[Federal Register: April 1, 2003 (Volume 68, Number 62)]
[Proposed Rules]
[Page 15690]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01ap03-18]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 49
[REG-141097-02]
RIN 1545-BB18
Excise Taxes; Communications Services, Distance Sensitivity
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: This document contains proposed regulations relating to the
definition of toll telephone service for purposes of the communications
excise tax. These regulations affect providers and purchasers of
communications services.
DATES: Written and electronic comments and requests for a public
hearing must be received by June 30, 2003.
ADDRESSES: Send submissions to: CC:PA:RU (REG-141097-02), room 5226,
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be hand delivered Monday through Friday
between the hours of 8 a.m. and 5 p.m. to: CC:PA:RU (REG-141097-02),
Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue,
NW., Washington, DC. Alternatively, taxpayers may submit electronic
comments directly to the IRS Internet site at http: www.irs.gov/regs.
FOR FURTHER INFORMATION CONTACT: Concerning submissions, LaNita Van
Dyke, (202) 622-7180; concerning the regulations, Cynthia McGreevy
(202) 622-3130 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
This document contains proposed amendments to the Facilities and
Services Excise Tax Regulations (26 CFR part 49) relating to the
definition of toll telephone service.
Section 4251 imposes tax on amounts paid for certain communications
services, including local and toll telephone service. Section
4252(b)(1) provides that toll telephone service means a telephonic
quality communication for which there is a toll charge that varies in
amount with the distance and elapsed transmission time of each
individual communication.
Section 4252(b)(1), as enacted in 1965, describes the long distance
telephone service sold to residential and most business subscribers
under the 1965 Federal Communications Commission rules. At that time,
the charge for a long distance telephone call increased as the duration
of the call increased and generally increased as the distance between
the originating telephone station and the terminating telephone station
increased. By the late 1990's, most carriers had moved toward a fee
structure that includes a flat per-minute rate for domestic calls.
In 1979, the Treasury Department published Rev. Rul. 79-404 (1979-2
C.B. 382), which stands for the principle that a long distance
telephone call for which the charge varies with elapsed transmission
time but not with distance is toll telephone service described in
section 4252(b)(1).
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in Executive Order
12866. Therefore, a regulatory assessment is not required. It also has
been determined that section 553(b) of the Administrative Procedure Act
(5 U.S.C. chapter 5) does not apply to these regulations and, because
these regulations do not impose on small entities a collection of
information requirement, the Regulatory Flexibility Act (5 U.S.C.
chapter 6) does not apply. Therefore, a Regulatory Flexibility Analysis
is not required. Pursuant to section 7805(f) of the Internal Revenue
Code, this 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.
Comments and Requests for a Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written and electronic comments that
are submitted timely to the IRS. The IRS and Treasury Department
specifically request comments on the clarity of the proposed
regulations and how they may be made easier to understand. All comments
will be available for public inspection and copying. A public hearing
may be scheduled if requested in writing by any person that timely
submits written comments. If a public hearing is scheduled, notice of
the date, time, and place for the hearing will be published in the
Federal Register.
Drafting Information
The principal author of these regulations is Cynthia McGreevy,
Office of Associate Chief Counsel (Passthroughs and Special
Industries). However, other personnel from the IRS and Treasury
Department participated in their development.
List of Subjects in 26 CFR Part 49
Excise taxes, Reporting and recordkeeping requirements, Telephone,
Transportation.
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 49 is proposed to be amended as follows:
PART 49--FACILITIES AND SERVICES EXCISE TAXES
1. The authority citation for part 49 continues to read in part as
follows:
Authority: 26 U.S.C. 7805. * * *
2. Section 49.4252-0 is added to read as follows:
Sec. 49.4252-0 Section 4252(b)(1); distance sensitivity.
(a) In general. For a communications service to constitute toll
telephone service described in section 4252(b)(1), the charge for the
service need not vary with the distance of each individual
communication.
(b) Effective date. This section applies to amounts paid on and
after the date of publication of these regulations in the Federal
Register as final regulations.
David A. Mader,
Assistant Deputy Commissioner of Internal Revenue.
[FR Doc. 03-7813 Filed 3-31-03; 8:45 am]
BILLING CODE 4830-01-P