[Federal Register Volume 66, Number 123 (Tuesday, June 26, 2001)]
[Rules and Regulations]
[Pages 33830-33832]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-15747]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1, 31, 35, 36, 40, 301, and 601

[TD 8952]
RIN 1545-AY10


Removal of Federal Reserve Banks as Federal Depositaries

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations and removal of temporary regulations.

-----------------------------------------------------------------------

SUMMARY: This document contains final regulations which remove the 
Federal Reserve banks as authorized depositaries for Federal tax 
deposits. The regulations affect taxpayers who make Federal tax 
deposits using paper Federal Tax Deposit (FTD) coupons (Form 8109) at 
Federal Reserve banks.

DATES: Effective Date: These regulations are effective June 26, 2001.
    Applicability Date: These regulations apply to deposits made after 
December 31, 2000.

FOR FURTHER INFORMATION CONTACT: Brinton T. Warren, (202) 622-4940 (not 
a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    This document contains amendments to 26 CFR parts 1, 31, 35, 36, 
40, 301, and 601 relating to Federal tax deposits under section 6302(c) 
of the Internal Revenue Code (Code). On December 26, 2000, temporary 
regulations (TD 8918) relating to the removal of Federal Reserve Banks 
as federal depositaries were published in the Federal Register (65 FR 
81356). A notice of proposed rulemaking that proposed the removal of 
Federal Reserve Banks as federal depositaries was published in the 
Federal Register for the same day (65 FR 81453). No comments were 
received from the public in response to the notice of proposed 
rulemaking.

[[Page 33831]]

Explanation of Provisions

    These final regulations, which permanently remove Federal Reserve 
Banks as authorized depositaries for Federal tax deposits, adopt the 
rules of the proposed regulations and remove the corresponding 
temporary regulations. The term Federal Reserve Bank includes twelve 
banks and their approximately two dozen branches that constitute the 
nation's central banking system. The term does not include the 
thousands of federally and state chartered banks that are recognized as 
members of the Federal Reserve System. Accordingly, these final 
regulations do not affect Federal Tax Deposits (FTDs) made with paper 
coupons at any of the more than 10,000 financial institutions 
nationwide that serve as Treasury Tax and Loan (TT&L) depositaries. 
Deposits made through the Electronic Federal Tax Payment System (EFTPS) 
are also not affected.

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in Executive Order 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 the 
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 Brinton T. Warren of 
the Office of Associate Chief Counsel, Procedure and Administration 
(Administrative Provisions and Judicial Practice Division). 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.

26 CFR Part 35

    Employment taxes, Income taxes, Reporting and recordkeeping 
requirements.

26 CFR Part 36

    Employment taxes, Foreign relations, Reporting and recordkeeping 
requirements, Social security.

26 CFR Part 40

    Excise taxes, Reporting and recordkeeping requirements.

26 CFR Part 301

    Administrative practice and procedure, Employment taxes, Estate 
taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and 
recordkeeping requirements.

26 CFR Part 601

    Administrative practice and procedure, Freedom of information, 
Reporting and recordkeeping requirements, Taxes.

Adoption of Amendments to the Regulations

    Accordingly, and under the authority of 26 U.S.C. 7805 and 5 U.S.C. 
301, 26 CFR parts 1, 31, 35, 36, 40, 301 and 601 are amended as 
follows:

PART 1--INCOME TAXES

    Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

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


Sec. 1.6302-1  [Amended]

    Par. 2. Section 1.6302-1 is amended by removing the fifth sentence 
in paragraph (b)(1).


Sec. 1.6302-2  [Amended]

    Par. 3. Section 1.6302-2 is amended by removing the third sentence 
in paragraph (b)(1).

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

    Par. 4. The authority citation for part 31 continues to read in 
part as follows:

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


Sec. 31.6302-1  [Amended]

    Par. 5. Section 31.6302-1 is amended by removing the fourth 
sentence in paragraph (i)(3).


Sec. 31.6302(c)-3  [Amended]

    Par. 6. Section 31.6302(c)-3 is amended by removing the third 
sentence in paragraph (b)(2).

PART 301--PROCEDURE AND ADMINISTRATION

    Par. 7. The authority for part 301 continues to read in part as 
follows:

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


Sec. 301.6302-1T  [Removed]

    Par. 8. Section 301.6302-1T is removed.

PARTS 1, 31, 35, 36, 40, 301, 601  [AMENDED]

    Par. 9. In the list below, for each section indicated in the left 
column, remove the language in the middle column and add, if any, the 
language in the right column:

------------------------------------------------------------------------
           Section                   Remove                  Add
------------------------------------------------------------------------
1.1461-1(a)(1), first         a Federal Reserve     an
 sentence.                     Bank or.
1.1502-5(a)(1), fourth        commercial            financial
 sentence.                     dispositary or        institution
                               Federal Reserve
                               Bank.
1.6151-1(d)(1)..............  Federal Reserve       ....................
                               Banks or.
1.6302-1(b)(1), fourth        214 or, at the        203
 sentence.                     election of the
                               corporation, to a
                               Federal Reserve
                               Bank.
1.6302-1(b)(1), fifth         the Federal Reserve   ....................
 sentence.                     Bank or.
1.6302-2(a)(1)(i), first      a Federal Reserve     an
 sentence.                     Bank or.
1.6302-2(a)(1)(ii), first     a Federal Reserve     an
 sentence.                     Bank or.
1.6302-2(a)(1)(iv), first     a Federal Reserve     an
 sentence.                     Bank or.
1.6302-2(b)(1), second        214 or, at the        203
 sentence.                     election of the
                               withholding agent,
                               to a Federal
                               Reserve Bank.
1.6302-2(b)(1), third         the Federal Reserve   ....................
 sentence.                     Bank or.
1.6302-3(a).................  or with a Federal     ....................
                               Reserve Bank.

[[Page 33832]]

 
31.6071(a)-1(a)(1), last      or by a Federal       ....................
 sentence.                     Reserve Bank.
31.6071(a)-1(c), last         a Federal Reserve     ....................
 sentence.                     Bank or by.
31.6151-1(b), first sentence  Federal Reserve       ....................
                               Banks and.
31.6302-1(c)(1), first        a Federal Reserve     an
 sentence.                     Bank or.
31.6302-1(c)(2)(i)            a Federal Reserve     an
 introductory text.            Bank or.
31.6302-1(c)(3) introductory  a Federal Reserve     an
 text, first sentence.         Bank or.
31.6302-1(i)(3), third        214 or, at the        203
 sentence.                     election of the
                               employer, to a
                               Federal Reserve
                               Bank.
31.6302-1(i)(5).............  the Federal Reserve   ....................
                               Bank or.
31.6302(c)-2A(b)(1)(i)......  with a Federal        ....................
                               Reserve Bank or.
31.6302(c)-2A(b)(3).........  with a Federal        ....................
                               Reserve Bank or.
31.6302(c)-3(a)(1)(i).......  with a Federal        ....................
                               Reserve Bank or.
31.6302(c)-3(a)(1)(ii)......  with a Federal        ....................
                               Reserve Bank or.
31.6302(c)-3(a)(3)..........  with a Federal        ....................
                               Reserve Bank or.
31.6302(c)-3(b)(2), second    214 or, at the        203
 sentence.                     election of the
                               employer, to a
                               Federal Reserve
                               Bank.
31.6302(c)-3(b)(2), third     the Federal Reserve   ....................
 sentence.                     Bank or.
35.3405-1T,e-10A., first      a Federal Reserve     ....................
 sentence.                     Bank or.
36.3121(l)(10)-4............  a Federal Reserve     an
                               Bank or.
40.6302(c)-1(d)(1)..........  214 or to a Federal   203
                               Reserve Bank.
301.6302-1(a)...............  Federal Reserve       authorized financial
                               Banks and             institutions
                               authorized
                               commercial banks.
301.6302-1(b)(1)............  Federal Reserve       authorized financial
                               Banks or authorized   institutions
                               commercial banks.
301.6302-1(b)(2)............  Federal Reserve       authorized financial
                               Banks or authorized   institutions
                               commercial banks.
301.9100-5T(c) concluding     Federal Reserve       ....................
 text.                         Banks and.
601.401(a)(5) heading.......  Federal Reserve       ....................
                               Banks and.
601.401(a)(5)(iii), first     a Federal Reserve     an
 sentence.                     Bank or.
601.401(a)(5)(iii), second    a Federal Reserve     an
 sentence.                     Bank or.
601.401(a)(5)(iv), first      a Federal Reserve     an authorized
 sentence.                     Bank or a financial   financial
                               institution           institution
                               authorized in
                               accordance with
                               Treasury Department
                               Circular No. 1079,
                               revised, to accept
                               remittances of
                               these taxes for
                               transmission to a
                               Federal Reserve
                               Bank.
------------------------------------------------------------------------


Robert E. Wenzel,
Deputy Commissioner of Internal Revenue.

    Approved: June 15, 2001.
Mark A. Weinberger,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 01-15747 Filed 6-25-01; 8:45 am]
BILLING CODE 4830-01-P