[Code of Federal Regulations]
[Title 31, Volume 2]
[Revised as of July 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR203.14]

[Page 17-18]
 
                  TITLE 31--MONEY AND FINANCE: TREASURY
 
         CHAPTER II--FISCAL SERVICE, DEPARTMENT OF THE TREASURY
 
PART 203_PAYMENT OF FEDERAL TAXES AND THE TREASURY TAX AND LOAN PROGRAM--Table 
 
                Subpart B_Electronic Federal Tax Payments
 
Sec.  203.14  Electronic Federal Tax Payment System interest assessments.

    (a) Circumstances subject to interest assessments. Treasury may 
assess interest on a financial institution in instances where a taxpayer 
that failed to meet a tax due date proves to the IRS that the delivery 
of tax payment instructions to

[[Page 18]]

the financial institution was timely and that the taxpayer satisfied the 
conditions imposed by the financial institution pursuant to Sec.  
203.11(b). Treasury also may assess interest where a financial 
institution failed to respond to an ACH prenotification entry on an ACH 
debit as required in Sec.  203.12(b) or failed to originate an ACH 
prenotification or zero dollar entry on an ACH credit as described in 
Sec.  203.12(c) which then resulted in a late payment.
    (b) Calculation of interest assessment. Any interest assessed under 
this section will be at the TT&L rate. The interest will be assessed 
from the day the taxpayer specified that its payment should settle to 
the Treasury until the receipt of the payment by Treasury, subject to 
the following limitations: For ACH debit transactions, interest will be 
limited to no more than seven calendar days; for ACH credit and same-day 
transactions, interest will be limited to no more than 45 calendar days. 
The limitation of liability in this paragraph does not apply to any 
interest assessment in which there is an indication of fraud, the 
presentation of a false claim, or misrepresentation or embezzlement on 
the part of the financial institution or any employee or agent of the 
financial institution.
    (c) Authorization to assess interest. A financial institution that 
processes Federal tax payments made by electronic payment methods under 
this subpart is deemed to authorize the FRB to debit its Federal Reserve 
account or the account of its designated correspondent financial 
institution for any interest assessed under this section. Upon the 
direction of Treasury, the FRB shall debit the Federal Reserve account 
of the financial institution or the account of its designated 
correspondent financial institution for the amount of the assessed 
interest.
    (d) Circumstances not subject to the assessment of interest. (1) 
Treasury will not assess interest on a taxpayer's financial institution 
if a taxpayer fails to meet a tax due date because the taxpayer has not 
satisfied conditions imposed by the financial institution pursuant to 
Sec.  203.11(b) and the financial institution has not contributed to the 
delay. The burden is on the financial institution to establish, pursuant 
to the procedures in Sec.  203.16, that the taxpayer has not satisfied 
the conditions and that the financial institution has not contributed to 
the delay.
    (2) Treasury will not assess interest on a financial institution if 
the delay causing the interest assessment is due to the FRB or the TFA 
and the financial institution did not contribute to the delay. The 
burden is on the financial institution to establish, pursuant to the 
procedures in Sec.  203.16, that it did not cause or contribute to the 
delay.