Federal Tax Deposits by Electronic Funds Transfer

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1 and 31

[IA-03-94]

RIN 1545-AS79

Federal Tax Deposits by Electronic Funds Transfer

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary

regulations and notice of public hearing.

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SUMMARY: In the Rules and Regulations section of this issue of the

Federal Register, the IRS is issuing temporary regulations relating to

the deposit of Federal taxes by electronic funds transfer under section

6302 of the Internal Revenue Code. The text of the temporary

regulations also serves as the comment document for this notice of

proposed rulemaking. This document also provides notice of a public

hearing on these proposed regulations.

DATES: Written comments and outlines of topics to be discussed at the

public hearing scheduled for July 16, 1996, beginning at 10 a.m., must

be received by June 19, 1996.

ADDRESSES: Send submissions to: CC:DOM:CORP:R (IA-03-94), room 5228,

Internal Revenue Service, POB 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 (IA-03-94), Courier's

Desk, Internal Revenue Service, 1111 Constitution Avenue, NW.,

Washington, DC. The public hearing will be held in the Commissioner's

Conference Room, room 3313, 1111 Constitution Avenue, NW., Washington,

DC.

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Vincent G.

Surabian, 202-622-6232 (not a toll-free number). Concerning submissions

and the public hearing, Michael Slaughter, 202-622-7190 (not a toll-

free number).

SUPPLEMENTARY INFORMATION:

Background

The temporary regulations published in the Rules and Regulations

section of this issue of the Federal Register contain amendments to the

Regulations on Employment Taxes and Collection of Income Tax at Source

(26 CFR part 31) and an addition to the Income Tax Regulations (26 CFR

part 1). These amendments relate to the deposit of Federal taxes by

electronic funds transfer. The text of those temporary regulations also

serves as the text of these proposed regulations. The preamble to the

temporary regulations explains these proposed regulations.

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) and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do

not apply to these rules and, therefore, a Regulatory Flexibility

Analysis is not required. Pursuant to section 7805(f) of the Internal

Revenue Code, a copy of 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 Public Hearing

Before these proposed regulations are adopted as final regulations,

consideration will be given to any written comments (a signed original

and eight (8) copies) that are timely submitted to the IRS. All

comments will be available for public inspection and copying.

A public hearing has been scheduled for July 16, 1996, beginning at

10 a.m. in the Commissioner's Conference Room, room 3313, Internal

Revenue Building. Because of access restrictions, visitors will not be

admitted beyond the building lobby more than 15 minutes before the

hearing starts.

The rules of 26 CFR 601.601(a)(3) apply to the hearing.

Persons who wish to present oral comments at the hearing must

submit written comments and an outline of the topics to be discussed

and the time to be devoted to each topic (signed original and eight (8)

copies) by June 19, 1996.

A period of 10 minutes will be allotted to each person for making

comments.

An agenda showing the scheduling of the speakers will be prepared

after the deadline for receiving outlines has passed. Copies of the

agenda will be available free of charge at the hearing.

[[Page 11596]]

Drafting Information

The principal author of these regulations is Vincent G. Surabian,

Office of the Assistant Chief Counsel (Income Tax & Accounting), IRS.

However, other personnel from the IRS and Treasury Department

participated in their development.

List of Subjects

26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 31

Employment taxes, Income taxes, Penalties, Pensions, Railroad

retirement, Reporting and recordkeeping requirements, Social security,

Unemployment compensation.

Proposed Amendments to the Regulations

Accordingly, 26 CFR parts 1 and 31 are proposed to be amended as

follows:

PART 1--INCOME TAXES

Paragraph 1. The authority citation for part 1 is amended by adding

the following entry to read as follows:

Authority: 26 U.S.C. 7805 * * *

Section 1.6302-4 also issued under 26 U.S.C. 6302(a) and (c). *

* *

Par. 2. Section 1.6302-4 is added to read as follows:

Sec. 1.6302-4 Use of financial institutions in connection with

individual income taxes.

[The text of this proposed section is the same as the text of

Sec. 1.6302-4T published elsewhere in this issue of the Federal

Register].

PART 31--EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT SOURCE

Par. 3. The authority citation for part 31 continues to read in

part as follows:

Authority: 26 U.S.C. 7805 * * *

Par. 4. Proposed Sec. 31.6302-1(h), published July 11, 1994 (59 FR

35418), by cross-referencing temporary regulations published the same

day (59 FR 35414) is amended as follows:

1. Paragraph (h)(1)(ii)(A) is redesignated as paragraph

(h)(1)(ii)(A)(1); the first sentence in the paragraph is removed, and

three new sentences are added in its place; and, in the last sentence

of the newly designated paragraph, the text preceding the table is

revised.

2. Paragraph (h)(1)(ii)(A)(2) is added.

3. Paragraphs (h)(2), (h)(3), (h)(7) and (h)(8) are revised.

The revised and added provisions read as follows:

Sec. 31.6302-1 Federal tax deposit rules for withheld income taxes and

taxes under the Federal Insurance Contributions Act (FICA) attributable

to payments made after December 31, 1992.

[The text of paragraphs (h)(1)(ii)(A)(1), (h)(1)(ii)(A)(2), (h)(2),

(h)(3), (h)(7) and (h)(8) is the same as the text of those paragraphs

in Sec. 31.6302-1T published elsewhere in this issue of the Federal

Register.]

Margaret Milner Richardson,

Commissioner of Internal Revenue.

[FR Doc. 96-6719 Filed 3-20-96; 8:45 am]

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