PATH Act Changes to Section 1445, 8398-8402 [2016-03421]
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8398
Federal Register / Vol. 81, No. 33 / Friday, February 19, 2016 / Rules and Regulations
Tompkinsville, KY, Tompkinsville-Monroe
County, RNAV (GPS) RWY 22, Amdt 1B
Orange, MA, Orange Muni, NDB RWY 1,
Amdt 1A, CANCELED
Orange, MA, Orange Muni, NDB RWY 32,
Amdt 1A, CANCELED
Vineyard Haven, MA, Martha’s Vineyard,
VOR RWY 24, Amdt 2A, CANCELED
Baltimore, MD, Baltimore/Washington Intl
Thurgood Marshall, VOR RWY 10, Amdt
17B, CANCELED
Baltimore, MD, Baltimore/Washington Intl
Thurgood Marshall, VOR/DME RWY 33L,
Amdt 3A, CANCELED
Eliot, ME, Littlebrook Air Park, NDB–B,
Amdt 1, CANCELED
Sanford, ME, Sanford Seacoast Rgnl, VOR
RWY 7, Amdt 4C, CANCELED
Alpena, MI, Alpena County Rgnl, VOR RWY
1, Amdt 14D, CANCELED
Hancock, MI, Houghton County Memorial,
VOR RWY 13, Amdt 16, CANCELED
Fairmont, MN, Fairmont Muni, VOR RWY
13, Amdt 5, CANCELED
Fairmont, MN, Fairmont Muni, VOR RWY
31, Amdt 8, CANCELED
Hibbing, MN, Range Rgnl, VOR RWY 13,
Amdt 13A, CANCELED
Hibbing, MN, Range Rgnl, VOR RWY 31,
Amdt 17, CANCELED
Willmar, MN, Willmar Muni-John L Rice
Field, VOR RWY 13, Orig, CANCELED
Glasgow, MT, Wokal Field/Glasgow Intl,
NDB RWY 30, Amdt 2A, CANCELED
Beaufort, NC, Michael J Smith Field, NDB
RWY 21, Amdt 2, CANCELED
Tarboro, NC, Tarboro-Edgecombe, NDB RWY
27, Orig, CANCELED
Berlin, NH, Berlin Rgnl, VOR–B, AMDT 3A,
CANCELED
Manchester, NH, Manchester, VOR RWY 35,
Amdt 15E, CANCELED
Portsmouth, NH, Portsmouth Intl at Pease,
VOR RWY 16, Amdt 5B, CANCELED
Portsmouth, NH, Portsmouth Intl at Pease,
VOR RWY 34, Orig–D, CANCELED
Newark, NJ, Newark Liberty Intl, VOR/DME
RWY 22L, Orig–D, CANCELED
Newark, NJ, Newark Liberty Intl, VOR/DME
RWY 22R, Amdt 4D, CANCELED
Hudson, NY, Columbia County, Takeoff
Minimums and Obstacle DP, Amdt 1
White Plains, NY, Westchester County, VOR/
DME–A, Amdt 4B, CANCELED
Knoxville, TN, Mc Ghee Tyson, Takeoff
Minimums and Obstacle DP, Amdt 8
RESCINDED: On December 7, 2015 (80 FR
75923), the FAA published an Amendment
in Docket No. 31049, Amdt No. 3671, to Part
97 of the Federal Aviation Regulations, under
section 97.20. The following entry for Port
Angeles, WA, effective February 4, 2016, is
hereby rescinded in its entirety:
Port Angeles, WA, William R Fairchild Intl,
WATTR SIX, Graphic DP
RESCINDED: On January 26, 2016 (81 FR
4174), the FAA published an Amendment in
Docket No. 31051, Amdt No. 3673, to Part 97
of the Federal Aviation Regulations, under
sections 97.29 and 97.33. The following
entries for Port Angeles, WA, effective
February 4, 2016, are hereby rescinded in
their entirety:
Port Angeles, WA, William R Fairchild Intl,
ILS OR LOC RWY 8, Amdt 3
VerDate Sep<11>2014
16:19 Feb 18, 2016
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Port Angeles, WA, William R Fairchild Intl,
RNAV (GPS) RWY 8, Amdt 1
Port Angeles, WA, William R Fairchild Intl,
RNAV (GPS) RWY 26, Amdt 1
[FR Doc. 2016–03368 Filed 2–18–16; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9751]
RIN 1545–BN22
PATH Act Changes to Section 1445
Internal Revenue Service (IRS),
Treasury.
ACTION: Final and temporary
regulations.
AGENCY:
This document contains final
and temporary regulations relating to
the taxation of, and withholding on,
foreign persons upon certain
dispositions of, and distributions with
respect to, United States real property
interests (USRPIs). The regulations
reflect changes made by the Protecting
Americans from Tax Hikes Act of 2015
(the PATH Act). In addition, the
regulations update certain mailing
addresses listed in regulations under
sections 897 and 1445. These
regulations affect certain holders of
USRPIs and withholding agents that are
required to withhold tax on certain
dispositions of, and distributions with
respect to, USRPIs. This document also
requests comments on certain other
aspects of the PATH Act that apply to
dispositions of, and distributions with
respect to, USRPIs.
DATES:
Effective date: These regulations are
effective on February 19, 2016.
Applicability date: For dates of
applicability, see §§ 1.1445–1(h),
1.1445–2(e), and 1.1445–5(h).
ADDRESSES: Send submissions to:
CC:PA:LPD:PR (REG–101329–16), Room
5203, Internal Revenue Service, P.O.
Box 7604, Ben Franklin Station,
Washington, DC 20044. Submissions
may be hand-delivered Monday through
Friday between the hours of 8 a.m. and
4 p.m. to CC:PA:LPD:PR (REG–101329–
16), Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue NW.,
Washington, DC 20224, or sent
electronically via the Federal
eRulemaking Portal at https://
www.regulations.gov (IRS REG–101329–
16).
FOR FURTHER INFORMATION CONTACT:
Milton M. Cahn or David A. Levine,
SUMMARY:
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(202) 317–6937; concerning submissions
of comments, Regina Johnson, (202)
317–6901 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collections of information
contained in these final regulations
were previously reviewed and approved
by the Office of Management and
Budget in accordance with the
Paperwork Reduction Act of 1995 (44
U.S.C. 3507) under control numbers
1545–0123, 1545–0902, and 1545–1797
in conjunction with Treasury decisions
7999 (49 FR 50689, Dec. 31, 1984), 8113
(51 FR 46620, Dec. 24, 1986), and 9082
(68 FR 46081, Aug. 5, 2003),
respectively. There are no proposals for
substantive changes to these collections
of information.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a valid control
number assigned by the Office of
Management and Budget.
Books or records relating to a
collection of information must be
retained as long as their contents might
become material in the administration
of any internal revenue law. Generally,
tax returns and tax return information
are confidential, as required by 26
U.S.C. 6103.
Background
Section 897(a)(1) provides, in general,
that gain or loss of a nonresident alien
individual or foreign corporation from
the disposition of a United States real
property interest (USRPI) shall be taken
into account under section 871(b)(1) or
882(a)(1), as applicable, as if the
nonresident alien individual or foreign
corporation were engaged in a trade or
business within the United States
during the taxable year and such gain or
loss were effectively connected with
that trade or business.
Section 897(c)(1)(A) defines a USRPI
to include any interest (other than solely
as a creditor) in any domestic
corporation unless the taxpayer
establishes that such corporation was at
no time a United States real property
holding corporation (USRPHC) during
the applicable testing period (generally,
the five-year period ending on the date
of the disposition of the USRPHC).
Under section 897(c)(2), a USRPHC
means any corporation if the fair market
value of its USRPIs equals or exceeds 50
percent of the total fair market value of
its USRPIs, its interests in real property
located outside the United States, and
any other assets that are used or held for
use in a trade or business. However,
section 897(c)(1)(B) generally provides
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that an interest in a corporation is not
a USRPI if the corporation does not hold
USRPIs as of the date its stock is sold
and the corporation disposed of all of
the USRPIs that it held during the
applicable testing period in transactions
in which the full amount of gain, if any,
was recognized (the cleansing
exception).
Section 1445(a) generally imposes a
withholding tax obligation on the
transferee when a foreign person
disposes of a USRPI. Section 1445(f)(3)
provides that a foreign person is any
person other than a United States
person. Section 1445(e)(3) generally
imposes a withholding obligation on a
domestic corporation that is a USRPHC
on distributions to foreign persons to
which section 302 or sections 331
through 346 apply. Section 1445(e)(3)
also provides that similar rules are
applicable to distributions to foreign
persons under section 301 that are not
made out of the earnings and profits of
the domestic corporation. Section
1445(e)(4) generally requires a domestic
or foreign partnership, the trustee of a
domestic or foreign trust, or the
executor of a domestic or foreign estate
to withhold on the distribution of any
USRPI to a partner or beneficiary who
is a foreign person. Under section
1445(e)(5), the transferee of a
partnership interest or of a beneficial
interest in a trust or estate is required to
deduct and withhold tax to the extent
provided in regulations. Any amounts
withheld under section 1445 are
credited against the foreign transferor’s
U.S. tax liability. § 1.1445–1(f)(1).
Before the enactment of the Protecting
Americans from Tax Hikes Act of 2015,
Public Law 114–113 (the PATH Act),
the withholding rate under sections
1445(a), 1445(e)(3), 1445(e)(4), and
1445(e)(5) was 10 percent of either the
amount realized or the fair market value
of the interest, as applicable. Section
324(a) of the PATH Act increased the
withholding rate under these sections
from 10 percent to 15 percent. This new
rate applies to dispositions after
February 16, 2016. Section 324(b) of the
PATH Act, however, retained the 10percent withholding rate in the case of
a disposition of property that is
acquired by the transferee for his or her
use as a residence with respect to which
the amount realized is greater than
$300,000 but does not exceed $1
million.
Section 325 of the PATH Act provides
that the cleansing exception will not
apply to dispositions on or after
December 18, 2015, if the corporation or
its predecessor was a real estate
investment trust or a regulated
investment company at any time during
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the shorter of the period that the
shareholder held the interest or the fiveyear period ending on the date of the
disposition of the shareholder’s interest
in the corporation.
Section 323(a) of the PATH Act added
section 897(l), which provides that
section 897 does not apply (i) to USRPIs
held directly (or indirectly through one
or more partnerships) by, or (ii) to
distributions received from a real estate
investment trust by, a qualified foreign
pension fund or an entity wholly owned
by a qualified foreign pension fund.
Section 897(l)(2) defines a qualified
foreign pension fund for purposes of
section 897(l), and section 897(l)(3)
provides that the Secretary shall
prescribe such regulations as may be
necessary or appropriate to carry out the
purposes of section 897(l). In addition,
section 323(b) of the PATH Act
amended the definition of foreign
person in section 1445(f)(3) to provide
that entities described in section 897(l)
are not treated as foreign persons for
purposes of section 1445, except as
otherwise provided by the Secretary.
The amendments in section 323 of the
PATH Act are applicable to dispositions
and distributions after December 18,
2015.
Explanation of Provisions
These regulations update § 1.897–2
and §§ 1.1445–1 through 1.1445–5, and
append an informational footnote to
§ 1.1445–11T(d)(2)(iii), to reflect
changes made by the PATH Act.
Additionally, for certain filings that
are described in regulations under
sections 897 and 1445, these regulations
provide that the mailing address is the
address specified in the Instructions for
Form 8288 under the heading ‘‘Where
To File.’’
Applicability Dates
Consistent with the PATH Act, the
revisions to § 1.1445–2 to incorporate
the exemption under section 1445(f)(3)
for entities described in section 897(l)
apply to dispositions and distributions
after December 18, 2015, and the
revisions to § 1.897–2 regarding the
cleansing exception apply to
dispositions on or after December 18,
2015. The new withholding rates
described in these regulations apply to
dispositions of, and distributions with
respect to, USRPIs that occur after
February 16, 2016.
Beginning after February 19, 2016,
taxpayers are required to use the revised
mailing address provided in these
regulations. However, the IRS will not
assert penalties against taxpayers that
use the mailing address previously
specified in the regulations on or before
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8399
June 20, 2016. Any prior timely filings
made pursuant to the regulations under
sections 897 and 1445 that were mailed
to the address specified in the
Instructions for Form 8288 under the
heading ‘‘Where To File,’’ instead of the
address previously specified in the
regulations, have been accepted by the
IRS.
Request for Comments
The Treasury Department and the IRS
request comments regarding what
regulations, if any, should be issued
pursuant to section 897(l)(3). All
comments that are submitted as
prescribed in this preamble under the
ADDRESSES heading will be available at
www.regulations.gov or upon request.
Special Analyses
Certain IRS regulations, including this
one, are exempt from the requirements
of Executive Order 12866, as
supplemented and reaffirmed by
Executive Order 13563. Therefore, a
regulatory impact assessment is not
required. Because no notice of proposed
rulemaking is required, a Regulatory
Flexibility Analysis under the
Regulatory Flexibility Act (5 U.S.C.
chapter 6) is not required.
The Treasury Department and the IRS
have determined that section 553(b) of
the Administrative Procedure Act (APA)
(5 U.S.C. chapter 5) does not apply to
these regulations, including because
good cause exists under section
553(b)(B) of the APA. Section 553(b)(B)
of the APA provides that an agency is
not required to publish a notice of
proposed rulemaking in the Federal
Register when the agency, for good
cause, finds that notice and public
comment thereon are impracticable,
unnecessary, or contrary to the public
interest. These regulations are necessary
to ensure that existing regulations for
transferees and other parties properly
reflect the changes implemented by the
PATH Act. Because these regulations
merely conform the regulations to
certain changes made by the PATH Act,
and update certain mailing addresses,
prior notice and public comment is
unnecessary. Accordingly, good cause
exists for dispensing with notice and
public comment pursuant to section
553(b) of the APA. For the same reasons
that section 553(b) of the APA does not
apply, including because good cause
exists under section 553(d)(3) of the
APA, the requirements in section 553(d)
of the APA for a delayed effective date
are inapplicable.
Drafting Information
The principal authors of these
regulations are Milton M. Cahn and
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David A. Levine of the Office of
Associate Chief Counsel (International).
However, other personnel from the IRS
and the Treasury Department
participated in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Paragraph 1. The authority citation
for part 1 continues to read in part as
follows:
■
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.897–2 is amended as
follows:
■ 1. By removing ‘‘, and’’ at the end of
paragraph (f)(2)(i) and adding a
semicolon in its place.
■
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR part 1 is
amended as follows:
Paragraph
2. By removing the period at the end
of paragraph (f)(2)(ii) and adding ‘‘;
and’’ in its place.
■ 1. By adding paragraph (f)(2)(iii)
before the existing undesignated
paragraph.
■ 2. In each of the paragraphs listed in
the first column by removing the
language in the ‘‘Remove’’ column and
adding in its place the language in the
‘‘Add’’ column.
■
PART 1—INCOME TAXES
Remove
(h)(2)(v), third sentence ......................................
(h)(4)(ii), first sentence .......................................
The revision and addition reads as
follows:
§ 1.897–2 United States real property
holding corporations.
*
*
*
*
*
(f) * * *
(2) * * * (iii) If the disposition occurs
on or after December 18, 2015, neither
Add
the Director, Philadelphia Service
P.O. Box 21086, Drop Point 8731,
Unit, Philadelphia, PA 19114–0586.
the Director, Philadelphia Service
P.O. Box 21086, Drop Point 8731,
Unit, Philadelphia, PA 19114–0586.
Center,
FIRPTA
Center,
FIRPTA
the corporation nor any predecessor of
the corporation was a regulated
investment company or a real estate
investment trust at any time during the
shorter of the periods described in
section 897(c)(1)(A)(ii).
*
*
*
*
*
Paragraph
the address specified in the Instructions
Form 8288 under the heading ‘‘Where
File’’.
the address specified in the Instructions
Form 8288 under the heading ‘‘Where
File’’.
§ 1.897–3
for
To
for
To
[Amended]
Par. 3. Section 1.897–3 is amended in
each of the paragraphs listed in the first
column by removing the language in the
‘‘Remove’’ column and adding in its
place the language in the ‘‘Add’’
column.
■
Remove
(c) introductory text, first sentence
(d)(1), fourth sentence ....................
(f)(1), second sentence ...................
(f)(1), fifth sentence .........................
Add
with the Director, Philadelphia Service Center, P.O.
Box 21086, Drop Point 8731, FIRPTA Unit, Philadelphia, PA 19114–0586.
the Philadelphia Service Center ................................
at the address specified in the Instructions for Form
8288 under the heading ‘‘Where To File’’.
addressed to the Director, Philadelphia Service
Center, P.O. Box 21086, Drop Point 8731,
FIRPTA Unit, Philadelphia, PA 19114–0586.
the Director, Philadelphia Service Center .................
Par. 4. Section 1.1445–1 is amended
as follows:
■ 1. By revising the first sentence and
removing the last sentence of paragraph
(b)(1).
■
the address specified in the Instructions for Form
8288 under the heading ‘‘Where To File’’.
delivered to the address specified in the Instructions
for Form 8288 under the heading ‘‘Where To
File’’.
the address specified in the Instructions for Form
8288 under the heading ‘‘Where To File’’.
2. By redesignating paragraphs (b)(2)
through (4) as paragraphs (b)(3) through
(5) respectively.
■ 3. By adding a new paragraph (b)(2).
■ 4. By revising paragraph (g)(10).
■ 5. By revising the heading and adding
two sentences after the first sentence in
paragraph (h).
■
6. In each of the paragraphs listed in
the first column by removing the
language in the ‘‘Remove’’ column and
adding in its place the language in the
‘‘Add’’ column.
■
Remove
Add
(a), second sentence ..........................................
asabaliauskas on DSK5VPTVN1PROD with RULES
Paragraph
10 percent ........................................................
newly designated (b)(4)(iii), first sentence .........
newly designated (b)(4)(iii), second sentence ...
(c)(2)(i)(A), first sentence ...................................
10 percent ........................................................
§ 1.1445–1(b)(3)(iii) ..........................................
10 percent ........................................................
(c)(2)(i)(B), third sentence ..................................
10 percent ........................................................
15 percent (10 percent in the case of dispositions described in paragraph (b)(2) of this
section).
15 percent.
paragraph (b)(4)(iii).
15 percent (10 percent in the case of dispositions described in paragraph (b)(2) of this
section).
15 percent (10 percent in the case of dispositions described in paragraph (b)(2) of this
section).
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The additions and revisions read as
follows:
§ 1.1445–1 Withholding on dispositions of
U.S. real property interests by foreign
persons: In general.
*
*
*
*
*
(b) Duty to withhold—(1) In general.
Except as provided in paragraph (b)(2)
and §§ 1.1445–2 and 1.1445–3,
transferees of U.S. real property
interests are required to deduct and
withhold a tax equal to 15 percent of the
amount realized by the transferor if the
transferor is a foreign person.* * *
(2) Reduced rate for certain
residences. Transferees of U.S. real
property interests are required to deduct
and withhold a tax equal to 10 percent
of the amount realized by the transferor
if the transferor is a foreign person and
the following requirements are satisfied:
(i) The property is acquired by the
transferee for use by the transferee as a
residence;
(ii) the amount realized for the
property does not exceed $1,000,000;
and
(iii) section 1445(b)(5) does not apply
to the disposition. See § 1.1445–2(d)(1).
*
*
*
*
*
(g) * * *
(10) Address for correspondence. Any
written communication to the Internal
Revenue Service described in this
section is to be mailed to the address
specified in the Instructions for Form
8288 under the heading ‘‘Where To
File.’’
(h) Applicability dates. * * * The
withholding rates set forth in
paragraphs (a), (b)(1), (b)(2), (b)(4)(iii),
(c)(2)(i)(A), and (c)(2)(i)(B) of this
section apply to dispositions after
8401
February 16, 2016. For dispositions on
or before February 16, 2016, see
paragraphs (a), (b)(1), (b)(3)(iii),
(c)(2)(i)(A), and (c)(2)(i)(B) of this
section as contained in 26 CFR part 1
revised as of April 1, 2015.
■ Par. 5. Section 1.1445–2 is amended
as follows:
■ 1. By revising the first sentence in the
undesignated paragraph following
paragraph (b)(2)(i)(C).
■ 2. In paragraph (b)(4)(iv), by adding a
sentence after the last sentence.
■ 3. In paragraph (e), by revising the
heading and adding two sentences after
the first sentence.
■ 4. In each of the paragraphs listed in
the first colum by removing the
language in the ‘‘Remove’’ column and
adding in its place the language in the
‘‘Add’’ column.
Paragraph
Remove
Add
(b)(4)(iv), second sentence ................................
(b)(4)(iv), third sentence .....................................
(b)(4)(iv), fourth sentence ...................................
(c)(3)(iii), second sentence .................................
(c)(3)(iii), third sentence .....................................
(c)(3)(iii), fourth sentence ...................................
(d)(2)(i)(B), first sentence ...................................
(d)(3)(i)(A) introductory text, first sentence ........
10 percent ........................................................
10 percent ........................................................
10 percent ........................................................
10 percent ........................................................
10 percent ........................................................
10 percent ........................................................
provides a copy of the transferor’s notice to
the Director, Philadelphia Service Center.
10 percent ........................................................
(d)(3)(i)(B) introductory text, first sentence ........
10 percent ........................................................
15 percent.
15 percent.
15 percent.
15 percent.
15 percent.
15 percent.
mails a copy of the transferor’s notice to the
Internal Revenue Service.
15 percent (10 percent in the case of dispositions described in § 1.1445–1(b)(2)).
15 percent (10 percent in the case of dispositions described in § 1.1445–1(b)(2)).
The additions and revision read as
follows:
§ 1.1445–2 Situations in which withholding
is not required under section 1445(a).
*
*
*
*
*
(b) * * *
(2) * * *
(i) * * *
(C) * * *
In general, a foreign person is a
nonresident alien individual, foreign
corporation, foreign partnership, foreign
trust, or foreign estate, but not a
qualified foreign pension fund (as
defined in section 897(l)) or an entity all
of the interests of which are held by a
qualified foreign pension fund. * * *
(4) * * *
(iv) * * * For dispositions described
in § 1.1445–1(b)(2), this paragraph shall
be applied by replacing ‘‘15 percent’’
with ‘‘10 percent’’ each time it appears.
*
*
*
*
*
(e) Applicability dates. * * * The
exclusion of entities described in
section 897(l) from the definition of
foreign person in paragraph (b)(2)(i) of
this section applies to dispositions and
distributions after December 18, 2015,
and the withholding rates set forth in
paragraphs (b)(4)(iv), (c)(3)(iii), and
Paragraph
to the Director, Philadelphia Service Center,
at.
to the Director, Philadelphia Service Center,
at.
by the Director, Philadelphia Service Center,
by the Director, Philadelphia Service Center
or his delegate.
addressed to the Director, Philadelphia Service Center, at.
(f)(1), first sentence ............................................
asabaliauskas on DSK5VPTVN1PROD with RULES
§ 1.1445–3
[Amended]
Par. 6. Section 1.1445–3 is amended
in each of the paragraphs listed in the
first column by removing the language
in the ‘‘Remove’’ column and adding in
its place the language in the ‘‘Add’’
column.
■
Remove
(b)(1), first sentence ...........................................
(d)(3)(i) of this section apply to
dispositions after February 16, 2016. For
dispositions on or before February 16,
2016, see paragraphs (b)(4)(iv),
(c)(3)(iii), and (d)(3)(i) of this section as
contained in 26 CFR part 1 revised as of
April 1, 2015.
(f)(2)(iii), heading ................................................
(f)(2)(iii), first sentence .......................................
(g) introductory text, third sentence ...................
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Add
to.
to.
on behalf of the Service.
on behalf of the Service.
delivered to.
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§ 1.1445–4
[Amended]
first column by removing the language
in the ‘‘Remove’’ column and adding in
Par. 7. Section 1.1445–4 is amended
in each of the paragraphs listed in the
■
its place the language in the ‘‘Add’’
column.
Paragraph
Remove
Add
(c)(1), tenth sentence .........................................
from a foreign person must withhold a tax
equal to 10 percent.
(c)(1), thirteenth sentence ..................................
10 percent tax ..................................................
(c)(2), second sentence .....................................
to the Director, Philadelphia Service Center,
at.
from a foreign person after February 16,
2016, must withhold a tax equal to 15 percent (10 percent in the case of dispositions
described in § 1.1445–1(b)(2)).
15 percent tax (10 percent tax in the case of
dispositions described in § 1.1445–1(b)(2)).
to.
Par. 8. Section 1.1445–5 is amended
as follows:
1. In each of the paragraphs listed in
the first column, by removing the
language in the ‘‘Remove’’ column and
■
■
Paragraph
Remove
(b)(2)(ii) introductory text, first sentence ............
to the Director, Philadelphia Service Center,
at.
10 percent ........................................................
with the Director, Philadelphia Service Center,
at.
with the Director, Philadelphia Service Center,
at.
10 percent ........................................................
(c)(3)(iv) introductory text, second sentence ......
(c)(3)(v), first sentence .......................................
(c)(3)(v), fifth sentence .......................................
(e)(1) introductory text, first sentence ................
2. In paragraph (h), by revising the
heading and adding two sentences after
the first sentence.
The revision and additions read as
follows:
■
§ 1.1445–5 Special rules concerning
distributions and other transactions by
corporations, partnerships, trusts, and
estates.
*
*
*
*
Add
(h) Applicability dates. * * * The
withholding rates set forth in
paragraphs (c)(3)(iv) and (e)(1) of this
section apply to distributions after
February 16, 2016. For distributions on
or before February 16, 2016, see
paragraphs (c)(3)(iv) and (e)(1) of this
section as contained in 26 CFR part 1
revised as of April 1, 2015.
to.
15 percent.
at.
at.
15 percent.
§ 1.1445–6
[Amended]
Par. 9. Section 1.1445–6 is amended
in each of the paragraphs listed in the
first column by removing the language
in the ‘‘Remove’’ column and adding in
its place the language in the ‘‘Add’’
column.
■
*
Paragraph
Remove
(f)(1), first sentence ............................................
to the Director, Philadelphia Service Center,
at.
by the Director, Philadelphia Service Center ..
by the Director, Philadelphia Service Center,
or his delegate.
addressed to the Director, Philadelphia Service Center, at.
(f)(2)(iii), heading ................................................
(f)(2)(iii), first sentence .......................................
(g) introductory text, second sentence ...............
§ 1.1445–11T
§ 1.1445–11T Special rules requiring
withholding under § 1.1445–5 (temporary).
*
*
*
(d) * * *
(2) * * *
(iii) * * *
*
*
John Dalrymple,
Deputy Commissioner for Services and
Enforcement.
Approved: February 12, 2016.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax
Policy).
[FR Doc. 2016–03421 Filed 2–17–16; 4:15 pm]
BILLING CODE 4830–01–P
1 Section 324(a) of the Protecting
Americans from Tax Hikes Act of 2015 (Pub.
L. 114–113) increased the withholding rate
under section 1445(e)(5) to 15 percent,
VerDate Sep<11>2014
Add
applicable to dispositions after February 16,
2016.
[Amended]
Par. 10. Section 1.1445–11T is
amended in paragraph (d)(2)(iii) by
adding footnote ‘‘1’’ after the last
sentence to read as follows:
■
asabaliauskas on DSK5VPTVN1PROD with RULES
adding in its place the language in the
‘‘Add’’ column.
16:19 Feb 18, 2016
Jkt 238001
PO 00000
Frm 00014
Fmt 4700
Sfmt 4700
to.
on behalf of the Service.
on behalf of the Service.
delivered to.
DEPARTMENT OF THE TREASURY
31 CFR Part 0
Department of the Treasury Employee
Rules of Conduct
AGENCY:
ACTION:
Department of the Treasury.
Interim final rule.
The Department of the
Treasury (the ‘‘Department’’ or
‘‘Treasury’’) is updating its Employee
Rules of Conduct, which prescribe
uniform rules of conduct and procedure
SUMMARY:
E:\FR\FM\19FER1.SGM
19FER1
]]>Agencies
[Federal Register Volume 81, Number 33 (Friday, February 19, 2016)]
[Rules and Regulations]
[Pages 8398-8402]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-03421]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9751]
RIN 1545-BN22
PATH Act Changes to Section 1445
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final and temporary regulations.
-----------------------------------------------------------------------
SUMMARY: This document contains final and temporary regulations
relating to the taxation of, and withholding on, foreign persons upon
certain dispositions of, and distributions with respect to, United
States real property interests (USRPIs). The regulations reflect
changes made by the Protecting Americans from Tax Hikes Act of 2015
(the PATH Act). In addition, the regulations update certain mailing
addresses listed in regulations under sections 897 and 1445. These
regulations affect certain holders of USRPIs and withholding agents
that are required to withhold tax on certain dispositions of, and
distributions with respect to, USRPIs. This document also requests
comments on certain other aspects of the PATH Act that apply to
dispositions of, and distributions with respect to, USRPIs.
DATES:
Effective date: These regulations are effective on February 19,
2016.
Applicability date: For dates of applicability, see Sec. Sec.
1.1445-1(h), 1.1445-2(e), and 1.1445-5(h).
ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-101329-16), Room
5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station,
Washington, DC 20044. Submissions may be hand-delivered Monday through
Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-
101329-16), Courier's Desk, Internal Revenue Service, 1111 Constitution
Avenue NW., Washington, DC 20224, or sent electronically via the
Federal eRulemaking Portal at https://www.regulations.gov (IRS REG-
101329-16).
FOR FURTHER INFORMATION CONTACT: Milton M. Cahn or David A. Levine,
(202) 317-6937; concerning submissions of comments, Regina Johnson,
(202) 317-6901 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collections of information contained in these final regulations
were previously reviewed and approved by the Office of Management and
Budget in accordance with the Paperwork Reduction Act of 1995 (44
U.S.C. 3507) under control numbers 1545-0123, 1545-0902, and 1545-1797
in conjunction with Treasury decisions 7999 (49 FR 50689, Dec. 31,
1984), 8113 (51 FR 46620, Dec. 24, 1986), and 9082 (68 FR 46081, Aug.
5, 2003), respectively. There are no proposals for substantive changes
to these collections of information.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a valid
control number assigned by the Office of Management and Budget.
Books or records relating to a collection of information must be
retained as long as their contents might become material in the
administration of any internal revenue law. Generally, tax returns and
tax return information are confidential, as required by 26 U.S.C. 6103.
Background
Section 897(a)(1) provides, in general, that gain or loss of a
nonresident alien individual or foreign corporation from the
disposition of a United States real property interest (USRPI) shall be
taken into account under section 871(b)(1) or 882(a)(1), as applicable,
as if the nonresident alien individual or foreign corporation were
engaged in a trade or business within the United States during the
taxable year and such gain or loss were effectively connected with that
trade or business.
Section 897(c)(1)(A) defines a USRPI to include any interest (other
than solely as a creditor) in any domestic corporation unless the
taxpayer establishes that such corporation was at no time a United
States real property holding corporation (USRPHC) during the applicable
testing period (generally, the five-year period ending on the date of
the disposition of the USRPHC). Under section 897(c)(2), a USRPHC means
any corporation if the fair market value of its USRPIs equals or
exceeds 50 percent of the total fair market value of its USRPIs, its
interests in real property located outside the United States, and any
other assets that are used or held for use in a trade or business.
However, section 897(c)(1)(B) generally provides
[[Page 8399]]
that an interest in a corporation is not a USRPI if the corporation
does not hold USRPIs as of the date its stock is sold and the
corporation disposed of all of the USRPIs that it held during the
applicable testing period in transactions in which the full amount of
gain, if any, was recognized (the cleansing exception).
Section 1445(a) generally imposes a withholding tax obligation on
the transferee when a foreign person disposes of a USRPI. Section
1445(f)(3) provides that a foreign person is any person other than a
United States person. Section 1445(e)(3) generally imposes a
withholding obligation on a domestic corporation that is a USRPHC on
distributions to foreign persons to which section 302 or sections 331
through 346 apply. Section 1445(e)(3) also provides that similar rules
are applicable to distributions to foreign persons under section 301
that are not made out of the earnings and profits of the domestic
corporation. Section 1445(e)(4) generally requires a domestic or
foreign partnership, the trustee of a domestic or foreign trust, or the
executor of a domestic or foreign estate to withhold on the
distribution of any USRPI to a partner or beneficiary who is a foreign
person. Under section 1445(e)(5), the transferee of a partnership
interest or of a beneficial interest in a trust or estate is required
to deduct and withhold tax to the extent provided in regulations. Any
amounts withheld under section 1445 are credited against the foreign
transferor's U.S. tax liability. Sec. 1.1445-1(f)(1).
Before the enactment of the Protecting Americans from Tax Hikes Act
of 2015, Public Law 114-113 (the PATH Act), the withholding rate under
sections 1445(a), 1445(e)(3), 1445(e)(4), and 1445(e)(5) was 10 percent
of either the amount realized or the fair market value of the interest,
as applicable. Section 324(a) of the PATH Act increased the withholding
rate under these sections from 10 percent to 15 percent. This new rate
applies to dispositions after February 16, 2016. Section 324(b) of the
PATH Act, however, retained the 10-percent withholding rate in the case
of a disposition of property that is acquired by the transferee for his
or her use as a residence with respect to which the amount realized is
greater than $300,000 but does not exceed $1 million.
Section 325 of the PATH Act provides that the cleansing exception
will not apply to dispositions on or after December 18, 2015, if the
corporation or its predecessor was a real estate investment trust or a
regulated investment company at any time during the shorter of the
period that the shareholder held the interest or the five-year period
ending on the date of the disposition of the shareholder's interest in
the corporation.
Section 323(a) of the PATH Act added section 897(l), which provides
that section 897 does not apply (i) to USRPIs held directly (or
indirectly through one or more partnerships) by, or (ii) to
distributions received from a real estate investment trust by, a
qualified foreign pension fund or an entity wholly owned by a qualified
foreign pension fund. Section 897(l)(2) defines a qualified foreign
pension fund for purposes of section 897(l), and section 897(l)(3)
provides that the Secretary shall prescribe such regulations as may be
necessary or appropriate to carry out the purposes of section 897(l).
In addition, section 323(b) of the PATH Act amended the definition of
foreign person in section 1445(f)(3) to provide that entities described
in section 897(l) are not treated as foreign persons for purposes of
section 1445, except as otherwise provided by the Secretary. The
amendments in section 323 of the PATH Act are applicable to
dispositions and distributions after December 18, 2015.
Explanation of Provisions
These regulations update Sec. 1.897-2 and Sec. Sec. 1.1445-1
through 1.1445-5, and append an informational footnote to Sec. 1.1445-
11T(d)(2)(iii), to reflect changes made by the PATH Act.
Additionally, for certain filings that are described in regulations
under sections 897 and 1445, these regulations provide that the mailing
address is the address specified in the Instructions for Form 8288
under the heading ``Where To File.''
Applicability Dates
Consistent with the PATH Act, the revisions to Sec. 1.1445-2 to
incorporate the exemption under section 1445(f)(3) for entities
described in section 897(l) apply to dispositions and distributions
after December 18, 2015, and the revisions to Sec. 1.897-2 regarding
the cleansing exception apply to dispositions on or after December 18,
2015. The new withholding rates described in these regulations apply to
dispositions of, and distributions with respect to, USRPIs that occur
after February 16, 2016.
Beginning after February 19, 2016, taxpayers are required to use
the revised mailing address provided in these regulations. However, the
IRS will not assert penalties against taxpayers that use the mailing
address previously specified in the regulations on or before June 20,
2016. Any prior timely filings made pursuant to the regulations under
sections 897 and 1445 that were mailed to the address specified in the
Instructions for Form 8288 under the heading ``Where To File,'' instead
of the address previously specified in the regulations, have been
accepted by the IRS.
Request for Comments
The Treasury Department and the IRS request comments regarding what
regulations, if any, should be issued pursuant to section 897(l)(3).
All comments that are submitted as prescribed in this preamble under
the ADDRESSES heading will be available at www.regulations.gov or upon
request.
Special Analyses
Certain IRS regulations, including this one, are exempt from the
requirements of Executive Order 12866, as supplemented and reaffirmed
by Executive Order 13563. Therefore, a regulatory impact assessment is
not required. Because no notice of proposed rulemaking is required, a
Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5
U.S.C. chapter 6) is not required.
The Treasury Department and the IRS have determined that section
553(b) of the Administrative Procedure Act (APA) (5 U.S.C. chapter 5)
does not apply to these regulations, including because good cause
exists under section 553(b)(B) of the APA. Section 553(b)(B) of the APA
provides that an agency is not required to publish a notice of proposed
rulemaking in the Federal Register when the agency, for good cause,
finds that notice and public comment thereon are impracticable,
unnecessary, or contrary to the public interest. These regulations are
necessary to ensure that existing regulations for transferees and other
parties properly reflect the changes implemented by the PATH Act.
Because these regulations merely conform the regulations to certain
changes made by the PATH Act, and update certain mailing addresses,
prior notice and public comment is unnecessary. Accordingly, good cause
exists for dispensing with notice and public comment pursuant to
section 553(b) of the APA. For the same reasons that section 553(b) of
the APA does not apply, including because good cause exists under
section 553(d)(3) of the APA, the requirements in section 553(d) of the
APA for a delayed effective date are inapplicable.
Drafting Information
The principal authors of these regulations are Milton M. Cahn and
[[Page 8400]]
David A. Levine of the Office of Associate Chief Counsel
(International). However, other personnel from the IRS and the Treasury
Department participated in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Adoption of Amendments to the Regulations
Accordingly, 26 CFR part 1 is amended as follows:
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 1.897-2 is amended as follows:
0
1. By removing ``, and'' at the end of paragraph (f)(2)(i) and adding a
semicolon in its place.
0
2. By removing the period at the end of paragraph (f)(2)(ii) and adding
``; and'' in its place.
0
1. By adding paragraph (f)(2)(iii) before the existing undesignated
paragraph.
0
2. In each of the paragraphs listed in the first column by removing the
language in the ``Remove'' column and adding in its place the language
in the ``Add'' column.
------------------------------------------------------------------------
Paragraph Remove Add
------------------------------------------------------------------------
(h)(2)(v), third sentence... the Director, the address
Philadelphia specified in the
Service Center, Instructions for
P.O. Box 21086, Form 8288 under the
Drop Point 8731, heading ``Where To
FIRPTA Unit, File''.
Philadelphia, PA
19114-0586.
(h)(4)(ii), first sentence.. the Director, the address
Philadelphia specified in the
Service Center, Instructions for
P.O. Box 21086, Form 8288 under the
Drop Point 8731, heading ``Where To
FIRPTA Unit, File''.
Philadelphia, PA
19114-0586.
------------------------------------------------------------------------
The revision and addition reads as follows:
Sec. 1.897-2 United States real property holding corporations.
* * * * *
(f) * * *
(2) * * * (iii) If the disposition occurs on or after December 18,
2015, neither the corporation nor any predecessor of the corporation
was a regulated investment company or a real estate investment trust at
any time during the shorter of the periods described in section
897(c)(1)(A)(ii).
* * * * *
Sec. 1.897-3 [Amended]
0
Par. 3. Section 1.897-3 is amended in each of the paragraphs listed in
the first column by removing the language in the ``Remove'' column and
adding in its place the language in the ``Add'' column.
------------------------------------------------------------------------
Paragraph Remove Add
------------------------------------------------------------------------
(c) introductory text, first with the Director, at the address
sentence. Philadelphia specified in the
Service Center, Instructions for
P.O. Box 21086, Form 8288 under
Drop Point 8731, the heading
FIRPTA Unit, ``Where To
Philadelphia, PA File''.
19114-0586.
(d)(1), fourth sentence......... the Philadelphia the address
Service Center. specified in the
Instructions for
Form 8288 under
the heading
``Where To
File''.
(f)(1), second sentence......... addressed to the delivered to the
Director, address specified
Philadelphia in the
Service Center, Instructions for
P.O. Box 21086, Form 8288 under
Drop Point 8731, the heading
FIRPTA Unit, ``Where To
Philadelphia, PA File''.
19114-0586.
(f)(1), fifth sentence.......... the Director, the address
Philadelphia specified in the
Service Center. Instructions for
Form 8288 under
the heading
``Where To
File''.
------------------------------------------------------------------------
0
Par. 4. Section 1.1445-1 is amended as follows:
0
1. By revising the first sentence and removing the last sentence of
paragraph (b)(1).
0
2. By redesignating paragraphs (b)(2) through (4) as paragraphs (b)(3)
through (5) respectively.
0
3. By adding a new paragraph (b)(2).
0
4. By revising paragraph (g)(10).
0
5. By revising the heading and adding two sentences after the first
sentence in paragraph (h).
0
6. In each of the paragraphs listed in the first column by removing the
language in the ``Remove'' column and adding in its place the language
in the ``Add'' column.
------------------------------------------------------------------------
Paragraph Remove Add
------------------------------------------------------------------------
(a), second sentence........ 10 percent.......... 15 percent (10
percent in the case
of dispositions
described in
paragraph (b)(2) of
this section).
newly designated 10 percent.......... 15 percent.
(b)(4)(iii), first sentence.
newly designated Sec. 1.1445- paragraph
(b)(4)(iii), second 1(b)(3)(iii). (b)(4)(iii).
sentence.
(c)(2)(i)(A), first sentence 10 percent.......... 15 percent (10
percent in the case
of dispositions
described in
paragraph (b)(2) of
this section).
(c)(2)(i)(B), third sentence 10 percent.......... 15 percent (10
percent in the case
of dispositions
described in
paragraph (b)(2) of
this section).
------------------------------------------------------------------------
[[Page 8401]]
The additions and revisions read as follows:
Sec. 1.1445-1 Withholding on dispositions of U.S. real property
interests by foreign persons: In general.
* * * * *
(b) Duty to withhold--(1) In general. Except as provided in
paragraph (b)(2) and Sec. Sec. 1.1445-2 and 1.1445-3, transferees of
U.S. real property interests are required to deduct and withhold a tax
equal to 15 percent of the amount realized by the transferor if the
transferor is a foreign person.* * *
(2) Reduced rate for certain residences. Transferees of U.S. real
property interests are required to deduct and withhold a tax equal to
10 percent of the amount realized by the transferor if the transferor
is a foreign person and the following requirements are satisfied:
(i) The property is acquired by the transferee for use by the
transferee as a residence;
(ii) the amount realized for the property does not exceed
$1,000,000; and
(iii) section 1445(b)(5) does not apply to the disposition. See
Sec. 1.1445-2(d)(1).
* * * * *
(g) * * *
(10) Address for correspondence. Any written communication to the
Internal Revenue Service described in this section is to be mailed to
the address specified in the Instructions for Form 8288 under the
heading ``Where To File.''
(h) Applicability dates. * * * The withholding rates set forth in
paragraphs (a), (b)(1), (b)(2), (b)(4)(iii), (c)(2)(i)(A), and
(c)(2)(i)(B) of this section apply to dispositions after February 16,
2016. For dispositions on or before February 16, 2016, see paragraphs
(a), (b)(1), (b)(3)(iii), (c)(2)(i)(A), and (c)(2)(i)(B) of this
section as contained in 26 CFR part 1 revised as of April 1, 2015.
0
Par. 5. Section 1.1445-2 is amended as follows:
0
1. By revising the first sentence in the undesignated paragraph
following paragraph (b)(2)(i)(C).
0
2. In paragraph (b)(4)(iv), by adding a sentence after the last
sentence.
0
3. In paragraph (e), by revising the heading and adding two sentences
after the first sentence.
0
4. In each of the paragraphs listed in the first colum by removing the
language in the ``Remove'' column and adding in its place the language
in the ``Add'' column.
------------------------------------------------------------------------
Paragraph Remove Add
------------------------------------------------------------------------
(b)(4)(iv), second sentence. 10 percent.......... 15 percent.
(b)(4)(iv), third sentence.. 10 percent.......... 15 percent.
(b)(4)(iv), fourth sentence. 10 percent.......... 15 percent.
(c)(3)(iii), second sentence 10 percent.......... 15 percent.
(c)(3)(iii), third sentence. 10 percent.......... 15 percent.
(c)(3)(iii), fourth sentence 10 percent.......... 15 percent.
(d)(2)(i)(B), first sentence provides a copy of mails a copy of the
the transferor's transferor's notice
notice to the to the Internal
Director, Revenue Service.
Philadelphia
Service Center.
(d)(3)(i)(A) introductory 10 percent.......... 15 percent (10
text, first sentence. percent in the case
of dispositions
described in Sec.
1.1445-1(b)(2)).
(d)(3)(i)(B) introductory 10 percent.......... 15 percent (10
text, first sentence. percent in the case
of dispositions
described in Sec.
1.1445-1(b)(2)).
------------------------------------------------------------------------
The additions and revision read as follows:
Sec. 1.1445-2 Situations in which withholding is not required under
section 1445(a).
* * * * *
(b) * * *
(2) * * *
(i) * * *
(C) * * *
In general, a foreign person is a nonresident alien individual,
foreign corporation, foreign partnership, foreign trust, or foreign
estate, but not a qualified foreign pension fund (as defined in section
897(l)) or an entity all of the interests of which are held by a
qualified foreign pension fund. * * *
(4) * * *
(iv) * * * For dispositions described in Sec. 1.1445-1(b)(2), this
paragraph shall be applied by replacing ``15 percent'' with ``10
percent'' each time it appears.
* * * * *
(e) Applicability dates. * * * The exclusion of entities described
in section 897(l) from the definition of foreign person in paragraph
(b)(2)(i) of this section applies to dispositions and distributions
after December 18, 2015, and the withholding rates set forth in
paragraphs (b)(4)(iv), (c)(3)(iii), and (d)(3)(i) of this section apply
to dispositions after February 16, 2016. For dispositions on or before
February 16, 2016, see paragraphs (b)(4)(iv), (c)(3)(iii), and
(d)(3)(i) of this section as contained in 26 CFR part 1 revised as of
April 1, 2015.
Sec. 1.1445-3 [Amended]
0
Par. 6. Section 1.1445-3 is amended in each of the paragraphs listed in
the first column by removing the language in the ``Remove'' column and
adding in its place the language in the ``Add'' column.
------------------------------------------------------------------------
Paragraph Remove Add
------------------------------------------------------------------------
(b)(1), first sentence...... to the Director, to.
Philadelphia
Service Center, at.
(f)(1), first sentence...... to the Director, to.
Philadelphia
Service Center, at.
(f)(2)(iii), heading........ by the Director, on behalf of the
Philadelphia Service.
Service Center,.
(f)(2)(iii), first sentence. by the Director, on behalf of the
Philadelphia Service.
Service Center or
his delegate.
(g) introductory text, third addressed to the delivered to.
sentence. Director,
Philadelphia
Service Center, at.
------------------------------------------------------------------------
[[Page 8402]]
Sec. 1.1445-4 [Amended]
0
Par. 7. Section 1.1445-4 is amended in each of the paragraphs listed in
the first column by removing the language in the ``Remove'' column and
adding in its place the language in the ``Add'' column.
------------------------------------------------------------------------
Paragraph Remove Add
------------------------------------------------------------------------
(c)(1), tenth sentence...... from a foreign from a foreign
person must person after
withhold a tax February 16, 2016,
equal to 10 percent. must withhold a tax
equal to 15 percent
(10 percent in the
case of
dispositions
described in Sec.
1.1445-1(b)(2)).
(c)(1), thirteenth sentence. 10 percent tax...... 15 percent tax (10
percent tax in the
case of
dispositions
described in Sec.
1.1445-1(b)(2)).
(c)(2), second sentence..... to the Director, to.
Philadelphia
Service Center, at.
------------------------------------------------------------------------
0
Par. 8. Section 1.1445-5 is amended as follows:
0
1. In each of the paragraphs listed in the first column, by removing
the language in the ``Remove'' column and adding in its place the
language in the ``Add'' column.
------------------------------------------------------------------------
Paragraph Remove Add
------------------------------------------------------------------------
(b)(2)(ii) introductory to the Director, to.
text, first sentence. Philadelphia
Service Center, at.
(c)(3)(iv) introductory 10 percent.......... 15 percent.
text, second sentence.
(c)(3)(v), first sentence... with the Director, at.
Philadelphia
Service Center, at.
(c)(3)(v), fifth sentence... with the Director, at.
Philadelphia
Service Center, at.
(e)(1) introductory text, 10 percent.......... 15 percent.
first sentence.
------------------------------------------------------------------------
0
2. In paragraph (h), by revising the heading and adding two sentences
after the first sentence.
The revision and additions read as follows:
Sec. 1.1445-5 Special rules concerning distributions and other
transactions by corporations, partnerships, trusts, and estates.
* * * * *
(h) Applicability dates. * * * The withholding rates set forth in
paragraphs (c)(3)(iv) and (e)(1) of this section apply to distributions
after February 16, 2016. For distributions on or before February 16,
2016, see paragraphs (c)(3)(iv) and (e)(1) of this section as contained
in 26 CFR part 1 revised as of April 1, 2015.
Sec. 1.1445-6 [Amended]
0
Par. 9. Section 1.1445-6 is amended in each of the paragraphs listed in
the first column by removing the language in the ``Remove'' column and
adding in its place the language in the ``Add'' column.
------------------------------------------------------------------------
Paragraph Remove Add
------------------------------------------------------------------------
(f)(1), first sentence...... to the Director, to.
Philadelphia
Service Center, at.
(f)(2)(iii), heading........ by the Director, on behalf of the
Philadelphia Service.
Service Center.
(f)(2)(iii), first sentence. by the Director, on behalf of the
Philadelphia Service.
Service Center, or
his delegate.
(g) introductory text, addressed to the delivered to.
second sentence. Director,
Philadelphia
Service Center, at.
------------------------------------------------------------------------
Sec. 1.1445-11T [Amended]
0
Par. 10. Section 1.1445-11T is amended in paragraph (d)(2)(iii) by
adding footnote ``1'' after the last sentence to read as follows:
Sec. 1.1445-11T Special rules requiring withholding under Sec.
1.1445-5 (temporary).
* * * * *
(d) * * *
(2) * * *
(iii) * * *
\1\ Section 324(a) of the Protecting Americans from Tax Hikes
Act of 2015 (Pub. L. 114-113) increased the withholding rate under
section 1445(e)(5) to 15 percent, applicable to dispositions after
February 16, 2016.
John Dalrymple,
Deputy Commissioner for Services and Enforcement.
Approved: February 12, 2016.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2016-03421 Filed 2-17-16; 4:15 pm]
BILLING CODE 4830-01-P
