[Code of Federal Regulations]
[Title 26, Volume 12]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.1464-1]

[Page 214-215]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.1464-1  Refunds or credits.

    (a) In general. The refund or credit under chapter 65 of the Code of 
an overpayment of tax which has actually been withheld at the source 
under chapter 3 of the Code shall be made to the taxpayer from whose 
income the amount of such tax was in fact withheld. To the extent that 
the overpayment under chapter 3 was not in fact withheld at the source, 
but was paid,

[[Page 215]]

by the withholding agent the refund or credit under chapter 65 of the 
overpayment shall be made to the withholding agent. Thus, where a debtor 
corporation assumes liability pursuant to its tax-free covenant for the 
tax required to be withheld under chapter 3 upon interest and pays the 
tax in behalf of its bondholder, and it can be shown that the bondholder 
is not in fact liable for any tax, the overpayment of tax shall be 
credited or refunded to the withholding agent in accordance with chapter 
65 since the tax was not actually deducted and withheld from the 
interest paid to the bondholder. In further illustration, where a 
withholding agent who is required by chapter 3 to withhold $300 tax from 
rents paid to a nonresident alien individual mistakenly withholds $320 
and mistakenly pays $350 as internal revenue tax, the amount of $30 
shall be credited or refunded to the withholding agent in accordance 
with chapter 65 and the amount of $20 shall be credited or refunded in 
accordance with such chapter to the person from whose income such amount 
has been withheld.
    (b) Tax repaid to payee. For purposes of this section and Sec. 
1.6414-1, any amount of tax withheld under chapter 3 of the Code, which, 
pursuant to paragraph (a)(1) of Sec. 1.1461-2, is repaid by the 
withholding agent to the person from whose income such amount was 
erroneously withheld shall be considered as tax which, within the 
meaning of sections 1464 and 6414, was not actually withheld by the 
withholding agent.

[T.D. 6922, 32 FR 8713, June 17, 1967, as amended by T.D. 8804, 63 FR 
72188, Dec. 31, 1998]

    Rules Applicable to Recovery of Excessive Profits on Government 
                                Contracts

          RECOVERY OF EXCESSIVE PROFITS ON GOVERNMENT CONTRACTS