32.1.5  Required Format for Regulations

Manual Transmittal

October 20, 2014

Purpose

(1) This transmits revised CCDM 32.1.5, Chief Counsel Regulation Handbook; Required Format for Regulations.

Background

CCDM 32.1.5, Required Format for Regulations, is being revised to provide additional information regarding the requirements of the Administrative Procedure Act, Executive Order 12866, and the Regulatory Flexibility Act.

Material Changes

(1) (1) CCDM 32.1.5, Required Format for Regulations, is being revised to provide additional information regarding effective/applicability dates, to provide information regarding executive summaries in preambles, to revise model preamble language, to remove language regarding justification of rules in preambles, to revise the signature block for the Assistant Secretary of the Treasury (Tax Policy), and to make other updates as necessary.

Effect on Other Documents

This section supersedes CCDM 32.1.5, dated September 30, 2011.

Audience

Chief Counsel

Effective Date

(10-20-2014)

Kathryn A. Zuba
Deputy Associate Chief Counsel
(Procedure & Administration)

32.1.5.1  (08-11-2004)
Overview of Format Required by the OFR

  1. The Office of the Federal Register (OFR) has adopted certain format and content rules for regulations that are to be published in the Federal Register. Regulations must include the following:

    • Billing Code

    • Headings

    • Preamble Requirements

    • List of Subjects

    • Regulatory Text

    • Signature Block

  2. Double-space the text of regulations, except for the following, which are single-spaced:

    • Titles

    • Tables of Content

    • Quotations

    • Examples

  3. When using "section" or "chapter" in the regulation preamble to refer to provisions of the Internal Revenue Code, the drafting team should include "of the Internal Revenue Code" only the first time. For example, the drafting team should use the phrase "section 382 of the Internal Revenue Code" for the first reference, and then use "section 382" for subsequent references. (A different rule, described in CCDM 32.1.5.7.3, applies to the regulation text.)

  4. The drafting team should use the section symbol, "§ " , to refer to a regulation section, unless it is the first word in a sentence. When "section" is the first word in a sentence, the drafting team should spell it out. Do not put a space between the "§" and the regulation section number. For example, "See §1.401(k)-1(a)(7) for rules applicable to collectively bargained plans."

  5. When citing a statute, the drafting team should spell out the word "section" (as opposed to using the section symbol, §), unless the drafting team is using a citation form such as "26 U.S.C. 7805," in which case no words or symbol is used.

  6. OFR document formatting and content requirements may be found in the Federal Register Document Drafting Handbook. It is available on-line at the OFR web site.

32.1.5.2  (08-11-2004)
Billing Code

  1. The Government Printing Office (GPO) assigns a billing code to each agency that publishes documents in the Federal Register. GPO uses this code to bill the agency for printing costs. The billing code must appear on each document submitted for publication.

  2. The IRS billing code is 4830-01-p.

  3. The billing code appears at the top of the first page, flush left, in brackets.

    Example:
    [4830-01-p]

32.1.5.3  (08-11-2004)
Headings

  1. The term "headings" refers to the general headings denoting sections and paragraphs (see CCDM 32.1.5.3.7), or the specific heading that must be included at the beginning of the document.

  2. General headings for sections and paragraphs identify the subject matter of the section or paragraph. Section and paragraph headings in the text of the regulation are underlined. However, when published in the Federal Register, section headings appear in bold face and paragraph headings appear in italics.

  3. The document containing the regulation must contain the following specific headings:

    • Name of the department,

    • Name of the agency within the department,

    • CFR title and part(s) affected by the regulation,

    • TD identification number or NPRM identification number,

    • Regulation Identifier Number (RIN), and

    • Subject.

  4. Each specific heading is positioned flush left. Any specific heading that is over one line long is single-spaced.

  5. Each required specific heading is discussed below, followed by examples.

32.1.5.3.1  (08-11-2004)
Department Name

  1. The department name is: DEPARTMENT OF THE TREASURY.

    Note:

    This is the only heading that is typed in all capital letters.

32.1.5.3.2  (08-11-2004)
Agency Name

  1. The agency name is: Internal Revenue Service.

32.1.5.3.3  (08-11-2004)
CFR Title and Part Number

  1. This item identifies, in numerical order, the part or parts of title 26 of the CFR that the regulation amends or proposes to amend. Even if the regulation affects only one paragraph within a part, that part must be identified.

  2. The drafting team must determine the part in title 26 where the regulation belongs. For example, part 1 is income taxes, part 31 is employment taxes and collection of income tax at the source, part 52 is environmental taxes, and part 301 is procedure and administration.

  3. Sometimes the same rule needs to be added to two or more parts or a cross-reference to the new rule needs to be added in a different part.

  4. See CCDM 32.1.1.3.2.3 The Code of Federal Regulations (CFR), for a list of the most commonly used CFR parts. See Exhibit 32.1.5-1 for a complete list of the CFR parts and part headings,

    Example:

    26 CFR Parts 1 and 52

32.1.5.3.4  (08-11-2004)
TD, ANPRM, and NPRM Identification Number

  1. A Treasury decision (TD) number identifies final and temporary regulations. The FRL assigns the TD number after the Commissioner/Deputy Commissioner for Services and Enforcement and the Assistant Secretary of the Treasury (Tax Policy) sign the regulation document and before it is forwarded to the OFR.

  2. A CASE-MIS ID number that begins with "REG" identifies an ANPRM or an NPRM. See CCDM 32.1.2.2, Opening a Regulation Project, and CCDM 32.1.2.2.2, Project ID (available here.).

  3. The TD and CASE-MIS ID numbers are typed in brackets.

    Examples:
    [TD 7843]
    [REG-203796-96]

32.1.5.3.5  (08-11-2004)
RIN

  1. See CCDM 32.1.2.2.5 , Obtaining an OMB Regulation Identifying Number, for more information about the RIN.

    Example:

    RIN 1545-AQ23

32.1.5.3.6  (08-11-2004)
Subject

  1. The subject is the title of the regulation and briefly describes the subject matter of the regulation. It is typed single-spaced. The drafting team should capitalize the first letter of each word, other than articles, conjunctions, and prepositions.

    Example:

    Exports of Ozone-Depleting Chemicals; Special Rules for Certain Medical Uses of Ozone-Depleting Chemicals

32.1.5.3.7  (08-11-2004)
Examples of Headings

  1. Headings for ANPRMs, NPRMs, and TDs are illustrated by the following examples.

    ANPRM and NPRM
      [4830-01-p]

    DEPARTMENT OF THE TREASURY

    Internal Revenue Service

    26 CFR Part 52

    [REG-203796-96]

    RIN 1545-AQ23

    Exports of Ozone-Depleting Chemicals; Special Rules for Certain Medical Uses of Ozone-Depleting Chemicals
    TD
      [4830-01-p]

    DEPARTMENT OF THE TREASURY

    Internal Revenue Service

    26 CFR Part 52

    [TD 7843]

    RIN 1545-AQ23

    Exports of Ozone-Depleting Chemicals; Special Rules for Certain Medical Uses of Ozone-Depleting Chemicals

32.1.5.4  (08-11-2004)
Preamble

  1. The preamble contains explanatory information that informs the reader of what is being proposed or adopted and enables the reader to determine whether it is affected by the regulation. The preamble contains no regulation text.

  2. The following captions, in the order shown, are used for the preamble. The drafting team should type the captions in all capital letters, flush left, followed by a colon.

    • AGENCY:

    • ACTION:

    • SUMMARY:

    • DATES:

    • ADDRESSES: (for ANPRMs and NPRMs)

    • FOR FURTHER INFORMATION CONTACT:

    • SUPPLEMENTARY INFORMATION:

32.1.5.4.1  (08-11-2004)
AGENCY Caption

  1. For IRS/Treasury regulations, this caption is:

    • AGENCY: Internal Revenue Service (IRS), Treasury.

32.1.5.4.2  (08-11-2004)
ACTION Caption

  1. This caption identifies the type of regulation. It does not summarize the subject matter of a particular regulation. Frequently used ACTION captions are:

    • ACTION: Advance notice of proposed rulemaking,

    • ACTION: Notice of proposed rulemaking and notice of public hearing,

    • ACTION: Notice of proposed rulemaking,

    • ACTION: Temporary regulation,

    • ACTION: Notice of proposed rulemaking by cross-reference to temporary regulation,

    • ACTION: Final regulation,

    • ACTION: Final and temporary regulations,

    • ACTION: Withdrawal of notice of proposed rulemaking,

    • ACTION: Notice of public hearing on proposed rulemaking, and

    • ACTION: Statement of procedural rules.

32.1.5.4.3  (10-20-2014)
SUMMARY Caption

  1. The SUMMARY briefly answers the following three questions:

    • What action is the agency taking?

    • Why is this action necessary?

    • Who will be affected by this action?

  2. When preparing the SUMMARY the drafting team should:

    • Be brief

    • Use language a nonexpert will understand

    • State what the regulation does, not how it affects the CFR

    • Refer to an act of Congress by its popular name

    • Do not use legal citations

    • Do not include regulatory history or extensive background

    • Do not include qualifications, exceptions, or specific details

  3. The drafting team should not use the SUMMARY to prove or argue a point. The drafting team should provide supporting information, details, discussion of the regulatory history, and precise legal citations under the SUPPLEMENTARY INFORMATION caption. See CCDM 32.1.5.4.7 for further information.

    Example 1: ANPRM
      SUMMARY: This document describes and explains rules and standards that Treasury and the IRS expect to propose in 2002 in a notice of proposed rulemaking that will clarify the application of section 263(a) of the Internal Revenue Code to expenditures incurred in acquiring, creating, or enhancing certain intangible assets or benefits. This document also invites comments from the public regarding these standards. All materials submitted will be available for public inspection and copying.
    Example 2: NPRM (with Notice of public hearing)
      SUMMARY: This document contains proposed regulations that provide guidance regarding the allowance of certain charitable contribution deductions, the substantiation requirements for charitable contributions of $250 or more, and the disclosure requirements for quid pro quo contributions in excess of $75. The regulations reflect changes to the law made by the Omnibus Budget Reconciliation Act of 1993. The regulations will affect certain charitable organizations and individuals and entities that make payments to those organizations. This document also provides a notice of a public hearing on these proposed regulations.
    Example 3: TEMP
      SUMMARY: This document contains temporary regulations that provide rules for obtaining and using IRS adoption taxpayer identification numbers. The regulations affect individuals who are in the process of adopting children and will be claiming certain tax benefits with respect to those children. The text of these temporary regulations also serves as the text of the proposed regulations set forth in the Proposed Rules section in this issue of the Federal Register.
    Example 4: FINAL
      SUMMARY: This document contains final regulations relating to certain adoptions, changes, and retentions of annual accounting periods. The final regulations are necessary to update, clarify, and reorganize the rules and procedures for adopting, changing, and retaining a taxpayer’s annual accounting period. The final regulations primarily affect taxpayers that want to adopt an annual accounting period under section 441 or that must receive approval from the Commissioner to adopt, change, or retain their annual accounting periods under section 442.

32.1.5.4.4  (08-11-2004)
DATES Caption

  1. The drafting team should insert a specific date or direct the OFR to compute and insert a date that is tied to the date the regulation is filed with, or published in, the Federal Register. In computing a date, the OFR begins counting on or after (as instructed) the date of filing or publication. If the date to be inserted falls on a weekend or a Federal holiday, the OFR uses the next Federal business day. See CCDM 32.1.1.3.2.4 , Federal Register Liaison Officers, and CCDM 32.1.6.11.2 , After Obtaining Filing and Publication Dates, for further information.

  2. To direct the OFR to compute and insert a date, the drafting team should bracket, capitalize, bold, and underline the date instructions.

    Example:
      DATES: Written or electronic comments must be received by [INSERT DATE 90 DAYS AFTER PUBLICATION OF THIS DOCUMENT IN THE FEDERAL REGISTER].

32.1.5.4.4.1  (09-30-2011)
ANPRM and NPRM

  1. When setting deadlines for comments on regulations or scheduling public hearings regarding regulations, the drafting team must consider the requirements of Executive Order 12866, as supplemented by Executive Order 13563. Executive Orders 12866 and 13563 state that

    1. Before issuing an NPRM, an agency should, where appropriate and feasible, seek the involvement of those who are intended to benefit from, and those expected to be burdened by, any regulation (including specifically, State, local, and tribal officials).

    2. An agency should afford the public a meaningful opportunity to comment through the Internet on any proposed regulation, which, in most cases, should include a comment period of at least 60 days.

    3. An agency, to the extent feasible and permitted by law, must provide, for both proposed and final rules, timely online access to the rulemaking docket on regulations.gov. For proposed rules, such access includes an opportunity to comment on all pertinent parts of the rulemaking docket.

  2. The DATES caption of an ANPRM provides the deadline for submitting comments.

  3. The DATES caption of an NPRM provides the:

    • Deadline for submitting comments

    • Date of the public hearing, if one has been scheduled, or deadline for requesting a public hearing, if one has not been scheduled (see CCDM 32.1.7.3, Public Hearings)

    • Deadline for submitting outlines of topics, if a public hearing has been scheduled (see CCDM 32.1.7.3)

  4. The deadline for submitting comments (and for requesting a public hearing if one has not been scheduled) is usually 90 days (but not less than 60 days) after the date of publication in the Federal Register. If a public hearing has been scheduled, the deadline for outlines of topics is usually three weeks prior to the hearing date. See CCDM 32.1.7.3.1 , Teleconferenced Public Hearings, for specific information regarding teleconferenced public hearings.

  5. If the preamble to the NPRM discusses the proposed effective date of a regulation, the drafting team should set out that discussion under the SUPPLEMENTARY INFORMATION caption, in a paragraph designated as "Proposed Effective Date." The drafting team should not discuss the proposed effective date of a regulation in the DATES section of an NPRM.

      Examples:
      DATES: Comments must be received by [ INSERT DATE 90 DAYS AFTER PUBLICATION OF THIS DOCUMENT IN THE FEDERAL REGISTER]. Outlines of topics to be discussed at the public hearing scheduled for Tuesday, June 3, 2003, at 10 a.m. must be received by Tuesday, May 13, 2003.
       
      DATES: Comments and requests for a public hearing must be received by [INSERT DATE 90 DAYS AFTER PUBLICATION OF THIS DOCUMENT IN THE FEDERAL REGISTER].

32.1.5.4.4.2  (10-20-2014)
TD

  1. The DATES caption of a TD provides the

    • Effective Date [Mandatory]

    • Date(s) of Applicability [Optional]

  2. The OFR defines "effective date" as the date on which the amendments in the TD would be added to the CFR, if the OFR updated the CFR daily. This date is mandatory and applies to all final and temporary regulations.

  3. Some IRS/Treasury regulations apply only on or after a certain date (for example, final regulations may provide that substantive rules apply on or after a particular date). This date is known as the "date of applicability." The date of applicability appears in the regulatory text in the "Effective/applicability date" section.

  4. In many cases, the effective and applicability dates are identical.

  5. For purposes of the Administrative Procedure Act and section 7805(b) of the Code, the applicability date, and not the effective date, is used to determine when the regulations have force and effect.

  6. If adding the date of applicability to the DATES caption, the drafting team may either:

    1. Repeat the effective date section of the regulation, or

    2. Provide a cross-reference to either the effective date section of the regulation or the "Effective Date" under the SUPPLEMENTAL INFORMATION caption of the preamble.

    Example:
    The TD is published in the Federal Register on November 1, 1999. The regulatory text provides for a January 1, 2000, effective date (the date of applicability).
       
      (g) Effective/applicability date. This section applies to qualified escrow accounts and qualified trusts established after December 31, 1999.
    Note:
    The DATES section of the preamble may read as one of the following:
    DATES: Effective Date: These regulations are effective [INSERT DATE OF PUBLICATION OF THIS DOCUMENT IN THE FEDERAL REGISTER].
       Applicability Date: These regulations apply to qualified escrow accounts and qualified trusts established after December 31, 1999.
      DATES: Effective Date: These regulations are effective [INSERT DATE OF PUBLICATION OF THIS DOCUMENT IN THE FEDERAL REGISTER].
       Applicability Date: For dates of applicability, see §1.468B-6(g).

32.1.5.4.4.3  (08-11-2004)
Table of Effective Dates and Time Periods

  1. The OFR uses the Table of Effective Dates and Time Periods (Table) to compute certain dates such as effective dates (see CCDM 32.1.5.4.4.2) and comment deadlines (see CCDM 32.1.5.4.4.1) that appear in regulations. In computing these dates, the day after publication is counted as the first day. If a date falls on a weekend or holiday, use the next Federal business day. The OFR publishes the Table in the first Federal Register issued each month.

32.1.5.4.5  (08-11-2004)
ADDRESSES Caption

  1. The ADDRESSES caption is always plural. This caption always appears in an ANPRM and an NPRM and appears in a TD that requests comments on issues discussed in the preamble. Under this caption, addresses are provided where to

    1. Mail, hand deliver, or electronically submit public comments and other submissions, such as a request to speak at a public hearing,

    2. Attend a public hearing, and

    3. Examine any material available for public inspection.

32.1.5.4.5.1  (08-11-2004)
Addresses for Submitting Comments

  1. The public may submit comments in three ways:

     
    U.S. Mail Address Internal Revenue Service
    CC:PA:LPD:PR (REG-XXXXXX-XX)
    Room 5203
    Post Office Box 7604
    Ben Franklin Station
    Washington, DC 20044
    Hand deliveries CC:PA:LPD:PR (REG-XXXXXX-XX)
    Courier’s Desk
    1111 Constitution Ave., N.W.
    Washington, DC 20224
    Electronic comments
    www.regulations.gov

    Example:


    ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-XXXXXX-XX), room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-XXXXXX-XX), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, N.W., Washington, DC, or sent electronically, via the Federal eRulemaking Portal at http://www.regulations.gov/ (indicate IRS and REG-XXXXXX-XX). The public hearing will be held in the IRS Auditorium, Internal Revenue Building, 1111 Constitution Avenue, N.W., Washington, DC.

32.1.5.4.5.2  (08-11-2004)
Public Hearing Address, Including Hearing Room

  1. Public hearings are held in several rooms in the National Office at 1111 Constitution Avenue. The Publications and Regulations Branch will reserve a hearing room and will furnish the drafting attorney with the hearing room information.

32.1.5.4.6  (08-11-2004)
FOR FURTHER INFORMATION CONTACT Caption

  1. This caption identifies the individual or individuals who will receive telephone inquiries and answer questions about the regulation, submission of comments, and hearing.

  2. The name, telephone number, and a statement that the telephone number is not a toll-free number must be included.

    Example 1: FOR FURTHER INFORMATION CONTACT: Drafting Attorney, (202) 622-XXXX (not a toll-free number).

    Example 2: FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Drafting Attorney, (202) 622-XXXX; concerning submissions of comments, the hearing, or to be placed on the building access list to attend the hearing, Publications and Regulations Branch Specialist, (202) 622-7180 (not toll-free numbers).

32.1.5.4.7  (08-11-2004)
SUPPLEMENTARY INFORMATION Caption

  1. In the SUPPLEMENTARY INFORMATION caption, the drafting team should provide the history of the regulation, other background information, and an explanation of the basis and purpose of the regulation. This section also includes information about Service compliance with Federal administrative laws (such as the Paperwork Reduction Act, Administrative Procedure Act, and Regulatory Flexibility Act), IRS policies, and Executive Orders (such as Executive Order 12866).

  2. The SUPPLEMENTARY INFORMATION caption generally includes the following descriptive, first level headings. The drafting team should type first level headings capitalizing the first letter of each word, except articles and prepositions consisting of fewer than five letters (for example "for," "to," v. "Under" ) in bold font, printed flush left. The drafting team should present first level headings in the following order:

    • Paperwork Reduction Act (if applicable)

    • Background

    • Explanation of Provisions (for ANPRMs, NPRMs, and TEMPs) or Summary of Comments or Explanation and Summary of Comments (for final regulations)

    • Effect on Other Documents (if applicable)

    • Special Analyses

    • Comments and Public Hearing (if applicable)

    • Drafting Information

    • List of Subjects

32.1.5.4.7.1  (08-11-2004)
Paperwork Reduction Act

  1. As discussed in CCDM 32.1.2.5, Applicability of Paperwork Reduction Act, regulations containing a collection of information requirement are subject to the Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3520). Regulations not containing a collection of information requirement are not subject to the PRA, and thus, are not required to have a Paperwork Reduction Act heading. For regulations subject to the PRA, the regulations must include text for the Paperwork Reduction Act heading that:

    1. Notifies the public that the agency submitted the collection of information requirement to OMB,

    2. Provides the OMB address where taxpayers should send comments on the collection of information requirement and the IRS address where taxpayers may submit copies of the comments,

    3. Identifies specific collection of information matters on which the agency would like taxpayers to submit comments,

    4. Provides a description of and need for the collection of information requirement,

    5. Identifies likely respondents,

    6. Provides a burden estimate,

    7. Notifies taxpayers that the collection of information requirement is not enforceable unless it displays an OMB control number (see CCDM 32.1.2.5, Applicability of Paperwork Reduction Act), and

    8. Instructs taxpayers to retain material related to the collection of information as long as it may be necessary to administer the internal revenue laws.

32.1.5.4.7.2  (09-30-2011)
Background

  1. In the Background section, the drafting team should briefly discuss the history of the project. For example, if the IRS issues proposed, final, or temporary regulations in response to legislation, the drafting team should identify the legislation addressed. Also, the drafting team should discuss any significant case law that is contrary to the regulation. Also, if the IRS issues a final regulation, the drafting team should provide a citation to the underlying NPRM and any ANPRM. If the agency issues an NPRM cross-referenced to a TEMP, the drafting team should provide the citation to the TEMP. Do not provide a citation to the cross-referenced NPRM in the corresponding temporary regulation.

    Example 1: NPRM
      Background

     This document contains proposed amendments to 26 CFR part 1 under section 468B of the Internal Revenue Code (Code). Section 468B was added to the Code by section 1807(a)(7)(A) of the Tax Reform Act of 1986 (Public Law 99-514, 100 Stat. 2814) and was amended by section 1018(f) of the Technical and Miscellaneous Revenue Act of 1988 (Public Law 100-647, 102 Stat. 3582). Section 468B(g) provides that nothing in any provision of law shall be construed as providing that an escrow account, settlement fund, or similar fund is not subject to current income tax. Section 468B(g) further provides that the Secretary shall prescribe regulations providing for the taxation of such accounts or funds as a grantor trust or otherwise.


     Final regulations (TD 8459) under section 468B(g) were published in the Federal Register for December 23, 1992 (57 FR 60983) to provide guidance concerning qualified settlement funds but not other types of escrow accounts, settlement funds, or similar funds. These proposed regulations provide guidance with respect to section 1031 qualified escrow accounts, pre-closing and post-closing escrows, and disputed ownership funds.
    Example 2: NPRM by cross-reference to temporary regulations
      Background

     Temporary regulations in the Rules and Regulations section of this issue of the Federal Register (64 FR 43910) amend 26 CFR part 1. The temporary regulations provide that an income tax return preparer who is an individual may furnish either a social security number or an alternative identifying number to satisfy the requirements of section 6109(a)(4). The text of those regulations also serves as the text of these regulations. The preamble to the temporary regulations explains the temporary regulations and these proposed regulations.
    Example 3: Temporary regulation
      Background

     This document contains amendments to 26 CFR part 1. Section 6109(a)(4) of the Internal Revenue Code (Code) provides that any return or claim for refund prepared by an income tax return preparer must bear the identifying number of the preparer as required by regulations prescribed by the Secretary. Prior to its amendment by the Internal Revenue Service Restructuring and Reform Act of 1998 (Public Law 105-206, 112 Stat. 685 (RRA ’98)), section 6109(a) provided that the identifying number of an individual preparer was that preparer’s social security number (SSN).


     Section 3710 of RRA ’98 amended section 6109(a) by removing the requirement that an individual preparer’s identifying number be the preparer’s SSN. Instead, the Secretary may prescribe alternatives to the SSN for purposes of identifying individual preparers.
    Example 4: Final regulation
      Background

     This document contains amendments to 26 CFR part 52. On September 6, 1990, a temporary regulation (TD 8311) relating to returns, payments, and deposits of tax under sections 4681 and 4682 (relating to the tax imposed on ozone-depleting chemicals) was published in the Federal Register (55 FR 36612). A notice of proposed rulemaking (REG-120200-87) cross-referencing the temporary regulations was published in the Federal Register for the same day (55 FR 36659). No public hearing was requested or held. Comments responding to the notice of proposed rulemaking were received. After consideration of all the comments, the proposed regulations are adopted as amended by this Treasury decision, and the corresponding temporary regulations are removed. The revisions are discussed below.
    Example 5: Final regulation (no change TD)
      Background

     This document contains amendments to 26 CFR part 1. On January 22, 1999, a notice of proposed rulemaking (REG-XXXXXX-XX) relating to the taxation of capital gains on installment sales of depreciable real property was published in the Federal Register (64 FR 3457). No comments were received from the public in response to the notice of proposed rulemaking. No public hearing was requested or held. The proposed regulations are adopted by this Treasury decision.

32.1.5.4.7.3  (10-20-2014)
Explanation of Provisions

  1. In the Explanation of Provisions section, the drafting team should describe the substantive provisions of the regulation in clear, concise, plain language without restating particular rules contained in the regulatory text.

  2. If the regulation is of a length or complexity that the Explanation of Provisions section itself is lengthy or complex, the drafting team may include a short, straightforward executive summary at the beginning of the section. OMB issued a January 4, 2012 memorandum encouraging use of executive summaries. See Memorandum on Clarifying Regulatory Requirements: Executive Summaries, Office of Mgmt. & Budget, Exec. Office of the President (Jan. 4, 2012), available at http://www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/clarifying-regulatory-requirements_executive-summaries.pdfIn the infrequent case of a significant regulation under Executive Order 12866, as supplemented by Executive Order 13563, a major rule under the Congressional Review Act, or a lengthy, highly technical rule, it may be appropriate to make additional efforts to provide a concise summary of the rule particularly when the preamble itself is lengthy, or difficult to read because of the technical subject matter. A general guideline to be used when deciding whether a condensed executive summary is necessary is to favor inclusion when the document (preamble and regulatory text) exceeds 100 pages. A separate executive summary, however, is not automatically required for every 100+ page document. Merely because a regulation is in excess of 100 pages or it is a multiagency regulation is not determinative that another executive summary, which is more concise than the executive summary prepared in conformance with our normal procedures, is required. Overall, the drafting team should consider whether this additional concise executive summary will be helpful in understanding the preamble and regulations, or if it will just be repetitive.

  3. For final regulations, the drafting team should use the heading title Summary of Comments or Summary of Comments and Explanation of Revisions, if appropriate. In this section, the drafting team should identify and describe the significant differences, if any, between the rules adopted in the final regulation and those proposed in the underlying NPRM. Do not repeat material stated in the preamble to the NPRM. Also, the drafting team should address the public comments submitted in writing and the oral comments presented at the public hearing on the NPRM (generally, including late comments). The drafting team may choose to explain in the Summary of Comments where the comments can be found. If so, the explanation should state that all comments are available at www.regulations.gov or upon request. The drafting team should explain why the agency found some comments persuasive, and others not, in issuing the final regulations. When discussing public comments, the IRS generally does not identify the parties submitting them. However, the drafting team should identify and discuss the comments submitted by the Chief Counsel for Advocacy of the Small Business Administration. See CCDM 32.1.5.4.7.5.2 for further information.

  4. The drafting team should use 2nd level through 5th level headings, as necessary, to organize the text of the Explanation of Provisions, highlight individual rules or issues, explain particularly complicated issues, or identify issues on which the agency would like to receive public comments. Second through 5th level headings are printed flush left and single-spaced. The first word may be a symbol (for example "§" ). These headings may be numbered or unnumbered. If numbered, OFR does not require any particular numbering convention (as it does for headings in the regulation text). When the Explanation of Provisions contains 2nd level through 5th level headings, the correct format is as follows:

    • 2nd level heading: Capitalize the first letter of each word, except articles and prepositions with less than five letters (for example, "for," "to," and "Under" ), underlined and not in bold font,

    • 3rd level heading: Capitalize the first letter of the first word, underlined and not in bold font,

    • 4th level heading: Capitalize the first letter of each word, except articles and prepositions that are less than five letters, not underlined and not in bold font, and

    • 5th level heading: Capitalize the first letter of the first word, not underlined and not in bold font.

      Example:

        Summary of Comments and Explanation of Revisions
        1. Comments and Changes Relating to §1.441 of the Proposed Regulations
        A. Definition of 52-53-week taxable year
          *****
        B. Changes to or from a 52-53-week taxable year
          *****
        C. Short periods of 6 days or less
          *****
        2. Comments and Changes Relating to §1.442 of the Proposed Regulations Time and Manner for Filing an Application
        3. Comments and Changes Relating to Partnerships, S Corporations, and Personal Service Corporations (PSCs)

32.1.5.4.7.4  (08-11-2004)
Effect on Other Documents

  1. A regulation is the highest form of published guidance and has the force and effect of law unless invalidated. A regulation may be used to affect a lower form of published guidance (i.e., revenue ruling, revenue procedure, or notice). However, a lower form of published guidance may not be used to affect a regulation.

  2. If the regulation obsoletes, clarifies, or modifies a revenue ruling, revenue procedure, or notice, describe the change in the Effect on Other Documents section. The drafting team must notify the Internal Revenue Bulletin Unit of any effect the regulation has on other documents to ensure that the information is printed in the Internal Revenue Bulletin and the effect on other documents is made available to the public.

    Example:
      Effect on Other Documents
      The following publications are obsolete as of [INSERT DATE OF PUBLICATION OF THIS DOCUMENT IN THE FEDERAL REGISTER]:
        Notice 90-8 (1990-1 CB 305).
        Notice 90-9 (1990-1 CB 312).

32.1.5.4.7.5  (08-11-2004)
Special Analyses

  1. The drafting team should use the Special Analyses section to describe IRS compliance with (or the inapplicability of) Federal statutory (including the Code), regulatory, and Executive Branch mandates governing the regulatory process. The Administrative Procedure Act, the Regulatory Flexibility Act, Executive Order 12866, and sections 7805(e) and (f) of the Code contain some of these mandates.

32.1.5.4.7.5.1  (09-30-2011)
Administrative Procedure Act

  1. The Administrative Procedure Act (APA) generally requires agencies that promulgate rules to provide public notice of a proposed rulemaking in the Federal Register, permit the public to submit written comments, and include a general statement of the rule’s basis and purpose when publishing the final rule. 5 U.S.C. § 553(b), (c). Regulations required to follow the APA’s notice and comment procedure are referred to as legislative rules or substantive rules.

    1. The APA excepts from these requirements interpretative rules, general statements of policy, and rules of agency organization, procedure, or practice. 5 U.S.C. § 553(b)(A).

    2. The APA also excepts from notice and comment those regulations that an agency, for good cause, finds that notice and public comment are “impracticable, unnecessary, or contrary to the public interest” and incorporates the good cause finding and a brief statement of the reasons therefore in the rule it issues. 5 U.S.C § 553(b)(B). Good cause also excepts the application of the APA rule that requires regulations to be published 30 days before the effective date issues.

  2. Under the guidelines in CCDM 32.1.1.2.8, How to Determine If a Rule Is Interpretative or Legislative, most IRS/Treasury regulations will be interpretative regulations because they fill gaps in legislation or have a prior existence in the law. Generally, the underlying Internal Revenue Code section imposing the tax or providing for collection of a tax will provide an adequate legislative basis for the action in the regulations. The regulations provide a mechanism to implement the Internal Revenue Code provision passed by Congress.

  3. Although most IRS/Treasury regulations are interpretative, and therefore not subject to the notice-and-comment provisions of the APA, the Service usually solicits public comment when it promulgates a rule.

  4. In the Special Analyses section, the drafting team should state whether the regulation is subject to 5 U.S.C. 553(b), (c), and (d).

  5. Section 553(d) of the APA requires agencies to publish regulations at least 30 days before their effective date. This provision does not apply to regulations

    • That adopt a substantive rule that grants or recognizes an exemption, or relieves a restriction, or

    • For which the agency has good cause.

  6. Notice and comment are "impracticable" when the agency cannot "both follow section 553 and execute its statutory duties" and "unnecessary" when "the regulation is technical or minor." Levesque v. Block, 723 F.2d 175, 184 (1st Cir. 1983). The public interest exception recognizes that "public rule-making procedures shall not prevent an agency from operating" and that "lack of public interest may warrant an agency to dispense with public procedure." 5 U.S.C. § 553(b)(B) (quoting S. Rep. No. 752, 79th Cong., 1st Sess. 14 (1945)).

  7. The Service will generally rely on the necessity of immediate guidance as good cause but the preamble should discuss and describe the circumstances causing the need for immediate guidance. The following considerations may support the conclusion that good cause exists:

    • The need to avoid confusion,

    • The complexity of the regulatory framework addressed by the regulation,

    • Congressional authorization for the issuance of the rule,

    • The temporary or interim effect of the rule during which the agency devises a final rule incorporating notice and comment, and

    • Agency diligence in seeking notice and comment and promulgating a final rule incorporating those comments in accordance with the APA.

  8. In addition to a description of the need for immediate guidance, any regulation relying on the good cause exception should include language similar to the following:

    "These regulations are necessary to provide taxpayers with immediate guidance. Accordingly, good cause is found for dispensing with notice and public comment pursuant to 5 U.S.C. 553(b) and (c) and with a delayed effective date pursuant to 5 U.S.C. 553(d)."

  9. IRS/Treasury temporary regulations are generally issued when there is a need to provide taxpayers with immediate guidance.

  10. IRS/Treasury regulations have the force and effect of law even though they are interpretative regulations.

32.1.5.4.7.5.2  (08-11-2004)
Section 7805(e) and (f) of the Code

  1. Section 7805(e) of the Code provides that any temporary regulation issued must also be issued as an NPRM.

  2. Section 7805(f) provides that after publishing NPRMs and temporary regulations, the IRS will submit the regulations to the Chief Counsel for Advocacy (CCA) of the Small Business Administration (SBA) for comment on the impact of the regulations on small business. (The Publications and Regulations Branch is responsible for submitting regulations to the SBA after publication in the Federal Register.)

    1. IRS will consider the comments of the CCA when issuing final regulations and will respond to those comments in the preamble (see CCDM 32.1.8.3), Preamble to the Final Regulation, and

    2. At least four weeks prior to publication in the Federal Register, the Publications and Regulations Branch will submit to the CCA for comment final regulations not preceded by an NPRM. The drafting team must consider any comments received in drafting the final regulations and must discuss the comments in the preamble to the final regulations.

  3. If the regulation is an NPRM or temporary regulation, the drafting team should include the following statement:

    "Pursuant to section 7805(f) of the Internal Revenue Code, this regulation has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. "

  4. If the regulation is a final regulation that supersedes an NPRM or temporary regulation, the drafting team should include the following statement:

    "Pursuant to section 7805(f) of the Internal Revenue Code, the NPRM preceding this regulation was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business." OR "The Chief Counsel for Advocacy submitted comments on the regulation, which are discussed elsewhere in this preamble."

  5. If the regulation is a final regulation without a prior NPRM, the drafting team should include the following statement:

    "Pursuant to section 7805(f) of the Internal Revenue Code, this regulation was submitted to the Chief Counsel for Advocacy of the SBA for comment on its impact on small business." OR "The Chief Counsel for Advocacy submitted comments on the regulation, which are discussed elsewhere in this preamble."


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