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Treasury Regulations (26 C.F.R.)

26 CFR § 31.3406(b)(2)-3

Window transactions.

Official textecfr.govlast amended

# (a) Requirement to backup withhold.

Withholding under section 3406 applies to a window transaction (as defined in paragraph (b) of this section) only if the payee does not furnish a taxpayer identification number to the payor in the manner required in paragraph (c) of this section or furnishes an obviously incorrect number as described in § 31.3406(h)-1(b)(2). Withholding does not apply to a window transaction even though the Internal Revenue Service notifies the payor of the payee's incorrect taxpayer identification number under section 3406(a)(1)(B) or of notified payee underreporting under section 3406(a)(1)(C). The payee in a window transaction is not required to certify under penalties of perjury that the payee is not subject to withholding due to notified payee underreporting (as described in § 31.3406(d)-2(b)(2)).

# (b)

Window transaction defined. Window transaction means a payment of interest with respect to any of the following obligations:

(1) An interest coupon in bearer form that is subject to taxation (i.e., other than exempt interest described in § 1.6049-5(b)(1)(ii) of this chapter);

(2) A United States savings bond; or

(3) A discount obligation having a maturity at issue of one year or less, including commercial paper and bankers' acceptances that are in definitive form (i.e., evidenced by a paper document other than a confirmation receipt) but not including short-term government obligations (as defined in section 1271(a)(3)(B)).

# (c) Manner of furnishing taxpayer identification number in the case of a window transaction.

A payee must furnish the payee's taxpayer identification number to the payor with respect to a window transaction either orally or in writing at the time that the window transaction occurs. See § 31.3406(g)-3(c)(1)(i), which provides that a payee may not claim the payee is awaiting receipt of a taxpayer identification number with respect to a window transaction. The payee is not required to certify, under penalties of perjury, that the taxpayer identification number provided is correct.

[T.D. 8637, 60 FR 66116, Dec. 21, 1995]

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In this part (40 sections)
  1. 31.3402(m)-1 · Additional withholding allowance.
  2. 31.3402(n)-1 · Employees incurring no income tax liability.
  3. 31.3402(o)-1 · Extension of withholding to supplemental unemployment…
  4. 31.3402(o)-2 · Extension of withholding to annuity payments if…
  5. 31.3402(o)-3 · Extension of withholding to sick pay.
  6. 31.3402(p)-1 · Voluntary withholding agreements.
  7. 31.3402(q)-1 · Extension of withholding to certain gambling winnings.
  8. 31.3402(r)-1 · Withholding on distributions of Indian gaming profits to…
  9. 31.3403-1 · Liability for tax.
  10. 31.3404-1 · Return and payment by governmental employer.
  11. 31.3405(a)-1 · Questions and answers relating to Federal income tax…
  12. 31.3405(c)-1 · Withholding on eligible rollover distributions;…
  13. 31.3405(e)-1 · Questions and answers relating to withholding on…
  14. 31.3406-0 · Outline of the backup withholding regulations.
  15. 31.3406(a)-1 · Backup withholding requirement on reportable payments.
  16. 31.3406(a)-2 · Definition of payors obligated to backup withhold.
  17. 31.3406(a)-3 · Scope and extent of accounts subject to backup…
  18. 31.3406(a)-4 · Time when payments are considered to be paid and subject…
  19. 31.3406(b)(2)-1 · Reportable interest payment.
  20. 31.3406(b)(2)-2 · Original issue discount.
  21. 31.3406(b)(2)-3 · Window transactions.
  22. 31.3406(b)(2)-4 · Reportable dividend payment.
  23. 31.3406(b)(2)-5 · Reportable patronage dividend payment.
  24. 31.3406(b)(3)-1 · Reportable payments of rents, commissions,…
  25. 31.3406(b)(3)-2 · Reportable barter exchanges and gross proceeds of…
  26. 31.3406(b)(3)-3 · Reportable payments by certain fishing boat operators.
  27. 31.3406(b)(3)-4 · Reportable payments of royalties.
  28. 31.3406(b)(3)-5 · Reportable payments of payment card and third party…
  29. 31.3406(b)(4)-1 · Exemption for certain minimal payments.
  30. 31.3406(c)-1 · Notified payee underreporting of reportable interest or…
  31. 31.3406(d)-1 · Manner required for furnishing a taxpayer identification…
  32. 31.3406(d)-2 · Payee certification failure.
  33. 31.3406(d)-3 · Special 30-day rules for certain reportable payments.
  34. 31.3406(d)-4 · Special rules for readily tradable instruments acquired…
  35. 31.3406(d)-5 · Backup withholding when the Service or a broker notifies…
  36. 31.3406(e)-1 · Period during which backup withholding is required.
  37. 31.3406(f)-1 · Confidentiality of information.
  38. 31.3406(g)-1 · Exception for payments to certain payees and certain…
  39. 31.3406(g)-2 · Exception for reportable payment for which withholding…
  40. 31.3406(g)-3 · Exemption while payee is waiting for a taxpayer…
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