[Federal Register Volume 86, Number 43 (Monday, March 8, 2021)]
[Rules and Regulations]
[Page 13191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00504]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9926]
RIN 1545-BO60


Title: Withholding of Tax and Information Reporting With Respect 
to Interests in Partnerships Engaged in a U.S. Trade or Business; 
Correcting Amendment

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

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SUMMARY: This document contains a correction to final regulations 
(Treasury Decision 9926) that were published in the Federal Register on 
Monday, November 30, 2020. The final regulations provide guidance 
related to the withholding of tax and information reporting with 
respect to certain dispositions of interests in partnerships engaged in 
a trade or business within the United States.

DATES: This correction is effective on March 8, 2021 and applies to 
partnership taxable years beginning on or after November 30, 2020. See 
Sec.  1.1446-7.

FOR FURTHER INFORMATION CONTACT: Chadwick Rowland or Ronald M. Gootzeit 
(202) 317-6937 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

    The final regulations (TD 9926) that are the subject of this 
correction are issued under section 1446 of the Code.

Need for Correction

    As published, November 30, 2020 (85 FR 76910), the final 
regulations (TD 9926) contain an error that needs to be corrected.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Correction of Publication

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

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. Amend Sec.  1.1446-4, by revising the last seven sentences of 
paragraph (f)(1).''


Sec.  1.1446-4  Publicly traded partnerships.

* * * * *
    (f)* * * (1) * * * LTP makes a distribution subject to section 1446 
of $100 to UTP during its taxable year beginning January 1, 2020, and 
withholds 37 percent (the highest rate in section 1) ($37) of that 
distribution under section 1446. UTP receives a net distribution of $63 
which it immediately redistributes to its partners. UTP has a liability 
to pay 37 percent of the total actual and deemed distribution it makes 
to its foreign partners as a section 1446 withholding tax. UTP may 
credit the $37 withheld by LTP against this liability as if it were 
paid by UTP. See Sec. Sec.  1.1462-1(b) and 1.1446-5(b)(1). When UTP 
distributes the $63 it actually receives from LTP to its partners, UTP 
is treated for purposes of section 1446 as if it made a distribution of 
$100 to its partners ($63 actual distribution and $37 deemed 
distribution). UTP's partners (U.S. and foreign) may claim a credit 
against their U.S. income tax liability for their allocable share of 
the $37 of 1446 tax paid on their behalf.
* * * * *

Crystal Pemberton,
Senior Federal Register Liaison, Legal Processing Division, Associate 
Chief Counsel, (Procedure and Administration).
[FR Doc. 2021-00504 Filed 3-5-21; 8:45 am]
BILLING CODE 4830-01-P