SERVICE WILL NO LONGER RULE ON WAGE WITHHOLDING FOR FORMER EMPLOYEES AFFECTED BY PLANT CLOSINGS, LAYOFFS, OR REDUCTIONS IN FORCE.

Rev. Proc. 89-7

SECTION 1. BACKGROUND

Rev. Proc. 89-3, 1989-1 I.R.B. 29, sets forth areas in which advance rulings or determination letters will not be issued by the Internal Revenue Service. Section 5 of Rev. Proc. 89-3 is entitled "Area Under Extensive Study In Which Rulings Or Determination Letters Will Not Be Issued Until The Service Resolves The Issue Through Publication Of A Revenue Ruling, Revenue Procedure, Regulations Or Otherwise."

SECTION 2. PROCEDURE

Rev. Proc. 89-3 is hereby amplified by adding to section 5 the following new section:

Sections 3121 and 3306. - Definitions. - Whether payments made to former employees in the event of a plan closing, layoff, or reduction in force are wages for purposes of the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act (FUTA).

SECTION 3. EFFECTIVE DATE

This revenue procedure will apply to all ruling requests on hand in the National Office on January 17, 1989, the date of publication of this revenue procedure in the Internal Revenue Bulletin, as well as to requests received thereafter.

SECTION 4. EFFECT ON OTHER REVENUE PROCEDURES

Rev. Proc. 89-3 is amplified.

SECTION 5. DRAFTING INFORMATION

The principal author of this revenue procedure is Janet Lloyd of the Office of Assistant Chief Counsel (Employee Benefits and Exempt Organizations). For further information regarding this revenue procedure contact Ms. Lloyd on (202) 566-4747 (not a toll-free call).