26 C.F.R. § 301.7609-2 Third-party recordkeepers.
Title 26 - Internal Revenue
(a) Definitions—(1) Accountant. A person is an “accountant” under section 7609(a)(3)(F) for purposes of determining whether that person is a third-party recordkeeper if the person is registered, licensed, or certified under State law as an accountant. (2) Attorney. A person is an “attorney” under section 7609(a)(3)(E) for purposes of determining whether that person is a third-party recordkeeper if the person is admitted to the bar of a State. (3) Credit cards—(i) Person extending credit through credit cards. The term “person extending credit through the use of credit cards or similar devices” under section 7609(a)(3)(C) generally includes any person who issues a credit card. It does not include a seller of goods or services that honors credit cards issued by other parties but does not extend credit on the basis of credit cards or similar devices issued by itself. (ii) Similar devices to credit cards. An object is a “similar device” to a credit card under section 7609(a)(3)(C) only if it is physical in nature, such as a coupon book, a charge plate, or a letter of credit. Thus, a person who extends credit by requiring credit customers to sign sales slips without requiring use of physical objects issued by that person is not a third-party recordkeeping under section 7609(a)(3)(C). (b) When third-party recordkeeper status arises—(1) In general. A person is a “third-party recordkeeper” with respect to a given set of records only if the person made or kept the records in the person's capacity as a third-party recordkeeper. Thus, for instance, an accountant is not a third-party recordkeeper (by reason of being an accountant) with respect to the accountant's records of a sale of property by the accountant to another person. Similarly, a credit card issuer is not a third-party recordkeeper (by reason of being a person extending credit through the use of credit cards or similar devices) with respect to— (i) Records relating to noncredit card transactions, such as a cash sale by the issuer to a holder of the issuer's credit card; or (ii) Records relating to transactions involving the use of another issuer's credit card. (2) Examples. The rules of paragraph (b)(1) of this section may be illustrated by the following examples: Example 1. V issues a credit card (the V card) that is honored by R, a retailer. When using the V card, C signs a sales slip in triplicate. C, R, and V each retain one copy. Only the copy held by V is held by a third-party recordkeeper under section 7609 (a)(3), even though R may issue its own credit card. Example 2. Assume the same facts as in example 1, except R does issue its own credit card to C (the R card). When C makes a credit purchase from R using the R card, C signs a sales slip in duplicate. C and R each retain one copy. Because R keeps the copy in its capacity as credit card issuer, as well as in its capacity as seller, it is a third-party recordkeeper under section 7609 (a)(3) with respect to that copy. (c) Duty of third-party recordkeeper—(1) In general. Upon receipt of a summons, the third-party recordkeeper (“recordkeeper”) must begin to assemble the summoned records. The recordkeeper must be prepared to produce the summoned records on the date which the summons states the records are to be examined regardless of the institution of anticipated institution of a proceeding to quash or the recordkeeper's intervention (as allowed under section 7609(b)(2)(C)) into a proceeding to quash. (2) Disclosing recordkeepers not liable—(i) In general. A recordkeeper, or an agent or employee thereof, who makes a disclosure of records as required by this section, in good faith reliance on the certificate of the Secretary (as defined in paragraph (c)(2)(ii) of this section) or an order of a court requiring production of records, will not be liable for such disclosure to any customer, or to any party with respect to whose tax liability the summons was issued, or to any other person. (ii) Certificate of the Secretary. The Secretary may issue to the recordkeeper a certificate stating both: (A) That the 20-day period, within which a notified person may institute a proceeding to quash the summons, has expired; and (B) That no proceeding has been properly instituted within that period. The Secretary may also issue a certificate to the recordkeeper if the taxpayer, with respect to whose tax liability the summons was issued, expressly consents to the examination of the records summoned. (3) Reimbursement of costs. Recordkeepers may be entitled to reimbursement of their costs of assembling and preparing to produce summoned records, to the extent allowed by section 7610, even if the summons ultimately is not enforced. (d) Effective dates. This section, with the exception of paragraph (c), applies generally to all summonses issued on or after March 1, 1977. Paragraph (c) applies only to summonses served after December 31, 1982. (Secs. 7610(a) and 7805 of the Internal Revenue Code of 1954 (26 U.S.C. 7610(a) and 7805)) [T.D. 7899, 48 FR 32772, July 19, 1983, as amended by T.D. 8091, 51 FR 23054, June 25, 1986]
Title 26: Internal Revenue
PART 301—PROCEDURE AND ADMINISTRATION
Discovery of Liability and Enforcement of Title
Examination and Inspection
§ 301.7609-2 Third-party recordkeepers.
