For Tax Professionals  
REG-110403-98 June 24, 1998

Federal Employment Tax Deposits--De Minimis Rule

DEPARTMENT OF THE TREASURY
Internal Revenue Service  26 CFR Part 31 [REG-110403-98] RIN 1545-
AW28

TITLE: Federal Employment Tax Deposits--De Minimis Rule

AGENCY: Internal Revenue Service (IRS), Treasury.

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

SUMMARY: In the Rules and Regulations section of this issue of the
Federal Register, the IRS is issuing temporary regulations relating
to the deposits of Federal employment taxes. The text of those
regulations also serves as the text of these proposed regulations.

DATES: Written comments and requests for a public hearing must be
received by September 14, 1998.

ADDRESSES: Send submissions to: CC:DOM:CORP:R (REG-110403-98), room
5226, Internal Revenue Service, POB 7604, Ben Franklin Station,
Washington, DC 20044. Submissions may be hand delivered between the
hours of 8:00 a.m. and 5 p.m. to: CC:DOM:CORP:R (REG-110403-98),
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
on 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: Concerning submissions, Michael
Slaughter, (202) 622-7180; concerning the regulations, Vincent
Surabian, (202) 622-4940 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions Temporary regulations in
the Rules and Regulations section of this issue of the Federal
Register amend the Employment Tax and Collection of Income Tax at
Source Regulations (26 CFR part 31) relating to section 6302. The
temporary regulations change the de minimis rule for the deposit of
Federal employment taxes.

The text of those regulations also serves as the text of these
proposed regulations. The preamble to the temporary regulations
explains the amendments.

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 a
collection of information on small entities, the Regulatory
Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to
section 7805(f) of the Internal Revenue 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 these proposed regulations are adopted as final regulations,
consideration will be given to any comments 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 by any person that timely submits 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 these regulations is Vincent Surabian,
Office of Assistant Chief Counsel (Income Tax & Accounting).
However, other personnel from the IRS and Treasury Department
participated in their development.

List of Subjects in 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 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. In 31.6302-1, paragraph (f)(4) is revised to read as
follows:.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 .

* * * * *

(f) * * *

(4) [The text of proposed 31.6302-1(f)(4) is the same as the text
of 31.6302-1T(f)(4)].

* * * * *

Deputy Commissioner of Internal Revenue


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