ACCOUNTING FOR LIABILITIES OF THE UNITED STATES FOR INTERNAL REVENUE TAXES WITHHELD AND OTHER DEDUCTIONS FROM PAY OF FEDERAL EMPLOYEES, INCLUDING THOSE IN THE GOVERNMENT OF THE DISTRICT OF COLUMBIA

[General Regulations No. 96-Supplement No. 1]

APRIL 3, 1943.

In General Regulations No. 96, dated December 15, 1942, 22 Comp. Gen. 1162, pertaining to the accounting for liabilities of the United States for internal revenue (Victory) taxes withheld from the pay of Federal employees and employees in the Government of the District of Columbia, it is stated in paragraph 12 that—

"Subsequent instructions will be issued directing the method for disposing of the check in payment of the accumulated tax for each quarter and the routing of the Victory tax return forms required * * *"

While it would appear that the interests of the United States would have been better served if the withholding agents of the Government routed their quarterly "returns" to the collectors of internal revenue by way of the disbursing officers in whose special deposit accounts the said Victory tax withholdings are accumulated, the Commissioner of Internal Revenue, who, under the provisions of the Revenue Act of 1942, is authorized to issue the regulations as to the procedure for rendering the said returns, has insisted that all such returns shall be rendered directly to the collectors of internal revenue by the designated withholding agents. Accordingly, the disbursing officers, in whose special deposit accounts the said Victory tax withholdings are accumulated, will issue their checks drawn payable to the order of the "Treasurer of the United States-Collector of Internal Revenue" in the amount of the voucher (Standard Form No. 1047) submitted by the withholding agents, representing the total of the Victory tax withholdings for the quarter, and will transmit such checks to the withholding agents responsible for the rendering of the quarterly returns.

Upon receipt of such checks from the disbursing officers, the withholding agents will attach same to the return forms and will promptly transmit them to the applicable collector of internal revenue.

LINDSAY C. WARREN, Comptroller General of the United States.

ACCOUNTING FOR INTERNAL REVENUE TAXES WITHHELD FROM PAY OF FEDERAL EMPLOYEES, AND EMPLOYEES OF THE DISTRICT OF COLUMBIA, PAID FROM FUNDS WITH THE TREASURER OF THE UNITED STATES, OTHER THAN EMPLOYEES OF THE POSTAL SERVICE

[General Regulations No. 96-Supplement No. 2]

JUNE 29, 1943.

1. Public Law 68, approved June 9, 1943, 57 Stat. 126," To provide for the current payment of the individual income tax, and for other purposes", directs in subchapter D, Collection of Income Tax at Source on Wages, with certain exceptions as set forth therein, that every employer making payment of wages shall deduct and withhold upon such wages a tax equal to the greater of the following:

"(1) 20 per centum of the excess of each payment of such wages over the family status withholding exemption allowable * * *, or

"(2) 3 per centum of the excess of each payment of such wages over the Victory tax withholding exemption allowable *

2. In General Regulations No. 54, Supplement No. 16, dated June 12, 1943, 22 Comp. Gen. 1156, there were set forth salary tables for the information and guidance of authorized certifying officers in the executive branch of the Government, and others concerned with the preparation, paying, and auditing of pay rolls of Federal employees and employees of the government of the District of Columbia, who are subject to the provisions of the said act of June 9, 1943.

Section 1624 of the act, 57 Stat. 137, directs that

"If the employer is the United States, or a State, Territory, or political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing, the return of the amount deducted and withheld upon any wages may be made by any officer or employee of the United States, or of such State, Territory, or political subdivision, or of the District of Columbia, or of such agency or instrumentality, as the case may be, having control of the payment of such wages, or appropriately designated for that purpose."

3. The amount of tax withheld, effective with the first pay period beginning after June 30, 1943, will be shown on the pay rolls and pay vouchers opposite the name of each employee to whom the withholding provisions of the act apply, in the deduction column heretofore used for recording deductions for the "Victory Tax", and which may now be captioned "Federal Tax." The total of such deductions will be included in the gross amount of the pay rolls to be charged to the appropriation(s). The symbol or code provided in General Regulations No. 54, Supplement No. 16, to indicate the "family status withholding exemption" of the employee may be shown on the pay roll or pay voucher on the same line with and immediately following the name of the employee.

4. Adjustments for clerical errors and cancellations of pay-roll items will be effected in the manner heretofore prescribed in General Regulations No. 96, dated December 15, 1942, 22 Comp. Gen. 1162.

5. When scheduling such pay rolls in the gross amount to the disbursing officer for payment, the total amount of withheld taxes as shown on each pay roll or pay voucher should be scheduled on Standard Form No. 1096 for credit to the account "[symbol of department or agency] F-5867, Special Deposits, Federal Tax Withheld from Salaries of Federal Employees (name of department or agency]," or “99 F-5867, Special Deposits, Federal Tax Withheld from Salaries of District of Columbia Employees," as the case may be.

6. The disbursing officer, taking credit in his accounts for the gross amount of the pay rolls as chargeable to the indicated appropriation(s), will immediately recharge his accounts with the total of the said deductions as pertaining to the "special deposit" accounts hereinabove set forth. The deductions for Federal tax withheld, so recharged in the accounts of the disbursing officer, will be accumulated therein until the end of the quarter, unless the procedure hereinafter set forth in paragraph 11 is to be followed.

7. In the event of a change of disbursing officers, the amounts accumulated in the said "special deposit" account of the outgoing disbursing officer will be transferred to his successor.

8. At the end of each quarter the administrative or certifying officer (withholding agent) responsible for making the required returns to the collector of internal revenue will submit a voucher in the usual manner on Standard Form No. 1047 to the disbursing officer in whose "special deposit" account the said deductions of Federal tax have accumulated, showing thereon in the space provided for "Remarks" the legend "Federal tax withheld from compensation of employees paid during the quarter ended 194..."

9. In the interest of simplified procedure and in the absence of definite objection by the Commissioner of Internal Revenue, "withholding agents" may send their quarterly "returns," Internal Revenue Form W-1, to the disbursing officer with the vouchers for the accumulated deductions for the quarter and request that the disbursing officer transmit both the "returns" and the checks to the collector of internal revenue.

10. Upon receipt of such documents, the disbursing officer will issue his check, drawn payable to the order of the "Treasurer of the U. 8., for account of Collector of Internal Revenue," in the amount of the voucher (Standard Form No. 1047) and transmit such check together with the "returns" to the appropriate collector of internal revenue. However, if the "withholding agent" does not send the quarterly "returns" form to the disbursing officer, that officer will transmit the check for the accumulated deductions to the "withholding agent" whose responsibility it is to file the said "returna" with the collector of internal revenue. See procedure prescribed in General Regulations No. 96, Supplement No. dated April 3, 1943, 22 Comp. Gen. 1168.

11. Deductions for the Federal tax withheld on vouchers (pay rolls, etc.) paid by disbursing officers of the Army and the Navy and by United States marshals may be currently transferred to designated central or regional accountable officers who will take the amounts transferred into their "special deposit" accounts which have been prescribed for such purpose. The amounts so transferred must by fully identified as to

(a) Name and symbol of disbursing officer paying the rolls and effecting the transfer, and "D.O." voucher number reference to the rolls on which the deductions appear, and

(b) Name and location of "withholding agent" responsible for preparing the "returns."

At the end of each quarter, the said "withholding agents" will transmit to the said designated accountable officers (1) the disbursement vouchers (Standard Form No. 1047), showing the information hereinabove referred to and (2) the "returns" form, and will request that both check and "returns" form be sent direct to the appropriate collector of internal revenue. If the "returns" form is not received by the disbursing officer, he will transmit the said check to the "withholding agent" whose responsibility it is to file the "returns" with the collector of internal revenue.

12. The method to be observed by the Postal Service will be the same as that heretofore followed in accounting for "Victory Tax" deductions.

13. The deductions for and payment of Federal tax withheld will be recorded in the administrative appropriation and fund control accounts in the same manner as provided for other special deposit accounts (including Victory tax), and under the symbol and title of the fund account hereinabove prescribed.

14. It is incumbent upon all Government-owned corporations and other agencies of the United States which pay their employees with funds deposited with the Treasurer of the United States to follow the procedures as hereinabove set forth.

15. In order to effect economies in those offices preparing pay rolls on bookkeeping machines, there is hereby prescribed a form of “Individual Earnings Record," Standard Form No. 1102A, to which postings of earnings, deductions, net paid, etc., can be made simultaneously with the preparation of the pay rolls on Standard Form No. 1072-Revised which provides for showing separately regular and "overtime" earnings. The size of the said form is 16 inches by 11 inches and may be used in lieu of "Individual Earnings Record," Standard Form No. 1102, prescribed in General Regulations No. 96, dated December 15, 1942.

16. Upon receipt of these regulations, each department, independent establishment, and other governmental agency having need therefor is requested to make requisition at once upon the Public Printer for a supply of the standard form herein prescribed, No. 1102A, “Individual Earnings Record." In so doing, it is understood and agreed by said departments, independent establishments, and agencies that they thereby consent to the plan of combining all the requisitions submitted and printing the total thereof in one edition to be delivered to the respective departments, independent establishments, or agencies, or placed in stock at the Government Printing Office, subject to their order, or partly delivered and partly placed in stock, as the case may be, and that they authorize the Public Printer to prorate the cost of printing and to render bill against each department, independent establishment, or agency for its proportionate share on the basis of the number of forms ordered by it.

LINDSAY C. WARREN, Comptroller General of the United States.