[Federal Register Volume 64, Number 116 (Thursday, June 17, 1999)]
[Rules and Regulations]
[Pages 32408-32409]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-15182]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 31

[TD 8822]
RIN 1545-AW28


Federal Employment Tax Deposits--De Minimis Rule

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

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SUMMARY: This document contains final regulations relating to the 
deposit of Federal employment taxes. The final regulations adopt the 
rules of temporary regulations that change the de minimis deposit rule 
for quarterly and annual return periods from $500 to $1,000. The 
regulations affect taxpayers required to make deposits of Federal 
employment taxes.

DATES: Effective date: These regulations are effective June 17, 1999.
    Applicability date: For dates of applicability, see Sec. 31.6302-
1(f)(4).

FOR FURTHER INFORMATION CONTACT: Vincent Surabian, (202) 622-4940 (not 
a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    This document contains amendments to 26 CFR part 31, Employment 
Taxes and Collection of Income Tax at Source. On June 16, 1998, 
temporary and final regulations (TD 8771) relating to the deposit of 
Federal employment taxes under section 6302 of the Internal Revenue 
Code were published in the Federal Register (63 FR 32735). A notice of 
proposed rulemaking (REG-110403-98) cross-referencing the temporary 
regulations was published in the Federal Register for the same day (63 
FR 32774). No comments were received from the public in response to the 
notice of proposed rulemaking.

Explanation of Provisions

    These final regulations adopt the rules of the temporary 
regulations. Under these rules, a taxpayer that has accumulated Federal 
employment taxes of less than $1,000 for a return period (quarterly or 
annual, as the case may be) does not have to make deposits but may 
remit its full liability with a timely filed return for the return 
period. The regulations are effective with respect to quarterly return 
periods beginning on or after July 1, 1998, and annual return periods 
beginning on or after January 1, 1999.

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 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, the notice of 
proposed rulemaking preceding these regulations was submitted to the 
Chief Counsel for Advocacy of the Small Business Administration for 
comment on its impact on small business.

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.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR part 31 is 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 
removing the entry for Section 31.6302-1T to read in part as follows:

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

    Par. 2. In Sec. 31.6302-1, paragraph (f)(4) is revised to read as 
follows:

[[Page 32409]]

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.

* * * * *
    (f) * * *
    (4) De Minimis rule. For quarterly return periods beginning on or 
after July 1, 1998, and annual return periods beginning on or after 
January 1, 1999, if the total amount of accumulated employment taxes 
for the return period is less than $1,000 and the amount is fully 
deposited or remitted with a timely filed return for the return period, 
the amount deposited or remitted will be deemed to have been timely 
deposited.
* * * * *


Sec. 31.6302-1T  [Removed]

    Par. 3. Section 31.6302-1T is removed.
Robert E. Wenzel,
Deputy Commissioner of Internal Revenue.

    Approved: June 9, 1999.
Donald C. Lubick,
Assistant Secretary of the Treasury.
[FR Doc. 99-15182 Filed 6-16-99; 8:45 am]
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