Regulations - Voluntary withholding agreements 

November 27: The Treasury Department and IRS today released for publication in the Federal Register temporary regulations (T.D. 9646) and by cross-reference, proposed regulations (REG-146620-13) relating to voluntary withholding agreements for amounts paid to employees that are not wages and for other payments.

Background

Section 3402(p) provides for voluntary income tax withholding agreements, and authorizes the Secretary to provide regulations for withholding from:


  • Remuneration for services performed by an employee for the employee's employer that does not constitute wages
  • 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

Regulations

Today’s temporary regulations [PDF 14 KB] and proposed regulations [PDF 196 KB]—


  • Allow the Secretary to describe other payments that may be subject to voluntary withholding agreements in future guidance (to be published in the Internal Revenue Bulletin)
  • Provide that the future IRB guidance will set forth requirements regarding the form and duration of the voluntary withholding agreement specific to the type of payment from which withholding is authorized

According to the preamble, by expanding the use of voluntary withholding agreements to payments designated as eligible for voluntary withholding, these regulations permit taxpayers to use the withholding regime (rather than the estimated tax payment process) to meet their tax payment obligations on a timely basis.


These regulations will appear in the Federal Register on Friday, November 29, 2013. Comments and/or requests for a public hearing are due 90 days after November 29.




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