Source: https://www.irs.gov/irb/2014-46_IRB/ar05.html
Timestamp: 2016-10-24 08:57:42
Document Index: 721051746

Matched Legal Cases: ['art 31', 'art 301', '§ 31', '§ 301', '§ 601', '§ 1', '§ 31', '§ 301', '§ 601', '§ 601']

Internal Revenue Bulletin - November 10, 2014 - T.D. 9699
Internal Revenue Bulletin: 2014-46 November 10, 2014 T.D. 9699
List of Subjects Amendments to the Regulations
This document contains final regulations that will remove regulations relating to information reporting and backup withholding
Program. Enactment of the payment card and third party network reporting requirements in the Housing Assistance Tax Act of
2008 made the QPCA Program obsolete. Because no payors have applied to be designated as a QPCA (and no payors have been designated
as a QPCA), no taxpayers will be affected by these final regulations.
Background This document amends the Employment Tax Regulations (26 CFR Part 31) and the Procedure and Administration Regulations (26
CFR Part 301) to remove deadwood provisions relating to the now obsolete QPCA Program. On March 24, 2014, a notice of proposed
rulemaking (REG–163195–05) was published in the Federal Register (79 FR 15926) proposing to remove §§ 31.3406(g)–1(f), 301.6724–1(e)(1)(vi)(H), and 301.6724–1(f)(5)(vii) and amend § 301.6724–1(c)(6)
to remove references to QPCAs. The notice of proposed rulemaking also withdrew proposed regulations published in the Federal Register on July 13, 2007 relating to the QPCA Program (72 FR 38534). No comments were received in response to the proposed regulations.
Section 6041(a) requires persons engaged in a trade or business and making payments in the course of such trade or business
and to furnish information statements to payees. Among other items, the payor must include the payee’s name and taxpayer identification
number (TIN) on the information return and the information statement. Section 3406(a)(1) requires a payor to withhold on any
reportable payment (as defined in section 3406(b)(1)) if: (1) the payee fails to furnish the payee’s TIN to the payor as required;
or (2) the Secretary notifies the payor that the TIN furnished by the payee is incorrect.
a payment card, such as a credit card, is accepted as payment. To implement the QPCA Program, on July 13, 2004, the Treasury
Department and the IRS published final regulations in the Federal Register (TD 9136) (69 FR 41938) under sections 6041, 3406, and 6724. The Treasury Department and the IRS also published several pieces
of guidance in the Internal Revenue Bulletin to implement the program. See Notice 2003–13 (2003–1 CB 513 (February 24, 2003));
Revenue Procedure 2004–42 (2004–2 CB 121 (August 2, 2004)); Revenue Procedure 2004–43 (2004–2 CB 124 (August 2, 2004)) (see
§ 601.601(d)(2)(ii)(b) of the chapter). In addition, proposed regulations were published on July 13, 2007 (REG–163195–05 published in the Federal Register (72 FR 38534) and a proposed revenue procedure (Notice 2007–59 (2007–30 IRB 135)) was published on July 23, 2007. The 2007
proposed regulations were withdrawn by the notice of proposed rulemaking (REG–163195–05) published in the Federal Register (79 FR 15926) on March 25, 2014.
Under the QPCA Program, a payment card organization may apply to the IRS to be designated as a QPCA. For this purpose, a payment
card organization was defined as an entity that set the standards and provided the mechanism, either directly or indirectly
through members and affiliates, for effectuating payment between a purchaser and a merchant in a payment card transaction.
See section 5.06 of Notice 2007–59. Once designated, the QPCA was permitted to act on behalf of a payor/cardholder to solicit,
collect, and validate the name and TIN of a payee/merchant, and to provide that information to the payor/cardholder to enable
the payor/cardholder to meet its section 6041 reporting obligation, if any.
Section 6050W, enacted by the Housing Assistance Tax Act of 2008, Public Law 110–289, obsoleted the QPCA Program. Section
6050W requires payment settlement entities, including payment card organizations, to report payments made in settlement of
payment card and third party network transactions. Regulations published under section 6050W and section 6041 provide, among
other things, that payments required to be reported under section 6050W are not also required to be reported under section
6041. See § 1.6041–1(a)(1)(iv). Because payment card organizations now have a reporting obligation with respect to payment
card transactions, there is no longer a need for payment card organizations to solicit, collect, and verify payee/merchant
names/TINs for the payor/cardholder. Thus, enactment of section 6050W made the QPCA Program obsolete.
These final regulations adopt the proposed regulations without change. Accordingly, the regulations under §§ 31.3406(g)–1(f),
301.6724–1(e)(1)(vi)(H), and 301.6724–1(f)(5)(vii) are removed, and the regulations under § 301.6724–1(c)(6) are amended.
In addition, Revenue Procedure 2004–42, Revenue Procedure 2004–43, Notice 2003–13, Notice 2003–37, and Notice 2007–59 are
obsoleted. See § 601.601(d)(2)(ii)(b) of the chapter.
Sections 31.3406(g)–1(f), 301.6724–1(e)(1)(vi)(H), and 301.6724–1(f)(5)(vii) would be removed on the date these regulations
was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business
Notice 2003–13 (2003–1 CB 513); Notice 2003–37 (2003–1 CB 1121); Rev. Proc. 2004–42 (2004–2 CB 121); Rev. Proc. 2004–43 (2004–2
CB 124); and Notice 2007–59 (2007–30 IRB 135) (see § 601.601(d)(2)(ii)(b) of the chapter).
security, Unemployment compensation.
(Filed by the Office of the Federal Register on October 24, 2014, 8:45 a.m., and published in the issue of the Federal Register
for October 27, 2014, 79 F.R. 63811)