[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)(17)-1]

[Page 210-211]
 
                       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)(17)-1  Remuneration for services performed on a boat 
engaged in catching fish.

    (a) Remuneration for services performed on or after December 31, 
1954, by an individual on a boat engaged in catching fish or other forms 
of aquatic animal life (hereinafter ``fish'') is excepted from wages and 
hence is not subject to withholding if--
    (1) The individual receives a share of the boat's (or boats' for a 
fishing operation involved more than one boat) catch of fish or a share 
of the proceeds from the sale of the catch,
    (2) The amount of the individual's share depends solely on the 
amount of the boat's (or boats' for a fishing operation involving more 
than one boat) catch of fish,
    (3) The individual does not receive, and is not entitled to receive, 
any cash remuneration, other than remuneration that is described in 
subparagraph (1) of this paragraph, and
    (4) The crew of the boat (or of each boat from which the individual 
receives a share of the catch) normally is made up of fewer than 10 
individuals.
    (b) The requirement of paragraph (a)(2) of this section is not 
satisfied if there exists an agreement with the boat's (or boats') owner 
or operator by which the individual's remuneration is determined 
partially or fully by a factor not dependent on the size of the catch. 
For example, if a boat is operated under a remuneration arrangement, 
e.g., a union contract, which specifies that crew members, in addition 
to receiving a share of the catch, are entitled to an hourly wage for 
repairing nets, regardless of whether this wage is actually paid, then 
all the crew members covered by the arrangement are entitled to receive 
cash remuneration other than as a share of the catch and are not 
excepted from employment by section 3121(b)(20).
    (c) The operating crew of a boat includes all persons on the boat 
(including the captain) who receive any form of remuneration in exchange 
for services rendered while on a boat engaged

[[Page 211]]

in catching fish. See Sec. 1.6050A-1 for reporting requirements for the 
operator of a boat engaged in catching fish with respect to individuals 
performing services described in this section.
    (d) During the same return period, service performed by a crew 
member may be excepted from employment by section 3121(b)(20) and this 
section for one voyage and not so excepted on a subsequent voyage on the 
same or on a different boat.

[T.D. 7716, 45 FR 57124, Aug. 27, 1980]