Federal Register / Vol. 60, No. 243 / Tuesday, December 19, 1995 / Rules and Regulations 65237

First Trading Day

First business day following an

expiration date

Exercise

After settlement of a spot-fixing on the

expiration date, automatic exercise

of in-the-money options.

Exercise: exchange of underlying

currencies

Trading Hours

Open outcry: 9:15 am to 5:00 pm (Paris

time)

THS (after hours trading): 5:00 pm to

9:15 am

List of Subjects in 17 CFR Part 30

Commodity futures, Commodity

options, Foreign transactions.

Accordingly, 17 CFR part 30 is

amended as set forth below:

PART 30—FOREIGN FUTURES AND

FOREIGN OPTION TRANSACTIONS

1. The authority citation for part 30

continues to read as follows:

Authority: Secs. 2(a)(1)(A), 4, 4c, and 8a of

the Commodity Exchange Act, 7 U.S.C. 2, 6,

6c and 12a.

2. Appendix B to part 30 is amended

by adding the following entry after the

existing entries for the ‘‘Marche a Terme

International de France’’ to read as

follows:

Appendix B to Part 30—Option

Contracts Permitted to be Offered or

Sold in the U.S. Pursuant to § 30.3(a)

Exchange Type of contract FR date and citation

Marche a Terme International de France ......... Option Contracts on the Deutsche Mark and

the French Franc (DEM/FRF).

December 19, 1995; 60 FR 65237

* * * * * * *

Issued in Washington, D.C. on December 6,

1995.

Jean A. Webb,

Secretary to the Commission.

[FR Doc. 95–30361 Filed 12–18–95; 8:45 am]

BILLING CODE 6351–01–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 31

[TD 8634]

RIN 1545–AT12

Withholding on Distributions of Indian

Gaming Profits to Tribal Members

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Final regulations.

SUMMARY: This document contains final

regulations relating to the income tax

withholding requirement on

distributions of profits from certain

gaming activities made to members of

Indian tribes under section 3402(r) of

the Internal Revenue Code of 1986.

Those affected by the regulations are

persons, including Indian tribes, making

payments to members of Indian tribes

from net revenues of certain gaming

activities conducted or licensed by the

tribes. Also affected are members of

Indian tribes who receive the payments.

DATES: These regulations are effective

December 19, 1995.

For date of applicability, see

§ 31.3402(r)–1(b).

FOR FURTHER INFORMATION CONTACT:

Rebecca Wilson (202) 622–6040 (not a

toll-free number).

SUPPLEMENTARY INFORMATION:

Background

This document contains amendments

to the Employment Tax Regulations (26

CFR part 31) under section 3402(r).

Section 3402(r) was added by section

701 of the Uruguay Round Agreements

Act, which approved the trade

agreements resulting from the Uruguay

Round of multilateral trade negotiations

under the auspices of the General

Agreement on Tariffs and Trade (GATT)

and the Statement of Administrative

Action to implement the Agreements.

On December 22, 1994, temporary

regulations (TD 8574) relating to

withholding on distributions of Indian

gaming profits to tribal members under

section 3402(r) were published in the

Federal Register (59 FR 65939). A

notice of proposed rulemaking (EE–60–

94) cross-referencing the temporary

regulations was published in the

Federal Register for the same day (59

FR 65982). No public hearing was

requested or held.

Also on December 22, 1994, the IRS

mailed a copy of Notice 1026, providing

withholding tables for use in 1995, to

Indian tribes and gaming establishments

listed with the National Indian Gaming

Commission. For 1996 and subsequent

years, tables will be printed in a

supplement to Circular E.

The IRS received written comments

responding to the notice of proposed

rulemaking. After consideration of the

comments, the regulations proposed by

EE–60–94 are adopted as revised by this

Treasury decision, and the

corresponding temporary regulations are

withdrawn. The regulations contain no

substantive changes.

Explanation of Provisions

1. Indian Gaming Regulatory Act. Net

revenue from certain gaming activities

conducted or licensed by an Indian tribe

may be used to make taxable

distributions to members of the Indian

tribe. The tribe must notify its members

of the tax liability at the time the

payments are made. 25 U.S.C. 2710

(b)(3) and (d)(1).

2. Prior law. Prior to the addition of

section 3402(r) in 1994, a tribe was not

required to withhold on these

distributions to tribal members except to

the extent backup withholding rules

applied under section 3406.

3. Code section 3402(r). Section

3402(r) generally requires that, for

payments made after December 31,

1994, persons, including Indian tribes,

making payments to members of Indian

tribes from the net revenues of certain

gaming activities conducted or licensed

by the tribes deduct and withhold

income taxes from those payments.

Section 3402(r) provides that the

withholding amount be calculated

assuming that the taxpayer is single and

has one exemption.

4. Legislative history. The legislative

history of section 3402(r) indicates that

the goal of the new withholding

requirement was to make it easier for

tribal members who receive gaming

distributions to meet their tax

responsibilities:

Distributions of net revenues from gaming

activity by an Indian tribe may result in

significant tax liability to the tribe’s

members. Establishing withholding on such

payments will more closely match estimated

tax payments to ultimate tax liability. For

some tribal members, this change may

eliminate the need to make quarterly
65238 Federal Register / Vol. 60, No. 243 / Tuesday, December 19, 1995 / Rules and Regulations

estimated tax payments. For others, it will

reduce the likelihood that they will face

penalties for underpayment of tax at the time

of tax filing.

H.R. Rep. No. 826, 103d Cong., 2d Sess.,

pt.1, at 170–171 (1994).

5. Proposed regulations. The proposed

regulations implement the withholding

method prescribed by section 3402(r).

They also permit additional

withholding by agreement between the

tribal member and the tribe.

6. Comments and final regulations.

The IRS received only two written

comments on the proposed regulations.

After consideration of both comments,

the proposed regulations are adopted

with no substantive changes.

No comments were received from the

Chief Counsel for Advocacy of the Small

Business Administration.

Special Analyses

It has been determined that this

Treasury decision is not a significant

regulatory action as defined in EO

12866. Therefore, a regulatory

assessment is not required. It also has

been determined that section 553(b) of

the Administrative Procedure Act (5

U.S.C. chapter 5) and the Regulatory

Flexibility Act (5 U.S.C. chapter 6) do

not apply to these regulations, and,

therefore, a Regulatory Flexibility

Analysis is not required. Pursuant to

section 7805(f) of the Internal Revenue

Code, the notice of proposed rulemaking

preceding these regulations was

submitted to the Small Business

Administration for comment on its

impact on small business.

Drafting Information. The principal author

of the regulations is Rebecca Wilson, Office

of the Associate Chief Counsel (Employee

Benefits and Exempt Organizations), IRS.

However, other personnel from the IRS and

Treasury Department participated in their

development.

List of Subjects in 26 CFR Part 31

Employment taxes, Income taxes,

Penalties, Pensions, Railroad retirement,

Reporting and recordkeeping

requirements, Social security,

Unemployment compensation.

Adoption of Amendments to the

Regulations

Accordingly, 26 CFR part 31 is

amended as follows:

PART 31—EMPLOYMENT TAXES AND

COLLECTION OF INCOME TAX AT

SOURCE

Paragraph 1. The authority citation

for part 31 is amended by removing the

entry for section 31.3402(r)–1T and

adding an entry in numerical order to

read as follows:

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

Section 31.3402(r)–1 also issued under 26

U.S.C. 3402(p) and (r), * * *

Par. 2. Section 31.3402(r)–1 is added

to read as follows:

§ 31.3402(r)–1 Withholding on

distributions of Indian gaming profits to

tribal members.

(a) (1) General rule. Section 3402(r)(1)

requires every person, including an

Indian tribe, making a payment to a

member of an Indian tribe from the net

revenues of any class II or class III

gaming activity, as defined in 25 U.S.C.

2703, conducted or licensed by such

tribe to deduct and withhold from such

payment a tax in an amount equal to

such payment’s proportionate share of

the annualized tax, as that term is

defined in section 3402(r)(3).

(2) Withholding tables. Except as

provided in paragraph (a)(4) of this

section, the amount of a payment’s

proportionate share of the annualized

tax shall be determined under the

applicable table provided by the

Commissioner.

(3) Annualized amount of payment.

Section 3402(r)(5) provides that

payments shall be placed on an

annualized basis under regulations

prescribed by the Secretary. A payment

may be placed on an annualized basis

by multiplying the amount of the

payment by the total number of

payments to be made in a calendar year.

For example, a monthly payment may

be annualized by multiplying the

amount of the payment by 12. Similarly,

a quarterly payment may be annualized

by multiplying the amount of the

payment by 4.

(4) Alternate withholding

procedures—(i) In general. Any

procedure for determining the amount

to be deducted and withheld under

section 3402(r) may be used, provided

that the amount of tax deducted and

withheld is substantially the same as it

would be using the tables provided by

the Commissioner under paragraph

(a)(2) of this section. At the election of

an Indian tribe, the amount to be

deducted and withheld under section

3402(r) shall be determined in

accordance with this alternate

procedure.

(ii) Method of election. It is sufficient

for purposes of making an election

under this paragraph (a)(4) that an

Indian tribe evidence the election in any

reasonable way, including use of a

particular method. Thus, no written

election is required.

(5) Additional withholding permitted.

Consistent with the provisions of

section 3402(p), a tribal member and a

tribe may enter into an agreement to

provide for the deduction and

withholding of additional amounts from

payments in order to satisfy the

anticipated tax liability of the tribal

member. The agreement may be made in

a manner similar to that described in

§ 31.3402(p)–1 (with respect to

voluntary withholding agreements

between employees and employers).

(b) Effective date. This section applies

to payments made after December 31,

1994.

§ 31.3402(r)–1T [Removed]

Par. 3. Section 31.3402(r)-1T is

removed.

Margaret Milner Richardson,

Commissioner of Internal Revenue.

Approved: November 28, 1995.

Leslie Samuels,

Assistant Secretary of the Treasury.

[FR Doc. 95–30683 Filed 12–18–95; 8:45 am]

BILLING CODE 4830–01–U

POSTAL SERVICE

39 CFR Part 20

Interim Rule Amending International

Mail Manual Subchapter 790, Items

Mailed Abroad by or on Behalf of

Senders in the U.S. and Certain Other

Countries

AGENCY: Postal Service.

ACTION: Interim rule.

SUMMARY: On March 10, 1994, the Postal

Service published in the Federal

Register (59 FR 11188–11193)

amendments to certain rules in

International Mail Manual (IMM)

subchapter 790 to clarify when a

mailing in a foreign country is by or on

behalf of a resident of the United States

for the purposes of collecting U.S.

domestic postage; and to authorize the

collection of U.S. domestic postage on

certain mail posted in a foreign country

by or on behalf of a person who is not

a resident of that foreign country. This

document amends IMM subchapter 790

to remove the threshold of 1,000 pieces

mailed abroad in a 30-day period by a

U.S. resident and to remove the

standards relative to the collection of

U.S. domestic postage on ‘‘A-B-C

remail’’.The basis for the amended rules

is contained in article 25, Posting

Abroad of Letter-Post Items, of the

Universal Postal Convention

(Washington, 1989).

DATES: The interim rule is effective

January 1, 1996. Comments must be

received on or before January 18, 1996.

ADDRESSES: Written comments should

be mailed or delivered to the Manager,