General Revision of Regulations Relating to Withholding of Tax on Certain U.S. Source Income Paid to Foreign Persons and Related Collection, Refunds, and Credits; Revision of Information Reporting and Backup Withholding Regulations; and Removal of Regulations Under Parts 1 and 35a and of Certain Regulations Under Income Tax Treaties
Federal RegisterDec 31, 1998
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1, 31, 35a, and 301
[TD 8804]
RIN 1545-AW39
General Revision of Regulations Relating to Withholding of Tax on
Certain U.S. Source Income Paid to Foreign Persons and Related
Collection, Refunds, and Credits; Revision of Information Reporting and
Backup Withholding Regulations; and Removal of Regulations Under Parts
1 and 35a and of Certain Regulations Under Income Tax Treaties
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final rule; delay of effective date, technical amendments, and
partial withdrawal.
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SUMMARY: This document contains changes delaying the effective date and
making technical amendments to final regulations (TD 8734), which were
published in the Federal Register for October 14, 1997, relating to the
withholding of income tax on certain U.S. source income payments to
foreign persons. The Department of the Treasury and the IRS believe it
is in the best interest of tax administration to extend the effective
date of the final withholding regulations to ensure that both taxpayers
and the government can complete changes necessary to implement the new
withholding regime. As extended by this document, the final withholding
regulations will apply to payments made after December 31, 1999. This
document also withdraws two amendments which have already been dealt
with in TD 8772, which was published in the Federal Register for June
30, 1998.
DATES: Effective Dates: The amendments in this final rule are effective
January 1, 2000. As of December 31, 1998, the effective date of the
final regulations published at 62 FR 53387, October 14, 1997, is
delayed from January 1, 1999, until January 1, 2000; however, the
effective date of the addition of Sec. 31.9999-0 and Sec. 35a.9999-0
and the removal of Sec. 35a.9999-0T remains October 14, 1997.
Withdrawal: Effective December 31, 1998, the amendments removing
Secs. 1.6045-1T and 1.6045-2T published at 62 FR 53387, October 14,
1997, are withdrawn.
FOR FURTHER INFORMATION CONTACT: Lilo Hester, (202) 622-3840 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are the subject of this amendment
provide guidance under sections 1441, 1442, and 1443 of the Internal
Revenue Code (Code) on certain U.S. source income paid to foreign
persons, the related tax deposit and reporting requirements under
section 1461 of the Code, and the related changes under sections
163(f), 165(j), 871, 881, 1462, 1463, 3401, 3406, 6041, 6041A, 6042,
6045, 6049, 6050A, 6050N, 6109, 6114, 6402, 6413, and 6724 of the Code.
Need for Changes
On April 13, 1998, in Notice 98-16 (1998-15 I.R.B. 12), the IRS and
Treasury announced their decision to extend the effective date of the
final regulations, and to make correlative changes to the transition
rules for obtaining new withholding certificates and statements
containing the necessary information and representations required by
the final regulations. As published in the Federal Register on October
14, 1997 (62 FR 53387), the final regulations were generally applicable
to payments made after December 31, 1998, and generally granted
withholding agents until after December 31, 1999, to obtain the new
withholding certificates and statements required under those
regulations. This amendment serves to make the final regulations
applicable to payments made after December 31, 1999, and to require
mandatory use of the new withholding certificates and statements after
December 31, 2000. In addition, this amendment serves to address
typographical errors, and to withdraw the removal of Secs. 1.6045-1T
and 1.6045-2T since those sections were already removed on June 30,
1998, in TD 8772 (63 FR 35517).
Special Analyses
It has been determined that this Treasury decision is not a
significant regulatory action as defined in EO 12866. Therefore, a
regulatory assessment is not required. It has also been determined that
section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5)
does not apply to these regulations. Finally, it has been determined
that the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply
to these regulations because the regulations do not impose a collection
of information on small entities. Pursuant to 7805(f) of the Code, the
notice of proposed rulemaking preceding these regulations (61 FR 17614)
was submitted to the Small
[[Page 72184]]
Business Administration for comment on its impact on small business.
List of Subjects
26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
26 CFR Part 31
Employment taxes, Income taxes, Penalties, Pensions, Railroad
retirement, Reporting and recordkeeping requirements, Social security,
Unemployment compensation.
26 CFR Part 35a
Employment taxes, Income taxes, Reporting and recordkeeping
requirements.
26 CFR Part 301
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income
taxes, Penalties, Reporting and recordkeeping requirements.
Accordingly, under the authority of 26 U.S.C. 7805, 26 CFR parts 1,
31, 35a, and 301 are amended by making the following correcting
amendments:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. In Sec. 1.871-14, paragraph (h) is revised to read as
follows:
Sec. 1.871-14 Rules relating to repeal of tax on interest of
nonresident alien individuals and foreign corporations received from
certain portfolio debt investments.
* * * * *
(h) Effective date--(1) In general. This section shall apply to
payments of interest made after December 31, 1999.
(2) Transition rule. For purposes of this section, the validity of
a Form W-8 that was valid on January 1, 1998, under the regulations in
effect prior to January 1, 2000 (see 26 CFR parts 1 and 35a, revised
April 1, 1998) and expired, or will expire, at any time during 1998, is
extended until December 31, 1998. The validity of a Form W-8 that is
valid on or after January 1, 1999, remains valid until its validity
expires under the regulations in effect prior to January 1, 2000 (see
26 CFR parts 1 and 35a, revised April 1, 1998) or, if earlier, until
December 31, 2000. The rule in this paragraph (h)(2), however, does not
apply to extend the validity period of a Form W-8 that expires solely
by reason of changes in the circumstances of the person whose name is
on the certificate. Notwithstanding the first three sentences of this
paragraph (h)(2), a withholding agent or payor may choose to not take
advantage of the transition rule in this paragraph (h)(2) with respect
to one or more withholding certificates valid under the regulations in
effect prior to January 1, 2000 (see 26 CFR parts 1 and 35a, revised
April 1, 1998) and, therefore, may choose to obtain withholding
certificates conforming to the requirements described in this section
(new withholding certificates). For purposes of this section, a new
withholding certificate is deemed to satisfy the documentation
requirement under the regulations in effect prior to January 1, 2000
(see 26 CFR parts 1 and 35a, revised April 1, 1998). Further, a new
withholding certificate remains valid for the period specified in
Sec. 1.1441-1(e)(4)(ii), regardless of when the certificate is
obtained.
Par. 3. In Sec. 1.1441-1 as revised at 62 FR 53424, paragraph (f)
is revised to read as follows:
Sec. 1.1441-1 Requirement for the deduction and withholding of tax on
payments to foreign persons.
* * * * *
(f) Effective date--(1) In general. This section applies to
payments made after December 31, 1999.
(2) Transition rules--(i) Special rules for existing documentation.
For purposes of paragraphs (d)(3) and (e)(2)(i) of this section, the
validity of a withholding certificate (namely, Form W-8, 8233, 1001,
4224, or 1078 , or a statement described in Sec. 1.1441-5 in effect
prior to January 1, 2000 (see Sec. 1.1441-5 as contained in 26 CFR part
1, revised April 1, 1998)) that was valid on January 1, 1998 under the
regulations in effect prior to January 1, 2000 (see 26 CFR parts 1 and
35a, revised April 1, 1998) and expired, or will expire, at any time
during 1998, is extended until December 31, 1998. The validity of a
withholding certificate that is valid on or after January 1, 1999,
remains valid until its validity expires under the regulations in
effect prior to January 1, 2000 (see 26 CFR parts 1 and 35a, revised
April 1, 1998) or, if earlier, until December 31, 2000. The rule in
this paragraph (f)(2)(i), however, does not apply to extend the
validity period of a withholding certificate that expires solely by
reason of changes in the circumstances of the person whose name is on
the certificate. Notwithstanding the first three sentences of this
paragraph (f)(2)(i), a withholding agent may choose to not take
advantage of the transition rule in this paragraph (f)(2)(i) with
respect to one or more withholding certificates valid under the
regulations in effect prior to January 1, 2000 (see 26 CFR parts 1 and
35a, revised April 1, 1998) and, therefore, to require withholding
certificates conforming to the requirements described in this section
(new withholding certificates). For purposes of this section, a new
withholding certificate is deemed to satisfy the documentation
requirement under the regulations in effect prior to January 1, 2000
(see 26 CFR parts 1 and 35a, revised April 1, 1998). Further, a new
withholding certificate remains valid for the period specified in
paragraph (e)(4)(ii) of this section, regardless of when the
certificate is obtained.
(ii) Lack of documentation for past years. A taxpayer may elect to
apply the provisions of paragraphs (b)(7)(i)(B), (ii), and (iii) of
this section, dealing with liability for failure to obtain
documentation timely, to all of its open tax years, including tax years
that are currently under examination by the IRS. The election is made
by simply taking action under those provisions in the same manner as
the taxpayer would take action for payments made after December 31,
1999.
Par. 4. In Sec. 1.1441-4 as amended at 62 FR 53450, paragraph (g)
is revised to read as follows:
Sec. 1.1441-4 Exemptions from withholding for certain effectively
connected income and other amounts.
* * * * *
(g) Effective date--(1) General rule. This section applies to
payments made after December 31, 1999.
(2) Transition rules. The validity of a Form 4224 or 8233 that was
valid on January 1, 1998, under the regulations in effect prior to
January 1, 2000 (see 26 CFR part 1, revised April 1, 1998) and expired,
or will expire, at any time during 1998, is extended until December 31,
1998. The validity of a Form 4224 or 8233 that is valid on or after
January 1, 1999, remains valid until its validity expires under the
regulations in effect prior to January 1, 2000 (see 26 CFR part 1,
revised April 1, 1998) or, if earlier, until December 31, 2000. The
rule in this paragraph (g)(2), however, does not apply to extend the
validity period of a Form 4224 or 8223 that expires solely by reason of
changes in the circumstances of the person whose name is on the
certificate. Notwithstanding the first three sentences of this
paragraph (g)(2), a withholding agent may choose to not take advantage
of the transition rule in this paragraph (g)(2) with respect to one or
more withholding certificates valid under the regulations in effect
prior to January 1, 2000 (see 26 CFR part 1, revised April 1, 1998)
and, therefore, to
[[Page 72185]]
require withholding certificates conforming to the requirements
described in this section (new withholding certificates). For purposes
of this section, a new withholding certificate is deemed to satisfy the
documentation requirement under the regulations in effect prior to
January 1, 2000 (see 26 CFR part 1, revised April 1, 1998). Further, a
new withholding certificate remains valid for the period specified in
Sec. 1.1441-1(e)(4)(ii), regardless of when the certificate is
obtained.
Par. 5. In Sec. 1.1441-5 as revised at 62 FR 53452, paragraph (g)
is revised to read as follows:
Sec. 1.1441-5 Withholding on payments to partnerships, trusts, and
estates.
* * * * *
(g) Effective date--(1) General rule. This section applies to
payments made after December 31, 1999.
(2) Transition rules. The validity of a withholding certificate
that was valid on January 1, 1998, under the regulations in effect
prior to January 1, 2000 (see 26 CFR parts 1 and 35a, revised April 1,
1998) and expired, or will expire, at any time during 1998, is extended
until December 31, 1998. The validity of a withholding certificate that
is valid on or after January 1, 1999, remains valid until its validity
expires under the regulations in effect prior to January 1, 2000 (see
26 CFR parts 1 and 35a, revised April 1, 1998) or, if earlier, until
December 31, 2000. The rule in this paragraph (g)(2), however, does not
apply to extend the validity period of a withholding certificate that
expires solely by reason of changes in the circumstances of the person
whose name is on the certificate. Notwithstanding the first three
sentences of this paragraph (g)(2), a withholding agent may choose to
not take advantage of the transition rule in this paragraph (g)(2) with
respect to one or more withholding certificates valid under the
regulations in effect prior to January 1, 2000 (see 26 CFR parts 1 and
35a, revised April 1, 1998) and, therefore, to require withholding
certificates conforming to the requirements described in this section
(new withholding certificates). For purposes of this section, a new
withholding certificate is deemed to satisfy the documentation
requirement under the regulations in effect prior to January 1, 2000
(see 26 CFR parts 1 and 35a, revised April 1, 1998). Further, a new
withholding certificate remains valid for the period specified in
Sec. 1.1441-1(e)(4)(ii), regardless of when the certificate is
obtained.
Par. 6. In Sec. 1.1441-6 as revised at 62 FR 53458, paragraph (g)
is revised to read as follows:
Sec. 1.1441-6 Claim of reduced withholding under an income tax treaty.
* * * * *
(g) Effective date--(1) General rule. This section applies to
payments made after December 31, 1999.
(2) Transition rules. For purposes of this section, the validity of
a Form 1001 or 8233 that was valid on January 1, 1998, under the
regulations in effect prior to January 1, 2000 (see 26 CFR parts 1 and
35a, revised April 1, 1998) and expired, or will expire, at any time
during 1998, is extended until December 31, 1998. The validity of a
Form 1001 or 8233 is valid on or after January 1, 1999, remains valid
until its validity expires under the regulations in effect prior to
January 1, 2000 (see 26 CFR parts 1 and 35a, revised April 1, 1998) or,
if earlier, until December 31, 2000. The rule in this paragraph (g)(2),
however, does not apply to extend the validity period of a Form 1001 or
8233 that expires solely by reason of changes in the circumstances of
the person whose name is on the certificate or in interpretation of the
law under the regulations under Sec. 1.894-1T(d). Notwithstanding the
first three sentences of this paragraph (g)(2), a withholding agent may
choose to not take advantage of the transition rule in this paragraph
(g)(2) with respect to one or more withholding certificates valid under
the regulations in effect prior to January 1, 2000 (see 26 CFR parts 1
and 35a, revised April 1, 1998) and, therefore, to require withholding
certificates conforming to the requirements described in this section
(new withholding certificates). For purposes of this section, a new
withholding certificate is deemed to satisfy the documentation
requirement under the regulations in effect prior to January 1, 2000
(see 26 CFR parts 1 and 35a, revised April 1, 1998). Further, a new
withholding certificate remains valid for the period specified in
Sec. 1.1441-1(e)(4)(ii), regardless of when the certificate is
obtained.
Par. 7. In Sec. 1.1441-8 as redesignated and amended at 62 FR
53464, paragraph (f) is revised to read as follows:
Sec. 1.1441-8 Exemption from withholding for payments to foreign
governments, international organizations, foreign central banks of
issue, and the Bank for International Settlements.
* * * * *
(f) Effective date--(1) In general. This section applies to
payments made after December 31, 1999.
(2) Transition rules. For purposes of this section, the validity of
a Form 8709 that was valid on January 1, 1998, under the regulations in
effect prior to January 1, 2000 (see 26 CFR part 1, revised April 1,
1998) and expired, or will expire, at any time during 1998, is extended
until December 31, 1998. The validity of a Form 8709 that is valid on
or after January 1, 1999, remains valid until its validity expires
under the regulations in effect prior to January 1, 2000 (see 26 CFR
part 1, revised April 1, 1998) or, if earlier, until December 31, 2000.
The rule in this paragraph (f)(2), however, does not apply to extend
the validity period of a Form 8709 that expires solely by reason of
changes in the circumstances of the person whose name is on the
certificate. Notwithstanding the first three sentences of this
paragraph (f)(2), a withholding agent may choose to not take advantage
of the transition rule in this paragraph (f)(2) with respect to one or
more withholding certificates valid under the regulations in effect
prior to January 1, 2000 (see 26 CFR part 1, revised April 1, 1998)
and, therefore, to require withholding certificates conforming to the
requirements described in this section (new withholding certificates).
For purposes of this section, a new withholding certificate is deemed
to satisfy the documentation requirement under the regulations in
effect prior to January 1, 2000 (see 26 CFR part 1, revised April 1,
1998). Further, a new withholding certificate remains valid for the
period specified in Sec. 1.1441-1(e)(4)(ii), regardless of when the
certificate is obtained.
Par. 8. In Sec. 1.1441-9, paragraph (d) is revised to read as
follows:
Sec. 1.1441-9 Exemption from withholding on exempt income of a foreign
tax-exempt organization, including foreign private foundations.
* * * * *
(d) Effective date--(1) In general. This section applies to
payments made after December 31, 1999.
(2) Transition rules. For purposes of this section, the validity of
a Form W-8, 1001, or 4224 or a statement that was valid on January 1,
1998, under the regulations in effect prior to January 1, 2000 (see 26
CFR parts 1 and 35a, revised April 1, 1998) and expired, or will
expire, at any time during 1998, is extended until December 31, 1998.
The validity of a Form W-8, 1001, or 4224 or a statement that is valid
on or after January 1, 1999 remains valid until its validity expires
under the regulations in effect prior to January 1, 2000 (see 26 CFR
parts 1 and 35a, revised April 1,
[[Page 72186]]
1998) or, if earlier, until December 31, 2000. The rule in this
paragraph (d)(2), however, does not apply to extend the validity period
of a Form W-8, 1001, or 4224 or a statement that expires solely by
reason of changes in the circumstances of the person whose name is on
the certificate. Notwithstanding the first three sentences of this
paragraph (d)(2), a withholding agent may choose to not take advantage
of the transition rule in this paragraph (d)(2) with respect to one or
more withholding certificates valid under the regulations in effect
prior to January 1, 2000 (see 26 CFR parts 1 and 35a, revised April 1,
1998) and, therefore, to require withholding certificates conforming to
the requirements described in this section (new withholding
certificates). For purposes of this section, a new withholding
certificate is deemed to satisfy the documentation requirement under
the regulations in effect prior to January 1, 2000 (see 26 CFR parts 1
and 35a, revised April 1, 1998). Further, a new withholding certificate
remains valid for the period specified in Sec. 1.1441-1(e)(4)(ii),
regardless of when the certificate is obtained.
Par. 9. In Sec. 1.1443-1 as revised at 62 FR 53466, paragraph (c)
is revised to read as follows:
Sec. 1.1443-1 Foreign tax-exempt organizations.
* * * * *
(c) Effective date--(1) In general. This section applies to
payments made after December 31, 1999.
(2) Transition rules. For purposes of this section, the validity of
an affidavit or opinion of counsel described in Sec. 1.1443-1(b)(4)(i)
in effect prior to January 1, 2000 (see Sec. 1.1443-1(b)(4)(i) as
contained in 26 CFR part 1, revised April 1, 1998) that is valid on
December 31, 1998 is extended until December 31, 2000. However, a
withholding agent may choose to not take advantage of the transition
rule in this paragraph (c)(2) with respect to one or more withholding
certificates valid under the regulations in effect prior to January 1,
2000 (see 26 CFR part 1, revised April 1, 1998) and, therefore, to
require withholding certificates conforming to the requirements
described in this section (new withholding certificates). For purposes
of this section, a new withholding certificate is deemed to satisfy the
documentation requirement under the regulations in effect prior to
January 1, 2000 (see 26 CFR part 1, revised April 1, 1998). Further, a
new withholding certificate remains valid for the period specified in
Sec. 1.1441-1(e)(4)(ii), regardless of when the certificate is
obtained.
Sec. 1.6041-3 [Amended]
Par. 10. Section 1.6041-3 as amended at 62 FR 53472 is further
amended by removing the last sentence of the introductory text.
Par. 11. In Sec. 1.6042-3 as amended at 62 FR 53475, paragraph
(b)(5) is revised to read as follows:
Sec. 1.6042-3 Dividends subject to reporting.
* * * * *
(b) * * *
(5) Effective date--(i) General rule. The provisions of this
paragraph (b) apply to payments made after December 31, 1999.
(ii) Transition rules. The validity of a withholding certificate
(namely, Form W-8 or other form upon which the payor is permitted to
rely to hold the payee as a foreign person) that was valid on January
1, 1998, under the regulations in effect prior to January 1, 2000 (see
26 CFR parts 1 and 35a, revised April 1, 1998) and expired, or will
expire, at any time during 1998, is extended until December 31, 1998.
The validity of a withholding certificate that is valid on or after
January 1, 1999, remains valid until its validity expires under the
regulations in effect prior to January 1, 2000 (see 26 CFR parts 1 and
35a, revised April 1, 1998) or, if earlier, until December 31, 2000.
The rule in this paragraph (b)(5)(ii), however, does not apply to
extend the validity period of a withholding certificate that expires
solely by reason of changes in the circumstances of the person whose
name is on the certificate. Notwithstanding the first three sentences
of this paragraph (b)(5)(ii), a payor may choose not to take advantage
of the transition rule in this paragraph (b)(5)(ii) with respect to one
or more withholding certificates valid under the regulations in effect
prior to January 1, 2000 (see 26 CFR parts 1 and 35a, revised April 1,
1998) and, therefore, to require withholding certificates conforming to
the requirements described in this section (new withholding
certificates). For purposes of this section, a new withholding
certificate is deemed to satisfy the documentation requirement under
the regulations in effect prior to January 1, 2000 (see 26 CFR parts 1
and 35a, revised April 1, 1998). Further, a new withholding certificate
remains valid for the period specified in Sec. 1.1441-1(e)(4)(ii),
regardless of when the certificate is obtained.
Par. 12. In Sec. 1.6045-1 as amended at 62 FR 53476, paragraph
(g)(5) is revised to read as follows:
Sec. 1.6045-1 Returns of information of brokers and barter exchanges.
* * * * *
(g) * * *
(5) Effective date--(i) General rule. The provisions of this
paragraph (g) apply to payments made after December 31, 1999.
(ii) Transition rules. The validity of a withholding certificate
(namely, Form W-8 or other form upon which the payor is permitted to
rely to hold the payee as a foreign person) that was valid on January
1, 1998, under the regulations in effect prior to January 1, 2000 (see
26 CFR parts 1 and 35a, revised April 1, 1998) and expired, or will
expire, at any time during 1998, is extended until December 31, 1998.
The validity of a withholding certificate that is valid on or after
January 1, 1999, remains valid until its validity expires under the
regulations in effect prior to January 1, 2000 (see 26 CFR parts 1 and
35a, revised April 1, 1998) or, if earlier, until December 31, 2000.
The rule in this paragraph (g)(5)(ii), however, does not apply to
extend the validity period of a form that expires in 1998 solely by
reason of changes in the circumstances of the person whose name is on
the certificate. Notwithstanding the first three sentences of this
paragraph (g)(5)(ii), a payor may choose not to take advantage of the
transition rule in this paragraph (g)(5)(ii) with respect to one or
more withholding certificates valid under the regulations in effect
prior to January 1, 2000 (see 26 CFR parts 1 and 35a, revised April 1,
1998) and, therefore, to require withholding certificates conforming to
the requirements described in this section (new withholding
certificates). For purposes of this section, a new withholding
certificate is deemed to satisfy the documentation requirement under
the regulations in effect prior to January 1, 2000 (see 26 CFR parts 1
and 35a, revised April 1, 1998). Further, a new withholding certificate
remains valid for the period specified in Sec. 1.1441-1(e)(4)(ii),
regardless of when the certificate is obtained.
Par. 13. Effective December 31, 1999, the amendments removing
Secs. 1.6045-1T and 1.6045-2T, published at 62 FR 53480, are withdrawn.
Par. 14. In Sec. 1.6049-5 as amended at 62 FR 53483, paragraph (g)
is revised to read as follows:
Sec. 1.6049-5 Interest and original issue discount subject to
reporting after December 31, 1982.
* * * * *
(g) Effective date--(1) General rule. The provisions of paragraphs
(b)(6) through (15), (c), (d), and (e) of this
[[Page 72187]]
section apply to payments made after December 31, 1999.
(2) Transition rules. The validity of a withholding certificate
(namely, Form W-8 or other form upon which the payor is permitted to
rely to hold the payee as a foreign person) that was valid on January
1, 1998, under the regulations in effect prior to January 1, 2000 (see
26 CFR parts 1 and 35a, revised April 1, 1998) and expired, or will
expire, at any time during 1998, is extended until December 31, 1998.
The validity of a withholding certificate that is valid on or after
January 1, 1999, remains valid until its validity expires under the
regulations in effect prior to January 1, 2000 (see 26 CFR parts 1 and
35a, revised April 1, 1998) or, if earlier, until December 31, 2000.
The rule in this paragraph (g)(2), however, does not apply to extend
the validity period of a withholding certificate that expires solely by
reason of changes in the circumstances of the person whose name is on
the certificate. Notwithstanding the first three sentences of this
paragraph (g)(2), a payor may choose not to take advantage of the
transition rule in this paragraph (g)(2) with respect to one or more
withholding certificates valid under the regulations in effect prior to
January 1, 2000 (see 26 CFR parts 1 and 35a, revised April 1, 1998)
and, therefore, may require withholding certificates conforming to the
requirements described in this section (new withholding certificates).
For purposes of this section, a new withholding certificate is deemed
to satisfy the documentation requirement under the regulations in
effect prior to January 1, 2000 (see 26 CFR parts 1 and 35a, revised
April 1, 1998). Further, a new withholding certificate remains valid
for the period specified in Sec. 1.1441-1(e)(4)(ii), regardless of when
the certificate is obtained.
PARTS 1, 31, 35a, and 301 [AMENDED]
Par. 15. In the list below, for each section indicated in the left
column (which was added, revised, or amended at 62 FR 53387), remove
the language in the middle column and add the language in the right
column:
------------------------------------------------------------------------
Section Remove Add
------------------------------------------------------------------------
1.871-14(c)(2)(iii)......... 1.1441-1(c)(3)(ii).. 1.1441-1(e)(3)(ii).
1.871-14(c)(3)(ii), Example, October 12, 1999.... October 12, 2000.
first and sixth sentences.
1.871-14(c)(3)(ii), Example, December 31, 1999... December 31, 2000.
sixth sentence.
1.871-14(c)(3)(ii), Example, June 15, 2003....... June 15, 2004.
sixth and seventh sentences.
1.1441-1(b)(2)(iii)(B), Savings clause...... Saving clause.
fifth sentence.
1.1441-1(b)(2)(iv)(E), Actually maintain... Actually maintains.
second sentence.
1.1441-1(b)(3)(iii)(B), That cannot reliably Cannot reliably.
first sentence.
1.1441-1(b)(3)(iii)(C), last 1.1441-4(e)......... 1.1441-4(d).
sentence.
1.1441-1(b)(3)(x), Example W s................. W's.
1, seventh and ninth
sentences.
1.1441-1(b)(3)(x), Example W s................. W's.
2, sixth and seventh
sentences.
1.1441-1(b)(3)(x), Example X, nc............... X, Inc.
3, third sentence.
1.1441-1(b)(4)(i), first 1.871-7(b)(2)(i).... 1.871-7(b)(2).
sentence.
1.1441-1(b)(4)(xix)......... January 1, 1999..... January 1, 2000.
1.1441-1(b)(4)(xix)......... April 1, 1997....... April 1, 1998.
1.1441-1(b)(5)(viii)........ I.R.B. 1996-49...... 1996-2 C.B. 227.
1.1441-1(b)(7)(v), Example June 15, 1999....... June 15, 2000.
1, first, fourth, and
eighth sentences.
1.1441-1(b)(7)(v), Example September 30, 2001.. September 30, 2002.
1, third and ninth
sentences.
1.1441-1(b)(7)(v), Example March 15, 2000...... March 15, 2001.
1, ninth sentence.
1.1441-1(b)(7)(v), Example June 15, 1999....... June 15, 2000.
2, first, fourth, and
seventh sentences.
1.1441-1(b)(7)(v), Example September 30, 2001.. September 30, 2002.
2, third and seventh
sentences.
1.1441-1(b)(7)(v), Example March 15, 2000...... March 15, 2001.
2, seventh and ninth
sentences.
1.1441-1(c)(6)(ii)(B)....... January 1, 1999..... January 1, 2000.
1.1441-1(c)(6)(ii)(B)....... April 1, 1997....... April 1, 1998.
1.1441-1(e)(4)(ii)(A)....... September 30, 1999.. September 30, 2000.
1.1441-1(e)(4)(ii)(A)....... December 31, 2002... December 31, 2003.
1.1441-1(e)(4)(vi), sixth Provided the Provided on the
sentence. acceptable. acceptable.
1.1441-1(e)(4)(ix)(A)(2), Sec. 31.3406(c)1(c) Sec. 31.3406(c)-1(c
second sentence. (3)(ii). )(3)(ii).
1.1441-1(e)(5)(i), Reportable payments. Reportable amounts.
penultimate sentence.
1.1441-1(e)(5)(v)(A), third The intermediary.... The qualified
sentence. intermediary.
1.1441-1(e)(5)(v)(A), fourth The intermediary to. The qualified
sentence. intermediary to.
1.1441-1(e)(5)(v)(B), Paragraph (b)(3)(vi) Paragraph
introductory text, third (e)(3)(vi).
sentence.
1.1441-1(e)(5)(v)(B)(1), Withholding agent... Qualified
second sentence. intermediary.
1.1441-1(e)(5)(v)(C), first The intermediary.... The qualified
sentence. intermediary.
1.1441-2(a), last sentence.. 871(h)(5)(B)........ 871(h)(5)(B) or a
member of a
clearing
organization which
member is the
beneficial owner of
the obligation.
1.1441-2(b)(1)(ii), fifth Someone's........... Someone's.
sentence.
1.1441-2(b)(3)(iv).......... December 31, 1998... December 31, 1999.
1.1441-2(f)................. December 31, 1998... December 31, 1999.
1.1441-3(h)................. December 31, 1998... December 31, 1999.
[[Page 72188]]
1.1441-4(a)(2)(i), second United States....... United States and is
sentence. includable in the
beneficial owner's
gross income for
the taxable year.
1.1441-5(a)(6), second Withholding Withholding foreign
sentence. partnership. partnership.
1.1441-5(c)(2)(ii)(B), sixth Qualified Withholding foreign
sentence. intermediary. partnership.
1.1441-5(c)(2)(ii)(B), sixth Customers........... Partners.
sentence.
1.1441-5(c)(3)(iii)(D)...... That the partners... That the amounts
allocable to the
partners.
1.1441-5(d)(4), Example 2, Depending of........ Depending on.
second sentence.
1.1441-6(b)(1), first Sec. 1.1441-1(e)(1) Sec. 1.1441-1(e)(1)
sentence. (ii)(B). (ii)(A)(2).
1.1441-6(c)(2)(ii), first Upon a certificate.. Upon receipt of a
sentence. certificate.
1.1441-6(d), second sentence Rate of tax......... Rate of withholding.
1.441-7(g).................. December 31, 1998... December 31, 1999.
1.1461-1(b)(2)(v)........... Foreign partnership Foreign partnership
shall. (whether or not a
withholding foreign
partnership) shall.
1.1461-1(b)(2)(vi), Banks, securities Banks, or insurance
paragraph heading. dealers, or companies.
insurance companies.
1.1461-1(c)(4)(iv), first Certificate attached Certificate or
sentence. to the documentary
intermediary's or evidence attached
partnership to the
withholding intermediary's or
certificate that is partnership
from a qualified withholding
intermediary or a certificate.
withholding foreign
partnership.
1.1461-1(i)................. December 31, 1998... December 31, 1999.
1.1461-2(a)(1), third An adjustment to.... A refund of.
sentence.
1.1461-2(a)(3), first Beneficial owner.... Beneficial owner or
sentence. payee.
1.1461-2(a)(4), Example December 1999....... December 2000.
1(i), second sentence.
1.1461-2(a)(4), Example February 10, 2000... February 10, 2001.
1(i), third sentence.
1.1461-2(a)(4), Example 1999................ 2000.
1(ii), first, second, and
last sentences.
1.1461-2(a)(4), Example March 15, 2000...... March 15, 2001.
1(ii), first sentence.
1.1461-2(a)(4), Example 2000................ 2001.
1(ii), third sentence.
1.1461-2(a)(4), Example 2, 2000................ 2001.
second and last sentences.
1.1461-2(a)(4), Example 2, June 2000........... June 2001.
second sentence.
1.1461-2(a)(4), Example 2, July 15, 2000....... July 15, 2001.
third sentence.
1.1461-2(a)(4), Example 2, 1999................ 2000.
third sentence.
1.1461-2(a)(4), Example 2, March 15, 2001...... March 15, 2002.
last sentence.
1.1461-2(a)(4), Example 3, February 15, 2000... February 15, 2001.
last sentence.
1.1461-2(a)(4), Example 3, March 15, 2000...... March 15, 2001.
last sentence.
1.1461-2(d)................. December 31, 1998... December 31, 1999.
1.1462-1(c)................. December 31, 1998... December 31, 1999.
1.1463-1(a), last sentence.. Sec. 1.1441-7(b)(7) Sec. 1.1441-7(b).
1.1463-1(b)................. December 31, 1989... December 31, 1999.
1.1464-1(b)................. Sec. 1.1461-4...... Sec. 1.1461-2.
1.6041-4(d)................. December 31, 1998... December 31, 1999.
1.6041A-1(d)(3)(i)(B), first If payments made.... If payments are
sentence. made.
1.6041A-1(d)(3)(iv), Amount paid......... Amounts paid.
paragraph heading.
1.6041A-1(d)(3)(v).......... December 31, 1998... December 31, 1999.
1.6043-2(a), first, second, 966................. 1099.
and last sentences.
1.6045-1(d)(6)(ii)(B)....... December 31, 1998... December 31, 1999.
1.6045-1(g)(3)(iv), second Example 7........... Example 6.
sentence.
1.6045-1(g)(4), Example Y s................. Y's.
7(ii), last sentence.
1.6049-4(c)(1)(ii)(A), Certificate meeting Certificate stating
second sentence. the certification that each member of
requirements of the partnership
paragraphs meets the
(c)(2)(ii)(A) (1) requirements of
through (5) of this paragraphs
section. (c)(1)(ii)(A)(1)
through (4) of this
section.
1.6049-4(d)(3)(ii)(B)....... December 31, 1998... December 31, 1999.
1.6049-5(b)(12), first Returns of Payments that.
sentence. information are not
required for
payments that.
1.6049-5(c)(4)(i), first The payor may....... The bank or other
sentence. financial
institution may.
1.6049-5(c)(4)(ii), second Then the financial Then the bank or
sentence. institution. other financial
institution.
1.6049-5(c)(4)(v)........... January 1, 1999..... January 1, 2000.
1.6049-5(d)(2)(ii), second Publicly traded..... Actively traded.
and last sentences.
1.6049-5(d)(2)(ii), eighth Is less than 31..... Is equal to or less
sentence. than 31.
1.6049-5(e)(1)(i), The amount.......... An amount is
introductory text. described in this
paragraph (e)(1)(i)
if it.
1.6049-5(e)(1)(ii).......... The amount.......... An amount is
described in this
paragraph
(e)(1)(ii) if it.
1.6049-5(e)(4), second Specifically Specifically
sentence. identifies. identify.
1.6049-5(e)(5), Example 5, Of is section....... Of this section.
last sentence.
1.6049-5(e)(5), Example 9, A holds............. A holds.
second sentence.
1.6049-5(e)(5), Example 9, Paid to a........... Paid to A.
third sentence.
1.6049-5(e)(5), Example 9 , A's................. A's.
third sentence.
1.6049-5(e)(5), Example 9, To a by DB.......... To A by DB.
last sentence.
1.6050N-1(e), first sentence Is applies to....... Applies to.
1.6050N-1(e), last sentence. December 31, 1998... December 31, 1999.
[[Page 72189]]
31.3401(a)(6)-1(e), January 1, 1999..... January 1, 2000.
paragraph heading.
31.3401(a)(6)-1(e), first January 1, 1999..... January 1, 2000.
sentence.
31.3401(a)(6)-1(f), December 31, 1998... December 31, 1999.
paragraph heading.
31.3401(a)(6)-1(f), first December 31, 1998... December 31, 1999.
sentence.
31.3406(g)-1(e), first December 31, 1998... December 31, 1999.
sentence.
31.3406(h)-2(d), penultimate December 31, 1998... December 31, 1999.
sentence.
31.9999-0................... January 1, 1999..... January 1, 2000.
301.6114-1(b)(4)(ii)(C), December 31, 1998... December 31, 1999.
introductory text.
301.6114-1(b)(4)(ii)(D)..... December 31, 1998... December 31, 1999.
301.6724-1(g)(2) Q-11....... January 1, 1999..... January 1, 2000.
301.6724-1(g)(2) Q-11....... April 1, 1997....... April 1, 1998.
301.6724-1(g)(2) A-11....... January 1, 1999..... January 1, 2000.
301.6724-1(g)(2) A-11....... April 1, 1997....... April 1, 1998.
301.6724-1(g)(3), first December 31, 1998... December 31, 1999.
sentence.
301.6724-1(g)(3), last January 1, 1999..... January 1, 2000.
sentence in both places.
301.6724-1(g)(3), last April 1, 1997....... April 1, 1998.
sentence.
------------------------------------------------------------------------
Robert E. Wenzel,
Deputy Commissioner of Internal Revenue.
Approved: December 7, 1998.
Donald C. Lubick,
Assistant Secretary of the Treasury.
[FR Doc. 98-34359 Filed 12-30-98; 8:45 am]
BILLING CODE 4830-01-U
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.