IRS issues final regs on voluntary withholding agreements

The IRS has released final regulations and removed temporary regulations relating to voluntary withholding agreements (see Payroll Management Guide Report Letter1407/2333, December 10, 2013). The final regulations allow the IRS to issue guidance in the Internal Revenue Bulletin (IRB) describing payments for which withholding under such an agreement would be appropriate. The regulations affect persons making and receiving payments for which the IRS later authorizes the parties to enter into voluntary withholding agreements.

The IRS issued temporary regulations (T.D. 9646) and proposed regulations (NPRM REG-146620-13) on November 29, 2013. The final regulations adopt the temporary and proposed regulations without change, and provide that guidance published in the IRB will set forth requirements regarding the form and duration of the voluntary withholding agreement specific to the type of payment from which withholding is authorized. The regulations are effective on September 16, 2014. (T.D. 9692, filed with the Federal Register on September 15, 2014.)

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