SECTION 2. BACKGROUND

.01 Section 31.6011(a)–7 of the Employment Taxes and Collection of Income Tax at Source Regulations provides that each return required under the regulations of this part, together with any prescribed copies or supporting data, must be filled in and disposed of in accordance with the forms, instructions, and regulations applicable thereto. The return may be made by an agent in the name of the person required to make the return if an acceptable power of attorney is filed with the Internal Revenue Service office with which such person is required to file returns and if such a return includes all taxes required to be reported by such person on such return.

.02 Section 31.6061–1 provides that the return may be signed for the taxpayer by an agent who is fully authorized in accordance with § 31.6011(a)–7 to make such return.

.03 Section 31.6302–1 provides taxpayers with the rules for depositing

withheld employment taxes. Section 31.6302–1T of the temporary regulations supplements these rules by implementing the mandate for the collection of federal depository taxes through an electronic funds transfer (‘‘EFT’’) system, as required by § 6302(h) of the Internal Revenue Code. EFT is any transfer of taxes made in accordance with Rev. Proc. 94–48, 1994–2 C.B. 694, or in accordance with procedures subsequently published by the Commissioner.

.04 The Service has prescribed the use of Form 8655 as the appropriate authorization form to use by a taxpayer for designating an Agent to:

(1) file and sign certain tax returns on magnetic tape or electronically;

(2) make FTD payments and submit FTD information on magnetic tape or electronically for certain tax returns;

(3) receive duplicate copies of official notices, correspondence, transcripts, or other information with respect to the magnetic tape or electronic returns filed by the Agent; or

(4) receive duplicate copies of official notices, correspondence, transcripts, frequency information, or other information with respect to FTDs submitted or to be submitted on magnetic tape or electronically by the Agent.

.05 Form 8655 provides an option for an Agent to receive deposit frequency information on magnetic tape (ASCII format on 10 ¹ ⁄2 inch round tape 6250 BPI) or on paper. Deposit frequency information will be sent on magnetic tape to an Agent with 4,000 or more clients, unless that Agent elects on the Authorization not to receive the information via magnetic tape. Deposit frequency information will be sent on paper to an Agent with less than 4,000 clients, unless that Agent elects on the Authorization to receive the information on magnetic tape. The cost of producing the tape will be incurred by the Service. However, an Agent is responsible for reading the magnetic tape.