[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: 26CFR31.3406(a)-2]

[Page 264]
 
                       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. 31.3406(a)-2  Definition of payors obligated to backup withhold.

    (a) In general. Payor means the person that is required to make an 
information return under section 6041, 6041A(a), 6042, 6044, 6045, 6049, 
6050A, or 6050N, with respect to any reportable payment (as described in 
section 3406(b)), or that is described in paragraph (b) of this section.
    (b) Persons treated as payors. The following persons are treated as 
payors for purposes of section 3406--
    (1) A grantor trust established after December 31, 1995, all of 
which is owned by two or more grantors (treating for this purpose 
spouses filing a joint return as one grantor);
    (2) A grantor trust with ten or more grantors established on or 
after January 1, 1984 but before January 1, 1996;
    (3) A common trust fund; and
    (4) A partnership or an S corporation that makes a reportable 
payment.
    (c) Persons not treated as payors. A person on the following list is 
not treated as a payor for purposes of section 3406 if the person does 
not have a reporting obligation under the section on information 
reporting to which the payment relates--
    (1) A trust (other than a grantor trust as described in paragraph 
(b)(1) or (2) of this section) that files a Form 1041 containing 
information required to be shown on an information return, including 
amounts withheld under section 3406; or
    (2) A partnership making a payment of a distributive share or an S 
corporation making a similar distribution.
    (d) Effective date. The provisions of this section apply to payments 
made after December 31, 2002.

[T.D. 9010, 67 FR 48759, July 26, 2002]