<!-- TTST:[3406]: TTC:[I]: TTSC:[C]: TTT:[r]: TTS:[31.3406(b)(2)-1]: TTCP:[Reportable interest payment]: TTCI:[Reg. 31.3406(b)(2)-1]: TTB:[1d.php?v=sr&s=31.3406(a)-4]: TTA:[1d.php?v=sr&s=31.3406(b)(2)-2]: TTD:[8391]: -->

TREASURY REGULATIONS


Index  » Subchapter C  » Reg. 31.3406(b)(2)-1

Reg. 31.3406(b)(2)-1
Reportable interest payment

January 14, 2024


§ 31.3406(a)-4 « Browse » § 31.3406(b)(2)-2

See related I.R.C. 3406

Treas. Reg. § 31.3406(b)(2)-1.  Reportable interest payment

(a) Interest subject to backup withholding—(1) In general. A payment of a kind, and to a payee, that is required to be reported under section 6049 (relating to returns regarding interest and original issue discount) is a reportable payment for purposes of section 3406, subject to the special rules of § 31.3406(b)(2)-2 (relating to original issue discount) and § 31.3406(b)(2)-3 (relating to window transactions). See § 31.6051-4 for the requirement to furnish a statement to the payee if tax is withheld under section 3406.

(2) Special rule for tax-exempt interest. When an issuer is required to make an information return under § 1.6049-4(d)(8) of this chapter because a payee provided a signed written statement on the envelope or shell incorrectly claiming that the interest was exempt from taxation under section 103(a) (as described in § 1.6049-5(b)(1)(ii) of this chapter), the issuer is not required to impose withholding under section 3406.

(b) Amount subject to backup withholding—(1) In general. The amount of interest subject to withholding under section 3406 is the amount subject to reporting under section 6049.

(2) Special rule to adjust for premature withdrawal penalty. Solely for purposes of computing the amount subject to withholding under section 3406, the payor may elect not to withhold from the portion of any interest payment that is not received by the payee because a penalty is in fact imposed for premature withdrawal of funds deposited in a time savings account, certificate of deposit, or similar class of deposit.


[T.D. 8637, 60 FR 66115, Dec. 21, 1995]
 

The preliminary Code is a preliminary release of the Internal Revenue Code of 1986 (the "Code") by the Office of the Law Revision Counsel and is subject to further revision before it is released again as a final version. The source of the preliminary Code used in TouchTax is available here: https://uscode.house.gov/download/download.shtml. The Code is a consolidation and codification by subject matter of the general and permanent laws of the U.S. prepared by the Office of the Law Revision Counsel of the U.S. House of Representatives. The Treasury Regulations are a codification of the general and permanent rules published in the Federal Register by the departments and agencies of the federal government. The version of the Treasury Regulations available within TouchTax is part of the Electronic Code of Federal Regulations which is not an official legal edition of the Code of Federal Regulations but is an editorial compilation of CFR material and Federal Register amendments produced by the National Archives and Records Administration's Office of the Federal Register (OFR) and the Government Publishing Office. The source of the CFR used in TouchTax is available here: https://www.govinfo.gov/bulkdata/ECFR/title-26. Those using TouchTax for legal research should verify their results against the printed versions of the Code and Treasury Regulations. TouchTax is copyright 2024 by Com-Lab (Mobile). Learn more at http://touchtax.edrich.de.