26 CFR § 31.3406(b)(3)-4

26 CFR · Internal Revenue

§ 31.3406(b)(3)-4 — Reportable payments of royalties.

TitleTitle 26: Internal Revenue PartPart 31: Employment Taxes and Collection of Income Tax at Source

SourceeCFR (current through Mar 20, 2026)

This text of 26 C.F.R. § 31.3406(b)(3)-4 (Reportable payments of royalties.) is published on Counsel Stack Legal Research, covering United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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26 C.F.R. § 31.3406(b)(3)-4 (2026).

Text

§ 31.3406(b)(3)-4 Reportable payments of royalties.

(a)Royalty payments subject to backup withholding. A payment of a kind, and to a payee, that is required to be reported under section 6050N (relating to information reporting of payments of royalties) is a reportable payment for purposes of section 3406. See § 31.6051-4 for the requirement to furnish a statement to the payee if tax is withheld under section 3406.

(b)Amount subject to backup withholding. In general, the amount described in paragraph (a) of this section that is subject to withholding under section 3406 is the amount subject to reporting under section 6050N. However, if the reportable payment is for an oil or gas interest, the amount subject to withholding is the net amount the payee receives (i.e., the gross proceeds les

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§ 31.3406(b)(3)-4 Reportable payments of royalties.

(a) Royalty payments subject to backup withholding. A payment of a kind, and to a payee, that is required to be reported under section 6050N (relating to information reporting of payments of royalties) is a reportable payment for purposes of section 3406. See § 31.6051-4 for the requirement to furnish a statement to the payee if tax is withheld under section 3406.

(b) Amount subject to backup withholding. In general, the amount described in paragraph (a) of this section that is subject to withholding under section 3406 is the amount subject to reporting under section 6050N. However, if the reportable payment is for an oil or gas interest, the amount subject to withholding is the net amount the payee receives (i.e., the gross proceeds less production-related taxes such as state severance taxes).

[T.D. 8637, 60 FR 66119, Dec. 21, 1995]