[Code of Federal Regulations]
[Title 26, Volume 15]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR31.3401(a)(13)-1]

[Page 208-209]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 31_EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT SOURCE--Table of Contents
 
              Subpart E_Collection of Income Tax at Source
 
Sec. 31.3401(a)(13)-1  Remuneration for services performed by Peace 
Corps volunteers.

    (a) Remuneration paid after September 22, 1961, for services 
performed as a volunteer or volunteer leader

[[Page 209]]

within the meaning of the Peace Corps Act (22 U.S.C. 2501) is excepted 
from wages, and hence is not subject to withholding, unless the 
remuneration is paid pursuant to section 5(c) or section 6(1) of the 
Peace Corps Act.
    (b) Sections 5 and 6 of the Peace Corps Act (22 U.S.C. 2504, 2505) 
provide, in part, as follows:

    Sec. 5 Peace Corps Volunteers [Peace Corps Act (75 Stat. 613); as 
amended by sec. 2(b), Act of December 13, 1963 (P.L. 88-200, 77 Stat. 
359); sec. 2(a), Act of August 24, 1965, (P.L. 89-134, 79 Stat. 549); 
sec. 3(a), Act of July 24, 1970 (P.L. 91-352, 84 Stat. 464)]

                                * * * * *

    (c) Readjustment allowances. Volunteers shall be entitled to receive 
a readjustment allowance at a rate not to exceed $75 for each month of 
satisfactory service as determined by the President; except that, in the 
cases of volunteers who have one or more minor children at the time of 
their entering a period of pre-enrollment training, one parent shall be 
entitled to receive a readjustment allowance at a rate not to exceed 
$125 for each month of satisfactory service as determined by the 
President. The readjustment allowance of each volunteer shall be payable 
on his return to the United States: Provided, however, That, under such 
circumstances as the President may determine, the accrued readjustment 
allowance, or any part thereof, may be paid to the volunteer, members of 
his family or others, during the period of his service, or prior to his 
return to the United States. In the event of the volunteer's death 
during the period of his service, the amount of any unpaid readjustment 
allowance shall be paid in accordance with the provisions of section 
5582(b) of Title 5. For purposes of the Internal Revenue Code of 1954, a 
volunteer shall be deemed to be paid and to receive each amount of a 
readjustment allowance to which he is entitled after December 31, 1964, 
when such amount is transferred from funds made available under this 
chapter to the fund from which such readjustment allowance is payable.

                                * * * * *

    Sec. 6 Peace Corps Volunteer Leaders; number; applicability of 
chapter; benefits [Peace Corps Act (75 Stat. 615), as amended by sec. 3, 
Act of December 13, 1963 (P.L. 88-200, 77 Stat. 360)] The President may 
enroll in the Peace Corps qualified citizens or nationals of the United 
States whose services are required for supervisory or other special 
duties or responsibilities in connection with programs under this 
chapter (referred to in this Act as ``volunteer leaders''). The ratio of 
the total number of volunteer leaders to the total number of volunteers 
in service at any one time shall not exceed one to twenty-five. Except 
as otherwise provided in this Act, all of the provisions of this Act 
applicable to volunteers shall be applicable to volunteer leaders, and 
the term ``volunteers'' shall include ``volunteer leaders'': Provided, 
however, That--
    (1) Volunteer leaders shall be entitled to receive a readjustment 
allowance at a rate not to exceed $125 for each month of satisfactory 
service as determined by the President;

[T.D. 6654, 28 FR 5252, May 28, 1963, as amended by T.D. 7493, 42 FR 
33729, July 1, 1977]