Federal Register / Vol. 61, No. 105 / Thursday, May 30, 1996 / Rules and Regulations 27007

entertainment or travel, is not subject to

the limitations on allowability of

deductions provided for in paragraphs

(a) through (e) of this section to the

extent that the expenditure is treated by

the taxpayer—

(1) On the taxpayer’s income tax

return as originally filed, as

compensation paid to the employee; and

(2) As wages to the employee for

purposes of withholding under chapter

24 (relating to collection of income tax

at source on wages).

(B) Expenses includible in income of

persons who are not employees. Any

expenditure by a taxpayer for

entertainment (or for use of a facility in

connection therewith), or for travel

described in section 274(m)(3), is not

subject to the limitations on allowability

of deductions provided for in

paragraphs (a) through (e) of this section

to the extent the expenditure is

includible in gross income as

compensation for services rendered, or

as a prize or award under section 74, by

a recipient of the expenditure who is

not an employee of the taxpayer. The

preceding sentence shall not apply to

any amount paid or incurred by the

taxpayer if such amount is required to

be included (or would be so required

except that the amount is less that $600)

in any information return filed by such

taxpayer under part III of subchapter A

of chapter 61 and is not so included. See

section 274(e)(9).

(C) Example. The following example

illustrates the provisions this paragraph

(f):

Example. If an employer rewards the

employee (and the employee’s spouse) with

an expense paid vacation trip, the expense is

deductible by the employer (if otherwise

allowable under section 162 and the

regulations thereunder) to the extent the

employer treats the expenses as

compensation and as wages. On the other

hand, if a taxpayer owns a yacht which the

taxpayer uses for the entertainment of

business customers, the portion of salary

paid to employee members of the crew which

is allocable to use of the yacht for

entertainment purposes (even though treated

on the taxpayer’s tax return as compensation

and treated as wages for withholding tax

purposes) would not come within this

exception since the members of the crew

were not recipients of the entertainment. If

an expenditure of a type described in this

subdivision properly constitutes a dividend

paid to a shareholder or if it constitutes

unreasonable compensation paid to an

employee, nothing in this exception prevents

disallowance of the expenditure to the

taxpayer under other provisions of the

Internal Revenue Code.

* * * * *

(g) Additional provisions of section

274—travel of spouse, dependent or

others. Section 274(m)(3) provides that

no deduction shall be allowed under

this chapter (except section 217) for

travel expenses paid or incurred with

respect to a spouse, dependent, or other

individual accompanying the taxpayer

(or an officer or employee of the

taxpayer) on business travel, unless

certain conditions are met. As provided

in section 274(m)(3), the term other

individual does not include a business

associate (as defined in paragraph

(b)(2)(iii) of this section) who otherwise

meets the requirements of sections

274(m)(3)(B) and (C).

Margaret Milner Richardson,

Commissioner of Internal Revenue.

Approved: March 26, 1996.

Leslie Samuels,

Assistant Secretary of the Treasury.

[FR Doc. 96–13298 Filed 5–29–96; 8:45 am]

BILLING CODE 4830–01–P

26 CFR Parts 31 and 602

[TD 8672]

RIN 1545–AT86

Reporting of Nonpayroll Withheld Tax

Liabilities

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Final regulations.

SUMMARY: This document contains final

regulations relating to the reporting of

nonpayroll withheld income taxes

under section 6011 of the Internal

Revenue Code. The final regulations

require a person to file Form 945,

Annual Return of Withheld Federal

Income Tax, only for a calendar year in

which the person is required to

withhold Federal income tax from

nonpayroll payments.

EFFECTIVE DATE: These regulations are

effective May 30, 1996.

FOR FURTHER INFORMATION CONTACT:

Vincent G. Surabian, 202–622–6232 (not

a toll-free number).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The collection of information

contained in these final regulations has

been reviewed and approved by the

Office of Management and Budget in

accordance with the Paperwork

Reduction Act (44 U.S.C. 3507) under

control number 1545–1413. Responses

to this collection of information are

required by the IRS to monitor

compliance with the Federal tax rules

related to the reporting and deposit of

nonpayroll withheld income taxes.

An agency may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless the collection of information

displays a valid control number.

Estimates of the reporting burden in

these final regulations are reflected in

the burden of Form 945.

Comments concerning the accuracy of

this burden estimate and suggestions for

reducing this burden should be sent to

the Internal Revenue Service, Attn: IRS

Reports Clearance Officer, T:FP,

Washington, DC 20224, and to the

Office of Management and Budget, Attn:

Desk Officer for the Department of the

Treasury, Office of Information and

Regulatory Affairs, Washington, DC

20503.

Books or records relating to this

collection of information must be

retained as long as their contents may

become material in the administration

of any internal revenue law. Generally,

tax returns and tax return information

are confidential, as required by 26

U.S.C. 6103.

Background

On October 16, 1995, final and

temporary regulations (TD 8624)

relating to the reporting of nonpayroll

withheld income taxes under section

6011 were published in the Federal

Register (60 FR 53509). A notice of

proposed rulemaking (IA–30–95) crossreferencing the temporary regulations

was published in the Federal Register

for the same day (60 FR 53561).

The IRS received no written

comments responding to the notice.

Accordingly, the regulations proposed

by IA–30–95 are adopted as proposed

with a minor editorial change.

Explanation of Provisions

These final regulations remove the

requirement that, once a person files a

Form 945 for a calendar year, the person

must file a Form 945 every subsequent

year until the person files a final return.

Under these final regulations, a person

must file a Form 945 only for a calendar

year in which the person is required to

withhold Federal income tax from

nonpayroll payments.

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
27008 Federal Register / Vol. 61, No. 105 / Thursday, May 30, 1996 / Rules and Regulations

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 these regulations is Vincent G. Surabian,

Office of the Assistant Chief Counsel (Income

Tax & Accounting). However, other

personnel from the IRS and Treasury

Department participated in their

development.

List of Subjects

26 CFR Part 31

Employment taxes, Income taxes,

Penalties, Pensions, Railroad retirement,

Reporting and recordkeeping

requirements, Social security,

Unemployment compensation.

26 CFR Part 602

Reporting and recordkeeping

requirements.

Adoption of Amendments to the

Regulations

Accordingly, 26 CFR parts 31 and 602

are 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

citation for ‘‘Section 31.6011(a)–4T’’ as

follows:

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

Par 2. Section 31.6011(a)–4 is

amended by revising paragraph (b) to

read as follows:

§ 31.6011(a)–4 Returns of income tax

withheld.

* * * * *

(b) Withheld from nonpayroll

payments. Every person required to

withhold tax from nonpayroll payments

for calendar year 1994 must make a

return for calendar year 1994 and for

any subsequent calendar year in which

the person is required to withhold such

tax until the person makes a final return

in accordance with § 31.6011(a)–6.

Every person not required to withhold

tax from nonpayroll payments for

calendar year 1994 must make a return

for the first calendar year after 1994 in

which the person is required to

withhold such tax and for any

subsequent calendar year in which the

person is required to withhold such tax

until the person makes a final return in

accordance with § 31.6011(a)–6. Form

945, Annual Return of Withheld Federal

Income Tax, is the form prescribed for

making the return required under this

paragraph (b). Nonpayroll payments

are—

(1) Certain gambling winnings subject

to withholding under section 3402(q);

(2) Retirement pay for services in the

Armed Forces of the United States

subject to withholding under section

3402;

(3) Certain annuities as described in

section 3402(o)(1)(B);

(4) Pensions, annuities, IRAs, and

certain other deferred income subject to

withholding under section 3405; and

(5) Reportable payments subject to

backup withholding under section 3406.

* * * * *

§ 31.6011(a)–4T [Removed]

Par. 3. Section 31.6011(a)–4T is

removed.

PART 602—OMB CONTROL NUMBERS

UNDER THE PAPERWORK

REDUCTION ACT

Par. 4. The authority citation for part

602 continues to read as follows:

Authority: 26 U.S.C. 7805.

§ 602.101 [Amended]

Par. 5. Section 602.101, paragraph (c)

is amended in the table by removing the

entry ‘‘31.6011(a)–4T....1545–1413’’.

Margaret Milner Richardson,

Commissioner of Internal Revenue.

Approved: April 5, 1996.

Leslie Samuels,

Assistant Secretary of the Treasury.

[FR Doc. 96–13398 Filed 5–29–96; 8:45 am]

BILLING CODE 4830–01–P

DEPARTMENT OF THE INTERIOR

National Park Service

36 CFR Part 13

RIN 1024–AC05

Glacier Bay National Park, Alaska:

Vessel Management Plan Regulations

AGENCY: National Park Service, Interior.

ACTION: Final rule.

SUMMARY: The National Park Service

(NPS) is revising the regulations,

including vessel quotas, that were

established to protect the endangered

humpback whale and other resources

within Glacier Bay National Park and

Preserve. The regulations authorize a

modest increase in cruise ship, charter

boat and private boat use, to be offset by

specific mitigation measures. The

regulations do not authorize an increase

in the maximum number of motor

vessels permitted to use the bay on any

given day.

Subject to the existing maximum

daily limit of two cruise ships per day,

the regulations authorize an immediate

30-percent increase in cruise ship traffic

during the 1996 and 1997 summer

seasons (June 1 through August 31).

Additionally, but contingent upon the

completion of studies demonstrating

that a further increase in cruise ship

traffic would be consistent with

protection of the values and purposes of

Glacier Bay National Park and Preserve,

the regulations could allow up to an

additional 42-percent increase (i.e., a

total increase of 72% from existing 1995

levels) in cruise ship traffic beginning

with the 1998 summer season. For each

summer season thereafter, the

regulations authorize the NPS to adjust

the number of cruise ship entries,

subject to the maximum daily limit of

two vessels, based on available

scientific and other information and

applicable authorities. NPS has also

revised current restrictions on seasonal

entries and use-days for charter and

private boats to authorize an 8-percent

increase in charter boat traffic and a 15

percent increase in private boat traffic

beginning with the 1996 summer

season.

The regulations also extend and

codify park compendium vessel

regulations for the protection of park

resource values. Several additional

measures, such as the requirement for

air, water and underwater noise

pollution minimization plans from

cruise ships, mitigate the potential

resource impacts associated with the

increase in vessel traffic. Finally, to

protect park resource values and

maintain opportunities for the safe use

of kayaks, the regulations close six

specified areas to motor vessels for

varying periods.

EFFECTIVE DATE: This rule is effective on

May 30, 1996.

FOR FURTHER INFORMATION CONTACT: Russ

Wilson, Alaska Desk Officer, National

Park Service, P.O. Box 37127,

Washington, D.C. 20013–7127.

Telephone 202–208–4874.

SUPPLEMENTARY INFORMATION:

Public Participation on the Proposed

Rule

The National Park Service published

proposed rules as well as a Notice of

Availability of the Vessel Management

Plan/Environmental Assessment (VMP/

EA) on June 5, 1995 (60 FR 29523). The

60 day period for public comment

closed on August 4, 1995, but was

subsequently reopened from August 10,

1995 (60 FR 40798), until August 25,

1995, to accommodate several

commenters who had requested an