UNITED STATES CODE ANNOTATED

TITLE 2.  THE CONGRESS

CHAPTER 4  -- OFFICERS  AND EMPLOYEES  OF  SENATE  AND  HOUSE  OF
REPRESENTATIVES

Current through P.L. 104-194, approved 9-9-96

Sec. 60c-3.  Withholding and  remittance of  State income  tax by
Secretary of Senate

(a) Agreement  by  Secretary  with  appropriate  State  official;
covered individuals

     Whenever  --

     (1) the  law of  any State provides for the collection of an
income tax  by imposing  upon employers  generally  the  duty  of
withholding sums from the compensation of employees and remitting
such sums to the authorities of such State;  and

     (2) such  duty to withhold is imposed generally with respect
to the compensation of employees who are residents of such State;
then the  Secretary of  the Senate  is authorized,  in accordance
with the  provisions of  this section, to enter into an agreement
with the  appropriate official  of that  State to provide for the
withholding and remittance of sums for individuals  --

     (A) whose pay is disbursed by the Secretary;  and

     (B) who  request the Secretary to make such withholdings for
remittance to that State.

(b) Number of remittances authorized

     Any agreement  entered into  under subsection  (a)  of  this
section shall  not require  the Secretary to remit such sums more
often than once each calendar quarter.

(c) Requests  by individuals  of Secretary  for  withholding  and
remittance;  amount of withholding;  number and effective date of
requests;   change of  designated State;   revocation of request;
rules and regulations

     (1) An  individual whose  pay is  disbursed by the Secretary
may request  the Secretary  to withhold  sums from  his  pay  for
remittance to  the appropriate  authorities of  the State that he
designates.   Amounts of withholdings shall be made in accordance
with those  provisions of  the law  of  that  State  which  apply
generally to withholding by employers.

     (2) An  individual may  have in  effect at any time only one
request for  withholdings, and he may not have more than two such
requests in  effect with  respect to  different States during any
one calendar  year.  The request for withholdings is effective on
the first  day of  the first  month commencing  after the  day on


                 Qualified State Tax References:
                          Page 1 of 148


which the  request is  received in  the Disbursing  Office of the
Senate, except that  --

     (A) when the Secretary first enters into an agreement with a
State, a request for withholdings shall be effective on such date
as the Secretary may determine;  and

     (B) when  an individual  first receives  an appointment, the
request shall  be effective  on the  day of  appointment, if  the
individual makes the request at the time of appointment.

     (3) An individual may change the State designated by him for
the purposes  of having  withholdings made  and request  that the
withholdings be  remitted in  accordance with such change, and he
may also  revoke his request for withholdings.  Any change in the
State designated  or revocation  is effective on the first day of
the first month commencing after the day on which the request for
change or the revocation is received in the Disbursing Office.

     (4)  The   Secretary  is   authorized  to  issue  rules  and
regulations  he   considers  appropriate  in  carrying  out  this
subsection.

(d) Time or times of agreements by Secretary

     The Secretary may enter into agreements under subsection (a)
of  this   section  at   such  time  or  times  as  he  considers
appropriate.

(e) Provisions  as not  imposing  duty,  burden,  requirement  or
penalty on  the United States, Senate, or any officer or employee
of United States;  effect of filing paper, form, or document with
Secretary

     This section  imposes no  duty, burden,  or requirement upon
the United  States, the Senate, or any officer or employee of the
United States,  except as  specifically provided in this section.
Nothing in  this section  shall  be  deemed  to  consent  to  the
application of  any provision  of law  which has  the  effect  of
subjecting the  United States,  the Senate,  or  any  officer  or
employee of  the United  States to  any penalty  or liability  by
reason of  the provisions  of this  section.  Any paper, form, or
document filed  with the  Secretary under this section is a paper
of the  Senate within  the provisions of rule XXX of the Standing
Rules of the Senate.

(f) "State" defined

     For the  purposes of  this section, "State" means any of the
States of the United States and the District of Columbia.

CREDIT(S)

1985 Main Volume

(P.L. 93-371, Sec. 101(2), Aug. 13, 1974, 88 Stat. 427.)



                 Qualified State Tax References:
                          Page 2 of 148


HISTORICAL NOTES

HISTORICAL AND STATUTORY NOTES

References in Text

     The Standing  Rules of  the Senate,  referred to  in subsec.
(e), were  revised generally  in 1979.   Provisions  relating  to
withdrawal of  papers from  the files  of the  Senate which  were
formerly contained  in Rule  XXX of  the Standing  Rules  of  the
Senate are  contained in  Rule XI  of the  Standing Rules  of the
Senate.

REFERENCES

CROSS REFERENCES

Withholding of  District of  Columbia and  State income  taxes by
Clerk and Sergeant at Arms of the House of Representatives, see 2
USCA 60e-1a.

Withholding of  District  of  Columbia  and  State  income  taxes
generally, see 5 USCA 5516 and 5517.

Withholding of  State income  taxes by  Architect of the Capitol,
see 40 USCA 166b-5.

2 USCA  60c-3, Withholding  and remittance of State income tax by
Secretary of Senate

------------ Excerpt from pages 30758-30759


UNITED STATES CODE ANNOTATED

TITLE 2.  THE CONGRESS

CHAPTER 4  -- OFFICERS  AND EMPLOYEES  OF  SENATE  AND  HOUSE  OF
REPRESENTATIVES

Current through P.L. 104-194, approved 9-9-96

Sec.  60e-1a.   Withholding  of   State  income   tax  by   Chief
Administrative Officer of the House

(a) Agreement with proper State official;  covered individuals

     Until otherwise  provided by  law, the  Chief Administrative
Officer of the House of Representatives shall, in accordance with
subsections (b),  (c), and  (d) of  this section  enter  into  an
agreement with  any State,  at the request for agreement from the
proper State  official.   The agreement  shall provide  that  the
Chief Administrative  Officer shall  withhold State income tax in
the case  of each  Member and  employee who  is subject  to  such
income tax and who voluntarily requests such withholding.

(b) Number of remittances authorized


                 Qualified State Tax References:
                          Page 3 of 148


     Any agreement  entered into  under subsection  (a)  of  this
section shall  not require  the Chief  Administrative Officer  to
remit sums  withheld pursuant  to any  such agreement  more often
than once each calendar quarter.

(c) Acceptance  or disapproval of proposed agreement by Committee
on House Administration

     (1) The  Chief Administrative Officer shall, before entering
into any agreement under subsection (a) of this section, transmit
a statement  with  respect  to  the  proposed  agreement  to  the
Committee on House Administration of the House of Representatives
(hereinafter in  this section  and section  60e-1b of  this title
referred to  as the "committee").  Such statement shall set forth
a detailed  description of  the proposed agreement, together with
any other information which the committee may require.

     (2)  If   the  committee   does  not   disapprove,   through
appropriate action,  any proposed  agreement transmitted  to  the
committee under  paragraph (1) no later than ten legislative days
after  receiving   such  proposed   agreement,  then   the  Chief
Administrative Officer  may enter  into such  proposed agreement.
The Chief  Administrative Officer may not enter into any proposed
agreement if  such  proposed  agreement  is  disapproved  by  the
committee under this paragraph.

(d) Number  and  effective  date  of  requests  for  withholding;
change of designated State;  revocation of request

     (1) A Member or employee may have in effect at any time only
one request for withholding under subsection (a) of this section,
and such  Member or  employee may  not have  more than  two  such
requests in  effect with  respect to  different States during any
one calendar  year.   The request for withholding is effective on
the first  day of  the month in which the request is processed by
the Chief  Administrative Officer,  but in no event later than on
the first day of the first month beginning after the day on which
such request  is received  by the  Chief Administrative  Officer,
except that  --

     (A) when  the Chief Administrative Officer first enters into
an agreement with a State under subsection (a) of this section, a
request for  withholding shall  be effective  on such date as the
Chief Administrative Officer may determine;

     (B) when  an individual  first receives an appointment as an
employee,  the   request  shall   be  effective  on  the  day  of
appointment, if  the individual  makes the request at the time of
appointment;  and

     (C) when  an individual  first becomes a Member, the request
shall be  effective on  the day such individual takes the oath of
office as  a Member,  if the individual makes the request at such
time.

     (2) A  Member or employee may change the State designated by


                 Qualified State Tax References:
                          Page 4 of 148


such Member or employee for purposes of having withholdings made,
and may  request that  the withholdings be remitted in accordance
with such  change.   A Member  or employee  also may  revoke  any
request of  such Member  or employee for withholding.  Any change
in the  State designated  or revocation is effective on the first
day of  the month  in which  the request  or  the  revocation  is
processed by  the Chief  Administrative Officer,  but in no event
later than  on the  first day  of the first month beginning after
the day  on which  such request  or revocation is received by the
Chief Administrative Officer.

(e) Provisions  as not  imposing duty,  burden,  requirement,  or
penalty on  United States,  House, or  any officer or employee of
United States;   effect  of filing  paper, form, or document with
Chief Administrative Officer

     This section  and section  60e-1b of  this title  impose  no
duty, burden, or requirement upon the United States, the House of
Representatives, or any officer or employee of the United States,
except as  specifically provided in this section and section 60e-
1b of  this title.  Nothing in this section and section 60e-1b of
this title  shall be  deemed to consent to the application of any
provision of  law which  has the  effect of subjecting the United
States, the  House of Representatives, or any officer or employee
of the United States to any penalty or liability by reason of the
provisions of this section and section 60e-1b of this title.  Any
paper, form, document, or any other item filed with, or submitted
to, the  Chief Administrative  Officer  under  this  section  and
section 60e-1b  of this  title is considered to be a paper of the
House of  Representatives within  the provisions  of the Rules of
the House of Representatives.

CREDIT(S)

1985 Main Volume

(P.L. 94-440, Title II, Sec. 101, Oct. 1, 1976, 90 Stat. 1448.)

1996 Electronic Update

(As amended  P.L. 104-186,  Title II, Sec. 204(4), Aug. 20, 1996,
110 Stat. 1730.)

HISTORICAL NOTES

HISTORICAL AND STATUTORY NOTES

Codification

     Section is  based on  section 1 of House Resolution No. 732,
Ninety-fourth Congress,  Nov. 4,  1975, which  was  enacted  into
permanent law by P.L. 94-440.

Change of Name

     Any reference in any provision of law enacted before Jan. 4,
1995, to  the Committee  on House  Administration of the House of


                 Qualified State Tax References:
                          Page 5 of 148


Representatives treated  as referring  to the  Committee on House
Oversight of the House of Representatives, see section 1(a)(7) of
P.L. 104-14,  set out  as a  note preceding  section 21  of  this
title.

Transfer of Functions

     Any reference in any provision of law enacted before Jan. 4,
1995, to a function, duty, or authority of the Clerk of the House
of Representatives  treated as  referring, with  respect to  that
function, duty,  or authority,  to the  officer of  the House  of
Representatives exercising  that function, duty, or authority, as
determined by  the Committee  on House  Oversight of the House of
Representatives, see  section 2(1)  of P.L.  104-14, set out as a
note preceding section 21 of this title.

     Certain functions  of Clerk and Sergeant at Arms of House of
Representatives transferred  to Director  of Non-legislative  and
Financial Services  by section 7 of House Resolution No. 423, One
Hundred Second  Congress, Apr.  9, 1992.   Any  reference in  any
provision of  law enacted  before Jan.  4, 1995,  to a  function,
duty,  or  authority  of  the  Director  of  Non-legislative  and
Financial Services  treated as  referring, with  respect to  that
function, duty,  or authority,  to the  officer of  the House  of
Representatives exercising  that function, duty, or authority, as
determined by  the Committee  on House  Oversight of the House of
Representatives, see  section 2(4)  of P.L.  104-14, set out as a
note preceding section 21 of this title.

Legislative History

     For legislative  history and  purpose of  P.L. 104-186,  see
1996 U.S. Code Cong. and Adm. News, p. ___.

REFERENCES

CROSS REFERENCES

Definitions for purposes of this section, see 2 USCA 60e-1b.

Withholding of  District of  Columbia and  State income  taxes by
Secretary of the Senate, see 2 USCA 60c-3.

Withholding of  District  of  Columbia  and  State  income  taxes
generally, see 5 USCA 5516 and 5517.

Withholding of  State income  taxes by  Architect of the Capitol,
see 40 USCA 166b-5.

2  USCA   60e-1a,  Withholding  of  State  income  tax  by  Chief
Administrative Officer of the House

------------ Excerpt from pages 30767-30769


UNITED STATES CODE ANNOTATED


                 Qualified State Tax References:
                          Page 6 of 148


TITLE 3.  THE PRESIDENT

CHAPTER 4 -- DELEGATION OF FUNCTIONS

Current through P.L. 104-194, approved 9-9-96

Sec.  301.   General   authorization   to   delegate   functions;
publication of delegations

     The  President   of  the  United  States  is  authorized  to
designate and empower the head of any department or agency in the
executive branch,  or any  official thereof who is required to be
appointed by  and with  the advice  and consent of the Senate, to
perform without  approval, ratification,  or other  action by the
President (1)  any function  which is  vested in the President by
law, or  (2) any  function which  such  officer  is  required  or
authorized by  law  to  perform  only  with  or  subject  to  the
approval,  ratification,   or  other  action  of  the  President:
Provided,  That   nothing  contained  herein  shall  relieve  the
President of  his responsibility  in office  for the  acts of any
such head  or other  official designated  by him  to perform such
functions.   Such  designation  and  authorization  shall  be  in
writing, shall  be published  in the  Federal Register,  shall be
subject  to  such  terms,  conditions,  and  limitations  as  the
President may  deem advisable, and shall be revocable at any time
by the President in whole or in part.

CREDIT(S)

1985 Main Volume

(Added Oct. 31, 1951, c. 655, Sec. 10, 65 Stat. 712.)

[General Materials (GM) - References, Annotations, or Tables]

HISTORICAL NOTES

HISTORICAL AND STATUTORY NOTES

Transfer of Functions

     All functions  vested by law (including reorganization plan)
in the  Bureau of the Budget or the Director of the Bureau of the
Budget were  transferred to the President of the United States by
section 101 of 1970 Reorg. Plan No. 2, eff. July 1, 1970, 35 F.R.
7959, 84  Stat. 2085.   Section  102 of  1970 Reorg. Plan. No. 2,
redesignated the Bureau of the Budget as the Office of Management
and Budget  and the  Director of  the Bureau  of  the  Budget  as
Director  of   the  Office   of  Management   and  Budget.    See
Reorganization Plan No. 2 of 1970, set out in Appendix 1 to Title
5, Government Organization and Employees.

Similar Provisions;  Repeal;  Savings Clause

     For similar  provisions contained  in prior  law, and saving
clause in connection therewith, see note preceding this section.



                 Qualified State Tax References:
                          Page 7 of 148


Standards  of   Ethical  Conduct   and  Comprehensive  System  of
Financial Reporting  for Officers  and Employees in the Executive
Branch

     For provisions  relating to standards of ethical conduct for
government officers  and employees, including financial reporting
requirements for  such persons,  see Ex.  Ord. No.  11222, May 8,
1965, 30  F.R. 6469,  as amended, set out as a note under section
201 of Title 18, Crimes and Criminal Procedure.

Abolition of  Interstate  Commerce  Commission  and  Transfer  of
Functions

     Interstate Commerce  Commission abolished  and functions  of
Commission transferred, except as otherwise provided in P.L. 104-
88, to  Surface Transportation  Board effective  Jan. 1, 1996, by
section 702  of Title 49, Transportation, and section 101 of P.L.
104-88, set  out as  a  note  under  section  701  of  Title  49.
References to  Interstate Commerce  Commission deemed to refer to
Surface Transportation  Board, a member or employee of the Board,
or Secretary  of Transportation,  as appropriate, see section 205
of P.L. 104-88, set out as a note under section 701 of Title 49.

Legislative History

     For legislative  history and  purpose of  Act Oct. 31, 1951,
see 1951 U.S.Code Cong. Service, p. 2578.

TEXT

EXECUTIVE ORDERS

EXECUTIVE ORDER NO. 10250

June 5,  1951, 16  F.R. 5385,  as amended  by Ex. Ord. No. 10732,
Oct. 10,  1957, 22 F.R. 8135;  Ex. Ord. No. 10752, Feb. 12, 1958,
23 F.R. 973

DELEGATION OF FUNCTIONS TO THE SECRETARY OF THE INTERIOR

     1. The  Secretary of  the Interior  is hereby designated and
empowered to  perform the  following-described functions  of  the
President without  the approval, ratification, or other action of
the President:

     (a) The  authority vested  in the  President by section 1 of
the act of July 10, 1935, ch. 375, 49 Stat. 477 [see sections 19e
to 19n  of Title  16], to  appoint members  of the  National Park
Trust Fund Board.

     (b) The authority vested in the President by section 2059 of
the Revised  Statutes [section 62 of Title 25] to discontinue any
Indian agency,  or transfer  the same,  from the  place or  tribe
designated by  law to  such other  place or  tribe as  the public
service may require.

     (c) The  authority vested  in the  President by section 6 of


                 Qualified State Tax References:
                          Page 8 of 148


the act  of May  17, 1882,  ch. 163,  22  Stat.  88,  as  amended
[section 63  of Title  25], to  consolidate two  or  more  Indian
agencies into  one, to consolidate one or more Indian tribes, and
to abolish such agencies as are thereby rendered unnecessary.

     (d) The  authority vested  in the  President by  the act  of
March 1, 1907, ch. 2285, 34 Stat. 1016 [section 140 of Title 25],
to divert  appropriations made for certain purposes to other uses
for the benefit of the several Indian tribes:  Provided, that the
Secretary of  the Interior  shall make  to the  Congress  reports
required in  connection with  action  taken  by  him  under  this
provision.

     (e) The  authority vested  in the  President by section 5 of
the act  of February  8, 1887,  ch. 119, 24 Stat. 389, as amended
[section 348  of Title  25], by the act of December 24, 1942, ch.
814, 56  Stat. 1081,  [section 348a  of Title  25], by the act of
June 21,  1906, ch. 3504, 34 Stat. 326 [section 391 of Title 25],
and by section 3 of the act of January 12, 1891, 26 Stat. 712, as
amended by  section 3  of the  act of  March 2, 1917, ch. 146, 39
Stat. 976,  to extend  trust periods  on land  patents issued  to
Indians and to continue restrictions on alienation.

     (f) The authority vested in the President by section 4705(b)
of the  Internal Revenue  Code of 1954 [former section 4705(b) of
Title 26]  to authorize  certain persons in the Virgin Islands to
obtain certain  drugs for  legitimate  medical  purposes  without
regard to  order forms,  and by  section  4762(b)  of  such  Code
[former section 4762 of Title 26] to provide for the registration
of and  the imposition of special and transfer taxes upon persons
in the Virgin Islands who import, manufacture, produce, compound,
sell, deal  in, dispense,  prescribe, administer,  or  give  away
marihuana:   Provided, that  the Secretary  of the Interior shall
perform  the   functions  referred   to  in  this  subsection  in
consultation with the Department of the Treasury.

     (g) The authority vested in the President by section 2343 of
the Revised  Statutes [section  46  of  Title  30]  to  establish
additional land districts and to appoint necessary officers under
existing laws when deemed necessary for the public convenience in
executing certain provisions of law with respect to mineral lands
and mining.

     (h) The authority vested in the President by section 2252 of
the Revised Statutes as affected by section 403 of Reorganization
Plan No.  3 of  1946, 60 Stat. 1100 [section 121 of Title 43], to
order the  discontinuance of  any land office and the transfer of
any of  its business and archives to any other land office within
the same State or Territory.

     (i) The authority vested in the President by section 2250 of
the Revised  Statutes [section  125 of Title 43] to discontinue a
land office in a land district under certain circumstances and to
annex the same to some other adjoining land district.

     (j) The authority vested in the President by section 2251 of
the Revised  Statutes [section  126 of  Title 43]  to change  the


                 Qualified State Tax References:
                          Page 9 of 148


location of  the land  offices  in  the  several  land  districts
established by  law and to relocate the same from time to time at
such point in the district as may be deemed expedient.

     (k) The authority vested in the President by section 2253 of
the Revised  Statutes [section 127 of Title 43] to change and re-
establish the boundaries of land districts.

     (l) The  authority vested  in the  President by section 2 of
the act  of March  2, 1917,  ch. 145,  39 Stat.  951, as  amended
[section 737  of Title  48], to  approve the  payment out  of the
Treasury for  other purposes of money derived from any tax levied
or assessed for a special purpose in Puerto Rico.

     (m) The  authority vested  in the  President by section 7 of
the act  of March  2, 1917,  ch. 145,  39 Stat.  954;  as amended
[section 748 of Title 48], to convey to the people of Puerto Rico
lands, buildings,  or interests in lands, or other property owned
by the  United States,  and to  accept lands, buildings, or other
interests or property by legislative grant from Puerto Rico.

     (n) The authority vested in the President by section 3(b) of
the Act of March 3, 1925, ch. 426, 43 Stat. 1111, as amended [see
section 167d  of Title  50], to approve regulations governing the
production and  sale  of  helium  for  medical,  scientific,  and
commercial use.

     (o) The  authority vested  in the  President by section 6 of
the act of April 26, 1906, ch. 1876, 34 Stat. 139, to remove from
office the  principal chief  of the  Choctaw, Cherokee, Creek, or
Seminole tribe or the governor of the Chickasaw tribe, to declare
any such  office vacant,  and to  fill any  vacancy in  any  such
office  arising   from  removal,  disability,  or  death  of  the
incumbent.

     (p) The  authority vested  in the President by section 28 of
the act  of April  26, 1906,  ch. 1876,  34 Stat. 148, to approve
acts,  ordinances,  or  resolutions  of  the  tribal  council  or
legislature of  the  Choctaw,  Chickasaw,  Cherokee,  Creek,  and
Seminole tribes  or nations,  and to approve contracts, involving
the  payment  or  expenditure  of  money  or  affecting  property
belonging to  any of  the said tribes or nations, made by them or
any of them or by any officer thereof.

     (q) [Superseded by section 3 of Ex. Ord. No. 10752, Feb. 12,
1958, 23  F.R. 973, set out as a note under section 715j of Title
15, Commerce and Trade].

     (r) The  authority vested  in the President by section 55 of
the act  of April 30, 1900, 31 Stat. 150, as amended [section 562
of Title  48] and  by section 4 of the act of August 24, 1954, 68
Stat. 785,  as amended  [former section  562o of  Title  48],  to
approve  the   issuance  of   bonds  or   other  instruments   of
indebtedness by the Territory of Hawaii.

     2. The  Secretary of  the Interior  is hereby designated and
empowered to  perform, without  the  approval,  ratification,  or


                 Qualified State Tax References:
                          Page 10 of 148


other action of the President, the following functions which have
heretofore,  under   the  respective  provisions  of  law  cited,
required the  approval, ratification,  or  other  action  of  the
President in  connection with  their performance by the Secretary
of the Interior:

     (a) The authority vested in the Secretary of the Interior by
section 1  of the  act of  June 6,  1942, ch.  330, 56  Stat. 326
[section 459r  of Title  16], to convey or lease to the States or
to the  political subdivisions  thereof any  or  all  of  certain
recreational  demonstration  projects  and  lands  and  equipment
comprised within  such projects  or any  parts of  such projects;
and to  transfer to  other  Federal  agencies  any  of  the  said
recreational demonstration  areas that  may be  of  use  to  such
agencies.

     (b) The authority vested in the Secretary of the Interior by
section 3  of the  act of July 3, 1918, ch. 128, 40 Stat. 755, as
amended, and  as affected  by section 4(f) of Reorganization Plan
No. II,  effective July  1, 1939,  53 Stat.  1433 [section 704 of
Title 16], to promulgate regulations permitting and governing the
hunting, taking,  capture, killing,  possession, sale,  purchase,
shipment, transportation,  carriage, or  export of  any migratory
bird included  in the  terms of certain conventions, or any part,
nest, or egg thereof.

     3. As  used in  this order,  the term  "functions"  embraces
duties, powers,  responsibilities, authority,  or discretion, and
the term "perform" may be construed to mean "exercise".

     4. All  actions heretofore taken by the President in respect
of the matters affected by this order and in force at the time of
the issuance  of this  order, including regulations prescribed by
the President  in respect  of such matters, shall, except as they
may be  inconsistent with the provisions of this order, remain in
effect until  modified  or  revoked  pursuant  to  the  authority
conferred by this order.

     5. The  Secretary of  the Interior  is hereby  authorized to
redelegate to  the Under  Secretary of  the Interior  any of  the
authority delegated to the Secretary of the Interior by section 1
of this order.

EXECUTIVE ORDER NO. 10289

Sept. 17,  1951, 16  F.R. 9499, as amended by Ex. Ord. No. 10583,
Dec. 20,  1954, 19 F.R. 8725;  Ex. Ord. No. 10882, July 18, 1960,
25 F.R.  6869;   Ex. Ord.  No. 11110, June 4, 1963, 28 F.R. 5605;
Ex. Ord.  No. 11825,  Dec. 31,  1974, 40 F.R. 1003;  Ex. Ord. No.
12608, Sept. 9, 1987, 52 F.R. 34617

DELEGATION OF FUNCTIONS TO SECRETARY OF THE TREASURY

     1. The  Secretary of  the Treasury  is hereby designated and
empowered to  perform the  following-described functions  of  the
President without  the approval, ratification, or other action of
the President:


                 Qualified State Tax References:
                          Page 11 of 148


     (a) The  authority vested  in the  President by section 1 of
the act  of August 1, 1914, c. 223, 38 Stat. 609, 623, as amended
[section 2  of Title  19], (1)  to rearrange, by consolidation or
otherwise,  the  several  customs-collection  districts,  (2)  to
discontinue  ports   of  entry   by  abolishing   the  same   and
establishing others  in their  stead, and (3) to change from time
to  time  the  location  of  the  headquarters  in  any  customs-
collection district as the needs of the service may require.

     (b) The  authority vested  in the  President by section 1 of
the Anti-Smuggling  Act of  August 5,  1935, c. 438, 49 Stat. 517
[section 1701  of Title  19], (1) to find and declare that at any
place or within any area on the high seas adjacent to but outside
customs waters  any vessel or vessels hover or are being kept off
the coast  of the  United States  and  that,  by  virtue  of  the
presence of  any such  vessel or  vessels at such place or within
such area,  the unlawful introduction or removal into or from the
United States  of any  merchandise or person is being, or may be,
occasioned, promoted, or threatened, (2) to find and declare that
certain waters  on the  high seas  are in  such proximity to such
vessel or  vessels that  such unlawful introduction or removal of
merchandise or  persons may  be carried  on by or to or from such
vessel or  vessels, and  (3) to find and declare that, within any
customs-enforcement area, the circumstances no longer exist which
gave  rise  to  the  declaration  of  such  area  as  a  customs-
enforcement area.

     (c) The  authority vested  in the  President by section 1 of
the Act  of August  26, 1985,  Public Law 98-89, 97 Stat. 510 (46
U.S.C. 3101)  [section 3101 of Title 46, Shipping] to suspend the
provisions of  law  requiring  the  inspection  of  foreign-built
vessels admitted to American registry.

     (d) The  authority vested  in the  President by section 5 of
the act  of May  28, 1908,  c. 212,  35 Stat. 425, as amended (46
U.S.C. Appendix  104) [section 104 of Title 46], to determine (as
a prerequisite  to the  extension of reciprocal privileges by the
Commissioner  of   Customs)  that   yachts  used   and   employed
exclusively as  pleasure vessels and belonging to any resident of
the United  States are  allowed to  arrive at and depart from any
foreign port  and to  cruise in  the waters  of such port without
entering or  clearing at the custom-house thereof and without the
payment of  any charges  for entering or clearing, dues, duty per
ton, tonnage taxes, or charges for cruising licenses.

     (e) The  authority vested  in the  President by section 2 of
the act of March 24, 1908, c. 96, 35 Stat. 46 (46 U.S.C. Appendix
134) [section  134 of  Title 46],  to name  the hospital ships to
which section  1 of  the said act shall apply and to indicate the
time when  the exemptions  thereby provided  for shall  begin and
end.

     (f) The authority vested in the President by section 4228 of
the  Revised  Statutes,  as  amended  (46  U.S.C.  Appendix  141)
[section 141  of Title  46], (1)  to  --  declare  that  --  upon
satisfactory proof  being given  by the government of any foreign


                 Qualified State Tax References:
                          Page 12 of 148


nation that  no discriminating  duties of  tonnage or imposts are
imposed or levied in the ports of such nation upon vessels wholly
belonging to  citizens of the United States, or upon the produce,
manufactures, or merchandise imported in the same from the United
States or  from any foreign country -- the foreign discriminating
duties of  tonnage  and  impost  within  the  United  States  are
suspended and  discontinued, so  far as  respects the  vessels of
such  foreign   nation,  and   the  produce,   manufactures,   or
merchandise imported  into the  United States  from such  foreign
nation, or  from any other foreign country, and (2) to suspend in
part the  operation of  section 4219  of the Revised Statutes, as
amended (46  U.S.C. Appendix  121) [section 121 of Title 46], and
section IV, J, subsection 1 of the act of October 3, 1913, c. 16,
38 Stat. 195, as amended (46 U.S.C. Appendix 146) [section 146 of
Title 46],  so that  foreign  vessels  from  a  country  imposing
partial discriminating  tonnage duties  upon American vessels, or
partial discriminating  import duties  upon American merchandise,
may enjoy  in our  ports the  identical privileges which the same
class of  American vessels  and merchandise  may  enjoy  in  such
country:  Provided, that prior to the issuance of an order of the
Secretary of the Treasury suspending and discontinuing (wholly or
in part)  discriminating  tonnage  duties,  imposts,  and  import
duties within  the United  States, the  Department of State shall
obtain and  furnish to  the Secretary  of the  Treasury the proof
required by  the said  section 4228, as amended, as the basis for
that order.

     (g) The authority vested in the President by section 3650 of
the Internal  Revenue Code  [now covered by section 7621 of Title
26],  to  establish  convenient  collection  districts  (for  the
purpose of  assessing, levying, and collecting the taxes provided
by the  internal revenue  laws), and  from time  to time to alter
such districts.

     (h) The  authority which  is now  vested in the President by
section 2564(b)  of the Internal Revenue Code [section 2564(b) of
Title 26  (I.R.C.1939) ], and which on and after January 1, 1955,
will be  vested in  the  President  by  section  4735(b)  of  the
Internal Revenue  Code of  1954  [section  4735(b)  of  Title  26
(I.R.C.1954) ],  to issue,  in accordance  with the provisions of
the said  section 2564(b)  or 4735(b), as the case may be, orders
providing for  the registration  and the  imposition of a special
tax upon  all persons  in the  Canal Zone  who  produce,  import,
compound, deal  in, dispense,  sell,  distribute,  or  give  away
narcotic drugs.

     (i) The authority vested in the President by section 5318 of
the Revised  Statutes, as amended (19 U.S.C. 540) [section 540 of
Title 19,  Customs Duties], to employ suitable vessels other than
Coast Guard  cutters in  the execution  of laws providing for the
collection of duties on imports and tonnage;

     [(j) Revoked.   Ex.  Ord. No.  12608, Sept. 9, 1987, 52 F.R.
34617]

     2. The  Secretary of  the Treasury  is hereby designated and
empowered to perform without the approval, ratification, or other


                 Qualified State Tax References:
                          Page 13 of 148


action of  the  President  the  following  functions  which  have
heretofore,  under   the  respective  provisions  of  law  cited,
required the  approval of  the President in connection with their
performance by the Secretary of the Treasury:

     (a) The authority vested in the Secretary of the Treasury by
section 6  of the  act of  July 8,  1937, c.  444, 50  Stat.  480
[section  728  of  Title  40],  to  make  rules  and  regulations
necessary for  the execution  of  the  functions  vested  in  the
Secretary of the Treasury by the said act, as amended.

     (b), (c)  [Revoked by  Ex. Ord.  No. 11110, June 4, 1963, 28
F.R. 5605.]

     (d) [Revoked  by Ex.  Ord. No. 11825, Dec. 31, 1974, 40 F.R.
1003.]

     (e) The authority vested in the Secretary of the Treasury by
section 1  of Title  II of  the act  of June  15, 1917, c. 30, 40
Stat.  220   [section  191  of  Title  50],  to  make  rules  and
regulations governing  the anchorage  and movement of any vessel,
foreign or  domestic, in  the territorial  waters of  the  United
States.

     [(f) Revoked.   Ex.  Ord. No.  12608, Sept. 9, 1987, 52 F.R.
34617.]

     3. (a)  The Secretary  of the  Treasury and  the  Postmaster
General are  hereby designated and empowered jointly to prescribe
without the  approval of the President regulations, under section
1 of  the act  of July 8, 1937, c. 444, 50 Stat. 479 [section 721
of  Title  40],  governing  the  shipment  of  valuables  by  the
executive  departments,   independent  establishments,  agencies,
wholly-owned corporations,  officers, and employees of the United
States.

     (b)  The   Postmaster  General  [now  United  States  Postal
Service] is  hereby designated  and empowered to exercise without
the approval,  ratification, or other action of the President the
authority vested  in the  President by section 504(b) of Title 18
of the  United States  Code to  approve regulations issued by the
Secretary of the Treasury under the authority of the said section
504(b) (relating  to the printing, publishing, or importation, or
the making  or importation  of  the  necessary  plates  for  such
printing  or   publishing,  of   postage  stamps  for  philatelic
purposes), and  to approve any amendment or repeal of any of such
regulations by the Secretary of the Treasury.

     4. As  used in  this order,  the term  "functions"  embraces
duties, powers,  responsibilities, authority,  or discretion, and
the term "perform" may be construed to mean "exercise".

     5. All  actions heretofore taken by the President in respect
of the matters affected by this order and in force at the time of
the issuance  of this  order, including regulations prescribed by
the President  in respect  of such matters, shall, except as they
may be  inconsistent with the provisions of this order, remain in


                 Qualified State Tax References:
                          Page 14 of 148


effect until  amended,  modified,  or  revoked  pursuant  to  the
authority conferred by this order.

3  USCA   301,  General   authorization  to  delegate  functions;
publication of delegations

------------ Excerpt from pages 32726-32733


     EXECUTIVE ORDER NO. 10637

Sept. 19, 1955, 20 F.R. 7025

DELEGATION OF FUNCTIONS TO SECRETARY OF THE TREASURY

     Section  1.   The  Secretary   of  the  Treasury  is  hereby
designated  and  empowered  to  perform  the  following-described
functions without  the approval, ratification, or other action of
the President:

     (a) The  authority vested in the President by section 149 of
title 14  of the United States Code, in his discretion, to detail
officers and  enlisted men  of the  Coast Guard to assist foreign
governments in matters concerning which the Coast Guard may be of
assistance.

     (b) The  authority vested in the President by section 229 of
title 14  of the  United States  Code to revoke the commission of
any officer  on the  active list  of the  Coast Guard who, at the
date of  such revocation,  has  had  less  than  three  years  of
continuous service  as a commissioned officer in the Coast Guard,
and to prescribe regulations relating to such revocations.

     (c) The  authority vested in the President by section 232 of
title 14  of the United States Code, in his discretion, to retire
from active  service any commissioned officer of the Coast Guard,
upon his  own application,  who has  completed  twenty  years  of
active service  in the  Coast Guard,  Navy, Army,  Air Force,  or
Marine Corps, or the Reserve Components thereof.

     (d) The  authority vested in the President by section 235 of
title 14  of the  United States  Code [see section 251 et seq. of
Title 14],  to retire, to approve the retirement of, to place out
of line  of promotion,  and to approve the placing out of line of
promotion of, officers of the Coast Guard.

     (e) The  authority vested in the President by section 492 of
title 14  of the  United States  Code to  present a distinguished
service medal  (including incidental  items) to  any person  who,
while serving in any capacity with the Coast Guard, distinguishes
himself by exceptionally meritorious service to the Government in
a duty of great responsibility.

     (f) The  authority vested in the President by section 493 of
title 14  of the  United States  Code to  present the Coast Guard
medal (including  incidental items)  to  any  person  who,  while
serving in  any capacity  with  the  Coast  Guard,  distinguishes


                 Qualified State Tax References:
                          Page 15 of 148


himself by heroism not involving actual conflict with an enemy.

     (g) The  authority vested in the President by section 494 of
title 14  of the  United States  Code to award emblems, insignia,
rosettes, and  other devices,  to the  extent that such authority
relates to  the awarding  of such  items  to  be  worn  with  the
distinguished service medal or the Coast Guard medal.

     (h) The  authority vested in the President by section 498 of
title 14  of the  United States Code to make posthumous awards of
decorations and  to designate  representatives  to  receive  such
awards, to the extent that such authority relates to the awarding
of the  distinguished service  medal or the Coast Guard medal, or
ribbons,  emblems,   insignia,   rosettes,   or   other   devices
corresponding thereto.

     (i) The  authority vested in the President by section 499 of
title 14  of the  United States  Code to make rules, regulations,
and orders  to the extent that they shall relate to the authority
described in sections 1(f), 1(g), and 1(h) above.

     (j) The  authority vested  in the  President  by  the  first
paragraph of  section 806  of the  act of  September 8, 1916, ch.
463, 39  Stat. 799  [section 77  of  Title  15],  to  direct  the
detention of  any vessel,  American or  foreign,  by  withholding
clearance or  by formal  notice forbidding  departure;   but such
authority shall  be exercised  by the  Secretary of  the Treasury
only upon  a finding  by the  President that  there is reasonable
ground to  believe that  the vessel concerned is making or giving
undue or unreasonable preference or advantage to any party, or is
subjecting  any   party  to   undue  or  unreasonable  prejudice,
disadvantage, injury, or discrimination, as described in the said
paragraph;   and the  authority so  vested to  revoke, modify, or
renew any such direction.

     (k) The  authority vested  in the  President by  the  second
paragraph of the said section 806 of the act of September 8, 1916
[section 77  of Title 15], to withhold clearance from one or more
vessels  of  a  belligerent  country  or  government  until  such
belligerent  shall  restore  to  American  vessels  and  American
citizens reciprocal  liberty of commerce and equal facilities for
trade, and  the authority  to direct  that similar privileges and
facilities, if  any, enjoyed  by vessels  and  citizens  of  such
belligerent in the United States or its possessions be refused to
vessels or  citizens of  such belligerent;   but  such  authority
shall not,  in either  instance, be exercised by the Secretary of
the Treasury  with respect  to any  vessel  or  citizen  of  such
belligerent unless  and until  the President  proclaims that  the
belligerent nation concerned is denying privileges and facilities
to American vessels as described in the said paragraph.

     (l) The  authority vested in the President by section 963(a)
of title  18 of  the United  States Code to detain, in accordance
with the  provisions of  such section,  any armed  vessel, or any
vessel, domestic or foreign (other than one which has entered the
ports of  the  United  States  as  a  public  vessel),  which  is
manifestly built  for warlike  purposes or  has been converted or


                 Qualified State Tax References:
                          Page 16 of 148


adapted from  a private  vessel to  one suitable for warlike use,
and to  determine, in  each case,  whether the  proof required by
such section is satisfactory.

     (m) The  authority vested in the President by section 967(a)
of title  18 of the United States Code, during a war in which the
United States  is a neutral nation, to withhold clearance from or
to any  vessel, domestic  or foreign,  or, by  service of  formal
notice upon  the owner, master, or person in command or in charge
of any  domestic vessel not required to secure clearances, and to
forbid its  departure  from  port  or  from  the  United  States,
whenever there is reasonable cause to believe that such vessel is
about to carry fuel, arms, ammunition, men, supplies, dispatches,
or information  to any  warship, tender,  or  supply  ship  of  a
foreign belligerent nation in violation of the laws, treaties, or
obligations of the United States under the law of nations.

     (n) The  authority vested  in the President by section 10(a)
of the act of November 4, 1939, ch. 2, 54 Stat. 9 [section 450(a)
of Title  22], to require the owner, master, or person in command
of a vessel to give a bond to the United States, as prescribed by
the said section 10(a).

     (o) The  authority vested  in the President by section 10(b)
of the act of November 4, 1939, ch. 2, 54 Stat. 9 [section 450(b)
of Title  22], to  prohibit the departure of a vessel from a port
of the  United States,  in accordance  with the provisions of the
said section 10(b).

     (p) The  authority vested  in the  President by section 2 of
the act of August 18, 1914, ch. 256, 38 Stat. 699 [section 236 of
Title 46],  to suspend,  in his  discretion, by order, so far and
for such  length of time as he may deem desirable, the provisions
of law  prescribing that  all watch  officers of  vessels of  the
United States  registered for  foreign trade shall be citizens of
the United States.

     (q) The  authority vested  in the  President by section 2 of
the act of October 17, 1940, ch. 896, 54 Stat. 1201 [section 643b
of Title  46], to  extend, whenever  in his judgment the national
interest requires,  the provisions  of subsection  (b) of section
4551.  Revised Statutes, as amended [section 643(b) of Title 46],
to such additional class or classes of vessels and to such waters
as he may designate.

     (r) The authority vested in the Secretary of the Treasury by
the first  paragraph of  section 1 of Title II of the act of June
15, 1917,  ch. 30, 40 Stat. 220, as amended [section 191 of Title
50], during  a national  emergency proclaimed  as provided in the
said paragraph,  (1) to  make rules and regulations governing the
anchorage and movement of any vessel, foreign or domestic, in the
territorial waters  of the  United States,  and (2)  to take full
possession and  control of such vessel for the purposes set forth
in the said paragraph.

     (s) The  authority vested  in the  President by section 6 of
the act  of July 24, 1941, ch. 320, 55 Stat. 604, as amended [see


                 Qualified State Tax References:
                          Page 17 of 148


note set  out under  section 5501  of Title 10, Armed Forces], to
make appointments  of officers below flag rank without the advice
and consent  of the  Senate, to  the extent  that such  authority
relates, pursuant  to section  11(b) of  the said act, as amended
[see section  5787 of Title 10, Armed Forces], to officers of the
United States Coast Guard.

     Sec. 2.  The Secretary  of the Treasury is hereby designated
and empowered  to perform  without the approval, ratification, or
other action  of the  President the following described functions
to the extent that they relate to the United States Coast Guard:

     (a) The authority vested in the President by Article 4(a) of
the Uniform Code of Military Justice (section 1 of the act of May
5, 1950,  ch. 169,  64 Stat.  110) [see  section 804 of Title 10,
Armed Forces],  to convene  a general  court-martial to  try  any
dismissed officer,  upon application by the officer concerned for
trial by court-martial.

     (b) The  authority vested  in the President by Articles 4(c)
and 75  of the  Uniform Code  of Military  Justice (64 Stat. 110,
132) [see  sections 804  and 875  of Title  10, Armed Forces], to
reappoint a  discharged officer  to such  commissioned  rank  and
precedence as  the former  officer would have attained had he not
been dismissed,  and to  direct the  extent  to  which  any  such
reappointment  shall   affect  the   promotion  status  of  other
officers.

     (c) The  authority vested  in the President by section 10 of
the act  of May 5, 1950, ch. 169, 64 Stat. 146 [see sections 1161
and 6408  of Title  10, Armed Forces], to drop from the rolls any
officer who  has been  absent without authority from his place of
duty for  a period  of three  months or more, or who, having been
found guilty  by the civil authorities of any offense, is finally
sentenced to  confinement in  a Federal  or State penitentiary or
correctional institution.

     (d) The  authority vested in the President by section 219 of
the Armed  Forces Reserve  Act, approved  July 9,  1952 (66 Stat.
487) [see  section 593  of  Title  10,  Armed  Forces],  to  make
appointments  of  Reserves  in  commissioned  grades  below  flag
officer grades.

     (e) The  authority vested in the President by section 221 of
the said  Armed Forces  Reserve Act [see section 593 of Title 10,
Armed Forces],  to determine the tenure in office of commissioned
officers of the reserve.

     (f) The  authority vested in the President by section 248 of
the said  Armed Forces Reserve Act [see section 1162 of Title 10,
Armed Forces],  to effect  the discharge of commissioned officers
of the reserve.

     (g) The  authority vested  in the  President by section 6 of
the act  of February  21, 1946,  ch. 34, 60 Stat. 27 [see section
6323 of  Title 10, Armed Forces], as made applicable to the Coast
Guard Reserve  by section 755(a) of title 14 of the United States


                 Qualified State Tax References:
                          Page 18 of 148


Code, in  his discretion,  to place  upon the  retired  list  any
officer of the Coast Guard Reserve, upon his own application, who
has completed  more  than  twenty  years  of  active  service  as
described in the said section 6.

     Sec. 3.  All actions  heretofore taken by the President with
respect to the matters affected by this order and in force at the
time  of  issuance  of  this  order,  including  any  regulations
prescribed or  approved by  the President  with respect  to  such
matters, shall,  except as  they may  be  inconsistent  with  the
provisions  of  this  order,  remain  in  effect  until  amended,
modified, or  revoked pursuant to the authority conferred by this
order.

     Sec. 4. As used in this order, the term "functions" embraces
duties, powers,  responsibilities, authority,  or discretion, and
the term "perform" may be construed to mean "exercise".

     Sec. 5.  Whenever the  entire  Coast  Guard  operates  as  a
service in  the Navy,  the references  to the  Secretary  of  the
Treasury in the introductory portions of sections 1 and 2 of this
order shall  be deemed  to be  references to the Secretary of the
Navy.

DWIGHT D. EISENHOWER

3  USCA   301,  General   authorization  to  delegate  functions;
publication of delegations

------------ Excerpt from pages 32737-32741


     EXECUTIVE ORDER NO. 11609

July 22,  1971, 36  F.R. 13747, as amended by Ex. Ord. No. 11713,
Apr. 21, 1973, 38 F.R. 10069;  Ex. Ord. No. 11779, Apr. 22, 1974,
39 F.R.  14185;  Ex. Ord. No. 12107, Dec. 28, 1978, 44 F.R. 1055;
Ex. Ord.  No. 12215,  May 27,  1980, 45 F.R. 36043;  Ex. Ord. No.
12466, Feb. 27, 1984, 49 F.R. 7349;  Ex. Ord. No. 12522, June 24,
1985, 50  F.R. 26337;  Ex. Ord. No. 12608, Sept. 9, 1987, 52 F.R.
34617;  Ex. Ord. No. 12822, Nov. 16, 1992, 57 F.R. 54289.

DELEGATION OF  CERTAIN FUNCTIONS VESTED IN THE PRESIDENT TO OTHER
OFFICERS OF THE GOVERNMENT

     By virtue  of the  authority vested  in me by section 301 of
title 3  of  the  United  States  Code  [this  section],  and  as
President of the United States, it is hereby ordered as follows:

     Section   1.   General   Services   Administration.      The
Administrator  of   General  Service  is  hereby  designated  and
empowered to  exercise, without  the approval,  ratification,  or
other action of the President, the following:

     (1) The  authority of  the President  under 5 U.S.C. 4111(b)
[section  4111(b)   of  Title   5,  Government  Organization  and
Employees] to prescribe regulations with respect to reductions to


                 Qualified State Tax References:
                          Page 19 of 148


be made  from payments by the Government to employees for travel,
subsistence, or  other expenses  incident to  training in  a non-
Government facility or to attendance at a meeting.

     (2) The  authority of  the President under the last sentence
of 5  U.S.C. 5702(a)  [section 5702(a)  of Title  5] to establish
maximum rates  of per  diem allowances  to the  extent that  such
authority pertains to travel status of employees (as defined in 5
U.S.C. 5701)  [section 5701  of Title 5] while en route to, from,
or between  localities situated  outside the 48 contiguous States
of the United States and the District of Columbia.

     (3) The  authority of  the President  under  5  U.S.C.  5707
[section 5707  of Title 5] to prescribe regulations necessary for
the administration  of subchapter  I of  chapter 57 of title 5 of
the United  States  Code  [section  5701  et  seq.  of  Title  5]
(relating  to   travel  and   subsistence  expenses  and  mileage
allowances).

     (4) The  authority of  the President  under 5 U.S.C. 5722(a)
[section 5722(a)  of  Title  5]  to  prescribe  regulations  with
respect to  the payment  of travel  expenses  and  transportation
expenses of household goods and personal effects.

     (5) The  authority of  the President  under 5 U.S.C. 5723(a)
[section 5723(a)  of  Title  5]  to  prescribe  regulations  with
respect to  the payment  of travel  expenses  and  transportation
expenses.

     (6) The  authority of  the President  under  5  U.S.C.  5724
[section 5724  of Title  5] to prescribe the regulations provided
for therein  (relating to  travel and transportation expenses and
other matters).

     (7)(a) The  authority of  the President under 5 U.S.C. 5724a
[section 5724a  of Title 5] to prescribe the regulations provided
for therein,  relating to  (i) the availability of appropriations
or other  funds of  agencies for  the reimbursement  of described
expenses of  employees for  whom the  Government pays expenses of
travel and transportation under 5 U.S.C. 5724(a) [section 5724(a)
of Title 5], (ii) the entitlement of employees to amounts related
to their basic pay, and (iii) the allowance, payment, and receipt
of expenses  and benefits  to former employees who are reemployed
by nontemporary appointments.

     (b) In  consultation with the Secretary of the Treasury, the
authority of the President under 5 U.S.C. 5724b [section 5724b of
Title 5,  Government Organization and Employees] to prescribe the
regulations provided  for therein  relating to  reimbursement  of
Federal, State, and city income taxes for travel, transportation,
and relocation  expenses of  employees, transferred at Government
expense, furnished  in kind  or for  which  reimbursement  or  an
allowance is provided.

     (c) The  authority of  the President  under 5  U.S.C.  5724c
[section 5724c of Title 5, Government Organization and Employees]
to prescribe  the regulations  provided for  therein pursuant  to


                 Qualified State Tax References:
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which each  agency shall  carry out  its responsibilities under 5
U.S.C.  5724c;     provided,   that  the   Director  of   Central
Intelligence,  after   consultation  with  the  Administrator  of
General  Services,  shall  prescribe  such  regulations  for  the
Central Intelligence Agency.

     (8) The  authority of  the President  under  5  U.S.C.  5726
[section 5726  of Title  5] to prescribe the regulations provided
for therein,  relating to  (i) the definition of "household goods
and  personal  effects",  (ii)  allowable  storage  expenses  and
related transportation,  and (iii)  the allowance of nontemporary
storage expenses  or storage at Government expense in Government-
owned facilities  (including  related  transportation  and  other
expenses).

     (9) The  authority of  the President  under  5  U.S.C.  5727
[section 5727  of Title  5] to prescribe the regulations provided
for therein, relating to the transportation at Government expense
of privately owned motor vehicles.

     (10) The  authority of  the President under 5 U.S.C. 5728(a)
and (b)  [section 5728(a)  and (b)  of Title  5] to prescribe the
regulations provided  for therein,  relating to the payment by an
agency from  its appropriations  of the  expenses of  round  trip
travel of  an employee,  and the  transportation of his immediate
family, in described circumstances.

     (11) The  authority of  the President under 5 U.S.C. 5729(a)
and (b)  [section 5729(a)  and (b)  of Title  5] to prescribe the
regulations provided  for therein, relating to (i) the payment by
an agency from its appropriations of the expenses of transporting
the immediate family of an employee and of shipping his household
goods and  personal effects,  and (ii) the reimbursement from its
appropriations by  an  agency  of  an  employee  for  the  proper
transportation expense  of returning  his  immediate  family  and
household  goods   and  personal   effects,  both   in  described
circumstances.

     (12) The  authority of  the President under 5 U.S.C. 5731(a)
[section  5731(a)  of  Title  5]  to  prescribe  the  regulations
provided  for  therein,  relating  to  certifications  respecting
transportation accommodations.

     (13) The  authority of  the President under 5 U.S.C. 5742(b)
[section 5742(b)  of  Title  5]  to  prescribe  regulations  with
respect to the payment of expenses when an employee dies.

     (14) The  authority of the President under the last sentence
of paragraph  (c) of  section 32  of title III of the Act of July
22, 1937,  c. 517,  50 Stat.  525  (7  U.S.C.  1011(c))  [section
1011(c) of  Title 7, Agriculture], to transfer to Federal, State,
or Territorial  agencies  lands  acquired  by  the  Secretary  of
Agriculture under  section 32(a)  of that Act [section 1011(a) of
Title 7].

     (15) The authority of the President under section 340 of the
Consolidated Farmers  Home Administration  Act of  1961, 75 Stat.


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318 (7  U.S.C. 1990) [section 1990 of Title 7], in his discretion
to transfer  to the  Secretary of Agriculture any right, interest
or title  held by  the United States in any lands acquired in the
program of  national  defense  and  no  longer  needed  for  that
program, and  to determine  the suitability  of the  lands to  be
transferred, for  the  purposes  referred  to  in  that  section:
Provided, That the exercise by the Administrator of the authority
delegated to  him  by  this  paragraph  (15)  shall  require  the
concurrence of  the Secretary  of Defense  as to  the absence  of
further need of the lands for the national defense program.

     (16) The  authority of  the President  under section 4(k) of
the Tennessee  Valley Authority  Act, 55  Stat.  599  (16  U.S.C.
831c(k)) [section  831c(k) of Title 16, Conservation], to approve
transfers under  paragraphs (a)  and (c)  of that  section, other
than leases  for terms  of less  than 20 years and conveyances of
property having a value not in excess of $500.

     (17) The  authority of  the President  under section 7(b) of
the Tennessee  Valley Authority  Act of May 18, 1933, 48 Stat. 63
(16 U.S.C. 831f(b)) [section 831f(b) of Title 16], to provide for
the transfer  to the  Tennessee  Valley  Authority  of  the  use,
possession, and  control of  real or  personal  property  of  the
United States  deemed by the Administrator of General Services to
be necessary  and proper  for the  purposes of  that Authority as
stated in that Act.

     (18) The  authority of  the President under section 1 of the
Act of  March 4,  1927, c.  505, 44  Stat. 1422  (20 U.S.C.  191)
[section  191  of  Title  20,  Education],  to  transfer  to  the
jurisdiction of  the Secretary of Agriculture for the purposes of
that Act  any land  belonging to  the  United  States  within  or
adjacent to  the District of Columbia located along the Anacostia
River North of Benning Bridge.

     (19) That  part of  the authority  of  the  President  under
section 7(a)  of the  Act of  July 17, 1959, P.L. 86-91, 73 Stat.
216, as  amended (20 U.S.C. 905(a)) [section 905(a) of Title 20],
which consists  of authority to prescribe regulations relating to
storage   (including    packing,    drayage,    unpacking,    and
transportation to  and from  storage) of  household  effects  and
personal possessions.

     (20) The  authority of the Administrator of General Services
under section  210(i) of  the Federal Property and Administrative
Services Act  of 1949,  as amended  (40 U.S.C.  490(i))  [section
490(i) of  Title 40,  Public Buildings,  Property, and  Works] to
prescribe regulations  relating to  the installation, repair, and
replacement of sidewalks.

     (21) The authority of the President under section 108 of the
Housing Act  of July  15, 1949,  c. 338, 63 Stat. 419, as amended
(42 U.S.C. 1458) [section 1458 of Title 42, The Public Health and
Welfare], to  transfer,  or  cause  to  be  transferred,  to  the
Secretary of  Housing and  Urban Development  any right, title or
interest held  by the  Federal Government  or any  department  or
agency thereof in any land (including buildings thereon) which is


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surplus to  the needs  of the Government and which a local public
agency certifies  will be  within the  area of  a  project  being
planned by it.

     (22), (23)  [Revoked by Ex. Ord. No. 12215, May 27, 1980, 45
F.R. 36043].

     Sec. 2.  Department of  the Treasury.   The Secretary of the
Treasury is  hereby designated and empowered to exercise, without
the approval, ratification, or other action of the President, the
following:

     (1) The authority under 5 U.S.C. 5943(a) [section 5943(a) of
Title 5]  to make recommendations to the President concerning the
meeting of  losses sustained  by employees  and  members  of  the
uniformed services  while serving  in a  foreign country  due  to
appreciation of  foreign currency in its relation to the American
dollar.

     (2) The authority under 5 U.S.C. 5943(d) [section 5943(d) of
Title 5]  to report annually to the Congress on expenditures made
under 5 U.S.C. 5943(d).

     Sec. 3.  Department of  Health  and  Human  Services.    The
Secretary of  Health and  Human Services is hereby designated and
empowered to  exercise without  the  approval,  ratification,  or
other action of the President, the following:

     (1) The  authority of  the President under the first section
of the  Act entitled "An Act to authorize the operation of stands
in Federal  buildings by  blind persons,  to enlarge the economic
opportunities of  the blind,  and for  other purposes,"  approved
June 20, 1936, 49 Stat. 1559, as amended (20 U.S.C. 107) [section
107 of  Title 20], to approve regulations prescribed by the heads
of the respective departments and agencies thereunder.

     (2) The  authority of  the Secretary  of  Health  and  Human
Services under section 2 of the Act of August 4, 1947, c. 478, 61
Stat. 751, as amended (24 U.S.C. 168a) [section 168a of Title 24,
Hospitals, Asylums  and Cemeteries],  to fix  per diem  rates for
care of patients in Saint Elizabeth Hospital.

     Sec. 4.  Department of  State. (a) The Secretary of State is
hereby designated  and empowered  to exercise his authority under
section 12  of the Act of August 1, 1956, 70 Stat. 892 (22 U.S.C.
2679)  [section   2679  of   Title  22,   Foreign  Relations  and
Intercourse] (being  authority to prescribe certain maximum rates
of per  diem in  lieu of  subsistence (or  of similar  allowances
therefor)), without  the approval,  ratification, or other action
of the President.

     (b)  The   Secretary  of  State  is  hereby  designated  and
empowered to  exercise  the  authority  of  the  President  under
section 9  of the  United Nations  Participation Act  of 1945 (59
Stat. 619),  as amended  by section  15 of  Public Law 93-126 (87
Stat. 454-455) [section 287e-1 of Title 22, Foreign Relations and
Intercourse].


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     Sec. 5.  Department of Defense.  The Secretary of Defense is
hereby designated  and empowered to exercise the authority of the
President under  the last sentence of section 4 of the Act of May
10, 1943,  c. 95, 57 Stat. 81 (24 U.S.C. 34) [section 34 of Title
24] to  prescribe from  time to time uniform rates of charges for
hospitalization and  dispensary services:    Provided,  That  the
authority hereby  delegated may not be redelegated to any officer
in the  Department of  the Navy,  Department of the Air Force, or
Department of the Army.

     Sec. 6. Department of Health and Human Services;  Department
of Defense.  The following are hereby designated and empowered to
exercise, without  the approval, ratification, or other action of
the President,  the authority  of the  President under  10 U.S.C.
1085 [section  1085 of  Title  10,  Armed  Forces]  to  establish
uniform rates  of reimbursement  for inpatient  medical or dental
care:

     (1) The Secretary of Health and Human Services in respect of
such care in a facility under his jurisdiction.

     (2) The  Secretary of  Defense in  respect of such care in a
facility of  an armed  force under the jurisdiction of a military
department.

     Sec. 7.  Veterans Administration [now Department of Veterans
Affairs].    (a)  The  Administrator  of  Veterans  Affairs  [now
Secretary of Veterans Affairs] is hereby designated and empowered
to exercise  the authority  of  the  President  under  10  U.S.C.
1074(b) [section 1074(b) of Title 10] to approve uniform rates of
reimbursement for  care provided  in facilities  operated by  the
Administrator [now Secretary].

     (b) Section  2 of  Executive Order No. 11302 of September 6,
1966, as  amended by  Executive Order  No. 11429  of September 9,
1968 [set  out as a note under section 111 of Title 38, Veterans'
Benefits], is  hereby further  amended by  substituting  for  the
words  "allowance  of  not  more  than  six  cents  a  mile"  the
following:     "allowance,  in   such  amount  per  mile  as  the
Administrator shall  from time  to time fix pursuant to 38 U.S.C.
111 as affected by this order,".

     Sec. 8.  Office of  Personnel Management.    The  Office  of
Personnel  Management  is  hereby  designated  and  empowered  to
exercise, without  the approval, ratification, or other action of
the President, the following:

     (1) The  authority of  the President  under 5 U.S.C. 5514(b)
[section 5514(b) of Title 5] to approve regulations prescribed by
the head  of each agency to carry out 5 U.S.C. 5514 [section 5514
of Title 5] and section 3(a) of the Act of July 15, 1954, c. 509,
68 Stat. 483, 31 U.S.C. 581d [section 581d of Title 31, Money and
Finance]  (relating   to  installment  deductions  from  pay  for
indebtedness because of erroneous payment).

     (2) The  authority of  the President  under  5  U.S.C.  5903


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[section 5903  of Title 5] to prescribe regulations necessary for
the uniform administration of subchapter I of chapter 59 of title
5 of  the United  States Code  [section 5901  et seq. of Title 5]
(relating to uniform allowances).

     (3) The  authority of  the President  under  5  U.S.C.  5942
[section 5942  of Title  5] to prescribe regulations establishing
rates at which an allowance based on duty (except temporary duty)
at remote  work sites  will be  paid and defining and designating
the sites,  areas and  groups of  positions to  which  the  rates
apply.

     (4) The  authority of  the President  under 5  U.S.C.  5942a
[section 5942a of Title 5] to prescribe regulations governing the
payment of  allowances to  employees assigned to duty at Johnston
Island for  the purposes of maintaining the employees' spouses or
dependents, or both, at a location other than Johnston Island.

     Sec. 9.  Office of  Management and  Budget.  The Director of
the Office  of Management  and Budget  is hereby  designated  and
empowered to  exercise, without  the approval,  ratification,  or
other action of the President, the following:

     (1) The  authority of  the President  under 5 U.S.C. 5911(f)
[section 5911(f)  of Title  5] to  issue the regulations provided
for  therein   (relating  to   the  provision,   occupancy,   and
availability of  quarters and  facilities, the  determination  of
rates and  charges therefor,  and other  related matters,  as are
necessary and  appropriate to  carry out the provision of section
5911 [section 5911 of Title 5]).

     (2) The  authority of  the President  under 10 U.S.C. 126(a)
[section 126(a) of Title 10] to approve the transfers of balances
of appropriations provided for therein.

     (3) The  authority of the President under section 202 of the
Budget and  Accounting Procedures  Act of  September 12, 1950, 64
Stat. 833  (31 U.S.C. 581c) [section 581c of Title 31] to approve
the transfers  of balances  of  appropriations  provided  for  in
subsections (a) and (b) of that section.

     (4) The  authority of  the President under the last sentence
of section  11 of  the Act  of June 6, 1924, c. 270, 43 Stat. 463
(40 U.S.C.  72) [section  72 of  Title 40],  to approve  (i)  the
designation  of  lands  to  be  acquired  by  condemnation,  (ii)
contracts for purchase of lands, and (iii) agreements between the
National Capital  Planning Commission and officials of the States
of Maryland and Virginia.

     (5) The  authority of  the President  under section 1 of the
Act of  December 22,  1928, c.  48, 45 Stat. 1070 (40 U.S.C. 72a)
[section 72a  of Title  40], to approve contracts for acquisition
of land subject to limited rights reserved to the grantor and for
the acquisition  of limited  permanent rights  in land  adjoining
park property.

     (6) The  authority of  the President under section 407(b) of


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the Act  of August  30, 1957,  71 Stat.  556 (42 U.S.C. 1594j(b))
[section 1594j(b)  of Title  42] to approve regulations (relating
to the rental of substandard housing for members of the uniformed
services) prescribed  pursuant to  that section.  The Secretaries
referred to  in section  407(c) of  that Act [section 1594j(c) of
Title 42]  shall furnish the Director of the Office of Management
and Budget  such reports with respect to matters within the scope
of the  regulations so  approved as  he may  require and  at such
times as he may specify.

     (7) The  authority of  the President  under 44  U.S.C.  1108
[section 1108  of Title  44, Public  Printing and  Documents]  to
approve the  use, from  the appropriations available for printing
and binding,  of such  sums as  are necessary for the printing of
journals, magazines, periodicals, and similar publications.

     (8) The  authority of  the  President  under  the  paragraph
appearing under  the heading "Expenses of Management Improvement"
in title  III of  the Treasury, Post Office, and Executive Office
Appropriation Act,  1971, P.L.  91-422, 84  Stat. 877,  or by any
reenactment of the provisions of that paragraph in the same or in
a different  amount of funds, to allocate to any agency or office
of the  executive branch  (including the Office of Management and
Budget) funds  appropriated by  that paragraph  or  by  any  such
reenactment on  it.  The Director of the Office of Management and
Budget shall from time to time report to the President concerning
activities carried  on by  executive agencies  and  offices  with
funds allocated  under this  paragraph and  shall, consonant with
law, exercise  such direction  and control  with respect to those
activities as he shall deem appropriate.

     Sec. 10.  General Provisions.  (a) Unless inappropriate, any
reference in  this order  to any provision of law shall be deemed
to include  reference thereto as amended from time to time and as
affected by Reorganization Plan No. 2 of 1970 (35 F.R. 7959) [set
out in the Appendix 1 to Title 5].

     (b) Unless  inappropriate, any  reference in  any  Executive
order to  any Executive  order which is superseded by this order,
or  to   any  Executive  order  provision  so  superseded,  shall
hereafter be deemed to refer to this order or to the provision of
the preceding  sections of  this order, if any, which corresponds
to the superseded provision.

     (c) All  actions heretofore  taken  by  the  President,  the
Director of  the Bureau  of the  Budget, or  the Director  of the
Office of  Management  and  Budget  in  respect  of  the  matters
affected by  the provisions  of the  preceding sections  of  this
order and  in force  at the  time of  the issuance of this order,
including any  regulations prescribed  or approved by any of them
in respect  of such matters, shall, except as may be inconsistent
with the  provisions  of  this  order,  remain  in  effect  until
amended, modified, or revoked pursuant to the authority conferred
by this order unless sooner terminated by operation of law.

     Sec. 11.  Orders  superseded.    The  following  are  hereby
superseded:


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     (1) Executive Order No. 10604 of April 22, 1955.

     (2) Executive Order No. 11230 of June 28, 1965.

     (3) Executive Order No. 11275 of March 31, 1966.

     (4) Executive Order No. 11290 of July 21, 1966.

     (5) Section  3 of  Executive Order  No. 11294  of August  4,
1966.

     (6) To  the extent  that it is inconsistent with this order,
Executive Order No. 11541 of July 1, 1970.

     Sec. 12.  Taking effect.   This  order  shall  be  effective
immediately except  that paragraphs  (1) to  (13), inclusive, and
paragraph (19), of section 1 hereof shall become effective ninety
days after the date of this order.

     [Veterans' Administration  and  Administrator  of  Veterans'
Affairs deemed  a reference to Department of Veterans Affairs and
Secretary of  Veterans Affairs,  respectively, pursuant  to  P.L.
100-527, Sec.  10(1), (2),  Oct. 25,  1988, 102  Stat.  2635,  as
amended, set  out as  a note  under  section  301  of  Title  38,
Veterans' Benefits.]

UNITED STATES CODE ANNOTATED

TITLE 5.  GOVERNMENT ORGANIZATION AND EMPLOYEES

PART III -- EMPLOYEES

SUBPART D -- PAY AND ALLOWANCES

CHAPTER 55 -- PAY ADMINISTRATION

SUBCHAPTER II -- WITHHOLDING PAY

Current through P.L. 104-194, approved 9-9-96

UNITED STATES CODE ANNOTATED

TITLE 5.  GOVERNMENT ORGANIZATION AND EMPLOYEES

PART III -- EMPLOYEES

SUBPART B -- EMPLOYMENT AND RETENTION

CHAPTER 33 -- EXAMINATION, SELECTION, AND PLACEMENT

SUBCHAPTER II -- OATH OF OFFICE

Current through P.L. 104-194, approved 9-9-96

Sec. 3331. Oath of office


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     An individual, except the President, elected or appointed to
an office  of honor  or profit  in the civil service or uniformed
services, shall  take the  following oath:   "I,  AB, do solemnly
swear (or affirm) that I will support and defend the Constitution
of the  United States  against all enemies, foreign and domestic;
that I  will bear  true faith and allegiance to the same;  that I
take this  obligation freely,  without any  mental reservation or
purpose of  evasion;    and  that  I  will  well  and  faithfully
discharge the  duties of the office on which I am about to enter.
So help  me God."   This  section does  not  affect  other  oaths
required by law.

CREDIT(S)

1996 Main Volume

(P.L. 89-554, Sept. 6, 1966, 80 Stat. 424.)

[General Materials (GM) - References, Annotations, or Tables]

HISTORICAL NOTES

HISTORICAL AND STATUTORY NOTES

Revision Notes and Legislative Reports

     1966 Acts.

     All but  the quoted language in R.S. Sec. 1757 is omitted as
obsolete since  R.S. Sec. 1757 was originally an alternative oath
to the  oath prescribed in R.S. Sec. 1756 which oath was repealed
by the  Act of  May 13,  1884, ch.  46, Sec. 2, 23 Stat. 22.  The
words "An  individual, except  the President,  . . . in the civil
service or  uniformed services" are substituted for "any person .
. .  either in  the civil, military, or naval service, except the
President of  the United  States".  The second sentence of former
section 16  is changed  to read,  "This section  does not  affect
other oaths required by law.".

     Standard changes  are made  to conform  with the definitions
applicable and the style of this title as outlined in the preface
to the report.

REFERENCES

CROSS REFERENCES

Custody of  oath in  Congress, court,  or agency  to which office
pertains, see 5 USCA 2906.

Fee or pay for administering oath prohibited, see 5 USCA 2904.

Officer affidavit  that no consideration was paid for appointment
filed with oath under this section, see 5 USCA 3332.


                 Qualified State Tax References:
                          Page 28 of 148


Peace Corps  enrollees oath  of office under this section, see 22
USCA 2504.

Persons authorized to administer oath, see 5 USCA 2903.

Postal Service oath of office, see 39 USCA 1011.

Renewal of oaths, see 5 USCA 2905.

Requirement to  take new  oath upon appointment to a higher grade
by  --

Coast Guard Reserve commissioned officers, see 14 USCA 735.

National  Oceanic  and  Atmospheric  Administration  commissioned
officers, see 33 USCA 854a-2.

Officers on the active-duty list, see 10 USCA 626.

Regular Coast Guard officers, see 14 USCA 273.

Reserve active-status list officers, see 10 USCA 14309.

Temporary appointees in time of war or national emergency, see 10
USCA 603.

Warrant officers, see 10 USCA 578.

Reserve component officer subscription to oath prescribed by this
section, see 10 USCA 12201.

Secretary of  the Senate  authorization to  designate  Disbursing
Office employees  to administer  oaths under  this section, see 2
USCA 64-1.

Volunteers in  Service to America oath under this section, see 42
USCA 4954.

Voting  referees  subscription  to  the  oath  required  by  this
section, see 42 USCA 1971.

LIBRARY REFERENCES

American Digest System

Appointment, qualification,  and tenure  of federal officers, see
United States K35.

Mode of administration of oath, see Oaths K3.

Encyclopedias

Appointment of  federal officers,  see C.J.S.  United States Sec.
35.

Requisites  and  sufficiency  of  oaths,  see  C.J.S.  Oaths  and
Affirmations Sec. 5.


                 Qualified State Tax References:
                          Page 29 of 148


ANNOTATIONS

NOTES OF DECISIONS

Effect of oath 5

Expatriation 9

Failure to take oath 6

Form of oath 4

Office within section 2

Other oaths required by law 7

Persons required to take oath 3

Prerequisite to compensation 8

Presumptions 10

Purpose 1

1. Purpose

     In reference  to the  oath of office required by Act Aug. 6,
1861, c.  64, 12  Stat. 326  (predecessor of  the commonly called
test oath  prescribed by Act July 2, 1862, c. 128, 12 Stat. 502),
it was  said that  such oath was wisely framed for the purpose of
upholding the  paramount authority of the national government and
recognized allegiance  to  the  United  States,  as  the  highest
political duty  and it emphatically repelled the deadly heresy of
a  paramount   state  allegiance.     Charge   to   Grand   Jury,
C.C.Mass.1861, 2 Sprague 287, Fed.Cas. No. 18,277.

2. Office within section

     An office  is a public station conferred by appointment, and
the term  embraces the  ideas of tenure, duration, emolument, and
duties.  Drury v. U.S., 1908, 43 Ct.Cl. 237.

3. Persons required to take oath

     A disbursing agent was a public officer required to take the
prescribed oath.  Bartlett v. U.S., 1904, 39 Ct.Cl. 338, affirmed
25 S.Ct. 433, 197 U.S. 230, 49 L.Ed. 735.

     Consular agents  were not  regarded as  officers required to
take the  oath of office and give a bond, but were accountable to
the Consul  under whom  they acted.   Sampson  v. U.S.,  1895, 30
Ct.Cl. 365.

     Requirement of  former Sec.  16  of  this  title  [now  this
section] that  every person  elected or  appointed to any office,
whether of  honor or  profit, take  a prescribed  oath,  did  not


                 Qualified State Tax References:
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extend to  the clerk  of a  Supervisor of Internal Revenue on the
ground that  he was  not an  officer.   Hedrick v. U.S., 1880, 16
Ct.Cl. 88.

     It was  no defense  to action  on arbitration award, made by
Interstate Commerce  Commission in  voluntary  proceedings,  that
oath was  not taken by arbitrator or waived, since every security
given by  arbitrator's oath  was afforded by constitutional oaths
of individual  members of  Commission, required by former Sec. 16
of this  title [now  this section].   Davis v. Rochester Can Co.,
1924, 207 N.Y.S. 33, 124 Misc. 123.

     The oath  prescribed by  Congress for  any person elected or
appointed to  any office  of  honor  or  profit  in  the  "civil,
military, or  naval service  of the  United  States"  except  the
President, has  no application  to officers of the states, or any
subdivision thereof,  and failure  of state  legislators to  take
such oath did not affect the validity of Vernon's Ann.C.C.P. art.
52-158 passed  at such  session creating the court that convicted
defendant.   Van  Hodge  v.  State,  1946,  191  S.W.2d  24,  149
Tex.Cr.R. 64.

     Subjects of  a foreign  nation may  be appointed marshals of
the consular  courts, and  when so  appointed need not, under the
laws and  regulations, take  the prescribed  oath  but  all  such
officers should  be required  to take  an oath  or affirmation to
faithfully perform  the duties  of their  offices  except  as  to
allegiance and  support of the Constitution of the United States.
1902, 23 Op.Atty.Gen. 608.

     Where, under  Act Feb.  14, 1889,  c. 166, 25 Stat. 670, one
was appointed  from civil  life to  be major  of engineers in the
Army, and thereupon was placed on the retired list of the Army as
of that  grade, he  had to  take the  required oath, and this act
would be  in law  a legal  acceptance of the office and as such a
sufficient formal acceptance.  1889, 19 Op.Atty.Gen. 283.

     Former Sec. 16 of this title [now this section] contemplated
that the  oath should  be taken  at every  new appointment before
entering upon the duty.  1889, 19 Op.Atty.Gen. 219, 221.

     The words  "every person  elected or appointed to any office
of honor  or profit,  either in  the civil,  military,  or  naval
service", used in former Sec. 16 of this title [now this section]
included members of Congress.  1882, 17 Op.Atty.Gen. 419.

     Clerks in  the executive departments were officers, and were
required to take the oath prescribed.  1868, 12 Op.Atty.Gen. 521.

     Aliens appointed  as professors  at the  U.S. Naval  Academy
must take  the  oath  prescribed  by  this  section.    1943,  23
Comp.Gen. 301.

4. Form of oath

     The form  of oath prescribed by former Sec. 16 of this title
[now this  section] was  intended to  relieve those  to  whom  it


                 Qualified State Tax References:
                          Page 31 of 148


related from  the necessity  of taking  the oath required by R.S.
Sec. 1756  (repealed by  Act May  13, 1884,  c. 46, 23 Stat. 22),
commonly known  as the  test oath, and in lieu thereof to require
the modified oath prescribed.  1871, 13 Op.Atty.Gen. 390.

5. Effect of oath

     An official  oath is  an incident  to the  discharge of  the
duties imposed and does not in itself constitute him who takes it
an officer  de jure.   Glavey  v.  U.S.,  1900,  35  Ct.Cl.  242,
reversed on  other grounds  21 S.Ct.  891, 182 U.S. 595, 45 L.Ed.
1247.

6. Failure to take oath

     Omission of  an officer  to take the required oath does not,
it seems,  invalidate his  acts in  regard to  third persons  nor
subject such  acts to  collateral attack.   Vaccari  v.  Maxwell,
C.C.N.Y.1855, 3 Blatchf. 368, 28 Fed.Cas. 862, No. 16,810.

7. Other oaths required by law

     While Postmasters,  in common  with all other offices of the
United States, except the President, are now required to take the
oath of  office prescribed  in R.S. Sec. 1757 [now this section],
they are not exempted from taking the oath prescribed by Act Mar.
5, 1874,  ch. 46  [now Sec.  1011 of  Title 39],  relative to the
performance of  duties in  the Postal Service, but must take this
also.  1885, 18 Op.Atty.Gen. 181.

8. Prerequisite to compensation

     A public  officer is  usually entitled  to the emoluments of
the office  only after  qualification.   Poore v.  U.S., 1914, 49
Ct.Cl. 192.

9. Expatriation

     A retired reserve officer who is receiving retired pay based
upon completion  of a  prescribed period  of service in the armed
forces when  he acquires  foreign citizenship  would no longer be
liable for  involuntary recall  to active duty in times of war or
national emergency and the acquisition of the foreign citizenship
would be  inconsistent  with  the  oath  prescribed  for  reserve
officers to  support and  defend the  Constitution of  the United
States;   therefore,  in  the  absence  of  any  law  authorizing
continuation of an officer's membership in a reserve organization
after he  becomes a  citizen of  a foreign  country,  payment  of
retired pay may not be approved.  1962, 41 Comp.Gen. 715.

10. Presumptions

     An officer  of the  Customs Service,  duly commissioned, and
acting in the duties of his office, is presumed to have taken the
regular oaths.   U.S.  v. Bachelder,  C.C.N.H.1814, Fed.Cas.  No.
14,490.



                 Qualified State Tax References:
                          Page 32 of 148


5 USCA 3331, Oath of office

------------ Excerpt from pages 35785-35789


Sec. 5511. Withholding pay;  employees removed for cause

     (a) Except  as provided  by subsection  (b) of this section,
the earned  pay of  an employee  removed for  cause  may  not  be
withheld or confiscated.

     (b) If  an employee indebted to the United States is removed
for cause,  the pay  accruing to the employee shall be applied in
whole or in part to the satisfaction of any claim or indebtedness
due the United States.

CREDIT(S)

1996 Main Volume

(P.L. 89-554, Sept. 6, 1966, 80 Stat. 477.)

[General Materials (GM) - References, Annotations, or Tables]


HISTORICAL NOTES

HISTORICAL AND STATUTORY NOTES

Revision Notes and Legislative Reports

     1966 Acts.

     In subsection  (a), the  words "From  and after February 24,
1931"  are   omitted  as   executed.    The  word  "employee"  is
coextensive with  and substituted  for  "civil  employee  of  the
United States" in view of the definition of "employee" in section
2105.

     Standard changes  are made  to conform  with the definitions
applicable and the style of this title as outlined in the preface
to the report.

REFERENCES

LIBRARY REFERENCES

American Digest System

Recovery of  compensation after suspension or removal of officer,
agent, or employee, see United States K39(1) et seq., 39(8).

Encyclopedias

Recovery of  compensation after suspension or removal of officer,
agent, or employee, see C.J.S. United States Sec. 43 et seq.


                 Qualified State Tax References:
                          Page 33 of 148


5 USCA 5511, Withholding pay;  employees removed for cause

------------ Excerpt from page 36772


UNITED STATES CODE ANNOTATED

TITLE 5.  GOVERNMENT ORGANIZATION AND EMPLOYEES

PART III -- EMPLOYEES

SUBPART D -- PAY AND ALLOWANCES

CHAPTER 55 -- PAY ADMINISTRATION

SUBCHAPTER II -- WITHHOLDING PAY

Current through P.L. 104-194, approved 9-9-96

Sec. 5512. Withholding pay;  individuals in arrears

     (a) The pay of an individual in arrears to the United States
shall be  withheld until  he has  accounted for and paid into the
Treasury of the United States all sums for which he is liable.

     (b) When  pay is  withheld  under  subsection  (a)  of  this
section,  the  General  Accounting  Office,  on  request  of  the
individual, his  agent, or his attorney, shall report immediately
to the  Attorney General  the balance  due;    and  the  Attorney
General, within 60 days, shall order suit to be commenced against
the individual.

CREDIT(S)

1996 Main Volume

(P.L. 89-554,  Sept. 6,  1966, 80  Stat. 477;  P.L. 92-310, Title
II, Sec. 202, June 6, 1972, 86 Stat. 202.)

[General Materials (GM) - References, Annotations, or Tables]


HISTORICAL NOTES

HISTORICAL AND STATUTORY NOTES

Revision Notes and Legislative Reports

     1966 Acts.

     In subsection  (b), reference  to  the  "General  Accounting
Office" is  substituted for "accounting officers of the Treasury"
on authority  of the  Act of June 10, 1921, ch. 18, title III, 42
Stat. 23.   The  words "on  request of"  are substituted  for "if
required to  do so  by" as more accurately reflecting the intent.


                 Qualified State Tax References:
                          Page 34 of 148


Reference to the "Attorney General" is substituted for "Solicitor
of the  Treasury" and  "Solicitor" on  authority of section 16 of
the Act  of March  3, 1933, ch. 212, 47 Stat. 1517;  section 5 of
E.O. 6166,  June 10, 1933;  and section 1 of 1950 Reorg. Plan No.
2, 64 Stat. 1261.

     Standard changes  are made  to conform  with the definitions
applicable and the style of this title as outlined in the preface
to the report.

     1972 Acts.  Senate Report  No. 92-790,  see 1972  U.S.  Code
Cong. and Adm. News, p. 2364.

Amendments

     1972 Amendments.  Subsec. (b).   P.L. 92-310 eliminated "and
his sureties" following "against the individual".

REFERENCES

CROSS REFERENCES

Armed forces  officers pay  withheld under  this section,  see 37
USCA 1007.

Coast Guard,  pay of  enlisted men indebted to United States, see
14 USCA 461.

LIBRARY REFERENCES

American Digest System

Compensation  of   federal  officers,   agents,  and   employees;
deductions and  set-offs against pay, see United States K39(1) et
seq., 39(10).

Encyclopedias

Compensation  of   federal  officers,   agents,  and   employees;
deductions and  set-offs against pay, see C.J.S. United States 43
et seq., 49.

ANNOTATIONS

NOTES OF DECISIONS

Generally 1

Hearing 4

Mandatory nature of section 2

Moot questions 5

Payments subject to withholding 3

1. Generally


                 Qualified State Tax References:
                          Page 35 of 148


     Federal Housing  Administration and Veterans' Administration
possessed clear authority to initiate setoff mechanism to collect
alleged debt  of federal government employee, who was employed by
Veterans'  Administration,  to  Federal  Housing  Administration.
Atwater v. Roudebush, D.C.Ill.1976, 452 F.Supp. 622.

2. Mandatory nature of section

     Should accountable  officer request  it, General  Accounting
Office is  required to  report lost  amount to  Attorney General,
who, in  turn, is  required to  institute  legal  action  against
accountable officer;   since  this section is mandatory, there is
no provision  for discretion to decline to report debt, or to sue
accountable officer.  1985, 64 Op.Comp.Gen. 606.

3. Payments subject to withholding

     Where  $15,992.20  in  government  funds  disappeared  while
entrusted to  United States Navy petty officer who was serving as
an agent-cashier aboard ship, the Navy did not act arbitrarily or
capriciously in  withholding a  total of $5,845.92 from the petty
officer's pay  between the  time the  loss was discovered and the
date of  his voluntary discharge from the Navy.  Serrano v. U.S.,
Ct.Cl.1979, 612 F.2d 525, 222 Ct.Cl. 52.

     Government possesses  clear  legal  authority,  grounded  in
common law  right of every creditor to apply moneys of his debtor
in his  hands to extinguishment of claims due him from debtor, to
apply all  available assets  in its  possession,  including  both
unpaid  salary  and  retirement  funds  belonging  to  defaulting
officer or  employee  toward  liquidation  of  that  individual's
indebtedness to  government.  Atwater v. Roudebush, D.C.Ill.1976,
452 F.Supp. 622.

     Where it  has been  determined that  a  United  States  Post
Office Department [now United States Postal Service] employee was
responsible for  thefts from registered currency remittances, the
setoff of  plaintiff's indebtedness  against  his  civil  service
retirement credit  and his  withheld salary  is authorized  under
this section.  Parker v. U.S., Ct.Cl.1969, 187 Ct.Cl. 553.

4. Hearing

     The Immigration  and Naturalization  Service must accord its
employees a  Goldberg v.  Kelly type  hearing before  the Service
withholds, pursuant  to this section, the wages of such employees
in satisfaction of a debt allegedly owed the United States.  1979
(Counsel-Inf.Op.) 3 Op.O.L.C. 269.

5. Moot questions

     Collection  of   debt  prior  to,  or  during  pendency  of,
litigation does  not present  courts with  moot  question,  since
issue at trial concerns original amount asserted against officer,
and not balance remaining to be paid.  1985, 64 Op.Comp.Gen. 606.


                 Qualified State Tax References:
                          Page 36 of 148


5 USCA 5512, Withholding pay;  individuals in arrears
------------ Excerpt from pages 36773-36775


UNITED STATES CODE ANNOTATED

TITLE 5.  GOVERNMENT ORGANIZATION AND EMPLOYEES

PART III -- EMPLOYEES

SUBPART D -- PAY AND ALLOWANCES

CHAPTER 55 -- PAY ADMINISTRATION

SUBCHAPTER II -- WITHHOLDING PAY

Current through P.L. 104-194, approved 9-9-96

UNITED STATES CODE ANNOTATED

TITLE 5.  GOVERNMENT ORGANIZATION AND EMPLOYEES

PART III -- EMPLOYEES

SUBPART D -- PAY AND ALLOWANCES

CHAPTER 55 -- PAY ADMINISTRATION

SUBCHAPTER II -- WITHHOLDING PAY

Current through P.L. 104-194, approved 9-9-96

Sec. 5513.  Withholding pay;   credit disallowed or charge raised
for payment

     When the  General Accounting  Office, on  a statement of the
account of  a disbursing  or certifying  official of  the  United
States, disallows  credit or  raises a charge for a payment to an
individual in  or under an Executive agency otherwise entitled to
pay, the  pay of  the payee shall be withheld in whole or in part
until full  reimbursement is made under regulations prescribed by
the head of the Executive agency from which the payee is entitled
to receive  pay.  This section does not repeal or modify existing
statutes relating  to the  collection of  the indebtedness  of an
accountable, certifying, or disbursing official.

CREDIT(S)

1996 Main Volume

(P.L. 89-554, Sept. 6, 1966, 80 Stat. 477.)

[General Materials (GM) - References, Annotations, or Tables]


                 Qualified State Tax References:
                          Page 37 of 148


HISTORICAL NOTES

HISTORICAL AND STATUTORY NOTES

Revision Notes and Legislative Reports

     1966 Acts.

     The words  "On and  after  May  26,  1936"  are  omitted  as
executed.   The word  "official" is substituted for "officer" and
"officers"  as  the  definition  of  "officer"  in  section  2104
excludes a  member of  a uniformed  service.  The words "from the
United States  or from  an agency or instrumentality thereof" are
omitted as unnecessary.

     Standard changes  are made  to conform  with the definitions
applicable and the style of this title as outlined in the preface
to the report.

REFERENCES

LIBRARY REFERENCES

American Digest System

Compensation  of   federal  officers,   agents,  and   employees;
deductions and  set-offs against pay, see United States K39(1) et
seq., 39(10).

Encyclopedias

Compensation  of   federal  officers,   agents,  and   employees;
deductions and  set-offs against pay, see C.J.S. United States 43
et seq., 49.

5 USCA 5513, Withholding pay;  credit disallowed or charge raised
for payment

------------ Excerpt from pages 36776-36777


UNITED STATES CODE ANNOTATED

TITLE 5.  GOVERNMENT ORGANIZATION AND EMPLOYEES

PART III -- EMPLOYEES

SUBPART D -- PAY AND ALLOWANCES

CHAPTER 55 -- PAY ADMINISTRATION

SUBCHAPTER II -- WITHHOLDING PAY

Current through P.L. 104-194, approved 9-9-96

Sec. 5514.  Installment deduction  for indebtedness to the United
States


                 Qualified State Tax References:
                          Page 38 of 148


     (a)(1) When the head of an agency or his designee determines
that an  employee, member  of the  Armed Forces or Reserve of the
Armed Forces, is indebted to the United States for debts to which
the United  States is  entitled to  be repaid  at the time of the
determination by  the head  of an  agency or  his designee, or is
notified of  such a  debt by  the head  of another  agency or his
designee the  amount of  indebtedness may be collected in monthly
installments, or  at officially  established  pay  intervals,  by
deduction from  the current  pay account  of the individual.  The
deductions may  be made  from basic  pay, special  pay, incentive
pay, retired  pay, retainer pay, or, in the case of an individual
not entitled  to basic  pay, other  authorized pay.   The  amount
deducted for  any period  may not exceed 15 percent of disposable
pay, except  that a  greater percentage  may be deducted upon the
written consent  of the  individual involved.   If the individual
retires or resigns, or if his employment or period of active duty
otherwise  ends,   before  collection   of  the   amount  of  the
indebtedness  is   completed,  deduction   shall  be   made  from
subsequent payments  of any  nature due  the individual  from the
agency concerned.   All  Federal agencies to which debts are owed
and which  have outstanding delinquent debts shall participate in
a computer  match at  least annually  of  their  delinquent  debt
records with  records of  Federal  employees  to  identify  those
employees who  are delinquent  in repayment  of those debts.  The
preceding sentence shall not apply to any debt under the Internal
Revenue Code  of 1986.   Matched  Federal employee  records shall
include, but  shall not  be limited  to, records  of active Civil
Service   employees   government-wide,   military   active   duty
personnel, military  reservists,  United  States  Postal  Service
employees,  employees   of  other  government  corporations,  and
seasonal and  temporary employees.  The Secretary of the Treasury
shall  establish   and  maintain  an  interagency  consortium  to
implement  centralized   salary  offset  computer  matching,  and
promulgate regulations  for this  program.  Agencies that perform
centralized salary  offset computer  matching services under this
subsection are authorized to charge a fee sufficient to cover the
full cost for such services.

     (2) Except  as provided in paragraph (3) of this subsection,
prior to  initiating any  proceedings under paragraph (1) of this
subsection to collect any indebtedness of an individual, the head
of the agency holding the debt or his designee, shall provide the
individual with  --

     (A) a  minimum of thirty days written notice, informing such
individual  of   the  nature   and  amount  of  the  indebtedness
determined by  such agency to be due, the intention of the agency
to initiate  proceedings to  collect the  debt through deductions
from pay,  and an  explanation of  the rights  of the  individual
under this subsection;

     (B) an  opportunity to  inspect and  copy Government records
relating to the debt;

     (C) an  opportunity to  enter into  a written agreement with
the agency,  under terms  agreeable to  the head of the agency or


                 Qualified State Tax References:
                          Page 39 of 148


his designee,  to establish  a schedule  for the repayment of the
debt;  and

     (D) an opportunity for a hearing on the determination of the
agency concerning the existence or the amount of the debt, and in
the case of an individual whose repayment schedule is established
other than  by a  written agreement pursuant to subparagraph (C),
concerning the terms of the repayment schedule.

A hearing,  described in  subparagraph (D),  shall be provided if
the individual,  on or before the fifteenth day following receipt
of the  notice described  in subparagraph  (A), and in accordance
with such  procedures as  the head  of the  agency may prescribe,
files a petition requesting such a hearing.  The timely filing of
a petition  for hearing shall stay the commencement of collection
proceedings.   A  hearing  under  subparagraph  (D)  may  not  be
conducted by  an individual  under the  supervision or control of
the head  of the  agency, except  that nothing  in this  sentence
shall  be   construed  to   prohibit  the   appointment   of   an
administrative law  judge.   The hearing  official shall  issue a
final decision  at the  earliest practicable  date, but not later
than sixty  days after  the filing of the petition requesting the
hearing.

     (3) Paragraph  (2) shall  not apply  to routine intra-agency
adjustments  of   pay  that   are  attributable  to  clerical  or
administrative errors  or delays in processing pay documents that
have  occurred   within  the   four  pay  periods  preceding  the
adjustment and  to any adjustment that amounts to $50 or less, if
at the  time  of  such  adjustment,  or  as  soon  thereafter  as
practical, the  individual is  provided  written  notice  of  the
nature and  the amount  of the  adjustment and a point of contact
for contesting such adjustment.

     (4) The collection of any amount under this section shall be
in accordance with the standards promulgated pursuant to sections
3711 and  3716-3718 of  title 31  or in accordance with any other
statutory authority  for the  collection of  claims of the United
States or any agency thereof.

     (5) For purposes of this subsection  --

     (A)  "disposable   pay"  means  that  part  of  pay  of  any
individual remaining  after the  deduction from those earnings of
any amounts required by law to be withheld;  and

     (B) "agency"  includes executive  departments and  agencies,
the United States Postal Service, the Postal Rate Commission, the
United States Senate, the United States House of Representatives,
and any court, court administrative office, or instrumentality in
the judicial  or legislative  branches  of  the  Government,  and
government corporations.

     (b)(1) The  head of each agency shall prescribe regulations,
subject to  the approval  of the  President, to  carry  out  this
section and  section 3530(d) of title 31.  Regulations prescribed
by the  Secretaries of  the military departments shall be uniform


                 Qualified State Tax References:
                          Page 40 of 148


for the military services insofar as practicable.

     (2) For  purposes of  section  7117(a)  of  this  title,  no
regulation prescribed  to carry  out subsection  (a)(2)  of  this
section shall  be considered  to be  a  Government-wide  rule  or
regulation.

     (c) Subsection  (a) of this section does not modify existing
statutes which provide for forfeiture of pay or allowances.  This
section and section 3530(d) of title 31 do not repeal, modify, or
amend section  4837(d) or 9837(d) of title 10 or section 1007(b),
(c) of title 37.

     (d) A  levy pursuant  to the  Internal Revenue  Code of 1986
shall take precedence over other deductions under this section.

CREDIT(S)

1996 Main Volume

(P.L. 89-554,  Sept. 6,  1966, 80  Stat. 477;   P.L.  96-54, Sec.
2(a)(2), Aug.  14,  1979,  93  Stat.  381;    P.L.  97-258,  Sec.
3(a)(12), Sept.  13, 1982,  96 Stat.  1063;  P.L. 97-365, Sec. 5,
Oct. 25,  1982, 96  Stat. 1751;   P.L. 97-452, Sec. 2(a)(2), Jan.
12, 1983,  96 Stat.  2478;   P.L. 98-216,  Sec. 3(a)(4), Feb. 14,
1984, 98 Stat. 6.)

1996 Electronic Update

(As amended  P.L. 104-134,  Title III,  Sec. 31001(h),  Apr.  26,
1996, 110 Stat. 1321-363.)

[General Materials (GM) - References, Annotations, or Tables]

HISTORICAL NOTES

HISTORICAL AND STATUTORY NOTES

Revision Notes and Legislative Reports

     1966 Acts.

     In subsection  (a), the words "head of the agency concerned"
are substituted for "Secretary of the department concerned or the
head of the agency or independent establishment concerned, or one
of their  designees".   The words  "an employee,  a member of the
armed forces,  or a  Reserve of the armed forces" are coextensive
with and substituted for "an employee of the United States or any
member of  the Army,  Navy, Air  Force, Marine  Corps,  or  Coast
Guard, or a reserve component thereof" in view of the definitions
in sections  2101 and  2105.   The words "basic compensation" are
omitted as included in "basic pay".

     In subsection  (b), the  words "head  of  each  agency"  are
substituted for  "Each Secretary  of a  department, or head of an
agency or  independent establishment, as appropriate".  The words
"Secretaries of  the military  departments" are  substituted  for


                 Qualified State Tax References:
                          Page 41 of 148


"Secretaries of  the Army, Navy, and Air Force" to conform to the
definition of "military department" in section 102.

     In subsection  (c), the words "section 4837(d) or 9837(d) of
title 10 or section 1007(b), (c) of title 37" are substituted for
"the provisions  of the  Act of  May 22,  1928 (ch. 676, 45 Stat.
698)" in  section 4  of the Act of July 15, 1954, on authority of
the Acts  of Aug.  10, 1956, ch. 1041, Sec. 49(b), 70A Stat. 640,
and Sept. 7, 1962, P.L. 87-649, Sec. 12(b), 76 Stat. 497.

     1979 Acts.  Senate Report  No. 96-276,  see 1979  U.S.  Code
Cong. and Adm. News, p. 931.

     1982 Acts. House Report No. 97-651, see 1982 U.S. Code Cong.
and Adm. News, p. 1895.

     Senate Report  Nos. 97-378  and 97-287,  see 1982  U.S. Code
Cong. and Adm. News, p. 3377.

     1983 Acts.  Detailed Explanation  prepared by  the Office of
the Law Revision Counsel, see 1982 U.S. Code Cong. and Adm. News,
p. 4301.

     1984 Acts.  Detailed Explanation of H.R. 2727, see 1984 U.S.
Code Cong. and Adm. News, p. 3.

References in Text

     The Internal  Revenue Code  of 1986, referred to in subsecs.
(a)(1) and (d), is set out in Title 26, Internal Revenue Code.

Amendments

     1996  Amendments.   Subsec.  (a)(1).    P.L.  104-134,  Sec.
31001(h)(A)(i),  inserted   provisions  directing   all   Federal
agencies to  which debts  are owed  and  which  have  outstanding
delinquent debts  to participate  in a  computer match  at  least
annually with  records of Federal employees to identify those who
are delinquent,  directing  the  Secretary  of  the  Treasury  to
establish and  maintain an  interagency consortium  to  implement
centralized salary  offset  computer  matching,  and  authorizing
agencies that  perform such computer matching to charge a fee for
the full cost of such services.

     Subsec. (a)(3).   P.L. 104-134, Sec. 31001(h)(A)(iii), added
par. (3).  Former par. (3) redesignated (4).

     Subsec. (a)(4),  (5).   P.L. 104-134,  Sec. 31001(h)(A)(ii),
redesignated  former   pars.  (3)   and  (4)   as  (4)  and  (5),
respectively.

     Subsec. (a)(5)(B).    P.L.  104-134,  Sec.  31001(h)(A)(iv),
amended subpar.  (B) generally.   Prior to amendment, subpar. (B)
read as  follows:   "'agency' includes  the United  States Postal
Service and the Postal Rate Commission."

     Subsec. (d).   P.L. 104-134, Sec. 31001(h)(B), added subsec.


                 Qualified State Tax References:
                          Page 42 of 148


(d).
     1984 Amendments.  Subsec.  (c).    P.L.  98-216  substituted
"section 3530(d) for "section 581d".

     1983 Amendments.  Subsec. (a)(3).   P.L. 97-452, substituted
"sections 3711 and 3716-3718 of title 31" for "the Federal Claims
Collection Act of 1966 (31 U.S.C. 951 et seq.)".

     1982  Amendments.   Catchline.    P.L.  97-365,  Sec.  5(c),
substituted "indebtedness to the United States" for "indebtedness
because of erroneous payment".

     Subsec. (a).  P.L. 97-365,  Sec. 5(a),  designated  existing
provisions as  par. (1), in par. (1) as so designated substituted
provisions relating  to debts  to  which  the  United  States  is
entitled to  be repaid  for provisions  which had  related to  an
indebtedness to the United States because of an erroneous payment
made by  an agency  to or  on  behalf  of  an  individual,  added
provisions relating  to the notification of a debt by the head of
another  agency   or   his   designee,   substituted   provisions
authorizing  the  deduction  of  not  to  exceed  15  percent  of
disposable pay  for provisions which had authorized the deduction
of not  to exceed  two-thirds of the pay from which the deduction
was made, and added pars. (2), (3), and (4).

     Subsec. (b).  P.L. 97-365,  Sec. 5(b),  designated  existing
provisions as par. (1) and added par. (2).

     P.L.  97-258,   Sec.  3(a)(12),  substituted  "3530(d)"  for
"581d".

     1979  Amendments.  Subsec.  (b).    P.L.  96-54  substituted
"President" for "Director of the Bureau of the Budget".

Effective Dates

     1996 Acts.  Amendment by  P.L. 104-134  effective  Apr.  26,
1996, see  section 31001(a)(2)(A)  of P.L.  104-134, set out as a
note under section 3322 of Title 31, Money and Finance.

     1979 Acts.  Amendment by P.L. 96-54 effective July 12, 1979,
see section  2(b) of  P.L. 96-54, set out as a note under section
305 of this title.

Savings Provisions

     For savings provisions relating to amendment by P.L. 98-216,
see section  5(d) of  P.L. 98-216,  set out  as a  note preceding
section 101 of Title 31, Money and Finance.

Short Title

     1982 Amendments.  Section 1  of P.L. 97-365 provided:  "That
this Act [enacting sections 954 and 955 of former Title 31, Money
and Finance,  amending this  section and  section  552a  of  this
title, section  1114 of  Title 18, Crimes and Criminal Procedure,


                 Qualified State Tax References:
                          Page 43 of 148


sections 6103  and 7213  of  Title  26,  Internal  Revenue  Code,
section 2415  of Title  28, Judiciary and Judicial Procedure, and
sections 484,  951, and  952 of  former Title  31,  and  enacting
provisions set  out as  notes under this section and section 6103
of Title 26] may be cited as the 'Debt Collection Act of 1982'."

Delegation of Functions

     Authority of the President under subsec. (b) of this section
to approve  regulations prescribed  by the head of each agency to
carry out  this section  and section  581d of Title 31, Money and
Finance [31 U.S.C.A. 3530(d)], relating to installment deductions
from pay for indebtedness because of erroneous payment, delegated
to the  Office of  Personnel Management,  see section 8(1) of Ex.
Ord. No.  11609, July  22, 1971, 36 F.R. 13747, set out as a note
under section 301 of Title 3, The President.

Collection of  Indebtedness of  Employees of  Federal  Government
Resulting From  Action or Suit Brought Against Employee by United
States

     P.L. 97-276, Sec. 124, Oct. 2, 1982, 96 Stat. 1195, provided
that:    "Notwithstanding  any  other  provision  of  this  joint
resolution [P.L.  97-276], in  the case  of any  employee of  the
Federal Government  who is  indebted to  the  United  States,  as
determined by  a court  of the United States in an action or suit
brought against such employee by the United States, the amount of
the indebtedness  may be collected in monthly installments, or at
officially established regular pay period intervals, by deduction
in reasonable  amounts  from  the  current  pay  account  of  the
individual.   The deductions  may be  made only  from basic  pay,
special pay,  incentive pay, or, in the case of an individual not
entitled to basic pay, other authorized pay.  Collection shall be
made over  a period  not greater  than the  anticipated period of
employment.   The amount  deducted for  any period may not exceed
one-fourth of  the pay  from which  the deduction is made, unless
the deduction  of a  greater amount  is  necessary  to  make  the
collection within  the period  of anticipated employment.  If the
individual retires  or resigns,  or if  his employment  otherwise
ends, before  collection of  the amount  of the  indebtedness  is
completed, deduction  shall be  made from  later payments  of any
nature due to the individual from the United States Treasury."

Improvements in  Debt Collection Procedures Under 1982 Amendments
as Contained  in Debt  Collection Act  of  1982  Inapplicable  to
Claims  or  Indebtedness  Under  Internal  Revenue  Code,  Social
Security Act, or Tariff Laws

     Section 8(e) of P.L. 97-365, as amended by P.L. 99-514, Sec.
2, Oct.  22, 1986,  100 Stat.  2095, provided  that:   "Except as
otherwise provided  in section 4 or 7 or the foregoing provisions
of this  section [amending  sections 6103  and 7213  of Title 26,
Internal Revenue  Code, and  enacting provisions set out as notes
under section  6103 of  Title 26], nothing in this Act (or in the
amendments made  by this Act) [see Short Title of 1982 Amendments
note under  this section]  shall apply  to claims or indebtedness
arising under,  or amounts  payable under,  the Internal  Revenue


                 Qualified State Tax References:
                          Page 44 of 148


Code of  1986 [Title 26], the Social Security Act [section 301 et
seq. of  Title 42,  The Public Health and Welfare], or the tariff
laws of the United States [Title 19, Customs Duties]."

REFERENCES

CROSS REFERENCES

Advisory Council  on Historic  Preservation employees  subject to
Department of  the Interior  regulations  prescribed  under  this
section, see 16 USCA 470m.

Armed forces  members provided  same notice  and opportunities as
provided under this section for breach of lease or damage paid by
military, see 10 USCA 1055.

Food stamp program overissuance of coupons recovered from Federal
pay as authorized by this section for purposes of  --

Disposition of claims, see 7 USCA 2022.

State plans of operation, see 7 USCA 2020.

Student loans  in default and referred to Secretary of Health and
Human Services  treated as  debt  subject  to  this  section  for
purposes of  --

Health professions education, see 42 USCA 292r.

Nurse education, see 42 USCA 297b.

LIBRARY REFERENCES

Administrative Law

Administrative personnel, see 5 CFR Parts 179, 550, and 1210.

Agriculture, see 7 CFR Part 3.

Banks and banking, see 12 CFR Parts 608 and 1408.

Commerce and foreign trade, see 15 CFR Part 22.

Commodity and securities exchanges, see 17 CFR Parts 141 and 204.

Education, see 34 CFR Parts 31 and 32.

Employees' benefits, see 20 CFR Part 361.

Energy, see 10 CFR Part 16.

Foreign relations, see 22 CFR Parts 34, 213, 309, 512, and 1007.

Housing and urban development, see 24 CFR Part 17.

Labor, see 29 CFR Parts 20, 1450, and 1600.


                 Qualified State Tax References:
                          Page 45 of 148


Mineral resources, see 30 CFR Part 870.

Money and Finance, Treasury, see 31 CFR Part 5.

National defense, see 32 CFR Part 1697.

Panama Canal, see 35 CFR Part 256.

Parks, forests, and public property, see 36 CFR Part 705.

Pensions, bonuses, and veterans' relief, see 38 CFR Part 1.

Postal Service, see 39 CFR Part 961.

Protection of environment, see 40 CFR Part 13.

Public welfare, see 45 CFR Parts 30, 607, 708, and 1179.

Telecommunication, see 47 CFR Part 1.

Transportation, see 49 CFR Parts 92 and 1017.

American Digest System

Recovery by government of compensation paid to officer, agent, or
employee, see United States K39(14).

Encyclopedias

Recovery by government of compensation paid to officer, agent, or
employee, see C.J.S. United States Sec. 50.

Law Review and Journal Commentaries

Due process  in federal  debt collection by offset:  Two concepts
and a case study.  Martin B. White, 41 Okla.L.Rev. 195 (1988).

ANNOTATIONS

NOTES OF DECISIONS

Constitutionality 1/2

Construction with other laws 1

Extreme financial hardship 7

Head of agency determination

Head of agency determination - Generally 2

Head of agency determination - Discretion of agency head 3

Indebtedness for which deductions may be made

Indebtedness for which deductions may be made - Generally 4


                 Qualified State Tax References:
                          Page 46 of 148


Indebtedness for  which deductions  may be  made -  Armed  forces
members 5

Jurisdiction 6

1/2. Constitutionality

     Statute  permitting   Department  of  Education  to  collect
student loan  debts of federal employees via offset against their
wages was  rationally related  to legitimate governmental purpose
of securing repayment of federally insured student loans, and did
not violate  federal employee's  equal protection rights.  Sibley
v. U.S. Dept. of Educ., N.D.Ill.1995, 913 F.Supp. 1181.

1. Construction with other laws

     Offsets against  employee's final  salary check and lump-sum
leave payment are governed generally by section 3716 of Title 31,
and fifteen percent limitation of this section is not applicable.
1985, 64 Op.Comp.Gen. 907.

     This section,  with its implementing regulations, authorizes
salary offset procedure not required by more specific provisions,
such as  sections 5522,  5705, and  5724 of this title.  1984, 64
Op.Comp.Gen. 142.

     This section  does not  require change  in rule  that  debts
arising  from   erroneous  payments  to  Army  enlisted  men  are
"administratively ascertained"  debts within  purview of 4837 and
9837 of  Title 10  and thus subject to remission by the Secretary
of the Army under such sections.  1956, 35 Comp.Gen. 421.

2. Head of agency determination -- Generally

     It was  invalid to  withhold installments from salary of Air
Force officer because of allegedly illegal dependency payments to
his parents  under this  section requiring Secretary of Air Force
or his designee to order withholding, where neither Secretary nor
his designee  made  required  determination.    Arnold  v.  U.S.,
Ct.Cl.1968, 404 F.2d 953, 186 Ct.Cl. 117.

3.  --  Discretion of agency head

     Order directing  the withholding of installments from salary
of Air  Force officer  because of  allegedly  illegal  dependency
payments to  his parents was invalid, where the withholding order
was issued  without any  exercise of  discretion by the Air Force
but solely  as a  mechanical response  to  Comptroller  General's
certificate of  indebtedness.   Arnold v.  U.S., Ct.Cl.1968,  404
F.2d 953, 186 Ct.Cl. 117.

4. Indebtedness for which deductions may be made -- Generally

     After  Air   Force  has   been  properly   billed  by  Labor
Department, an  overpayment by Department's employee compensation
fund to Air Force employee may be collected under this section as
if it  had been  made directly  by Air Force.  1982, 61 Op. Comp.


                 Qualified State Tax References:
                          Page 47 of 148


Gen. 450.

     Where federal  employee was erroneously granted compensatory
time off  in excess of the hours for which he could have received
overtime pay  under the aggregate salary limitation provisions of
section 5547  of this title, such employee's annual leave balance
could not  be charged  with a compensatory time deduction without
employee consent,  but such amount could be recovered by means of
offset.  (1979) 58 Op. Comp. Gen. 571.

5.  --  --  Armed forces members

     Statute [set out as a note under this section] providing 25%
right of offset against "current pay account" of "any employee of
the Federal  Government" who is indebted to United States did not
apply to  members of  armed forces.  U.S. v. Tafoya, C.A.5 (Tex.)
1986, 803 F.2d 140.

     Where it was invalid to withhold installments from salary of
Air  Force   officer  because  of  allegedly  illegal  dependency
payments to  his parents  because neither  Secretary of Air Force
nor his  designee authorized  such withholding,  Secretary had no
power years  later through  designee to  direct the  withholding.
Arnold v. U.S., Ct.Cl.1968, 404 F.2d 953, 183 Ct.Cl. 117.

6. Jurisdiction

     Claim of  retired Marine officer to amounts withheld monthly
from his  retirement pay  on ground  retired Marine  officer  had
received overpayment  of retirement  pay constituted  claim  over
which Court of Claims [now Court of Federal Claims] had exclusive
jurisdiction, and,  therefore, federal  district court  could not
entertain claim  for recovery of the amounts withheld.  Gordon v.
Shoup, C.A.D.C.1963, 316 F.2d 683, 115 U.S.App.D.C. 32.

7. Extreme financial hardship

     Federal government  employee failed  to show that 15% offset
from wages  proposed by  Department of Education for repayment of
student  loan   would  impose  "extreme  financial  hardship"  on
employee within meaning of statutory restriction on such offsets,
where employee  failed to  provide medical records in support his
claim that  he had  to eat  four times  a day  at restaurants, to
demonstrate extent to which his health insurance covered his $657
claimed monthly medical expenses, or to show that claimed monthly
credit card  expense related  to charges  incurred for  essential
subsistence expenses;   unsupported  expense claims were properly
reduced or  eliminated, in assessing what hardship, if any, would
result from  allowance of  15% offset  against employee's  wages.
Sibley v. U.S. Dept. of Educ., N.D.Ill.1995, 913 F.Supp. 1181.

5 USCA 5514, Installment deduction for indebtedness to the United
States

------------ Excerpt from pages 36778-36788


                 Qualified State Tax References:
                          Page 48 of 148


Sec. 5516. Withholding District of Columbia income taxes

     (a)  The   Secretary  of  the  Treasury,  under  regulations
prescribed by  the President,  shall enter into an agreement with
the Mayor  of the  District of  Columbia within  120  days  of  a
request for  agreement from  the  Mayor.    The  agreement  shall
provide that  the head  of each agency of the United States shall
comply with  the requirements  of subchapter  II of chapter 15 of
title 47,  District of Columbia Code, in the case of employees of
the agency  who are  subject to  income  taxes  imposed  by  that
subchapter and  whose regular  place of  employment is within the
District of  Columbia.   The agreement may not apply to pay of an
employee who  is not  a resident  of the  District of Columbia as
defined in  subchapter II  of chapter 15 of title 47, District of
Columbia Code.  In the case of pay for service as a member of the
armed forces,  the second  sentence of  this subsection  shall be
applied by  substituting "who  are residents  of the  District of
Columbia" for  "whose regular  place of  employment is within the
District of  Columbia".   For the  purpose  of  this  subsection,
"employee" has  the meaning given it by section 1551c(z) of title
47, District of Columbia Code.

     (b) This  section does  not give  the consent  of the United
States to  the  application  of  a  statute  which  imposes  more
burdensome requirements  on  the  United  States  than  on  other
employers, or  which subjects  the United States or its employees
to a penalty or liability because of this section.

CREDIT(S)

1996 Main Volume

(P.L. 89-554,  Sept. 6,  1966, 80  Stat. 478;   P.L. 90-623, Sec.
1(9), Oct. 22, 1968, 82 Stat. 1312;  P.L. 94-455, Title XII, Sec.
1207(a)(2), Oct.  4, 1976,  90 Stat.  1705;    P.L.  96-54,  Sec.
2(a)(30), Aug. 14, 1979, 93 Stat. 383.)

[General Materials (GM) - References, Annotations, or Tables]

HISTORICAL NOTES

HISTORICAL AND STATUTORY NOTES

Revision Notes and Legislative Reports

     1966 Acts.

     Section 2(c)  "(z)" of the Act of Mar. 31, 1956, 70 Stat. 68
(section  1551c(z)  of  title  47,  District  of  Columbia  Code)
contains a  definition of  "employee" that  is applicable to this
section.   Accordingly, the  last sentence  of subsection  (a) is
added to preserve the application of the source law.

     Standard changes  are made  to conform  with the definitions
applicable and the style of this title as outlined in the preface
to the report.


                 Qualified State Tax References:
                          Page 49 of 148


     1968 Acts.  Senate Report No. 1624, see 1968 U.S. Code Cong.
and Adm. News, p. 4446.

     1976 Acts.  House Report  Nos. 94-658  and  94-1380,  Senate
Report No.  94-938(Parts I  and II),  and House Conference Report
No. 94-1515, see 1976 U.S. Code Cong. and Adm. News, p. 2897.

     1979 Acts.  Senate Report  No. 96-276,  see 1979  U.S.  Code
Cong. and Adm. News, p. 931.

Amendments

     1979  Amendments.  Subsec.  (a).    P.L.  96-54  substituted
"Mayor" for "Commissioner" wherever appearing therein.

     1976 Amendments.  P.L. 94-455 struck out "pay for service as
a member of the armed forces, or to" following "The agreement may
not apply  to" and added provision that in the case of service as
a member  of the  armed forces,  the  second  sentence  shall  be
applied by  substituting "who  are residents  of the  District of
Columbia" for  "whose regular  place of  employment is within the
District of Columbia".

     1968 Amendments.  Subsec.  (a).    P.L.  90-623  substituted
"Commissioner" for "Commissioners" in two instances.

Effective Dates

     1979 Acts.  Amendment by P.L. 96-54 effective July 12, 1979,
see section  2(b) of  P.L. 96-54, set out as a note under section
305 of this title.

     1976 Acts.  Section 1207(f)(1) of P.L. 94-455 provided that:
"The amendments  made by  subsection (a) [amending subsec. (a) of
this section  and section  5517(a) of  this title] shall apply to
wages withheld after the 120-day period following any request for
an agreement after the date of the enactment of this Act [Oct. 4,
1976]."

     1968 Acts.  Amendment by  P.L. 90-623  intended  to  restate
without substantive  change the  law in  effect on Oct. 22, 1968,
see section  6 of  P.L. 90-623,  set out  as a note under section
5334 of this title.

REFERENCES

CROSS REFERENCES

Withholding of District of Columbia income taxes by  --

Clerk and  Sergeant at  Arms of  House of  Representatives, see 2
USCA 60e-1a and 60e-1b.

Secretary of Senate, see 2 USCA 60c-3.

LIBRARY REFERENCES


                 Qualified State Tax References:
                          Page 50 of 148


Administrative Law

Money and finance, Treasury, see 31 CFR Part 215.

American Digest System

Compensation  of   federal  officers,   agents,  and   employees;
deductions and  set-offs against pay, see United States K39(1) et
seq., 39(10).

Encyclopedias

Compensation  of   federal  officers,   agents,  and   employees;
deductions and  set-offs against  pay, see  C.J.S. United States,
sections 43 et seq., 49.

ANNOTATIONS

NOTES OF DECISIONS

Constitutionality 1

1. Constitutionality

     There was  no unlawful  deprivation of  equal protection  in
that Sec.  5517 of  this title  granted authority to officials to
enter into  and effectuate  an agreement with State of New Mexico
for withholding  of New  Mexico income  tax from pay of plaintiff
residents of  El Paso,  Texas, employed at federal enclave in New
Mexico, while this section prevented Secretary from entering into
an  agreement   with  commissioners  [now  commissioner]  of  the
District of Columbia for withholding District income tax from the
pay of  any federal  employee not  a resident  of the District of
Columbia.   Lung v.  O'Cheskey, D.C.N.M.1973,  358  F.Supp.  928,
affirmed 94 S.Ct. 159, 414 U.S. 802, 38 L.Ed.2d 39.

5 USCA 5516, Withholding District of Columbia income taxes

------------ Excerpt from pages 36791-36793


UNITED STATES CODE ANNOTATED

TITLE 5.  GOVERNMENT ORGANIZATION AND EMPLOYEES

PART III -- EMPLOYEES

SUBPART D -- PAY AND ALLOWANCES

CHAPTER 55 -- PAY ADMINISTRATION

SUBCHAPTER II -- WITHHOLDING PAY

Current through P.L. 104-194, approved 9-9-96

Sec. 5517. Withholding State income taxes


                 Qualified State Tax References:
                          Page 51 of 148


     (a) When a State statute  --

     (1) provides  for the collection of a tax either by imposing
on employers  generally the duty of withholding sums from the pay
of employees  and making  returns of the sums to the State, or by
granting to  employers generally  the authority  to withhold sums
from the  pay of  employees if any employee voluntarily elects to
have such sums withheld;  and

     (2) imposes  the duty  or grants  the authority  to withhold
generally with  respect to the pay of employees who are residents
of the State;

the Secretary  of the  Treasury, under  regulations prescribed by
the President,  shall enter  into an  agreement  with  the  State
within 120  days of a request for agreement from the proper State
official.   The agreement  shall provide  that the  head of  each
agency of the United States shall comply with the requirements of
the State  withholding statute  in the  case of  employees of the
agency who  are subject  to the  tax and  whose regular  place of
Federal employment  is within  the State with which the agreement
is made.  In the case of pay for service as a member of the armed
forces, the  preceding sentence  shall be applied by substituting
"who are residents of the State with which the agreement is made"
for "whose  regular place  of Federal  employment is  within  the
State with which the agreement is made".

     (b) This  section does  not give  the consent  of the United
States to  the  application  of  a  statute  which  imposes  more
burdensome requirements  on  the  United  States  than  on  other
employers, or  which subjects  the United States or its employees
to a  penalty or liability because of this section.  An agency of
the United  States may  not accept  pay from a State for services
performed in  withholding State  income taxes from the pay of the
employees of the agency.

     (c) For  the purpose  of this section, "State" means a State
or territory or possession of the United States.

     (d) For  the purpose  of this  section and sections 5516 and
5520, the  terms "serve  as a  member of  the armed  forces"  and
"service as a member of the Armed Forces" include  --

     (1) participation  in exercises  or the  performance of duty
under section 502 of title 32, United States Code, by a member of
the National Guard;  and

     (2) participation  in scheduled  drills or training periods,
or service  on active  duty for  training, under section 10147 of
title 10, United States Code, by a member of the Ready Reserve.

CREDIT(S)

1996 Main Volume

(P.L. 89-554,  Sept. 6,  1966, 80  Stat. 478;  P.L. 94-455, Title
XII, Sec.  1207(a)(1), (b),  (c), Oct.  4, 1976,  90 Stat.  1704,


                 Qualified State Tax References:
                          Page 52 of 148


1705;   P.L. 100-180, Div. A, Title V, Sec. 505(1), Dec. 4, 1987,
101  Stat.   1086;    P.L.  103-337,  Div.  A,  Title  XVI,  Sec.
1677(a)(1), Oct. 5, 1994, 108 Stat. 3019.)

[General Materials (GM) - References, Annotations, or Tables]

HISTORICAL NOTES

HISTORICAL AND STATUTORY NOTES

Revision Notes and Legislative Reports

     1966 Acts.

       NOTE -- Some parts of this form are wider than one screen.
To view

       material  that exceeds  the width  of this screen, use the
right arrow

       key.  To return to the original screen, use the left arrow
key.

     In subsection  (b), the  words "after  March 31,  1959"  are
omitted as executed.

     Standard changes  are made  to conform  with the definitions
applicable and the style of this title as outlined in the preface
to the report.

     1976 Acts.  House Report  Nos. 94-658  and  94-1380,  Senate
Report No.  94-938(Parts I  and II),  and House Conference Report
No. 94-1515, see 1976 U.S. Code Cong. and Adm. News, p. 2897.

     1987 Acts.  House Report  No. 100-58  and  House  Conference
Report No.  100-446, see  1987 U.S.  Code Cong. and Adm. News, p.
1018.

     1994 Acts.  House Report  No. 103-499  and House  Conference
Report No.  103-701, see  1994 U.S.  Code Cong. and Adm. News, p.
2091.

Amendments

     1994  Amendments.   Subsec.  (d)(2).    P.L.  103-337,  Sec.
1677(a)(1), substituted  "section 10147 of title 10" for "section
270(a) of title 10".

     1987 Amendments.  Subsec. (d).   P.L.  100-180, Sec. 505(1),
struck out "do not" before "include".

     1976 Amendments. Subsec. (a).  P.L. 94-455, Sec. 1207(a)(1),
(c), added  in par.  (1)  provision  relating  to  the  grant  to
employers of  the authority  to withhold  sums from  the  pay  of
employees if  any employee  voluntarily elects  to have such sums
withheld,  inserted   in  par.  (2)  "or  grants  the  authority"
following  "imposes   the  duty",  and  substituted  in  material


                 Qualified State Tax References:
                          Page 53 of 148


following par. (2) provisions that in the case of pay for service
as a  member of the armed forces, the preceding sentence shall be
applied by  substituting "who  are residents  of the  State  with
which the  agreement is made" for "whose regular place of Federal
employment is  within the State with which the agreement is made"
for provision that the agreement may not apply to pay for service
as a member of the armed forces.

     Subsec. (d). P.L. 94-455, Sec. 1207(b), added subsec. (d).

Effective Dates

     1994  Acts.  Except  as  otherwise  provided,  amendment  by
section 1677(a)(1)  of P.L.  103-337 effective  Dec. 1, 1994, see
section 1691  of P.L.  103-337, set  out as  a note under section
10001 of Title 10, Armed Forces.

     1976 Acts.  Amendment by  section 1207(a)(1)  of P.L. 94-455
applicable to  wages withheld  after the 120-day period following
any request  for an  agreement after  Oct. 4,  1976, see  section
1207(f)(1) of  P.L. 94-455,  set out as a note under section 5516
of this title.

     Section 1207(f)(2)  of P.L.  94-455  provided  that:    "The
amendments made  by subsections  (b) and  (c) [amending  subsecs.
(a)(1), (2)  and adding  subsec. (d) of this section] shall apply
to wages  withheld after the 120-day period following the date of
the enactment of this Act [Oct. 4, 1976]."

TEXT

EXECUTIVE ORDERS

EXECUTIVE ORDER NO. 10407

     Ex. Ord.  No. 10407,  Nov. 7,  1952, 17 F.R. 10132, formerly
set  out   as  a  note  under  this  section,  which  related  to
regulations governing agreements concerning withholdings of state
or territorial  income taxes,  was revoked by Ex. Ord. No. 11968,
Jan. 31,  1977, 42  F.R. 6787,  formerly set  out as a note under
section 5520 of this title.

REFERENCES

CROSS REFERENCES

Military leave  entitlements for  Federal government and District
of Columbia  employees except  as provided in this section, see 5
USCA 6323.

Withholding of State income taxes by  --

Architect of the Capitol, see 40 USCA 166b-5.

Clerk and Sergeant at Arms of the House of Representatives, see 2
USCA 60e-1a and 60e-1b.


                 Qualified State Tax References:
                          Page 54 of 148


Secretary of Senate, see 2 USCA 60c-3.

LIBRARY REFERENCES

Administrative Law

Money and finance, Treasury, see 31 CFR Part 215.

American Digest System

Compensation  of   federal  officers,   agents,  and   employees;
deductions and  set-offs against pay, see United States K39(1) et
seq., 39(10).

Encyclopedias

Compensation  of   federal  officers,   agents,  and   employees;
deductions and  set-offs against  pay, see  C.J.S. United States,
sections 43 et seq., 49.

ANNOTATIONS

NOTES OF DECISIONS

Generally 3

Constitutionality 1

Jurisdiction 7

Law governing 2

Liability for taxes erroneously withheld 5

Sovereign immunity 6

States within section 4

1. Constitutionality

     There was  no unlawful  deprivation of  equal protection  in
that this  section granted  authority to  officials to enter into
and  effectuate  an  agreement  with  State  of  New  Mexico  for
withholding of  New Mexico  income  tax  from  pay  of  plaintiff
residents of  El Paso,  Texas, employed at federal enclave in New
Mexico, while  Sec. 5516  of this  title prevented Secretary from
entering into  an agreement with commissioners of the District of
Columbia for  withholding District income tax from the pay of any
federal employee  not a  resident of  the District  of  Columbia.
Lung v.  O'Cheskey, D.C.N.M.1973,  358 F.Supp.  928, affirmed  94
S.Ct. 154, 414 U.S. 802, 38 L.Ed.2d 39.

2. Law governing

     Power of defendant finance and accounting officer at federal
enclave in  New Mexico  where plaintiffs  were  employed  and  of
Secretary of  the Treasury  to enter  into withholding agreements


                 Qualified State Tax References:
                          Page 55 of 148


and to  withhold New  Mexico income  tax from plaintiffs' pay did
not derive from state law and they were not acting under color of
state law  as required  for a  civil  rights  action.    Lung  v.
O'Cheskey, D.C.N.M.1973,  358 F.Supp. 928, affirmed 94 S.Ct. 159,
414 U.S. 802, 38 L.Ed.2d 39.

3. Generally

     This section  authorizing the  Secretary of  the Treasury to
enter into  agreements with  the state  as regards withholding of
state income  taxes from state residents who are employees of the
federal government  does not  authorize imposition  of a  greater
burden on the federal government than that imposed on the private
employer as  regards withholding of state income taxes.  Clincher
v. U.S.,  Ct.Cl.1974, 499  F.2d 1250,  205 Ct.Cl.  8,  certiorari
denied 95 S.Ct. 1427, 420 U.S. 991, 43 L.Ed.2d 672.

4. States within section

     The  Commonwealth  of  Puerto  Rico  was  not  a  "State  or
territory or  possession of  the United  States," for purposes of
statute authorizing  Secretary of  the  Treasury  to  enter  into
agreement to  withhold state income taxes from federal employees'
wages, and, therefore, withholding agreement with Commonwealth of
Puerto Rico was unlawful and void;  Congress had amended similar,
related statute  in same  Title to  include Puerto Rico expressly
but, in  stark contrast, had never expressly authorized Secretary
to enter into withholding agreements with Puerto Rico.  Romero v.
U.S., C.A.Fed. (Puerto Rico) 1994, 38 F.3d 1204.

5. Liability for taxes erroneously withheld

     Federal employees  were not entitled, under Back Pay Act, to
refund of  any  money  which  United  States  had  paid  over  to
Commonwealth of  Puerto  Rico  pursuant  to  invalid  income  tax
withholding agreement  between  Secretary  of  the  Treasury  and
Commonwealth of Puerto Rico, but rather, could recover only those
amounts which  had been  withheld but  had  not  yet  been  paid.
Romero v. U.S., C.A.Fed. (Puerto Rico) 1994, 38 F.3d 1204.

     United States  was not  liable to  its Arizona  and  Montana
Indian employees for state income taxes erroneously withheld from
their salaries since a private employer would not be liable under
Arizona or  Montana law.   Clincher v. U.S., Ct.Cl.1974, 499 F.2d
1250, 205  Ct.Cl. 8,  certiorari denied  95 S.Ct.  1427, 420 U.S.
991, 43 L.Ed.2d 672.

6. Sovereign immunity

     Where defendant  finance and  accounting officer  at federal
enclave in  New Mexico  where plaintiff  residents  of  El  Paso,
Texas, were  employed and  Secretary of  the Treasury were acting
within scope  of authority granted them by Congress under statute
in entering  into and effectuating an agreement with the state of
New Mexico  for withholding  of New Mexico income tax from pay of
plaintiffs and  were acting  as authorized  by  a  constitutional
statute, claim  against  them,  as  individuals,  regarding  acts


                 Qualified State Tax References:
                          Page 56 of 148


performed in  their official  capacity was  barred by doctrine of
sovereign immunity.  Lung v. O'Cheskey, D.C.N.M.1973, 358 F.Supp.
928, affirmed 94 S.Ct. 159, 414 U.S. 802, 38 L.Ed.2d 39.

7. Jurisdiction

     Court of  claims [now  Court of  Federal Claims] had subject
matter jurisdiction of action by seven American Indians, who were
or had  been United  States  employees  on  Indian  reservations,
seeking to  recover amounts  withheld from  their  wages  by  the
federal government  for state  income taxes  and paid over to the
state.   Clincher v.  U.S., Ct.Cl.1974, 499 F.2d 1250, certiorari
denied 95 S.Ct. 1427, 420 U.S. 991, 43 L.Ed.2d 672.

5 USCA 5517, Withholding State income taxes

------------ Excerpt from pages 36794-36799


UNITED STATES CODE ANNOTATED

TITLE 5.  GOVERNMENT ORGANIZATION AND EMPLOYEES

PART III -- EMPLOYEES

SUBPART D -- PAY AND ALLOWANCES

CHAPTER 55 -- PAY ADMINISTRATION

SUBCHAPTER II -- WITHHOLDING PAY

Current through P.L. 104-194, approved 9-9-96

Sec. 5518.  Deductions for  State retirement  systems;   National
Guard employees

     When  --

     (1) a  State statute  provides for  the payment  of employee
contributions to a State employee retirement system or to a State
sponsored  plan   providing  retirement,   disability,  or  death
benefits, by withholding sums from the pay of State employees and
making returns  of the  sums withheld  to State authorities or to
the person  or organization  designated by  State authorities  to
receive sums withheld for the program;  and

     (2) individuals  employed by the Army National Guard and the
Air National  Guard,  except  employees  of  the  National  Guard
Bureau,  are   eligible  for   membership  in  a  State  employee
retirement system or other State sponsored plan;

the Secretary  of Defense,  under regulations  prescribed by  the
President, shall  enter into  an agreement  with the State within
120 days  of a  request  for  agreement  from  the  proper  State
official.   The agreement  shall provide  that the  Department of
Defense shall comply with the requirements of State statute as to
the individuals  named by  paragraph (2)  of this section who are


                 Qualified State Tax References:
                          Page 57 of 148


eligible for  membership in the State employee retirement system.
The disbursing  officials paying these individuals shall withhold
and pay  to the State employee retirement system or to the person
or organization  designated by  State authorities to receive sums
withheld for  the program  the employee  contributions for  these
individuals.   For the  purpose of  this section, "State" means a
State or  territory or  possession of the United States including
the Commonwealth of Puerto Rico.

CREDIT(S)

1996 Main Volume

(P.L. 89-554, Sept. 6, 1966, 80 Stat. 479.)

[General Materials (GM) - References, Annotations, or Tables]

HISTORICAL NOTES

HISTORICAL AND STATUTORY NOTES

Revision Notes and Legislative Reports

     1966 Acts.

     The  words   "individuals  employed   by"   and   the   word
"individuals" are  substituted for  "civilian employees  of"  and
"employees",  respectively,   in  view   of  the   definition  of
"employee" in  section 2105 which is limited to those employed by
the Government  of the  United States.   The  word "civilian"  is
omitted as  unnecessary as military personnel are not "employed".
The words  "disbursing officials" are substituted for "disbursing
officers" as the definition of "officer" in section 2104 excludes
a member of a uniformed service.

     Standard changes  are made  to conform  with the definitions
applicable and the style of this title as outlined in the preface
to the report.

TEXT

EXECUTIVE ORDERS

EXECUTIVE ORDER NO. 10996

Feb. 16, 1962, 27 F.R. 1521

WITHHOLDING  OF   COMPENSATION  FOR   STATE  AND  STATE-SPONSORED
EMPLOYEE RETIREMENT, DISABILITY, OR DEATH BENEFITS PROGRAMS

     By virtue  of the  authority vested in me by the act of June
15, 1956,  as amended,  75 Stat.  496 (5  U.S.C. 84d)  [now  this
section], and by section 301 of title 3 of the United States Code
[section 301  of Title 3, The President], and as President of the
United States, it is ordered as follows:

     Section 1. As used in this order, the term:


                 Qualified State Tax References:
                          Page 58 of 148


     (a)  "Employees"   means  civilian  employees  of  the  Army
National Guard  or Air National Guard of a State who are employed
pursuant to  section 709  of title  32 of  the United States Code
[section 709 of Title 32, National Guard], and paid from Federal,
appropriated funds.

     (b) "State" means one of the United States, the Commonwealth
of Puerto Rico, and any territory of the United States.

     Sec. 2.  Each agreement between the Secretary of Defense and
the Governor or other proper official of a State, pursuant to the
provisions of  the act of June 15, 1956, as amended, with respect
to withholding  of compensation  of certain civilian employees of
the Army  National Guard  and the Air National Guard for purposes
of State  or State-sponsored  employee retirement, disability, or
death benefits systems, shall be entered into by the Secretary of
Defense within  one hundred  and twenty  days of the receipt of a
request therefor  by the Secretary from the Governor or any other
proper official of any State:  Provided, that  --

     (a) the  law of  such State  provides  for  the  payment  of
employee contributions  to such State or State-sponsored employee
retirement, disability,  or death benefits systems by withholding
sums from  the compensation  of such  State employees  and making
returns of  such sums  to officials of such State or organization
designated by  such officials  to receive  sums withheld for such
programs;

     (b) civilian  employees of  the Army  National Guard and the
Air National  Guard, other  than those  employed by  the National
Guard Bureau,  are eligible for membership in a State retirement,
disability, or death benefits system;  and

     (c) each such agreement is consistent with the provisions of
the said  act of  June 15,  1956, as  amended, and  of rules  and
regulations issued  thereunder, and  contains a  clause  that  it
shall be  subject to  any amendments  of the  said act, including
amendments occurring after the effective date of such agreement.

     Sec. 3. Each such agreement shall:

     (a) Provide  that the  Secretary of the Army with respect to
civilian employees  of the Army National Guard, and the Secretary
of the  Air Force  with respect  to civilian employees of the Air
National Guard,  shall comply with the requirements of such State
law in  the case of employees subject to the said act of June 15,
1956, as  amended,  who  are  eligible  for  membership  in  such
retirement,  disability,  or  death  benefits  system  for  State
employees;

     (b)  Specify   when  the   withholding  of   sums  from  the
compensation of such State employees shall commence;  and

     (c) Provide  for procedures  for the withholding, the filing
of the  returns, and  the  payment  of  the  sums  withheld  from
compensation to  the officials  of  the  State,  or  organization


                 Qualified State Tax References:
                          Page 59 of 148


designated by  such officials  to receive  sums withheld for such
programs, which  procedures shall conform, so far as practicable,
to the  usual fiscal  practices of the Department of the Army and
the Department of the Air Force, respectively.

     Sec. 4.  The Secretary  of the Army with respect to civilian
employees of  the Army  National Guard,  and the Secretary of the
Air Force  with respect to civilian employees of the Air National
Guard, shall  designate, or  provide for  the designation of, the
officers or  employees whose  duty it  shall be  to withhold sums
from compensation,  file required returns, and direct the payment
of sums  so  withheld,  in  accordance  with  the  terms  of  the
agreements entered  into between the Secretary of Defense and the
States.

     Sec. 5.  Nothing in  this order,  or in rules or regulations
issued thereunder,  or in  any agreement  entered  into  pursuant
thereto, shall  be construed as giving consent to the application
of any  provision of  law of  any State  which has  the effect of
imposing more burdensome requirements upon the United States than
it imposes  upon departments, agencies, or political subdivisions
of the State concerned, with respect to employees thereof who are
members of  the State  or State-sponsored retirement, disability,
or death  benefits system,  or which has the effect of subjecting
the United  States or  any of  its officers  or employees  to any
penalty or liability.

     Sec. 6.  I hereby  delegate  to  the  Secretary  of  Defense
authority  to   prescribe  such   rules  and   regulations,   not
inconsistent herewith,  as may be necessary to effectuate further
the provisions  of the  said act of June 15, 1956, as amended, or
of this order.

     Sec. 7.  Except to  the extent that they may be inconsistent
with this order, all determinations, authorizations, regulations,
rulings, certificates, orders, directives, contracts, agreements,
and other  actions made,  issued, or entered into with respect to
any function  affected by this order and not revoked, superseded,
or otherwise  made inapplicable  before the  date of  this order,
shall continue  in full force and effect until amended, modified,
or terminated by appropriate authority.

     Sec. 8.  This order  supersedes Executive Order No. 10679 of
September 20, 1956.

JOHN F. KENNEDY

REFERENCES

LIBRARY REFERENCES

Administrative Law

National defense, see 32 CFR Part 79.

American Digest System


                 Qualified State Tax References:
                          Page 60 of 148


Compensation  of   federal  officers,   agents,  and   employees;
deductions and  set-offs against pay, see United States K39(1) et
seq., 39(10).

Encyclopedias

Compensation  of   federal  officers,   agents,  and   employees;
deductions and  set-offs against  pay, see  C.J.S. United States,
sections 43 et seq., 49.

5 USCA  5518, Deductions  for State retirement systems;  National
Guard employees

------------ Excerpt from pages 36800-36803


UNITED STATES CODE ANNOTATED

TITLE 5.  GOVERNMENT ORGANIZATION AND EMPLOYEES

PART III -- EMPLOYEES

SUBPART D -- PAY AND ALLOWANCES

CHAPTER 55 -- PAY ADMINISTRATION

SUBCHAPTER II -- WITHHOLDING PAY

Current through P.L. 104-194, approved 9-9-96

Sec. 5520.  Withholding of  city or  county income  or employment
taxes

     (a) When a city or county ordinance  --

     (1) provides  for the  collection of  a tax  by imposing  on
employers generally  the duty of withholding sums from the pay of
employees and  making returns of the sums to a designated city or
county officer, department, or instrumentality;  and

     (2) imposes the duty to withhold generally on the payment of
compensation earned within the jurisdiction of the city or county
in the  case of  employees whose  regular place  of employment is
within such jurisdiction;

the Secretary  of the  Treasury, under  regulations prescribed by
the President,  shall enter  into an  agreement with  the city or
county within  120 days  of a request for agreement by the proper
city or  county official.   The  agreement shall provide that the
head of  each agency  of the  United States shall comply with the
requirements of  the city  or county ordinance in the case of any
employee of  the agency  who is  subject to the tax and (i) whose
regular place of Federal employment is within the jurisdiction of
the city  or county with which the agreement is made or (ii) is a
resident of  such city or county.  The agreement may not apply to
pay for  service as  a member  of the  Armed Forces  (other  than
service described  in  section  5517(d)  of  this  title).    The


                 Qualified State Tax References:
                          Page 61 of 148


agreement may not permit withholding of a city or county tax from
the pay of an employee who is not a resident of, or whose regular
place of  Federal employment  is not  within, the  State in which
that city  or county  is located  unless the employee consents to
the withholding.

     (b) This  section does  not give  the consent  of the United
States to  the application  of an  ordinance which  imposes  more
burdensome requirements  on  the  United  States  than  on  other
employers or which subjects the United States or its employees to
a penalty or liability because of this section.  An agency of the
United States  may not  accept pay  from a  city  or  county  for
services performed  in  withholding  city  or  county  income  or
employment taxes from the pay of employees of the agency.

     (c) For the purpose of this section  --

     (1) "city"  means any unit of general local government which
--

     (A) is  classified as  a municipality  by the  Bureau of the
Census, or

     (B) is a town or township which, in the determination of the
Secretary of the Treasury  --

     (i) possesses  powers and  performs functions  comparable to
those associated with municipalities,

     (ii) is closely settled, and

     (iii) contains within its boundaries no incorporated places,
as defined by the Bureau of the Census,

within the  political boundaries of which 500 or more persons are
regularly employed by all agencies of the Federal Government;

     (2) "county"  means any  unit of  local  general  government
which is  classified as  a county by the Bureau of the Census and
within the  political boundaries of which 500 or more persons are
regularly employed by all agencies of the Federal Government;

     (3) "ordinance"  means an  ordinance, order,  resolution, or
similar instrument  which is  duly adopted and approved by a city
or county in accordance with the constitution and statutes of the
State in  which it  is located  and which  has the  force of  law
within such city or county;  and

     (4) "agency" means  --

     (A) an Executive agency;

     (B) the judicial branch;  and

     (C) the United States Postal Service.

CREDIT(S)


                 Qualified State Tax References:
                          Page 62 of 148


1996 Main Volume

(Added P.L.  93-340, Sec.  1(a), July 10, 1974, 88 Stat. 294, and
amended P.L.  94-358, Sec.  1, July 12, 1976, 90 Stat. 910;  P.L.
95-30, Title  IV, Sec.  408(a), May 23, 1977, 91 Stat. 157;  P.L.
95-365, Sec. 1, Sept. 15, 1978, 92 Stat. 599;  P.L. 100-180, Div.
A, Title V, Sec. 505(2), Dec. 4, 1987, 101 Stat. 1086.)

[General Materials (GM) - References, Annotations, or Tables]

HISTORICAL NOTES

HISTORICAL AND STATUTORY NOTES

Revision Notes and Legislative Reports

     1974 Acts.  Senate Report  No. 93-946,  see 1974  U.S.  Code
Cong. and Adm. News, p. 3450.

     1976 Acts.  House Report  No. 94-1008,  see 1976  U.S.  Code
Cong. and Adm. News, p. 1680.

     1977 Acts.  Senate Report  No. 95-66  and  House  Conference
Report No.  95-263, see  1977 U.S.  Code Cong.  and Adm. News, p.
185.

     1978 Acts.  Senate Report  No. 95-1083,  see 1978  U.S. Code
Cong. and Adm. News, p. 1375.

     1987 Acts.  House Report  No. 100-58  and  House  Conference
Report No.  100-446, see  1987 U.S.  Code Cong. and Adm. News, p.
1018.

Amendments

     1987 Amendments.  Subsec. (a).   P.L.  100-180, Sec. 505(2),
inserted "(other  than service  described in  section 5517(d)  of
this title)" after "Armed Forces" in penultimate sentence.

     1978  Amendments.  Subsec.  (a).    P.L.  95-365  designated
existing provisions  as cl.  (i), and  added ",  or whose regular
place of  Federal employment  is not  within," following  "not  a
resident of", and added cl. (ii).

     1977 Amendments.  P.L. 95-30,  Sec. 408(a)(1),  inserted "or
county" following "city" in the section catchline.

     Subsec. (a).  P.L. 95-30,  Sec. 408(a)(2),  (3), substituted
"city or  county"  for  "city"  in  the  introductory  provisions
preceding par.  (1), in par. (2), and in the provisions following
par. (2),  and, in  par. (1),  substituted "a  designated city or
county officer, department, or instrumentality" for "the city".

     Subsec. (b).  P.L. 95-30,  Sec. 408(a)(2), substituted "city
or county" for "city".


                 Qualified State Tax References:
                          Page 63 of 148


     Subsec. (c).  P.L. 95-30,  Sec. 408(a)(4),  (5), added pars.
(2) and (3), and redesignated former par. (2) as (4).

     1976 Amendments.  Subsec. (c)(1).   P.L.  94-358 substituted
provision defining  a city,  for purposes of this section, as any
unit  of   general  local   government  which   is  classified  a
municipality by  the Bureau  of the  Census,  or  is  a  town  or
township which  in the  opinion of  the Secretary of the Treasury
possesses powers  and  performs  functions  comparable  to  those
associated with  municipalities, is closely settled, and contains
within its  boundaries no  incorporated places, as defined by the
Bureau of  the Census,  within the  political boundaries of which
five hundred  or more  persons  are  regularly  employed  by  all
agencies of  the Federal  Government, for  provision  defining  a
city, for  purposes of  this section,  as a  city which  is  duly
incorporated under  the laws  of a State and within the political
boundaries of  which five  hundred or  more persons are regularly
employed by all agencies of the Federal Government.

Effective Dates

     1978 Acts.  Section 2  of P.L.  95-365 provided  that:  "The
amendments made  by the  first  section  of  this  Act  [amending
subsec. (a)  of this  section] shall  take effect on the 90th day
after the date of the enactment of this Act [Sept. 15, 1978]."

     1977 Acts. Section 408(c) of P.L. 95-30 provided that:  "The
amendments made  by this  section [amending  this section]  shall
take effect on the date of enactment of this Act [May 23, 1977]."

     1976 Acts.  Section 2  of P.L.  94-358 provided  that:  "The
amendment made by the first section of this Act [amending subsec.
(c)(1) of  this section]  shall take  effect on  the date  of the
enactment of this Act [July 12, 1976]."

     1974 Acts.  Section 3  of P.L.  93-340 provided that:  "This
section shall  become effective  on the date of enactment of this
Act [July  10, 1974].   The  provisions of  the first section and
section 2 of this Act [enacting this section and amending section
410(b)(1) of  Title 39, Postal Service] shall become effective on
the ninetieth  day following  the date  of  enactment  [July  10,
1974]."

TEXT

EXECUTIVE ORDERS

EXECUTIVE ORDER NO. 11833

     Ex. Ord.  No. 11833,  Jan. 13,  1975, 40 F.R. 2673, formerly
set out  as a  note under  this section,  which  related  to  the
withholding  of  city  income  or  employment  taxes  by  federal
agencies, was  revoked by  Ex. Ord.  No. 11863, June 12, 1975, 40
F.R. 25431, formerly set out as a note under this section.

EXECUTIVE ORDER NO. 11863


                 Qualified State Tax References:
                          Page 64 of 148


     Ex. Ord.  No. 11863,  June 12, 1975, 40 F.R. 25431, formerly
set out  as a  note under  this section,  which  related  to  the
withholding  of  city  income  or  employment  taxes  by  federal
agencies, was  revoked by  Ex. Ord.  No. 11968, Jan. 31, 1977, 42
F.R. 6787, formerly set out as a note under this section.

EXECUTIVE ORDER NO. 11968

     Ex. Ord.  No. 11968,  Jan. 31,  1977, 42 F.R. 6787, formerly
set out  as a  note under  this section,  which  related  to  the
withholding of  District of  Columbia, state  and city  income or
employment taxes,  was revoked  by Ex.  Ord. No.  11997, June 22,
1977, 42 F.R. 31759, set out under this section.

EXECUTIVE ORDER NO. 11997

June 22, 1977, 42 F.R. 31759

WITHHOLDING OF  DISTRICT OF  COLUMBIA,  STATE,  CITY  AND  COUNTY
INCOME OR EMPLOYMENT TAXES

     By virtue  of the  authority vested  in me by Sections 5516,
5517 and  5520 of  Title 5  of the  United States  Code [sections
5516, 5517  of this  title and  this section], and Section 301 of
Title 3  of the  United States  Code [section 301 of Title 3, The
President], and  as President of the United States of America, in
order to  authorize the  Secretary of the Treasury to provide for
the  withholding   of  county   income  or  employment  taxes  as
authorized by  Section 5520  of Title 5 of the United States Code
as amended  by Section 408 of Public Law 95-30 [this section], as
well as  to provide  for the withholding of District of Columbia,
State and  city income  or employment taxes, it is hereby ordered
as follows:

     Section 1.  Whenever the  Secretary of  the Treasury  enters
into an  agreement pursuant  to Sections  5516, 5517  or 5520  of
Title 5  of the  United States  Code [sections 5516, 5517 of this
title or this section], with the District of Columbia, a State, a
city or  a county,  as the  case  may  be,  with  regard  to  the
withholding, by  an agency  of  the  United  States,  hereinafter
referred to  as an agency, of income or employment taxes from the
pay of  Federal employees  or members  of the  Armed Forces,  the
Secretary of  the Treasury  shall ensure  that each  agreement is
consistent with  those sections  and regulations,  including this
Order, issued thereunder.

     Sec.  2.   Each  agreement   shall  provide   (a)  when  tax
withholding shall  begin, (b) that the head of an agency may rely
on the  withholding certificate of an employee or a member of the
Armed Forces  in withholding  taxes,  (c)  that  the  method  for
calculating the  amount to  be withheld for District of Columbia,
State, city  or county  income or  employment taxes shall produce
approximately the  tax required to be withheld by the District of
Columbia or  State law, or city or county ordinance, whichever is
applicable, and  (d) that  procedures for the withholding, filing
of returns,  and payment of the withheld taxes to the District of
Columbia, a  State, a city or a county shall conform to the usual


                 Qualified State Tax References:
                          Page 65 of 148


fiscal practices of agencies.  Any agreement affecting members of
the Armed  Forces shall  also provide  that the head of an agency
may rely on the certificate of legal residence of a member of the
Armed  Forces  in  determining  his  or  her  residence  for  tax
withholding purposes.   No agreement shall require the collection
by an  agency of  delinquent tax  liabilities of an employee or a
member of the Armed Forces.

     Sec. 3.  The head of each agency shall designate, or provide
for the  designation of,  the officers or employees whose duty it
shall be  to withhold  taxes, file  required returns,  and direct
payment of the taxes withheld, in accordance with this Order, any
regulations prescribed  by the Secretary of the Treasury, and the
new applicable agreement.

     Sec. 4.  The Secretary  of the  Treasury  is  authorized  to
prescribe additional regulations to implement Sections 5516, 5517
and 5520  of Title  5 of  the United  States Code [sections 5516,
5517 of this title and this section], and this Order.

     Sec. 5.  Executive Order  No. 11968  of January 31, 1977, is
hereby revoked.   However,  all actions  heretofore taken  by the
President or  his delegates in respect of the matters affected by
this Order  and in  force at  the time  of the  issuance of  this
Order, including  any regulations  prescribed or  approved by the
President or  his delegates  in respect  of such  matters and any
existing agreements  approved by  his delegates, shall, except as
they may  be inconsistent  with the  provisions  of  this  Order,
remain in  effect until amended, modified, or revoked pursuant to
the authority  conferred by  this Order, unless sooner terminated
by operation of law.

JIMMY CARTER

REFERENCES

CROSS REFERENCES

Applicability of  this section to the Postal Service, see 39 USCA
410.

LIBRARY REFERENCES

American Digest System

Compensation  of   federal  officers,   agents,  and   employees;
deductions and  set-offs against pay, see United States K39(1) et
seq., 39(10).

Encyclopedias

Compensation  of   federal  officers,   agents,  and   employees;
deductions and  set-offs against  pay, see  C.J.S. United States,
sections 43 et seq., 49.

ANNOTATIONS


                 Qualified State Tax References:
                          Page 66 of 148


NOTES OF DECISIONS

Purpose 1

1. Purpose

     Enactment of  the withholding  procedure for city income and
employment taxes  imposed upon federal employees was not intended
by Congress  to modify in any substantive manner the liability of
federal employees  for local  taxes.   U.S. v. City and County of
Denver, D.C.Colo.1983, 573 F.Supp. 686.

5 USCA  5520, Withholding  of city or county income or employment
taxes

------------ Excerpt from pages 36805-36809


UNITED STATES CODE ANNOTATED

TITLE 5.  GOVERNMENT ORGANIZATION AND EMPLOYEES

PART III -- EMPLOYEES

SUBPART D -- PAY AND ALLOWANCES

CHAPTER 55 -- PAY ADMINISTRATION

SUBCHAPTER III -- ADVANCEMENT, ALLOTMENT, AND ASSIGNMENT OF PAY

Current through P.L. 104-194, approved 9-9-96

Sec. 5521. Definitions

     For the purpose of this subchapter  --

     (1) "agency" means  --

     (A) an Executive agency;

     (B) the judicial branch;

     (C) the Library of Congress;

     (D) the Government Printing Office;  and

     (E) the government of the District of Columbia;

     (2) "employee"  means an  individual employed in or under an
agency;

     (3) "head of each agency" means  --

     (A) the  Director of the Administrative Office of the United
States Courts with respect to the judicial branch;  and

     (B) the  Mayor of  the District  of Columbia with respect to


                 Qualified State Tax References:
                          Page 67 of 148


the government of the District of Columbia;  and

     (4) "United  States", when  used in  a  geographical  sense,
means the several States and the District of Columbia.

CREDIT(S)

1996 Main Volume

(P.L. 89-554,  Sept. 6,  1966, 80  Stat. 479;   P.L. 90-623, Sec.
1(10), Oct.  22, 1968, 82 Stat. 1312;  P.L. 96-54, Sec. 2(a)(31),
Aug. 14, 1979, 93 Stat. 383.)

[General Materials (GM) - References, Annotations, or Tables]

HISTORICAL NOTES

HISTORICAL AND STATUTORY NOTES

Revision Notes and Legislative Reports

     1966 Acts.

     In paragraph  (1), the  word  "agency"  is  substituted  for
"department".  The term "Executive agency" is substituted for the
reference to  "each executive department of the Government of the
United  States   of  America;     each   agency  or   independent
establishment in  the executive  branch of such Government;  each
corporation wholly  owned or  controlled by  such Government"  in
former section 3071(1)(A)-(C).

     Paragraph (2)  is added  for clarity and in view of the fact
that the  definition of  "employee"  in  section  2105  does  not
include individuals employed by the government of the District of
Columbia.

     In paragraph  (3), the  term "department head" is omitted as
unnecessary.

     In paragraph  (4),  the  words  "of  the  United  States  of
America" are omitted as unnecessary.

     Standard changes  are made  to conform  with the definitions
applicable and the style of this title as outlined in the preface
to the report.

     1968 Acts.  Senate Report No. 1624, see 1968 U.S. Code Cong.
and Adm. News, p. 4446.

     1979 Acts.  Senate Report  No. 96-276,  see 1979  U.S.  Code
Cong. and Adm. News, p. 931.

Amendments

     1979  Amendments.  Par.  (3)(B).    P.L.  96-54  substituted
"Mayor" for "Commissioner".


                 Qualified State Tax References:
                          Page 68 of 148


     1968 Amendments.  Par.  (3)(B).    P.L.  90-623  substituted
"Commissioner" for "Board of Commissioners".

Effective Dates

     1979 Acts.  Amendment by P.L. 96-54 effective July 12, 1979,
see section  2(b) of  P.L. 96-54, set out as a note under section
305 of this title.

     1968 Acts.  Amendment by  P.L. 90-623  intended  to  restate
without substantive  change the  law in  effect on Oct. 22, 1968,
see section  6 of  P.L. 90-623,  set out  as a note under section
5334 of this title.

REFERENCES

LIBRARY REFERENCES

American Digest System

Compensation  of  federal  officers,  agents,  and  employees  in
general, see United States K39(1) et seq.

Encyclopedias

Compensation  of  federal  officers,  agents,  and  employees  in
general, see C.J.S. United States Sec. 43 et seq.

5 USCA 5521, Definitions

------------ Excerpt from pages 36816-36817


UNITED STATES CODE ANNOTATED

TITLE 5.  GOVERNMENT ORGANIZATION AND EMPLOYEES

PART III -- EMPLOYEES

SUBPART D -- PAY AND ALLOWANCES

CHAPTER 55 -- PAY ADMINISTRATION

SUBCHAPTER III -- ADVANCEMENT, ALLOTMENT, AND ASSIGNMENT OF PAY

Current through P.L. 104-194, approved 9-9-96

Sec. 5527. Regulations

     (a) To  the extent  practicable in  the public interest, the
President shall  coordinate the  policies and  procedures of  the
respective Executive agencies under this subchapter.

     (b) The  President, with  respect to the Executive agencies,
the head of the agency concerned, with respect to the appropriate
agency outside the executive branch, and the District of Columbia
Council, with  respect to  the  government  of  the  District  of


                 Qualified State Tax References:
                          Page 69 of 148


Columbia,  shall   prescribe  and   issue,  or  provide  for  the
formulation  and   issuance   of,   regulations   necessary   and
appropriate to carry out the provisions, accomplish the purposes,
and govern the administration of this subchapter.

     (c) The  head of  each Executive  agency may  prescribe  and
issue regulations,  not inconsistent  with the regulations of the
President issued  under subsection (b) of this section, necessary
and appropriate to carry out his functions under this subchapter.

CREDIT(S)

1996 Main Volume

(P.L. 89-554,  Sept. 6,  1966, 80  Stat. 481;   P.L. 90-623, Sec.
1(11), Oct. 22, 1968, 82 Stat. 1312.)

[General Materials (GM) - References, Annotations, or Tables]

HISTORICAL NOTES

HISTORICAL AND STATUTORY NOTES

Revision Notes and Legislative Reports

     1966 Acts.

     In subsection (b), the last sentence of former section 3076,
which provided for the issuance of the regulations not later than
December 25,  1961, and  the effective date of the regulations as
not later than March 25, 1962, is omitted as executed.

     Standard changes  are made  to conform  with the definitions
applicable and the style of this title as outlined in the preface
to the report.

     1968 Acts.  Senate Report No. 1624, see 1968 U.S. Code Cong.
and Adm. News, p. 4446.

Amendments

     1968  Amendments.   Subsec.  (b).     P.L.  90-623  inserted
reference to  the District  of Columbia  Council, with respect to
the government of the District of Columbia.

Effective Dates

     1968 Acts.  Amendment by  P.L. 90-623  intended  to  restate
without substantive  change the  law in  effect on Oct. 22, 1968,
see section  6 of  P.L. 90-623,  set out  as a note under section
5334 of this title.

TEXT

EXECUTIVE ORDERS

EXECUTIVE ORDER NO. 10982


                 Qualified State Tax References:
                          Page 70 of 148


Dec. 25,  1961, 27 F.R. 3, as amended by Ex. Ord. No. 12107, Dec.
28, 1978,  44 F.R.  1055;   Ex. Ord.  No. 12748, Feb. 1, 1991, 56
F.R. 4521

ADMINISTRATION OF PROVISIONS OF CHAPTER

     By virtue  of the  authority vested  in me  by  the  act  of
September 26,  1961 (75  Stat. 662)  [now this subchapter] and by
section 301  of title 3 of the United States Code [section 301 of
Title 3,  The President],  and as President of the United States,
it is ordered as follows:

     Section 1. As used in this order:

     (a) The  term "the  act" means the act of September 26, 1961
(Public Law 87-304), 75 Stat. 662 [now this subchapter].

     (b) The term "Federal agency" means any executive department
of the  Government of the United States of America, any agency or
independent  establishment   in  the   executive  branch  of  the
Government, and any corporation wholly owned or controlled by the
Government.

     (c) The  term "foreign  area" means  any area (including the
Trust Territory  of the Pacific Islands) situated outside (1) the
United States  (including the  District  of  Columbia),  (2)  the
Commonwealth of  Puerto Rico,  (3) the  Canal Zone,  and (4)  any
territory or possession of the United States.

     Sec. 2. (a) Except as otherwise provided by section 2(b) and
section 3 (c) of this order, the Secretary of State in respect of
civilian employees of Federal agencies who are located in foreign
areas immediately  prior to  an  emergency  evacuation,  and  the
Office of  Personnel Management  in respect of all other civilian
employees  of   Federal  agencies,   are  hereby  designated  and
empowered, without the approval, ratification, or other action of
the President,  to  perform  the  functions  conferred  upon  the
President by  section 3(a), section 3(b), and section 6(a) of the
act [now  sections 5523(a)  and 5523(b) of this title and subsec.
(a) of this section].

     (b) The  Office of Personnel Management is hereby designated
and  empowered  to  perform  the  functions  conferred  upon  the
President by  the provisions  of section  5527 of title 5, United
States Code  [this  section],  with  respect  to  allotments  and
assignments authorized  by section 5525 of title 5, United States
Code [section  5525 of  this title],  and advance payments to new
appointees authorized  by section 5524a of title 5, United States
Code [section 5524a of this title], as added by section 107(a) of
the  Federal   Employees  Pay   Comparability  Act  of  1990,  as
incorporated in section 529 of Public Law 101-509.

     Sec. 3.  The following  regulations are hereby prescribed as
necessary and appropriate to carry out the provisions, accomplish
the purposes, and govern the administration of the act:


                 Qualified State Tax References:
                          Page 71 of 148


     (a) To  the maximum  extent practicable,  the  Secretary  of
State, the Office of Personnel Management, and the heads of other
Federal agencies shall exercise their authority under the act and
this order  so  that  employees  of  different  Federal  agencies
evacuated from  the same  geographic area  under the same general
circumstances may be treated uniformly.

     (b)  Advance   payments  of  compensation,  allowances,  and
differentials, as authorized by section 2 of the act [now section
5522 of  this title],  shall be held to the minimum period during
which the  order for  evacuation is  anticipated to continue, and
shall in no event be made for a period of more than thirty days.

     (c) It  is hereby  determined to  be in  the interest of the
United States  that payments of monetary amounts as authorized by
section 3  of the act [now section 5523 of this title] to and for
the account of an employee whose evacuation is ordered and who is
prevented from  performing the  duties of his position, under the
circumstances set forth in section 3 of the act [now section 5523
of this title], should be extended beyond sixty days for not more
than  one   hundred  and   twenty  additional   days  only   upon
determination, pursuant to regulations of the head of the Federal
agency concerned,  that such  additional payments  are reasonably
necessary to  maintain a civilian staff available for performance
of duty.   Such  payments of monetary amounts under the authority
of section 3 of the act [now section 5523 of this title] shall be
terminated as of such dates as may be determined by the Secretary
of State  or the  Office of Personnel Management, as appropriate,
but not  later than  the date  on which  an employee  resumes his
duties at  the post  from which  he  has  been  evacuated  or  is
assigned to another position.

     Sec. 4.  (a) The  head of each Federal agency shall issue as
soon as  practicable such  regulations as  may be  necessary  and
appropriate to  carry out  his functions  under the  act and this
order.

     (b) In  order to  coordinate the  policies and procedures of
the executive  branch of  the Government,  all regulations of any
Federal agency  prepared for  issuance under  the  provisions  of
section 6(c) of the act [now subsection (c) of this section], and
section 4(a)  of this order shall be submitted for prior approval
to the  Secretary  of  State,  or  to  the  Office  of  Personnel
Management, as may be appropriate, under section 2 of this order.
The Secretary  of State  and the  Office of  Personnel Management
shall review  such regulations  for conformance  with the purpose
and intent of the act and of the regulations contained in section
3 of  this order.  No Federal agency shall make any payment under
the provisions  of the  act or  this order until such regulations
have been  approved by  the Secretary  of State, or the Office of
Personnel Management, as appropriate.

REFERENCES

LIBRARY REFERENCES

Administrative Law


                 Qualified State Tax References:
                          Page 72 of 148


Administrative personnel, see 5 CFR Part 550.

American Digest System

Compensation  of  federal  officers,  agents,  and  employees  in
general, see United States K39(1) et seq.

Encyclopedias

Compensation  of  federal  officers,  agents,  and  employees  in
general, see C.J.S. United States Sec. 43 et seq.

5 USCA 5527, Regulations

------------ Excerpt from pages 36831-36834


UNITED STATES CODE ANNOTATED

TITLE 26.  INTERNAL REVENUE CODE

SUBTITLE F -- PROCEDURE AND ADMINISTRATION

CHAPTER 65 -- ABATEMENTS, CREDITS, AND REFUNDS

SUBCHAPTER B -- RULES OF SPECIAL APPLICATION

Current through P.L. 104-194, approved 9-9-96

Sec. 6414. Income tax withheld

     In the  case of an overpayment of tax imposed by chapter 24,
or by  chapter 3,  refund or credit shall be made to the employer
or to  the withholding  agent, as  the case  may be,  only to the
extent that  the amount  of such overpayment was not deducted and
withheld by the employer or withholding agent.

CREDIT(S)

1989 Main Volume

(Aug. 16, 1954, c. 736, 68A Stat. 798.)

[General Materials (GM) - References, Annotations, or Tables]

HISTORICAL NOTES

HISTORICAL AND STATUTORY NOTES

Revision Notes and Legislative Reports

     1954 Act. House Report No. 1337, Senate Report No. 1622, and
Conference Report No. 2543, see 1954 U.S.Code Cong. and Adm.News,
pp. 4560, 5331.

26 USCA 6414, Income tax withheld


                 Qualified State Tax References:
                          Page 73 of 148


------------ Excerpt from page 185228


Sec. 1464. Refunds and credits with respect to withheld tax

     Where there  has been  an  overpayment  of  tax  under  this
chapter, any refund or credit made under chapter 65 shall be made
to the  withholding agent  unless the  amount  of  such  tax  was
actually withheld by the withholding agent.

26 USCA 1464, Refunds and credits with respect to withheld tax

------------ Excerpt from page 179978


     [a](16) Withholding  agent. --  The term "withholding agent"
means any  person required  to deduct  and withhold any tax under
the provisions of section 1441, 1442, 1443, or 1461.

26 USCA 7701, Definitions

------------ Excerpt from page 188548


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366

s 301.6363-1 State agreements.

     (a) Notice  of election.   If a State elects to enter into a
State agreement  it shall  file notice  of such election with the
Secretary or  his delegate.  The notice of election shall include
the following:

     (1) Statement  by the  Governor.  A written statement by the
Governor of the electing State:

     (i)  Requesting  that  the  Secretary  enter  into  a  State
agreement, and

     (ii) Binding  the Governor  and his  successors in office to
notify  the   Secretary  or   his  delegate  immediately  of  the
enactment, between  the time  of the  filing  of  the  notice  of


                 Qualified State Tax References:
                          Page 74 of 148


election and the time of the execution of the State agreement, of
any law of that State which meets the description given in any of
the subdivisions  of subparagraph  (2)  of  this  paragraph  (a),
whether or  not such  law is  intended to  be administered by the
United States pursuant to subchapter E.

     (2) Copy  of State  laws.   Certified copies  of all laws of
that State described in any of the following subdivisions of this
subparagraph,  and   a  specification   of  laws   described   in
subdivision (i)  of this  subparagraph as "subchapter E laws", of
laws described  in subdivision  (ii) as "other tax laws", of laws
described in  subdivision (iii)  as "non-tax  laws", and  of laws
described in subdivision (iv) as "interstate cooperation laws":

     (i) All  of the  State individual income tax laws (including
laws relating  to the  collection or administration of such taxes
or to  the prosecution  of alleged  civil or  criminal violations
with respect  to such  taxes) which  the State  would expect  the
United States to administer pursuant to subchapter E if the State
agreement is  executed as  requested.   In order  to have a valid
notice,  the   State  must  have  a  tax  which  would  meet  the
requirements for  qualification specified in section 6362 and the
regulations thereunder  if a  State agreement were in effect with
respect thereto, with no conditions attached to the effectiveness
of such  tax other than the execution of a State agreement.  Such
tax must  be effective  no later  than the January 1 specified in
the State's notice of election as the date as of which subchapter
E is  desired to  become applicable to the electing State, except
that such  effective date  shall be deferred to the date provided
in the  State agreement  for the  beginning of  applicability  of
subchapter E  to the  State, if the latter date is different from
the date specified in the notice of election.

     (ii)  All  of  the  State  income  tax  laws  applicable  to
individuals  (including   laws  relating  to  the  collection  or
administration of  such taxes  or to  the prosecution  of alleged
civil or  criminal violations  with respect  to such taxes) which
the State  would not  expect the  United States to administer but
which may  be in  effect simultaneously  (for any period of time)
with the State agreement.

     (iii) All of the State laws other than individual income tax
laws which  provide for  the making  of any payments by the State
based on  one or  more criteria  which the  State may  desire  to
verify by  reference  to  information  contained  in  returns  of
qualified taxes.

     (iv)  All   of  the  State  laws  which  may  be  in  effect
simultaneously (for  any period of time) with the State agreement
and which provide for cooperation or reciprocal agreement between
the electing State and another State with respect to income taxes
applicable to individuals.

     (3)   Approval    by   legislature   or   authorization   by
constitutional  amendment.    A  certified  copy  of  an  Act  or
Resolution of  the legislature of the electing State in which the
legislature affirmatively  expresses its  approval of the State's


                 Qualified State Tax References:
                          Page 75 of 148


entry into a State agreement, or a certified copy of an amendment
to the  constitution of  such State  by which  the voters  of the
State affirmatively authorize such entry.

     (4) Opinion by State Attorney General or judgment of highest
court.   A written statement by the State Attorney General to the
effect  that,  in  his  opinion,  no  provision  of  the  State's
Constitution would  be violated  by the State law's incorporation
by reference  of the  Federal  individual  income  tax  laws  and
regulations, as  amended  from  time  to  time,  by  the  Federal
prosecution and  trial of  individuals who  are alleged  to  have
committed crimes  with respect to the State's qualified tax (when
it goes  into effect as such), or by any other provision relating
to such  tax, considered as of the time it is being collected and
administered by  the Federal Government pursuant to subchapter E.
However, if  such a  statement is  not included  in the notice of
election, a  judgment of  the highest  court of  the State to the
same effect may be submitted in its place.

     (5) Effective  date.  A written specification of the January
as of  which subchapter  E is desired to become applicable to the
electing State.

     (b) Rules  relating to  time for  filing notice of election.
An electing  State must  file its  notice of election more than 6
months prior  to the  January 1  as of which the notice specifies
that the  provisions  of  subchapter  E  are  desired  to  become
applicable to  such State.    Thus,  for  example,  if  the  date
specified in  the notice  is January  1, 1979, the notice must be
filed no  later than  June 30,  1978.  However, because under the
provisions of  section 204(b) of the Federal-State Tax Collection
Act of  1972 (86 Stat. 945), as amended by section 2116(a) of the
Tax Reform  Act of  1976  (90  Stat.  1910),  the  provisions  of
subchapter E  will initially  take effect  on the first January 1
which is  more than 1 year after the first date on which at least
one State  has filed a notice of its election (see s 301.6361-5),
the notice  of an election which causes subchapter E to initially
take effect must be filed with the Secretary or his delegate more
than 1  year prior  to the  January 1  as of  which  such  notice
specifies that  the provisions  of subchapter  E are  desired  to
become applicable  to such  State.  Thus, for example, if such an
initially electing  State desires  to elect  subchapter E  as  of
January 1,  1979, its notice must be filed no later than December
31, 1977.   For  purposes of  this  section,  if  the  notice  of
election is  sent by  either registered  or certified mail to the
Secretary of  the Treasury, Washington, D.C. 20220, then it shall
be deemed  to be  filed on  the date  of mailing;  otherwise, the
notice of  election shall  be deemed  to  be  filed  when  it  is
received by the Secretary or his delegate.

     (c) Procedures  relating to  defects in  notice or tax laws.
If a  State has  filed a  notice of  election, then the Secretary
shall, within  90 days  after the  notice is  filed,  notify  the
Governor of  such State in writing of any defect in the notice of
election which prevents it from being valid, and of any defect in
the State's  tax laws  which causes  the tax submitted to fail to
meet the requirements for qualification specified in section 6362


                 Qualified State Tax References:
                          Page 76 of 148


and the regulations thereunder, other than the fact that no State
agreement is  in effect with respect thereto.  Any such defect of
which the  Secretary does not notify the Governor within such 90-
day period  is waived.  The Secretary or his delegate may, in his
discretion, permit  any of  such defects of which the Governor is
timely notified  to be  cured retroactively  to the  date of  the
filing of  the notice  of election, by amendment of the notice or
the State  law.  Judicial review of the Secretary's determination
that the  notice of  election or  the tax  laws, or both, contain
defects, may  be obtained  as set  forth in section 6363(d) and s
301.6363-4.

     (d) Execution  and contents  of State  agreement.    If  the
Secretary does  not timely notify the Governor of a defect in the
notice of  election or  in the  State's tax  laws, as provided in
paragraph (c)  of this  section,  or  if,  as  provided  in  such
paragraph, all  such defects  have been cured retroactively, then
the Secretary  shall enter into a State agreement.  The agreement
shall include the following elements:

     (1) Effective date.  The agreement shall specify the January
1 as  of which subchapter E will commence to be applicable to the
State.   Such date  shall be  the same  as that  specified in the
notice of  election pursuant to paragraph (a)(5) of this section,
unless the parties agree to a different January 1, except that in
no event  shall a  State  agreement  executed  after  November  1
specify the next January 1.

     (2) Obligation  of Governor  to notify  the United States of
changes in pertinent State laws.  The agreement shall require the
Governor of  the State,  and his  successors in office, to notify
the Secretary  or his delegate within 30 days of the enactment of
any law  of the State, after the execution of the agreement, of a
type described in paragraph (a)(2) of this section.

     (3) Obligation  of Governor  to furnish to the United States
information needed  to administer  State tax laws.  The agreement
shall require  the Governor  and his successors to furnish to the
Secretary or  his delegate  any information needed by the Federal
Government to  administer the  State tax  laws.  Such information
shall include,  for example, a list (which shall be maintained on
a current  basis) of  those  obligations  of  the  State  or  its
political subdivisions  described in section 103(a)(1) from which
the interest is not subject to the qualified taxes of the State.

     (4) Identification  of State official to act as liaison with
Federal Government.  The agreement shall include a designation by
the Governor  of the  State official  or officials  with whom the
Secretary or  his delegate  should coordinate  in connection with
any questions  or problems  which may arise during the period for
which the State agreement is effective, including those which may
result from  changes or  contemplated changes  in pertinent State
laws.

     (5) Identification  of State official to receive transferred
funds.  The agreement shall include a designation by the Governor
of the  State official  who shall  initially receive the funds on


                 Qualified State Tax References:
                          Page 77 of 148


behalf of the State when they are transferred pursuant to section
6361(c) and s 301.6361-3.

     (6) Other  obligations.   If the  Secretary and the Governor
both  so  agree,  the  agreement  shall  provide  for  additional
obligations.

     (e) State  agreement superseding  certain other  agreements.
For the  period of  its effectiveness,  a State  agreement  shall
supersede an  otherwise effective  agreement entered  into by the
State and the Secretary for the withholding of State income taxes
from the  compensation of  Federal employees pursuant to 5 U.S.C.
5517 (or  pursuant to  5 U.S.C. 5516, in the case of the District
of Columbia).

[T.D. 7577, 43 F.R. 59373, Dec. 20, 1978]

26 CFR s 301.6363-1, State agreements.

------------ Excerpt from pages 160534-160537


CODE OF FEDERAL REGULATIONS

TITLE 20 -- EMPLOYEES' BENEFITS

CHAPTER III -- SOCIAL SECURITY ADMINISTRATION

PART 404  -- FEDERAL  OLD-AGE, SURVIVORS AND DISABILITY INSURANCE
(1950-  )

SUBPART A -- INTRODUCTION, GENERAL PROVISIONS AND DEFINITIONS

Current through January 1, 1997;  61 F.R. 69366

s 404.2 General definitions and list of terms.

     (a) Terms relating to the Act and regulations.

     (1) "The  Act" means the Social Security Act, as amended (42
U.S.C. Chapter 7).

     (2) "Section" means a section of the regulations in Part 404
of this chapter unless the context indicates otherwise.

     (b)   Secretary;       Commissioner;      Appeals   Council;
Administrative Law Judge defined.

     (1) "Secretary"  means the  Secretary of  Health  and  Human
Services.

     (2)  "Commissioner"   means  the   Commissioner  of   Social
Security.

     (3) "Appeals  Council" means  the  Appeals  Council  of  the
Office  of   Hearings  and   Appeals  in   the  Social   Security
Administration or  such member  or  members  thereof  as  may  be


                 Qualified State Tax References:
                          Page 78 of 148


designated by the Chairman.

     (4) "Administrative  Law Judge"  means an Administrative Law
Judge in  the Office  of  Hearings  and  Appeals  of  the  Social
Security Administration.

     (c) Miscellaneous.

     (1) "Certify," when used in connection with the duty imposed
on the  Secretary by section 205(i) of the act, means that action
taken by  the Administration  in the  form of a written statement
addressed to  the Managing  Trustee, setting  forth the  name and
address of  the person  to whom payment of a benefit or lump sum,
or any  part thereof,  is to  be made, the amount to be paid, and
the time at which payment should be made.

     (2) "Benefit" means an old-age insurance benefit, disability
insurance benefit,  wife's insurance benefit, husband's insurance
benefit, child's  insurance benefit,  widow's insurance  benefit,
widower's insurance benefit, mother's insurance benefit, father's
insurance benefit, parent's insurance benefit, or special payment
at age  72 under title II of the Act. (Lump sums, which are death
payments under  title II  of the  Act, are excluded from the term
"benefit" as  defined in  this part  to permit greater clarity in
the regulations.)

     (3) "Lump sum" means a lump-sum death payment under title II
of the act or any person's share of such a payment.

     (4) "Attainment  of age."  An individual attains a given age
on the  first moment  of the day preceding the anniversary of his
birth corresponding to such age.

     (5) "State,"  unless otherwise  indicated, includes  (i) the
District  of   Columbia,  (ii)  the  Virgin  Islands,  (iii)  the
Commonwealth of  Puerto Rico effective January 1, 1951, (iv) Guam
and American  Samoa, effective September 13, 1960, generally, and
for purposes  of sections  210(a) and  211 of  the act  effective
after 1960  with respect  to service  performed after  1960,  and
effective for  taxable years beginning after 1960 with respect to
crediting net  earnings from  self-employment and self-employment
income, and  (v) the  Territories of  Alaska and  Hawaii prior to
January 3,  1959, and  August 21,  1959, respectively  when those
territories acquired statehood.

     (6) "United  States," when  used in  a  geographical  sense,
includes, unless  otherwise indicated,  (i) the  States, (ii) the
Territories of  Alaska and  Hawaii prior  to January 3, 1959, and
August 21,  1959, respectively,  when  they  acquired  statehood,
(iii) the  District of Columbia, (iv) the Virgin Islands, (v) the
Commonwealth of  Puerto Rico  effective January 1, 1951, and (vi)
Guam and American Samoa, effective September 13, 1960, generally,
and for purposes of sections 210(a) and 211 of the act, effective
after 1960  with respect  to service  performed after  1960,  and
effective for  taxable years beginning after 1960 with respect to
crediting net  earnings from  self-employment and self-employment
income.


                 Qualified State Tax References:
                          Page 79 of 148


     (7) Masculine gender includes the feminine, unless otherwise
indicated.

     (8) The  terms defined  in sections 209, 210, and 211 of the
act shall have the meanings therein assigned to them.

[26 F.R.  7055, Aug.  5, 1961;   26  F.R. 7760, Aug. 19, 1961, as
amended at  28 F.R.  1037, Feb. 2, 1963;  28 F.R. 14492, Dec. 31,
1963;   29 F.R.  15509, Nov.  19, 1964;   41  F.R. 32886, Aug. 6,
1976;   51 F.R.  11718, April  7, 1986;   61  F.R. 41330, Aug. 8,
1996]

[[SUBPART A -- INTRODUCTION, GENERAL PROVISIONS AND DEFINITIONS]]

Authority:   Secs. 203,  205(a), 216(j),  and  702(a)(5)  of  the
Social  Security   Act  (42   U.S.C.  403,  405(a),  416(j),  and
902(a)(5)).

Source:   51 F.R.  11718, April 7, 1986;  52 F.R. 27540, July 22,
1987;   56 F.R.  60060, Nov.  27, 1991;   61  F.R. 5940, Feb. 15,
1996, unless otherwise noted.

20 CFR s 404.2, General definitions and list of terms.

------------ Excerpt from pages 103006-103007


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER A -- INCOME TAX

PART 1 -- INCOME TAXES

NORMAL TAXES AND SURTAXES

COMPUTATION OF TAXABLE INCOME

ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS

Current through January 1, 1997;  61 F.R. 69366

s 1.164-3 Definitions and special rules.

     For purposes  of section  164 and  s 1.164-1  to s  1.164-8,
inclusive  --

     (a) State  or local  taxes.   A State  or local tax includes
only a tax imposed by a State, a possession of the United States,
or a  political subdivision  of any  of the  foregoing, or by the
District of Columbia.

     (b) Real  property taxes.   The  term "real  property taxes"


                 Qualified State Tax References:
                          Page 80 of 148


means taxes  imposed on interests in real property and levied for
the general  public  welfare,  but  it  does  not  include  taxes
assessed against local benefits.  See s 1.164-4.

     (c) Personal  property taxes.   The  term "personal property
tax" means  an ad valorem tax which is imposed on an annual basis
in respect  of personal  property.   To  qualify  as  a  personal
property tax, a tax must meet the following three tests:

     (1) The  tax must be ad valorem -- that is, substantially in
proportion to the value of the personal property.  A tax which is
based on  criteria other  than  value  does  not  qualify  as  ad
valorem.  For example, a motor vehicle tax based on weight, model
year, and  horsepower, or  any of these characteristics is not an
ad valorem  tax.   However, a  tax which is partly based on value
and partly  based on  other criteria  may qualify  in part.   For
example, in the case of a motor vehicle tax of 1 percent of value
plus 40  cents per  hundredweight, the part of the tax equal to 1
percent of  value qualifies  as an ad valorem tax and the balance
does not qualify.

     (2) The  tax must  be imposed  on an  annual basis,  even if
collected more frequently or less frequently.

     (3) The tax must be imposed in respect of personal property.
A tax  may be  considered to  be imposed  in respect  of personal
property even  if in  form it  is imposed  on the  exercise of  a
privilege.   Thus, for taxable years beginning after December 31,
1963, State  and local  taxes on the registration or licensing of
highway motor  vehicles are  not deductible  as personal property
taxes unless  and to the extent that the tests prescribed in this
subparagraph are  met.   For example,  an annual  ad valorem  tax
qualifies as a personal property tax although it is denominated a
registration fee  imposed for  the privilege of registering motor
vehicles or of using them on the highways.

     (d) Foreign  taxes.   The term "foreign tax" includes only a
tax imposed by the authority of a foreign country.  A tax-imposed
by a  political subdivision of a foreign country is considered to
be imposed by the authority of that foreign country.

     (e) Sales tax.  (1) The term "sales tax" means a tax imposed
upon persons  engaged in  selling tangible  personal property, or
upon the  consumers of  such property,  including persons selling
gasoline or  other motor  vehicle fuels  at wholesale  or retail,
which is  a stated  sum per  unit of  property sold  or which  is
measured by  the gross sales price or the gross receipts from the
sale.   The term also includes a tax imposed upon persons engaged
in furnishing  services which  is measured  by the gross receipts
for furnishing such services.

     (2) In  general, the term "consumer" means the ultimate user
or purchaser;   it  does  not  include  a  purchaser  such  as  a
retailer, who acquires the property for resale.

     (f) General sales tax.  A "general sales tax" is a sales tax
which is  imposed at one rate in respect of the sale at retail of


                 Qualified State Tax References:
                          Page 81 of 148


a broad  range of  classes of  items.   No foreign  sales tax  is
deductible under  section 164(a) and paragraph (a)(4) of s 1.164-
1.   To qualify  as a  general sales  tax, a  tax must  meet  the
following two tests:

     (1) The  tax must  be a  tax in  respect of sales at retail.
This may  include a  tax imposed  on persons  engaged in  selling
property at retail or furnishing services at retail, for example,
if the  tax is measured by gross sales price or by gross receipts
from sales or services.  Rentals qualify as sales at retail if so
treated under applicable State sales tax laws.

     (2) The  tax must  be general -- that is, it must be imposed
at one  rate in  respect of  the retail sales of a broad range of
classes of  items.   A sales  tax is  considered  to  be  general
although imposed  on sales  of various  classes of  items at more
than one  rate provided that one rate applies to the retail sales
of a  broad range of classes of items.  The term "items" includes
both commodities and services.

     (g) Special  rules relating  to general  sales taxes.  (1) A
sales tax  which is  general is  usually imposed  at one  rate in
respect of  the retail  sales of  all tangible  personal property
(with exceptions  and additions).   However, a sales tax which is
selective --  that is,  a tax  which applies  at  one  rate  with
respect to  retail sales  of  specified  classes  of  items  also
qualifies as  general if  the specified classes represent a broad
range of  classes of items.  A selective sales tax which does not
apply at one rate to the retail sales of a broad range of classes
of items  is not  general.  For example, a tax which applies only
to sales  of alcoholic  beverages,  tobacco,  admissions,  luxury
items, and  a few  other items  is not general.  Similarly, a tax
imposed solely  on services is not general.  However, a selective
sales tax  may be  deemed to be part of the general sales tax and
hence may  be deductible,  even if  imposed by  a separate Title,
etc., of  the State  or local law, if imposed at the same rate as
the general  rate of  tax (as defined in subparagraph (4) of this
paragraph) which  qualifies a tax in the taxing jurisdiction as a
general sales  tax.   For example,  if a  State has  a 5  percent
general sales tax and a separate selective sales tax of 5 percent
on transient  accommodations, the tax on transient accommodations
is deductible.

     (2) A  tax is  imposed at  one rate only if it is imposed at
that rate  on generally  the same  base for  all items subject to
tax.  For example, a sales tax imposed at a 3 percent rate on 100
percent of  the sales  price of  some classes of items and at a 3
percent rate on 50 percent of the sales price of other classes of
items would  not be  imposed at one rate with respect to all such
classes.   However, a tax is considered to be imposed at one rate
although it  allows dollar  exemptions,  if  the  exemptions  are
designed to exclude all sales under a certain dollar amount.  For
example, a  tax may be imposed at one rate although it applies to
all sales of tangible personal property but applies only to sales
amounting to more than 10 cents.

     (3) The  fact that  a  sales  tax  exempts  food,  clothing,


                 Qualified State Tax References:
                          Page 82 of 148


medical supplies,  and motor  vehicles, or any of them, shall not
be taken into account in determining whether the tax applies to a
broad range  of classes  of items.   The  fact that  a sales  tax
applies to  food, clothing, medical supplies, and motor vehicles,
or any of them, at a rate which is lower than the general rate of
tax (as  defined in  subparagraph (4)  of this  paragraph) is not
taken into  account in  determining whether the tax is imposed at
one rate  on the  retail sales  of a  broad range  of classes  of
items.   For purposes of this section, the term "food" means food
for human  consumption off  the premises where sold, and the term
"medical  supplies"   includes  drugs,   medicines,  and  medical
devices.

     (4) Except  in the case of a lower rate of tax applicable in
respect of  food, clothing, medical supplies, and motor vehicles,
or any  of them,  no deduction is allowed for a general sales tax
in respect  of any  item if  the tax is imposed on such item at a
rate other than the general rate of tax.  The general rate of tax
is the one rate which qualifies a tax in a taxing jurisdiction as
a general  sales tax  because the tax is imposed at such one rate
on a  broad range  of classes  of items.   There  can be only one
general rate  of tax  in any one taxing jurisdiction.  However, a
general sales  tax imposed  at a  lower rate  or rates  on  food,
clothing, motor  vehicles, and  medical supplies, or any of them,
may nonetheless  be deductible  with respect  to such items.  For
example, a  sales tax  which is imposed at 1 percent with respect
to food,  imposed at  3 percent  with respect to a broad range of
classes of  tangible personal  property, and imposed at 4 percent
with respect  to transient  accommodations  would  qualify  as  a
general sales tax.  Taxes paid at the 1 percent and the 3 percent
rates are  deductible, but  tax paid at the 4 percent rate is not
deductible.    The  fact  that  a  sales  tax  provides  for  the
adjustment of  the general  rate of  tax to reflect the sales tax
rate in  another taxing  jurisdiction shall  not  be  taken  into
account in  determining whether the tax is imposed at one rate on
the retail sales of a broad range of classes of items.  Moreover,
a general  sales tax  imposed at  a lower rate with respect to an
item in  order to reflect the tax rate in another jurisdiction is
also deductible at such lower rate.  For example, State E imposes
a general sales tax whose general rate is 3 percent.  The State E
sales tax  law provides  that in  areas bordering  on States with
general sales  taxes, selective  sales taxes,  or special  excise
taxes, the  rate applied  in the  adjoining State will be used if
such rate  is under 3 percent.  State F imposes a 2 percent sales
tax.   The 2  percent sales  tax paid  by residents of State E in
areas bordering on State F is deductible.

     (h) Compensating  use taxes.   A  compensating  use  tax  in
respect of  any item is treated as a general sales tax.  The term
"compensating use tax" means, in respect of any item, a tax which
is imposed  on the  use, storage, or consumption of such item and
which is complementary to a general sales tax which is deductible
with respect to sales of similar items.

     (i) Special  rules relating  to compensating use taxes.  (1)
In general,  a use  tax on  an item is complementary to a general
sales tax  on similar  items if the use tax is imposed on an item


                 Qualified State Tax References:
                          Page 83 of 148


which was  not subject  to such general sales tax but which would
have been  subject to  such general  sales tax if the sale of the
item had  taken place  within the  jurisdiction imposing  the use
tax.  For example, a tax imposed by State A on the use of a motor
vehicle purchased  in State  B is  complementary to  the  general
sales tax  of State A on similar items, if the latter tax applies
to motor vehicles sold in State A.

     (2) Since  a compensating  use tax  is treated  as a general
sales tax,  it is  subject to  the rule  of subparagraph  (C)  of
section 164(b)(2)  and paragraph  (g)(4) of  this section that no
deduction is  allowed for  a general sales tax imposed in respect
of an  item at  a rate other than the general rate of tax (except
in the case of lower rates on the sale of food, clothing, medical
supplies, and  motor vehicles).  The fact that a compensating use
tax in respect of any item provides for an adjustment in the rate
of the  compensating use tax or the amount of such tax to be paid
on account  of a sales tax on such item imposed by another taxing
jurisdiction is not taken into account in determining whether the
compensating use  tax is imposed in respect of the item at a rate
other than  the general rate of tax.  For example, a compensating
use tax  imposed by  State C  on the  use of an item purchased in
State D  is considered  to be  imposed at the general rate of tax
even though  the tax  imposed by  State C allows a credit for any
sales tax  paid on  such item  in State  D, or  the rate  of such
compensating use tax is adjusted to reflect the rate of sales tax
imposed by State D.

[T.D. 6500,  25 F.R.  11402, Nov.  26, 1960,  as amended  by T.D.
6780, 29 F.R. 18146, Dec. 22, 1964]

26 CFR s 1.164-3, Definitions and special rules.

------------ Excerpt from pages 143910-143913


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER A -- INCOME TAX

PART 1 -- INCOME TAXES

NORMAL TAXES AND SURTAXES

TAX BASED  ON INCOME  FROM SOURCES  WITHIN OR  WITHOUT THE UNITED
STATES

EARNED INCOME OF CITIZENS OR RESIDENTS OF UNITED STATES

POSSESSIONS OF THE UNITED STATES

Current through January 1, 1997;  61 F.R. 69366

s 1.932-1 Status of citizens of U.S. possessions.


                 Qualified State Tax References:
                          Page 84 of 148


     (a) General rule -- (1) Definition and treatment.  A citizen
of a possession of the United States (except Puerto Rico and, for
taxable years  beginning after  December 31,  1972, Guam), who is
not otherwise  a  citizen  or  resident  of  the  United  States,
including only  the States  and  the  District  of  Columbia,  is
treated for the purpose of the taxes imposed by subtitle A of the
Code (relating to income taxes) as if he were a nonresident alien
individual.   However, for  purposes of  the tax imposed on self-
employment income  by chapter 2 of the Code, the term "possession
of the  United States"  as used  in section 932 and the preceding
sentence does  not include  American Samoa,  Guam, or  the Virgin
Islands.  See section 1402(a)(9).  See subpart A (section 871 and
following), part II, subchapter N, chapter 1 of the Code, and the
regulations thereunder,  for rules  relating to imposition of tax
on  nonresident  alien  individuals.    For  Federal  income  tax
purposes, a  citizen of  a possession of the United States who is
not otherwise  a citizen  of the  United States is a citizen of a
possession of  the United  States who has not become a citizen of
the United States by naturalization in a State, Territory, or the
District of  Columbia.   The  fixed  or  determinable  annual  or
periodical income  from sources  within the  United States  of  a
citizen of a possession of the United States who is treated as if
he were a nonresident alien individual is subject to withholding.
See section 1441.

     (2) Classification of citizens of United States possessions.
For the  purpose of  this section  citizens of the possessions of
the United  States who  are not  otherwise citizens of the United
States are divided into two classes:  (i) Citizens of possessions
of the  United States who at any time within the taxable year are
not engaged  in trade  or business  within the United States, and
(ii) citizens of possessions of the United States who at any time
within the  taxable year  are engaged in trade or business within
the United  States.  The provisions of subpart A (section 871 and
following)  and   the  regulations   thereunder,  applicable   to
nonresident alien  individuals not  engaged in  trade or business
within the  United States  are  applicable  to  the  citizens  of
possessions falling  within the first class, while the provisions
of such  sections applicable to nonresident alien individuals who
at any  time within  the taxable  year are  engaged in  trade  or
business within  the United  States are applicable to citizens of
possessions falling within the second class.

     (b) Nonapplication  to citizen  of Puerto Rico or Guam.  The
provisions of section 932(a) and paragraph (a) of this section do
not apply in the case of a citizen of Puerto Rico or, for taxable
years beginning  after December  31, 1972,  a  citizen  of  Guam.
Thus, for  example, any such citizen who is not a resident of the
United States  will not  be treated  by the  United States  as  a
nonresident alien  individual for  purposes of section 2(b)(3)(A)
or (d),  relating to  definitions and  special  rules;    section
4(d)(1), relating  to taxpayers  not eligible to use the optional
tax tables;   section  37(h), relating  to denial  of  retirement
income credit;   section 116(d), relating to taxpayers ineligible
for dividend exclusion;  section 142(b)(1), relating to taxpayers
ineligible for  standard deduction;   section 152(b)(3), relating


                 Qualified State Tax References:
                          Page 85 of 148


to definition  of "dependent";   section  402(a)(4), relating  to
distributions  by   the  United  States  to  nonresident  aliens;
section  545(d),   relating  to   certain  foreign  corporations;
section 565(e),  relating to  certain consent dividends;  section
861(a)(1), relating  to interest  from sources  within the United
States;   sections 871  to 877,  relating  to  nonresident  alien
individuals;    section  1303(b),  relating  to  individuals  not
eligible for  income averaging;   section 1371(a)(3), relating to
definition of  small  business  corporation;    section  1402(b),
relating to  definition of  "self-employment  income";    section
1441, relating  to withholding  of  tax  on  nonresident  aliens;
section 3401(a),  relating  to  definition  of  wages;    section
6013(a)(1),  relating  to  inability  to  make  a  joint  return;
section 6015(b)  and (i),  relating to  declaration of  estimated
income tax  by nonresident  alien  individuals;    section  6017,
relating to  self-employment tax  returns;   section  6042(b)(2),
relating to  returns regarding  payments of  dividends;   section
6049(b)(2), relating  to returns  regarding payments of interest;
section  6072(c),   relating  to   time  for  filing  returns  of
nonresident alien  individuals;   section  6091(b),  relating  to
place for  filing returns  of nonresident  aliens;   and  section
6096(a), relating  to designation of tax payments to Presidential
Election Campaign  Fund.   For other rules applicable to citizens
of Puerto  Rico, see  ss 1.1-1(b)  and 1.933-1.   For other rules
applicable to  citizens of  Guam, see  ss 1.1-1(b) and 1.935-1 of
this chapter  (Income Tax  Regulations) and  s 301.7654-1 of this
chapter (Regulations on Procedure and Administration).

[T.D. 6500,  25 F.R.  11910, Nov.  26, 1960,  as amended  by T.D.
7332, 39  F.R. 44230,  Dec. 23,  1974;  T.D. 7385, 40 F.R. 50260,
Oct. 29, 1975]
26 CFR s 1.932-1, Status of citizens of U.S. possessions.

------------ Excerpt from pages 152184-152185


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER A -- INCOME TAX

PART 1 -- INCOME TAXES

PROCEDURE AND ADMINISTRATION

INFORMATION AND RETURNS

RETURNS AND RECORDS

TAX RETURNS OR STATEMENTS

Current through January 1, 1997;  61 F.R. 69366

s 1.6015(c)-1 Definition of estimated tax.


                 Qualified State Tax References:
                          Page 86 of 148


     (a) In  general.   In the  case of  an individual,  the term
"estimated tax" means:

     (1) The  amount which the individual estimates as the amount
of the  income tax  imposed by  chapter 1  (other  than  the  tax
imposed  by  section  56  or  for  taxable  years  ending  before
September 30,  1968, the tax surcharge imposed by section 51) for
the taxable  year (and including the amount which he estimates as
the amount  of any  qualified State individual income taxes which
are treated  pursuant to  section 6361(a) as if they were imposed
by chapter 1 for the taxable year), plus

     (2) For taxable years beginning after December 31, 1966, the
amount which  the individual estimates as the amount of the self-
employment tax imposed by chapter 2 for the taxable year, minus

     (3) The  amount which the individual estimates as the sum of
any credits  against tax  provided by  part IV of subchapter A of
chapter 1.   These  credits are  those  provided  by  section  31
(relating to  tax withheld on wages), section 32 (relating to tax
withheld at source on nonresident aliens and foreign corporations
and on  tax-free covenant bonds), section 33 (relating to foreign
taxes), section 34 (relating to the credit for dividends received
on  or  before  December  31,  1964),  section  35  (relating  to
partially tax-exempt  interest),  section  37  (relating  to  the
elderly), section 38 (relating to the investment credit), section
39 (relating  to certain  uses of  gasoline, special  fuels,  and
lubricating oil),  section  40  (relating  to  expenses  of  work
incentive programs),  section 41  (relating to  contributions  to
candidates), section 42 (relating to general tax credit), section
43 (relating  to earned income), section 44 (relating to purchase
of new  principal residence),  section 44A  (relating to expenses
for household  and dependent  care services necessary for gainful
employment), section  44B (relating  to credit  for employment of
certain new  employees), and section 45 (relating to overpayments
of tax), minus,

     (4) In  the case  of an  individual who is subject to one or
more qualified State individual income taxes, the amount which he
estimates as  the sum  of the  credits allowed against such taxes
pursuant to  section 6362(b)(2)(B)  or (C)  or section 6362(c)(4)
and paragraph (c) of s 301.6362-4 of this chapter (Regulations on
Procedure and  Administration) (relating to the credit for income
taxes of  other States  or political  subdivisions  thereof)  and
paragraph (c)(2)  of s 301.6361-1 (relating to the credit for tax
withheld from  wages on  account of  qualified  State  individual
income taxes), and minus

     (5) For  taxable years  ending after  February 29, 1980, the
amount which  the individual estimates will be the amount of such
individual's  overpayment  of  windfall  profit  tax  imposed  by
section 4986 of the Code for the taxable year.  For this purpose,
the amount  of such  overpayment is  the  amount  by  which  such
individual's aggregate  windfall profit  tax  liability  for  the
taxable year as a producer of crude oil is reasonably expected to
be exceeded by withholding of windfall profit tax for the taxable


                 Qualified State Tax References:
                          Page 87 of 148


year.

     (b) Example.   A,  a self-employed individual not subject to
any qualified  State individual  income tax,  estimates that  his
liabilities for  income tax and self-employment tax for 1973 will
be $1,600  and $400,  respectively.  A is required to declare and
pay an estimated tax of $2,000 for that year.

[T.D. 6500,  25 F.R.  12108, Nov.  26, 1960,  as amended  by T.D.
6777, 29  F.R. 17810,  Dec. 16,  1964;  T.D. 7427, 41 F.R. 34027,
Aug. 12,  1976;   T.D. 7577,  43 F.R. 59358, Dec. 20, 1978;  T.D.
8016, 50 F.R. 11854, March 26, 1985]

26 CFR s 1.6015(c)-1, Definition of estimated tax.

------------ Excerpt from pages 155379-155380


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER C  -- EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT
SOURCE

PART 31  -- EMPLOYMENT  TAXES AND  COLLECTION OF  INCOME  TAX  AT
SOURCE

SUBPART G  -- ADMINISTRATIVE PROVISIONS OF SPECIAL APPLICATION TO
EMPLOYMENT TAXES  (SELECTED PROVISIONS  OF SUBTITLE  F,  INTERNAL
REVENUE CODE OF 1954)

Current through January 1, 1997;  61 F.R. 69366

s 31.6361-1  Collection and  administration  of  qualified  State
individual income taxes.

     Except as otherwise provided in ss 301.6361-1 to 301.6385-2,
inclusive,  of   this  chapter   (Regulations  on  Procedure  and
Administration), the  provisions of this part under subtitle F or
chapter 24  of the  Internal Revenue Code of 1954 relating to the
collection and  administration of  the taxes imposed by chapter 1
of such  Code on the incomes of individuals (or relating to civil
or  criminal  sanctions  with  respect  to  such  collection  and
administration) shall  apply to the collection and administration
of qualified State individual income taxes (as defined in section
6362 of  such Code  and the  regulations thereunder)  as if  such
taxes were imposed by chapter 1 of chapter 24.

[T.D. 7577, 43 F.R. 59360, Dec. 20, 1978]

26 CFR  s 31.6361-1,  Collection and  administration of qualified
State individual income taxes.

------------ Excerpt from page 158442


                 Qualified State Tax References:
                          Page 88 of 148


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER A -- INCOME TAX

PART 1 -- INCOME TAXES

PROCEDURE AND ADMINISTRATION

COLLECTION

GENERAL PROVISIONS

Current through January 1, 1997;  61 F.R. 69366

s 1.6361-1  Collection  and  administration  of  qualified  State
individual income taxes.

     Except as otherwise provided in ss 301.6361-1 to 301.6365-2,
inclusive,  of   this  chapter   (Regulations  on  Procedure  and
Administration), the  provisions of this part under subtitle F of
the Internal  Revenue Code of 1954 relating to the collection and
administration of  the taxes imposed by chapter 1 of such Code on
the incomes  of individuals  (or relating  to civil  or  criminal
sanctions with  respect to  such collection  and  administration)
shall apply  to the  collection and  administration of  qualified
State individual income taxes (as defined in section 6362 of such
Code and  the regulations  thereunder)  as  if  such  taxes  were
imposed by chapter 1.

[T.D. 7577, 43 F.R. 59358, Dec. 20, 1978]

26 CFR  s 1.6361-1,  Collection and  administration of  qualified
State individual income taxes.

------------ Excerpt from page 155888


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER B -- ESTATE AND GIFT TAXES

PART 20  -- ESTATE  TAX;  ESTATES OF DECEDENTS DYING AFTER AUGUST
16, 1954

ACTUARIAL TABLES APPLICABLE BEFORE MAY 1, 1989

TAXABLE ESTATE


                 Qualified State Tax References:
                          Page 89 of 148


Current through January 1, 1997;  61 F.R. 69366

s 20.2056(b)-7 Election with respect to life estate for surviving
spouse.

     (a) In  general.  Subject  to  section  2056(d),  a  marital
deduction is  allowed under  section 2056(b)(7)  with respect  to
estates of decedents dying after December 31, 1981, for qualified
terminable interest  property as defined in paragraph (b) of this
section. All  of the  property for  which a  deduction is allowed
under this  paragraph (a)  is treated as passing to the surviving
spouse (for  purposes of  s 20.2056(a)-1),  and no  part  of  the
property is  treated as  passing to  any person  other  than  the
surviving spouse (for purposes of s 20.2056(b)-1).

     (b)  Qualified   terminable  interest  property  --  (1)  In
general. Section  2056(b)(7)(B)(i)  provides  the  definition  of
qualified terminable interest property.

     (i) Terminable  interests described in section 2056(b)(1)(C)
cannot qualify  as qualified  terminable interest property. Thus,
if the  decedent directs  the executor  to purchase  a terminable
interest with  estate assets,  the terminable  interest  acquired
will not qualify as qualified terminable interest property.

     (ii) For  purposes of  section  2056(b)(7)(B)(i),  the  term
property generally  means the entire interest in property (within
the meaning  of s  20.2056(b)-5(d)) or  a specific portion of the
entire interest (within the meaning of s 20.2056(b)-5(c)).

     (2) Property  for which  an election  may be  made -- (i) In
general. The  election may  relate to all or any part of property
that meets the requirements of section 2056(b)(7)(B)(i), provided
that any  partial  election  must  be  made  with  respect  to  a
fractional or  percentage share  of  the  property  so  that  the
elective portion reflects its proportionate share of the increase
or decrease  in value  of the  entire property  for  purposes  of
applying sections 2044 or 2519. The fraction or percentage may be
defined by formula.

     (ii) Division  of trusts  -- (A)  In general. A trust may be
divided into  separate trusts  to reflect a partial election that
has been  made, or  is  to  be  made,  if  authorized  under  the
governing instrument  or otherwise  permissible under  local law.
Any such  division must  be accomplished no later than the end of
the period  of estate  administration. If,  at the  time  of  the
filing of  the estate  tax return,  the trust  has not  yet  been
divided, the  intent to  divide the  trust must  be unequivocally
signified on the estate tax return.

     (B) Manner  of dividing  and funding  trust. The division of
the trust  must be  done on  a fractional  or percentage basis to
reflect the partial election. However, the separate trusts do not
have to  be funded  with a pro rata portion of each asset held by
the undivided trust.


                 Qualified State Tax References:
                          Page 90 of 148


     (C) Local  law. A trust may be divided only if the fiduciary
is required,  either by applicable local law or by the express or
implied provisions  of the  governing instrument,  to divide  the
trust on  the basis of the fair market value of the assets of the
trust at the time of the division.

     (3) Persons  permitted to  make the  election. The  election
referred to  in section 2056(b)(7)(B)(i)(III) must be made by the
executor that  is appointed,  qualified, and  acting  within  the
United States,  within the meaning of section 2203, regardless of
whether the  property with respect to which the election is to be
made is  in the  executor's possession.  If there  is no executor
appointed, qualified,  and acting  within the  United States, the
election may  be made  by any  person with respect to property in
the actual or constructive possession of that person and may also
be made  by that person with respect to other property not in the
actual or constructive possession of that person if the person in
actual or constructive possession of such other property does not
make the  election. For  example, in  the absence of an appointed
executor, the  trustee of  an inter vivos trust (that is included
in the gross estate of the decedent) can make the election.

     (4) Manner  and time  of  making  the  election  --  (i)  In
general.    The     election    referred     to    in     section
2056(b)(7)(B)(i)(III) and  (v) is  made  on  the  return  of  tax
imposed by  section 2001  (or section 2101). For purposes of this
paragraph, the  term return  of tax imposed by section 2001 means
the last estate tax return filed by the executor on or before the
due date  of the  return, including  extensions or,  if a  timely
return is  not filed,  the first  estate tax  return filed by the
executor after the due date.

     (ii) Election  irrevocable.    The  election, once  made, is
irrevocable, provided that an election may be revoked or modified
on a  subsequent return  filed on  or before  the due date of the
return, including  extensions actually  granted. If  an  executor
appointed under  local law  has made an election on the return of
tax imposed by section 2001 (or section 2101) with respect to one
or more  properties, no  subsequent election  may  be  made  with
respect to  other properties  included in  the gross estate after
the return  of tax  imposed by section 2001 is filed. An election
under section  2056(b)(7)(B)(v) is  separate from  any  elections
made under section 2056A(a)(3).

     (c) Protective  elections --  (1) In  general. A  protective
election may  be made  to treat  property as qualified terminable
interest property  only if,  at the  time the  federal estate tax
return is filed, the executor of the decedent's estate reasonably
believes that there is a bona fide issue that concerns whether an
asset is includible in the decedent's gross estate, or the amount
or nature  of the  property the  surviving spouse  is entitled to
receive, i.e.,  whether property  that is  includible is eligible
for the  qualified terminable  interest  property  election.  The
protective election  must identify  either  the  specific  asset,
group of  assets, or  trust to which the election applies and the
specific basis for the protective election.


                 Qualified State Tax References:
                          Page 91 of 148


     (2)  Protective   election   irrevocable.   The   protective
election, once made on the return of tax imposed by section 2001,
cannot be  revoked. For example, if a protective election is made
on the  basis that  a bona  fide question  exists  regarding  the
inclusion of  a trust  corpus in the gross estate and it is later
determined that the trust corpus is so includible, the protective
election becomes  effective with  respect to the trust corpus and
cannot thereafter be revoked.

     (d) Qualifying  income interest  for life -- (1) In general.
Section 2056(b)(7)(B)(ii)  provides the  definition of qualifying
income   interest    for   life.    For   purposes   of   section
2056(b)(7)(B)(ii)(II), the  surviving spouse  is included  within
the prohibited class of powerholders referred to therein.

     (2) Entitled  for life  to all  income. The  principles of s
20.2056(b)-5(f), relating  to whether  the spouse is entitled for
life to all of the income from the entire interest, or a specific
portion of  the entire interest, apply in determining whether the
surviving spouse  is entitled  for life to all of the income from
the property  regardless of  whether the  interest passing to the
spouse is in trust.

     (3) Contingent  income interests. An income interest granted
for a term of years, or a life estate subject to termination upon
the occurrence  of a specified event (e.g., remarriage), is not a
qualifying income  interest for  life.  In  addition,  an  income
interest (or  life estate) that is contingent upon the executor's
election under  section  2056(b)(7)(B)(v)  is  not  a  qualifying
income interest  for life,  regardless of whether the election is
actually made.

     (4) Income  between  last  distribution  date  and  date  of
spouse's death.    An income interest does not fail to constitute
a qualifying  income interest  for  life  solely  because  income
between the  last distribution date and the date of the surviving
spouse's death is not required to be distributed to the surviving
spouse or  to the estate of the surviving spouse. See s 20.2044-1
relating to  the inclusion  of such  undistributed income  in the
gross estate of the surviving spouse.

     (5) Pooled  income funds.  An income  interest in  a  pooled
income  fund   described  in   section  642(c)(5)  constitutes  a
qualifying income  interest for  life  for  purposes  of  section
2056(b)(7)(B)(ii).

     (6) Power  to distribute  principal to  spouse.    An income
interest in  a trust  will not  fail to  constitute a  qualifying
income interest  for life  solely because the trustee has a power
to distribute  principal to  or for  the benefit of the surviving
spouse. The  fact that property distributed to a surviving spouse
may be  transferred by  the spouse  to another  person  does  not
result in  a  failure  to  satisfy  the  requirement  of  section
2056(b)(7)(B)(ii)(II).  However,   if  the  surviving  spouse  is
legally bound  to transfer  the distributed  property to  another
person without  full  and  adequate  consideration  in  money  or
money's worth,  the requirement  of section 2056(b)(7)(B)(ii)(II)


                 Qualified State Tax References:
                          Page 92 of 148


is not satisfied.

     (e) Annuities  payable from trusts in the case of estates of
decedents dying  on or  before  October  24,  1992,  and  certain
decedents dying  after October  24, 1992, with wills or revocable
trusts executed  on or  prior to  that date -- (1) In general. In
the case  of estates  of decedents  within  the  purview  of  the
effective date  and transitional rules contained in s 20.2056(b)-
7(e)(5), a  surviving spouse's  lifetime annuity interest payable
from a  trust or  other group of assets passing from the decedent
is treated  as a qualifying income interest for life for purposes
of section 2056(b)(7)(B)(ii).

     (2)  Deductible   interest.  The  deductible  interest,  for
purposes of  s 20.2056(a)-2(b),  is the  specific portion  of the
property that,  assuming the applicable interest rate for valuing
annuities, would  produce income  equal  to  the  minimum  amount
payable annually  to the  surviving  spouse.  If,  based  on  the
applicable interest  rate, the  entire property  from  which  the
annuity may  be satisfied is insufficient to produce income equal
to the  minimum annual  payment,  the  value  of  the  deductible
interest is  the entire  value of  the property. The value of the
deductible interest may not exceed the value of the property from
which the annuity is payable. If the annual payment may increase,
the increased  amount is  not taken  into account  in valuing the
deductible interest.

     (3) Distributions permissible only to surviving spouse.   An
annuity interest  is not  treated as a qualifying income interest
for life  for purposes of section 2056(b)(7)(B)(ii) if any person
other than the surviving spouse may receive, during the surviving
spouse's lifetime, any distribution of the property or its income
(including any distribution under an annuity contract) from which
the annuity is payable.

     (4) Applicable  interest rate.  To determine  the applicable
interest rate  for valuing  annuities, see sections 2031 and 7520
and the regulations under those sections.

     (5)  Effective   dates.    (i)  The  rules  contained  in  s
20.2056(b)-7(e) apply  with respect to estates of decedents dying
on or before October 24, 1992.

     (ii) The  rules contained  in s 20.2056(b)-7(e) apply in the
case of  decedents dying  after October  24,  1992,  if  property
passes to  the spouse  pursuant to  a  will  or  revocable  trust
executed on or before October 24, 1992, and either  --

     (A) On that date, the decedent was under a mental disability
to change  the disposition of his property and did not regain his
competence to  dispose of such property before the date of death;
or

     (B) The decedent dies prior to October 24, 1995.

     (iii) Notwithstanding  the foregoing, the rules contained in
s 20.2056(b)-7(e)  do not apply if the will or revocable trust is


                 Qualified State Tax References:
                          Page 93 of 148


amended after October 24, 1992, in any respect that increases the
amount of  the transfer  qualifying for  the marital deduction or
alters the terms by which the interest so passes to the surviving
spouse.

     (f) Joint and survivor annuities. [Reserved]

     (g) Application  of local law.   The provisions of local law
are taken  into account  in determining whether the conditions of
section 2056(b)(7)(B)(ii)(I)  are satisfied. For example, silence
of a  trust instrument  as to  the frequency  of payment  is  not
regarded as  a failure to satisfy the requirement that the income
must  be  payable  to  the  surviving  spouse  annually  or  more
frequently unless  applicable local  law  permits  payments  less
frequently.

     (h)  Examples.     The  following  examples  illustrate  the
application of  paragraphs (a)  through (g)  of this  section. In
each example, it is assumed that the decedent, D, was survived by
S, D's  spouse and  that, unless  stated otherwise,  S is not the
trustee of any trust established for S's benefit.

Example 1. Life estate in residence. D owned a personal residence
valued at  $250,000 for  estate tax purposes. Under D's will, the
exclusive and  unrestricted right to use the residence (including
the right  to continue  to occupy  the  property  as  a  personal
residence or  to rent the property and receive the income) passes
to S for life. At S's death, the property passes to D's children.
Under applicable  local law,  S must  consent to  any sale of the
property. If  the executor  elects to  treat all  of the personal
residence  as   qualified  terminable   interest  property,   the
deductible interest  is $250,000,  the value of the residence for
estate tax purposes.

Example  2.   Power  to   make  property   productive.  D's  will
established a  trust funded  with property  valued for estate tax
purposes at  $500,000. The  assets include  both income producing
assets  and   non-productive  assets.  S  was  given  the  power,
exercisable annually, to require distribution of all of the trust
income to  herself. No  trust property  may be distributed during
S's lifetime  to any  person other  than S.  Applicable local law
permits S  to require  that the  trustee either  make  the  trust
property  productive   or  sell  the  property  and  reinvest  in
productive property  within a reasonable time after D's death. If
the executor  elects to  treat all  of  the  trust  as  qualified
terminable  interest   property,  the   deductible  interest   is
$500,000. If  the executor elects to treat only 20 percent of the
trust as  qualified terminable  interest property, the deductible
interest is $100,000, i.e., 20 percent of $500,000.

Example 3.  Power of  distribution over fraction of trust income.
The facts are the same as in Example 2 except that S is given the
right  exercisable   annually  for   S's  lifetime   to   require
distribution to  herself of  only 50  percent of the trust income
for life.  The remaining  trust income  is to  be accumulated  or
distributed among  S and the decedent's children in the trustee's
discretion. The  maximum amount  that D's  executor may  elect to


                 Qualified State Tax References:
                          Page 94 of 148


treat as  qualified terminable  interest  property  is  $250,000;
i.e., the  estate tax value of the trust ($500,000) multiplied by
the percentage  of the  trust in  which S has a qualifying income
interest for  life (50  percent). If D's executor elects to treat
only 20  percent of  the portion  of the  trust in  which S has a
qualifying  income  interest  as  qualified  terminable  interest
property, the deductible interest is $50,000, i.e., 20 percent of
$250,000.

Example  4.       Power  to  distribute  trust  corpus  to  other
beneficiaries. D's  will established  a trust providing that S is
entitled to  receive at  least annually all the trust income. The
trustee is  given the  power to  use annually during S's lifetime
$5,000 from  the trust  for the  maintenance and  support of  S's
minor child,  C.  Any  such  distribution  does  not  necessarily
relieve S of S's obligation to support and maintain C. S does not
have a  qualifying income interest for life in any portion of the
trust because  the bequest fails to satisfy the condition that no
person have  a power,  other than  a power  the exercise of which
takes effect  only at  or after S's death, to appoint any part of
the property  to any person other than S. The trust would also be
nondeductible under  section 2056(b)(7)  if S,  rather  than  the
trustee, held  the power to appoint a portion of the principal to
C. However,  in the latter case, if S made a qualified disclaimer
(within the  meaning of  section 2518) of the power to appoint to
C, the  trust could qualify for the marital deduction pursuant to
section 2056(b)(7),  assuming that the power is personal to S and
S's disclaimer  terminates the  power. Similarly, in either case,
if C  made  a  qualified  disclaimer  of  C's  right  to  receive
distributions from  the trust,  the  trust  would  qualify  under
section 2056(b)(7),  assuming  that  C's  disclaimer  effectively
negates the trustee's power under local law.

Example 5. Spouse's income interest terminable on remarriage. D's
will established  a trust  providing that all of the trust income
is payable  at least  annually to  S for  S's lifetime,  provided
that, if  S remarries,  S's interest in the trust will pass to X.
The trust  is not deductible under section 2056(b)(7). S's income
interest is  not a qualifying income interest for life because it
is not for life but, rather, is terminable upon S's remarriage.

Example 6.     Spouse's income  interest contingent on executor's
election. D's  will established  a  trust  providing  that  S  is
entitled to  receive the  income from  that portion  of the trust
that  the  executor  elects  to  treat  as  qualified  terminable
interest property.  S does  not have a qualifying income interest
for life  in any portion of the trust because the income interest
is contingent  upon the  executor's  election.  Accordingly,  the
executor cannot elect qualified terminable interest treatment for
any portion  of the  trust. If  the  decedent's  will  gives  the
surviving spouse  a qualifying  income interest  for  life  in  a
specific portion of the trust (such as the minimum portion of the
trust that is necessary to reduce the Federal estate tax to zero)
and the  interest is  not contingent  on the executor's election,
the executor  can elect  qualified terminable  interest treatment
for the specified portion of the trust.


                 Qualified State Tax References:
                          Page 95 of 148


Example 7.     Formula partial  election. D's  will established a
trust funded  with the  residue of D's estate. Trust income is to
be paid  annually to  S for  life, and  the principal  is  to  be
distributed to  D's children  upon S's  death. S has the power to
require that  all the trust property be made productive. There is
no power  to distribute trust property during S's lifetime to any
person other  than S.  D's executor elects to deduct a fractional
share of  the residuary  estate  under  section  2056(b)(7).  The
election specifies  that the  numerator of  the fraction  is  the
amount of deduction necessary to reduce the Federal estate tax to
zero (taking  into account  final  estate  tax  values)  and  the
denominator of  the fraction is the final estate tax value of the
residuary estate  (taking into  account any  specific bequests or
liabilities of  the estate paid out of the residuary estate). The
formula election is of a fractional share. The value of the share
qualifies for  the marital  deduction even  though the executor's
determinations to  claim administration  expenses  as  estate  or
income tax deductions and the final estate tax values will affect
the size of the fractional share.

Example 8. Formula partial election. The facts are the same as in
Example 7  except that,  rather than  defining  a  fraction,  the
executor's formula  states:   "I  elect  to  treat  as  qualified
terminable interest property that portion of the residuary trust,
up to  100 percent, necessary to reduce the Federal estate tax to
zero, after  taking into  account the  available unified  credit,
final estate tax values and any liabilities and specific bequests
paid from  the residuary  estate." The  formula election  is of a
fractional share. The share is equivalent to the fractional share
determined in Example 7.

Example 9.     Severance of  QTIP trust.  D's will  established a
trust funded  with the  residue of D's estate. Trust income is to
be paid  annually to  S for  life, and  the principal  is  to  be
distributed to  D's children  upon S's  death. S has the power to
require that  all of the trust property be made productive. There
is no  power to  distribute trust property during S's lifetime to
any person other than S. D's will authorizes the executor to make
the election  under section  2056(b)(7) only  with respect to the
minimum amount  of property  necessary to  reduce estate taxes on
D's estate  to  zero,  authorizes  the  executor  to  divide  the
residuary  estate   into  two  separate  trusts  to  reflect  the
election, and  authorizes the  executor to  charge any payment of
principal to  S to  the qualified terminable interest trust. S is
the sole  beneficiary of  both trusts  during S's  lifetime.  The
authorizations in  the will do not adversely affect the allowance
of the  marital deduction.  Only the  property remaining  in  the
marital deduction  trust, after  payment of  principal to  S,  is
subject to  inclusion in  S's gross  estate under section 2044 or
subject to gift tax under section 2519.

Example 10.     Payments to  spouse  from  individual  retirement
account. S  is the  life beneficiary  of sixteen remaining annual
installments payable  from D's individual retirement account. The
terms of  the account  provide for  the payment  of  the  account
balance in  nineteen annual  installments that  commenced when  D
reached age  70 1/2.  Each installment is equal to all the income


                 Qualified State Tax References:
                          Page 96 of 148


earned on  the remaining principal in the account plus a share of
the remaining  principal equal  to  1/19 in the first year,  1/18
in the second year,  1/17 in the third year, etc. Under the terms
of the account, S has no right to withdraw any other amounts from
the account.  Any payments  remaining after S's death pass to D's
children. S's  interest in  the account qualifies as a qualifying
income interest for life under section 2056(b)(7)(B)(ii), without
regard to the provisions of section 2056(b)(7)(C).

Example 11.     Spouse's interest  in trust  in the  form  of  an
annuity. D died prior to October 24, 1992. D's will established a
trust funded  with income  producing property  valued at $500,000
for estate  tax purposes.  The trustee  is required  by the trust
instrument to  pay $20,000  a year to S for life. Trust income in
excess of  the annuity  amount is  to be accumulated in the trust
and may  not be  distributed during  S's lifetime.  S's  lifetime
annuity interest  is treated  as a qualifying income interest for
life. If  the executor  elects to treat the entire portion of the
trust in  which S  has a  qualifying income interest as qualified
terminable  interest   property,  the  value  of  the  deductible
interest is  (assuming that 10 percent is the applicable interest
rate under  section 7520 for valuing annuities on the appropriate
valuation date)  $200,000, because  that amount  would  yield  an
income to S of $20,000 a year.

Example 12.     Value of  spouse's annuity exceeds value of trust
corpus. The  facts are  the same as in Example 11 except that the
trustee is  required to  pay S  $70,000 a  year for  life. If the
executor elects to treat the entire portion of the trust in which
S has  a  qualifying  income  interest  as  qualified  terminable
interest property,  the  value  of  the  deductible  interest  is
$500,000, which is the lesser of the entire value of the property
($500,000), or the amount of property that (assuming a 10 percent
interest rate)  would yield  an income  to S  of $70,000  a  year
($700,000).

Example 13.   Pooled income fund. D's will provides for a bequest
of  $200,000  to  a  pooled  income  fund  described  in  section
642(c)(5), designating  S as  the income beneficiary for life. If
D's executor  elects to  treat the  entire $200,000  as qualified
terminable  interest   property,  the   deductible  interest   is
$200,000.

Example 14.   Funding severed QTIP trusts. D's will established a
trust satisfying the requirements of section 2056(b)(7). Pursuant
to the  authority in  D's will  and s 20.2056(b)-7(b)(2)(ii), D's
executor indicates  on the  Federal estate  tax  return  that  an
election under  section 2056(b)(7)  is being made with respect to
50 percent  of the trust, and that the trust will subsequently be
divided to  reflect the partial election on the basis of the fair
market value  of the  property at  the time  of the division. D's
executor funds  the trust  at the  end of  the period  of  estate
administration. At  that time, the property available to fund the
trusts consists  of 100  shares of  X Corporation  stock  with  a
current value  of $400,000  and 200 shares of Y Corporation stock
with a  current value of $400,000. D may fund each trust with the
stock  of  either  or  both  corporations,  in  any  combination,


                 Qualified State Tax References:
                          Page 97 of 148


provided that  the aggregate value of the stock allocated to each
trust is $400,000.

[T.D. 8522, 59 F.R. 9651, March 1, 1994]

26 CFR  s 20.2056(b)-7,  Election with respect to life estate for
surviving spouse.

------------ Excerpt from pages 157089-157096


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER B -- ESTATE AND GIFT TAXES

PART 20  -- ESTATE  TAX;  ESTATES OF DECEDENTS DYING AFTER AUGUST
16, 1954

PROCEDURE AND ADMINISTRATION

Current through January 1, 1997;  61 F.R. 69366

s 20.6324B-1  Special lien for additional estate tax attributable
to farm, etc., valuation.

     (a) General  rule.    In the case of an estate of a decedent
dying after  December 31,  1976, which  includes any  interest in
qualified real  property, if the executor elects to value part or
all of  such property pursuant to section 2032A, a lien arises in
favor of  the United States on the property to which the election
applies.   The lien  is in  the amount  equal to the adjusted tax
difference attributable  to such  interest (as defined by section
2032A(c)(2)(B)).    The  term  "qualified  real  property"  means
qualified real property as defined in section 2032A(b), qualified
replacement   property    within   the    meaning   of    section
2032A(h)(3)(B),  and   qualified  exchange  property  within  the
meaning of  section 2032A(i)(3).   The  rules set  forth  in  the
regulations  under  section  2032A  shall  apply  in  determining
whether this  section is  applicable to  otherwise qualified real
property held by a partnership, corporation or trust.

     (b) Period  of lien.    The lien shall arise at the time the
executor files  an election under section 2032A.  It shall remain
in effect until one of the following occurs:

     (1) The  liability  for  the  additional  estate  tax  under
section  2032A(c)   with  respect   to  such  interest  has  been
satisfied;  or

     (2) Such  liability has  become unenforceable  by reason  of
lapse of time;  or

     (3) The  district director  is  satisfied  that  no  further


                 Qualified State Tax References:
                          Page 98 of 148


liability for additional estate tax with respect to such interest
may arise  under section 2032A(c), i.e., the required time period
has elapsed  since the decedent's death without the occurrence of
an event  described in section 2032A(c)(1), or the qualified heir
(as defined in section 2032A(e)(1)) had died.

For procedures regarding the release or subordination of liens or
discharge of  property from  liens,  see  s  301.6325-1  of  this
chapter (Regulations on Procedure and Administration).

     (c) Substitution  of security  for  lien.      The  district
director may,  upon written application of the qualified heir (as
defined  in   section  2032A(e)(1))  acquiring  any  interest  in
qualified real  property to which a lien imposed by section 6324B
attaches, issue a certificate of discharge of any or all property
subject to such lien, after receiving a bond or other security in
an amount  or  value  determined  by  the  district  director  as
sufficient security  for  the  maximum  potential  liability  for
additional estate  tax with  respect to  such interest.  Any bond
shall be  in the  form and  with the  security  prescribed  in  s
301.7101-1 of this chapter.

     (d) Special  rules.      The  rules  set  forth  in  section
6324A(d)(1), (3),  and (4), and the regulations thereunder, shall
apply with  respect to  a lien  imposed by section 6324B as if it
were a lien imposed by section 6324A.

[T.D. 7847, 47 F.R. 50856, Nov. 10, 1982]

26 CFR  s 20.6324B-1,  Special lien  for  additional  estate  tax
attributable to farm, etc., valuation.

------------ Excerpt from pages 157272-157273


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

LIEN FOR TAXES

Current through January 1, 1997;  61 F.R. 69366

s 301.6321-1 Lien for taxes.

     If any  person liable  to pay any tax neglects or refuses to
pay the  same after  demand, the  amount (including any interest,
additional  amount,  addition  to  tax,  or  assessable  penalty,
together with  any costs  that may  accrue in  addition  thereto)


                 Qualified State Tax References:
                          Page 99 of 148


shall be  a lien  in favor of the United States upon all property
and rights  to property,  whether real  or personal,  tangible or
intangible, belonging  to such  person.   For purposes of section
6321 and  this section,  the term "any tax" shall include a State
individual income  tax which  is a "qualified tax", as defined in
paragraph (b) of s 301.6361-4.  The lien attaches to all property
and rights  to property  belonging to  such person  at  any  time
during the  period of  the lien, including any property or rights
to property  acquired by  such  person  after  the  lien  arises.
Solely for  purposes of  sections 6321  and 6331, any interest in
restricted land  held in  trust  by  the  United  States  for  an
individual noncompetent Indian (and not for a tribe) shall not be
deemed to  be property, or a right to property, belonging to such
Indian.   For the method of allocating amounts collected pursuant
to a  lien between  the Federal  Government and a State or States
imposing a qualified tax with respect to which the lien attached,
see paragraph  (f) of  s 301.6361-1.   For  the special  lien for
estate and gift taxes, see section 6324 and s 301.6324-1.

[32 F.R.  15241, Nov.  3, 1967,  as amended by T.D. 7139, 36 F.R.
15041, Aug. 12, 1971;  T.D. 7577, 43 F.R. 59361, Dec. 20, 1978]

26 CFR s 301.6321-1, Lien for taxes.

------------ Excerpt from page 160371


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366

s 301.6361-1 Collection and administration of qualified taxes.

     (a) In  general.   In the  case of  any State  which has  in
effect a  State agreement  (as defined  in  paragraph  (a)  of  s
301.6361-4), the  Commissioner of  Internal Revenue shall collect
and administer each qualified tax (as defined in paragraph (b) of
s 301.6361-4)  of such  State.   No fee  or other charge shall be
imposed upon  any State  for the  collection or administration of
any qualified  tax of such State or any other State.  In any such
case of  collection and  administration of  qualified taxes,  the
provisions   of   subtitle   F   (relating   to   procedure   and
administration), subtitle  G (relating  to the Joint Committee on
Taxation), and  chapter 24  (relating to the collection of income
tax at  source on  wages),  and  the  provisions  of  regulations


                 Qualified State Tax References:
                          Page 100 of 148


thereunder, insofar  as such  provisions relate to the collection
and  administration  of  the  taxes  imposed  on  the  income  of
individuals by  chapter 1  (and the  civil and criminal sanctions
provided by  subtitle F, or by title 18 of the United States Code
(relating to crimes and criminal procedure), with respect to such
collection and  administration) shall apply to the collection and
administration of  qualified taxes  as if such taxes were imposed
by chapter  1, except  to the extent that the application of such
provisions (and  sanctions) are  modified by  regulations  issued
under subchapter E (as defined in paragraph (d) of s 301.6361-4).
Any extension  of time  which is  granted for  the  making  of  a
payment, or  for the  filing of  any return, which relates to any
Federal tax  imposed by subtitle A (or by subtitle C with respect
to filing  a return)  shall constitute automatically an extension
of the  same amount  of time  for the making of the corresponding
payment or for the filing of the corresponding return relating to
any qualified tax.

     (b) Returns  of qualified  taxes.  Every individual, estate,
or trust  which has liability for one or more qualified taxes for
a taxable year  --

     (1) Shall  file a  Federal income  tax return  at  the  time
prescribed pursuant  to section  6072(a)  (whether  or  not  such
return is  required by section 6012), and shall file therewith on
the prescribed  form a return under penalties of perjury for each
tax which is  --

     (i) A qualified resident tax imposed by a State of which the
taxpayer was a resident, as defined in s 301.6362-6, for any part
of the taxable year;

     (ii) A  qualified nonresident  tax imposed by a State within
which was  located the  source or sources from which the taxpayer
derived, while  not a resident of such State and while not exempt
from liability  for the  tax by  reason of a reciprocal agreement
between such  State and  the State  of which he is a resident, 25
percent or  more of his aggregate wage and other business income,
as defined  in paragraph  (c) of  s 301.6362-5,  for the  taxable
year;  or

     (iii) A  qualified resident  or nonresident tax with respect
to which  any amount  was currently collected from the taxpayer's
income (including  collection  by  withholding  on  wages  or  by
payment of estimated income tax), as provided in paragraph (f) of
s 301.6362-6, for any part of the taxable year;  and

     (2) Shall  declare (in  addition to the declaration required
with respect  to the  return of the Federal income tax and in the
place and  manner prescribed  by form  or  instructions  thereto)
under penalties of perjury that, to the best of the knowledge and
belief of the taxpayer (or, in the case of an estate or trust, of
the fiduciary who executes the Federal income tax return), he has
no liability  for any  qualified tax  for the  taxable year other
than any  such liabilities  returned with  the Federal income tax
return (pursuant  to subparagraph  (1) of  this  paragraph  (b)).
Such  declaration   shall  constitute   a  return  indicating  no


                 Qualified State Tax References:
                          Page 101 of 148


liability with  respect to each qualified tax other than any such
tax for  which liability  is so  returned.   A Federal income tax
return form  which is  filed but  which  does  not  contain  such
declaration shall  constitute a Federal income tax return only if
the taxpayer in fact has no liability for any qualified State tax
for the taxable year.

     (c) Credits  -- (1)  Credit for  tax  of  another  State  or
political subdivision  -- (i)  In general.   A  credit  allowable
under a qualified tax law against the tax imposed by such law for
a taxpayer's  tax liability  to  another  State  or  a  political
subdivision of another State shall be allowed if the requirements
of subdivision  (ii) of  this subparagraph  are met,  and if  the
credit meets  the requirements  of paragraph (c) of s 301.6362-4.
Such credit  shall be  allowed without  regard to whether the tax
imposed by  the other State or subdivision thereof is a qualified
tax, and without regard to whether such tax has been paid.

     (ii) Substantiation  of tax  liability for which a credit is
allowed.   If the  liability which  gives rise to a credit of the
type described  in subdivision  (i) of  this subparagraph is with
respect to a qualified tax, then the fact of such liability shall
be substantiated  by filing the return on which such liability is
reported.   If such  liability is not with respect to a qualified
tax, then  the Commissioner  may require  a taxpayer  who  claims
entitlement to  such a  credit to complete a form to be submitted
with his  return of the qualified tax against which the credit is
claimed.   On such  form the  taxpayer shall identify each of the
other States  (the liabilities to which were not substantiated as
provided in  the first sentence of this subdivision) or political
subdivisions to which the taxpayer reported a liability for a tax
giving rise  to the  credit, furnish  the name  or description of
each such tax, state the amount of the liability so reported with
respect to  each such  tax and  the beginning and ending dates of
the taxable  period for  which such  liability was  reported, and
provide such  other information as is requested in the form or in
the instructions  thereto.  In addition, the taxpayer shall agree
on such  form to  notify the  Commissioner in  the event that the
amount of any tax liability (or portion thereof) which is claimed
as giving  rise to  a credit of the type described in subdivision
(i) of  this subparagraph  is changed  or adjusted,  whether as a
result  of   an  amended   return  filed   by  the   taxpayer,  a
determination by  the jurisdiction  imposing the  tax, or  in any
other manner.

     (2) Credit  or withheld  qualified tax.   An individual from
whose wages  an amount  is withheld on account of a qualified tax
shall receive  a credit  for such  amount against  his  aggregate
liability for all such qualified taxes and the Federal income tax
for the  taxable year, whether or not such tax has been paid over
to the  Federal Government  by the  employer.   The credit  shall
operate in  the manner  provided by section 31(a) of the Code and
the regulations  thereunder with  respect to  Federal income  tax
withholding.

     (d) Collection  of qualified taxes at source on wages -- (1)
In general.   Except as otherwise provided in subparagraph (2) of


                 Qualified State Tax References:
                          Page 102 of 148


this paragraph,  every employer  making payment  of wages  to  an
employee described in such subparagraph shall deduct and withhold
upon such  wages  the  amount  prescribed  with  respect  to  the
qualified tax  designated in  such  subparagraph.    The  amounts
prescribed for  withholding with  respect to  each such qualified
tax shall  be published  in Circular  E (Employer's Tax Guide) or
other appropriate  Internal Revenue  Service publications.    See
paragraph (f)(1)  of s  301.6362-7  with  respect  to  civil  and
criminal penalties  to which  an employer  shall be  subject with
respect to his responsibilities relating to qualified taxes.

     (2) Specific  withholding requirements.   An  employer shall
deduct  and   withhold  upon   an  employee's  wages  the  amount
prescribed with  respect to a qualified tax with respect to which
such employee  is subject  to the  current collection  provisions
pursuant to paragraph (f) of s 301.6362-6, unless:

     (i) In  the case of a qualified resident tax, the employee's
services giving rise to the wages are performed in another State,
and such other State or a political subdivision thereof imposes a
nonresident tax  on such  employee  with  respect  to  which  the
withholding amount exceeds the prescribed withholding amount with
respect to  such qualified  resident tax,  and the State imposing
such qualified  resident tax  grants a credit against it for such
nonresident tax.

     (ii) In the case of a qualified nonresident tax, either:

     (A) Residents of the State in which the employee resides are
exempt from  liability for  the qualified nonresident tax imposed
by the  State from  sources  within  which  his  wage  income  is
derived, by reason of an interstate compact or agreement to which
the two States are parties, or

     (B) The  State in  which  the  employee  resides  imposes  a
qualified resident tax on such employee with respect to which the
prescribed withholding  amounts exceed the prescribed withholding
amounts with  respect to the qualified nonresident tax imposed by
the State  from sources  within which his wage income is derived,
and the  State in  which he  resides grants  a credit against its
qualified resident tax for such qualified nonresident tax.

If the  nonresident tax  described in  subdivision  (i)  of  this
subparagraph is  a qualified  nonresident tax imposed by a State,
then the  reference in such subdivision to the State in which the
services are  performed shall  be construed as a reference to the
State from  sources within  which the  wage  income  is  derived,
within the meaning of paragraph (d)(1) of s 301.6362-5.

     (3) Forms,  procedures, and  returns relating to withholding
with respect to qualified taxes -- (i) Forms W-4 and W-4P.  Forms
W-4  (Employee's  Withholding  Allowance  Certificate)  and  W-4P
(Annuitant's Request  for Income  Tax Withholding), shall include
information as  to the  State in  which the employee resides, and
shall be  used for  purposes of  withholding with respect to both
Federal and  qualified taxes.  An employee shall show on his Form
W-4 the State in which he resides for purposes of this paragraph,


                 Qualified State Tax References:
                          Page 103 of 148


and shall file a new Form W-4 within 10 days after he changes his
State of  residence.  An employee who fails to meet either of the
requirements set forth in the preceding sentence, with the intent
to evade  the withholding tax imposed with respect to a qualified
tax, shall  be subject to the penalty provided in section 7205 of
the Code.   An  employer shall be responsible for determining the
State within  which  are  located  the  sources  from  which  the
employee's wage income is derived for purposes of this paragraph;
and, if the employee does not file a Form W-4, the employer shall
assume for such purposes that the employee resides in that State.
When  an   employer  and  an  employee  enter  into  a  voluntary
withholding agreement  pursuant to  s 31.3402(p)-1,  the employer
shall  withhold   the  amount  prescribed  with  respect  to  the
qualified resident tax imposed by the State in which the employee
resides, as  indicated on  Form W-4.   Similarly, if an annuitant
requests  withholding   with  respect  to  his  annuity  payments
pursuant to  section 3402(o)(1)(B)  of the  Code, the payer shall
withhold the  whole dollar amount specified by the annuitant with
respect to  a qualified  resident tax, provided that the combined
withholding with  respect to  Federal and qualified taxes on each
annuity payment  shall be a whole dollar amount not less than $5,
and that  the net  amount of  any annuity payment received by the
payee shall not be reduced to less than $10.

     (ii) Forms W-2 and W-2P.  Forms W-2 (Wage and Tax Statement)
and W-2P (the corresponding form for annuities) shall show:

     (A) The  total amount  withheld with  respect to the Federal
income tax;

     (B) The  total amount  withheld with  respect  to  qualified
taxes;

     (C) The name of each State imposing a qualified tax in which
the employee  (or annuitant)  resided during the taxable year, as
shown on Form W-4 (or W-4P);

     (D) The  name of each State imposing a qualified nonresident
tax within  which were  located sources from which the employee's
wage income  was derived  during a  period of the taxable year in
which he  was not  shown as a resident of such State on Form W-4,
and the amount of the employee's wage income so derived;  and

     (E) The  name of  each State  or locality  that  imposes  an
income tax which is not a qualified tax and with respect to which
the employer  withheld on  the employee's  wage  income  for  the
taxable year, and the amount of wage income with respect to which
the employer so withheld.

     (iii)  Requirements  relating  to  deposit  and  payment  of
withheld tax.   Rules  relating to  the deposit and remittance of
withheld  Federal   income  and   FICA  taxes,   including  those
prescribed in  section 6302  of  the  Code  and  the  regulations
thereunder, shall  apply also to amounts withheld with respect to
qualified taxes.   Thus,  an employer's liability with respect to
the deposit  and payment  of withheld  taxes  shall  be  for  the
combined amount  of  withholding  with  respect  to  Federal  and


                 Qualified State Tax References:
                          Page 104 of 148


qualified taxes.   The  Federal Tax Deposit form shall separately
indicate:

     (A) The  combined total  amount of Federal income, FICA, and
qualified taxes withheld;

     (B) The  combined total  amount of qualified taxes withheld;
and

     (C) The  total  amount  of  qualified  taxes  withheld  with
respect to each electing State.

Data indicating the total amount of tax deposits processed by the
Internal Revenue  Service with  respect to the qualified taxes of
an electing State will be available to that State upon request on
as frequent  as a  weekly basis.  These data will be available no
later than  10 working days after the end of the calendar week in
which the deposits were processed by the Service.

     (iv)  Employment   tax  returns.     Forms  941  (Employer's
Quarterly  Federal   Tax  Return),  941-E  (Quarterly  Return  of
Withheld Income  Tax),  941-M  (Employer's  Monthly  Federal  Tax
Return), 942  (Employer's  Quarterly  Tax  Return  for  Household
Employees),  and   943  (Employer's   Annual   Tax   Return   for
Agricultural Employees), shall indicate the total amount withheld
with respect  to each qualified tax, as directed by such forms or
their instructions.

     (e) Criminal  penalties.   A criminal offense committed with
respect to a qualified tax shall be treated as a separate offense
from a similar offense committed with respect to the Federal tax.
Thus, for example, if a taxpayer willfully attempts to evade both
the Federal  tax and  a qualified  tax by  failing  to  report  a
portion of his income, he shall be considered as having committed
two criminal  offenses, each  subject to a separate penalty under
section 7201.   See also s 301.6362-7(f) with respect to criminal
penalties.

     (f) Allocation  of amounts collected with respect to tax and
criminal fines  -- (1) In general.  The aggregate amount that has
been collected  from a  taxpayer (including  amounts collected by
withholding) in  respect  of  liability  for  both  one  or  more
qualified taxes  and the  Federal income  tax for  a taxable year
shall be  allocated among  the Federal  Government and the States
imposing qualified  taxes for which the taxpayer is liable in the
proportion which the taxpayer's liability for each such tax bears
to his  aggregate liability  for such  year to all of such taxing
jurisdictions with  respect to  such taxes.  A reallocation shall
be made  either when  an amount is collected from the taxpayer or
his  employer  or  is  credited  or  refunded  to  the  taxpayer,
subsequent to  the making  of the  initial allocation,  or when a
determination is  made by the Commissioner that an error was made
with respect  to  a  previous  allocation.    However,  any  such
allocation or  reallocation shall  not affect  the  amount  of  a
taxpayer's or employer's liability to either jurisdiction, or the
amount of  the assessment  and collection  which may be made with
respect to a taxpayer or employer.  Accordingly, such allocations


                 Qualified State Tax References:
                          Page 105 of 148


and reallocations  shall not  be  taken  into  consideration  for
purposes  of   the  application  of  statutes  of  limitation  or
provisions relating to interest, additions to tax, penalties, and
criminal sanctions.   See example (4) in subparagraph (4) of this
paragraph (e).   In addition, any such allocation or reallocation
shall not  affect the amount of the deduction to which a taxpayer
is entitled under section 164 for a year in which he made payment
(including payments  made by  withholding) of an amount which was
designated as  being in  respect of his liability for a qualified
tax.   However, to  the extent that an amount which was paid by a
taxpayer and  designated as being in respect of his liability for
a qualified  tax is  allocated or reallocated in such a manner as
to apply  it toward  the taxpayer's  liability  for  the  Federal
income tax, such allocation or reallocation shall be treated as a
refund to  the taxpayer  of an  amount paid in respect of a State
income tax,  and shall  be included  in the  gross income  of the
taxpayer to  the extent  appropriate under  section 111  and  the
regulations thereunder  in the  year in  which the  allocation or
reallocation is  made.   See  section  451  and  the  regulations
thereunder.   Similarly, to  the extent  that an amount which was
paid by  a taxpayer  and designated  as being  in respect  of his
Federal income  tax liability is allocated or reallocated in such
a manner as to apply it toward his liability for a qualified tax,
such allocation  or reallocation  shall be  treated as  a payment
made by  the taxpayer in respect of a State income tax, and shall
be deductible  under  section  164  in  the  year  in  which  the
allocation or reallocation is made.  The Internal Revenue Service
shall notify  the  taxpayer  in  writing  of  any  allocation  or
reallocation of  tax liabilities  in a proportion other than that
of  the  respective  tax  liabilities  shown  on  the  taxpayer's
returns.

     (2) Amounts of collections and liabilities.  For purposes of
this paragraph  the aggregate amount that has been collected from
a taxpayer  or his  employer in  respect of  tax liability  shall
include the  amounts of  interest provided  in  chapter  67,  and
additions to tax and assessable penalties provided in chapter 68,
which are  collected with  respect to  such tax;   but  shall not
include criminal  fines provided in chapter 75, or in title 18 of
the United  States Code,  which are  collected  with  respect  to
offenses relating  to such  tax.   (See subparagraph  (3) of this
paragraph (e)  with respect  to the  treatment of  such  criminal
fines.)    However, for purposes of this paragraph, the amount of
the taxpayer's liability for each tax shall exclude his liability
for such interest additions to tax, and assessable penalties with
respect to such tax, and his liability for criminal fines imposed
with respect  to offenses  relating to such tax.  For purposes of
this paragraph,  the amount  of the taxpayer's liability for each
tax shall be computed by taking credits into account, except that
there shall  be no  reduction for  any amounts paid on account of
such liability,  whether by  means of  withholding, estimated tax
payment, or otherwise.

     (3) Special rules relating to criminal fines.  (i) Except as
otherwise provided in subdivision (ii) of this subparagraph, when
a criminal charge is brought against a taxpayer with respect to a
taxable year pursuant to chapter 75, or to title 18 of the United


                 Qualified State Tax References:
                          Page 106 of 148


States Code,  or to  a corresponding provision of a qualified tax
law, alleging  that an  offense was  committed against the United
States with  respect to the Federal income tax or against a State
with respect  to a  qualified tax,  and an  amount  of  money  is
collected by the Federal Government as a fine as a result of such
charge, then the Federal Government shall remit an amount to each
State, if  any, which  is an  affected jurisdiction.   The amount
remitted to each such State shall bear the same proportion to the
total amount collected as a fine as the taxpayer's liability with
respect to  the qualified  taxes  of  that  State  bears  to  the
aggregate  of  the  taxpayer's  income  tax  liabilities  to  all
affected jurisdictions  for the taxable year, as determined under
subparagraphs (1) and (2) of this paragraph (e).  For purposes of
this subparagraph, an affected jurisdiction is (A) a jurisdiction
with respect  to the  tax of which a criminal charge described in
the preceding sentence was brought for the taxable year, or (B) a
jurisdiction with  respect to  the  Federal  income  tax  or  the
qualified tax  of which  the acts  or omissions alleged in such a
criminal charge  would constitute the basis for the bringing of a
criminal charge  for the  same taxable year.  However, in no case
shall the  amount received by an affected State, or the amount of
the excess  of the amount received by the Federal Government over
the amount  of its  remissions to  States, with respect to a fine
exceed the  maximum fine  prescribed by  statute for  the offense
against that jurisdiction with respect to which a criminal charge
was brought,  or with respect to which the bringing of a criminal
charge could  have been  supported on  the basis  of the  acts or
omissions alleged  in a criminal charge brought.  For purposes of
this subparagraph,  the amount collected as a fine as a result of
a criminal  charge shall include amounts paid in settlement of an
actual or  potential liability  for a fine, amounts paid pursuant
to a  conviction and amounts paid pursuant to a plea of guilty or
nolo contendere.

     (ii) If a criminal charge described in the first sentence of
subdivision (i)  of this  subparagraph is  actually brought  with
respect to  the income  tax of  every affected  jurisdiction with
respect to  the taxable  year, and  if a Court adjudicates on the
merits  the   taxpayer's  liability  for  a  fine  to  each  such
jurisdiction, and  includes in  its decree  a  direction  of  the
amount, if  any, to  be paid as a fine to each such jurisdiction,
then that  decree shall  govern the  allocation of  the amount of
money collected  by the Federal Government as a fine with respect
to the taxable year.

     (4) Examples.   The  application of  this paragraph  may  be
illustrated by the following examples:

Example (1).   The total combined amount of State X qualified tax
and Federal  income tax  collected from A, a resident of State X,
for the  taxable year  is $5,100.  The amounts of A's liabilities
for such  taxes for  that year  are $800 to State X and $4,000 to
the Federal  Government.   Since A's  tax liability to State X is
one-sixth of the combined tax liability ($4,800), one-sixth ($50)
of the  amount to  be refunded  to A ($300) is chargeable against
State X's  account, and  five-sixths ($250) is chargeable against
the Federal Government's account.


                 Qualified State Tax References:
                          Page 107 of 148


Example (2).  Assume the same facts as in example (1) except that
the  total  amount  collected  from  A  is  $4,500.    Since  A's
liabilities for the State X tax and the Federal tax are one-sixth
and five-sixths, respectively, of the combined tax liability, the
Federal Government  shall pay over to State X one-sixth ($750) of
the amount  actually collected from A, and the Federal Government
shall retain five-sixths ($3,750).

Example (3).   The total amount of State X qualified tax, State Y
qualified tax,  and  Federal  income  tax  collected  from  B,  a
resident of  State X  who is employed in State Y, for the taxable
year is  $5,500.   The amounts  of B's liabilities for such taxes
for that  year are:  $250 for the State X tax (after allowance of
a credit  for State Y's qualified tax), $750 for the State Y tax,
and $4,000  for the  Federal tax.   Since  B's liability  for the
State X  tax ($250)  is 5  percent of  the combined tax liability
($5,000), his  liability for the State Y tax ($750) is 15 percent
of such combined liability, and his liability for the Federal tax
($4,000) is  80 percent  of such  combined liability,  the  total
amount to  be refunded  to B  ($500) shall  be chargeable  in the
following manner:   5 percent ($25) against State X's account, 15
percent ($75)  against State  Y's account,  and 80 percent ($400)
against the Federal Government's account.

Example (4).   C  is liable  for $2,000 in Federal income tax and
$500 in  State X  qualified tax  (a resident tax) for the taxable
year.  However, on his Federal income tax return for such year, C
erroneously described  himself as  a resident  of State  Y (which
does not have a qualified tax), and he filed with such return his
declaration to  the effect that he had no qualified tax liability
for the  year.   Accordingly, C  paid only $2,000 for his Federal
tax liability, and such amount was retained in the account of the
Federal Government.   Subsequently, C's error is discovered.  The
amount collected  by the  Federal Government from C for such year
must be  allocated between  the Federal Government and State X in
proportion to  C's tax  liability  to  both.    Accordingly,  the
Federal Government  must pay  over to  State X the amount of $400
(which is   1/5  ($500/$2,500) of  the $2,000 collected).  If the
Federal Government  collects from  C the additional $500 owed, it
will retain  $400 of  such amount  and pay  the remaining $100 to
State X.   Similarly,  if the  Federal Government collects from C
any interest,  or any  additions to  tax or  assessable penalties
under chapter 68,  4/5 of the amount of such collections shall be
retained by  the Federal Government and  1/5 of such amount shall
be paid over to State X.  However, notwithstanding the allocation
of the  funds between the taxing jurisdictions, C's liability for
the $500  retains its  character as  a liability for State X tax.
Therefore,  any   interest,  additions   to  tax,  or  assessable
penalties imposed  with respect  to the  State  X  tax  shall  be
imposed with  respect to  C's full  $500 liability  for such tax,
notwithstanding the  fact that  amounts collected with respect to
such items shall be allocated  4/5 to the Federal Government.

Example (5).   A criminal charge is brought against D pursuant to
chapter 75,  alleging that  he willfully  evaded the  payment  of
Federal income  tax by  failing to report interest income derived


                 Qualified State Tax References:
                          Page 108 of 148


from obligations  of the  United States.   D enters a plea of non
contendere to the charge and pays $2,500 as a fine to the Federal
Government.   The act  alleged in  the criminal  charge would not
support the  bringing of  a criminal  charge under  a  State  law
corresponding to  chapter 75, or to title 18 of the United States
Code,  with   respect  to   the  qualified   tax  of  any  State;
accordingly, the United States is the only affected jurisdiction,
and no remittances shall be made to any State with respect to the
amount collected by the Federal Government as a fine.

Example (6).   A criminal charge is brought against E pursuant to
chapter 75,  alleging that  he willfully  attempted to  evade the
assessment of  liability for  both Federal  income  tax  and  the
qualified tax  of State  X by  filing false and fraudulent income
tax returns.   E's case is settled upon the condition that he pay
a fine  in the  amount of  $5,000.   As  determined  pursuant  to
subparagraph (2)  of this  paragraph,  E's  liabilities  for  the
taxable year  are  in  the  amounts  of  $7,200  to  the  Federal
Government and  $800 to  State X.  Accordingly, after the Federal
Government  collects   the  fine,  $500  ($5,000+$800X$8,000)  is
remitted to State X.

Example (7).   Assume  the same  facts as  in example (6), except
that E  is tried  and convicted  on both charges, and pursuant to
court decree  he pays  to the United States a fine of $6,000 with
respect to  each charge,  or a  total  of  $12,000.    Because  a
criminal  charge  was  brought  with  respect  to  each  affected
jurisdiction, and  the allocation  of the  total amount paid as a
fine was specifically imposed by a court decree, the direction of
the Court  shall govern  the allocation.   Accordingly, after the
Federal Government  collects the fines it pays over $6,000 to the
account of State X.

[T.D. 7577, 43 F.R. 59361, Dec. 20, 1978]

26 CFR  s 301.6361-1,  Collection and administration of qualified
taxes.

------------ Excerpt from pages 160495-160502


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366



                 Qualified State Tax References:
                          Page 109 of 148


s 301.6361-2  Judicial and  administrative proceedings;   Federal
representation of State interests.

     (a) Civil proceedings -- (1) General rule.  Any person shall
have the  same right  to bring  or contest a civil action, and to
obtain  a  review  thereof,  with  respect  to  a  qualified  tax
(including the  current collection  thereof) in the same court or
courts which  would be available to him, and pursuant to the same
requirements and  procedures to  which he would be subject, under
chapter 76 (relating to judicial proceedings), and under title 28
of the United States Code (relating to the judiciary and judicial
procedure), if the tax were imposed by section 1 or chapter 24 of
the Internal  Revenue Code.   For  purposes of  this section, the
term  "person"  includes  the  Federal  Government.    Except  as
provided in subparagraph (2) of this paragraph (a), to the extent
that  the   preceding  sentence   provides  judicial   procedures
(including review  procedures) with  respect to  any matter, such
procedures shall  replace civil  judicial procedures  under State
law.

     (2) Exception.   The  right or  power of  the courts  of any
State to pass on matters involving the constitution of such State
is unaffected  by any  provision of this paragraph;  however, the
jurisdiction of  a State  court in  such matters shall not extend
beyond the  issue of  constitutionality.   Thus,  if  in  a  case
involving the validity of a qualified tax statute under the State
constitution, the  State court holds such statute constitutional,
such court  shall not  proceed to  decide the  amount of  the tax
liability.

     (b) Criminal proceedings.  Only the Federal Government shall
have the  right to  bring a  criminal action  with respect  to  a
qualified tax  (including the  current collection thereof).  Such
an action  shall be  brought in  the same  court or  courts which
would be available to the Federal Government, and pursuant to the
same requirements  and procedures to which the Federal Government
would be subject, if the tax were imposed by section 1 or chapter
24 of the Internal Revenue Code.

     (c) Administrative  proceedings.   Any person shall have the
same rights in administrative proceedings of the Internal Revenue
Service with  respect to  a qualified  tax (including the current
collection thereof) which would be available to him, and shall be
subject to the same administrative requirements and procedures to
which he  would be  subject, if the tax were imposed by section 1
or chapter 24 of the Internal Revenue Code.

     (d) United  States representation  of State interests -- (1)
General rule.  Except as provided in subparagraphs (2) and (3) of
this paragraph (d), the Federal Government shall appear on behalf
of any  State the  qualified tax  of which  it collects  (or  did
collect for  the year in issue), and shall represent such State's
interests in  any administrative  or judicial  proceeding, either
civil or  criminal in nature, which relates to the administration
and collection  of such  qualified tax,  in the same manner as it
represents the  interests of  the United  States in corresponding
proceedings involving Federal income tax matters.


                 Qualified State Tax References:
                          Page 110 of 148


     (2)  Exceptions.    The  Federal  Government  shall  not  so
represent a State's interests either  --

     (i)  In   proceedings  in   a  State   court  involving  the
constitution of  such State, to the extent of such constitutional
issue, or

     (ii) In  proceedings in any court involving the relationship
between the  United States  and the  State, to  the extent of the
issue pertaining to such relationship, if either:

     (A) The  proceeding is  one which is initiated by the United
States against  the State,  or by  the State  against the  United
States, and  no individual  (except in his official capacity as a
governmental official) is an original party to the proceeding, or

     (B) The  proceeding is  not one  described in  (A), but  the
State elects  to  represent  its  own  interests  to  the  extent
permissible under this subdivision.

     (3)  Finality   of  Federal  administrative  determinations.
State and local government officials and employees may not review
Federal administrative  determinations concerning tax liabilities
of, refunds  owed to,  or criminal  prosecutions of,  individuals
with respect  to qualified  taxes.   See, however,  s  301.6363-3
relating to  State administration of a qualified tax with respect
to transition  years.   If requested  by an  electing State,  the
Commissioner or  his delegate may, under terms and conditions set
forth in an agreement with such State, permit such State to carry
on operations  supplementary to the Federal administration of the
State's  qualified   tax  (including   supplemental   audits   or
examinations of  tax returns  by State  audit personnel), but all
administrative  determinations  shall  be  made  by  the  Federal
Government without  review by  the State.    An  agreement  which
permits supplemental  audits or  examinations of  tax returns  by
State  audit   personnel  shall   provide  that  the  audits  and
examinations shall be conducted under the supervision and control
of the Commissioner or his delegate, who shall have the authority
to determine  which returns  shall be audited and when the audits
shall occur.   Also,  such  agreements  shall  provide  that  the
results of  any such  supplemental audit shall be referred to the
Commissioner   or   his   delegate   for   final   administrative
determination.   The Commissioner  or his  delegate shall, to the
extent permitted  by law,  allow  an  electing  State  reasonable
access  to   tax  returns   and  other  appropriate  records  and
information relating  to its  qualified tax  for the  purpose  of
conducting any  such supplemental  operations.   In addition, the
Secretary or  his delegate  shall permit  an  electing  State  to
inspect the  workpapers which  are  compiled  in  the  course  of
verification by the Treasury Department of the correctness of the
accounting by  which the  amounts of  the actual  net collections
attributable  to   the  electing   State's  qualified  taxes  are
determined.

[T.D. 7577, 43 F.R. 59364, Dec. 20, 1978]


                 Qualified State Tax References:
                          Page 111 of 148


26 CFR  s 301.6361-2,  Judicial and  administrative  proceedings;
Federal representation of State interests.

------------ Excerpt from pages 160503-160505


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366

s 301.6361-3 Transfers to States.

     (a) Periodic  transfers.   In general,  amounts collected by
the Federal  Government which  are allocable  to qualified  taxes
(including criminal  fines which  are required  to be  paid to  a
State, as  determined under  paragraph (f)(3)  of  s  301.6361-1)
shall be  promptly transferred to each State imposing such a tax.
Transfers of  such amounts,  based on  percentages  of  estimated
Federal collections, shall be made not less frequently than every
third business day unless the State agrees to accept transfers at
less frequent intervals.

     (b) Determination  of amounts  of transfers.    The  amounts
allocable to  the qualified  taxes of  each State for purposes of
periodic transfer  shall be  determined as  a percentage  of  the
estimated aggregate net individual income tax collections made by
the Federal  Government.   For purposes  of this  paragraph,  the
"aggregate net  individual income  tax collections" shall include
amounts collected on account of the Federal individual income tax
and all  qualified taxes by all means (including withholding, tax
returns, and declarations of estimated tax), and shall be reduced
to the  extent of  any liability  to  taxpayers  for  credits  or
refunds by  reason of overpayments of such taxes.  The percentage
of the estimated amount of such collections which is allocated to
each State  shall be  based on an estimate which is to be made by
the Office  of Tax  Analysis  prior  to  the  beginning  of  each
calendar year  as to  what portion of the estimated aggregate net
individual income  tax collections  for the forthcoming year will
be attributable to the qualified taxes of that State.  Each State
will be  notified prior to the beginning of each calendar year of
the amount  which it  is estimated that the State will receive by
application of that percentage for the year.  However, the Office
of Tax  Analysis shall, from time to time throughout the calendar
year, revise the percentage estimates when such a revision is, in
the opinion of that office necessary to conform such estimates to


                 Qualified State Tax References:
                          Page 112 of 148


the actual  receipts.  When such a revision is made, the payments
to the State will be adjusted accordingly.

     (c) Adjustment  of difference between actual collections and
periodic transfers.   At least once annually the Secretary or his
delegate shall  determine the  difference between  the  aggregate
amount of  the actual  net collections  made (taking into account
credits,  refunds,  and  amounts  received  by  withholding  with
respect to which a tax return is not filed) which is attributable
to each State's qualified taxes during the preceding year and the
aggregate amount  actually transferred  to such  State  based  on
estimates during such year.  The amount of such difference, as so
determined, shall  be a  charge against,  or an  addition to, the
amounts otherwise determined to be payable to the State.

     (d) Recipient  of transferred  funds.  All funds transferred
pursuant to  section 6361(c)  and paragraph  (a) of  this section
shall be  transferred by  the Federal  Government  to  the  State
official designated  by the Governor to receive such funds in the
State agreement  pursuant to  paragraph (d)(5)  of s  301.6363-1,
unless the  Governor notifies  the Secretary  or his  delegate in
writing of  the designation  of a  different  State  official  to
receive the funds.

[T.D. 7577, 43 F.R. 59365, Dec. 20, 1978]

26 CFR s 301.6361-3, Transfers to States.

------------ Excerpt from pages 160506-160507


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366

s 301.6361-4 Definitions.

     For  purposes   of  the   regulations  in  this  part  under
subchapter E  of chapter 64 of the Internal Revenue Code of 1954,
relating to  collection and  administration of  State  individual
income taxes  --

     (a) State  agreement.   The term  "State agreement" means an
agreement between  a State  and the  Federal Government which was
entered  into  pursuant  to  section  6363  and  the  regulations


                 Qualified State Tax References:
                          Page 113 of 148


thereunder, and  which provides  for the  Federal collection  and
administration of the qualified tax or taxes of that State.

     (b) Qualified  tax.   The term  "qualified tax"  means a tax
which is a "qualified State individual income tax", as defined in
section 6362 (including subsection (f)(1) thereof, which requires
that  a  State  agreement  be  in  effect)  and  the  regulations
thereunder.

     (c) Chapters  and subtitles.   References  in regulations in
this part  under subchapter  E to  chapters and  subtitles are to
chapters and  subtitles of  the Internal  Revenue Code  of  1954,
unless otherwise indicated.

     (d) Subchapter  E.  The term "subchapter E" means subchapter
E of chapter 64 of the Internal Revenue Code of 1954, relating to
collection and  administration of  State individual income taxes,
as amended from time to time.

[T.D. 7577, 43 F.R. 59365, Dec. 20, 1978]

26 CFR s 301.6361-4, Definitions.

------------ Excerpt from page 160508


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366

s 301.6361-5 Effective date of section 6361.

     Section 6361  shall take effect on the first January 1 which
is more  than 1  year after  the first date on which at least one
State has  filed a  notice of  election with the Secretary or his
delegate to  enter into  a State agreement.  For purposes of this
section, a  notice of election shall be deemed to have been filed
by a  State only  if there  is no  defect in  either the  State's
notice of  election or the State's tax law of which the Secretary
notified the  Governor pursuant to paragraph (c) of s 301.6363-1,
and which  has not  been retroactively cured under the provisions
of such paragraph.

[T.D. 7577, 43 F.R. 59365, Dec. 20, 1978]


                 Qualified State Tax References:
                          Page 114 of 148


26 CFR s 301.6361-5, Effective date of section 6361.

------------ Excerpt from page 160509


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366

s 301.6362-1 Types of qualified tax.

     (a) In  general.  A qualified tax may be either a "qualified
resident tax"  within  the  meaning  of  paragraph  (b)  of  this
section, or  a "qualified  nonresident tax" within the meaning of
paragraph (c) of this section.

     (b) Qualified resident tax.  A tax imposed by a State on the
income of individuals, estates, and trusts which are residents of
such State within the meaning of section 6362(e) and s 301.6362-6
shall be a "qualified resident tax" if it is either:

     (1) A  tax based  on Federal  taxable income which meets the
requirements  of  section  6362(b),  (e),  and  (f),  and  of  ss
301.6362-2, 301.6362-6, and 301.6362-7;  or

     (2) A tax which is a percentage of the Federal tax and which
meets the  requirements of  section 6362(c), (e), and (f), and of
ss 301.6362-3, 301.6362-6, and 301.6362-7.

     (c) Qualified  nonresident tax.  A tax imposed by a State on
the wage  and other  business income  of individuals  who are not
residents of  such State within the meaning of section 6362(e)(1)
and  paragraph   (b)  of  s  301.6362-6  shall  be  a  "qualified
nonresident tax" if it meets the requirements of section 6362(d),
(e), and (f), and of ss 301.6362-5, 301.6362-6, and 301.6362-7.

[T.D. 7577, 43 F.R. 59366, Dec. 20, 1978]

26 CFR s 301.6362-1, Types of qualified tax.

------------ Excerpt from page 160510


CODE OF FEDERAL REGULATIONS


                 Qualified State Tax References:
                          Page 115 of 148


TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366

s 301.6362-2 Qualified resident tax based on taxable income.

     (a) In  general.   A tax  meets the  requirements of section
6362(b) and  this section  only if it is imposed on the amount of
the taxable  income, as defined in section 63, of the individual,
estate, or trust, adjusted  --

     (1) By  subtracting an  amount equal  to the  amount of  the
taxpayer's interest on obligations of the United States which was
included in his gross income for the taxable year;

     (2)  By  adding  an  amount  equal  to  the  amount  of  the
taxpayer's  net   State  income  tax  deduction,  as  defined  in
paragraph (a) of s 301.6362-4, for the taxable year;

     (3)  By  adding  an  amount  equal  to  the  amount  of  the
taxpayer's net  tax-exempt income, as defined in paragraph (b) of
s 301.6362-4, for the taxable year;  and

     (4) If  a credit  is allowed  against the  tax in accordance
with paragraph  (b)(3) of  this section  for sales tax imposed by
the State or a political subdivision thereof, by adding an amount
equal to  the amount  of the  taxpayer's deduction  under section
164(a)(4) for such sales tax.

The tax  may provide  for either  a single rate or multiple rates
which vary with the amount of taxable income, as adjusted.

     (b) Permitted  adjustments.  A tax which otherwise meets the
requirements of paragraph (a) of this section shall not be deemed
to fail  to meet such requirements solely because it provides for
one or more of the following adjustments:

     (1) A  credit meeting the requirements of paragraph (c) of s
301.6362-4 is  allowed against  the tax for the taxpayer's income
tax  liability  to  another  State  or  a  political  subdivision
thereof.

     (2) A  tax is  imposed on  the amount taxed under section 56
(relating to the minimum tax for tax preferences).

     (3) A credit is allowed against the tax for all or a portion
of any  general sales  tax imposed  by the  State or  a political


                 Qualified State Tax References:
                          Page 116 of 148


subdivision thereof  with respect to sales either to the taxpayer
or to one or more of his dependents.

     (c) Method  of making  mandatory adjustments.  The mandatory
adjustments provided  in paragraph  (a) of  this section shall be
made directly to taxable income.  Except as provided in paragraph
(c)(2) of  s  301.6362-4,  no  account  shall  be  taken  of  any
reduction or  increase in the Federal adjusted gross income which
would result  from the  exclusion from,  or inclusion  in,  gross
income of  the items  which are  the subject  of the adjustments.
Thus, for  example, when  for purposes  of  the  calculation  the
taxpayer's Federal  taxable income  is adjusted  to  reflect  the
exclusion from  gross income  of interest  on obligations  of the
United States,  no change  shall be  made in  the amount  of  the
taxpayer's deduction  for medical  expenses, or  in the amount of
his charitable  contribution base, even though such amounts would
ordinarily depend upon the amount of adjusted gross income.

[T.D. 7577, 43 F.R. 59366, Dec. 20, 1978]

26 CFR  s 301.6362-2,  Qualified resident  tax based  on  taxable
income.

------------ Excerpt from pages 160511-160512


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366

s 301.6362-3  Qualified resident  tax which  is a  percentage  of
Federal tax.

     (a) In  general.   A tax  meets the  requirements of section
6362(c) and this section only if:

     (1) The  tax is  imposed as a single specified percentage of
the excess  of the taxes imposed by chapter 1 over the sum of the
credits allowable  under part  IV of  subchapter A  of chapter  1
(other than the credits allowable under sections 31 and 39), and

     (2) The  amount of the tax is decreased by the amount of the
decrease in such liability which would result from excluding from
the taxpayer's  gross income  an amount  equal to  the amount  of
interest on  obligations of  the United States which was included


                 Qualified State Tax References:
                          Page 117 of 148


in his gross income for the taxable year.

     (b) Permitted  adjustments.  A tax which otherwise meets the
requirements of paragraph (a) of this section shall not be deemed
to fail  to meet such requirements solely because it provides for
one or more of the following three adjustments:

     (1)  The  amount  of  a  taxpayer's  liability  for  tax  is
increased by  the amount  of the increase in such liability which
would result  from including  in such taxpayer's gross income all
of the following:

     (i) An  amount equal  to the  amount of his net State income
tax deduction,  as defined  in paragraph (a) of s 301.6362-4, for
the taxable year,

     (ii) An  amount equal  to the  amount of  his net tax-exempt
income, as  defined in  paragraph (b)  of s  301.6362-4, for  the
taxable year, and

     (iii) If a credit is allowed against the tax under paragraph
(b)(3) of  this section  for sales  tax imposed by the State or a
political subdivision  thereof, an  amount equal to the amount of
his deduction under section 164(a)(4) for such sales tax.

     (2) A  credit meeting the requirements of paragraph (c) of s
301.6362-4 is  allowed against  the tax  for the  income  tax  of
another State or a political subdivision thereof.

     (3) A credit is allowed against the tax for all or a portion
of any  general sales  tax imposed  by the  State or  a political
subdivision thereof  with respect to sales either to the taxpayer
or to one or more of his dependents.

     (c) Method  of making  adjustments.   Except as specifically
provided in  paragraphs (a)(2)  and (b)(1) of this section and in
paragraph (c)(2)  of s  301.6362-4, no  account shall be taken of
any reduction  or increase  in the  Federal adjusted gross income
which would  result from  the exclusion  from, or  inclusion  in,
gross  income   of  the  items  which  are  the  subject  of  the
adjustments provided  in those  paragraphs.   Thus, for  example,
when for  purposes of  the  calculation  the  taxpayer's  Federal
income tax  liability is  adjusted to  reflect the exclusion from
gross income  of interest on obligations of the United States, no
change shall  be made  in the  amount of the taxpayer's deduction
for  medical  expenses,  or  in  the  amount  of  his  charitable
contribution base,  even though  such  amounts  would  ordinarily
depend upon  the amount  of adjusted  gross income.   Also,  when
calculating the  adjusted Federal tax liability to which the rate
of the State tax is to be applied, no adjustment shall be made in
the amount  of any credit against Federal tax to which a taxpayer
is entitled.

[T.D. 7577, 43 F.R. 59366, Dec. 20, 1978]

26 CFR s 301.6362-3, Qualified resident tax which is a percentage
of Federal tax.


                 Qualified State Tax References:
                          Page 118 of 148


------------ Excerpt from pages 160513-160514


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366

s 301.6362-4 Rules for adjustments relating to qualified resident
taxes.

     (a) Net State income tax deduction.  For purposes of section
6362 (b)(1)(B)  and (c)(3)(B),  and ss 301.6362-2 and 301.6362-3,
the "net State income tax deduction" shall be the excess (if any)
of (1) the amount deducted from income under section 164(a)(3) as
taxes paid to a State or to a political subdivision thereof, over
(2) the  amounts included in income as recoveries of prior income
taxes which  were paid  to a  State or to a political subdivision
thereof and which had been deducted under section 164(a)(3).

     (b)  Net   tax-exempt  income.    For  purposes  of  section
6362(b)(1)(C) and (c)(3)(A) and ss 301.6362-2 and 301.6362-3, the
"net tax-exempt income" shall be the excess (if any) of:

     (1) The  sum of (i) the interest on obligations described in
section 103(a)(1)  other than  obligations of  the State imposing
the tax  and the  political subdivisions  thereof, and  (ii)  the
interest on  obligations described  in such section of such State
and the political subdivisions thereof which under the law of the
State is subject to the tax;  over

     (2) The sum of (i) the amount of deductions allocable to the
interest  described  in  subparagraph  (1)(i)  or  (ii)  of  this
paragraph (b),  which is  disallowed pursuant  to section 265 and
the regulations thereunder, and (ii) the amount of the adjustment
to basis  allocable to  such obligations  which is required to be
made for the taxable year under section 1016(a)(5) or (6).

For purposes  of subparagraph  (1)(ii) of  this paragraph  (b), a
State may,  at its  option, subject  to the tax the interest from
all, none, or some of its section 103(a)(1) obligations and those
of its  political subdivisions.  For example, a State may subject
to tax  all of  such obligations other than those which it or its
political subdivisions  issued prior  to a  specified date, which
may be the date that subchapter E became applicable to the State.


                 Qualified State Tax References:
                          Page 119 of 148


     (c) Credits  for taxes  of other  jurisdictions  --  (1)  In
general.  A State tax law that provides for a credit, pursuant to
section 6362(b)(2)(B) or (C) or section 6362(c)(4), and paragraph
(b)(1) of  s 301.6362-2  or paragraph (b)(2) of s 301.6362-3, for
income tax  of another  State or  a political subdivision thereof
shall provide  that, in  the case of each taxpayer, the amount of
the credit  shall equal  the amount of his liability with respect
to such  other jurisdiction's tax for the taxable year which runs
concurrently with, or which ends in, the taxable year used by the
taxpayer for  purposes of  the State  tax which  provides for the
credit.   Such a  credit may  be allowed  with respect  to  every
income tax  (whether or not qualified) imposed on the taxpayer by
another State  or a  political subdivision  thereof, or only with
respect to  certain of such taxes.  However, for purposes of this
paragraph, the amount which is treated as being the amount of the
taxpayer's liability  with respect  to any  such tax  imposed  by
another jurisdiction shall not exceed the amount of liability for
such tax which is both  --

     (A) Reported  to  the  taxing  authorities  responsible  for
collecting such other jurisdiction's tax, and

     (B) Substantiated  pursuant to the requirements of paragraph
(c)(1)(ii) of s 301.6361-1.

     (2) Limitation.   The  amount of  any credit allowed for the
taxable year  pursuant to  this paragraph  shall not  exceed  the
product of  the amount  of the  resident tax  against  which  the
credit is  allowed, as  computed  without  subtracting  any  such
credit, multiplied  by a  fraction the  numerator of which is the
amount of  income subject  to tax  by both the State imposing the
resident tax  against which  the credit  is allowed and the other
jurisdiction whose  tax is being credited, and the denominator of
which is  the amount  of income  subject  to  tax  by  the  State
imposing the  resident tax  against which  the credit is allowed.
For purposes  of the  preceding sentence, "income subject to tax"
means the amount of the taxpayer's adjusted gross income which is
taken into  account for  purposes of computing tax liability;  in
the case of a qualified resident tax, an appropriate modification
shall be made to take into account any adjustments which are made
pursuant to paragraph (a)(1) and (3) of s 301.6362-2, or pursuant
to paragraph (a)(2) or (b)(1)(ii) of s 301.6362-3.

     (3) Examples.   The  application of  this paragraph  may  be
illustrated by the following examples:

Example (1).   (i)  A, a calendar-year, cash-basis taxpayer, is a
resident of  State X throughout the taxable year.  For such year,
his  adjusted  gross  income  for  Federal  income  tax  purposes
consists of $24,000, consisting of $3,000 derived from employment
in State  X, $5,000  derived from  employment in State Y, $15,000
derived from employment in State Z, and $1,000 in interest income
from United  States savings  bonds.  In addition, he received net
tax-exempt income in the amount of $2,000.  For the taxable year,
he incurs  liabilities of $200 for the State Y nonresident income
tax, and $1,400 for the State Z nonresident income tax.  State X,


                 Qualified State Tax References:
                          Page 120 of 148


which has  in effect  a State  agreement for  the  taxable  year,
imposes a  resident tax against which credits are allowed for the
nonresident taxes  imposed by States Y and Z.  Without taking any
such credits  into account,  however, the amount of A's liability
for such  resident tax  would be  $1,500.  A properly reports his
nonresident income  tax liabilities to States Y and Z at the same
time that  he files  his return  with respect to the State X tax,
and he  substantiates on  such return his liabilities to States Y
and Z.

(ii) The  amount of  A's income  subject to  tax in  State  X  is
$25,000 (his  adjusted gross  income of $24,000, minus the United
States savings  bond income  of $1,000,  plus the  net tax-exempt
income of  $2,000).   The amount  of the credit allowable against
the State  X resident  tax for  the amount  of A's liability with
respect to  the State Y nonresident tax is calculated as follows:
The maximum  amount  of  credit  is  the  actual  amount  of  his
liability to  Y,  or  $200.    Under  subparagraph  (2)  of  this
paragraph, the  amount of the credit is limited to $300 ($1,500 X
$5,000/$25,000).   Thus, such  limit has  no effect, and the full
$200 is  allowable as  a credit  against A's  liability  for  the
resident tax  of State  X.   The amount  of the  credit allowable
against the  State X resident tax for the amount of A's liability
with respect  to the  State Z  nonresident tax  is calculated  as
follows:   The maximum  amount of the credit is the actual amount
of his liability to Z, or $1,400.  Under subparagraph (2) of this
paragraph, the  amount of the credit is limited to $900 ($1,500 X
$15,000/$25,000).  Thus, such limit has the effect of reducing to
$900 the  amount of  the credit  allowable for  tax  of  State  Z
against A's liability for the resident tax of State X.

Example (2).   (i)  B, a calendar-year, cash-basis taxpayer, is a
resident of  State X  employed in State Y through March 14, 1977.
On March  15, 1977, B becomes a resident of State Z and remains a
resident of  such State through the remainder of 1977.  For 1977,
the amount  of B's  adjusted gross  income for Federal income tax
purposes is $20,000, consisting of $6,000 derived from employment
in State  Y which  B held  during the  period of his residence in
State X,  $12,000 derived from employment in State Z which B held
during the  period of  his residence  in State  Z, and  $2,000 in
interest income  from various  bank accounts.  During 1977, B has
no interest  income from  United States  obligations, and no tax-
exempt income.  For 1977, B incurs a liability of $200 to State Y
on account  of its nonresident income tax imposed with respect to
his $6,000  of income  derived from  sources within  that  State.
State Z,  which has in effect a State agreement for 1977, imposes
a resident  income tax  on B  which, if  B had been a resident of
State Z  for all  of 1977,  would amount  to $1,200  prior to the
allowance of  any credits  under this  paragraph.    However,  by
reason of paragraph (e)(1) of s 301.6362-6, B's liability for the
resident tax  of State  Z, before  taking  into  account  credits
allowed under  this paragraph,  is  reduced  to  $960  ($1,200  X
292/365, or   4/5).  Furthermore, State Z allows a credit for the
nonresident tax imposed by State Y.

(ii) The  amount of  the credit  allowable against  the  State  Z
resident tax  for the amount of B's liability with respect to the


                 Qualified State Tax References:
                          Page 121 of 148


State Y  nonresident tax  is calculated  as follows:  The maximum
amount of  the credit  is the  amount of  his actual liability to
State Y,  or $200.  Under subparagraph (2) of this paragraph, the
amount of  the credit is limited to $288 ($960 X $6,000/$20,000).
Thus, such limit has no effect, and the full $200 is allowable as
a credit  for tax  of State  Y  against  B's  liability  for  the
resident tax of State Z.

[T.D. 7577, 43 F.R. 59367, Dec. 20, 1978]

26 CFR  s 301.6362-4, Rules for adjustments relating to qualified
resident taxes.

------------ Excerpt from pages 160515-160517


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366

s 301.6362-5 Qualified nonresident tax.

     (a) In  general.   A tax  meets the  requirements of section
6362(d) and this section only if:

     (1) The  tax is  imposed by  a  State  which  simultaneously
imposes a  resident  tax  meeting  the  requirements  of  section
6362(b) and s 301.6362-2 or of section 6362(c) and s 301.6362-3;

     (2) The  tax is  required to  be computed in accordance with
either the  method prescribed in paragraph (b) of this section or
another method  of which  the Secretary  or his delegate approves
upon submission by the State of the laws pertaining to the tax;

     (3) The  tax is  imposed only on the wage and other business
income derived  from sources  within such  State (as  defined  in
paragraph (d)  of this  section), of all individuals each of whom
derives 25  percent or  more of  his  aggregate  wage  and  other
business income  for the  taxable year  from sources  within such
State while he is neither (i) a resident of such State within the
meaning of section 6362(e) and s 301.6362-6, nor (ii) exempt from
liability for the tax by reason of a reciprocal agreement between
such State  and the  State of  which he  is a resident within the
meaning of those provisions;


                 Qualified State Tax References:
                          Page 122 of 148


     (4) The  amount of  the tax  imposed  with  respect  to  any
individual does  not exceed  the amount  of tax  for  which  such
individual would  be liable  under  the  qualified  resident  tax
imposed by  such State if he were a resident of the State for the
period during  which he earned wage or other business income from
sources within  the State,  and if  his taxable  income for  such
period were an amount equal to the sum of the zero bracket amount
(within the  meaning of section 63(d) and determined as if he had
been a resident of the State for such period) and the excess of:

     (i) The amount of his wage and other business income derived
from sources within the State, over

     (ii) That  portion of the sum of the zero bracket amount and
the nonbusiness  deductions (i.e.,  all deductions  from adjusted
gross income  allowable in  computing taxable  income) taken into
account for  purposes of the State's qualified resident tax which
bears the  same ratio  to such  sum as  the amount  described  in
subdivision (i)  of this subparagraph bears to his total adjusted
gross income for the year;  and

     (5) For  purposes of  the tax, wage or other business income
is considered  as being the income of the individual whose income
it is for purposes of section 61.

     (b) Approved  method of  computing liability  for  qualified
nonresident tax.   A  tax satisfies  the requirement of paragraph
(a)(2) of  this section  if the  amount of  the tax  is  computed
either as  a percentage  of the excess of the amount described in
paragraph (a)(4)(i)  of this section over the amount described in
paragraph (a)(4)(ii)  of  this  section,  or  by  application  of
progressive rates to such excess.

     (c) Definition  of wage  and other  business  income.    For
purposes of  section 6362(d) and this section, the term "wage and
other business income" means the following types of income:

     (1) Wages, as defined in section 3401(a) and the regulations
thereunder, but for these purposes:

     (i) The  amount of  wages shall  exclude amounts  which  are
treated as  wages under  section  3402(o)  or  (p)  (relating  to
supplemental   unemployment    compensation   benefits,   annuity
payments, and  voluntary  withholding  agreements),  and  amounts
which are  treated as disability payments to the extent that they
are excluded  from gross  income for Federal income tax purposes,
pursuant to section 105(d), and

     (ii) The  amount of wages shall be reduced by those expenses
which are  directly related to the earning of such wages and with
respect to  which deductions  are  properly  claimed  from  gross
income in computing adjusted gross income;

     (2) Net earnings from self-employment, as defined in section
1402(a);  and

     (3) The  distributive  share  of  income  of  any  trade  or


                 Qualified State Tax References:
                          Page 123 of 148


business carried  on  by  a  trust,  estate,  or  electing  small
business corporation  (as defined  in  section  1371(a)  and  the
regulations thereunder), to the extent that such share:

     (i) Is  includible in  the gross  income of the taxpayer for
the taxable year, and

     (ii) Would  constitute net  earnings from self-employment if
the trade or business were carried on by a partnership.

For purposes  of this subparagraph, "distributive share" includes
the income  of a trust or estate which is taxable to the taxpayer
as a  beneficiary under  applicable Federal income tax rules, and
the undistributed  taxable income  of an  electing small business
corporation which  is taxable  to the  taxpayer as  a shareholder
under section 1373.

     (d) Income derived from sources within a State -- (1) Income
attributable primarily to services.  Except as otherwise provided
by Federal  statute (see  paragraphs  (h),  (i),  and  (j)  of  s
301.6362-7), wage  income and other business income (net earnings
from   self-employment   or   distributive   shares)   which   is
attributable more to services performed by the taxpayer than to a
capital investment  of the  taxpayer shall  be considered to have
been derived  from sources within a State only if the services of
the taxpayer  which give rise to the income are performed in such
State.   If for  a taxable  year only a portion of the taxpayer's
services giving rise to the income from one employment, trade, or
business is  performed within  a State, then it shall be presumed
that the  amount  of  income  from  such  employment,  trade,  or
business which  is derived  from sources within that State equals
that portion  of the  total income  derived from such employment,
trade, or business for the year which the amount of time spent by
the taxpayer  for such  year performing  services with respect to
that employment,  trade, or  business in  that State bears to the
aggregate amount  of time  spent by  the taxpayer  for such  year
performing all of such services.  However, the presumption stated
in the  preceding sentence  may be rebutted in the event that the
taxpayer proves,  by use  of detailed  records, that  the correct
allocation of his income is otherwise.

     (2) Income  attributable primarily to investment.  Except as
otherwise provided  by Federal  statute (see  paragraph (j)  of s
301.6362-7), business  income (net  earnings from self-employment
or distributive  shares) which  is attributable more to a capital
investment of  the taxpayer  than to  services performed  by  the
taxpayer shall  be considered  to have  been derived from sources
within the  State, if any, in which the significant activities of
the trade  or business  are conducted.   If  for the taxable year
only a  portion of  the  significant  activities  conducted  with
respect to  one trade  or business  is conducted within a certain
State, then  the portion  of the  taxpayer's total income for the
year from  such trade  or business  which  is  considered  to  be
derived from  sources within  that State  shall  be  computed  as
follows:

     (i) Allocation  by records.   The  portion of the taxpayer's


                 Qualified State Tax References:
                          Page 124 of 148


total income from the trade or business which is considered to be
derived from  sources within the State shall be the portion which
is allocable  to such  sources according  to the  records of  the
taxpayer or  of the partnership, trust, estate, or electing small
business corporation  from which  his income is derived, provided
that the taxpayer establishes to the satisfaction of the district
director, when  requested to do so, that those records fairly and
equitably reflect the income which is allocable to sources within
the State.  An allocation made pursuant to this subdivision shall
be based  on the  location of  the significant  activities of the
trade  or  business,  and  not  on  the  location  at  which  the
taxpayer's personal services are performed.

     (ii) Allocation  by formula.   If the taxpayer (or the trade
or business)  does not  keep records  meeting the requirements of
subdivision (i) of this subparagraph, or if the taxpayer fails to
meet the  burden of  proof set  forth therein, then the amount of
the taxpayer's  income  from  the  trade  or  business  which  is
considered to  be derived  from sources within the State shall be
determined by  multiplying the total of his income (as defined in
paragraphs (c)(2)  and (3)  of this  section) from  the trade  or
business for  the taxable  year by  the percentage  which is  the
average of these three percentages:

     (A)  Property   percentage.    The  percentage  computed  by
dividing the  average of  the value,  at the beginning and end of
the  taxable   year,  of  real  and  tangible  personal  property
connected with  the taxpayer's  trade  or  business  and  located
within the  State, by  the average of the value, at the beginning
and end  of the  taxable year,  of all such property located both
within and  without the  State.   For this purpose, real property
shall include  real property rented to the taxpayer in connection
with the trade or business, or rented to the trade or business.

     (B) Payroll percentage.  The percentage computed by dividing
the total  wages, salaries,  and other  compensation for personal
services which  is paid  or incurred  during the  taxable year to
employees in  connection with  the taxpayer's  trade or business,
and which  would be  treated as  derived by  such employees  from
sources within  the State  pursuant to  subparagraph (1)  of this
paragraph (d),  by the  total of  all such  wages, salaries,  and
other compensation  for personal  services which  is so  paid  or
incurred without regard to whether such payments would be treated
as derived  by the  employees from sources within the State.  For
purposes of  this subdivision  (ii), no  amount paid  as deferred
compensation pursuant  to a  retirement plan to a former employee
shall be taken into consideration.

     (C) Gross  income percentage.   The  percentage computed  by
dividing the  gross sales or charges for services performed by or
through an  agency located  within the  State by the total of all
gross sales  or charges  for services  performed both  within and
without the  State.   The sales or charges to be allocated to the
State shall  include all  sales which are negotiated, and charges
which are  for services performed, by an employee, agent, agency,
or  independent   contractor  chiefly  situated  at,  or  working
principally out of an office located within, the State.


                 Qualified State Tax References:
                          Page 125 of 148


     (3)  Income   attributable  to   real   estate   investment.
Notwithstanding subparagraph  (2) of  this paragraph  (d), income
and deductions  from the  rental of  real property,  and gain and
loss from  the sale,  exchange,  or  other  disposition  of  real
property, shall  not be  subject to allocation under subparagraph
(2), but  shall be  considered as  entirely derived  from sources
located within the State in which such property is located.

     (4) Treatment  of  losses.    A  loss  attributable  to  the
taxpayer's employment, or to his conduct of, participation in, or
investment in a trade or business, shall be allocated in the same
manner as  the income attributable to such employment or trade or
business would be allocated pursuant to this paragraph.

     (5) Examples.   The  application of  this paragraph  may  be
illustrated by the following examples:

Example (1).   A,  an employee  who earns  $10,000 in wage income
attributable to  services, and  who has  no other  wage or  other
business income, spends 60 percent of his working time performing
services for  his employer in State X, 30 percent in State Y, and
10 percent  in State Z.  In the absence of the requisite proof to
the contrary,  A's wage income is considered to have been derived
60 percent from sources located within State X, 30 percent within
State Y,  and 10  percent within  State Z.   Assuming that A is a
nonresident with  respect to  all three States, and that they all
impose  qualified   nonresident   taxes,   then   the   qualified
nonresident tax  of State  X is  imposed on $6,000, the qualified
nonresident tax  of  State  Y  is  imposed  on  $3,000,  and  the
qualified nonresident tax of State Z is not imposed on any of the
income because  A did  not derive at least 25 percent of his wage
and other business income from sources located within State Z.

Example (2).   B, who earns no wage income but who has a total of
$10,000 of  other business  income for  the taxable  year, all of
which is  net income  from self-employment attributable primarily
to services,  spends 45  percent of  his working  time performing
services in  State X,  30 percent  in State  Y, and 25 percent in
State Z.   However,  the rates  that B  is able to charge for his
services and  the business  expenses which  he incurs vary in the
different States,  and he  is able  to prove  by detailed records
that his  net income  from self-employment was in fact derived 50
percent from  sources located  within State  X, 35  percent  from
sources located  within State  Y, and  15  percent  from  sources
located within  State Z.   Assuming  that B is a nonresident with
respect to  all three  States, and that they all impose qualified
nonresident taxes,  then the qualified nonresident tax of State X
is imposed on $5,000, the qualified nonresident tax of State Y is
imposed on  $3,500, and  the qualified nonresident tax of State Z
is not  imposed on  any of the income because B did not derive at
least 25  percent of  his wage  and other  business  income  from
sources located within State Z.

Example (3).  C is a partner in a profitable business concern, in
which he  has a substantial capital investment.  His net earnings
from self-employment attributable to his partnership interest are


                 Qualified State Tax References:
                          Page 126 of 148


$75,000 for  the taxable  year.   The fair  market value  of  the
services which  C performs for the partnership during the taxable
year is  $30,000.  C's income is therefore attributable primarily
to his  capital investment.   The partnership business is carried
on partially within and partially without State X.  Neither C nor
the partnership  maintains records  from which the portion of C's
$75,000 income  which is  considered to  be derived  from sources
within State X can be satisfactorily proven.  As determined under
subparagraph (2)  of this  paragraph, the partnership's "property
percentage" in State X is 70, its "payroll percentage" therein is
60, and  its "gross income percentage" therein is 56.  The amount
of C's  partnership income  considered to be derived from sources
within State  X is  $46,500 ($75,000  X62 percent).   This result
would obtain  even  if  C's  services  for  the  partnership  are
performed entirely within State X.

Example (4).   Assume  the same  facts as in (3), except that the
records of  the partnership  of which C is a member indicate that
the net  profits of  the partnership  are derived 40 percent from
business activities  conducted in  State X,  and 60  percent from
business activities  conducted in  State Y.   C  is requested  to
prove that  those records fairly and equitably reflect the income
which is  allocable to  sources within  State X.  The documentary
evidence which  he adduces  in support  of the allocation made by
the records  shows how  such allocation  results from  a  careful
step-by-step tracing  of the  profitability  of  each  phase  and
aspect of  the partnership's  operations, and  shows the State in
which each  such phase and aspect of the operations is conducted.
C's proof is satisfactory to show that the percentage allocation,
and the amount of his partnership income considered to be derived
from sources  within State X is $30,000, or $75,000 multiplied by
40 percent.   This  result would  obtain even if B's services for
the partnership are performed entirely within State X.

[T.D. 7577, 43 F.R. 59367, Dec. 20, 1978]

26 CFR s 301.6362-5, Qualified nonresident tax.

------------ Excerpt from pages 160518-160522


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366



                 Qualified State Tax References:
                          Page 127 of 148


s 301.6362-6 Requirements relating to residence.

     (a) In  general.   A  tax  imposed  by  a  State  meets  the
requirements of  section 6362(e) and this section if in effect it
provides that:

     (1) The  State of  residence of  an individual,  estate,  or
trust is  determined according  to paragraph  (1),  (2),  or  (3)
respectively, of section 6362(e), and according to paragraph (b),
(c), or (d), respectively, of this section.

     (2) The  liability for  a resident tax imposed by such State
upon an  individual or  trust which  changes residence to another
State in  the taxable  year is  determined according  to  section
6362(e)(4) and paragraph (e) of this section.

     (3) The rules relating to current collection of tax apply as
provided in section 6362(e)(5) and paragraph (f) of this section.

     (b) Residence of an individual -- (1) In general.  Except as
otherwise provided  in subparagraph (5) of this paragraph (b), an
individual is  treated as a resident of a State with respect to a
taxable year only if:

     (i)  His   principal  place  of  residence  (as  defined  in
subparagraph (2)  of this paragraph (b)) is within such State for
a period  of at  least 135  consecutive days, at least 30 days of
which are in such taxable year;  or

     (ii) In  the case  of a  citizen or  resident of  the United
States who is not a resident of any State (determined as provided
in subdivision  (i) of  this subparagraph)  with respect  to such
taxable year,  his domicile  (as defined  in subparagraph  (3) of
this paragraph  (b)) is in such State for at least 30 days during
such taxable year.

With respect  to an  individual who  is a resident (determined as
provided in  subdivision (i)  of this  subparagraph) of more than
one State  during a  taxable year,  see  paragraph  (e)  of  this
section.

     (2) Principal  place of  residence --  (i) Definition.   For
purposes of  subparagraph  (1)(i)  of  this  paragraph  (b),  and
paragraph (d)(4)  of this  section, the  term "principal place of
residence" shall  mean the place which is an individual's primary
home.   An individual's  temporary absence  from his primary home
shall not  effect a  change with  respect thereto.   On the other
hand, if  an individual  moves to  another State, other than as a
mere transient  or sojourner,  he  shall  be  treated  as  having
changed the location of his primary home.

     (ii) Examples.   The application of this subparagraph may be
illustrated by the following examples:

Example (1).   A  has a city home and a country home.  He resides
in the city home for 7 months of the year and uses the address of
that home  as  his  legal  residence  for  purposes  of  driver's


                 Qualified State Tax References:
                          Page 128 of 148


license, automobile  registration, and  voter registration.    He
resides in  the country home 5 months of the year.  His city home
is considered his principal place of residence.

Example (2).   During the taxable year, B, a construction worker,
is employed  at several  different locations in different States.
The duration  of each  job on  which he is employed ranges from a
few weeks  to several  months, and he knows when he accepts a job
what its  approximate duration will be.  He owns a house in State
X which  he uses  as his legal residence for purposes of driver's
license, automobile  registration, and  voter registration.    In
addition, his  family lives  there during  the entire year, and B
lives there  during periods  between jobs.  However, the duration
of the  jobs and the distance between the job-sites and his house
require him to live in the localities of the respective job-sites
during the  period of  his employment,  although occasionally  he
returns to  his house in State X on weekends.  B's house in State
X is  his principal  place of residence during all of the taxable
year.

Example (3).   C, a dependent of his parents who are residents of
State X,  is a  full-time student in a 4-year degree program at a
college in State Y.  During the 9-month academic year, C lives on
the college  campus, but he returns to his parents' home in State
X for  the summer  recess.   C gives the State Y as his residence
for purposes  of his driver's license and voter registration, but
lists the  address of  his  parents'  home  in  State  X  as  his
"permanent address"  on the  records  of  the  college  which  he
attends.   Although C's  domicile remains at his parents' home in
State X,  his presence in State Y cannot be regarded as that of a
mere transient or sojourner;  accordingly, C's principal place of
residence is  in State  Y for  that portion  of the  taxable year
during which he attends college.

Example (4).   D  loses his  job in  State X,  where he lived and
worked for  many years.   After a series of unsuccessful attempts
to find other employment in State X, he accepts a job in State Y.
D gives  up his  apartment in  State X  and moves to State Y upon
commencing his  new job;   however,  he intends  to  continue  to
explore available  employment opportunities in State X so that he
may return  there as  soon as  an opportunity to do so arises.  D
changes his  principal place  of residence when he moves to State
Y.

     (3) Domicile  defined.  For purposes of subparagraph (1)(ii)
of this  paragraph (b), and paragraph (d)(4) of this section, the
term "domicile"  shall mean  an individual's  fixed or  permanent
home.   An individual  acquires a  domicile in  a place by living
there;  even for a brief period of time, with no definite present
intention of  later removing  therefrom.   Residence without  the
requisite intention  to remain  indefinitely will  not suffice to
change domicile,  nor will  intention to  change domicile  effect
such a  change until  accompanied by actual removal.  A domicile,
once acquired, is maintained until a new domicile is acquired.

     (4) Period  of residence -- (i) General rule.  An individual
who becomes a resident of a State pursuant to subparagraph (1) of


                 Qualified State Tax References:
                          Page 129 of 148


this paragraph  (b), or who is at the beginning of a taxable year
a resident  of a  State pursuant  to  such  provision,  shall  be
treated as  continuing to be a resident of such State through the
end of  the taxable  year, unless, prior thereto, such individual
becomes a  resident, under the principles of subparagraph (1), of
another State  or a  possession or foreign country.  In the event
that  the   individual  becomes   a  resident   of  such  another
jurisdiction prior  to the end of the taxable year, his residence
in such  State shall be treated as ending on the day prior to the
day on  which he  becomes a  resident of  such other jurisdiction
pursuant to subparagraph (1).

     (ii) Examples.   The application of this subparagraph may be
illustrated by the following examples:

Example (1).   A,  a calendar-year  taxpayer, has  his  principal
place of  residence in State X from the beginning of 1976 through
August 1, 1976, when he gives up permanently such principal place
of residence.   He spends the remainder of 1976 traveling outside
of the United States, but does not become a resident of any other
country.   A is  considered to  be a  resident of State X for the
entire year 1976.

Example (2).   Assume  the same  facts as  in example (1), except
that A  ceases his  traveling and establishes his principal place
of residence in State Y on November 15, 1976.  Assume, also, that
A maintains  that principal  place of residence for more than 135
consecutive days.   Under  these circumstances,  for his  taxable
year 1976,  A is  considered to  be a  resident of  State X  from
January 1  through November  14, and  a resident  of State Y from
November 15 through December 31.

     (5) Special  rules.  (i) No provision of subchapter E or the
regulations thereunder shall be construed to require or authorize
the treatment of a Senator, Representative, Delegate, or Resident
Commissioner as  a resident of a State other than the State which
he represents in Congress.

     (ii) For  special rules  relating to  members of  the  Armed
Forces, see paragraph (h) of s 301.6362-7.

     (6) Examples.   The  application of  this paragraph  may  be
illustrated by the following examples:

Example  (1).     A,  a  calendar-year  taxpayer,  maintains  his
principal place  of residence  in State  X from December 1, 1976,
through April  15, 1977.   Assuming  that A was not a resident of
any other jurisdiction at any time during 1976, A is treated as a
resident of  State X for the entire year 1976.  Such result would
obtain even  if A  was absent  from State  X on vacation for some
portion of  December 1976.   Moreover,  such result  would obtain
even if  it is  assumed that  A was a domiciliary of State Y from
January 1,  1976, through April 15, 1977, because an individual's
domicile does not determine his residence so long as residence in
one State for the taxable year can be determined from the general
rule stated  in the  first sentence  of paragraph  (b)(1) of this
section.


                 Qualified State Tax References:
                          Page 130 of 148


Example (2).   Assume the same facts as in example (1) (including
the fact  of A's  domicile in  State Y), except that A maintained
his principal  place of  residence in  State Z from September 15,
1975, through  January 31,  1976, inclusive.  With respect to the
year 1976,  A is  treated as a resident of State Z from January 1
through November 30, and as a resident of State X from December 1
through December  31.   A's liability  for the qualified taxes of
the respective  States for  1976 shall  be determined pursuant to
the provisions in paragraph (e) of this section.

     (c) Residence  of an  estate.  An estate of an individual is
treated as  a resident of the last State of which such individual
was a resident, as determined under the rules of paragraph (b) of
this section,  prior to  his death.   However,  the estate  of an
individual who  was not  a resident  of any  State (as determined
without regard  to the  30-day requirement in paragraph (b)(1) of
this section)  immediately prior  to his death, and who was not a
resident of any State at any time during the 3-year period ending
on the  date of  his death,  is not  treated as a resident of any
State.   For purposes of determining the decedent's last State of
residence,  the   rules  of   paragraph  (b)   shall  be  applied
irrespective of  whether subchapter  E was  in effect at the time
the period of 135 consecutive days of residence began, or whether
the decedent's  last State  of residence  is a  State electing to
enter  into   an  agreement   pursuant  to  subchapter  E.    The
determination of  the State of residence of an estate pursuant to
this paragraph  shall not  be governed by any determination under
State law  as to  which State  is treated  as  the  residence  or
domicile of  the decedent  for purposes other than its individual
income tax  (such as  liability  for  State  inheritance  tax  or
jurisdiction of probate proceedings).

     (d) Residence  of a  trust -- (1) In general.  (i) The State
of residence  of a  trust shall be determined by reference to the
circumstances of  the individual  who, by  either an  inter-vivos
transfer  or  a  testamentary  transfer,  is  deemed  to  be  the
"principal contributor"  to the  trust under  the  provisions  of
subdivision (ii) of this subparagraph.

     (ii) If  only one  individual has ever contributed assets to
the trust,  including the  assets which  were transferred  to the
trust at  its inception,  then such  individual is  the principal
contributor to  the trust.   However, if on any day subsequent to
the initial  creation of  the trust,  such trust  receives assets
having a  value greater  than the  aggregate value  of all assets
theretofore contributed  to it,  then the  trust shall  be deemed
(for the  limited purpose  of determining the State of residence)
to have been "created" anew, and the individual who on the day of
such  creation   contributed  more  (in  value)  than  any  other
individual contributed  on that  day shall  become the  principal
contributor to  the trust.   When  a trust  is created  anew, all
references in  this paragraph  to the creation of the trust shall
be construed  as referring  to the  most recent  creation.    For
purposes of  this paragraph,  the value of any asset shall be its
fair market  value on  the day  that it  was contributed  to  the
trust;   any subsequent appreciation or depreciation in the value


                 Qualified State Tax References:
                          Page 131 of 148


of the asset shall be disregarded.

     (2) Testamentary  trust.   A trust  with respect  to which a
deceased individual  is the  principal contributor  by reason  of
property passing  on his  death is  treated as  a resident of the
last State of which such individual was a resident, as determined
under the  rules of  paragraph (b)  of this  section, before  his
death.   However, if  such deceased individual was not a resident
of  any  State  (as  determined  without  regard  to  the  30-day
requirement in  paragraph (b)(1)  of  this  section)  immediately
prior to  his death,  and was  not a resident of any State at any
time during  the 3-year  period ending  on the date of his death,
then  a   testamentary  trust   of  which  he  is  the  principal
contributor by  reason of  property passing  on his  death is not
treated as  a resident of any State.  All property passing on the
transferor's death  is treated for this purpose as a contribution
made to  the trust  on the  date of death, regardless of when the
property is actually paid over to the trust.

     (3) Nontestamentary  trust.   A trust  which is  not a trust
described in  subparagraph (2)  of this paragraph (d), is treated
as a  resident of the State in which the principal contributor to
the trust,  during the  3-year period  ending on  the date of the
creation of  the trust,  had his principal place of residence for
an aggregate  number of  days longer than the aggregate number of
days he  had his principal place of residence in any other State.
However, if  the principal  contributor to such a trust was not a
resident of any State at any time during such 3-year period, then
the trust is not treated as a resident of any State.

     (4) Special  rules.  If the application of the provisions of
the foregoing  subparagraphs  of  this  paragraph  results  in  a
determination of more than one State of residence for a trust, or
does not provide a rule by which the residence or nonresidence of
the trust  can be determined, then the determination of the State
of residence  of such  trust shall be made according to the rules
of the applicable subdivision of this subparagraph.

     (i) If,  at the time of creation of the trust, 50 percent or
more in value of the trust corpus consists of real property, then
the trust  shall be  treated as  a resident of the State in which
more of  the real  property (in  value) which was in the trust at
such time was located than any other State.

     (ii) If,  at the time of creation of the trust, less than 50
percent in  value of  the trust corpus consists of real property,
then the  trust shall  be treated  as a  resident of the State in
which, at  such time,  the trustee,  if an  individual,  had  his
principal place  of residence,  or, if  a  corporation,  had  its
principal place of business.  If there were two or more trustees,
then the  foregoing sentence shall be applied by reference to the
principal places of residence, or of business, of the majority of
trustees  who   had  authority   to  make  investment  and  other
management decisions for the trust.

     (iii)  If,   after  application   of   the   provisions   of
subdivisions (i)  and (ii)  of this  subparagraph, the  State  of


                 Qualified State Tax References:
                          Page 132 of 148


residence of  the trust  still cannot  be ascertained,  then  the
Commissioner of  Internal Revenue  shall determine  the State  of
residence of  such trust  for purposes  of qualified taxes.  Such
determination shall  be  made  by  reference  to  the  number  of
significant contacts each State had with the trust at the time of
its creation.   Significant  contacts shall include the principal
place of  residence of  the principal contributor or contributors
to the trust, the principal place of residence or business of the
trustee (or trustees), the situs of the assets of which the trust
corpus was  composed, and  the  location  from  which  management
decisions emanated  with respect  to the  business and investment
interests of the trusts.

     (5) Examples.   The  application of  this paragraph  may  be
illustrated by the following examples:

Example (1).   A  created a  trust in  1950 by transferring to it
certain stock  in a  corporation.   At the time of such transfer,
the stock  had a  fair market value of $1,000.  A at all relevant
times had  his principal  place of  residence  in  State  X,  and
accordingly the  trust is treated as a resident of such State for
qualified tax  purposes.   As  of  January  1,  1977,  the  stock
originally contributed  by A,  which was  at all  times the  only
property in  the trust,  has a  fair market  value of $3,000.  On
such date,  B, who  has had  his principal  place of residence in
State Y  for more than 3 years, contributes to the trust property
having  a   fair  market  value  of  $1,200.    For  purposes  of
determining the  identity of  the principal  contributor  to  the
trust and  the  State  of  residence  of  the  trust,  the  stock
contributed by A in 1950 continues to be valued for such purposes
at $1,000.   Thus,  the trust is treated as being created anew on
January 1,  1977, with  B as  the principal contributor, and with
State Y as its State of residence.

Example (2).   C  has his principal place of residence in State X
continuously for  many years,  until  August  1,  1978,  when  he
establishes his  principal place  of residence  in State  Y.  The
change of  residence is  intended to  be permanent,  and C has no
further contact  with State  X after  such change.  On January 1,
1980, C  creates a  nontestamentary trust.    During  the  3-year
period ending on such date C had his principal place of residence
in State X for 576 days, and in State Y for 519 days.  Therefore,
the trust is treated as a resident of State X.

     (e) Liability  for tax on change of residence during taxable
year --  (1) In  general.   If, under the principles contained in
paragraph (b)  or (d)  of this  section, an  individual or  trust
becomes a  resident, or  ceases to be a resident, of a State, and
is also  a resident of another jurisdiction outside of such State
during the same taxable year, the liability of such individual or
trust for  the resident  tax of such State shall be determined by
multiplying the  amount which  would be  his or its liability for
tax (computed  after allowing  the nonrefundable  credits  (i.e.,
credits not  corresponding to  the credits referred to in section
6401(b) available  against the  tax)) if  he or  it  had  been  a
resident of such State for the entire taxable year by a fraction,
the numerator  of which  is the  number of  days he  or it  was a


                 Qualified State Tax References:
                          Page 133 of 148


resident  of   such  State  during  the  taxable  year,  and  the
denominator of  which is  the total number of days in the taxable
year.   The preceding  sentence shall  not apply by reason of the
fact that  an individual is born or dies during the taxable year,
or by  reason of  the fact  that a  trust comes into existence or
ceases to exist during the taxable year.

     (2) Residence determined by domicile.  When an individual is
treated as  a resident of a State by reason of being domiciled in
such State,  pursuant to  paragraph (b)(1)(ii)  of this  section,
then the  numerator of  the fraction provided in subparagraph (1)
of this paragraph (e), shall be the number of days the individual
was domiciled in the State during the taxable year.

     (3) Example.   The  application of  this  paragraph  may  be
illustrated by the following example:

Example.   A, a  calendar-year taxpayer, is a resident of State X
continuously for  many years  prior to  March 15,  1977.  On such
date,  A  retires  and  establishes  a  new  principal  place  of
residence in  State Y.  A earns $6,000 in 1977 prior to March 15,
but receives  no taxable  income for  the remainder of such year.
If A  had been  a resident of State X for the entire taxable year
1977, his  liability with  respect to  the qualified  tax of such
State  (computed   after  allowing   the  nonrefundable   credits
available against  the tax)  would be  $600.   If he  had been  a
resident of  State Y  for  the  entire  taxable  year  1977,  his
liability with  respect  to  the  qualified  tax  on  that  State
(computed similarly)  would be  $400.  Pursuant to the provisions
in paragraph  (e) of  this section,  A's  liabilities  for  State
qualified taxes for 1977 are as follows:

     (f) Current  collection of  tax.   The State  tax laws shall
contain provisions for methods of current collection with respect
to individuals which correspond to the provisions of the Internal
Revenue Code  of 1954  with respect  to such  current collection,
including chapter 24 (relating to the collection of income tax at
source on  wages)  and  sections  6015,  6073,  6153,  and  other
provisions of  the Code  relating to declarations (and amendments
thereto) and  payments  of  estimated  income  tax.    Except  as
otherwise provided  by Federal  statute (see paragraphs (h), (i),
and (j)  of s  301.6362-7), in  applying such  provisions of  the
State tax laws:

     (1) In  the case  of a  resident tax, an individual shall be
subject to the current collection provisions if either  --

     (i) He  is a  resident of  the State  within the  meaning of
paragraph (b) of this section, or

     (ii) He  has his principal place of residence (as defined in
paragraph (b)(2) of this section) within the State,

And it  is reasonable  to expect  him to have it within the State
for 30 days or more during the taxable year.

     (2) In the case of a nonresident tax, an individual shall be


                 Qualified State Tax References:
                          Page 134 of 148


subject to  the current collection provisions if he does not meet
either description  relating to an individual in subparagraph (1)
of this paragraph (f), if he is not exempt from liability for the
tax by  reason for  a reciprocal  agreement between  the State of
which he  is a resident and the State imposing the tax, and if it
is reasonable  to expect  him to  receive wage  or other business
income derived from sources within the State imposing the tax (as
defined in  paragraph (d) of s 301.6362-5) for services performed
on 30 days or more of the taxable year.

For additional rules relating to withholding see paragraph (d) of
s 301.6361-1.

[T.D. 7577, 43 F.R. 59369, Dec. 20, 1978]

26 CFR s 301.6362-6, Requirements relating to residence.

------------ Excerpt from pages 160523-160530


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366

s 301.6362-7 Additional requirements.

     A State  tax meets  the additional  requirements of  section
6362(f) and this section only if:

     (a) State  agreement must be in effect for period concerned.
A State  agreement, as  defined in paragraph (a) of s 301.6361-4,
is in  effect with  respect to such tax for the taxable period in
question.

     (b) State  laws must  contain certain provisions.  Under the
laws of  such State,  the provisions  of  subchapter  E  and  the
regulations thereunder,  as in  effect from  time  to  time,  are
applicable for the entire period for which the State agreement is
in effect.   Any change made by the State in such tax (other than
an adjustment  in the  State law which is made solely in order to
comply with a change in the Federal Law or regulations) shall not
apply to  taxable years  beginning in any calendar year for which
the State  agreement is  in effect  unless the  change is enacted
before November 1 of such year.


                 Qualified State Tax References:
                          Page 135 of 148


     (c) State  individual income tax laws can be only of certain
kinds.   Such State  does not  impose any  tax on  the income  of
individuals other  than (1)  a qualified  resident tax,  and  (2)
either or  both a qualified nonresident tax and a separate tax on
income which  is not wage and other business income as defined in
paragraph (c) of s 301.6362-5 and which is received or accrued by
individuals who  are domiciled  in the  State, but  who  are  not
residents of  the  State  (as  defined  in  paragraph  (b)  of  s
301.6362-6).   For purposes  of this  paragraph, a tax imposed on
the amount taxed under section 56 (as permitted under s 301.6362-
2(b)(2)) shall  be treated  as an adjustment to and a part of the
qualified resident  tax.   Also, tax  laws which  were in  effect
prior to  the effective  date of  a State agreement and which are
not repealed,  but which  are made  inapplicable for  the  period
during  which   the  State  agreement  is  in  effect,  shall  be
disregarded.

     (d) Taxable  years must  coincide.  The taxable years of all
individuals, estates,  and trusts  under such tax are required to
coincide with  their taxable years used for purposes of the taxes
imposed by  chapter 1.   Accordingly, when subchapter E begins to
apply to  a State,  a taxpayer whose taxable year for purposes of
the Federal  income tax  is different  from his  taxable year for
purposes of the State income tax which precedes the qualified tax
may have one short taxable year for purposes of such State income
tax, so  that thereafter  his taxable  years for  purposes of the
qualified tax will coincide with the Federal taxable year.

     (e) Married individuals.  Individuals who are married within
the meaning of section 143 of the Code are prohibited from filing
(1) a  joint return  for purposes  of such State tax if they file
separate Federal  income tax returns, or (2) separate returns for
purposes for  such State  tax if they file a joint Federal income
tax return.

     (f) Penalties;   no double jeopardy.  Under the laws of such
State:

     (1) Civil and criminal sanctions identical to those provided
by subtitle  F, and  by  title  18  of  the  United  States  Code
(relating to crimes and criminal procedures), with respect to the
taxes imposed  on the  income of  individuals by chapter 1 and on
the wages  of individuals by chapter 24, apply to individuals and
their employers  who are  subject to  such  State  tax  (and  the
collection   and    administration   thereof,    including    the
corresponding withholding  tax imposed  to implement  the current
collection of  such State  tax) as  if such  tax were  imposed by
chapter 1  or chapter  24, in  the case  of the withholding tax),
except to  the extent  that the  application of such sanctions is
modified by regulations issued under subchapter E;  and

     (2) No  other sanctions  or penalties  apply with respect to
any act or omission to act in respect of such State tax.

See also  paragraph (e)  of s 301.6361-1 with respect to criminal
penalties.


                 Qualified State Tax References:
                          Page 136 of 148


     (g) Partnerships,  trusts, subchapter  S  corporations,  and
other conduit  entities.  Under the laws of such State, the State
tax treatment of  --

     (1) Partnerships and partners,

     (2) Trusts and their beneficiaries,

     (3) Estate and their beneficiaries,

     (4) Electing small business corporations (within the meaning
of section 1371(a)) and their shareholders, and

     (5) Any  other entity  and the individuals having beneficial
interests therein  (such as  a cooperative  corporation  and  its
shareholders), to  the extent  that such  entity is  treated as a
conduit  for   purposes  of  the  taxes  imposed  by  chapter  1,
corresponds to  the tax  treatment provided therefor with respect
to the  taxes imposed  by chapter 1.  For example, a subchapter S
corporation shall  not be subject to the State's corporate income
tax on  amounts which  are includible  in  shareholders'  incomes
which are  subject to  that State's individual income tax, except
to the extent that the subchapter S corporation is subject to tax
under Federal law.  Similarly, a partnership shall not be subject
to the  State's unincorporated  business income  tax  on  amounts
which are  includible in  partners' incomes  which are subject to
that State's  individual income  tax.   However, the  laws of the
State which  set forth  the provisions  of such  State individual
income tax  shall authorize  the Commissioner of Internal Revenue
to require  that the conduit entities described in this paragraph
(or some  of them)  supply information  to the Federal Government
with respect  to the source of income, the State of residence, or
the amount  of income  of a  particular type,  of an  individual,
estate, or  trust holding  a beneficial  interest in such conduit
entity.

     (h) Members  of armed  forces.   The relief  provided to any
member of  the Armed  Forces by  section 514 of the Soldiers' and
Sailors' Civil  Relief Act  (50 U.S.C. App. section 574) is in no
way diminished.   Accordingly, for purposes of such State tax, an
individual shall not be considered to have become a resident of a
State solely  because of  his absence  from his original State of
residence under  military  order.    Moreover,  compensation  for
military service shall not be considered as income derived from a
source within  a State  of  which  the  individual  earning  such
compensation is  not a  resident, within the meaning of paragraph
(d) of  s 301.6362-5.   The preceding sentence shall not apply to
nonmilitary compensation.   Thus,  for example,  if an individual
who is  serving in  State X  as a member of the Armed Forces, and
who is  regarded as a resident of State Y under the Soldiers' and
Sailors' Civil  Relief Act,  earns nonmilitary  income in State X
from a part-time job, such nonmilitary income may be subject to a
qualified nonresident tax imposed by State X.

     (i) Withholding  on compensation  of employees of railroads,
motor carriers,  airlines, and  water  carriers.    There  is  no
contravention of  the provisions  of section  26, 226A, or 324 of


                 Qualified State Tax References:
                          Page 137 of 148


the Interstate  Commerce Act,  or of  section 1112 of the Federal
Aviation  Act  of  1958,  with  respect  to  the  withholding  of
compensation to  which such  sections apply  for purposes  of the
nonresident tax.

     (j) Income  derived from  interstate commerce.   There is no
contravention of  the provisions of the Act of September 14, 1959
(73 Stat.  555), with  respect to  the taxation of income derived
from interstate commerce to which such statute applies.

[T.D. 7577, 43 F.R. 59372, Dec. 20, 1978]

26 CFR s 301.6362-7, Additional requirements.

------------ Excerpt from pages 160531-160533


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366

s 301.6363-1 State agreements.

     (a) Notice  of election.   If a State elects to enter into a
State agreement  it shall  file notice  of such election with the
Secretary or  his delegate.  The notice of election shall include
the following:

     (1) Statement  by the  Governor.  A written statement by the
Governor of the electing State:

     (i)  Requesting  that  the  Secretary  enter  into  a  State
agreement, and

     (ii) Binding  the Governor  and his  successors in office to
notify  the   Secretary  or   his  delegate  immediately  of  the
enactment, between  the time  of the  filing  of  the  notice  of
election and the time of the execution of the State agreement, of
any law of that State which meets the description given in any of
the subdivisions  of subparagraph  (2)  of  this  paragraph  (a),
whether or  not such  law is  intended to  be administered by the
United States pursuant to subchapter E.

     (2) Copy  of State  laws.   Certified copies  of all laws of
that State described in any of the following subdivisions of this


                 Qualified State Tax References:
                          Page 138 of 148


subparagraph,  and   a  specification   of  laws   described   in
subdivision (i)  of this  subparagraph as "subchapter E laws", of
laws described  in subdivision  (ii) as "other tax laws", of laws
described in  subdivision (iii)  as "non-tax  laws", and  of laws
described in subdivision (iv) as "interstate cooperation laws":

     (i) All  of the  State individual income tax laws (including
laws relating  to the  collection or administration of such taxes
or to  the prosecution  of alleged  civil or  criminal violations
with respect  to such  taxes) which  the State  would expect  the
United States to administer pursuant to subchapter E if the State
agreement is  executed as  requested.   In order  to have a valid
notice,  the   State  must  have  a  tax  which  would  meet  the
requirements for  qualification specified in section 6362 and the
regulations thereunder  if a  State agreement were in effect with
respect thereto, with no conditions attached to the effectiveness
of such  tax other than the execution of a State agreement.  Such
tax must  be effective  no later  than the January 1 specified in
the State's notice of election as the date as of which subchapter
E is  desired to  become applicable to the electing State, except
that such  effective date  shall be deferred to the date provided
in the  State agreement  for the  beginning of  applicability  of
subchapter E  to the  State, if the latter date is different from
the date specified in the notice of election.

     (ii)  All  of  the  State  income  tax  laws  applicable  to
individuals  (including   laws  relating  to  the  collection  or
administration of  such taxes  or to  the prosecution  of alleged
civil or  criminal violations  with respect  to such taxes) which
the State  would not  expect the  United States to administer but
which may  be in  effect simultaneously  (for any period of time)
with the State agreement.

     (iii) All of the State laws other than individual income tax
laws which  provide for  the making  of any payments by the State
based on  one or  more criteria  which the  State may  desire  to
verify by  reference  to  information  contained  in  returns  of
qualified taxes.

     (iv)  All   of  the  State  laws  which  may  be  in  effect
simultaneously (for  any period of time) with the State agreement
and which provide for cooperation or reciprocal agreement between
the electing State and another State with respect to income taxes
applicable to individuals.

     (3)   Approval    by   legislature   or   authorization   by
constitutional  amendment.    A  certified  copy  of  an  Act  or
Resolution of  the legislature of the electing State in which the
legislature affirmatively  expresses its  approval of the State's
entry into a State agreement, or a certified copy of an amendment
to the  constitution of  such State  by which  the voters  of the
State affirmatively authorize such entry.

     (4) Opinion by State Attorney General or judgment of highest
court.   A written statement by the State Attorney General to the
effect  that,  in  his  opinion,  no  provision  of  the  State's
Constitution would  be violated  by the State law's incorporation


                 Qualified State Tax References:
                          Page 139 of 148


by reference  of the  Federal  individual  income  tax  laws  and
regulations, as  amended  from  time  to  time,  by  the  Federal
prosecution and  trial of  individuals who  are alleged  to  have
committed crimes  with respect to the State's qualified tax (when
it goes  into effect as such), or by any other provision relating
to such  tax, considered as of the time it is being collected and
administered by  the Federal Government pursuant to subchapter E.
However, if  such a  statement is  not included  in the notice of
election, a  judgment of  the highest  court of  the State to the
same effect may be submitted in its place.

     (5) Effective  date.  A written specification of the January
as of  which subchapter  E is desired to become applicable to the
electing State.

     (b) Rules  relating to  time for  filing notice of election.
An electing  State must  file its  notice of election more than 6
months prior  to the  January 1  as of which the notice specifies
that the  provisions  of  subchapter  E  are  desired  to  become
applicable to  such State.    Thus,  for  example,  if  the  date
specified in  the notice  is January  1, 1979, the notice must be
filed no  later than  June 30,  1978.  However, because under the
provisions of  section 204(b) of the Federal-State Tax Collection
Act of  1972 (86 Stat. 945), as amended by section 2116(a) of the
Tax Reform  Act of  1976  (90  Stat.  1910),  the  provisions  of
subchapter E  will initially  take effect  on the first January 1
which is  more than 1 year after the first date on which at least
one State  has filed a notice of its election (see s 301.6361-5),
the notice  of an election which causes subchapter E to initially
take effect must be filed with the Secretary or his delegate more
than 1  year prior  to the  January 1  as of  which  such  notice
specifies that  the provisions  of subchapter  E are  desired  to
become applicable  to such  State.  Thus, for example, if such an
initially electing  State desires  to elect  subchapter E  as  of
January 1,  1979, its notice must be filed no later than December
31, 1977.   For  purposes of  this  section,  if  the  notice  of
election is  sent by  either registered  or certified mail to the
Secretary of  the Treasury, Washington, D.C. 20220, then it shall
be deemed  to be  filed on  the date  of mailing;  otherwise, the
notice of  election shall  be deemed  to  be  filed  when  it  is
received by the Secretary or his delegate.

     (c) Procedures  relating to  defects in  notice or tax laws.
If a  State has  filed a  notice of  election, then the Secretary
shall, within  90 days  after the  notice is  filed,  notify  the
Governor of  such State in writing of any defect in the notice of
election which prevents it from being valid, and of any defect in
the State's  tax laws  which causes  the tax submitted to fail to
meet the requirements for qualification specified in section 6362
and the regulations thereunder, other than the fact that no State
agreement is  in effect with respect thereto.  Any such defect of
which the  Secretary does not notify the Governor within such 90-
day period  is waived.  The Secretary or his delegate may, in his
discretion, permit  any of  such defects of which the Governor is
timely notified  to be  cured retroactively  to the  date of  the
filing of  the notice  of election, by amendment of the notice or
the State  law.  Judicial review of the Secretary's determination


                 Qualified State Tax References:
                          Page 140 of 148


that the  notice of  election or  the tax  laws, or both, contain
defects, may  be obtained  as set  forth in section 6363(d) and s
301.6363-4.

     (d) Execution  and contents  of State  agreement.    If  the
Secretary does  not timely notify the Governor of a defect in the
notice of  election or  in the  State's tax  laws, as provided in
paragraph (c)  of this  section,  or  if,  as  provided  in  such
paragraph, all  such defects  have been cured retroactively, then
the Secretary  shall enter into a State agreement.  The agreement
shall include the following elements:

     (1) Effective date.  The agreement shall specify the January
1 as  of which subchapter E will commence to be applicable to the
State.   Such date  shall be  the same  as that  specified in the
notice of  election pursuant to paragraph (a)(5) of this section,
unless the parties agree to a different January 1, except that in
no event  shall a  State  agreement  executed  after  November  1
specify the next January 1.

     (2) Obligation  of Governor  to notify  the United States of
changes in pertinent State laws.  The agreement shall require the
Governor of  the State,  and his  successors in office, to notify
the Secretary  or his delegate within 30 days of the enactment of
any law  of the State, after the execution of the agreement, of a
type described in paragraph (a)(2) of this section.

     (3) Obligation  of Governor  to furnish to the United States
information needed  to administer  State tax laws.  The agreement
shall require  the Governor  and his successors to furnish to the
Secretary or  his delegate  any information needed by the Federal
Government to  administer the  State tax  laws.  Such information
shall include,  for example, a list (which shall be maintained on
a current  basis) of  those  obligations  of  the  State  or  its
political subdivisions  described in section 103(a)(1) from which
the interest is not subject to the qualified taxes of the State.

     (4) Identification  of State official to act as liaison with
Federal Government.  The agreement shall include a designation by
the Governor  of the  State official  or officials  with whom the
Secretary or  his delegate  should coordinate  in connection with
any questions  or problems  which may arise during the period for
which the State agreement is effective, including those which may
result from  changes or  contemplated changes  in pertinent State
laws.

     (5) Identification  of State official to receive transferred
funds.  The agreement shall include a designation by the Governor
of the  State official  who shall  initially receive the funds on
behalf of the State when they are transferred pursuant to section
6361(c) and s 301.6361-3.

     (6) Other  obligations.   If the  Secretary and the Governor
both  so  agree,  the  agreement  shall  provide  for  additional
obligations.

     (e) State  agreement superseding  certain other  agreements.


                 Qualified State Tax References:
                          Page 141 of 148


For the  period of  its effectiveness,  a State  agreement  shall
supersede an  otherwise effective  agreement entered  into by the
State and the Secretary for the withholding of State income taxes
from the  compensation of  Federal employees pursuant to 5 U.S.C.
5517 (or  pursuant to  5 U.S.C. 5516, in the case of the District
of Columbia).

[T.D. 7577, 43 F.R. 59373, Dec. 20, 1978]

26 CFR s 301.6363-1, State agreements.

------------ Excerpt from pages 160534-160537


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366

s 301.6363-2 Withdrawal from State agreements.

     (a) By  notification.   If a  State which has entered into a
State agreement  desires to  withdraw  from  the  agreement,  its
Governor shall  file a notice of withdrawal with the Secretary or
his delegate.  A notice of withdrawal shall include the following
documents:

     (1) Request  by the  Governor.  A request by the Governor of
the State  that the  State agreement  cease to  be effective with
respect to  taxable years  beginning  on  or  after  a  specified
January 1, except as provided in paragraph (b)(2) of s 301.6365-2
with respect to withholding in the case of fiscal year taxpayers.

     (2) Legislative approval of withdrawal.  A certified copy of
an act or Resolution of the legislature of the State in which the
legislature affirmatively  expresses its  approval of the State's
withdrawal from the State agreement.

     (3)  Identification   of  State   official.      A   written
identification of  the State  official or officials with whom the
Secretary or  his delegate  should coordinate  in connection with
the State's withdrawal from the State agreement.

     (b) By change in State law.  If any law of a State which has
entered  into   a  State   agreement  is  enacted  pertaining  to
individual   income    taxes   (including   the   collection   or


                 Qualified State Tax References:
                          Page 142 of 148


administration of  such taxes,  and the  prosecution  of  alleged
civil or  criminal violations with respect to such taxes), and if
the Secretary or his delegate determines that as a result of such
law the  State no longer has a qualified tax, then such change in
the State  law shall  be treated  as a notification of withdrawal
from the  agreement.   The Secretary shall notify the Governor in
writing when  a change  is to  be so  treated.  Such notification
shall have  the same  effect as  if, on the effective date of the
disqualifying change  in the law, the Governor had filed with the
Secretary or  his delegate  a  valid  and  sufficient  notice  of
withdrawal requesting  that  the  State  agreement  cease  to  be
effective with respect to taxable years beginning on or after the
first January  1 which  is more than 6 months thereafter, subject
to the  exception with  respect to  withholding in  the  case  of
fiscal-year taxpayers.   However,  the cessation of effectiveness
may be  deferred to  a subsequent  January 1  if the  Governor so
requests and  if the  Secretary or his delegate in his discretion
determines that  the date  of cessation provided in the preceding
sentence would  subject the  State  or  its  taxpayers  to  undue
hardship.  In addition, the Governor may request the Secretary or
his delegate  to permit  the State's  early withdrawal  from  the
agreement, pursuant  to paragraph  (c)(2) of this section.  Until
the date  of cessation  of effectiveness  of the State agreement,
the change  in State  law which  was treated as a notification of
withdrawal, and  any other  such subsequent  change that would be
similarly treated,  shall not be given effect for purposes of the
Federal  collection   and  administration  of  the  State  taxes.
Similarly, such  changes shall  not  be  given  effect  for  such
purposes during  the period  of litigation  if  the  State  seeks
judicial review  of the  action of  the Secretary or his delegate
pursuant to section 6363(d) or s 301.6363-4, even if such changes
are ultimately  found by  the court not to disqualify the State's
qualified tax.   However,  a change  in State  law which would be
treated as a notice of withdrawal in the absence of this sentence
shall not  be so  treated  if,  prior  to  the  last  November  1
preceding the  January 1  on which the cessation of effectiveness
of the  State agreement  is to occur, either such change in State
law is  retroactively repealed, or the State law is retroactively
modified and  the Secretary  or his delegate determines that with
such modification the State has a qualified tax.

     (c) Rules  relating to  time of  withdrawal --  (1)  General
rule.   Except as  provided in subparagraph (2) of this paragraph
(c), a notice of withdrawal shall not be valid unless the January
1 specified therein is not earlier than the first January 1 which
is more  than 6 months subsequent to the date on which the notice
is received by the Secretary or his delegate.  Thus, for example,
if the  notice specifies  January 1,  1980, for  withdrawal,  the
notice must be received no later than June 30, 1979.

     (2) Early withdrawal.  The Secretary or his delegate may, in
his discretion  and upon written request by a Governor of a State
who  has  filed  a  notice  of  withdrawal,  waive  the  6-months
requirement of  section 6363(b)(1)  and subparagraph  (1) of this
paragraph (c), if the Secretary determines that:

     (i) The  State will  suffer a  hardship if  required to meet


                 Qualified State Tax References:
                          Page 143 of 148


such requirement, and

     (ii) The early withdrawal requested by the Governor would be
practicable from  the standpoint  of orderly  collection  of  the
qualified tax  and administration of the State law by the Federal
Government.

[T.D. 7577, 43 F.R. 59374, Dec. 20, 1978]

26 CFR s 301.6363-2, Withdrawal from State agreements.

------------ Excerpt from pages 160538-160539


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366

s 301.6363-3 Transition years.

     The State may by law provide for the transition to or from a
qualified tax  to the extent necessary to prevent double taxation
or other unintended hardships, or to prevent unintended benefits,
under  State   law.     Generally,  such   provisions  shall   be
administered by  the State;   but,  if requested  to do so by the
Governor of  the State,  the Secretary or his delegate may in his
discretion, agree  to administer such provisions either solely or
jointly with the State.

[T.D. 7577, 43 F.R. 59375, Dec. 20, 1978]

26 CFR s 301.6363-3, Transition years.

------------ Excerpt from page 160540


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION


                 Qualified State Tax References:
                          Page 144 of 148


COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366

s 301.6363-4 Judicial review.

     (a)  General  rule.    If  the  Secretary  or  his  delegate
determines pursuant to paragraph (c) of s 301.6363-1 that a State
did not  file a  valid notice  of election or does not have a tax
which would  meet the requirements for qualification specified in
section 6362  and the regulations thereunder if a State agreement
were in effect with respect thereto, or if he determines pursuant
to paragraph  (b) of  s 301.6363-2 that a participating State has
enacted a  law as  a result  of which  the State  no longer has a
qualified tax,  such State may, within 60 days after its Governor
has received  notification of such determination, file a petition
for the  review of  such determination  with  either  the  United
States Court  of Appeals  for the  circuit in  which the State is
located or the United States Court of Appeals for the District of
Columbia.   If a  State files  such a  petition, the clerk of the
court shall  forthwith transmit  a copy  of the  petition to  the
Secretary or  his delegate,  who in  turn shall thereupon file in
the court  the record  of proceedings  on which the determination
adverse to  the State  was based,  as provided in section 2112 of
title 28, United States Code.

     (b) Court  of Appeals'  jurisdiction.   The Court of Appeals
may affirm  or set  aside, in whole or in part, the action of the
Secretary or  his delegate;   and  (subject to the rules delaying
the  effectiveness  of  the  change  in  State  law  provided  in
paragraph (b)  of s  301.6363-2) the  court may  issue such other
orders as  may be appropriate with respect to taxable years which
include any part of the period of litigation.

     (c) Review  of Court  of Appeals' judgment.  The judgment of
the Court  of Appeals  shall be  subject to review by the Supreme
Court of  the United  States  upon  certiorari  or  certification
sought by  either party  as provided in section 1254 of title 28,
United States Code.

     (d) Effect of final judgment.  If a final judgment, rendered
with respect to litigation involving a State's petition to review
a determination  of the  Secretary or  his delegate to the effect
that the  State's individual  income tax  laws  included  in  its
notice  of   election  would   not  meet   the  requirements  for
qualification specified  in  section  6362  and  the  regulations
thereunder if  a State  agreement were  in  effect  with  respect
thereto, includes  a determination  that the State's tax would in
fact meet  such requirements, then the provisions of subchapter E
shall apply  to the State with respect to taxable years beginning
on or after the first January 1 which is more than 6 months after
the date  of such  final judgment.  If a final judgment, rendered
with respect to litigation involving a State's petition to review
a determination  of the  Secretary or  his delegate to the effect


                 Qualified State Tax References:
                          Page 145 of 148


that the  State's  previously-qualified  tax  ceases  to  qualify
because of  a change in the State's law, includes a determination
that the  State's tax  does in  fact cease  to qualify,  then the
provisions of  subchapter E (other than section 6363) shall cease
to apply  to the State with respect to taxable years beginning on
or after  the first  January 1  which is more than 6 months after
the date  of such  final  judgment.    See  paragraph  (b)  of  s
301.6365-2 for  special rules  with respect to withholding in the
case of fiscal-year taxpayers.

     (e) Expeditious  treatment of  judicial proceedings.   Under
section 6363(d)(4), any judicial proceedings to which a State and
the United  States are parties, and which are brought pursuant to
section 6363,  are entitled  to receive  a preference,  and to be
heard and  determined as  expeditiously as possible, upon request
of the Secretary or the State.

[T.D. 7577, 43 F.R. 59375, Dec. 20, 1978]

26 CFR s 301.6363-4, Judicial review.

------------ Excerpt from pages 160541-160542


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366

s 301.6365-1 Definitions.

     (a) State.  For purposes of subchapter E and the regulations
thereunder, the  term  "State"  shall  include  the  District  of
Columbia, but  shall not  include the Commonwealth of Puerto Rico
or any possession of the United States.

     (b)  Governor.    For  purposes  of  subchapter  E  and  the
regulations thereunder,  the term  "Governor" shall  include  the
Mayor of the District of Columbia.

[T.D. 7577, 43 F.R. 59375, Dec. 20, 1978]

26 CFR s 301.6365-1, Definitions.

------------ Excerpt from page 160543


                 Qualified State Tax References:
                          Page 146 of 148


CODE OF FEDERAL REGULATIONS

TITLE 26 -- INTERNAL REVENUE

CHAPTER I -- INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER F -- PROCEDURE AND ADMINISTRATION

PART 301 -- PROCEDURE AND ADMINISTRATION

COLLECTION

SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

Current through January 1, 1997;  61 F.R. 69366

s 301.6365-2  Commencement  and  cessation  of  applicability  of
subchapter E to individual taxpayers.

     (a) General  rule.    Except  for  purposes  of  chapter  24
(relating to  the collection  of income  tax at source on wages),
whenever subchapter  E begins  or ceases  to apply  to any  State
(i.e., a  State agreement begins or ceases to be effective) as of
any January  1, such  commencement or  cessation of applicability
shall apply to taxable years of individuals beginning on or after
such date.   For  example, if  subchapter E  begins to apply to a
particular State  on January  1, 1980, it would become applicable
for calendar year 1980 for calendar-year taxpayers in that State;
but if  a taxpayer  in the  State is  using a fiscal year running
from July  1 to  June 30,  the subchapter  would begin  to  apply
(except for  purposes of  chapter 24) to that taxpayer on July 1,
1980, for  his taxable  year ending June 30, 1981.  Similarly, if
the subchapter  ceases to apply to such State on January 1, 1982,
it would  cease to apply to calendar-year taxpayers after the end
of calendar  year 1981;   but it would cease to apply (except for
purposes of  chapter 24)  to fiscal-year  taxpayers at the end of
their fiscal years which are in progress on January 1, 1982.  The
cessation of  applicability of  subchapter E  to a State does not
affect rights,  duties,  and  liabilities  with  respect  to  any
taxable year  for which  subchapter E  does apply with respect to
any taxpayer (or his employer).

     (b)  Special   rules  pertaining   to  withholding   --  (1)
Subchapter E  beginning to apply.  The Federal withholding system
provided in  chapter 24 shall go into effect for State individual
income tax  purposes with  respect to  wages paid on or after the
January 1  as of  which subchapter  E begins to apply to a State.
If an  employee is  subject to  a qualified  tax imposed  by  the
State, such  withholding system  shall apply to his wages paid on
or after  that January  1, without  regard to  whether  he  is  a
calendar-year or  fiscal-year taxpayer.   See  s 301.6363-3  with
respect to transition-year rules.

     (2) Subchapter  E ceasing to apply.  The Federal withholding
system provided  in chapter  24 shall  cease to  be effective for
State tax  purposes with  respect to  wages paid  on or after the


                 Qualified State Tax References:
                          Page 147 of 148


January 1  as of which subchapter E ceases to apply to the State,
although fiscal-year  taxpayers of  that  State  continue  to  be
subject to the other provisions of subchapter E for the remainder
of their  fiscal years  then in  progress.  See s 301.6363-3 with
respect to transition-year rules.

[T.D. 7577, 43 F.R. 59375, Dec. 20, 1978]

26 CFR  s 301.6365-2, Commencement and cessation of applicability
of subchapter E to individual taxpayers.

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                 Qualified State Tax References:
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