[Federal Register Volume 59, Number 66 (Wednesday, April 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8146]
[[Page Unknown]]
[Federal Register: April 6, 1994]
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48 CFR Part 31
[FAR Case 92-604]
Federal Acquisition Regulation; Nonallowability of Excise Taxes
on Nondeductible Contributions To Deferred Compensation Plans
agencies: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
action: Proposed rule.
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summary: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council are proposing to revise the cost
principle concerning taxes. This regulatory action was not subject to
Office of Management and Budget review pursuant to Executive Order
12866, dated September 30, 1993.
dates: Comments should be submitted on or before June 6, 1994 to be
considered in the formulation of a final rule.
addresses: Interested parties should submit written comments to:
General Services Administration, FAR Secretariat (VRS), 18th & F
Streets, NW, room 4037, Washington, DC 20405.
Please cite FAR case 92-604 in all correspondence related to this
case.
for further information contact: Jeremy F. Olson at (202) 501-3221 in
reference to this FAR case. For general information, contact the FAR
Secretariat, room 4037, GS Building, Washington, DC 20405 (202) 501-
4755. Please cite Far case 92-604.
SUPPLEMENTARY INFORMATION:
A. Background
Under the current FAR 31.205-41(b)(6), excise taxes on accumulated
funding deficiencies or prohibited transactions involving employee
deferred compensation plans pursuant to sections 4971 and 4975 of the
Internal Revenue Code of 1954, as amended, are unallowable. This
reflects a long-standing Government policy that punitive-type excise
taxes are not reimbursable costs on Government contracts. Over the
years, subsequent legislation has added several new excise taxes to
subtitle D, chapter 43 of the Internal Revenue Service Code such that
the Code currently lists 13 such taxes. The Councils have agreed that
it is appropriate to revise FAR 31.205-41(b)(6) to insert a general
prohibition on all excise taxes found at subtitle D, chapter 43 of the
Internal Revenue Service Code. Such a general prohibition will ensure
that future legislative changes to subtitle D, chapter 43 of the
Internal Revenue Service Code will be automatically reflected in the
cost principle.
B. Regulatory Flexibility Act
The proposed rule is not expected to have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because most
contracts awarded to small entities are awarded on a competitive,
fixed-price basis and the cost principles do not apply. An analysis of
data available for fiscal years 1989 through 1991 reveals that, in the
Department of Defense, the number of contract actions awarded to small
businesses which required the submission of cost or pricing data
averaged less than 1 percent of the total number of small business
actions during the three-year period. An Initial Regulatory Flexibility
Analysis has, therefore, not been performed. Comments from small
entities concerning the affected FAR subpart will be considered in
accordance with section 610 of the Act. Such comments must be submitted
separately and should cite 5 U.S.C. 601, et seq. (FAR case 92-604), in
correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the proposed
changes to the FAR do not impose recordkeeping or information
collection requirements, or collections of information from offerors,
contractors, or members of the public which require the approval of the
Office of Management and Budget under 44 U.S.C. 3501, et seq.
List of Subjects in 48 CFR Part 31
Government procurement.
Dated: March 28, 1994.
Albert A. Vicchiolla,
Director, Office of Federal Acquisition Policy.
Therefore, it is proposed that 48 CFR part 31 be amended as set
forth below:
PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES
1. The authority citation for 48 CFR part 31 continues to read as
follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
2. Section 31.205-41 is amended by revising paragraph (b)(6) to
read as follows:
31.205-41 Taxes.
* * * * *
(b) * * *
(6) Any excise tax in subtitle D, chapter 43 of the Internal
Revenue Code of 1986, as amended. That chapter includes excise taxes
imposed in connection with qualified pension plans, welfare plans,
deferred compensation plans, or other similar types of plans.
* * * * *
[FR Doc. 94-8146 Filed 4-5-94; 8:45 am]
BILLING CODE 6820-34-M
