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April 16, 1993
TO: TAX COMMITTEE NO. 22-93
PENSION COMMITTEE NO. 14-93
OPERATIONS COMMITTEE NO. 15-93
TRANSFER AGENT ADVISORY COMMITTEE NO. 27-93
RE: IRS CONSIDERS REMOVAL OF NONPAYROLL ITEMS FROM IRS FORM 941
__________________________________________________________
As we previously informed you, last summer the Institute
filed written comments and testified on amendments to the
regulations under section 6302 of the Internal Revenue Code that
provide rules for depositing "employment taxes", including
payroll taxes, pension and annuity withholding amounts and backup
withholding amounts. (See Institute Memoranda to Tax Committee
No. 29-92, Pension Committee No. 27-92, Operations Committee No.
21-92 and Transfer Agent Advisory Committee No. 42-92, dated
August 3, 1992; and to Tax Committee No. 28-92, Pension Committee
No. 26-92, Operations Committee No. 20-92 and Transfer Agent
Advisory Committee No. 39-92, dated July 24, 1992.) In its
comments and testimony, the Institute supported the distinctions
made for deposit purposes between backup withholding and other
withheld tax amounts and further urged that separate tax deposit
rules be provided for pension and annuity withholding.
In the attached IRS Announcement (No. 93-51), the IRS
provides proof copies of proposed revisions to various IRS tax
deposit forms. Of particular interest to investment companies is
a proposal to remove from IRS Form 941 (Employee's Quarterly
Federal Tax Return) all nonpayroll items, such as backup
withholding and withholding for pensions and annuities. An
annual return -- IRS Form 945 (Annual Return of Withheld Federal
Income Tax) -- would be used to report these nonpayroll items for
1994 (with the first such return due in 1995).
The IRS would like to receive comments on these forms by
June 1, 1993. If you have comments that you would like the
Institute to submit, please call the undersigned at (202) 955-
3585 no later than May 17.
We will keep you informed of developments.
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Keith D. Lawson
Associate Counsel - Tax
Attachment