[Federal Register Volume 67, Number 12 (Thursday, January 17, 2002)]
[Proposed Rules]
[Pages 2387-2388]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-1126]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1 and 301

[REG-159079-01]
RIN 1545-BA38


Taxpayer Identification Number Rule Where Taxpayer Claims Treaty 
Rate and Is Entitled to an Immediate Payment

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations.

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SUMMARY: This document contains proposed regulations that provide 
additional guidance needed to comply with the withholding rules under 
section 1441 and conforming changes to the regulations under section 
6109. Specifically, these proposed regulations provide rules that 
facilitate compliance by withholding agents where foreign individuals 
who are claiming reduced rates of withholding under an income tax 
treaty receive an unexpected payment from the withholding agent, yet do 
not possess the required individual taxpayer identification number. The 
text of the temporary regulations on this subject in this issue of the 
Federal Register, also serves as the text of these proposed regulations 
set forth in this cross-referenced notice of proposed rulemaking.

DATES: Written or electronic comments and requests for a public hearing 
must be received by April 17, 2002.

ADDRESSES: Send submissions to: CC:ITA:RU (REG-159079-01), room 5226, 
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, 
DC 20044. Submissions may be hand delivered between the hours of 8 a.m. 
and 5 p.m. to: CC:ITA:RU (REG-159079-01), Courier's Desk, Internal 
Revenue Service, 1111 Constitution Avenue, NW, Washington, DC. 
Alternatively, taxpayers may submit comments electronically via the 
Internet by selecting the ``Tax Regs'' option of the IRS Home Page or 
by submitting comments directly to the IRS internet site at http://irs.gov/tax_regs/reglist.html.

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Jonathan A. Sambur at (202) 622-3840; concerning submissions, Donna 
Poindexter, (202) 622-7180 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register amend 26 CFR parts 1 and 301. The 
temporary regulations provide rules that facilitate compliance by 
withholding agents where foreign individuals who are claiming reduced 
rates of withholding under an income tax treaty receive an unexpected 
payment from the withholding agent, yet do not possess the required 
individual taxpayer identification number. The text of the temporary 
regulations also serves as the text of these proposed regulations. The 
preamble to the temporary regulations explains the temporary 
regulations and these proposed regulations.

Special Analyses

    It has been determined that this notice of proposed rulemaking is 
not a significant regulatory action as defined in Executive Order 
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. Because these 
regulations impose no new collection of information on small entities, 
a Regulatory Flexibility Analysis under the Regulatory Flexibility Act 
(5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of 
the Internal Revenue Code, this notice of proposed rulemaking will be 
submitted to the Chief Counsel for Advocacy of the Small Business 
Administration for comment on its impact on small business.

Comments and Requests for a Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any written (preferably a signed 
original and eight (8) copies) or electronically generated comments 
that are submitted timely to the IRS. The IRS and Treasury Department 
request comments on the clarity of the proposed rules and how they can 
be made easier to understand. All comments will be available for public 
inspection and copying. A public hearing will be scheduled if requested 
in writing by any person that timely submits written comments. If a 
public hearing is scheduled, notice of the date, time, and place for 
the public hearing will be published in the Federal Register.

Drafting Information

    The principal author of these regulations is Jonathan A. Sambur, 
Office of the Associate Chief Counsel (International). However, other 
personnel from the IRS and Treasury Department participated in their 
development.

List of Subjects

26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 301

    Administrative practice and procedure, Income taxes, Reporting and 
recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR parts 1 and 301 are proposed to be amended as 
follows:

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. Section 1.1441-1 is amended as follows:


Sec. 1.1441-1  Requirement for the deduction and withholding of tax on 
payments to foreign persons.

    [The text of the proposed amendments to this section is the same as 
the text of Sec. 1.1441-1T published elsewhere in this issue of the 
Federal Register].
    Par. 3. Section 1.1441-6 is amended as follows:

[[Page 2388]]

Sec. 1.1441-6  Claim of reduced withholding under an income tax treaty.

    [The text of the proposed amendments to this section is the same as 
the text of Sec. 1.1441-6T published elsewhere in this issue of the 
Federal Register].

PART 301-- ADMINISTRATIVE PRACTICES AND PROCEDURE, INCOME TAXES, 
REPORTING AND RECORDKEEPING REQUIREMENTS

    Par. 4. The authority citation for part 301 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805 * * *

    Par. 5. Section 301.6109-1 is amended as follows:


Sec. 301.6109-1  Identifying numbers.

    [The text of the proposed amendments to this section is the same as 
the text of Sec. 301.6109-1T published elsewhere in this issue of the 
Federal Register].

Robert E. Wenzel,
Deputy Commissioner of Internal Revenue.
[FR Doc. 02-1126 Filed 1-16-02; 8:45 am]
BILLING CODE 4830-01-P