[Federal Register Volume 70, Number 71 (Thursday, April 14, 2005)]
[Proposed Rules]
[Pages 19721-19722]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-6719]


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

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 31

[REG-162813-04]
RIN 1545-BE20


Withholding Exemptions

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations and notice of public hearing.

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

SUMMARY: In the Rules and Regulations section of this issue of the 
Federal Register, the IRS is issuing temporary regulations providing 
guidance under section 3402(f) of the Internal Revenue Code (Code) for 
employers and employees relating to the Form W-4, ``Employee's 
Withholding Allowance Certificate.'' The temporary regulations provide 
rules for the submission of copies of certain withholding exemption 
certificates to the IRS, the notification provided to the employer and 
the employee of the maximum number of withholding exemptions permitted, 
and the use of substitute forms. The text of the temporary regulations 
also serves as the text of these proposed regulations. This document 
also provides notice of a public hearing on these proposed regulations.

DATES: Written or electronic comments must be received by July 5, 2005. 
Requests to speak (with outlines of topics to be discussed) at the 
public hearing scheduled for July 26, 2005, must be received by July 5, 
2005.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-162813-04), room 
5203, Internal Revenue Service, POB 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand delivered Monday through 
Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-
162813-04), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue NW., Washington, DC. Alternatively, taxpayers may submit 
comments electronically via the IRS Internet site at www.irs.gov/regs 
or via the Federal eRulemaking Portal at www.regulations.gov (IRS-REG-
162813-04). The public hearing will be held in the Auditorium, Internal 
Revenue Building, 1111 Constitution Avenue, NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Margaret A. Owens, (202) 622-0047; concerning submission of comments, 
the hearing, and/or to be placed on the building access list to attend 
the hearing, Guy Traynor, (202) 622-7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION: 

Paperwork Reduction Act

    These proposed regulations do not impose any new information 
collection. The Office of Management and Budget (OMB) previously 
approved the information collection requirements concerning Form W-4 
contained in the regulation under section 6001 (Sec.  31.6001-5; OMB 
Control No. 1545-0798) and in the regulation under section 3402 (Sec.  
31.3402(f)(2)-1; OMB Control No.1545-0010) under the provisions of the 
Paperwork Reduction Act, 44 U.S.C. 3501 et seq. Books or records 
relating to a collection of information must be retained as long as 
their contents may become material in the administration of any 
internal revenue law. Generally, tax returns and tax return information 
are confidential, as required by 26 U.S.C. 6103.

Background

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register amend the Employment Tax Regulations (26 
CFR part 31) relating to the Form W-4, ``Employee's Withholding 
Allowance Certificate.'' These temporary regulations provide rules for 
the submission of copies of certain withholding exemption certificates 
to the IRS, the notification provided to the employer and the employee 
of the maximum number of withholding exemptions permitted, and the use 
of substitute forms. 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 Executive Order 
12866. Therefore, a

[[Page 19722]]

regulatory assessment is not required. It has also 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 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 Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any written (a signed original and eight 
(8) copies) or electronic comments that are submitted timely to the 
IRS. The Treasury Department and the IRS request comments on the 
clarity of the proposed rules and how they can be made easier to 
understand. The Treasury Department and the IRS are considering 
additional amendments to the regulations under section 3402 to address 
other issues including, but not limited to, the criteria for 
identifying a valid withholding exemption certificate. The Treasury 
Department and the IRS specifically welcome comments on this issue. All 
comments will be available for public inspection and copying. A public 
hearing has been scheduled for July 26, 2005, at 10 a.m., in the 
Auditorium, Internal Revenue Building, 1111 Constitution Avenue, NW., 
Washington DC. Due to building security procedures, visitors must enter 
at the Constitution Avenue entrance. In addition, all visitors must 
present photo identification to enter the building. Because of access 
restrictions, visitors will not be admitted beyond the immediate 
entrance area more than 30 minutes before the hearing starts. For 
information about having your name placed on the building access list 
to attend the hearing, see the FOR FURTHER INFORMATION CONTACT section 
of this preamble.
    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 comments and 
an outline of the topics to be discussed and the time to be devoted to 
each topic by July 5, 2005.
    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.

Drafting Information

    The principal author of these proposed regulations is Margaret A. 
Owens, Office of the Division Counsel/Associate Chief Counsel (Tax 
Exempt and Government Entities), IRS. However, other personnel from the 
IRS and the Treasury Department participated in the development of 
these proposed regulations.

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

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

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

    Par 2. Section 31.3402(f)(2)-1 is amended by revising paragraph (g) 
to read as follows:


Sec.  31.3402(f)(2)-1  Withholding exemption certificates.

[The text of proposed Sec.  31.3402(f)(2)-1(g) is the same as the text 
of Sec.  31.3402(f)(2)-1T(g) published elsewhere in this issue of the 
Federal Register].
    Par. 3. Section 31.3402(f)(5)-1 is amended by revising paragraph 
(a) to read as follows:


Sec.  31.3402(f)(5)-1  Form and contents of withholding exemption 
certificates.

[The text of proposed Sec.  31.3402(f)(5)-1(a) is the same as the text 
of Sec.  31.3402(f)(5)-1T(a) published elsewhere in this issue of the 
Federal Register].
* * * * *

Mark E. Matthews,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 05-6719 Filed 4-13-05; 8:45 am]
BILLING CODE 4830-01-P