[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: 26CFR31.6205-2]

[Page 370-371]
 
                       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 G_Administrative Provisions of Special Application to Employment 
Taxes (Selected Provisions of Subtitle F, Internal Revenue Code of 1954)
 
Sec. 31.6205-2  Adjustments of underpayments of hospital insurance 

taxes that accrue after March 31, 1986, and before January 1, 1987, 
with respect to wages of State and local government employees.

    (a) Adjustments without interest. A State or local government 
employer who makes, or has made, an undercollection or underpayment of 
the hospital insurance taxes imposed by sections 3101(b) and 3111(b) 
that--

[[Page 371]]

    (1) Are required to be paid by reason of section 3121(u)(2), and
    (2) Are required to be reported on returns due July 31, 1986, 
October 31, 1986, or February 2, 1987.

may make an adjustment without interest with respect to such taxes 
provided that all such taxes for the time period specified in paragraph 
(a)(2) (except for amounts that are subsequently paid pursuant to an 
interest-free adjustment under Sec. 31.6205-1) are paid on or before 
February 2, 1987.
    (b) Example. The application of the provisions of this section are 
illustrated by the following example:

    Example. A State or local government employer should have withheld 
and paid $100 dollars in hospital insurance taxes for the quarter 
beginning April 1, 1986, and ending June 30, 1986. The due date for the 
return and payment for that period is July 31, 1986. If the employer 
made the payment by February 2, 1987, then, under section 6601, interest 
is not assessable with respect to the underpayment of the hospital 
insurance taxes. If the employer did not make the payment by February 2, 
1987, the interest is assessable for the period from July 31, 1986, 
until the time of payment.

[T.D. 8156, 52 FR 33582, Sept. 4, 1987]