(3) Guam or American Samoa as employer. For purposes of this subsection, in the case of remuneration received during any calendar year from the Government of Guam, the Government of American Samoa, a political subdivision of either or any instrumentality of any one or more of the foregoing which is wholly owned thereby, the Governor of Guam, the Governor of American Samoa, and each agent designated by either who makes a return pursuant to section 3125 shall be deemed a separate employer.

(4) District of Columbia as employer. For purposes of this subsection, in the case of remuneration received during any calendar year from the District of Columbia or any instrumentality which is wholly owned thereby, the Commissioners of the District of Columbia and each agent designated by them who makes a return pursuant to section 3125 shall be deemed a separate employer.

(b) Underpayments. If less than the correct amount of tax imposed by section 3101, 3111, 3201, 3221, or 3402 is paid or deducted with respect to any payment of wages or compensation and the underpayment cannot be adjusted under subsection (a) of this section, the amount of the underpayment shall be assessed and collected in such manner and at such times (subject to the statute of limitations properly applicable thereto) as the Secretary or his delegate may by regulations prescribe.

[Sec. 6205 as amended by sec. 103 (r) (1), Social Security Amendments 1960; sec. 317(d), Social Security Amendments 1965] [T.D. 6516, 25 F.R. 13032, Dec. 20, 1960, as amended by T.D. 6876, 31 F.R. 2596, Feb. 10, 1966; T.D. 6983, 33 F.R. 18019, Dec. 4, 1968] § 31.6205-1 Adjustments of underpay

ments.

(a) In general. (1) An employer who makes, or has made, an undercollection or underpayment of—

(i) Employee tax under section 3101, employer tax under section 3111, or the employee or employer tax under corresponding provisions of prior law,

(ii) Employee tax under section 3201, employer tax under section 3221, or the employee or employer tax under corresponding provisions of prior law, or

(iii) Income tax required under section 3402 to be withheld,

with respect to any payment of wages or compensation, shall correct such error as provided in this section. Such correction shall constitute an adjustment without interest to the extent provided in paragraph (b) or (c) of this section.

(2) Every correction under this section of an underpayment of tax with respect to a payment of wages or compen

sation shall be made on the return form which is prescribed for use, at the time the correction is made, in reporting tax which corresponds to the tax underpaid.

(3) Every return or supplemental return on which an underpayment is corrected pursuant to this section must have securely attached as a part thereof a statement explaining the correction, designating the return period in which the error was ascertained and the return period to which the error relates, and setting forth such other information as may be required by the regulations in this subpart and by the instructions relating to the return.

(4) For purposes of this section, an error is ascertained when the employer has sufficient knowledge of the error to be able to correct it.

(5) If a correction is made under this section with respect to the erroneous reporting on a return, or omission from a return, under the Federal Insurance Contributions Act, as in effect prior to or on and after January 1, 1955, of an amount of wages required to be shown on the return as a separate item in respect of a particular employee, the statement referred to in subparagraph (3) of this paragraph shall include the following information:

(i) The name and account number of each employee whose wages were erroneously reported or omitted from such return,

(ii) The period for which such wages were required to be reported on such return,

(iii) The amount, if any, of wages actually reported on such return for each such employee, and

(iv) The amount of wages which should have been reported on such return for each such employee.

No particular form is prescribed for furnishing the information required by this subparagraph, but if printed forms are desired, the district director will supply Form 941c or Form 941c PR, whichever is appropriate, upon request.

(6) No underpayment shall be reported pursuant to this section after receipt from the district director of notice and demand for payment thereof based upon an assessment, but the amount shall be paid in accordance with such notice and demand.

(7) For provisions relating to correction of erroneous statements furnished to employees in respect of wages subject

to withholding of income tax under section 3402, and of wages under the Federal Insurance Contributions Act, see paragraph (c) of § 31.6051-1.

(b) Federal Insurance Contributions Act and Railroad Retirement Tax Act(1) Undercollection ascertained before return is filed. If no employee tax or less than the correct amount of employee tax is deducted from any payment to an employee of wages, as defined in the Federal Insurance Contributions Act, or compensation as defined in the Railroad Retirement Tax Act, and the error is ascertained before the filing of the return on which the employee tax with respect to such wages or compensation is required to be reported, the employer shall nevertheless report on such return and pay to the district director the correct amount of such employee tax. However, the reporting and payment by the employer of the correct amount of such tax in accordance with this subparagraph do not constitute an adjustment.

(2) Underpayment ascertained after return is filed. (i) If a return is filed, and if no employee tax, no employer tax, or less than the correct amount of either such tax with respect to any payment to an employee of wages as defined in the Federal Insurance Contributions Act or corresponding provisions of prior law, or compensation as defined in the Railroad Retirement Tax Act or corresponding provisions of prior law, is reported on such return and paid to the district director, the employer shall adjust the underpayment (a) by reporting the additional amount due by reason of the underpayment as an adjustment on a return filed on or before the last day on which the return is required to be filed for the return period in which the error is ascertained, or (b) by reporting such additional amount on a supplemental return for the return period in which such payment of wages or compensation is made. The reporting of such underpayment on a supplemental return constitutes an adjustment within the meaning of this section only when the supplemental return is filed on or before the last day on which the return is required to be filed for the return period in which the error is ascertained. The amount of each underpayment adjusted in accordance with this subdivision shall be paid to the district director, without interest, at the time fixed for reporting the adjustment. If an adjustment is reported pursuant to

this subdivision, but the amount thereof is not paid when due, interest thereafter accrues (see section 6601).

(ii) If a return is filed, and if no employee tax, no employer tax, or less than the correct amount of either such tax with respect to a payment to an employee of wages or compensation is reported on such return and paid to the district director, and such underpayment is not reported as an adjustment within the time prescribed by subdivision (i) of this subparagraph, the amount of such underpayment shall be (a) reported on the employer's next return, or (b) reported immediately on a supplemental return. For interest accruing on amounts so reported, see section 6601 and corresponding provisions of prior law.

(3) Deductions from employees. If an employer collects no employee tax or less than the correct amount of employee tax from an employee with respect to a payment of wages as defined in the Federal Insurance Contributions Act or corresponding provisions of prior law, or compensation as defined in the Railroad Retirement Tax Act or corresponding provisions of prior law, the employer shall collect the amount of the undercollection by deducting such amount from remuneration of the employee, if any, under his control after he ascertains the error. Such deductions may be made even though the remuneration, for any reason, does not constitute wages or compensation. The amount of an undercollection of employee tax from an employee shall be reported and paid, as provided in subparagraph (1) or (2) of this paragraph, whether or not the undercollection is corrected by a deduction made as prescribed in the foregoing provisions of this subparagraph. If such a deduction is not made, the obligation of the employee to the employer with respect to the undercollection is a matter for settlement between the employee and the employer. If any employer makes an erroneous collection of employee tax from two or more of his employees, a separate settlement must be made with respect to each employee. Thus, an overcollection of employee tax from one employee may not be used to offset an undercollection of such tax from another employee.

(c) Income tax required to be withheld from wages-(1) Undercollection

ascertained before return is filed. If no income tax, or less than the correct amount of income tax, required under section 3402 to be withheld from wages is deducted from wages paid to an employee in any return period, and if the error is ascertained before the return is filed for the period in which such wages are paid, the employer shall nevertheless report on such return the correct amount of the tax required to be withheld. However, the reporting and payment by an employer of tax in accordance with this subparagraph do not constitute an adjustment.

(2) Underpayment ascertained after return is filed. (i) If a return is filed for a return period, and if no income tax, or less than the correct amount of income tax, required under section 3402 to be withheld from wages paid to an employee in such period, is reported on a return and paid to the district director, the employer shall (a) report the additional amount due by reason of the underpayment on a return for any return period in the calendar year in which the wages were paid, or (b) report such additional amount on a supplemental return for the return period in which such wages were paid. Such reporting constitutes an adjustment within the meaning of this section only if the return or supplemental return on which the underpayment is reported is filed on or before the last day on which the return is required to be filed for the return period in which the error was ascertained.

(ii) If a return is filed for a return period, and if no income tax, or less than the correct amount of income tax, required under section 3402 to be withheld from wages paid to an employee in such period is reported on such return and paid to the district director, and such underpayment is not reported as an adjustment within the time prescribed by subdivision (i) of this subparagraph, the amount of such underpayment shall be (a) reported on the employer's next return, if such next return is for any return period in the calendar year in which the wages were paid, or (b) reported immediately on a supplemental return.

(3) Payment of amounts reported as undercollections or underpayments. (i) For provisions relating to the employer's liability for an underpayment of tax

unless he can show that the income tax against which the tax under section 3402 may be credited has been paid, see § 31.3402 (d)—1.

(ii) Except as provided in § 31.3402 (d)-1, any amount reported as an adjustment within the meaning of this paragraph shall be paid to the district director, without interest, at the time fixed for reporting the adjustment.

(iii) For interest accruing on amounts which are not paid when due, see section 6601.

(4) Deductions from employee. If no income tax, or less than the correct amount of income tax, required under section 3402 to be withheld from wages is deducted from wages paid to an employee in a calendar year, the employer shall collect the amount of the undercollection on or before the last day of such year by deducting such amount from remuneration of the employee, if any, under his control. Such deductions may be made even though the remuneration, for any reason, does not constitute wages. Any undercollection in a calendar year not corrected by a deduction made pursuant to the foregoing provisions of this subparagraph is a matter for settlement between the employee and the employer within such calendar year. For provisions relating to the employer's liability for the tax, whether or not he collects it from the employee, see § 31.3403-1.

§ 31.6302 (b) Statutory provisions; mode or time of collection; discretionary method.

SEC. 6302. Mode or time of collection. *

(b) Discretionary method. Whether or not the method of collecting any tax imposed by chapters 21, 31, 32, 33, section 4481 of chapter 36, sections 4501 (a) or 4511 of chapter 37, or sections 4701 or 4721 of chapter 39 is specifically provided for by this title, any such tax may, under regulations prescribed by the Secretary or his delegate, be collected by means of returns, stamps, coupons, tickets, books, or such other reasonable devices or methods as may be necessary or helpful in securing a complete and proper collection of the tax.

[Sec. 6302(b) as amended by sec. 206(b), Highway Revenue Act 1956 (70 Stat. 391)] § 31.6302(b)−1 Method of collection.

For provisions relating to collection by means of returns of the taxes imposed by chapter 21 (Federal Insurance Contributions Act), see §§ 31.6011(a)–1 and 31.6011(a)-5.

§ 31.6302 (c)

Statutory provisions; mode or time of collection; use of Government depositaries.

SEC. 6302. Mode or time of collection. *

(c) Use of Government depositaries. The Secretary or his delegate may authorize Federal Reserve banks, and incorporated banks or trust companies which are depositaries or financial agents of the United States, to receive any tax imposed under the internal revenue laws, in such manner, at such times, and under such conditions as he may prescribe; and he shall prescribe the manner, times, and conditions under which the receipt of such tax by such banks and trust companies is to be treated as payment of such tax to the Secretary or his delegate.

§ 31.6302(c)-1.

Use of Government depositaries in connection with taxes under Federal Insurance Contributions Act and income tax withheld. (a) Requirement—(1) In general. (i) Except as provided in paragraph (b) of this section and subdivision (ii) of this subparagraph, if during any calendar month other than the last month of a calendar quarter, the aggregate amount of taxes (as defined in subdivision (iii) of this subparagraph) exceeds $100 in the case of an employer, such employer shall deposit such aggregate amount within 15 days after the close of such calendar month with a Federal Reserve bank. Notwithstanding the provisions of this subdivision—

(a) Amounts required to be deposited for May 1966 may be deposited after June 15, 1966, but not later than June 20, 1966, if such amounts are combined with an amount required to be deposited under subdivision (ii) of this subparagraph for the first semimonthly period in June 1966, and

(b) Amounts required to be deposited under this subdivision for January 1967 may be deposited after February 15, 1967, but not later than February 20, 1967, if such amounts are combined with an amount required to be deposited under subdivision (ii) of this subparagraph for the first semimonthly period in February 1967.

(ii) This subdivision shall apply to taxes with respect to wages paid by an employer during February or March 1967 or during a calendar quarter thereafter if the aggregate of the taxes with respect to wages paid during any calendar month in the preceding calendar quarter exceeded $2,500 in the case of such employer. This subdivision also

applies to taxes with respect to wages paid by an employer during June 1966, during either of the last two calendar quarters in the calendar year 1966, or during January 1967, if the aggregate of the taxes with respect to wages paid during any calendar month in the preceding calendar quarter exceeded $4,000 in the case of such employer. An employer shall deposit taxes to which this subdivision applies in a Federal Reserve bank within 3 banking days after the close of the semimonthly period during which the wages to which such taxes relate are paid. For purposes of this subdivision, "semimonthly period" means the first 15 days of a calendar month or the portion of a calendar month following the 15th of such month. An employer will be considered to have complied with the requirements of this subdivision for a semimontly period

if

(a) (1) His deposit for such semimonthly period is not less than 90 percent of the aggregate amount of the taxes for such period and (2) if such period occurs in a month other than the last month in a calendar quarter, he deposits any underpayment for such month within 3 banking days after the 15th day of the following month;

(b) (1) His deposit for each semimonthly period in the month is not less than 45 percent of the aggregate amount of the taxes for the month, and (2) if such month is other than the last month in a calendar quarter, he deposits any underpayment for such month within 3 banking days after the 15th day of the following month; or

(c) (1) His deposit for each semimonthly period in the month is not less than 50 percent of the aggregate amount of the taxes for the preceding month, and (2) if the current month is other than the last month in a calendar quarter, he deposits any underpayment for such month within 3 banking days after the 15th day of the following month. Subdivisions (b) and (c) of this subdivision shall not apply to any employer who normally pays in the first semimonthly period in each month more than 75 percent of the total wages paid during the month.

(iii) As used in subdivisions (i) and (ii) of this subparagraph, the term "taxes" means

(a) The employee tax withheld under section 3102,

(b) The employer tax under section 3111, and

(c) The income tax withheld under section 3402,

exclusive of taxes with respect to wages for agricultural labor or for domestic service in a private home of the employer.

(iv) If the aggregate amount of taxes reportable on a return (other than a return on Form 942) for a calendar quarter beginning after March 31, 1968, exceeds by more than $100 the total amount deposited by the employer pursuant to subdivision (i) or (ii) of this subparagraph for such calendar quarter, the employer shall, on or before the last day of the first calendar month following the period for which the return is required to be filed, deposit with a Federal Reserve bank or authorized commercial bank an amount equal to the amount by which the taxes reportable on the return exceed the total deposits (if any) made pursuant to subdivision (i) or (ii) of this subparagraph for such calendar quarter. As used in this subdivision, the term "taxes" shall have the meaning assigned to such term in subdivision (iii) of this subparagraph, except that the term shall include the employee tax and employer tax referred to in (a) and (b) of such subdivision (iii) of this subparagraph with respect to any wages for domestic service in a private home of the employer which the employer elects to report on a quarterly return other than a quarterly return made on Form 942.

(2) Employers of agricultural workers-(i) Requirement for 1955. If during any calendar month, other than the last month of a calendar quarter, in 1955 the aggregate amount of—

(a) The employee tax withheld under section 3102 with respect to wages for agricultural labor, and

(b) The employer tax under section 3111 for such month with respect to wages for agricultural labor,

exceeds $100 in the case of an employer, such employer shall deposit such aggregate amount within 15 days after the close of such calendar month with a Federal Reserve bank.

(ii) Requirement for 1956 and subsequent years. Except as provided in paragraph (b) of this section, if during any calendar month other than December, in any calendar year after 1955, the aggregate amount of

(a) The employee tax withheld under section 3102 during such month with respect to wages for agricultural labor, plus any such employee tax which was previously withheld in the same calendar year with respect to such wages but which was neither deposited nor required to be deposited on or before the last day of such month, and

(b) The employer tax under section 3111 for such month with respect to wages for agricultural labor, plus any such employer tax, which was neither deposited nor required to be deposited on or before the last day of such month, for any prior month of the same calendar year with respect to wages for agricultural labor,

exceeds $100 in the case of an employer, such employer shall deposit such aggregate amount within 15 days after the close of such calendar month with a Federal Reserve bank.

(iii) Additional requirement for 1968 and subsequent years. If the aggregate amount of taxes reportable on a return on Form 943 for a calendar year beginning after December 31, 1967, exceeds by more than $100 the total amount deposited by the employer pursuant to subdivision (ii) of this subparagraph for such calendar year, the employer shall, on or before the last day of the first calendar month following the period for which the return is required to be filed, deposit with a Federal Reserve bank or authorized commercial bank an amount equal to the amount by which the taxes reportable on the return exceed the total deposits (if any) made pursuant to subdivision (ii) of this subparagraph for such calendar year.

(3) Depositary forms—(i) In general. A deposit required to be made by an employer under subparagraph (1) of this paragraph shall be made separately from any deposit required to be made by him under subparagraph (2) of this paragraph. Similarly, a deposit required to be made by this section shall be made separately from a deposit required by any other section. An employer may make one, or more than one, remittance of the amount required to be deposited. However, a deposit for a period in one calendar quarter shall be made separately from any deposit for a period in another calendar quarter. An amount of tax which is not required to be deposited