[Federal Register Volume 72, Number 90 (Thursday, May 10, 2007)]
[Rules and Regulations]
[Pages 26542-26543]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-8922]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9323]
RIN 1545-BF64


Revisions to Regulations Relating to Repeal of Tax on Interest of 
Nonresident Alien Individuals and Foreign Corporations Received From 
Certain Portfolio Debt Investments; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

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SUMMARY: This document contains a correction to final regulations (TD 
9323) that were published in the Federal Register on Thursday, April 
12, 2007 (72 FR 18386) relating to the exclusion from gross income of 
portfolio interest paid to a nonresident alien individual or foreign 
corporation.

DATES: The correction is effective May 10, 2007.

FOR FURTHER INFORMATION CONTACT: Kathryn Holman of the Office of the 
Associate Chief Counsel (International), (202) 622-3840 (not a toll-
free call).

SUPPLEMENTARY INFORMATION:

Background

    The final regulations that are the subject of this correction are 
under sections 871 and 881 of the Internal Revenue Code.

Need for Correction

    As published, final regulations (TD 9323) contain an error that may 
prove to be misleading and is in need of clarification.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

[[Page 26543]]

Correction of Publication

0
Accordingly, 26 CFR part 1 is corrected by making the following 
correcting amendment:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

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

0
Par. 2. Section 1.871-14 is amended by revising the second sentence of 
paragraph (g)(3)(ii) 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.

* * * * *
    (g) * * *
    (3) * * *
    (ii) * * * For example, in the case of U.S. source interest paid by 
a domestic corporation to a domestic partnership or withholding foreign 
partnership (as defined in Sec.  1.1441-5(c)(2)), the 10-percent 
shareholder test is applied when any distributions that include the 
interest are made to a foreign partner and, to the extent that a 
foreign partner's distributive share of the interest has not actually 
been distributed, on the earlier of the date that the statement 
required under section 6031(b) is mailed or otherwise provided to such 
partner, or the due date for furnishing such statement. * * *
* * * * *

LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel (Procedure and Administration).
[FR Doc. E7-8922 Filed 5-9-07; 8:45 am]
BILLING CODE 4830-01-P