[Federal Register Volume 62, Number 247 (Wednesday, December 24, 1997)]
[Proposed Rules]
[Pages 67304-67305]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-33247]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 31
[REG-209484-87 and REG-209807-95]
RIN 1545-AF97; 1545-AT99
FICA and FUTA Taxation of Amounts Under Employee Benefit Plans
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: This document contains a revision to the proposed regulations
under section 3121(v)(2) of the Internal Revenue Code of 1986, relating
to when amounts deferred under or paid from certain nonqualified
deferred compensation plans are taken into account as ``wages'' for
purposes of the taxes imposed by the Federal Insurance Contributions
Act (FICA). This document extends the proposed general effective date
of the regulations to January 1, 1998. The extension also applies to
the proposed regulations under section 3306(r)(2), relating to when
amounts deferred under or paid from certain nonqualified deferred
compensation plans are taken into account as ``wages'' for purposes of
the taxes imposed by the Federal Unemployment Tax Act (FUTA), due to
the cross-reference therein to the provisions of the proposed
regulations under section 3121(v)(2).
DATES: Written comments and requests for a public hearing must be
received by March 24, 1998.
ADDRESSES: Send submissions to: CC:DOM:CORP:R (EE-142-87), room 5228,
Internal Revenue Service, P.O. Box 7604, Ben Franklin Station,
Washington, DC 20044. In the alternative, submissions may be hand
delivered between the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R
(REG-209484-87), Courier's Desk, Internal Revenue Service, 1111
Constitution Avenue, NW. Washington, DC. Alternatively, taxpayers may
submit comments electronically via the Internet by selecting the ``Tax
Regs'' option of the IRS Home Page, or by submitting comments directly
to the IRS Internet site at: http://www.irs.ustreas.gov/prod/tax_regs/
comments.html.
FOR FURTHER INFORMATION CONTACT: Janine Cook, (202) 622-6040 (not a
toll-free number), concerning the regulations, and Michael Slaughter,
(202) 622-7190 (not a toll-free number), concerning submissions.
SUPPLEMENTARY INFORMATION:
Background
This document contains a revision to the proposed amendments to the
Employment Tax Regulations (26 CFR part 31) under section 3121(v)(2) of
the Internal Revenue Code of 1986 (Code), relating to the Federal
Insurance Contributions Act (FICA) tax treatment of amounts deferred
under or paid from certain nonqualified deferred compensation plans.
The proposed regulations were published in the Federal Register on
January 25, 1996 (61 FR 2194), with a proposed general effective date
of January 1, 1997. This document extends the proposed general
effective date to January 1, 1998. The same issue of the Federal
Register contained proposed amendments to the Employment Tax
Regulations under
[[Page 67305]]
section 3306(r)(2) of the Code, relating to the Federal Unemployment
Tax Act (FUTA) tax treatment of amounts deferred under or paid from
certain nonqualified deferred compensation plans (61 FR 2214). The
proposed regulations under section 3306(r)(2) cross-reference the
provisions of the proposed regulations under section 3121(v)(2),
including the proposed general effective date. Consequently, the
extension of the effective date under the proposed regulations under
section 3121(v)(2) automatically applies to the proposed regulations
under section 3306(r)(2).
The project numbers assigned to the notices of proposed rulemaking
setting forth the proposed regulations under section 3121(v)(2) and
section 3306(r)(2) were EE-142-87 and EE-55-95, respectively. Due to
changes in the Internal Revenue Service's regulations numbering system,
the project numbers for this notice of proposed rulemaking have been
changed to REG-209484-87 and REG-209807-95, respectively, as reflected
at the beginning of this document.
Explanation of Provisions
Section 31.3121(v)(2)-1(g)(1)(i) of the proposed regulations
provides that the proposed general effective date of the regulations is
January 1, 1997. Because the final regulations have not been issued,
this document contains an amendment to the proposed regulations to
extend the proposed general effective date to January 1, 1998. This
extension of the proposed general effective date also applies to
Sec. 31.3306(r)(2)-1 of the proposed regulations due to the cross-
reference therein to the provisions in the proposed regulations under
section 3121(v)(2).
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in EO 12866. Therefore,
a regulatory assessment is not required.
It also has been determined that section 553(b) of the
Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to
these regulations, and because these regulations do not impose on small
entities a collection of information requirement, the Regulatory
Flexibility Act (5 U.S.C. chapter 6) does not apply. Therefore, a
Regulatory Flexibility Analysis is not required. Pursuant to section
7805(f) of the Code, this notice of proposed rulemaking will be
submitted to the Chief Counsel for Advocacy of the Small Business
Administration for comment on its impact on small business.
Comments and Requests for a Public Hearing
Before this revision to the proposed regulations is adopted as part
of the final regulations, consideration will be given to any written
comments (preferably a signed original and eight (8) copies) that are
submitted timely to the IRS. All comments will be available for public
inspection and copying. A public hearing may be scheduled if requested
in writing by a person that timely submits written comments. If a
public hearing is scheduled, notice of the date, time, and place for
the hearing will be published in the Federal Register.
Drafting Information
The principal author of this revision to the proposed regulations
is Janine Cook, Office of the Associate Chief Counsel (Employee
Benefits and Exempt Organizations), IRS. However, other personnel from
the IRS and Treasury Department participated in its development.
List of Subjects in 26 CFR Part 31
Employment taxes, Income taxes, Penalties, Pensions, Railroad
retirement, Reporting and recordkeeping requirements, Social security,
Unemployment tax, Withholding.
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 31 is proposed to be amended as follows:
PART 31--EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT SOURCE
Paragraph 1. The authority citation for part 31 continues to read
in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 31.3121(v)(2)-1 as proposed to be added at 61 FR
2199, January 25, 1996, is amended by revising paragraph (g)(1)(i) to
read as follows:
Sec. 31.3121(v)(2)-1 Treatment of amounts deferred under certain
nonqualified deferred compensation plans.
* * * * *
(g) Effective date and transition rules--(1) General effective
date--(i) Effective date. Except as otherwise provided in this
paragraph (g) or in Sec. 31.3121(v)-2, this section is effective for
amounts deferred and benefits paid on or after January 1, 1998.
* * * * *
Michael P. Dolan,
Deputy Commissioner of Internal Revenue.
[FR Doc. 97-33247 Filed 12-23-97; 8:45 am]
BILLING CODE 4830-01-U
