UNITED STATES CODE ANNOTATED
TITLE 2. THE CONGRESS
CHAPTER 4 -- OFFICERS AND EMPLOYEES OF SENATE AND HOUSE OF
REPRESENTATIVES
Current through P.L. 104-194, approved 9-9-96
Sec. 60c-3. Withholding and remittance of State income tax by
Secretary of Senate
(a) Agreement by Secretary with appropriate State official;
covered individuals
Whenever --
(1) the law of any State provides for the collection of an
income tax by imposing upon employers generally the duty of
withholding sums from the compensation of employees and remitting
such sums to the authorities of such State; and
(2) such duty to withhold is imposed generally with respect
to the compensation of employees who are residents of such State;
then the Secretary of the Senate is authorized, in accordance
with the provisions of this section, to enter into an agreement
with the appropriate official of that State to provide for the
withholding and remittance of sums for individuals --
(A) whose pay is disbursed by the Secretary; and
(B) who request the Secretary to make such withholdings for
remittance to that State.
(b) Number of remittances authorized
Any agreement entered into under subsection (a) of this
section shall not require the Secretary to remit such sums more
often than once each calendar quarter.
(c) Requests by individuals of Secretary for withholding and
remittance; amount of withholding; number and effective date of
requests; change of designated State; revocation of request;
rules and regulations
(1) An individual whose pay is disbursed by the Secretary
may request the Secretary to withhold sums from his pay for
remittance to the appropriate authorities of the State that he
designates. Amounts of withholdings shall be made in accordance
with those provisions of the law of that State which apply
generally to withholding by employers.
(2) An individual may have in effect at any time only one
request for withholdings, and he may not have more than two such
requests in effect with respect to different States during any
one calendar year. The request for withholdings is effective on
the first day of the first month commencing after the day on
Qualified State Tax References:
Page 1 of 148
which the request is received in the Disbursing Office of the
Senate, except that --
(A) when the Secretary first enters into an agreement with a
State, a request for withholdings shall be effective on such date
as the Secretary may determine; and
(B) when an individual first receives an appointment, the
request shall be effective on the day of appointment, if the
individual makes the request at the time of appointment.
(3) An individual may change the State designated by him for
the purposes of having withholdings made and request that the
withholdings be remitted in accordance with such change, and he
may also revoke his request for withholdings. Any change in the
State designated or revocation is effective on the first day of
the first month commencing after the day on which the request for
change or the revocation is received in the Disbursing Office.
(4) The Secretary is authorized to issue rules and
regulations he considers appropriate in carrying out this
subsection.
(d) Time or times of agreements by Secretary
The Secretary may enter into agreements under subsection (a)
of this section at such time or times as he considers
appropriate.
(e) Provisions as not imposing duty, burden, requirement or
penalty on the United States, Senate, or any officer or employee
of United States; effect of filing paper, form, or document with
Secretary
This section imposes no duty, burden, or requirement upon
the United States, the Senate, or any officer or employee of the
United States, except as specifically provided in this section.
Nothing in this section shall be deemed to consent to the
application of any provision of law which has the effect of
subjecting the United States, the Senate, or any officer or
employee of the United States to any penalty or liability by
reason of the provisions of this section. Any paper, form, or
document filed with the Secretary under this section is a paper
of the Senate within the provisions of rule XXX of the Standing
Rules of the Senate.
(f) "State" defined
For the purposes of this section, "State" means any of the
States of the United States and the District of Columbia.
CREDIT(S)
1985 Main Volume
(P.L. 93-371, Sec. 101(2), Aug. 13, 1974, 88 Stat. 427.)
Qualified State Tax References:
Page 2 of 148
HISTORICAL NOTES
HISTORICAL AND STATUTORY NOTES
References in Text
The Standing Rules of the Senate, referred to in subsec.
(e), were revised generally in 1979. Provisions relating to
withdrawal of papers from the files of the Senate which were
formerly contained in Rule XXX of the Standing Rules of the
Senate are contained in Rule XI of the Standing Rules of the
Senate.
REFERENCES
CROSS REFERENCES
Withholding of District of Columbia and State income taxes by
Clerk and Sergeant at Arms of the House of Representatives, see 2
USCA 60e-1a.
Withholding of District of Columbia and State income taxes
generally, see 5 USCA 5516 and 5517.
Withholding of State income taxes by Architect of the Capitol,
see 40 USCA 166b-5.
2 USCA 60c-3, Withholding and remittance of State income tax by
Secretary of Senate
------------ Excerpt from pages 30758-30759
UNITED STATES CODE ANNOTATED
TITLE 2. THE CONGRESS
CHAPTER 4 -- OFFICERS AND EMPLOYEES OF SENATE AND HOUSE OF
REPRESENTATIVES
Current through P.L. 104-194, approved 9-9-96
Sec. 60e-1a. Withholding of State income tax by Chief
Administrative Officer of the House
(a) Agreement with proper State official; covered individuals
Until otherwise provided by law, the Chief Administrative
Officer of the House of Representatives shall, in accordance with
subsections (b), (c), and (d) of this section enter into an
agreement with any State, at the request for agreement from the
proper State official. The agreement shall provide that the
Chief Administrative Officer shall withhold State income tax in
the case of each Member and employee who is subject to such
income tax and who voluntarily requests such withholding.
(b) Number of remittances authorized
Qualified State Tax References:
Page 3 of 148
Any agreement entered into under subsection (a) of this
section shall not require the Chief Administrative Officer to
remit sums withheld pursuant to any such agreement more often
than once each calendar quarter.
(c) Acceptance or disapproval of proposed agreement by Committee
on House Administration
(1) The Chief Administrative Officer shall, before entering
into any agreement under subsection (a) of this section, transmit
a statement with respect to the proposed agreement to the
Committee on House Administration of the House of Representatives
(hereinafter in this section and section 60e-1b of this title
referred to as the "committee"). Such statement shall set forth
a detailed description of the proposed agreement, together with
any other information which the committee may require.
(2) If the committee does not disapprove, through
appropriate action, any proposed agreement transmitted to the
committee under paragraph (1) no later than ten legislative days
after receiving such proposed agreement, then the Chief
Administrative Officer may enter into such proposed agreement.
The Chief Administrative Officer may not enter into any proposed
agreement if such proposed agreement is disapproved by the
committee under this paragraph.
(d) Number and effective date of requests for withholding;
change of designated State; revocation of request
(1) A Member or employee may have in effect at any time only
one request for withholding under subsection (a) of this section,
and such Member or employee may not have more than two such
requests in effect with respect to different States during any
one calendar year. The request for withholding is effective on
the first day of the month in which the request is processed by
the Chief Administrative Officer, but in no event later than on
the first day of the first month beginning after the day on which
such request is received by the Chief Administrative Officer,
except that --
(A) when the Chief Administrative Officer first enters into
an agreement with a State under subsection (a) of this section, a
request for withholding shall be effective on such date as the
Chief Administrative Officer may determine;
(B) when an individual first receives an appointment as an
employee, the request shall be effective on the day of
appointment, if the individual makes the request at the time of
appointment; and
(C) when an individual first becomes a Member, the request
shall be effective on the day such individual takes the oath of
office as a Member, if the individual makes the request at such
time.
(2) A Member or employee may change the State designated by
Qualified State Tax References:
Page 4 of 148
such Member or employee for purposes of having withholdings made,
and may request that the withholdings be remitted in accordance
with such change. A Member or employee also may revoke any
request of such Member or employee for withholding. Any change
in the State designated or revocation is effective on the first
day of the month in which the request or the revocation is
processed by the Chief Administrative Officer, but in no event
later than on the first day of the first month beginning after
the day on which such request or revocation is received by the
Chief Administrative Officer.
(e) Provisions as not imposing duty, burden, requirement, or
penalty on United States, House, or any officer or employee of
United States; effect of filing paper, form, or document with
Chief Administrative Officer
This section and section 60e-1b of this title impose no
duty, burden, or requirement upon the United States, the House of
Representatives, or any officer or employee of the United States,
except as specifically provided in this section and section 60e-
1b of this title. Nothing in this section and section 60e-1b of
this title shall be deemed to consent to the application of any
provision of law which has the effect of subjecting the United
States, the House of Representatives, or any officer or employee
of the United States to any penalty or liability by reason of the
provisions of this section and section 60e-1b of this title. Any
paper, form, document, or any other item filed with, or submitted
to, the Chief Administrative Officer under this section and
section 60e-1b of this title is considered to be a paper of the
House of Representatives within the provisions of the Rules of
the House of Representatives.
CREDIT(S)
1985 Main Volume
(P.L. 94-440, Title II, Sec. 101, Oct. 1, 1976, 90 Stat. 1448.)
1996 Electronic Update
(As amended P.L. 104-186, Title II, Sec. 204(4), Aug. 20, 1996,
110 Stat. 1730.)
HISTORICAL NOTES
HISTORICAL AND STATUTORY NOTES
Codification
Section is based on section 1 of House Resolution No. 732,
Ninety-fourth Congress, Nov. 4, 1975, which was enacted into
permanent law by P.L. 94-440.
Change of Name
Any reference in any provision of law enacted before Jan. 4,
1995, to the Committee on House Administration of the House of
Qualified State Tax References:
Page 5 of 148
Representatives treated as referring to the Committee on House
Oversight of the House of Representatives, see section 1(a)(7) of
P.L. 104-14, set out as a note preceding section 21 of this
title.
Transfer of Functions
Any reference in any provision of law enacted before Jan. 4,
1995, to a function, duty, or authority of the Clerk of the House
of Representatives treated as referring, with respect to that
function, duty, or authority, to the officer of the House of
Representatives exercising that function, duty, or authority, as
determined by the Committee on House Oversight of the House of
Representatives, see section 2(1) of P.L. 104-14, set out as a
note preceding section 21 of this title.
Certain functions of Clerk and Sergeant at Arms of House of
Representatives transferred to Director of Non-legislative and
Financial Services by section 7 of House Resolution No. 423, One
Hundred Second Congress, Apr. 9, 1992. Any reference in any
provision of law enacted before Jan. 4, 1995, to a function,
duty, or authority of the Director of Non-legislative and
Financial Services treated as referring, with respect to that
function, duty, or authority, to the officer of the House of
Representatives exercising that function, duty, or authority, as
determined by the Committee on House Oversight of the House of
Representatives, see section 2(4) of P.L. 104-14, set out as a
note preceding section 21 of this title.
Legislative History
For legislative history and purpose of P.L. 104-186, see
1996 U.S. Code Cong. and Adm. News, p. ___.
REFERENCES
CROSS REFERENCES
Definitions for purposes of this section, see 2 USCA 60e-1b.
Withholding of District of Columbia and State income taxes by
Secretary of the Senate, see 2 USCA 60c-3.
Withholding of District of Columbia and State income taxes
generally, see 5 USCA 5516 and 5517.
Withholding of State income taxes by Architect of the Capitol,
see 40 USCA 166b-5.
2 USCA 60e-1a, Withholding of State income tax by Chief
Administrative Officer of the House
------------ Excerpt from pages 30767-30769
UNITED STATES CODE ANNOTATED
Qualified State Tax References:
Page 6 of 148
TITLE 3. THE PRESIDENT
CHAPTER 4 -- DELEGATION OF FUNCTIONS
Current through P.L. 104-194, approved 9-9-96
Sec. 301. General authorization to delegate functions;
publication of delegations
The President of the United States is authorized to
designate and empower the head of any department or agency in the
executive branch, or any official thereof who is required to be
appointed by and with the advice and consent of the Senate, to
perform without approval, ratification, or other action by the
President (1) any function which is vested in the President by
law, or (2) any function which such officer is required or
authorized by law to perform only with or subject to the
approval, ratification, or other action of the President:
Provided, That nothing contained herein shall relieve the
President of his responsibility in office for the acts of any
such head or other official designated by him to perform such
functions. Such designation and authorization shall be in
writing, shall be published in the Federal Register, shall be
subject to such terms, conditions, and limitations as the
President may deem advisable, and shall be revocable at any time
by the President in whole or in part.
CREDIT(S)
1985 Main Volume
(Added Oct. 31, 1951, c. 655, Sec. 10, 65 Stat. 712.)
[General Materials (GM) - References, Annotations, or Tables]
HISTORICAL NOTES
HISTORICAL AND STATUTORY NOTES
Transfer of Functions
All functions vested by law (including reorganization plan)
in the Bureau of the Budget or the Director of the Bureau of the
Budget were transferred to the President of the United States by
section 101 of 1970 Reorg. Plan No. 2, eff. July 1, 1970, 35 F.R.
7959, 84 Stat. 2085. Section 102 of 1970 Reorg. Plan. No. 2,
redesignated the Bureau of the Budget as the Office of Management
and Budget and the Director of the Bureau of the Budget as
Director of the Office of Management and Budget. See
Reorganization Plan No. 2 of 1970, set out in Appendix 1 to Title
5, Government Organization and Employees.
Similar Provisions; Repeal; Savings Clause
For similar provisions contained in prior law, and saving
clause in connection therewith, see note preceding this section.
Qualified State Tax References:
Page 7 of 148
Standards of Ethical Conduct and Comprehensive System of
Financial Reporting for Officers and Employees in the Executive
Branch
For provisions relating to standards of ethical conduct for
government officers and employees, including financial reporting
requirements for such persons, see Ex. Ord. No. 11222, May 8,
1965, 30 F.R. 6469, as amended, set out as a note under section
201 of Title 18, Crimes and Criminal Procedure.
Abolition of Interstate Commerce Commission and Transfer of
Functions
Interstate Commerce Commission abolished and functions of
Commission transferred, except as otherwise provided in P.L. 104-
88, to Surface Transportation Board effective Jan. 1, 1996, by
section 702 of Title 49, Transportation, and section 101 of P.L.
104-88, set out as a note under section 701 of Title 49.
References to Interstate Commerce Commission deemed to refer to
Surface Transportation Board, a member or employee of the Board,
or Secretary of Transportation, as appropriate, see section 205
of P.L. 104-88, set out as a note under section 701 of Title 49.
Legislative History
For legislative history and purpose of Act Oct. 31, 1951,
see 1951 U.S.Code Cong. Service, p. 2578.
TEXT
EXECUTIVE ORDERS
EXECUTIVE ORDER NO. 10250
June 5, 1951, 16 F.R. 5385, as amended by Ex. Ord. No. 10732,
Oct. 10, 1957, 22 F.R. 8135; Ex. Ord. No. 10752, Feb. 12, 1958,
23 F.R. 973
DELEGATION OF FUNCTIONS TO THE SECRETARY OF THE INTERIOR
1. The Secretary of the Interior is hereby designated and
empowered to perform the following-described functions of the
President without the approval, ratification, or other action of
the President:
(a) The authority vested in the President by section 1 of
the act of July 10, 1935, ch. 375, 49 Stat. 477 [see sections 19e
to 19n of Title 16], to appoint members of the National Park
Trust Fund Board.
(b) The authority vested in the President by section 2059 of
the Revised Statutes [section 62 of Title 25] to discontinue any
Indian agency, or transfer the same, from the place or tribe
designated by law to such other place or tribe as the public
service may require.
(c) The authority vested in the President by section 6 of
Qualified State Tax References:
Page 8 of 148
the act of May 17, 1882, ch. 163, 22 Stat. 88, as amended
[section 63 of Title 25], to consolidate two or more Indian
agencies into one, to consolidate one or more Indian tribes, and
to abolish such agencies as are thereby rendered unnecessary.
(d) The authority vested in the President by the act of
March 1, 1907, ch. 2285, 34 Stat. 1016 [section 140 of Title 25],
to divert appropriations made for certain purposes to other uses
for the benefit of the several Indian tribes: Provided, that the
Secretary of the Interior shall make to the Congress reports
required in connection with action taken by him under this
provision.
(e) The authority vested in the President by section 5 of
the act of February 8, 1887, ch. 119, 24 Stat. 389, as amended
[section 348 of Title 25], by the act of December 24, 1942, ch.
814, 56 Stat. 1081, [section 348a of Title 25], by the act of
June 21, 1906, ch. 3504, 34 Stat. 326 [section 391 of Title 25],
and by section 3 of the act of January 12, 1891, 26 Stat. 712, as
amended by section 3 of the act of March 2, 1917, ch. 146, 39
Stat. 976, to extend trust periods on land patents issued to
Indians and to continue restrictions on alienation.
(f) The authority vested in the President by section 4705(b)
of the Internal Revenue Code of 1954 [former section 4705(b) of
Title 26] to authorize certain persons in the Virgin Islands to
obtain certain drugs for legitimate medical purposes without
regard to order forms, and by section 4762(b) of such Code
[former section 4762 of Title 26] to provide for the registration
of and the imposition of special and transfer taxes upon persons
in the Virgin Islands who import, manufacture, produce, compound,
sell, deal in, dispense, prescribe, administer, or give away
marihuana: Provided, that the Secretary of the Interior shall
perform the functions referred to in this subsection in
consultation with the Department of the Treasury.
(g) The authority vested in the President by section 2343 of
the Revised Statutes [section 46 of Title 30] to establish
additional land districts and to appoint necessary officers under
existing laws when deemed necessary for the public convenience in
executing certain provisions of law with respect to mineral lands
and mining.
(h) The authority vested in the President by section 2252 of
the Revised Statutes as affected by section 403 of Reorganization
Plan No. 3 of 1946, 60 Stat. 1100 [section 121 of Title 43], to
order the discontinuance of any land office and the transfer of
any of its business and archives to any other land office within
the same State or Territory.
(i) The authority vested in the President by section 2250 of
the Revised Statutes [section 125 of Title 43] to discontinue a
land office in a land district under certain circumstances and to
annex the same to some other adjoining land district.
(j) The authority vested in the President by section 2251 of
the Revised Statutes [section 126 of Title 43] to change the
Qualified State Tax References:
Page 9 of 148
location of the land offices in the several land districts
established by law and to relocate the same from time to time at
such point in the district as may be deemed expedient.
(k) The authority vested in the President by section 2253 of
the Revised Statutes [section 127 of Title 43] to change and re-
establish the boundaries of land districts.
(l) The authority vested in the President by section 2 of
the act of March 2, 1917, ch. 145, 39 Stat. 951, as amended
[section 737 of Title 48], to approve the payment out of the
Treasury for other purposes of money derived from any tax levied
or assessed for a special purpose in Puerto Rico.
(m) The authority vested in the President by section 7 of
the act of March 2, 1917, ch. 145, 39 Stat. 954; as amended
[section 748 of Title 48], to convey to the people of Puerto Rico
lands, buildings, or interests in lands, or other property owned
by the United States, and to accept lands, buildings, or other
interests or property by legislative grant from Puerto Rico.
(n) The authority vested in the President by section 3(b) of
the Act of March 3, 1925, ch. 426, 43 Stat. 1111, as amended [see
section 167d of Title 50], to approve regulations governing the
production and sale of helium for medical, scientific, and
commercial use.
(o) The authority vested in the President by section 6 of
the act of April 26, 1906, ch. 1876, 34 Stat. 139, to remove from
office the principal chief of the Choctaw, Cherokee, Creek, or
Seminole tribe or the governor of the Chickasaw tribe, to declare
any such office vacant, and to fill any vacancy in any such
office arising from removal, disability, or death of the
incumbent.
(p) The authority vested in the President by section 28 of
the act of April 26, 1906, ch. 1876, 34 Stat. 148, to approve
acts, ordinances, or resolutions of the tribal council or
legislature of the Choctaw, Chickasaw, Cherokee, Creek, and
Seminole tribes or nations, and to approve contracts, involving
the payment or expenditure of money or affecting property
belonging to any of the said tribes or nations, made by them or
any of them or by any officer thereof.
(q) [Superseded by section 3 of Ex. Ord. No. 10752, Feb. 12,
1958, 23 F.R. 973, set out as a note under section 715j of Title
15, Commerce and Trade].
(r) The authority vested in the President by section 55 of
the act of April 30, 1900, 31 Stat. 150, as amended [section 562
of Title 48] and by section 4 of the act of August 24, 1954, 68
Stat. 785, as amended [former section 562o of Title 48], to
approve the issuance of bonds or other instruments of
indebtedness by the Territory of Hawaii.
2. The Secretary of the Interior is hereby designated and
empowered to perform, without the approval, ratification, or
Qualified State Tax References:
Page 10 of 148
other action of the President, the following functions which have
heretofore, under the respective provisions of law cited,
required the approval, ratification, or other action of the
President in connection with their performance by the Secretary
of the Interior:
(a) The authority vested in the Secretary of the Interior by
section 1 of the act of June 6, 1942, ch. 330, 56 Stat. 326
[section 459r of Title 16], to convey or lease to the States or
to the political subdivisions thereof any or all of certain
recreational demonstration projects and lands and equipment
comprised within such projects or any parts of such projects;
and to transfer to other Federal agencies any of the said
recreational demonstration areas that may be of use to such
agencies.
(b) The authority vested in the Secretary of the Interior by
section 3 of the act of July 3, 1918, ch. 128, 40 Stat. 755, as
amended, and as affected by section 4(f) of Reorganization Plan
No. II, effective July 1, 1939, 53 Stat. 1433 [section 704 of
Title 16], to promulgate regulations permitting and governing the
hunting, taking, capture, killing, possession, sale, purchase,
shipment, transportation, carriage, or export of any migratory
bird included in the terms of certain conventions, or any part,
nest, or egg thereof.
3. As used in this order, the term "functions" embraces
duties, powers, responsibilities, authority, or discretion, and
the term "perform" may be construed to mean "exercise".
4. All actions heretofore taken by the President in respect
of the matters affected by this order and in force at the time of
the issuance of this order, including regulations prescribed by
the President in respect of such matters, shall, except as they
may be inconsistent with the provisions of this order, remain in
effect until modified or revoked pursuant to the authority
conferred by this order.
5. The Secretary of the Interior is hereby authorized to
redelegate to the Under Secretary of the Interior any of the
authority delegated to the Secretary of the Interior by section 1
of this order.
EXECUTIVE ORDER NO. 10289
Sept. 17, 1951, 16 F.R. 9499, as amended by Ex. Ord. No. 10583,
Dec. 20, 1954, 19 F.R. 8725; Ex. Ord. No. 10882, July 18, 1960,
25 F.R. 6869; Ex. Ord. No. 11110, June 4, 1963, 28 F.R. 5605;
Ex. Ord. No. 11825, Dec. 31, 1974, 40 F.R. 1003; Ex. Ord. No.
12608, Sept. 9, 1987, 52 F.R. 34617
DELEGATION OF FUNCTIONS TO SECRETARY OF THE TREASURY
1. The Secretary of the Treasury is hereby designated and
empowered to perform the following-described functions of the
President without the approval, ratification, or other action of
the President:
Qualified State Tax References:
Page 11 of 148
(a) The authority vested in the President by section 1 of
the act of August 1, 1914, c. 223, 38 Stat. 609, 623, as amended
[section 2 of Title 19], (1) to rearrange, by consolidation or
otherwise, the several customs-collection districts, (2) to
discontinue ports of entry by abolishing the same and
establishing others in their stead, and (3) to change from time
to time the location of the headquarters in any customs-
collection district as the needs of the service may require.
(b) The authority vested in the President by section 1 of
the Anti-Smuggling Act of August 5, 1935, c. 438, 49 Stat. 517
[section 1701 of Title 19], (1) to find and declare that at any
place or within any area on the high seas adjacent to but outside
customs waters any vessel or vessels hover or are being kept off
the coast of the United States and that, by virtue of the
presence of any such vessel or vessels at such place or within
such area, the unlawful introduction or removal into or from the
United States of any merchandise or person is being, or may be,
occasioned, promoted, or threatened, (2) to find and declare that
certain waters on the high seas are in such proximity to such
vessel or vessels that such unlawful introduction or removal of
merchandise or persons may be carried on by or to or from such
vessel or vessels, and (3) to find and declare that, within any
customs-enforcement area, the circumstances no longer exist which
gave rise to the declaration of such area as a customs-
enforcement area.
(c) The authority vested in the President by section 1 of
the Act of August 26, 1985, Public Law 98-89, 97 Stat. 510 (46
U.S.C. 3101) [section 3101 of Title 46, Shipping] to suspend the
provisions of law requiring the inspection of foreign-built
vessels admitted to American registry.
(d) The authority vested in the President by section 5 of
the act of May 28, 1908, c. 212, 35 Stat. 425, as amended (46
U.S.C. Appendix 104) [section 104 of Title 46], to determine (as
a prerequisite to the extension of reciprocal privileges by the
Commissioner of Customs) that yachts used and employed
exclusively as pleasure vessels and belonging to any resident of
the United States are allowed to arrive at and depart from any
foreign port and to cruise in the waters of such port without
entering or clearing at the custom-house thereof and without the
payment of any charges for entering or clearing, dues, duty per
ton, tonnage taxes, or charges for cruising licenses.
(e) The authority vested in the President by section 2 of
the act of March 24, 1908, c. 96, 35 Stat. 46 (46 U.S.C. Appendix
134) [section 134 of Title 46], to name the hospital ships to
which section 1 of the said act shall apply and to indicate the
time when the exemptions thereby provided for shall begin and
end.
(f) The authority vested in the President by section 4228 of
the Revised Statutes, as amended (46 U.S.C. Appendix 141)
[section 141 of Title 46], (1) to -- declare that -- upon
satisfactory proof being given by the government of any foreign
Qualified State Tax References:
Page 12 of 148
nation that no discriminating duties of tonnage or imposts are
imposed or levied in the ports of such nation upon vessels wholly
belonging to citizens of the United States, or upon the produce,
manufactures, or merchandise imported in the same from the United
States or from any foreign country -- the foreign discriminating
duties of tonnage and impost within the United States are
suspended and discontinued, so far as respects the vessels of
such foreign nation, and the produce, manufactures, or
merchandise imported into the United States from such foreign
nation, or from any other foreign country, and (2) to suspend in
part the operation of section 4219 of the Revised Statutes, as
amended (46 U.S.C. Appendix 121) [section 121 of Title 46], and
section IV, J, subsection 1 of the act of October 3, 1913, c. 16,
38 Stat. 195, as amended (46 U.S.C. Appendix 146) [section 146 of
Title 46], so that foreign vessels from a country imposing
partial discriminating tonnage duties upon American vessels, or
partial discriminating import duties upon American merchandise,
may enjoy in our ports the identical privileges which the same
class of American vessels and merchandise may enjoy in such
country: Provided, that prior to the issuance of an order of the
Secretary of the Treasury suspending and discontinuing (wholly or
in part) discriminating tonnage duties, imposts, and import
duties within the United States, the Department of State shall
obtain and furnish to the Secretary of the Treasury the proof
required by the said section 4228, as amended, as the basis for
that order.
(g) The authority vested in the President by section 3650 of
the Internal Revenue Code [now covered by section 7621 of Title
26], to establish convenient collection districts (for the
purpose of assessing, levying, and collecting the taxes provided
by the internal revenue laws), and from time to time to alter
such districts.
(h) The authority which is now vested in the President by
section 2564(b) of the Internal Revenue Code [section 2564(b) of
Title 26 (I.R.C.1939) ], and which on and after January 1, 1955,
will be vested in the President by section 4735(b) of the
Internal Revenue Code of 1954 [section 4735(b) of Title 26
(I.R.C.1954) ], to issue, in accordance with the provisions of
the said section 2564(b) or 4735(b), as the case may be, orders
providing for the registration and the imposition of a special
tax upon all persons in the Canal Zone who produce, import,
compound, deal in, dispense, sell, distribute, or give away
narcotic drugs.
(i) The authority vested in the President by section 5318 of
the Revised Statutes, as amended (19 U.S.C. 540) [section 540 of
Title 19, Customs Duties], to employ suitable vessels other than
Coast Guard cutters in the execution of laws providing for the
collection of duties on imports and tonnage;
[(j) Revoked. Ex. Ord. No. 12608, Sept. 9, 1987, 52 F.R.
34617]
2. The Secretary of the Treasury is hereby designated and
empowered to perform without the approval, ratification, or other
Qualified State Tax References:
Page 13 of 148
action of the President the following functions which have
heretofore, under the respective provisions of law cited,
required the approval of the President in connection with their
performance by the Secretary of the Treasury:
(a) The authority vested in the Secretary of the Treasury by
section 6 of the act of July 8, 1937, c. 444, 50 Stat. 480
[section 728 of Title 40], to make rules and regulations
necessary for the execution of the functions vested in the
Secretary of the Treasury by the said act, as amended.
(b), (c) [Revoked by Ex. Ord. No. 11110, June 4, 1963, 28
F.R. 5605.]
(d) [Revoked by Ex. Ord. No. 11825, Dec. 31, 1974, 40 F.R.
1003.]
(e) The authority vested in the Secretary of the Treasury by
section 1 of Title II of the act of June 15, 1917, c. 30, 40
Stat. 220 [section 191 of Title 50], to make rules and
regulations governing the anchorage and movement of any vessel,
foreign or domestic, in the territorial waters of the United
States.
[(f) Revoked. Ex. Ord. No. 12608, Sept. 9, 1987, 52 F.R.
34617.]
3. (a) The Secretary of the Treasury and the Postmaster
General are hereby designated and empowered jointly to prescribe
without the approval of the President regulations, under section
1 of the act of July 8, 1937, c. 444, 50 Stat. 479 [section 721
of Title 40], governing the shipment of valuables by the
executive departments, independent establishments, agencies,
wholly-owned corporations, officers, and employees of the United
States.
(b) The Postmaster General [now United States Postal
Service] is hereby designated and empowered to exercise without
the approval, ratification, or other action of the President the
authority vested in the President by section 504(b) of Title 18
of the United States Code to approve regulations issued by the
Secretary of the Treasury under the authority of the said section
504(b) (relating to the printing, publishing, or importation, or
the making or importation of the necessary plates for such
printing or publishing, of postage stamps for philatelic
purposes), and to approve any amendment or repeal of any of such
regulations by the Secretary of the Treasury.
4. As used in this order, the term "functions" embraces
duties, powers, responsibilities, authority, or discretion, and
the term "perform" may be construed to mean "exercise".
5. All actions heretofore taken by the President in respect
of the matters affected by this order and in force at the time of
the issuance of this order, including regulations prescribed by
the President in respect of such matters, shall, except as they
may be inconsistent with the provisions of this order, remain in
Qualified State Tax References:
Page 14 of 148
effect until amended, modified, or revoked pursuant to the
authority conferred by this order.
3 USCA 301, General authorization to delegate functions;
publication of delegations
------------ Excerpt from pages 32726-32733
EXECUTIVE ORDER NO. 10637
Sept. 19, 1955, 20 F.R. 7025
DELEGATION OF FUNCTIONS TO SECRETARY OF THE TREASURY
Section 1. The Secretary of the Treasury is hereby
designated and empowered to perform the following-described
functions without the approval, ratification, or other action of
the President:
(a) The authority vested in the President by section 149 of
title 14 of the United States Code, in his discretion, to detail
officers and enlisted men of the Coast Guard to assist foreign
governments in matters concerning which the Coast Guard may be of
assistance.
(b) The authority vested in the President by section 229 of
title 14 of the United States Code to revoke the commission of
any officer on the active list of the Coast Guard who, at the
date of such revocation, has had less than three years of
continuous service as a commissioned officer in the Coast Guard,
and to prescribe regulations relating to such revocations.
(c) The authority vested in the President by section 232 of
title 14 of the United States Code, in his discretion, to retire
from active service any commissioned officer of the Coast Guard,
upon his own application, who has completed twenty years of
active service in the Coast Guard, Navy, Army, Air Force, or
Marine Corps, or the Reserve Components thereof.
(d) The authority vested in the President by section 235 of
title 14 of the United States Code [see section 251 et seq. of
Title 14], to retire, to approve the retirement of, to place out
of line of promotion, and to approve the placing out of line of
promotion of, officers of the Coast Guard.
(e) The authority vested in the President by section 492 of
title 14 of the United States Code to present a distinguished
service medal (including incidental items) to any person who,
while serving in any capacity with the Coast Guard, distinguishes
himself by exceptionally meritorious service to the Government in
a duty of great responsibility.
(f) The authority vested in the President by section 493 of
title 14 of the United States Code to present the Coast Guard
medal (including incidental items) to any person who, while
serving in any capacity with the Coast Guard, distinguishes
Qualified State Tax References:
Page 15 of 148
himself by heroism not involving actual conflict with an enemy.
(g) The authority vested in the President by section 494 of
title 14 of the United States Code to award emblems, insignia,
rosettes, and other devices, to the extent that such authority
relates to the awarding of such items to be worn with the
distinguished service medal or the Coast Guard medal.
(h) The authority vested in the President by section 498 of
title 14 of the United States Code to make posthumous awards of
decorations and to designate representatives to receive such
awards, to the extent that such authority relates to the awarding
of the distinguished service medal or the Coast Guard medal, or
ribbons, emblems, insignia, rosettes, or other devices
corresponding thereto.
(i) The authority vested in the President by section 499 of
title 14 of the United States Code to make rules, regulations,
and orders to the extent that they shall relate to the authority
described in sections 1(f), 1(g), and 1(h) above.
(j) The authority vested in the President by the first
paragraph of section 806 of the act of September 8, 1916, ch.
463, 39 Stat. 799 [section 77 of Title 15], to direct the
detention of any vessel, American or foreign, by withholding
clearance or by formal notice forbidding departure; but such
authority shall be exercised by the Secretary of the Treasury
only upon a finding by the President that there is reasonable
ground to believe that the vessel concerned is making or giving
undue or unreasonable preference or advantage to any party, or is
subjecting any party to undue or unreasonable prejudice,
disadvantage, injury, or discrimination, as described in the said
paragraph; and the authority so vested to revoke, modify, or
renew any such direction.
(k) The authority vested in the President by the second
paragraph of the said section 806 of the act of September 8, 1916
[section 77 of Title 15], to withhold clearance from one or more
vessels of a belligerent country or government until such
belligerent shall restore to American vessels and American
citizens reciprocal liberty of commerce and equal facilities for
trade, and the authority to direct that similar privileges and
facilities, if any, enjoyed by vessels and citizens of such
belligerent in the United States or its possessions be refused to
vessels or citizens of such belligerent; but such authority
shall not, in either instance, be exercised by the Secretary of
the Treasury with respect to any vessel or citizen of such
belligerent unless and until the President proclaims that the
belligerent nation concerned is denying privileges and facilities
to American vessels as described in the said paragraph.
(l) The authority vested in the President by section 963(a)
of title 18 of the United States Code to detain, in accordance
with the provisions of such section, any armed vessel, or any
vessel, domestic or foreign (other than one which has entered the
ports of the United States as a public vessel), which is
manifestly built for warlike purposes or has been converted or
Qualified State Tax References:
Page 16 of 148
adapted from a private vessel to one suitable for warlike use,
and to determine, in each case, whether the proof required by
such section is satisfactory.
(m) The authority vested in the President by section 967(a)
of title 18 of the United States Code, during a war in which the
United States is a neutral nation, to withhold clearance from or
to any vessel, domestic or foreign, or, by service of formal
notice upon the owner, master, or person in command or in charge
of any domestic vessel not required to secure clearances, and to
forbid its departure from port or from the United States,
whenever there is reasonable cause to believe that such vessel is
about to carry fuel, arms, ammunition, men, supplies, dispatches,
or information to any warship, tender, or supply ship of a
foreign belligerent nation in violation of the laws, treaties, or
obligations of the United States under the law of nations.
(n) The authority vested in the President by section 10(a)
of the act of November 4, 1939, ch. 2, 54 Stat. 9 [section 450(a)
of Title 22], to require the owner, master, or person in command
of a vessel to give a bond to the United States, as prescribed by
the said section 10(a).
(o) The authority vested in the President by section 10(b)
of the act of November 4, 1939, ch. 2, 54 Stat. 9 [section 450(b)
of Title 22], to prohibit the departure of a vessel from a port
of the United States, in accordance with the provisions of the
said section 10(b).
(p) The authority vested in the President by section 2 of
the act of August 18, 1914, ch. 256, 38 Stat. 699 [section 236 of
Title 46], to suspend, in his discretion, by order, so far and
for such length of time as he may deem desirable, the provisions
of law prescribing that all watch officers of vessels of the
United States registered for foreign trade shall be citizens of
the United States.
(q) The authority vested in the President by section 2 of
the act of October 17, 1940, ch. 896, 54 Stat. 1201 [section 643b
of Title 46], to extend, whenever in his judgment the national
interest requires, the provisions of subsection (b) of section
4551. Revised Statutes, as amended [section 643(b) of Title 46],
to such additional class or classes of vessels and to such waters
as he may designate.
(r) The authority vested in the Secretary of the Treasury by
the first paragraph of section 1 of Title II of the act of June
15, 1917, ch. 30, 40 Stat. 220, as amended [section 191 of Title
50], during a national emergency proclaimed as provided in the
said paragraph, (1) to make rules and regulations governing the
anchorage and movement of any vessel, foreign or domestic, in the
territorial waters of the United States, and (2) to take full
possession and control of such vessel for the purposes set forth
in the said paragraph.
(s) The authority vested in the President by section 6 of
the act of July 24, 1941, ch. 320, 55 Stat. 604, as amended [see
Qualified State Tax References:
Page 17 of 148
note set out under section 5501 of Title 10, Armed Forces], to
make appointments of officers below flag rank without the advice
and consent of the Senate, to the extent that such authority
relates, pursuant to section 11(b) of the said act, as amended
[see section 5787 of Title 10, Armed Forces], to officers of the
United States Coast Guard.
Sec. 2. The Secretary of the Treasury is hereby designated
and empowered to perform without the approval, ratification, or
other action of the President the following described functions
to the extent that they relate to the United States Coast Guard:
(a) The authority vested in the President by Article 4(a) of
the Uniform Code of Military Justice (section 1 of the act of May
5, 1950, ch. 169, 64 Stat. 110) [see section 804 of Title 10,
Armed Forces], to convene a general court-martial to try any
dismissed officer, upon application by the officer concerned for
trial by court-martial.
(b) The authority vested in the President by Articles 4(c)
and 75 of the Uniform Code of Military Justice (64 Stat. 110,
132) [see sections 804 and 875 of Title 10, Armed Forces], to
reappoint a discharged officer to such commissioned rank and
precedence as the former officer would have attained had he not
been dismissed, and to direct the extent to which any such
reappointment shall affect the promotion status of other
officers.
(c) The authority vested in the President by section 10 of
the act of May 5, 1950, ch. 169, 64 Stat. 146 [see sections 1161
and 6408 of Title 10, Armed Forces], to drop from the rolls any
officer who has been absent without authority from his place of
duty for a period of three months or more, or who, having been
found guilty by the civil authorities of any offense, is finally
sentenced to confinement in a Federal or State penitentiary or
correctional institution.
(d) The authority vested in the President by section 219 of
the Armed Forces Reserve Act, approved July 9, 1952 (66 Stat.
487) [see section 593 of Title 10, Armed Forces], to make
appointments of Reserves in commissioned grades below flag
officer grades.
(e) The authority vested in the President by section 221 of
the said Armed Forces Reserve Act [see section 593 of Title 10,
Armed Forces], to determine the tenure in office of commissioned
officers of the reserve.
(f) The authority vested in the President by section 248 of
the said Armed Forces Reserve Act [see section 1162 of Title 10,
Armed Forces], to effect the discharge of commissioned officers
of the reserve.
(g) The authority vested in the President by section 6 of
the act of February 21, 1946, ch. 34, 60 Stat. 27 [see section
6323 of Title 10, Armed Forces], as made applicable to the Coast
Guard Reserve by section 755(a) of title 14 of the United States
Qualified State Tax References:
Page 18 of 148
Code, in his discretion, to place upon the retired list any
officer of the Coast Guard Reserve, upon his own application, who
has completed more than twenty years of active service as
described in the said section 6.
Sec. 3. All actions heretofore taken by the President with
respect to the matters affected by this order and in force at the
time of issuance of this order, including any regulations
prescribed or approved by the President with respect to such
matters, shall, except as they may be inconsistent with the
provisions of this order, remain in effect until amended,
modified, or revoked pursuant to the authority conferred by this
order.
Sec. 4. As used in this order, the term "functions" embraces
duties, powers, responsibilities, authority, or discretion, and
the term "perform" may be construed to mean "exercise".
Sec. 5. Whenever the entire Coast Guard operates as a
service in the Navy, the references to the Secretary of the
Treasury in the introductory portions of sections 1 and 2 of this
order shall be deemed to be references to the Secretary of the
Navy.
DWIGHT D. EISENHOWER
3 USCA 301, General authorization to delegate functions;
publication of delegations
------------ Excerpt from pages 32737-32741
EXECUTIVE ORDER NO. 11609
July 22, 1971, 36 F.R. 13747, as amended by Ex. Ord. No. 11713,
Apr. 21, 1973, 38 F.R. 10069; Ex. Ord. No. 11779, Apr. 22, 1974,
39 F.R. 14185; Ex. Ord. No. 12107, Dec. 28, 1978, 44 F.R. 1055;
Ex. Ord. No. 12215, May 27, 1980, 45 F.R. 36043; Ex. Ord. No.
12466, Feb. 27, 1984, 49 F.R. 7349; Ex. Ord. No. 12522, June 24,
1985, 50 F.R. 26337; Ex. Ord. No. 12608, Sept. 9, 1987, 52 F.R.
34617; Ex. Ord. No. 12822, Nov. 16, 1992, 57 F.R. 54289.
DELEGATION OF CERTAIN FUNCTIONS VESTED IN THE PRESIDENT TO OTHER
OFFICERS OF THE GOVERNMENT
By virtue of the authority vested in me by section 301 of
title 3 of the United States Code [this section], and as
President of the United States, it is hereby ordered as follows:
Section 1. General Services Administration. The
Administrator of General Service is hereby designated and
empowered to exercise, without the approval, ratification, or
other action of the President, the following:
(1) The authority of the President under 5 U.S.C. 4111(b)
[section 4111(b) of Title 5, Government Organization and
Employees] to prescribe regulations with respect to reductions to
Qualified State Tax References:
Page 19 of 148
be made from payments by the Government to employees for travel,
subsistence, or other expenses incident to training in a non-
Government facility or to attendance at a meeting.
(2) The authority of the President under the last sentence
of 5 U.S.C. 5702(a) [section 5702(a) of Title 5] to establish
maximum rates of per diem allowances to the extent that such
authority pertains to travel status of employees (as defined in 5
U.S.C. 5701) [section 5701 of Title 5] while en route to, from,
or between localities situated outside the 48 contiguous States
of the United States and the District of Columbia.
(3) The authority of the President under 5 U.S.C. 5707
[section 5707 of Title 5] to prescribe regulations necessary for
the administration of subchapter I of chapter 57 of title 5 of
the United States Code [section 5701 et seq. of Title 5]
(relating to travel and subsistence expenses and mileage
allowances).
(4) The authority of the President under 5 U.S.C. 5722(a)
[section 5722(a) of Title 5] to prescribe regulations with
respect to the payment of travel expenses and transportation
expenses of household goods and personal effects.
(5) The authority of the President under 5 U.S.C. 5723(a)
[section 5723(a) of Title 5] to prescribe regulations with
respect to the payment of travel expenses and transportation
expenses.
(6) The authority of the President under 5 U.S.C. 5724
[section 5724 of Title 5] to prescribe the regulations provided
for therein (relating to travel and transportation expenses and
other matters).
(7)(a) The authority of the President under 5 U.S.C. 5724a
[section 5724a of Title 5] to prescribe the regulations provided
for therein, relating to (i) the availability of appropriations
or other funds of agencies for the reimbursement of described
expenses of employees for whom the Government pays expenses of
travel and transportation under 5 U.S.C. 5724(a) [section 5724(a)
of Title 5], (ii) the entitlement of employees to amounts related
to their basic pay, and (iii) the allowance, payment, and receipt
of expenses and benefits to former employees who are reemployed
by nontemporary appointments.
(b) In consultation with the Secretary of the Treasury, the
authority of the President under 5 U.S.C. 5724b [section 5724b of
Title 5, Government Organization and Employees] to prescribe the
regulations provided for therein relating to reimbursement of
Federal, State, and city income taxes for travel, transportation,
and relocation expenses of employees, transferred at Government
expense, furnished in kind or for which reimbursement or an
allowance is provided.
(c) The authority of the President under 5 U.S.C. 5724c
[section 5724c of Title 5, Government Organization and Employees]
to prescribe the regulations provided for therein pursuant to
Qualified State Tax References:
Page 20 of 148
which each agency shall carry out its responsibilities under 5
U.S.C. 5724c; provided, that the Director of Central
Intelligence, after consultation with the Administrator of
General Services, shall prescribe such regulations for the
Central Intelligence Agency.
(8) The authority of the President under 5 U.S.C. 5726
[section 5726 of Title 5] to prescribe the regulations provided
for therein, relating to (i) the definition of "household goods
and personal effects", (ii) allowable storage expenses and
related transportation, and (iii) the allowance of nontemporary
storage expenses or storage at Government expense in Government-
owned facilities (including related transportation and other
expenses).
(9) The authority of the President under 5 U.S.C. 5727
[section 5727 of Title 5] to prescribe the regulations provided
for therein, relating to the transportation at Government expense
of privately owned motor vehicles.
(10) The authority of the President under 5 U.S.C. 5728(a)
and (b) [section 5728(a) and (b) of Title 5] to prescribe the
regulations provided for therein, relating to the payment by an
agency from its appropriations of the expenses of round trip
travel of an employee, and the transportation of his immediate
family, in described circumstances.
(11) The authority of the President under 5 U.S.C. 5729(a)
and (b) [section 5729(a) and (b) of Title 5] to prescribe the
regulations provided for therein, relating to (i) the payment by
an agency from its appropriations of the expenses of transporting
the immediate family of an employee and of shipping his household
goods and personal effects, and (ii) the reimbursement from its
appropriations by an agency of an employee for the proper
transportation expense of returning his immediate family and
household goods and personal effects, both in described
circumstances.
(12) The authority of the President under 5 U.S.C. 5731(a)
[section 5731(a) of Title 5] to prescribe the regulations
provided for therein, relating to certifications respecting
transportation accommodations.
(13) The authority of the President under 5 U.S.C. 5742(b)
[section 5742(b) of Title 5] to prescribe regulations with
respect to the payment of expenses when an employee dies.
(14) The authority of the President under the last sentence
of paragraph (c) of section 32 of title III of the Act of July
22, 1937, c. 517, 50 Stat. 525 (7 U.S.C. 1011(c)) [section
1011(c) of Title 7, Agriculture], to transfer to Federal, State,
or Territorial agencies lands acquired by the Secretary of
Agriculture under section 32(a) of that Act [section 1011(a) of
Title 7].
(15) The authority of the President under section 340 of the
Consolidated Farmers Home Administration Act of 1961, 75 Stat.
Qualified State Tax References:
Page 21 of 148
318 (7 U.S.C. 1990) [section 1990 of Title 7], in his discretion
to transfer to the Secretary of Agriculture any right, interest
or title held by the United States in any lands acquired in the
program of national defense and no longer needed for that
program, and to determine the suitability of the lands to be
transferred, for the purposes referred to in that section:
Provided, That the exercise by the Administrator of the authority
delegated to him by this paragraph (15) shall require the
concurrence of the Secretary of Defense as to the absence of
further need of the lands for the national defense program.
(16) The authority of the President under section 4(k) of
the Tennessee Valley Authority Act, 55 Stat. 599 (16 U.S.C.
831c(k)) [section 831c(k) of Title 16, Conservation], to approve
transfers under paragraphs (a) and (c) of that section, other
than leases for terms of less than 20 years and conveyances of
property having a value not in excess of $500.
(17) The authority of the President under section 7(b) of
the Tennessee Valley Authority Act of May 18, 1933, 48 Stat. 63
(16 U.S.C. 831f(b)) [section 831f(b) of Title 16], to provide for
the transfer to the Tennessee Valley Authority of the use,
possession, and control of real or personal property of the
United States deemed by the Administrator of General Services to
be necessary and proper for the purposes of that Authority as
stated in that Act.
(18) The authority of the President under section 1 of the
Act of March 4, 1927, c. 505, 44 Stat. 1422 (20 U.S.C. 191)
[section 191 of Title 20, Education], to transfer to the
jurisdiction of the Secretary of Agriculture for the purposes of
that Act any land belonging to the United States within or
adjacent to the District of Columbia located along the Anacostia
River North of Benning Bridge.
(19) That part of the authority of the President under
section 7(a) of the Act of July 17, 1959, P.L. 86-91, 73 Stat.
216, as amended (20 U.S.C. 905(a)) [section 905(a) of Title 20],
which consists of authority to prescribe regulations relating to
storage (including packing, drayage, unpacking, and
transportation to and from storage) of household effects and
personal possessions.
(20) The authority of the Administrator of General Services
under section 210(i) of the Federal Property and Administrative
Services Act of 1949, as amended (40 U.S.C. 490(i)) [section
490(i) of Title 40, Public Buildings, Property, and Works] to
prescribe regulations relating to the installation, repair, and
replacement of sidewalks.
(21) The authority of the President under section 108 of the
Housing Act of July 15, 1949, c. 338, 63 Stat. 419, as amended
(42 U.S.C. 1458) [section 1458 of Title 42, The Public Health and
Welfare], to transfer, or cause to be transferred, to the
Secretary of Housing and Urban Development any right, title or
interest held by the Federal Government or any department or
agency thereof in any land (including buildings thereon) which is
Qualified State Tax References:
Page 22 of 148
surplus to the needs of the Government and which a local public
agency certifies will be within the area of a project being
planned by it.
(22), (23) [Revoked by Ex. Ord. No. 12215, May 27, 1980, 45
F.R. 36043].
Sec. 2. Department of the Treasury. The Secretary of the
Treasury is hereby designated and empowered to exercise, without
the approval, ratification, or other action of the President, the
following:
(1) The authority under 5 U.S.C. 5943(a) [section 5943(a) of
Title 5] to make recommendations to the President concerning the
meeting of losses sustained by employees and members of the
uniformed services while serving in a foreign country due to
appreciation of foreign currency in its relation to the American
dollar.
(2) The authority under 5 U.S.C. 5943(d) [section 5943(d) of
Title 5] to report annually to the Congress on expenditures made
under 5 U.S.C. 5943(d).
Sec. 3. Department of Health and Human Services. The
Secretary of Health and Human Services is hereby designated and
empowered to exercise without the approval, ratification, or
other action of the President, the following:
(1) The authority of the President under the first section
of the Act entitled "An Act to authorize the operation of stands
in Federal buildings by blind persons, to enlarge the economic
opportunities of the blind, and for other purposes," approved
June 20, 1936, 49 Stat. 1559, as amended (20 U.S.C. 107) [section
107 of Title 20], to approve regulations prescribed by the heads
of the respective departments and agencies thereunder.
(2) The authority of the Secretary of Health and Human
Services under section 2 of the Act of August 4, 1947, c. 478, 61
Stat. 751, as amended (24 U.S.C. 168a) [section 168a of Title 24,
Hospitals, Asylums and Cemeteries], to fix per diem rates for
care of patients in Saint Elizabeth Hospital.
Sec. 4. Department of State. (a) The Secretary of State is
hereby designated and empowered to exercise his authority under
section 12 of the Act of August 1, 1956, 70 Stat. 892 (22 U.S.C.
2679) [section 2679 of Title 22, Foreign Relations and
Intercourse] (being authority to prescribe certain maximum rates
of per diem in lieu of subsistence (or of similar allowances
therefor)), without the approval, ratification, or other action
of the President.
(b) The Secretary of State is hereby designated and
empowered to exercise the authority of the President under
section 9 of the United Nations Participation Act of 1945 (59
Stat. 619), as amended by section 15 of Public Law 93-126 (87
Stat. 454-455) [section 287e-1 of Title 22, Foreign Relations and
Intercourse].
Qualified State Tax References:
Page 23 of 148
Sec. 5. Department of Defense. The Secretary of Defense is
hereby designated and empowered to exercise the authority of the
President under the last sentence of section 4 of the Act of May
10, 1943, c. 95, 57 Stat. 81 (24 U.S.C. 34) [section 34 of Title
24] to prescribe from time to time uniform rates of charges for
hospitalization and dispensary services: Provided, That the
authority hereby delegated may not be redelegated to any officer
in the Department of the Navy, Department of the Air Force, or
Department of the Army.
Sec. 6. Department of Health and Human Services; Department
of Defense. The following are hereby designated and empowered to
exercise, without the approval, ratification, or other action of
the President, the authority of the President under 10 U.S.C.
1085 [section 1085 of Title 10, Armed Forces] to establish
uniform rates of reimbursement for inpatient medical or dental
care:
(1) The Secretary of Health and Human Services in respect of
such care in a facility under his jurisdiction.
(2) The Secretary of Defense in respect of such care in a
facility of an armed force under the jurisdiction of a military
department.
Sec. 7. Veterans Administration [now Department of Veterans
Affairs]. (a) The Administrator of Veterans Affairs [now
Secretary of Veterans Affairs] is hereby designated and empowered
to exercise the authority of the President under 10 U.S.C.
1074(b) [section 1074(b) of Title 10] to approve uniform rates of
reimbursement for care provided in facilities operated by the
Administrator [now Secretary].
(b) Section 2 of Executive Order No. 11302 of September 6,
1966, as amended by Executive Order No. 11429 of September 9,
1968 [set out as a note under section 111 of Title 38, Veterans'
Benefits], is hereby further amended by substituting for the
words "allowance of not more than six cents a mile" the
following: "allowance, in such amount per mile as the
Administrator shall from time to time fix pursuant to 38 U.S.C.
111 as affected by this order,".
Sec. 8. Office of Personnel Management. The Office of
Personnel Management is hereby designated and empowered to
exercise, without the approval, ratification, or other action of
the President, the following:
(1) The authority of the President under 5 U.S.C. 5514(b)
[section 5514(b) of Title 5] to approve regulations prescribed by
the head of each agency to carry out 5 U.S.C. 5514 [section 5514
of Title 5] and section 3(a) of the Act of July 15, 1954, c. 509,
68 Stat. 483, 31 U.S.C. 581d [section 581d of Title 31, Money and
Finance] (relating to installment deductions from pay for
indebtedness because of erroneous payment).
(2) The authority of the President under 5 U.S.C. 5903
Qualified State Tax References:
Page 24 of 148
[section 5903 of Title 5] to prescribe regulations necessary for
the uniform administration of subchapter I of chapter 59 of title
5 of the United States Code [section 5901 et seq. of Title 5]
(relating to uniform allowances).
(3) The authority of the President under 5 U.S.C. 5942
[section 5942 of Title 5] to prescribe regulations establishing
rates at which an allowance based on duty (except temporary duty)
at remote work sites will be paid and defining and designating
the sites, areas and groups of positions to which the rates
apply.
(4) The authority of the President under 5 U.S.C. 5942a
[section 5942a of Title 5] to prescribe regulations governing the
payment of allowances to employees assigned to duty at Johnston
Island for the purposes of maintaining the employees' spouses or
dependents, or both, at a location other than Johnston Island.
Sec. 9. Office of Management and Budget. The Director of
the Office of Management and Budget is hereby designated and
empowered to exercise, without the approval, ratification, or
other action of the President, the following:
(1) The authority of the President under 5 U.S.C. 5911(f)
[section 5911(f) of Title 5] to issue the regulations provided
for therein (relating to the provision, occupancy, and
availability of quarters and facilities, the determination of
rates and charges therefor, and other related matters, as are
necessary and appropriate to carry out the provision of section
5911 [section 5911 of Title 5]).
(2) The authority of the President under 10 U.S.C. 126(a)
[section 126(a) of Title 10] to approve the transfers of balances
of appropriations provided for therein.
(3) The authority of the President under section 202 of the
Budget and Accounting Procedures Act of September 12, 1950, 64
Stat. 833 (31 U.S.C. 581c) [section 581c of Title 31] to approve
the transfers of balances of appropriations provided for in
subsections (a) and (b) of that section.
(4) The authority of the President under the last sentence
of section 11 of the Act of June 6, 1924, c. 270, 43 Stat. 463
(40 U.S.C. 72) [section 72 of Title 40], to approve (i) the
designation of lands to be acquired by condemnation, (ii)
contracts for purchase of lands, and (iii) agreements between the
National Capital Planning Commission and officials of the States
of Maryland and Virginia.
(5) The authority of the President under section 1 of the
Act of December 22, 1928, c. 48, 45 Stat. 1070 (40 U.S.C. 72a)
[section 72a of Title 40], to approve contracts for acquisition
of land subject to limited rights reserved to the grantor and for
the acquisition of limited permanent rights in land adjoining
park property.
(6) The authority of the President under section 407(b) of
Qualified State Tax References:
Page 25 of 148
the Act of August 30, 1957, 71 Stat. 556 (42 U.S.C. 1594j(b))
[section 1594j(b) of Title 42] to approve regulations (relating
to the rental of substandard housing for members of the uniformed
services) prescribed pursuant to that section. The Secretaries
referred to in section 407(c) of that Act [section 1594j(c) of
Title 42] shall furnish the Director of the Office of Management
and Budget such reports with respect to matters within the scope
of the regulations so approved as he may require and at such
times as he may specify.
(7) The authority of the President under 44 U.S.C. 1108
[section 1108 of Title 44, Public Printing and Documents] to
approve the use, from the appropriations available for printing
and binding, of such sums as are necessary for the printing of
journals, magazines, periodicals, and similar publications.
(8) The authority of the President under the paragraph
appearing under the heading "Expenses of Management Improvement"
in title III of the Treasury, Post Office, and Executive Office
Appropriation Act, 1971, P.L. 91-422, 84 Stat. 877, or by any
reenactment of the provisions of that paragraph in the same or in
a different amount of funds, to allocate to any agency or office
of the executive branch (including the Office of Management and
Budget) funds appropriated by that paragraph or by any such
reenactment on it. The Director of the Office of Management and
Budget shall from time to time report to the President concerning
activities carried on by executive agencies and offices with
funds allocated under this paragraph and shall, consonant with
law, exercise such direction and control with respect to those
activities as he shall deem appropriate.
Sec. 10. General Provisions. (a) Unless inappropriate, any
reference in this order to any provision of law shall be deemed
to include reference thereto as amended from time to time and as
affected by Reorganization Plan No. 2 of 1970 (35 F.R. 7959) [set
out in the Appendix 1 to Title 5].
(b) Unless inappropriate, any reference in any Executive
order to any Executive order which is superseded by this order,
or to any Executive order provision so superseded, shall
hereafter be deemed to refer to this order or to the provision of
the preceding sections of this order, if any, which corresponds
to the superseded provision.
(c) All actions heretofore taken by the President, the
Director of the Bureau of the Budget, or the Director of the
Office of Management and Budget in respect of the matters
affected by the provisions of the preceding sections of this
order and in force at the time of the issuance of this order,
including any regulations prescribed or approved by any of them
in respect of such matters, shall, except as may be inconsistent
with the provisions of this order, remain in effect until
amended, modified, or revoked pursuant to the authority conferred
by this order unless sooner terminated by operation of law.
Sec. 11. Orders superseded. The following are hereby
superseded:
Qualified State Tax References:
Page 26 of 148
(1) Executive Order No. 10604 of April 22, 1955.
(2) Executive Order No. 11230 of June 28, 1965.
(3) Executive Order No. 11275 of March 31, 1966.
(4) Executive Order No. 11290 of July 21, 1966.
(5) Section 3 of Executive Order No. 11294 of August 4,
1966.
(6) To the extent that it is inconsistent with this order,
Executive Order No. 11541 of July 1, 1970.
Sec. 12. Taking effect. This order shall be effective
immediately except that paragraphs (1) to (13), inclusive, and
paragraph (19), of section 1 hereof shall become effective ninety
days after the date of this order.
[Veterans' Administration and Administrator of Veterans'
Affairs deemed a reference to Department of Veterans Affairs and
Secretary of Veterans Affairs, respectively, pursuant to P.L.
100-527, Sec. 10(1), (2), Oct. 25, 1988, 102 Stat. 2635, as
amended, set out as a note under section 301 of Title 38,
Veterans' Benefits.]
UNITED STATES CODE ANNOTATED
TITLE 5. GOVERNMENT ORGANIZATION AND EMPLOYEES
PART III -- EMPLOYEES
SUBPART D -- PAY AND ALLOWANCES
CHAPTER 55 -- PAY ADMINISTRATION
SUBCHAPTER II -- WITHHOLDING PAY
Current through P.L. 104-194, approved 9-9-96
UNITED STATES CODE ANNOTATED
TITLE 5. GOVERNMENT ORGANIZATION AND EMPLOYEES
PART III -- EMPLOYEES
SUBPART B -- EMPLOYMENT AND RETENTION
CHAPTER 33 -- EXAMINATION, SELECTION, AND PLACEMENT
SUBCHAPTER II -- OATH OF OFFICE
Current through P.L. 104-194, approved 9-9-96
Sec. 3331. Oath of office
Qualified State Tax References:
Page 27 of 148
An individual, except the President, elected or appointed to
an office of honor or profit in the civil service or uniformed
services, shall take the following oath: "I, AB, do solemnly
swear (or affirm) that I will support and defend the Constitution
of the United States against all enemies, foreign and domestic;
that I will bear true faith and allegiance to the same; that I
take this obligation freely, without any mental reservation or
purpose of evasion; and that I will well and faithfully
discharge the duties of the office on which I am about to enter.
So help me God." This section does not affect other oaths
required by law.
CREDIT(S)
1996 Main Volume
(P.L. 89-554, Sept. 6, 1966, 80 Stat. 424.)
[General Materials (GM) - References, Annotations, or Tables]
HISTORICAL NOTES
HISTORICAL AND STATUTORY NOTES
Revision Notes and Legislative Reports
1966 Acts.
All but the quoted language in R.S. Sec. 1757 is omitted as
obsolete since R.S. Sec. 1757 was originally an alternative oath
to the oath prescribed in R.S. Sec. 1756 which oath was repealed
by the Act of May 13, 1884, ch. 46, Sec. 2, 23 Stat. 22. The
words "An individual, except the President, . . . in the civil
service or uniformed services" are substituted for "any person .
. . either in the civil, military, or naval service, except the
President of the United States". The second sentence of former
section 16 is changed to read, "This section does not affect
other oaths required by law.".
Standard changes are made to conform with the definitions
applicable and the style of this title as outlined in the preface
to the report.
REFERENCES
CROSS REFERENCES
Custody of oath in Congress, court, or agency to which office
pertains, see 5 USCA 2906.
Fee or pay for administering oath prohibited, see 5 USCA 2904.
Officer affidavit that no consideration was paid for appointment
filed with oath under this section, see 5 USCA 3332.
Qualified State Tax References:
Page 28 of 148
Peace Corps enrollees oath of office under this section, see 22
USCA 2504.
Persons authorized to administer oath, see 5 USCA 2903.
Postal Service oath of office, see 39 USCA 1011.
Renewal of oaths, see 5 USCA 2905.
Requirement to take new oath upon appointment to a higher grade
by --
Coast Guard Reserve commissioned officers, see 14 USCA 735.
National Oceanic and Atmospheric Administration commissioned
officers, see 33 USCA 854a-2.
Officers on the active-duty list, see 10 USCA 626.
Regular Coast Guard officers, see 14 USCA 273.
Reserve active-status list officers, see 10 USCA 14309.
Temporary appointees in time of war or national emergency, see 10
USCA 603.
Warrant officers, see 10 USCA 578.
Reserve component officer subscription to oath prescribed by this
section, see 10 USCA 12201.
Secretary of the Senate authorization to designate Disbursing
Office employees to administer oaths under this section, see 2
USCA 64-1.
Volunteers in Service to America oath under this section, see 42
USCA 4954.
Voting referees subscription to the oath required by this
section, see 42 USCA 1971.
LIBRARY REFERENCES
American Digest System
Appointment, qualification, and tenure of federal officers, see
United States K35.
Mode of administration of oath, see Oaths K3.
Encyclopedias
Appointment of federal officers, see C.J.S. United States Sec.
35.
Requisites and sufficiency of oaths, see C.J.S. Oaths and
Affirmations Sec. 5.
Qualified State Tax References:
Page 29 of 148
ANNOTATIONS
NOTES OF DECISIONS
Effect of oath 5
Expatriation 9
Failure to take oath 6
Form of oath 4
Office within section 2
Other oaths required by law 7
Persons required to take oath 3
Prerequisite to compensation 8
Presumptions 10
Purpose 1
1. Purpose
In reference to the oath of office required by Act Aug. 6,
1861, c. 64, 12 Stat. 326 (predecessor of the commonly called
test oath prescribed by Act July 2, 1862, c. 128, 12 Stat. 502),
it was said that such oath was wisely framed for the purpose of
upholding the paramount authority of the national government and
recognized allegiance to the United States, as the highest
political duty and it emphatically repelled the deadly heresy of
a paramount state allegiance. Charge to Grand Jury,
C.C.Mass.1861, 2 Sprague 287, Fed.Cas. No. 18,277.
2. Office within section
An office is a public station conferred by appointment, and
the term embraces the ideas of tenure, duration, emolument, and
duties. Drury v. U.S., 1908, 43 Ct.Cl. 237.
3. Persons required to take oath
A disbursing agent was a public officer required to take the
prescribed oath. Bartlett v. U.S., 1904, 39 Ct.Cl. 338, affirmed
25 S.Ct. 433, 197 U.S. 230, 49 L.Ed. 735.
Consular agents were not regarded as officers required to
take the oath of office and give a bond, but were accountable to
the Consul under whom they acted. Sampson v. U.S., 1895, 30
Ct.Cl. 365.
Requirement of former Sec. 16 of this title [now this
section] that every person elected or appointed to any office,
whether of honor or profit, take a prescribed oath, did not
Qualified State Tax References:
Page 30 of 148
extend to the clerk of a Supervisor of Internal Revenue on the
ground that he was not an officer. Hedrick v. U.S., 1880, 16
Ct.Cl. 88.
It was no defense to action on arbitration award, made by
Interstate Commerce Commission in voluntary proceedings, that
oath was not taken by arbitrator or waived, since every security
given by arbitrator's oath was afforded by constitutional oaths
of individual members of Commission, required by former Sec. 16
of this title [now this section]. Davis v. Rochester Can Co.,
1924, 207 N.Y.S. 33, 124 Misc. 123.
The oath prescribed by Congress for any person elected or
appointed to any office of honor or profit in the "civil,
military, or naval service of the United States" except the
President, has no application to officers of the states, or any
subdivision thereof, and failure of state legislators to take
such oath did not affect the validity of Vernon's Ann.C.C.P. art.
52-158 passed at such session creating the court that convicted
defendant. Van Hodge v. State, 1946, 191 S.W.2d 24, 149
Tex.Cr.R. 64.
Subjects of a foreign nation may be appointed marshals of
the consular courts, and when so appointed need not, under the
laws and regulations, take the prescribed oath but all such
officers should be required to take an oath or affirmation to
faithfully perform the duties of their offices except as to
allegiance and support of the Constitution of the United States.
1902, 23 Op.Atty.Gen. 608.
Where, under Act Feb. 14, 1889, c. 166, 25 Stat. 670, one
was appointed from civil life to be major of engineers in the
Army, and thereupon was placed on the retired list of the Army as
of that grade, he had to take the required oath, and this act
would be in law a legal acceptance of the office and as such a
sufficient formal acceptance. 1889, 19 Op.Atty.Gen. 283.
Former Sec. 16 of this title [now this section] contemplated
that the oath should be taken at every new appointment before
entering upon the duty. 1889, 19 Op.Atty.Gen. 219, 221.
The words "every person elected or appointed to any office
of honor or profit, either in the civil, military, or naval
service", used in former Sec. 16 of this title [now this section]
included members of Congress. 1882, 17 Op.Atty.Gen. 419.
Clerks in the executive departments were officers, and were
required to take the oath prescribed. 1868, 12 Op.Atty.Gen. 521.
Aliens appointed as professors at the U.S. Naval Academy
must take the oath prescribed by this section. 1943, 23
Comp.Gen. 301.
4. Form of oath
The form of oath prescribed by former Sec. 16 of this title
[now this section] was intended to relieve those to whom it
Qualified State Tax References:
Page 31 of 148
related from the necessity of taking the oath required by R.S.
Sec. 1756 (repealed by Act May 13, 1884, c. 46, 23 Stat. 22),
commonly known as the test oath, and in lieu thereof to require
the modified oath prescribed. 1871, 13 Op.Atty.Gen. 390.
5. Effect of oath
An official oath is an incident to the discharge of the
duties imposed and does not in itself constitute him who takes it
an officer de jure. Glavey v. U.S., 1900, 35 Ct.Cl. 242,
reversed on other grounds 21 S.Ct. 891, 182 U.S. 595, 45 L.Ed.
1247.
6. Failure to take oath
Omission of an officer to take the required oath does not,
it seems, invalidate his acts in regard to third persons nor
subject such acts to collateral attack. Vaccari v. Maxwell,
C.C.N.Y.1855, 3 Blatchf. 368, 28 Fed.Cas. 862, No. 16,810.
7. Other oaths required by law
While Postmasters, in common with all other offices of the
United States, except the President, are now required to take the
oath of office prescribed in R.S. Sec. 1757 [now this section],
they are not exempted from taking the oath prescribed by Act Mar.
5, 1874, ch. 46 [now Sec. 1011 of Title 39], relative to the
performance of duties in the Postal Service, but must take this
also. 1885, 18 Op.Atty.Gen. 181.
8. Prerequisite to compensation
A public officer is usually entitled to the emoluments of
the office only after qualification. Poore v. U.S., 1914, 49
Ct.Cl. 192.
9. Expatriation
A retired reserve officer who is receiving retired pay based
upon completion of a prescribed period of service in the armed
forces when he acquires foreign citizenship would no longer be
liable for involuntary recall to active duty in times of war or
national emergency and the acquisition of the foreign citizenship
would be inconsistent with the oath prescribed for reserve
officers to support and defend the Constitution of the United
States; therefore, in the absence of any law authorizing
continuation of an officer's membership in a reserve organization
after he becomes a citizen of a foreign country, payment of
retired pay may not be approved. 1962, 41 Comp.Gen. 715.
10. Presumptions
An officer of the Customs Service, duly commissioned, and
acting in the duties of his office, is presumed to have taken the
regular oaths. U.S. v. Bachelder, C.C.N.H.1814, Fed.Cas. No.
14,490.
Qualified State Tax References:
Page 32 of 148
5 USCA 3331, Oath of office
------------ Excerpt from pages 35785-35789
Sec. 5511. Withholding pay; employees removed for cause
(a) Except as provided by subsection (b) of this section,
the earned pay of an employee removed for cause may not be
withheld or confiscated.
(b) If an employee indebted to the United States is removed
for cause, the pay accruing to the employee shall be applied in
whole or in part to the satisfaction of any claim or indebtedness
due the United States.
CREDIT(S)
1996 Main Volume
(P.L. 89-554, Sept. 6, 1966, 80 Stat. 477.)
[General Materials (GM) - References, Annotations, or Tables]
HISTORICAL NOTES
HISTORICAL AND STATUTORY NOTES
Revision Notes and Legislative Reports
1966 Acts.
In subsection (a), the words "From and after February 24,
1931" are omitted as executed. The word "employee" is
coextensive with and substituted for "civil employee of the
United States" in view of the definition of "employee" in section
2105.
Standard changes are made to conform with the definitions
applicable and the style of this title as outlined in the preface
to the report.
REFERENCES
LIBRARY REFERENCES
American Digest System
Recovery of compensation after suspension or removal of officer,
agent, or employee, see United States K39(1) et seq., 39(8).
Encyclopedias
Recovery of compensation after suspension or removal of officer,
agent, or employee, see C.J.S. United States Sec. 43 et seq.
Qualified State Tax References:
Page 33 of 148
5 USCA 5511, Withholding pay; employees removed for cause
------------ Excerpt from page 36772
UNITED STATES CODE ANNOTATED
TITLE 5. GOVERNMENT ORGANIZATION AND EMPLOYEES
PART III -- EMPLOYEES
SUBPART D -- PAY AND ALLOWANCES
CHAPTER 55 -- PAY ADMINISTRATION
SUBCHAPTER II -- WITHHOLDING PAY
Current through P.L. 104-194, approved 9-9-96
Sec. 5512. Withholding pay; individuals in arrears
(a) The pay of an individual in arrears to the United States
shall be withheld until he has accounted for and paid into the
Treasury of the United States all sums for which he is liable.
(b) When pay is withheld under subsection (a) of this
section, the General Accounting Office, on request of the
individual, his agent, or his attorney, shall report immediately
to the Attorney General the balance due; and the Attorney
General, within 60 days, shall order suit to be commenced against
the individual.
CREDIT(S)
1996 Main Volume
(P.L. 89-554, Sept. 6, 1966, 80 Stat. 477; P.L. 92-310, Title
II, Sec. 202, June 6, 1972, 86 Stat. 202.)
[General Materials (GM) - References, Annotations, or Tables]
HISTORICAL NOTES
HISTORICAL AND STATUTORY NOTES
Revision Notes and Legislative Reports
1966 Acts.
In subsection (b), reference to the "General Accounting
Office" is substituted for "accounting officers of the Treasury"
on authority of the Act of June 10, 1921, ch. 18, title III, 42
Stat. 23. The words "on request of" are substituted for "if
required to do so by" as more accurately reflecting the intent.
Qualified State Tax References:
Page 34 of 148
Reference to the "Attorney General" is substituted for "Solicitor
of the Treasury" and "Solicitor" on authority of section 16 of
the Act of March 3, 1933, ch. 212, 47 Stat. 1517; section 5 of
E.O. 6166, June 10, 1933; and section 1 of 1950 Reorg. Plan No.
2, 64 Stat. 1261.
Standard changes are made to conform with the definitions
applicable and the style of this title as outlined in the preface
to the report.
1972 Acts. Senate Report No. 92-790, see 1972 U.S. Code
Cong. and Adm. News, p. 2364.
Amendments
1972 Amendments. Subsec. (b). P.L. 92-310 eliminated "and
his sureties" following "against the individual".
REFERENCES
CROSS REFERENCES
Armed forces officers pay withheld under this section, see 37
USCA 1007.
Coast Guard, pay of enlisted men indebted to United States, see
14 USCA 461.
LIBRARY REFERENCES
American Digest System
Compensation of federal officers, agents, and employees;
deductions and set-offs against pay, see United States K39(1) et
seq., 39(10).
Encyclopedias
Compensation of federal officers, agents, and employees;
deductions and set-offs against pay, see C.J.S. United States 43
et seq., 49.
ANNOTATIONS
NOTES OF DECISIONS
Generally 1
Hearing 4
Mandatory nature of section 2
Moot questions 5
Payments subject to withholding 3
1. Generally
Qualified State Tax References:
Page 35 of 148
Federal Housing Administration and Veterans' Administration
possessed clear authority to initiate setoff mechanism to collect
alleged debt of federal government employee, who was employed by
Veterans' Administration, to Federal Housing Administration.
Atwater v. Roudebush, D.C.Ill.1976, 452 F.Supp. 622.
2. Mandatory nature of section
Should accountable officer request it, General Accounting
Office is required to report lost amount to Attorney General,
who, in turn, is required to institute legal action against
accountable officer; since this section is mandatory, there is
no provision for discretion to decline to report debt, or to sue
accountable officer. 1985, 64 Op.Comp.Gen. 606.
3. Payments subject to withholding
Where $15,992.20 in government funds disappeared while
entrusted to United States Navy petty officer who was serving as
an agent-cashier aboard ship, the Navy did not act arbitrarily or
capriciously in withholding a total of $5,845.92 from the petty
officer's pay between the time the loss was discovered and the
date of his voluntary discharge from the Navy. Serrano v. U.S.,
Ct.Cl.1979, 612 F.2d 525, 222 Ct.Cl. 52.
Government possesses clear legal authority, grounded in
common law right of every creditor to apply moneys of his debtor
in his hands to extinguishment of claims due him from debtor, to
apply all available assets in its possession, including both
unpaid salary and retirement funds belonging to defaulting
officer or employee toward liquidation of that individual's
indebtedness to government. Atwater v. Roudebush, D.C.Ill.1976,
452 F.Supp. 622.
Where it has been determined that a United States Post
Office Department [now United States Postal Service] employee was
responsible for thefts from registered currency remittances, the
setoff of plaintiff's indebtedness against his civil service
retirement credit and his withheld salary is authorized under
this section. Parker v. U.S., Ct.Cl.1969, 187 Ct.Cl. 553.
4. Hearing
The Immigration and Naturalization Service must accord its
employees a Goldberg v. Kelly type hearing before the Service
withholds, pursuant to this section, the wages of such employees
in satisfaction of a debt allegedly owed the United States. 1979
(Counsel-Inf.Op.) 3 Op.O.L.C. 269.
5. Moot questions
Collection of debt prior to, or during pendency of,
litigation does not present courts with moot question, since
issue at trial concerns original amount asserted against officer,
and not balance remaining to be paid. 1985, 64 Op.Comp.Gen. 606.
Qualified State Tax References:
Page 36 of 148
5 USCA 5512, Withholding pay; individuals in arrears
------------ Excerpt from pages 36773-36775
UNITED STATES CODE ANNOTATED
TITLE 5. GOVERNMENT ORGANIZATION AND EMPLOYEES
PART III -- EMPLOYEES
SUBPART D -- PAY AND ALLOWANCES
CHAPTER 55 -- PAY ADMINISTRATION
SUBCHAPTER II -- WITHHOLDING PAY
Current through P.L. 104-194, approved 9-9-96
UNITED STATES CODE ANNOTATED
TITLE 5. GOVERNMENT ORGANIZATION AND EMPLOYEES
PART III -- EMPLOYEES
SUBPART D -- PAY AND ALLOWANCES
CHAPTER 55 -- PAY ADMINISTRATION
SUBCHAPTER II -- WITHHOLDING PAY
Current through P.L. 104-194, approved 9-9-96
Sec. 5513. Withholding pay; credit disallowed or charge raised
for payment
When the General Accounting Office, on a statement of the
account of a disbursing or certifying official of the United
States, disallows credit or raises a charge for a payment to an
individual in or under an Executive agency otherwise entitled to
pay, the pay of the payee shall be withheld in whole or in part
until full reimbursement is made under regulations prescribed by
the head of the Executive agency from which the payee is entitled
to receive pay. This section does not repeal or modify existing
statutes relating to the collection of the indebtedness of an
accountable, certifying, or disbursing official.
CREDIT(S)
1996 Main Volume
(P.L. 89-554, Sept. 6, 1966, 80 Stat. 477.)
[General Materials (GM) - References, Annotations, or Tables]
Qualified State Tax References:
Page 37 of 148
HISTORICAL NOTES
HISTORICAL AND STATUTORY NOTES
Revision Notes and Legislative Reports
1966 Acts.
The words "On and after May 26, 1936" are omitted as
executed. The word "official" is substituted for "officer" and
"officers" as the definition of "officer" in section 2104
excludes a member of a uniformed service. The words "from the
United States or from an agency or instrumentality thereof" are
omitted as unnecessary.
Standard changes are made to conform with the definitions
applicable and the style of this title as outlined in the preface
to the report.
REFERENCES
LIBRARY REFERENCES
American Digest System
Compensation of federal officers, agents, and employees;
deductions and set-offs against pay, see United States K39(1) et
seq., 39(10).
Encyclopedias
Compensation of federal officers, agents, and employees;
deductions and set-offs against pay, see C.J.S. United States 43
et seq., 49.
5 USCA 5513, Withholding pay; credit disallowed or charge raised
for payment
------------ Excerpt from pages 36776-36777
UNITED STATES CODE ANNOTATED
TITLE 5. GOVERNMENT ORGANIZATION AND EMPLOYEES
PART III -- EMPLOYEES
SUBPART D -- PAY AND ALLOWANCES
CHAPTER 55 -- PAY ADMINISTRATION
SUBCHAPTER II -- WITHHOLDING PAY
Current through P.L. 104-194, approved 9-9-96
Sec. 5514. Installment deduction for indebtedness to the United
States
Qualified State Tax References:
Page 38 of 148
(a)(1) When the head of an agency or his designee determines
that an employee, member of the Armed Forces or Reserve of the
Armed Forces, is indebted to the United States for debts to which
the United States is entitled to be repaid at the time of the
determination by the head of an agency or his designee, or is
notified of such a debt by the head of another agency or his
designee the amount of indebtedness may be collected in monthly
installments, or at officially established pay intervals, by
deduction from the current pay account of the individual. The
deductions may be made from basic pay, special pay, incentive
pay, retired pay, retainer pay, or, in the case of an individual
not entitled to basic pay, other authorized pay. The amount
deducted for any period may not exceed 15 percent of disposable
pay, except that a greater percentage may be deducted upon the
written consent of the individual involved. If the individual
retires or resigns, or if his employment or period of active duty
otherwise ends, before collection of the amount of the
indebtedness is completed, deduction shall be made from
subsequent payments of any nature due the individual from the
agency concerned. All Federal agencies to which debts are owed
and which have outstanding delinquent debts shall participate in
a computer match at least annually of their delinquent debt
records with records of Federal employees to identify those
employees who are delinquent in repayment of those debts. The
preceding sentence shall not apply to any debt under the Internal
Revenue Code of 1986. Matched Federal employee records shall
include, but shall not be limited to, records of active Civil
Service employees government-wide, military active duty
personnel, military reservists, United States Postal Service
employees, employees of other government corporations, and
seasonal and temporary employees. The Secretary of the Treasury
shall establish and maintain an interagency consortium to
implement centralized salary offset computer matching, and
promulgate regulations for this program. Agencies that perform
centralized salary offset computer matching services under this
subsection are authorized to charge a fee sufficient to cover the
full cost for such services.
(2) Except as provided in paragraph (3) of this subsection,
prior to initiating any proceedings under paragraph (1) of this
subsection to collect any indebtedness of an individual, the head
of the agency holding the debt or his designee, shall provide the
individual with --
(A) a minimum of thirty days written notice, informing such
individual of the nature and amount of the indebtedness
determined by such agency to be due, the intention of the agency
to initiate proceedings to collect the debt through deductions
from pay, and an explanation of the rights of the individual
under this subsection;
(B) an opportunity to inspect and copy Government records
relating to the debt;
(C) an opportunity to enter into a written agreement with
the agency, under terms agreeable to the head of the agency or
Qualified State Tax References:
Page 39 of 148
his designee, to establish a schedule for the repayment of the
debt; and
(D) an opportunity for a hearing on the determination of the
agency concerning the existence or the amount of the debt, and in
the case of an individual whose repayment schedule is established
other than by a written agreement pursuant to subparagraph (C),
concerning the terms of the repayment schedule.
A hearing, described in subparagraph (D), shall be provided if
the individual, on or before the fifteenth day following receipt
of the notice described in subparagraph (A), and in accordance
with such procedures as the head of the agency may prescribe,
files a petition requesting such a hearing. The timely filing of
a petition for hearing shall stay the commencement of collection
proceedings. A hearing under subparagraph (D) may not be
conducted by an individual under the supervision or control of
the head of the agency, except that nothing in this sentence
shall be construed to prohibit the appointment of an
administrative law judge. The hearing official shall issue a
final decision at the earliest practicable date, but not later
than sixty days after the filing of the petition requesting the
hearing.
(3) Paragraph (2) shall not apply to routine intra-agency
adjustments of pay that are attributable to clerical or
administrative errors or delays in processing pay documents that
have occurred within the four pay periods preceding the
adjustment and to any adjustment that amounts to $50 or less, if
at the time of such adjustment, or as soon thereafter as
practical, the individual is provided written notice of the
nature and the amount of the adjustment and a point of contact
for contesting such adjustment.
(4) The collection of any amount under this section shall be
in accordance with the standards promulgated pursuant to sections
3711 and 3716-3718 of title 31 or in accordance with any other
statutory authority for the collection of claims of the United
States or any agency thereof.
(5) For purposes of this subsection --
(A) "disposable pay" means that part of pay of any
individual remaining after the deduction from those earnings of
any amounts required by law to be withheld; and
(B) "agency" includes executive departments and agencies,
the United States Postal Service, the Postal Rate Commission, the
United States Senate, the United States House of Representatives,
and any court, court administrative office, or instrumentality in
the judicial or legislative branches of the Government, and
government corporations.
(b)(1) The head of each agency shall prescribe regulations,
subject to the approval of the President, to carry out this
section and section 3530(d) of title 31. Regulations prescribed
by the Secretaries of the military departments shall be uniform
Qualified State Tax References:
Page 40 of 148
for the military services insofar as practicable.
(2) For purposes of section 7117(a) of this title, no
regulation prescribed to carry out subsection (a)(2) of this
section shall be considered to be a Government-wide rule or
regulation.
(c) Subsection (a) of this section does not modify existing
statutes which provide for forfeiture of pay or allowances. This
section and section 3530(d) of title 31 do not repeal, modify, or
amend section 4837(d) or 9837(d) of title 10 or section 1007(b),
(c) of title 37.
(d) A levy pursuant to the Internal Revenue Code of 1986
shall take precedence over other deductions under this section.
CREDIT(S)
1996 Main Volume
(P.L. 89-554, Sept. 6, 1966, 80 Stat. 477; P.L. 96-54, Sec.
2(a)(2), Aug. 14, 1979, 93 Stat. 381; P.L. 97-258, Sec.
3(a)(12), Sept. 13, 1982, 96 Stat. 1063; P.L. 97-365, Sec. 5,
Oct. 25, 1982, 96 Stat. 1751; P.L. 97-452, Sec. 2(a)(2), Jan.
12, 1983, 96 Stat. 2478; P.L. 98-216, Sec. 3(a)(4), Feb. 14,
1984, 98 Stat. 6.)
1996 Electronic Update
(As amended P.L. 104-134, Title III, Sec. 31001(h), Apr. 26,
1996, 110 Stat. 1321-363.)
[General Materials (GM) - References, Annotations, or Tables]
HISTORICAL NOTES
HISTORICAL AND STATUTORY NOTES
Revision Notes and Legislative Reports
1966 Acts.
In subsection (a), the words "head of the agency concerned"
are substituted for "Secretary of the department concerned or the
head of the agency or independent establishment concerned, or one
of their designees". The words "an employee, a member of the
armed forces, or a Reserve of the armed forces" are coextensive
with and substituted for "an employee of the United States or any
member of the Army, Navy, Air Force, Marine Corps, or Coast
Guard, or a reserve component thereof" in view of the definitions
in sections 2101 and 2105. The words "basic compensation" are
omitted as included in "basic pay".
In subsection (b), the words "head of each agency" are
substituted for "Each Secretary of a department, or head of an
agency or independent establishment, as appropriate". The words
"Secretaries of the military departments" are substituted for
Qualified State Tax References:
Page 41 of 148
"Secretaries of the Army, Navy, and Air Force" to conform to the
definition of "military department" in section 102.
In subsection (c), the words "section 4837(d) or 9837(d) of
title 10 or section 1007(b), (c) of title 37" are substituted for
"the provisions of the Act of May 22, 1928 (ch. 676, 45 Stat.
698)" in section 4 of the Act of July 15, 1954, on authority of
the Acts of Aug. 10, 1956, ch. 1041, Sec. 49(b), 70A Stat. 640,
and Sept. 7, 1962, P.L. 87-649, Sec. 12(b), 76 Stat. 497.
1979 Acts. Senate Report No. 96-276, see 1979 U.S. Code
Cong. and Adm. News, p. 931.
1982 Acts. House Report No. 97-651, see 1982 U.S. Code Cong.
and Adm. News, p. 1895.
Senate Report Nos. 97-378 and 97-287, see 1982 U.S. Code
Cong. and Adm. News, p. 3377.
1983 Acts. Detailed Explanation prepared by the Office of
the Law Revision Counsel, see 1982 U.S. Code Cong. and Adm. News,
p. 4301.
1984 Acts. Detailed Explanation of H.R. 2727, see 1984 U.S.
Code Cong. and Adm. News, p. 3.
References in Text
The Internal Revenue Code of 1986, referred to in subsecs.
(a)(1) and (d), is set out in Title 26, Internal Revenue Code.
Amendments
1996 Amendments. Subsec. (a)(1). P.L. 104-134, Sec.
31001(h)(A)(i), inserted provisions directing all Federal
agencies to which debts are owed and which have outstanding
delinquent debts to participate in a computer match at least
annually with records of Federal employees to identify those who
are delinquent, directing the Secretary of the Treasury to
establish and maintain an interagency consortium to implement
centralized salary offset computer matching, and authorizing
agencies that perform such computer matching to charge a fee for
the full cost of such services.
Subsec. (a)(3). P.L. 104-134, Sec. 31001(h)(A)(iii), added
par. (3). Former par. (3) redesignated (4).
Subsec. (a)(4), (5). P.L. 104-134, Sec. 31001(h)(A)(ii),
redesignated former pars. (3) and (4) as (4) and (5),
respectively.
Subsec. (a)(5)(B). P.L. 104-134, Sec. 31001(h)(A)(iv),
amended subpar. (B) generally. Prior to amendment, subpar. (B)
read as follows: "'agency' includes the United States Postal
Service and the Postal Rate Commission."
Subsec. (d). P.L. 104-134, Sec. 31001(h)(B), added subsec.
Qualified State Tax References:
Page 42 of 148
(d).
1984 Amendments. Subsec. (c). P.L. 98-216 substituted
"section 3530(d) for "section 581d".
1983 Amendments. Subsec. (a)(3). P.L. 97-452, substituted
"sections 3711 and 3716-3718 of title 31" for "the Federal Claims
Collection Act of 1966 (31 U.S.C. 951 et seq.)".
1982 Amendments. Catchline. P.L. 97-365, Sec. 5(c),
substituted "indebtedness to the United States" for "indebtedness
because of erroneous payment".
Subsec. (a). P.L. 97-365, Sec. 5(a), designated existing
provisions as par. (1), in par. (1) as so designated substituted
provisions relating to debts to which the United States is
entitled to be repaid for provisions which had related to an
indebtedness to the United States because of an erroneous payment
made by an agency to or on behalf of an individual, added
provisions relating to the notification of a debt by the head of
another agency or his designee, substituted provisions
authorizing the deduction of not to exceed 15 percent of
disposable pay for provisions which had authorized the deduction
of not to exceed two-thirds of the pay from which the deduction
was made, and added pars. (2), (3), and (4).
Subsec. (b). P.L. 97-365, Sec. 5(b), designated existing
provisions as par. (1) and added par. (2).
P.L. 97-258, Sec. 3(a)(12), substituted "3530(d)" for
"581d".
1979 Amendments. Subsec. (b). P.L. 96-54 substituted
"President" for "Director of the Bureau of the Budget".
Effective Dates
1996 Acts. Amendment by P.L. 104-134 effective Apr. 26,
1996, see section 31001(a)(2)(A) of P.L. 104-134, set out as a
note under section 3322 of Title 31, Money and Finance.
1979 Acts. Amendment by P.L. 96-54 effective July 12, 1979,
see section 2(b) of P.L. 96-54, set out as a note under section
305 of this title.
Savings Provisions
For savings provisions relating to amendment by P.L. 98-216,
see section 5(d) of P.L. 98-216, set out as a note preceding
section 101 of Title 31, Money and Finance.
Short Title
1982 Amendments. Section 1 of P.L. 97-365 provided: "That
this Act [enacting sections 954 and 955 of former Title 31, Money
and Finance, amending this section and section 552a of this
title, section 1114 of Title 18, Crimes and Criminal Procedure,
Qualified State Tax References:
Page 43 of 148
sections 6103 and 7213 of Title 26, Internal Revenue Code,
section 2415 of Title 28, Judiciary and Judicial Procedure, and
sections 484, 951, and 952 of former Title 31, and enacting
provisions set out as notes under this section and section 6103
of Title 26] may be cited as the 'Debt Collection Act of 1982'."
Delegation of Functions
Authority of the President under subsec. (b) of this section
to approve regulations prescribed by the head of each agency to
carry out this section and section 581d of Title 31, Money and
Finance [31 U.S.C.A. 3530(d)], relating to installment deductions
from pay for indebtedness because of erroneous payment, delegated
to the Office of Personnel Management, see section 8(1) of Ex.
Ord. No. 11609, July 22, 1971, 36 F.R. 13747, set out as a note
under section 301 of Title 3, The President.
Collection of Indebtedness of Employees of Federal Government
Resulting From Action or Suit Brought Against Employee by United
States
P.L. 97-276, Sec. 124, Oct. 2, 1982, 96 Stat. 1195, provided
that: "Notwithstanding any other provision of this joint
resolution [P.L. 97-276], in the case of any employee of the
Federal Government who is indebted to the United States, as
determined by a court of the United States in an action or suit
brought against such employee by the United States, the amount of
the indebtedness may be collected in monthly installments, or at
officially established regular pay period intervals, by deduction
in reasonable amounts from the current pay account of the
individual. The deductions may be made only from basic pay,
special pay, incentive pay, or, in the case of an individual not
entitled to basic pay, other authorized pay. Collection shall be
made over a period not greater than the anticipated period of
employment. The amount deducted for any period may not exceed
one-fourth of the pay from which the deduction is made, unless
the deduction of a greater amount is necessary to make the
collection within the period of anticipated employment. If the
individual retires or resigns, or if his employment otherwise
ends, before collection of the amount of the indebtedness is
completed, deduction shall be made from later payments of any
nature due to the individual from the United States Treasury."
Improvements in Debt Collection Procedures Under 1982 Amendments
as Contained in Debt Collection Act of 1982 Inapplicable to
Claims or Indebtedness Under Internal Revenue Code, Social
Security Act, or Tariff Laws
Section 8(e) of P.L. 97-365, as amended by P.L. 99-514, Sec.
2, Oct. 22, 1986, 100 Stat. 2095, provided that: "Except as
otherwise provided in section 4 or 7 or the foregoing provisions
of this section [amending sections 6103 and 7213 of Title 26,
Internal Revenue Code, and enacting provisions set out as notes
under section 6103 of Title 26], nothing in this Act (or in the
amendments made by this Act) [see Short Title of 1982 Amendments
note under this section] shall apply to claims or indebtedness
arising under, or amounts payable under, the Internal Revenue
Qualified State Tax References:
Page 44 of 148
Code of 1986 [Title 26], the Social Security Act [section 301 et
seq. of Title 42, The Public Health and Welfare], or the tariff
laws of the United States [Title 19, Customs Duties]."
REFERENCES
CROSS REFERENCES
Advisory Council on Historic Preservation employees subject to
Department of the Interior regulations prescribed under this
section, see 16 USCA 470m.
Armed forces members provided same notice and opportunities as
provided under this section for breach of lease or damage paid by
military, see 10 USCA 1055.
Food stamp program overissuance of coupons recovered from Federal
pay as authorized by this section for purposes of --
Disposition of claims, see 7 USCA 2022.
State plans of operation, see 7 USCA 2020.
Student loans in default and referred to Secretary of Health and
Human Services treated as debt subject to this section for
purposes of --
Health professions education, see 42 USCA 292r.
Nurse education, see 42 USCA 297b.
LIBRARY REFERENCES
Administrative Law
Administrative personnel, see 5 CFR Parts 179, 550, and 1210.
Agriculture, see 7 CFR Part 3.
Banks and banking, see 12 CFR Parts 608 and 1408.
Commerce and foreign trade, see 15 CFR Part 22.
Commodity and securities exchanges, see 17 CFR Parts 141 and 204.
Education, see 34 CFR Parts 31 and 32.
Employees' benefits, see 20 CFR Part 361.
Energy, see 10 CFR Part 16.
Foreign relations, see 22 CFR Parts 34, 213, 309, 512, and 1007.
Housing and urban development, see 24 CFR Part 17.
Labor, see 29 CFR Parts 20, 1450, and 1600.
Qualified State Tax References:
Page 45 of 148
Mineral resources, see 30 CFR Part 870.
Money and Finance, Treasury, see 31 CFR Part 5.
National defense, see 32 CFR Part 1697.
Panama Canal, see 35 CFR Part 256.
Parks, forests, and public property, see 36 CFR Part 705.
Pensions, bonuses, and veterans' relief, see 38 CFR Part 1.
Postal Service, see 39 CFR Part 961.
Protection of environment, see 40 CFR Part 13.
Public welfare, see 45 CFR Parts 30, 607, 708, and 1179.
Telecommunication, see 47 CFR Part 1.
Transportation, see 49 CFR Parts 92 and 1017.
American Digest System
Recovery by government of compensation paid to officer, agent, or
employee, see United States K39(14).
Encyclopedias
Recovery by government of compensation paid to officer, agent, or
employee, see C.J.S. United States Sec. 50.
Law Review and Journal Commentaries
Due process in federal debt collection by offset: Two concepts
and a case study. Martin B. White, 41 Okla.L.Rev. 195 (1988).
ANNOTATIONS
NOTES OF DECISIONS
Constitutionality 1/2
Construction with other laws 1
Extreme financial hardship 7
Head of agency determination
Head of agency determination - Generally 2
Head of agency determination - Discretion of agency head 3
Indebtedness for which deductions may be made
Indebtedness for which deductions may be made - Generally 4
Qualified State Tax References:
Page 46 of 148
Indebtedness for which deductions may be made - Armed forces
members 5
Jurisdiction 6
1/2. Constitutionality
Statute permitting Department of Education to collect
student loan debts of federal employees via offset against their
wages was rationally related to legitimate governmental purpose
of securing repayment of federally insured student loans, and did
not violate federal employee's equal protection rights. Sibley
v. U.S. Dept. of Educ., N.D.Ill.1995, 913 F.Supp. 1181.
1. Construction with other laws
Offsets against employee's final salary check and lump-sum
leave payment are governed generally by section 3716 of Title 31,
and fifteen percent limitation of this section is not applicable.
1985, 64 Op.Comp.Gen. 907.
This section, with its implementing regulations, authorizes
salary offset procedure not required by more specific provisions,
such as sections 5522, 5705, and 5724 of this title. 1984, 64
Op.Comp.Gen. 142.
This section does not require change in rule that debts
arising from erroneous payments to Army enlisted men are
"administratively ascertained" debts within purview of 4837 and
9837 of Title 10 and thus subject to remission by the Secretary
of the Army under such sections. 1956, 35 Comp.Gen. 421.
2. Head of agency determination -- Generally
It was invalid to withhold installments from salary of Air
Force officer because of allegedly illegal dependency payments to
his parents under this section requiring Secretary of Air Force
or his designee to order withholding, where neither Secretary nor
his designee made required determination. Arnold v. U.S.,
Ct.Cl.1968, 404 F.2d 953, 186 Ct.Cl. 117.
3. -- Discretion of agency head
Order directing the withholding of installments from salary
of Air Force officer because of allegedly illegal dependency
payments to his parents was invalid, where the withholding order
was issued without any exercise of discretion by the Air Force
but solely as a mechanical response to Comptroller General's
certificate of indebtedness. Arnold v. U.S., Ct.Cl.1968, 404
F.2d 953, 186 Ct.Cl. 117.
4. Indebtedness for which deductions may be made -- Generally
After Air Force has been properly billed by Labor
Department, an overpayment by Department's employee compensation
fund to Air Force employee may be collected under this section as
if it had been made directly by Air Force. 1982, 61 Op. Comp.
Qualified State Tax References:
Page 47 of 148
Gen. 450.
Where federal employee was erroneously granted compensatory
time off in excess of the hours for which he could have received
overtime pay under the aggregate salary limitation provisions of
section 5547 of this title, such employee's annual leave balance
could not be charged with a compensatory time deduction without
employee consent, but such amount could be recovered by means of
offset. (1979) 58 Op. Comp. Gen. 571.
5. -- -- Armed forces members
Statute [set out as a note under this section] providing 25%
right of offset against "current pay account" of "any employee of
the Federal Government" who is indebted to United States did not
apply to members of armed forces. U.S. v. Tafoya, C.A.5 (Tex.)
1986, 803 F.2d 140.
Where it was invalid to withhold installments from salary of
Air Force officer because of allegedly illegal dependency
payments to his parents because neither Secretary of Air Force
nor his designee authorized such withholding, Secretary had no
power years later through designee to direct the withholding.
Arnold v. U.S., Ct.Cl.1968, 404 F.2d 953, 183 Ct.Cl. 117.
6. Jurisdiction
Claim of retired Marine officer to amounts withheld monthly
from his retirement pay on ground retired Marine officer had
received overpayment of retirement pay constituted claim over
which Court of Claims [now Court of Federal Claims] had exclusive
jurisdiction, and, therefore, federal district court could not
entertain claim for recovery of the amounts withheld. Gordon v.
Shoup, C.A.D.C.1963, 316 F.2d 683, 115 U.S.App.D.C. 32.
7. Extreme financial hardship
Federal government employee failed to show that 15% offset
from wages proposed by Department of Education for repayment of
student loan would impose "extreme financial hardship" on
employee within meaning of statutory restriction on such offsets,
where employee failed to provide medical records in support his
claim that he had to eat four times a day at restaurants, to
demonstrate extent to which his health insurance covered his $657
claimed monthly medical expenses, or to show that claimed monthly
credit card expense related to charges incurred for essential
subsistence expenses; unsupported expense claims were properly
reduced or eliminated, in assessing what hardship, if any, would
result from allowance of 15% offset against employee's wages.
Sibley v. U.S. Dept. of Educ., N.D.Ill.1995, 913 F.Supp. 1181.
5 USCA 5514, Installment deduction for indebtedness to the United
States
------------ Excerpt from pages 36778-36788
Qualified State Tax References:
Page 48 of 148
Sec. 5516. Withholding District of Columbia income taxes
(a) The Secretary of the Treasury, under regulations
prescribed by the President, shall enter into an agreement with
the Mayor of the District of Columbia within 120 days of a
request for agreement from the Mayor. The agreement shall
provide that the head of each agency of the United States shall
comply with the requirements of subchapter II of chapter 15 of
title 47, District of Columbia Code, in the case of employees of
the agency who are subject to income taxes imposed by that
subchapter and whose regular place of employment is within the
District of Columbia. The agreement may not apply to pay of an
employee who is not a resident of the District of Columbia as
defined in subchapter II of chapter 15 of title 47, District of
Columbia Code. In the case of pay for service as a member of the
armed forces, the second sentence of this subsection shall be
applied by substituting "who are residents of the District of
Columbia" for "whose regular place of employment is within the
District of Columbia". For the purpose of this subsection,
"employee" has the meaning given it by section 1551c(z) of title
47, District of Columbia Code.
(b) This section does not give the consent of the United
States to the application of a statute which imposes more
burdensome requirements on the United States than on other
employers, or which subjects the United States or its employees
to a penalty or liability because of this section.
CREDIT(S)
1996 Main Volume
(P.L. 89-554, Sept. 6, 1966, 80 Stat. 478; P.L. 90-623, Sec.
1(9), Oct. 22, 1968, 82 Stat. 1312; P.L. 94-455, Title XII, Sec.
1207(a)(2), Oct. 4, 1976, 90 Stat. 1705; P.L. 96-54, Sec.
2(a)(30), Aug. 14, 1979, 93 Stat. 383.)
[General Materials (GM) - References, Annotations, or Tables]
HISTORICAL NOTES
HISTORICAL AND STATUTORY NOTES
Revision Notes and Legislative Reports
1966 Acts.
Section 2(c) "(z)" of the Act of Mar. 31, 1956, 70 Stat. 68
(section 1551c(z) of title 47, District of Columbia Code)
contains a definition of "employee" that is applicable to this
section. Accordingly, the last sentence of subsection (a) is
added to preserve the application of the source law.
Standard changes are made to conform with the definitions
applicable and the style of this title as outlined in the preface
to the report.
Qualified State Tax References:
Page 49 of 148
1968 Acts. Senate Report No. 1624, see 1968 U.S. Code Cong.
and Adm. News, p. 4446.
1976 Acts. House Report Nos. 94-658 and 94-1380, Senate
Report No. 94-938(Parts I and II), and House Conference Report
No. 94-1515, see 1976 U.S. Code Cong. and Adm. News, p. 2897.
1979 Acts. Senate Report No. 96-276, see 1979 U.S. Code
Cong. and Adm. News, p. 931.
Amendments
1979 Amendments. Subsec. (a). P.L. 96-54 substituted
"Mayor" for "Commissioner" wherever appearing therein.
1976 Amendments. P.L. 94-455 struck out "pay for service as
a member of the armed forces, or to" following "The agreement may
not apply to" and added provision that in the case of service as
a member of the armed forces, the second sentence shall be
applied by substituting "who are residents of the District of
Columbia" for "whose regular place of employment is within the
District of Columbia".
1968 Amendments. Subsec. (a). P.L. 90-623 substituted
"Commissioner" for "Commissioners" in two instances.
Effective Dates
1979 Acts. Amendment by P.L. 96-54 effective July 12, 1979,
see section 2(b) of P.L. 96-54, set out as a note under section
305 of this title.
1976 Acts. Section 1207(f)(1) of P.L. 94-455 provided that:
"The amendments made by subsection (a) [amending subsec. (a) of
this section and section 5517(a) of this title] shall apply to
wages withheld after the 120-day period following any request for
an agreement after the date of the enactment of this Act [Oct. 4,
1976]."
1968 Acts. Amendment by P.L. 90-623 intended to restate
without substantive change the law in effect on Oct. 22, 1968,
see section 6 of P.L. 90-623, set out as a note under section
5334 of this title.
REFERENCES
CROSS REFERENCES
Withholding of District of Columbia income taxes by --
Clerk and Sergeant at Arms of House of Representatives, see 2
USCA 60e-1a and 60e-1b.
Secretary of Senate, see 2 USCA 60c-3.
LIBRARY REFERENCES
Qualified State Tax References:
Page 50 of 148
Administrative Law
Money and finance, Treasury, see 31 CFR Part 215.
American Digest System
Compensation of federal officers, agents, and employees;
deductions and set-offs against pay, see United States K39(1) et
seq., 39(10).
Encyclopedias
Compensation of federal officers, agents, and employees;
deductions and set-offs against pay, see C.J.S. United States,
sections 43 et seq., 49.
ANNOTATIONS
NOTES OF DECISIONS
Constitutionality 1
1. Constitutionality
There was no unlawful deprivation of equal protection in
that Sec. 5517 of this title granted authority to officials to
enter into and effectuate an agreement with State of New Mexico
for withholding of New Mexico income tax from pay of plaintiff
residents of El Paso, Texas, employed at federal enclave in New
Mexico, while this section prevented Secretary from entering into
an agreement with commissioners [now commissioner] of the
District of Columbia for withholding District income tax from the
pay of any federal employee not a resident of the District of
Columbia. Lung v. O'Cheskey, D.C.N.M.1973, 358 F.Supp. 928,
affirmed 94 S.Ct. 159, 414 U.S. 802, 38 L.Ed.2d 39.
5 USCA 5516, Withholding District of Columbia income taxes
------------ Excerpt from pages 36791-36793
UNITED STATES CODE ANNOTATED
TITLE 5. GOVERNMENT ORGANIZATION AND EMPLOYEES
PART III -- EMPLOYEES
SUBPART D -- PAY AND ALLOWANCES
CHAPTER 55 -- PAY ADMINISTRATION
SUBCHAPTER II -- WITHHOLDING PAY
Current through P.L. 104-194, approved 9-9-96
Sec. 5517. Withholding State income taxes
Qualified State Tax References:
Page 51 of 148
(a) When a State statute --
(1) provides for the collection of a tax either by imposing
on employers generally the duty of withholding sums from the pay
of employees and making returns of the sums to the State, or by
granting to employers generally the authority to withhold sums
from the pay of employees if any employee voluntarily elects to
have such sums withheld; and
(2) imposes the duty or grants the authority to withhold
generally with respect to the pay of employees who are residents
of the State;
the Secretary of the Treasury, under regulations prescribed by
the President, shall enter into an agreement with the State
within 120 days of a request for agreement from the proper State
official. The agreement shall provide that the head of each
agency of the United States shall comply with the requirements of
the State withholding statute in the case of employees of the
agency who are subject to the tax and whose regular place of
Federal employment is within the State with which the agreement
is made. In the case of pay for service as a member of the armed
forces, the preceding sentence shall be applied by substituting
"who are residents of the State with which the agreement is made"
for "whose regular place of Federal employment is within the
State with which the agreement is made".
(b) This section does not give the consent of the United
States to the application of a statute which imposes more
burdensome requirements on the United States than on other
employers, or which subjects the United States or its employees
to a penalty or liability because of this section. An agency of
the United States may not accept pay from a State for services
performed in withholding State income taxes from the pay of the
employees of the agency.
(c) For the purpose of this section, "State" means a State
or territory or possession of the United States.
(d) For the purpose of this section and sections 5516 and
5520, the terms "serve as a member of the armed forces" and
"service as a member of the Armed Forces" include --
(1) participation in exercises or the performance of duty
under section 502 of title 32, United States Code, by a member of
the National Guard; and
(2) participation in scheduled drills or training periods,
or service on active duty for training, under section 10147 of
title 10, United States Code, by a member of the Ready Reserve.
CREDIT(S)
1996 Main Volume
(P.L. 89-554, Sept. 6, 1966, 80 Stat. 478; P.L. 94-455, Title
XII, Sec. 1207(a)(1), (b), (c), Oct. 4, 1976, 90 Stat. 1704,
Qualified State Tax References:
Page 52 of 148
1705; P.L. 100-180, Div. A, Title V, Sec. 505(1), Dec. 4, 1987,
101 Stat. 1086; P.L. 103-337, Div. A, Title XVI, Sec.
1677(a)(1), Oct. 5, 1994, 108 Stat. 3019.)
[General Materials (GM) - References, Annotations, or Tables]
HISTORICAL NOTES
HISTORICAL AND STATUTORY NOTES
Revision Notes and Legislative Reports
1966 Acts.
NOTE -- Some parts of this form are wider than one screen.
To view
material that exceeds the width of this screen, use the
right arrow
key. To return to the original screen, use the left arrow
key.
In subsection (b), the words "after March 31, 1959" are
omitted as executed.
Standard changes are made to conform with the definitions
applicable and the style of this title as outlined in the preface
to the report.
1976 Acts. House Report Nos. 94-658 and 94-1380, Senate
Report No. 94-938(Parts I and II), and House Conference Report
No. 94-1515, see 1976 U.S. Code Cong. and Adm. News, p. 2897.
1987 Acts. House Report No. 100-58 and House Conference
Report No. 100-446, see 1987 U.S. Code Cong. and Adm. News, p.
1018.
1994 Acts. House Report No. 103-499 and House Conference
Report No. 103-701, see 1994 U.S. Code Cong. and Adm. News, p.
2091.
Amendments
1994 Amendments. Subsec. (d)(2). P.L. 103-337, Sec.
1677(a)(1), substituted "section 10147 of title 10" for "section
270(a) of title 10".
1987 Amendments. Subsec. (d). P.L. 100-180, Sec. 505(1),
struck out "do not" before "include".
1976 Amendments. Subsec. (a). P.L. 94-455, Sec. 1207(a)(1),
(c), added in par. (1) provision relating to the grant to
employers of the authority to withhold sums from the pay of
employees if any employee voluntarily elects to have such sums
withheld, inserted in par. (2) "or grants the authority"
following "imposes the duty", and substituted in material
Qualified State Tax References:
Page 53 of 148
following par. (2) provisions that in the case of pay for service
as a member of the armed forces, the preceding sentence shall be
applied by substituting "who are residents of the State with
which the agreement is made" for "whose regular place of Federal
employment is within the State with which the agreement is made"
for provision that the agreement may not apply to pay for service
as a member of the armed forces.
Subsec. (d). P.L. 94-455, Sec. 1207(b), added subsec. (d).
Effective Dates
1994 Acts. Except as otherwise provided, amendment by
section 1677(a)(1) of P.L. 103-337 effective Dec. 1, 1994, see
section 1691 of P.L. 103-337, set out as a note under section
10001 of Title 10, Armed Forces.
1976 Acts. Amendment by section 1207(a)(1) of P.L. 94-455
applicable to wages withheld after the 120-day period following
any request for an agreement after Oct. 4, 1976, see section
1207(f)(1) of P.L. 94-455, set out as a note under section 5516
of this title.
Section 1207(f)(2) of P.L. 94-455 provided that: "The
amendments made by subsections (b) and (c) [amending subsecs.
(a)(1), (2) and adding subsec. (d) of this section] shall apply
to wages withheld after the 120-day period following the date of
the enactment of this Act [Oct. 4, 1976]."
TEXT
EXECUTIVE ORDERS
EXECUTIVE ORDER NO. 10407
Ex. Ord. No. 10407, Nov. 7, 1952, 17 F.R. 10132, formerly
set out as a note under this section, which related to
regulations governing agreements concerning withholdings of state
or territorial income taxes, was revoked by Ex. Ord. No. 11968,
Jan. 31, 1977, 42 F.R. 6787, formerly set out as a note under
section 5520 of this title.
REFERENCES
CROSS REFERENCES
Military leave entitlements for Federal government and District
of Columbia employees except as provided in this section, see 5
USCA 6323.
Withholding of State income taxes by --
Architect of the Capitol, see 40 USCA 166b-5.
Clerk and Sergeant at Arms of the House of Representatives, see 2
USCA 60e-1a and 60e-1b.
Qualified State Tax References:
Page 54 of 148
Secretary of Senate, see 2 USCA 60c-3.
LIBRARY REFERENCES
Administrative Law
Money and finance, Treasury, see 31 CFR Part 215.
American Digest System
Compensation of federal officers, agents, and employees;
deductions and set-offs against pay, see United States K39(1) et
seq., 39(10).
Encyclopedias
Compensation of federal officers, agents, and employees;
deductions and set-offs against pay, see C.J.S. United States,
sections 43 et seq., 49.
ANNOTATIONS
NOTES OF DECISIONS
Generally 3
Constitutionality 1
Jurisdiction 7
Law governing 2
Liability for taxes erroneously withheld 5
Sovereign immunity 6
States within section 4
1. Constitutionality
There was no unlawful deprivation of equal protection in
that this section granted authority to officials to enter into
and effectuate an agreement with State of New Mexico for
withholding of New Mexico income tax from pay of plaintiff
residents of El Paso, Texas, employed at federal enclave in New
Mexico, while Sec. 5516 of this title prevented Secretary from
entering into an agreement with commissioners of the District of
Columbia for withholding District income tax from the pay of any
federal employee not a resident of the District of Columbia.
Lung v. O'Cheskey, D.C.N.M.1973, 358 F.Supp. 928, affirmed 94
S.Ct. 154, 414 U.S. 802, 38 L.Ed.2d 39.
2. Law governing
Power of defendant finance and accounting officer at federal
enclave in New Mexico where plaintiffs were employed and of
Secretary of the Treasury to enter into withholding agreements
Qualified State Tax References:
Page 55 of 148
and to withhold New Mexico income tax from plaintiffs' pay did
not derive from state law and they were not acting under color of
state law as required for a civil rights action. Lung v.
O'Cheskey, D.C.N.M.1973, 358 F.Supp. 928, affirmed 94 S.Ct. 159,
414 U.S. 802, 38 L.Ed.2d 39.
3. Generally
This section authorizing the Secretary of the Treasury to
enter into agreements with the state as regards withholding of
state income taxes from state residents who are employees of the
federal government does not authorize imposition of a greater
burden on the federal government than that imposed on the private
employer as regards withholding of state income taxes. Clincher
v. U.S., Ct.Cl.1974, 499 F.2d 1250, 205 Ct.Cl. 8, certiorari
denied 95 S.Ct. 1427, 420 U.S. 991, 43 L.Ed.2d 672.
4. States within section
The Commonwealth of Puerto Rico was not a "State or
territory or possession of the United States," for purposes of
statute authorizing Secretary of the Treasury to enter into
agreement to withhold state income taxes from federal employees'
wages, and, therefore, withholding agreement with Commonwealth of
Puerto Rico was unlawful and void; Congress had amended similar,
related statute in same Title to include Puerto Rico expressly
but, in stark contrast, had never expressly authorized Secretary
to enter into withholding agreements with Puerto Rico. Romero v.
U.S., C.A.Fed. (Puerto Rico) 1994, 38 F.3d 1204.
5. Liability for taxes erroneously withheld
Federal employees were not entitled, under Back Pay Act, to
refund of any money which United States had paid over to
Commonwealth of Puerto Rico pursuant to invalid income tax
withholding agreement between Secretary of the Treasury and
Commonwealth of Puerto Rico, but rather, could recover only those
amounts which had been withheld but had not yet been paid.
Romero v. U.S., C.A.Fed. (Puerto Rico) 1994, 38 F.3d 1204.
United States was not liable to its Arizona and Montana
Indian employees for state income taxes erroneously withheld from
their salaries since a private employer would not be liable under
Arizona or Montana law. Clincher v. U.S., Ct.Cl.1974, 499 F.2d
1250, 205 Ct.Cl. 8, certiorari denied 95 S.Ct. 1427, 420 U.S.
991, 43 L.Ed.2d 672.
6. Sovereign immunity
Where defendant finance and accounting officer at federal
enclave in New Mexico where plaintiff residents of El Paso,
Texas, were employed and Secretary of the Treasury were acting
within scope of authority granted them by Congress under statute
in entering into and effectuating an agreement with the state of
New Mexico for withholding of New Mexico income tax from pay of
plaintiffs and were acting as authorized by a constitutional
statute, claim against them, as individuals, regarding acts
Qualified State Tax References:
Page 56 of 148
performed in their official capacity was barred by doctrine of
sovereign immunity. Lung v. O'Cheskey, D.C.N.M.1973, 358 F.Supp.
928, affirmed 94 S.Ct. 159, 414 U.S. 802, 38 L.Ed.2d 39.
7. Jurisdiction
Court of claims [now Court of Federal Claims] had subject
matter jurisdiction of action by seven American Indians, who were
or had been United States employees on Indian reservations,
seeking to recover amounts withheld from their wages by the
federal government for state income taxes and paid over to the
state. Clincher v. U.S., Ct.Cl.1974, 499 F.2d 1250, certiorari
denied 95 S.Ct. 1427, 420 U.S. 991, 43 L.Ed.2d 672.
5 USCA 5517, Withholding State income taxes
------------ Excerpt from pages 36794-36799
UNITED STATES CODE ANNOTATED
TITLE 5. GOVERNMENT ORGANIZATION AND EMPLOYEES
PART III -- EMPLOYEES
SUBPART D -- PAY AND ALLOWANCES
CHAPTER 55 -- PAY ADMINISTRATION
SUBCHAPTER II -- WITHHOLDING PAY
Current through P.L. 104-194, approved 9-9-96
Sec. 5518. Deductions for State retirement systems; National
Guard employees
When --
(1) a State statute provides for the payment of employee
contributions to a State employee retirement system or to a State
sponsored plan providing retirement, disability, or death
benefits, by withholding sums from the pay of State employees and
making returns of the sums withheld to State authorities or to
the person or organization designated by State authorities to
receive sums withheld for the program; and
(2) individuals employed by the Army National Guard and the
Air National Guard, except employees of the National Guard
Bureau, are eligible for membership in a State employee
retirement system or other State sponsored plan;
the Secretary of Defense, under regulations prescribed by the
President, shall enter into an agreement with the State within
120 days of a request for agreement from the proper State
official. The agreement shall provide that the Department of
Defense shall comply with the requirements of State statute as to
the individuals named by paragraph (2) of this section who are
Qualified State Tax References:
Page 57 of 148
eligible for membership in the State employee retirement system.
The disbursing officials paying these individuals shall withhold
and pay to the State employee retirement system or to the person
or organization designated by State authorities to receive sums
withheld for the program the employee contributions for these
individuals. For the purpose of this section, "State" means a
State or territory or possession of the United States including
the Commonwealth of Puerto Rico.
CREDIT(S)
1996 Main Volume
(P.L. 89-554, Sept. 6, 1966, 80 Stat. 479.)
[General Materials (GM) - References, Annotations, or Tables]
HISTORICAL NOTES
HISTORICAL AND STATUTORY NOTES
Revision Notes and Legislative Reports
1966 Acts.
The words "individuals employed by" and the word
"individuals" are substituted for "civilian employees of" and
"employees", respectively, in view of the definition of
"employee" in section 2105 which is limited to those employed by
the Government of the United States. The word "civilian" is
omitted as unnecessary as military personnel are not "employed".
The words "disbursing officials" are substituted for "disbursing
officers" as the definition of "officer" in section 2104 excludes
a member of a uniformed service.
Standard changes are made to conform with the definitions
applicable and the style of this title as outlined in the preface
to the report.
TEXT
EXECUTIVE ORDERS
EXECUTIVE ORDER NO. 10996
Feb. 16, 1962, 27 F.R. 1521
WITHHOLDING OF COMPENSATION FOR STATE AND STATE-SPONSORED
EMPLOYEE RETIREMENT, DISABILITY, OR DEATH BENEFITS PROGRAMS
By virtue of the authority vested in me by the act of June
15, 1956, as amended, 75 Stat. 496 (5 U.S.C. 84d) [now this
section], and by section 301 of title 3 of the United States Code
[section 301 of Title 3, The President], and as President of the
United States, it is ordered as follows:
Section 1. As used in this order, the term:
Qualified State Tax References:
Page 58 of 148
(a) "Employees" means civilian employees of the Army
National Guard or Air National Guard of a State who are employed
pursuant to section 709 of title 32 of the United States Code
[section 709 of Title 32, National Guard], and paid from Federal,
appropriated funds.
(b) "State" means one of the United States, the Commonwealth
of Puerto Rico, and any territory of the United States.
Sec. 2. Each agreement between the Secretary of Defense and
the Governor or other proper official of a State, pursuant to the
provisions of the act of June 15, 1956, as amended, with respect
to withholding of compensation of certain civilian employees of
the Army National Guard and the Air National Guard for purposes
of State or State-sponsored employee retirement, disability, or
death benefits systems, shall be entered into by the Secretary of
Defense within one hundred and twenty days of the receipt of a
request therefor by the Secretary from the Governor or any other
proper official of any State: Provided, that --
(a) the law of such State provides for the payment of
employee contributions to such State or State-sponsored employee
retirement, disability, or death benefits systems by withholding
sums from the compensation of such State employees and making
returns of such sums to officials of such State or organization
designated by such officials to receive sums withheld for such
programs;
(b) civilian employees of the Army National Guard and the
Air National Guard, other than those employed by the National
Guard Bureau, are eligible for membership in a State retirement,
disability, or death benefits system; and
(c) each such agreement is consistent with the provisions of
the said act of June 15, 1956, as amended, and of rules and
regulations issued thereunder, and contains a clause that it
shall be subject to any amendments of the said act, including
amendments occurring after the effective date of such agreement.
Sec. 3. Each such agreement shall:
(a) Provide that the Secretary of the Army with respect to
civilian employees of the Army National Guard, and the Secretary
of the Air Force with respect to civilian employees of the Air
National Guard, shall comply with the requirements of such State
law in the case of employees subject to the said act of June 15,
1956, as amended, who are eligible for membership in such
retirement, disability, or death benefits system for State
employees;
(b) Specify when the withholding of sums from the
compensation of such State employees shall commence; and
(c) Provide for procedures for the withholding, the filing
of the returns, and the payment of the sums withheld from
compensation to the officials of the State, or organization
Qualified State Tax References:
Page 59 of 148
designated by such officials to receive sums withheld for such
programs, which procedures shall conform, so far as practicable,
to the usual fiscal practices of the Department of the Army and
the Department of the Air Force, respectively.
Sec. 4. The Secretary of the Army with respect to civilian
employees of the Army National Guard, and the Secretary of the
Air Force with respect to civilian employees of the Air National
Guard, shall designate, or provide for the designation of, the
officers or employees whose duty it shall be to withhold sums
from compensation, file required returns, and direct the payment
of sums so withheld, in accordance with the terms of the
agreements entered into between the Secretary of Defense and the
States.
Sec. 5. Nothing in this order, or in rules or regulations
issued thereunder, or in any agreement entered into pursuant
thereto, shall be construed as giving consent to the application
of any provision of law of any State which has the effect of
imposing more burdensome requirements upon the United States than
it imposes upon departments, agencies, or political subdivisions
of the State concerned, with respect to employees thereof who are
members of the State or State-sponsored retirement, disability,
or death benefits system, or which has the effect of subjecting
the United States or any of its officers or employees to any
penalty or liability.
Sec. 6. I hereby delegate to the Secretary of Defense
authority to prescribe such rules and regulations, not
inconsistent herewith, as may be necessary to effectuate further
the provisions of the said act of June 15, 1956, as amended, or
of this order.
Sec. 7. Except to the extent that they may be inconsistent
with this order, all determinations, authorizations, regulations,
rulings, certificates, orders, directives, contracts, agreements,
and other actions made, issued, or entered into with respect to
any function affected by this order and not revoked, superseded,
or otherwise made inapplicable before the date of this order,
shall continue in full force and effect until amended, modified,
or terminated by appropriate authority.
Sec. 8. This order supersedes Executive Order No. 10679 of
September 20, 1956.
JOHN F. KENNEDY
REFERENCES
LIBRARY REFERENCES
Administrative Law
National defense, see 32 CFR Part 79.
American Digest System
Qualified State Tax References:
Page 60 of 148
Compensation of federal officers, agents, and employees;
deductions and set-offs against pay, see United States K39(1) et
seq., 39(10).
Encyclopedias
Compensation of federal officers, agents, and employees;
deductions and set-offs against pay, see C.J.S. United States,
sections 43 et seq., 49.
5 USCA 5518, Deductions for State retirement systems; National
Guard employees
------------ Excerpt from pages 36800-36803
UNITED STATES CODE ANNOTATED
TITLE 5. GOVERNMENT ORGANIZATION AND EMPLOYEES
PART III -- EMPLOYEES
SUBPART D -- PAY AND ALLOWANCES
CHAPTER 55 -- PAY ADMINISTRATION
SUBCHAPTER II -- WITHHOLDING PAY
Current through P.L. 104-194, approved 9-9-96
Sec. 5520. Withholding of city or county income or employment
taxes
(a) When a city or county ordinance --
(1) provides for the collection of a tax by imposing on
employers generally the duty of withholding sums from the pay of
employees and making returns of the sums to a designated city or
county officer, department, or instrumentality; and
(2) imposes the duty to withhold generally on the payment of
compensation earned within the jurisdiction of the city or county
in the case of employees whose regular place of employment is
within such jurisdiction;
the Secretary of the Treasury, under regulations prescribed by
the President, shall enter into an agreement with the city or
county within 120 days of a request for agreement by the proper
city or county official. The agreement shall provide that the
head of each agency of the United States shall comply with the
requirements of the city or county ordinance in the case of any
employee of the agency who is subject to the tax and (i) whose
regular place of Federal employment is within the jurisdiction of
the city or county with which the agreement is made or (ii) is a
resident of such city or county. The agreement may not apply to
pay for service as a member of the Armed Forces (other than
service described in section 5517(d) of this title). The
Qualified State Tax References:
Page 61 of 148
agreement may not permit withholding of a city or county tax from
the pay of an employee who is not a resident of, or whose regular
place of Federal employment is not within, the State in which
that city or county is located unless the employee consents to
the withholding.
(b) This section does not give the consent of the United
States to the application of an ordinance which imposes more
burdensome requirements on the United States than on other
employers or which subjects the United States or its employees to
a penalty or liability because of this section. An agency of the
United States may not accept pay from a city or county for
services performed in withholding city or county income or
employment taxes from the pay of employees of the agency.
(c) For the purpose of this section --
(1) "city" means any unit of general local government which
--
(A) is classified as a municipality by the Bureau of the
Census, or
(B) is a town or township which, in the determination of the
Secretary of the Treasury --
(i) possesses powers and performs functions comparable to
those associated with municipalities,
(ii) is closely settled, and
(iii) contains within its boundaries no incorporated places,
as defined by the Bureau of the Census,
within the political boundaries of which 500 or more persons are
regularly employed by all agencies of the Federal Government;
(2) "county" means any unit of local general government
which is classified as a county by the Bureau of the Census and
within the political boundaries of which 500 or more persons are
regularly employed by all agencies of the Federal Government;
(3) "ordinance" means an ordinance, order, resolution, or
similar instrument which is duly adopted and approved by a city
or county in accordance with the constitution and statutes of the
State in which it is located and which has the force of law
within such city or county; and
(4) "agency" means --
(A) an Executive agency;
(B) the judicial branch; and
(C) the United States Postal Service.
CREDIT(S)
Qualified State Tax References:
Page 62 of 148
1996 Main Volume
(Added P.L. 93-340, Sec. 1(a), July 10, 1974, 88 Stat. 294, and
amended P.L. 94-358, Sec. 1, July 12, 1976, 90 Stat. 910; P.L.
95-30, Title IV, Sec. 408(a), May 23, 1977, 91 Stat. 157; P.L.
95-365, Sec. 1, Sept. 15, 1978, 92 Stat. 599; P.L. 100-180, Div.
A, Title V, Sec. 505(2), Dec. 4, 1987, 101 Stat. 1086.)
[General Materials (GM) - References, Annotations, or Tables]
HISTORICAL NOTES
HISTORICAL AND STATUTORY NOTES
Revision Notes and Legislative Reports
1974 Acts. Senate Report No. 93-946, see 1974 U.S. Code
Cong. and Adm. News, p. 3450.
1976 Acts. House Report No. 94-1008, see 1976 U.S. Code
Cong. and Adm. News, p. 1680.
1977 Acts. Senate Report No. 95-66 and House Conference
Report No. 95-263, see 1977 U.S. Code Cong. and Adm. News, p.
185.
1978 Acts. Senate Report No. 95-1083, see 1978 U.S. Code
Cong. and Adm. News, p. 1375.
1987 Acts. House Report No. 100-58 and House Conference
Report No. 100-446, see 1987 U.S. Code Cong. and Adm. News, p.
1018.
Amendments
1987 Amendments. Subsec. (a). P.L. 100-180, Sec. 505(2),
inserted "(other than service described in section 5517(d) of
this title)" after "Armed Forces" in penultimate sentence.
1978 Amendments. Subsec. (a). P.L. 95-365 designated
existing provisions as cl. (i), and added ", or whose regular
place of Federal employment is not within," following "not a
resident of", and added cl. (ii).
1977 Amendments. P.L. 95-30, Sec. 408(a)(1), inserted "or
county" following "city" in the section catchline.
Subsec. (a). P.L. 95-30, Sec. 408(a)(2), (3), substituted
"city or county" for "city" in the introductory provisions
preceding par. (1), in par. (2), and in the provisions following
par. (2), and, in par. (1), substituted "a designated city or
county officer, department, or instrumentality" for "the city".
Subsec. (b). P.L. 95-30, Sec. 408(a)(2), substituted "city
or county" for "city".
Qualified State Tax References:
Page 63 of 148
Subsec. (c). P.L. 95-30, Sec. 408(a)(4), (5), added pars.
(2) and (3), and redesignated former par. (2) as (4).
1976 Amendments. Subsec. (c)(1). P.L. 94-358 substituted
provision defining a city, for purposes of this section, as any
unit of general local government which is classified a
municipality by the Bureau of the Census, or is a town or
township which in the opinion of the Secretary of the Treasury
possesses powers and performs functions comparable to those
associated with municipalities, is closely settled, and contains
within its boundaries no incorporated places, as defined by the
Bureau of the Census, within the political boundaries of which
five hundred or more persons are regularly employed by all
agencies of the Federal Government, for provision defining a
city, for purposes of this section, as a city which is duly
incorporated under the laws of a State and within the political
boundaries of which five hundred or more persons are regularly
employed by all agencies of the Federal Government.
Effective Dates
1978 Acts. Section 2 of P.L. 95-365 provided that: "The
amendments made by the first section of this Act [amending
subsec. (a) of this section] shall take effect on the 90th day
after the date of the enactment of this Act [Sept. 15, 1978]."
1977 Acts. Section 408(c) of P.L. 95-30 provided that: "The
amendments made by this section [amending this section] shall
take effect on the date of enactment of this Act [May 23, 1977]."
1976 Acts. Section 2 of P.L. 94-358 provided that: "The
amendment made by the first section of this Act [amending subsec.
(c)(1) of this section] shall take effect on the date of the
enactment of this Act [July 12, 1976]."
1974 Acts. Section 3 of P.L. 93-340 provided that: "This
section shall become effective on the date of enactment of this
Act [July 10, 1974]. The provisions of the first section and
section 2 of this Act [enacting this section and amending section
410(b)(1) of Title 39, Postal Service] shall become effective on
the ninetieth day following the date of enactment [July 10,
1974]."
TEXT
EXECUTIVE ORDERS
EXECUTIVE ORDER NO. 11833
Ex. Ord. No. 11833, Jan. 13, 1975, 40 F.R. 2673, formerly
set out as a note under this section, which related to the
withholding of city income or employment taxes by federal
agencies, was revoked by Ex. Ord. No. 11863, June 12, 1975, 40
F.R. 25431, formerly set out as a note under this section.
EXECUTIVE ORDER NO. 11863
Qualified State Tax References:
Page 64 of 148
Ex. Ord. No. 11863, June 12, 1975, 40 F.R. 25431, formerly
set out as a note under this section, which related to the
withholding of city income or employment taxes by federal
agencies, was revoked by Ex. Ord. No. 11968, Jan. 31, 1977, 42
F.R. 6787, formerly set out as a note under this section.
EXECUTIVE ORDER NO. 11968
Ex. Ord. No. 11968, Jan. 31, 1977, 42 F.R. 6787, formerly
set out as a note under this section, which related to the
withholding of District of Columbia, state and city income or
employment taxes, was revoked by Ex. Ord. No. 11997, June 22,
1977, 42 F.R. 31759, set out under this section.
EXECUTIVE ORDER NO. 11997
June 22, 1977, 42 F.R. 31759
WITHHOLDING OF DISTRICT OF COLUMBIA, STATE, CITY AND COUNTY
INCOME OR EMPLOYMENT TAXES
By virtue of the authority vested in me by Sections 5516,
5517 and 5520 of Title 5 of the United States Code [sections
5516, 5517 of this title and this section], and Section 301 of
Title 3 of the United States Code [section 301 of Title 3, The
President], and as President of the United States of America, in
order to authorize the Secretary of the Treasury to provide for
the withholding of county income or employment taxes as
authorized by Section 5520 of Title 5 of the United States Code
as amended by Section 408 of Public Law 95-30 [this section], as
well as to provide for the withholding of District of Columbia,
State and city income or employment taxes, it is hereby ordered
as follows:
Section 1. Whenever the Secretary of the Treasury enters
into an agreement pursuant to Sections 5516, 5517 or 5520 of
Title 5 of the United States Code [sections 5516, 5517 of this
title or this section], with the District of Columbia, a State, a
city or a county, as the case may be, with regard to the
withholding, by an agency of the United States, hereinafter
referred to as an agency, of income or employment taxes from the
pay of Federal employees or members of the Armed Forces, the
Secretary of the Treasury shall ensure that each agreement is
consistent with those sections and regulations, including this
Order, issued thereunder.
Sec. 2. Each agreement shall provide (a) when tax
withholding shall begin, (b) that the head of an agency may rely
on the withholding certificate of an employee or a member of the
Armed Forces in withholding taxes, (c) that the method for
calculating the amount to be withheld for District of Columbia,
State, city or county income or employment taxes shall produce
approximately the tax required to be withheld by the District of
Columbia or State law, or city or county ordinance, whichever is
applicable, and (d) that procedures for the withholding, filing
of returns, and payment of the withheld taxes to the District of
Columbia, a State, a city or a county shall conform to the usual
Qualified State Tax References:
Page 65 of 148
fiscal practices of agencies. Any agreement affecting members of
the Armed Forces shall also provide that the head of an agency
may rely on the certificate of legal residence of a member of the
Armed Forces in determining his or her residence for tax
withholding purposes. No agreement shall require the collection
by an agency of delinquent tax liabilities of an employee or a
member of the Armed Forces.
Sec. 3. The head of each agency shall designate, or provide
for the designation of, the officers or employees whose duty it
shall be to withhold taxes, file required returns, and direct
payment of the taxes withheld, in accordance with this Order, any
regulations prescribed by the Secretary of the Treasury, and the
new applicable agreement.
Sec. 4. The Secretary of the Treasury is authorized to
prescribe additional regulations to implement Sections 5516, 5517
and 5520 of Title 5 of the United States Code [sections 5516,
5517 of this title and this section], and this Order.
Sec. 5. Executive Order No. 11968 of January 31, 1977, is
hereby revoked. However, all actions heretofore taken by the
President or his delegates in respect of the matters affected by
this Order and in force at the time of the issuance of this
Order, including any regulations prescribed or approved by the
President or his delegates in respect of such matters and any
existing agreements approved by his delegates, shall, except as
they may be inconsistent with the provisions of this Order,
remain in effect until amended, modified, or revoked pursuant to
the authority conferred by this Order, unless sooner terminated
by operation of law.
JIMMY CARTER
REFERENCES
CROSS REFERENCES
Applicability of this section to the Postal Service, see 39 USCA
410.
LIBRARY REFERENCES
American Digest System
Compensation of federal officers, agents, and employees;
deductions and set-offs against pay, see United States K39(1) et
seq., 39(10).
Encyclopedias
Compensation of federal officers, agents, and employees;
deductions and set-offs against pay, see C.J.S. United States,
sections 43 et seq., 49.
ANNOTATIONS
Qualified State Tax References:
Page 66 of 148
NOTES OF DECISIONS
Purpose 1
1. Purpose
Enactment of the withholding procedure for city income and
employment taxes imposed upon federal employees was not intended
by Congress to modify in any substantive manner the liability of
federal employees for local taxes. U.S. v. City and County of
Denver, D.C.Colo.1983, 573 F.Supp. 686.
5 USCA 5520, Withholding of city or county income or employment
taxes
------------ Excerpt from pages 36805-36809
UNITED STATES CODE ANNOTATED
TITLE 5. GOVERNMENT ORGANIZATION AND EMPLOYEES
PART III -- EMPLOYEES
SUBPART D -- PAY AND ALLOWANCES
CHAPTER 55 -- PAY ADMINISTRATION
SUBCHAPTER III -- ADVANCEMENT, ALLOTMENT, AND ASSIGNMENT OF PAY
Current through P.L. 104-194, approved 9-9-96
Sec. 5521. Definitions
For the purpose of this subchapter --
(1) "agency" means --
(A) an Executive agency;
(B) the judicial branch;
(C) the Library of Congress;
(D) the Government Printing Office; and
(E) the government of the District of Columbia;
(2) "employee" means an individual employed in or under an
agency;
(3) "head of each agency" means --
(A) the Director of the Administrative Office of the United
States Courts with respect to the judicial branch; and
(B) the Mayor of the District of Columbia with respect to
Qualified State Tax References:
Page 67 of 148
the government of the District of Columbia; and
(4) "United States", when used in a geographical sense,
means the several States and the District of Columbia.
CREDIT(S)
1996 Main Volume
(P.L. 89-554, Sept. 6, 1966, 80 Stat. 479; P.L. 90-623, Sec.
1(10), Oct. 22, 1968, 82 Stat. 1312; P.L. 96-54, Sec. 2(a)(31),
Aug. 14, 1979, 93 Stat. 383.)
[General Materials (GM) - References, Annotations, or Tables]
HISTORICAL NOTES
HISTORICAL AND STATUTORY NOTES
Revision Notes and Legislative Reports
1966 Acts.
In paragraph (1), the word "agency" is substituted for
"department". The term "Executive agency" is substituted for the
reference to "each executive department of the Government of the
United States of America; each agency or independent
establishment in the executive branch of such Government; each
corporation wholly owned or controlled by such Government" in
former section 3071(1)(A)-(C).
Paragraph (2) is added for clarity and in view of the fact
that the definition of "employee" in section 2105 does not
include individuals employed by the government of the District of
Columbia.
In paragraph (3), the term "department head" is omitted as
unnecessary.
In paragraph (4), the words "of the United States of
America" are omitted as unnecessary.
Standard changes are made to conform with the definitions
applicable and the style of this title as outlined in the preface
to the report.
1968 Acts. Senate Report No. 1624, see 1968 U.S. Code Cong.
and Adm. News, p. 4446.
1979 Acts. Senate Report No. 96-276, see 1979 U.S. Code
Cong. and Adm. News, p. 931.
Amendments
1979 Amendments. Par. (3)(B). P.L. 96-54 substituted
"Mayor" for "Commissioner".
Qualified State Tax References:
Page 68 of 148
1968 Amendments. Par. (3)(B). P.L. 90-623 substituted
"Commissioner" for "Board of Commissioners".
Effective Dates
1979 Acts. Amendment by P.L. 96-54 effective July 12, 1979,
see section 2(b) of P.L. 96-54, set out as a note under section
305 of this title.
1968 Acts. Amendment by P.L. 90-623 intended to restate
without substantive change the law in effect on Oct. 22, 1968,
see section 6 of P.L. 90-623, set out as a note under section
5334 of this title.
REFERENCES
LIBRARY REFERENCES
American Digest System
Compensation of federal officers, agents, and employees in
general, see United States K39(1) et seq.
Encyclopedias
Compensation of federal officers, agents, and employees in
general, see C.J.S. United States Sec. 43 et seq.
5 USCA 5521, Definitions
------------ Excerpt from pages 36816-36817
UNITED STATES CODE ANNOTATED
TITLE 5. GOVERNMENT ORGANIZATION AND EMPLOYEES
PART III -- EMPLOYEES
SUBPART D -- PAY AND ALLOWANCES
CHAPTER 55 -- PAY ADMINISTRATION
SUBCHAPTER III -- ADVANCEMENT, ALLOTMENT, AND ASSIGNMENT OF PAY
Current through P.L. 104-194, approved 9-9-96
Sec. 5527. Regulations
(a) To the extent practicable in the public interest, the
President shall coordinate the policies and procedures of the
respective Executive agencies under this subchapter.
(b) The President, with respect to the Executive agencies,
the head of the agency concerned, with respect to the appropriate
agency outside the executive branch, and the District of Columbia
Council, with respect to the government of the District of
Qualified State Tax References:
Page 69 of 148
Columbia, shall prescribe and issue, or provide for the
formulation and issuance of, regulations necessary and
appropriate to carry out the provisions, accomplish the purposes,
and govern the administration of this subchapter.
(c) The head of each Executive agency may prescribe and
issue regulations, not inconsistent with the regulations of the
President issued under subsection (b) of this section, necessary
and appropriate to carry out his functions under this subchapter.
CREDIT(S)
1996 Main Volume
(P.L. 89-554, Sept. 6, 1966, 80 Stat. 481; P.L. 90-623, Sec.
1(11), Oct. 22, 1968, 82 Stat. 1312.)
[General Materials (GM) - References, Annotations, or Tables]
HISTORICAL NOTES
HISTORICAL AND STATUTORY NOTES
Revision Notes and Legislative Reports
1966 Acts.
In subsection (b), the last sentence of former section 3076,
which provided for the issuance of the regulations not later than
December 25, 1961, and the effective date of the regulations as
not later than March 25, 1962, is omitted as executed.
Standard changes are made to conform with the definitions
applicable and the style of this title as outlined in the preface
to the report.
1968 Acts. Senate Report No. 1624, see 1968 U.S. Code Cong.
and Adm. News, p. 4446.
Amendments
1968 Amendments. Subsec. (b). P.L. 90-623 inserted
reference to the District of Columbia Council, with respect to
the government of the District of Columbia.
Effective Dates
1968 Acts. Amendment by P.L. 90-623 intended to restate
without substantive change the law in effect on Oct. 22, 1968,
see section 6 of P.L. 90-623, set out as a note under section
5334 of this title.
TEXT
EXECUTIVE ORDERS
EXECUTIVE ORDER NO. 10982
Qualified State Tax References:
Page 70 of 148
Dec. 25, 1961, 27 F.R. 3, as amended by Ex. Ord. No. 12107, Dec.
28, 1978, 44 F.R. 1055; Ex. Ord. No. 12748, Feb. 1, 1991, 56
F.R. 4521
ADMINISTRATION OF PROVISIONS OF CHAPTER
By virtue of the authority vested in me by the act of
September 26, 1961 (75 Stat. 662) [now this subchapter] and by
section 301 of title 3 of the United States Code [section 301 of
Title 3, The President], and as President of the United States,
it is ordered as follows:
Section 1. As used in this order:
(a) The term "the act" means the act of September 26, 1961
(Public Law 87-304), 75 Stat. 662 [now this subchapter].
(b) The term "Federal agency" means any executive department
of the Government of the United States of America, any agency or
independent establishment in the executive branch of the
Government, and any corporation wholly owned or controlled by the
Government.
(c) The term "foreign area" means any area (including the
Trust Territory of the Pacific Islands) situated outside (1) the
United States (including the District of Columbia), (2) the
Commonwealth of Puerto Rico, (3) the Canal Zone, and (4) any
territory or possession of the United States.
Sec. 2. (a) Except as otherwise provided by section 2(b) and
section 3 (c) of this order, the Secretary of State in respect of
civilian employees of Federal agencies who are located in foreign
areas immediately prior to an emergency evacuation, and the
Office of Personnel Management in respect of all other civilian
employees of Federal agencies, are hereby designated and
empowered, without the approval, ratification, or other action of
the President, to perform the functions conferred upon the
President by section 3(a), section 3(b), and section 6(a) of the
act [now sections 5523(a) and 5523(b) of this title and subsec.
(a) of this section].
(b) The Office of Personnel Management is hereby designated
and empowered to perform the functions conferred upon the
President by the provisions of section 5527 of title 5, United
States Code [this section], with respect to allotments and
assignments authorized by section 5525 of title 5, United States
Code [section 5525 of this title], and advance payments to new
appointees authorized by section 5524a of title 5, United States
Code [section 5524a of this title], as added by section 107(a) of
the Federal Employees Pay Comparability Act of 1990, as
incorporated in section 529 of Public Law 101-509.
Sec. 3. The following regulations are hereby prescribed as
necessary and appropriate to carry out the provisions, accomplish
the purposes, and govern the administration of the act:
Qualified State Tax References:
Page 71 of 148
(a) To the maximum extent practicable, the Secretary of
State, the Office of Personnel Management, and the heads of other
Federal agencies shall exercise their authority under the act and
this order so that employees of different Federal agencies
evacuated from the same geographic area under the same general
circumstances may be treated uniformly.
(b) Advance payments of compensation, allowances, and
differentials, as authorized by section 2 of the act [now section
5522 of this title], shall be held to the minimum period during
which the order for evacuation is anticipated to continue, and
shall in no event be made for a period of more than thirty days.
(c) It is hereby determined to be in the interest of the
United States that payments of monetary amounts as authorized by
section 3 of the act [now section 5523 of this title] to and for
the account of an employee whose evacuation is ordered and who is
prevented from performing the duties of his position, under the
circumstances set forth in section 3 of the act [now section 5523
of this title], should be extended beyond sixty days for not more
than one hundred and twenty additional days only upon
determination, pursuant to regulations of the head of the Federal
agency concerned, that such additional payments are reasonably
necessary to maintain a civilian staff available for performance
of duty. Such payments of monetary amounts under the authority
of section 3 of the act [now section 5523 of this title] shall be
terminated as of such dates as may be determined by the Secretary
of State or the Office of Personnel Management, as appropriate,
but not later than the date on which an employee resumes his
duties at the post from which he has been evacuated or is
assigned to another position.
Sec. 4. (a) The head of each Federal agency shall issue as
soon as practicable such regulations as may be necessary and
appropriate to carry out his functions under the act and this
order.
(b) In order to coordinate the policies and procedures of
the executive branch of the Government, all regulations of any
Federal agency prepared for issuance under the provisions of
section 6(c) of the act [now subsection (c) of this section], and
section 4(a) of this order shall be submitted for prior approval
to the Secretary of State, or to the Office of Personnel
Management, as may be appropriate, under section 2 of this order.
The Secretary of State and the Office of Personnel Management
shall review such regulations for conformance with the purpose
and intent of the act and of the regulations contained in section
3 of this order. No Federal agency shall make any payment under
the provisions of the act or this order until such regulations
have been approved by the Secretary of State, or the Office of
Personnel Management, as appropriate.
REFERENCES
LIBRARY REFERENCES
Administrative Law
Qualified State Tax References:
Page 72 of 148
Administrative personnel, see 5 CFR Part 550.
American Digest System
Compensation of federal officers, agents, and employees in
general, see United States K39(1) et seq.
Encyclopedias
Compensation of federal officers, agents, and employees in
general, see C.J.S. United States Sec. 43 et seq.
5 USCA 5527, Regulations
------------ Excerpt from pages 36831-36834
UNITED STATES CODE ANNOTATED
TITLE 26. INTERNAL REVENUE CODE
SUBTITLE F -- PROCEDURE AND ADMINISTRATION
CHAPTER 65 -- ABATEMENTS, CREDITS, AND REFUNDS
SUBCHAPTER B -- RULES OF SPECIAL APPLICATION
Current through P.L. 104-194, approved 9-9-96
Sec. 6414. Income tax withheld
In the case of an overpayment of tax imposed by chapter 24,
or by chapter 3, refund or credit shall be made to the employer
or to the withholding agent, as the case may be, only to the
extent that the amount of such overpayment was not deducted and
withheld by the employer or withholding agent.
CREDIT(S)
1989 Main Volume
(Aug. 16, 1954, c. 736, 68A Stat. 798.)
[General Materials (GM) - References, Annotations, or Tables]
HISTORICAL NOTES
HISTORICAL AND STATUTORY NOTES
Revision Notes and Legislative Reports
1954 Act. House Report No. 1337, Senate Report No. 1622, and
Conference Report No. 2543, see 1954 U.S.Code Cong. and Adm.News,
pp. 4560, 5331.
26 USCA 6414, Income tax withheld
Qualified State Tax References:
Page 73 of 148
------------ Excerpt from page 185228
Sec. 1464. Refunds and credits with respect to withheld tax
Where there has been an overpayment of tax under this
chapter, any refund or credit made under chapter 65 shall be made
to the withholding agent unless the amount of such tax was
actually withheld by the withholding agent.
26 USCA 1464, Refunds and credits with respect to withheld tax
------------ Excerpt from page 179978
[a](16) Withholding agent. -- The term "withholding agent"
means any person required to deduct and withhold any tax under
the provisions of section 1441, 1442, 1443, or 1461.
26 USCA 7701, Definitions
------------ Excerpt from page 188548
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
s 301.6363-1 State agreements.
(a) Notice of election. If a State elects to enter into a
State agreement it shall file notice of such election with the
Secretary or his delegate. The notice of election shall include
the following:
(1) Statement by the Governor. A written statement by the
Governor of the electing State:
(i) Requesting that the Secretary enter into a State
agreement, and
(ii) Binding the Governor and his successors in office to
notify the Secretary or his delegate immediately of the
enactment, between the time of the filing of the notice of
Qualified State Tax References:
Page 74 of 148
election and the time of the execution of the State agreement, of
any law of that State which meets the description given in any of
the subdivisions of subparagraph (2) of this paragraph (a),
whether or not such law is intended to be administered by the
United States pursuant to subchapter E.
(2) Copy of State laws. Certified copies of all laws of
that State described in any of the following subdivisions of this
subparagraph, and a specification of laws described in
subdivision (i) of this subparagraph as "subchapter E laws", of
laws described in subdivision (ii) as "other tax laws", of laws
described in subdivision (iii) as "non-tax laws", and of laws
described in subdivision (iv) as "interstate cooperation laws":
(i) All of the State individual income tax laws (including
laws relating to the collection or administration of such taxes
or to the prosecution of alleged civil or criminal violations
with respect to such taxes) which the State would expect the
United States to administer pursuant to subchapter E if the State
agreement is executed as requested. In order to have a valid
notice, the State must have a tax which would meet the
requirements for qualification specified in section 6362 and the
regulations thereunder if a State agreement were in effect with
respect thereto, with no conditions attached to the effectiveness
of such tax other than the execution of a State agreement. Such
tax must be effective no later than the January 1 specified in
the State's notice of election as the date as of which subchapter
E is desired to become applicable to the electing State, except
that such effective date shall be deferred to the date provided
in the State agreement for the beginning of applicability of
subchapter E to the State, if the latter date is different from
the date specified in the notice of election.
(ii) All of the State income tax laws applicable to
individuals (including laws relating to the collection or
administration of such taxes or to the prosecution of alleged
civil or criminal violations with respect to such taxes) which
the State would not expect the United States to administer but
which may be in effect simultaneously (for any period of time)
with the State agreement.
(iii) All of the State laws other than individual income tax
laws which provide for the making of any payments by the State
based on one or more criteria which the State may desire to
verify by reference to information contained in returns of
qualified taxes.
(iv) All of the State laws which may be in effect
simultaneously (for any period of time) with the State agreement
and which provide for cooperation or reciprocal agreement between
the electing State and another State with respect to income taxes
applicable to individuals.
(3) Approval by legislature or authorization by
constitutional amendment. A certified copy of an Act or
Resolution of the legislature of the electing State in which the
legislature affirmatively expresses its approval of the State's
Qualified State Tax References:
Page 75 of 148
entry into a State agreement, or a certified copy of an amendment
to the constitution of such State by which the voters of the
State affirmatively authorize such entry.
(4) Opinion by State Attorney General or judgment of highest
court. A written statement by the State Attorney General to the
effect that, in his opinion, no provision of the State's
Constitution would be violated by the State law's incorporation
by reference of the Federal individual income tax laws and
regulations, as amended from time to time, by the Federal
prosecution and trial of individuals who are alleged to have
committed crimes with respect to the State's qualified tax (when
it goes into effect as such), or by any other provision relating
to such tax, considered as of the time it is being collected and
administered by the Federal Government pursuant to subchapter E.
However, if such a statement is not included in the notice of
election, a judgment of the highest court of the State to the
same effect may be submitted in its place.
(5) Effective date. A written specification of the January
as of which subchapter E is desired to become applicable to the
electing State.
(b) Rules relating to time for filing notice of election.
An electing State must file its notice of election more than 6
months prior to the January 1 as of which the notice specifies
that the provisions of subchapter E are desired to become
applicable to such State. Thus, for example, if the date
specified in the notice is January 1, 1979, the notice must be
filed no later than June 30, 1978. However, because under the
provisions of section 204(b) of the Federal-State Tax Collection
Act of 1972 (86 Stat. 945), as amended by section 2116(a) of the
Tax Reform Act of 1976 (90 Stat. 1910), the provisions of
subchapter E will initially take effect on the first January 1
which is more than 1 year after the first date on which at least
one State has filed a notice of its election (see s 301.6361-5),
the notice of an election which causes subchapter E to initially
take effect must be filed with the Secretary or his delegate more
than 1 year prior to the January 1 as of which such notice
specifies that the provisions of subchapter E are desired to
become applicable to such State. Thus, for example, if such an
initially electing State desires to elect subchapter E as of
January 1, 1979, its notice must be filed no later than December
31, 1977. For purposes of this section, if the notice of
election is sent by either registered or certified mail to the
Secretary of the Treasury, Washington, D.C. 20220, then it shall
be deemed to be filed on the date of mailing; otherwise, the
notice of election shall be deemed to be filed when it is
received by the Secretary or his delegate.
(c) Procedures relating to defects in notice or tax laws.
If a State has filed a notice of election, then the Secretary
shall, within 90 days after the notice is filed, notify the
Governor of such State in writing of any defect in the notice of
election which prevents it from being valid, and of any defect in
the State's tax laws which causes the tax submitted to fail to
meet the requirements for qualification specified in section 6362
Qualified State Tax References:
Page 76 of 148
and the regulations thereunder, other than the fact that no State
agreement is in effect with respect thereto. Any such defect of
which the Secretary does not notify the Governor within such 90-
day period is waived. The Secretary or his delegate may, in his
discretion, permit any of such defects of which the Governor is
timely notified to be cured retroactively to the date of the
filing of the notice of election, by amendment of the notice or
the State law. Judicial review of the Secretary's determination
that the notice of election or the tax laws, or both, contain
defects, may be obtained as set forth in section 6363(d) and s
301.6363-4.
(d) Execution and contents of State agreement. If the
Secretary does not timely notify the Governor of a defect in the
notice of election or in the State's tax laws, as provided in
paragraph (c) of this section, or if, as provided in such
paragraph, all such defects have been cured retroactively, then
the Secretary shall enter into a State agreement. The agreement
shall include the following elements:
(1) Effective date. The agreement shall specify the January
1 as of which subchapter E will commence to be applicable to the
State. Such date shall be the same as that specified in the
notice of election pursuant to paragraph (a)(5) of this section,
unless the parties agree to a different January 1, except that in
no event shall a State agreement executed after November 1
specify the next January 1.
(2) Obligation of Governor to notify the United States of
changes in pertinent State laws. The agreement shall require the
Governor of the State, and his successors in office, to notify
the Secretary or his delegate within 30 days of the enactment of
any law of the State, after the execution of the agreement, of a
type described in paragraph (a)(2) of this section.
(3) Obligation of Governor to furnish to the United States
information needed to administer State tax laws. The agreement
shall require the Governor and his successors to furnish to the
Secretary or his delegate any information needed by the Federal
Government to administer the State tax laws. Such information
shall include, for example, a list (which shall be maintained on
a current basis) of those obligations of the State or its
political subdivisions described in section 103(a)(1) from which
the interest is not subject to the qualified taxes of the State.
(4) Identification of State official to act as liaison with
Federal Government. The agreement shall include a designation by
the Governor of the State official or officials with whom the
Secretary or his delegate should coordinate in connection with
any questions or problems which may arise during the period for
which the State agreement is effective, including those which may
result from changes or contemplated changes in pertinent State
laws.
(5) Identification of State official to receive transferred
funds. The agreement shall include a designation by the Governor
of the State official who shall initially receive the funds on
Qualified State Tax References:
Page 77 of 148
behalf of the State when they are transferred pursuant to section
6361(c) and s 301.6361-3.
(6) Other obligations. If the Secretary and the Governor
both so agree, the agreement shall provide for additional
obligations.
(e) State agreement superseding certain other agreements.
For the period of its effectiveness, a State agreement shall
supersede an otherwise effective agreement entered into by the
State and the Secretary for the withholding of State income taxes
from the compensation of Federal employees pursuant to 5 U.S.C.
5517 (or pursuant to 5 U.S.C. 5516, in the case of the District
of Columbia).
[T.D. 7577, 43 F.R. 59373, Dec. 20, 1978]
26 CFR s 301.6363-1, State agreements.
------------ Excerpt from pages 160534-160537
CODE OF FEDERAL REGULATIONS
TITLE 20 -- EMPLOYEES' BENEFITS
CHAPTER III -- SOCIAL SECURITY ADMINISTRATION
PART 404 -- FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE
(1950- )
SUBPART A -- INTRODUCTION, GENERAL PROVISIONS AND DEFINITIONS
Current through January 1, 1997; 61 F.R. 69366
s 404.2 General definitions and list of terms.
(a) Terms relating to the Act and regulations.
(1) "The Act" means the Social Security Act, as amended (42
U.S.C. Chapter 7).
(2) "Section" means a section of the regulations in Part 404
of this chapter unless the context indicates otherwise.
(b) Secretary; Commissioner; Appeals Council;
Administrative Law Judge defined.
(1) "Secretary" means the Secretary of Health and Human
Services.
(2) "Commissioner" means the Commissioner of Social
Security.
(3) "Appeals Council" means the Appeals Council of the
Office of Hearings and Appeals in the Social Security
Administration or such member or members thereof as may be
Qualified State Tax References:
Page 78 of 148
designated by the Chairman.
(4) "Administrative Law Judge" means an Administrative Law
Judge in the Office of Hearings and Appeals of the Social
Security Administration.
(c) Miscellaneous.
(1) "Certify," when used in connection with the duty imposed
on the Secretary by section 205(i) of the act, means that action
taken by the Administration in the form of a written statement
addressed to the Managing Trustee, setting forth the name and
address of the person to whom payment of a benefit or lump sum,
or any part thereof, is to be made, the amount to be paid, and
the time at which payment should be made.
(2) "Benefit" means an old-age insurance benefit, disability
insurance benefit, wife's insurance benefit, husband's insurance
benefit, child's insurance benefit, widow's insurance benefit,
widower's insurance benefit, mother's insurance benefit, father's
insurance benefit, parent's insurance benefit, or special payment
at age 72 under title II of the Act. (Lump sums, which are death
payments under title II of the Act, are excluded from the term
"benefit" as defined in this part to permit greater clarity in
the regulations.)
(3) "Lump sum" means a lump-sum death payment under title II
of the act or any person's share of such a payment.
(4) "Attainment of age." An individual attains a given age
on the first moment of the day preceding the anniversary of his
birth corresponding to such age.
(5) "State," unless otherwise indicated, includes (i) the
District of Columbia, (ii) the Virgin Islands, (iii) the
Commonwealth of Puerto Rico effective January 1, 1951, (iv) Guam
and American Samoa, effective September 13, 1960, generally, and
for purposes of sections 210(a) and 211 of the act effective
after 1960 with respect to service performed after 1960, and
effective for taxable years beginning after 1960 with respect to
crediting net earnings from self-employment and self-employment
income, and (v) the Territories of Alaska and Hawaii prior to
January 3, 1959, and August 21, 1959, respectively when those
territories acquired statehood.
(6) "United States," when used in a geographical sense,
includes, unless otherwise indicated, (i) the States, (ii) the
Territories of Alaska and Hawaii prior to January 3, 1959, and
August 21, 1959, respectively, when they acquired statehood,
(iii) the District of Columbia, (iv) the Virgin Islands, (v) the
Commonwealth of Puerto Rico effective January 1, 1951, and (vi)
Guam and American Samoa, effective September 13, 1960, generally,
and for purposes of sections 210(a) and 211 of the act, effective
after 1960 with respect to service performed after 1960, and
effective for taxable years beginning after 1960 with respect to
crediting net earnings from self-employment and self-employment
income.
Qualified State Tax References:
Page 79 of 148
(7) Masculine gender includes the feminine, unless otherwise
indicated.
(8) The terms defined in sections 209, 210, and 211 of the
act shall have the meanings therein assigned to them.
[26 F.R. 7055, Aug. 5, 1961; 26 F.R. 7760, Aug. 19, 1961, as
amended at 28 F.R. 1037, Feb. 2, 1963; 28 F.R. 14492, Dec. 31,
1963; 29 F.R. 15509, Nov. 19, 1964; 41 F.R. 32886, Aug. 6,
1976; 51 F.R. 11718, April 7, 1986; 61 F.R. 41330, Aug. 8,
1996]
[[SUBPART A -- INTRODUCTION, GENERAL PROVISIONS AND DEFINITIONS]]
Authority: Secs. 203, 205(a), 216(j), and 702(a)(5) of the
Social Security Act (42 U.S.C. 403, 405(a), 416(j), and
902(a)(5)).
Source: 51 F.R. 11718, April 7, 1986; 52 F.R. 27540, July 22,
1987; 56 F.R. 60060, Nov. 27, 1991; 61 F.R. 5940, Feb. 15,
1996, unless otherwise noted.
20 CFR s 404.2, General definitions and list of terms.
------------ Excerpt from pages 103006-103007
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER A -- INCOME TAX
PART 1 -- INCOME TAXES
NORMAL TAXES AND SURTAXES
COMPUTATION OF TAXABLE INCOME
ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS
Current through January 1, 1997; 61 F.R. 69366
s 1.164-3 Definitions and special rules.
For purposes of section 164 and s 1.164-1 to s 1.164-8,
inclusive --
(a) State or local taxes. A State or local tax includes
only a tax imposed by a State, a possession of the United States,
or a political subdivision of any of the foregoing, or by the
District of Columbia.
(b) Real property taxes. The term "real property taxes"
Qualified State Tax References:
Page 80 of 148
means taxes imposed on interests in real property and levied for
the general public welfare, but it does not include taxes
assessed against local benefits. See s 1.164-4.
(c) Personal property taxes. The term "personal property
tax" means an ad valorem tax which is imposed on an annual basis
in respect of personal property. To qualify as a personal
property tax, a tax must meet the following three tests:
(1) The tax must be ad valorem -- that is, substantially in
proportion to the value of the personal property. A tax which is
based on criteria other than value does not qualify as ad
valorem. For example, a motor vehicle tax based on weight, model
year, and horsepower, or any of these characteristics is not an
ad valorem tax. However, a tax which is partly based on value
and partly based on other criteria may qualify in part. For
example, in the case of a motor vehicle tax of 1 percent of value
plus 40 cents per hundredweight, the part of the tax equal to 1
percent of value qualifies as an ad valorem tax and the balance
does not qualify.
(2) The tax must be imposed on an annual basis, even if
collected more frequently or less frequently.
(3) The tax must be imposed in respect of personal property.
A tax may be considered to be imposed in respect of personal
property even if in form it is imposed on the exercise of a
privilege. Thus, for taxable years beginning after December 31,
1963, State and local taxes on the registration or licensing of
highway motor vehicles are not deductible as personal property
taxes unless and to the extent that the tests prescribed in this
subparagraph are met. For example, an annual ad valorem tax
qualifies as a personal property tax although it is denominated a
registration fee imposed for the privilege of registering motor
vehicles or of using them on the highways.
(d) Foreign taxes. The term "foreign tax" includes only a
tax imposed by the authority of a foreign country. A tax-imposed
by a political subdivision of a foreign country is considered to
be imposed by the authority of that foreign country.
(e) Sales tax. (1) The term "sales tax" means a tax imposed
upon persons engaged in selling tangible personal property, or
upon the consumers of such property, including persons selling
gasoline or other motor vehicle fuels at wholesale or retail,
which is a stated sum per unit of property sold or which is
measured by the gross sales price or the gross receipts from the
sale. The term also includes a tax imposed upon persons engaged
in furnishing services which is measured by the gross receipts
for furnishing such services.
(2) In general, the term "consumer" means the ultimate user
or purchaser; it does not include a purchaser such as a
retailer, who acquires the property for resale.
(f) General sales tax. A "general sales tax" is a sales tax
which is imposed at one rate in respect of the sale at retail of
Qualified State Tax References:
Page 81 of 148
a broad range of classes of items. No foreign sales tax is
deductible under section 164(a) and paragraph (a)(4) of s 1.164-
1. To qualify as a general sales tax, a tax must meet the
following two tests:
(1) The tax must be a tax in respect of sales at retail.
This may include a tax imposed on persons engaged in selling
property at retail or furnishing services at retail, for example,
if the tax is measured by gross sales price or by gross receipts
from sales or services. Rentals qualify as sales at retail if so
treated under applicable State sales tax laws.
(2) The tax must be general -- that is, it must be imposed
at one rate in respect of the retail sales of a broad range of
classes of items. A sales tax is considered to be general
although imposed on sales of various classes of items at more
than one rate provided that one rate applies to the retail sales
of a broad range of classes of items. The term "items" includes
both commodities and services.
(g) Special rules relating to general sales taxes. (1) A
sales tax which is general is usually imposed at one rate in
respect of the retail sales of all tangible personal property
(with exceptions and additions). However, a sales tax which is
selective -- that is, a tax which applies at one rate with
respect to retail sales of specified classes of items also
qualifies as general if the specified classes represent a broad
range of classes of items. A selective sales tax which does not
apply at one rate to the retail sales of a broad range of classes
of items is not general. For example, a tax which applies only
to sales of alcoholic beverages, tobacco, admissions, luxury
items, and a few other items is not general. Similarly, a tax
imposed solely on services is not general. However, a selective
sales tax may be deemed to be part of the general sales tax and
hence may be deductible, even if imposed by a separate Title,
etc., of the State or local law, if imposed at the same rate as
the general rate of tax (as defined in subparagraph (4) of this
paragraph) which qualifies a tax in the taxing jurisdiction as a
general sales tax. For example, if a State has a 5 percent
general sales tax and a separate selective sales tax of 5 percent
on transient accommodations, the tax on transient accommodations
is deductible.
(2) A tax is imposed at one rate only if it is imposed at
that rate on generally the same base for all items subject to
tax. For example, a sales tax imposed at a 3 percent rate on 100
percent of the sales price of some classes of items and at a 3
percent rate on 50 percent of the sales price of other classes of
items would not be imposed at one rate with respect to all such
classes. However, a tax is considered to be imposed at one rate
although it allows dollar exemptions, if the exemptions are
designed to exclude all sales under a certain dollar amount. For
example, a tax may be imposed at one rate although it applies to
all sales of tangible personal property but applies only to sales
amounting to more than 10 cents.
(3) The fact that a sales tax exempts food, clothing,
Qualified State Tax References:
Page 82 of 148
medical supplies, and motor vehicles, or any of them, shall not
be taken into account in determining whether the tax applies to a
broad range of classes of items. The fact that a sales tax
applies to food, clothing, medical supplies, and motor vehicles,
or any of them, at a rate which is lower than the general rate of
tax (as defined in subparagraph (4) of this paragraph) is not
taken into account in determining whether the tax is imposed at
one rate on the retail sales of a broad range of classes of
items. For purposes of this section, the term "food" means food
for human consumption off the premises where sold, and the term
"medical supplies" includes drugs, medicines, and medical
devices.
(4) Except in the case of a lower rate of tax applicable in
respect of food, clothing, medical supplies, and motor vehicles,
or any of them, no deduction is allowed for a general sales tax
in respect of any item if the tax is imposed on such item at a
rate other than the general rate of tax. The general rate of tax
is the one rate which qualifies a tax in a taxing jurisdiction as
a general sales tax because the tax is imposed at such one rate
on a broad range of classes of items. There can be only one
general rate of tax in any one taxing jurisdiction. However, a
general sales tax imposed at a lower rate or rates on food,
clothing, motor vehicles, and medical supplies, or any of them,
may nonetheless be deductible with respect to such items. For
example, a sales tax which is imposed at 1 percent with respect
to food, imposed at 3 percent with respect to a broad range of
classes of tangible personal property, and imposed at 4 percent
with respect to transient accommodations would qualify as a
general sales tax. Taxes paid at the 1 percent and the 3 percent
rates are deductible, but tax paid at the 4 percent rate is not
deductible. The fact that a sales tax provides for the
adjustment of the general rate of tax to reflect the sales tax
rate in another taxing jurisdiction shall not be taken into
account in determining whether the tax is imposed at one rate on
the retail sales of a broad range of classes of items. Moreover,
a general sales tax imposed at a lower rate with respect to an
item in order to reflect the tax rate in another jurisdiction is
also deductible at such lower rate. For example, State E imposes
a general sales tax whose general rate is 3 percent. The State E
sales tax law provides that in areas bordering on States with
general sales taxes, selective sales taxes, or special excise
taxes, the rate applied in the adjoining State will be used if
such rate is under 3 percent. State F imposes a 2 percent sales
tax. The 2 percent sales tax paid by residents of State E in
areas bordering on State F is deductible.
(h) Compensating use taxes. A compensating use tax in
respect of any item is treated as a general sales tax. The term
"compensating use tax" means, in respect of any item, a tax which
is imposed on the use, storage, or consumption of such item and
which is complementary to a general sales tax which is deductible
with respect to sales of similar items.
(i) Special rules relating to compensating use taxes. (1)
In general, a use tax on an item is complementary to a general
sales tax on similar items if the use tax is imposed on an item
Qualified State Tax References:
Page 83 of 148
which was not subject to such general sales tax but which would
have been subject to such general sales tax if the sale of the
item had taken place within the jurisdiction imposing the use
tax. For example, a tax imposed by State A on the use of a motor
vehicle purchased in State B is complementary to the general
sales tax of State A on similar items, if the latter tax applies
to motor vehicles sold in State A.
(2) Since a compensating use tax is treated as a general
sales tax, it is subject to the rule of subparagraph (C) of
section 164(b)(2) and paragraph (g)(4) of this section that no
deduction is allowed for a general sales tax imposed in respect
of an item at a rate other than the general rate of tax (except
in the case of lower rates on the sale of food, clothing, medical
supplies, and motor vehicles). The fact that a compensating use
tax in respect of any item provides for an adjustment in the rate
of the compensating use tax or the amount of such tax to be paid
on account of a sales tax on such item imposed by another taxing
jurisdiction is not taken into account in determining whether the
compensating use tax is imposed in respect of the item at a rate
other than the general rate of tax. For example, a compensating
use tax imposed by State C on the use of an item purchased in
State D is considered to be imposed at the general rate of tax
even though the tax imposed by State C allows a credit for any
sales tax paid on such item in State D, or the rate of such
compensating use tax is adjusted to reflect the rate of sales tax
imposed by State D.
[T.D. 6500, 25 F.R. 11402, Nov. 26, 1960, as amended by T.D.
6780, 29 F.R. 18146, Dec. 22, 1964]
26 CFR s 1.164-3, Definitions and special rules.
------------ Excerpt from pages 143910-143913
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER A -- INCOME TAX
PART 1 -- INCOME TAXES
NORMAL TAXES AND SURTAXES
TAX BASED ON INCOME FROM SOURCES WITHIN OR WITHOUT THE UNITED
STATES
EARNED INCOME OF CITIZENS OR RESIDENTS OF UNITED STATES
POSSESSIONS OF THE UNITED STATES
Current through January 1, 1997; 61 F.R. 69366
s 1.932-1 Status of citizens of U.S. possessions.
Qualified State Tax References:
Page 84 of 148
(a) General rule -- (1) Definition and treatment. A citizen
of a possession of the United States (except Puerto Rico and, for
taxable years beginning after December 31, 1972, Guam), who is
not otherwise a citizen or resident of the United States,
including only the States and the District of Columbia, is
treated for the purpose of the taxes imposed by subtitle A of the
Code (relating to income taxes) as if he were a nonresident alien
individual. However, for purposes of the tax imposed on self-
employment income by chapter 2 of the Code, the term "possession
of the United States" as used in section 932 and the preceding
sentence does not include American Samoa, Guam, or the Virgin
Islands. See section 1402(a)(9). See subpart A (section 871 and
following), part II, subchapter N, chapter 1 of the Code, and the
regulations thereunder, for rules relating to imposition of tax
on nonresident alien individuals. For Federal income tax
purposes, a citizen of a possession of the United States who is
not otherwise a citizen of the United States is a citizen of a
possession of the United States who has not become a citizen of
the United States by naturalization in a State, Territory, or the
District of Columbia. The fixed or determinable annual or
periodical income from sources within the United States of a
citizen of a possession of the United States who is treated as if
he were a nonresident alien individual is subject to withholding.
See section 1441.
(2) Classification of citizens of United States possessions.
For the purpose of this section citizens of the possessions of
the United States who are not otherwise citizens of the United
States are divided into two classes: (i) Citizens of possessions
of the United States who at any time within the taxable year are
not engaged in trade or business within the United States, and
(ii) citizens of possessions of the United States who at any time
within the taxable year are engaged in trade or business within
the United States. The provisions of subpart A (section 871 and
following) and the regulations thereunder, applicable to
nonresident alien individuals not engaged in trade or business
within the United States are applicable to the citizens of
possessions falling within the first class, while the provisions
of such sections applicable to nonresident alien individuals who
at any time within the taxable year are engaged in trade or
business within the United States are applicable to citizens of
possessions falling within the second class.
(b) Nonapplication to citizen of Puerto Rico or Guam. The
provisions of section 932(a) and paragraph (a) of this section do
not apply in the case of a citizen of Puerto Rico or, for taxable
years beginning after December 31, 1972, a citizen of Guam.
Thus, for example, any such citizen who is not a resident of the
United States will not be treated by the United States as a
nonresident alien individual for purposes of section 2(b)(3)(A)
or (d), relating to definitions and special rules; section
4(d)(1), relating to taxpayers not eligible to use the optional
tax tables; section 37(h), relating to denial of retirement
income credit; section 116(d), relating to taxpayers ineligible
for dividend exclusion; section 142(b)(1), relating to taxpayers
ineligible for standard deduction; section 152(b)(3), relating
Qualified State Tax References:
Page 85 of 148
to definition of "dependent"; section 402(a)(4), relating to
distributions by the United States to nonresident aliens;
section 545(d), relating to certain foreign corporations;
section 565(e), relating to certain consent dividends; section
861(a)(1), relating to interest from sources within the United
States; sections 871 to 877, relating to nonresident alien
individuals; section 1303(b), relating to individuals not
eligible for income averaging; section 1371(a)(3), relating to
definition of small business corporation; section 1402(b),
relating to definition of "self-employment income"; section
1441, relating to withholding of tax on nonresident aliens;
section 3401(a), relating to definition of wages; section
6013(a)(1), relating to inability to make a joint return;
section 6015(b) and (i), relating to declaration of estimated
income tax by nonresident alien individuals; section 6017,
relating to self-employment tax returns; section 6042(b)(2),
relating to returns regarding payments of dividends; section
6049(b)(2), relating to returns regarding payments of interest;
section 6072(c), relating to time for filing returns of
nonresident alien individuals; section 6091(b), relating to
place for filing returns of nonresident aliens; and section
6096(a), relating to designation of tax payments to Presidential
Election Campaign Fund. For other rules applicable to citizens
of Puerto Rico, see ss 1.1-1(b) and 1.933-1. For other rules
applicable to citizens of Guam, see ss 1.1-1(b) and 1.935-1 of
this chapter (Income Tax Regulations) and s 301.7654-1 of this
chapter (Regulations on Procedure and Administration).
[T.D. 6500, 25 F.R. 11910, Nov. 26, 1960, as amended by T.D.
7332, 39 F.R. 44230, Dec. 23, 1974; T.D. 7385, 40 F.R. 50260,
Oct. 29, 1975]
26 CFR s 1.932-1, Status of citizens of U.S. possessions.
------------ Excerpt from pages 152184-152185
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER A -- INCOME TAX
PART 1 -- INCOME TAXES
PROCEDURE AND ADMINISTRATION
INFORMATION AND RETURNS
RETURNS AND RECORDS
TAX RETURNS OR STATEMENTS
Current through January 1, 1997; 61 F.R. 69366
s 1.6015(c)-1 Definition of estimated tax.
Qualified State Tax References:
Page 86 of 148
(a) In general. In the case of an individual, the term
"estimated tax" means:
(1) The amount which the individual estimates as the amount
of the income tax imposed by chapter 1 (other than the tax
imposed by section 56 or for taxable years ending before
September 30, 1968, the tax surcharge imposed by section 51) for
the taxable year (and including the amount which he estimates as
the amount of any qualified State individual income taxes which
are treated pursuant to section 6361(a) as if they were imposed
by chapter 1 for the taxable year), plus
(2) For taxable years beginning after December 31, 1966, the
amount which the individual estimates as the amount of the self-
employment tax imposed by chapter 2 for the taxable year, minus
(3) The amount which the individual estimates as the sum of
any credits against tax provided by part IV of subchapter A of
chapter 1. These credits are those provided by section 31
(relating to tax withheld on wages), section 32 (relating to tax
withheld at source on nonresident aliens and foreign corporations
and on tax-free covenant bonds), section 33 (relating to foreign
taxes), section 34 (relating to the credit for dividends received
on or before December 31, 1964), section 35 (relating to
partially tax-exempt interest), section 37 (relating to the
elderly), section 38 (relating to the investment credit), section
39 (relating to certain uses of gasoline, special fuels, and
lubricating oil), section 40 (relating to expenses of work
incentive programs), section 41 (relating to contributions to
candidates), section 42 (relating to general tax credit), section
43 (relating to earned income), section 44 (relating to purchase
of new principal residence), section 44A (relating to expenses
for household and dependent care services necessary for gainful
employment), section 44B (relating to credit for employment of
certain new employees), and section 45 (relating to overpayments
of tax), minus,
(4) In the case of an individual who is subject to one or
more qualified State individual income taxes, the amount which he
estimates as the sum of the credits allowed against such taxes
pursuant to section 6362(b)(2)(B) or (C) or section 6362(c)(4)
and paragraph (c) of s 301.6362-4 of this chapter (Regulations on
Procedure and Administration) (relating to the credit for income
taxes of other States or political subdivisions thereof) and
paragraph (c)(2) of s 301.6361-1 (relating to the credit for tax
withheld from wages on account of qualified State individual
income taxes), and minus
(5) For taxable years ending after February 29, 1980, the
amount which the individual estimates will be the amount of such
individual's overpayment of windfall profit tax imposed by
section 4986 of the Code for the taxable year. For this purpose,
the amount of such overpayment is the amount by which such
individual's aggregate windfall profit tax liability for the
taxable year as a producer of crude oil is reasonably expected to
be exceeded by withholding of windfall profit tax for the taxable
Qualified State Tax References:
Page 87 of 148
year.
(b) Example. A, a self-employed individual not subject to
any qualified State individual income tax, estimates that his
liabilities for income tax and self-employment tax for 1973 will
be $1,600 and $400, respectively. A is required to declare and
pay an estimated tax of $2,000 for that year.
[T.D. 6500, 25 F.R. 12108, Nov. 26, 1960, as amended by T.D.
6777, 29 F.R. 17810, Dec. 16, 1964; T.D. 7427, 41 F.R. 34027,
Aug. 12, 1976; T.D. 7577, 43 F.R. 59358, Dec. 20, 1978; T.D.
8016, 50 F.R. 11854, March 26, 1985]
26 CFR s 1.6015(c)-1, Definition of estimated tax.
------------ Excerpt from pages 155379-155380
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER C -- EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT
SOURCE
PART 31 -- EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT
SOURCE
SUBPART G -- ADMINISTRATIVE PROVISIONS OF SPECIAL APPLICATION TO
EMPLOYMENT TAXES (SELECTED PROVISIONS OF SUBTITLE F, INTERNAL
REVENUE CODE OF 1954)
Current through January 1, 1997; 61 F.R. 69366
s 31.6361-1 Collection and administration of qualified State
individual income taxes.
Except as otherwise provided in ss 301.6361-1 to 301.6385-2,
inclusive, of this chapter (Regulations on Procedure and
Administration), the provisions of this part under subtitle F or
chapter 24 of the Internal Revenue Code of 1954 relating to the
collection and administration of the taxes imposed by chapter 1
of such Code on the incomes of individuals (or relating to civil
or criminal sanctions with respect to such collection and
administration) shall apply to the collection and administration
of qualified State individual income taxes (as defined in section
6362 of such Code and the regulations thereunder) as if such
taxes were imposed by chapter 1 of chapter 24.
[T.D. 7577, 43 F.R. 59360, Dec. 20, 1978]
26 CFR s 31.6361-1, Collection and administration of qualified
State individual income taxes.
------------ Excerpt from page 158442
Qualified State Tax References:
Page 88 of 148
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER A -- INCOME TAX
PART 1 -- INCOME TAXES
PROCEDURE AND ADMINISTRATION
COLLECTION
GENERAL PROVISIONS
Current through January 1, 1997; 61 F.R. 69366
s 1.6361-1 Collection and administration of qualified State
individual income taxes.
Except as otherwise provided in ss 301.6361-1 to 301.6365-2,
inclusive, of this chapter (Regulations on Procedure and
Administration), the provisions of this part under subtitle F of
the Internal Revenue Code of 1954 relating to the collection and
administration of the taxes imposed by chapter 1 of such Code on
the incomes of individuals (or relating to civil or criminal
sanctions with respect to such collection and administration)
shall apply to the collection and administration of qualified
State individual income taxes (as defined in section 6362 of such
Code and the regulations thereunder) as if such taxes were
imposed by chapter 1.
[T.D. 7577, 43 F.R. 59358, Dec. 20, 1978]
26 CFR s 1.6361-1, Collection and administration of qualified
State individual income taxes.
------------ Excerpt from page 155888
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER B -- ESTATE AND GIFT TAXES
PART 20 -- ESTATE TAX; ESTATES OF DECEDENTS DYING AFTER AUGUST
16, 1954
ACTUARIAL TABLES APPLICABLE BEFORE MAY 1, 1989
TAXABLE ESTATE
Qualified State Tax References:
Page 89 of 148
Current through January 1, 1997; 61 F.R. 69366
s 20.2056(b)-7 Election with respect to life estate for surviving
spouse.
(a) In general. Subject to section 2056(d), a marital
deduction is allowed under section 2056(b)(7) with respect to
estates of decedents dying after December 31, 1981, for qualified
terminable interest property as defined in paragraph (b) of this
section. All of the property for which a deduction is allowed
under this paragraph (a) is treated as passing to the surviving
spouse (for purposes of s 20.2056(a)-1), and no part of the
property is treated as passing to any person other than the
surviving spouse (for purposes of s 20.2056(b)-1).
(b) Qualified terminable interest property -- (1) In
general. Section 2056(b)(7)(B)(i) provides the definition of
qualified terminable interest property.
(i) Terminable interests described in section 2056(b)(1)(C)
cannot qualify as qualified terminable interest property. Thus,
if the decedent directs the executor to purchase a terminable
interest with estate assets, the terminable interest acquired
will not qualify as qualified terminable interest property.
(ii) For purposes of section 2056(b)(7)(B)(i), the term
property generally means the entire interest in property (within
the meaning of s 20.2056(b)-5(d)) or a specific portion of the
entire interest (within the meaning of s 20.2056(b)-5(c)).
(2) Property for which an election may be made -- (i) In
general. The election may relate to all or any part of property
that meets the requirements of section 2056(b)(7)(B)(i), provided
that any partial election must be made with respect to a
fractional or percentage share of the property so that the
elective portion reflects its proportionate share of the increase
or decrease in value of the entire property for purposes of
applying sections 2044 or 2519. The fraction or percentage may be
defined by formula.
(ii) Division of trusts -- (A) In general. A trust may be
divided into separate trusts to reflect a partial election that
has been made, or is to be made, if authorized under the
governing instrument or otherwise permissible under local law.
Any such division must be accomplished no later than the end of
the period of estate administration. If, at the time of the
filing of the estate tax return, the trust has not yet been
divided, the intent to divide the trust must be unequivocally
signified on the estate tax return.
(B) Manner of dividing and funding trust. The division of
the trust must be done on a fractional or percentage basis to
reflect the partial election. However, the separate trusts do not
have to be funded with a pro rata portion of each asset held by
the undivided trust.
Qualified State Tax References:
Page 90 of 148
(C) Local law. A trust may be divided only if the fiduciary
is required, either by applicable local law or by the express or
implied provisions of the governing instrument, to divide the
trust on the basis of the fair market value of the assets of the
trust at the time of the division.
(3) Persons permitted to make the election. The election
referred to in section 2056(b)(7)(B)(i)(III) must be made by the
executor that is appointed, qualified, and acting within the
United States, within the meaning of section 2203, regardless of
whether the property with respect to which the election is to be
made is in the executor's possession. If there is no executor
appointed, qualified, and acting within the United States, the
election may be made by any person with respect to property in
the actual or constructive possession of that person and may also
be made by that person with respect to other property not in the
actual or constructive possession of that person if the person in
actual or constructive possession of such other property does not
make the election. For example, in the absence of an appointed
executor, the trustee of an inter vivos trust (that is included
in the gross estate of the decedent) can make the election.
(4) Manner and time of making the election -- (i) In
general. The election referred to in section
2056(b)(7)(B)(i)(III) and (v) is made on the return of tax
imposed by section 2001 (or section 2101). For purposes of this
paragraph, the term return of tax imposed by section 2001 means
the last estate tax return filed by the executor on or before the
due date of the return, including extensions or, if a timely
return is not filed, the first estate tax return filed by the
executor after the due date.
(ii) Election irrevocable. The election, once made, is
irrevocable, provided that an election may be revoked or modified
on a subsequent return filed on or before the due date of the
return, including extensions actually granted. If an executor
appointed under local law has made an election on the return of
tax imposed by section 2001 (or section 2101) with respect to one
or more properties, no subsequent election may be made with
respect to other properties included in the gross estate after
the return of tax imposed by section 2001 is filed. An election
under section 2056(b)(7)(B)(v) is separate from any elections
made under section 2056A(a)(3).
(c) Protective elections -- (1) In general. A protective
election may be made to treat property as qualified terminable
interest property only if, at the time the federal estate tax
return is filed, the executor of the decedent's estate reasonably
believes that there is a bona fide issue that concerns whether an
asset is includible in the decedent's gross estate, or the amount
or nature of the property the surviving spouse is entitled to
receive, i.e., whether property that is includible is eligible
for the qualified terminable interest property election. The
protective election must identify either the specific asset,
group of assets, or trust to which the election applies and the
specific basis for the protective election.
Qualified State Tax References:
Page 91 of 148
(2) Protective election irrevocable. The protective
election, once made on the return of tax imposed by section 2001,
cannot be revoked. For example, if a protective election is made
on the basis that a bona fide question exists regarding the
inclusion of a trust corpus in the gross estate and it is later
determined that the trust corpus is so includible, the protective
election becomes effective with respect to the trust corpus and
cannot thereafter be revoked.
(d) Qualifying income interest for life -- (1) In general.
Section 2056(b)(7)(B)(ii) provides the definition of qualifying
income interest for life. For purposes of section
2056(b)(7)(B)(ii)(II), the surviving spouse is included within
the prohibited class of powerholders referred to therein.
(2) Entitled for life to all income. The principles of s
20.2056(b)-5(f), relating to whether the spouse is entitled for
life to all of the income from the entire interest, or a specific
portion of the entire interest, apply in determining whether the
surviving spouse is entitled for life to all of the income from
the property regardless of whether the interest passing to the
spouse is in trust.
(3) Contingent income interests. An income interest granted
for a term of years, or a life estate subject to termination upon
the occurrence of a specified event (e.g., remarriage), is not a
qualifying income interest for life. In addition, an income
interest (or life estate) that is contingent upon the executor's
election under section 2056(b)(7)(B)(v) is not a qualifying
income interest for life, regardless of whether the election is
actually made.
(4) Income between last distribution date and date of
spouse's death. An income interest does not fail to constitute
a qualifying income interest for life solely because income
between the last distribution date and the date of the surviving
spouse's death is not required to be distributed to the surviving
spouse or to the estate of the surviving spouse. See s 20.2044-1
relating to the inclusion of such undistributed income in the
gross estate of the surviving spouse.
(5) Pooled income funds. An income interest in a pooled
income fund described in section 642(c)(5) constitutes a
qualifying income interest for life for purposes of section
2056(b)(7)(B)(ii).
(6) Power to distribute principal to spouse. An income
interest in a trust will not fail to constitute a qualifying
income interest for life solely because the trustee has a power
to distribute principal to or for the benefit of the surviving
spouse. The fact that property distributed to a surviving spouse
may be transferred by the spouse to another person does not
result in a failure to satisfy the requirement of section
2056(b)(7)(B)(ii)(II). However, if the surviving spouse is
legally bound to transfer the distributed property to another
person without full and adequate consideration in money or
money's worth, the requirement of section 2056(b)(7)(B)(ii)(II)
Qualified State Tax References:
Page 92 of 148
is not satisfied.
(e) Annuities payable from trusts in the case of estates of
decedents dying on or before October 24, 1992, and certain
decedents dying after October 24, 1992, with wills or revocable
trusts executed on or prior to that date -- (1) In general. In
the case of estates of decedents within the purview of the
effective date and transitional rules contained in s 20.2056(b)-
7(e)(5), a surviving spouse's lifetime annuity interest payable
from a trust or other group of assets passing from the decedent
is treated as a qualifying income interest for life for purposes
of section 2056(b)(7)(B)(ii).
(2) Deductible interest. The deductible interest, for
purposes of s 20.2056(a)-2(b), is the specific portion of the
property that, assuming the applicable interest rate for valuing
annuities, would produce income equal to the minimum amount
payable annually to the surviving spouse. If, based on the
applicable interest rate, the entire property from which the
annuity may be satisfied is insufficient to produce income equal
to the minimum annual payment, the value of the deductible
interest is the entire value of the property. The value of the
deductible interest may not exceed the value of the property from
which the annuity is payable. If the annual payment may increase,
the increased amount is not taken into account in valuing the
deductible interest.
(3) Distributions permissible only to surviving spouse. An
annuity interest is not treated as a qualifying income interest
for life for purposes of section 2056(b)(7)(B)(ii) if any person
other than the surviving spouse may receive, during the surviving
spouse's lifetime, any distribution of the property or its income
(including any distribution under an annuity contract) from which
the annuity is payable.
(4) Applicable interest rate. To determine the applicable
interest rate for valuing annuities, see sections 2031 and 7520
and the regulations under those sections.
(5) Effective dates. (i) The rules contained in s
20.2056(b)-7(e) apply with respect to estates of decedents dying
on or before October 24, 1992.
(ii) The rules contained in s 20.2056(b)-7(e) apply in the
case of decedents dying after October 24, 1992, if property
passes to the spouse pursuant to a will or revocable trust
executed on or before October 24, 1992, and either --
(A) On that date, the decedent was under a mental disability
to change the disposition of his property and did not regain his
competence to dispose of such property before the date of death;
or
(B) The decedent dies prior to October 24, 1995.
(iii) Notwithstanding the foregoing, the rules contained in
s 20.2056(b)-7(e) do not apply if the will or revocable trust is
Qualified State Tax References:
Page 93 of 148
amended after October 24, 1992, in any respect that increases the
amount of the transfer qualifying for the marital deduction or
alters the terms by which the interest so passes to the surviving
spouse.
(f) Joint and survivor annuities. [Reserved]
(g) Application of local law. The provisions of local law
are taken into account in determining whether the conditions of
section 2056(b)(7)(B)(ii)(I) are satisfied. For example, silence
of a trust instrument as to the frequency of payment is not
regarded as a failure to satisfy the requirement that the income
must be payable to the surviving spouse annually or more
frequently unless applicable local law permits payments less
frequently.
(h) Examples. The following examples illustrate the
application of paragraphs (a) through (g) of this section. In
each example, it is assumed that the decedent, D, was survived by
S, D's spouse and that, unless stated otherwise, S is not the
trustee of any trust established for S's benefit.
Example 1. Life estate in residence. D owned a personal residence
valued at $250,000 for estate tax purposes. Under D's will, the
exclusive and unrestricted right to use the residence (including
the right to continue to occupy the property as a personal
residence or to rent the property and receive the income) passes
to S for life. At S's death, the property passes to D's children.
Under applicable local law, S must consent to any sale of the
property. If the executor elects to treat all of the personal
residence as qualified terminable interest property, the
deductible interest is $250,000, the value of the residence for
estate tax purposes.
Example 2. Power to make property productive. D's will
established a trust funded with property valued for estate tax
purposes at $500,000. The assets include both income producing
assets and non-productive assets. S was given the power,
exercisable annually, to require distribution of all of the trust
income to herself. No trust property may be distributed during
S's lifetime to any person other than S. Applicable local law
permits S to require that the trustee either make the trust
property productive or sell the property and reinvest in
productive property within a reasonable time after D's death. If
the executor elects to treat all of the trust as qualified
terminable interest property, the deductible interest is
$500,000. If the executor elects to treat only 20 percent of the
trust as qualified terminable interest property, the deductible
interest is $100,000, i.e., 20 percent of $500,000.
Example 3. Power of distribution over fraction of trust income.
The facts are the same as in Example 2 except that S is given the
right exercisable annually for S's lifetime to require
distribution to herself of only 50 percent of the trust income
for life. The remaining trust income is to be accumulated or
distributed among S and the decedent's children in the trustee's
discretion. The maximum amount that D's executor may elect to
Qualified State Tax References:
Page 94 of 148
treat as qualified terminable interest property is $250,000;
i.e., the estate tax value of the trust ($500,000) multiplied by
the percentage of the trust in which S has a qualifying income
interest for life (50 percent). If D's executor elects to treat
only 20 percent of the portion of the trust in which S has a
qualifying income interest as qualified terminable interest
property, the deductible interest is $50,000, i.e., 20 percent of
$250,000.
Example 4. Power to distribute trust corpus to other
beneficiaries. D's will established a trust providing that S is
entitled to receive at least annually all the trust income. The
trustee is given the power to use annually during S's lifetime
$5,000 from the trust for the maintenance and support of S's
minor child, C. Any such distribution does not necessarily
relieve S of S's obligation to support and maintain C. S does not
have a qualifying income interest for life in any portion of the
trust because the bequest fails to satisfy the condition that no
person have a power, other than a power the exercise of which
takes effect only at or after S's death, to appoint any part of
the property to any person other than S. The trust would also be
nondeductible under section 2056(b)(7) if S, rather than the
trustee, held the power to appoint a portion of the principal to
C. However, in the latter case, if S made a qualified disclaimer
(within the meaning of section 2518) of the power to appoint to
C, the trust could qualify for the marital deduction pursuant to
section 2056(b)(7), assuming that the power is personal to S and
S's disclaimer terminates the power. Similarly, in either case,
if C made a qualified disclaimer of C's right to receive
distributions from the trust, the trust would qualify under
section 2056(b)(7), assuming that C's disclaimer effectively
negates the trustee's power under local law.
Example 5. Spouse's income interest terminable on remarriage. D's
will established a trust providing that all of the trust income
is payable at least annually to S for S's lifetime, provided
that, if S remarries, S's interest in the trust will pass to X.
The trust is not deductible under section 2056(b)(7). S's income
interest is not a qualifying income interest for life because it
is not for life but, rather, is terminable upon S's remarriage.
Example 6. Spouse's income interest contingent on executor's
election. D's will established a trust providing that S is
entitled to receive the income from that portion of the trust
that the executor elects to treat as qualified terminable
interest property. S does not have a qualifying income interest
for life in any portion of the trust because the income interest
is contingent upon the executor's election. Accordingly, the
executor cannot elect qualified terminable interest treatment for
any portion of the trust. If the decedent's will gives the
surviving spouse a qualifying income interest for life in a
specific portion of the trust (such as the minimum portion of the
trust that is necessary to reduce the Federal estate tax to zero)
and the interest is not contingent on the executor's election,
the executor can elect qualified terminable interest treatment
for the specified portion of the trust.
Qualified State Tax References:
Page 95 of 148
Example 7. Formula partial election. D's will established a
trust funded with the residue of D's estate. Trust income is to
be paid annually to S for life, and the principal is to be
distributed to D's children upon S's death. S has the power to
require that all the trust property be made productive. There is
no power to distribute trust property during S's lifetime to any
person other than S. D's executor elects to deduct a fractional
share of the residuary estate under section 2056(b)(7). The
election specifies that the numerator of the fraction is the
amount of deduction necessary to reduce the Federal estate tax to
zero (taking into account final estate tax values) and the
denominator of the fraction is the final estate tax value of the
residuary estate (taking into account any specific bequests or
liabilities of the estate paid out of the residuary estate). The
formula election is of a fractional share. The value of the share
qualifies for the marital deduction even though the executor's
determinations to claim administration expenses as estate or
income tax deductions and the final estate tax values will affect
the size of the fractional share.
Example 8. Formula partial election. The facts are the same as in
Example 7 except that, rather than defining a fraction, the
executor's formula states: "I elect to treat as qualified
terminable interest property that portion of the residuary trust,
up to 100 percent, necessary to reduce the Federal estate tax to
zero, after taking into account the available unified credit,
final estate tax values and any liabilities and specific bequests
paid from the residuary estate." The formula election is of a
fractional share. The share is equivalent to the fractional share
determined in Example 7.
Example 9. Severance of QTIP trust. D's will established a
trust funded with the residue of D's estate. Trust income is to
be paid annually to S for life, and the principal is to be
distributed to D's children upon S's death. S has the power to
require that all of the trust property be made productive. There
is no power to distribute trust property during S's lifetime to
any person other than S. D's will authorizes the executor to make
the election under section 2056(b)(7) only with respect to the
minimum amount of property necessary to reduce estate taxes on
D's estate to zero, authorizes the executor to divide the
residuary estate into two separate trusts to reflect the
election, and authorizes the executor to charge any payment of
principal to S to the qualified terminable interest trust. S is
the sole beneficiary of both trusts during S's lifetime. The
authorizations in the will do not adversely affect the allowance
of the marital deduction. Only the property remaining in the
marital deduction trust, after payment of principal to S, is
subject to inclusion in S's gross estate under section 2044 or
subject to gift tax under section 2519.
Example 10. Payments to spouse from individual retirement
account. S is the life beneficiary of sixteen remaining annual
installments payable from D's individual retirement account. The
terms of the account provide for the payment of the account
balance in nineteen annual installments that commenced when D
reached age 70 1/2. Each installment is equal to all the income
Qualified State Tax References:
Page 96 of 148
earned on the remaining principal in the account plus a share of
the remaining principal equal to 1/19 in the first year, 1/18
in the second year, 1/17 in the third year, etc. Under the terms
of the account, S has no right to withdraw any other amounts from
the account. Any payments remaining after S's death pass to D's
children. S's interest in the account qualifies as a qualifying
income interest for life under section 2056(b)(7)(B)(ii), without
regard to the provisions of section 2056(b)(7)(C).
Example 11. Spouse's interest in trust in the form of an
annuity. D died prior to October 24, 1992. D's will established a
trust funded with income producing property valued at $500,000
for estate tax purposes. The trustee is required by the trust
instrument to pay $20,000 a year to S for life. Trust income in
excess of the annuity amount is to be accumulated in the trust
and may not be distributed during S's lifetime. S's lifetime
annuity interest is treated as a qualifying income interest for
life. If the executor elects to treat the entire portion of the
trust in which S has a qualifying income interest as qualified
terminable interest property, the value of the deductible
interest is (assuming that 10 percent is the applicable interest
rate under section 7520 for valuing annuities on the appropriate
valuation date) $200,000, because that amount would yield an
income to S of $20,000 a year.
Example 12. Value of spouse's annuity exceeds value of trust
corpus. The facts are the same as in Example 11 except that the
trustee is required to pay S $70,000 a year for life. If the
executor elects to treat the entire portion of the trust in which
S has a qualifying income interest as qualified terminable
interest property, the value of the deductible interest is
$500,000, which is the lesser of the entire value of the property
($500,000), or the amount of property that (assuming a 10 percent
interest rate) would yield an income to S of $70,000 a year
($700,000).
Example 13. Pooled income fund. D's will provides for a bequest
of $200,000 to a pooled income fund described in section
642(c)(5), designating S as the income beneficiary for life. If
D's executor elects to treat the entire $200,000 as qualified
terminable interest property, the deductible interest is
$200,000.
Example 14. Funding severed QTIP trusts. D's will established a
trust satisfying the requirements of section 2056(b)(7). Pursuant
to the authority in D's will and s 20.2056(b)-7(b)(2)(ii), D's
executor indicates on the Federal estate tax return that an
election under section 2056(b)(7) is being made with respect to
50 percent of the trust, and that the trust will subsequently be
divided to reflect the partial election on the basis of the fair
market value of the property at the time of the division. D's
executor funds the trust at the end of the period of estate
administration. At that time, the property available to fund the
trusts consists of 100 shares of X Corporation stock with a
current value of $400,000 and 200 shares of Y Corporation stock
with a current value of $400,000. D may fund each trust with the
stock of either or both corporations, in any combination,
Qualified State Tax References:
Page 97 of 148
provided that the aggregate value of the stock allocated to each
trust is $400,000.
[T.D. 8522, 59 F.R. 9651, March 1, 1994]
26 CFR s 20.2056(b)-7, Election with respect to life estate for
surviving spouse.
------------ Excerpt from pages 157089-157096
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER B -- ESTATE AND GIFT TAXES
PART 20 -- ESTATE TAX; ESTATES OF DECEDENTS DYING AFTER AUGUST
16, 1954
PROCEDURE AND ADMINISTRATION
Current through January 1, 1997; 61 F.R. 69366
s 20.6324B-1 Special lien for additional estate tax attributable
to farm, etc., valuation.
(a) General rule. In the case of an estate of a decedent
dying after December 31, 1976, which includes any interest in
qualified real property, if the executor elects to value part or
all of such property pursuant to section 2032A, a lien arises in
favor of the United States on the property to which the election
applies. The lien is in the amount equal to the adjusted tax
difference attributable to such interest (as defined by section
2032A(c)(2)(B)). The term "qualified real property" means
qualified real property as defined in section 2032A(b), qualified
replacement property within the meaning of section
2032A(h)(3)(B), and qualified exchange property within the
meaning of section 2032A(i)(3). The rules set forth in the
regulations under section 2032A shall apply in determining
whether this section is applicable to otherwise qualified real
property held by a partnership, corporation or trust.
(b) Period of lien. The lien shall arise at the time the
executor files an election under section 2032A. It shall remain
in effect until one of the following occurs:
(1) The liability for the additional estate tax under
section 2032A(c) with respect to such interest has been
satisfied; or
(2) Such liability has become unenforceable by reason of
lapse of time; or
(3) The district director is satisfied that no further
Qualified State Tax References:
Page 98 of 148
liability for additional estate tax with respect to such interest
may arise under section 2032A(c), i.e., the required time period
has elapsed since the decedent's death without the occurrence of
an event described in section 2032A(c)(1), or the qualified heir
(as defined in section 2032A(e)(1)) had died.
For procedures regarding the release or subordination of liens or
discharge of property from liens, see s 301.6325-1 of this
chapter (Regulations on Procedure and Administration).
(c) Substitution of security for lien. The district
director may, upon written application of the qualified heir (as
defined in section 2032A(e)(1)) acquiring any interest in
qualified real property to which a lien imposed by section 6324B
attaches, issue a certificate of discharge of any or all property
subject to such lien, after receiving a bond or other security in
an amount or value determined by the district director as
sufficient security for the maximum potential liability for
additional estate tax with respect to such interest. Any bond
shall be in the form and with the security prescribed in s
301.7101-1 of this chapter.
(d) Special rules. The rules set forth in section
6324A(d)(1), (3), and (4), and the regulations thereunder, shall
apply with respect to a lien imposed by section 6324B as if it
were a lien imposed by section 6324A.
[T.D. 7847, 47 F.R. 50856, Nov. 10, 1982]
26 CFR s 20.6324B-1, Special lien for additional estate tax
attributable to farm, etc., valuation.
------------ Excerpt from pages 157272-157273
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
LIEN FOR TAXES
Current through January 1, 1997; 61 F.R. 69366
s 301.6321-1 Lien for taxes.
If any person liable to pay any tax neglects or refuses to
pay the same after demand, the amount (including any interest,
additional amount, addition to tax, or assessable penalty,
together with any costs that may accrue in addition thereto)
Qualified State Tax References:
Page 99 of 148
shall be a lien in favor of the United States upon all property
and rights to property, whether real or personal, tangible or
intangible, belonging to such person. For purposes of section
6321 and this section, the term "any tax" shall include a State
individual income tax which is a "qualified tax", as defined in
paragraph (b) of s 301.6361-4. The lien attaches to all property
and rights to property belonging to such person at any time
during the period of the lien, including any property or rights
to property acquired by such person after the lien arises.
Solely for purposes of sections 6321 and 6331, any interest in
restricted land held in trust by the United States for an
individual noncompetent Indian (and not for a tribe) shall not be
deemed to be property, or a right to property, belonging to such
Indian. For the method of allocating amounts collected pursuant
to a lien between the Federal Government and a State or States
imposing a qualified tax with respect to which the lien attached,
see paragraph (f) of s 301.6361-1. For the special lien for
estate and gift taxes, see section 6324 and s 301.6324-1.
[32 F.R. 15241, Nov. 3, 1967, as amended by T.D. 7139, 36 F.R.
15041, Aug. 12, 1971; T.D. 7577, 43 F.R. 59361, Dec. 20, 1978]
26 CFR s 301.6321-1, Lien for taxes.
------------ Excerpt from page 160371
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
s 301.6361-1 Collection and administration of qualified taxes.
(a) In general. In the case of any State which has in
effect a State agreement (as defined in paragraph (a) of s
301.6361-4), the Commissioner of Internal Revenue shall collect
and administer each qualified tax (as defined in paragraph (b) of
s 301.6361-4) of such State. No fee or other charge shall be
imposed upon any State for the collection or administration of
any qualified tax of such State or any other State. In any such
case of collection and administration of qualified taxes, the
provisions of subtitle F (relating to procedure and
administration), subtitle G (relating to the Joint Committee on
Taxation), and chapter 24 (relating to the collection of income
tax at source on wages), and the provisions of regulations
Qualified State Tax References:
Page 100 of 148
thereunder, insofar as such provisions relate to the collection
and administration of the taxes imposed on the income of
individuals by chapter 1 (and the civil and criminal sanctions
provided by subtitle F, or by title 18 of the United States Code
(relating to crimes and criminal procedure), with respect to such
collection and administration) shall apply to the collection and
administration of qualified taxes as if such taxes were imposed
by chapter 1, except to the extent that the application of such
provisions (and sanctions) are modified by regulations issued
under subchapter E (as defined in paragraph (d) of s 301.6361-4).
Any extension of time which is granted for the making of a
payment, or for the filing of any return, which relates to any
Federal tax imposed by subtitle A (or by subtitle C with respect
to filing a return) shall constitute automatically an extension
of the same amount of time for the making of the corresponding
payment or for the filing of the corresponding return relating to
any qualified tax.
(b) Returns of qualified taxes. Every individual, estate,
or trust which has liability for one or more qualified taxes for
a taxable year --
(1) Shall file a Federal income tax return at the time
prescribed pursuant to section 6072(a) (whether or not such
return is required by section 6012), and shall file therewith on
the prescribed form a return under penalties of perjury for each
tax which is --
(i) A qualified resident tax imposed by a State of which the
taxpayer was a resident, as defined in s 301.6362-6, for any part
of the taxable year;
(ii) A qualified nonresident tax imposed by a State within
which was located the source or sources from which the taxpayer
derived, while not a resident of such State and while not exempt
from liability for the tax by reason of a reciprocal agreement
between such State and the State of which he is a resident, 25
percent or more of his aggregate wage and other business income,
as defined in paragraph (c) of s 301.6362-5, for the taxable
year; or
(iii) A qualified resident or nonresident tax with respect
to which any amount was currently collected from the taxpayer's
income (including collection by withholding on wages or by
payment of estimated income tax), as provided in paragraph (f) of
s 301.6362-6, for any part of the taxable year; and
(2) Shall declare (in addition to the declaration required
with respect to the return of the Federal income tax and in the
place and manner prescribed by form or instructions thereto)
under penalties of perjury that, to the best of the knowledge and
belief of the taxpayer (or, in the case of an estate or trust, of
the fiduciary who executes the Federal income tax return), he has
no liability for any qualified tax for the taxable year other
than any such liabilities returned with the Federal income tax
return (pursuant to subparagraph (1) of this paragraph (b)).
Such declaration shall constitute a return indicating no
Qualified State Tax References:
Page 101 of 148
liability with respect to each qualified tax other than any such
tax for which liability is so returned. A Federal income tax
return form which is filed but which does not contain such
declaration shall constitute a Federal income tax return only if
the taxpayer in fact has no liability for any qualified State tax
for the taxable year.
(c) Credits -- (1) Credit for tax of another State or
political subdivision -- (i) In general. A credit allowable
under a qualified tax law against the tax imposed by such law for
a taxpayer's tax liability to another State or a political
subdivision of another State shall be allowed if the requirements
of subdivision (ii) of this subparagraph are met, and if the
credit meets the requirements of paragraph (c) of s 301.6362-4.
Such credit shall be allowed without regard to whether the tax
imposed by the other State or subdivision thereof is a qualified
tax, and without regard to whether such tax has been paid.
(ii) Substantiation of tax liability for which a credit is
allowed. If the liability which gives rise to a credit of the
type described in subdivision (i) of this subparagraph is with
respect to a qualified tax, then the fact of such liability shall
be substantiated by filing the return on which such liability is
reported. If such liability is not with respect to a qualified
tax, then the Commissioner may require a taxpayer who claims
entitlement to such a credit to complete a form to be submitted
with his return of the qualified tax against which the credit is
claimed. On such form the taxpayer shall identify each of the
other States (the liabilities to which were not substantiated as
provided in the first sentence of this subdivision) or political
subdivisions to which the taxpayer reported a liability for a tax
giving rise to the credit, furnish the name or description of
each such tax, state the amount of the liability so reported with
respect to each such tax and the beginning and ending dates of
the taxable period for which such liability was reported, and
provide such other information as is requested in the form or in
the instructions thereto. In addition, the taxpayer shall agree
on such form to notify the Commissioner in the event that the
amount of any tax liability (or portion thereof) which is claimed
as giving rise to a credit of the type described in subdivision
(i) of this subparagraph is changed or adjusted, whether as a
result of an amended return filed by the taxpayer, a
determination by the jurisdiction imposing the tax, or in any
other manner.
(2) Credit or withheld qualified tax. An individual from
whose wages an amount is withheld on account of a qualified tax
shall receive a credit for such amount against his aggregate
liability for all such qualified taxes and the Federal income tax
for the taxable year, whether or not such tax has been paid over
to the Federal Government by the employer. The credit shall
operate in the manner provided by section 31(a) of the Code and
the regulations thereunder with respect to Federal income tax
withholding.
(d) Collection of qualified taxes at source on wages -- (1)
In general. Except as otherwise provided in subparagraph (2) of
Qualified State Tax References:
Page 102 of 148
this paragraph, every employer making payment of wages to an
employee described in such subparagraph shall deduct and withhold
upon such wages the amount prescribed with respect to the
qualified tax designated in such subparagraph. The amounts
prescribed for withholding with respect to each such qualified
tax shall be published in Circular E (Employer's Tax Guide) or
other appropriate Internal Revenue Service publications. See
paragraph (f)(1) of s 301.6362-7 with respect to civil and
criminal penalties to which an employer shall be subject with
respect to his responsibilities relating to qualified taxes.
(2) Specific withholding requirements. An employer shall
deduct and withhold upon an employee's wages the amount
prescribed with respect to a qualified tax with respect to which
such employee is subject to the current collection provisions
pursuant to paragraph (f) of s 301.6362-6, unless:
(i) In the case of a qualified resident tax, the employee's
services giving rise to the wages are performed in another State,
and such other State or a political subdivision thereof imposes a
nonresident tax on such employee with respect to which the
withholding amount exceeds the prescribed withholding amount with
respect to such qualified resident tax, and the State imposing
such qualified resident tax grants a credit against it for such
nonresident tax.
(ii) In the case of a qualified nonresident tax, either:
(A) Residents of the State in which the employee resides are
exempt from liability for the qualified nonresident tax imposed
by the State from sources within which his wage income is
derived, by reason of an interstate compact or agreement to which
the two States are parties, or
(B) The State in which the employee resides imposes a
qualified resident tax on such employee with respect to which the
prescribed withholding amounts exceed the prescribed withholding
amounts with respect to the qualified nonresident tax imposed by
the State from sources within which his wage income is derived,
and the State in which he resides grants a credit against its
qualified resident tax for such qualified nonresident tax.
If the nonresident tax described in subdivision (i) of this
subparagraph is a qualified nonresident tax imposed by a State,
then the reference in such subdivision to the State in which the
services are performed shall be construed as a reference to the
State from sources within which the wage income is derived,
within the meaning of paragraph (d)(1) of s 301.6362-5.
(3) Forms, procedures, and returns relating to withholding
with respect to qualified taxes -- (i) Forms W-4 and W-4P. Forms
W-4 (Employee's Withholding Allowance Certificate) and W-4P
(Annuitant's Request for Income Tax Withholding), shall include
information as to the State in which the employee resides, and
shall be used for purposes of withholding with respect to both
Federal and qualified taxes. An employee shall show on his Form
W-4 the State in which he resides for purposes of this paragraph,
Qualified State Tax References:
Page 103 of 148
and shall file a new Form W-4 within 10 days after he changes his
State of residence. An employee who fails to meet either of the
requirements set forth in the preceding sentence, with the intent
to evade the withholding tax imposed with respect to a qualified
tax, shall be subject to the penalty provided in section 7205 of
the Code. An employer shall be responsible for determining the
State within which are located the sources from which the
employee's wage income is derived for purposes of this paragraph;
and, if the employee does not file a Form W-4, the employer shall
assume for such purposes that the employee resides in that State.
When an employer and an employee enter into a voluntary
withholding agreement pursuant to s 31.3402(p)-1, the employer
shall withhold the amount prescribed with respect to the
qualified resident tax imposed by the State in which the employee
resides, as indicated on Form W-4. Similarly, if an annuitant
requests withholding with respect to his annuity payments
pursuant to section 3402(o)(1)(B) of the Code, the payer shall
withhold the whole dollar amount specified by the annuitant with
respect to a qualified resident tax, provided that the combined
withholding with respect to Federal and qualified taxes on each
annuity payment shall be a whole dollar amount not less than $5,
and that the net amount of any annuity payment received by the
payee shall not be reduced to less than $10.
(ii) Forms W-2 and W-2P. Forms W-2 (Wage and Tax Statement)
and W-2P (the corresponding form for annuities) shall show:
(A) The total amount withheld with respect to the Federal
income tax;
(B) The total amount withheld with respect to qualified
taxes;
(C) The name of each State imposing a qualified tax in which
the employee (or annuitant) resided during the taxable year, as
shown on Form W-4 (or W-4P);
(D) The name of each State imposing a qualified nonresident
tax within which were located sources from which the employee's
wage income was derived during a period of the taxable year in
which he was not shown as a resident of such State on Form W-4,
and the amount of the employee's wage income so derived; and
(E) The name of each State or locality that imposes an
income tax which is not a qualified tax and with respect to which
the employer withheld on the employee's wage income for the
taxable year, and the amount of wage income with respect to which
the employer so withheld.
(iii) Requirements relating to deposit and payment of
withheld tax. Rules relating to the deposit and remittance of
withheld Federal income and FICA taxes, including those
prescribed in section 6302 of the Code and the regulations
thereunder, shall apply also to amounts withheld with respect to
qualified taxes. Thus, an employer's liability with respect to
the deposit and payment of withheld taxes shall be for the
combined amount of withholding with respect to Federal and
Qualified State Tax References:
Page 104 of 148
qualified taxes. The Federal Tax Deposit form shall separately
indicate:
(A) The combined total amount of Federal income, FICA, and
qualified taxes withheld;
(B) The combined total amount of qualified taxes withheld;
and
(C) The total amount of qualified taxes withheld with
respect to each electing State.
Data indicating the total amount of tax deposits processed by the
Internal Revenue Service with respect to the qualified taxes of
an electing State will be available to that State upon request on
as frequent as a weekly basis. These data will be available no
later than 10 working days after the end of the calendar week in
which the deposits were processed by the Service.
(iv) Employment tax returns. Forms 941 (Employer's
Quarterly Federal Tax Return), 941-E (Quarterly Return of
Withheld Income Tax), 941-M (Employer's Monthly Federal Tax
Return), 942 (Employer's Quarterly Tax Return for Household
Employees), and 943 (Employer's Annual Tax Return for
Agricultural Employees), shall indicate the total amount withheld
with respect to each qualified tax, as directed by such forms or
their instructions.
(e) Criminal penalties. A criminal offense committed with
respect to a qualified tax shall be treated as a separate offense
from a similar offense committed with respect to the Federal tax.
Thus, for example, if a taxpayer willfully attempts to evade both
the Federal tax and a qualified tax by failing to report a
portion of his income, he shall be considered as having committed
two criminal offenses, each subject to a separate penalty under
section 7201. See also s 301.6362-7(f) with respect to criminal
penalties.
(f) Allocation of amounts collected with respect to tax and
criminal fines -- (1) In general. The aggregate amount that has
been collected from a taxpayer (including amounts collected by
withholding) in respect of liability for both one or more
qualified taxes and the Federal income tax for a taxable year
shall be allocated among the Federal Government and the States
imposing qualified taxes for which the taxpayer is liable in the
proportion which the taxpayer's liability for each such tax bears
to his aggregate liability for such year to all of such taxing
jurisdictions with respect to such taxes. A reallocation shall
be made either when an amount is collected from the taxpayer or
his employer or is credited or refunded to the taxpayer,
subsequent to the making of the initial allocation, or when a
determination is made by the Commissioner that an error was made
with respect to a previous allocation. However, any such
allocation or reallocation shall not affect the amount of a
taxpayer's or employer's liability to either jurisdiction, or the
amount of the assessment and collection which may be made with
respect to a taxpayer or employer. Accordingly, such allocations
Qualified State Tax References:
Page 105 of 148
and reallocations shall not be taken into consideration for
purposes of the application of statutes of limitation or
provisions relating to interest, additions to tax, penalties, and
criminal sanctions. See example (4) in subparagraph (4) of this
paragraph (e). In addition, any such allocation or reallocation
shall not affect the amount of the deduction to which a taxpayer
is entitled under section 164 for a year in which he made payment
(including payments made by withholding) of an amount which was
designated as being in respect of his liability for a qualified
tax. However, to the extent that an amount which was paid by a
taxpayer and designated as being in respect of his liability for
a qualified tax is allocated or reallocated in such a manner as
to apply it toward the taxpayer's liability for the Federal
income tax, such allocation or reallocation shall be treated as a
refund to the taxpayer of an amount paid in respect of a State
income tax, and shall be included in the gross income of the
taxpayer to the extent appropriate under section 111 and the
regulations thereunder in the year in which the allocation or
reallocation is made. See section 451 and the regulations
thereunder. Similarly, to the extent that an amount which was
paid by a taxpayer and designated as being in respect of his
Federal income tax liability is allocated or reallocated in such
a manner as to apply it toward his liability for a qualified tax,
such allocation or reallocation shall be treated as a payment
made by the taxpayer in respect of a State income tax, and shall
be deductible under section 164 in the year in which the
allocation or reallocation is made. The Internal Revenue Service
shall notify the taxpayer in writing of any allocation or
reallocation of tax liabilities in a proportion other than that
of the respective tax liabilities shown on the taxpayer's
returns.
(2) Amounts of collections and liabilities. For purposes of
this paragraph the aggregate amount that has been collected from
a taxpayer or his employer in respect of tax liability shall
include the amounts of interest provided in chapter 67, and
additions to tax and assessable penalties provided in chapter 68,
which are collected with respect to such tax; but shall not
include criminal fines provided in chapter 75, or in title 18 of
the United States Code, which are collected with respect to
offenses relating to such tax. (See subparagraph (3) of this
paragraph (e) with respect to the treatment of such criminal
fines.) However, for purposes of this paragraph, the amount of
the taxpayer's liability for each tax shall exclude his liability
for such interest additions to tax, and assessable penalties with
respect to such tax, and his liability for criminal fines imposed
with respect to offenses relating to such tax. For purposes of
this paragraph, the amount of the taxpayer's liability for each
tax shall be computed by taking credits into account, except that
there shall be no reduction for any amounts paid on account of
such liability, whether by means of withholding, estimated tax
payment, or otherwise.
(3) Special rules relating to criminal fines. (i) Except as
otherwise provided in subdivision (ii) of this subparagraph, when
a criminal charge is brought against a taxpayer with respect to a
taxable year pursuant to chapter 75, or to title 18 of the United
Qualified State Tax References:
Page 106 of 148
States Code, or to a corresponding provision of a qualified tax
law, alleging that an offense was committed against the United
States with respect to the Federal income tax or against a State
with respect to a qualified tax, and an amount of money is
collected by the Federal Government as a fine as a result of such
charge, then the Federal Government shall remit an amount to each
State, if any, which is an affected jurisdiction. The amount
remitted to each such State shall bear the same proportion to the
total amount collected as a fine as the taxpayer's liability with
respect to the qualified taxes of that State bears to the
aggregate of the taxpayer's income tax liabilities to all
affected jurisdictions for the taxable year, as determined under
subparagraphs (1) and (2) of this paragraph (e). For purposes of
this subparagraph, an affected jurisdiction is (A) a jurisdiction
with respect to the tax of which a criminal charge described in
the preceding sentence was brought for the taxable year, or (B) a
jurisdiction with respect to the Federal income tax or the
qualified tax of which the acts or omissions alleged in such a
criminal charge would constitute the basis for the bringing of a
criminal charge for the same taxable year. However, in no case
shall the amount received by an affected State, or the amount of
the excess of the amount received by the Federal Government over
the amount of its remissions to States, with respect to a fine
exceed the maximum fine prescribed by statute for the offense
against that jurisdiction with respect to which a criminal charge
was brought, or with respect to which the bringing of a criminal
charge could have been supported on the basis of the acts or
omissions alleged in a criminal charge brought. For purposes of
this subparagraph, the amount collected as a fine as a result of
a criminal charge shall include amounts paid in settlement of an
actual or potential liability for a fine, amounts paid pursuant
to a conviction and amounts paid pursuant to a plea of guilty or
nolo contendere.
(ii) If a criminal charge described in the first sentence of
subdivision (i) of this subparagraph is actually brought with
respect to the income tax of every affected jurisdiction with
respect to the taxable year, and if a Court adjudicates on the
merits the taxpayer's liability for a fine to each such
jurisdiction, and includes in its decree a direction of the
amount, if any, to be paid as a fine to each such jurisdiction,
then that decree shall govern the allocation of the amount of
money collected by the Federal Government as a fine with respect
to the taxable year.
(4) Examples. The application of this paragraph may be
illustrated by the following examples:
Example (1). The total combined amount of State X qualified tax
and Federal income tax collected from A, a resident of State X,
for the taxable year is $5,100. The amounts of A's liabilities
for such taxes for that year are $800 to State X and $4,000 to
the Federal Government. Since A's tax liability to State X is
one-sixth of the combined tax liability ($4,800), one-sixth ($50)
of the amount to be refunded to A ($300) is chargeable against
State X's account, and five-sixths ($250) is chargeable against
the Federal Government's account.
Qualified State Tax References:
Page 107 of 148
Example (2). Assume the same facts as in example (1) except that
the total amount collected from A is $4,500. Since A's
liabilities for the State X tax and the Federal tax are one-sixth
and five-sixths, respectively, of the combined tax liability, the
Federal Government shall pay over to State X one-sixth ($750) of
the amount actually collected from A, and the Federal Government
shall retain five-sixths ($3,750).
Example (3). The total amount of State X qualified tax, State Y
qualified tax, and Federal income tax collected from B, a
resident of State X who is employed in State Y, for the taxable
year is $5,500. The amounts of B's liabilities for such taxes
for that year are: $250 for the State X tax (after allowance of
a credit for State Y's qualified tax), $750 for the State Y tax,
and $4,000 for the Federal tax. Since B's liability for the
State X tax ($250) is 5 percent of the combined tax liability
($5,000), his liability for the State Y tax ($750) is 15 percent
of such combined liability, and his liability for the Federal tax
($4,000) is 80 percent of such combined liability, the total
amount to be refunded to B ($500) shall be chargeable in the
following manner: 5 percent ($25) against State X's account, 15
percent ($75) against State Y's account, and 80 percent ($400)
against the Federal Government's account.
Example (4). C is liable for $2,000 in Federal income tax and
$500 in State X qualified tax (a resident tax) for the taxable
year. However, on his Federal income tax return for such year, C
erroneously described himself as a resident of State Y (which
does not have a qualified tax), and he filed with such return his
declaration to the effect that he had no qualified tax liability
for the year. Accordingly, C paid only $2,000 for his Federal
tax liability, and such amount was retained in the account of the
Federal Government. Subsequently, C's error is discovered. The
amount collected by the Federal Government from C for such year
must be allocated between the Federal Government and State X in
proportion to C's tax liability to both. Accordingly, the
Federal Government must pay over to State X the amount of $400
(which is 1/5 ($500/$2,500) of the $2,000 collected). If the
Federal Government collects from C the additional $500 owed, it
will retain $400 of such amount and pay the remaining $100 to
State X. Similarly, if the Federal Government collects from C
any interest, or any additions to tax or assessable penalties
under chapter 68, 4/5 of the amount of such collections shall be
retained by the Federal Government and 1/5 of such amount shall
be paid over to State X. However, notwithstanding the allocation
of the funds between the taxing jurisdictions, C's liability for
the $500 retains its character as a liability for State X tax.
Therefore, any interest, additions to tax, or assessable
penalties imposed with respect to the State X tax shall be
imposed with respect to C's full $500 liability for such tax,
notwithstanding the fact that amounts collected with respect to
such items shall be allocated 4/5 to the Federal Government.
Example (5). A criminal charge is brought against D pursuant to
chapter 75, alleging that he willfully evaded the payment of
Federal income tax by failing to report interest income derived
Qualified State Tax References:
Page 108 of 148
from obligations of the United States. D enters a plea of non
contendere to the charge and pays $2,500 as a fine to the Federal
Government. The act alleged in the criminal charge would not
support the bringing of a criminal charge under a State law
corresponding to chapter 75, or to title 18 of the United States
Code, with respect to the qualified tax of any State;
accordingly, the United States is the only affected jurisdiction,
and no remittances shall be made to any State with respect to the
amount collected by the Federal Government as a fine.
Example (6). A criminal charge is brought against E pursuant to
chapter 75, alleging that he willfully attempted to evade the
assessment of liability for both Federal income tax and the
qualified tax of State X by filing false and fraudulent income
tax returns. E's case is settled upon the condition that he pay
a fine in the amount of $5,000. As determined pursuant to
subparagraph (2) of this paragraph, E's liabilities for the
taxable year are in the amounts of $7,200 to the Federal
Government and $800 to State X. Accordingly, after the Federal
Government collects the fine, $500 ($5,000+$800X$8,000) is
remitted to State X.
Example (7). Assume the same facts as in example (6), except
that E is tried and convicted on both charges, and pursuant to
court decree he pays to the United States a fine of $6,000 with
respect to each charge, or a total of $12,000. Because a
criminal charge was brought with respect to each affected
jurisdiction, and the allocation of the total amount paid as a
fine was specifically imposed by a court decree, the direction of
the Court shall govern the allocation. Accordingly, after the
Federal Government collects the fines it pays over $6,000 to the
account of State X.
[T.D. 7577, 43 F.R. 59361, Dec. 20, 1978]
26 CFR s 301.6361-1, Collection and administration of qualified
taxes.
------------ Excerpt from pages 160495-160502
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
Qualified State Tax References:
Page 109 of 148
s 301.6361-2 Judicial and administrative proceedings; Federal
representation of State interests.
(a) Civil proceedings -- (1) General rule. Any person shall
have the same right to bring or contest a civil action, and to
obtain a review thereof, with respect to a qualified tax
(including the current collection thereof) in the same court or
courts which would be available to him, and pursuant to the same
requirements and procedures to which he would be subject, under
chapter 76 (relating to judicial proceedings), and under title 28
of the United States Code (relating to the judiciary and judicial
procedure), if the tax were imposed by section 1 or chapter 24 of
the Internal Revenue Code. For purposes of this section, the
term "person" includes the Federal Government. Except as
provided in subparagraph (2) of this paragraph (a), to the extent
that the preceding sentence provides judicial procedures
(including review procedures) with respect to any matter, such
procedures shall replace civil judicial procedures under State
law.
(2) Exception. The right or power of the courts of any
State to pass on matters involving the constitution of such State
is unaffected by any provision of this paragraph; however, the
jurisdiction of a State court in such matters shall not extend
beyond the issue of constitutionality. Thus, if in a case
involving the validity of a qualified tax statute under the State
constitution, the State court holds such statute constitutional,
such court shall not proceed to decide the amount of the tax
liability.
(b) Criminal proceedings. Only the Federal Government shall
have the right to bring a criminal action with respect to a
qualified tax (including the current collection thereof). Such
an action shall be brought in the same court or courts which
would be available to the Federal Government, and pursuant to the
same requirements and procedures to which the Federal Government
would be subject, if the tax were imposed by section 1 or chapter
24 of the Internal Revenue Code.
(c) Administrative proceedings. Any person shall have the
same rights in administrative proceedings of the Internal Revenue
Service with respect to a qualified tax (including the current
collection thereof) which would be available to him, and shall be
subject to the same administrative requirements and procedures to
which he would be subject, if the tax were imposed by section 1
or chapter 24 of the Internal Revenue Code.
(d) United States representation of State interests -- (1)
General rule. Except as provided in subparagraphs (2) and (3) of
this paragraph (d), the Federal Government shall appear on behalf
of any State the qualified tax of which it collects (or did
collect for the year in issue), and shall represent such State's
interests in any administrative or judicial proceeding, either
civil or criminal in nature, which relates to the administration
and collection of such qualified tax, in the same manner as it
represents the interests of the United States in corresponding
proceedings involving Federal income tax matters.
Qualified State Tax References:
Page 110 of 148
(2) Exceptions. The Federal Government shall not so
represent a State's interests either --
(i) In proceedings in a State court involving the
constitution of such State, to the extent of such constitutional
issue, or
(ii) In proceedings in any court involving the relationship
between the United States and the State, to the extent of the
issue pertaining to such relationship, if either:
(A) The proceeding is one which is initiated by the United
States against the State, or by the State against the United
States, and no individual (except in his official capacity as a
governmental official) is an original party to the proceeding, or
(B) The proceeding is not one described in (A), but the
State elects to represent its own interests to the extent
permissible under this subdivision.
(3) Finality of Federal administrative determinations.
State and local government officials and employees may not review
Federal administrative determinations concerning tax liabilities
of, refunds owed to, or criminal prosecutions of, individuals
with respect to qualified taxes. See, however, s 301.6363-3
relating to State administration of a qualified tax with respect
to transition years. If requested by an electing State, the
Commissioner or his delegate may, under terms and conditions set
forth in an agreement with such State, permit such State to carry
on operations supplementary to the Federal administration of the
State's qualified tax (including supplemental audits or
examinations of tax returns by State audit personnel), but all
administrative determinations shall be made by the Federal
Government without review by the State. An agreement which
permits supplemental audits or examinations of tax returns by
State audit personnel shall provide that the audits and
examinations shall be conducted under the supervision and control
of the Commissioner or his delegate, who shall have the authority
to determine which returns shall be audited and when the audits
shall occur. Also, such agreements shall provide that the
results of any such supplemental audit shall be referred to the
Commissioner or his delegate for final administrative
determination. The Commissioner or his delegate shall, to the
extent permitted by law, allow an electing State reasonable
access to tax returns and other appropriate records and
information relating to its qualified tax for the purpose of
conducting any such supplemental operations. In addition, the
Secretary or his delegate shall permit an electing State to
inspect the workpapers which are compiled in the course of
verification by the Treasury Department of the correctness of the
accounting by which the amounts of the actual net collections
attributable to the electing State's qualified taxes are
determined.
[T.D. 7577, 43 F.R. 59364, Dec. 20, 1978]
Qualified State Tax References:
Page 111 of 148
26 CFR s 301.6361-2, Judicial and administrative proceedings;
Federal representation of State interests.
------------ Excerpt from pages 160503-160505
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
s 301.6361-3 Transfers to States.
(a) Periodic transfers. In general, amounts collected by
the Federal Government which are allocable to qualified taxes
(including criminal fines which are required to be paid to a
State, as determined under paragraph (f)(3) of s 301.6361-1)
shall be promptly transferred to each State imposing such a tax.
Transfers of such amounts, based on percentages of estimated
Federal collections, shall be made not less frequently than every
third business day unless the State agrees to accept transfers at
less frequent intervals.
(b) Determination of amounts of transfers. The amounts
allocable to the qualified taxes of each State for purposes of
periodic transfer shall be determined as a percentage of the
estimated aggregate net individual income tax collections made by
the Federal Government. For purposes of this paragraph, the
"aggregate net individual income tax collections" shall include
amounts collected on account of the Federal individual income tax
and all qualified taxes by all means (including withholding, tax
returns, and declarations of estimated tax), and shall be reduced
to the extent of any liability to taxpayers for credits or
refunds by reason of overpayments of such taxes. The percentage
of the estimated amount of such collections which is allocated to
each State shall be based on an estimate which is to be made by
the Office of Tax Analysis prior to the beginning of each
calendar year as to what portion of the estimated aggregate net
individual income tax collections for the forthcoming year will
be attributable to the qualified taxes of that State. Each State
will be notified prior to the beginning of each calendar year of
the amount which it is estimated that the State will receive by
application of that percentage for the year. However, the Office
of Tax Analysis shall, from time to time throughout the calendar
year, revise the percentage estimates when such a revision is, in
the opinion of that office necessary to conform such estimates to
Qualified State Tax References:
Page 112 of 148
the actual receipts. When such a revision is made, the payments
to the State will be adjusted accordingly.
(c) Adjustment of difference between actual collections and
periodic transfers. At least once annually the Secretary or his
delegate shall determine the difference between the aggregate
amount of the actual net collections made (taking into account
credits, refunds, and amounts received by withholding with
respect to which a tax return is not filed) which is attributable
to each State's qualified taxes during the preceding year and the
aggregate amount actually transferred to such State based on
estimates during such year. The amount of such difference, as so
determined, shall be a charge against, or an addition to, the
amounts otherwise determined to be payable to the State.
(d) Recipient of transferred funds. All funds transferred
pursuant to section 6361(c) and paragraph (a) of this section
shall be transferred by the Federal Government to the State
official designated by the Governor to receive such funds in the
State agreement pursuant to paragraph (d)(5) of s 301.6363-1,
unless the Governor notifies the Secretary or his delegate in
writing of the designation of a different State official to
receive the funds.
[T.D. 7577, 43 F.R. 59365, Dec. 20, 1978]
26 CFR s 301.6361-3, Transfers to States.
------------ Excerpt from pages 160506-160507
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
s 301.6361-4 Definitions.
For purposes of the regulations in this part under
subchapter E of chapter 64 of the Internal Revenue Code of 1954,
relating to collection and administration of State individual
income taxes --
(a) State agreement. The term "State agreement" means an
agreement between a State and the Federal Government which was
entered into pursuant to section 6363 and the regulations
Qualified State Tax References:
Page 113 of 148
thereunder, and which provides for the Federal collection and
administration of the qualified tax or taxes of that State.
(b) Qualified tax. The term "qualified tax" means a tax
which is a "qualified State individual income tax", as defined in
section 6362 (including subsection (f)(1) thereof, which requires
that a State agreement be in effect) and the regulations
thereunder.
(c) Chapters and subtitles. References in regulations in
this part under subchapter E to chapters and subtitles are to
chapters and subtitles of the Internal Revenue Code of 1954,
unless otherwise indicated.
(d) Subchapter E. The term "subchapter E" means subchapter
E of chapter 64 of the Internal Revenue Code of 1954, relating to
collection and administration of State individual income taxes,
as amended from time to time.
[T.D. 7577, 43 F.R. 59365, Dec. 20, 1978]
26 CFR s 301.6361-4, Definitions.
------------ Excerpt from page 160508
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
s 301.6361-5 Effective date of section 6361.
Section 6361 shall take effect on the first January 1 which
is more than 1 year after the first date on which at least one
State has filed a notice of election with the Secretary or his
delegate to enter into a State agreement. For purposes of this
section, a notice of election shall be deemed to have been filed
by a State only if there is no defect in either the State's
notice of election or the State's tax law of which the Secretary
notified the Governor pursuant to paragraph (c) of s 301.6363-1,
and which has not been retroactively cured under the provisions
of such paragraph.
[T.D. 7577, 43 F.R. 59365, Dec. 20, 1978]
Qualified State Tax References:
Page 114 of 148
26 CFR s 301.6361-5, Effective date of section 6361.
------------ Excerpt from page 160509
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
s 301.6362-1 Types of qualified tax.
(a) In general. A qualified tax may be either a "qualified
resident tax" within the meaning of paragraph (b) of this
section, or a "qualified nonresident tax" within the meaning of
paragraph (c) of this section.
(b) Qualified resident tax. A tax imposed by a State on the
income of individuals, estates, and trusts which are residents of
such State within the meaning of section 6362(e) and s 301.6362-6
shall be a "qualified resident tax" if it is either:
(1) A tax based on Federal taxable income which meets the
requirements of section 6362(b), (e), and (f), and of ss
301.6362-2, 301.6362-6, and 301.6362-7; or
(2) A tax which is a percentage of the Federal tax and which
meets the requirements of section 6362(c), (e), and (f), and of
ss 301.6362-3, 301.6362-6, and 301.6362-7.
(c) Qualified nonresident tax. A tax imposed by a State on
the wage and other business income of individuals who are not
residents of such State within the meaning of section 6362(e)(1)
and paragraph (b) of s 301.6362-6 shall be a "qualified
nonresident tax" if it meets the requirements of section 6362(d),
(e), and (f), and of ss 301.6362-5, 301.6362-6, and 301.6362-7.
[T.D. 7577, 43 F.R. 59366, Dec. 20, 1978]
26 CFR s 301.6362-1, Types of qualified tax.
------------ Excerpt from page 160510
CODE OF FEDERAL REGULATIONS
Qualified State Tax References:
Page 115 of 148
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
s 301.6362-2 Qualified resident tax based on taxable income.
(a) In general. A tax meets the requirements of section
6362(b) and this section only if it is imposed on the amount of
the taxable income, as defined in section 63, of the individual,
estate, or trust, adjusted --
(1) By subtracting an amount equal to the amount of the
taxpayer's interest on obligations of the United States which was
included in his gross income for the taxable year;
(2) By adding an amount equal to the amount of the
taxpayer's net State income tax deduction, as defined in
paragraph (a) of s 301.6362-4, for the taxable year;
(3) By adding an amount equal to the amount of the
taxpayer's net tax-exempt income, as defined in paragraph (b) of
s 301.6362-4, for the taxable year; and
(4) If a credit is allowed against the tax in accordance
with paragraph (b)(3) of this section for sales tax imposed by
the State or a political subdivision thereof, by adding an amount
equal to the amount of the taxpayer's deduction under section
164(a)(4) for such sales tax.
The tax may provide for either a single rate or multiple rates
which vary with the amount of taxable income, as adjusted.
(b) Permitted adjustments. A tax which otherwise meets the
requirements of paragraph (a) of this section shall not be deemed
to fail to meet such requirements solely because it provides for
one or more of the following adjustments:
(1) A credit meeting the requirements of paragraph (c) of s
301.6362-4 is allowed against the tax for the taxpayer's income
tax liability to another State or a political subdivision
thereof.
(2) A tax is imposed on the amount taxed under section 56
(relating to the minimum tax for tax preferences).
(3) A credit is allowed against the tax for all or a portion
of any general sales tax imposed by the State or a political
Qualified State Tax References:
Page 116 of 148
subdivision thereof with respect to sales either to the taxpayer
or to one or more of his dependents.
(c) Method of making mandatory adjustments. The mandatory
adjustments provided in paragraph (a) of this section shall be
made directly to taxable income. Except as provided in paragraph
(c)(2) of s 301.6362-4, no account shall be taken of any
reduction or increase in the Federal adjusted gross income which
would result from the exclusion from, or inclusion in, gross
income of the items which are the subject of the adjustments.
Thus, for example, when for purposes of the calculation the
taxpayer's Federal taxable income is adjusted to reflect the
exclusion from gross income of interest on obligations of the
United States, no change shall be made in the amount of the
taxpayer's deduction for medical expenses, or in the amount of
his charitable contribution base, even though such amounts would
ordinarily depend upon the amount of adjusted gross income.
[T.D. 7577, 43 F.R. 59366, Dec. 20, 1978]
26 CFR s 301.6362-2, Qualified resident tax based on taxable
income.
------------ Excerpt from pages 160511-160512
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
s 301.6362-3 Qualified resident tax which is a percentage of
Federal tax.
(a) In general. A tax meets the requirements of section
6362(c) and this section only if:
(1) The tax is imposed as a single specified percentage of
the excess of the taxes imposed by chapter 1 over the sum of the
credits allowable under part IV of subchapter A of chapter 1
(other than the credits allowable under sections 31 and 39), and
(2) The amount of the tax is decreased by the amount of the
decrease in such liability which would result from excluding from
the taxpayer's gross income an amount equal to the amount of
interest on obligations of the United States which was included
Qualified State Tax References:
Page 117 of 148
in his gross income for the taxable year.
(b) Permitted adjustments. A tax which otherwise meets the
requirements of paragraph (a) of this section shall not be deemed
to fail to meet such requirements solely because it provides for
one or more of the following three adjustments:
(1) The amount of a taxpayer's liability for tax is
increased by the amount of the increase in such liability which
would result from including in such taxpayer's gross income all
of the following:
(i) An amount equal to the amount of his net State income
tax deduction, as defined in paragraph (a) of s 301.6362-4, for
the taxable year,
(ii) An amount equal to the amount of his net tax-exempt
income, as defined in paragraph (b) of s 301.6362-4, for the
taxable year, and
(iii) If a credit is allowed against the tax under paragraph
(b)(3) of this section for sales tax imposed by the State or a
political subdivision thereof, an amount equal to the amount of
his deduction under section 164(a)(4) for such sales tax.
(2) A credit meeting the requirements of paragraph (c) of s
301.6362-4 is allowed against the tax for the income tax of
another State or a political subdivision thereof.
(3) A credit is allowed against the tax for all or a portion
of any general sales tax imposed by the State or a political
subdivision thereof with respect to sales either to the taxpayer
or to one or more of his dependents.
(c) Method of making adjustments. Except as specifically
provided in paragraphs (a)(2) and (b)(1) of this section and in
paragraph (c)(2) of s 301.6362-4, no account shall be taken of
any reduction or increase in the Federal adjusted gross income
which would result from the exclusion from, or inclusion in,
gross income of the items which are the subject of the
adjustments provided in those paragraphs. Thus, for example,
when for purposes of the calculation the taxpayer's Federal
income tax liability is adjusted to reflect the exclusion from
gross income of interest on obligations of the United States, no
change shall be made in the amount of the taxpayer's deduction
for medical expenses, or in the amount of his charitable
contribution base, even though such amounts would ordinarily
depend upon the amount of adjusted gross income. Also, when
calculating the adjusted Federal tax liability to which the rate
of the State tax is to be applied, no adjustment shall be made in
the amount of any credit against Federal tax to which a taxpayer
is entitled.
[T.D. 7577, 43 F.R. 59366, Dec. 20, 1978]
26 CFR s 301.6362-3, Qualified resident tax which is a percentage
of Federal tax.
Qualified State Tax References:
Page 118 of 148
------------ Excerpt from pages 160513-160514
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
s 301.6362-4 Rules for adjustments relating to qualified resident
taxes.
(a) Net State income tax deduction. For purposes of section
6362 (b)(1)(B) and (c)(3)(B), and ss 301.6362-2 and 301.6362-3,
the "net State income tax deduction" shall be the excess (if any)
of (1) the amount deducted from income under section 164(a)(3) as
taxes paid to a State or to a political subdivision thereof, over
(2) the amounts included in income as recoveries of prior income
taxes which were paid to a State or to a political subdivision
thereof and which had been deducted under section 164(a)(3).
(b) Net tax-exempt income. For purposes of section
6362(b)(1)(C) and (c)(3)(A) and ss 301.6362-2 and 301.6362-3, the
"net tax-exempt income" shall be the excess (if any) of:
(1) The sum of (i) the interest on obligations described in
section 103(a)(1) other than obligations of the State imposing
the tax and the political subdivisions thereof, and (ii) the
interest on obligations described in such section of such State
and the political subdivisions thereof which under the law of the
State is subject to the tax; over
(2) The sum of (i) the amount of deductions allocable to the
interest described in subparagraph (1)(i) or (ii) of this
paragraph (b), which is disallowed pursuant to section 265 and
the regulations thereunder, and (ii) the amount of the adjustment
to basis allocable to such obligations which is required to be
made for the taxable year under section 1016(a)(5) or (6).
For purposes of subparagraph (1)(ii) of this paragraph (b), a
State may, at its option, subject to the tax the interest from
all, none, or some of its section 103(a)(1) obligations and those
of its political subdivisions. For example, a State may subject
to tax all of such obligations other than those which it or its
political subdivisions issued prior to a specified date, which
may be the date that subchapter E became applicable to the State.
Qualified State Tax References:
Page 119 of 148
(c) Credits for taxes of other jurisdictions -- (1) In
general. A State tax law that provides for a credit, pursuant to
section 6362(b)(2)(B) or (C) or section 6362(c)(4), and paragraph
(b)(1) of s 301.6362-2 or paragraph (b)(2) of s 301.6362-3, for
income tax of another State or a political subdivision thereof
shall provide that, in the case of each taxpayer, the amount of
the credit shall equal the amount of his liability with respect
to such other jurisdiction's tax for the taxable year which runs
concurrently with, or which ends in, the taxable year used by the
taxpayer for purposes of the State tax which provides for the
credit. Such a credit may be allowed with respect to every
income tax (whether or not qualified) imposed on the taxpayer by
another State or a political subdivision thereof, or only with
respect to certain of such taxes. However, for purposes of this
paragraph, the amount which is treated as being the amount of the
taxpayer's liability with respect to any such tax imposed by
another jurisdiction shall not exceed the amount of liability for
such tax which is both --
(A) Reported to the taxing authorities responsible for
collecting such other jurisdiction's tax, and
(B) Substantiated pursuant to the requirements of paragraph
(c)(1)(ii) of s 301.6361-1.
(2) Limitation. The amount of any credit allowed for the
taxable year pursuant to this paragraph shall not exceed the
product of the amount of the resident tax against which the
credit is allowed, as computed without subtracting any such
credit, multiplied by a fraction the numerator of which is the
amount of income subject to tax by both the State imposing the
resident tax against which the credit is allowed and the other
jurisdiction whose tax is being credited, and the denominator of
which is the amount of income subject to tax by the State
imposing the resident tax against which the credit is allowed.
For purposes of the preceding sentence, "income subject to tax"
means the amount of the taxpayer's adjusted gross income which is
taken into account for purposes of computing tax liability; in
the case of a qualified resident tax, an appropriate modification
shall be made to take into account any adjustments which are made
pursuant to paragraph (a)(1) and (3) of s 301.6362-2, or pursuant
to paragraph (a)(2) or (b)(1)(ii) of s 301.6362-3.
(3) Examples. The application of this paragraph may be
illustrated by the following examples:
Example (1). (i) A, a calendar-year, cash-basis taxpayer, is a
resident of State X throughout the taxable year. For such year,
his adjusted gross income for Federal income tax purposes
consists of $24,000, consisting of $3,000 derived from employment
in State X, $5,000 derived from employment in State Y, $15,000
derived from employment in State Z, and $1,000 in interest income
from United States savings bonds. In addition, he received net
tax-exempt income in the amount of $2,000. For the taxable year,
he incurs liabilities of $200 for the State Y nonresident income
tax, and $1,400 for the State Z nonresident income tax. State X,
Qualified State Tax References:
Page 120 of 148
which has in effect a State agreement for the taxable year,
imposes a resident tax against which credits are allowed for the
nonresident taxes imposed by States Y and Z. Without taking any
such credits into account, however, the amount of A's liability
for such resident tax would be $1,500. A properly reports his
nonresident income tax liabilities to States Y and Z at the same
time that he files his return with respect to the State X tax,
and he substantiates on such return his liabilities to States Y
and Z.
(ii) The amount of A's income subject to tax in State X is
$25,000 (his adjusted gross income of $24,000, minus the United
States savings bond income of $1,000, plus the net tax-exempt
income of $2,000). The amount of the credit allowable against
the State X resident tax for the amount of A's liability with
respect to the State Y nonresident tax is calculated as follows:
The maximum amount of credit is the actual amount of his
liability to Y, or $200. Under subparagraph (2) of this
paragraph, the amount of the credit is limited to $300 ($1,500 X
$5,000/$25,000). Thus, such limit has no effect, and the full
$200 is allowable as a credit against A's liability for the
resident tax of State X. The amount of the credit allowable
against the State X resident tax for the amount of A's liability
with respect to the State Z nonresident tax is calculated as
follows: The maximum amount of the credit is the actual amount
of his liability to Z, or $1,400. Under subparagraph (2) of this
paragraph, the amount of the credit is limited to $900 ($1,500 X
$15,000/$25,000). Thus, such limit has the effect of reducing to
$900 the amount of the credit allowable for tax of State Z
against A's liability for the resident tax of State X.
Example (2). (i) B, a calendar-year, cash-basis taxpayer, is a
resident of State X employed in State Y through March 14, 1977.
On March 15, 1977, B becomes a resident of State Z and remains a
resident of such State through the remainder of 1977. For 1977,
the amount of B's adjusted gross income for Federal income tax
purposes is $20,000, consisting of $6,000 derived from employment
in State Y which B held during the period of his residence in
State X, $12,000 derived from employment in State Z which B held
during the period of his residence in State Z, and $2,000 in
interest income from various bank accounts. During 1977, B has
no interest income from United States obligations, and no tax-
exempt income. For 1977, B incurs a liability of $200 to State Y
on account of its nonresident income tax imposed with respect to
his $6,000 of income derived from sources within that State.
State Z, which has in effect a State agreement for 1977, imposes
a resident income tax on B which, if B had been a resident of
State Z for all of 1977, would amount to $1,200 prior to the
allowance of any credits under this paragraph. However, by
reason of paragraph (e)(1) of s 301.6362-6, B's liability for the
resident tax of State Z, before taking into account credits
allowed under this paragraph, is reduced to $960 ($1,200 X
292/365, or 4/5). Furthermore, State Z allows a credit for the
nonresident tax imposed by State Y.
(ii) The amount of the credit allowable against the State Z
resident tax for the amount of B's liability with respect to the
Qualified State Tax References:
Page 121 of 148
State Y nonresident tax is calculated as follows: The maximum
amount of the credit is the amount of his actual liability to
State Y, or $200. Under subparagraph (2) of this paragraph, the
amount of the credit is limited to $288 ($960 X $6,000/$20,000).
Thus, such limit has no effect, and the full $200 is allowable as
a credit for tax of State Y against B's liability for the
resident tax of State Z.
[T.D. 7577, 43 F.R. 59367, Dec. 20, 1978]
26 CFR s 301.6362-4, Rules for adjustments relating to qualified
resident taxes.
------------ Excerpt from pages 160515-160517
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
s 301.6362-5 Qualified nonresident tax.
(a) In general. A tax meets the requirements of section
6362(d) and this section only if:
(1) The tax is imposed by a State which simultaneously
imposes a resident tax meeting the requirements of section
6362(b) and s 301.6362-2 or of section 6362(c) and s 301.6362-3;
(2) The tax is required to be computed in accordance with
either the method prescribed in paragraph (b) of this section or
another method of which the Secretary or his delegate approves
upon submission by the State of the laws pertaining to the tax;
(3) The tax is imposed only on the wage and other business
income derived from sources within such State (as defined in
paragraph (d) of this section), of all individuals each of whom
derives 25 percent or more of his aggregate wage and other
business income for the taxable year from sources within such
State while he is neither (i) a resident of such State within the
meaning of section 6362(e) and s 301.6362-6, nor (ii) exempt from
liability for the tax by reason of a reciprocal agreement between
such State and the State of which he is a resident within the
meaning of those provisions;
Qualified State Tax References:
Page 122 of 148
(4) The amount of the tax imposed with respect to any
individual does not exceed the amount of tax for which such
individual would be liable under the qualified resident tax
imposed by such State if he were a resident of the State for the
period during which he earned wage or other business income from
sources within the State, and if his taxable income for such
period were an amount equal to the sum of the zero bracket amount
(within the meaning of section 63(d) and determined as if he had
been a resident of the State for such period) and the excess of:
(i) The amount of his wage and other business income derived
from sources within the State, over
(ii) That portion of the sum of the zero bracket amount and
the nonbusiness deductions (i.e., all deductions from adjusted
gross income allowable in computing taxable income) taken into
account for purposes of the State's qualified resident tax which
bears the same ratio to such sum as the amount described in
subdivision (i) of this subparagraph bears to his total adjusted
gross income for the year; and
(5) For purposes of the tax, wage or other business income
is considered as being the income of the individual whose income
it is for purposes of section 61.
(b) Approved method of computing liability for qualified
nonresident tax. A tax satisfies the requirement of paragraph
(a)(2) of this section if the amount of the tax is computed
either as a percentage of the excess of the amount described in
paragraph (a)(4)(i) of this section over the amount described in
paragraph (a)(4)(ii) of this section, or by application of
progressive rates to such excess.
(c) Definition of wage and other business income. For
purposes of section 6362(d) and this section, the term "wage and
other business income" means the following types of income:
(1) Wages, as defined in section 3401(a) and the regulations
thereunder, but for these purposes:
(i) The amount of wages shall exclude amounts which are
treated as wages under section 3402(o) or (p) (relating to
supplemental unemployment compensation benefits, annuity
payments, and voluntary withholding agreements), and amounts
which are treated as disability payments to the extent that they
are excluded from gross income for Federal income tax purposes,
pursuant to section 105(d), and
(ii) The amount of wages shall be reduced by those expenses
which are directly related to the earning of such wages and with
respect to which deductions are properly claimed from gross
income in computing adjusted gross income;
(2) Net earnings from self-employment, as defined in section
1402(a); and
(3) The distributive share of income of any trade or
Qualified State Tax References:
Page 123 of 148
business carried on by a trust, estate, or electing small
business corporation (as defined in section 1371(a) and the
regulations thereunder), to the extent that such share:
(i) Is includible in the gross income of the taxpayer for
the taxable year, and
(ii) Would constitute net earnings from self-employment if
the trade or business were carried on by a partnership.
For purposes of this subparagraph, "distributive share" includes
the income of a trust or estate which is taxable to the taxpayer
as a beneficiary under applicable Federal income tax rules, and
the undistributed taxable income of an electing small business
corporation which is taxable to the taxpayer as a shareholder
under section 1373.
(d) Income derived from sources within a State -- (1) Income
attributable primarily to services. Except as otherwise provided
by Federal statute (see paragraphs (h), (i), and (j) of s
301.6362-7), wage income and other business income (net earnings
from self-employment or distributive shares) which is
attributable more to services performed by the taxpayer than to a
capital investment of the taxpayer shall be considered to have
been derived from sources within a State only if the services of
the taxpayer which give rise to the income are performed in such
State. If for a taxable year only a portion of the taxpayer's
services giving rise to the income from one employment, trade, or
business is performed within a State, then it shall be presumed
that the amount of income from such employment, trade, or
business which is derived from sources within that State equals
that portion of the total income derived from such employment,
trade, or business for the year which the amount of time spent by
the taxpayer for such year performing services with respect to
that employment, trade, or business in that State bears to the
aggregate amount of time spent by the taxpayer for such year
performing all of such services. However, the presumption stated
in the preceding sentence may be rebutted in the event that the
taxpayer proves, by use of detailed records, that the correct
allocation of his income is otherwise.
(2) Income attributable primarily to investment. Except as
otherwise provided by Federal statute (see paragraph (j) of s
301.6362-7), business income (net earnings from self-employment
or distributive shares) which is attributable more to a capital
investment of the taxpayer than to services performed by the
taxpayer shall be considered to have been derived from sources
within the State, if any, in which the significant activities of
the trade or business are conducted. If for the taxable year
only a portion of the significant activities conducted with
respect to one trade or business is conducted within a certain
State, then the portion of the taxpayer's total income for the
year from such trade or business which is considered to be
derived from sources within that State shall be computed as
follows:
(i) Allocation by records. The portion of the taxpayer's
Qualified State Tax References:
Page 124 of 148
total income from the trade or business which is considered to be
derived from sources within the State shall be the portion which
is allocable to such sources according to the records of the
taxpayer or of the partnership, trust, estate, or electing small
business corporation from which his income is derived, provided
that the taxpayer establishes to the satisfaction of the district
director, when requested to do so, that those records fairly and
equitably reflect the income which is allocable to sources within
the State. An allocation made pursuant to this subdivision shall
be based on the location of the significant activities of the
trade or business, and not on the location at which the
taxpayer's personal services are performed.
(ii) Allocation by formula. If the taxpayer (or the trade
or business) does not keep records meeting the requirements of
subdivision (i) of this subparagraph, or if the taxpayer fails to
meet the burden of proof set forth therein, then the amount of
the taxpayer's income from the trade or business which is
considered to be derived from sources within the State shall be
determined by multiplying the total of his income (as defined in
paragraphs (c)(2) and (3) of this section) from the trade or
business for the taxable year by the percentage which is the
average of these three percentages:
(A) Property percentage. The percentage computed by
dividing the average of the value, at the beginning and end of
the taxable year, of real and tangible personal property
connected with the taxpayer's trade or business and located
within the State, by the average of the value, at the beginning
and end of the taxable year, of all such property located both
within and without the State. For this purpose, real property
shall include real property rented to the taxpayer in connection
with the trade or business, or rented to the trade or business.
(B) Payroll percentage. The percentage computed by dividing
the total wages, salaries, and other compensation for personal
services which is paid or incurred during the taxable year to
employees in connection with the taxpayer's trade or business,
and which would be treated as derived by such employees from
sources within the State pursuant to subparagraph (1) of this
paragraph (d), by the total of all such wages, salaries, and
other compensation for personal services which is so paid or
incurred without regard to whether such payments would be treated
as derived by the employees from sources within the State. For
purposes of this subdivision (ii), no amount paid as deferred
compensation pursuant to a retirement plan to a former employee
shall be taken into consideration.
(C) Gross income percentage. The percentage computed by
dividing the gross sales or charges for services performed by or
through an agency located within the State by the total of all
gross sales or charges for services performed both within and
without the State. The sales or charges to be allocated to the
State shall include all sales which are negotiated, and charges
which are for services performed, by an employee, agent, agency,
or independent contractor chiefly situated at, or working
principally out of an office located within, the State.
Qualified State Tax References:
Page 125 of 148
(3) Income attributable to real estate investment.
Notwithstanding subparagraph (2) of this paragraph (d), income
and deductions from the rental of real property, and gain and
loss from the sale, exchange, or other disposition of real
property, shall not be subject to allocation under subparagraph
(2), but shall be considered as entirely derived from sources
located within the State in which such property is located.
(4) Treatment of losses. A loss attributable to the
taxpayer's employment, or to his conduct of, participation in, or
investment in a trade or business, shall be allocated in the same
manner as the income attributable to such employment or trade or
business would be allocated pursuant to this paragraph.
(5) Examples. The application of this paragraph may be
illustrated by the following examples:
Example (1). A, an employee who earns $10,000 in wage income
attributable to services, and who has no other wage or other
business income, spends 60 percent of his working time performing
services for his employer in State X, 30 percent in State Y, and
10 percent in State Z. In the absence of the requisite proof to
the contrary, A's wage income is considered to have been derived
60 percent from sources located within State X, 30 percent within
State Y, and 10 percent within State Z. Assuming that A is a
nonresident with respect to all three States, and that they all
impose qualified nonresident taxes, then the qualified
nonresident tax of State X is imposed on $6,000, the qualified
nonresident tax of State Y is imposed on $3,000, and the
qualified nonresident tax of State Z is not imposed on any of the
income because A did not derive at least 25 percent of his wage
and other business income from sources located within State Z.
Example (2). B, who earns no wage income but who has a total of
$10,000 of other business income for the taxable year, all of
which is net income from self-employment attributable primarily
to services, spends 45 percent of his working time performing
services in State X, 30 percent in State Y, and 25 percent in
State Z. However, the rates that B is able to charge for his
services and the business expenses which he incurs vary in the
different States, and he is able to prove by detailed records
that his net income from self-employment was in fact derived 50
percent from sources located within State X, 35 percent from
sources located within State Y, and 15 percent from sources
located within State Z. Assuming that B is a nonresident with
respect to all three States, and that they all impose qualified
nonresident taxes, then the qualified nonresident tax of State X
is imposed on $5,000, the qualified nonresident tax of State Y is
imposed on $3,500, and the qualified nonresident tax of State Z
is not imposed on any of the income because B did not derive at
least 25 percent of his wage and other business income from
sources located within State Z.
Example (3). C is a partner in a profitable business concern, in
which he has a substantial capital investment. His net earnings
from self-employment attributable to his partnership interest are
Qualified State Tax References:
Page 126 of 148
$75,000 for the taxable year. The fair market value of the
services which C performs for the partnership during the taxable
year is $30,000. C's income is therefore attributable primarily
to his capital investment. The partnership business is carried
on partially within and partially without State X. Neither C nor
the partnership maintains records from which the portion of C's
$75,000 income which is considered to be derived from sources
within State X can be satisfactorily proven. As determined under
subparagraph (2) of this paragraph, the partnership's "property
percentage" in State X is 70, its "payroll percentage" therein is
60, and its "gross income percentage" therein is 56. The amount
of C's partnership income considered to be derived from sources
within State X is $46,500 ($75,000 X62 percent). This result
would obtain even if C's services for the partnership are
performed entirely within State X.
Example (4). Assume the same facts as in (3), except that the
records of the partnership of which C is a member indicate that
the net profits of the partnership are derived 40 percent from
business activities conducted in State X, and 60 percent from
business activities conducted in State Y. C is requested to
prove that those records fairly and equitably reflect the income
which is allocable to sources within State X. The documentary
evidence which he adduces in support of the allocation made by
the records shows how such allocation results from a careful
step-by-step tracing of the profitability of each phase and
aspect of the partnership's operations, and shows the State in
which each such phase and aspect of the operations is conducted.
C's proof is satisfactory to show that the percentage allocation,
and the amount of his partnership income considered to be derived
from sources within State X is $30,000, or $75,000 multiplied by
40 percent. This result would obtain even if B's services for
the partnership are performed entirely within State X.
[T.D. 7577, 43 F.R. 59367, Dec. 20, 1978]
26 CFR s 301.6362-5, Qualified nonresident tax.
------------ Excerpt from pages 160518-160522
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
Qualified State Tax References:
Page 127 of 148
s 301.6362-6 Requirements relating to residence.
(a) In general. A tax imposed by a State meets the
requirements of section 6362(e) and this section if in effect it
provides that:
(1) The State of residence of an individual, estate, or
trust is determined according to paragraph (1), (2), or (3)
respectively, of section 6362(e), and according to paragraph (b),
(c), or (d), respectively, of this section.
(2) The liability for a resident tax imposed by such State
upon an individual or trust which changes residence to another
State in the taxable year is determined according to section
6362(e)(4) and paragraph (e) of this section.
(3) The rules relating to current collection of tax apply as
provided in section 6362(e)(5) and paragraph (f) of this section.
(b) Residence of an individual -- (1) In general. Except as
otherwise provided in subparagraph (5) of this paragraph (b), an
individual is treated as a resident of a State with respect to a
taxable year only if:
(i) His principal place of residence (as defined in
subparagraph (2) of this paragraph (b)) is within such State for
a period of at least 135 consecutive days, at least 30 days of
which are in such taxable year; or
(ii) In the case of a citizen or resident of the United
States who is not a resident of any State (determined as provided
in subdivision (i) of this subparagraph) with respect to such
taxable year, his domicile (as defined in subparagraph (3) of
this paragraph (b)) is in such State for at least 30 days during
such taxable year.
With respect to an individual who is a resident (determined as
provided in subdivision (i) of this subparagraph) of more than
one State during a taxable year, see paragraph (e) of this
section.
(2) Principal place of residence -- (i) Definition. For
purposes of subparagraph (1)(i) of this paragraph (b), and
paragraph (d)(4) of this section, the term "principal place of
residence" shall mean the place which is an individual's primary
home. An individual's temporary absence from his primary home
shall not effect a change with respect thereto. On the other
hand, if an individual moves to another State, other than as a
mere transient or sojourner, he shall be treated as having
changed the location of his primary home.
(ii) Examples. The application of this subparagraph may be
illustrated by the following examples:
Example (1). A has a city home and a country home. He resides
in the city home for 7 months of the year and uses the address of
that home as his legal residence for purposes of driver's
Qualified State Tax References:
Page 128 of 148
license, automobile registration, and voter registration. He
resides in the country home 5 months of the year. His city home
is considered his principal place of residence.
Example (2). During the taxable year, B, a construction worker,
is employed at several different locations in different States.
The duration of each job on which he is employed ranges from a
few weeks to several months, and he knows when he accepts a job
what its approximate duration will be. He owns a house in State
X which he uses as his legal residence for purposes of driver's
license, automobile registration, and voter registration. In
addition, his family lives there during the entire year, and B
lives there during periods between jobs. However, the duration
of the jobs and the distance between the job-sites and his house
require him to live in the localities of the respective job-sites
during the period of his employment, although occasionally he
returns to his house in State X on weekends. B's house in State
X is his principal place of residence during all of the taxable
year.
Example (3). C, a dependent of his parents who are residents of
State X, is a full-time student in a 4-year degree program at a
college in State Y. During the 9-month academic year, C lives on
the college campus, but he returns to his parents' home in State
X for the summer recess. C gives the State Y as his residence
for purposes of his driver's license and voter registration, but
lists the address of his parents' home in State X as his
"permanent address" on the records of the college which he
attends. Although C's domicile remains at his parents' home in
State X, his presence in State Y cannot be regarded as that of a
mere transient or sojourner; accordingly, C's principal place of
residence is in State Y for that portion of the taxable year
during which he attends college.
Example (4). D loses his job in State X, where he lived and
worked for many years. After a series of unsuccessful attempts
to find other employment in State X, he accepts a job in State Y.
D gives up his apartment in State X and moves to State Y upon
commencing his new job; however, he intends to continue to
explore available employment opportunities in State X so that he
may return there as soon as an opportunity to do so arises. D
changes his principal place of residence when he moves to State
Y.
(3) Domicile defined. For purposes of subparagraph (1)(ii)
of this paragraph (b), and paragraph (d)(4) of this section, the
term "domicile" shall mean an individual's fixed or permanent
home. An individual acquires a domicile in a place by living
there; even for a brief period of time, with no definite present
intention of later removing therefrom. Residence without the
requisite intention to remain indefinitely will not suffice to
change domicile, nor will intention to change domicile effect
such a change until accompanied by actual removal. A domicile,
once acquired, is maintained until a new domicile is acquired.
(4) Period of residence -- (i) General rule. An individual
who becomes a resident of a State pursuant to subparagraph (1) of
Qualified State Tax References:
Page 129 of 148
this paragraph (b), or who is at the beginning of a taxable year
a resident of a State pursuant to such provision, shall be
treated as continuing to be a resident of such State through the
end of the taxable year, unless, prior thereto, such individual
becomes a resident, under the principles of subparagraph (1), of
another State or a possession or foreign country. In the event
that the individual becomes a resident of such another
jurisdiction prior to the end of the taxable year, his residence
in such State shall be treated as ending on the day prior to the
day on which he becomes a resident of such other jurisdiction
pursuant to subparagraph (1).
(ii) Examples. The application of this subparagraph may be
illustrated by the following examples:
Example (1). A, a calendar-year taxpayer, has his principal
place of residence in State X from the beginning of 1976 through
August 1, 1976, when he gives up permanently such principal place
of residence. He spends the remainder of 1976 traveling outside
of the United States, but does not become a resident of any other
country. A is considered to be a resident of State X for the
entire year 1976.
Example (2). Assume the same facts as in example (1), except
that A ceases his traveling and establishes his principal place
of residence in State Y on November 15, 1976. Assume, also, that
A maintains that principal place of residence for more than 135
consecutive days. Under these circumstances, for his taxable
year 1976, A is considered to be a resident of State X from
January 1 through November 14, and a resident of State Y from
November 15 through December 31.
(5) Special rules. (i) No provision of subchapter E or the
regulations thereunder shall be construed to require or authorize
the treatment of a Senator, Representative, Delegate, or Resident
Commissioner as a resident of a State other than the State which
he represents in Congress.
(ii) For special rules relating to members of the Armed
Forces, see paragraph (h) of s 301.6362-7.
(6) Examples. The application of this paragraph may be
illustrated by the following examples:
Example (1). A, a calendar-year taxpayer, maintains his
principal place of residence in State X from December 1, 1976,
through April 15, 1977. Assuming that A was not a resident of
any other jurisdiction at any time during 1976, A is treated as a
resident of State X for the entire year 1976. Such result would
obtain even if A was absent from State X on vacation for some
portion of December 1976. Moreover, such result would obtain
even if it is assumed that A was a domiciliary of State Y from
January 1, 1976, through April 15, 1977, because an individual's
domicile does not determine his residence so long as residence in
one State for the taxable year can be determined from the general
rule stated in the first sentence of paragraph (b)(1) of this
section.
Qualified State Tax References:
Page 130 of 148
Example (2). Assume the same facts as in example (1) (including
the fact of A's domicile in State Y), except that A maintained
his principal place of residence in State Z from September 15,
1975, through January 31, 1976, inclusive. With respect to the
year 1976, A is treated as a resident of State Z from January 1
through November 30, and as a resident of State X from December 1
through December 31. A's liability for the qualified taxes of
the respective States for 1976 shall be determined pursuant to
the provisions in paragraph (e) of this section.
(c) Residence of an estate. An estate of an individual is
treated as a resident of the last State of which such individual
was a resident, as determined under the rules of paragraph (b) of
this section, prior to his death. However, the estate of an
individual who was not a resident of any State (as determined
without regard to the 30-day requirement in paragraph (b)(1) of
this section) immediately prior to his death, and who was not a
resident of any State at any time during the 3-year period ending
on the date of his death, is not treated as a resident of any
State. For purposes of determining the decedent's last State of
residence, the rules of paragraph (b) shall be applied
irrespective of whether subchapter E was in effect at the time
the period of 135 consecutive days of residence began, or whether
the decedent's last State of residence is a State electing to
enter into an agreement pursuant to subchapter E. The
determination of the State of residence of an estate pursuant to
this paragraph shall not be governed by any determination under
State law as to which State is treated as the residence or
domicile of the decedent for purposes other than its individual
income tax (such as liability for State inheritance tax or
jurisdiction of probate proceedings).
(d) Residence of a trust -- (1) In general. (i) The State
of residence of a trust shall be determined by reference to the
circumstances of the individual who, by either an inter-vivos
transfer or a testamentary transfer, is deemed to be the
"principal contributor" to the trust under the provisions of
subdivision (ii) of this subparagraph.
(ii) If only one individual has ever contributed assets to
the trust, including the assets which were transferred to the
trust at its inception, then such individual is the principal
contributor to the trust. However, if on any day subsequent to
the initial creation of the trust, such trust receives assets
having a value greater than the aggregate value of all assets
theretofore contributed to it, then the trust shall be deemed
(for the limited purpose of determining the State of residence)
to have been "created" anew, and the individual who on the day of
such creation contributed more (in value) than any other
individual contributed on that day shall become the principal
contributor to the trust. When a trust is created anew, all
references in this paragraph to the creation of the trust shall
be construed as referring to the most recent creation. For
purposes of this paragraph, the value of any asset shall be its
fair market value on the day that it was contributed to the
trust; any subsequent appreciation or depreciation in the value
Qualified State Tax References:
Page 131 of 148
of the asset shall be disregarded.
(2) Testamentary trust. A trust with respect to which a
deceased individual is the principal contributor by reason of
property passing on his death is treated as a resident of the
last State of which such individual was a resident, as determined
under the rules of paragraph (b) of this section, before his
death. However, if such deceased individual was not a resident
of any State (as determined without regard to the 30-day
requirement in paragraph (b)(1) of this section) immediately
prior to his death, and was not a resident of any State at any
time during the 3-year period ending on the date of his death,
then a testamentary trust of which he is the principal
contributor by reason of property passing on his death is not
treated as a resident of any State. All property passing on the
transferor's death is treated for this purpose as a contribution
made to the trust on the date of death, regardless of when the
property is actually paid over to the trust.
(3) Nontestamentary trust. A trust which is not a trust
described in subparagraph (2) of this paragraph (d), is treated
as a resident of the State in which the principal contributor to
the trust, during the 3-year period ending on the date of the
creation of the trust, had his principal place of residence for
an aggregate number of days longer than the aggregate number of
days he had his principal place of residence in any other State.
However, if the principal contributor to such a trust was not a
resident of any State at any time during such 3-year period, then
the trust is not treated as a resident of any State.
(4) Special rules. If the application of the provisions of
the foregoing subparagraphs of this paragraph results in a
determination of more than one State of residence for a trust, or
does not provide a rule by which the residence or nonresidence of
the trust can be determined, then the determination of the State
of residence of such trust shall be made according to the rules
of the applicable subdivision of this subparagraph.
(i) If, at the time of creation of the trust, 50 percent or
more in value of the trust corpus consists of real property, then
the trust shall be treated as a resident of the State in which
more of the real property (in value) which was in the trust at
such time was located than any other State.
(ii) If, at the time of creation of the trust, less than 50
percent in value of the trust corpus consists of real property,
then the trust shall be treated as a resident of the State in
which, at such time, the trustee, if an individual, had his
principal place of residence, or, if a corporation, had its
principal place of business. If there were two or more trustees,
then the foregoing sentence shall be applied by reference to the
principal places of residence, or of business, of the majority of
trustees who had authority to make investment and other
management decisions for the trust.
(iii) If, after application of the provisions of
subdivisions (i) and (ii) of this subparagraph, the State of
Qualified State Tax References:
Page 132 of 148
residence of the trust still cannot be ascertained, then the
Commissioner of Internal Revenue shall determine the State of
residence of such trust for purposes of qualified taxes. Such
determination shall be made by reference to the number of
significant contacts each State had with the trust at the time of
its creation. Significant contacts shall include the principal
place of residence of the principal contributor or contributors
to the trust, the principal place of residence or business of the
trustee (or trustees), the situs of the assets of which the trust
corpus was composed, and the location from which management
decisions emanated with respect to the business and investment
interests of the trusts.
(5) Examples. The application of this paragraph may be
illustrated by the following examples:
Example (1). A created a trust in 1950 by transferring to it
certain stock in a corporation. At the time of such transfer,
the stock had a fair market value of $1,000. A at all relevant
times had his principal place of residence in State X, and
accordingly the trust is treated as a resident of such State for
qualified tax purposes. As of January 1, 1977, the stock
originally contributed by A, which was at all times the only
property in the trust, has a fair market value of $3,000. On
such date, B, who has had his principal place of residence in
State Y for more than 3 years, contributes to the trust property
having a fair market value of $1,200. For purposes of
determining the identity of the principal contributor to the
trust and the State of residence of the trust, the stock
contributed by A in 1950 continues to be valued for such purposes
at $1,000. Thus, the trust is treated as being created anew on
January 1, 1977, with B as the principal contributor, and with
State Y as its State of residence.
Example (2). C has his principal place of residence in State X
continuously for many years, until August 1, 1978, when he
establishes his principal place of residence in State Y. The
change of residence is intended to be permanent, and C has no
further contact with State X after such change. On January 1,
1980, C creates a nontestamentary trust. During the 3-year
period ending on such date C had his principal place of residence
in State X for 576 days, and in State Y for 519 days. Therefore,
the trust is treated as a resident of State X.
(e) Liability for tax on change of residence during taxable
year -- (1) In general. If, under the principles contained in
paragraph (b) or (d) of this section, an individual or trust
becomes a resident, or ceases to be a resident, of a State, and
is also a resident of another jurisdiction outside of such State
during the same taxable year, the liability of such individual or
trust for the resident tax of such State shall be determined by
multiplying the amount which would be his or its liability for
tax (computed after allowing the nonrefundable credits (i.e.,
credits not corresponding to the credits referred to in section
6401(b) available against the tax)) if he or it had been a
resident of such State for the entire taxable year by a fraction,
the numerator of which is the number of days he or it was a
Qualified State Tax References:
Page 133 of 148
resident of such State during the taxable year, and the
denominator of which is the total number of days in the taxable
year. The preceding sentence shall not apply by reason of the
fact that an individual is born or dies during the taxable year,
or by reason of the fact that a trust comes into existence or
ceases to exist during the taxable year.
(2) Residence determined by domicile. When an individual is
treated as a resident of a State by reason of being domiciled in
such State, pursuant to paragraph (b)(1)(ii) of this section,
then the numerator of the fraction provided in subparagraph (1)
of this paragraph (e), shall be the number of days the individual
was domiciled in the State during the taxable year.
(3) Example. The application of this paragraph may be
illustrated by the following example:
Example. A, a calendar-year taxpayer, is a resident of State X
continuously for many years prior to March 15, 1977. On such
date, A retires and establishes a new principal place of
residence in State Y. A earns $6,000 in 1977 prior to March 15,
but receives no taxable income for the remainder of such year.
If A had been a resident of State X for the entire taxable year
1977, his liability with respect to the qualified tax of such
State (computed after allowing the nonrefundable credits
available against the tax) would be $600. If he had been a
resident of State Y for the entire taxable year 1977, his
liability with respect to the qualified tax on that State
(computed similarly) would be $400. Pursuant to the provisions
in paragraph (e) of this section, A's liabilities for State
qualified taxes for 1977 are as follows:
(f) Current collection of tax. The State tax laws shall
contain provisions for methods of current collection with respect
to individuals which correspond to the provisions of the Internal
Revenue Code of 1954 with respect to such current collection,
including chapter 24 (relating to the collection of income tax at
source on wages) and sections 6015, 6073, 6153, and other
provisions of the Code relating to declarations (and amendments
thereto) and payments of estimated income tax. Except as
otherwise provided by Federal statute (see paragraphs (h), (i),
and (j) of s 301.6362-7), in applying such provisions of the
State tax laws:
(1) In the case of a resident tax, an individual shall be
subject to the current collection provisions if either --
(i) He is a resident of the State within the meaning of
paragraph (b) of this section, or
(ii) He has his principal place of residence (as defined in
paragraph (b)(2) of this section) within the State,
And it is reasonable to expect him to have it within the State
for 30 days or more during the taxable year.
(2) In the case of a nonresident tax, an individual shall be
Qualified State Tax References:
Page 134 of 148
subject to the current collection provisions if he does not meet
either description relating to an individual in subparagraph (1)
of this paragraph (f), if he is not exempt from liability for the
tax by reason for a reciprocal agreement between the State of
which he is a resident and the State imposing the tax, and if it
is reasonable to expect him to receive wage or other business
income derived from sources within the State imposing the tax (as
defined in paragraph (d) of s 301.6362-5) for services performed
on 30 days or more of the taxable year.
For additional rules relating to withholding see paragraph (d) of
s 301.6361-1.
[T.D. 7577, 43 F.R. 59369, Dec. 20, 1978]
26 CFR s 301.6362-6, Requirements relating to residence.
------------ Excerpt from pages 160523-160530
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
s 301.6362-7 Additional requirements.
A State tax meets the additional requirements of section
6362(f) and this section only if:
(a) State agreement must be in effect for period concerned.
A State agreement, as defined in paragraph (a) of s 301.6361-4,
is in effect with respect to such tax for the taxable period in
question.
(b) State laws must contain certain provisions. Under the
laws of such State, the provisions of subchapter E and the
regulations thereunder, as in effect from time to time, are
applicable for the entire period for which the State agreement is
in effect. Any change made by the State in such tax (other than
an adjustment in the State law which is made solely in order to
comply with a change in the Federal Law or regulations) shall not
apply to taxable years beginning in any calendar year for which
the State agreement is in effect unless the change is enacted
before November 1 of such year.
Qualified State Tax References:
Page 135 of 148
(c) State individual income tax laws can be only of certain
kinds. Such State does not impose any tax on the income of
individuals other than (1) a qualified resident tax, and (2)
either or both a qualified nonresident tax and a separate tax on
income which is not wage and other business income as defined in
paragraph (c) of s 301.6362-5 and which is received or accrued by
individuals who are domiciled in the State, but who are not
residents of the State (as defined in paragraph (b) of s
301.6362-6). For purposes of this paragraph, a tax imposed on
the amount taxed under section 56 (as permitted under s 301.6362-
2(b)(2)) shall be treated as an adjustment to and a part of the
qualified resident tax. Also, tax laws which were in effect
prior to the effective date of a State agreement and which are
not repealed, but which are made inapplicable for the period
during which the State agreement is in effect, shall be
disregarded.
(d) Taxable years must coincide. The taxable years of all
individuals, estates, and trusts under such tax are required to
coincide with their taxable years used for purposes of the taxes
imposed by chapter 1. Accordingly, when subchapter E begins to
apply to a State, a taxpayer whose taxable year for purposes of
the Federal income tax is different from his taxable year for
purposes of the State income tax which precedes the qualified tax
may have one short taxable year for purposes of such State income
tax, so that thereafter his taxable years for purposes of the
qualified tax will coincide with the Federal taxable year.
(e) Married individuals. Individuals who are married within
the meaning of section 143 of the Code are prohibited from filing
(1) a joint return for purposes of such State tax if they file
separate Federal income tax returns, or (2) separate returns for
purposes for such State tax if they file a joint Federal income
tax return.
(f) Penalties; no double jeopardy. Under the laws of such
State:
(1) Civil and criminal sanctions identical to those provided
by subtitle F, and by title 18 of the United States Code
(relating to crimes and criminal procedures), with respect to the
taxes imposed on the income of individuals by chapter 1 and on
the wages of individuals by chapter 24, apply to individuals and
their employers who are subject to such State tax (and the
collection and administration thereof, including the
corresponding withholding tax imposed to implement the current
collection of such State tax) as if such tax were imposed by
chapter 1 or chapter 24, in the case of the withholding tax),
except to the extent that the application of such sanctions is
modified by regulations issued under subchapter E; and
(2) No other sanctions or penalties apply with respect to
any act or omission to act in respect of such State tax.
See also paragraph (e) of s 301.6361-1 with respect to criminal
penalties.
Qualified State Tax References:
Page 136 of 148
(g) Partnerships, trusts, subchapter S corporations, and
other conduit entities. Under the laws of such State, the State
tax treatment of --
(1) Partnerships and partners,
(2) Trusts and their beneficiaries,
(3) Estate and their beneficiaries,
(4) Electing small business corporations (within the meaning
of section 1371(a)) and their shareholders, and
(5) Any other entity and the individuals having beneficial
interests therein (such as a cooperative corporation and its
shareholders), to the extent that such entity is treated as a
conduit for purposes of the taxes imposed by chapter 1,
corresponds to the tax treatment provided therefor with respect
to the taxes imposed by chapter 1. For example, a subchapter S
corporation shall not be subject to the State's corporate income
tax on amounts which are includible in shareholders' incomes
which are subject to that State's individual income tax, except
to the extent that the subchapter S corporation is subject to tax
under Federal law. Similarly, a partnership shall not be subject
to the State's unincorporated business income tax on amounts
which are includible in partners' incomes which are subject to
that State's individual income tax. However, the laws of the
State which set forth the provisions of such State individual
income tax shall authorize the Commissioner of Internal Revenue
to require that the conduit entities described in this paragraph
(or some of them) supply information to the Federal Government
with respect to the source of income, the State of residence, or
the amount of income of a particular type, of an individual,
estate, or trust holding a beneficial interest in such conduit
entity.
(h) Members of armed forces. The relief provided to any
member of the Armed Forces by section 514 of the Soldiers' and
Sailors' Civil Relief Act (50 U.S.C. App. section 574) is in no
way diminished. Accordingly, for purposes of such State tax, an
individual shall not be considered to have become a resident of a
State solely because of his absence from his original State of
residence under military order. Moreover, compensation for
military service shall not be considered as income derived from a
source within a State of which the individual earning such
compensation is not a resident, within the meaning of paragraph
(d) of s 301.6362-5. The preceding sentence shall not apply to
nonmilitary compensation. Thus, for example, if an individual
who is serving in State X as a member of the Armed Forces, and
who is regarded as a resident of State Y under the Soldiers' and
Sailors' Civil Relief Act, earns nonmilitary income in State X
from a part-time job, such nonmilitary income may be subject to a
qualified nonresident tax imposed by State X.
(i) Withholding on compensation of employees of railroads,
motor carriers, airlines, and water carriers. There is no
contravention of the provisions of section 26, 226A, or 324 of
Qualified State Tax References:
Page 137 of 148
the Interstate Commerce Act, or of section 1112 of the Federal
Aviation Act of 1958, with respect to the withholding of
compensation to which such sections apply for purposes of the
nonresident tax.
(j) Income derived from interstate commerce. There is no
contravention of the provisions of the Act of September 14, 1959
(73 Stat. 555), with respect to the taxation of income derived
from interstate commerce to which such statute applies.
[T.D. 7577, 43 F.R. 59372, Dec. 20, 1978]
26 CFR s 301.6362-7, Additional requirements.
------------ Excerpt from pages 160531-160533
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
s 301.6363-1 State agreements.
(a) Notice of election. If a State elects to enter into a
State agreement it shall file notice of such election with the
Secretary or his delegate. The notice of election shall include
the following:
(1) Statement by the Governor. A written statement by the
Governor of the electing State:
(i) Requesting that the Secretary enter into a State
agreement, and
(ii) Binding the Governor and his successors in office to
notify the Secretary or his delegate immediately of the
enactment, between the time of the filing of the notice of
election and the time of the execution of the State agreement, of
any law of that State which meets the description given in any of
the subdivisions of subparagraph (2) of this paragraph (a),
whether or not such law is intended to be administered by the
United States pursuant to subchapter E.
(2) Copy of State laws. Certified copies of all laws of
that State described in any of the following subdivisions of this
Qualified State Tax References:
Page 138 of 148
subparagraph, and a specification of laws described in
subdivision (i) of this subparagraph as "subchapter E laws", of
laws described in subdivision (ii) as "other tax laws", of laws
described in subdivision (iii) as "non-tax laws", and of laws
described in subdivision (iv) as "interstate cooperation laws":
(i) All of the State individual income tax laws (including
laws relating to the collection or administration of such taxes
or to the prosecution of alleged civil or criminal violations
with respect to such taxes) which the State would expect the
United States to administer pursuant to subchapter E if the State
agreement is executed as requested. In order to have a valid
notice, the State must have a tax which would meet the
requirements for qualification specified in section 6362 and the
regulations thereunder if a State agreement were in effect with
respect thereto, with no conditions attached to the effectiveness
of such tax other than the execution of a State agreement. Such
tax must be effective no later than the January 1 specified in
the State's notice of election as the date as of which subchapter
E is desired to become applicable to the electing State, except
that such effective date shall be deferred to the date provided
in the State agreement for the beginning of applicability of
subchapter E to the State, if the latter date is different from
the date specified in the notice of election.
(ii) All of the State income tax laws applicable to
individuals (including laws relating to the collection or
administration of such taxes or to the prosecution of alleged
civil or criminal violations with respect to such taxes) which
the State would not expect the United States to administer but
which may be in effect simultaneously (for any period of time)
with the State agreement.
(iii) All of the State laws other than individual income tax
laws which provide for the making of any payments by the State
based on one or more criteria which the State may desire to
verify by reference to information contained in returns of
qualified taxes.
(iv) All of the State laws which may be in effect
simultaneously (for any period of time) with the State agreement
and which provide for cooperation or reciprocal agreement between
the electing State and another State with respect to income taxes
applicable to individuals.
(3) Approval by legislature or authorization by
constitutional amendment. A certified copy of an Act or
Resolution of the legislature of the electing State in which the
legislature affirmatively expresses its approval of the State's
entry into a State agreement, or a certified copy of an amendment
to the constitution of such State by which the voters of the
State affirmatively authorize such entry.
(4) Opinion by State Attorney General or judgment of highest
court. A written statement by the State Attorney General to the
effect that, in his opinion, no provision of the State's
Constitution would be violated by the State law's incorporation
Qualified State Tax References:
Page 139 of 148
by reference of the Federal individual income tax laws and
regulations, as amended from time to time, by the Federal
prosecution and trial of individuals who are alleged to have
committed crimes with respect to the State's qualified tax (when
it goes into effect as such), or by any other provision relating
to such tax, considered as of the time it is being collected and
administered by the Federal Government pursuant to subchapter E.
However, if such a statement is not included in the notice of
election, a judgment of the highest court of the State to the
same effect may be submitted in its place.
(5) Effective date. A written specification of the January
as of which subchapter E is desired to become applicable to the
electing State.
(b) Rules relating to time for filing notice of election.
An electing State must file its notice of election more than 6
months prior to the January 1 as of which the notice specifies
that the provisions of subchapter E are desired to become
applicable to such State. Thus, for example, if the date
specified in the notice is January 1, 1979, the notice must be
filed no later than June 30, 1978. However, because under the
provisions of section 204(b) of the Federal-State Tax Collection
Act of 1972 (86 Stat. 945), as amended by section 2116(a) of the
Tax Reform Act of 1976 (90 Stat. 1910), the provisions of
subchapter E will initially take effect on the first January 1
which is more than 1 year after the first date on which at least
one State has filed a notice of its election (see s 301.6361-5),
the notice of an election which causes subchapter E to initially
take effect must be filed with the Secretary or his delegate more
than 1 year prior to the January 1 as of which such notice
specifies that the provisions of subchapter E are desired to
become applicable to such State. Thus, for example, if such an
initially electing State desires to elect subchapter E as of
January 1, 1979, its notice must be filed no later than December
31, 1977. For purposes of this section, if the notice of
election is sent by either registered or certified mail to the
Secretary of the Treasury, Washington, D.C. 20220, then it shall
be deemed to be filed on the date of mailing; otherwise, the
notice of election shall be deemed to be filed when it is
received by the Secretary or his delegate.
(c) Procedures relating to defects in notice or tax laws.
If a State has filed a notice of election, then the Secretary
shall, within 90 days after the notice is filed, notify the
Governor of such State in writing of any defect in the notice of
election which prevents it from being valid, and of any defect in
the State's tax laws which causes the tax submitted to fail to
meet the requirements for qualification specified in section 6362
and the regulations thereunder, other than the fact that no State
agreement is in effect with respect thereto. Any such defect of
which the Secretary does not notify the Governor within such 90-
day period is waived. The Secretary or his delegate may, in his
discretion, permit any of such defects of which the Governor is
timely notified to be cured retroactively to the date of the
filing of the notice of election, by amendment of the notice or
the State law. Judicial review of the Secretary's determination
Qualified State Tax References:
Page 140 of 148
that the notice of election or the tax laws, or both, contain
defects, may be obtained as set forth in section 6363(d) and s
301.6363-4.
(d) Execution and contents of State agreement. If the
Secretary does not timely notify the Governor of a defect in the
notice of election or in the State's tax laws, as provided in
paragraph (c) of this section, or if, as provided in such
paragraph, all such defects have been cured retroactively, then
the Secretary shall enter into a State agreement. The agreement
shall include the following elements:
(1) Effective date. The agreement shall specify the January
1 as of which subchapter E will commence to be applicable to the
State. Such date shall be the same as that specified in the
notice of election pursuant to paragraph (a)(5) of this section,
unless the parties agree to a different January 1, except that in
no event shall a State agreement executed after November 1
specify the next January 1.
(2) Obligation of Governor to notify the United States of
changes in pertinent State laws. The agreement shall require the
Governor of the State, and his successors in office, to notify
the Secretary or his delegate within 30 days of the enactment of
any law of the State, after the execution of the agreement, of a
type described in paragraph (a)(2) of this section.
(3) Obligation of Governor to furnish to the United States
information needed to administer State tax laws. The agreement
shall require the Governor and his successors to furnish to the
Secretary or his delegate any information needed by the Federal
Government to administer the State tax laws. Such information
shall include, for example, a list (which shall be maintained on
a current basis) of those obligations of the State or its
political subdivisions described in section 103(a)(1) from which
the interest is not subject to the qualified taxes of the State.
(4) Identification of State official to act as liaison with
Federal Government. The agreement shall include a designation by
the Governor of the State official or officials with whom the
Secretary or his delegate should coordinate in connection with
any questions or problems which may arise during the period for
which the State agreement is effective, including those which may
result from changes or contemplated changes in pertinent State
laws.
(5) Identification of State official to receive transferred
funds. The agreement shall include a designation by the Governor
of the State official who shall initially receive the funds on
behalf of the State when they are transferred pursuant to section
6361(c) and s 301.6361-3.
(6) Other obligations. If the Secretary and the Governor
both so agree, the agreement shall provide for additional
obligations.
(e) State agreement superseding certain other agreements.
Qualified State Tax References:
Page 141 of 148
For the period of its effectiveness, a State agreement shall
supersede an otherwise effective agreement entered into by the
State and the Secretary for the withholding of State income taxes
from the compensation of Federal employees pursuant to 5 U.S.C.
5517 (or pursuant to 5 U.S.C. 5516, in the case of the District
of Columbia).
[T.D. 7577, 43 F.R. 59373, Dec. 20, 1978]
26 CFR s 301.6363-1, State agreements.
------------ Excerpt from pages 160534-160537
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
s 301.6363-2 Withdrawal from State agreements.
(a) By notification. If a State which has entered into a
State agreement desires to withdraw from the agreement, its
Governor shall file a notice of withdrawal with the Secretary or
his delegate. A notice of withdrawal shall include the following
documents:
(1) Request by the Governor. A request by the Governor of
the State that the State agreement cease to be effective with
respect to taxable years beginning on or after a specified
January 1, except as provided in paragraph (b)(2) of s 301.6365-2
with respect to withholding in the case of fiscal year taxpayers.
(2) Legislative approval of withdrawal. A certified copy of
an act or Resolution of the legislature of the State in which the
legislature affirmatively expresses its approval of the State's
withdrawal from the State agreement.
(3) Identification of State official. A written
identification of the State official or officials with whom the
Secretary or his delegate should coordinate in connection with
the State's withdrawal from the State agreement.
(b) By change in State law. If any law of a State which has
entered into a State agreement is enacted pertaining to
individual income taxes (including the collection or
Qualified State Tax References:
Page 142 of 148
administration of such taxes, and the prosecution of alleged
civil or criminal violations with respect to such taxes), and if
the Secretary or his delegate determines that as a result of such
law the State no longer has a qualified tax, then such change in
the State law shall be treated as a notification of withdrawal
from the agreement. The Secretary shall notify the Governor in
writing when a change is to be so treated. Such notification
shall have the same effect as if, on the effective date of the
disqualifying change in the law, the Governor had filed with the
Secretary or his delegate a valid and sufficient notice of
withdrawal requesting that the State agreement cease to be
effective with respect to taxable years beginning on or after the
first January 1 which is more than 6 months thereafter, subject
to the exception with respect to withholding in the case of
fiscal-year taxpayers. However, the cessation of effectiveness
may be deferred to a subsequent January 1 if the Governor so
requests and if the Secretary or his delegate in his discretion
determines that the date of cessation provided in the preceding
sentence would subject the State or its taxpayers to undue
hardship. In addition, the Governor may request the Secretary or
his delegate to permit the State's early withdrawal from the
agreement, pursuant to paragraph (c)(2) of this section. Until
the date of cessation of effectiveness of the State agreement,
the change in State law which was treated as a notification of
withdrawal, and any other such subsequent change that would be
similarly treated, shall not be given effect for purposes of the
Federal collection and administration of the State taxes.
Similarly, such changes shall not be given effect for such
purposes during the period of litigation if the State seeks
judicial review of the action of the Secretary or his delegate
pursuant to section 6363(d) or s 301.6363-4, even if such changes
are ultimately found by the court not to disqualify the State's
qualified tax. However, a change in State law which would be
treated as a notice of withdrawal in the absence of this sentence
shall not be so treated if, prior to the last November 1
preceding the January 1 on which the cessation of effectiveness
of the State agreement is to occur, either such change in State
law is retroactively repealed, or the State law is retroactively
modified and the Secretary or his delegate determines that with
such modification the State has a qualified tax.
(c) Rules relating to time of withdrawal -- (1) General
rule. Except as provided in subparagraph (2) of this paragraph
(c), a notice of withdrawal shall not be valid unless the January
1 specified therein is not earlier than the first January 1 which
is more than 6 months subsequent to the date on which the notice
is received by the Secretary or his delegate. Thus, for example,
if the notice specifies January 1, 1980, for withdrawal, the
notice must be received no later than June 30, 1979.
(2) Early withdrawal. The Secretary or his delegate may, in
his discretion and upon written request by a Governor of a State
who has filed a notice of withdrawal, waive the 6-months
requirement of section 6363(b)(1) and subparagraph (1) of this
paragraph (c), if the Secretary determines that:
(i) The State will suffer a hardship if required to meet
Qualified State Tax References:
Page 143 of 148
such requirement, and
(ii) The early withdrawal requested by the Governor would be
practicable from the standpoint of orderly collection of the
qualified tax and administration of the State law by the Federal
Government.
[T.D. 7577, 43 F.R. 59374, Dec. 20, 1978]
26 CFR s 301.6363-2, Withdrawal from State agreements.
------------ Excerpt from pages 160538-160539
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
s 301.6363-3 Transition years.
The State may by law provide for the transition to or from a
qualified tax to the extent necessary to prevent double taxation
or other unintended hardships, or to prevent unintended benefits,
under State law. Generally, such provisions shall be
administered by the State; but, if requested to do so by the
Governor of the State, the Secretary or his delegate may in his
discretion, agree to administer such provisions either solely or
jointly with the State.
[T.D. 7577, 43 F.R. 59375, Dec. 20, 1978]
26 CFR s 301.6363-3, Transition years.
------------ Excerpt from page 160540
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
Qualified State Tax References:
Page 144 of 148
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
s 301.6363-4 Judicial review.
(a) General rule. If the Secretary or his delegate
determines pursuant to paragraph (c) of s 301.6363-1 that a State
did not file a valid notice of election or does not have a tax
which would meet the requirements for qualification specified in
section 6362 and the regulations thereunder if a State agreement
were in effect with respect thereto, or if he determines pursuant
to paragraph (b) of s 301.6363-2 that a participating State has
enacted a law as a result of which the State no longer has a
qualified tax, such State may, within 60 days after its Governor
has received notification of such determination, file a petition
for the review of such determination with either the United
States Court of Appeals for the circuit in which the State is
located or the United States Court of Appeals for the District of
Columbia. If a State files such a petition, the clerk of the
court shall forthwith transmit a copy of the petition to the
Secretary or his delegate, who in turn shall thereupon file in
the court the record of proceedings on which the determination
adverse to the State was based, as provided in section 2112 of
title 28, United States Code.
(b) Court of Appeals' jurisdiction. The Court of Appeals
may affirm or set aside, in whole or in part, the action of the
Secretary or his delegate; and (subject to the rules delaying
the effectiveness of the change in State law provided in
paragraph (b) of s 301.6363-2) the court may issue such other
orders as may be appropriate with respect to taxable years which
include any part of the period of litigation.
(c) Review of Court of Appeals' judgment. The judgment of
the Court of Appeals shall be subject to review by the Supreme
Court of the United States upon certiorari or certification
sought by either party as provided in section 1254 of title 28,
United States Code.
(d) Effect of final judgment. If a final judgment, rendered
with respect to litigation involving a State's petition to review
a determination of the Secretary or his delegate to the effect
that the State's individual income tax laws included in its
notice of election would not meet the requirements for
qualification specified in section 6362 and the regulations
thereunder if a State agreement were in effect with respect
thereto, includes a determination that the State's tax would in
fact meet such requirements, then the provisions of subchapter E
shall apply to the State with respect to taxable years beginning
on or after the first January 1 which is more than 6 months after
the date of such final judgment. If a final judgment, rendered
with respect to litigation involving a State's petition to review
a determination of the Secretary or his delegate to the effect
Qualified State Tax References:
Page 145 of 148
that the State's previously-qualified tax ceases to qualify
because of a change in the State's law, includes a determination
that the State's tax does in fact cease to qualify, then the
provisions of subchapter E (other than section 6363) shall cease
to apply to the State with respect to taxable years beginning on
or after the first January 1 which is more than 6 months after
the date of such final judgment. See paragraph (b) of s
301.6365-2 for special rules with respect to withholding in the
case of fiscal-year taxpayers.
(e) Expeditious treatment of judicial proceedings. Under
section 6363(d)(4), any judicial proceedings to which a State and
the United States are parties, and which are brought pursuant to
section 6363, are entitled to receive a preference, and to be
heard and determined as expeditiously as possible, upon request
of the Secretary or the State.
[T.D. 7577, 43 F.R. 59375, Dec. 20, 1978]
26 CFR s 301.6363-4, Judicial review.
------------ Excerpt from pages 160541-160542
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
s 301.6365-1 Definitions.
(a) State. For purposes of subchapter E and the regulations
thereunder, the term "State" shall include the District of
Columbia, but shall not include the Commonwealth of Puerto Rico
or any possession of the United States.
(b) Governor. For purposes of subchapter E and the
regulations thereunder, the term "Governor" shall include the
Mayor of the District of Columbia.
[T.D. 7577, 43 F.R. 59375, Dec. 20, 1978]
26 CFR s 301.6365-1, Definitions.
------------ Excerpt from page 160543
Qualified State Tax References:
Page 146 of 148
CODE OF FEDERAL REGULATIONS
TITLE 26 -- INTERNAL REVENUE
CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION
PART 301 -- PROCEDURE AND ADMINISTRATION
COLLECTION
SEIZURE OF PROPERTY FOR COLLECTION OF TAXES
Current through January 1, 1997; 61 F.R. 69366
s 301.6365-2 Commencement and cessation of applicability of
subchapter E to individual taxpayers.
(a) General rule. Except for purposes of chapter 24
(relating to the collection of income tax at source on wages),
whenever subchapter E begins or ceases to apply to any State
(i.e., a State agreement begins or ceases to be effective) as of
any January 1, such commencement or cessation of applicability
shall apply to taxable years of individuals beginning on or after
such date. For example, if subchapter E begins to apply to a
particular State on January 1, 1980, it would become applicable
for calendar year 1980 for calendar-year taxpayers in that State;
but if a taxpayer in the State is using a fiscal year running
from July 1 to June 30, the subchapter would begin to apply
(except for purposes of chapter 24) to that taxpayer on July 1,
1980, for his taxable year ending June 30, 1981. Similarly, if
the subchapter ceases to apply to such State on January 1, 1982,
it would cease to apply to calendar-year taxpayers after the end
of calendar year 1981; but it would cease to apply (except for
purposes of chapter 24) to fiscal-year taxpayers at the end of
their fiscal years which are in progress on January 1, 1982. The
cessation of applicability of subchapter E to a State does not
affect rights, duties, and liabilities with respect to any
taxable year for which subchapter E does apply with respect to
any taxpayer (or his employer).
(b) Special rules pertaining to withholding -- (1)
Subchapter E beginning to apply. The Federal withholding system
provided in chapter 24 shall go into effect for State individual
income tax purposes with respect to wages paid on or after the
January 1 as of which subchapter E begins to apply to a State.
If an employee is subject to a qualified tax imposed by the
State, such withholding system shall apply to his wages paid on
or after that January 1, without regard to whether he is a
calendar-year or fiscal-year taxpayer. See s 301.6363-3 with
respect to transition-year rules.
(2) Subchapter E ceasing to apply. The Federal withholding
system provided in chapter 24 shall cease to be effective for
State tax purposes with respect to wages paid on or after the
Qualified State Tax References:
Page 147 of 148
January 1 as of which subchapter E ceases to apply to the State,
although fiscal-year taxpayers of that State continue to be
subject to the other provisions of subchapter E for the remainder
of their fiscal years then in progress. See s 301.6363-3 with
respect to transition-year rules.
[T.D. 7577, 43 F.R. 59375, Dec. 20, 1978]
26 CFR s 301.6365-2, Commencement and cessation of applicability
of subchapter E to individual taxpayers.
------------ Excerpt from pages 160544-160545
Qualified State Tax References:
Page 148 of 148
# # #
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Dan Meador : Set 4