Unknown. Interim rule and request for comments

37,060 words·~168 min read·/register/2008/01/07/08-1

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

--- schema: federal-register doc_type: fedreg source_file: FR-2008-01-07.xml --- 72 4 Monday, January 7, 2008 Contents Agriculture Agriculture Department See Animal and Plant Health Inspection Service See Forest Service Animal Animal and Plant Health Inspection Service RULES Addition of Armenia to the List of Regions Where African Swine Fever Exists, E7-25661 NOTICES Environmental Impact Statement; Regulated Status of Alfalfa Genetically Engineered for Tolerance to the Herbicide Glyphosate, E7-25662 Meetings:

National Poultry Improvement Plan General Conference Committee, E8-13 Army Army Department NOTICES Environmental statements; record of decision: Army growth and force structure realignment, 07-6222 Coast Guard Coast Guard PROPOSED RULES Security Zone: Waters Surrounding U.S. Forces Vessel SBX-1, HI, E8-19 Commerce Commerce Department See International Trade Administration Commodity Commodity Futures Trading Commission NOTICES Exemption Extension Granted Pursuant to Commodity Exchange Act for Certain Over-the-Counter Swaps;

Eligibility of Certain Floor Brokers and Traders, E8-11 Defense Defense Department See Army Department See Navy Department Drug Drug Enforcement Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, E7-25596 Energy Energy Department See Energy Efficiency and Renewable Energy Office See Federal Energy Regulatory Commission NOTICES Energy Conservation Program for Commercial Equipment: Petition for Waiver From Daikin AC (Americas), etc., E8-12 Meetings:

Environmental Management Site-Specific Advisory Board, Hanford, E8-14 Energy Energy Efficiency and Renewable Energy Office NOTICES Energy Conservation Program for Certain Industrial Equipment: Publication of the Petition for Waiver From Daikin AC, Inc. and Granting of the Application f, E7-25650 EPA Environmental Protection Agency RULES Michigan: Final Authorization of State Hazardous Waste Management Program Revision, E8-16 PROPOSED RULES Approval and Promulgation of Air Quality Implementation Plans:

Pennyslvania; Redesignation of the Allentown-Bethlehem-Easton 8-hour Ozone Nonattainment Area to Attainment and Approval of the Maintenance Plan, etc., E8-27 Approval and Promulgation of Implementation Plans and Designation of Areas for Air Quality Planning Purposes: Nevada; Wintertime Oxygenated Gasoline Rule; Vehicle Inspection and Maintenance Program, etc., E7-25636 NOTICES Meetings: Adaptation for Climate-Sensitive Ecosystems and Resources Advisory Committee, E8-17 Human Impacts of Climate Change Advisory Committee, E8-22 FAA Federal Aviation Administration RULES Airworthiness directives:

BAE Systems (Operations) Limited Model BAE 146 and Avro 146-RJ Airplanes, E7-25479 Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP Series Airplanes, E7-25614, E7-25616 Boeing Model 747 Airplanes, E7-25500 Rolls-Royce Deutschland Ltd & Co KG Tay 611-8, Tay 611-8C, Tay 620-15, Tay 650-15, and Tay 651-54 Turbofan Engines, E7-25497 NOTICES Airport Noise Compatibility Program: Noise Exposure Maps— Ocala International Airport, FL, 08-5 Orlando Executive Airport, FL, 08-4 FCC Federal Communications Commission RULES Exclusive Service Contracts for Provision of Video Services in Multiple Dwelling Units and Other Real Estate Developments, E7-25349 PROPOSED RULES Exclusive Service Contracts for Provision of Video Services in Multiple Dwelling Units and Other Real Estate Developments, E7-25214 Federal Energy Federal Energy Regulatory Commission PROPOSED RULES Pipeline Posting Requirements under Section 23 of the Natural Gas Act, E7-25435 NOTICES Combined Notice of Filings No. 1, E8-21 Federal Highway Federal Highway Administration NOTICES Environmental Statements;

Notice of Intent: Saint Louis County, MN, 07-6303 Stearns County, MN, 07-6302 Federal Motor Federal Motor Carrier Safety Administration NOTICES Meetings; Sunshine Act, 08-19 Federal Procurement Federal Procurement Policy Office NOTICES Reports and guidance documents; availability, etc.: Green products and services acquisition; policy letter, 73904-73909 [ **Editorial Note:** This document was inadvertently placed under the Personnel Management Office in the **Federal Register** Table of Contents of December 28, 2007.] Fish Fish and Wildlife Service NOTICES Notice of availability of the Final Comprehensive Conservation Plan for Catahoula National Wildlife Refuge in LaSalle and Catahoula Parishes, Louisiana, E8-4 Vieques National Wildlife Refuge, Vieques, PR;

Notice of Availability; Record of Decision, E8-5 Food Food and Drug Administration NOTICES Meetings: Public Input Ensuring the Safety of Pet Food, E7-25599 Foreign Foreign Assets Control Office NOTICES Unblocking of Specially Designated Narcotics Traffickers Pursuant to Executive Order 12978, E7-25591 Forest Forest Service PROPOSED RULES Special Areas; Roadless Area Conservation; Applicability to the National Forests in Idaho, 07-6305 NOTICES Plumas National Forest; California;

Moonlight Fire Recovery and Restoration Project, 07-6301 GSA General Services Administration NOTICES Use of Segways® and Similar Devices by Individuals with a Mobility Impairment in GSA-Controlled Federal Facilities, E7-25592 Health Health and Human Services Department See Food and Drug Administration See National Institutes of Health NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, E7-25431 Homeland Homeland Security Department See Coast Guard Housing Housing and Urban Development Department NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, E7-25663 Indian Indian Affairs Bureau NOTICES Indian Gaming, E7-25628 Interior Interior Department See Fish and Wildlife Service See Indian Affairs Bureau IRS Internal Revenue Service RULES Guidance Necessary to Facilitate Electronic Tax Administration—Updating of Section 7216 Regulations, 08-1 PROPOSED RULES Guidance Necessary to Facilitate Electronic Tax Administration—Updating of Section 7216 Regulations, 08-2 S Corporation Guidance Under AJCA of 2004 and GOZA of 2005;

Hearing Cancellation, E8-24 International International Trade Administration NOTICES Antidumping: Stainless Steel Butt-Weld Pipe Fittings From— Taiwan, E7-25644 Brake Rotors from the People's Republic of China: Extension of Time Limit for the Preliminary Results of the 2006; 2007 Administrative and New Shipper Reviews, E7-25645 Extension of Time Limit for Final Results of Administrative Review: Oil Country Tubular Goods, Other Than Drill Pipe from Korea, E7-25646 International International Trade Commission NOTICES Uncovered Innerspring Units From China, South Africa, and Vietnam, E8-7 Justice Justice Department See Drug Enforcement Administration NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, E7-25594 Consent Decree Under the Clean Air Act, 07-6295 Proposed Consent Decree Under the Clean Air Act, 07-6296 Management Management and Budget Office See Federal Procurement Policy Office NIH National Institutes of Health NOTICES Meetings: National Institute of Child Health and Human Development, 07-6292 National Institute of Mental Health, 07-6293 National Institute on Drug Abuse Draft Strategic Plan, E7-25521 National Transportation National Transportation Safety Board NOTICES Meetings:

Marine Accident Report—Heeling Accident on M/V Crown Princess, Atlantic Ocean Off Port Canaveral, Florida, July 18, 2006, 07-6294 Navy Navy Department NOTICES Meetings: Chief of Naval Operations Executive Panel, E8-25 Nuclear Nuclear Regulatory Commission NOTICES Imposition of Civil Penalty on Contractors and Subcontractors Who Discriminate Against Employees for Engaging in Protected Activities, E7-25629 Pipeline Pipeline and Hazardous Materials Safety Administration RULES Hazardous Materials:

Revisions to the List of Hazardous Substances and Reportable Quantities, 07-6297 Postal Postal Regulatory Commission NOTICES FY 2007 Annual Compliance Report; comment request, E7-25656 Meetings: Cost model used for periodicals in the Cost and Revenue Analysis Report FY 2007; technical conference, E8-36 Postal Postal Service PROPOSED RULES Implementation of Intelligent Mail Barcodes, E7-25635 SEC Securities and Exchange Commission NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, E8-2, E8-3 Meetings; Sunshine Act, E8-43 Self-Regulatory Organizations; Proposed Rule Changes: American Stock Exchange, LLC, E7-25598 Chicago Board Options Exchange, Inc., E7-25651 Depository Trust Co., E7-25655 International Securities Exchange, LLC, E7-25652 New York Stock Exchange LLC, E7-25597, E7-25600, E7-25654 Philadelphia Stock Exchange, Inc., E7-25653, E8-9 Social Social Security Administration NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, E8-10 State State Department NOTICES Culturally Significant Objects Imported for Exhibition Determinations:, E8-20 Between India and Portugal Around 1600 Assorted Objects of Greek and Roman Art, E8-18 Surface Surface Transportation Board NOTICES Colorado Springs & Eastern Railroad Company-Abandonment Exemption-in El Paso County, CO, E8-8 Mid-Michigan Railroad, Inc.?Abandonment Exemption?in Kent and Ionia Counties, MI, E8-40 Transportation Transportation Department See Federal Aviation Administration See Federal Highway Administration See Federal Motor Carrier Safety Administration See Pipeline and Hazardous Materials Safety Administration See Surface Transportation Board Treasury Treasury Department See Foreign Assets Control Office See Internal Revenue Service NOTICES Agency information collection activities; proposals, submissions, and approvals, E7-25649 Veterans Veterans Affairs Department RULES Dependents’ Education Assistance, E7-25657 Education:

Approval of Accredited Courses for VA Education Benefits, E7-25658 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, E7-25659, E7-25660 Reader Aids Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, reminders, and notice of recently enacted public laws. To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.gpo.gov and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions. 73 4 Monday, January 7, 2008 Rules and Regulations DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 9 CFR Part 94 [Docket No.

APHIS-2007-0142] Addition of Armenia to the List of Regions Where African Swine Fever Exists AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Interim rule and request for comments. SUMMARY: We are amending the regulations concerning the importation of animals and animal products by adding Armenia to the list of regions where African swine fever exists. We are taking this action because outbreaks of African swine fever have been confirmed in various locations in the northern portion of Armenia.

This action will restrict the importation of pork and pork products into the United States from Armenia and is necessary to prevent the introduction of African swine fever into the United States. DATES: This interim rule is effective January 7, 2008. However, we are imposing this restriction retroactively to August 29, 2007, which is the date that the presence of ASF in Armenia was confirmed. We will consider all comments that we receive on or before March 7, 2008. ADDRESSES:

You may submit comments by either of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov/fdmspublic/component/main?main=DocketDetail&d=APHIS-2007-0142* to submit or view comments and to view supporting and related materials available electronically. • *Postal Mail/Commercial Delivery:* Please send two copies of your comment to Docket No. APHIS-2007-0142, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238.

Please state that your comment refers to Docket No. APHIS-2007-0142. *Reading Room:* You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue, SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call

(202)690-2817 before coming. *Other Information:* Additional information about APHIS and its programs is available on the Internet at *http://www.aphis.usda.gov* . FOR FURTHER INFORMATION CONTACT: Mr. Javier Vargas, Animal Scientist, Regionalization Evaluation Services Staff, National Center for Import and Export, VS, APHIS, 4700 River Road Unit 38, Riverdale, MD 20737-1231;

(301)734-0756. SUPPLEMENTARY INFORMATION: Background The regulations in 9 CFR part 94 (referred to below as the regulations) govern the importation of specified animals and animal products to prevent the introduction into the United States of various animal diseases, including rinderpest, foot-and-mouth disease, bovine spongiform encephalopathy, swine vesicular disease, classical swine fever, and African swine fever (ASF). These are dangerous and destructive diseases of ruminants and swine. Section 94.8 of the regulations lists regions of the world where ASF exists or is reasonably believed to exist and imposes restrictions on the importation of pork and pork products into the United States from those regions. On August 29, 2007, Armenia reported to the World Organization for Animal Health six outbreaks of ASF in various areas in the northern part of the country. The source of the outbreaks is unknown. Therefore, in order to prevent the introduction of ASF into the United States, we are amending the regulations by adding Armenia to the list of regions in § 94.8 where ASF exists or is reasonably believed to exist. As a result of this action, the importation into the United States of pork and pork products from Armenia will be restricted. We are imposing this restriction retroactively to August 29, 2007, which is the date that the presence of ASF in Armenia was confirmed. Emergency Action This rulemaking is necessary on an emergency basis to prevent the introduction of ASF into the United States. Under these circumstances, the Administrator has determined that prior notice and opportunity for public comment are contrary to the public interest and that there is good cause under 5 U.S.C. 553 for making this rule effective less than 30 days after publication in the **Federal Register** . We will consider comments we receive during the comment period for this interim rule (see DATES above). After the comment period closes, we will publish another document in the **Federal Register** . The document will include a discussion of any comments we receive and any amendments we are making to the rule. Executive Order 12866 and Regulatory Flexibility Act This interim rule has been reviewed under Executive Order 12866. For this action, the Office of Management and Budget has waived its review under Executive Order 12866. This interim rule amends the regulations by adding Armenia to the list of regions in which ASF exists. This action is necessary on an emergency basis to prevent the introduction of ASF into the United States. The rule will restrict the importation of pork and pork products from Armenia. While the United States imported approximately $2.1 million of agricultural products from Armenia between 2002 and 2006, these were largely horticultural products, wine and wine products, and fruit and vegetable products. Pork and pork products are not currently imported from Armenia into the United States. Therefore, it is unlikely that this interim rule will have any substantial effects on trade, or on large or small businesses. Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities. Executive Order 12988 This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule:

(1)Preempts all State and local laws and regulations that are inconsistent with this rule;

(2)has retroactive effect to August 29, 2007; and

(3)does not require administrative proceedings before parties may file suit in court challenging this rule. Paperwork Reduction Act This interim rule contains no information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, *et seq.* ). List of Subjects in 9 CFR Part 94 Animal diseases, Imports, Livestock, Meat and meat products, Milk, Poultry and poultry products, Reporting and recordkeeping requirements. Accordingly, we are amending 9 CFR part 94 as follows: PART 94—RINDERPEST, FOOT-AND-MOUTH DISEASE, FOWL PEST (FOWL PLAGUE), EXOTIC NEWCASTLE DISEASE, AFRICAN SWINE FEVER, CLASSICAL SWINE FEVER, AND BOVINE SPONGIFORM ENCEPHALOPATHY: PROHIBITED AND RESTRICTED IMPORTATIONS 1. The authority citation for part 94 continues to read as follows: Authority: 7 U.S.C. 450, 7701-7772, 7781-7786, and 8301-8317; 21 U.S.C. 136 and 136a; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.4. § 94.8 [Amended] 2. In § 94.8, the introductory text is amended by adding the word “Armenia,” after the word “Africa,”. Done in Washington, DC, this 27th day of December 2007. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E7-25661 Filed 1-4-08; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-0044; Directorate Identifier 2007-NM-126-AD; Amendment 39-15320; AD 2007-26-18] RIN 2120-AA64 Airworthiness Directives; BAE Systems (Operations) Limited Model BAe 146 and Avro 146-RJ Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: We are adopting a new airworthiness directive

(AD)for the products listed above. This AD results from mandatory continuing airworthiness information

(MCAI)originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: “An accumulator cylinder had material defects and suffered an in-flight burst failure causing damage to the aircraft structure.” We are issuing this AD to require actions to correct the unsafe condition on these products. DATES: This AD becomes effective February 11, 2008. The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of February 11, 2008. ADDRESSES: You may examine the AD docket on the Internet at *http://www.regulations.gov* or in person at the U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC. FOR FURTHER INFORMATION CONTACT: Todd Thompson, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)227-1175; fax

(425)227-1149. SUPPLEMENTARY INFORMATION: Discussion We issued a notice of proposed rulemaking

(NPRM)to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the **Federal Register** on October 17, 2007 (72 FR 58774). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states: An accumulator cylinder had material defects and suffered an in-flight burst failure causing damage to the aircraft structure. This resulted in the issue of EASA Emergency AD 2006-0061-E [we issued AD 2006-23-12 to address that EASA AD] that required the identification and check of cylinders from known suspect batches. Further investigations and checks by the accumulator manufacturer have concluded that all cylinders from a particular supplier may not have been correctly inspected at manufacture. To prevent the risk of further failures, this Airworthiness Directive

(AD)requires all accumulators with cylinders from this supplier to be identified and inspected prior to re-installation. The corrective action includes replacing any accumulator found to have a defect. You may obtain further information by examining the MCAI in the AD docket. Comments We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public. Conclusion We reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed. Differences Between This AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have required different actions in this AD from those in the MCAI in order to follow our FAA policies. Any such differences are highlighted in a NOTE within the AD. Costs of Compliance We estimate that this AD will affect about 1 product of U.S. registry. We also estimate that it will take about 4 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $80 per work-hour. Based on these figures, we estimate the cost of this AD to the U.S. operators to be $320, or $320 per product. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify this AD: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket. Examining the AD Docket You may examine the AD docket on the Internet at *http://www.regulations.gov* ; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone

(800)647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new AD: **2007-26-18 BAE Systems (Operations) Limited (Formerly British Aerospace Regional Aircraft):** Amendment 39-15320. Docket No. FAA-2007-0044; Directorate Identifier 2007-NM-126-AD. Effective Date

(a)This airworthiness directive

(AD)becomes effective February 11, 2008. Affected ADs

(b)None. Applicability

(c)This AD applies to BAE Systems (Operations) Limited Model BAe 146-100A, -200A, and -300A series airplanes; and Model Avro 146-RJ70A, 146-RJ85A, and 146-RJ100A airplanes; certificated in any category, all models, all serial numbers. Subject

(d)Air Transport Association

(ATA)of America Code 29: Hydraulic power. Reason

(e)The mandatory continuing airworthiness information

(MCAI)states: An accumulator cylinder had material defects and suffered an in-flight burst failure causing damage to the aircraft structure. This resulted in the issue of EASA Emergency AD 2006-0061-E [we issued AD 2006-23-12 to address that EASA AD] that required the identification and check of cylinders from known suspect batches. Further investigations and checks by the accumulator manufacturer have concluded that all cylinders from a particular supplier may not have been correctly inspected at manufacture. To prevent the risk of further failures, this Airworthiness Directive

(f)Unless already done, do the following actions.

(1)Within 30 months after the effective date of this AD, identify the installed accumulator in accordance with paragraph 2.C. of BAE Systems (Operations) Limited Inspection Service Bulletin ISB.29-047, dated October 3, 2006, which makes reference to APPH Service Bulletin AIR91666-29-03, dated July 2006.

(2)When an accumulator is identified as being affected by this AD, before further flight after accomplishing the actions required in paragraph (f)(1) of this AD, remove the accumulator in accordance with paragraph 2.D. of BAE Systems (Operations) Limited Inspection Service Bulletin ISB.29-047, dated October 3, 2006, and do a magnetic particle inspection of the cylinder for any defects in accordance with the Accomplishment Instructions of APPH Service Bulletin AIR91666-29-03, dated July 2006.

(3)If any defect is found during the inspection required in paragraph (f)(2) of this AD, before next flight, replace the accumulator with a serviceable unit in accordance with the Accomplishment Instructions of APPH Service Bulletin AIR91666-29-03, dated July 2006.

(4)After the effective date of this AD, no person may install a spare accumulator identified by APPH Service Bulletin AIR91666-29-03, dated July 2006, as a replacement part, unless it has been inspected in accordance with APPH Service Bulletin AIR91666-29-02, dated March 2006; or APPH Service Bulletin AIR91666-29-03, dated July 2006 (see second Note in paragraph 1.D.(1) of BAE Systems (Operations) Limited Inspection Service Bulletin ISB.29-047, dated October 3, 2006, for further explanation). FAA AD Differences Note: This AD differs from the MCAI and/or service information as follows:

(1)Where the MCAI specifies to identify the installed accumulator within 6 weeks after the effective date of the AD, we have determined that the identification may be done within 30 months after the effective date of this AD to coincide with the compliance time for the magnetic particle inspection. In making this determination, we considered the maximum interval of time allowable for all affected airplanes to continue to operate without compromising safety, fleet usage, and the availability of replacement parts. Other FAA AD Provisions

(g)The following provisions also apply to this AD:

(1)*Alternative Methods of Compliance (AMOCs):* The Manager, ANM-116, International Branch, Transport Airplane Directorate, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Send information to ATTN: Todd Thompson, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)227-1175; fax

(425)227-1149. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector

(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.

(2)*Airworthy Product:* For any requirement in this AD to obtain corrective actions from a manufacturer or other source, use these actions if they are FAA-approved. Corrective actions are considered FAA-approved if they are approved by the State of Design Authority (or their delegated agent). You are required to assure the product is airworthy before it is returned to service.

(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act, the Office of Management and Budget

(OMB)has approved the information collection requirements and has assigned OMB Control Number 2120-0056. Related Information

(h)Refer to MCAI European Aviation Safety Agency Airworthiness Directive 2007-0076, dated March 21, 2007, and the service information listed in Table 1 of this AD for related information. Table 1.—Service Information Service Bulletin Date APPH Service Bulletin AIR91666-29-02 March 2006. APPH Service Bulletin AIR91666-29-03 July 2006. BAE Systems (Operations) Limited Inspection Service Bulletin ISB.29-047 October 3, 2006. Material Incorporated by Reference

(i)You must use the service information specified in Table 2 of this AD to do the actions required by this AD, unless the AD specifies otherwise.

(1)The Director of the Federal Register approved the incorporation by reference of this service information under 5 U.S.C. 552(a) and 1 CFR part 51.

(2)For service information identified in this AD, contact British Aerospace Regional Aircraft American Support 13850 Mclearen Road, Herndon, Virginia 20171; and APPH Ltd., Engineering Division, Unit 1, Pembroke Court, Chancellor Road, Manor Park, Runcorn, Cheshire, WA7 1TG, England, United Kingdom.

(3)You may review copies at the FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call

(202)741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* Table 2.—Material Incorporated by Reference Service Bulletin Date APPH Service Bulletin AIR91666-29-03 July 2006. BAE Systems (Operations) Limited Inspection Service Bulletin ISB.29-047 October 3, 2006. Issued in Renton, Washington, on December 20, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-25479 Filed 1-4-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28989; Directorate Identifier 2007-NM-070-AD; Amendment 39-15319; AD 2007-26-17] RIN 2120-AA64 Airworthiness Directives; Boeing Model 747 Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is superseding an existing airworthiness directive (AD), which applies to certain Boeing Model 747-200B, 747-200C, 747-200F, 747-300, 747-400, and 747SP series airplanes. That AD currently requires doing a detailed inspection of the left and right longeron extension fittings, and corrective action if necessary. This new AD adds airplanes to the applicability of the existing AD. This AD results from reports that accidental drilling damage to the longeron extension fittings was found on airplanes not subject to the existing AD. We are issuing this AD to detect and correct accidental drilling damage of the longeron extension fittings, which could lead to cracking of the longeron extension fittings and result in rapid decompression of the airplane. DATES: This AD becomes effective February 11, 2008. The Director of the Federal Register approved the incorporation by reference of a certain publication listed in the AD as of February 11, 2008. On June 16, 2006 (71 FR 27592, May 12, 2006), the Director of the Federal Register approved the incorporation by reference of Boeing Alert Service Bulletin 747-53A2515, dated October 20, 2005. ADDRESSES: For service information identified in this AD, contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207. Examining the AD Docket You may examine the AD docket on the Internet at *http://www.regulations.gov;* or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The address for the Docket Office (telephone 800-647-5527) is the Document Management Facility, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. FOR FURTHER INFORMATION CONTACT: Ivan Li, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)917-6437; fax

(425)917-6590. SUPPLEMENTARY INFORMATION: Discussion The FAA issued a notice of proposed rulemaking

(NPRM)to amend 14 CFR part 39 to include an AD that supersedes AD 2006-10-04, amendment 39-14588 (71 FR 27592, May 12, 2006). The existing AD applies to certain Boeing Model 747-200B, 747-200C, 747-200F, 747-300, 747-400, and 747SP series airplanes. That NPRM was published in the **Federal Register** on August 16, 2007 (72 FR 45973). That NPRM proposed to continue to require doing a detailed inspection of the left and right longeron extension fittings, and corrective action if necessary. That NPRM also proposed to add airplanes to the applicability of the existing AD. Comments We gave the public the opportunity to participate in developing this AD. We considered the single comment received. Boeing supports the NPRM. Clarification of Service Bulletins Where paragraphs

(h)and

(i)of the NPRM referred to “the alert service bulletin” and “the service bulletin,” we have specified the number, revision level and date of those service bulletins for clarity. Conclusion We reviewed the relevant data, considered the comment received, and determined that air safety and the public interest require adopting the AD with the changes described previously. We also determined that these changes will not increase the economic burden on any operator or increase the scope of the AD. Interim Action We consider this AD interim action. If final action is later identified, we might consider further rulemaking then. Costs of Compliance There are about 876 airplanes of the affected design in the worldwide fleet. This AD affects about 156 airplanes of U.S. registry. The actions specified by this AD were previously required by AD 2006-10-04, which was applicable to approximately 25 airplanes of U.S. registry. The actions required by that AD take about 1 work hour per airplane. We estimated the cost of the current requirements of that AD on U.S. operators to be $2,000, or $80 per airplane. Some operators of the 25 airplanes subject to AD 2006-10-04 may have already initiated the required actions. This AD adds no new costs associated with those airplanes. This AD is applicable to approximately 131 additional airplanes of U.S. registry. New actions required by this AD take about 1 work hour per airplane. Based on the current labor rate of $80 per work hour, we estimate the new costs imposed by this AD on U.S. operators to be $10,480, or $80 per airplane. This figure is based on assumptions that no operator of these additional airplanes has yet done any of the requirements of this AD, and that no operator would do those actions in the future if this AD were not adopted. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:

(1)Is not a “significant regulatory action” under Executive Order 12866;

(2)Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

(3)Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration

(FAA)amends § 39.13 by removing amendment 39-14588 (71 FR 27592, May 12, 2006) and by adding the following new airworthiness directive (AD): **2007-26-17 Boeing:** Amendment 39-15319. Docket No. FAA-2007-28989; Directorate Identifier 2007-NM-070-AD. Effective Date

(a)This AD becomes effective February 11, 2008. Affected ADs

(b)This AD supersedes AD 2006-10-04. Applicability

(c)This AD applies to Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP series airplanes, certificated in any category; as identified in Boeing Alert Service Bulletin 747-53A2515, Revision 1, dated March 1, 2007. Unsafe Condition

(d)This AD results from reports that accidental drilling damage to the longeron extension fittings was found on airplanes not subject to the existing AD. We are issuing this AD to detect and correct accidental drilling damage of the longeron extension fittings, which could lead to cracking of the longeron extension fittings and result in rapid decompression of the airplane. Compliance

(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Restatement of Certain Requirements of AD 2006-10-04 Detailed Inspection

(f)For Group 1 airplanes identified in Boeing Alert Service Bulletin 747-53A2515, Revision 1, dated March 1, 2007: At the applicable compliance time specified in paragraph (f)(1) or (f)(2) of this AD, do a detailed inspection of the left and right longeron extension fittings for damage, and, before further flight, do the corrective action if applicable, by accomplishing all the applicable actions specified in the Accomplishment Instructions of Boeing Alert Service Bulletin 747-53A2515, dated October 20, 2005; or Revision 1, dated March 1, 2007. Note 1: Boeing Alert Service Bulletin 747-53A2515, dated October 20, 2005; and Revision 1, dated March 1, 2007; refer to Boeing Alert Service Bulletin 747-53A2390, Revision 1, dated July 6, 2000, as an additional source of service information for replacing a damaged longeron fitting with a new longeron extension fitting.

(1)For airplanes that have accomplished the inspection of the splice area for cracking as specified in Boeing Alert Service Bulletin 747-53A2390, dated July 31, 1997; or Revision 1, dated July 6, 2000: Inspect in accordance with paragraph

(f)of this AD before the airplane has accumulated 10,000 total flight cycles, or within 1,000 flight cycles after June 16, 2006 (the effective date of AD 2006-10-04), whichever is later.

(2)For airplanes that have not accomplished the inspection of the splice area for cracking as specified in Boeing Alert Service Bulletin 747-53A2390, dated July 31, 1997; or Revision 1, dated July 6, 2000: Inspect in accordance with paragraph

(f)of this AD before the airplane has accumulated 10,000 total flight cycles, or within 250 flight cycles after June 16, 2006, whichever is later. New Requirements of This AD Detailed Inspection of Additional Airplanes

(g)For Group 2 and Group 3 airplanes identified in Boeing Alert Service Bulletin 747-53A2515, Revision 1, dated March 1, 2007: Except as provided by paragraphs

(h)and

(i)of this AD, at the applicable time specified in paragraph 1.E of Boeing Alert Service Bulletin 747-53A2515, Revision 1, dated March 1, 2007, do a detailed inspection of the left and right longeron extension fittings for damage and, before further flight, do the corrective action, as applicable; by accomplishing all the applicable actions specified in the Accomplishment Instructions of the alert service bulletin. Compliance Times

(h)Where the Boeing Alert Service Bulletin 747-53A2515, dated October 20, 2005; or Revision 1, dated March 1, 2007; specify compliance times relative to the release date of the alert service bulletin, this AD requires compliance at compliance times relative to the effective date of this AD. Repair of Certain Conditions

(i)If any damage is found during any inspection required by this AD and Boeing Alert Service Bulletin 747-53A2515, Revision 1, dated March 1, 2007, specifies to contact Boeing for appropriate action: Before further flight, repair the damage using a method approved in accordance with the procedures specified in paragraph

(k)of this AD. Credit for Actions Done Using Previous Service Information

(j)Actions done before the effective date of this AD in accordance with Boeing Alert Service Bulletin 747-53A2515, dated October 20, 2005, are considered acceptable for compliance with the corresponding actions of this AD. Alternative Methods of Compliance (AMOCs) (k)(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.

(2)AMOCs approved previously in accordance with AD 2006-10-04, are approved as AMOCs for the corresponding provisions of this AD.

(3)To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector

(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.

(4)An AMOC that provides an acceptable level of safety may be used for any repair required by this AD, if it is approved by an Authorized Representative for the Boeing Commercial Airplanes Delegation Option Authorization Organization who has been authorized by the Manager, Seattle ACO, to make those findings. For a repair method to be approved, the repair must meet the certification basis of the airplane, and the approval must specifically refer to this AD. Material Incorporated by Reference

(l)You must use Boeing Alert Service Bulletin 747-53A2515, dated October 20, 2005; or Boeing Alert Service Bulletin 747-53A2515, Revision 1, dated March 1, 2007; as applicable, to perform the actions that are required by this AD, unless the AD specifies otherwise.

(1)The Director of the Federal Register approved the incorporation by reference of Boeing Alert Service Bulletin 747-53A2515, Revision 1, dated March 1, 2007, in accordance with 5 U.S.C. 552(a) and 1 CFR part 51.

(2)On June 16, 2006 (71 FR 27592, May 12, 2006), the Director of the Federal Register approved the incorporation by reference of Boeing Alert Service Bulletin 747-53A2515, dated October 20, 2005.

(3)Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for a copy of this service information. You may review copies at the FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* Issued in Renton, Washington, on December 20, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-25500 Filed 1-4-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-27811; Directorate Identifier 2004-NE-11-AD; Amendment 39-15321; AD 2007-26-19] RIN 2120-AA64 Airworthiness Directives; Rolls-Royce Deutschland Ltd & Co KG Tay 611-8, Tay 611-8C, Tay 620-15, Tay 650-15, and Tay 651-54 Turbofan Engines AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is superseding an existing airworthiness directive

(AD)for Rolls-Royce Deutschland Ltd & Co KG

(RRD)Tay 611-8, Tay 620-15, Tay 650-15, and Tay 651-54 turbofan engines. That AD currently requires initial and repetitive visual inspections of all ice-impact panels and fillers in the low pressure

(LP)compressor case for certain conditions and replacing, as necessary, any or all panels. This AD requires the same actions, provides terminating action to those repetitive actions, and adds the Tay 611-8C turbofan engine to the applicability. This AD results from RRD introducing new LP compressor case ice-impact panels with additional retention features to these Tay turbofan engines. We are issuing this AD to prevent release of ice-impact panels due to improper bonding that can result in loss of thrust in both engines. DATES: This AD becomes effective February 11, 2008. The Director of the Federal Register previously approved the incorporation by reference of certain publications listed in the regulations as of January 21, 2005 (70 FR 1172, January 6, 2005). The Director of the Federal Register approved the incorporation by reference of certain publications listed in the regulations as of February 11, 2008. ADDRESSES: You can get the service information identified in this AD from Rolls-Royce Deutschland Ltd & Co KG, Eschenweg 11, D-15827 Dahlewitz, Germany; telephone 49

(0)33-7086-1768; fax 49

(0)33-7086-3356. The Docket Operations office is located at Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue, SE., West Building, Ground Floor, Room W12-140, Washington, DC 20590-0001. FOR FURTHER INFORMATION CONTACT: Jason Yang, Aerospace Engineer, Engine Certification Office, FAA, Engine and Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; e-mail: *Jason.yang@faa.gov* ; telephone

(781)238-7747; fax

(781)238-7199. SUPPLEMENTARY INFORMATION: The FAA proposed to amend 14 CFR part 39 by superseding AD 2004-26-10, Amendment 39-13922 (70 FR 1172, January 6, 2005), with a proposed AD. The proposed AD applies to RRD Tay 611-8, Tay 620-15, Tay 650-15, and Tay 651-54 turbofan engines. We published the proposed AD in the **Federal Register** on July 6, 2007 (72 FR 36916). That action proposed to require initial and repetitive visual inspections of all ice-impact panels and fillers in the LP compressor case for certain conditions and replacing, as necessary, any or all panels. That action also proposed to provide terminating action to those repetitive actions, and to add the Tay 611-8C turbofan engine to the applicability. Examining the AD Docket You may examine the AD docket on the Internet at *http://www.regulations.gov* ; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone

(800)647-5527) is provided in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the comments received. Request for Compliance Time Extension Two commenters, Rolls-Royce North America Inc. and Gulfstream, request that we extend the Tay 611-8 and 611-8C engine compliance time four more years, from December 31, 2011, to December 31, 2015, to address new engines having the 6-ice-impact panel configuration. The commenters state that so far, 12 engines have incorporated the ice-impact panel retention features, and those engines displayed strong bonding of the ice-impact panels before the panels were removed. The commenters are concerned with potential shop capacity problems, and extra cost if a special in-service repair is necessary. We do not agree. We coordinated with Rolls-Royce Deutschland Ltd & Co KG in reviewing the request. Rolls-Royce Deutschland Ltd & Co KG re-states that the rework of the LP compressor case and installation of new LP compressor case ice-impact panels with additional retention features must be done before December 31, 2011 in accordance with Alert Service Bulletin No. TAY-72-A1650, dated November 2, 2005. Reference Errors in the Proposed AD Rolls-Royce Deutschland Ltd & Co KG requests that we correct some reference errors appearing in the proposed AD, as follows: • In paragraphs (f)(2) and (f)(3), change “RRD SB No. TAY-72-1638, Revision 2, dated September 21, 2004”, to “RRD SB No. TAY-72-1638, Revision 3, dated February 25, 2005.” • In paragraphs (h)(2) and (i)(2), change “RRD SB No. TAY-72-1638, Revision 2, dated September 21, 2004”, to “RRD SB No. TAY-72-1639, Revision 2, dated September 21, 2004.” • In paragraph (h)(3), change “every 1,000 CSLI” to “every 1,000 operating hours.” • In paragraph (i)(1), change “every 3,000 CSLI” to “every 3,000 operating hours.” We agree and made these corrections to the AD. Corrections Not Carried Forward Rolls-Royce Deutschland Ltd & Co KG also requests that we review the proposed AD for missing corrections that were made to AD 2004-26-10, but not carried forward. We agree. The corrections were inadvertently left out of the proposed AD. We have made those corrections to this AD, which throughout the compliance section changed “paragraph 3.E.” to “paragraphs 3.C. through 3.E.” Conclusion We have carefully reviewed the available data, including the comments received, and determined that air safety and the public interest require adopting the AD with the changes described previously. We have determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD. Costs of Compliance We estimate that this AD will affect about 1,085 engines installed on airplanes of U.S. registry. We also estimate that it will take about 2.5 work-hours per engine to perform an inspection, and about 12 work-hours to perform a repair. The average labor rate is $80 per work-hour. Required terminating action parts will cost about $7,500 per engine. Based on these figures, for the AD, we estimate: • The cost of one inspection to the U.S. fleet to be $217,000. • The cost of a repair to the U.S fleet to be $1,041,600. • The cost of parts to the U.S. fleet for terminating action to be $8,137,500. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:

(1)Is not a “significant regulatory action” under Executive Order 12866;

(2)Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

(3)Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a summary of the costs to comply with this AD and placed it in the AD docket. You may get a copy of this summary at the address listed under ADDRESSES . List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the Federal Aviation Administration amends 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by removing Amendment 39-13922 (70 FR 1172, January 6, 2005), and by adding a new airworthiness directive, Amendment 39-15321, to read as follows: **2007-26-19 Rolls-Royce Deutschland Ltd & Co KG (Formerly Rolls-Royce plc):** Amendment 39-15321. Docket No. FAA-2007-27811; Directorate Identifier 2004-NE-11-AD. Effective Date

(a)This airworthiness directive

(AD)becomes effective February 11, 2008. Affected ADs

(b)This AD supersedes AD 2004-26-10, Amendment 39-13922. Applicability

(c)This AD applies to:

(1)Rolls-Royce Deutschland Ltd & Co KG

(RRD)Tay 611-8, Tay 620-15, Tay 650-15, and Tay 651-54 turbofan engines that have one or more ice-impact panels installed in the low pressure

(LP)compressor case that conform to the

(RRD)Service Bulletin

(SB)No. TAY-72-1326 standard.

(2)RRD Tay 611-8C turbofan engines with serial numbers

(SN)below SN 85078.

(3)The turbofan engines listed in paragraph

(c)of this AD are installed on, but not limited to, Fokker F.28 Mk.0070 and Mk.0100 series airplanes, Gulfstream Aerospace G-IV and G-IV-X series airplanes, and Boeing Company 727-100 series airplanes modified in accordance with Supplemental Type Certificate SA8472SW (727-QF). Unsafe Condition

(d)This AD results from RRD introducing new LP compressor case ice-impact panels with additional retention features, to these Tay turbofan engines. We are issuing this AD to prevent release of ice-impact panels due to improper bonding that can result in loss of thrust in both engines. Compliance

(e)You are responsible for having the actions required by this AD performed within the compliance times specified unless the actions have already been done. Inspecting Ice-Impact Panels in Tay 620-15, Tay 650-15, and Tay 651-54 Engines

(f)For airplanes that have any Tay 620-15, Tay 650-15, or Tay 651-54 engines with ice-impact panels incorporated by the RR SB No. TAY-72-1326 standard, and not all panels were repaired using polysulfide bonding material by RR repair scheme TV5451R, HRS3491, HRS3615, HRS3648, or HRS3649, do the following:

(1)Before further flight, rework all six ice-impact panels using repair scheme HRS3648 or HRS3649 on at least one of the affected engines.

(2)Before further flight, inspect the ice-impact panels and the surrounding fillers on the engine not reworked. Use paragraphs 3.C. through 3.E. of the Accomplishment Instructions of RRD SB No. TAY-72-1638, Revision 2, dated September 21, 2004, or SB No. TAY-72-1638, Revision 3, dated February 25, 2005, and the inspection disposition criteria in Table 1 of this AD. Table 1.—Inspection Disposition Criteria If: Then:

(i)Any movement or rocking motion of LP compressor ice-impact panel, or any movement of the front edge of ice-impact panel Before further flight, replace all panels using repair scheme HRS3648 or HRS3649.

(ii)Reappearing signs of moisture on the ice-impact panel or the surrounding filler Before further flight, replace all panels using repair scheme HRS3648 or HRS3649.

(iii)Any dents or impact damage on the ice-impact panel that is greater than 3.1 square inch in total Before further flight, replace the damaged panel using repair scheme HRS3648 or HRS3649.

(iv)Any dents or impact damage on the ice-impact panel that is between 1.55 square inch and 3.1 square inch in total Within 5 flight cycles or 5 flight hours, whichever occurs first, replace the damaged panel using repair scheme HRS3648 or HRS3649.

(v)Any dents or impact damage on the ice-impact panel that is less than 1.55 square inch in total Within 50 flight cycles or 50 flight hours, whichever occurs first, replace the damaged panel using repair scheme HRS3648 or HRS3649.

(vi)Any crack appears on the ice-impact panel and there is visible distortion of the airwashed surface Within 50 flight cycles or 50 flight hours, whichever occurs first, replace the damaged panel using repair scheme HRS3648 or HRS3649.

(vii)Any crack appears on the ice-impact panel and there is no visible distortion of the airwashed surface Within 150 flight cycles or 150 flight hours, whichever occurs first, replace the damaged panel using repair scheme HRS3648 or HRS3649.

(viii)Delamination or peeling of the compound layers of the airwashed surface and the penetrated area is greater than 3.1 square inch in total Before further flight, replace the damaged panel using repair scheme HRS3648 or HRS3649.

(ix)Delamination or peeling of the compound layers of the airwashed surface and the penetrated area is between 1.55 square inch and 3.1 square inch in total Within 5 flight cycles or 5 flight hours, whichever occurs first, replace the damaged panel using repair scheme HRS3648 or HRS3649.

(x)Delamination or peeling of the compound layers of the airwashed surface and the penetrated area is less than 1.55 square inch in total Within 50 flight cycles or 50 flight hours, whichever occurs first, replace the damaged panel using repair scheme HRS3648 or HRS3649.

(xi)Delamination or peeling of the compound layers but the airwashed surface is not penetrated Within 150 flight cycles or 150 flight hours, whichever occurs first, repair the damaged panel using repair scheme HRS3630.

(xii)Missing filler surrounding the LP compressor case Before further flight, repair the damaged filler using repair scheme HRS3630.

(xiii)Damage to the filler surrounding the LP compressor case such as chipped, cracked, or missing material Within 25 flight cycles or 25 flight hours, whichever occurs first, repair damaged filler using repair scheme HRS 3630.

(3)Re-inspect all ice-impact panels within every 500 cycles-since-last-inspection

(CSLI)or two months since-last-inspection, whichever occurs first. Use paragraphs 3.C. through 3.E. of the Accomplishment Instructions of RRD SB No. TAY-72-1638, Revision 2, dated September 21, 2004, or SB No. TAY-72-1638, Revision 3, dated February 25, 2005, and the inspection disposition criteria in Table 1 of this AD. Repetitive Inspections for Tay 620-15, Tay 650-15, and Tay 651-54 Engines With All Ice-Impact Panels Repaired by Polysulfide Bonding Material

(g)For Tay 620-15, Tay 650-15, and Tay 651-54 engines with ice-impact panels incorporated by the RRD SB No. TAY-72-1326 standard, and all panels were repaired using polysulfide bonding material by RR repair scheme TV5451R, HRS3491, HRS3615, HRS3648 or HRS3649, do the following:

(1)Re-inspect within every 1,500 CSLI, for the condition of the ice-impact panels and the surrounding fillers.

(2)Use paragraphs 3.C. through 3.E. of the Accomplishment Instructions of RRD SB No. TAY-72-1638, Revision 2, dated September 21, 2004 or SB No. TAY-72-1638, Revision 3, dated February 25, 2005, and the inspection disposition criteria in Table 1 of this AD. Inspecting Ice-Impact Panels in Tay 611-8 Engines

(h)For airplanes that have any Tay 611-8 engines with ice-impact panels incorporated by the RR SB No. TAY-72-1326 standard, and RR repair scheme HRS3491 or HRS3615 was done with two pack epoxy (Omat 8/52) on one or more of the six ice-impact panels, do the following:

(1)Before further flight, rework all six ice-impact panels using repair scheme HRS3648 or HRS3649 on at least one of the affected engines.

(2)Before further flight, inspect the ice-impact panels and the surrounding fillers on the engine not reworked. Use paragraphs 3.C. through 3.E. of the Accomplishment Instructions of RRD SB No. TAY-72-1639, Revision 2, dated September 21, 2004 and the inspection disposition criteria in Table 1 of this AD.

(3)Re-inspect the ice-impact panels within every 1,000 operating hours or six months since-last-inspection, whichever occurs first. Use paragraphs 3.C. through 3.E. of the Accomplishment Instructions of RRD SB No. TAY-72-1639, Revision 2, dated September 21, 2004, and the inspection disposition criteria in Table 1 of this AD. Repetitive Inspections for Tay 611-8 Engines With All Ice-Impact Panels Repaired by Polysulfide Bonding Material or Introduced Since New Production

(i)For Tay 611-8 engines with ice-impact panels incorporated by the RRD SB No. TAY-72-1326 standard and all panels were repaired using polysulfide bonding material by RR repair scheme TV5451R, HRS3491, HRS3615, HRS3648 or HRS3649, or panels were introduced since new production, do the following:

(1)Re-inspect within every 3,000 hours-since-last-inspection, for the condition of the ice-impact panels and the surrounding fillers.

(2)Use paragraphs 3.C. through 3.E. of the Accomplishment Instructions of RRD SB No. TAY-72-1639, Revision 2, dated September 21, 2004, and the inspection disposition criteria in Table 1 of this AD. Installing Tay 620-15, Tay 650-15, or Tay 651-54 Engines That Are Not Inspected

(j)After the effective date of this AD, do not install any Tay 620-15, Tay 650-15, or Tay 651-54 engines with ice-impact panels if:

(1)Those ice-impact panels incorporate the RR SB No. TAY-72-1326 standard; and

(2)Ice-impact panels were repaired using RR repair scheme TV5451R, HRS3491, or HRS3615 and bonding material other than polysulfide; unless

(3)The panels and the surrounding fillers are inspected for condition using 3.B. through 3.D.(3) (in-service) or 3.K.(1) through 3.(M)(3) (at overhaul or shop visit) of the Accomplishment Instructions of RRD SB No. TAY-72-1638, Revision 2, dated September 21, 2004, or SB No. TAY-72-1638, Revision 3, dated February 25, 2005.

(k)Perform repetitive inspections as specified in paragraph

(g)of this AD. Installing Tay 611-8 Engines That Are Not Inspected

(l)After the effective date of this AD, do not install any Tay 611-8 engine with ice-impact panels if:

(1)Those ice-impact panels incorporate the RR SB No. TAY-72-1326 standard; and

(2)Ice-impact panels were repaired using RR repair scheme TV5451R, HRS3491, or HRS3615 and bonding material other than polysulfide, unless

(3)The panels and the surrounding fillers are inspected for condition using 3.B. through 3.D.(2) (in-service) or 3.K.(1) through 3.M.(3) (at overhaul or shop visit) of the Accomplishment Instructions of RRD SB No. TAY-72-1639, Revision 2, dated September 21, 2004.

(m)Perform repetitive inspections as specified in paragraph

(i)of this AD. Mandatory Terminating Action

(n)No later than December 31, 2011, as mandatory terminating action to the repetitive visual inspections or rework required by paragraphs (f), (g), (h), (i), (j), (k), (l), and

(m)of this AD, do the following:

(1)Rework the LP compressor case and install new LP compressor case ice-impact panels with additional retention features, at the next shop visit requiring the removal of any module, except when the work scope requires only the removal of the high speed gearbox module.

(2)For Tay 620-15, Tay 650-15, and Tay 651-54 turbofan engines, do the rework and installation using the Accomplishment Instructions of RRD Alert SB No. TAY-72-A1643, Revision 1, dated November 2, 2005.

(3)For Tay 611-8 turbofan engines, do the rework and installation using the Accomplishment Instructions of RRD Alert SB No. TAY-72-A1650, dated November 2, 2005. Tay 611-8C Turbofan Engines

(o)For Tay 611-8C turbofan engines, no later than December 31, 2011, do the following:

(1)Rework the LP compressor case and install new LP compressor case ice-impact panels with additional retention features, at the next shop visit after the effective date of this AD, requiring the removal of any module, except when the work scope requires only the removal of the high speed gearbox module.

(2)Do the rework and installation using the Accomplishment Instructions of RRD Alert SB No. TAY-72-A1650, dated November 2, 2005. Alternative Methods of Compliance

(p)The Manager, Engine Certification Office, has the authority to approve alternative methods of compliance for this AD if requested using the procedures found in 14 CFR 39.19. Related Information

(q)German AD D2004-313R5, dated November 15, 2005, also addresses the subject of this AD.

(r)Contact Jason Yang, Aerospace Engineer, Engine Certification Office, FAA, Engine and Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; e-mail: *Jason.yang@faa.gov* ; telephone

(781)238-7747; fax

(781)238-7199, for more information about this AD. Material Incorporated by Reference

(s)You must use the service information specified in Table 2 of this AD to perform the inspections and rework required by this AD. Except for Service Bulletin No. TAY-72-1638, Revision 3, Alert Service Bulletin No. TAY-72-A1643, Revision 1, and Alert Service Bulletin No. TAY-72-A1650, the Director of the Federal Register previously approved the incorporation by reference of the Rolls-Royce Deutschland Ltd & Co KG service information listed in Table 2 of this AD as of January 21, 2005 (70 FR 1172, January 6, 2005). The Director of the Federal Register approved the incorporation by reference of Service Bulletin No. TAY-72-1638, Revision 3, dated February 25, 2005, Alert Service Bulletin No. TAY-72-A1643, Revision 1, dated November 2, 2005, and Alert Service Bulletin No. TAY-72-A1650, dated November 2, 2005, in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Contact Rolls-Royce Deutschland Ltd & Co KG, Eschenweg 11, D-15827 Dahlewitz, Germany; telephone 49

(0)33-7086-1768; fax 49

(0)33-7086-3356 for a copy of this service information. You may review copies at the FAA, New England Region, 12 New England Executive Park, Burlington, MA; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* Table 2.—Incorporation by Reference Service information No. Page Revision Date SB No. TAY-72-1638 ALL 2 September 21, 2004. Total Pages: 35 SB No. TAY-72-1638 ALL 3 February 25, 2005. Total Pages: 35 SB No. TAY-72-1639 ALL 2 September 21, 2004. Total Pages: 28 Alert SB No. TAY-72-A1643 ALL 1 November 2, 2005. Total Pages: 13 Alert SB No. TAY-72-A1643 Appendix 1 ALL 1 November 2, 2005. Total Pages: 43 Alert SB No. TAY-72-A1650 ALL Original November 2, 2005. Total Pages: 11 Alert SB No. TAY-72-A1650 Appendix 1 ALL Original November 2, 2005. Total Pages: 45 Repair Scheme No. HRS3648 Front Sheet ALL 2 January 28, 2004. Total Pages: 1 Repair Scheme No. HRS3648 History Sheet ALL 2 January 28, 2004. Total Pages: 3 Repair Scheme No. HRS3648 ALL 2 January 27, 2004. Total Pages: 30 Repair Scheme No. HRS3649 Front Sheet ALL 2 September 1, 2004. Total Pages: 1 Repair Scheme No. HRS3649 History Sheet ALL 2 September 7, 2004. Total Pages: 3 Repair Scheme No. HRS3649 ALL 2 June 17, 2004. Total Pages: 24 Issued in Burlington, Massachusetts, on December 21, 2007. Peter A. White, Assistant Manager, Engine and Propeller Directorate, Aircraft Certification Service. [FR Doc. E7-25497 Filed 1-4-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2008-0411; Directorate Identifier 2007-NM-291-AD; Amendment 39-15326; AD 2004-07-22 R1] RIN 2120-AA64 Airworthiness Directives; Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule; request for comments. SUMMARY: The FAA is revising an existing airworthiness directive

(AD)that applies to all Boeing Model 747 series airplanes. That AD currently requires that the FAA-approved maintenance inspection program be revised to include inspections that will give no less than the required damage tolerance rating for each structural significant item, and repair of cracked structure. We issued that AD to ensure the continued structural integrity of the entire fleet of Model 747 series airplanes. This new AD clarifies the applicability of the existing AD by specifying which Boeing Model 747 airplanes are affected by this AD because we have determined that certain new variants that have not yet been certified will not be subject to the requirements of this AD. This AD results from a report of incidents involving fatigue cracking in transport category airplanes that are approaching or have exceeded their design service objective. We are issuing this AD to ensure the continued structural integrity of all Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP series airplanes. DATES: Effective January 22, 2008. The incorporation by reference of Boeing Document D6-35022, “Supplemental Structural Inspection Document

(SSID)for Model 747 Airplanes,” Revision G, dated December 2000, was approved previously by the Director of the Federal Register as of May 12, 2004 (69 FR 18250, April 7, 2004). The incorporation by reference of Boeing Document No. D6-35022, Volumes 1 and 2, “Supplemental Structural Inspection Document

(SSID)for Model 747 Airplanes,” Revision E, dated June 17, 1993, was approved previously by the Director of the Federal Register as of September 12, 1994 (59 FR 41233, August 11, 1994). The incorporation by reference of Boeing Document No. D6-35655, “Supplemental Structural Inspection Document for 747-100SR,” dated April 2, 1986, was approved previously by the Director of the Federal Register as of August 10, 1994 (59 FR 37933, July 26, 1994). We must receive comments on this AD by March 7, 2008. ADDRESSES: You may send comments by any of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov* . Follow the instructions for submitting comments. • *Fax:* 202-493-2251. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • *Hand Delivery:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. For service information identified in this AD, contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207. Examining the AD Docket You may examine the AD docket on the Internet at *http://www.regulations.gov* ; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Ivan Li, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)917-6437; fax

(425)917-6590. SUPPLEMENTARY INFORMATION: Discussion On March 24, 2004, we issued AD 2004-07-22, amendment 39-13566 (69 FR 18250, April 7, 2004). A correction of that AD was published in the **Federal Register** on May 3, 2004 (69 FR 24063). AD 2004-07-22 applies to all Boeing Model 747 series airplanes. That AD requires that the FAA-approved maintenance inspection program be revised to include inspections that will give no less than the required damage tolerance rating for each structural significant item, and repair of cracked structure. That AD resulted from a report of incidents involving fatigue cracking in transport category airplanes that are approaching or have exceeded their design service objective. We issued that AD to ensure the continued structural integrity of the entire fleet of Model 747 series airplanes. Actions Since Existing AD Was Issued Since we issued AD 2004-07-22, Boeing has announced the production of additional Model 747 variants. Although they have not yet been certified, the new variants (Model 747-8 and -8F series airplanes) have a certification basis that will alleviate the safety issues addressed by AD 2004-07-22. All of the supplemental structural inspections required by AD 2004-07-22 will be included in the Airworthiness Limitations Section of the Boeing 747-8/8F Maintenance Planning Data Document. Because AD 2004-07-22 currently applies to “all Boeing Model 747 series airplanes,” these additional Model 747 variants will be required to do the actions mandated by that AD, once they are certified. Therefore, we must clarify the applicability to specify only the airplanes that are affected by this AD. FAA's Determination and Requirements of This AD The unsafe condition described previously is likely to exist or develop on other airplanes of the same type design. For this reason, we are issuing this AD to revise AD 2004-07-22. This new AD retains the requirements of the existing AD. This AD also clarifies the applicability of the existing AD. Change to Existing AD Since we issued AD 2004-07-22, the AD format has been revised, and certain paragraphs have been rearranged. As a result, the corresponding paragraph identifiers have changed in this AD, as listed in the following table: Revised Paragraph Identifiers Requirement in AD 2004-07-22 Corresponding requirement in AD 2004-07-22 R1 Paragraph

(a)Paragraph (f). Paragraph

(b)Paragraph (g). Paragraph

(c)Paragraph (h). Paragraph

(d)Paragraph (i). (This paragraph was mis-lettered as

(a)in the Federal Register .) Paragraph

(e)Paragraph (j). Paragraph

(f)Paragraph (k). We have also removed Note 1 of AD 2004-07-22 from this AD. The information in that note is now included in the Federal Aviation Regulations (14 CFR part 39) and it is not necessary to include it in this AD. We have re-numbered the notes in AD 2004-07-22 R1 accordingly. Costs of Compliance We estimate that this AD affects about 165 airplanes of U.S. registry. The requirements of this AD add no additional economic burden. The current costs for this AD are repeated for the convenience of affected operators, as follows: We estimate that the actions required by AD 2004-07-22 and retained in this AD take up to 6,825 work-hours per product. The average labor rate is $80 per work hour. Based on these figures, we estimate the cost of this AD to U.S. operators to be up to $90,090,000 or up to $546,000 per product. The number of work hours, as indicated above, is presented as if the accomplishment of the actions required by AD 2004-07-22 and retained in this AD are to be conducted as “stand alone” actions. However, in actual practice, these actions for the most part will be accomplished coincidentally or in combination with normally scheduled airplane inspections and other maintenance program tasks. Therefore, the actual number of necessary additional work hours will be minimal in many instances. Additionally, any costs associated with special airplane scheduling will be minimal. FAA's Determination of the Effective Date No airplane variant that we had previously excluded from the applicability of this AD is currently on the U.S. Register. Therefore, providing notice and opportunity for public comment is unnecessary before this AD is issued, and this AD may be made effective in less than 30 days after it is published in the **Federal Register** . Comments Invited This AD is a final rule that involves requirements affecting flight safety, and we did not provide you with notice and an opportunity to provide your comments before it becomes effective. However, we invite you to send any written data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2008-0411; Directorate Identifier 2007-NM-291-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments. We will post all comments we receive, without change, to *http://www.regulations.gov* , including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this AD. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration

(FAA)amends § 39.13 by removing amendment 39-13566 (69 FR 18250, April 7, 2004), corrected at 69 FR 24063, May 3, 2004, and adding the following new airworthiness directive (AD): **2004-07-22 R1 Boeing:** Amendment 39-15326. Docket No. FAA-2008-0411; Directorate Identifier 2007-NM-291-AD. Effective Date

(a)This AD becomes effective January 22, 2008. Affected ADs

(b)This AD revises AD 2004-07-22. Applicability

(c)This AD applies to all Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP series airplanes, certificated in any category. Unsafe Condition

(d)This AD results from a report of incidents involving fatigue cracking in transport category airplanes that are approaching or have exceeded their design service objective. We are issuing this AD to ensure the continued structural integrity of all Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP series airplanes. Compliance

(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Note 1: Where there are differences between this AD and the supplemental structural inspection document

(SSID)specified in this AD, the AD prevails. Requirements of AD 2004-07-22 Inspection Program

(f)For Model 747-100SR series airplanes having line numbers 346, 351, 420, 426, 427, and 601: Within 1 year after August 10, 1994 (the effective date of AD 94-15-12, amendment 39-8983, which was superseded by AD 2004-07-22), incorporate a revision into the FAA-approved maintenance inspection program that provides no less than the required damage tolerance rating

(DTR)for each structural significant item

(SSI)listed in Boeing Document No. D6-35655, “Supplemental Structural Inspection Document

(SSID)for 747-100SR,” dated April 2, 1986. The revision to the maintenance program must include and be implemented per the procedures specified in Sections 5.0 and 6.0 of the SSID D6-35655. Revision to the maintenance program shall be per the SSID D6-35655, dated April 2, 1986, until Revision G of the SSID D6-35022 is incorporated into the FAA-approved maintenance or inspection program per the requirements of paragraph

(h)of this AD. Note 2: For the purposes of this AD, an SSI is defined as a principal structural element (PSE). A PSE is a structural element that contributes significantly to the carrying of flight, ground, or pressurization loads, and whose integrity is essential in maintaining the overall structural integrity of the airplane.

(g)For airplanes listed in Boeing Document No. D6-35022, Volumes 1 and 2, “Supplemental Structural Inspection Document

(SSID)for Model 747 Airplanes,” Revision E, dated June 17, 1993; and manufacturer's line numbers 42, 174, 221, 231, 234, 239, 242, and 254: Within 12 months after September 12, 1994 (the effective date of AD 94-15-18, amendment 39-8989, which was superseded by AD 2004-07-22), incorporate a revision into the FAA-approved maintenance inspection program that provides no less than the required DTR for each SSI listed in Boeing Document No. D6-35022, Volumes 1 and 2, “Supplemental Structural Inspection Document

(SSID)for Model 747 Airplanes,” Revision E, dated June 17, 1993. Revision F, dated May 1996, is acceptable for compliance with this paragraph. (The required DTR value for each SSI is listed in the document.) The revision to the maintenance program shall include Sections 5.0 and 6.0 of the SSID D6-35022 and shall be implemented per the procedures contained in those sections. Revision to the maintenance program shall be per Revision E or F of SSID D6-35022, until Revision G of the SSID D6-35022 is incorporated into the FAA-approved maintenance or inspection program per the requirements of paragraph

(h)of this AD.

(h)For all Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP series airplanes: Prior to reaching either of the thresholds specified in paragraph (i)(1)(i) or (i)(2)(i) of this AD, or within 12 months after May 12, 2004 (the effective date of AD 2004-07-22), whichever occurs later, incorporate a revision into the FAA-approved maintenance or inspection program that provides no less than the required DTR for each SSI listed in Boeing Document No. D6-35022, “Supplemental Structural Inspection Document,” Revision G, dated December 2000 (hereinafter referred to as “Revision G”). (The required DTR value for each SSI is listed in Revision G.) The revision to the maintenance or inspection program shall include and shall be implemented per the procedures in Section 5.0, “DTR System Application” and Section 6.0, “SSI Discrepancy Reporting” of Revision G, excluding paragraphs 5.1.2; 5.1.6, item 5; 5.1.8; 5.2; 5.2.1; 5.2.2; 5.2.3; and 5.2.4 of Revision G. Under the provisions of the Paperwork Reduction Act of 1980 (44 U.S.C. 3501, *et seq.* ), the Office of Management and Budget

(OMB)has approved the information collection requirements (Section 6.0, “SSI Discrepancy Reporting”) contained in this AD and has assigned OMB Control Number 2120-0056. Upon incorporation of Revision G required by this paragraph, the revision required by either paragraph

(f)or

(g)of this AD, as applicable, may be removed. Note 3: Operators should note that, although paragraph 5.2 is referenced in paragraph 5.1.11 of Revision G, paragraph 5.2 is excluded as a method of compliance with the requirements of this AD. Initial Inspection

(i)For all Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP series airplanes: Perform an inspection to detect cracks of all structure identified in Revision G of SSID D6-35022 at the time specified in paragraph (i)(1), (i)(2), or (i)(3) of this AD, as applicable.

(1)For wing structure: At the times specified in paragraph (i)(1)(i) or (i)(1)(ii) of this AD, whichever occurs later.

(i)Prior to the accumulation of 20,000 total flight cycles or 100,000 total flight hours, whichever comes first. Or,

(ii)Within 1,000 flight cycles measured from 12 months after May 12, 2004.

(2)For all other structure: At the times specified in paragraph (i)(2)(i) or (i)(2)(ii) of this AD, whichever occurs later.

(i)Prior to the accumulation of 20,000 total flight cycles, or

(ii)Within 1,000 flight cycles measured from 12 months after May 12, 2004.

(3)For any portion of an SSI that has been replaced with new structure: At the later of the times specified in paragraph (i)(3)(i) or (i)(3)(ii) of this AD.

(i)At the times specified in either paragraph (i)(1) or (i)(2) of this AD, as applicable, or

(ii)Within 10,000 flight cycles after the replacement of the part with a new part. Note 4: Notwithstanding the provisions of paragraphs 5.1.2, 5.1.6, item 5, 5.2, 5.2.1, 5.2.2, 5.2.3, and 5.2.4 of the General Instructions of Revision G, which would permit operators to perform fleet and rotational sampling inspections to perform inspections on less than whole airplane fleet sizes and to perform inspections on substitute airplanes, this AD requires that all airplanes that exceed the threshold be inspected per Revision G. Although paragraph 5.1.8 of Revision G allows provisions for touch-and-go training flights, fleet averaging, and 10% escalations of flight cycles to achieve the required DTR, this AD does not allow for those provisions. Note 5: Once the initial inspection has been performed, operators are required to perform repetitive inspections at the intervals specified in Revision G in order to remain in compliance with their maintenance or inspection programs, as revised per paragraph

(h)of this AD. Repair

(j)Cracked structure found during any inspection required by this AD shall be repaired, prior to further flight, in accordance with an FAA-approved method. Inspection Program for Transferred Airplanes

(k)Before any airplane that is subject to this AD and that has exceeded the applicable compliance times specified in paragraph

(i)of this AD can be added to an air carrier's operations specifications, a program for the accomplishment of the inspections required by this AD must be established per paragraph (k)(1) or (k)(2) of this AD, as applicable.

(1)For airplanes that have been inspected per this AD, the inspection of each SSI must be accomplished by the new operator per the previous operator's schedule and inspection method, or the new operator's schedule and inspection method, at whichever time would result in the earlier accomplishment for that SSI inspection. The compliance time for accomplishment of this inspection must be measured from the last inspection accomplished by the previous operator. After each inspection has been performed once, each subsequent inspection must be performed per the new operator's schedule and inspection method.

(2)For airplanes that have not been inspected per this AD, the inspection of each SSI required by this AD must be accomplished either prior to adding the airplane to the air carrier's operations specification, or per a schedule and an inspection method approved by the Manager, Seattle Aircraft Certification Office (ACO). After each inspection has been performed once, each subsequent inspection must be performed per the new operator's schedule. Alternative Methods of Compliance (AMOCs) (l)(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, ATTN: Ivan Li, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)917-6437; fax

(425)917-6590; has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19.

(2)To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector

(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.

(3)An AMOC that provides an acceptable level of safety may be used for any repair required by this AD, if it is approved by an Authorized Representative for the Boeing Commercial Airplanes Delegation Option Authorization Organization who has been authorized by the Manager, Seattle ACO, to make those findings. For a repair method to be approved the repair must meet the certification basis of the airplane and the approval must specifically refer to this AD.

(4)AMOCs approved previously in accordance with AD 94-15-12, are approved as alternative methods of compliance for the requirements of paragraphs

(f)and

(j)of this AD.

(5)AMOCs approved previously in accordance with AD 94-15-18, are approved as alternative methods of compliance for the requirements of paragraphs

(g)and

(j)of this AD.

(6)AMOCs approved previously in accordance with AD 2004-07-22, are approved as AMOCs for the corresponding provisions of this AD. Material Incorporated by Reference

(m)You must use Boeing Document No. D6-35655, “Supplemental Structural Inspection Document for 747-100SR,” dated April 2, 1986; Boeing Document No. D6-35022, Volumes 1 and 2, “Supplemental Structural Inspection Document

(SSID)for Model 747 Airplanes,” Revision E, dated June 17, 1993; and Boeing Document No. D6-35022, “Supplemental Structural Inspection Document

(SSID)for Model 747 Airplanes,” Revision G, dated December 2000; as applicable; to perform the actions that are required by this AD, unless the AD specifies otherwise.

(1)The incorporation by reference of Boeing Document D6-35022, “Supplemental Structural Inspection Document

(SSID)for Model 747 Airplanes,” Revision G, dated December 2000, was approved previously by the Director of the Federal Register as of May 12, 2004 (69 FR 18250, April 7, 2004).

(2)The incorporation by reference of Boeing Document No. D6-35022, Volumes 1 and 2, “Supplemental Structural Inspection Document

(SSID)for Model 747 Airplanes,” Revision E, dated June 17, 1993, was approved previously by the Director of the Federal Register as of September 12, 1994 (59 FR 41233, August 11, 1994).

(3)The incorporation by reference of Boeing Document No. D6-35655, “Supplemental Structural Inspection Document for 747-100SR,” dated April 2, 1986, was approved previously by the Director of the Federal Register as of August 10, 1994 (59 FR 37933, July 26, 1994).

(4)Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for a copy of this service information. You may review copies at the FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* Issued in Renton, Washington, on December 26, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-25614 Filed 1-4-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2008-0412; Directorate Identifier 2007-NM-290-AD; Amendment 39-15327; AD 90-25-05 R1] RIN 2120-AA64 Airworthiness Directives; Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule; request for comments. SUMMARY: The FAA is revising an existing airworthiness directive

(AD)that applies to all Boeing Model 747 series airplanes. That AD currently requires the implementation of a corrosion prevention and control program. We issued that AD to prevent degradation of the structural capabilities of the affected airplanes. This new AD clarifies the applicability of the existing AD by specifying which Boeing Model 747 airplanes are affected by this AD because we have determined that certain new variants that have not yet been certified will not be subject to the requirements of this AD. This AD results from reports of incidents involving corrosion and cracking in transport category airplanes, which have jeopardized the airworthiness of the affected airplanes. We are issuing this AD to prevent degradation of the structural capabilities of all Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP series airplanes. DATES: Effective January 22, 2008. On December 31, 1990 (55 FR 49268, November 27, 1990), the Director of the Federal Register approved the incorporation by reference of Boeing Document Number D6-36022, “Aging Airplane Corrosion Prevention and Control Program, Model 747,” Revision A, dated July 28, 1989. We must receive comments on this AD by March 7, 2008. ADDRESSES: You may send comments by any of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov.* Follow the instructions for submitting comments. • *Fax:* 202-493-2251. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building, Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • *Hand Delivery:* U.S. Department of Transportation, Docket Operations, M-30, West Building, Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. For service information identified in this AD, contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207. Examining the AD Docket You may examine the AD docket on the Internet at *http://www.regulations.gov;* or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Ivan Li, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)917-6437; fax

(425)917-6590. SUPPLEMENTARY INFORMATION: Discussion On November 5, 1990, we issued AD 90-25-05, amendment 39-6790 (55 FR 49268, November 27, 1990). AD 90-25-05 applies to all Boeing Model 747 series airplanes. That AD requires the implementation of a corrosion prevention and control program. That AD resulted from reports of incidents involving corrosion and cracking in transport category airplanes, which have jeopardized the airworthiness of the affected airplanes. We issued that AD to prevent degradation of the structural capabilities of the affected airplanes. Actions Since Existing AD Was Issued Since we issued AD 90-25-05, Boeing has announced the production of additional Model 747 variants. Although they have not yet been certified, the new variants (Model 747-8 and -8F series airplanes) have a certification basis that will alleviate the safety issues addressed by AD 90-25-05. All of the inspections required by AD 90-25-05 will be included in the Boeing Model 747-8/8F Maintenance Review Board Report

(MRBR)Document and the corresponding Boeing Model 747-8/8F Maintenance Planning Data

(MPD)Document. Because AD 90-25-05 currently applies to “all Boeing Model 747 series airplanes,” these additional Model 747 variants will be required to do the actions mandated by that AD, once they are certified. Therefore, we must clarify the applicability to specify only the airplanes that are affected by this AD. FAA's Determination and Requirements of This AD The unsafe condition described previously is likely to exist or develop on other airplanes of the same type design. For this reason, we are issuing this AD to revise AD 90-25-05. This new AD retains the requirements of the existing AD. This AD also clarifies the applicability of the existing AD. Change to Existing AD Since we issued AD 90-25-05, the AD format has been revised, and certain paragraphs have been rearranged. As a result, the corresponding paragraph identifiers have changed in this AD, as listed in the following table: Revised Paragraph Identifiers Requirement in AD 90-25-05 Corresponding requirement in AD 90-25-05 R1 paragraph A paragraph (f). paragraph B.1 paragraph (g). paragraph B.2 paragraph (h). paragraph B.3 paragraph (i). paragraph C paragraph (j). paragraph D paragraph (k). paragraph E paragraph (l). paragraph F paragraph (m). paragraph G paragraph (n). We have also changed this AD to include numbers on each of the notes in the AD. Costs of Compliance We estimate that this AD affects about 165 airplanes of U.S. registry. The requirements of this AD add no additional economic burden. The current costs for this AD are repeated for the convenience of affected operators, as follows: We estimate that the actions required by AD 90-25-05 and retained in this AD take about 4,720 work-hours per product. The average labor rate is $80 per work-hour. Based on these figures, we estimate the cost of this AD to U.S. operators to be $62,304,000 or $377,600 per product. The number of work hours, as indicated above, is presented as if the accomplishment of the actions required by AD 90-25-05 and retained in this AD are to be conducted as “stand alone” actions. However, in actual practice, these actions for the most part will be accomplished coincidentally or in combination with normally scheduled airplane inspections and other maintenance program tasks. Therefore, the actual number of necessary additional work hours will be minimal in many instances. Additionally, any costs associated with special airplane scheduling will be minimal. FAA's Determination of the Effective Date No airplane variant that we had previously excluded from the applicability of this AD is currently on the U.S. Register. Therefore, providing notice and opportunity for public comment is unnecessary before this AD is issued, and this AD may be made effective in less than 30 days after it is published in the **Federal Register** . Comments Invited This AD is a final rule that involves requirements affecting flight safety, and we did not provide you with notice and an opportunity to provide your comments before it becomes effective. However, we invite you to send any written data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2008-0412; Directorate Identifier 2007-NM-290-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments. We will post all comments we receive, without change, to *http://www.regulations.gov,* including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this AD. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration

(FAA)amends § 39.13 by removing amendment 39-6790 (55 FR 49268, November 27, 1990), and adding the following new airworthiness directive (AD): **90-25-05 R1 Boeing:** Amendment 39-15327. Docket No. FAA-2008-0412; Directorate Identifier 2007-NM-290-AD. Effective Date

(a)This AD becomes effective January 22, 2008. Affected ADs

(b)This AD revises AD 90-25-05. Applicability

(d)This AD results from reports of incidents involving corrosion and cracking in transport category airplanes, which have jeopardized the airworthiness of the affected airplanes. We are issuing this AD to prevent degradation of the structural capabilities of all Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP series airplanes. Compliance

(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Note 1: This AD references Boeing Document Number D6-36022, “Aging Airplane Corrosion Prevention and Control Program, Model 747,” Revision A, dated July 28, 1989, for inspection procedures, compliance times, and reporting requirements. In addition, this AD specifies inspection and reporting requirements beyond those included in the Document. Where there are differences between the AD and the Document, the AD prevails. Requirements of AD 90-25-05 Maintenance Program Revision

(f)Within one year after December 31, 1990 (the effective date of AD 90-25-05), revise the FAA-approved maintenance program to include the corrosion control program specified in Boeing Document Number D6-36022, “Aging Airplane Corrosion Prevention and Control Program, Model 747,” Revision A, dated July 28, 1989, (hereinafter referred to as “the Document”). Note 2: All structure found corroded or cracked as a result of an inspection conducted in accordance with paragraph

(f)of this AD must be addressed in accordance with FAR Part 43. Note 3: Where non-destructive inspection

(NDI)methods are employed, in accordance with Section 4.1 of the Document, the standards and procedures used must be acceptable to the Administrator in accordance with FAR 43.13. Note 4: Procedures identified in the Document as “optional” are not required to be accomplished by this AD. Actions if Corrosion is Found

(g)If, as a result of any inspection conducted in accordance with the program required by paragraph

(f)of this AD, Level 3 corrosion is determined to exist in any area, accomplish paragraph (g)(1) or (g)(2) of this AD within 7 days after such determination.

(1)Submit a report of any findings of Level 3 corrosion to the Manager of the Seattle Aircraft Certification Office (ACO), FAA, and inspect the affected area on all Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP series airplanes in the operator's fleet.

(2)Submit for approval to the Manager of the Seattle ACO the proposal or data in paragraph (g)(2)(i) or (g)(2)(ii) of this AD.

(i)Proposed adjustments to the schedule for performing the tasks in that area on remaining airplanes in the operator's fleet, which are adequate to ensure that any other Level 3 corrosion is detected in a timely manner, along with substantiating data for those adjustments.

(ii)Data substantiating that the Level 3 corrosion found is an isolated occurrence and that no such adjustments are necessary. Note 5: Notwithstanding the provision of Section 1.1. of the Document that would permit corrosion that otherwise meets the definition of Level 3 corrosion (i.e., which is determined to be a potentially urgent airworthiness concern requiring expeditious action) to be treated as Level 1 if the operator finds that it “can be attributed to an event not typical of the operator's usage of other airplanes in the same fleet,” paragraph (g)(2) of this AD requires that data substantiating any such finding be submitted to the FAA for approval. Note 6: As used throughout this AD, where documents are to be submitted to the Manager of the Seattle ACO, the document should be submitted directly to the Manager, Seattle ACO, and a copy sent to the cognizant FAA Principal Inspector (PI). The PI will then forward comments or concurrence to the Seattle ACO. The Seattle ACO will not respond to the operator without the PI's comments or concurrence.

(h)The FAA may impose adjustments other than those proposed, upon a finding that such adjustments are necessary to ensure that any other Level 3 corrosion is detected in a timely manner.

(i)Prior to the compliance time specified for the first task required in the adjusted schedule approved under paragraph

(g)or

(h)of this AD, revise the FAA-approved maintenance program to include those adjustments. Note 7: The reporting requirements of paragraphs

(g)and

(k)of this AD do not relieve operators from reporting corrosion as required by FAR Section 121.703. Acceptable Extension to Repeat Inspection Interval

(j)To accommodate unanticipated scheduling requirements, it is acceptable for a repeat inspection interval to be increased by up to 10% but not to exceed 6 months. The cognizant FAA Principal Inspector

(PI)must be informed, in writing, of any extension. Note 8: Except as provided paragraph

(j)of this AD, notwithstanding Section 3.1., paragraph 4, of the Document, all extensions to any compliance time must be approved by the Manager of the Seattle ACO. Report of Levels 2 and 3 Corrosion

(k)Report forms for Level 2 corrosion and a follow-up report for Level 3 corrosion must be submitted at least quarterly in accordance with Section 5.0 of the Document. Approval for Increasing Existing Corrosion Inspection/Task Intervals

(l)If the repeat inspection or task intervals of an operator's existing corrosion inspection program are shorter than the corresponding intervals in Section 4.3 of the Document, they may not be increased without specific approval of the Manager of the Seattle ACO. Addition of an Airplane to Operations Specifications

(m)Before any airplane that is subject to this AD can be added to an air carrier's operations specifications, a program for the accomplishment of tasks required by this AD must be established in accordance with paragraphs (m)(1) and (m)(2) of this AD.

(1)For airplanes that have previously been operated under an FAA-approved maintenance program, the initial task on each area to be accomplished by the new operator must be accomplished in accordance with the previous operator's schedule or with the new operator's schedule, whichever would result in the earlier accomplishment date for that task. After each task has been performed once, each subsequent task must be performed in accordance with the new operator's schedule.

(2)For airplanes that have not previously been operated under an FAA-approved maintenance program, each initial task required by this AD must be accomplished either prior to the airplane's being added to the air carrier's operations specifications, or in accordance with a schedule approved by the Manager, Seattle ACO. Actions for Corrosion That Exceeds Level 1

(n)If corrosion is found to exceed Level 1 on any inspection after the initial inspection, the corrosion control program for the affected area must be reviewed and means implemented to reduce corrosion to Level 1 or better.

(1)Within 60 days after such a finding, if corrective action is necessary to reduce future findings of corrosion to Level 1 or better, such proposed corrective action must be submitted for approval to the Manager, Seattle ACO.

(2)Within 30 days after the corrective action is approved, revise the FAA-approved maintenance program to include the approved corrective action. Alternative Methods of Compliance (AMOCs) (o)(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, ATTN: Ivan Li, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)917-6437; fax

(425)917-6590; has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19.

(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.

(3)An AMOC that provides an acceptable level of safety may be used for any repair required by this AD, if it is approved by an Authorized Representative for the Boeing Commercial Airplanes Delegation Option Authorization Organization who has been authorized by the Manager, Seattle ACO, to make those findings. For a repair method to be approved, the repair must meet the certification basis of the airplane and the approval must specifically refer to this AD.

(4)AMOCs approved previously in accordance with AD 90-25-05, are approved as AMOCs for the corresponding provisions of this AD. Material Incorporated by Reference

(p)You must use Boeing Document Number D6-36022, “Aging Airplane Corrosion Prevention and Control Program, Model 747,” Revision A, dated July 28, 1989, to perform the actions that are required by this AD, unless the AD specifies otherwise.

(1)The incorporation by reference of Boeing Document Number D6-36022, “Aging Airplane Corrosion Prevention and Control Program, Model 747,” Revision A, dated July 28, 1989, was approved previously by the Director of the Federal Register as of December 31, 1990 (55 FR 49268, November 27, 1990).

(2)Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for a copy of this service information. You may review copies at the FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html* . Issued in Renton, Washington, on December 26, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-25616 Filed 1-4-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 301 [TD 9375] RIN-1545-BA96 Guidance Necessary To Facilitate Electronic Tax Administration—Updating of Section 7216 Regulations AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final regulations. SUMMARY: This document contains regulations to update the rules regarding the disclosure and use of tax return information by tax return preparers. Among other things, the regulations finalize rules for taxpayers to consent to the disclosure or use of their tax return information by tax return preparers. DATES: *Effective Date:* These regulations are effective January 7, 2008. *Applicability Date:* The regulations apply to disclosures or uses of tax return information occurring on or after January 1, 2009. SUPPLEMENTARY INFORMATION: Background This document contains amendments to the Regulations on Procedure and Administration (26 CFR Part 301) under section 7216 of the Internal Revenue Code. These regulations strengthen taxpayers' ability to control their tax return information by requiring that tax return preparers give taxpayers specific information, including who will receive the tax return information and the particular items of tax return information that will be disclosed or used, to allow taxpayers to make knowing, informed, and voluntary decisions over the disclosure or use of their tax information by their tax return preparer. Section 7216 imposes criminal penalties on tax return preparers who knowingly or recklessly make unauthorized disclosures or uses of information furnished to them in connection with the preparation of an income tax return. In addition, tax return preparers are subject to civil penalties under section 6713 for disclosure or use of this information unless an exception under the rules of section 7216(b) applies to the disclosure or use. Section 7216 was enacted by section 316 of the Revenue Act of 1971, Public Law 92-178 (85 Stat. 529). In 1988, Congress modified the section by limiting the criminal sanction to knowing or reckless, unauthorized disclosures. Public Law 100-647 (102 Stat. 3749). At the same time, Congress enacted the civil penalty that is now found in section 6713. Public Law 100-647, § 6242(a) (102 Stat. 3759). In 1989, Congress further modified section 7216, directing the Treasury Department to issue regulations permitting disclosures of tax return information for quality or peer reviews. Public Law 101-239, § 7739(a) (103 Stat. 3759). The Treasury Department and the IRS proposed regulations under section 7216 on December 20, 1972 (37 FR 28070). Final regulations were issued on March 29, 1974 (39 FR 11537). These regulations are divided into three parts: § 301.7216-1 for general provisions and definitions; § 301.7216-2 for disclosures and uses that do not require formal taxpayer consent; and § 301.7216-3 for disclosures and uses that require formal taxpayer consent. Since the regulations were adopted in 1974, the Treasury Department and the IRS have amended § 301.7216-2 on occasion, but §§ 301.7216-1 and 301.7216-3 have remained unchanged. A notice of proposed rulemaking (REG-137243-02) was published in the **Federal Register** (70 FR 72954) on December 8, 2005. Concurrently with publication of the proposed regulations, the IRS published Notice 2005-93, 2005-52 I.R.B. 1204 (December 07, 2005), setting forth a proposed revenue procedure that would provide guidance to tax return preparers regarding the format and content of consents to disclose and consents to use tax return information under § 301.7216-3. Written comments were received in response to the notice of proposed rulemaking. A public hearing was held on April 4, 2006. Commentators appeared at the public hearing and commented on the notice of proposed rulemaking. All comments were considered and are available for public inspection upon request. This preamble summarizes most of the comments received by the IRS and Treasury Department. After consideration of the written comments and the comments provided at the public hearing, the proposed regulations under section 7216 are adopted as revised by this Treasury decision. Concurrently with publication of these regulations, the IRS is publishing a revenue procedure and an advanced notice of proposed rulemaking. The revenue procedure provides guidance on the format and content of consents to disclose or use tax return information under § 301.7216-3 for taxpayers filing a return in the Form 1040 series, e.g., Form 1040, Form 1040NR, Form 1040A, or Form 1040EZ. The revenue procedure also provides specific guidance for electronic signatures when a taxpayer filing a return in the Form 1040 series executes an electronic consent to the disclosure or use of the taxpayer's tax return information. The advanced notice of proposed rulemaking requests comments regarding a proposed rule under § 301.7216-3 that a tax return preparer may not obtain a consent to disclose or use tax return information for the purpose of the tax return preparer soliciting, or the taxpayer obtaining, a refund anticipation loan

(RAL)or certain other products. Summary of Comments 1. Preamble Some commentators recommended that the final regulations specify the existing revenue rulings, notices, and other guidance under section 7216 that continue to have effect under the final regulations. While the final regulations do not identify all guidance that has continuing effect, the section of this Treasury decision entitled “Effect on Other Documents” specifies guidance that Treasury and the IRS have determined as contrary to the regulations. One commentator requested that the preamble of the regulations clarify whether a tax return preparer may offer for sale an insurance policy that will reimburse the taxpayer additional tax the taxpayer is required to pay under certain circumstances involving errors by the tax return preparer. Section 7216 and the regulations thereunder govern only a tax return preparer's disclosure or use of tax return information. To the extent that a tax return preparer offers a product, such as insurance, where the offer is based on the disclosure of tax return information to a third-party, or where use of such tax return information serves as the basis for making the offer, section 7216 and the regulations thereunder only govern whether use or disclosure of the tax return information requires taxpayer consent. 2. Section 301.7216-1 Penalty for Disclosure or Use of Tax Return Information A. Statutory Provisions Some commentators recommended that Treasury and the IRS seek legislative changes to section 7216. More specifically, these commentators recommended that the amount of the section 7216 criminal penalty be increased, that the amount of the section 6713 civil penalty be increased, and that the Code be amended to provide a private right of action against tax return preparers. Another commentator recommended amending section 7216 to provide a means to abate the penalty in cases where reasonable cause and good faith is established. This commentator also recommended that Treasury and the IRS not attempt to regulate the disclosure or use of tax return information in the context of a criminal statute, section 7216, but that only civil penalties should apply. Requests for statutory changes to sections 7216 and 6713 are outside of the scope of these regulations. Section 7216 expressly provides for Treasury to promulgate regulations to exempt certain disclosures or uses of information from the statute's criminal sanction. Although Treasury and the IRS do not have the regulatory authority to provide for a reasonable cause exception under section 7216, the criminal penalty provided for by that statute is premised on a finding of knowing or reckless conduct. B. Tax Return Preparer One commentator requested expanding the definition of tax return preparer to include clerical staff involved in preparation of a tax return. Because the definition of tax return preparer in the regulations already encompasses clerical staff involved in the preparation of a return, no change is needed to address this comment. While approving of the generally broad scope of the term “tax return preparer,” one commentator expressed concern that the term did not cover employees of tax return preparers who do not personally assist in the preparation of tax returns or the provision of auxiliary services. That commentator recommended that section 7216 should nonetheless apply to any employee. This comment was not adopted. The statute applies only to persons “engaged in the business of preparing, or providing services in connection with the preparation of, returns.” The regulations, however, do not permit disclosure by one employee of a tax return preparer to another employee of the tax return preparer on the basis of employment status alone. See Treas. Reg. § 301.7216-2(c). Based on recent amendments to section 7701(a)(36) of the Code (which post-amendment applies more generally to tax return preparers other than income tax returns), the final regulations were revised to omit the language in the proposed regulations pertaining to the lack of uniformity of the definition of tax return preparer provided in section 7701(a)(36) and the definition of tax return preparer for purposes of section 7216. C. Tax Return Information Some commentators expressed concern that the definition of tax return information encompasses an overly broad amount of information. One commentator recommended that a taxpayer's name, address, telephone number, e-mail address, and identification number should not be treated as tax return information. Another commentator recommended that a taxpayer's name, address, and other contact information should be available for a tax return preparer to use to provide the taxpayer with any information that the tax return preparer believes may be of interest to the taxpayer. These recommendations regarding tax return information were not adopted because information revealing the identity of, or how to contact, a person is information central to one's privacy and deserving of treatment as tax return information when submitted for, or in connection with, the preparation of a tax return. Section 301.7216-2(n), however, permits tax return preparers to make limited use of taxpayer's contact information to offer tax information or additional tax return preparation services to previous customers. One commentator recommended eliminating language from the regulations providing that information maintained in a form that is associated with the tax return preparation becomes tax return information regardless of how the information was initially obtained. The commentator questioned whether non-tax return information could become tax return information as a result of the manner in which it is stored and maintained by the tax return preparer. Treasury and the IRS agree that section 7216 protects only information furnished to a tax return preparer for, or in connection with, the preparation of a return and that information does not become tax return information merely by the method in which the information is stored. The language in the proposed regulations that is the subject of the comment was included to recognize that the protections of section 7216 may extend to information furnished by persons other than the taxpayer, including information furnished by one person within a firm to a tax return preparer employed by the same firm. In that situation, the information in the hands of the tax return preparer would be tax return information even if the person furnishing the information had obtained it other than in connection with the preparation of a tax return. Because this rule is evident from other provisions of the regulations, and the language commented upon may create confusion, the language has been removed from these regulations. One commentator expressed concern that the proposed regulations improperly expand upon section 7216 by defining “tax return information” to include information derived or generated from tax return information. The commentator commented that section 7216 protects only information furnished to tax return preparers, and data that a tax return preparer derives from that information should not be considered data furnished to the tax return preparer. The commentator, therefore, recommended removing this language from the regulations. The commentator's recommendation was not adopted. Information that a tax return preparer would typically derive from other information furnished in connection with the preparation of a return could include information on the taxpayer's entitlement to deductions, credits, losses or gains, the amounts thereof, and the amount of tax due. It would frustrate the purpose of the statute not to protect this information when a taxpayer has furnished the tax return preparer the means to derive it. Similarly, the same commentator stated that the proposed regulations improperly expand upon the statute by defining “tax return information” to include “information received by the tax return preparer from the IRS in connection with the processing of such return.” The commentator recommended eliminating this language from the regulations. This recommendation was not adopted. The statute protects information furnished to a tax return preparer for, or in connection with, preparation of a return and does not require that the taxpayer have furnished the information. Some commentators approved of the proposed regulations' definition of tax return information, but expressed concern that Example 1 in § 301.7216-1(b)(3)(ii) suggests that information supplied to register tax preparation software is not tax return information unless the tax return preparer states during the registration process that it will provide updates to registrants. These commentators, therefore, recommended deleting that fact from the example. This recommendation was adopted to explicitly provide that all information furnished to register tax return preparation software is tax return information. Some commentators expressed concern that if information furnished to register tax return preparation software was treated as tax return information, then tax return preparers would be required to obtain consent from taxpayers prior to updating the tax return preparation software. To address this concern, section 301.7216-2(c) of the regulations has been revised. D. Disclosure and Use One commentator stated that the definition of “use” is overly broad. The commentator proposed that the “use” of tax return information should not include tax return preparers informing taxpayers of the availability of products and services that tax return preparers offer that could benefit taxpayers. As an example, the commentator stated that informing a taxpayer about the availability of a refund anticipation loan based on the taxpayer's tax return information should not be a “use” of tax return information. This recommendation was not adopted. The regulations require consents for tax return preparers to use tax return information so that taxpayers themselves determine whether they want additional information regarding products and services that might benefit them. The potential uses of tax return information should be clearly described by tax return preparers and the potential uses must be consented to by taxpayers before such uses occur. Two commentators recommended that tax return preparers should be responsible for subsequent disclosures or uses of tax return information by third parties to whom tax return preparers made an authorized disclosure of tax return information. This recommendation was not adopted because section 7216 does not apply to third parties who are not tax return preparers. E. Providing Auxiliary Services Section 301.7216-1(b)(2)(iii) of the proposed regulations provides that a person is engaged in the business of providing auxiliary services in connection with the preparation of tax returns as described in paragraph (b)(2)(i)(B) of that section if, in the course of the person's business, the person holds himself out to tax return preparers or to taxpayers as a person who performs auxiliary services, whether or not providing the auxiliary services is the person's sole business activity and whether or not the person charges a fee for the auxiliary services. One commentator recommended broadening the definition of auxiliary services to include analysis of data for purposes of monitoring the tax return preparer's business for fraud prevention and provision of data storage services. These services as well as similar services are typical of the types of auxiliary services that can be provided to tax return preparers as contemplated by § 301.7216-1(b)(2)(iii) and are already covered by the broad definition of auxiliary services in the regulations. The same commentator also recommended broadening the definition of auxiliary services to include the analysis of customer activity to improve services and assistance in connection with preparation for taxpayer audits. These services are already addressed in other parts of the regulations. See §§ 301.7216-2(o) and 301.7216-2(k). F. Exclusions Under § 301.7216-1(b)(2)(v) One commentator recommended that the express exclusion under § 301.7216-1(b)(2)(v) of the proposed regulations of certain persons from the definition of tax return preparer should be extended to include persons who provide “a broad range of financial products and services * * * to customers of tax return preparers, including savings, transaction, and retirement accounts.” The commentator's recommendation was not adopted as the regulations do not provide an exhaustive list of the persons identified as excluded from the definition of tax return preparer. To the extent the service providers suggested to be excluded by the commentator provide services only incidentally related to the preparation of the return, these persons would be excluded under the regulation. G. Hyperlinks One commentator recommended that the regulations should not treat as a disclosure by a tax return preparer the situation where a taxpayer is transferred from the tax return preparer's website to a different website and the taxpayer separately enters information on the different website. This recommendation was not adopted because the regulations already do not treat this fact pattern as a disclosure by the tax return preparer. 3. Section 301.7216-2 Permissible Disclosures or Uses Without Consent of the Taxpayer A. Disclosures to the IRS Section 301.7216-2(b) of the proposed regulations provides that tax return preparers may disclose to the IRS any tax return information the IRS requests to assist in the administration of electronic filing programs. One commentator requested limiting this rule to “specific necessary purposes, such as compliance by electronic return originators.” This recommendation was not adopted. Return information in the hands of the IRS is already protected from unauthorized disclosure. *See, e.g.* , section 6103. Other commentators expressed concern regarding whether § 301.7216-2(b) permitted disclosures of tax return information to the IRS in general. Because the purpose of these regulations is to protect taxpayers from the unauthorized uses and disclosures by tax return preparers, and because tax return information in the hands of the IRS is already protected from unauthorized disclosure, § 301.7216-2(b) has been modified to clarify that return preparers may disclose any tax return information to the IRS for any purpose. B. Use By Tax Return Preparer for Purposes of Updating Software Section 301.7216-2(c)(1) of the final regulations has been revised to provide that if a tax return preparer provides software to a taxpayer that is used in connection with the preparation or filing of a tax return, the tax return preparer may use the taxpayer's tax return information to update the taxpayer's software for the purpose of addressing changes in IRS forms, e-file specifications and administrative, regulatory and legislative guidance or to test and ensure the software's technical capabilities without obtaining the taxpayer's consent under § 301.7216-3. C. Disclosure to a Tax Return Preparer Within the Same Firm Located Outside of the United States Section 301.7216-2(c) of the proposed regulations generally provides that an officer, employee, or member of a tax return preparer in the United States may disclose tax return information to another officer, employee, or member of the same tax return preparer located within the United States. Section 301.7216-2(c)(1) of the proposed regulations provides that the taxpayer must give consent under § 301.7216-3 prior to any disclosure of tax return information by an officer, employee, or member of a tax return preparer in the United States to an officer, employee, or member of the same tax return preparer located outside of the United States or any territory or possession of the United States. One commentator expressed concern that this rule was too strict with respect to multinational companies and employees on assignment outside of the United States. This commentator stated that such taxpayers anticipate that their tax return information will be disclosed outside of the United States. This commentator recommended that consent under § 301.7216-3 should not be required with respect to disclosures when the taxpayer is a multinational company or an individual taxpayer employed or on assignment outside of the United States and that an engagement letter explaining potential circumstances involving disclosures overseas ought to be permitted in these situations. This recommendation was not adopted. As explained in the preamble to the proposed regulations, the Treasury Department and IRS believe that a separate explanation is required under these circumstances in order to advise taxpayers that their tax return information is being disclosed to tax return preparers located outside the United States. The final regulations, however, address the commentator's request for additional flexibility with respect to the form and manner of the consent for taxpayers other than individuals. For tax return preparers providing tax return preparation services to taxpayers who do not file an income tax return in the Form 1040 series, *e.g.* , Form 1040, Form 1040NR, Form 1040A, or Form 1040EZ, a consent to disclose tax return information outside the United States may be in any format, including an engagement letter to a client, as long as the consent provides sufficient information to enable the taxpayer to provide informed consent. For tax return preparers providing tax return preparation services to taxpayers who file an income tax return in the Form 1040 series, the regulations provide that the Secretary may issue guidance, by publication in the Internal Revenue Bulletin, prescribing the form and manner of the consent to disclose tax return information, including disclosure of return information outside the United States. This rule is consistent with the general rule adopted by these final regulations with respect to a tax return preparer's request for consent to disclose tax return information. *See* section 301.7216-3(a)(3). Additionally, one commentator recommended that, rather than provide limitations on the disclosure of tax return information by a tax return preparer within the United States to another tax return preparer of the same firm who is located outside of the United States, the regulations should instead permit such disclosures without consent if the tax return preparer of the same firm outside of the United States consents to adhere to the rules of section 7216. This recommendation was not adopted because it does not inform taxpayers that their tax return information will be disclosed outside of the United States or allow taxpayers to control the decision whether their information is disclosed overseas. D. Disclosures to Other Tax Return Preparers Section 301.7216-2(d) of the proposed regulations provides that disclosures between tax return preparers are authorized when the disclosures

(i)assist in the preparation of a return;

(ii)the services provided by the recipient of the disclosure are not substantive determinations or advice affecting a taxpayer's reported tax liability; and

(iii)the disclosure is to a tax return preparer located in the United States. Two commentators expressed concern that the phrase “substantive determinations or advice” is a vague standard and recommended the use of examples in the regulations that adequately define the phrase. The final regulations clarify the meaning of substantive determinations and provide an example to illustrate the operation of this rule. One commentator recommended adopting the professional ethics rules of the American Institute of Certified Public Accountants (AICPA) on outsourcing in lieu of § 301.7216-2(d) of the proposed regulations. Rule 102 of the AICPA Code of Professional Conduct requires that, prior to sharing confidential client information (such as a tax return) with a third-party service provider, an AICPA member must inform the client, preferably in writing, that the member may use a third-party service provider when providing professional services to the client. Unlike the rules in the regulations, the AICPA Code of Professional Conduct does not require that the client consent to the disclosure of tax return information when substantive determinations or advice are sought from third parties. Under the AICPA rules, AICPA members who use third-party service providers remain responsible for the work done by the service providers and they must contract with the third-party service provider for the service provider to monitor the confidentiality of the client's information to the third-party Service provider. The commentator's recommendation that the regulations adopt only the protections of the AICPA ethics rules was not adopted. The Treasury Department and the IRS are concerned that taxpayers and tax return information would not be adequately protected if a tax return preparer could disclose tax return information to any third-party service provider without taxpayer consent to that disclosure. One commentator recommended modifying § 301.7216-2(d) of the proposed regulations to allow disclosures between franchisors and franchisees in the tax return preparation business according to the terms of their franchise agreement. The commentator's recommendation was not adopted because the existence of a written franchise agreement should not affect the confidentiality of a taxpayer's tax return information. One commentator critiqued § 301.7216-2(d) because it will limit the benefits tax return preparation firms may enjoy from using foreign outsourcing. Foreign outsourcing is not prohibited by the final regulations, which permit the disclosure of tax return information outside of the United States if the taxpayer consents to such disclosure. One commentator recommended that tax return preparers should be allowed to disclose tax return information to third-party service providers subject to the requirements of the privacy provisions of Title V of the Gramm-Leach-Bliley Act, Public Law 106-102 (113 Stat. 1338) (GLBA). Specifically, the commentator proposed that the regulations should permit tax return preparers to:

(1)Execute a written contract with a service provider limiting the service provider's disclosure or use of tax return information;

(2)select and retain service providers that are capable of safeguarding tax return information; and

(3)implement contractual provisions requiring service providers to develop and maintain appropriate information safeguards. This recommendation was not adopted. While the requirements of section 7216 and these regulations do not override any requirements or restrictions of the GLBA, the sensitivity of tax return information justifies affording tax return information stronger protections than other information subject to the GLBA. E. Disclosure Pursuant to an Order of a Court, or an Administrative Order, Demand, Request, Summons or Subpoena Which is Issued in the Performance of its Duties by a Federal or State Agency, the United States Congress, a Professional Association Ethics Committee or Board, or the Public Company Accounting Oversight Board One commentator recommended that the title of proposed § 301.7216-2(f) be revised to add the word “request” following the word “demand,” to align the subsection's title with the regulation's language in § 301.7216-2(f)(5). This recommendation was adopted in the final regulation. One commentator recommended replacing the phrase “professional ethics board” in proposed § 301.7216-2(f) with the phrase “certain professional association ethics committees or boards.” The commentator noted that this change would avoid confusion as to whether the reference to professional ethics boards means governmental entities that control licensing for CPAs or whether the phrase would include professional associations that have boards or committees that discipline their members, such as the AICPA or state and local bar associations. This recommendation was adopted, in part, by changing the phrase “professional ethics board” to “professional association ethics committee or board.” Section 301.7216-2(f)(4)(ii) separately addresses disclosures to government entities charged with licensing, registration, or regulation of tax return preparers. One commentator recommended permitting disclosure of tax return information without taxpayer consent pursuant to disclosures required by Federal or State laws and administrative rules, but did not identify any specific rule or law that required a disclosure in circumstances contrary to either the preexisting regulations or the proposed regulations. Preexisting regulations already permitted disclosures pursuant to an order of a court or a Federal or State agency. These final regulations permit disclosures pursuant to an order of a court or an administrative order, demand, summons or subpoena that is issued in the performance of its duties by a Federal or State agency, the United States Congress, a professional association ethics committee or board, or the Public Company Accounting Oversight Board. The protections offered by limiting disclosures to responses to specific governmental or quasi-governmental requests provide appropriate protection for taxpayer privacy. One commentator expressed concern about proposed § 301.7216-2(f)(5) and the safeguarding of tax return information received by a professional association board or committee conducting an ethics investigation. The commentator recommended revising § 301.7216-2(f)(5) to expressly prohibit professional associations from publishing as part of any resulting professional disciplinary determination the tax return information of a taxpayer furnished to them during an ethics investigation of a preparer unless the taxpayer provides consent. This recommendation was not adopted because section 7216 does not provide for penalties against third parties who receive tax return information in this context. One commentator recommended rewording proposed § 301.7216-2(f)(6) to provide the following: “A written request from the Public Company Accounting Oversight Board (PCAOB) in connection with an inspection under section 104 of the Sarbanes-Oxley Act of 2002, 15 U.S.C. 7214, or an investigation under section 105 of such Act, 15 U.S. 7215, for use in accordance with such Act.” The commentator noted that this wording describes more clearly the situations in which disclosures to the PCAOB are permitted, and to permit registered firms and their associated persons to comply with their disclosure obligations under the Act. This recommendation was adopted. One commentator expressed concern that permitting the disclosure of tax return information pursuant to a subpoena issued by the United States Congress is inconsistent with the rules regarding disclosures by the IRS to Congress under section 6103(f). The commentator stated that the regulations may provide a method to avoid the specific disclosure rules of section 6103(f), which are designed to protect taxpayers and prevent Congressional abuse of returns or return information. Another commentator recommended eliminating the term “demand” in § 301.7216-2(f)(4)(i) because the commentator believes the term is too broad and could permit any Federal agency to simply ask for tax return information even if the agency does not have authority to issue “formal legal orders” compelling the disclosure. These recommendations were not adopted. Both Congress and Federal agencies are presumed to act in accordance with the law and there are other limitations on their abilities to seek tax return information. F. Disclosure for Use in Securing Legal Advice, Treasury Investigations, or Court Proceedings Final section 301.7216-2(g) has been revised to confirm that a tax return preparer may disclose tax return information to an attorney for purposes of the preparer securing legal advice. G. Tax Return Preparers Working for the Same Firm Section 301.7216-2(h)(1)(ii) provides that a tax return preparer's law or accounting firm does not include any related or affiliated firms. Some commentators expressed concern that this rule reduces the application of the § 301.7216-2 exceptions for tax return preparers that are structured as separate legal entities, but are closely related. One commentator recommended that the regulations be revised to provide that the “same firm” standard be determined in a manner similar to the rules for qualified employee plans for a single employer. This recommendation was not adopted. Taxpayers should have a clear understanding with whom they are dealing. Adopting this recommendation would require that a taxpayer understand complex rules about which separate legal entities are part of the “same firm” as their tax return preparer to be able to understand who might receive their tax return information. Additionally, a tax return preparer has the ability to obtain consent from a taxpayer to disclose tax return information to a related or affiliated firm. H. Disclosure or Use of Tax Return Information in Preparation for Audit One commentator recommended that a tax return preparer should be permitted to disclose tax return information to another tax return preparer so that the second tax return preparer can provide assistance in connection with the audit of a return under the law of any State or political subdivision thereof, the District of Columbia, or any territory or possession of the United States. This comment was not adopted because § 301.7216-2(k) already permits such disclosures. I. Payment for Tax Preparation Services Section 301.7216-2(l) provides that a tax return preparer may disclose and use, without the taxpayer's written consent, tax return information that the taxpayer provides to the tax return preparer to pay for tax preparation services to the extent necessary to process the payment. One commentator recommended applying this rule to the collection of payments. This recommendation was adopted. The exception under § 301.7216-2(l) for the collection of payments is subject to the same limitations as the rule for processing payments. Only tax return information that the taxpayer provided to the tax return preparer to pay for tax return preparation services may be used to collect payment. This limitation precludes tax return preparers from using any other tax return information to collect on delinquent payments. J. Lists for Solicitation of Tax Return Business Section 301.7216-2(n) of the proposed regulations provides that a tax return preparer may compile and maintain a separate list containing solely the names, addresses, e-mail addresses, and phone numbers of taxpayers whose tax returns the tax return preparer has prepared or processed. The proposed regulations also state that this list may be used by the compiler solely to contact the taxpayers on the list for the purpose of offering tax information or additional tax return preparation services. One commentator recommended adding that no mention of services or products other than those related to tax preparation services may be made. Treasury and the IRS agree that the prohibition on using the list to solicit business other than tax return preparation services could be strengthened, and have modified § 301.7216-2(n) to address the commentator's concern. K. Producing Statistical Information in Connection With Tax Return Preparation Business Section 301.7216-2(o) of the proposed regulations permits a tax return preparer to use tax return information to prepare anonymous statistical compilations for limited purposes related to management or support of the tax return preparer's business. Two commentators recommended that the disclosure or use of tax return information in statistical compilations should be limited to “internal management” because “support” might be read to allow a tax return preparer to target specific customers with advertising. This recommendation was not adopted because § 301.7216-2(o) specifically prohibits the disclosure or use of statistical compilations in connection with, or in support of, businesses other than tax return preparation, and use of lists to solicit additional tax return preparation business is specifically governed, and limited, by § 301.7216-2(n). One commentator recommended that statistical compilations of tax return information that do not identify taxpayers should not be considered “tax return information” for purposes of section 7216. The commentator stated that if statistical information is treated as “tax return information,” such a rule could prevent tax return preparers (especially tax return preparers that are publicly traded) from reporting essential data to financial regulators or to market participants to provide an accurate picture of the tax return preparer's performance and financial condition. In response to the concern raised by the commentator, the final regulation was modified to provide that the compiler of the statistical compilation may not disclose the compilation, or any part thereof, to any other person unless the disclosure of the statistical compilation is made in order to comply with financial accounting or regulatory reporting requirements or occurs in conjunction with the sale or other disposition of the compiler's tax return preparation business. One commentator recommended that tax return preparers located within the same firm should be permitted, without obtaining consent, to use tax return information for “the management, support or maintenance of the tax return preparer's business.” This recommendation was not adopted. Because the regulations already permit a tax return preparer to use tax return information to prepare statistical compilations for limited purposes related to management or support of the tax return preparer's business, it is unclear how the commentator's recommendation would further aid in the management or support of a tax return preparer's business. One commentator recommended that the regulations require that “taxpayer identifying” data, such as names and social security numbers, be redacted from statistical information. This recommendation was not adopted. The regulations already require that statistical compilations must be “anonymous.” L. Quality or Peer Reviews Section 301.7216-2(p) of the proposed regulations provides that a quality or peer review may be conducted only by attorneys, certified public accountants, enrolled agents, and enrolled actuaries who are eligible to practice before the Internal Revenue Service. Some commentators recommended that this subsection of the proposed regulations should be revised to permit other professionals to participate in quality or peer reviews. This recommendation was not adopted. The restriction helps to prevent unauthorized disclosures of tax return information by limiting participation in such reviews to those persons subject to Circular 230, 31 CFR Part 10. M. Extraction of Tax Return Information Within Software Only for the Purposes of Reducing Repetitive Data Entry One commentator recommended that the use of computer software designed to assist with the preparation of an income tax return should be allowed without consent to “extract” certain tax return information once entered, such as the taxpayer's name and address, and reprint such information in required fields on the same return in order to eliminate repetitive data entry. This comment was not adopted because the regulations do not prohibit such a use of tax return information where the information is being used for the permitted purpose of preparing the taxpayer's tax return. 4. Proposed § 301.7216-3: Disclosures and Uses Authorized by Taxpayer Consent A. Consent To Disclose Tax Return Information Some commentators expressed concern that the proposed regulations authorize the IRS to make available for sale to third parties its internal records and data containing tax return information. This concern reflects a fundamental misunderstanding of the proposed regulations. The proposed regulations do not address any disclosure of tax return information by the IRS; the proposed regulations address only the disclosure and use of tax return information by tax return preparers. Separate laws, including section 6103, strictly protect the confidentiality of returns and return information in the hands of IRS employees and others. Some commentators expressed concern that the proposed regulations would loosen the current rules regarding a tax return preparer's ability to disclose a client's tax return information. This concern is based on a misunderstanding of the purpose and content of the proposed and preexisting regulations. Section 301.7216-3(a)(1) of the proposed regulations provides that, unless section 7216 or § 301.7216-2 authorizes the disclosure of tax return information, a tax return preparer may not disclose a taxpayer's tax return information prior to obtaining consent from the taxpayer. Since 1974, section 301.7216-3(a)(2) has provided that, “[i]f a tax return preparer has obtained from a taxpayer a consent * * *, he may disclose the tax return information of such taxpayer to such third persons as the taxpayer may direct.” Thus, the proposed regulations contained the same substantive rule that has been in place for over 30 years. Throughout the long-standing existence of former § 301.7216-3(a)(2), there has been no objection to the provision that allowed taxpayers to provide informed consent to tax return preparers disclosing tax return information to third parties. Nonetheless, commentators criticized the proposed rule, stating that it could allow tax return preparers to induce clients into providing unknowing or inadvertent consents to sell or otherwise disclose tax return information. Furthermore, they argue that disclosure to third parties could result in identity theft. Thus, one solution these commentators recommend is to prohibit taxpayers from ever consenting to the disclosure of their tax return information. The Treasury Department and IRS did not adopt the commentators' recommendation. Rather, the final regulations retain the general rule that has been in place for more than 30 years recognizing that taxpayers should have control over their own tax return information and that taxpayers should, with appropriate limits and safeguards, be able to direct tax return preparers to disclose tax return information as taxpayers see fit. This rule parallels the statutory rule in section 6103(c) that allows taxpayers to consent to the IRS disclosing returns or return information to third parties of the taxpayer's choosing. In addition, this rule is consistent with the privacy protection regime in the Health Insurance Portability and Accountability Act (HIPAA), Public Law 104-191 (110 Stat. 1936). HIPAA permits health care providers and health plans to disclose information about health status, provision of health care, or payment to a third-party if they have obtained authorization from the individual patient. While identity theft is a significant concern, Treasury and the IRS do not believe a generalized concern regarding the potential for criminal activity by third parties should preclude taxpayers from being able to direct the disclosure of tax return information to third parties for legitimate reasons of the taxpayer's own choosing, particularly in the absence of any evidence that disclosure of tax return information by tax return preparers has been a source of identity theft problems. While the idea of a complete prohibition on consent to disclosure was rejected, Treasury and the IRS did revise § 301.7216-3(b)(5), based on several factors. These factors include:

(1)The fact that it is not necessary for tax return preparers to disclose certain taxpayer identifying information to other tax return preparers who are assisting them in preparing a return;

(2)the important role a social security number

(SSN)plays in the tax administration process, and the heightened potential for misuse when an SSN is readily associated with confidential information, such as tax return information; and

(3)the heightened concern about the theft of an individual's confidential information resulting from disclosures outside the United States. Section 301.7216-3(b)(4) now provides that a tax return preparer located within the United States, including any territory or possession of the United States, may not obtain consent to disclose a taxpayer's SSN to a tax return preparer located outside of the United States or any territory or possession of the United States. Thus, if a tax return preparer located within the United States obtains consent from a taxpayer to disclose tax return information to another tax return preparer located outside of the United States, as provided under §§ 301.7216-2(c) and 301.7216-2(d), the tax return preparer located in the United States may not disclose the taxpayer's SSN, and the tax return preparer must redact or otherwise mask the taxpayer's SSN before the tax return information is disclosed outside of the United States. If a tax return preparer located within the United States initially receives or obtains a taxpayer's SSN from another tax return preparer located outside of the United States, however, the tax return preparer within the United States may, without consent, retransmit the taxpayer's SSN to the tax return preparer located outside the United States that initially provided the SSN to the tax return preparer located within the United States. Where a taxpayer-client requests that a tax return preparer within the United States transfer the return preparation engagement to a tax return preparer located outside the United States, the preparer must still redact or otherwise mask the taxpayer's SSN before the information is disclosed and, in this situation, it will be incumbent upon the taxpayer to provide the SSN directly to the tax return preparer located abroad. Some commentators recommended that the regulations provide taxpayers with the ability to informally initiate a request for the disclosure of tax return information from their tax return preparers without formally following the consent rules of § 301.7216-3. This recommendation was not adopted. As a practical matter, it would be difficult to distinguish when a taxpayer informally initiates a request for the disclosure of tax return information and when tax return preparers merely claim that a taxpayer initiated the request for disclosure. Additionally, tax return preparers are always free to provide taxpayers their own returns and taxpayers may disclose tax return information to others directly. Other commentators recommended that the regulations should prohibit disclosure to third-party solicitors and not allow taxpayers to consent to disclosures for the purpose of receiving solicitations because the risks to the taxpayer of providing consent inadvertently are too great in comparison to the benefit of receiving solicitations from third parties. This recommendation was not adopted because it denies taxpayers the ability to control and direct the disclosure of their own tax return information. If taxpayers do not wish to receive offers or solicitations from third parties, they can simply refuse to provide the consent needed for third parties to receive their tax return information. If a tax return preparer obtains written consent under circumstances that make the consent unknowing or uninformed, the consent would be invalid under the requirements of the regulations. B. Consent To Use of Tax Return Information Section 301.7216-3 of the preexisting regulations provides that a consent to use tax return information does not apply for purposes of facilitating the solicitation of the taxpayer's use of any services or facilities furnished by a person other than the tax return preparer, unless the other person and the tax return preparer are members of the same affiliated group of corporations within the meaning of section 1504. The proposed regulations removed this “affiliated group” limitation because the affiliated group concept has little application in the context of modern return preparation businesses. The proposed regulations also reflected a determination by the IRS and Treasury Department that a taxpayer's ability to consent to a preparer's use of tax return information to solicit additional business should not be limited by arbitrary factors largely beyond the taxpayer's knowledge or control, such as the size, diversity, or organizational structure of the tax return preparer. Some commentators expressed concern that removal of the “affiliated group” limitation would make it easier for tax return preparers to disclose tax return information to third parties for marketing purposes. This comment reflects a misunderstanding of the nature of a consent governing a tax return preparer's use of tax return information. Use consents are limited to what a tax return preparer can do with tax return information in the tax return preparer's own hands; use consents cannot be used in connection with disclosures to third parties. Thus, identity theft or other abuses by third parties could not arise from taxpayers providing use consents to tax return preparers. Further, prohibiting the commercial use of tax return information outright would result in no longer allowing legitimate uses of tax return information that have evolved over time as standard commercial practices. For example, tax return preparers could not use tax return information to advise taxpayers of strategies that may positively affect the taxpayers' finances such as individual retirement accounts or qualified tuition programs, or of the taxpayers' eligibility to participate in government benefit programs, such as food stamps. C. Prohibit Tax Return Preparers From Disclosing Tax Return Information for Any Reason Unrelated to the Preparation of a Tax Return Many commentators recommended prohibiting tax return preparers from disclosing tax return information for any purpose unrelated to the preparation of tax returns. This recommendation was not adopted because there are many legitimate purposes for the disclosure of tax return information identified in § 301.7216-2, such as the disclosure of tax return information for the reporting of a crime or for an ethics investigation. Similarly, there are legitimate purposes, other than tax return preparation, when a taxpayer would choose to consent to the tax return preparer's disclosure of tax return information. As an alternative, some commentators recommended that the regulations prohibit or greatly restrict the use or disclosure of tax return information for marketing purposes. They specifically recommended banning tax return preparers from disclosing tax return information in association with taxpayers seeking refund anticipation loans

(RALs)and similar products. Treasury and the IRS did not adopt this recommendation because it was not contained in the proposed regulations and could have a significant impact on existing business practices. Concurrently with the publication of these final regulations, however, Treasury and the IRS are requesting comments on a proposed rule that, if ultimately adopted as final, would prohibit tax return preparers from using or disclosing tax return information for the purpose of soliciting, or the taxpayer obtaining, a RAL or certain other products. Commentators also recommended that disclosure of tax return information by tax return preparers should be conditioned upon the existence of an agreement by third parties receiving the information that the tax return information will not be used for any purpose other than the purpose for which the information was provided. This recommendation was not adopted because policing agreements by third parties are outside the scope of section 7216. Section 7216 governs only the actions of tax return preparers. D. Obtaining Consent Through Engagement Letters Some commentators recommended that when the regulations require consent to disclose or use tax return information, tax return preparers should be permitted to obtain such consent from “large taxpayers,” such as large corporations, through an engagement letter. These commentators observed that it is ordinary business practice for tax return preparers and large taxpayers to negotiate and set the terms of the provision of services, including the preparation of income tax returns, in an engagement letter. This recommendation was adopted. Treasury and the IRS agree that requiring multiple, separate consents would impose a significant burden and could frustrate these taxpayers' ability to comply with tax laws and other regulatory and reporting requirements. Section 301.7216-3(a)(3) has been modified to provide a set of requirements regarding the format and content of consents to disclose and use tax return information with respect to taxpayers filing income tax returns in the Form 1040 series, *e.g.* , Form 1040, Form 1040NR, Form 1040A, or Form 1040EZ, and a separate set of requirements regarding the format and content of consents to disclose and use tax return information with respect to taxpayers filing all other tax returns. Under § 301.7216-3(a)(3)(iii), for tax return preparers providing tax return preparation services to taxpayers who do not file an income tax return in the Form 1040 series, a consent to use or a consent to disclose may be in any format, including an engagement letter to a client, as long as the consent complies with the requirements of § 301.7216-3(a)(3)(i). E. Conditioning Services on Consent Section 301.7216-3(a)(1) provides that a consent to use or disclose tax return information must be knowing and voluntary. Section 301.7216-3(a)(1) has been modified to clarify that to condition the provision of services on the taxpayer's consent will make the consent involuntary and invalid unless § 301.7216-3(a)(2) applies. Section 301.7216-3(a)(2) provides that a tax return preparer may condition its provision of preparation services upon a taxpayer's consenting to disclosure of the taxpayer's tax return information to another tax return preparer for the purpose of performing services that assist in the preparation of, or provide auxiliary services in connection with the preparation of, the tax return of the taxpayer. One commentator requested a clarification regarding whether a tax return preparer with offices within and outside of the United States is permitted to condition its provision of tax preparation services to a taxpayer outside of the United States on the taxpayer consenting to disclosure. The final regulations permit a tax return preparer with offices within and outside of the United States to condition its provision of tax preparation services to a taxpayer on the taxpayer's consenting to disclosure to a return preparer located outside the United States. An example was added to the final regulations to clarify this rule. Other commentators recommended that the regulations should prohibit tax return preparers from conditioning the provision of any services upon consent. This recommendation was adopted by inserting the word “any” before “services” in § 301.7216-3(a)(1), to which § 301.7216-3(a)(2) provides the only exception. F. Requests To Consent After Completed Tax Return Provided to Taxpayer Proposed section 301.7216-3(b)(2) provides that a tax return preparer may not request a taxpayer's consent to disclose or use tax return information after the tax return preparer provides a completed tax return to the taxpayer for signature. Commentators suggested that there may be legitimate circumstances where a request to consent is necessary in light of taxpayer preferences and is part of client service provided by the preparer. Specifically, the commentators gave the example of a taxpayer requesting that his or her tax return preparer disclose the past three years of the taxpayer's tax returns to his or her attorney for purposes of preparing the client's estate plan. Under the proposed regulation, a request for consent to disclose would be untimely in this situation, even though the taxpayer requests the disclosure as part of the client service provided by the tax return preparer. As indicated by the provisions regarding solicitation of other business that were included in the previous final regulations, the Treasury Department and IRS believe that taxpayers should not be the subject of repetitive solicitation requests for business made by tax return preparers after the tax preparation engagement has ended. Consistent with previous final regulations, the final regulation in section 301.7216-3(b)(2) has been modified to state that a tax return preparer may not request a taxpayer's consent to disclose or use tax return information for purposes of solicitation of business unrelated to tax return preparation after the tax return preparer provides a completed tax return to the taxpayer for signature. Under the final regulations, the preparer would not be precluded from requesting consent to disclose the past three years of the taxpayer's tax returns to his or her attorney for purposes of preparing the client's estate plan according to the example provided by commentators. G. Prohibition on Multiple Requests for Consent Proposed section 301.7216-3(b)(3) provides that if a taxpayer declines to provide consent to a disclosure or use of tax return information, a tax return preparer cannot make another request for consent. Some commentators recommended that the regulations permit a tax return preparer to clarify the purpose and extent of the consent if necessary after the taxpayer declines to provide consent, and that such a clarification should not be treated as a second request by the tax return preparer to obtain a consent. Another commentator stated that tax return preparers should be permitted to request consent whenever they wish so long as the consent properly describes the nature of, and reasons for, potential disclosures or uses. The commentators' recommendations were based upon the recognition that there may be legitimate reasons for the preparer to more thoroughly explain the request for consent and how the consent relates to the tax preparation engagement. However, Treasury and the IRS are concerned that lack of restrictions regarding multiple requests for consent regarding the same or similar request may cause undue pressure to consent where there are repetitious requests. In light of these concerns, section 301.7216-3(b)(3) has been modified to provide that, for purposes unrelated to a tax preparation engagement, if a taxpayer declines a request for consent to the disclosure or use of tax return information, the tax return preparer may not solicit from the taxpayer another consent for a purpose substantially similar to that of the rejected request. Under this rule, there is no prohibition regarding the taxpayer independently asking the tax return preparer about a disclosure or use of the taxpayer's same tax return information after a declined consent request. H. Multiple Disclosures or Multiple Uses Within a Single Consent Form Section 301.7216-3(c)(1) of the proposed regulations provides that a taxpayer may consent to multiple disclosures within the same written document, or multiple uses within the same written document. One commentator recommended permitting taxpayers to consent to multiple disclosures and multiple uses with the same form. Another commentator recommended prohibiting a taxpayer from consenting to multiple disclosures within the same written document, or multiple uses within the same written document, in order to avoid potential taxpayer confusion. These recommendations were not adopted. The proposed rule was intended to emphasize that disclosure and use are two distinct concepts, and a taxpayer may consider consenting to one and not the other. The comments to the proposed regulations demonstrated that there is potential for confusion regarding the distinction between disclosure and use. Treasury and the IRS believe it is appropriate to require separate consents in situations where there is a probability that the taxpayer could become confused over the distinction between use and disclosure. Section 301-7216-3(c)(1) of the final regulations provides that for taxpayers who are filers of returns in the Form 1040 series, the proposed rule is retained. The rule requiring separate consents is limited to individuals because use or disclosure of that tax return information involves situations where confusion is most likely to occur. I. Disclosure of All Information Contained Within a Return Section 301.7216-3(c)(2) of the proposed regulations provides that a consent authorizing the disclosure of all information contained within a return must set forth an explanation of the reason why a consent authorizing a more limited disclosure of tax return information is unsatisfactory for the purpose of the consent. Some commentators characterized this requirement as burdensome in certain situations and recommended eliminating this requirement. Commentators reasoned that a third party service provider, such as the taxpayer's attorney, may request a copy of the return and the requirement to provide an explanation would interject the preparer between the requirements imposed by the third party service provider and the taxpayer. In light of these concerns, section 301.7216-3(c)(2) of the final regulations modifies this provision to provide that where a consent authorizes the disclosure of a copy of the taxpayer's tax return or all information contained within a return, the consent must provide that the taxpayer has the ability to request a more limited disclosure of tax return information as the taxpayer may direct. Some commentators concerned with marketing of tax return information recommended that disclosure of the entire tax return should not be permitted under any circumstances. The commentators' rationale was that disclosure of the entire return is never necessary for marketing purposes. This recommendation was not adopted because, in general, taxpayers should have control over their own tax return information and they should be able to direct tax return preparers to disclose tax return information as the taxpayers see fit. J. Duration of Consent Section 301.7216-3(b)(5) of the proposed regulations provides that no consent to the disclosure or use of tax return information may be effective for a period longer than one year from the date the taxpayer signed the consent. Some commentators expressed concern that the duration of consent may need to be effective for a period greater than one year. One commentator observed that when preparing expatriate tax returns, there may be circumstances when the due date for a foreign tax return or other related document is more than one year after the taxpayer signs the consent. Some commentators recommended that taxpayers should be permitted to establish the duration of consent, and the one-year period should apply only if the taxpayer fails to specify a different duration of consent. This recommendation was adopted in the final regulations. K. Consents Read Aloud Some commentators recommended that § 301.7216-3 require that consents be read aloud by audio output. This recommendation was not adopted. This recommendation would impose a burdensome rule that is outside the norm of standard practices for obtaining consent. 5. General Comments Several commentators recommended rejecting all of the provisions of the proposed regulations under section 7216. The recommendations to reject the proposed regulations were not adopted. The proposed regulations were finalized to provide updates relating to uses and disclosures of tax return information in the electronic return preparation context and create an environment that allows taxpayers to make informed decisions regarding the disclosure or use of their tax return information. Effect on Other Documents The following publication is obsolete on or after January 1, 2009: Rev. Rul. 79-114, 1979-1 C.B. 441 (1979). Special Analyses It has been determined that this Treasury decision 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 a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f), the notice of proposed rulemaking preceding these regulations was 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 regulations is Dillon Taylor, formerly of the Office of the Associate Chief Counsel (Procedure and Administration). For further information regarding these regulations contact Lawrence Mack of the Office of the Associate Chief Counsel (Procedure and Administration) at 202-622-4940 (not a toll-free call). List of Subjects in 26 CFR Part 301 Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements. Amendment to the Regulations Accordingly, 26 CFR part 301 is amended as follows: PART 301—PROCEDURE AND ADMINISTRATION **Paragraph 1.** The authority citation for part 301 continues to read, in part, as follows: Authority: 26 U.S.C. 7805 * * * **Par. 2.** Section 301.7216-0 is added to read as follows: § 301.7216-0 Table of contents. This section lists captions contained in §§ 301.7216-1 through 301.7216-3. *§ 301.7216-1 Penalty for disclosure or use of tax return information.*

(a)In general.

(b)Definitions.

(c)Gramm-Leach-Bliley Act.

(d)Effective date. *§ 301.7216-2 Permissible disclosures or uses without consent of the taxpayer.*

(a)Disclosure pursuant to other provisions of the Internal Revenue Code.

(b)Disclosures to the IRS.

(c)Disclosures or uses for preparation of a taxpayer's return.

(d)Disclosures to other tax return preparers.

(e)Disclosure or use of information in the case of related taxpayers.

(f)Disclosure pursuant to an order of a court, or an administrative order, demand, request, summons or subpoena which is issued in the performance of its duties by a Federal or State agency, the United States Congress, a professional association ethics committee or board, or the Public Company Accounting Oversight Board.

(g)Disclosure for use in securing legal advice, Treasury investigations or court proceedings.

(h)Certain disclosures by attorneys and accountants.

(i)Corporate fiduciaries.

(j)Disclosure to taxpayer's fiduciary.

(k)Disclosure or use of information in preparation or audit of State or local tax returns or assisting a taxpayer with foreign country tax obligations.

(l)Payment for tax preparation services.

(m)Retention of records.

(n)Lists for solicitation of tax return business.

(o)Producing statistical information in connection with tax return preparation business.

(p)Disclosure or use of information for quality or peer reviews.

(q)Disclosure to report the commission of a crime.

(r)Disclosure of tax return information due to a tax return preparer's incapacity or death.

(s)Effective date. *§ 301.7216-3 Disclosure or use permitted only with the taxpayer's consent.*

(a)In general.

(b)Timing requirements and limitations.

(c)Special rules.

(d)Effective date. **Par. 3.** Section 301.7216-1 is revised to read as follows: § 301.7216-1 Penalty for disclosure or use of tax return information.

(a)*In general.* Section 7216(a) prescribes a criminal penalty for tax return preparers who knowingly or recklessly disclose or use tax return information for a purpose other than preparing a tax return. A violation of section 7216 is a misdemeanor, with a maximum penalty of up to one year imprisonment or a fine of not more than $1,000, or both, together with the costs of prosecution. Section 7216(b) establishes exceptions to the general rule in section 7216(a) prohibiting disclosure and use. Section 7216(b) also authorizes the Secretary to promulgate regulations prescribing additional permitted disclosures and uses. Section 6713(a) prescribes a related civil penalty for disclosures and uses that constitute a violation of section 7216. The penalty for violating section 6713 is $250 for each prohibited disclosure or use, not to exceed a total of $10,000 for a calendar year. Section 6713(b) provides that the exceptions in section 7216(b) also apply to section 6713. Under section 7216(b), the provisions of section 7216(a) will not apply to any disclosure or use permitted under regulations prescribed by the Secretary.

(b)*Definitions.* For purposes of section 7216 and §§ 301.7216-1 through 301.7216-3:

(1)*Tax return.* The term *tax return* means any return (or amended return) of income tax imposed by chapter 1 of the Internal Revenue Code.

(2)*Tax return preparer—*

(i)*In general.* The term *tax return preparer* means:

(A)Any person who is engaged in the business of preparing or assisting in preparing tax returns;

(B)Any person who is engaged in the business of providing auxiliary services in connection with the preparation of tax returns, including a person who develops software that is used to prepare or file a tax return and any Authorized IRS e-file Provider;

(C)Any person who is otherwise compensated for preparing, or assisting in preparing, a tax return for any other person; or

(D)Any individual who, as part of their duties of employment with any person described in paragraph (b)(2)(i)(A), (B), or

(C)of this section performs services that assist in the preparation of, or assist in providing auxiliary services in connection with the preparation of, a tax return.

(ii)*Business of preparing returns.* A person is engaged in the business of preparing tax returns as described in paragraph (b)(2)(i)(A) of this section if, in the course of the person's business, the person holds himself out to tax return preparers or taxpayers as a person who prepares tax returns or assists in preparing tax returns, whether or not tax return preparation is the person's sole business activity and whether or not the person charges a fee for tax return preparation services.

(iii)*Providing auxiliary services.* A person is engaged in the business of providing auxiliary services in connection with the preparation of tax returns as described in paragraph (b)(2)(i)(B) of this section if, in the course of the person's business, the person holds himself out to tax return preparers or to taxpayers as a person who performs auxiliary services, whether or not providing the auxiliary services is the person's sole business activity and whether or not the person charges a fee for the auxiliary services. Likewise, a person is engaged in the business of providing auxiliary services if, in the course of the person's business, the person receives a taxpayer's tax return information from another tax return preparer pursuant to the provisions of § 301.7216-2(d)(2).

(iv)*Otherwise compensated.* A tax return preparer described in paragraph (b)(2)(i)(C) of this section includes any person who—

(A)Is compensated for preparing a tax return for another person, but not in the course of a business; or

(B)Is compensated for helping, on a casual basis, a relative, friend, or other acquaintance to prepare their tax return.

(v)*Exclusions.* A person is not a tax return preparer merely because he leases office space to a tax return preparer, furnishes credit to a taxpayer whose tax return is prepared by a tax return preparer, furnishes information to a tax return preparer at the taxpayer's request, furnishes access (free or otherwise) to a separate person's tax return preparation Web site through a hyperlink on his own Web site, or otherwise performs some service that only incidentally relates to the preparation of tax returns.

(vi)*Examples.* The application of § 301.7216-1(b)(2) may be illustrated by the following examples: *Example 1.* Bank B is a tax return preparer within the meaning of paragraph (b)(2)(i)(A) of this section, and an Authorized IRS e-file Provider. B employs one individual, Q, to solicit the necessary tax return information for the preparation of a tax return; another individual, R, to prepare the return on the basis of the information that is furnished; a secretary, S, who types the information on the returns into a computer; and an administrative assistant, T, who uses a computer to file electronic versions of the tax returns. Under these circumstances, only R is a tax return preparer for purposes of section 7701(a)(36), but all four employees are tax return preparers for purposes of section 7216, as provided in paragraph

(b)of this section. *Example 2.* Tax return preparer P contracts with department store D to rent space in D's store. D advertises that taxpayers who use P's services may charge the cost of having their tax return prepared to their charge account with D. Under these circumstances, D is not a tax return preparer because it provides space, credit, and services only incidentally related to the preparation of tax returns.

(3)*Tax return information* —(i) *In general.* The term *tax return information* means any information, including, but not limited to, a taxpayer's name, address, or identifying number, which is furnished in any form or manner for, or in connection with, the preparation of a tax return of the taxpayer. This information includes information that the taxpayer furnishes to a tax return preparer and information furnished to the tax return preparer by a third party. Tax return information also includes information the tax return preparer derives or generates from tax return information in connection with the preparation of a taxpayer's return.

(A)Tax return information can be provided directly by the taxpayer or by another person. Likewise, tax return information includes information received by the tax return preparer from the IRS in connection with the processing of such return, including an acknowledgment of acceptance or notice of rejection of an electronically filed return.

(B)Tax return information includes statistical compilations of tax return information, even in a form that cannot be associated with, or otherwise identify, directly or indirectly, a particular taxpayer. See § 301.7216-2(o) for limited use of tax return information to make statistical compilations without taxpayer consent and to use the statistical compilations for limited purposes.

(C)Tax return information does not include information identical to any tax return information that has been furnished to a tax return preparer if the identical information was obtained otherwise than in connection with the preparation of a tax return.

(D)Information is considered “in connection with tax return preparation,” and therefore tax return information, if the taxpayer would not have furnished the information to the tax return preparer but for the intention to engage, or the engagement of, the tax return preparer to prepare the tax return.

(ii)*Examples.* The application of this paragraph (b)(3) may be illustrated by the following examples: *Example 1.* Taxpayer A purchases computer software designed to assist with the preparation and filing of her income tax return. When A loads the software onto her computer, it prompts her to register her purchase of the software. In this situation, the software provider is a tax return preparer under paragraph (b)(2)(i)(B) of this section and the information that A provides to register her purchase is tax return information because she is providing it in connection with the preparation of a tax return. *Example 2.* Corporation A is a brokerage firm that maintains a Web site through which its clients may access their accounts, trade stocks, and generally conduct a variety of financial activities. Through its Web site, A offers its clients free access to its own tax preparation software. Taxpayer B is a client of A and has furnished A his name, address, and other information when registering for use of A's Web site to use A's brokerage services. In addition, A has a record of B's brokerage account activity, including sales of stock, dividends paid, and IRA contributions made. B uses A's tax preparation software to prepare his tax return. The software populates some fields on B's return on the basis of information A already maintains in its databases. A is a tax return preparer within the meaning of paragraph (b)(2)(i)(B) of this section because it has prepared and provided software for use in preparing tax returns. The information in A's databases that the software accesses to populate B's return, *i.e.* , the registration information and brokerage account activity, is not tax return information because A did not receive that information in connection with the preparation of a tax return. Once A uses the information to populate the return, however, the information associated with the return becomes tax return information. If A retains the information in a form in which A can identify that the information was used in connection with the preparation of a return, the information in that form is tax return information. If, however, A retains the information in a database in which A cannot identify whether the information was used in connection with the preparation of a return, then that information is not tax return information.

(4)*Use* —(i) *In general.* Use of tax return information includes any circumstance in which a tax return preparer refers to, or relies upon, tax return information as the basis to take or permit an action.

(ii)*Example.* The application of this paragraph (b)(4) may be illustrated by the following example: *Example.* Preparer G is a tax return preparer as defined by paragraph (b)(2)(i)(A) of this section. If G determines, upon preparing a return, that the taxpayer is eligible to make a contribution to an individual retirement account (IRA), G will ask whether the taxpayer desires to make a contribution to an IRA. G does not ask about IRAs in cases in which the taxpayer is not eligible to make a contribution. G is using tax return information when it asks whether a taxpayer is interested in making a contribution to an IRA because G is basing the inquiry upon knowledge gained from information that the taxpayer furnished in connection with the preparation of the taxpayer's return.

(5)*Disclosure.* The term *disclosure* means the act of making tax return information known to any person in any manner whatever. To the extent that a taxpayer's use of a hyperlink results in the transmission of tax return information, this transmission of tax return information is a disclosure by the tax return preparer subject to penalty under section 7216 if not authorized by regulation.

(6)*Hyperlink.* For purposes of section 7216, a hyperlink is a device used to transfer an individual using tax preparation software from a tax return preparer's Web page to a Web page operated by another person without the individual having to separately enter the Web address of the destination page.

(7)*Request for consent.* A request for consent includes any effort by a tax return preparer to obtain the taxpayer's consent to use or disclose the taxpayer's tax return information. The act of supplying a taxpayer with a paper or electronic form that meets the requirements of a revenue procedure published pursuant to § 301.7216-3(a) is a request for a consent. When a tax return preparer requests a taxpayer's consent, any associated efforts of the tax return preparer, including, but not limited to, verbal or written explanations of the form, are part of the request for consent.

(c)*Gramm-Leach-Bliley Act.* Any applicable requirements of the Gramm-Leach-Bliley Act, Public Law 106-102 (113 Stat. 1338), do not supersede, alter, or affect the requirements of section 7216 and §§ 301.7216-1 through 301.7216-3. Similarly, the requirements of section 7216 and §§ 301.7216-1 through 301.7216-3 do not override any requirements or restrictions of the Gramm-Leach-Bliley Act, which are in addition to the requirements or restrictions of section 7216 and §§ 301.7216-1 through 301.7216-3.

(d)*Effective/applicability date.* This section applies to disclosures or uses of tax return information occurring on or after January 1, 2009. **Par. 4.** Section 301.7216-2 is revised to read as follows: § 301.7216-2 Permissible disclosures or uses without consent of the taxpayer.

(a)*Disclosure pursuant to other provisions of the Internal Revenue Code.* The provisions of section 7216(a) and § 301.7216-1 shall not apply to any disclosure of tax return information if the disclosure is made pursuant to any other provision of the Internal Revenue Code or the regulations thereunder.

(b)*Disclosures to the IRS.* The provisions of section 7216(a) and § 301.7216-1 shall not apply to any disclosure of tax return information to an officer or employee of the IRS.

(c)*Disclosures or uses for preparation of a taxpayer's return* —(1) *Updating Taxpayers' Tax Return Preparation Software.* If a tax return preparer provides software to a taxpayer that is used in connection with the preparation or filing of a tax return, the tax return preparer may use the taxpayer's tax return information to update the taxpayer's software for the purpose of addressing changes in IRS forms, e-file specifications and administrative, regulatory and legislative guidance or to test and ensure the software's technical capabilities without the taxpayer's consent under § 301.7216-3.

(2)*Tax return preparers located within the same firm in the United States.* If a taxpayer furnishes tax return information to a tax return preparer located within the United States, including any territory or possession of the United States, an officer, employee, or member of a tax return preparer may use the tax return information, or disclose the tax return information to another officer, employee, or member of the same tax return preparer, for the purpose of performing services that assist in the preparation of, or assist in providing auxiliary services in connection with the preparation of, the taxpayer's tax return. If an officer, employee, or member to whom the tax return information is to be disclosed is located outside of the United States or any territory or possession of the United States, the taxpayer's consent under § 301.7216-3 prior to any disclosure is required.

(3)*Furnishing tax return information to tax return preparers located outside the United States.* If a taxpayer initially furnishes tax return information to a tax return preparer located outside of the United States or any territory or possession of the United States, an officer, employee, or member of a tax return preparer may use tax return information, or disclose any tax return information to another officer, employee, or member of the same tax return preparer, for the purpose of performing services that assist in the preparation of, or assist in providing auxiliary services in connection with the preparation of, the tax return of a taxpayer by or for whom the information was furnished without the taxpayer's consent under § 301.7216-3.

(4)*Examples.* The following examples illustrate this paragraph (c): *Example 1.* Preparer P provides tax return preparation software to Taxpayer T for T to use in the preparation of its 2009 income tax return. For the 2009 tax year, and using T's tax return information furnished while registering for the software, P would like to update the tax return preparation software that T is using to account for last minute changes made to the tax laws for the 2009 tax year. P is not required to obtain T's consent to update the tax return preparation software. P may perform a software update regardless of whether the software update will affect T's particular return preparation activities. *Example 2.* T is a client of Firm, which is a tax return preparer. E, an employee at Firm's State A office, receives tax return information from T for use in preparing T's income tax return. E discloses the tax return information to P, an employee in Firm's State B office; P uses the tax return information to process T's income tax return. Firm is not required to receive T's consent under § 301.7216-3 prior to E's disclosure of T's tax return information to P because the tax return information is disclosed to an employee employed by the same tax return preparer located within the United States. *Example 3.* Same facts as *Example 2* except T's tax return information is disclosed to FE who is located in Firm's Country F office. FE uses the tax return information to process T's income tax return. After processing, FE returns the processed tax return information to E in Firm's State A office. Because FE is outside of the United States, Firm is required to obtain T's consent under § 301.7216-3 prior to E's disclosure of T's tax return information to FE. *Example 4.* T, Firm's client, is temporarily located in Country F. She initially furnishes her tax return information to employee FE in Firm's Country F office for the purpose of having Firm prepare her U.S. income tax return. FE makes the substantive determinations concerning T's tax liability and forwards T's tax return information to FP, an employee in Firm's Country P office, for the purpose of processing T's tax return information. FP processes the return information and forwards it to Partner at Firm's State A office in the United States for review and delivery to T. Because T initially furnished the tax return information to a tax return preparer outside of the United States, T's prior consent for disclosure or use under § 301.7216-3 was not required. An officer, employee, or member of Firm in the United States may use T's tax return information or disclose the tax return information to another officer, employee, or member of Firm without T's prior consent under § 301.7216-3 as long as any disclosure or use of T's tax return information is within the United States. Firm is required to receive T's consent under § 301.7216-3 prior to any subsequent disclosure of T's tax return information to a tax return preparer located outside of the United States.

(d)*Disclosures to other tax return preparers* —(1) *Preparer-to-preparer disclosures.* Except as limited in paragraph (d)(2) of this section, an officer, employee, or member of a tax return preparer may disclose tax return information of a taxpayer to another tax return preparer (other than an officer, employee, or member of the same tax return preparer) located in the United States (including any territory or possession of the United States) for the purpose of preparing or assisting in preparing a tax return, or obtaining or providing auxiliary services in connection with the preparation of any tax return, so long as the services provided are not substantive determinations or advice affecting the tax liability reported by taxpayers. A substantive determination involves an analysis, interpretation, or application of the law. The authorized disclosures permitted under this paragraph (d)(1) include one tax return preparer disclosing tax return information to another tax return preparer for the purpose of having the second tax return preparer transfer that information to, and compute the tax liability on, a tax return of the taxpayer by means of electronic, mechanical, or other form of tax return processing service. The authorized disclosures permitted under this paragraph (d)(1) also include disclosures by a tax return preparer to an Authorized IRS *e-file* Provider for the purpose of electronically filing the return with the IRS. Authorized disclosures also include disclosures by a tax return preparer to a second tax return preparer for the purpose of making information concerning the return available to the taxpayer. This would include, for example, whether the return has been accepted or rejected by the IRS, or the status of the taxpayer's refund. Except as provided in paragraph

(c)of this section, a tax return preparer may not disclose tax return information to another tax return preparer for the purpose of the second tax return preparer providing substantive determinations without first receiving the taxpayer's consent in accordance with the rules under § 301.7216-3.

(2)*Disclosures to contractors.* A tax return preparer may disclose tax return information to a person under contract with the tax return preparer in connection with the programming, maintenance, repair, testing, or procurement of equipment or software used for purposes of tax return preparation only to the extent necessary for the person to provide the contracted services, and only if the tax return preparer ensures that all individuals who are to receive disclosures of tax return information receive a written notice that informs them of the applicability of sections 6713 and 7216 to them and describes the requirements and penalties of sections 6713 and 7216. Contractors receiving tax return information pursuant to this section are tax return preparers under section 7216 because they are performing auxiliary services in connection with tax return preparation. See § 301.7216-1(b)(2)(i)(B) and (D).

(3)*Examples.* The following examples illustrate this paragraph (d): *Example 1.* E, an employee at Firm's State A office, receives tax return information from T for Firm's use in preparing T's income tax return. E makes substantive determinations and forwards the tax return information to P, an employee at Processor; Processor is located in State B. P places the tax return information on the income tax return and furnishes the finished product to E. E is not required to receive T's prior consent under § 301.7216-3 before disclosing T's tax return information to P because Processor's services are not substantive determinations and the tax return information remained in the United States at Processor's State B office during the entire course of the tax return preparation process. *Example 2.* Firm, a tax return preparer, offers income tax return preparation services. Firm's contract with its software provider, Contractor, requires Firm to periodically randomly select certain taxpayers' tax return information solely for the purpose of testing the reliability of the software sold to Firm. Under its agreement with Contractor, Firm discloses tax return information to Contractor's employee, C, who services Firm's contract without providing Contractor or C with a written notice that describes the requirements of and penalties under sections 7216 and 6713. C uses the tax return information solely for quality assurance purposes. Firm's disclosure of tax return information to C was an impermissible disclosure because Firm failed to ensure that C received a written notice that describes the requirements and penalties of sections 7216 and 6713. *Example 3.* E, an employee of Firm in State A in the United States, receives tax return information from T for use in preparing T's income tax return. After E enters T's tax return information into Firm's computer, that information is stored on a computer server that is physically located in State A. Firm contracts with Contractor, located in Country F, to prepare its clients' tax returns. FE, an employee of Contractor, uses a computer in Country F and inputs a password to view T's income tax information stored on the computer server in State A to prepare T's tax return. A computer program permits FE to view T's tax return information, but prohibits FE from downloading or printing out T's tax return information from the computer server. Because Firm is disclosing T's tax return information outside of the United States, Firm is required to obtain T's consent under § 301.7216-3 prior to the disclosure to FE. As provided in § 301.7216-3(b)(5), however, Firm may not obtain consent to disclose T's social security number

(SSN)to a tax return preparer located outside of the United States or any territory or possession of the United States. *Example 4.* A, an employee at Firm A, receives tax return information from T for Firm's use in preparing T's income tax return. A forwards the tax return information to B, an employee at another firm, Firm B, to obtain advice on the issue of whether T may claim a deduction for a certain business expense. A is required to receive T's prior consent under § 301.7216-3 before disclosing T's tax return information to B because B's services involve a substantive determination affecting the tax liability that T will report.

(e)*Disclosure or use of information in the case of related taxpayers.*

(1)In preparing a tax return of a second taxpayer, a tax return preparer may use, and may disclose to the second taxpayer in the form in which it appears on the return, any tax return information that the tax return preparer obtained from a first taxpayer if—

(i)The second taxpayer is related to the first taxpayer within the meaning of paragraph (e)(2) of this section;

(ii)The first taxpayer's tax interest in the information is not adverse to the second taxpayer's tax interest in the information; and

(iii)The first taxpayer has not expressly prohibited the disclosure or use.

(2)For purposes of paragraph (e)(1)(i) of this section, a taxpayer is related to another taxpayer if they have any one of the following relationships: Husband and wife, child and parent, grandchild and grandparent, partner and partnership, trust or estate and beneficiary, trust or estate and fiduciary, corporation and shareholder, or members of a controlled group of corporations as defined in section 1563.

(3)See § 301.7216-3 for disclosure or use of tax return information of the taxpayer in preparing the tax return of a second taxpayer when the requirements of this paragraph are not satisfied.

(f)D *isclosure pursuant to an order of a court, or an administrative order, demand, request, summons or subpoena which is issued in the performance of its duties by a Federal or State agency, the United States Congress, a professional association ethics committee or board, or the Public Company Accounting Oversight Board.* The provisions of section 7216(a) and § 301.7216-1 will not apply to any disclosure of tax return information if the disclosure is made pursuant to any one of the following documents:

(1)The order of any court of record, Federal, State, or local.

(2)A subpoena issued by a grand jury, Federal or State.

(3)A subpoena issued by the United States Congress.

(4)An administrative order, demand, summons or subpoena that is issued in the performance of its duties by—

(i)Any Federal agency as defined in 5 U.S.C. 551(1) and 5 U.S.C. 552(f), or

(ii)A State agency, body, or commission charged under the laws of the State or a political subdivision of the State with the licensing, registration, or regulation of tax return preparers.

(5)A written request from a professional association ethics committee or board investigating the ethical conduct of the tax return preparer.

(6)A written request from the Public Company Accounting Oversight Board in connection with an inspection under section 104 of the Sarbanes-Oxley Act of 2002, 15 U.S.C. 7214, or an investigation under section 105 of such Act, 15 U.S.C. 7215, for use in accordance with such Act.

(g)*Disclosure for use in securing legal advice, Treasury investigations or court proceedings.* A tax return preparer may disclose tax return information—

(1)To an attorney for purposes of securing legal advice;

(2)To an employee of the Treasury Department for use in connection with any investigation of the tax return preparer (including investigations relating to the tax return preparer in its capacity as a practitioner) conducted by the IRS or the Treasury Department; or

(3)To any officer of a court for use in connection with proceedings involving the tax return preparer (including proceedings involving the tax return preparer in its capacity as a practitioner), or the return preparer's client, before the court or before any grand jury that may be convened by the court.

(h)*Certain disclosures by attorneys and accountants.* The provisions of section 7216(a) and § 301.7216-1 shall not apply to any disclosure of tax return information permitted by this paragraph (h). (1)(i) A tax return preparer who is lawfully engaged in the practice of law or accountancy and prepares a tax return for a taxpayer may use the taxpayer's tax return information, or disclose the information to another officer, employee or member of the tax return preparer's law or accounting firm, consistent with applicable legal and ethical responsibilities, who may use the tax return information for the purpose of providing other legal or accounting services to the taxpayer. As an example, a lawyer who prepares a tax return for a taxpayer may use the tax return information of the taxpayer for, or in connection with, rendering legal services, including estate planning or administration, or preparation of trial briefs or trust instruments, for the taxpayer or the estate of the taxpayer. In addition, the lawyer who prepared the tax return may disclose the tax return information to another officer, employee or member of the same firm for the purpose of providing other legal services to the taxpayer. As another example, an accountant who prepares a tax return for a taxpayer may use the tax return information, or disclose it to another officer, employee or member of the firm, for use in connection with the preparation of books and records, working papers, or accounting statements or reports for the taxpayer. In the normal course of rendering the legal or accounting services to the taxpayer, the attorney or accountant may make the tax return information available to third parties, including stockholders, management, suppliers, or lenders, consistent with the applicable legal and ethical responsibilities, unless the taxpayer directs otherwise. For rules regarding disclosures outside of the United States, see § 301.7216-2(c) and (d).

(ii)A tax return preparer's law or accounting firm does not include any related or affiliated firms. For example, if law firm A is affiliated with law firm B, officers, employees and members of law firm A must receive a taxpayer's consent under § 301.7216-3 before disclosing the taxpayer's tax return information to an officer, employee or member of law firm B.

(2)A tax return preparer who is lawfully engaged in the practice of law or accountancy and prepares a tax return for a taxpayer may, consistent with the applicable legal and ethical responsibilities, take the tax return information into account, and may act upon it, in the course of performing legal or accounting services for a client other than the taxpayer, or disclose the information to another officer, employee or member of the tax return preparer's law or accounting firm to enable that other officer, employee or member to take the information into account, and act upon it, in the course of performing legal or accounting services for a client other than the taxpayer. This is permissible when the information is, or may be, relevant to the subject matter of the legal or accounting services for the other client, and consideration of the information by those performing the services is necessary for the proper performance of the services. In no event, however, may the tax return information be disclosed to a person who is not an officer, employee or member of the law or accounting firm, unless the disclosure is exempt from the application of section 7216(a) and § 301.7216-1 by reason of another provision of §§ 301.7216-2 or 301.7216-3.

(3)*Examples.* The application of this paragraph may be illustrated by the following examples: *Example 1.* A, a member of an accounting firm, renders an opinion on a financial statement of M Corporation that is part of a registration statement filed with the Securities and Exchange Commission. After the registration statement is filed, but before its effective date, B, a member of the same accounting firm, prepares an income tax return for N Corporation. In the course of preparing N's income tax return, B discovers that N does business with M and concludes that the information given by N should be considered by A to determine whether the financial statement opined on by A contains an untrue statement of material fact or omits a material fact required to keep the statement from being misleading. B discloses to A the tax return information of N for this purpose. A determines that there is an omission of material fact and that an amended statement should be filed. A so advises M and the Securities and Exchange Commission. A explains that the omission was revealed as a result of confidential information that came to A's attention after the statement was filed, but A does not disclose the identity of the taxpayer or the tax return information itself. Section 7216(a) and § 301.7216-1 do not apply to B's disclosure of N's tax return information to A and A's use of the information in advising M and the Securities and Exchange Commission of the necessity for filing an amended statement. Section 7216(a) and § 301.7216-1 would apply to a disclosure of N's tax return information to M or to the Securities and Exchange Commission unless the disclosure is exempt from the application of section 7216(a) and § 301.7216-1 by reason of another provision of either this section or § 301.7216-3. *Example 2.* A, a member of an accounting firm, is conducting an audit of M Corporation, and B, a member of the same accounting firm, prepares an income tax return for D, an officer of M. In the course of preparing the return, B obtains information from D indicating that D, pursuant to an arrangement with a supplier doing business with M, has been receiving from the supplier a percentage of the amounts that the supplier invoices to M. B discloses this information to A who, acting upon it, searches in the course of the audit for indications of a kickback scheme. As a result, A discovers information from audit sources that independently indicate the existence of a kickback scheme. Without revealing the tax return information A has received from B, A brings to the attention of officers of M the audit information indicating the existence of the kickback scheme. Section 7216(a) and § 301.7216-1 do not apply to B's disclosure of D's tax return information to A, A's use of D's information in the course of the audit, and A's disclosure to M of the audit information indicating the existence of the kickback scheme. Section 7216(a) and § 301.7216-1 would apply to a disclosure to M, or to any other person not an employee or member of the accounting firm, of D's tax return information furnished to B.

(i)*Corporate fiduciaries.* A trust company, trust department of a bank, or other corporate fiduciary that prepares a tax return for a taxpayer for whom it renders fiduciary, investment, or other custodial or management services may, unless the taxpayer directs otherwise—

(1)Disclose or use the taxpayer's tax return information in the ordinary course of rendering such services to or for the taxpayer; or

(2)Make the information available to the taxpayer's attorney, accountant, or investment advisor.

(j)*Disclosure to taxpayer's fiduciary.* If, after furnishing tax return information to a tax return preparer, the taxpayer dies or becomes incompetent, insolvent, or bankrupt, or the taxpayer's assets are placed in conservatorship or receivership, the tax return preparer may disclose the information to the duly appointed fiduciary of the taxpayer or his estate, or to the duly authorized agent of the fiduciary.

(k)*Disclosure or use of information in preparation or audit of State or local tax returns or assisting a taxpayer with foreign country tax obligations.* The provisions of paragraphs

(c)and

(d)of this section shall apply to the disclosure by any tax return preparer of any tax return information in the preparation of, or in connection with the preparation of, any tax return of the taxpayer under the law of any State or political subdivision thereof, of the District of Columbia, of any territory or possession of the United States, or of a country other than the United States. The provisions of section 7216(a) and § 301.7216-1 shall not apply to the use by any tax return preparer of any tax return information in the preparation of, or in connection with the preparation of, any tax return of the taxpayer under the law of any State or political subdivision thereof, of the District of Columbia, of any territory or possession of the United States, or of a country other than the United States. The provisions of section 7216(a) and § 301.7216-1 shall not apply to the disclosure or use by any tax return preparer of any tax return information in the audit of, or in connection with the audit of, any tax return of the taxpayer under the law of any State or political subdivision thereof, the District of Columbia, or any territory or possession of the United States.

(l)*Payment for tax preparation services.* A tax return preparer may use and disclose, without the taxpayer's written consent, tax return information that the taxpayer provides to the tax return preparer to pay for tax preparation services to the extent necessary to process or collect the payment. For example, if the taxpayer gives the tax return preparer a credit card to pay for tax preparation services, the tax return preparer may disclose the taxpayer's name, credit card number, credit card expiration date, and amount due for tax preparation services to the credit card company, as necessary, to process the payment. Any tax return information that the taxpayer did not give the tax return preparer for the purpose of making payment for tax preparation services may not be used or disclosed by the tax return preparer without the taxpayer's prior written consent, unless otherwise permitted under another provision of this section.

(m)*Retention of records.* A tax return preparer may retain tax return information of a taxpayer, including copies of tax returns, in paper or electronic format, prepared on the basis of the tax return information, and may use the information in connection with the preparation of other tax returns of the taxpayer or in connection with an examination by the Internal Revenue Service of any tax return or subsequent tax litigation relating to the tax return. The provisions of paragraph

(n)of this section regarding the transfer of a taxpayer list also apply to the transfer of any records and related papers to which this paragraph applies.

(n)*Lists for solicitation of tax return business.* A tax return preparer may compile and maintain a separate list containing solely the names, addresses, e-mail addresses, and phone numbers of taxpayers whose tax returns the tax return preparer has prepared or processed. This list may be used by the compiler solely to contact the taxpayers on the list for the purpose of offering tax information or additional tax return preparation services to such taxpayers. The compiler of the list may not transfer the taxpayer list, or any part thereof, to any other person unless the transfer takes place in conjunction with the sale or other disposition of the compiler's tax return preparation business. A person who acquires a taxpayer list, or a part thereof, in conjunction with a sale or other disposition of a tax return preparation business is subject to the provisions of this paragraph with respect to the list. The term *list,* as used in this paragraph (n), includes any record or system whereby the names and addresses of taxpayers are retained. The provisions of this paragraph

(n)also apply to the transfer of any records and related papers to which this paragraph

(n)applies.

(o)*Producing statistical information in connection with tax return preparation business.* A tax return preparer may use, for the limited purpose specified in this paragraph (o), tax return information to produce a statistical compilation of data described in § 301.7216-1(b)(3)(i)(B). The purpose and use of the statistical compilation must relate directly to the internal management or support of the tax return preparer's tax return preparation business. The tax return preparer may not disclose or use the tax return information in connection with, or in support of, businesses other than tax return preparation. The compiler of the statistical compilation may not disclose the compilation, or any part thereof, to any other person unless disclosure of the statistical compilation is made in order to comply with financial accounting or regulatory reporting requirements or occurs in conjunction with the sale or other disposition of the compiler's tax return preparation business. A person who acquires a compilation, or a part thereof, in conjunction with a sale or other disposition of a tax return preparation business is subject to the provisions of this paragraph

(o)with respect to the compilation as if the acquiring person had compiled it.

(p)*Disclosure or use of information for quality or peer reviews.* The provisions of section 7216(a) and § 301.7216-1 shall not apply to any disclosure for the purpose of a quality or peer review to the extent necessary to accomplish the review. A quality or peer review is a review that is undertaken to evaluate, monitor, and improve the quality and accuracy of a tax return preparer's tax preparation, accounting, or auditing services. A quality or peer review may be conducted only by attorneys, certified public accountants, enrolled agents, and enrolled actuaries who are eligible to practice before the Internal Revenue Service. See Department of the Treasury Circular 230, 31 CFR part 10. Tax return information may also be disclosed to persons who provide administrative or support services to an individual who is conducting a quality or peer review under this paragraph (p), but only to the extent necessary for the reviewer to conduct the review. Tax return information gathered in conducting a review may be used only for purposes of a review. No tax return information identifying a taxpayer may be disclosed in any evaluative reports or recommendations that may be accessible to any person other than the reviewer or the tax return preparer being reviewed. The tax return preparer being reviewed will maintain a record of the review including the information reviewed and the identity of the persons conducting the review. After completion of the review, no documents containing information that may identify any taxpayer by name or identification number may be retained by a reviewer or by the reviewer's administrative or support personnel. Any person (including administrative and support personnel) receiving tax return information in connection with a quality or peer review is a tax return preparer for purposes of sections 7216(a) and 6713(a).

(q)*Disclosure to report the commission of a crime.* The provisions of section 7216(a) and § 301.7216-1 shall not apply to the disclosure of any tax return information to the proper Federal, State, or local official in order, and to the extent necessary, to inform the official of activities that may constitute, or may have constituted, a violation of any criminal law or to assist the official in investigating or prosecuting a violation of criminal law. A disclosure made in the bona fide but mistaken belief that the activities constituted a violation of criminal law is not subject to section 7216(a) and § 301.7216-1.

(r)*Disclosure of tax return information due to a tax return preparer's incapacity or death.* In the event of incapacity or death of a tax return preparer, disclosure of tax return information may be made for the purpose of assisting the tax return preparer or his legal representative (or the representative of a deceased tax return preparer's estate) in operating the business. Any person receiving tax return information under the provisions of this paragraph

(r)is a tax return preparer for purposes of sections 7216(a) and 6713(a).

(s)*Effective/applicability date* . This section applies to disclosures or uses of tax return information occurring on or after January 1, 2009. **Par. 5.** Section 301.7216-3 is revised to read as follows: § 301.7216-3 Disclosure or use permitted only with the taxpayer's consent.

(a)*In general* —(1) *Taxpayer consent.* Unless section 7216 or § 301.7216-2 specifically authorizes the disclosure or use of tax return information, a tax return preparer may not disclose or use a taxpayer's tax return information prior to obtaining a written consent from the taxpayer, as described in this section. A tax return preparer may disclose or use tax return information as the taxpayer directs as long as the preparer obtains a written consent from the taxpayer as provided in this section. The consent must be knowing and voluntary. Except as provided in paragraph (a)(2) of this section, conditioning the provision of any services on the taxpayer's furnishing consent will make the consent involuntary, and the consent will not satisfy the requirements of this section.

(2)*Taxpayer consent to a tax return preparer furnishing tax return information to another tax return preparer.*

(i)A tax return preparer may condition its provision of preparation services upon a taxpayer's consenting to disclosure of the taxpayer's tax return information to another tax return preparer for the purpose of performing services that assist in the preparation of, or provide auxiliary services in connection with the preparation of, the tax return of the taxpayer.

(ii)*Example.* The application of this paragraph (a)(2) may be illustrated by the following example: Example. Preparer P, who is located within the United States, is retained by Company C to provide tax return preparation services for employees of Company C. An employee of Company C, Employee E, works for C outside of the United States. To provide tax return preparation services for E, P requires the assistance of and needs to disclose E's tax return information to a tax return preparer who works for P's affiliate located in the country where E works. P may condition its provision of tax return preparation services upon E consenting to the disclosure of E's tax return information to the tax return preparer in the country where E works.

(3)*The form and contents of taxpayer consents* —(i) *In general.* All consents to disclose or use tax return information must satisfy the following requirements—

(A)A taxpayer's consent to a tax return preparer's disclosure or use of tax return information must include the name of the tax return preparer and the name of the taxpayer.

(B)If a taxpayer consents to a disclosure of tax return information, the consent must identify the intended purpose of the disclosure. Except as provided in § 301.7216-3(a)(3)(iii), if a taxpayer consents to a disclosure of tax return information, the consent must also identify the specific recipient (or recipients) of the tax return information. If the taxpayer consents to use of tax return information, the consent must describe the particular use authorized. For example, if the tax return preparer intends to use tax return information to generate solicitations for products or services other than tax return preparation, the consent must identify each specific type of product or service for which the tax return preparer may solicit use of the tax return information. Examples of products or services that must be identified include, but are not limited to, balance due loans, mortgage loans, mutual funds, individual retirement accounts, and life insurance.

(C)The consent must specify the tax return information to be disclosed or used by the return preparer.

(D)If a tax return preparer to whom the tax return information is to be disclosed is located outside of the United States, the taxpayer's consent under § 301.7216-3 prior to any disclosure is required. See § 301.7216-2(c) and (d).

(E)A consent to disclose or use tax return information must be signed and dated by the taxpayer.

(ii)*The form and contents of taxpayer consents with respect to taxpayers filing a return in the Form 1040 series—guidance describing additional requirements for taxpayer consents with respect to Form 1040 series filers.* The Secretary may issue guidance, by publication in the Internal Revenue Bulletin (see § 601.601(d)(2)(ii)(b) of this chapter), describing additional requirements for tax return preparers regarding the format and content of consents to disclose and use tax return information with respect to taxpayers filing a return in the Form 1040 series, *e.g.* , Form 1040, Form 1040NR, Form 1040A, or Form 1040EZ.

(iii)*The form and contents of taxpayer consents with respect to all other taxpayers.* A consent to disclose or use tax return information with respect to a taxpayer not filing a return in the Form 1040 series may be in any format, including an engagement letter to a client, as long as the consent complies with the requirements of § 301.7216-3(a)(3)(i). Additionally, the requirements of § 301.7216-3(c)(1) are inapplicable to consents to disclose or use tax return information with respect to taxpayers not filing a return in the Form 1040 series. Solely for purposes of a consent issued under § 301.7216-3(a)(3)(iii), in lieu of identifying specific recipients of an intended disclosure under § 301.7216-3(a)(3)(i)(B), a consent may allow disclosure to a descriptive class of entities engaged by a taxpayer or the taxpayer's affiliate for purposes of services in connection with the preparation of tax returns, audited financial statements, or other financial statements or financial information as required by a government authority, municipality or regulatory body.

(iv)*Examples.* The application of § 301.7216-3(a)(3)(iii) may be illustrated by the following examples: Example 1. Consistent with applicable legal and ethical responsibilities, Preparer Z sends its client, a corporation, Taxpayer C, an engagement letter. Part of the engagement letter requests the consent of Taxpayer C for the purpose of disclosing tax return information to an investment banking firm to assist the investment banking firm in securing long term financing for Taxpayer C. The engagement letter includes language and information that meets the requirements of § 301.7216-3(a)(3)(i), including:

(I)Preparer Z's name, Taxpayer C's name, and a signature and date line for Taxpayer C; and

(II)a statement that “Taxpayer C authorizes Preparer Z to disclose the portions of Taxpayer C's 2009 tax return information to the firm retained by Taxpayer C necessary for the purposes of assisting Taxpayer C secure long term financing.” The engagement letter satisfies the requirements of § 301.7216-3(a)(3) for the disclosure of the information provided therein for the specific purpose stated. Example 2. Consistent with applicable legal and ethical responsibilities, Preparer N sends its client, a corporation, Taxpayer D, an engagement letter. Part of the engagement letter requests the consent of Taxpayer D for the purpose of disclosing tax return information to Preparer N's affiliated firms located outside of the United States for the purposes of preparation of Taxpayer D's 2009 tax return”. The engagement letter includes language and information that meets the requirements of § 301.7216-3(a)(3)(i), including:

(I)Preparer N's name, Taxpayer D's name, and a signature and date line for Taxpayer D;

(II)a statement that “Taxpayer D authorizes Preparer N to disclose Taxpayer D's 2009 tax return information to Preparer N's affiliates located outside of the United States for the purposes of assisting Preparer N prepare Taxpayer D's 2009 tax return”; and

(III)a statement that, in providing consent, Taxpayer D acknowledges that its tax return information for 2009 will be disclosed to tax return preparers located abroad. The engagement letter satisfies the requirements of § 301.7216-3(a)(3) for the disclosure of the information provided therein for the specific purpose stated.

(b)*Timing requirements and limitations* —(1) *No retroactive consent.* A taxpayer must provide written consent before a tax return preparer discloses or uses the taxpayer's tax return information.

(2)*Time limitations on requesting consent in solicitation context.* A tax return preparer may not request a taxpayer's consent to disclose or use tax return information for purposes of solicitation of business unrelated to tax return preparation after the tax return preparer provides a completed tax return to the taxpayer for signature.

(3)*No requests for consent after an unsuccessful request.* With regard to tax return information for each income tax return that a tax return preparer prepares, if a taxpayer declines a request for consent to the disclosure or use of tax return information for purposes of solicitation of business unrelated to tax return preparation, the tax return preparer may not solicit from the taxpayer another consent for a purpose substantially similar to that of the rejected request.

(4)*No consent to the disclosure of a taxpayer's social security number to a return preparer outside of the United States.* A tax return preparer located within the United States, including any territory or possession of the United States, may not obtain consent to disclose the taxpayer's social security number

(SSN)to a tax return preparer located outside of the United States or any territory or possession of the United States. Thus, if a tax return preparer located within the United States (including any territory or possession of the United States) obtains consent from a taxpayer to disclose tax return information to another tax return preparer located outside of the United States, as provided under §§ 301.7216-2(c) and 301.7216-2(d), the tax return preparer located in the United States may not disclose the taxpayer's SSN, and the tax return preparer must redact or otherwise mask the taxpayer's SSN before the tax return information is disclosed outside of the United States. If a tax return preparer located within the United States initially receives or obtains a taxpayer's SSN from another tax return preparer located outside of the United States, however, the tax return preparer within the United States may, without consent, retransmit the taxpayer's SSN to the tax return preparer located outside the United States that initially provided the SSN to the tax return preparer located within the United States.

(5)*Duration of consent.* A consent document may specify the duration of the taxpayer's consent to the disclosure or use of tax return information. If a consent agreed to by the taxpayer does not specify the duration of the consent, the consent to the disclosure or use of tax return information will be effective for a period of one year from the date the taxpayer signed the consent.

(c)*Special rules* —(1) *Multiple disclosures within a single consent form or multiple uses within a single consent form.* A taxpayer may consent to multiple uses within the same written document, or multiple disclosures within the same written document. A single written document, however, cannot authorize both uses and disclosures; rather one written document must authorize the uses and another separate written document must authorize the disclosures. Furthermore, a consent that authorizes multiple disclosures or multiple uses must specifically and separately identify each disclosure or use. See § 301.7216-3(a)(3)(iii) for an exception to this rule for certain taxpayers.

(2)*Disclosure of entire return.* A consent may authorize the disclosure of all information contained within a return. A consent authorizing the disclosure of an entire return must provide that the taxpayer has the ability to request a more limited disclosure of tax return information as the taxpayer may direct.

(3)*Copy of consent must be provided to taxpayer.* The tax return preparer must provide a copy of the executed consent to the taxpayer at the time of execution. The requirements of this paragraph (c)(3) may also be satisfied by giving the taxpayer the opportunity, at the time of executing the consent, to print the completed consent or save it in electronic form.

(d)*Effective/applicability date.* This section applies to disclosures or uses of tax return information occurring on or after January 1, 2009. Linda E. Stiff, Deputy Commissioner for Services and Enforcement. Approved: December 21, 2007. Eric Solomon, Assistant Secretary of the Treasury (Tax Policy). [FR Doc. 08-1 Filed 1-3-08; 8:58 am]

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