[Federal Register Volume 78, Number 230 (Friday, November 29, 2013)]
[Proposed Rules]
[Pages 71542-71543]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-28529]



Internal Revenue Service

26 CFR Part 31

RIN 1545-BL92

Authority for Voluntary Withholding on Other Payments

AGENCY: Internal Revenue Service (IRS), Treasury.

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


SUMMARY: This document contains proposed regulations under the Internal 
Revenue Code (Code) relating to voluntary withholding agreements. In 
the Rules and Regulations of this issue of the Federal Register, the 
IRS is also issuing temporary regulations to allow the Secretary to 
issue guidance in the Internal Revenue Bulletin to describe payments 
for which the Secretary finds that income tax withholding under a 
voluntary withholding agreement would be appropriate. The text of those 
temporary regulations also generally serves as the text of these 
proposed regulations. The regulations affect persons making and persons 
receiving payments for which the IRS issues subsequent guidance 
authorizing the parties to enter into voluntary withholding agreements.

DATES: Written or electronic comments and requests for a public hearing 
must be received by February 25, 2014.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-146620-13), room 
5203, Internal Revenue Service, PO Box 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-
146620-13), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue NW., Washington, DC, or sent electronically via the Federal 
eRulemaking Portal at http://www.regulations.gov (IRS REG-146620-13).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Linda L. Conway-Hataloski at (202) 317-6798; concerning submission of 
comments and request for hearing, Oluwafunmilayo (Funmi) Taylor at 
(202) 317-5179 (not toll-free numbers).



    Section 3402(p) allows for voluntary income tax withholding 
agreements. Section 3402(p)(3) authorizes the Secretary to provide 
regulations for withholding from (A) remuneration for services 
performed by an employee for the employee's employer which does not 
constitute wages, and (B) from any other payment with respect to which 
the Secretary finds that withholding would be appropriate, if the 
employer and employee, or the person making and the person receiving 
such other type of payment, agree to such withholding. Section 
3402(p)(3) also authorizes the Secretary to prescribe in regulations 
the form and manner of such agreement. Section 31.3402(p)-1 of the 
Employment Tax Regulations describes how an employer and an employee 
may enter into an income tax withholding agreement under section 
3402(p) for amounts that are excepted from the definition of wages in 
section 3401(a).

Explanation of Provisions

    The proposed regulations amend the headings to paragraphs (a) and 
(b) of Sec.  31.3402(p)-1 to clarify that those paragraphs apply to 
voluntary withholding agreements between an employer and employee. 
Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register also amend the Employment Tax Regulations 
(26 CFR part 31) under section 3402(p). The text of those temporary 
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, as supplemented by Executive Order 13563. Therefore, a 
regulatory assessment is not required. It has also been determined that 
5 U.S.C. 533(b) of the Administrative Procedure Act (5 U.S.C. chapter 
5) does not apply to these regulations and because the regulation does 
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, these 
regulations have been submitted to the Office of Chief Counsel for 
Advocacy of the Small Business Administration for comment on their 
impact on small business.

Comments and Requests for 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 as prescribed in the ADDRESSES heading in this preamble. The 
IRS and Treasury Department request comments on all aspects of the 
proposed regulations. All comments will be available at 
www.regulations.gov or upon request.
    A public hearing will be scheduled if requested in writing by any 
person that timely submits written comments. If a public hearing is 
scheduled, notice of the date, time, and place for the public hearing 
will be published in the Federal Register.

Drafting Information

    The principal author of these regulations is Linda L. Conway-
Hataloski, Office of Associate Chief Counsel (Tax Exempt and Government 
Entities). 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:


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

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

Par. 2. Section 31.3402(p)-1 is amended by:

[[Page 71543]]

1. Revising the headings of paragraphs (a) and (b).
2. Removing the language ``3402(b)'' in the first sentence and 
``3402(p)'' in the third sentence and adding ``3402(p)(3)(A)'' in its 
place as it appears in paragraph (a) and the five places ``3402(p) as 
it appears in paragraph (b).
3. Adding paragraphs (c) and (d).
    The revisions and additions read as follows:

Sec.  31.3402(p)-1  Voluntary Withholding Agreements.

    (a) Employer-employee agreement. * * *
* * * * *
    (b) Form and duration of employer-employee agreement. * * *
* * * * *
    (c) [The text of this paragraph (c) is the same as the text of 
paragraph (c) of Sec.  31.3402(p)-1T published elsewhere in this issue 
of the Federal Register].
    (d) [The text of this paragraph (d) is the same as the text of 
paragraph (d)(1) of Sec.  31.3402(p)-1T published elsewhere in this 
issue of the Federal Register].

John Dalrymple,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2013-28529 Filed 11-27-13; 8:45 am]