Temporary and Proposed Regs Provide Rules on Cash Reporting by Court Clerks

 AGENCY: Internal Revenue Service (IRS), Treasury.

 ACTION: Temporary regulations.

 SUMMARY: This document contains temporary regulations relating to the information reporting requirements of court clerks upon receipt of more than $10,000 in cash as bail for any individual charged with a specified criminal offense. The regulations reflect changes to the Internal Revenue Code made by section 20415 of the Violent Crime Control and Law Enforcement Act of 1994 (the Act). The text of these temporary regulations also serves as the text of the proposed regulations set forth in the notice of proposed rulemaking on this subject in the Proposed Rules section of this issue of the Federal Register.

 EFFECTIVE DATE: These regulations are effective February 13, 1995.

 FOR FURTHER INFORMATION CONTACT: Susie K. Bird at (202) 622-4960 (not a toll-free number).

 SUPPLEMENTARY INFORMATION:

PAPERWORK REDUCTION ACT

This regulation is 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 this regulation has been reviewed and, pending receipt and evaluation of public comments, approved by the Office of Management and Budget under control number 1545-1449. The time estimates for the reporting requirements contained in this regulation are reflected in the burden estimates for Form 8300.

 For further information concerning this collection of information, where to submit comments on the collection of information, 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 published in the Proposed Rules section of this issue of the Federal Register.

BACKGROUND

 This document contains amendments to the Income Tax Regulations (26 CFR parts 1 and 602) under section 6050I of the Internal Revenue Code of 1986 (Code). Section 6050I generally requires persons engaged in a trade or business to report cash receipts of more than $10,000. Section 6050I(g), which was enacted on September 13, 1994, by section 20415 of the Act, requires court clerks to report certain cash receipts of more than $10,000. Section 20415(c) of the Act provides that the Secretary of the Treasury or the Secretary's delegate shall prescribe temporary regulations relating to section 6050I(g) of the Code within 90 days of enactment of the Act. Thus, these temporary regulations are required by statute in order to set forth the time, form, and manner of reporting under section 6050I(g).

EXPLANATION OF PROVISIONS

 The temporary regulations reflect the statutory requirement that any clerk of a Federal or State court who receives more than $10,000 in cash as bail for any individual charged with a specified criminal offense must make a return with respect to the receipt of that cash. For this purpose, a clerk is the clerk's office or the office, department, division, branch, or unit of the court that is authorized to receive bail.

 The temporary regulations define the term cash as coin and currency of the United States or of any other country, and a cashier's check, bank draft, traveler's check, or money order having a face amount of $10,000 or less. The term "specified criminal offense" is defined in the temporary regulations as (a) a Federal criminal offense involving a controlled substance (as defined in section 802 of title 21 of the United States Code), provided the offense is described in Part D of Subchapter I or Subchapter II of title 21 of the United States Code; (b) racketeering (as defined in section 1951, 1952, or 1955 of title 18 of the United States Code); (c) money laundering (as defined in section 1956 or 1957 of title 18 of the United States Code); and (d) any state criminal offense substantially similar to an offense described above. The IRS welcomes comments on what constitutes a state criminal offense that is substantially similar to one of the federal specified criminal offenses described in the temporary regulations.

 The temporary regulations provide that the required information must be reported on Form 8300 and must be filed with the IRS by the 15th day after the date the cash bail is received. The information return must be filed with the IRS office designated in the instructions for Form 8300 and must contain: (a) the name, address, and taxpayer identification number (TIN) of the individual charged with the specified criminal offense; (b) the name, address, and TIN of each person posting the bail, other than a person posting bail who is licensed as a bail bondsman; (c) the amount of cash received; (d) the date the cash was received; and (e) any other information required by Form 8300 or its instructions.

 The temporary regulations also require the furnishing of a written statement to the United States Attorney for the jurisdiction in which the individual charged with the specified criminal offense resides and the jurisdiction in which the specified criminal offense occurred (applicable United States Attorney(s)). The written statement must be filed with the applicable United States Attorney(s) by the 15th day after the date the cash bail is received. The written statement must include the information required to be included on the Form 8300 filed with the IRS, and a copy of the Form 8300 may be used to satisfy this requirement.

 The temporary regulations also require the furnishing of a written statement to each person posting bail (payor of bail) whose name is set forth in a Form 8300 required to be filed with the IRS. The statement must be furnished to such a payor of bail on or before January 31 of the year following the year in which the cash is received. The statement must contain: (a) the name and address of the clerk's office making the return; (b) the aggregate amount of reportable cash received during the calendar year by the clerk required to file the Form 8300 in all cash transactions relating to the payor of bail; and (c) a legend stating that the information contained in the statement has been reported to the IRS and the applicable United States Attorney(s). The temporary regulations apply to cash received by court clerks on or after February 13, 1995.

SPECIAL ANALYSES

 It has been determined that this Treasury decision is not a significant regulatory action as defined in EO 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) and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do not apply to these regulations, and, therefore, a Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, these temporary regulations will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small businesses.

DRAFTING INFORMATION

 The principal author of these regulations is Susie K. Bird of the Office of Assistant Chief Counsel (Income Tax and Accounting). However, other personnel from the IRS and Treasury Department participated in their development.

LIST OF SUBJECTS

26 CFR Part 1

 Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 602

 Reporting and recordkeeping requirements.

Treasury Decision 8572

ADOPTION OF AMENDMENTS TO THE REGULATIONS

Accordingly, 26 CFR parts 1 and 602 are amended as follows:

PART 1 -- INCOME TAXES

Paragraph 1. The authority citation for part 1 is amended by adding an entry in numerical order to read as follows:

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

Section 1.6050I-2T is issued under 26 U.S.C. 6050I. * * *

Par. 2. Sections 1.6050I-0T and 1.6050I-2T are added to read as follows:

SECTION 1.6050I-0T TABLE OF CONTENTS (TEMPORARY).

This section lists the major captions that appear in sections 1.6050I-1 and 1.6050I-2T.

 SECTION 1.6050I-1  RETURNS RELATING TO CASH IN EXCESS OF $10,000 RECEIVED IN A TRADE OR

(a) REPORTING REQUIREMENT. Any clerk of a Federal or State court who receives more than $10,000 in cash as bail for any individual charged with a specified criminal offense must make a return of information with respect to that cash receipt. For purposes of this section, a clerk is the clerk's office or the office, department, division, branch, or unit of the court that is authorized to receive bail.

(b) MEANING OF TERMS. The following definitions apply for purposes of this section 1.6050I-2T --

CASH means --

(1) The coin and currency of the United States, or of any other country, that circulate in and are customarily used and accepted as money in the country in which issued; and

(2) A cashier's check (by whatever name called, including TREASURER'S CHECK and BANK CHECK), bank draft, traveler's check, or money order having a face amount of not more than $10,000.

SPECIFIED CRIMINAL OFFENSE MEANS --

(1) A Federal criminal offense involving a controlled substance (as defined in section 802 of title 21 of the United States Code), provided the offense is described in Part D of Subchapter I or Subchapter II of title 21 of the United States Code;

(2) Racketeering (as defined in section 1951, 1952, or 1955 of title 18 of the United States Code);

(3) Money laundering (as defined in section 1956 or 1957 of title 18 of the United States Code); and

(4) Any State criminal offense substantially similar to an offense described in paragraph (b)(2)(i), (ii), or (iii) of this section.

(c) TIME, FORM, AND MANNER OF REPORTING -- (1) TIME OF REPORTING. The information return required by this section must be filed with the Internal Revenue Service by the 15th day after the date the cash bail is received.

(2) FORM OF REPORTING. A report required by paragraph (a) of this section must be made on Form 8300 and must contain the following information --

(i) The name, address, and taxpayer identification number (TIN) of the individual charged with the specified criminal offense;

(ii) The name, address, and TIN of each person posting the bail (payor of bail), other than a person posting bail who is licensed as a bail bondsman in the jurisdiction in which the bail is received;

(iii) The amount of cash received;

(iv) The date the cash was received; and

(v) Any other information required by Form 8300 or its instructions.

(3) MANNER OF REPORTING -- (i) WHERE TO FILE. Returns required by this section must be filed with the Internal Revenue Service office designated in the instructions for Form 8300. A copy of the information return required to be filed under this section must be retained for five years from the date of filing.

(ii) VERIFICATION OF IDENTITY. A clerk required to make an information return under this section must, in accordance with section 1.6050I-1(e)(3)(ii), verify the identity of each payor of bail listed in the return.

(d) REQUIREMENT TO FURNISH STATEMENTS -- (1) INFORMATION TO FEDERAL PROSECUTORS -- (i) IN GENERAL. A clerk required to make an information return under this section must furnish a written statement to the United States Attorney for the jurisdiction in which the individual charged with the specified crime resides and the United States Attorney for the jurisdiction in which the specified criminal offense occurred (applicable United States Attorney(s)). The written statement must be filed with the applicable United States Attorney(s) by the 15th day after the date the cash bail is received.

(ii) FORM OF STATEMENT. The written statement must include the information required by paragraph (c)(2) of this section. This paragraph (d)(1)(ii) requirement will be satisfied if the clerk provides to the applicable United States Attorney(s) a copy of the Form 8300 that is filed with the Internal Revenue Service pursuant to this section.

(2) INFORMATION TO PAYORS OF BAIL -- (i) IN GENERAL. A clerk required to make an information return under this section must furnish a written statement to each payor of bail whose name is set forth in a return required by this section. A statement required under this paragraph (d)(2) must be furnished to a payor of bail on or before January 31 of the year following the calendar year in which the cash is received. A statement shall be considered to be furnished to a payor of bail if it is mailed to the payor of bail's last known address.

(ii) FORM OF STATEMENT. The statement required by this paragraph (d)(2) need not follow any particular format, but it must contain the following information --

(A) The name and address of the clerk's office making the return;

(B) The aggregate amount of reportable cash received during the calendar year by the clerk who made the information return required by this section in all cash transactions relating to the payor of bail; and

(C) A legend stating that the information contained in the statement has been reported to the Internal Revenue Service and the applicable United States Attorney(s).

(e) CROSS-REFERENCE TO PENALTY PROVISIONS. See sections 6721 through 6724 for penalties relating to the failure to comply with the provisions of this section.

(f) EFFECTIVE DATE. This section applies with respect to cash received by court clerks on or after [INSERT DATE 60 DAYS AFTER PUBLICATION OF THIS DOCUMENT IN THE FEDERAL REGISTER].

PART 602 -- OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT

Par. 3. The authority citation for part 602 continues to read as follows:

Authority: 26 U.S.C. 7805.

Section 602.101 -- [Amended]

Par. 4. Section 602.101(c) is amended by adding an entry for 1.6050I-2T ......1545-1449 in numerical order in the table.