To amend the Internal Revenue Code of 1986 to simplify the application of the provisions relating to deposit requirements for employment taxes.

Amends the Internal Revenue Code to specify the frequency of deposits of employment taxes (social security, railroad retirement, and withheld income taxes) by small and large depositors. Repeals a provision of the Railroad Retirement Solvency Act of 1983 to conform to this Act.

 
HR 4588 IH
102d CONGRESS
2d Session
 H. R. 4588
To amend the Internal Revenue Code of 1986 to simplify the application of
the provisions relating to deposit requirements for employment taxes.
IN THE HOUSE OF REPRESENTATIVES
March 26, 1992
Mr. ANDREWS of Texas introduced the following bill; which was referred to
the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to simplify the application of
the provisions relating to deposit requirements for employment taxes.
  Be it enacted by the Senate and House of Representatives of the United
  States of America in Congress assembled,
SECTION 1. SIMPLIFICATION OF DEPOSIT REQUIREMENTS FOR SOCIAL SECURITY,
RAILROAD RETIREMENT, AND WITHHELD INCOME TAXES.
  (a) IN GENERAL- Subsection (g) of section 6302 of the Internal Revenue
  Code of 1986 (relating to deposits of social security taxes and withheld
  income taxes) is amended to read as follows:
  `(g) DEPOSITS OF SOCIAL SECURITY, RAILROAD RETIREMENT, AND WITHHELD
  INCOME TAXES-
  `(1) GENERAL RULE- Except as otherwise provided in this subsection--
  `(A) employment taxes attributable to payments on Wednesday, Thursday, or
  Friday of any week shall be deposited on or before the following Tuesday, and
  `(B) employment taxes attributable to payments on Saturday, Sunday, Monday,
  or Tuesday of any week shall be deposited on or before the following Friday.
  `(2) SMALL DEPOSITORS-
  `(A) IN GENERAL- If any person is a small depositor for any calendar
  quarter, such person shall make deposits of employment taxes attributable
  to payments during any month in such quarter on or before the 15th day of
  the following month.
  `(B) SMALL DEPOSITOR- For purposes of this subsection, a person is a small
  depositor for any calendar quarter if, for each calendar quarter in the
  base period, the average monthly amount of employment taxes attributable
  to payments made by such person during such calendar quarter did not
  exceed $6,000. For purposes of the preceding sentence, the base period
  for any calendar quarter is the 4 calendar quarters ending with the second
  preceding calendar quarter.
  `(C) CESSATION AS SMALL DEPOSITOR- A person shall cease to be treated as a
  small depositor for a calendar quarter after any day on which such person
  is required to make a deposit under paragraph (3).
  `(3) LARGE DEPOSITORS- Notwithstanding paragraphs (1) and (2), if, on
  any day, any person has $100,000 or more of employment taxes for deposit,
  such taxes shall be deposited on the next day.
  `(4) SAFE HARBOR-
  `(A) IN GENERAL- A person shall be treated as depositing the required
  amount of employment taxes in any deposit if the shortfall does not exceed
  the greater of--
  `(i) $250, or
  `(ii) 2 percent of the amount of employment taxes required to be deposited
  in such deposit (determined without regard to this paragraph).
Such shortfall shall be deposited as required by the Secretary by regulations.
  `(B) SHORTFALL- For purposes of this paragraph, the term `shortfall' means,
  with respect to any deposit, the excess of the amount of employment taxes
  required to be deposited in such deposit (determined without regard to
  this paragraph) over the amount (if any) thereof deposited on or before
  the last date prescribed therefor.
  `(5) DEPOSIT REQUIRED ONLY ON BANKING DAYS- If taxes are required to be
  deposited under this subsection on any day which is not a banking day,
  such taxes shall be treated as timely deposited if deposited on the first
  banking day thereafter.
  `(6) EMPLOYMENT TAXES- For purposes of this subsection, the term `employment
  taxes' means the taxes imposed by chapters 21, 22, and 24.
  `(7) SUBSECTION TO APPLY ONLY TO REQUIRED DEPOSITS- This subsection shall
  not apply to employment taxes which are not required to be deposited under
  the regulations prescribed by the Secretary under this section.
  `(8) REGULATIONS- The Secretary may prescribe regulations--
  `(A) specifying employment tax deposit requirements for persons who fail
  to comply with the requirements of this subsection,
  `(B) specifying circumstances under which a person shall be treated as a
  small depositor for purposes of this subsection notwithstanding that such
  person is not described in paragraph (2)(B),
  `(C) specifying modifications to the provisions of this subsection for
  end-of-quarter periods, and
  `(D) establishing deposit requirements for taxes imposed by section 3406
  which apply in lieu of the requirements of this subsection.'
  (b) CONFORMING AMENDMENT- Section 226 of the Railroad Retirement Solvency
  Act of 1983 is hereby repealed.
  (c) EFFECTIVE DATE- The amendment made by this section shall apply to
  amounts attributable to payments made after December 31, 1992.