§ 1.6050M-1 — Information returns relating to persons receiving contracts from certain Federal executive agencies.
§ 1.6050M-1 Information returns relating to persons receiving contracts from certain Federal executive agencies.
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(a) General rule. Except as otherwise provided in paragraph (c) of this section, the head of every Federal executive agency or his or her delegate shall make an information return to the Internal Revenue Service reporting the following information with respect to each contract entered into by that Federal executive agency—
(1) Name and address of the contractor;
(2) Contractor's TIN and, if the contractor is a member of an affiliated group of corporations that files its Federal income tax returns on a consolidated basis, the name and TIN of the common parent of the affiliated group;
(3) The date of the contract action;
(4) The expected date of completion of the contract as determined under any reasonable method, such as the expected contract delivery date under the contract schedule;
(5) The total amount obligated under the contract action; and
(6) Any other information required by Forms 8596 and 8596A and their instructions, or by any other administrative guidance issued by the Internal Revenue Service (such as a revenue procedure).
See paragraph (e) of this section relating to the manner in which to report increases in amounts obligated under existing contracts. See paragraph (d)(5) of this section for special rules for agencies that submit contract information to the Federal Procurement Data Center. For provisions concerning the requesting and furnishing of identifying numbers, see section 6109 and the regulations thereunder.
(b) Definitions. The following definitions apply for purposes of this section—
(1) Federal executive agency. The term “Federal executive agency” means—
(i) Any executive agency (as defined in 5 U.S.C. 105) other than the General Accounting Office;
(ii) Any military department (as defined in 5 U.S.C. 102); and
(iii) The United States Postal Service and the Postal Rate Commission.
(2) Contract—(i) General rule. The term “contract” means an obligation of a Federal executive agency to make payment of money (or other property) to a person in return for the sale of property, the rendering of services, or other consideration. The term “contract” includes, for example, such an obligation arising from a written agreement executed by the agency and the contractor, an award or notice of award, a job order or task letter issued under a basic ordering agreement, a letter contract, an order that becomes effective only upon written acceptance or performance, or an action described in paragraph (e) of this section.
(ii) Exceptions. For purposes of this section, the term “contract” does not include—
(A) A license granted by a Federal executive agency;
(B) An obligation of a contractor (other than a Federal executive agency) to a subcontractor;
(C) A debt instrument of the United States Government or a Federal agency, such as a Treasury note, Treasury bond, Treasury bill, savings bond, or similar instrument; or
(D) An obligation of a Federal executive agency to lend money, lease property to a lessee, or sell property.
(iii) Special rule for certain contracts of the Small Business Administration. Any subcontract entered into by the Small Business Administration (SBA) under a prime contract between the SBA and a procuring Federal executive agency pursuant to section 8(a) of the Small Business Act (15 U.S.C. 637(a)) shall not be treated as a contract of the SBA but shall be treated as a contract of the procuring agency for purposes of this section.
(iv) Certain schedule contracts. For purposes of this section, any of the following contracts entered into on behalf of one or more Federal executive agencies is not a “contract” to be reported by the General Services Administration or the Department of Veteran's Affairs at the time of execution:
(A) A Federal Supply Schedule Contract entered into by the General Services Administration,
(B) An Automated Data Processing Schedule Contract entered into by the General Services Administration, or
(C) A schedule contract entered into by the Department of Veteran's Affairs.
Instead, an order placed by a Federal executive agency, including the General Services Administration or the Department of Veteran's Affairs, under such a schedule contract is a “contract” for purposes of this section.
(v) Blanket purchase agreements. For purposes of this section, the term contract does not include a blanket purchase agreement between one or more Federal executive agencies and one or more contractors. Instead, an order placed by a Federal executive agency under the terms of a blanket purchase agreement is a “contract” for purposes of this section.
(vi) Contracts entered into using non-appropriated funds. [Reserved]
(3) Contractor. The term contractor means any person who enters into a contract with a Federal executive agency.
(4) Person and TIN. The terms person and TIN are defined in sections 7701(a) (1) and (41), respectively.
(c) Exceptions to information reporting requirement—(1) General exceptions. The following do not need to be reported pursuant to this section:
(i) Any contract or contract action for which the amount obligated is $25,000 or less;
(ii) Any contract with a contractor who, in making the agreement, is acting in his or her capacity as an employee of a Federal executive agency (e.g., any contract of employment under which the employee is paid wages subject to the withholding provisions contained in chapter 24 of subtitle C);
(iii) Any contract between a Federal executive agency and another Federal governmental unit (or any agency or instrumentality thereof);
(iv) Any contract with a foreign government (or any agency or instrumentality thereof);
(v) Any contract with a state or local governmental unit (or any agency or instrumentality thereof);
(vi) Any contract with a person who is not required to have a TIN (see, for example, § 301.6109-1(g));
(vii) Any contract the terms of which provide that all amounts payable under the contract by any Federal executive agency will be paid on or before the 120th day following the date of the contract action, and for which it is reasonable to except that all amounts will be so paid.
(viii) Any contract under which all money (or other property) that will be received by the contractor after the 120th day after the date of the contract action will come from persons other than a Federal executive agency or an agent of such an agency (e.g., a contract under which the contractor will collect amounts owed to a Federal executive agency by the agency's debtor and will remit to the agency the money collected less an amount that serves as the contractor's consideration under the contract).
(ix) Any contract for which the Commissioner determines that the information described in paragraph (a) of this section will not facilitate the collection of Federal tax liabilities because of the manner, method, or timing of payment by the agency under that contract.
(2) Special rule for certain classified or confidential contracts. Contracts described in section 6050M(e)(3), relating to certain classified or confidential contracts, are to be reported only in accordance with section 6050M(e)(2).
(d) Filing requirements—(1) Frequency and time for filing. The information returns required by this section with respect to contracts of a Federal executive agency entered into on or after January 1, 1989, must be filed on a quarterly basis for the calendar quarters ending on the last day of March, June, September, and December. Except as provided in paragraph (d)(5) of this section, the returns for contracts entered into during a calendar quarter must be filed on or before the last day of the month following that quarter. Notwithstanding the preceding sentence, returns filed before May 7, 1990, will be considered timely filed.
(2) Form of reporting—(i) General rule concerning electronic filing. The information returns required by this section with respect to contracts of a Federal executive agency for each calendar quarter must be made in one submission (or in multiple submissions if permitted by paragraph (d)(4) of this section). Except as provided in paragraph (d)(2)(ii) of this section, the required returns must be made in electronic form (within the meaning of § 301.6011-2(a)(1) of this chapter) in accordance with any applicable revenue procedure or other guidance promulgated by the Internal Revenue Service for the filing of such returns under section 6050M.
(ii) Exceptions from electronic filing. Any Federal executive agency that, on October 1, has a reasonable expectation of entering into, during the one-year period beginning on that date, fewer than 10 contracts subject to the reporting requirements under this section that are to be filed during the calendar years after 2023, may make the information returns required by this section for each quarter of that one-year period on the prescribed paper Form 8596 in accordance with the instructions accompanying such form.
(iii) Exclusions from electronic-filing requirements—(A) Waivers. The Commissioner may grant waivers of the requirements of this section in cases of undue hardship. One principal factor in determining hardship will be the amount, if any, by which the cost of filing the return electronically in accordance with this section exceeds the cost of filing the return on paper. A request for a waiver must be made in accordance with applicable IRS revenue procedures, publications, forms, instructions, or other guidance, including postings to the IRS.gov website. The waiver request will specify the type of filing (that is, a return required under paragraph (a) of this section) and the period to which it applies.
(B) Exemptions. The Commissioner may provide exemptions from the requirements of this section to promote effective and efficient tax administration. A submission claiming an exemption must be made in accordance with applicable IRS revenue procedures, publications, forms, instructions, or other guidance, including postings to the IRS.gov website.
(3) Place of filing—(i) Returns in electronic form. Information returns made under this section in electronic form must be filed with the Internal Revenue Service in accordance with any applicable revenue procedure or other guidance promulgated by the Internal Revenue Service relating to the filing of returns under section 6050M.
(ii) Form 8596. Information returns made on paper Form 8596 must be filed with the Internal Revenue Service at the location specified in the instructions for that form.
(4) Special rule concerning multiple returns. To the extent permitted in any revenue procedure or other guidance relating to the filing of information returns under this section, a Federal executive agency which files information returns under this section on magnetic media may make more than one magnetic media submission for any quarter, if each submission for that quarter contains all of the information required by paragraph (a) of this section with respect to contracts entered into by one or more departments, branches, bureaus, agencies, or other readily identifiable operating functions (such as a geographic region) of the Federal executive agency.
(5) Special rules for agencies reporting to the Federal Procurement Data Center—(i) Election to have the Director of the Federal Procurement Data Center make returns on behalf of agency. If, in complying with the requirements of the Federal Procurement Data System (FPDS) (as established under the authority of the Office of Federal Procurement Policy Act, as amended, 41 U.S.C. 401 et seq.), a Federal executive agency is required to submit to the Federal Procurement Data Center (FPDC) all the information with respect to one or more contracts required to be reported by paragraph (a) of this section, that Federal executive agency may, in lieu of making returns directly to the Internal Revenue Service with respect to those contracts, elect to have the Director of the FPDC (or his or her delegate) make the required returns with respect to all of those contracts on its behalf. In order to make this election for such contracts entered into during a calendar quarter, the head of a Federal executive agency (or his or her delegate) shall attach to its submission to the FPDC for that quarter a signed statement to the effect that:
(A) The Director of the FPDC (or his or her delegate) is authorized, in accordance with an election made under 26 CFR 1.6050M-1(d)(5) to make, on the agency's behalf, the required returns for such contracts for that quarter, and
(B) Under the penalties of perjury, such official has examined the information to be submitted by the agency to the FPDC for making those returns and certifies that information to be, to the best of such official's knowledge and belief, a compilation of agency records maintained in the normal course of business for the purpose of providing the information necessary for making true, correct, and complete returns as required by section 6050M.
If the election is made, the Director of the FPDC (or his or her delegate) shall, on the electing agency's behalf, make the returns required by paragraph (a) of this section with respect to the contracts to which the election applies.
(ii) Time, manner, and place of filing. The Director of the FPDC (or his or her delegate) must—
(A) Make the required returns for a quarter on or before the earlier of;
(1) 45 days following the date that the contract information is required to be submitted to the FPDC, or
(2) 90 days following the end of the calendar quarter for which the election is made, except that, if that calendar quarter ends September 30, 105 days following the end of that quarter, and
(B) Comply with paragraph (d)(2)(i) and (3)(i) of this section, relating to form and place of filing.
Notwithstanding the preceding sentence, returns made before May 7, 1990, will be considered timely filed.
(iii) Contracts reported directly to the Internal Revenue Service. Even if the election is made, all information with respect to any particular contract required to be reported under paragraph (a) of this section must be reported directly to the Internal Revenue Service by the electing agency if the FPDS does not require that information to be submitted to the FPDC. An electing agency shall not, however, make direct returns to the Internal Revenue Service of contract information that is subject to the election.
(6) Certification of return—(i) Returns made directly with the Internal Revenue Service. Each return made under this section by a Federal executive agency directly with the Internal Revenue Service on magnetic media or on Forms 8596 and 8596-A shall be signed by the head of the Federal executive agency (or his or her delegate) under the penalties of perjury, certifying that such official has examined the return, that it is prepared pursuant to the requirements of section 6050M and that, to the best of such official's knowledge and belief, it is compiled from agency records maintained in the normal course of business for the purpose of making a true, correct, and complete return as required by section 6050M.
(ii) Returns made by Director of FPDC on agency's behalf. Each return made under this section by the Director of the FPDC on behalf of a Federal executive agency shall be signed by the Director of the FPDC (or his or her delegate) under the penalties of perjury, certifying that such official has examined the return, that it is prepared pursuant to the requirements of section 6050M and that, to the best of such official's knowledge and belief, it is compiled from information submitted by the Federal executive agency to the FPDC pursuant to § 1.6050M-1(d)(5)(i) for the purpose of making a true, correct, and complete return as required by section 6050M.
(e) Special rules relating to increases in amount obligated. If, through the exercise of an option contained in a basic or initial contract or under any other rule of contract law, express or implied, the amount of money or other property obligated under the contract is increased by more than $25,000 in one contract action, then that action shall be treated as the entering into of a new contract with respect to which the information required by paragraph (a) of this section is to be reported to the Internal Revenue Service for the calendar quarter in which the increase occurs.
(f) Applicability date—(1) Contracts required to be reported. Except as otherwise provided in this paragraph (f), this section applies to each Federal executive agency with respect to its contracts entered into on or after January 1, 1989 (including any increase in amount obligated on or after January 1, 1989, that is treated as a new contract under paragraph (e) of this section).
(2) Contracts not required to be reported. A Federal executive agency is not required to report—
(i) Any basic or initial contract entered into before January 1, 1989,
(ii) Any increase contract action occurring before January 1, 1989, that is treated as a new contract under paragraph (e) of this section, or
(iii) Any increase contract action that is treated as a new contract under paragraph (e) of this section if the basic or initial contract to which that contract action relates was entered into before January 1, 1989, and—
(A) The increase occurs before April 1, 1990, or
(B) The amount of the increase does not exceed $50,000.
(3) Illustration. (i) If a Federal executive agency enters into an initial contract on December 1, 1988, and the amount of money obligated under the contract is increased by $55,000 on April 15, 1990, then there is no reporting requirement with respect to the contract when entered into on December 1, 1988. However, the April 15, 1990, increase, which is treated as a new contract under paragraph (e) of this section, is subject to the reporting requirements of this section because it is considered to be a new contract entered into on April 15, 1990.
(ii) If the $55,000 increase had occurred before April 1, 1990, there would not have been a reporting requirement with respect to that increase.
(4) Filing requirements for contracts required to be reported. Section 1.6050M-1(d)(2) and (3) (as contained in 26 CFR part 1, revised February 23, 2023) applies to information returns required to be filed during calendar years beginning after December 31, 2023.
26 C.F.R. § 1.6050M-1 (Information returns relating to persons receiving contracts from certain Federal executive agencies.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.