are established for the calendar quarter beginning April 1, 2001. The overpayment rate for the portion of a corporate overpayment exceeding $10,000 for the calendar quarter beginning April 1, 2001, is 5.5 percent. The underpayment rate for large corporate underpayments for the calendar quarter beginning April 1, 2001, is 10 percent. These rates apply to amounts bearing interest during that calendar quarter.

Under § 6621(b)(2)(B), the 9 percent rate that applies to estimated tax underpayments for the first calendar quarter in 2001, as provided in Rev.Rul. 2000–57, 2000–50 I.R.B. 579, also applies to such underpayments for the first 15 days in April 2001.

Interest factors for daily compound interest for annual rates of 5.5 percent, 7 percent, 8 percent, and 10 percent are published in Tables 16, 19, 21, and 25 of Rev. Proc. 95–17, 1995–1 C.B. 556, 570, 573, 575, and 579. Annual interest rates to be compounded daily pursuant to § 6622 that apply for prior periods are set forth in the tables accompanying this revenue ruling.

DRAFTING INFORMATION

The principal author of this revenue ruling is Raymond Bailey of the Office of Associate Chief Counsel (Procedure & Administration), Administrative Provisions & Judicial Practice Division. For further information regarding this revenue ruling, contact Mr. Bailey at (202) 6226226 (not a toll-free call).

Section 6621.— Determination of Interest Rate

26 CFR 301.6621–1: Interest rate.

Interest rates; underpayments and overpayments. The rate of interest determined under section 6621 of the Code for the second calendar quarter of 2001, beginning April 1, 2001, will be 8 percent for overpayments (7 percent in the case of a corporation), 8 percent for underpayments, and 10 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 is 5.5 percent.

Rev. Rul. 2001–16

Section 6621 of the Internal Revenue Code establishes the rates for interest on tax overpayments and tax underpayments. Under § 6621(a)(1), the overpayment rate beginning April 1, 2001, is the sum of the federal short-term rate plus 3 percentage points (2 percentage points in the case of a corporation), except the rate for the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the sum of the federal short-term rate plus 0.5 of a percentage point for interest computations made after December 31, 1994. Under § 6621(a)(2), the underpayment rate is the sum of the federal short-term rate plus 3 percentage points.

Section 6621(c) provides that for purposes of interest payable under § 6601 on any large corporate underpayment, the underpayment rate under § 6621(a)(2) is determined by substituting “5 percentage points” for “3 percentage points.” See § 6621(c) and § 301.6621–3 of the Regulations on Procedure and Administration for

the definition of a large corporate underpayment and for the rules for determining the applicable date. Section 6621(c) and § 301.6621–3 are generally effective for periods after December 31, 1990.

Section 6621(b)(1) provides that the Secretary will determine the federal shortterm rate for the first month in each calendar quarter.

Section 6621(b)(2)(A) provides that the federal short-term rate determined under § 6621(b)(1) for any month applies during the first calendar quarter beginning after such month.

Section 6621(b)(2)(B) provides that in determining the addition to tax under § 6654 for failure to pay estimated tax for any taxable year, the federal short-term rate that applies during the third month following such taxable year also applies during the first 15 days of the fourth month following such taxable year.

Section 6621(b)(3) provides that the federal short-term rate for any month is the federal short-term rate determined during such month by the Secretary in accordance with § 1274(d), rounded to the nearest full percent (or, if a multiple of 1/2 of 1 percent, the rate is increased to the next highest full percent).

Notice 88–59, 1988–1 C.B. 546, announced that, in determining the quarterly interest rates to be used for overpayments and underpayments of tax under § 6621, the Internal Revenue Service will use the federal short-term rate based on daily compounding because that rate is most consistent with § 6621 which, pursuant to § 6622, is subject to daily compounding.

Rounded to the nearest full percent, the federal short-term rate based on daily compounding determined during the

March 26, 2001 936 2001–13 I.R.B.

TABLE OF INTEREST RATES

PERIODS BEFORE JUL. 1, 1975 - PERIODS ENDING DEC. 31, 1986

OVERPAYMENTS AND UNDERPAYMENTS

In 1995–1 C.B. PERIOD RATE DAILY RATE TABLE

Before Jul. 1, 1975 6% Table 2, pg. 557 Jul. 1, 1975—Jan. 31, 1976 9% Table 4, pg. 559 Feb. 1, 1976—Jan. 31, 1978 7% Table 3, pg. 558 Feb. 1, 1978—Jan. 31, 1980 6% Table 2, pg. 557 Feb. 1, 1980—Jan. 31, 1982 12% Table 5, pg. 560 Feb. 1, 1982—Dec. 31, 1982 20% Table 6, pg. 560 Jan. 1, 1983—Jun. 30, 1983 16% Table 37, pg. 591 Jul. 1, 1983—Dec. 31, 1983 11% Table 27, pg. 581 Jan. 1, 1984—Jun. 30, 1984 11% Table 75, pg. 629 Jul. 1, 1984—Dec. 31, 1984 11% Table 75, pg. 629 Jan. 1, 1985—Jun. 30, 1985 13% Table 31, pg. 585 Jul. 1, 1985—Dec. 31, 1985 11% Table 27, pg. 581 Jan. 1, 1986—Jun. 30, 1986 10% Table 25, pg. 579 Jul. 1, 1986—Dec. 31, 1986 9% Table 23, pg. 577

TABLE OF INTEREST RATES FROM JAN. 1, 1987 - DEC. 31, 1998

OVERPAYMENTS UNDERPAYMENTS

1995–1 C.B. 1995–1 C.B. RATE TABLE PG RATE TABLE PG

Jan. 1, 1987—Mar. 31, 1987 8% 21 575 9% 23 577 Apr. 1, 1987—Jun. 30, 1987 8% 21 575 9% 23 577 Jul. 1, 1987—Sep. 30, 1987 8% 21 575 9% 23 577 Oct. 1, 1987—Dec. 31, 1987 9% 23 577 10% 25 579 Jan. 1, 1988—Mar. 31, 1988 10% 73 627 11% 75 629 Apr. 1, 1988—Jun. 30, 1988 9% 71 625 10% 73 627 Jul. 1, 1988—Sep. 30, 1988 9% 71 625 10% 73 627 Oct. 1, 1988—Dec. 31, 1988 10% 73 627 11% 75 629 Jan. 1, 1989—Mar. 31, 1989 10% 25 579 11% 27 581 Apr. 1, 1989—Jun. 30, 1989 11% 27 581 12% 29 583 Jul. 1, 1989—Sep. 30, 1989 11% 27 581 12% 29 583 Oct. 1, 1989—Dec. 31, 1989 10% 25 579 11% 27 581 Jan. 1, 1990—Mar. 31, 1990 10% 25 579 11% 27 581 Apr. 1, 1990—Jun. 30, 1990 10% 25 579 11% 27 581 Jul. 1, 1990—Sep. 30, 1990 10% 25 579 11% 27 581 Oct. 1, 1990—Dec. 31, 1990 10% 25 579 11% 27 581 Jan. 1, 1991—Mar. 31, 1991 10% 25 579 11% 27 581 Apr. 1, 1991—Jun. 30, 1991 9% 23 577 10% 25 579 Jul. 1, 1991—Sep. 30, 1991 9% 23 577 10% 25 579 Oct. 1, 1991—Dec. 31, 1991 9% 23 577 10% 25 579 Jan. 1, 1992—Mar. 31, 1992 8% 69 623 9% 71 625 Apr. 1, 1992—Jun. 30, 1992 7% 67 621 8% 69 623 Jul. 1, 1992—Sep. 30, 1992 7% 67 621 8% 69 623 Oct. 1, 1992—Dec. 31, 1992 6% 65 619 7% 67 621 Jan. 1, 1993—Mar. 31, 1993 6% 17 571 7% 19 573 Apr. 1, 1993—Jun. 30, 1993 6% 17 571 7% 19 573 Jul. 1, 1993—Sep. 30, 1993 6% 17 571 7% 19 573 Oct. 1, 1993—Dec. 31, 1993 6% 17 571 7% 19 573 Jan. 1, 1994—Mar. 31, 1994 6% 17 571 7% 19 573

2001–13 I.R.B. 937 March 26, 2001

TABLE OF INTEREST RATES—Continued

FROM JAN. 1, 1987 - DEC. 31, 1998

OVERPAYMENTS UNDERPAYMENTS

1995–1 C.B. 1995–1 C.B. RATE TABLE PG RATE TABLE PG

Apr. 1, 1994—Jun. 30, 1994 6% 17 571 7% 19 573 Jul. 1, 1994—Sep. 30, 1994 7% 19 573 8% 21 575 Oct. 1, 1994—Dec. 31, 1994 8% 21 575 9% 23 577 Jan. 1, 1995—Mar. 31, 1995 8% 21 575 9% 23 577 Apr. 1, 1995—Jun. 30, 1995 9% 23 577 10% 25 579 Jul. 1, 1995—Sep. 30, 1995 8% 21 575 9% 23 577 Oct. 1, 1995—Dec. 31, 1995 8% 21 575 9% 23 577 Jan. 1, 1996—Mar. 31, 1996 8% 69 623 9% 71 625 Apr. 1, 1996—Jun. 30, 1996 7% 67 621 8% 69 623 Jul. 1, 1996—Sep. 30, 1996 8% 69 623 9% 71 625 Oct. 1, 1996—Dec. 31, 1996 8% 69 623 9% 71 625 Jan. 1, 1997—Mar. 31, 1997 8% 21 575 9% 23 577 Apr. 1, 1997—Jun. 30, 1997 8% 21 575 9% 23 577 Jul. 1, 1997—Sep. 30, 1997 8% 21 575 9% 23 577 Oct. 1, 1997—Dec. 31, 1997 8% 21 575 9% 23 577 Jan. 1, 1998—Mar. 31, 1998 8% 21 575 9% 23 577 Apr. 1, 1998—Jun. 30, 1998 7% 19 573 8% 21 575 Jul. 1, 1998—Sep. 30, 1998 7% 19 573 8% 21 575 Oct. 1, 1998—Dec. 31, 1998 7% 19 573 8% 21 575

TABLE OF INTEREST RATES

FROM JANUARY 1, 1999 - PRESENT

NONCORPORATE OVERPAYMENTS AND UNDERPAYMENTS

1995–1 C.B. RATE TABLE PAGE

Jan. 1, 1999—Mar. 31, 1999 7% 19 573 Apr. 1, 1999—Jun. 30, 1999 8% 21 575 Jul. 1, 1999—Sep. 30, 1999 8% 21 575 Oct. 1, 1999—Dec. 31, 1999 8% 21 575 Jan. 1, 2000—Mar. 31, 2000 8% 69 623 Apr. 1, 2000—Jun. 30, 2000 9% 71 625 Jul. 1, 2000—Sep. 30, 2000 9% 71 625 Oct. 1, 2000—Dec 31, 2000 9% 71 625 Jan. 1, 2001—Mar. 31 2001 9% 23 577 Apr. 1, 2001—Jun. 30 2001 8% 21 575

March 26, 2001 938 2001–13 I.R.B.

TABLE OF INTEREST RATES

FROM JANUARY 1, 1999 - PRESENT

CORPORATE OVERPAYMENTS AND UNDERPAYMENTS

OVERPAYMENTS UNDERPAYMENTS

1995–1 C.B. 1995–1 C.B. RATE TABLE PG RATE TABLE PG

Jan. 1, 1999—Mar. 31, 1999 6% 17 571 7% 19 573 Apr. 1, 1999—Jun. 30, 1999 7% 19 573 8% 21 575 Jul. 1, 1999—Sep. 30, 1999 7% 19 573 8% 21 575 Oct. 1, 1999—Dec. 31, 1999 7% 19 573 8% 21 575 Jan. 1, 2000—Mar. 31, 2000 7% 67 621 8% 69 623 Apr. 1, 2000—Jun. 30, 2000 8% 69 623 9% 71 625 Jul. 1, 2000—Sep. 30, 2000 8% 69 623 9% 71 625 Oct. 1, 2000—Dec. 31, 2000 8% 69 623 9% 71 625 Jan. 1, 2001—Mar. 31, 2001 8% 21 575 9% 23 577 Apr. 1, 2001—Jun. 30, 2001 7% 19 573 8% 21 575

TABLE OF INTEREST RATES FOR

LARGE CORPORATE UNDERPAYMENTS

FROM JANUARY 1, 1991 - PRESENT

1995–1 C.B. RATE TABLE PG

Jan. 1, 1991—Mar. 31, 1991 13% 31 585 Apr. 1, 1991—Jun. 30, 1991 12% 29 583 Jul. 1, 1991—Sep. 30, 1991 12% 29 583 Oct. 1, 1991—Dec. 31, 1991 12% 29 583 Jan. 1, 1992—Mar. 31, 1992 11% 75 629 Apr. 1, 1992—Jun. 30, 1992 10% 73 627 Jul. 1, 1992—Sep. 30, 1992 10% 73 627 Oct. 1, 1992—Dec. 31, 1992 9% 71 625 Jan. 1, 1993—Mar. 31, 1993 9% 23 577 Apr. 1, 1993—Jun. 30, 1993 9% 23 577 Jul. 1, 1993—Sep. 30, 1993 9% 23 577 Oct. 1, 1993—Dec. 31, 1993 9% 23 577 Jan. 1, 1994—Mar. 31, 1994 9% 23 577 Apr. 1, 1994—Jun. 30, 1994 9% 23 577 Jul. 1, 1994—Sep. 30, 1994 10% 25 579 Oct. 1, 1994—Dec. 31, 1994 11% 27 581 Jan. 1, 1995—Mar. 31, 1995 11% 27 581 Apr. 1, 1995—Jun. 30, 1995 12% 29 583 Jul. 1, 1995—Sep. 30, 1995 11% 27 581 Oct. 1, 1995—Dec. 31, 1995 11% 27 581 Jan. 1, 1996—Mar. 31, 1996 11% 75 629 Apr. 1, 1996—Jun. 30, 1996 10% 73 627 Jul. 1, 1996—Sep. 30, 1996 11% 75 629 Oct. 1, 1996—Dec. 31, 1996 11% 75 629 Jan. 1, 1997—Mar. 31, 1997 11% 27 581 Apr. 1, 1997—Jun. 30, 1997 11% 27 581 Jul. 1, 1997—Sep. 30, 1997 11% 27 581 Oct. 1, 1997—Dec. 31, 1997 11% 27 581 Jan. 1, 1998—Mar. 31, 1998 11% 27 581 Apr. 1, 1998—Jun. 30, 1998 10% 25 579 Jul. 1, 1998—Sep. 30, 1998 10% 25 579

2001–13 I.R.B. 939 March 26, 2001

TABLE OF INTEREST RATES FOR

LARGE CORPORATE UNDERPAYMENTS—Continued

FROM JANUARY 1, 1991 - PRESENT

1995–1 C.B. RATE TABLE PG

Oct. 1, 1998—Dec. 31, 1998 10% 25 579 Jan. 1, 1999—Mar. 31, 1999 9% 23 577 Apr. 1, 1999—Jun. 30, 1999 10% 25 579 Jul. 1, 1999—Sep. 30, 1999 10% 25 579 Oct. 1, 1999—Dec. 31, 1999 10% 25 579 Jan. 1, 2000—Mar. 31, 2000 10% 73 627 Apr. 1, 2000—Jun. 30, 2000 11% 75 629 Jul. 1, 2000—Sep. 30, 2000 11% 75 629 Oct. 1, 2000—Dec. 31, 2000 11% 75 629 Jan. 1, 2001—Mar. 31, 2001 11% 27 581 Apr. 1, 2001—Jun. 30, 2001 10% 25 579

TABLE OF INTEREST RATES FOR CORPORATE

OVERPAYMENTS EXCEEDING $10,000

FROM JANUARY 1, 1995 - PRESENT

1995–1 C.B. RATE TABLE PG

Jan. 1, 1995—Mar. 31, 1995 6.5% 18 572 Apr. 1, 1995—Jun. 30, 1995 7.5% 20 574 Jul. 1, 1995—Sep. 30, 1995 6.5% 18 572 Oct. 1, 1995—Dec. 31, 1995 6.5% 18 572 Jan. 1, 1996—Mar. 31, 1996 6.5% 66 620 Apr. 1, 1996—Jun. 30, 1996 5.5% 64 618 Jul. 1, 1996—Sep. 30, 1996 6.5% 66 620 Oct. 1, 1996—Dec. 31, 1996 6.5% 66 620 Jan. 1, 1997—Mar. 31, 1997 6.5% 18 572 Apr. 1, 1997—Jun. 30, 1997 6.5% 18 572 Jul. 1, 1997—Sep. 30, 1997 6.5% 18 572 Oct. 1, 1997—Dec. 31, 1997 6.5% 18 572 Jan. 1, 1998—Mar. 31, 1998 6.5% 18 572 Apr. 1, 1998—Jun. 30, 1998 5.5% 16 570 Jul. 1. 1998—Sep. 30, 1998 5.5% 16 570 Oct. 1, 1998—Dec. 31, 1998 5.5% 16 570 Jan. 1, 1999—Mar. 31, 1999 4.5% 14 568 Apr. 1, 1999—Jun. 30, 1999 5.5% 16 570 Jul. 1, 1999—Sep. 30, 1999 5.5% 16 570 Oct. 1, 1999—Dec. 31, 1999 5.5% 16 570 Jan. 1, 2000—Mar. 31, 2000 5.5% 64 618 Apr. 1, 2000—Jun. 30, 2000 6.5% 66 620 Jul. 1, 2000—Sep. 30, 2000 6.5% 66 620 Oct. 1, 2000—Dec. 31, 2000 6.5% 66 620 Jan. 1, 2001—Mar. 31, 2001 6.5% 18 572 Apr. 1, 2001—Jun. 30, 2001 5.5% 16 570

March 26, 2001 940 2001–13 I.R.B.