[Federal Register Volume 79, Number 207 (Monday, October 27, 2014)]
[Rules and Regulations]
[Pages 63811-63812]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-25475]



Internal Revenue Service

26 CFR Parts 31 and 301

[TD 9699]
RIN 1545-BG53

Removal of the Qualified Payment Card Agent Program

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.


SUMMARY: This document contains final regulations that will remove 
regulations relating to information reporting and backup withholding 
for the Qualified Payment Card Agent (QPCA) Program. This document also 
amends regulations to remove references to the QPCA Program. Enactment 
of the payment card and third party network reporting requirements in 
the Housing Assistance Tax Act of 2008 made the QPCA Program obsolete. 
Because no payors have applied to be designated as a QPCA (and no 
payors have been designated as a QPCA), no taxpayers will be affected 
by these final regulations.

DATES: These regulations are effective October 27, 2014.

FOR FURTHER INFORMATION CONTACT: Michael Hara, (202) 317-5413 (not 
toll-free calls).



    This document amends the Employment Tax Regulations (26 CFR Part 
31) and the Procedure and Administration Regulations (26 CFR Part 301) 
to remove deadwood provisions relating to the now obsolete QPCA 
Program. On March 24, 2014, a notice of proposed rulemaking (REG-
163195-05) was published in the Federal Register (79 FR 15926) 
proposing to remove Sec. Sec.  31.3406(g)-1(f), 301.6724-
1(e)(1)(vi)(H), and 301.6724-1(f)(5)(vii) and amend Sec.  301.6724-
1(c)(6) to remove references to QPCAs. The notice of proposed 
rulemaking also withdrew proposed regulations published in the Federal 
Register on July 13, 2007 relating to the QPCA Program (72 FR 38534). 
No comments were received in response to the proposed regulations.
    Section 6041(a) requires persons engaged in a trade or business and 
making payments in the course of such trade or business to another 
person of rent, salaries, wages, premiums, annuities, compensations, 
remunerations, emoluments, or other fixed or determinable gains, 
profits, and income of $600 or more in any one taxable year to file 
information returns with the IRS and to furnish information statements 
to payees. Among other items, the payor must include the payee's name 
and taxpayer identification number (TIN) on the information return and 
the information statement. Section 3406(a)(1) requires a payor to 
withhold on any reportable payment (as defined in section 3406(b)(1)) 
if: (1) The payee fails to furnish the payee's TIN to the payor as 
required; or (2) the Secretary notifies the payor that the TIN 
furnished by the payee is incorrect.
    The QPCA Program was developed by the IRS to enhance the accuracy 
of section 6041 information reporting in transactions where a payment 
card, such as a credit card, is accepted as

[[Page 63812]]

payment. To implement the QPCA Program, on July 13, 2004, the Treasury 
Department and the IRS published final regulations in the Federal 
Register (TD 9136) (69 FR 41938) under sections 6041, 3406, and 6724. 
The Treasury Department and the IRS also published several pieces of 
guidance in the Internal Revenue Bulletin to implement the program. See 
Notice 2003-13 (2003-1 CB 513 (February 24, 2003)); Revenue Procedure 
2004-42 (2004-2 CB 121 (August 2, 2004)); Revenue Procedure 2004-43 
(2004-2 CB 124 (August 2, 2004)) (see Sec.  601.601(d)(2)(ii)(b) of the 
chapter). In addition, proposed regulations were published on July 13, 
2007 (REG-163195-05 published in the Federal Register (72 FR 38534) and 
a proposed revenue procedure (Notice 2007-59 (2007-30 IRB 135)) was 
published on July 23, 2007. The 2007 proposed regulations were 
withdrawn by the notice of proposed rulemaking (REG-163195-05) 
published in the Federal Register (79 FR 15926) on March 25, 2014.
    Under the QPCA Program, a payment card organization may apply to 
the IRS to be designated as a QPCA. For this purpose, a payment card 
organization was defined as an entity that set the standards and 
provided the mechanism, either directly or indirectly through members 
and affiliates, for effectuating payment between a purchaser and a 
merchant in a payment card transaction. See section 5.06 of Notice 
2007-59. Once designated, the QPCA was permitted to act on behalf of a 
payor/cardholder to solicit, collect, and validate the name and TIN of 
a payee/merchant, and to provide that information to the payor/
cardholder to enable the payor/cardholder to meet its section 6041 
reporting obligation, if any.
    Section 6050W, enacted by the Housing Assistance Tax Act of 2008, 
Public Law 110-289, obsoleted the QPCA Program. Section 6050W requires 
payment settlement entities, including payment card organizations, to 
report payments made in settlement of payment card and third party 
network transactions. Regulations published under section 6050W and 
section 6041 provide, among other things, that payments required to be 
reported under section 6050W are not also required to be reported under 
section 6041. See Sec.  1.6041-1(a)(1)(iv). Because payment card 
organizations now have a reporting obligation with respect to payment 
card transactions, there is no longer a need for payment card 
organizations to solicit, collect, and verify payee/merchant names/TINs 
for the payor/cardholder. Thus, enactment of section 6050W made the 
QPCA Program obsolete.

Explanation of Provisions

    These final regulations adopt the proposed regulations without 
change. Accordingly, the regulations under Sec. Sec.  31.3406(g) 1(f), 
301.6724-1(e)(1)(vi)(H), and 301.6724-1(f)(5)(vii) are removed, and the 
regulations under Sec.  301.6724-1(c)(6) are amended. In addition, 
Revenue Procedure 2004-42, Revenue Procedure 2004-43, Notice 2003-13, 
Notice 2003-37, and Notice 2007-59 are obsoleted. See Sec.  
601.601(d)(2)(ii)(b) of the chapter.

Effective Date

    Sections 31.3406(g)-1(f), 301.6724-1(e)(1)(vi)(H), and 301.6724-
1(f)(5)(vii) would be removed on the date these regulations are 
published as final regulations in the Federal Register. Amendments to 
Sec.  301.6724-1(c)(6) would be effective on the date these regulations 
are published as final in the Federal Register.

Special Analyses

    It has been determined that this Treasury Decision is not a 
significant regulatory action as defined in Executive Order 12866, as 
supplemented by Executive Order 13563. 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. 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, the notice of proposed rulemaking that preceded these final 
regulations was submitted to the Chief Counsel for Advocacy of the 
Small Business Administration for comment on its impact on small 
business and no comments were received.

Effect on Other Documents

    The following publications are obsolete as of October 27, 2014:
    Notice 2003-13 (2003-1 CB 513); Notice 2003-37 (2003-1 CB 1121); 
Rev. Proc. 2004-42 (2004-2 CB 121); Rev. Proc. 2004-43 (2004-2 CB 124); 
and Notice 2007-59 (2007-30 IRB 135) (see Sec.  601.601(d)(2)(ii)(b) of 
the chapter).

Drafting Information

    The principal author of these final regulations is Michael Hara of 
the Office of Associate Chief Counsel (Procedure and Administration).

List of Subjects

26 CFR Part 31

    Employment taxes, Income taxes, Penalties, Pensions, Railroad 
retirement, Reporting and recordkeeping requirements, Social Security, 
Unemployment compensation.

26 CFR Part 301

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

Amendments to the Regulations

    Accordingly, 26 CFR parts 31 and 301 are amended as follows:


Paragraph 1. The authority citation for part 31 continues to read in 
part as follows:

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

Sec.  31.3406(g)-1  [Amended]

Par. 2. Section 31.3406(g)-1 is amended by removing paragraph (f).


Par. 3. The authority citation for part 301 continues to read in part 
as follows:

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

Sec.  301.6724-1  [Amended]

Par. 4. Section 301.6724-1 is amended by:
a. Removing the language ``or a qualified Payment Card Agent (QPCA) as 
defined in Sec.  31.3406(g)-1(f)(2)(v) of this chapter,'' from the 
introductory text of paragraph (c)(6).
b. Removing paragraphs (e)(1)(vi)(H) and (f)(5)(vii).

    Approved: October 9, 2014.
John Dalrymple,
Deputy Commissioner for Services and Enforcement.
Mark J. Mazur,
Assistant Secretary of Treasury (Tax Policy).
[FR Doc. 2014-25475 Filed 10-24-14; 8:45 am]