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Dividend Equivalents From Sources Within the United States; Correction

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AGENCY:

Internal Revenue Service (IRS), Treasury.

ACTION:

Final regulations and temporary regulations; Correcting amendments.

SUMMARY:

This document contains corrections to final and temporary regulations (TD TD 9815), which were published in the Federal Register on Tuesday, January 24, 2017.

DATES:

Effective Date: These corrections are effective October 26, 2017.

Applicability Date: The corrections to §§ 1.1.871-15, 1.871-15T, 1.1441-1(e)(5)(v)(B)(4), (e)(6), and (f)(5), 1.1441-2, 1.1441-7, and 1.1461-1 are applicable on January 19, 2017.

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FOR FURTHER INFORMATION CONTACT:

D. Peter Merkel or Karen Walny at 202-317-6938 (not a toll-free number).

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Background

The final and temporary regulations that are the subject of these corrections are §§ 1.871-15, 1.871-15T, 1.1441-1, 1.1441-2, 1.1441-7, and 1.1461-1, promulgated under sections 871(m) and 7805 of the Internal Revenue Code. These regulations affect foreign persons that hold certain financial products providing for payments that are contingent upon or determined by reference to U.S. source dividends, as well withholding agents with respect to dividend equivalents and certain other parties to section 871(m) transactions and their agents.

Need for Correction

As published, TD 9815 contains errors that may prove to be misleading and are in need of clarification.

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List of Subjects in 26 CFR Part 1

  • Income taxes
  • Reporting and recordkeeping requirements
End List of Subjects

Correction of Publication

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

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PART 1—INCOME TAXES

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

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

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[Amended]
Start Amendment Part

Par. 2. Section 1.871-15 is amended by:

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1. Removing paragraph (r)(2).

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2. Redesignating paragraphs (r)(3), (4), and (5), as (r)(2), (3), and (4), respectively.

End Amendment Part
[Amended]
Start Amendment Part

Par. 3. For each section listed in the table, remove the language in the “Remove” column and add in its place the language in the “Add” column as set forth below:

End Amendment Part
SectionRemoveAdd
§ 1.871-15(a)(14)(ii)(B)ELI.MoreELI. More
§ 1.871-15(l)(1), second sentencedescribed in this paragraph (l)described in this paragraph (l)(1)
§ 1.871-15(q)(1)qualified intermediary agreementqualified intermediary withholding agreement
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§ 1.871-15(q)(4)ordinaryordinarily
§ 1.871-15(q)(5), Example (3), paragraph (ii)country that provides withholdingcountry with a treaty that provides withholding
§ 1.871-15(q)(5), Example (3), paragraph (ii)paid by qualified derivatives dealerpaid by the qualified derivatives dealer
§ 1.871-15(r)(1)September 18, 2015January 19, 2017
[Amended]
Start Amendment Part

Par. 4. Section 1.871-15T is amended by redesignating paragraph (r)(5) as (r)(4).

End Amendment Part
[Amended]
Start Amendment Part

Par. 5. For each section listed in the table, remove the language in the “Remove” column and add in its place the language in the “Add” column as set forth below:

End Amendment Part
SectionRemoveAdd
§ 1.871-15T(p)(5)Example 1.Example.
§ 1.871-15T(q) through (r)(4) [Reserved](q) through (r)(4) [Reserved]. For further guidance, see § 1.871-15(r)(1) through (4)(q) through (r)(3) [Reserved]. For further guidance, see § 1.871-15(q) through (r)(3)
§ 1.871-15T(r)(4) newly redesignatedafter on Januaryafter January
[Amended]
Start Amendment Part

Par. 6. For each section listed in the table, remove the language in the “Remove” column and add in its place the language in the “Add” column as set forth below:

End Amendment Part
SectionRemoveAdd
§ 1.1441-1(e)(5)(v)(B)(4)(iv)U.S. income taxU.S. federal income tax
§ 1.1441-1(e)(6)(i)(B)and other withholding provisionsand other provisions
§ 1.1441-1(e)(6)(i)(C)underlying securities (includingunderlying securities as defined in § 1.871- 15(a)(15) (including
§ 1.1441-1(e)(6)(i)(C)received in the equityreceived in its equity
§ 1.1441-1(e)(6)(i)(D)(3)U.S. tax returnU.S. federal tax return
§ 1.1441-1(e)(6)(i)(F)QDDqualified derivatives dealer
§ 1.1441-1(e)(6)(ii)(B) introductory textorganized, or operatesorganized or operates
§ 1.1441-1(e)(6)(ii)(B)(2)pursuant towith respect to
§ 1.1441-1(f)(5)Paragraphs (e)(5)(ii)(D)Paragraphs (e)(5)(ii)(C)
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Par. 7. Section 1.1441-2 is amended by removing the last two sentences of paragraph (f)(1) and adding a sentence at the end of the paragraph to read as follows:

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Amounts subject to withholding.
* * * * *

(f) * * *

(1) * * * Paragraph (e)(7) of this section applies on or after January 19, 2017.

* * * * *
[Amended]
Start Amendment Part

Par. 8. For each section listed in the table, remove the language in the “Remove” column and add in its place the language in the “Add” column as set forth below:

End Amendment Part
SectionRemoveAdd
§ 1.1441-2(e)(7)(ii)(A)§ 1.871-15(i)(3),§ 1.871-15(i)(3)(i),
§ 1.1441-2(e)(7)(iv)type (securitiestype (for example, securities
§ 1.1441-2(e)(7)(v)the types of section 871(m) transactionthe type of section 871(m) transaction
§ 1.1441-2(e)(7)(v)certifying that has notifiedcertifying that it has notified
[Amended]
Start Amendment Part

Par. 9. Section 1.1441-7 is amended by removing the second sentence of paragraph (a)(4).

End Amendment Part
[Amended]
Start Amendment Part

Par. 10. For each section listed in the table, remove the language in the “Remove” column and add in its place the language in the “Add” column as set forth below:

End Amendment Part
SectionRemoveAdd
§ 1.1441-7(a)(3), Example 9not required withholdnot required to withhold
§ 1.1441-7(a)(4)Example 8 andExample 7, Example 8, and
§ 1.1441-7(a)(4)apply to payments made on or after January 19apply beginning January 19
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Par. 11. Section 1.1461-1 is amended by revising paragraph (c)(2)(iii) to read as follows:

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Payment and returns of tax withheld.
* * * * *

(c) * * *

(2) * * *

(iii) Applicability date. Paragraph (c)(2) of this section applies beginning January 19, 2017.

* * * * *
Start Signature

Martin V. Franks,

Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration).

End Signature End Supplemental Information

[FR Doc. 2017-22830 Filed 10-25-17; 8:45 am]

BILLING CODE 4830-01-P