[Federal Register Volume 60, Number 199 (Monday, October 16, 1995)]
[Rules and Regulations]
[Pages 53509-53511]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-25314]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 31 and 602
[TD 8624]
RIN 1545-AT87
Reporting of Nonpayroll Withheld Tax Liabilities
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final and temporary regulations.
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SUMMARY: This document contains final and temporary regulations
relating to
[[Page 53510]]
the reporting of nonpayroll withheld income taxes under section 6011 of
the Internal Revenue Code. The temporary regulations remove the
requirement that a person file Form 945, Annual Return of Withheld
Federal Income Tax, for each calendar year, whether or not the person
is required to withhold the taxes reported on Form 945 in a particular
calendar year. The temporary regulations require that a person file
Form 945 only for a calendar year in which the person is required to
withhold taxes required to be reported on Form 945. The text of these
temporary regulations also serves as the text of the proposed
regulations set forth in the notice of proposed rulemaking on this
subject in the Proposed Rules section of this issue of the Federal
Register.
EFFECTIVE DATE: These regulations are effective October 16, 1995.
FOR FURTHER INFORMATION CONTACT: Vincent G. Surabian, 202-622-6232 (not
a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
These regulations are being issued without prior notice and public
procedure pursuant to the Administrative Procedure Act (5 U.S.C. 553).
For this reason, the collection of information contained in these
regulations has been reviewed and, pending receipt and evaluation of
public comments, approved by the Office of Management and Budget under
control number 1545-1413. Responses to this collection of information
are required to monitor compliance with the federal tax laws related to
the reporting and deposit of nonpayroll withheld taxes.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid control number.
For further information concerning this collection of information,
and where to submit comments on the collection of information and the
accuracy of the estimated burden, and suggestions for reducing this
burden, please refer to the preamble to the cross-referencing notice of
proposed rulemaking published in the Proposed Rules section of this
issue of the Federal Register.
Books or records relating to a collection of information must be
retained as long as their contents may become material in the
administration of any internal revenue law. Generally, tax returns and
tax return information are confidential, as required by 26 U.S.C. 6103.
Background
On December 23, 1993, the IRS published final regulations (TD 8504)
in the Federal Register (58 FR 68033) relating to both the reporting
and depositing of Federal employment taxes. Those regulations simplify
reporting requirements by removing all ``nonpayroll'' withheld taxes
from reporting on Form 941, Employer's Quarterly Federal Tax Return (or
Form 941E, Quarterly Return of Withheld Federal Income Tax and Medicare
Tax) and requiring those taxes to be reported on Form 945. Those final
regulations were effective December 23, 1993.
Section 31.6011(a)-4(b) of those regulations provides that every
person required to make a return of income tax withheld from nonpayroll
payments for calendar year 1994 must make a return for calendar year
1994 and for each subsequent calendar year (whether or not any such tax
is required to be withheld that year) until a final return is made in
accordance with Sec. 31.6011(a)-6. In addition, every person not
required to make a return of income tax withheld from nonpayroll
payments for calendar year 1994 must make a return for the first
calendar year after 1994 in which the person is required to withhold
the tax and for each subsequent calendar year until a final return is
made in accordance with Sec. 31.6011(a)-6.
In the preamble to TD 8504, the IRS stated that it welcomed and
would consider comments from the public regarding the requirement to
continue filing Form 945 annually, regardless of liability, until a
final return is filed in accordance with Sec. 31.6011(a)-6. Several
commentators responded to that invitation, all opposing the requirement
to file a return for a calendar year for which there is no liability.
As a result, the IRS has reconsidered the specific requirement.
Explanation of Provisions
These temporary regulations remove the requirement that, once a
person files an annual Form 945, the person must file a Form 945 every
subsequent year until the person files a final return. Under these
temporary regulations, a person must file a Form 945 only for a
calendar year in which the person is required to withhold Federal
income tax from nonpayroll payments.
Special Analyses
It has been determined that this Treasury decision is not a
significant regulatory action as defined in EO 12866. Therefore, a
regulatory assessment is not required. It has also been determined that
section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5)
and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do not apply to
these regulations and, therefore, a Regulatory Flexibility Analysis is
not required. Pursuant to section 7805(f) of the Internal Revenue Code,
a copy of these temporary regulations will be submitted to the Chief
Counsel for Advocacy of the Small Business Administration for comment
on their impact on small business.
Drafting Information
The principal author of these regulations is Vincent G. Surabian,
Office of the Assistant Chief Counsel (Income Tax and Accounting).
However, other personnel from the IRS and Treasury Department
participated in their development.
List of Subjects
26 CFR Part 31
Employment taxes, Income taxes, Penalties, Pensions, Railroad
retirement, Reporting and recordkeeping requirements, Social security,
Unemployment compensation.
26 CFR Part 602
Reporting and recordkeeping requirements.
Adoption of Amendments to the Regulations
Accordingly, 26 CFR parts 31 and 602 are amended as follows:
PART 31--EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT SOURCE
Paragraph 1. The authority citation for part 31 is amended by
adding an entry in numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
Section 31.6011(a)-4T also issued under 26 U.S.C. 6011. * * *
Par 2. Section 31.6011(a)-4 is amended by revising paragraph (b) to
read as follows:
Sec. 31.6011(a)-4 Returns of income tax withheld.
* * * * *
(b) [Reserved] For further guidance see Sec. 31.6011(a)-4T(b).
* * * * *
Par. 3. Section 31.6011(a)-4T is added to read as follows:
[[Page 53511]]
Sec. 31.6011(a)-4T Returns of income tax withheld (temporary).
(a) [Reserved] For further guidance see Sec. 31.6011(a)-4(a).
(b) Withheld from nonpayroll payments. Every person required to
withhold tax from nonpayroll payments for calendar year 1994 must make
a return for calendar year 1994 and for any subsequent calendar year in
which any such tax is required to be withheld until the person makes a
final return in accordance with Sec. 31.6011(a)-6. Every person not
required to withhold tax from nonpayroll payments for calendar year
1994 must make a return for the first calendar year after 1994 in which
the person is required to withhold such tax and for any subsequent
calendar year in which the person is required to withhold such tax
until the person makes a final return in accordance with
Sec. 31.6011(a)-6. Form 945, Annual Return of Withheld Federal Income
Tax, is the form prescribed for making the return required under this
paragraph (b). Nonpayroll payments are--
(1) Certain gambling winnings subject to withholding under section
3402(q);
(2) Retirement pay for services in the Armed Forces of the United
States subject to withholding under section 3402;
(3) Certain annuities as described in section 3402(o)(1)(B);
(4) Pensions, annuities, IRAs, and certain other deferred income
subject to withholding under section 3405; and
(5) Reportable payments subject to backup withholding under section
3406.
PART 602--OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT
Par. 4. The authority citation for part 602 continues to read as
follows:
Authority: 26 U.S.C. 7805.
Sec. 602.101 [Amended]
Par. 5. Section 602.101, paragraph (c) is amended in the table by
adding the entry ``31.6011(a)-4T . . . . 1545-1413'' in numerical
order.
Margaret Milner Richardson,
Commissioner of Internal Revenue.
Approved: September 22, 1995.
Leslie Samuels,
Assistant Secretary of the Treasury.
[FR Doc. 95-25314 Filed 10-13-95; 8:45 am]
BILLING CODE 4830-01-U
