Internal Revenue Code
Sec. 3406. Backup withholding
(b) Reportable payment, etc.
For purposes of this
section - (1) Reportable payment
The term "reportable
payment" means - (A)
any reportable interest or dividend
payment, and (B) any other
reportable
payment.
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The reportable interest and
dividend payments are omitted from this examination because we are only
interested in how
this law affects our compensation for
labor.
Internal Revenue Code
Sec. 3406. Backup withholding
(b) Reportable payment, etc.
(3) Other reportable payment
The term "other reportable
payment" means any payment
of a kind, and to
a payee, required to be
shown on a return required under - (A) section
6041 (relating to certain information at source), (B) section 6041A(a)
(relating to payments of remuneration for services), (C) section 6045
(relating to returns of brokers), (D) section 6050A (relating to
reporting requirements of certain fishing boat operators), but only to
the extent such payment is in money and represents a share of the
proceeds of the catch, or (E) section 6050N (relating to payments of
royalties).
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The term "other reportable payment"
means any "payment
of a kind" "required
to be shown on a return." Does this section (3406) tell us
what "kind"
of payment is a "payment
of a kind" required to be shown on a return?
That means we will have to
look at sections 6041, 6041A and their regulations to see what kinds of
payments are "payments
of a kind" required to be reported. The pages that do that
will follow shortly in this chapter.
The chain of meanings thus
far is:
- Reportable payment
means:
- Other reportable
payment which means:
- Payment of a kind
required to be shown on a return which means:
- A payment required to be shown under section 6041
and/or;
- A payment required to be shown under section 6041A(a).
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Treasury Regulations
Sec. 31.3406(b)(3)-1 Reportable
payments of rents, commissions,
nonemployee compensation, etc.
(a) Section 6041 and 6041A(a)
payments subject to backup withholding.
A payment of a kind,
and to a payee, that is required to
be reported
under section 6041 (relating to information reporting of rents,
commissions, nonemployee compensation, etc.) or a payment that is
required to be reported under section 6041A(a) (relating to
information
reporting of payments to nonemployees for services) is a reportable
payment for purposes of section 3406.
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- Any particular payment that is NOT required to be
reported under section 6041 is NOT "a payment of a kind"
that is a "reportable
payment".
- Any particular payment that is NOT required to be
reported under section
6041A(a) is NOT "a
payment of a kind" that is a "reportable
payment".
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Treasury Regulations
Sec. 31.3406(b)(3)-1 Reportable
payments of rents, commissions,
nonemployee compensation, etc.
(b) Amount subject to backup
withholding--(1) In general. The
amount of
a payment described in paragraph (a) of this section subject to
withholding under section 3406 is the amount subject to reporting
under
section 6041 or section 6041A(a).
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The only payments subject to
backup withholding are the following payments:
- A payment required to be reported under section 6041
- A payment required to be reported under section
6041A(a)
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Internal Revenue Code
Sec. 3406. Backup withholding
(6) Other reportable payments include
payments described in section
6041(a) or 6041A(a) only where aggregate for calendar year is $600 or
more
Any payment of a kind required to be shown on
a return required under
section 6041(a) or 6041A(a) which is made during any calendar
year shall be treated as a reportable
payment only if - [such payment meets the criteria omitted.]
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"Payments of a kind"
required to be shown on a return (once we actually know what "kind" of
payments those are) are only treated as a reportable payment if such
payments meet the criteria omitted as not important to the purpose of
this web
page. We have been told three times on this page and once on the
prior page that sections 6041 &
6041A are
where we find out what "kinds" of
payments are "payments
of a kind" required to be shown on an information return and
subject to backup withholding.
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