side the United States primarily for nonresident aliens (as described in subsection (b) (4) of section 4 of Subtitle A of Title I of the Employee Retirement Income Security Act of 1974 (88 Stat. 840)). The term does not include anuity contracts described in section 403 (b) (1) or individual retirement accounts (an individual participant or surveying beneficiary in such account must file under paragraph (d) (2) of this section) and bonds described in sections 408(c) and 409.

(3) Required Information. The information required to be furnished on the forms prescribed by section 6058 (a) shall include such information concerning the qualification of the plan, the financial condition of the trust, fund, or custodial or fiduciary account which is a part of the plan, and the operation of the plan as shall be required by the forms, applicable accompanying schedules and related instructions applicable to the annual period.

(4) Time of filing. The forms prescribed by section 6058(a) shall be filed in the manner and at the time as required by the forms and related instructions applicable to the annual period.

(b) Who must file-(1) In general. The annual return required to be filed under section 6058(a) and paragraph (a) of this section for the annual period shall be filed by either the employer maintaining the plan or the plan administrator (as defined in section 414(g)) of the plan for that annual period. Whether the employer or plan administrator files shall be determined under the forms prescribed by section 6058(a) and related instructions applicable to the annual period. Nothing in these forms shall preclude an employer from filing the return on behalf of the plan administrator, or the plan administrator from filing on behalf of the employer.

(2) Definition of employer. For purposes of subparagraph (1) of this

paragraph, the term "employer" includes a sole proprietor and a partnership.

(c) Other rules applicable to annual returns (1) Extensions of time for filing. For rules relating to the extension of time for filing, see section 6081 and the regulations thereunder and the instructions on the forms prescribed by section 6058(a).

(2) Amended filing. Any form prescribed by this section may be filed as an amendment to a form previously filed under this section with respect to the same annual period pursuant to the instructions for such forms.

(3) Additional information. In addition to the information otherwise required to be furnished by this section, the district director may require any further information that is considered necessary to determine allowable deductions under section 404, qualification under section 401, or the financial condition and operation of the plan.

(4) Records. Records substantiating all data and information required by this section to be filed must be kept at all times available for inspection by internal revenue officers at the principal office or place of business of the employer or plan administrator.

(5) Relief from filing. Notwithstanding paragraph (a) of this section, the Commissioner may, in his discretion, relieve an employer, or plan administrator, from reporting information on the forms prescribed by section 6058(a). This discretion includes the ability to relieve an employer, or plan administrator, from filing the applicable form.

(d) Special rules for individual retirement arrangements (1) Application. This paragraph, in lieu of paragraph (a) of this section, applies to

an individual retirement account described in section 408(a) and an individual retirement annuity described in section 408(b), including such accounts and annuities for which a deduction is allowable under section 220

(spousal individual retirement arrangements).

(2) General rule. For each taxable year beginning after December 31, 1974, every individual who during such taxable year

(i) Establishes or maintains an individual retirement account described in section 408(a) (including an individual who is a participant in an individual retirement account described in section 408(c)),

(ii) Purchases or maintains an individual retirement annuity described in section 408(b), or

(iii) Is a surviving beneficiary with respect to an account or annuity referred to in this subparagraph which is in existence during such taxable

year,

shall file Form 5329 (or any other form designated by the Commissioner for this purpose), as an attachment to or part of the Form 1040 filed by such individual for such taxable year, setting forth in full the information required by that form and the accompanying instructions.

(3) Special information returns. If an individual described in subparagraph (2) of this paragraph is not required to file a Form 1040 for such taxable year, such individual shall file a Form 5329 (or any other designated form) with the Internal Revenue Service by the 15th day of the 4th month following the close of such individual's taxable year setting forth in full the information required by that form and the accompanying instructions.

(4) Relief from filing. The Commissioner may, in his discretion, relieve an individual from filing the form prescribed by this paragraph.

(5) Retirement bonds. An individual who purchases, holds, or maintains a retirement bond described in section 409 may be required to file a return under other provisions of the Code.

(e) Actuarial statement in case of mergers, etc. For requirements with respect to the filing of actuarial state

or

ments in the case of a merger, consolidation, or transfer of assets liabilities, see section 6058(b) and section 414(1) and the regulations thereunder.

(f) Effective dates (1) Section 6058 (a) requirements. The rules with respect to annual returns required under section 6058(a) (the rules in this section, other than paragraph (e) thereof) are effective for plan years beginning after September 2, 1974.

(2) Section 6058 (b) requirements. The requirements of section 6058 (b), relating to mergers, etc., and paragraph (e) of this section are effective on September 2, 1974, with respect to events described in section 6058(b) occurring on or after such date.

is

described in § 301.6058-1 (d) (2) who must file the annual return under § 301.6058-1(d) is liable for the amount imposed with respect to a failure to so file the annual return. The amount imposed is $10 for each. day during which the failure to file the annual return on behalf of a plan for a year continues. However, the total amount imposed with respect to a failure to file on behalf of a plan for any year shall not exceed $5,000.

*

AGENCY: Internal Revenue Service, Treasury.

ACTION: Temporary regulations.

SUMMARY: This document contains amendments to the existing temporary regulations relating to the disclosure of returns and return information to and by attorneys and other officers and employees of the Department of Justice in preparation for proceedings or investigations involving tax administration. These amendments are intended to add additional requirements or restrictions applicable to certain disclosures. They affect disclosures to and by attorneys of the Department of Justice to other attorneys of the Department of Justice where necessary in connection with preparing for a proceeding or conducting an investigation involving tax administration.

DATE: The regulations, as amended, apply to disclosures made after July 6, 1978.

FOR FURTHER INFORMATION: Diane L. Renfroe of the Legislation and Regulations Division, Office of the Chief Counsel, Internal Revenue Service, 1111 Constitution Avenue, N.W., Washington, D.C. 20224 (Attention: CC:LR:T) (202-566-3590). INFORMA

SUPPLEMENTARY

TION:

BACKGROUND

This document contains amendments to the temporary regulations relating to disclosure of returns and return information to and by attorneys of the Department of Justice under section 6103 (h) (2) of the Internal Revenue Code of 1954 as added by section 1202 of the Tax Reform Act of 1976 (Pub. L. 94-455 [1976-3 C.B. (Vol. 1) 1], 90 Stat. 1674).

SUBSEQUENT DISCLOSURE OF RETURNS AND RETURN INFORMATION BY ATTORNEYS OF THE DEPARTMENT OF JUSTICE RECEIVING THE

SAME IN CONNECTION WITH A PROCEEDING OR INVESTIGATION INVOLVING TAX

ADMINISTRATION

as

This temporary regulation, amended, provides for subsequent disclosure and use of returns or return information made available to attorneys of the Department of Justice under paragraph (a) (1) of the existing temporary regulation. First, subdivision (i) of paragraph (a) (2) provides for such subsequent disclosure in connection with preparing for a proceeding or conducting an investigation described in paragraph (a) (1). Second, subdivision (ii) provides for such subsequent disclosure in connection with a proceeding or investigation described in paragraph (a) (1) which also involves enforcement of a specific federal criminal statute other than one described in paragraph (a) (1) provided that three conditions are met. First, such other matter must involve or arise out of the particular facts and circumstances giving rise to a proceeding or investigation involving tax administration. Second, the tax portion of such joint proceeding or investigation must have been authorized by the Assistant Attorney General for the Tax Division of the Department of Justice at the request of the Internal Revenue Service as a proceeding involving tax administration. Third, if the tax administration portion of the joint proceedings is terminated for any reason, attorneys of the Department of Justice working on the nontax portion

of the case must then obtain a court order as required under section 6103 (i) prior to further use of the tax returns or taxpayer derived tax data in their possession.

The second and third conditions are new and have been added to provide further safeguards to insure adequate protection of the confidentiality of this

tax material.

PUBLICATION OF NOTICE OF PROPOSED RULEMAKING

These temporary regulations, as

amended, are also published as a notice of proposed rulemaking under section 6103 (h) (2) of the Code.

DRAFTING INFORMATION

The principal author of this regulation was Diane L. Renfroe of the Legislation and Regulations Division of the Office of Chief Counsel, Internal Revenue Service. However, personnel from other offices of the Internal Revenue Service and Treasury Department participated in developing the regulation, both on matters of substance and style.

WAIVER OF CERTΑΙΝ

§ 404.6103(h) (2)-1 Disclosure of returns and return information (including taxpayer return information) to and by attorneys and other officers and employees of the Department of Justice in preparation for proceeding or investigation involving tax administration.

(a) Disclosure of returns and return information (including taxpayer return information) to and by attorneys of the Department of Justice.

(1) ***

(2) Returns and return information (including taxpayer return informa

OF PROPOSED TREASURY
DIRECTIVE

A determination has been made by one of the undersigned, Jerome Kurtz, Commissioner of Internal Revenue, that there is an immediate need for amendment of the temporary regulations under section 6103(h) (2) in order to clarify rules relating to disclosures of returns and return information in situations involving certain joint tax and nontax related investigations. Because of the immediate need for such clarification, compliance with the procedural requirements of paragraphs 8 through 13 of the proposed Treasury directive, relating to improving regulations (43 F.R. 22319), would be impractical, and, therefore, these requirements have not been followed. Adoption of amendments to the

regulations

In order to amend the temporary regulations on Procedure and Administration (26 CFR Part 404) to provide additional restrictions on certain disclosures of returns and return information to and by attorneys of the Department of Justice in connection with matters involving tax administration under section 6103(h) (2), the heading of § 404.6103(h) (2)-1 and paragraph (a) (2) of such section are amended to read as follows:

torneys of the Department of Justice as provided in paragraph (a) (1) of this section may also be used by such attorneys, or disclosed by them to other attorneys (including United States attorneys and supervisory personnel, such as Section Chiefs, Deputy Assistant Attorneys General, Assistant Attorneys General, the Deputy Attorney General, and the Attorney General) of the Department of Justice, where

necessaryー

(i) In connection with preparation for any proceeding (or with an investigation which may result in such a proceeding) described in paragraph (a) (1), or

(ii) In connection with preparation for any proceeding (or with an investigation which may result in such a proceeding) described in paragraph (a) (1) which also involves enforcement of a specific federal criminal statute other than one described in paragraph (a) (1) to which the United States is or may be a party, provided such matter involves or arises out of the particular facts and circumstances giving rise to the proceeding (or investigation) described in paragraph (a) (1) and further provided the tax portion of such proceeding (or investigation) has been duly authorized by or on behalf of the Assistant Attorney General for the Tax Division of the Department of Justice, pursuant to the

request of the Secretary, as a proceeding (or investigation) described in paragraph (a) (1).

If, in the course of preparation for a proceeding (or the conduct of an investigation which may result in such a proceeding) described in subdivision (ii) of this subparagraph, the tax administration portion thereof is terminated for any reason, any further use or disclosure of such returns or taxpayer return information in such preparation or investigation with respect to the remaining portion may be made. only pursuant to, and upon the grant of, a court order as provided by section 6103 (i) (1) (A), provided, however, that the returns and taxpayer return information may in any event be used for purposes of obtaining the necessary court order.

There is a need for immediate guidance with respect to the provisions contained in this Treasury decision. For this reason, it is found impracticable to issue it with notice and public procedure under subsection (b) of section 553 of Title 5 of the United States Code or subject to the effective date limitation of subsection (d) of that section.

This Treasury decision is issued under the authority contained in section 6103 (q) of the Internal Revenue Code of 1954 (90 Stat. 1685; 26 U.S.C. 6103 (q)) and section 7805 of the Internal Revenue Code of 1954 (68A Stat. 917; 26 U.S.C. 7805).

JEROME KURTZ,
Commissioner of
Internal Revenue.

Approved June 21, 1978.

ROBERT H. Mundheim,
General Counsel

of the Treasury.

(Filed by the Office of the Federal Register on June 30, 1978, 4:10 p.m., and published in the issue of the Federal Register for July 6, 1978, 43 F.R. 29115)

Section 6107.-Income Tax Return Preparer Must Furnish

Copy of Return to Taxpayer and Must Retain a Copy or List

26 CFR 1.6107-1: Income tax return preparer must furnish copy of return to taxpayer and must retain a copy or record.

Is an income tax return preparer required to sign and affix an identification number to the taxpayer's copy of a federal income tax return? See Rev. Rul. 78-317, page 335.

26 CFR 1.6107-1: Income tax return preparer must furnish copy of return to taxpayer and must retain a copy or record.

Whether the lease of facilities and services to an unrelated income tax return preparer makes the lessor an income tax return preparer or the employer of an income tax return preparer. See Rev. Rul. 78-318, page 345.

Section 6109.—Identifying
Numbers

26 CFR 1.6109-1: Identifying numbers.

Is an income tax return preparer required to sign and affix an identification number to the taxpayer's copy of a federal income tax return? See Rev. Rul. 78-317, page 335.

26 CFR 301.6109-1: Identifying numbers.

Magnetic tape reporting requirements. See Rev. Proc. 78-26, page 505.

Chapter 62.-Time and Place for Paying Tax Subchapter A.-Place and Due Date for Payment of Tax

Section 6152.—Installment
Payments

26 CFR 1.6152-1: Installment payments. Rev. Rul. 78-329

ISSUE

Have the taxpayers in the situations described below made valid elections to pay their unpaid taxes in two equal installments, as provided by section 6152 of the Internal Revenue Code of 1954?

FACTS

Situation 1

On March 15, W corporation filed

a Form 7004, Application for Automatic Extension of Time to File Corporation Income Tax Return, reporting a tax liability of 20x dollars and claiming estimated tax payments of 20x dollars. On June 15, W filed its income tax return reporting a tax liability of 24x dollars. W paid the 4x dollars of tax due with the return. Situation 2

On March 15, X corporation timely filed a Form 7004, reporting a tax liability of 10x dollars and claiming no estimated tax payments. On March 15, X paid 5x dollars, 50 percent of the unpaid tax shown on Form 7004. On June 15, X filed its income tax return reporting a tax liability of 50x dollars less estimated tax payments of 40x dollars and payment with Form 7004 of 5x dollars. X paid the 5x dollars of tax due with the return.

Situation 3

On March 15, Y corporation timely filed a Form 7004, reporting a tax liability of 35x dollars and claimed estimated tax payments of 25x dollars. On March 15, Y paid 5x dollars, 50 percent of the unpaid tax shown on Form 7004. On June 15, Y filed its income tax return reporting a tax liability of 37x dollars, less estimated tax payments of 29x dollars and payment with Form 7004 of 5x dollars. On June 15, Y paid the 3x dollars of tax due with the return. An audit of the return disclosed a deficiency of 6x dollars.

Situation 4

On March 15, Z corporation timely filed a Form 7004, reporting a tax liability of 50x dollars and estimated tax payments of 30x dollars. On March 15, Z paid 10x dollars, 50 percent of the unpaid tax shown on Form 7004. On June 15, Z filed its income tax return reporting a tax liability of 60x dollars, less estimated tax payments of 30x dollars and payment with Form 7004 of 10x dollars. On June 15, Z paid the 20x dollars of tax due with the return.