[Federal Register Volume 61, Number 159 (Thursday, August 15, 1996)]
[Proposed Rules]
[Pages 42401-42402]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-20665]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1, 31, 35a, 301, 502, 503, 509, 513, 514, 516, 517, 
520 and 521

[INTL-062-90; INTL-0032-93; INTL-52-86; INTL-52-94]
RIN 1545-AO27; 1545-AR90; 1545-AL99; 1545-AT00


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 Part 
35a and of Certain Regulations Under Income Tax Treaties; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correction to notice of proposed rulemaking.

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SUMMARY: This document contains corrections to the notice of proposed 
rulemaking (INTL-062-90; INTL-0032-93; INTL-52-86; INTL-52-94) which 
was published in the Federal Register for Monday, April 22, 1996 (61 FR 
17614). The notice of proposed rulemaking relates to the withholding of 
income tax under sections 1441 and 1442 on certain U.S. source income 
paid to foreign persons, the related tax deposit and reporting 
requirements under section 1461, and the related collection, refunds, 
and credits of withheld tax under sections 1461 through 1463 and 
section 6402. In addition, the notice of proposed rulemaking also 
relates to the statutory exemption under sections 871(h) and 881(c) for 
portfolio interest. The notice of proposed rulemaking proposes to 
remove certain temporary employment tax regulations under the Interest 
and Dividend Compliance Act of 1983 and to amend existing regulations 
under sections 6041A and 6050N. The notice of proposed rulemaking also 
proposes changes to proposed regulations contained in project number 
INTL-52-86, published on February 29, 1988 (53 FR 5991) under sections 
6041, 6042, 6045, and 6049. The document proposes related changes to 
the regulations under sections 163(f), 165(j), 3401, 3406, 6114, and 
6413 and proposes further changes to the proposed regulations under 
section 6109 contained in project number IL-0024-94 published on June 
8, 1995 (60 FR 30211). The document proposes to remove certain 
regulations under income tax treaties.

FOR FURTHER INFORMATION CONTACT: Philip Garlett, (202) 622-3880 for 
questions on proposed regulations under sections 1441, 1442, 1461, 
1462, 1463, 3401, 6402, and 6413; Gwendolyn Stanley, (202) 622-3860 for 
questions on payments to partnerships; Carl Cooper, (202) 622-3840 for 
questions on proposed regulations under section 163(f), 165(j), 871(h) 
and 881(c) and on withholding agreements; Teresa Burridge Hughes, (202) 
622-3880 for questions on proposed regulations under section 6041 
through 6049, 6050N; Teresa Burridge Hughes, (202) 622-3880 and Renay 
France, (202) 622-4910 for questions on proposed regulations under 
section 3406; Elissa Shendalman, (202) 622-3870 on proposed regulations 
under sections 6045 and 6049 relating to the reporting of payments made 
in a currency other than the U.S. dollar or transactions subject to 
section 988; Lilo Hester, (202) 874-1490 for questions on proposed 
regulations under section 6109; David F. Bergkuist, (202) 622-3860 for 
questions on proposed regulations under section 6114 (numbers are not 
toll-free).

SUPPLEMENTARY INFORMATION:

Background

    The notice of proposed rulemaking that is the subject of these 
corrections are under sections 163(f), 165(j), 871, 881, 1441, 1442, 
1461, 1462, 1463, 3401, 3406, 6041, 6041A, 6042, 6045, 6049, 6050N, 
6109, 6114, 6402, and 6413 of the Internal Revenue Code.

Need for Correction

    As published, the notice of proposed rulemaking (INTL-062-90; INTL-
0032-93; INTL-52-86; INTL-52-94) contain errors which may prove to be 
misleading and are in need of clarification.

Correction of Publication

    Accordingly, the publication of the notice of proposed rulemaking 
(INTL-062-90; INTL-0032-93; INTL-52-86; INTL-52-94) which is the 
subject of FR Doc. 96-8936 is corrected as follows:
    1. On page 17619, column 1, in the preamble following the paragraph 
heading ``Section 1.165-12 Denial of Deduction for Losses on 
Registration-Required Obligations Not in Registered Form'', the last 
line in the first paragraph is corrected to read ``in Section 35a.9999-
4T, A-5 that the person is not a U.S. person.'', and the italicized 
heading preceding the second paragraph is removed.
    2. On page 17621, column 1, in the preamble following the paragraph 
heading ``Section 1.1441-1 Requirement for the Withholding of Tax on 
Payments to Foreign Persons'', line 16 from the top of the column, the 
language ``continue to apply trusts. See Sec. 1.1441-'' is corrected to 
read ``continue to apply to trusts. See Sec. 1.1441-''.
    3. On page 17621, column 3, in the preamble following the paragraph 
heading ``Section 1.1441-1 Requirement for the Withholding of Tax on 
Payments to Foreign Persons'', the second full paragraph, line 3 from 
the bottom of the paragraph, the language ``Sec. 1.9999-5(b), A9 and 
that are proposed'' is corrected to read ``Sec. 35a.9999-5(b), A-9 and 
that are proposed''.
    4. On page 17626, column 3, in the preamble following the paragraph 
heading ``Section 1.1441-4 Certain Exemptions From Withholding'' the 
first full paragraph, line 11, the language ``(which expired on 
February, 1993). A'' is corrected to read ``(which expired on February 
2, 1993). A''.
    5. On page 17628, column 2, in the preamble under the paragraph 
heading ``Section 1.1441-7 General Provisions Relating to Withholding 
Agents'', the

[[Page 42402]]

italicized second paragraph from the bottom of the column, is corrected 
to read as follows:
    Section 1.1441-7(b)(3) of the existing regulations is proposed to 
be removed, pending comments on the continuing necessity of providing 
guidance on tax-free covenant bonds.
    6. On page 17630, column 2, in the preamble under the paragraph 
heading ``Section 1.1461-1 Deposit and Return of Tax Withheld'', the 
last two paragraphs under that paragraph heading are merged.
    7. On page 17632, column 1, in the preamble following the paragraph 
heading ``Section 31.3401(a)(6)-1(e) Income Exempt From Income Tax'', 
line 18 from the top of the column, the language ``withholding 
certificate should to be'' is corrected to read ``withholding 
certificate should be''.


Sec. 1.871-14  [Corrected]

    8. On page 17633, column 2, Sec. 1.871-14 (a), line 4 from the top 
of the column, the language ``871(h) or 882(a) if such interest is'' is 
corrected to read ``871(b) or 882(a) if such interest is''.


Sec. 1.1441-1  [Corrected]

    9. On page 17635, column 1, Sec. 1.1441-1 (b), line 10, the 
language ``of tax and for the withholding agent'' is corrected to read 
``of tax and for which the withholding agent''.
    10. On page 17636, column 2, Sec. 1.1441-1 (c)(6)(ii)(B), line 17 
from the top of the column, the language ``payments made to a single 
foreign entity'' is corrected to read ``payments made to a single 
foreign entity''.
    11. On page 17637, column 3, Sec. 1.1441-1 (e)(3)(ii)(E), line 1, 
the language ``If the information is not assuming'' is corrected to 
read ``If the qualified intermediary is not assuming''.
    12. On page 17638, column 2, Sec. 1.1441-1 (e)(4)(ii)(B), line 10, 
the language ``1(c)(2)(ii) or the taxpayer identifying'' is corrected 
to read ``1(c)(2)(i) or the taxpayer identifying''.
    13. On page 17641, column 2, Sec. 1.1441-1 (f)(3)(i), line 4, the 
language ``is presumed made to a U.S. person if the'' is corrected to 
read ``is presumed made to a U.S. person unless the''.


Sec. 1.1441-3  [Corrected]

    14. On page 17645, column 3, Sec. 1.1441-3 (e)(2), line 17, the 
language ``dollar amounts withheld from year to'' is corrected to read 
``dollar amounts withheld and from year to''.


Sec. 1.1441-4  [Corrected]

    15. On page 17647, column 2, Sec. 1.1441-4 (b)(2)(ii) introductory 
text, line 6, the language ``the penalties of perjury, and contain 
the'' is corrected to read ``penalties of perjury, and contain the''.
    16. On page 17648, column 2, Sec. 1.1441-4 (f)(2), line 3, the 
language ``a date that is 60 days after the date these'' is corrected 
to read ``the date that is 60 days after the date these''.


Sec. 1.1441-6  [Corrected]

    17. On page 17649, column 3, Sec. 1.1441-6 (b)(1), line 22 from the 
top of the column, the language ``meaning of section 267(b) and 
707(b),'' is corrected to read ``meaning of section 267(b) or 
707(b),''.
    18. On page 17649, column 3, Sec. 1.1441-6 (b)(1), lines 31 and 32 
from the top of the column, the language ``this chapter. See paragraph 
(d) of this section for circumstances under which'' is corrected to 
read ``this chapter. See Sec. 1.1441-1(e)(4)(v) for circumstances under 
which''.


Sec. 1.1461-2   [Corrected]

    19. On page 17656, column 3, Sec. 1.1461-2 (a)(2)(ii), line 8, the 
language ``must provide a copy or such receipt to'' is corrected to 
read ``must provide a copy of such receipt to''.


Sec. 1.6041-1   [Corrected]

    20. On page 17657, column 3, Sec. 1.6041-1 (a)(1)(ii), line 14, the 
language ``royalties); or section 6050P(a) or (b)'' is corrected to 
read ``royalties); or section 6050P(a) and (b)''.


Sec. 1.6041-4   [Corrected]

    21. On page 17658, column 2, Sec. 1.6041-4 (b)(1), line 8, the 
language ``middleman. The term middleman'' is corrected to read 
``middleman and the term middleman''.
    22. On page 17658, column 3, Sec. 1.6041-4 (d), line 10, the 
language ``furnished such certification or'' is corrected to read 
``furnished required certification or''.


Sec. 1.6045-1   [Corrected]

    23. On page 17660, column 3, amendatory instruction 4. under ``Par. 
34.'', is corrected to read as follows:
    4. Revising paragraph (g)(1) heading; removing paragraph (g)(1) 
introductory text; and revising paragraphs (g)(1)(i) and (g)(2) through 
(g)(4).
    24. On page 17661, column 2, Sec. 1.6045-1 (g)(4)(ii), last line in 
the column, the language ``holds a valid Form W-8 on a date that'' is 
corrected to read ``holds a valid Form W-8 on the date that''.


Sec. 1.6049-4   [Corrected]

    25. On page 17662, column 1, Sec. 1.6049-4 (c)(1)(ii)(A)(6), line 2 
from the top of the column, the language ``established on or before a 
date that is 60'' is corrected to read ``established on or before the 
date that is 60''.


Sec. 1.6049-5   [Corrected]

    26. On page 17664, column 1, Sec. 1.6049-5 (g)(2), line 2, the 
language ``holds a valid Form W-8 on a date that'' is corrected to read 
``holds a valid Form W-8 on the date that''.


Sec. 1.6050N-1   [Corrected]

    27. On page 17664, column 3, Sec. 1.6050N-1 (e)(2), line 2, the 
language ``holds a valid Form W-8 on a date that'' is corrected to read 
``holds a valid Form W-8 on the date that''.


Sec. 31.3406(g)-1   [Corrected]

    28. On page 17665, column 2, Sec. 31.3406(g)-1 (e), line 10, the 
language ``evidence described in Sec. 1.6049-5(2)(ii)'' is corrected to 
read ``evidence described in Sec. 1.6049-5(c)(2)(ii)''.


Sec. 301.6114-1   [Corrected]

    29. On page 17666, column 2, amendatory instruction 3. under ``Par. 
49.'' is corrected to read as follows:
    3. Revising paragraphs (c)(1) and (d)(4)(v).
    The revisions read as follows:


Sec. 301.6114-1   [Corrected]

    30. On page 17666, column 3, Sec. 301.6114-1 (a)(1)(ii), line 7 
from the top of the column, the language ``under the penalties of 
perjury (as well'' is corrected to read ``under penalties of perjury 
(as well''.
Cynthia E. Grigsby,
Chief, Regulations Unit, Assistant Chief Counsel (Corporate).
[FR Doc. 96-20665 Filed 8-14-96; 8:45 am]
BILLING CODE 4830-01-P