IRB 2017-06 (Rev. February 6, 2017) · Notice 2017–13, page 780. This notice sets forth updates...

HIGHLIGHTSOF THIS ISSUEThese synopses are intended only as aids to the reader inidentifying the subject matter covered. They may not berelied upon as authoritative interpretations.

INCOME TAX

Rev. Rul. 2017–4, page 776.Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes ofsections 382, 642, 1274, 1288, 7872, and other sections ofthe Code, tables setforth the rates for February 2017.

Rev. Proc. 2017–13, page 787.This revenue procedure provides safe harbor conditions underwhich a management contract does not result in private busi-ness use of property financed with governmental tax-exemptbonds under section 141(b) of the Internal Revenue Code orcause the modified private business use test for propertyfinanced with qualified 501(c)(3) bonds under section145(a)(2)(B) to be met.

Notice 2017–14, page 783.This notice provides that the hardship exemption from theindividual shared responsibility payment under § 5000A, de-scribed by the Department of Health and Human Services, foran individual who is not enrolled in health insurance coveragethat qualifies for the health coverage tax credit (HCTC) allowedby § 35 for one more months between July 2016 and Decem-ber 2016, but who would have been eligible for the HCTC under§ 35 if enrolled, may be claimed on a Federal income tax returnwithout obtaining a hardship exemption certification from theMarketplace.

Rev. Proc. 2017–21, page 791.This revenue procedure updates the agreements entered intoby withholding foreign partnerships (WPs) and withholding for-eign trusts (WTs), as provided in Revenue Procedure 2014–47. These agreements were to expire on December 31, 2016,but were extended in Revenue Procedure 2017–15 in antici-pation of the new agreements being issued in January 2017.This revenue procedure will apply to WP and WT agreementseffective on or after the date of issuance of this revenue

procedure. The WP and WT agreements are updated consis-tent with recently published guidance, including the qualifiedintermediary withholding agreement, which was published inRevenue Procedure 2017–15. The revenue procedure alsoprovides information on submitting an application or requestfor renewal of a WP or WT agreement.

T.D. 9810, page 775.In general, S corporations, regulated investment companies(“RICs”), and real estate investment trusts (“REITs”) are nottaxed at the corporate level (in the case of S corporations) orrarely incur corporate-level tax (in the case of RICs and REITs).An exception to this general rule occurs when an S corporation,a RIC, or a REIT disposes of certain property previously held bya C corporation within a specified period of time, known as the“recognition period.” The length of the recognition period for Scorporations is provided by statute, while the length of therecognition period for RICs and REITs is provided by regula-tions. These final regulations will conform the length of therecognition period for RICs and REITs to the length of therecognition period for S corporations.

EMPLOYEE PLANS

REG–131643–15, page 865.These proposed regulations would amend the regulations un-der section 401(k) to provide that amounts used to fundqualified matching contributions and qualified nonelective con-tributions must satisfy certain nonforfeitability and distributionrequirements when they are allocated to participants’ ac-counts, and not when they are first contributed to the plan.

(Continued on the next page)

Finding Lists begin on page ii.

Bulletin No. 2017–6February 6, 2017

Notice 2017–13, page 780.This notice sets forth updates on the corporate bond monthlyyield curve, the corresponding spot segment rates for January2017 used under § 417(e)(3)(D), the 24-month average segmentrates applicable for January 2017, and the 30-year Treasuryrates. These rates reflect the application of § 430(h)(2)(C)(iv),which was added by the Moving Ahead for Progress in the 21stCentury Act, Public Law 112–141 (MAP–21) and amended bysection 2003 of the Highway and Transportation Funding Act of2014 (HATFA).

ESTATE TAX

Notice 2017–15, page 783.The notice provides special administrative procedures for al-lowing certain taxpayers and the executors of certain taxpay-ers’ estates to recalculate a taxpayer’s remaining applicableexclusion amount and remaining GST exemption to the extentan allocation of that exclusion or exemption was made tocertain transfers made while the taxpayer was married to aperson of the same sex.

GIFT TAX

Notice 2017–15, page 783.The notice provides special administrative procedures for al-lowing certain taxpayers and the executors of certain taxpay-ers’ estates to recalculate a taxpayer’s remaining applicableexclusion amount and remaining GST exemption to the extentan allocation of that exclusion or exemption was made tocertain transfers made while the taxpayer was married to aperson of the same sex.

EXCISE TAX

Notice 2017–5, page 779.Notice 2017–5 provides interim definitions of the terms �chas-sis� and �body� for purposes of section 4051(a)(1) and forpurposes of applying the safe harbor provision in section4052(f)(1). This notice also requests comments on the interimdefinitions.

ADMINISTRATIVE

Rev. Proc. 2017–22, page 863.This procedure clarifies Rev. Proc. 2010–46, 2010–49 I.R.B.814, which provides a safe harbor under section 118(a) of theCode for certain amounts received by corporate taxpayersunder certain Department of Transportation programs. Rev.Proc. 2010–46 is clarified.

The IRS MissionProvide America’s taxpayers top-quality service by helpingthem understand and meet their tax responsibilities and en-force the law with integrity and fairness to all.

IntroductionThe Internal Revenue Bulletin is the authoritative instrument ofthe Commissioner of Internal Revenue for announcing officialrulings and procedures of the Internal Revenue Service and forpublishing Treasury Decisions, Executive Orders, Tax Conven-tions, legislation, court decisions, and other items of generalinterest. It is published weekly.

It is the policy of the Service to publish in the Bulletin allsubstantive rulings necessary to promote a uniform applicationof the tax laws, including all rulings that supersede, revoke,modify, or amend any of those previously published in theBulletin. All published rulings apply retroactively unless other-wise indicated. Procedures relating solely to matters of internalmanagement are not published; however, statements of inter-nal practices and procedures that affect the rights and dutiesof taxpayers are published.

Revenue rulings represent the conclusions of the Service onthe application of the law to the pivotal facts stated in therevenue ruling. In those based on positions taken in rulings totaxpayers or technical advice to Service field offices, identify-ing details and information of a confidential nature are deletedto prevent unwarranted invasions of privacy and to comply withstatutory requirements.

Rulings and procedures reported in the Bulletin do not have theforce and effect of Treasury Department Regulations, but theymay be used as precedents. Unpublished rulings will not berelied on, used, or cited as precedents by Service personnel inthe disposition of other cases. In applying published rulings andprocedures, the effect of subsequent legislation, regulations,court decisions, rulings, and procedures must be considered,and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unlessthe facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.This part includes rulings and decisions based on provisions ofthe Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation.This part is divided into two subparts as follows: Subpart A, TaxConventions and Other Related Items, and Subpart B, Legisla-tion and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.To the extent practicable, pertinent cross references to thesesubjects are contained in the other Parts and Subparts. Alsoincluded in this part are Bank Secrecy Act Administrative Rul-ings. Bank Secrecy Act Administrative Rulings are issued bythe Department of the Treasury’s Office of the Assistant Sec-retary (Enforcement).

Part IV.—Items of General Interest.This part includes notices of proposed rulemakings, disbar-ment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index forthe matters published during the preceding months. Thesemonthly indexes are cumulated on a semiannual basis, and arepublished in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

February 6, 2017 Bulletin No. 2017–6

Part I. Rulings and Decisions Under the Internal Revenue Codeof 1986T.D. 9810DEPARTMENT OF THETREASURYInternal Revenue Service26 CFR Part 1

Certain Transfers of Propertyto Regulated InvestmentCompanies [RICs] and RealEstate Investment Trusts[REITs]

AGENCY: Internal Revenue Service (IRS),Treasury.

ACTION: Final regulations.

SUMMARY: This document contains fi-nal regulations effecting the repeal of theGeneral Utilities doctrine by the Tax Re-form Act of 1986. The final regulationsaddress the length of time during which aRIC or a REIT may be subject to corpo-rate level tax on certain dispositions ofproperty. The final regulations affect RICsand REITs.

DATES: Effective Date: These regula-tions are effective January 18, 2017.

Applicability Dates: For dates of appli-cability, see § 1.337(d)–7(g)(2)(iii).

FOR FURTHER INFORMATION CON-TACT:Austin M. Diamond-Jones, (202)317-5363 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

This document contains amendmentsto 26 CFR part 1. On June 8, 2016, theDepartment of the Treasury (TreasuryDepartment) and the IRS published tem-porary regulations (TD 9770) under sec-tion 337(d) (temporary regulations) inthe Federal Register (81 FR 36793)concerning certain transfers of propertyto regulated investment companies(RICs) and real estate investment trusts(REITs). A notice of proposed rulemak-ing cross-referencing the temporary reg-ulations (REG–126452–15) (proposedregulations) was published in the Fed-

eral Register (81 FR 36816) on thesame day. A correction to the temporaryregulations was published in the Fed-eral Register (81 FR 41800) on June28, 2016. The Treasury Department andthe IRS received one written commentin response to the proposed regulations.The comment requested a public hear-ing, and a hearing was held on Novem-ber 9, 2016. After consideration of thewritten comment and the commentsmade at the public hearing, the proposedregulations are adopted in part and asamended by this Treasury decision, andthe corresponding temporary regulationsare removed in part. The revisions ad-opted by this Treasury decision are dis-cussed below.

Summary of Comments andExplanation of Revisions

The comment requested that the tem-porary regulations and the proposed reg-ulations with respect to the recognitionperiod be immediately withdrawn and therecognition period with respect to REITsbe defined with reference to the recogni-tion period of section 1374(d)(7), which iscurrently a five-year period as a result ofsection 127(a) of the Protecting Ameri-cans Against Tax Hikes Act of 2015(PATH Act), enacted as Division Q of theConsolidated Appropriations Act, 2016,Public Law 114–113, 129 Stat. 2422. Thecomment asserted that the change tothe length of the recognition period in thetemporary regulations and the proposedregulations was inconsistent with Con-gress’s intent in the PATH Act and withprior administrative guidance. On October18, 2016, the Chairmen and RankingMembers of the Ways and Means Com-mittee of the U.S. House of Representa-tives and the Finance Committee of theU.S. Senate addressed a letter to the Sec-retary of the Treasury stating that the rec-ognition period in the temporary regula-tions and the proposed regulations wasinconsistent with congressional intent andthe longstanding practice of treating RE-ITs and RICs as having the same built-ingain recognition period as S corporations,currently five years. The Chairmen and

Ranking Members also asked that thetemporary regulations and the proposedregulations be modified to provide thatREITs, RICs and S corporations are allsubject to the same five-year built-in gainrecognition period in order to be consis-tent with congressional intent and long-standing practice.

The Treasury Department and theIRS decline to withdraw the temporaryregulations and the proposed regulationsrelating to the recognition period butagree with the comment relating to thelength of the recognition period. Ac-cordingly, these final regulations pro-vide that the term recognition periodmeans the recognition period describedin section 1374(d)(7), beginning, in thecase of a conversion transaction that is aqualification of a C corporation as a RICor a REIT, on the first day of the RIC’sor the REIT’s first taxable year, and, inthe case of other conversion transac-tions, on the day the RIC or the REITacquires the property. The final regula-tions will apply prospectively from Feb-ruary 17, 2017, but taxpayers maychoose to apply the definition of recog-nition period in the final regulations,instead of the 10-year recognition pe-riod in the temporary regulations, forconversion transactions occurring on orafter August 8, 2016, and on or beforeFebruary 17, 2017.

The Treasury Department and the IRScontinue to study the other issues ad-dressed in the temporary regulations andthe proposed regulations, including otherissues raised by the comment, and wel-come further comment on those issues.

Special Analyses

Certain IRS regulations, including thisone, are exempt from the requirements ofExecutive Order 12866, as supplementedby Executive Order 13653. Therefore, aregulatory assessment is not required. Pur-suant to the Regulatory Flexibility Act (5U.S.C. chapter 6), it is hereby certifiedthat this regulation will not have a signif-icant economic impact on a substantialnumber of small entities. This certificationis based on the fact that this regulation

Bulletin No. 2017–6 February 6, 2017775

will primarily affect large corporationswith a substantial number of shareholders.Accordingly, a regulatory flexibility anal-ysis is not required. Pursuant to section7805(f) of the Internal Revenue Code, thenotice of proposed rulemaking precedingthis regulation was submitted to the ChiefCounsel for Advocacy of the Small Busi-ness Administration for comment on itsimpact on small business, and no com-ments were received.

Drafting Information

The principal author of these regula-tions is Austin M. Diamond-Jones, Officeof Associate Chief Counsel (Corporate).However, other personnel from the Trea-sury Department and the IRS participatedin their development.

* * * * *

Adoption of Amendments to theRegulations

Accordingly, 26 CFR part 1 is amendedas follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation forpart 1 continues to read as follows:

Authority: 26 U.S.C. 7805 * * ** * * * *Par. 2. Section 1.337(d)–7 is amended

by revising paragraphs (b)(2)(iii) and (g)(2)(iii) to read as follows:

§ 1.337(d)–7 Tax on property owned bya C corporation that becomes propertyof a RIC or REIT.

* * * * *(b) * * *(2) * * *(iii) Recognition period. For purposes

of applying the rules of section 1374 andthe regulations thereunder, as modified byparagraph (b) of this section, the termrecognition period means the recognitionperiod described in section 1374(d)(7),beginning—

(A) In the case of a conversion transac-tion that is a qualification of a C corporationas a RIC or a REIT, on the first day of theRIC’s or the REIT’s first taxable year; and

(B) In the case of other conversiontransactions, on the day the RIC or theREIT acquires the property.* * * * *

(g) * * *(2) * * *(iii) Recognition period. Paragraphs

(b)(1)(ii) and (d)(2)(iii) of this sectionapply to conversion transactions that oc-cur on or after August 8, 2016. Para-graph (b)(2)(iii) of this section appliesto conversion transactions that occur af-ter February 17, 2017. For conversiontransactions that occurred on or afterAugust 8, 2016 and on or before Febru-ary 17, 2017, see § 1.337(d)–7T(b)(2)(iii) in effect on August 8,2016. However, taxpayers may applyparagraph (b)(2)(iii) of this section toconversion transactions that occurred onor after August 8, 2016 and on or beforeFebruary 17, 2017. For conversiontransactions that occurred on or afterJanuary 2, 2002 and before August 8,2016, see § 1.337(d)–7 as contained in26 CFR part 1 in effect on April 1, 2016.

Par. 3. Section 1.337(d)–7T is amendedby revising paragraphs (b)(1) through (3)and (g)(2)(iii) to read as follows:

§ 1.337(d)–7T Tax on property ownedby a C corporation that becomesproperty of a RIC or REIT.

* * * * *(b)(1) through (3) [Reserved]. For fur-

ther guidance, see § 1.337(d)–7(b)(1)through (3).* * * * *

(g) * * *(2) * * *(iii) [Reserved]. For further guidance,

see § 1.337(d)–7(g)(2)(iii).* * * * *

John Dalrymple,Deputy Commissioner for

Services and Enforcement.

Approved: December 30, 2016.

Mark J. Mazur,Assistant Secretary of the

Treasury (Tax Policy).

(Filed by the Office of the Federal Register on January 17,2017, 8:45 a.m., and published in the issue of the FederalRegister for January 18, 2017, 82 F.R. 5387)

Section 1274.—Determina-tion of Issue Price in theCase of Certain DebtInstruments Issued forProperty

(Also Sections 42, 280G, 382, 467, 468, 482, 483,642, 1288, 7520, 7872.)

Rev. Rul. 2017–4

This revenue ruling provides variousprescribed rates for federal income taxpurposes for February 2017 (the currentmonth). Table 1 contains the short-term,mid-term, and long-term applicable fed-eral rates (AFR) for the current month forpurposes of section 1274(d) of the InternalRevenue Code. Table 2 contains the short-term, mid-term, and long-term adjustedapplicable federal rates (adjusted AFR)for the current month for purposes of sec-tion 1288(b). Table 3 sets forth the ad-justed federal long-term rate and the long-term tax-exempt rate described in section382(f). Table 4 contains the appropriatepercentages for determining the low-income housing credit described in sec-tion 42(b)(1) for buildings placed in ser-vice during the current month. However,under section 42(b)(2), the applicable per-centage for non-federally subsidized newbuildings placed in service after July 30,2008, shall not be less than 9%. Finally,Table 5 contains the federal rate for de-termining the present value of an annuity,an interest for life or for a term of years, ora remainder or a reversionary interest forpurposes of section 7520.


REV. RUL. 2017–4 TABLE 1Applicable Federal Rates (AFR) for February 2017

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-term

AFR 1.04% 1.04% 1.04% 1.04%

110% AFR 1.14% 1.14% 1.14% 1.14%

120% AFR 1.25% 1.25% 1.25% 1.25%

130% AFR 1.35% 1.35% 1.35% 1.35%

Mid-term

AFR 2.10% 2.09% 2.08% 2.08%

110% AFR 2.31% 2.30% 2.29% 2.29%

120% AFR 2.53% 2.51% 2.50% 2.50%

130% AFR 2.74% 2.72% 2.71% 2.70%

150% AFR 3.16% 3.14% 3.13% 3.12%

175% AFR 3.69% 3.66% 3.64% 3.63%

Long-term

AFR 2.81% 2.79% 2.78% 2.77%

110% AFR 3.09% 3.07% 3.06% 3.05%

120% AFR 3.38% 3.35% 3.34% 3.33%

130% AFR 3.66% 3.63% 3.61% 3.60%

REV. RUL. 2017–4 TABLE 2Adjusted AFR for February 2017

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-term adjusted AFR .77% .77% .77% .77%

Mid-term adjusted AFR 1.56% 1.55% 1.55% 1.55%

Long-term adjusted AFR 2.09% 2.08% 2.07% 2.07%

REV. RUL. 2017–4 TABLE 3Rates Under Section 382 for February 2017

Adjusted federal long-term rate for the current month 2.09%

Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted federallong-term rates for the current month and the prior two months.)

2.09%

REV. RUL. 2017–4 TABLE 4Appropriate Percentages Under Section 42(b)(1) for February 2017

Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed inservice after July 30, 2008, shall not be less than 9%.

Appropriate percentage for the 70% present value low-income housing credit 7.56%

Appropriate percentage for the 30% present value low-income housing credit 3.24%


REV. RUL. 2017–4 TABLE 5Rate Under Section 7520 for February 2017

Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years,or a remainder or reversionary interest

2.6%

Section 42.—Low-IncomeHousing Credit

The applicable federal short-term, mid-term, andlong-term rates are set forth for the month of Feb-ruary 2017. See Rev. Rul. 2017–4, page 776.

Section 280G.—GoldenParachute Payments

Federal short-term, mid-term, and long-termrates are set forth for the month of February 2017.See Rev. Rul. 2017–4 , page 776.

Section 382.—Limitationon Net Operating LossCarryforwards and CertainBuilt-In Losses FollowingOwnership Change

The adjusted applicable federal long-term rate isset forth for the month of February 2017. See Rev.Rul. 2017–4 , page 776.

Section 467.—CertainPayments for the Use ofProperty or Services

The applicable federal short-term, mid-term,and long-term rates are set forth for the month

of February 2017. See Rev. Rul. 2017– 4, page776.

Section 468.—SpecialRules for Mining and SolidWaste Reclamation andClosing Costs


Section 482.—Allocation ofIncome and DeductionsAmong Taxpayers

Federal short-term, mid-term, and long-termrates are set forth for the month of February 2017.See Rev. Rul. 2017–4, page 776.

Section 483.—Interest onCertain Deferred Payments


Section 642.—SpecialRules for Credits andDeductions

Federal short-term, mid-term, and long-termrates are set forth for the month of February 2017.See Rev. Rul. 2017–4, page 776.

Section 1288.—Treatmentof Original Issue Discounton Tax-Exempt Obligations

The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the monthof February 2017. See Rev. Rul. 2017–4, page 776.

Section 7520.—ValuationTables


Section 7872.—Treatmentof Loans With Below-Market Interest Rates



Part III. Administrative, Procedural, and MiscellaneousInterim Guidance andRequest for Comments onDefinitions of Chassis andBody; Retail Excise Tax onHeavy Trucks, Trailers, andTractorsNotice 2017–5

SECTION 1. PURPOSE

This notice provides interim guidancerelating to the excise tax imposed by§ 4051 of the Internal Revenue Code onthe first retail sale of heavy trucks, trailers,and tractors. Specifically, this notice pro-vides interim definitions of the terms“chassis” and “body” for purposes of§ 4051(a)(1) and for purposes of applyingthe safe harbor provision in § 4052(f)(1).This notice also requests comments on theinterim definitions.

SECTION 2. BACKGROUND

Section 4051(a)(1) imposes a 12-percenttax on the first retail sale of automobiletruck chassis and bodies, truck trailer andsemitrailer chassis and bodies, and trac-tors of the kind chiefly used for highwaytransportation in combination with atrailer or semitrailer. Section 145.4051–1(e)(1)(i) of the Temporary Excise TaxRegulations Under The Highway RevenueAct of 1982 defines “tractor” as a highwayvehicle primarily designed to tow a vehi-cle, such as a trailer or a semitrailer, butdoes not carry cargo on the same chassisas the engine.

Generally, the § 4051 tax applies to thefirst retail sale of an article. Section4052(a)(1) defines “first retail sale” as thefirst sale, for a purpose other than forresale or leasing in a long-term lease, afterproduction, manufacture, or importation.The safe harbor provision in § 4052(f)(1)excludes from the definition of “manufac-tured” or “produced” an article that isrepaired or modified (including any mod-ification that changes the transportationfunction of the article or restores awrecked article to a functional condition)if the cost of such repairs and modifica-tions does not exceed 75 percent of theretail price of a comparable new article.

Neither the Code nor the regulationsdefine the terms “chassis” or “body” forpurposes of determining articles that aresubject to tax under § 4051(a)(1). Like-wise, there is no definition of “chassis” or“body” for determining whether an articlesatisfies the safe harbor provision in§ 4052(f)(1).

The Treasury Department and the IRSrecognize that taxpayers would benefitfrom having definitions of “chassis” and“body” in order to identify chassis andbodies that are subject to tax under§ 4051(a)(1) and in order to apply the safeharbor provision in § 4052(f)(1). Accord-ingly, the Treasury Department and theIRS have adopted interim definitions of“chassis” and “body” for these purposes.The interim definitions are set forth inSection 3 of this notice. In crafting thesedefinitions, the Treasury Department andthe IRS consulted numerous sources, in-cluding the Society of Automotive Engi-neers (SAE) Glossary of AutomotiveTerms and Title 49 of the Code of FederalRegulations (Transportation).

SECTION 3. DEFINITIONS OFCHASSIS AND BODY

.01 A “chassis” is a vehicle’s frameand supporting structure and all thosecomponents that are attached to it, exceptthose components that are exempt fromtax, such as certain idling reduction de-vices described in § 4053(9).

For purposes of § 4051(a)(1)(A) and(E), the following is a nonexclusive list ofcomponents that are attached to and,therefore, part of a chassis:

• engine• axles• transmission• drive train• suspension• exhaust aftertreatment system (includ-

ing, but not limited to, a diesel partic-ulate filter)

• cabFor purposes of § 4051(a)(1)(E), a

chassis includes a chassis cab within themeaning of § 145.4051–1(e)(1)(ii)(A), (B)and (D).

A chassis does not include a vehicle’sbody, as defined in Section 3.02 of this notice.

.02 A “body” is the cargo or load car-rying structure of a truck, trailer, or semi-trailer. Examples of a body include, butare not limited to, a flatbed body, a tankerbody, and a box body.

SECTION 4. APPLICATION OFCHASSIS AND BODYDEFINITIONS TO SECTION4052(f)(1)

Section 4052(f)(1) provides that anarticle taxed under § 4051(a)(1) is nottreated as manufactured or produced solelyby reason of repairs or modifications to thearticle if the cost of the repairs and mod-ifications does not exceed 75 percent ofthe retail price of a comparable new arti-cle. The safe harbor provision in § 4052(f)(1) applies only to a § 4051(a)(1) articlethat has been previously taxed. See § 4052(f)(2). The § 4051(a)(1) articles are: truckchassis and bodies, truck trailer and semi-trailer chassis and bodies, and highwaytractors. Therefore, a taxpayer must repairor modify one of the seven articles iden-tified in § 4051(a)(1) in order to use thesafe harbor provision in § 4052(f)(1).

For purposes of § 4052(f)(1), the IRSwill use the definitions of chassis and bodyin Section 3 of this notice to determine thethreshold issue of whether a § 4051(a)(1)article has been repaired or modified. Inother words, the § 4052(f)(1) safe harborprovision may be applied to a chassis orbody only if the chassis or body being re-paired or modified is identifiable as suchwithin the meaning of Section 3 of thisnotice.

SECTION 5. REQUEST FORCOMMENTS

The Treasury Department and the IRSrequest comments on the interim defini-tions of “chassis” and “body” set forth inSection 3 of this notice. The deadline forsubmission of comments is May 9, 2017.

Written comments should be submittedto: Internal Revenue Service, CC:PA:LPD:PR (Notice 2017–5), Room 5203,Internal Revenue Service, P.O. Box 7604,Ben Franklin Station, Washington, DC20224. Submissions may be hand-delivered Monday through Friday be-tween the hours of 8 a.m. and 4 p.m. to


CC:PA:LPD:PR (Notice 2017–5), Couri-er’s Desk, Internal Revenue Service, 1111Constitution Ave., NW, Washington, DC.

Alternatively, comments may be submittedelectronically via the following e-mail address:[email protected] include “Notice 2017–5” in the sub-ject line of an electronic communication.

All submissions will be available forpublic inspection and copying in room1621, 1111 Constitution Avenue, NW,Washington, DC, from 9 a.m. to 4 p.m.

SECTION 6. EFFECTIVE DATE

This notice is effective on and afterJanuary 9, 2017.

SECTION 7. DRAFTINGINFORMATION

The principal author of this notice isCelia Gabrysh of the Office of the Asso-ciate Chief Counsel (Passthroughs & Spe-cial Industries). For further informationregarding this notice, please contact CeliaGabrysh or Amanda Dunlap at (202) 317-6855 (not a toll-free number).

Update for WeightedAverage Interest Rates,Yield Curves, and SegmentRates

Notice 2017–13

This notice provides guidance on thecorporate bond monthly yield curve, the

corresponding spot segment rates used un-der § 417(e)(3), and the 24-month averagesegment rates under § 430(h)(2) of theInternal Revenue Code. In addition, thisnotice provides guidance as to the interestrate on 30-year Treasury securities under§ 417(e)(3)(A)(ii)(II) as in effect for planyears beginning before 2008 and the 30-year Treasury weighted average rate un-der § 431(c)(6)(E)(ii)(I).

YIELD CURVE AND SEGMENTRATES

Generally, except for certain plans un-der sections 104 and 105 of the PensionProtection Act of 2006 and CSEC plansunder § 414(y), § 430 of the Code speci-fies the minimum funding requirementsthat apply to single-employer plans pursu-ant to § 412. Section 430(h)(2) specifiesthe interest rates that must be used todetermine a plan’s target normal cost andfunding target. Under this provision, pres-ent value is generally determined usingthree 24-month average interest rates(“segment rates”), each of which appliesto cash flows during specified periods. Tothe extent provided under § 430(h)(2)(C)(iv), these segment rates are adjustedby the applicable percentage of the 25-year average segment rates for the periodending September 30 of the year preced-ing the calendar year in which the planyear begins.1 However, an election maybe made under § 430(h)(2)(D)(ii) to usethe monthly yield curve in place of thesegment rates.

Notice 2007–81, 2007–44 I.R.B. 899,provides guidelines for determining themonthly corporate bond yield curve, andthe 24-month average corporate bond seg-ment rates used to compute the target nor-mal cost and the funding target. Consis-tent with the methodology specified inNotice 2007–81, the monthly corporatebond yield curve derived from December2016 data is in Table I at the end of thisnotice. The spot first, second, and thirdsegment rates for the month of December2016 are, respectively, 2.04, 4.03, and4.82.

The 24-month average segment ratesdetermined under § 430(h)(2)(C)(i) through(iii) must be adjusted pursuant to § 430(h)(2)(C)(iv) to be within the applicable min-imum and maximum percentages of thecorresponding 25-year average segmentrates. For plan years beginning before2021, the applicable minimum percentageis 90% and the applicable maximum per-centage is 110%. The 25-year averagesegment rates for plan years beginning in2015, 2016, and 2017 were publishedin Notice 2014–50, 2014–40 I.R.B. 590,Notice 2015–61, 2015–39 I.R.B. 408, andNotice 2016–54, 2016–40 I.R.B. 429, re-spectively.

24-MONTH AVERAGECORPORATE BOND SEGMENTRATES

The three 24-month average corporatebond segment rates applicable for January2017 without adjustment for the 25-yearaverage segment rate limits are as follows:

ApplicableMonth

FirstSegment

SecondSegment

ThirdSegment

January 2017 1.57 3.77 4.73

Based on § 430(h)(2)(C)(iv), the 24-month averages applicable for January

2017 adjusted to be within the applicableminimum and maximum percentages of

the corresponding 25-year average seg-ment rates, are as follows:

1Pursuant to § 433(h)(3)(A), the 3rd segment rate determined under § 430(h)(2)(C) is used to determine the current liability of a CSEC plan (which is used to calculate the minimum amountof the full funding limitation under § 433(c)(7)(C)).


For PlanYears

BeginningIn

Adjusted 24-Month AverageSegment Rates

ApplicableMonth

FirstSegment

SecondSegment

ThirdSegment

2015 January 2017 4.72 6.11 6.81

2016 January 2017 4.43 5.91 6.65

2017 January 2017 4.16 5.72 6.48

30-YEAR TREASURY SECURITIESINTEREST RATES

Generally for plan years beginning af-ter 2007, § 431 specifies the minimumfunding requirements that apply to mul-tiemployer plans pursuant to § 412. Sec-tion 431(c)(6)(B) specifies a minimumamount for the full-funding limitation de-scribed in § 431(c)(6)(A), based on theplan’s current liability. Section 431(c)(6)

(E)(ii)(I) provides that the interest rateused to calculate current liability for thispurpose must be no more than 5 percentabove and no more than 10 percent belowthe weighted average of the rates of inter-est on 30-year Treasury securities duringthe four-year period ending on the last daybefore the beginning of the plan year.Notice 88–73, 1988–2 C.B. 383, providesguidelines for determining the weightedaverage interest rate. The rate of interest

on 30-year Treasury securities for Decem-ber 2016 is 3.11 percent. The Service de-termined this rate as the average of thedaily determinations of yield on the 30-year Treasury bond maturing in Novem-ber 2046. For plan years beginning in themonth shown below, the weighted aver-age of the rates of interest on 30-yearTreasury securities and the permissiblerange of rate used to calculate currentliability are as follows:

For Plan YearsBeginning in

30-YearTreasuryWeightedAverage

Permissible Range

Month Year 90% to 105%

January 2017 2.90 2.61 3.05

MINIMUM PRESENT VALUESEGMENT RATES

In general, the applicable interest ratesunder § 417(e)(3)(D) are segment rates

computed without regard to a 24-monthaverage. Notice 2007–81 provides guide-lines for determining the minimum pres-ent value segment rates. Pursuant to thatnotice, the minimum present value seg-

ment rates determined for December 2016are as follows:

FirstSegment

SecondSegment

ThirdSegment

2.04 4.03 4.82

DRAFTING INFORMATION

The principal author of this notice isTom Morgan of the Office of the Associ-

ate Chief Counsel (Tax Exempt and Gov-ernment Entities). However, other person-nel from the IRS participated in thedevelopment of this guidance. For further

information regarding this notice, contactMr. Morgan at 202-317-6700 or TonyMontanaro at 202-317-8698 (not toll-freenumbers).


Table IMonthly Yield Curve for December 2016

Derived from December 2016 Data

Maturity Yield Maturity Yield Maturity Yield Maturity Yield Maturity Yield

0.5 1.12 20.5 4.60 40.5 4.85 60.5 4.93 80.5 4.98

1.0 1.41 21.0 4.62 41.0 4.85 61.0 4.94 81.0 4.98

1.5 1.67 21.5 4.63 41.5 4.85 61.5 4.94 81.5 4.98

2.0 1.88 22.0 4.64 42.0 4.86 62.0 4.94 82.0 4.98

2.5 2.06 22.5 4.65 42.5 4.86 62.5 4.94 82.5 4.98

3.0 2.21 23.0 4.65 43.0 4.86 63.0 4.94 83.0 4.98

3.5 2.34 23.5 4.66 43.5 4.86 63.5 4.94 83.5 4.98

4.0 2.46 24.0 4.67 44.0 4.87 64.0 4.94 84.0 4.98

4.5 2.58 24.5 4.68 44.5 4.87 64.5 4.94 84.5 4.98

5.0 2.71 25.0 4.69 45.0 4.87 65.0 4.95 85.0 4.98

5.5 2.83 25.5 4.69 45.5 4.88 65.5 4.95 85.5 4.99

6.0 2.96 26.0 4.70 46.0 4.88 66.0 4.95 86.0 4.99

6.5 3.08 26.5 4.71 46.5 4.88 66.5 4.95 86.5 4.99

7.0 3.20 27.0 4.72 47.0 4.88 67.0 4.95 87.0 4.99

7.5 3.32 27.5 4.72 47.5 4.89 67.5 4.95 87.5 4.99

8.0 3.44 28.0 4.73 48.0 4.89 68.0 4.95 88.0 4.99

8.5 3.55 28.5 4.74 48.5 4.89 68.5 4.95 88.5 4.99

9.0 3.65 29.0 4.74 49.0 4.89 69.0 4.96 89.0 4.99

9.5 3.75 29.5 4.75 49.5 4.89 69.5 4.96 89.5 4.99

10.0 3.84 30.0 4.75 50.0 4.90 70.0 4.96 90.0 4.99

10.5 3.92 30.5 4.76 50.5 4.90 70.5 4.96 90.5 4.99

11.0 4.00 31.0 4.77 51.0 4.90 71.0 4.96 91.0 4.99

11.5 4.07 31.5 4.77 51.5 4.90 71.5 4.96 91.5 4.99

12.0 4.13 32.0 4.78 52.0 4.91 72.0 4.96 92.0 4.99

12.5 4.19 32.5 4.78 52.5 4.91 72.5 4.96 92.5 4.99

13.0 4.24 33.0 4.79 53.0 4.91 73.0 4.96 93.0 5.00

13.5 4.29 33.5 4.79 53.5 4.91 73.5 4.97 93.5 5.00

14.0 4.33 34.0 4.80 54.0 4.91 74.0 4.97 94.0 5.00

14.5 4.37 34.5 4.80 54.5 4.91 74.5 4.97 94.5 5.00

15.0 4.40 35.0 4.81 55.0 4.92 75.0 4.97 95.0 5.00

15.5 4.43 35.5 4.81 55.5 4.92 75.5 4.97 95.5 5.00

16.0 4.45 36.0 4.81 56.0 4.92 76.0 4.97 96.0 5.00

16.5 4.48 36.5 4.82 56.5 4.92 76.5 4.97 96.5 5.00

17.0 4.50 37.0 4.82 57.0 4.92 77.0 4.97 97.0 5.00

17.5 4.52 37.5 4.83 57.5 4.92 77.5 4.97 97.5 5.00

18.0 4.54 38.0 4.83 58.0 4.93 78.0 4.97 98.0 5.00

18.5 4.55 38.5 4.83 58.5 4.93 78.5 4.97 98.5 5.00

19.0 4.57 39.0 4.84 59.0 4.93 79.0 4.98 99.0 5.00

19.5 4.58 39.5 4.84 59.5 4.93 79.5 4.98 99.5 5.00

20.0 4.59 40.0 4.84 60.0 4.93 80.0 4.98 100.0 5.00


Individual SharedResponsibility PaymentHardship Exemption thatMay Be Claimed on aFederal Income Tax ReturnWithout Obtaining aHardship ExemptionCertification from theMarketplace

Notice 2017–14

PURPOSE

This notice supplements Notice 2014–76, 2014–50 I.R.B. 946, by identifying anadditional hardship exemption from theindividual shared responsibility paymentunder § 5000A of the Internal RevenueCode that a taxpayer may claim on a Fed-eral income tax return without obtaining ahardship exemption certification from theHealth Insurance Marketplace (Market-place).

BACKGROUND

For each month beginning after De-cember 31, 2013, § 5000A requires indi-viduals to have minimum essential healthcoverage for themselves and any nonex-empt family member whom the taxpayermay claim as a dependent, to qualify foran exemption, or to include an individualshared responsibility payment with theirFederal income tax return.

Section 5000A(e)(5) and § 1.5000A–3(h) of the Income Tax Regulations pro-vide that, in general, an individual is ex-empt from § 5000A for a month if he orshe has in effect a hardship exemptioncertification issued by the Marketplacecertifying that the individual has suffereda hardship (as that term is defined in 45CFR 155.605(d)) affecting the individu-al’s capability to obtain minimum essentialcoverage in that month. Section 1.5000A–3(h)(3) provides that an individual mayclaim a hardship exemption on the indi-vidual’s Federal income tax return with-out obtaining a hardship exemption certi-fication from the Marketplace if theindividual is eligible for a hardship ex-emption described in guidance released bythe Department of Health and Human Ser-vices (HHS) and the exemption is allowed

to be claimed on the individual’s Federalincome tax return without obtaining ahardship exemption certification from theMarketplace pursuant to guidance pub-lished by the Treasury Department and theInternal Revenue Service. Notice 2014–76 provides a list of hardship exemptionsthat may be claimed on a Federal incometax return without obtaining a hardshipexemption certification. See also 45 CFR155.605(e) (providing a partial list ofhardship exemptions that may be claimedon a tax return without obtaining an ex-emption certification). This notice ex-pands that list by providing an additionalhardship exemption that may be claimedon a Federal income tax return withoutobtaining a hardship exemption certifica-tion.

DISCUSSION

This notice recognizes the followinghardship identified by HHS and allows aqualifying individual (or the taxpayer whomay claim a qualifying individual as adependent) to claim a hardship exemptionon a Federal income tax return withoutobtaining a hardship exemption certifica-tion from the Marketplace. Accordingly,the Discussion section of Notice 2014–76is supplemented by adding the followingparagraph:

G. Individuals eligible for the HealthCoverage Tax Credit (HCTC) but not en-rolled in HCTC-qualifying health coverage.In guidance released on August 12, 2016,HHS provides that any individual who is notenrolled in HCTC-qualifying health insur-ance coverage for one or more months be-tween July 2016 and December 2016, butwho would have been eligible for the HCTCunder § 35 if enrolled, is entitled to a hard-ship exemption for the months during thatperiod when he or she was HCTC-eligible.This exemption applies to eligible individu-als (within the meaning of § 35(c)) andqualifying family members (within themeaning of § 35(d)). See HHS Centers forMedicare & Medicaid Services, Guidanceon Health Coverage Tax Credit HardshipExemption (Aug. 12, 2016) (availableat https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Final-Guidance-for-5000A-HCTC.pdf). An indi-vidual meeting the requirements describedabove may claim a hardship exemption ona Federal income tax return without ob-

taining a hardship exemption certificationfor any month or months between July2016 and December 2016 for which thatindividual (or qualifying family member)would have been eligible for the HCTC ifhe or she enrolled in HCTC-qualifyingcoverage.

Individuals seeking a hardship exemp-tion that is not described in this notice orlisted in Notice 2014–76 can apply for anexemption through the Marketplace.

EFFECT ON OTHER DOCUMENTS

Notice 2014–76 is supplemented.

EFFECTIVE DATE

This notice applies to taxable yearsending after June 30, 2016.


The principal author of this notice isJames Beatty of the Office of AssociateChief Counsel (Income Tax & Account-ing). For further information regardingthis notice contact Mr. Beatty at (202)317-7006 (not a toll-free number).

Notice 2017–15

PURPOSE

This notice provides guidance on theapplication of the decision in UnitedStates v. Windsor, 570 U.S. ___, 133 S.Ct. 2675 (2013), and the holdings of Rev-enue Ruling 2013–17, 2013–38 I.R.B.201, to the rules regarding the applicableexclusion amount under §§ 2010(c) and2505 of the Internal Revenue Code(Code), and the generation-skipping trans-fer (GST) exemption under § 2631, asthey relate to certain gifts, bequests, andgeneration-skipping transfers by (or to)same-sex spouses. In particular, this no-tice provides special administrative proce-dures allowing certain taxpayers and theexecutors of certain taxpayers’ estates torecalculate a taxpayer’s remaining appli-cable exclusion amount and remainingGST exemption to the extent an allocationof that exclusion or exemption was madeto certain transfers made while the tax-payer was married to a person of the samesex.


With respect to the applicable exclu-sion amount applied to a transfer betweenspouses that did not qualify for the maritaldeduction for federal estate or gift taxpurposes at the time of the transfer, basedsolely on the application of the Defense ofMarriage Act (DOMA), Public Law 104–199 (110 Stat. 2419), taxpayers will bepermitted to establish that transfer’s qual-ification for the marital deduction and torecover the applicable exclusion amountpreviously applied on a return by reasonof such a transfer, even if the limitationsperiod applicable to that return for theassessment of tax or for claiming a creditor refund of tax under §§ 6501 or 6511,respectively, has expired. If, however,qualification for the marital deduction or areverse qualified terminable interest prop-erty (QTIP) election would require aQTIP, qualified domestic trust (QDOT),or reverse QTIP election, such taxpayerswill have to request relief pursuant to§ 301.9100–3 of the Procedure and Ad-ministration Regulations to make such anelection.

With respect to a taxpayer’s GST ex-emption that was allocated to transfersmade, prior to the recognition of same-sexmarriages for federal tax purposes, to orfor the benefit of one or more persons in asame-sex marriage and/or any other per-son(s) whose generation assignment is de-termined under § 2651 with reference to asame-sex spouse, certain exemption allo-cations to transfers to persons now recog-nized to be non-skip persons as defined in§ 2613(b) will be deemed void. Accord-ingly, taxpayers who made such a transferwill be permitted to recalculate theamount of their remaining GST exemp-tion.

BACKGROUND

Prior to the decision of the SupremeCourt in Windsor, the Internal RevenueService (IRS) interpreted section 3 ofDOMA as prohibiting it from recognizingsame-sex marriages for federal tax pur-poses. Specifically, section 3 of DOMAprovided that:

In determining the meaning of anyAct of Congress, or of any ruling,regulation, or interpretation of thevarious administrative bureaus andagencies of the United States, theword ‘marriage’ means only a legal

union between one man and onewoman as husband and wife, andthe word ‘spouse’ refers only to aperson of the opposite sex who is ahusband or a wife.

1 U.S.C. § 7.

As a result, taxpayers in a same-sexmarriage were not treated as married forpurposes of gift, estate, and GST taxesand were not entitled to claim a maritaldeduction for gifts or bequests to eachother. Those taxpayers were required touse their applicable exclusion amount un-der § 2505 or § 2010(c) to defray any giftor estate tax imposed on the transfer orwere required to pay gift or estate taxes, tothe extent the taxpayer’s exclusion previ-ously had been exhausted. Further, tax-payers in a same-sex marriage were notallowed to determine generation assign-ments for GST tax purposes based on afamilial relationship with the spouserather than on age.

In Windsor, the Supreme Court heldthat section 3 of DOMA is unconstitu-tional because it violates the principles ofequal protection. Subsequently, the IRSissued Revenue Ruling 2013–17, whichprovides that, for federal tax purposes, theterms “spouse,” “husband and wife,”“husband,” and “wife” include an individ-ual married to a person of the same sex ifthe individuals are lawfully married understate law, and the term “marriage” in-cludes such a marriage between individu-als of the same sex. Revenue Ruling2013–17 also provides a general rule rec-ognizing a marriage of same-sex individ-uals that was validly entered into in a statewhose laws authorize the marriage of twoindividuals of the same sex even if themarried couple is domiciled in a state thatdoes not recognize the validity of same-sex marriages. In addition, the terms“spouse,” “husband and wife,” “husband,”and “wife” do not include individuals(whether of the opposite sex or the samesex) who have entered into a registereddomestic partnership, civil union, or othersimilar formal relationship recognized un-der state law that is not denominated as amarriage under the laws of that state, andthe term “marriage” does not include suchformal relationships.

Revenue Ruling 2013–17 provides thatits holdings will be applied prospectively

as of September 16, 2013, the date of itspublication in the Internal Revenue Bul-letin. Taxpayers in a same-sex marriagerecognized under state law may rely uponthe revenue ruling to file original,amended, or adjusted returns, or claimsfor credits or refunds for any overpaymentof tax resulting from the holdings in therevenue ruling, provided that the applica-ble limitations period for filing such aclaim under § 6511 has not expired.

On September 2, 2016, the Departmentof the Treasury (Treasury Department)and the IRS published in the Federal Reg-ister (81 FR 60609–01) final regulations(T.D. 9785) amending the regulations un-der § 7701 to provide that, for federal taxpurposes, the terms “spouse,” “husband,”and “wife” mean an individual lawfullymarried to another individual, and theterm “husband and wife” means two indi-viduals lawfully married to each other.See also § 301.7701–18. In addition, thefinal regulations provide that a marriageof two individuals will be recognized forfederal tax purposes if that marriagewould be recognized by the state, posses-sion, or territory of the United States inwhich the marriage is entered into, regard-less of the domicile of the parties to themarriage or, for a foreign marriage, if therelationship would be recognized as mar-riage by at least one state, possession, orterritory of the United States, regardless ofthe domicile of the parties. Finally, thefinal regulations clarify that the term“marriage” does not include registered do-mestic partnerships, civil unions, or othersimilar relationships recognized understate law that are not denominated as amarriage under that state’s law, and theterms “spouse,” “husband and wife,”“husband,” and “wife” do not include in-dividuals who have entered into such arelationship.

SPECIAL ADMINISTRATIVEPROCEDURES

1. Marital Deduction and ApplicableExclusion Amount

Section 2001(a) imposes an estate taxon the transfer of the taxable estate ofevery decedent who is a citizen or residentof the United States. Section 2010(a) pro-vides that a credit of the applicable creditamount is allowed to the estate of every


decedent against the tax imposed by§ 2001. Section 2010(c)(1) defines theapplicable credit amount as the amount ofthe tentative tax that would be determinedunder § 2001(c) if the amount with respectto which such tentative tax is to be com-puted were equal to the applicable exclu-sion amount. Section 2010(c)(2) definesthe applicable exclusion amount as thesum of the basic exclusion amount of$5,000,000 (as increased for inflation) andthe deceased spousal unused exclusionamount. Section 2056(a) provides that,except as limited for certain terminableinterests, the value of the decedent’s tax-able estate is determined by deductingfrom the value of the gross estate thevalue of all interests in property passingfrom the decedent to the surviving spouse(estate tax marital deduction), assumingall requirements for that deduction are sat-isfied.

Section 2501 imposes a gift tax foreach calendar year on the transfer of prop-erty by gift during such calendar year byany individual. Section 2502 provides thatthe tax imposed by § 2501 for each cal-endar year is an amount equal to the ex-cess of (1) a tentative tax, computed under§ 2001(c), on the aggregate sum of thetaxable gifts for such calendar year andfor each of the preceding calendar periods,over (2) a tentative tax, computed undersuch section, on the aggregate sum of thetaxable gifts for each of the precedingcalendar periods. Under section 2505(a),in the case of a citizen or resident of theUnited States, a credit is allowed againstthe tax imposed by § 2501 for each cal-endar year in an amount equal to (1) theapplicable credit amount in effect under§ 2010(c) that would apply if the donordied at the end of the calendar year, re-duced by (2) the sum of the amounts al-lowable as a credit to the individual under§ 2505 for all preceding calendar periods.Section 2523(a) provides that, when a do-nor transfers an interest in property by giftto a donee who is then the donor’s spouse,the amount of the donor’s taxable gifts forthat calendar year is reduced by the totalvalue of such gifts to the donor’s spouse(gift tax marital deduction), assuming thatthe other requirements for that deductionare satisfied.

For example, when a married individ-ual (A) makes a gift or bequest to A’s

spouse (B), A is entitled to claim a gift orestate tax marital deduction for the gift orbequest under § 2523 or § 2056 if therequirements of those sections are satis-fied. Because of this marital deduction, Adoes not have to use any of A’s applicableexclusion amount to exclude that spousaltransfer from tax, thus preserving A’s ap-plicable exclusion amount for other giftsand bequests. Prior to the decision inWindsor, if A and B were of the same sex,A was not allowed to claim the maritaldeduction for a transfer to B, and A’sapplicable exclusion amount (if any)would have been applied automatically toreduce the amount of the gift or estate taxdue.

Applicable law provides that, as longas the limitations period for filing claimsof credits or refunds under § 6511 has notexpired, a taxpayer may file an amendedForm 709 (United States Gift (andGeneration-Skipping Transfer) Tax Re-turn) or a supplemental Form 706 (UnitedStates Estate (and Generation-SkippingTransfer) Tax Return) to claim the maritaldeduction for a gift or bequest to the tax-payer’s same-sex spouse and to restore theapplicable exclusion amount allocated tothat transfer. If the limitations period hasexpired, this notice allows the taxpayer torecalculate the taxpayer’s remaining ap-plicable exclusion amount as a result ofrecognizing the taxpayer’s marriage to thetaxpayer’s spouse. However, once thelimitations period on assessment of taxhas expired, neither the value of the trans-ferred interest nor any position concerninga legal issue (other than the existence ofthe marriage) related to the transfer can bechanged pursuant to this notice. See§§ 2001(f), 2504(c), 6501(c)(9) and theregulations thereunder. Similarly, nocredit or refund of the tax paid on thatmarital gift can be given once the limita-tions period on claims for credit or refundhas expired.

In the interest of providing certaintyand to ease the administrative burden onboth the taxpayer and IRS, a taxpayermust recalculate the taxpayer’s remainingapplicable exclusion amount, in accor-dance with IRS forms and instructions, ona Form 709 (preferably, the first Form 709required to be filed by the taxpayer afterthe issuance of this notice), on anamended Form 709 (if the limitations pe-

riod under § 6511 has not expired), or onthe Form 706 for the taxpayer’s estate ifnot reported on a Form 709. Unless ataxpayer has predeceased this notice, it isnot necessary to file an amended or sup-plemental return solely to report the in-crease in available applicable exclusionamount as a result of this administrativeguidance. The taxpayer should include astatement at the top of the Form 706 orForm 709 that the return is “FILED PUR-SUANT TO NOTICE 2017–15.” More-over, the taxpayer must attach a statementsupporting the claim for the marital de-duction and detailing the recalculation ofthe taxpayer’s remaining applicable ex-clusion amount as directed in forms andinstructions issued by the IRS. If a QTIPor QDOT election is required in order toobtain the marital deduction, a separaterequest for relief pursuant to § 301.9100–3 must be submitted. The IRS will provideon www.irs.gov a worksheet and instruc-tions to the Form 706 and Form 709 toproperly compute and report the recalcu-lated applicable exclusion amount.

The provisions of this section 1 applyboth to the recalculation of the remainingapplicable exclusion amount of a taxpayer(whether living or deceased), as well as tothe recalculation of any deceased spousalexclusion amount allowed to be includedin the applicable exclusion amount of thattaxpayer’s surviving spouse.

While this notice allows taxpayers torecalculate their remaining applicable ex-clusion amount as a result of the allow-ance of a marital deduction, it does notextend the applicable time limits on elect-ing to split gifts made by a spouse under§ 2513. In addition, any claims for creditor refund of gift or estate tax filed after theexpiration of the limitations period under§ 6511 will be denied. Any unrefundedgift tax paid on a gift to a same-sexspouse, for which the limitations periodunder § 6511 has expired, will continue tobe recognized as gift tax paid or payablefor purposes of the computation of theestate tax under § 2001.

2. GST Exemption and GenerationAssignments

Section 2601 imposes a tax on allgeneration-skipping transfers. Section2611(a) provides that a “generation-skipping transfer” is a taxable distribution,


a taxable termination, or a direct skip, allof which are transfers to or for the benefitof one or more skip persons. Section2613(a) provides that a skip person is (1)a person assigned to a generation that istwo or more generations below the gener-ation assignment of the transferor, or (2) atrust (A) if all interests in such trust areheld by skip persons, or (B) if (i) there isno person holding an interest in such trust,and (ii) at no time after such transfer maya distribution (including distributions ontermination) be made from such trust to anon-skip person.

A person’s generation is determinedunder § 2651 based on the transferee’sfamilial relationship to the transferor orthe transferor’s spouse, or if there is nosuch relationship, then based on the dif-ference in age between the transferor andtransferee. For purposes of the GST gen-eration assignment rules, family membersof the transferor include the transferor’sspouse and each lineal descendant of agrandparent of the transferor or the trans-feror’s spouse. The generation assignmentof each family member other than aspouse is determined by comparing thenumber of generations between the trans-feree and a grandparent of the transferee(or of the transferee’s spouse or formerspouse) with the number of generationsbetween that grandparent and the trans-feror (or the transferor’s spouse or formerspouse). Spouses are assigned to the samegeneration: an individual who has beenmarried at any time to the transferor isassigned to the transferor’s generation,and an individual who has been married atany time to a lineal descendant of a grand-parent of the transferor (or of the transfer-or’s spouse or former spouse) is assignedto the generation of that lineal descendant.Finally, a relationship by legal adoption orby the half-blood is treated as a relation-ship by blood.

Section 2651(d) provides that an indi-vidual who is not assigned to a generationby reason of the family relationships de-scribed in the preceding paragraph shallbe assigned to a generation on the basis ofthe date of such individual’s birth. Anindividual born not more than 12½ yearsafter the date of birth of the transferor isassigned to the transferor’s generation. Anindividual born more than 12½ years butnot more than 37½ years after the trans-

feror is assigned to the first generationyounger than the transferor. A new gen-eration begins every 25 years thereafter.

Under § 2631, every individual is al-lowed a GST exemption amount whichmay be allocated by such individual toany property with respect to which suchindividual is the transferor.

Section 26.2632–1(b)(4)(i) of theGeneration-Skipping Transfer Tax Regu-lations provides that an allocation of GSTexemption to a trust is void to the extentthat the amount allocated exceeds theamount necessary to obtain an inclusionratio of zero with respect to the trust. Anallocation also is void if the allocation ismade with respect to a trust that, at thetime of the allocation, has no GST poten-tial with respect to the transferor whoseexemption was allocated. For this pur-pose, a trust has GST potential even if thepossibility of a GST is so remote as to benegligible. Under this rule, an allocationmade to a trust with one or more skippersons as beneficiaries is not void.

Prior to the decision in Windsor, if amarried individual (A) made a gift to A’ssame-sex spouse (B) or to a lineal descen-dant of B, B and B’s descendants would beassigned to a generation for GST tax pur-poses based upon their ages, because theyhad no familial relationship to A that wasrecognized for federal tax purposes. Ifthose generation assignments resulted in Bor any of B’s descendants being skip per-sons, A’s gift could be subject to GST taxexcept to the extent A allocated A’s GSTexemption to the gift (or to the recipienttrust). One result of the Windsor decision,however, is that the generation assign-ments of B and B’s lineal descendantsinstead are established based on their fa-milial relationship with A by reason of Aand B’s marriage. Accordingly, B is in thesame generation as A, so neither B nor anyof B’s children are skip persons, A’s gifts(or transfers on death) to them are notsubject to GST tax, and any of A’s GSTexemption allocated to such transfers (ormade to a trust solely for those individu-als) is void.

In light of the Windsor decision, theTreasury Department and the IRS con-clude that any allocation of GST exemp-tion to a transfer also is void if the transferis a direct skip not in trust to B or to alineal descendant of B (or such descen-

dant’s spouse) who is not a skip personwith regard to transfers from A.

These rules apply to allocations of ataxpayer’s GST exemption made on a re-turn filed, or by operation of law as of adate, before the issuance of this notice,whether or not the limitations period onclaims for credits or refunds under § 6511has expired. This notice also permits ataxpayer to reduce his or her GST exemp-tion allocated to transfers that were madeto or for the benefit of transferees whosegeneration assignment is changed as a re-sult of the Windsor decision. This notice islimited to the recalculation of the taxpay-er’s GST exemption that was allocated toa transfer to (or to a trust for the solebenefit of) one or more transferees whosegeneration assignment for purposes of thatexemption allocation should have beendetermined on the basis of a familial re-lationship as the result of the Windsordecision, and who therefore are non-skippersons.

In the interest of providing certaintyand to ease the administrative burden onboth the taxpayer and IRS, a taxpayershould recalculate (also taking into ac-count the GST implications of any interimtransfers), in accordance with IRS formsand instructions, and report such taxpay-er’s available GST exemption based uponthat recalculation, on a Form 709 (prefer-ably, the first Form 709 required to befiled by the taxpayer after the issuance ofthis notice), on an amended Form 709 (ifthe limitations period under § 6511 hasnot expired), or on the Form 706 for thetaxpayer’s estate if not reported on a Form709. Unless a taxpayer has predeceasedthis notice, it is not necessary to file anamended or supplemental return solely toreport the increase in available GST ex-emption as a result of this notice. Chapter13 of the Code, and the regulations there-under, shall apply to the allocation of ataxpayer’s newly recalculated GST ex-emption. A request for relief under§ 301.9100–3 is not required. Rather, thetaxpayer should include a statement at thetop of the Form 706 or Form 709 that thereturn is “FILED PURSUANT TO NO-TICE 2017–15.” Moreover, the taxpayershould attach a statement that the taxpay-er’s allocation of GST exemption in aprior year is void pursuant to this noticeand a copy of the computation of the


resulting exemption allocation(s) and theamount of exemption remaining availableto that taxpayer. The IRS will provide onwww.irs.gov a worksheet and instructionsto the Form 706 and Form 709 to be usedto properly recalculate the remaining ex-emption amount.

Notwithstanding the recalculation ofGST exemption under this notice, a claimfor a credit or refund resulting from thisnotice will be denied if the claim is notfiled within the applicable period of limi-tations under § 6511.


The principal authors of this notice areJuli Ro Kim and Mayer Samuels of theOffice of Associate Chief Counsel (Pass-throughs & Special Industries). For fur-ther information regarding this notice,contact Ms. Kim or Mr. Samuels at (202)317-6859 (not a toll-free number).

26 CFR 601.601: Rules and regulations.(Also:§§ 141, 145, 1.141–3, 1.145–2)

Rev. Proc. 2017–13SECTION 1. PURPOSE

This revenue procedure provides safeharbor conditions under which a manage-ment contract does not result in privatebusiness use of property financed withgovernmental tax-exempt bonds under§ 141(b) of the Internal Revenue Code orcause the modified private business usetest for property financed with qualified501(c)(3) bonds under § 145(a)(2)(B) tobe met. This revenue procedure modifies,amplifies, and supersedes Rev. Proc.2016–44, 2016–36 IRB 316, to addresscertain types of compensation, the timingof payment of compensation, the treat-ment of land, and methods of approval ofrates. Sections 2.11 through 2.14 of thisrevenue procedure generally describe themodifications and amplifications made toRev. Proc. 2016–44 by this revenue pro-cedure.


.01 Section 103(a) provides that, ex-cept as provided in § 103(b), gross incomedoes not include interest on any State orlocal bond. Section 103(b)(1) providesthat § 103(a) shall not apply to any private

activity bond that is not a qualified bond(within the meaning of § 141). Section141(a) provides that the term “private ac-tivity bond” means any bond issued aspart of an issue (1) that meets the privatebusiness use test and private security orpayment test, or (2) that meets the privateloan financing test.

.02 Section 141(b)(1) provides gener-ally that an issue meets the private busi-ness use test if more than 10 percent of theproceeds of the issue are to be usedfor any private business use. Section141(b)(6) defines “private business use”as use (directly or indirectly) in a trade orbusiness carried on by any person otherthan a governmental unit. For this pur-pose, any activity carried on by a personother than a natural person must be treatedas a trade or business.

.03 Section 1.141–3(a)(1) of the In-come Tax Regulations provides, in part,that the 10 percent private business usetest of § 141(b)(1) is met if more than 10percent of the proceeds of an issue is usedin a trade or business of a nongovernmen-tal person. For this purpose, the use offinanced property is treated as the directuse of proceeds. Section 1.141–3(a)(2)provides that, in determining whether anissue meets the private business use test, itis necessary to look at both indirect anddirect use of proceeds. Proceeds aretreated as used in the trade or business ofa nongovernmental person if a nongovern-mental person, as a result of a single trans-action or a series of related transactions,uses property acquired with the proceedsof an issue.

.04 Section 1.141–3(b)(1) provides thatboth actual and beneficial use by a non-governmental person may be treated asprivate business use. In most cases, theprivate business use test is met only if anongovernmental person has special legalentitlements to use the financed propertyunder an arrangement with the issuer. Ingeneral, a nongovernmental person istreated as a private business user as aresult of ownership; actual or beneficialuse of property pursuant to a lease, a man-agement contract, or an incentive paymentcontract; or certain other arrangementssuch as a take or pay or other output-typecontract.

.05 Section 1.141–3(b)(3) providesgenerally that the lease of financed prop-

erty to a nongovernmental person is pri-vate business use of that property. For thispurpose, any arrangement that is properlycharacterized as a lease for federal incometax purposes is treated as a lease. Section1.141–3(b)(3) further provides that, in de-termining whether a management contractis properly characterized as a lease, it isnecessary to consider all the facts andcircumstances, including the followingfactors: (1) the degree of control over theproperty that is exercised by a nongovern-mental person; and (2) whether a nongov-ernmental person bears the risk of loss ofthe financed property.

.06 Section 1.141–3(b)(4)(i) providesgenerally that a management contract withrespect to financed property may result inprivate business use of that property,based on all of the facts and circum-stances. A management contract with re-spect to financed property generally re-sults in private business use of thatproperty if the contract provides for com-pensation for services rendered with com-pensation based, in whole or in part, on ashare of net profits from the operations ofthe facility. Section 1.141–3(b)(4)(iv) pro-vides generally that a management con-tract with respect to financed property re-sults in private business use of thatproperty if the service provider is treatedas the lessee or owner of financed prop-erty for federal income tax purposes.

.07 Section 1.141–3(b)(4)(ii) defines“management contract” as a management,service, or incentive payment contract be-tween a governmental person and a ser-vice provider under which the service pro-vider provides services involving all, aportion, or any function, of a facility. Forexample, a contract for the provision ofmanagement services for an entire hospi-tal, a contract for management services fora specific department of a hospital, and anincentive payment contract for physicianservices to patients of a hospital are eachtreated as a management contract.

.08 Section 1.141–3(b)(4)(iii) providesthat the following arrangements generallyare not treated as management contractsthat give rise to private business use: (A)contracts for services that are solely inci-dental to the primary governmental func-tion or functions of a financed facility (forexample, contracts for janitorial, officeequipment repair, hospital billing, or sim-


ilar services); (B) the mere granting ofadmitting privileges by a hospital to adoctor, even if those privileges are condi-tioned on the provision of de minimisservices if those privileges are available toall qualified physicians in the area, con-sistent with the size and nature of thehospital’s facilities; (C) a contract to pro-vide for the operation of a facility or sys-tem of facilities that consists primarily ofpublic utility property, if the only com-pensation is the reimbursement of actualand direct expenses of the service pro-vider and reasonable administrative over-head expenses of the service provider; and(D) a contract to provide for services, ifthe only compensation is the reimburse-ment of the service provider for actual anddirect expenses paid by the service pro-vider to unrelated parties.

.09 Section 141(e) provides, in part,that the term “qualified bond” includes aqualified 501(c)(3) bond if certain require-ments stated therein are met. Section145(a) provides generally that “qualified501(c)(3) bond” means any private activ-ity bond issued as part of an issue if (1) allproperty that is to be provided by the netproceeds of the issue is to be owned by a501(c)(3) organization or a governmentalunit, and (2) such bond would not be aprivate activity bond if (A) 501(c)(3) or-ganizations were treated as governmentalunits with respect to their activities that donot constitute unrelated trades or busi-nesses, determined by applying § 513(a),and (B) § 141(b)(1) and (2) were appliedby substituting “5 percent” for “10 per-cent” each place it appears and by substi-tuting “net proceeds” for “proceeds” eachplace it appears. Section 1.145–2 providesthat, with certain exceptions and modifi-cations, §§ 1.141–0 through 1.141–15 ap-ply to § 145(a).

.10 Rev. Proc. 2016–44 provides safeharbor conditions under which a manage-ment contract does not result in privatebusiness use of property financed withgovernmental tax-exempt bonds under§ 141(b) or cause the modified privatebusiness use test for property financedwith qualified 501(c)(3) bonds under§ 145(a)(2)(B) to be met. Rev. Proc.2016–44 modified and superseded Rev.Proc. 97–13, 1997–1 C.B. 632; Rev. Proc.2001–39, 2001–2 C.B. 38; and section

3.02 of Notice 2014–67, 2014–46 I.R.B.822.

.11 Section 5.02 of Rev. Proc. 2016–44 sets forth general financial require-ments for management compensation ar-rangements eligible for the safe harbor.Sections 5.02(2) and 5.02(3) of Rev. Proc.2016–44 provide that the contract mustneither provide to the service provider ashare of net profits nor impose on theservice provider the burden of bearing anyshare of net losses from the operation ofthe managed property. Before the publi-cation of Rev. Proc. 2016–44, previouslyapplicable revenue procedures expresslytreated certain types of compensation, in-cluding capitation fees, periodic fixedfees, and per-unit fees (as defined therein),as not providing a share of net profits.Questions have arisen regarding whetherthese common types of compensationcontinue to be treated in a similar mannerunder Rev. Proc. 2016–44. Related ques-tions have arisen about whether a serviceprovider’s payment of expenses of the op-eration of the managed property withoutreimbursement from the qualified user (asdefined in section 4.04 of Rev. Proc.2016–44) affects the treatment of thesetypes of compensation. To provide conti-nuity with the previous safe harbors, thisrevenue procedure clarifies that thesetypes of compensation and certain incen-tive compensation will not be treated asproviding a share of net profits or requir-ing the service provider to bear a share ofnet losses.

.12 Sections 5.02(2) and 5.02(3) ofRev. Proc. 2016–44 also provide that thetiming of payment of compensation can-not be contingent upon net profits or netlosses from the operation of the managedproperty. Questions have arisen about theeffect of these restrictions on the timing ofpayment of compensation. This revenueprocedure clarifies that compensation sub-ject to an annual payment requirement andreasonable consequences for late payment(such as interest charges or late paymentfees) will not be treated as contingentupon net profits or net losses if the con-tract includes a requirement that the qual-ified user will pay the deferred compen-sation within five years of the original duedate of the payment.

.13 Section 5.03 of Rev. Proc. 2016–44 provides that the term of the contract,

including all renewal options (as definedin § 1.141–1(b)), must be no greater thanthe lesser of 30 years or 80 percent of theweighted average reasonably expectedeconomic life of the managed property.For this purpose, under Rev. Proc. 2016–44, economic life is determined in thesame manner as under § 147(b), but with-out regard to § 147(b)(3)(B)(ii), as of thebeginning of the term of contract. Section147(b)(3)(B)(i) provides that generallyland is not taken into account, but§ 147(b)(3)(B)(ii) provides that if 25 per-cent or more of the net proceeds of anyissue is to be used to finance the acquisi-tion of land, such land shall be taken intoaccount and treated as having an eco-nomic life of 30 years. Questions havearisen about excluding land when the costof the land accounts for a significant por-tion of the managed property. This reve-nue procedure provides that economic lifeis determined in the same manner as under§ 147(b) as of the beginning of the term ofthe contract. Thus, land will be treated ashaving an economic life of 30 years if 25percent or more of the net proceeds of theissue that finances the managed propertyis to be used to finance the costs of suchland.

.14 Section 5.04 of Rev. Proc. 2016–44 provides that the qualified user mustexercise a significant degree of controlover the use of the managed property.Section 5.04 of Rev. Proc. 2016–44 fur-ther provides that this requirement is metif the contract requires the qualified userto approve, among other things, the ratescharged for use of the managed property.Section 5.04 of Rev. Proc. 2016–44 alsoprovides that a qualified user may showapproval of rates charged for use of themanaged property by either expressly ap-proving such rates (or the methodologyfor setting such rates) or by including inthe contract a requirement that serviceprovider charge rates that are reasonableand customary as specifically determinedby an independent third party. Questionshave arisen about the requirement to ap-prove the rates in various circumstances inwhich it may not be feasible to approveeach specific rate charged, such as for aphysician’s professional services at a§ 501(c)(3) hospital or hotel room rates ata governmentally-owned hotel. This rev-enue procedure clarifies that a qualified


user may satisfy the approval of rates re-quirement by approving a reasonable gen-eral description of the method used to setthe rates or by requiring that the serviceprovider charge rates that are reasonableand customary as specifically determinedby, or negotiated with, an independentthird party.

SECTION 3. SCOPE

This revenue procedure applies to amanagement contract (as defined in sec-tion 4.03 of this revenue procedure) in-volving managed property (as defined insection 4.04 of this revenue procedure)financed with the proceeds of an issueof governmental bonds (as defined in§ 1.141–1(b)) or qualified 501(c)(3) bonds(as defined in § 145).

SECTION 4. DEFINITIONS

For purposes of this revenue proce-dure, the following definitions apply:

.01 Capitation fee means a fixed peri-odic amount for each person for whom theservice provider or the qualified user as-sumes the responsibility to provide allneeded services for a specified period solong as the quantity and type of servicesactually provided to such persons variessubstantially. For example, a capitationfee includes a fixed dollar amount payableper month to a medical service providerfor each member of a health maintenanceorganization plan for whom the provideragrees to provide all needed medical ser-vices for a specified period. A fixed peri-odic amount may include an automaticincrease according to a specified, objec-tive, external standard that is not linked tothe output or efficiency of the managedproperty. For example, the ConsumerPrice Index and similar external indicesthat track increases in prices in an area orincreases in revenues or costs in an indus-try are objective, external standards. Acapitation fee may include a variable com-ponent of up to 20 percent of the totalcapitation fee designed to protect the ser-vice provider against risk such as risk ofcatastrophic loss.

.02 Eligible expense reimbursement ar-rangement means a management contractunder which the only compensation con-sists of reimbursements of actual and di-rect expenses paid by the service provider

to unrelated parties and reasonable relatedadministrative overhead expenses of theservice provider.

.03 Management contract means amanagement, service, or incentive pay-ment contract between a qualified userand a service provider under which theservice provider provides services for amanaged property. A management con-tract does not include a contract or portionof a contract for the provision of servicesbefore a managed property is placed inservice (for example, pre-operating ser-vices for construction design or construc-tion management).

.04 Managed property means the por-tion of a project (as defined in § 1.141–6(a)(3)) with respect to which a serviceprovider provides services.

.05 Periodic fixed fee means a stateddollar amount for services rendered for aspecified period of time. For example, astated dollar amount per month is a peri-odic fixed fee. The stated dollar amountmay automatically increase according to aspecified, objective external standard thatis not linked to the output or efficiency ofthe managed property. For example, theConsumer Price Index and similar exter-nal indices that track increases in prices inan area or increases in revenues or costs inan industry are objective external stan-dards. Capitation fees and per-unit feesare not periodic fixed fees.

.06 Per-unit fee means a fee based on aunit of service provided specified in thecontract or otherwise specifically deter-mined by an independent third party, suchas the administrator of the Medicare pro-gram, or the qualified user. For example, astated dollar amount for each specifiedmedical procedure performed, car parked,or passenger mile is a per-unit fee. Sepa-rate billing arrangements between physi-cians and hospitals are treated as per-unitfee arrangements. A fee that is a stateddollar amount specified in the contractdoes not fail to be a per-unit fee as a resultof a provision under which the fee mayautomatically increase according to aspecified, objective, external standard thatis not linked to the output or efficiency ofthe managed property. For example, theConsumer Price Index and similar exter-nal indices that track increases in prices inan area or increases in revenues or costs in

an industry are objective, external stan-dards.

.07 Qualified user means, for projects(as defined in § 1.141–6(a)(3)) financedwith governmental bonds, any govern-mental person (as defined in § 1.141–1(b))or, for projects financed with qualified501(c)(3) bonds, any governmental per-son or any 501(c)(3) organization withrespect to its activities which do not con-stitute an unrelated trade or business, de-termined by applying § 513(a).

.08 Service provider means any personother than a qualified user that providesservices to, or for the benefit of, a quali-fied user under a management contract.

.09 Unrelated parties means personsother than either: (1) a related party (asdefined in § 1.150–1(b)) to the serviceprovider or (2) a service provider’s em-ployee.

SECTION 5. SAFE HARBORCONDITIONS UNDER WHICHMANAGEMENT CONTRACTS DONOT RESULT IN PRIVATEBUSINESS USE

.01 In general. If a management con-tract meets all of the applicable conditionsof sections 5.02 through section 5.07 ofthis revenue procedure, or is an eligibleexpense reimbursement arrangement, themanagement contract does not result inprivate business use under § 141(b) or145(a)(2)(B). Further, under section 5.08of this revenue procedure, use function-ally related and subordinate to a manage-ment contract that meets these conditionsdoes not result in private business use.

.02 General financial requirements.(1) In general. The payments to the

service provider under the contract mustbe reasonable compensation for servicesrendered during the term of the contract.Compensation includes payments to reim-burse actual and direct expenses paid bythe service provider and related adminis-trative overhead expenses of the serviceprovider.

(2) No net profits arrangements. Thecontract must not provide to the serviceprovider a share of net profits from theoperation of the managed property. Com-pensation to the service provider will notbe treated as providing a share of netprofits if no element of the compensationtakes into account, or is contingent upon,


either the managed property’s net profitsor both the managed property’s revenuesand expenses (other than any reimburse-ments of direct and actual expenses paidby the service provider to unrelated thirdparties) for any fiscal period. For this pur-pose, the elements of the compensationare the eligibility for, the amount of, andthe timing of the payment of the compen-sation. Incentive compensation will not betreated as providing a share of net profitsif the eligibility for the incentive compen-sation is determined by the service pro-vider’s performance in meeting one ormore standards that measure quality ofservices, performance, or productivity,and the amount and the timing of thepayment of the compensation meet therequirements of this section 5.02(2).

(3) No bearing of net losses of themanaged property.

(a) The contract must not, in sub-stance, impose upon the service providerthe burden of bearing any share of netlosses from the operation of the managedproperty. An arrangement will not betreated as requiring the service provider tobear a share of net losses if:

(i) The determination of the amountof the service provider’s compensation andthe amount of any expenses to be paid bythe service provider (and not reimbursed),separately and collectively, do not take intoaccount either the managed property’s netlosses or both the managed property’s rev-enues and expenses for any fiscal period;and

(ii) The timing of the payment ofcompensation is not contingent upon themanaged property’s net losses.

(b) For example, a service providerwhose compensation is reduced by astated dollar amount (or one of multiplestated dollar amounts) for failure to keepthe managed property’s expenses below aspecified target (or one of multiple speci-fied targets) will not be treated as bearinga share of net losses as a result of thisreduction.

(4) Treatment of certain types of com-pensation. Without regard to whether theservice provider pays expenses with re-spect to the operation of the managedproperty without reimbursement by thequalified user, compensation for serviceswill not be treated as providing a share ofnet profits or requiring the service pro-

vider to bear a share of net losses undersections 5.02(2) and 5.02(3) of this reve-nue procedure if the compensation for ser-vices is: (a) based solely on a capitationfee, a periodic fixed fee, or a per-unit fee;(b) incentive compensation described inthe last sentence of section 5.02(2) of thisrevenue procedure; or (c) a combinationof these types of compensation.

(5) Treatment of timing of payment ofcompensation. Deferral due to insufficientnet cash flows from the operation of themanaged property of the payment of com-pensation that otherwise meets the re-quirements of sections 5.02(2) and 5.02(3)of this revenue procedure will not causethe deferred compensation to be treatedas contingent upon net profits or net lossesunder sections 5.02(2) and 5.02(3) of thisrevenue procedure if the contract includesrequirements that:

(a) The compensation is payable atleast annually;

(b) The qualified user is subject toreasonable consequences for late pay-ment, such as reasonable interest chargesor late payment fees; and

(c) The qualified user will pay suchdeferred compensation (with interest orlate payment fees) no later than the end offive years after the original due date of thepayment.

.03 Term of the contract and revisions.The term of the contract, including allrenewal options (as defined in § 1.141–1(b)), must not be greater than the lesserof 30 years or 80 percent of the weightedaverage reasonably expected economiclife of the managed property. For this pur-pose, economic life is determined in thesame manner as under § 147(b) as of thebeginning of the term of the contract. Acontract that is materially modified withrespect to any matters relevant to this sec-tion 5 is retested under this section 5 as anew contract as of the date of the materialmodification.

.04 Control over use of the managedproperty. The qualified user must exercisea significant degree of control over the useof the managed property. This control re-quirement is met if the contract requiresthe qualified user to approve the annualbudget of the managed property, capitalexpenditures with respect to the managedproperty, each disposition of property thatis part of the managed property, rates

charged for the use of the managed prop-erty, and the general nature and type ofuse of the managed property (for example,the type of services). For this purpose, forexample, a qualified user may show ap-proval of capital expenditures for a man-aged property by approving an annualbudget for capital expenditures describedby functional purpose and specific maxi-mum amounts; and a qualified user mayshow approval of dispositions of propertythat is part of the managed property in asimilar manner. Further, for example, aqualified user may show approval of ratescharged for use of the managed propertyby expressly approving such rates or ageneral description of the methodologyfor setting such rates (such as a methodthat establishes hotel room rates usingspecified revenue goals based on compa-rable properties), or by requiring that theservice provider charge rates that are rea-sonable and customary as specifically de-termined by, or negotiated with, an inde-pendent third party (such as a medicalinsurance company).

.05 Risk of loss of the managed prop-erty. The qualified user must bear the riskof loss upon damage or destruction of themanaged property (for example, due toforce majeure). A qualified user does notfail to meet this risk of loss requirement asa result of insuring against risk of lossthrough a third party or imposing upon theservice provider a penalty for failure tooperate the managed property in accor-dance with the standards set forth in themanagement contract.

.06 No inconsistent tax position. Theservice provider must agree that it is notentitled to and will not take any tax posi-tion that is inconsistent with being a ser-vice provider to the qualified user withrespect to the managed property. For ex-ample, the service provider must agree notto claim any depreciation or amortizationdeduction, investment tax credit, or de-duction for any payment as rent with re-spect to the managed property.

.07 No circumstances substantially lim-iting exercise of rights.

(1) In general. The service providermust not have any role or relationshipwith the qualified user that, in effect, sub-stantially limits the qualified user’s abilityto exercise its rights under the contract,based on all the facts and circumstances.


(2) Safe harbor. A service providerwill not be treated as having a role orrelationship prohibited under section5.07(1) of this revenue procedure if:

(a) No more than 20 percent of thevoting power of the governing body of thequalified user is vested in the directors,officers, shareholders, partners, members,and employees of the service provider, inthe aggregate;

(b) The governing body of thequalified user does not include the chiefexecutive officer of the service provider orthe chairperson (or equivalent executive)of the service provider’s governing body;and

(c) The chief executive officer ofthe service provider is not the chief exec-utive officer of the qualified user or any ofthe qualified user’s related parties (as de-fined in § 1.150–1(b)).

(3) For purposes of section 5.07(2)of this revenue procedure, the phrase “ser-vice provider” includes the service pro-vider’s related parties (as defined in§ 1.150–1(b)) and the phrase “chief exec-utive officer” includes a person withequivalent management responsibilities.

.08 Functionally related and subordi-nate use. A service provider’s use of aproject (as defined in § 1.141–6(a)(3))that is functionally related and subordi-nate to performance of its services under amanagement contract for managed prop-erty that meets the conditions of this sec-tion 5 does not result in private businessuse of that project. For example, use ofstorage areas to store equipment used toperform activities required under a man-agement contract that meets the require-ments of this section 5 does not result inprivate business use.

SECTION 6. EFFECT ON OTHERDOCUMENTS

Rev. Proc. 2016–44 is modified, am-plified, and superseded.

SECTION 7. DATE OFAPPLICABILITY

This revenue procedure applies to anymanagement contract that is entered intoon or after January 17, 2017, and an issuermay apply this revenue procedure to anymanagement contract that was enteredinto before January 17, 2017. In addition,

an issuer may apply the safe harbors inRev. Proc. 97–13, as modified by Rev.Proc. 2001–39 and amplified by Notice2014–67, to a management contract thatis entered into before August 18, 2017 andthat is not materially modified or extendedon or after August 18, 2017 (other thanpursuant to a renewal option as defined in§ 1.141–1(b)).


The principal authors of this revenueprocedure are Johanna Som de Cerff andDavid White of the Office of AssociateChief Counsel (Financial Institutions &Products). For further information regard-ing this revenue procedure, contact DavidWhite on (202) 317-6980 (not a toll-freenumber).

Updated WithholdingForeign PartnershipAgreement and WithholdingForeign Trust AgreementRev. Proc. 2017–21

SECTION 1. PURPOSE

This revenue procedure sets forth thewithholding foreign partnership agree-ment (WP agreement) and withholdingforeign trust agreement (WT agreement)entered into under § 1.1441–5(c)(2)(ii)and (e)(5)(v). In general, the WP and WTagreements allow a foreign partnership orforeign trust to assume the withholdingand reporting obligations under chapters 3and 4 of the Internal Revenue Code(Code) for certain payments of U.S.source income (such as interest, divi-dends, and royalties) made to its directpartners, beneficiaries, or owners, and insome cases, persons holding interests inthe partnership or trust through one ormore foreign intermediaries or flow-through entities (indirect partners, benefi-ciaries, or owners). This revenue proce-dure also provides guidance to foreignpartnerships and foreign trusts for how toapply to enter into, or renew, the WP orWT agreement.

The WP agreement and WT agreementprovided in Revenue Procedure 2014–47,2014–35 I.R.B. 393 (the 2014 WP agree-

ment and 2014 WT agreement), werescheduled to expire on December 31,2016, but on December 30, 2016, the De-partment of the Treasury (Treasury De-partment) and the Internal RevenueService (IRS) announced in Revenue Pro-cedure 2017–15, 2017–03 I.R.B. 437, thatthe 2014 WP and WT agreements wouldbe treated as in effect until the updatedagreements are issued in January 2017.The WP and WT agreements in this rev-enue procedure apply to withholding for-eign partnerships (WPs) and withholdingforeign trusts (WTs) with a WP or WTagreement effective on or after the date ofissuance of this revenue procedure (butsee section 12 of the WP or WT agree-ment for when the terms of the WP or WTagreement applies).

Section 2 of this revenue procedureprovides background on the withholdingand reporting requirements of chapters 3and 4 of the Code. Section 3 of this rev-enue procedure describes the scope of thisrevenue procedure, and section 4 of thisrevenue procedure highlights changes tothe WP and WT agreements. Section 5 ofthis revenue procedure provides the appli-cation procedures for becoming a WP orWT and for renewing a WP or WT agree-ment. Section 6 of this revenue procedureprovides the WP agreement and section 7of this revenue procedure provides theWT agreement. Section 8 of this revenueprocedure provides the effective date; sec-tion 9 provides the effect on other docu-ments; section 10 describes the collectionof information burdens under the Paper-work Reduction Act; and section 11 pro-vides drafting information.


.01 Withholding and Reporting underChapter 4 of the Code. On March 18,2010, the Hiring Incentives to RestoreEmployment Act of 2010, Pub. L. 111–147, added chapter 4 of Subtitle A (chap-ter 4 or FATCA) of the Code, comprisedof sections 1471 through 1474. On Janu-ary 28, 2013, the Treasury Departmentand the IRS published final regulations(TD 9610) under chapter 4 (78 FR 5874),and, on September 10, 2013, publishedcorrections to those final regulations (78FR 55202) (collectively, the 2013 chapter4 regulations). On March 6, 2014, theTreasury Department and the IRS pub-


lished temporary regulations (TD 9657)providing clarifications and modificationsto the 2013 final regulations, and, on July1, 2014, and November 18, 2014, pub-lished corrections to those temporary reg-ulations (79 FR 37175 and 78 FR 68619,respectively) (collectively, the 2014 chap-ter 4 regulations). On January 6, 2017, theTreasury Department and the IRS pub-lished regulations finalizing the 2014chapter 4 regulations with certain modifi-cations (final chapter 4 regulations) andpublished temporary regulations provid-ing additional rules under chapter 4 (tem-porary chapter 4 regulations) (TD 9809,82 FR 2124).

Section 1471(a) requires a withholdingagent to deduct and withhold a tax equalto 30 percent on any withholdable pay-ment made to a foreign financial institu-tion (FFI), unless the FFI agrees to andcomplies with the terms of an FFI agree-ment (published in Revenue Procedure2017–16, 2017–03 I.R.B. 501 (as updatedor superseded by any subsequent revenueprocedure)) to satisfy the obligationsspecified in section 1471(b) (a participat-ing FFI), is deemed to meet these require-ments under section 1471(b) (a deemed-compliant FFI), or is treated as an exemptbeneficial owner under § 1.1471–6. Sec-tion 1472(a) requires a withholding agentto deduct and withhold a tax equal to 30percent on any withholdable paymentmade to a non-financial foreign entity(NFFE), other than an excepted NFFE,unless such entity provides informationregarding its substantial U.S. owners orcertifies that it does not have any suchowners.

.02 Withholding and Reporting underChapter 3 of the Code. Under sections1441 and 1442, a withholding agent isrequired to deduct and withhold a taxequal to 30 percent on any payment ofU.S. source fixed or determinable, annualor periodical (FDAP) income that is anamount subject to withholding (as definedin § 1.1441–2(a)) made to a foreign per-son. A reduced rate of withholding mayapply under the Code (for example, sec-tion 1443) or an income tax treaty. Gen-erally, a withholding agent must report thepayments on Forms 1042–S, regardless ofwhether withholding is required. See§ 1.1461–1(c).

.03 Coordination of Withholding andReporting Requirements under Chapters 3and 4 of the Code. On March 6, 2014, theTreasury Department and the IRS pub-lished temporary regulations (TD 9658,79 FR 12726) providing rules under chap-ters 3, 61, and section 3406 of the Code tocoordinate with the requirements providedin the 2013 and 2014 chapter 4 regula-tions, and, on July 1, 2014, published cor-rections to those temporary regulations(79 FR 37181) (collectively, the tempo-rary coordination regulations). On Janu-ary 6, 2017, the Treasury Department andthe IRS published regulations finalizingcertain temporary regulations under chap-ters 3 and 61 and sections 3406 and 6402(final chapter 3 regulations) and publishedtemporary regulations providing addi-tional rules under chapter 3 (temporarychapter 3 regulations) (TD 9808, 82 FR2046).

With respect to a payment that is sub-ject to withholding under chapter 4, awithholding agent may credit any taxwithheld under chapter 4 against its liabil-ity for any tax due with respect to thepayment under chapter 3. A withholdingagent is required to use a single Form1042–S to report information required un-der both chapters 3 and 4 with respect to apayment subject to withholding underboth chapters 3 and 4 for which a creditagainst the beneficial owner’s chapter 3liability, if any, may be claimed. Withrespect to a withholdable payment that isnot subject to withholding under chapter 4and that is an amount subject to withhold-ing under chapter 3, a withholding agent isalso required to report the applicablechapter 4 exemption code for the paymentand the recipient’s chapter 4 status.

.04 Reporting Regarding Certain U.S.Persons by Foreign Partnerships andForeign Trusts. If a foreign partnershiphas U.S. partners, the foreign partnershipis generally required to file Form 1065with a Schedule K–1 to report each U.S.partner. See § 1.6031(a)–1. If a U.S. per-son is treated as the owner of any portionof a foreign trust under the grantor trustrules (sections 671 through 679 of theCode), the foreign trust is required to fileForm 3520–A, “Annual Information Re-turn of a Foreign Trust with a U.S.Owner,” and to provide statements to eachU.S. owner, as well as to each U.S. person

who is not an owner and receives a distri-bution. See section 6048(b); see also theInstructions for Form 3520–A.

SECTION 3. SCOPE

.01 Entities Eligible to Execute a WPor WT Agreement. The WP agreementmay be entered into by a foreign partner-ship described in § 1.1441–5(c)(2)(ii), andthe WT agreement may be entered into bya foreign trust described in § 1.1441–5(e)(5)(v). With respect to an FFI, the WPor WT agreement may only be enteredinto by an FFI that agrees to satisfy therequirements and obligations of a partici-pating FFI, registered deemed-compliantFFI, or registered deemed-compliantModel 1 IGA FFI. An FFI that is a retire-ment fund (as defined in section 2.69 ofthe WP or section 2.67 of the WT agree-ment) or a NFFE may also apply to enterinto a WP or WT agreement. A partner-ship or trust that is a territory financialinstitution (as defined in § 1.1471–1(b)(130)) may not enter into a WP or WTagreement. An FFI that is a foreign re-verse hybrid entity (as defined in section2.31 of the WP agreement) may apply toenter into a WP agreement, provided thatthe FFI is a participating FFI, a registereddeemed-compliant FFI, or a registereddeemed-compliant Model 1 IGA FFI. Seesection 4.03 of this revenue procedure fora summary of the requirements in the WPagreement applicable to a foreign reversehybrid entity.

.02 Chapter 4 Requirements with Re-spect to Financial Accounts. Certain FFIshave withholding and reporting obliga-tions under chapter 4 with respect to theFFI’s financial accounts. Under § 1.1471–5(b)(1), a financial account is definedbroadly, and includes, for example, non-publicly traded equity interests in an FFIthat is an investment entity (as defined in§ 1.1471–4(e)(4)(i)). Therefore, if a WPor WT is an FFI, WP’s or WT’s directpartners, beneficiaries, or owners are con-sidered account holders for purposes ofchapter 4, and the WP or WT will berequired to comply with the withholdingand reporting requirements with respect tosuch partners, beneficiaries, or owners un-der WP’s or WT’s FATCA requirements.

.03 Assumption of Primary Chapters 3and 4 Withholding Responsibilities. TheWP and WT agreements require a foreign


partnership or foreign trust to assume pri-mary withholding responsibilities underchapters 3 and 4 with respect to the WP’sor WT’s direct partners, beneficiaries, orowners, and permit the WP or WT toassume primary withholding responsibili-ties under chapters 3 and 4 for certainindirect partners, beneficiaries, or owners.Section 2.09 of the WP and WT agree-ments defines chapter 3 to mean sections1441, 1442, 1443, 1461, 1463, and 1464.The WP and WT agreements do not per-mit a WP or WT to assume primary with-holding responsibility under section 1445or 1446.

.04 Indirect Partners, Beneficiaries, orOwners That Are U.S. Non-Exempt Recip-ients. A WP or WT must act in its capacityas a WP or WT for reportable amountsthat are distributed to, or included in thedistributive share of, the WP’s or WT’sdirect partners, beneficiaries, or owners. AWP or WT may also act as a WP or WTfor reportable amounts that are distributedto, or included in the distributive share of,certain indirect partners, beneficiaries, orowners. Although § 1.1441–5(c)(2)(ii)and (e)(5)(v) authorize the IRS to enterinto an agreement with a WP or WT topermit it to act as a withholding agent orpayor under chapters 3, 4, and 61, andsection 3406, the WP and WT agreementsdo not cover chapter 61 or section 3406.Accordingly, a WP or WT may only act asa WP or WT for an indirect partner, ben-eficiary, or owner that is a U.S. non-exempt recipient if the indirect partner,beneficiary, or owner is included in achapter 4 withholding rate pool of thepassthrough partner, beneficiary, or owner(as defined in section 2.56 of the WPagreement and 2.54 of the WT agree-ment). If the indirect partner, beneficiary,or owner that is a U.S. non-exempt recip-ient is not included in the passthroughpartner’s, beneficiary’s, or owner’s chap-ter 4 withholding rate pool, the WP or WTcannot act as a WP or WT for such indi-rect partner, beneficiary, or owner, andmust provide specific documentation onsuch indirect partner, beneficiary, orowner to the withholding agent paying thereportable amount. See section 9.03 of theWP or WT agreement on the treatment ofindirect partners, beneficiaries, or ownersunder each of these agreements.

SECTION 4. SIGNIFICANTCHANGES TO THE WP AND WTAGREEMENTS

This section summarizes the significantchanges to the WP and WT agreements.Several of these changes are made to con-form with the final and temporary chapter3 regulations, the final and temporarychapter 4 regulations, Notice 2016–42,2016–29 I.R.B. 67, and Revenue Proce-dure 2017–15.

.01 Compliance Procedures (In Gen-eral). Notice 2016–42 sets forth a draftqualified intermediary (QI) agreementwith proposed updates and modifications,and announced that the proposed changesto the QI compliance review are intended,with appropriate modifications, to be in-corporated in the WP and WT agreements.Revenue Procedure 2017–15 sets forth thefinal QI agreement for QIs with a QIagreement effective on or after January 1,2017 (the 2017 QI agreement). Accord-ingly, the compliance procedures in theWP and WT agreements are updated toinclude compliance review proceduressimilar to the compliance procedures inthe 2017 QI agreement. For example, theWP and WT agreements allow the respon-sible officer to make the certification ofinternal controls based on, in addition tothe periodic review (if required), any otherreasonable processes, procedures, re-views, or certifications made by other per-sons that the responsible officer has deter-mined are necessary in order to make theresponsible officer’s periodic certificationof compliance. The WP and WT agree-ments also provide that the periodic re-view may be conducted for any calendaryear covered by the certification period,rather than the most recent calendar year.If a WP or WT chooses to review the lastyear of the certification period for its pe-riodic review, the WP or WT will alsohave an extended six-month period oftime to make the certification on or beforeDecember 31 of the calendar year follow-ing the certification period (rather thanJuly 31 of the calendar year following thecertification period). The WP and WTagreements also permit certain WPs andWTs that meet the requirements in section8.07 of the WP or WT agreement to applyfor a waiver from the periodic review re-quirement. A WP or WT that is a NFFE

and a WP that is a member of a consoli-dated compliance program may not applyfor a waiver from the periodic review re-quirement. As in the 2017 QI agreement,the WP and WT agreements require thatthe reviewer have sufficient independenceto objectively conduct the review and can-not review his or her own work. See thepreamble to the 2017 QI agreement foradditional discussion of the standard ofindependence required of a reviewer,which also applies to the WP and WTagreements. The Appendix to the WP andWT agreements provides the certificationof internal controls, waiver request, andfactual information.

Under the 2014 WP and WT agree-ments, the initial certification period of theWP or WT agreement is the period endingon the third full calendar year that the WPor WT agreement is in effect, and subse-quent certification periods are every threeyears following the initial certification pe-riod, other than for a WP or WT that is aNFFE or a retirement fund that does notmake a pooled reporting election undersection 6.02(D) of the WP or WT agree-ment, in which case subsequent certifica-tion periods are every six years for suchNFFE or retirement fund. To make theWP and WT agreements more administra-ble for the IRS, the WP and WT agree-ments are revised to provide a three-yearsubsequent certification period for allWPs or WTs. In addition, the WP and WTagreements are revised to clarify that thecertification period under the WP or WTagreement may not necessarily be thesame as the certification period that ap-plies to the WP’s or WT’s FATCA re-quirements as a participating FFI or reg-istered deemed-compliant FFI. Therefore,a WP or WT may have a different reviewcycle and certification due date for thecertification required under its FATCA re-quirements than under its WP or WTagreement, and should comply with therequirements for both. In the certificationof internal controls in the Appendix to theWP and WT agreements, a WP or WTmust certify that it has maintained itschapter 4 status during the certificationperiod under the WP or WT agreement(not the WP’s or WT’s certification periodunder its FATCA requirements, if any).

The 2017 QI agreement allows the useof statistical sampling of a QI’s accounts


for purposes of the periodic review forcertain QIs, and includes a safe harbormethod in Appendix II of the 2017 QIagreement for determining a statisticalsample of accounts for the periodic re-view. Section 8.05 of the WP and WTagreements provides that if a WP or WThas more than 60 partners, beneficiaries,or owners for which the WP or WT actsfor the year of the periodic review, theWP’s or WT’s reviewer may use statisti-cal sampling procedures by applying theprinciples set forth in Appendix II of the2017 QI Agreement in Revenue Proce-dure 2017–15 for its periodic review.

.02 Consolidated Compliance Pro-gram. In response to a comment to the2014 WP agreement, section 8.02(C) ofthe WP agreement provides an allowancefor consolidated compliance program forWPs, similar to the allowance for QIs.Under this option, a Compliance Entitymust implement a compliance programthat includes uniform practices, proce-dures, and systems, subject to uniformmonitoring and control, with respect to allWPs in the consolidated compliance pro-gram for purposes of meeting the require-ments of section 8 of the WP agreement.The Compliance Entity must agree to bejointly and severally liable for each WP’sobligations under its WP agreement. AWP in a consolidated compliance programmay not request a waiver of the periodicreview requirement. The responsible offi-cer of the Compliance Entity must per-form a consolidated periodic review de-scribed in sections 8.04 and 8.05 of theWP agreement that includes each WP inthe consolidated compliance program, butis permitted to make one certification forall WPs in the consolidated complianceprogram. The responsible officer of theCompliance Entity must submit factualinformation (described in Part IV of theAppendix to the WP agreement) for eachWP. The Compliance Entity must be thesponsoring entity for chapter 4 purposesfor each WP in the consolidated compli-ance program unless the IRS Foreign In-termediaries Program approves the use ofa different entity.

A comment to Notice 2016–42 sug-gested that a consolidated complianceprogram for WPs should not include arequirement that the program have “uni-form” practices, procedures, and systems

because this may be interpreted to mean“identical” practices, procedures, and sys-tems. This comment is not adopted be-cause “uniform” does not necessarilymean identical, but can also mean “con-sistent in approach,” which is the intendedmeaning here.

.03 Foreign Reverse Hybrid Entities.The WP agreement is revised to includerequirements for a WP that is a foreignreverse hybrid entity. Under the 2014 WPagreement, a foreign reverse hybrid entitycould only act as a WP if it obtained arider that modified the terms of the WPagreement. A foreign reverse hybrid entityis defined in section 2.31 of the WP agree-ment as an entity organized or incorpo-rated outside of the United States that istreated as a corporation for U.S. federalincome tax purposes but is fiscally trans-parent (within the meaning of § 1.894–1(d)(3)(ii)) under the laws of the countryin which it is organized with respect to theitems of income paid to the entity. A WPthat is a foreign reverse hybrid entity mustbe a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. The WPagreement only allows a foreign reversehybrid entity to obtain reduced rates ofwithholding under tax treaties for foreigninterest holders, and requires the foreignreverse hybrid entity to comply with therequirements in section 6.03(C) of the WPagreement. Since a foreign reverse hybridentity is treated as a corporation for U.S.tax purposes, and therefore is not requiredto file Form 1065 or Schedule K–1, sec-tion 6.03(C) of the WP agreement doesnot require a WP that is a foreign reversehybrid entity to file a Form 1065 orSchedule K–1, and instead the WP mustprepare the reconciliation statement de-scribed in section 6.03(C)(3) of the WPagreement to support the WP’s allocationsof U.S. source FDAP income to each part-ner that claims treaty benefits and issuePFIC Annual Information Statements tothe extent required in section 6.03(C)(4)of the WP agreement. The reconciliationstatement and the PFIC Annual Informa-tion Statements must be reviewed for ac-curacy as part of a WP’s periodic review.

.04 Additional Changes to Coordinatewith the 2017 QI Agreement and the Tem-porary Chapter 3 Regulations. The WPand WT agreements are updated consis-

tent with the 2017 QI agreement and thetemporary chapter 3 regulations. For ex-ample, the WP and WT agreements re-quire a WP or WT to obtain informationregarding limitation on benefits on a treatystatement obtained from an entity that is abeneficial owner claiming treaty benefits.A transitional rule permits a WP or WT toobtain the information on limitation onbenefits for certain partners, beneficiaries,or owners by January 1, 2019. In addition,section 6.02(B)(6) of the 2014 WP andWT agreements, which required specificreporting of each partnership or trust towhich the joint account option is applied,is removed because section 9.01(B)(3) ofthe WP and WT agreements permits a WPor WT to report amounts distributed to, orincluded in the distributive share of, thepartnership’s or trust’s direct partners,beneficiaries, or owners in chapter 3 re-porting pools on Form 1042–S. See thepreamble to the 2017 QI agreement foradditional information on these changes.

.05 Changes to Coordinate with theTemporary and Final Chapter 4 Regula-tions. In section 2 of the WP and WTagreements, the definition of participatingFFI is revised to cross-reference § 1.1471–1(b)(91) to incorporate the definition inthe final chapter 4 regulations, and thedefinition of U.S. person is updated toincorporate revisions to the definition inthe final chapter 4 regulations. Section6.05(A)(2) of the WP agreement incorpo-rates rules in the temporary chapter 4 reg-ulations regarding account reporting re-quirements for participating FFIs that arepartnerships. A WP that is a participatingFFI or registered deemed-compliant FFI(other than a reporting Model 1 FFI) re-porting a U.S. account or an account heldby an owner-documented FFI on Form8966 must report the partner’s distributiveshare of the partnership’s income or lossfor the calendar year, without regard towhether any such amount is distributed tothe partner during the year, and any guar-anteed payments for the use of capital.The amount required to be reported withrespect to a partner may be determinedbased on the WP’s tax returns or, if the taxreturns are unavailable by the due date forfiling Form 8966, the WP’s financial state-ments or any other reasonable methodused by the WP for calculating the part-


ner’s share of partnership income and lossby such date.

.06 Additional Changes and Correc-tions. The 2014 WP and WT agreementsprovide that a WP or WT that is an FFImay obtain documentary evidence in ac-cordance with the know-your-customer(KYC) rules set forth in an attachment tothe WP or WT agreement. The KYC rulesthat have been approved for each jurisdic-tion are available at http://www.irs.gov/Businesses/International-Businesses/List-of-Approved-KYC-Rules. Because theKYC rules are readily accessible online,and because the IRS no longer providessigned copies of a WP or WT agreement,the applicable KYC rules will no longerbe attached to a WP or WT agreement andreferences to an attachment to the WP orWT agreement are removed.

The WP and WT agreements includerevisions and corrections to several defi-nitions in section 2 of the WP or WTagreement. The definition of financial in-stitution is revised to correct a cross-reference and conform to the definition in§ 1.1471–1(b)(50), and the definition offoreign financial institution is revised toconform to the definition in § 1.1471–1(b)(47). Definitions of the terms non-qualified intermediary, nonreporting Model1 FFI, nonreporting Model 2 FFI, and (inthe WP agreement only) foreign reversehybrid entity are added. The definition ofcertified deemed-compliant FFI is movedto section 2.08 of the WP or WT agree-ment and revised to exclude registereddeemed-compliant Model 1 IGA FFIs be-cause when the term certified deemed-compliant FFI was used in the 2014 WPand WT agreements, registered deemed-compliant Model 1 IGA FFIs were ex-cluded by a parenthetical. The definitionof registered deemed-compliant FFI ismoved to section 2.63 of the WP agree-ment and section 2.61 of the WT agree-ment and revised to exclude registereddeemed-compliant Model 1 IGA FFIsproviding a chapter 4 withholding ratepool of U.S. payees. The inclusion of reg-istered deemed-compliant Model 1 IGAFFIs in the definition of registereddeemed-compliant FFI was unnecessarybecause section 6.02(C) of the 2014 WPor WT agreement already specificallyidentified registered deemed-compliantModel 1 IGA FFIs as a category of FFIs

that may provide a U.S. payee pool. Fi-nally, the definition of registered deemed-compliant Model 1 IGA FFI is moved tosection 2.64 of the WP agreement andsection 2.62 of the WT agreement.

In the 2014 WP and WT agreements, apassthrough partner or passthrough bene-ficiary or owner is defined as a direct orindirect partner, beneficiary, or owner of aWP or WT that is a foreign intermediaryor foreign flow-through entity, and an in-termediary is defined as any person thatacts as a custodian, broker, nominee, oragent with respect to a payment. How-ever, a passthrough partner or passthroughbeneficiary or owner should not include aQI that assumes primary chapters 3 and 4withholding responsibility with respect topayments of U.S. source FDAP income orassumes primary Form 1099 reporting andbackup withholding responsibility. There-fore, the definition of passthrough partneror passthrough beneficiary or owner iscorrected to exclude a QI that assumesprimary chapters 3 and 4 withholding re-sponsibility with respect to payments ofU.S. source FDAP income or primaryForm 1099 reporting and backup with-holding responsibility.

Section 3.03 of the WP and WT agree-ments provides the general rule for with-holding on amounts subject to chapter 3withholding and withholdable paymentsthat are distributed to, or included in thedistributive share of, a foreign partner,beneficiary, or owner. The 2014 WP andWT agreements do not provide a rule forwhen to report withholding on a distribu-tive share when the withholding occursafter the due date (including extensions)for filing Forms 1042–S. Section 3.03 ofthe WP and WT agreements is revised toprovide that if the date that is the earlier ofthe due date for filing Schedule K–1 (orthe statement required under section6048(b)) or the date that the Schedule K–1(or the statement required under section6048(b)) is actually furnished to the part-ner, beneficiary, or owner, is after the duedate (including extensions) for filing theWP’s or WT’s Forms 1042–S for the cal-endar year, the WP or WT must withholdand report the withholding on the distrib-utive share that relates to the prior calen-dar year as if it arises in the subsequentcalendar year.

Under section 3.04 of the WP and WTagreements, a WP or WT may determinethe amount of withholding on a distribu-tion based on an estimate of a partner’s,beneficiary’s, or owner’s distributiveshare of income, provided that the WP orWT corrects the withholding to reflect thepartner’s, beneficiary’s, or owner’s actualdistributive share on the earlier of the duedate for filing Schedule K–1 (or the state-ment required under section 6048(b)) orthe date that the Schedule K–1 (or thestatement required under section 6048(b))is actually furnished to the partner, bene-ficiary, or owner. Section 3.04 of the WPand WT agreements is revised to require aWP or WT that makes corrections afterthe earlier of the due date (including ex-tensions) for filing Forms 1042–S or thedate that Forms 1042–S are actually filedto report such corrections on Forms1042–S for the subsequent calendar year.This revision is made to ensure that a WPor WT that has already filed Forms1042–S reports the corrections for thesubsequent year rather than amending theprior year Forms 1042–S.

.07 Effective Date and Term of the WPand WT Agreements. In Revenue Proce-dure 2017–15, the Treasury Departmentand the IRS announced that because theupdated WP and WT agreements wouldnot be published before December 31,2016, WPs and WTs with agreements ineffect on December 31, 2016, may con-tinue to treat those agreements as in effectuntil the updated WP and WT agreementsare issued.

Section 12.01(A) of the WP and WTagreements provides that, in general, theeffective date of a WP or WT agreementdepends on when the WP or WT applica-tion is submitted. If a WP or WT applieson or before March 31 of the calendaryear and is approved for WP or WT status,the WP or WT agreement will be effectiveJanuary 1 of such calendar year. If a WPor WT applies after March 31 and is ap-proved in the same calendar year and re-ceives reportable amounts between Janu-ary 1 of the year in which the applicationis submitted and the date of approval, theWP or WT agreement will be effectiveJanuary 1 of the following calendar year.If a WP or WT that applies after March 31does not receive any reportable amountsbetween January 1 of the year in which


the application is submitted and the dateof approval, the WP or WT agreementwill be effective on the date the WP orWT is issued a WP-EIN or WT-EIN.

A special rule for calendar year 2017provides that if a WP or WT is approvedfor WP or WT status during calendar year2017, the rules described in section12.01(A) of the WP or WT agreementapply, except that the terms of the WP orWT agreement effective from January 1,2017, to the date of issuance of this rev-enue procedure will be the terms in theWP or WT agreement in Revenue Proce-dure 2014–47, and the terms of the WP orWT agreement provided in this revenueprocedure will apply beginning on thedate of issuance of this revenue procedure.

The WP and WT agreements in sec-tions 6 and 7 of this revenue procedureexpire upon the earlier of the date the WPor WT terminates under its partnershipagreement or trust instrument (as applica-ble) or the end of the sixth full calendaryear the WP or WT agreement is in effect,unless the WP or WT agreement is termi-nated under section 10.02 or 10.03 of theWP or WT agreement.

SECTION 5. APPLICATIONPROCEDURES FOR WP OR WTAGREEMENTS

.01 Prospective WP or WT. An entityseeking to enter into a WP or WT agree-ment must submit Form 14345, “Applica-tion for Qualified Intermediary, Withhold-ing Foreign Partnership, or WithholdingForeign Trust Status,” online through theQI/WP/WT Application and AccountManagement System accessible throughthe QI/WP/WT landing page available athttps://www.irs.gov/businesses/corporations/qualified-intermediary-system. The applica-tion must also include any additional in-formation and documentation requestedby the IRS. The application must estab-lish, to the satisfaction of the IRS, that theapplicant has adequate resources and hasestablished appropriate practices and pro-cedures to comply with the terms of theWP or WT agreement. Questions regard-ing WP and WT applications may be sentto [email protected].

Prior to submitting Form 14345, a pro-spective WP or WT (other than an FFIthat is a retirement fund or an NFFE thatis not a sponsoring entity) must submit

Form 8957, “Foreign Account TaxCompliance Act (FATCA) Registration,”through the FATCA registration websiteavailable at www.irs.gov/FATCA to ob-tain a chapter 4 status of participating FFI,registered deemed-compliant FFI, regis-tered deemed-compliant Model 1 IGAFFI, or sponsoring entity. Upon comple-tion of the registration process, a WP orWT described in the preceding sentencewill be issued a GIIN (which is separatefrom its WP-EIN or WT-EIN) to be usedto identify its chapter 4 status to withhold-ing agents and to tax administrators, ifapplicable, and for FATCA reporting tothe extent required under its FATCA re-quirements.

If the IRS approves the WP’s or WT’sapplication, the IRS will send the WP orWT an approval notice and the WP-EINor WT-EIN assigned to the entity for ful-filling the requirements of a WP or WTunder the WP or WT agreement. A WP orWT that has been issued a GIIN must,within 90 days of the date of approval ofits WP or WT application, update itsFATCA registration on the FATCA reg-istration website to include its WP-EIN orWT-EIN.

The IRS will not enter into a WP orWT agreement with an FFI that providesfor the use of documentary evidence ob-tained under a jurisdiction’s know-your-customer rules if it has not approved thatjurisdiction’s know-your-customer prac-tices and procedures. A list of jurisdic-tions with know-your-customer rules thatthe IRS has approved is available athttp://www.irs.gov/Businesses/International-Businesses/List-of-Approved-KYC-Rules.To request IRS approval of a jurisdiction’sknow-your-customer rules, contact theKYC coordinator in the IRS Foreign Inter-mediaries Program at [email protected].

.02 Existing WP or WT. A WP or WTthat has executed a WP or WT agreementand seeks to renew its WP or WT agree-ment must do so online through the QI/WP/WT Application and Account Man-agement System and include the informationrequested for renewal of its WP or WTstatus. A WP or WT will retain its previ-ously issued WP-EIN or WT-EIN for ful-filling the requirements of a WP or WTunder chapters 3 and 4.

.03 Contact Information. For questionsregarding the WP and WT applicationprocess, contact the Foreign Intermediar-ies Program at [email protected].

SECTION 6. WITHHOLDINGFOREIGN PARTNERSHIPAGREEMENT

Section 1. PURPOSE AND SCOPESection 2. DEFINITIONSSection 3. WITHHOLDING RESPON-

SIBILITYSection 4. DOCUMENTATION RE-

QUIREMENTSSection 5. WITHHOLDING FOREIGN

PARTNERSHIP WITHHOLDING CER-TIFICATE

Section 6. TAX RETURN AND IN-FORMATION REPORTING OBLIGA-TIONS

Section 7. ADJUSTMENTS FOR OVER-AND UNDERWITHHOLDING; RE-FUNDS

Section 8. COMPLIANCE PROCE-DURES

Section 9. CERTAIN PARTNERSHIPSAND TRUSTS AND INDIRECT PART-NERS

Section 10. EXPIRATION, TERMI-NATION AND DEFAULT

Section 11. MISCELLANEOUS PRO-VISIONS

Section 12. EFFECTIVE DATE OFAGREEMENTThe text of the WP agreement is set forthbelow. The IRS will not provide signedcopies of the WP agreement. A reportingModel 2 FFI should interpret this Agree-ment by substituting the term “reportingModel 2 FFI” for “participating FFI”throughout this Agreement, except incases where this Agreement explicitly re-fers to a reporting Model 2 FFI. A report-ing Model 1 FFI and a nonreportingModel 2 FFI treated as a registered deemed-compliant FFI should apply this Agreementby substituting the term “reporting Model 1FFI” or “nonreporting Model 2 FFI,” asapplicable, for “registered deemed-compliant FFI” throughout this Agreement,except in cases where this Agreement ex-plicitly refers to a reporting Model 1 FFI ornonreporting Model 2 FFI treated as a reg-istered deemed-compliant FFI.

WHEREAS, WP has submitted anapplication in accordance with this reve-nue procedure to be a withholding foreign


partnership for purposes of § 1.1441–5(c)(2);

WHEREAS, WP and the IRS desireto enter into an agreement to establishWP’s rights and obligations regardingdocumentation, withholding, informationreporting, tax return filing, deposits, andrefund procedures under sections 1441,1442, 1443, 1461, 1471, 1472, 1474,6031, 6302, 6402, and 6414 with respectto certain types of payments;

WHEREAS, WP represents thatthere are no legal restrictions that prohibitit from complying with the requirementsof this Agreement;

WHEREAS, if WP is a foreign fi-nancial institution (other than a retirementfund), WP represents that it has agreed tocomply with the requirements of the FFIagreement, in the case of a participatingFFI (including a reporting Model 2 FFI);§ 1.1471–5(f)(1) or the applicable Model2 IGA, in the case of a registered deemed-compliant FFI (other than a reportingModel 1 FFI); or an applicable Model 1IGA, in the case of a reporting Model 1FFI or a registered deemed-compliantModel 1 IGA FFI beginning on the effec-tive date of this Agreement;

NOW, THEREFORE, in consider-ation of the following terms, representa-tions, and conditions, the parties agree asfollows:

Section 1. PURPOSE AND SCOPE

Sec. 1.01. General Obligations. Whenthe IRS enters into a WP agreement witha foreign person, that foreign person be-comes a WP. Except as otherwise pro-vided in this Agreement, WP’s obligationswith respect to income distributed to, orincluded in the distributive shares of, itspartners are governed by the Internal Rev-enue Code and the regulations thereunder.WP must act in its capacity as a withhold-ing foreign partnership pursuant to thisAgreement for reportable amounts that aredistributed to, or included in the distribu-tive share of, WP’s direct partners. Not-withstanding the preceding sentence, thisAgreement only allows a WP that is aforeign reverse hybrid entity (as defined insection 2.31 of this Agreement) to obtainreduced rates of withholding under taxtreaties for foreign interest holders, andrequires the foreign reverse hybrid entityto comply with the requirements of sec-

tion 6.03(C) of this Agreement. WP mayalso act as a withholding foreign partner-ship for reportable amounts that are dis-tributed to, or included in the distributiveshare of, a partner, beneficiary, or ownerof a passthrough partner (i.e., an indirectpartner of WP) if such indirect partner isnot a U.S. non-exempt recipient. Notwith-standing the preceding sentence, a WPmay act as a withholding foreign partner-ship for an indirect partner that is a U.S.non-exempt recipient if such partner isincluded in the passthrough partner’schapter 4 withholding rate pool (as de-fined in section 2.15 of this Agreement) ofU.S. payees or recalcitrant account hold-ers provided on the FFI withholding state-ment (as defined in section 2.26 of thisAgreement) of the passthrough partner.WP is not required to act as a withholdingforeign partnership for payments that itdistributes to, or includes in the distribu-tive share of, a passthrough partner orindirect partner. With respect to an indi-rect partner for which WP does not (orcannot) act as a withholding foreign part-nership, WP must, as part of its WP agree-ment, comply with the requirements of awithholding agent, as applicable to a non-withholding foreign partnership underchapters 3 and 4. WP (regardless ofwhether it is an FFI or NFFE) must also,pursuant to this Agreement, assume pri-mary reporting responsibility for purposesof section 1472.If WP is an FFI, the requirements WP hasagreed to as a participating FFI, registereddeemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI ap-ply in addition to the requirements underthis Agreement except to the extent spe-cifically modified by this Agreement. ThisAgreement references WP’s FATCA re-quirements when necessary to facilitatecoordination with a WP’s obligations un-der this Agreement with respect to itspartners. A participating FFI’s obligationsare provided in the FFI agreement, a reg-istered deemed-compliant FFI’s (otherthan a reporting Model 1 FFI’s) obliga-tions are provided in § 1.1471–5(f)(1) orthe applicable Model 2 IGA, and the ob-ligations of a reporting Model 1 FFI or aregistered deemed-compliant Model 1IGA FFI are provided in the applicableModel 1 IGA.If WP is an NFFE, WP must comply with

the requirements of a withholding agentunder sections 1471 and 1472, which areprovided in this Agreement.If a WP acts as a sponsoring entity onbehalf of a sponsored FFI or sponsoreddirect reporting NFFE, it must complywith the due diligence, withholding, re-porting, and compliance requirements of asponsoring entity in addition to its re-quirements under this Agreement.Sec. 1.02. Parties to the Agreement.This Agreement applies to WP and theIRS.

Section 2. DEFINITIONS

For purposes of this Agreement, unlessotherwise specified in this Agreement, theterms listed in this section 2 are definedherein. Any term not defined in this sec-tion has the same meaning that it hasunder the Code, including the income taxregulations under the Code, any applica-ble income tax treaty, or any applicableModel 1 IGA or Model 2 IGA with re-spect to WP’s FATCA requirements as aparticipating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI.Sec. 2.01. Account. “Account” has themeaning given to that term in § 1.1471–1(b)(1) with respect to WP’s FATCA re-quirements.Sec. 2.02. Account Holder. “Accountholder” has the meaning given to that termin § 1.1471–1(b)(2) with respect to WP’sFATCA requirements with respect to anaccount that it maintains within the mean-ing of § 1.1471–5(b)(5).Sec. 2.03. Agreement. “Agreement”means this Agreement between WP andthe IRS, the Appendix to this Agreementand WP’s application to become a with-holding foreign partnership. The Appen-dix to this Agreement and WP’s applica-tion are incorporated into this Agreementby reference.Sec. 2.04. Amount Subject to Chapter 3Withholding. An “amount subject tochapter 3 withholding” is an amount de-scribed in § 1.1441–2(a), regardless ofwhether such amount is withheld upon.Sec. 2.05. Amount Subject to Chapter 4Withholding. An “amount subject tochapter 4 withholding” is a withholdablepayment (as defined in section 2.81 of thisAgreement) for which withholding is re-quired under chapter 4 or an amount for


which withholding was otherwise appliedunder chapter 4.Sec. 2.06. Assuming Primary Withhold-ing Responsibility. “Assuming primarywithholding responsibility” refers to whena WP assumes primary chapters 3 and 4withholding responsibility with respect toamounts subject to chapter 3 or 4 with-holding under the terms of the WP agree-ment. Generally, a WP assuming primarychapters 3 and 4 withholding responsibil-ity relieves the person who makes a pay-ment to the WP from the responsibility towithhold. See sections 3.03 and 3.04 ofthis Agreement for when WP is requiredto withhold under this Agreement.Sec. 2.07. Beneficial Owner. A “benefi-cial owner” has the meaning given to thatterm in § 1.1441–1(c)(6).Sec. 2.08. Certified Deemed-CompliantFFI. “Certified deemed-compliant FFI”means an FFI described in § 1.1471–5(f)(2), and includes a nonreportingModel 1 FFI and a nonreporting Model 2FFI that is treated as a certified deemed-compliant FFI.Sec. 2.09. Chapter 3. Any reference to“chapter 3 of the Code” or “chapter 3”means sections 1441, 1442, 1443, 1461,1463, and 1464.Sec. 2.10. Chapter 3 Reporting Pool. Achapter 3 reporting pool means a reportingpool described in section 6.02(D) of thisAgreement.Sec. 2.11. Chapter 3 Status. The term“chapter 3 status” refers to the attributesof a payee (and a partner of WP for pur-poses of this Agreement) relevant for de-termining the rate of withholding with re-spect to a payment made to the payee forpurposes of chapter 3.Sec. 2.12. Chapter 4. Any reference to“chapter 4 of the Code” or “chapter 4”means sections 1471, 1472, 1473, and1474.Sec. 2.13. Chapter 4 Reporting Pool. Achapter 4 reporting pool means a reportingpool described in section 6.02(C) of thisAgreement.

Sec. 2.14. Chapter 4 Status. “Chapter4 status” means the status of a person as aU.S. person, specified U.S. person, an in-dividual that is a foreign person, a partic-ipating FFI, a deemed-compliant FFI, arestricted distributor, an exempt beneficialowner, a nonparticipating FFI, a territory

financial institution, an excepted NFFE, ora passive NFFE.Sec. 2.15. Chapter 4 Withholding RatePool. A “chapter 4 withholding rate pool”means a pool of payees that are nonpar-ticipating FFIs provided on a chapter 4withholding statement (as described in§ 1.1471–3(c)(3)(iii)(B)(3)) to which awithholdable payment is allocated. Theterm chapter 4 withholding rate pool alsomeans a pool of payees provided on anFFI withholding statement (as describedin § 1.1471–3(c)(3)(iii)(B)(2)) to which awithholdable payment is allocated to —(A) A pool of payees consisting of eachclass of recalcitrant account holders de-scribed in § 1.1471–4(d)(6) (or with re-spect to an FFI that is a QI, a single poolof recalcitrant account holders that is notsubdivided into classes of recalcitrant ac-count holders described in § 1.1471–4(d)(6)), including a separate pool of ac-count holders to which the escrowprocedures for dormant accounts apply; or(B) A pool of payees that are U.S. personsas described in § 1.1471–3(c)(3)(iii)(B)(2).Sec. 2.16. Deemed-Compliant FFI.“Deemed-compliant FFI” means a certi-fied deemed-compliant FFI, registereddeemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI thatis treated, pursuant to section 1471(b)(2)and § 1.1471–5(f), as meeting the require-ments of section 1471(b). For the defini-tion of certified deemed-compliant FFI,see section 2.08 of this Agreement. Forthe definition of registered deemed-compliant FFI, see section 2.63 of thisAgreement. For the definition of regis-tered deemed-compliant Model 1 IGAFFI, see section 2.64 of this Agreement.Sec. 2.17. Direct Partner. A “direct part-ner” means a partner that is not an indirectpartner (as defined in section 2.40 of thisAgreement).Sec. 2.18. Documentary Evidence.“Documentary evidence” means any doc-umentation obtained under the appropriateknow-your-customer rules (as defined insection 2.42 of this Agreement), or anydocumentary evidence described in§ 1.1441–6 sufficient to establish entitle-ment to a reduced rate of withholdingunder an income tax treaty. Documentaryevidence does not include a Form W–8 or

Form W–9 (or an acceptable substituteForm W–8 or Form W–9).Sec. 2.19. Documentation. “Documenta-tion” means any valid Form W–8, FormW–9 (or acceptable substitute Form W–8or Form W–9), or documentary evidence,as defined in section 2.18 of this Agree-ment, including all statements or otherinformation required to be associated withthe form or documentary evidence.Sec. 2.20. Excepted NFFE. “ExceptedNFFE” means a person described in§ 1.1471–1(b)(41).Sec. 2.21. Exempt Beneficial Owner.“Exempt beneficial owner” means a per-son described in § 1.1471–1(b)(42) andincludes any person that is treated as anexempt beneficial owner under an appli-cable Model 1 IGA or Model 2 IGA.Sec. 2.22. Exempt Recipient. An “ex-empt recipient” means a person describedin § 1.6049–4(c)(1)(ii) (for interest, divi-dends, and royalties), a person describedin § 1.6045–2(b)(2)(i) (for broker pro-ceeds), and a person described in § 1.6041–3(p) (for rents, amounts paid on notionalprincipal contracts, and other fixed or deter-minable income), for which no Form 1099reporting is required. Exempt recipients arenot exempt from reporting or withholdingunder chapter 3 or 4.Sec. 2.23. FATCA Requirements as aParticipating FFI, Registered Deemed-Compliant FFI, or Registered Deemed-Compliant Model 1 IGA FFI. “FATCArequirements as a participating FFI, regis-tered deemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI”means:(A) For a participating FFI, the require-ments set forth in the FFI agreement;(B) For a registered deemed-compliantFFI (other than a reporting Model 1 FFI),the requirements under § 1.1471–5(f)(1)or the applicable Model 2 IGA; or(C) For a reporting Model 1 FFI and aregistered deemed-compliant Model 1IGA FFI, the requirements under applica-ble foreign law to implement the applica-ble Model 1 IGA.Sec. 2.24. Financial Institution (FI). “Fi-nancial institution” or “FI” has the mean-ing set forth in § 1.1471–5(e) and includesa financial institution as defined under anapplicable Model 1 IGA or Model 2 IGA.Sec. 2.25. FFI Agreement. “FFI agree-ment” means an agreement of a participat-


ing FFI described in § 1.1471–4(a) andpublished in Revenue Procedure 2017–16,2017–03 I.R.B.501 (as updated or super-seded by any subsequent revenue proce-dure).Sec. 2.26. FFI Withholding Statement.An “FFI withholding statement” means awithholding statement provided by an FFIthat meets the requirements of § 1.1471–3(c)(3)(iii)(B)(1) and (2).Sec. 2.27. Flow-Through Entity. A“flow-through entity” is a foreign partner-ship described in § 301.7701–2 or 3 (otherthan a withholding foreign partnership), aforeign trust that is described in section651(a) (other than a withholding foreigntrust), or a foreign trust if all or a portionof such trust is treated as owned by thegrantor or other person under sections 671through 679. With respect to an item ofU.S. source FDAP income for which atreaty benefit is claimed, an entity is alsoa flow-through entity to the extent it istreated as fiscally transparent under sec-tion 894 and the regulations thereunder.Sec. 2.28. Foreign Financial Institution(FFI). “Foreign financial institution” or“FFI” has the meaning set forth in§ 1.1471–5(d).Sec. 2.29. Foreign TIN. A “foreign TIN”is a taxpayer identification number issuedby a foreign person’s country of resi-dence.Sec. 2.30. Foreign Person. A “foreignperson” is any person that is not a U.S.person and includes a nonresident alienindividual, a foreign corporation, a for-eign partnership, a foreign trust, and aforeign estate, as those terms are definedin section 7701 of the Code. For purposesof chapters 3 and 4, the term “foreignperson” also means, with respect to a pay-ment by a withholding agent, a foreignbranch (including a foreign disregardedentity) of a U.S. person that provides avalid Form W–8IMY on which it repre-sents that it is a QI.Sec. 2.31. Foreign Reverse Hybrid En-tity. A “foreign reverse hybrid entity”means an entity organized or incorporatedoutside of the United States that is treatedas a corporation for U.S. federal incometax purposes but is fiscally transparent(within the meaning of § 1.894–1(d)(3)(ii)) under the laws of the countryin which it is organized with respect to theitems of income paid to the entity.

Sec. 2.32. Form W–8. “Form W–8”means IRS Form W–8BEN, Certificate ofForeign Status of Beneficial Owner forUnited States Tax Withholding (Individu-als); IRS Form W–8BEN–E, Certificateof Status of Beneficial Owner for UnitedStates Tax Withholding and Reporting(Entities), IRS Form W–8ECI, Certificateof Foreign Person’s Claim That Income isEffectively Connected With the Conductof a Trade or Business in the UnitedStates; IRS Form W–8EXP, Certificate ofForeign Government or Other Foreign Or-ganization for United States Tax With-holding and Reporting; and IRS FormW–8IMY, Certificate of Foreign Interme-diary, Foreign Flow-Through Entity, orCertain U.S. Branches for United StatesTax Withholding and Reporting, as appro-priate. It also includes any acceptablesubstitute Form W–8 described under§§ 1.1441–1(e)(4)(vi) and 1.1471–3(c)(6)(v).Sec. 2.33. Form W–9. “Form W–9”means IRS Form W–9, Request for Tax-payer Identification Number and Certifi-cation, or any acceptable substitute FormW–9 as described under § 31.3406(h)–3(c).Sec. 2.34. Form 1042. “Form 1042”means IRS Form 1042, Annual Withhold-ing Tax Return for U.S. Source Income ofForeign Persons.Sec. 2.35. Form 1042–S. “Form 1042–S”means IRS Form 1042–S, Foreign Per-son’s U.S. Source Income Subject toWithholding.Sec. 2.36. Form 1065. “Form 1065”means IRS Form 1065, U.S. Return ofPartnership Income, including SchedulesK–1 associated with that form.Sec. 2.37. Form 1099. “Form 1099”means IRS Form 1099–B, Proceeds FromBroker and Barter Exchange Transac-tions; IRS Form 1099–DIV, Dividendsand Distributions; IRS Form 1099–INT,Interest Income; IRS Form 1099–MISC,Miscellaneous Income; IRS Form 1099–OID, Original Issue Discount; and anyother form in the IRS Form 1099 seriesappropriate to the type of payment re-quired to be reported.Sec. 2.38. Form 8966. “Form 8966”means IRS Form 8966, FATCA Report.Sec. 2.39. Global Intermediary Identifi-cation Number (GIIN). “Global interme-diary identification number” or “GIIN”

means the identification number that isassigned by the IRS to a participating FFI,registered deemed-compliant FFI, directreporting NFFE, or sponsoring entity. Theterm also includes the identification num-ber assigned by the IRS to a reportingModel 1 FFI or registered deemed-compliant Model 1 IGA FFI for the pur-pose of identifying itself to withholdingagents.Sec. 2.40. Indirect Partner. An “indirectpartner” is a person that owns a partner-ship interest in WP through one or morepassthrough partners (as defined in section2.56 of this Agreement). For example, aperson that holds an account with a for-eign intermediary or an interest in a flow-through entity which intermediary orflow-through entity, in turn, is a directpartner of WP is an indirect partner. Aperson is an indirect partner of WP even ifthere are multiple tiers of intermediariesor flow-through entities between the per-son and WP.Sec. 2.41. Intermediary. An “intermedi-ary” means a person that, for that pay-ment, acts as a custodian, broker, nomi-nee, or otherwise as an agent for anotherperson, regardless of whether such otherperson is the beneficial owner of theamount paid, a flow-through entity, or an-other intermediary.Sec. 2.42. Know-Your-Customer Rules.“Know-your-customer rules” refers to theapplicable laws, regulations, rules, and ad-ministrative practices and procedures gov-erning the requirements of certain WPsthat are FFIs to obtain documentation con-firming the identity of WP’s direct part-ners. A list of jurisdictions for which theIRS has received know-your-customer in-formation and for which the know-your-customer rules and specified documenta-tion are acceptable is available at: http://www.irs.gov/Businesses/International-Businesses/List-of-Approved-KYC-Rules.Sec. 2.43. Marketable Securities. Forpurposes of this Agreement, the term“marketable securities” means those secu-rities described in § 1.1441–6 for which aU.S. TIN or foreign TIN is not required tobe provided by the beneficial owner toobtain treaty benefits.Sec. 2.44. Non-Consenting U.S. Ac-count. For purposes of a reporting Model2 FFI, “non-consenting U.S. account” has


the meaning that such term has under theapplicable Model 2 IGA.Sec. 2.45. Non-Exempt Recipient. A“non-exempt recipient” means a personthat is not an exempt recipient under thedefinition in section 2.22 of this Agree-ment.Sec. 2.46. Non-Financial Foreign Entity(NFFE). A “non-financial foreign entity”or “NFFE” means a foreign entity that isnot a financial institution (including anentity that is incorporated or organizedunder the laws of any U.S. territory andthat is not a financial institution). The termalso means a foreign entity treated as anNFFE pursuant to a Model 1 IGA orModel 2 IGA.Sec. 2.47. Nonparticipating FFI. A“nonparticipating FFI” means an FFIother than a participating FFI, a deemed-compliant FFI, or an exempt beneficialowner.Sec. 2.48. Nonqualified Intermediary. A“nonqualified intermediary” is any inter-mediary that is not a qualified intermedi-ary. A nonqualified intermediary includesany intermediary that is a foreign personunless such person enters an agreement tobe a qualified intermediary and acts insuch capacity. A nonqualified intermedi-ary also includes an intermediary that is aterritory financial institution (as defined in§ 1.1471–1(b)(130)) unless such institu-tion agrees to be treated as a U.S. person.Sec. 2.49. Nonreporting Model 1 FFI. A“nonreporting Model 1 FFI” means a non-reporting financial institution described inAnnex II of a Model 1 IGA.Sec. 2.50. Nonreporting Model 2 FFI. A“nonreporting Model 2 FFI” means a non-reporting financial institution described inAnnex II of a Model 2 IGA.Sec. 2.51. Nonwithholding Foreign Part-nership (NWP). A “nonwithholding for-eign partnership” means a foreign partner-ship other than a withholding foreignpartnership, as defined in § 1.1441–5(c)(2).Sec. 2.52. Nonwithholding ForeignTrust (NWT). A “nonwithholding for-eign trust” means a foreign trust (as de-fined in section 7701(a)(31)(B)) that is aforeign simple trust or a foreign grantortrust and that is not a withholding foreigntrust (as defined in section 2.85 of thisAgreement).Sec. 2.53. Overwithholding. The term“overwithholding” means any amount ac-

tually withheld (determined before appli-cation of the adjustment procedures de-scribed in section 7.01 of this Agreement)from an item of income or other paymentthat is in excess of:(A) The amount required to be withheldunder chapter 4 with respect to such itemof income or other payment, if applicable,and(B) In the case of an amount subject tochapter 3 withholding, the actual tax lia-bility of the beneficial owner of the in-come or payment to which the withheldamount is attributable, regardless ofwhether such overwithholding was in er-ror or appeared correct at the time it oc-curred. For purposes of section 3406, theterm “overwithholding” means the excessof the amount actually withheld undersection 3406 over the amount required tobe withheld.Sec. 2.54. Participating FFI. A “partici-pating FFI” is defined in § 1.1471–1(b)(91).Sec. 2.55. Partnership and Partner. Theterms “partnership” and “partner” are de-fined in section 7701(a)(2) of the Codeand the regulations thereunder. For pur-poses of chapter 4, “partner” includes anaccount holder, as defined in section 2.02of this Agreement, with respect to a WPthat is an FFI. For purposes of a foreignreverse hybrid entity, the term “partner”includes a foreign interest holder of a for-eign reverse hybrid entity, when the for-eign reverse hybrid entity is treated asfiscally transparent under the tax laws ofthe interest holder’s country of residence(within the meaning of § 1.894–1(d)(3)(iii)) with respect to the item of incomepaid to the foreign reverse hybrid entity,and the interest holder itself is not treatedas fiscally transparent under the tax lawsof the interest holder’s country of resi-dence.Sec. 2.56. Passthrough Partner. A“passthrough partner” is a direct or indi-rect partner of WP that is a nonqualifiedintermediary, a qualified intermediary thatdoes not assume primary chapters 3 and 4withholding responsibility with respect topayments of U.S. source FDAP income orprimary Form 1099 reporting and backupwithholding responsibility, or a flow-through entity. As provided in section2.27 of this Agreement, a withholding for-eign partnership or withholding foreign

trust is not a flow-through entity and thusis not a passthrough partner.Sec. 2.57. Payee. For purposes of chapter3, a “payee” is defined in § 1.1441–1(c)(12), and for purposes of chapter 4, a“payee” means a person described in§ 1.1471–3(a).Sec. 2.58. Payment. A “payment” meansan amount considered made to a person ifthat person realizes income whether ornot such income results from an actualtransfer of cash or other property. See§ 1.1441–2(e).Sec. 2.59. Payor. A “payor” is defined in§ 31.3406(a)–2 and § 1.6049–4(a)(2) andgenerally means any person required tomake an information return under chapter61.Sec. 2.60. Pooled Reporting (PR) Elec-tion. A “pooled reporting election” or “PRelection” is an election to pool reportchapter 3 reporting pools on Form 1042–Sfor chapter 3 purposes as described insection 6.02(D) of this Agreement.Sec. 2.61. Qualified Intermediary (QI).A “qualified intermediary” or “QI” is aperson (or branch) described in § 1.1441–1(e)(5)(ii) that has in effect an agreementwith the IRS to be treated as a QI and actsas a QI. See Rev. Proc. 2017–15, 2017–03I.R.B. 437 (as updated or superseded byany subsequent revenue procedure), forthe QI Agreement.Sec. 2.62. Recalcitrant Account Holder.A “recalcitrant account holder” means aperson described in § 1.1471–5(g).Sec. 2.63. Registered Deemed-CompliantFFI. “Registered deemed-compliant FFI”means an FFI described in § 1.1471–5(f)(1)and includes a reporting Model 1 FFI and anonreporting Model 2 FFI that is treated asa registered deemed-compliant FFI.Sec. 2.64. Registered Deemed-CompliantModel 1 IGA FFI. “Registered deemed-compliant Model 1 IGA FFI” means an FFItreated as a deemed-compliant FFI under anapplicable Model 1 IGA that is subject tosimilar due diligence and reporting require-ments with respect to U.S. accounts as thoseapplicable to a registered deemed-compliantFFI under § 1.1471–5(f)(1), including therequirement to register with the IRS.Sec. 2.65. Reportable Amount. A “re-portable amount” means U.S. sourceFDAP income that is an amount subject tochapter 3 withholding (as defined in sec-tion 2.04 of this Agreement), U.S. source


deposit interest (as defined in section871(i)(2)(A)), and U.S. source interest ororiginal issue discount paid on the re-demption of short-term obligations (as de-fined in section 871(g)(1)(B)(i)). The termdoes not include payments on depositswith banks and other financial institutionsthat remain on deposit for two weeks orless. It also does not include amounts oforiginal issue discount arising from a saleand repurchase transaction completedwithin a period of two weeks or less, oramounts described in § 1.6049–5(b)(7),(10), or (11) (relating to certain foreigntargeted registered obligations and certainobligations issued in bearer form).Sec. 2.66. Reporting Model 1 FFI. A“reporting Model 1 FFI” means an FFIwith respect to which a foreign govern-ment or agency thereof agrees to obtainand exchange information pursuant to aModel 1 IGA, other than an FFI that istreated as a nonreporting Model 1 FFI(including a registered deemed-compliantModel 1 IGA FFI) or nonparticipating FFIunder an applicable Model 1 IGA.Sec. 2.67. Reporting Pool. A “reportingpool” is defined in section 6.02(A) of thisAgreement.Sec. 2.68. Responsible Officer. A “re-sponsible officer” of a WP means a part-ner of WP or an officer or agent of thegeneral partner of WP with sufficient au-thority to fulfill the duties of a responsibleofficer as described in section 8 of thisAgreement, including the requirements toperiodically certify and to respond to re-quests by the IRS for additional informa-tion to review WP’s compliance with thisAgreement.Sec. 2.69. Retirement Fund. A “retire-ment fund” means a retirement fund orother fund that is an exempt beneficialowner described in § 1.1471–6(f) or asimilar fund that qualifies as an exemptbeneficial owner under an applicableModel 1 IGA or Model 2 IGA.Sec. 2.70. Schedule K–1. “ScheduleK–1” or “K–1” is a schedule associatedwith Form 1065 that shows each partner’sseparate share of partnership’s income,credits, deductions, etc.Sec. 2.71. Sponsored Direct ReportingNFFE. The term “sponsored direct report-ing NFFE” has the meaning set forth in§ 1.1472–1(c)(5).Sec. 2.72. Sponsored FFI. The term

“sponsored FFI” means any entity de-scribed in § 1.1471–5(f)(1)(i)(F) (spon-sored investment entities and sponsoredcontrolled foreign corporations) or§ 1.1471–5(f)(2)(iii) (sponsored, closelyheld investment vehicles).Sec. 2.73. Sponsoring Entity. “Sponsor-ing entity” means (i) an entity that regis-ters with the IRS and agrees to performthe due diligence, withholding, and re-porting obligations of one or more spon-sored FFIs pursuant to § 1.1471–5(f)(1)(i)(F) or (f)(2)(iii); or (ii) an entitythat registers with the IRS and agrees toperform the due diligence and reportingobligations of one or more direct reportingNFFEs pursuant to § 1.1472–1(c)(5).Sec. 2.74. Underwithholding. “Under-withholding” means the excess of theamount required to be withheld underchapter 3 or 4 over the amount actuallywithheld.Sec. 2.75. Undocumented Partner. An“undocumented partner” is a partner forwhom WP does not have valid documen-tation.Sec. 2.76. U.S. Account. A “U.S. ac-count” is any financial account maintainedby a participating FFI or registereddeemed-compliant FFI that is held by oneor more specified U.S. persons or U.S.owned foreign entities that such FFI re-ports or elects to report under the FFIagreement or § 1.1471–5(f), as applicable.A U.S. account includes, in the case of areporting Model 1 FFI or registereddeemed-compliant Model 1 IGA FFI, aU.S. reportable account as defined in sec-tion 2.78 of this Agreement.Sec. 2.77. U.S. Person. A “United Statesperson” (or “U.S. person”) is a persondescribed in section 7701(a)(30), the U.S.government (including an agency or in-strumentality thereof), a State of theUnited States (including an agency or in-strumentality thereof), or the District ofColumbia (including an agency or instru-mentality thereof). An individual will notbe treated as a U.S. person for purposes ofthis Agreement for a taxable year or anyportion of a taxable year that the individ-ual is a dual resident taxpayer (within themeaning of § 301.7701(b)–7(a)(1)) who istreated as a nonresident alien pursuant to§ 301.7701(b)–7 for purposes of comput-ing the individual’s U.S. tax liability. AU.S. person does not include an alien in-

dividual who has made an election undersection 6013(g) or (h) to be treated as aresident of the United States. For chapter4 purposes, the term “U.S. person” or“United States person” also means a for-eign insurance company that has made anelection under section 953(d), providedthat either the foreign insurance companyis not a specified insurance company (asdescribed in § 1.1471–5(e)(1)(iv)), or theforeign insurance company is a specifiedinsurance company and is licensed to dobusiness in any State of the United States.Sec. 2.78. U.S. Reportable Account. A“U.S. reportable account” means a finan-cial account maintained by a reportingModel 1 FFI or registered deemed-compliant Model 1 IGA FFI that such FFIreports or elects to report under the appli-cable domestic law for compliance withand implementation of FATCA.Sec. 2.79. U.S. Source FDAP. “U.S.source FDAP” means amounts fromsources within the United States that con-stitute fixed or determinable annual or pe-riodical income, as defined in § 1.1441–2(b)(1).Sec. 2.80. U.S. TIN. A “U.S. TIN” meansa U.S. taxpayer identification number as-signed under section 6109.Sec. 2.81. Withholdable Payment. A“withholdable payment” means anamount described in § 1.1473–1(a).Sec. 2.82. Withholding Agent. A “with-holding agent” has the same meaning asset forth in § 1.1441–7(a) for purposes ofchapter 3 and as set forth in § 1.1473–1(d)for purposes of chapter 4 and includes apayor (as defined in section 2.59 of thisAgreement).Sec. 2.83. Withholding Foreign Part-nership (WP). A “withholding foreignpartnership” or “WP” means a partner-ship, described in § 1.1441–5(c)(2), thathas in effect a withholding agreementwith the IRS to be treated as a withholdingforeign partnership.Sec. 2.84. WP-EIN. A “WP-EIN” meansthe employer identification number as-signed by the IRS to a withholding foreignpartnership. WP’s WP-EIN is only to beused when WP is acting as a WP. Forexample, WP must give a withholdingagent its EIN (other than its WP-EIN), ifany, if it is not acting as a WP (i.e., actingas a nonwithholding foreign partnership)


and a taxpayer identification number isrequired.Sec. 2.85. Withholding Foreign Trust(WT). A “withholding foreign trust” or“WT” means a trust, described in§ 1.1441–5(e)(5)(v), that has in effect awithholding agreement with the IRS to betreated as a withholding foreign trust.

Section 3. WITHHOLDINGRESPONSIBILITY

Sec. 3.01. Chapters 3 and 4 Withhold-ing—In General.(A) Chapter 4 Withholding.WP (unless WP is a retirement fund) is awithholding agent for purposes of chapter4 and is subject to the withholding andreporting provisions applicable to with-holding agents under sections 1471 and1472 with respect to its partners. WP isrequired to withhold 30 percent of anywithholdable payment made after June 30,2014, that is distributed to, or included inthe distributive share of, a partner that isan FFI unless WP can reliably associatethe payment (or portion of the payment)with documentation upon which it is per-mitted to rely to treat the payment asexempt from withholding under § 1.1471–2(a)(4), or the payment is made under agrandfathered obligation described in§ 1.1471–2(b). See § 1.1473–1(a) for thedefinition of a withholdable payment andthe applicable exceptions to this defini-tion. WP is also required to withhold 30percent of any withholdable paymentmade after June 30, 2014, that is distrib-uted to, or included in the distributiveshare of, a partner that is an NFFE unlessWP can reliably associate the payment (orportion of the payment) with a certifica-tion described in § 1.1472–1(b)(1)(ii),or an exception to withholding under§ 1.1472–1 applies.If WP is a retirement fund, WP is notrequired to withhold under section 1471or 1472. If WP is a participating FFI orregistered deemed-compliant FFI (otherthan a reporting Model 1 FFI), WP willsatisfy its requirement to withhold undersections 1471(a) and 1472(a) with respectto direct partners that are entities by with-holding on withholdable payments madeto nonparticipating FFIs and recalcitrantaccount holders to the extent requiredunder its FATCA requirements as a par-ticipating FFI or registered deemed-

compliant FFI. See the FFI agreement,§ 1.1471–5(f), or the applicable Model 2IGA for the withholding requirementsthat apply to withholdable paymentsmade to direct partners that are individ-uals and are treated as recalcitrantaccount holders. If WP is a reportingModel 1 FFI or a registered deemed-compliant Model 1 IGA FFI, WP willsatisfy its requirement to withhold undersection 1471(a) with respect to directpartners by withholding on withholdablepayments made to nonparticipating FFIsto the extent required under its FATCArequirements as a registered deemed-compliant FFI or registered deemed-compliant Model 1 IGA FFI. WP mustwithhold at the time and in the mannerdescribed in sections 3.02 through 3.04of this Agreement, which modifies otherprovisions describing the time and man-ner in which WP would otherwise berequired to withhold for chapter 4 pur-poses.(B) Chapter 3 Withholding.WP is a withholding agent for purposes ofchapter 3 and is subject to the withholdingand reporting provisions applicable towithholding agents under chapter 3. WPmust withhold 30 percent of any paymentof an amount subject to chapter 3 with-holding that is distributed to, or includedin the distributive share of, a partner thatis a foreign person unless WP can reliablyassociate the payment with documentationupon which it can rely to treat the pay-ment as made to a payee that is a U.S.person or as made to a beneficial ownerthat is a foreign person entitled to a re-duced rate of withholding. See section 4of this Agreement regarding documenta-tion requirements applicable to WP fordetermining whether chapter 3 withhold-ing applies.With respect to an amount subject tochapter 4 withholding that is also anamount subject to chapter 3 withholding,WP may credit any tax withheld underchapter 4 against its liability for any taxdue under chapter 3 with respect to thepayment so that no additional withholdingis required on the payment for purposes ofchapter 3. Nothing in chapter 4 or theregulations thereunder (including the FFIagreement) or any applicable IGA relievesWP of its requirements to withhold on anamount subject to chapter 3 withholding

to the extent required under sections 3.02through 3.04 of this Agreement or modi-fies the documentation upon which WPmay rely under section 4 of this Agree-ment for determining whether withhold-ing under chapter 3 applies.Sec. 3.02. Primary Chapters 3 and 4Withholding Responsibility. WP mustassume primary chapters 3 and 4 with-holding responsibility for all withholdablepayments and amounts subject to chapter3 withholding that are distributed to, orincluded in the distributive share of, anydirect partner and any indirect partner forwhich it acts as a WP to the extent per-missible under section 9 of this Agree-ment. If WP acts as a nonwithholdingforeign partnership (NWP) with respect toan indirect partner, it cannot assume pri-mary chapters 3 and 4 withholding re-sponsibility for payments made to thatindirect partner. WP is not required towithhold on amounts it pays to a QI thatassumes primary withholding responsibil-ity with respect to the payment, or to aWT, or another WP.If WP is a participating FFI or a registereddeemed-compliant FFI, it may not electwith respect to its direct partners to satisfyits obligation to withhold under chapter 4(or the FFI agreement) on a withholdablepayment made to a recalcitrant accountholder that is a U.S. non-exempt recipientby backup withholding under section3406 as provided in § 1.1471–4(b)(3)(iii)and section 4 of the FFI agreement.See section 6 of this Agreement regardingWP’s responsibility to report amountssubject to withholding on Form 1042–S.Sec. 3.03. Timing of Withholding. WPmust withhold on the date it makes adistribution to a foreign partner that in-cludes a withholdable payment or anamount subject to chapter 3 withholdingas determined under section 3.04 of thisAgreement. To the extent a partner’s dis-tributive share of income subject to with-holding has not actually been distributedto the partner, WP must withhold on thepartner’s distributive share on the earlierof the date that the statement requiredunder section 6031(b) (i.e., Schedule K–1)is mailed or otherwise provided to thepartner or the due date for furnishing thestatement (whether or not WP is requiredto prepare and furnish the statement). Ifthat date is after the due date (including


extensions) for filing WP’s Forms 1042–Sfor the calendar year to which the distrib-utive share relates, WP must withhold andreport the withholding on the distributiveshare that relates to the prior calendar yearas if it arises in the subsequent calendaryear. See section 6.01 of this Agreementfor the requirement to report the withheldtax.Sec. 3.04. Withholding on Distributions.WP may determine the amount of with-holding on a distribution based on a rea-sonable estimate of the partner’s distribu-tive share of income subject to withholdingfor the year. WP must correct the estimatedwithholding to reflect the partner’s actualdistributive share on the earlier of the datethat the statement required under section6031(b) (i.e., Schedule K–1) is mailed orotherwise provided to the partner or thedue date for furnishing the statement(whether or not WP is required to prepareand furnish the statement). If that date isafter the earlier of the due date (includingextensions) for filing WP’s Forms 1042–Sor the date WP actually issues Forms1042–S for the calendar year, WP mustwithhold and report any adjustments re-quired by correcting the information forthe following calendar year.Sec. 3.05. Deposit Requirements. WPmust deposit amounts withheld underchapters 3 and 4 at the time and in themanner provided under section 6302 (see§ 1.6302–2(a) or § 31.6302–1(h)).

Section 4. DOCUMENTATIONREQUIREMENTS

Sec. 4.01. Documentation Requirements.(A) General Documentation Require-ments. Except as otherwise provided inthis section 4, WP must obtain a FormW–8 or Form W–9 from every direct part-ner that receives a distribution or distrib-utive share of a reportable amount. If WPis an FFI and is subject to the know-your-customer rules for documenting its part-ners (or subset of partners), WP may ob-tain documentary evidence as set forth inthe “know-your-customer” rules approvedby the IRS (or the documentation de-scribed in section 4.03(A)(3) of thisAgreement) for the applicable jurisdictionfrom its direct partners rather than a FormW–8 or Form W–9, provided WP adheresto the know-your-customer rules that ap-ply to WP with respect to the direct part-

ner from whom the documentary evidenceis obtained.WP must review and maintain documen-tation in accordance with this section 4and, in the case of documentary evidenceobtained from direct partners, in accor-dance with the know-your-customer rulesapproved by the IRS for the applicablejurisdiction. WP must make documenta-tion (together with any associated with-holding statements and other documentsor information) available upon request forinspection by WP’s external reviewer, ifthe performance of an external review isrequested by the IRS (as described in sec-tion 8.07(D) of this Agreement). WP rep-resents that none of the laws to which it issubject prohibits disclosure of the identityof any partner or corresponding partnerinformation to WP’s reviewer.(B) Coordination of Chapter 3 and Chap-ter 4 Documentation Requirements. If WPis an FFI (other than a retirement fund),WP is required to perform the due dili-gence procedures under its FATCA re-quirements as a participating FFI, regis-tered deemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI foreach direct partner to determine if thepartner is a holder of a U.S. account (orU.S. reportable account), and to determineeach direct partner that is a nonparticipat-ing FFI and, if applicable, that is a recal-citrant account holder (or non-consentingU.S. account). See, however, the auto-matic termination provision of section10.03(A) of this Agreement if WP is notin possession of valid documentation forany direct partner at any time that with-holding or reporting is required. For pur-poses of this section 4, with respect todocumenting a partner for chapter 4 pur-poses, documentary evidence also in-cludes documentation or information thatis publicly available to determine thechapter 4 status of the account holder tothe extent permitted under an applicableIGA.If WP is an NFFE, WP is required todocument the chapter 4 status of eachpartner to determine if reporting or with-holding applies under section 1471 or1472 on withholdable payments distrib-uted to, or included in the distributiveshare of, the partner under the require-ments of § 1.1471–3(d).If WP has determined that withholding is

not required under chapter 4, WP mustobtain, unless already collected, docu-mentation that meets the requirements ofthis section 4 to determine whether with-holding applies under chapter 3. See alsoWP’s FATCA requirements as a partici-pating FFI, registered deemed-compliantFFI, or registered deemed-compliant Model1 IGA FFI for when WP will have reason toknow that a claim of chapter 4 status isunreliable or incorrect and for WP’s re-quirements following a change in circum-stances. If WP is an NFFE, see § 1.1471–3(e)(4) for when WP will have reason toknow that an entity’s claim of chapter 4status is unreliable or incorrect and§ 1.1471–3(c)(6)(ii)(E) for WP’s require-ments following a change in circum-stances.Sec. 4.02. Documentation for ForeignPartners. WP may treat a partner as aforeign beneficial owner of an amount ifthe partner provides a valid Form W–8(other than Form W–8IMY), or valid doc-umentary evidence, to the extent permit-ted under section 4.01(A) of this Agree-ment, that supports the partner’s status asa foreign person. WP may treat a partnerthat has provided documentation as enti-tled to a reduced rate of withholding underchapter 3 if all the requirements for areduced rate are met and the documenta-tion provided by the partner supports en-titlement to a reduced rate of withholdingand no withholding under chapter 4. Sec-tions 4.03 through 4.06 of this Agreementdescribe the specific documentation re-quirements necessary for obtaining a re-duced rate of withholding in certain cir-cumstances.Sec. 4.03. Treaty Claims. WP may notreduce the rate of withholding under chap-ter 3 based on a partner’s claim of treatybenefits unless WP has determined that nochapter 4 withholding is required and itobtains from the partner the documenta-tion required by section 4.03(A) of thisAgreement. In addition, WP agrees to es-tablish procedures to inform partners ofthe terms of the limitation on benefits pro-visions of a treaty (if applicable, and re-gardless of whether those provisions arecontained in a separate article entitledLimitation on Benefits) under which thepartner is claiming benefits. For partnersthat are entities documented by WP on orafter January 1, 2017, WP is required to


obtain a Form W–8BEN–E with the ap-propriate limitation on benefits certifica-tion or, if WP is allowed to and obtainsdocumentary evidence, the written certifi-cation included in the treaty statement asdescribed in section 4.03(B) of this Agree-ment. For partners that are entities thatwere documented with documentary evi-dence prior to January 1, 2017, and forwhich treaty benefits are being claimed,WP is required to obtain the appropriatelimitation on benefits statement prior toJanuary 1, 2019.(A) Treaty Documentation. The documen-tation required by this section 4.03(A) isas follows:(1) A Form W– 8BEN or Form W–8BEN–E on which a claim of treatybenefits is made, including, for an en-tity, the appropriate limitation on bene-fits and section 894 certifications, asprovided in § 1.1441– 6(b)(1) (if appli-cable), and a U.S. TIN or foreign TIN. AU.S. TIN or foreign TIN shall not berequired, however, if the partner is adirect partner. If WP is acting as a with-holding foreign partnership for an indi-rect partner, the indirect partner is re-quired to have either a U.S. TIN or aforeign TIN in order to claim treaty ben-efits unless it is claiming treaty benefitson income from marketable securities asdescribed in § 1.1441– 6(c);(2) Documentary evidence, as permittedunder section 4.01(A) of this Agreement,that has been obtained pursuant to theknow-your-customer rules that apply tothe direct partner, and the direct partner, ifit is an entity, has made the treaty state-ment (if applicable) required by section4.03(B) of this Agreement; or(3) The type of documentary evidence, aspermitted under section 4.01(A) of thisAgreement, required under § 1.1441–6 toestablish entitlement to a reduced rate ofwithholding under a treaty, and the directpartner, if it is an entity, has made thetreaty statement (if applicable) requiredby section 4.03(B) of this Agreement.(B) Treaty Statement. The treaty statementrequired by an entity direct partner underthis section 4.03(B) is as follows: [Nameof Direct Partner] meets all provisions ofthe treaty that are necessary to claim areduced rate of withholding, including anyapplicable limitation on benefits provi-sions, and derives the income within the

meaning of section 894, and the regula-tions thereunder, as the beneficial owner.WP is only required to obtain the treatystatement described in this section 4.03(B)from a partner that is an entity. WP shallnot be required to obtain a treaty state-ment described in this section 4.03(B)from an individual who is a resident of anapplicable treaty country or from the gov-ernment, or its political subdivisions, of atreaty country. WP is required to collectand report (as required on Form 1042–S)the specific category of limitation on ben-efits provision from all of its entity part-ners, including a government (or its polit-ical subdivisions). WP may rely on apartner’s claim of the specific category oflimitation on benefits provision absent ac-tual knowledge that the claim is unreliableor incorrect.(C) A WP that is a foreign reverse hybridentity may reduce the rate of withholdingon an item of income under chapter 3based on a partner’s claim of treaty ben-efits only if the partner is not fiscallytransparent in the jurisdiction in which itis resident with respect to the item ofincome, and WP (and, if applicable, anyflow-through entity through which thepartner holds an interest in WP) is consid-ered to be fiscally transparent under thelaws of the partner’s jurisdiction with re-spect to the item of income. The claim oftreaty benefits must be based on the taxtreaty between the United States and thejurisdiction where the partner is resident.To determine when WP is treated as fis-cally transparent under the laws of thepartner’s jurisdiction with respect to theitem of income, see the rules in § 1.894–1(d)(3)(iii).Sec. 4.04. Documentation for Interna-tional Organizations. WP may not treat apartner as an international organizationentitled to an exemption from withholdingunder section 892 unless WP has deter-mined that no chapter 4 withholding isrequired and it obtains a Form W–8EXP(or documentary evidence as permittedunder section 4.01(A) of this Agreement)from the international organization. Thename provided on the documentationmust be the name of an entity designatedas an international organization by exec-utive order pursuant to 22 United StatesCode 288 through 288f. If an internationalorganization is not claiming benefits un-

der section 892 but under another Codeexception, the provisions of section 4.02of this Agreement apply rather than theprovisions of this section 4.04.Sec. 4.05. Documentation for ForeignGovernments and Foreign CentralBanks of Issue.(A) Documentation for a Foreign Govern-ment or Foreign Central Bank of IssueClaiming an Exemption from WithholdingUnder Section 892 or Section 895. WPmay not treat a partner as a foreign gov-ernment or foreign central bank of issueexempt from withholding under section892 or 895 unless WP has determined thatno chapter 4 withholding is requiredand—(1) WP receives from the partner a FormW–8EXP (or documentary evidence aspermitted under section 4.01(A) of thisAgreement) establishing that the partner isa foreign government or foreign centralbank of issue;(2) The income distributed to, or includedin the distributive share of, the partner isthe type of income that qualifies for anexemption from withholding under sec-tion 892 or 895; and(3) WP does not know, or have reason toknow, that the partner is a controlled com-mercial entity as described in section 892,that the income owned by the foreign gov-ernment or foreign central bank of issue isbeing received from a controlled commer-cial entity, or that the income is from thedisposition of an interest in a controlledcommercial entity.(B) Treaty Benefits. WP may not treat apartner as a foreign government or foreigncentral bank of issue entitled to a reducedrate of withholding under an income taxtreaty for purposes of chapter 3 unless WPhas determined that no chapter 4 with-holding is required and it has valid docu-mentation that is sufficient to obtain areduced rate of withholding under a treaty,as described in section 4.03 of this Agree-ment.(C) Other Code Exception. If a foreigngovernment or foreign central bank of is-sue is not claiming benefits under section892 or 895 or a reduced rate under anincome tax treaty but under another Codeexception (e.g., the portfolio interest ex-ception under section 871(h) or 881(c)),the provisions of section 4.02 of this


Agreement apply rather than the provi-sions of this section 4.05.Sec. 4.06. Documentation for ForeignTax-Exempt Organizations. To the ex-tent that WP determines that an amountdistributed to, or included in the distribu-tive share of, a partner is not subject towithholding under chapter 4, WP may nottreat the partner as a foreign tax-exemptorganization and reduce the rate of with-holding or exempt the partner from with-holding for purposes of chapter 3 unlessWP satisfies the requirements provided insection 4.06(A), (B), or (C) of this Agree-ment.(A) Reduced Rate of Withholding UnderSection 501. WP may not treat a partner asa foreign organization described undersection 501(c), and therefore exempt fromwithholding under chapter 3 (or, if thepartner is a foreign private foundation,subject to withholding at a 4-percent rateunder section 1443(b)) unless WP obtainsa valid Form W–8EXP with Part IV of theform completed.(B) Treaty Exemption. WP may not treat apartner as a foreign organization that istax-exempt on an item of income pursuantto a treaty unless WP obtains valid docu-mentation as described under section 4.03of this Agreement that is sufficient forobtaining a reduced rate of withholdingunder the treaty and the documentationestablishes that the partner is an organiza-tion exempt from tax under the treaty onthat item of income.(C) Other Exceptions. If a tax-exempt en-tity is not claiming a reduced rate of with-holding because it is a foreign organiza-tion described under section 501(c) orunder a treaty article that applies to ex-empt certain foreign organizations fromtax, but is claiming a reduced rate of with-holding under another Code or treaty ex-ception, the provisions of section 4.02 or4.03 of this Agreement (as applicable)shall apply rather than the provisions ofthis section 4.06.Sec. 4.07. Documentation from Pass-through Partners. Except as otherwiseprovided in section 9 of this Agreement,WP shall not act as a withholding foreignpartnership with respect to an amount dis-tributed to, or included in the distributiveshare of, a passthrough partner. WP mustforward the passthrough partner’s docu-mentation (and associated withholding

statement and documentation of indirectpartners) to the withholding agent fromwhom WP receives a reportable amount.Sec. 4.08. Documentation for U.S. Ex-empt Recipients. WP shall not treat apartner as a U.S. exempt recipient unlessWP obtains from the partner—(A) A valid Form W–9 on which the part-ner includes an exempt payee code to cer-tify that the partner is a U.S. exempt re-cipient;(B) Documentary evidence, as permittedunder section 4.01(A) of this Agreement,that is sufficient to establish that the part-ner is a U.S. exempt recipient; or(C) Documentary evidence, as permittedunder section 4.01(A) of this Agreement,that is sufficient to establish the partner’sstatus as a U.S. person and WP can treatthe partner as an exempt recipient underthe rules of §§ 1.6045–2(b)(2)(i) or1.6049–4(c)(1)(ii), as appropriate, with-out obtaining documentation.Sec. 4.09. Documentation for U.S. Non-Exempt Recipients. WP shall not treat apartner as a U.S. non-exempt recipientunless WP obtains a valid Form W–9from the partner.Sec. 4.10. Documentation Validity.(A) In General. WP may not rely on doc-umentation if WP has actual knowledge orreason to know that the information orcertifications contained in the documenta-tion provided by a partner is unreliable orincorrect, or that there is a change in cir-cumstances with respect to the informa-tion or statements contained in the docu-mentation or in WP’s files (accountinformation) pertaining to the obligationthat affects the reliability of the partner’sclaim. See § 1.1441–1(e)(4)(ii)(D) for thedefinition of change in circumstances.Once WP knows, or has reason to know,that documentation provided by a partneris unreliable or incorrect to establish for-eign status or residency for purposes ofclaiming benefits under an applicable in-come tax treaty, it can no longer reliablyassociate a payment with valid documen-tation unless it obtains additional docu-mentation to establish the partner’s chap-ter 3 status. If WP can no longer reliablyassociate a payment with valid documen-tation, it must obtain new documentationprior to the time withholding is requiredunder section 3 of this Agreement. Withrespect to a withholding agent’s reason to

know that a claim for treaty benefits isunreliable or incorrect based on the exis-tence of a tax treaty, the rules in § 1.1441–6(b)(1)(ii) will apply to preexistingpartners for which WP held valid docu-mentation upon a change in circumstancesor, with respect to a preexisting entitypartner, when it provides a written limita-tion on benefits statement (as described insection 4.03(B) of this Agreement). Forall partners admitted on or after January 1,2017, this rule will apply on admission ofthe partner to the partnership. For pur-poses of this section 4.10(A), a “preexist-ing partner” or “preexisting entity part-ner” is a partner documented by WP priorto January 1, 2017, for a WP with a WPAgreement in effect prior to that date. Fora WP that did not have a WP Agreementin effect prior to January 1, 2017, a “pre-existing partner” or “preexisting entitypartner” means a partner that was admit-ted to the partnership (and for which WPhas valid documentation) prior to the ef-fective date of its WP Agreement.(B) General Rules.(1) WP shall not rely on a Form W–9 if itis not permitted to do so under the rules of§ 31.3406(h)–3(e) or if it has been in-formed by the IRS or another withholdingagent that the form is unreliable or incor-rect and shall not rely on a Form W–8 ifit is not permitted to do so under thissection 4.10.(2) WP shall not treat documentary evi-dence provided by a partner as valid if thedocumentary evidence does not reason-ably establish the identity of the personpresenting the documentary evidence. Forexample, documentary evidence is notvalid if it is provided in person by a part-ner that is a natural person and the photo-graph on the documentary evidence, ifany, does not match the appearance of theperson presenting the document.(3) WP may not rely on documentation toreduce the withholding rate that wouldotherwise apply if—(a) The partner’s documentation is incom-plete or contains information that is incon-sistent with the partner’s claim,(b) WP has other information in the ac-count information that is inconsistent withthe partner’s claim, or(c) The documentation lacks the informa-tion necessary to establish entitlement to areduced rate of withholding.


For example, if a direct partner that is anentity provides documentation to claimtreaty benefits and the documentation es-tablishes the direct partner’s status as aforeign person and a resident of a treatycountry but fails to provide the treatystatement in section 4.03(B) of this Agree-ment, the documentation does not estab-lish the direct partner’s entitlement to areduced rate of withholding.Sec. 4.11. Documentation Validity Pe-riod.(A) Documentation Other Than a FormW–9. WP, as permitted under section4.01(A) of this Agreement, may rely onvalid documentary evidence obtainedfrom direct partners in accordance withapplicable know-your-customer rules aslong as the documentary evidence remainsvalid under those rules or until WP knows,or has reason to know, that the informa-tion contained in the documentary evi-dence is unreliable or incorrect. However,WP may only rely on statements regard-ing entitlement to treaty benefits describedin § 1.1441–6(c)(5)(i) or the representa-tions described in section 4.03 of thisAgreement until the validity expires under§ 1.1441–1(e)(4)(ii)(A)(2). For establish-ing a partner’s chapter 3 status (as definedin § 1.1441–1(c)(45)) or foreign status forchapter 61 purposes, WP may rely on avalid Form W–8 until its validity expiresunder § 1.1441–1(e)(4)(ii) and may relyon documentary evidence (other than doc-umentary evidence obtained pursuant toapplicable know-your-customer rules) un-til its validity expires under § 1.6049–5(c).(B) Form W–9. WP may rely on a FormW–9 unless one of the conditions of§ 31.3406(h)–3(e)(2)(i) through (v) ap-plies or if it has been informed by the IRSor another withholding agent that the formis unreliable or incorrect.Sec. 4.12. Maintenance and Retentionof Documentation.(A) Maintaining Documentation. WPshall maintain documentation by retainingthe original documentation, a certifiedcopy, a photocopy, a scanned copy, a mi-crofiche, or other means that allow repro-duction (provided that WP has recordedreceipt of the documentation and is able toproduce a hard copy). If WP is not re-quired to retain copies of documentaryevidence under its know-your-customer

rules, WP may instead retain a notation ofthe type of documentation reviewed, thedate the documentation was reviewed, thedocument’s identification number, if any(e.g., a passport number), and whethersuch documentation contained any U.S.indicia. For obligations held by a directpartner opened prior to January 1, 2001, ifWP was not required under its know-your-customer rules to maintain originalsor copies of documentation, WP may nev-ertheless rely on the information if it hascomplied with all other aspects of itsknow-your-customer rules regarding es-tablishment of a partner’s identity, it has arecord that the documentation requiredunder the know-your-customer rules wasactually examined by an employee of WPor partner of WP in accordance with theknow-your-customer rules, and it has noinformation in its possession that wouldrequire WP to treat the documentation asinvalid.(B) Retention Period. WP shall retain apartner’s documentation obtained underthis section 4 for as long as the documentis relevant for the determination of WP’stax liability or reporting responsibilitiesunder chapters 3, 4, and 61, and section3406.

Section 5. WITHHOLDINGFOREIGN PARTNERSHIPWITHHOLDING CERTIFICATE

Sec. 5.01. WP Withholding Certificate.WP agrees to furnish a withholding for-eign partnership withholding certificate toeach withholding agent from which it re-ceives a reportable amount as a withhold-ing foreign partnership. The withholdingforeign partnership withholding certificateis a Form W–8IMY (or acceptable substi-tute form) that certifies that WP is actingas a withholding foreign partnership, con-tains WP’s WP–EIN, and provides allother information and certifications re-quired by the form, including its WP-EIN.If WP is receiving a reportable amountthat is a withholdable payment, the with-holding certificate must also contain WP’schapter 4 status to the extent required,provide its GIIN (if applicable), and pro-vide the other information and certifica-tions required on the form. If WP is anFFI, WP must provide a GIIN on its with-holding foreign partnership withholdingcertificate irrespective of the time the FFI

is permitted under its FATCA require-ments as a participating FFI, registereddeemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI toobtain a GIIN. WP is not required to dis-close, as part of that Form W–8IMY or itswithholding statement, any informationregarding the identity of its direct partnersand those indirect partners for which itacts as a withholding foreign partnershipto the extent permitted under section 9 ofthis Agreement.If WP does not act as a withholding for-eign partnership for an indirect partner,WP is required to furnish a nonwithhold-ing foreign partnership certificate to itswithholding agent. See § 1.1441–5(c)(3)for the requirements of a nonwithholdingforeign partnership withholding certifi-cate, the withholding statement associatedwith the withholding certificate, and theother documentation or other informationfor each passthrough partner and its directand indirect partners.Sec. 5.02. Withholding Statement.When WP is acting as a withholding for-eign partnership, WP must assume pri-mary chapters 3 and 4 withholding re-sponsibility as required by section 3.02 ofthis Agreement for reportable amountsthat are distributed to, or included in thedistributive shares of, its direct partnersand any indirect partners for which it isacting as a withholding foreign partner-ship. Accordingly, WP is not required toprovide a withholding statement in suchcircumstances. See section 9 of thisAgreement, providing that WP may notact as a withholding foreign partnershipfor certain indirect partners that are U.S.non-exempt recipients.

Section 6. TAX RETURN ANDINFORMATION REPORTINGOBLIGATIONS

Sec. 6.01. Form 1042 Filing Require-ment.(A) In General. WP shall file a return onForm 1042, whether or not WP withheldany amounts under chapter 3 or 4 of theCode, on or before March 15 of the yearfollowing any calendar year in which WPacts as a withholding foreign partnership.In addition to the information required onForm 1042 and its accompanying instruc-tions, WP shall attach a statement settingforth the amounts of any overwithholding


or underwithholding adjustments madeunder sections 7.01 and 7.03 of thisAgreement, and an explanation of the cir-cumstances that resulted in the over- orunderwithholding. If WP is requesting acollective refund or credit, WP shall at-tach the statements required by section7.02 of this Agreement and shall complywith the procedures specified in section7.02 of this Agreement.(B) Extensions for Filing Returns. WPmay request an extension of the time forfiling Form 1042, or any of the informa-tion required to be attached to the form, bysubmitting Form 7004, Application forAutomatic Extension of Time to File Cer-tain Business Income, Tax, Information,and Other Returns, on or before the duedate of the return.Sec. 6.02. Form 1042–S Reporting.(A) In General. WP must file Form1042–S for each partner for whom it actsas a withholding foreign partnership andfor whom WP distributes, or in whosedistributive share is included, a reportableamount unless WP is permitted under sec-tions 6.02(C) and (D) of this Agreement toreport in pools (reporting pools). Withrespect to its direct partners, WP must fileForms 1042–S in the manner required bythe regulations under chapters 3 and 4 foramounts distributed to, or included in thedistributive share of, its partners (or in thecase of a participating FFI, pursuant to itsFATCA requirements as a participatingFFI) and the instructions to the form, in-cluding any requirement to file the formsmagnetically or electronically. Any Form1042–S required to be filed by this section6 shall be filed on or before March 15following the calendar year in which with-holding, if any, was required under sec-tion 3.02 of this Agreement. WP may re-quest an extension of time to file Forms1042–S by submitting Form 8809, Appli-cation for Extension of Time to File In-formation Returns, (or other supersedingform) by the due date of Forms 1042–S inthe manner required by (and to the extentpermitted on) Form 8809.(B) Recipient Specific Reporting. WP isrequired to file a separate Form 1042–Sfor amounts distributed to, or included inthe distributive share of, each separatepartner as described in this section6.02(B). WP must file separate Forms1042–S by income code, chapter 3 or 4

exemption code, recipient code, chapter 4withholding rate pool (if applicable), andwithholding rate.(1) Unless WP has made the pooled re-porting election pursuant to section6.02(D) of this Agreement, WP must file aseparate Form 1042–S for each directpartner (other than a passthrough partner)to whom WP distributes, or whose distrib-utive share includes, an amount subject tochapter 3 withholding that is either not awithholdable payment or is a withhold-able payment for which no chapter 4 with-holding is required.(2) WP must file a separate Form 1042–Sfor each partner that is a qualified inter-mediary, a withholding foreign partner-ship, or a withholding foreign trust towhom WP distributes, or whose distribu-tive share includes, an amount subject towithholding under chapters 3 or 4, regard-less of whether such partner is a direct orindirect partner of WP.(3) WP must file a separate Form 1042–Sfor each passthrough partner that is a non-qualified intermediary or flow-through en-tity that is a participating FFI, registereddeemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI andto whom WP distributes, or whose distrib-utive share includes, an amount subject tochapter 4 withholding allocable to suchFFI’s chapter 4 withholding rate pools ofrecalcitrant account holders, nonpartici-pating FFIs, and reportable amounts allo-cable to U.S. payees, if applicable, regard-less of whether such FFI is a direct orindirect partner of WP when WP appliessection 9.03 of this Agreement.(4) WP must file a separate Form 1042–Sfor each passthrough partner that is a non-qualified intermediary or flow-through en-tity that is not described in section6.02(B)(3) of this Agreement (other than anonparticipating FFI), and to whom WPdistributes, or whose distributive share in-cludes, an amount subject to chapter 4withholding allocable to such passthroughpartner’s chapter 4 withholding rate poolof payees that are nonparticipating FFIs,regardless of whether such passthroughpartner is a direct or indirect partner ofWP when WP applies section 9.03 of thisAgreement.(5) WP must file a separate Form 1042–Sfor each partner of WP that is a partner-ship or trust to which WP applies the

agency option under section 9.02 of thisAgreement and to whom WP distributes,or whose distributive share includes, anamount subject to chapter 4 withholdingthat is allocable to the partnership ortrust’s chapter 4 withholding rate pool ofpayees that are nonparticipating FFIs or towhom WP distributes, or whose distribu-tive share includes, an amount subject tochapter 3 withholding that is either not awithholdable payment or is a withhold-able payment for which no chapter 4 with-holding is required and that is allocable tosuch partnership’s or trust’s chapter 3withholding rate pools.(6) WP must file a separate Form 1042–Sfor each foreign account holder (or inter-est holder) of a passthrough partner that isa nonparticipating FFI that receives a pay-ment on behalf of an exempt beneficialowner (regardless of whether the pass-through partner is a direct or indirect part-ner of WP) to the extent WP can reliablyassociate such amounts with valid docu-mentation from such passthrough partneras to the portion of the payment allocableto one or more exempt beneficial owners.In addition, WP must file separate Forms1042–S in the same manner for each for-eign account holder (or interest holder) ofa passthrough partner that is described inthe preceding sentence and that is a director indirect partner, beneficiary, or ownerof a partnership or trust to which WPapplies the agency option.(7) WP must file a separate Form 1042–Sfor each foreign account holder (or inter-est holder) of a passthrough partner towhom WP distributes, or whose distribu-tive share includes, an amount subject tochapter 3 withholding that is either not awithholdable payment or is a withhold-able payment for which no chapter 4 with-holding is required to the extent WP canreliably associate such amounts with validdocumentation from an account holder (orinterest holder) that is not itself a non-qualified intermediary or flow-through en-tity when WP applies section 9.03 of thisAgreement. In addition, WP must file aseparate Form 1042–S in the same mannerfor each foreign account holder (or inter-est holder) of a nonqualified intermediaryor flow-through entity (to which WP doesnot apply the agency option) that is de-scribed in the preceding sentence and thatis a direct or indirect account holder (or


interest holder) of a partnership or trust towhich WP applies the agency option.(8) If WP is an NFFE, WP must file aseparate Form 1042–S for each directpartner that establishes its status as a pas-sive NFFE but fails to provide the infor-mation regarding its owners as requiredunder § 1.1471–3(d)(12)(iii).(C) Chapter 4 Reporting Pools.If WP is an FFI, WP shall report on Form1042–S amounts subject to chapter 4withholding that it distributes to, or in-cludes in the distributive share of, its di-rect partners consistent with its FATCArequirements as a participating FFI, regis-tered deemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI. Aseparate Form 1042–S shall be filed foreach type of chapter 4 reporting pool. Achapter 4 reporting pool is a payment of asingle type of income, determined in ac-cordance with the categories of incomereported on Form 1042–S, that is allocableto a chapter 4 withholding rate pool con-sisting of payees that are nonparticipatingFFIs or recalcitrant account holders. WPmust report recalcitrant account holders inpools based upon their particular class de-scribed in § 1.1471–4(d)(6), with a sepa-rate Form 1042–S issued for each suchpool. See section 9 of this Agreement forwhen a WP may include certain indirectpartners in its chapter 4 reporting pools.If WP is a participating FFI or registereddeemed-compliant FFI (including for thispurpose a reporting Model 1 IGA FFI),WP may report in a chapter 4 withholdingrate pool of U.S. payees reportableamounts that are distributed to, or in-cluded in the distributive share of, a directpartner that is a U.S. person, provided thatWP reports such partner as a U.S. account(or U.S reportable account) under its ap-plicable FATCA requirements as a partic-ipating FFI, registered deemed-compliantFFI, reporting Model 1 FFI, or registereddeemed-compliant Model 1 IGA FFI. WPshall include in its U.S. payee pool report-able amounts that are distributed to, orincluded in the distributive share of, adirect partner that is a U.S. person whenWP either reports such partner as a U.S.account (or U.S. reportable account) pur-suant to its FATCA requirements as aparticipating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI; or reports

such partner as a recalcitrant accountholder (or non-consenting U.S. account)provided that WP is not required to with-hold on such partner pursuant to itsFATCA requirements as a participatingFFI, registered deemed-compliant FFI, orregistered deemed-compliant Model 1IGA FFI. See, however, the automatic ter-mination provision of section 10.03(A) ofthis Agreement if WP is not in possessionof valid documentation for any direct part-ner at any time that withholding or report-ing is required.If WP is an NFFE, WP shall reportamounts subject to chapter 4 withholdingby reporting pools on a Form 1042–S ifthose amounts are distributed to, or in-cluded in the distributive share of, directpartners of WP that are nonparticipatingFFIs in a chapter 4 reporting pool of non-participating FFIs.(D) Chapter 3 Reporting Pools.WP may elect to perform pool reporting(PR election) for an amount subject tochapter 3 withholding that either is not awithholdable payment or is a withhold-able payment for which no chapter 4 with-holding is required and that WP distrib-utes to, or includes in the distributiveshare of, a foreign direct partner (otherthan a passthrough partner, withholdingforeign partnership, or withholding for-eign trust). A separate Form 1042–S shallbe filed for each chapter 3 reporting pool.A chapter 3 reporting pool is a payment ofa single type of income that falls within aparticular withholding rate, chapter 3 ex-emption code and, if the payment is awithholdable payment, a chapter 4 exemp-tion code as determined on Form 1042–Sand its accompanying instructions. WPmay use a single chapter 3 pool reportingcode (e.g., WP- withholding rate pool-general) for all reporting pools except foramounts paid to foreign tax-exempt recip-ients, for which a separate chapter 3 poolreporting code (e.g., WP- withholding ratepool- exempt organization) must be used.For this purpose, a foreign tax-exemptrecipient includes any organization that isnot subject to chapter 3 withholding and isnot liable to tax in its jurisdiction of res-idence because it is a charitable organiza-tion, a pension fund, or a foreign govern-ment. See section 9 of this Agreement forwhen a WP may include certain indirectpartners in its chapter 3 reporting pools.

If WP has made the PR election pursuantto this section 6.02(D), WP is not requiredto file Forms 1042–S for amounts distrib-uted to, or included in the distributiveshare of, each separate direct partner forwhom such reporting would otherwise berequired. Instead, WP shall file a separateForm 1042–S for each reporting pool.However, see section 7.02 of this Agree-ment for the requirement for WP to pro-vide a Form 1042–S to a partner if re-quested. Once made, the PR election iseffective for the entire term of this Agree-ment beginning on the effective date ofthe Agreement and ending on the date ofits expiration or termination under section10 of the Agreement. WP must make anew election for each renewal term of thisAgreement. If WP makes the PR election,WP cannot revoke it prior to the end of theterm for which WP has made the PR elec-tion unless WP obtains consent from theIRS to revoke such election. WP mayrequest IRS consent by contacting the IRSat the address specified in section 11.06 ofthis Agreement. If WP did not make thePR election at the time this Agreementwas executed, then WP may make a PRelection only by contacting the IRS at theaddress specified in section 11.06 of thisAgreement.Sec. 6.03. Form 1065 Filing Require-ment.(A) General Rule. If WP is required to fileForm 1065 and Schedules K–1 under§ 1.6031(a)–1, then WP shall file Form1065 and Schedules K–1 in accordancewith the regulations and the instructionsfor the form as modified by section6.03(B) or (C) of this Agreement.(B) Modified Filing Obligations. If WPhas U.S. source income, WP may availitself of the modified obligations de-scribed in section 6.03(B)(1) or (2) of thisAgreement, if, in addition to satisfying therequirements of section 6.03(B)(1) or (2)of this Agreement, none of this income isattributable to a permanent establishmentinside the United States, none of this in-come is effectively connected with a tradeor business within the United States, andWP would not otherwise be required toreport to any partner a specially allocateditem on Schedule K–1.(1) WP is not required to file a Form 1065provided that WP has no direct or indirect


partners that are U.S. persons at any timeduring WP’s taxable year.(2) WP is required to file a Form 1065, butis not required to file Schedules K–1 forany partners other than its direct U.S. part-ners and its passthrough partners (whetherU.S. or foreign) through which indirectU.S. partners hold an interest in WP.Schedules K–1 that are not excepted fromthe filing requirement under this section6.03(B)(2) must contain the same infor-mation required of a U.S. partnership un-der § 1.6031(a)–1(a).(C) Foreign Reverse Hybrid Entities. IfWP is an FFI that is a foreign reversehybrid entity, WP is not required to fileForm 1065 and Schedules K–1, and in-stead WP must satisfy the requirements insections 6.03(C)(1) through (5) of thisAgreement.(1) WP is a participating FFI, registereddeemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI.(2) WP files Form 1120–F for each tax-able year to report income effectively con-nected with a U.S. trade or business (ECI)(if any).(3) With respect to each calendar year,WP prepares a statement supporting itsallocations of U.S. source FDAP incomefor the year to each partner that claimsbenefits under an income tax treaty (“Rec-onciliation Statement”). The Reconcilia-tion Statement shall be prepared by thedue date (including extensions) for filingWP’s Forms 1042 and 1042–S for thecalendar year. The Reconciliation State-ment must be retained for six years andprovided to the IRS upon request, andmust be reviewed by the reviewer for ac-curacy as part of the periodic review un-der sections 8.04 and 8.05 of this Agree-ment. The Reconciliation Statement mustinclude the following information:(i) The total amount of non-ECI U.S.source FDAP income that is received byWP during the year and, of such amount,the portion that is included in the distrib-utive share of each partner that is a U.S.person; each foreign partner that claimsbenefits under an income tax treaty withrespect to such income; and all other part-ners in WP (in the aggregate);(ii) For each partner described in section6.03(C)(3)(i) of this Agreement, theamount of withholding applied by WP tothe distribution or distributive share of the

amount of non-ECI U.S. source FDAPallocated to such partner for the year; and(iii) Identification of any allocation ofnon-ECI U.S. source FDAP income to apartner claiming benefits under an incometax treaty with respect to such income in aratio different than the ratio for allocatingincome or loss generally to such partnerunder WP’s partnership agreement andidentifying information with respect toeach such partner that would be providedon Schedule K–1 if WP were required toprovide Schedule K–1 under § 1.6031(a)–1 for such partner.(4) If WP is a passive foreign investmentcompany (PFIC), WP must issue a PFICAnnual Information Statement (describedin § 1.1295–1(g)(1)) each year to eachU.S. person that is a shareholder (as de-fined in § 1.1295–1(j)) of the PFIC thathas made an election to treat WP as aqualified electing fund under section1295(b). WP shall retain a copy of eachPFIC Annual Information Statement forsix years and provide each such statementto the IRS upon request. Each PFIC An-nual Information Statement must be re-viewed by the reviewer for accuracy aspart of the periodic review under sections8.04 and 8.05 of this Agreement.(5) WP may not reduce the rate of with-holding under chapter 3 based on a part-ner’s claim of treaty benefits unless WPobtains from the partner the documenta-tion required under section 4.03 of thisAgreement.Sec. 6.04. Retention of Returns. WPshall retain Forms 1042 and 1065 for theperiod of the applicable statute of limita-tions on assessments and collection underthe Code.Sec. 6.05. FATCA U.S. Account Report-ing.(A) WP that is an FFI.(1) In general. If WP is an FFI, WP isrequired to report each U.S. account (or,in the case of an FFI that is a reportingModel 1 FFI or registered deemed-compliant Model 1 IGA FFI, each U.S.reportable account) that it maintains con-sistent with its FATCA requirements asa participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. If WP is aparticipating FFI or registered deemed-compliant FFI (other than a reportingModel 1 FFI), WP must report its U.S.

accounts on Form 8966 in the time andmanner specified under its FATCA re-quirements as a participating FFI orregistered deemed-compliant FFI, exceptto the extent WP is reporting under§ 1.1471–4(d)(5) on Form 1099 with re-spect to its U.S. accounts. If WP is areporting Model 1 FFI or registereddeemed-compliant Model 1 IGA FFI, WPmust report each U.S. reportable accountas required under the applicable Model 1IGA.(2) Reporting payments made to partnerson Form 8966. Beginning with reportingwith respect to calendar year 2017, if WPis a participating FFI or registereddeemed-compliant FFI (other than a re-porting Model 1 FFI) reporting a U.S.account or an account held by an owner-documented FFI on Form 8966, WPmust report the payments described in§ 1.1471–4(d)(4)(iv)(C) (i.e., the part-ner’s distributive share of the partner-ship’s income or loss for the calendaryear, without regard to whether any suchamount is distributed to the partner duringthe year, and any guaranteed payments forthe use of capital).(B) WP that is an NFFE. If WP is anNFFE, WP shall file Forms 8966 to reportwithholdable payments distributed to, orincluded in the distributive share of, anypartner that is an NFFE (other than anexcepted NFFE) with one or more sub-stantial U.S. owners if the NFFE is thebeneficial owner of the withholdable pay-ment received by WP. See § 1.1471–1(b)(8) for the definition of beneficialowner. WP must report on Form 8966 inaccordance with the form and its accom-panying instructions.The Form 8966 must include the name ofthe NFFE that is owned by a substantialU.S. owner; the name, address, and U.S.TIN of each substantial U.S. owner; thetotal of all withholdable payments distrib-uted to, or included in the distributiveshare of, the NFFE during the calendaryear; and any other information as re-quired by the form and its accompanyinginstructions. If WP is acting as a sponsor-ing entity on behalf of a NFFE for chapter4 purposes, WP is not required to report asdescribed in this paragraph if WP reportsthe NFFE as part of WP’s requirements asa sponsoring entity. See § 1.1472–1(c)


(5)(ii) for the reporting requirements of asponsoring entity.(C) Form 8966 Reporting for Payees thatare NFFEs. WP shall file Form 8966 toreport withholdable payments that WPdistributes to, or includes in the distribu-tive share of, a passthrough partner thatprovides information regarding an ac-count holder (or interest holder) that is anNFFE (other than an excepted NFFE)with one or more substantial U.S. owners(or one or more controlling persons that isa specified U.S. person under an applica-ble IGA) and that is the beneficial ownerof the withholdable payment received byWP when such substantial U.S. owner orcontrolling person is not reported undersection 6.05(A) of this Agreement. WPmust report on Form 8966 in the time andmanner provided in § 1.1474–1(i)(2).Such report must include the name of theNFFE that is owned by a substantial U.S.owner (or controlling person that is aspecified U.S. person); the name, address,and U.S. TIN of each substantial U.S.owner (or controlling person that is aspecified U.S. person); the total of allwithholdable payments made to the NFFEduring the calendar year (or reportableperiod under the applicable IGA); and anyother information as required by the formand its accompanying instructions.WP is not required to report on Form8966, however, on a withholdable pay-ment made to a passthrough partner that isa participating FFI or registered deemed-compliant FFI that is allocated to a payeethat is a passive NFFE with one or moresubstantial U.S. owners on an FFI with-holding statement when the participatingFFI or registered deemed-compliant FFIincludes on the statement the certificationdescribed in § 1.1471–3(c)(3)(iii)(B)(2)(iv) (certifying that the FFI is reporting thepassive NFFE as a U.S. account or U.S.reportable account in accordance with theterms of the FFI agreement or an applica-ble IGA), provided WP does not know orhave reason to know that the certificationis incorrect or unreliable. See § 1.1474–1(i)(2).

Section 7. ADJUSTMENTS FOROVER- AND UNDERWITHHOLDING;REFUNDS

Sec. 7.01. Adjustments for Chapter 3 or4 Overwithholding by WP. WP may

make an adjustment for amounts paid toits partners when WP has overwithheldunder chapter 3 or 4 by applying either thereimbursement procedure described insection 7.01(A) of this Agreement or theset-off procedure described in section7.01(B) of this Agreement within the timeperiod prescribed for those procedures.(A) Reimbursement Procedure. WP mayrepay its partners for an amount overwith-held under chapter 3 or 4 and reimburseitself by reducing, by the amount of taxactually repaid to the partners, the amountof any subsequent deposit of tax requiredto be made by WP under section 3.05 ofthis Agreement. For purposes of this sec-tion 7.01(A), an amount that is overwith-held shall be applied in order of time (i.e.,sequentially) to each of WP’s subsequentdeposit periods in the same calendar yearto the extent that the withholding taxesrequired to be deposited for a subsequentdeposit period exceed the amount actuallydeposited. An amount overwithheld in acalendar year may be applied to depositperiods in the calendar year following thecalendar year of overwithholding onlyif—(1) The repayment occurs before the ear-lier of the due date (without regard toextensions) for filing Form 1042–S for thecalendar year of overwithholding or thedate that the Form 1042–S is actually filedby WP with the IRS;(2) WP states on a Form 1042–S (issued,if applicable, to the partner or otherwise toa chapter 3 or 4 reporting pool) filed byMarch 15 of the calendar year followingthe calendar year of overwithholding, theamount of tax withheld and the amount ofany actual repayments; and(3) WP states on a Form 1042, filed byMarch 15 of the calendar year followingthe calendar year of overwithholding, thatthe filing of the Form 1042 constitutes aclaim for credit in accordance with§ 1.6414–1.(B) Set-Off Procedure. WP may repay itspartners by applying the amount over-withheld against any amount which other-wise would be required under chapter 3 or4 to be withheld from a payment made byWP before the earlier of March 15 of thecalendar year following the calendar yearof overwithholding or the date that theForm 1042–S is actually filed with theIRS. For purposes of making a return on

Form 1042 or Form 1042–S for the cal-endar year of overwithholding, and forpurposes of making a deposit of theamount withheld, the reduced amountshall be considered the amount required tobe withheld from such income underchapter 3 or 4.Sec. 7.02. Collective Credit or RefundProcedures for Chapter 3 or 4 Over-withholding. If WP has made a PR elec-tion and there has been overwithholding(as defined in section 2.53 of this Agree-ment) on amounts paid to WP’s directpartners during a calendar year and theamount of overwithholding has not beenrecovered under the reimbursement or set-off procedures as described in section 7.01of this Agreement, WP may request acredit or refund of the total amount over-withheld by following the procedures ofthis section 7.02. WP shall follow the pro-cedures set forth under sections 6402 and6414, and the regulations thereunder, toclaim the credit or refund. No credit orrefund will be allowed after the expirationof the statutory period of limitation forrefunds under section 6511. If there hasbeen overwithholding and WP does notapply for a collective refund, it must pro-vide a Form 1042–S for the payment thatwas subject to the overwithholding if re-quested by the partner receiving the pay-ment.(A) Payments for which a Collective Re-fund is Permitted. Except as otherwiseprovided in this section 7.02, WP may usethe collective refund procedure of thissection 7.02 with respect to all amountssubject to chapter 3 or 4 withholding thatWP has withheld under this Agreement.With respect to amounts withheld underchapter 3 or 4, WP shall not include in itscollective refund claim any amounts with-held on payments made to an indirectpartner or a direct account holder of WPthat is a passthrough partner. Further, withrespect to amounts withheld under chapter4, if WP is a participating FFI or regis-tered deemed-compliant FFI, WP shall notinclude in its collective refund claim anyamounts withheld on payments made toany partner that is an account holder de-scribed in the FFI agreement or in§ 1.1471–4(h)(2).(B) Requirements for a Collective Refund.(1) WP may use the collective refund pro-cedures under this section 7.02 only if WP


has not issued (and will not issue) Forms1042–S to the partners that were subject tooverwithholding and for which a collec-tive refund claim is being made.(2) WP must submit, together with itsamended Form 1042 on which it providesa reconciliation of amounts withheld and aclaim for credit or refund, a statement thatincludes the following information andrepresentations—(i) The reason(s) for the overwithholding;(ii) WP deposited the tax for which arefund is being sought under section 6302and WP has not applied the reimburse-ment or set-off procedures of §§ 1.1461–2and 1.1474–2 to adjust the tax withheld towhich the claim relates;(iii) WP has repaid or will repay theamount for which a refund is sought to theappropriate partners;(iv) WP retains a record showing the totalamount of tax withheld, adjustments forunderwithholding, and reimbursementsfor overwithholding as it relates to eachpartner and also showing the repayment(if applicable) to such partners for theamount of tax for which a refund is beingsought;(v) WP retains valid documentation thatmeets the requirements of chapter 3 or 4(as applicable) to substantiate the amountof overwithholding with respect to eachpartner for which a refund is being sought;and(vi) WP has not issued (and will not issue)a Form 1042–S (or such other form as theIRS may prescribe) to any partner withrespect to the payments for which a refundis being sought.Sec. 7.03. Adjustments for Chapter 3 or4 Underwithholding. If WP knows thatan amount should have been withheld un-der chapter 3 or 4 from a previous pay-ment made to a partner and the amountwas not withheld, WP may either with-hold from future payments made pursuantto chapter 3 or chapter 4 to the samepartner or satisfy the tax from the part-ner’s proportionate share of assets overwhich WP has control. The additionalwithholding or satisfaction of the taxowed described in the previous sentencemust be made before the due date (notincluding extensions) of the Form 1042for the calendar year in which the under-withholding occurred.Sec. 7.04. Chapter 3 or 4 Underwith-

holding after Form 1042 Filed. If, after aForm 1042 has been filed for a calendaryear, WP, WP’s reviewer, or the IRS de-termines that WP has underwithheld taxunder chapter 3 or 4 for such year, WPshall file an amended Form 1042 to reportand pay the underwithheld tax. WP shallpay the underwithheld tax, the interest dueon the underwithheld tax, and any appli-cable penalties, at the time of filing theamended Form 1042. If WP fails to file anamended return, the IRS shall make suchreturn under section 6020 and assess suchtax under the procedures set forth in theCode.

Section 8. COMPLIANCEPROCEDURES

Sec. 8.01. In General.(A) In General. WP must adopt a compli-ance program under the authority of aresponsible officer or, if WP adopts a con-solidated compliance program, under theauthority of a responsible officer of theCompliance Entity (as described in sec-tion 8.02(C) of this Agreement). WP’scompliance program must include poli-cies, procedures, and processes sufficientfor WP to satisfy the documentation, re-porting, and withholding requirements ofthis Agreement and sufficient for the re-sponsible officer of WP to make the cer-tifications required under section 8.03 ofthis Agreement. See section 2.68 of thisAgreement for the definition of responsi-ble officer. WP must also perform or ar-range for the performance of the periodicreview described in section 8.04 of thisAgreement to the extent required by thatsection. As part of the responsible off-icer’s certification, WP must provide tothe IRS the factual information as re-quired by and referenced in sections 8.04and 8.05 of this Agreement and in theAppendix to this Agreement. WP mustalso satisfy the requirements of section8.06 of this Agreement with respect to thereport of the periodic review and mustcomply with the IRS review referenced insection 8.08 of this Agreement.(B) Coordination with FATCA Require-ments as a Participating FFI, RegisteredDeemed-Compliant FFI, or RegisteredDeemed-Compliant Model 1 IGA FFI. Asa condition for maintaining this Agree-ment, WP must maintain its chapter 4status. Therefore, WP must, as part of the

compliance procedures described in thissection 8, determine whether it is compli-ant with its FATCA requirements as aparticipating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI.Sec. 8.02. Compliance Program.(A) Responsible Officer. WP must appointan individual as the responsible officer (asdefined in section 2.68 of this Agree-ment). The responsible officer must beidentified on the QI/WP/WT Applicationand Accounts Management System as theWP’s responsible officer, and such personmay, but is not required to, be the sameresponsible officer as for purposes ofcompliance with WP’s FATCA require-ments as a participating FFI, registereddeemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI. Theresponsible officer must establish a com-pliance program that meets the require-ments of this section 8.02 and must makethe periodic certifications to the IRS de-scribed in section 8.03 of this Agreement.The responsible officer of WP must be apartner of WP or an officer or agent of thegeneral partner with sufficient authority tofulfill the duties of a responsible officerdescribed in this section 8.02. The respon-sible officer (or a delegate appointed bythe responsible officer) must also serve asthe point of contact for the IRS for allissues related to this Agreement and forcomplying with IRS requests for informa-tion or additional review procedures undersection 8.08 of this Agreement. Refer-ences in this section 8.02 to the responsi-ble officer include a responsible officer’sdesignee, where appropriate.(B) Compliance Program. The responsi-ble officer must establish a program forWP to comply with the requirements ofthis Agreement that includes the follow-ing:(1) Written Policies and Procedures. Theresponsible officer must ensure the draft-ing and updating, as necessary, of writtenpolicies and procedures sufficient for WPto satisfy the documentation, withholding,reporting, and other obligations of thisAgreement. Such written policies and pro-cedures must include a process for an em-ployee or partner of WP to raise issues tothe responsible officer that concern WP’scompliance with this Agreement.(2) Training. The responsible officer must


communicate such policies and proce-dures to persons responsible for obtaining,reviewing, and retaining a record of doc-umentation under the requirements of sec-tion 4 of this Agreement, making distri-butions and allocations to partners onbehalf of WP that are subject to withhold-ing under section 3 of this Agreement, orreporting distributions or allocations topartners under section 6 of this Agree-ment.(3) Systems. The responsible officer mustensure that systems and processes are inplace that will allow WP to fulfill its ob-ligations under this Agreement. For exam-ple, in order to fulfill WP’s obligations toreport on Forms 1042–S, Schedules K–1,and Forms 8966 under section 6 of thisAgreement, WP must establish systemsfor documenting partners and for record-ing the information with respect to eachsuch partner that WP is required to reportunder that section.(4) Monitoring of Business Changes. Theresponsible officer must monitor businesspractices and arrangements that affectWP’s compliance with this Agreement,including, for example, changes in WP’spartners that give rise to documentation,withholding, or reporting obligations un-der this Agreement.(5) Periodic Review. Unless WP receivesa waiver (the requirements of which aredescribed in section 8.07 of this Agree-ment), the responsible officer must desig-nate a reviewer that meets the qualifica-tions described in section 8.04(A) of thisAgreement to perform the periodic reviewdescribed in section 8.05 of this Agree-ment, to the extent required.(6) Certification of Internal Controls. Theresponsible officer must make the certifi-cation of internal controls as described insection 8.03 of this Agreement, includingensuring that corrective actions are takenin response to any material failures (asdefined in section 8.03(D) of this Agree-ment) of WP’s compliance with thisAgreement.(C) Consolidated Compliance Program.The IRS, in its discretion, may permit aWP to participate in a consolidated com-pliance program if all the requirements inthis section 8.02(C) are met.Two or more WPs may designate an entity(the Compliance Entity) to implement aconsolidated compliance program that in-

cludes uniform practices, procedures, andsystems, subject to uniform monitoringand control, with respect to all WPs in theconsolidated compliance program for pur-poses of meeting the requirements of sec-tion 8 of this Agreement. The responsibleofficer of the Compliance Entity must per-form a consolidated periodic review de-scribed in sections 8.04 and 8.05 of thisAgreement that includes each WP in theconsolidated compliance program. The re-sponsible officer of the Compliance Entitymay make a single certification of internalcontrols under section 8.03 of this Agree-ment that covers all WPs in the consoli-dated compliance program, but must pro-vide the factual information described insections 8.04 and 8.05 of this Agreementand the Appendix to this Agreement sep-arately for each WP in the consolidatedcompliance program.The Compliance Entity must be the sameas the sponsoring entity for chapter 4 pur-poses for each WP in the consolidatedcompliance program unless the IRS For-eign Intermediaries Program approves theuse a different entity. The ComplianceEntity must agree to be jointly and sever-ally liable for the obligations and liabili-ties of each WP in the consolidatedcompliance program relating to WP’s ob-ligations under this Agreement. A WP in aconsolidated compliance program maynot request a waiver of the periodic re-view requirement described in section8.04 of this Agreement.Sec. 8.03. Certification of Internal Con-trols by Responsible Officer. WP’s re-sponsible officer must make the applica-ble certification of compliance describedin either Part II.A (Certification of Effec-tive Internal Controls) or Part II.B (Qual-ified Certification) of the Appendix to thisAgreement and must disclose any materialfailures that occurred during the certifica-tion period or during any prior period ifthe material failure was not disclosed aspart of a prior certification or written dis-closure made by WP to the IRS. If theresponsible officer has identified an eventof default or a material failure that has notbeen corrected as of the date of the certi-fication, the responsible officer cannotmake the certification in Part II.A (Certi-fication of Effective Internal Controls)and must make the certification in PartII.B (Qualified Certification) of the Ap-

pendix to this Agreement. All WPs mustalso complete Parts II.C through II.F ofthe Appendix to this Agreement.The certification of internal controls re-quired by this section 8.03 applies only tothe internal controls related to WP’s com-pliance with this Agreement and itsFATCA requirements as a participatingFFI, registered deemed-compliant FFI, orregistered deemed-compliant Model 1IGA FFI and does not relate to any otherobligations or requirements. In making thecertification required by this section 8.03,the responsible officer may rely on, inaddition to the results of the periodic re-view (if required), any reasonable proce-dures, processes, reviews, or certificationsmade by other persons that the responsibleofficer has determined are necessary inorder to make the certification describedin this section 8.03. If the responsible of-ficer relies on an internal or external re-view for this purpose (i.e., for purposes ofdetermining whether WP has effective in-ternal controls), the internal or externalreviewer must be independent, as de-scribed in section 8.04 of this Agreement.The responsible officer must documentthe procedures, processes, reviews, or cer-tifications relied upon in making the cer-tification. WP’s responsible officer (or theresponsible officer of its Compliance En-tity) must make the certifications of com-pliance in such manner as the IRS mayprescribe.(A) Partnerships or Trusts to which WPApplies the Agency Option. Unless WPhas received a waiver of the periodic re-view requirement, any partnership or trustto which WP applies the agency optionmust provide its documentation and otherinformation to WP for inclusion in WP’speriodic review or conduct an indepen-dent periodic review and provide a writtencertification to WP regarding its compli-ance with the requirements of the agencyagreement. Such certification must beavailable to the IRS upon a request madeas part of the review described in section8.08 of this Agreement (with a certifiedtranslation into English if the certificationis not in English).(B) Material Failures.(1) Material Failures Defined. A materialfailure is generally a failure of WP tofulfill the requirements of this Agreementor its FATCA requirements as a partici-


pating FFI, registered deemed-compliantFFI, or registered deemed-compliantModel 1 IGA FFI. For purposes of thecertifications described in Parts II.A andII.B of the Appendix to this Agreement, amaterial failure is limited to the following:(i) WP’s establishing of, for financialstatement purposes, a tax reserve or pro-vision for a potential future tax liabilityrelated to WP’s failure to comply with thisAgreement, including its FATCA require-ments as a participating FFI, registereddeemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI;(ii) WP’s failure to establish written pol-icies, procedures, or systems sufficient forthe relevant personnel of WP to take ac-tions consistent with WP’s obligations un-der this Agreement;(iii) A criminal or civil penalty or sanctionimposed on WP by a regulator or othergovernmental authority or agency withoversight over WP’s compliance with theAML/KYC procedures, if applicable, towhich WP is subject and that is imposeddue to WP’s failure to properly identifypartners under the requirements of thoseprocedures; or(iv) A finding (including a finding noted inthe reviewer’s periodic review report de-scribed in section 8.06 of this Agreement)that, for one or more years covered by thisAgreement, WP failed to—(a) Withhold an amount that WP was re-quired to withhold under chapter 3 or 4 asrequired under section 3 of this Agree-ment;(b) Make deposits in the time and mannerrequired by section 3.05 of this Agree-ment or make adequate deposits to satisfyits withholding obligations, taking into ac-count the procedures under section 7 ofthis Agreement; or(c) Report accurately on Forms 1042,1042–S, 8966 (or similar report of U.S.reportable accounts as required under aModel 1 IGA), 1065 and Schedules K–1as required under section 6 of this Agree-ment.(2) Limitations on Material Failures. Afailure described in section 8.03(B)(1)(iv)of this Agreement is a material failureonly if the failure was the result of adeliberate action on the part of one ormore employees or partners of WP toavoid the requirements of this Agreementor WP’s FATCA requirements as a par-

ticipating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI with respectto one or more partners of WP, or was anerror attributable to a failure of WP toestablish or implement internal controlsnecessary for WP to meet the require-ments of this Agreement. Regardless ofthese limitations for the certifications de-scribed in sections 8.03(A) and (B) of thisAgreement, WP is required to correct afailure to withhold or deposit tax undersection 3 of this Agreement or to reportunder section 6 of this Agreement.(C) Certification Period and CertificationDue Date.(1) Certification Due Date. For a WP thatuses the last year of the certification pe-riod for its periodic review, the certifica-tion is due on or before December 31 ofthe calendar year following the end of thecertification period. For a WP that uses ayear other than the last year of the certi-fication period for its periodic review, anda WP that obtains a waiver of the periodicreview requirement, the certification isdue on or before July 1 of the year fol-lowing the certification period.(2) Certification Period. The initial certi-fication period is the period beginning onthe effective date of the WP agreementand ending on the third full calendar yearthat this Agreement is in effect (includingrenewals of this Agreement). Subsequentcertification periods will be every threecalendar years following the initial certi-fication period (including renewals of thisAgreement).(3) FATCA Certifications. The certifica-tion period described in section 8.03(C)(2)of this Agreement may not be the same asthe certification period (if any) applicableto WP’s FATCA requirements as a partic-ipating FFI or registered deemed-compliant FFI. WP is required to make thecertification required under its FATCA re-quirements as a participating FFI or reg-istered deemed-compliant FFI at the timeand in the manner specified in such re-quirements.Sec. 8.04. Periodic Review AbsentWaiver.Unless WP receives a waiver (the require-ments of which are described in section8.07(B) of this Agreement), at the timeWP provides the certification described insection 8.03 of this Agreement, WP must

also provide certain factual informationregarding its partners, withholdable pay-ments, and amounts subject to chapter 3withholding, based on the results of a pe-riodic review. The factual information re-quested is included in the Appendix to thisAgreement.(A) Independent Reviewer. The periodicreview may be performed by an internalreviewer (such as an internal auditor) thatis an employee of WP or the general part-ner of WP, including an employee of theCompliance Entity in the case of a con-solidated compliance program (internalreviewer), or a certified public accountant,attorney, or third-party consultant (exter-nal reviewer), or any combination thereof.(1) Internal Reviewer. WP may designatean internal reviewer to perform the peri-odic review (or a portion of the periodicreview) only when the internal reviewer iscompetent with respect to the require-ments of this Agreement. The internal re-viewer must also be able to report findingsthat reflect the independent judgment ofthe reviewer. The internal reviewer mustnot be reviewing its own work, proce-dures, or results (e.g., the internal re-viewer reviewing WP’s documentationcannot be part of the team primarily re-sponsible for collecting and validatingdocumentation). The results of the peri-odic review and the internal reviewer’sreporting of such results to the responsibleofficer cannot influence or affect the com-pensation, bonus, employment status, oremployee review of the internal reviewer.The IRS has the right to request the per-formance of the periodic review by analternative reviewer if the IRS, in its solediscretion, reasonably believes that the re-viewer selected by WP was not indepen-dent, as described in this Agreement, ordid not perform an effective periodic re-view under this Agreement.In the case of a consolidated complianceprogram, the Compliance Entity of a con-solidated compliance program of whichWP is a member (if WP is approved bythe IRS) may designate an internal re-viewer to perform the consolidated peri-odic review (or a portion of the consoli-dated periodic review). See sections8.02(B) and (C) of this Agreement. Theinternal reviewer of the Compliance En-tity must meet the requirements of thissection with respect to each WP that is a


member of the consolidated complianceprogram.(2) External Reviewer. WP may engage anexternal reviewer that is a certified publicaccountant, attorney, or third-party con-sultant that is regularly engaged in thepractice of performing reviews of clients’policies, procedures, and processes forcomplying with accounting, tax, or regu-latory requirements (including for assist-ing clients in determining such compli-ance). The external reviewer cannot bereviewing systems, policies, or proceduresor the results thereof that it (or the firmwith which it is affiliated) was involved indesigning, implementing, or maintaining.The external reviewer must be in goodstanding with and comply with any appli-cable professional standards for maintain-ing its license as an accountant or attorney(or other third-party consultant that hassimilar professional standards or require-ments). The external reviewer is not re-quired to make an attestation or render anopinion regarding WP’s compliance withthis Agreement or WP’s compliance withits FATCA requirements as a participatingFFI, registered deemed-compliant FFI, orregistered deemed-compliant Model 1IGA FFI, but the reviewer must be able toperform the periodic review as specifiedin section 8.05 of this Agreement. WPmust permit the external reviewer accessto all relevant records of WP for purposesof performing the review, including infor-mation regarding specific partners. Addi-tionally, the engagement between the ex-ternal reviewer and WP must impose norestrictions on WP’s ability to provide theresults of the review to the IRS. However,the external reviewer is not required todivulge the identity of WP’s foreign part-ners to the IRS, except as otherwise re-quired under WP’s FATCA requirementsas a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. WP mustpermit the IRS to communicate directlywith the external reviewer and any legalprohibitions that prevent the IRS fromcommunicating directly with the reviewermust be waived.Sec. 8.05. Scope and Timing of Review.The responsible officer of WP (or theCompliance Entity if WP is a member ofa consolidated compliance program) mustrequire the reviewer to review WP’s doc-

umentation, withholding, reporting, andother obligations under this Agreementand WP’s FATCA requirements as aparticipating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI, and identifydeficiencies in meeting these obligations.To the extent WP applies the joint accountoption with respect to another partnershipor trust as described in section 9.01 of thisAgreement or acts as a withholding for-eign partnership for any indirect partnersas described in section 9.03 of this Agree-ment, the review must include such indi-rect partners, beneficiaries, or owners inaddition to WP’s direct partners. In addi-tion, if WP applies the agency option to apartnership or trust as described in section9.02 of this Agreement, the review mustinclude the partners, beneficiaries, orowners of such partnership or trust unlessthe partnership or trust conducts its ownreview in accordance with this section 8of this Agreement and provides the re-sponsible officer of WP with the reportdocumenting the results of such review asdescribed in section 8.06 of this Agree-ment. Unless otherwise approved by theIRS, the review must include the stepsdescribed in sections 8.05(A) through (D)of this Agreement. WP is required to ar-range for the performance of one reviewfor the certification period to evaluateWP’s documentation, withholding, andreporting practices. The review may beconducted for any calendar year coveredby the certification period. WP may con-duct a review for a particular calendaryear if, on the due date for reporting thefactual information relating to the periodicreview (provided in section 8.04 of thisAgreement), there are 15 or more monthsavailable on the period for assessment un-der section 6501(a) of the calendar yearfor which the review is to be conducted orthe WP submits, upon request, a Form872, Consent to Extend the Time to As-sess Tax, that will satisfy the 15-monthrequirement. The Form 872 must be sub-mitted to the IRS at the address providedin section 11.06 of this Agreement.If WP has more than 60 partners for whichWP acts for the year of the periodic re-view, WP’s reviewer may use statisticalsampling procedures by applying the prin-ciples set forth in Appendix II of the QIAgreement in Revenue Procedure 2017–

15, 2017–03 I.R.B. 437 for the periodicreview.If the reviewer determines that underwith-holding has occurred, WP shall pay anyamount determined and report both theunderwithholding determined by the re-view and any amount of underwithholdingthat was cured following the review byobtaining the documentation required tosupport reduced withholding by WP(without regard to projection if statisticalsampling is used for the review). WP mustalso notify the IRS Foreign IntermediariesProgram at the address provided in section11.06 of this Agreement of the underwith-holding discovered as a result of the re-view within 30 days of the completion ofthe review.(A) Documentation. The reviewer must—(1) Review information contained in doc-umentation obtained for WP’s partnersand any correspondence or memorandaassociated with the partners (the partners’files) to ensure that WP obtained docu-mentation that meets the requirements de-scribed in section 4 of this Agreement(including the treaty statements and limi-tation on benefits information required bysection 4.03(B) of this Agreement forpartners making treaty claims);(2) Review information contained in thepartners’ files to determine if the docu-mentation validity standards of section4.10 of this Agreement have been met.For example, the reviewer must verify thatWP is withholding at the correct rate afterany change in circumstances (e.g., achange of address to a U.S. address orchange of account holder status from for-eign to U.S. or a change in chapter 4 statusfrom participating FFI to nonparticipatingFFI); and(3) Review WP’s partners’ files to ensurethat WP is obtaining, reviewing, andmaintaining documentation in accordancewith its FATCA requirements as a partic-ipating FFI, registered deemed-compliantFFI, or registered deemed-compliantModel 1 IGA FFI.(B) Withholding Responsibilities. The re-viewer must—(1) Perform test checks of WP’s directpartners that are recalcitrant account hold-ers (if applicable) and nonparticipatingFFIs to verify that WP is withholding asrequired under chapter 4;(2) Perform test checks of foreign partners


for which no withholding is required un-der chapter 4 based on the partner’s chap-ter 4 status to verify that WP withheld theproper amounts; and(3) Verify that amounts withheld by WPwere timely deposited in accordance withsection 3.05 of this Agreement.(C) Return Filing and Information Re-porting. The reviewer must—(1) Obtain copies of original and amendedForms 1042, and any schedules, state-ments, or attachments required to be filedwith those forms, and verify that the formshave been filed and determine whether theamounts of income, taxes, and other in-formation reported on those forms are ac-curate by—(i) Reviewing copies of Forms 1042–Sreceived from withholding agents for rec-onciling amounts received by WP with theamounts distributed to, or included in thedistributive share of, WP’s partners;(ii) Reviewing account statements andcorrespondence from withholding agents;(iii) Determining that adjustments to theamount of tax shown on Form 1042 (andany claim by WP for refund or credit)properly reflect the adjustments to with-holding made by WP using the reimburse-ment or set-off procedures under section 7of this Agreement and that the adjust-ments are supported by sufficient docu-mentation;(iv) Reconciling amounts shown on Forms1042 with amounts shown on Form1042–S (including the amount of taxesreported as withheld); and(v) In the case of collective credits orrefunds, reviewing the statements attachedto the amended Forms 1042 filed to claima collective credit or refund, determinewhether those forms are accurate, and—(a) Determining the causes of any over-withholding reported and ensure WP didnot issue Forms 1042–S to partners thatwere included as part of its collectivecredit or refund claim;(b) Determining that WP repaid the appro-priate partners and that the amount of theclaim is accurate and supported by ade-quate documentation for reducing the rateof withholding; and(c) Determining that WP did not includepayments made to a partner described insection 7.02(A) of this Agreement or apartnership or trust described in section9.01 of this Agreement.

(2) Obtain copies of original and amendedForms 1042–S, 1065, Schedules K–1, and1120–F (if applicable) filed by WP to-gether with the work papers used to pre-pare those forms and determine whetherthe amounts reported on those forms areaccurate by—(i) Reviewing the Forms 1042–S receivedfrom withholding agents;(ii) Reviewing the Form 1065, if required,and if no Form 1065 was required to befiled, determining whether the exemptionfrom filing was properly applied;(iii) Reviewing Schedules K–1 or incomestatements issued by WP to partners, ifany;(iv) Reviewing Form 1120–F (if applica-ble);

(v) Reconciling any payments and taxreported on Forms 1042–S received fromwithholding agents with amounts (includ-ing characterization of income) and taxesreported by WP as withheld on Forms1042–S and determining the reason(s) forany variance; and(vi) Determining, in any case in which WPutilized the reimbursement or set-off pro-cedure, that WP satisfied the requirementsof section 7 of this Agreement and that theadjusted amounts of tax withheld areproperly reflected on Forms 1042–S.(3) Obtain copies of original and amendedForms 8966 (or, if WP is a reportingModel 1 FFI, any analogous forms usedfor reporting account information pursu-ant to an applicable Model 1 IGA), anddetermine whether the amounts of incomeand other information reported on Forms8966 are accurate by—(i) Reviewing U.S. accounts (or U.S. re-portable accounts), accounts held by non-participating FFIs, and recalcitrant ac-count holders to determine that suchaccounts were reported in accordancewith WP’s FATCA requirements as aparticipating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI;(ii) If WP is an NFFE, confirming that anydirect partners that are passive NFFEswith one or more substantial U.S. ownerswere reported in accordance with § 1.1472–1(c)(3);(iii) Confirming with respect to any pass-through partner that provides informationregarding an account holder (or interestholder) that is an NFFE (other than an

excepted NFFE) with one or more sub-stantial U.S. owners that such substantialU.S. owners were reported to the extentrequired under section 6.05(C) of thisAgreement;(iv) Reviewing the documentation pro-vided by a partnership or trust to whichWP applied the agency option, confirmingthat WP reported on Form 8966 (or, if WPis a reporting Model 1 FFI, any analogousforms used for reporting account informa-tion pursuant to an applicable Model 1IGA) to the extent required under section9 of this Agreement; and(v) Reviewing work papers used to pre-pare these forms.(4) If WP is a foreign reverse hybrid en-tity, obtain the Reconciliation Statementdescribed in section 6.03(C)(3) of thisAgreement and determine whether theamounts shown on the statement are ac-curate by—(i) Comparing the total amount of non-ECI U.S. source FDAP income shown onthe Reconciliation Statement to the totalamount of non-ECI U.S. source FDAPincome reported on Forms 1042–S re-ceived from withholding agents; and(ii) Comparing the allocations of non-ECIU.S. source FDAP income to each partneron the Reconciliation Statement to the al-locations of income and loss generally toeach such partner under WP’s partnershipagreement.(5) If WP is a foreign reverse hybrid en-tity, obtain copies of the PFIC AnnualInformation Statements issued to eachU.S. person that is a shareholder (as de-fined in § 1.1295–1(j)) and determinewhether the amounts shown on the state-ments are accurate by reviewing WP’sbooks of account, records, and such otherdocuments maintained by WP to establishthat WP’s ordinary earnings and net cap-ital gain are computed in accordance withU.S. income tax principles, and to verifythese amounts and each shareholder’s prorata shares thereof.(D) Significant Change in Circumstances.The reviewer must verify that in thecourse of the review it has not discoveredany significant change in circumstances,as described in section 10.04(A), (D), or(E) of this Agreement.Sec. 8.06. Periodic Review Report.(A) In General. The results of the periodicreview must be documented in a written


report addressed to the responsible officerof WP (or the responsible officer of theCompliance Entity) and must be availableto the IRS upon request (with a certifiedtranslation into English if the report is notin English). The report must describe thescope of the review and the actions per-formed to satisfy each requirement of sec-tion 8.05(A) through (D). The report mayinclude explanatory footnotes to clarifythe results of the report. Recommenda-tions may be included but are not requiredto be provided in the report. The periodicreview report should form the basis for thefactual information provided by WP thatis set forth in the Appendix to this Agree-ment.In addition to the findings of section 8.05of this Agreement, the periodic reviewreport must also include details regardingthe documentation and tax deposit andpayment failures identified by the re-viewer but then cured before the periodicreview report is finalized. While the cur-ing of inadequate documentation is per-missible, the factual information reported(as set forth in the Appendix to thisAgreement) should report the results ofthe review as it was performed and shouldnot reflect the results after curing. Anycuring process should not delay certifica-tion of internal controls or factual infor-mation required in the Appendix to thisAgreement. To the extent necessary, theperiodic review report should include thedates on (or time period during) whichcurative documentation was received forpartners with respect to which the re-viewer determined that underwithholdinghad occurred, the number of partners forwhich curative documentation was ob-tained, and a revised calculation of theunderwithholding.(B) Partnership or Trust to which WPApplies the Agency Option. Any partner-ship or trust to which WP applies theagency option and that does not providedocumentation and other information toWP for inclusion in WP’s periodic reviewdescribed in section 8.04 of this Agree-ment must conduct an independent peri-odic review in accordance with the com-pliance procedures described in section8.05 of this Agreement. The performanceresults of the periodic review must bedocumented in a written report addressedto the responsible officer of WP and must

be available to the IRS upon request (witha certified translation into English if thecertification is not in English).(C) Retention of Report and Certifica-tions. The report and certifications de-scribed in this section 8.06 must be re-tained by WP (or the Compliance Entityof a consolidated compliance group) foras long as this Agreement is in effect(including renewals of this Agreement).Sec. 8.07. Waiver of Periodic ReviewRequirement.(A) In General. A WP that is an FFI thatmeets the requirements of section 8.07(B)of this Agreement may apply for a waiverof the periodic review requirement. Thewaiver application is set forth in Part III ofthe Appendix to this Agreement. WP mustinclude the information of any partnershipor trust to which WP applies the agencyoption in its waiver application. WP mustrequest a waiver under this section 8.07 atthe time the responsible officer makes thecertification described in section 8.03 ofthis Agreement. WP’s request for such awaiver must be approved by the IRS, andwaiver requests are not approved automat-ically. If WP’s request for a waiver isapproved, such approval is only to waiveWP’s obligations under sections 8.04 and8.05 of this Agreement, and WP is stillrequired to make the certification de-scribed in section 8.03 of this Agreement.The waiver does not preclude the IRSfrom requesting information or conduct-ing a correspondence review as describedin section 8.08 of this Agreement. WPmust apply for a waiver for each certifi-cation period for which a waiver is re-quested.(B) Eligibility. WP is eligible to apply fora waiver of the periodic review require-ment if it meets the following require-ments—(1) WP must be an FFI;(2) WP cannot be part of a consolidatedcompliance program;(3) For each calendar year covered bythe certification period, the reportableamounts received by WP cannot exceed$1 million;(4) WP must have timely filed its Forms1042, 1042–S, and 8966 (or the reportingrequired under an applicable IGA), 1065,and Schedule K–1, as applicable, for allyears (fiscal or calendar) in the certifica-tion period;

(5) WP must have made all periodic cer-tifications and reviews required by sec-tions 8.02 and 8.03 of this Agreement foreach certification period, as well as anycertifications required pursuant to WP’sFATCA requirements as a participatingFFI or registered deemed-compliant FFI;and(6) WP must make the certification ofeffective internal controls described inPart II.A of the Appendix to this Agree-ment for the certification period for whichWP is applying for a waiver of the peri-odic review.(C) Documentation Required with WaiverApplication. When applying for a waiverunder this section 8.07, WP must includethe information described in Part III.B ofthe Appendix to this Agreement using themost recent calendar year in the certifica-tion period for which filing is due andreporting such results without any curingor remediation.(D) Approval. If WP’s request for awaiver of the periodic review requirementis approved, the IRS will notify WP. IfWP requests a waiver but such request isnot approved, WP will be granted a sixmonth extension from the date of denial ofthe waiver to complete the periodic re-view under sections 8.04 and 8.05 of thisAgreement. Such extension will not begranted if WP has made the request forwaiver in bad faith.Sec. 8.08. IRS Review.(A) In General. Based upon the certifica-tions made by the responsible officer anddisclosure of material failures, the infor-mation reported on Forms 1042, 1042–S,1065, and 8966 and Schedules K–1 filedwith the IRS during the certification pe-riod, or otherwise at the IRS’s discretionfor compliance purposes, the IRS mayinitiate requests of WP under this section8.08. The IRS may request remediation orthe conduct of a limited periodic reviewearlier than the time period provided inthis section if, based on the informationdescribed above, the IRS identifies, in itsdiscretion, a presence of factors indicatingsystemic or significant compliance fail-ures by WP. The IRS may also requestthat WP designate a replacement respon-sible officer if WP’s responsible officerhas not complied with its responsibilities(including responding to requests by theIRS for additional information) or the IRS


has information that indicates the respon-sible officer may not be relied upon tocomply with its responsibilities.(B) Periodic Review Report. The IRS mayrequest, through written correspondenceto the responsible officer of WP or theCompliance Entity, a copy of the resultsof WP’s periodic review for any priorcertification period or the periodic reviewreport of any partnership or trust withwhich WP has an agency agreement dur-ing the current certification period (with acertified translation into English if the re-port is not in English). WP is required toprovide the results within 30 calendardays of such request.(C) Correspondence Review. The IRSmay, in its discretion, conduct additionalfact finding through a correspondence re-view. In such a review, the IRS will con-tact the responsible officer of WP (or theCompliance Entity of a consolidated com-pliance program) in writing and requestinformation about WP’s compliance withthis Agreement or the compliance of apartnership or trust to which WP appliedthe agency option, including, for example,information about documentation, with-holding, or reporting processes, its peri-odic review, and information about anymaterial failures that were disclosed to theIRS (including remediation plans). TheIRS may request phone or video inter-views with relevant personnel of WP (orthe Compliance Entity of a consolidatedcompliance program) or a partnership ortrust to which WP applied the agency op-tion as part of such review. WP is requiredto respond within a reasonable period oftime to any such requests.(D) Additional Review Procedures. Inlimited circumstances, the IRS may directWP (or the Compliance Entity of a con-solidated compliance program) or anypartnership or trust described in section9.02 of this Agreement to which WP ap-plies the agency option to perform addi-tional, specified review procedures. TheIRS reserves the right to require WP (orthe Compliance Entity of a consolidatedcompliance program) or a partnership ortrust to which WP applied the agency op-tion to engage an external reviewer toperform the additional review proceduresregardless of whether such reviewer per-formed the periodic review. The IRS willprovide the responsible officer of WP with

a written plan describing the additionalreview procedures and will provide a pe-riod of not more than 120 days withinwhich the WP must provide to the IRS areport covering the reviewer’s findings.

Section 9. CERTAIN PARTNERSHIPSAND TRUSTS

Sec. 9.01. Joint Account Treatment forCertain Partnerships and Trusts.(A) In General. WP may enter an agree-ment with a nonwithholding foreign part-nership or nonwithholding foreign trustthat is either a simple or grantor trustdescribed in this section 9.01(A) to applythe simplified joint account documenta-tion, reporting, and withholding proce-dures provided in section 9.01(B) of thisAgreement. WP and the partnership ortrust that apply this section 9.01 to anycalendar year must apply these rules to thecalendar year in its entirety. WP and thepartnership or trust may not apply thissection 9.01 to any calendar year in whichthe partnership or trust has failed to makeavailable to WP or WP’s reviewer therecords described in section 9.01(A)(5) ofthis Agreement within 90 days after theserecords are requested and the partnershipor trust must waive any legal prohibitionsagainst providing such records to WP. Ifthe partnership or trust has failed to makethese records available within the 90-dayperiod, or if WP and the partnership ortrust fail to comply with any other require-ments of this section 9.01, WP must applythe provisions of §§ 1.1441–1 and1.1441–5 to the partnership or trust as anonwithholding foreign partnership ornonwithholding foreign trust, must correctits withholding for the period duringwhich the failure occurred in accordancewith section 7.03 of this Agreement, andcannot apply this section 9.01 to subse-quent calendar years. WP and the partner-ship or trust that apply this section 9.01 toany calendar year are not required to ap-ply this section 9.01 to subsequent calen-dar years.A partnership or trust is described in thissection 9.01(A) if the following condi-tions are met.(1) The partnership or trust has a chapter 4status as a certified deemed-compliantFFI, an owner-documented FFI with re-spect to WP, an exempt beneficial owner,or an NFFE, and has provided WP with a

certification that it has maintained suchchapter 4 status at all times during eachcertification period;(2) The partnership or trust is a directpartner of WP;(3) None of the partnership’s or trust’spartners, beneficiaries, or owners is aflow-through entity or intermediary;(4) None of the partnership’s or trust’spartners, beneficiaries, or owners is a U.S.person and none of its foreign partners,beneficiaries, or owners is subject to with-holding or reporting under chapter 4 (e.g.,a nonparticipating FFI or certain passiveNFFEs); and(5) The partnership or trust agrees to makeavailable upon request to WP and WP’sreviewer for purposes of WP’s periodicreview under section 8 of this Agreement(including to respond to IRS inquiries re-garding its compliance review) recordsthat establish that the partnership or trusthas provided WP with documentation forpurposes of chapters 3 and 4 for all of itspartners, beneficiaries, or owners.(B) Modification of Obligations for WP.(1) WP may rely on a valid FormW–8IMY provided by the partnership ortrust and may rely on a withholding state-ment that meets the requirements of§§ 1.1441–5(c)(3)(iv) or (e)(5)(iv) and1.1471–3(c)(3)(iii)(B) (if the payment is awithholdable payment) and that providesinformation for all partners, beneficiaries,or owners together with valid Forms W–8and, for a withholdable payment made toa partner, beneficiary, or owner that isan entity, documentation required under§ 1.1471–3(d) to establish such partner’s,beneficiary’s, or owner’s chapter 4 status.The withholding statement, however,need not provide any allocation informa-tion.(2) WP must treat amounts distributed to,or included in the distributive share of, thepartnership or trust as allocated solely to apartner, beneficiary, or owner that is sub-ject to the highest rate of withholding un-der chapter 3 and must withhold at thatrate.(3) WP may pool report amounts distrib-uted to, or included in the distributiveshare of, the partnership’s or trust’s directpartners, beneficiaries, or owners in WP’schapter 3 reporting pools on Form 1042–Sas described in section 6.02(D) of thisAgreement.


(4) After WP has withheld in accordancewith section 9.01(B)(2) of this Agree-ment, it may file a separate Form 1042–Sfor any partner, beneficiary, or owner whorequests that it do so. If WP issues aseparate Form 1042–S for any partner,beneficiary, or owner, it cannot includesuch partner, beneficiary, or owner in itschapter 3 reporting pool. If WP has al-ready filed a Form 1042–S and includedthe partner, beneficiary, or owner in achapter 3 reporting pool, it must file anamended return to reduce the amount ofthe payment reported to reflect the amountallocated to the recipient on the recipient’sspecific Form 1042–S. WP may file a sep-arate Form 1042–S for a partner, benefi-ciary, or owner only if the partnership ortrust provides a withholding statementthat includes allocation information forthe requesting partner, beneficiary, orowner and only if the partnership or trusthas agreed in writing to make available toWP or WP’s reviewer the records thatsubstantiate the allocation information in-cluded in its withholding statement.(5) WP may not include any amounts dis-tributed to, or included in the distributiveshare of, a partnership or trust to whichWP is applying the rules of this section9.01 in any collective refund claim madeunder section 7.02 of this Agreement.Sec. 9.02. Agency Option for CertainPartnerships and Trusts.(A) In General. WP may enter an agree-ment with a nonwithholding foreign part-nership or nonwithholding foreign trustthat is either a simple or grantor trustdescribed in section 9.02(A) of thisAgreement under which the partnership ortrust agrees to act as an agent of WP withrespect to its partners, beneficiaries, orowners, and, as WP’s agent, to apply theprovisions of the WP agreement to thepartners, beneficiaries, or owners. By en-tering into an agreement with a partner-ship or trust as described in this section9.02, WP is not assigning its liability forthe performance of any of its obligationsunder the WP agreement. WP and thepartnership or trust to which WP appliesthe rules of this section 9.02 are jointlyand severally liable for any tax, penalties,and interest that may result from the fail-ure of the partnership or trust to meet anyof the obligations imposed by its agree-ment with WP. WP and the partnership or

trust that applies the agency option to anycalendar year must apply these rules to thecalendar year in its entirety. Generally,WP and the partnership or trust that applythe agency option to any calendar year arenot required to apply the agency option tosubsequent calendar years. If, however,WP withholds and reports any adjust-ments required by corrected informationin a subsequent calendar year under sec-tion 9.02(B)(2) of this Agreement, WPmust apply the agency option to that cal-endar year in its entirety.If the partnership or trust is included inWP’s periodic review of compliance asdescribed in section 9.02(A)(6) of thisAgreement, WP and the partnership ortrust may not apply the agency option toany calendar year in which the partnershipor trust has failed to make available to WPor WP’s reviewer the records described inthis section 9.02 within 90 days after theserecords are requested and the partnershipor trust must waive any legal prohibitionsagainst providing such records to the WP.If, for any calendar year, the partnershipor trust has failed to make these recordsavailable within the 90-day period, or ifWP and the partnership or trust fail tocomply with any other requirement of thissection 9.02, WP must apply §§ 1.1441–1and 1.1441–5 to the partnership or trust asa nonwithholding foreign partnership ornonwithholding foreign trust, correct itswithholding for the period in which thefailure occurred in accordance with sec-tion 7.03 of this Agreement, and cannotapply this section 9.02 to subsequent cal-endar years.A partnership or trust is described in thissection 9.02(A) if the following condi-tions are met:(1) The partnership or trust is either adirect partner of WP or an indirect partnerof WP that is a direct partner, beneficiary,or owner of a partnership or trust to whichWP also applies this section 9.02.(2) The partnership or trust has a chapter 4status as a certified deemed-compliantFFI, an owner-documented FFI with re-spect to WP, an NFFE, or an exemptbeneficial owner, and has provided WPwith a certification that it has maintainedsuch chapter 4 status during each certifi-cation period.(3) None of the partnership’s or trust’spartners, beneficiaries, or owners is a WT,

WP, participating FFI, registered deemed-compliant FFI, registered deemed-compliant Model 1 IGA FFI, or QI act-ing as an intermediary for a paymentmade by WP to the partnership or trust.(4) WP may not act as a withholdingforeign partnership with respect to anydirect or indirect partner of the partnershipor trust that is a U.S. non-exempt recipi-ent, unless the U.S. non-exempt recipientis an owner of an owner-documented FFIor passive NFFE to which WP applies theagency option and is included in WP’sU.S. payee pool (described in section6.02(C) of this Agreement).(5) The partnership or trust agrees to com-ply with the documentation requirementsdescribed in section 4 of this Agreement.(6) The partnership or trust agrees, to theextent necessary for WP to satisfy itscompliance obligations (e.g., if the WPdoes not receive a waiver as described insection 8.07 of this Agreement), either to(i) conduct an independent periodic re-view in accordance with the proceduresdescribed in section 8.05 of this Agree-ment and provide WP with the certifica-tion required under section 8.03 of thisAgreement for each certification period inorder to allow the responsible officer ofWP to make a certification to the IRSregarding the partnership’s or trust’s com-pliance with this section 9.02, or (ii) pro-vide WP with documentation or other in-formation for inclusion in WP’s periodicreview described in section 8.04 of thisAgreement. The partnership or trust mustalso agree to respond (either directly orthrough WP) to IRS inquiries regarding itscompliance review, as described in sec-tion 8.08 of this Agreement, including, ifapplicable, providing the WP and the IRSwith the results of the reviewer’s testingof partners, beneficiaries, or owners de-scribed in section 8.06 of this Agreement.(B) Modification of Obligations for WP.(1) WP may rely on a valid FormW–8IMY provided by the partnership ortrust, together with a withholding state-ment described in §§ 1.1441–5(c)(3)(iv)or (e)(5)(iv) and 1.1471–3(c)(3)(iii)(B) (ifthe payment is a withholdable payment)that includes all information necessary forWP to fulfill its withholding, reporting,and filing obligations under this Agree-ment. For a withholdable payment, thewithholding statement may include a


chapter 4 withholding rate pool (as de-fined in § 1.1471–1(b)(20)) of nonpartic-ipating FFIs for payments of amountssubject to chapter 4 withholding. Thewithholding statement may also includechapter 3 withholding rate pools for part-ners, beneficiaries, or owners that are notintermediaries, flow-through entities (orpersons holding interests in the partner-ship or trust through such entities), U.S.non-exempt recipients, or passive NFFEswith one or more substantial U.S. owners(or one or more controlling persons that isa specified U.S. person under an applica-ble Model 1 or Model 2 IGA), and thepartnership or trust need not provide toWP documentation for these partners,beneficiaries, or owners. Notwithstandingthe preceding sentences of this section9.02(B)(1), the partnership or trust is re-quired to disclose to WP any partner orinterest holder that is a passive NFFE withsubstantial U.S. owners (or controllingpersons that are specified U.S. personsunder an applicable IGA) or that is a U.S.non-exempt recipient, as well as the ac-count holders of any nonqualified inter-mediary or interest holders in a flow-through entity which has an interest in thepartnership or trust, and provide all of thedocumentation and other information re-lating to those account holders and inter-est holders that is required for WP oranother withholding agent to report thepayments made to those account holdersand interest holders to the extent requiredby section 6 of this Agreement.(2) Timing of Withholding. WP must with-hold on the date an amount is distributedto, or included in the distributive share of,the partnership or trust based on a with-holding statement provided by the part-nership or trust on which WP is permittedto rely. The amount allocated to eachpartner, beneficiary, or owner in thewithholding statement may be based ona reasonable estimate of the partner’s,beneficiary’s, or owner’s distributiveshare of income subject to withholdingfor the year. The partnership or trustmust correct the estimated allocations toreflect the partner’s, beneficiary’s, orowner’s actual distributive share andmust provide this corrected informationto WP on the earlier of the date thatthe statement required under section6031(b) (i.e., Schedule K–1) or the Ben-

eficiary Statement or Owner Statementis mailed or otherwise provided to thepartner, beneficiary, or owner or thedue date for furnishing the statement(whether or not the partnership or trustis required to prepare and furnish thestatement). If that date is after the duedate (without regard to extensions) forWP’s Forms 1042 and 1042–S for thecalendar year, WP may withhold andreport any adjustments required by cor-recting the information in the followingcalendar year.(3) Payments Reportable under Chapters3 and 4. WP shall report on Form 1042–Sall amounts subject to chapters 3 and 4withholding distributed to, or included inthe distributive share of, the partnership ortrust as follows.(i) For a direct partner, beneficiary, orowner of the partnership or trust that is anonparticipating FFI, WP shall report anamount subject to withholding using thechapter 4 reporting pool described in sec-tion 6.02(C) of this Agreement with thepartnership or trust reported as the recip-ient.(ii) For a direct partner, beneficiary, orowner of the partnership or trust that is aforeign person for which no withholdingis required under chapter 4 (other than anintermediary, agent, or flow-through en-tity described below), WP shall report anamount subject to chapter 3 withholdingusing the chapter 3 reporting pools as de-scribed in section 6.02(D) of this Agree-ment with the partnership or trust reportedas the recipient.(iii) For a direct or indirect partner, ben-eficiary, or owner of the partnership ortrust that is a nonqualified intermediary orflow-through entity, WP shall report pay-ments of amounts subject to chapter 4withholding included in a chapter 4 with-holding rate pool of nonparticipating FFIsusing the chapter 4 reporting pool for suchpartner, beneficiary, or owner with thenonqualified intermediary or flow-throughentity reported as the recipient, and WPshall report payments of amounts subjectto chapter 3 withholding that are not with-holdable payments or are withholdablepayments for which no chapter 4 with-holding is required by reporting the pay-ments as made to specific recipients asdescribed in 6.02(B) of this Agreement.(4) Form 8966 Reporting Requirements. If

WP is an FFI and if the partnership ortrust is a U.S. account (or U.S. reportableaccount), WP is required to report thepartnership or trust consistent with itsFATCA requirements as a participatingFFI, registered deemed-compliant FFI, orregistered deemed-compliant Model 1IGA FFI. The agreement between WP andthe partnership or trust must also providethat WP shall report withholdable pay-ments that the partnership or trust distrib-utes to, or includes in the distributiveshare of, a partner, beneficiary, or ownerthat is an NFFE (other than an exceptedNFFE) with one or more substantial U.S.owners (or one or more controlling per-sons that is a specified U.S. person underan applicable IGA) and is the beneficialowner of the withholdable payment re-ceived by the partnership or trust. WPmust report on Form 8966 in the time andmanner provided in § 1.1474–1(i)(2).Such report must include the name of theNFFE that is owned by a substantial U.S.owner (or controlling person that is aspecified U.S. person); the name, address,and U.S. TIN of each substantial U.S.owner (or controlling person that is aspecified U.S. person); the total of allwithholdable payments made to the NFFEduring the calendar year (or reportableperiod under the applicable IGA); and anyother information as required by the formand its accompanying instructions.(C) Other Requirements of Agency Agree-ment. WP shall require the partnership ortrust to which it applies the agency optiondescribed in this section 9.02 to provideWP with all the information necessary forWP to meet its obligations under thisAgreement. No provisions shall be con-tained in the agreement between WP andthe partnership’s or trust that preclude,and no provisions of this Agreement shallbe construed to preclude, the partnership’sor trust’s joint and several liability for tax,penalties, and interest under chapters 3and 4 to the extent that underwithholding,penalties, and interest have not been col-lected from WP and the underwithholdingor failure to report amounts correctly onForms 1042, 1042–S or 8966, is due to thepartnership’s or trust’s failure to properlyperform its obligations under its agree-ment with WP. Nothing in the agreementbetween WP and the partnership or trustshall be construed to limit the partner-


ship’s or trust’s requirements under chap-ter 4 as a certified deemed-compliant FFI,an owner-documented FFI with respect toWP, an NFFE, or an exempt beneficialowner. Further, nothing in the agreementbetween WP and the partnership or trustshall permit the partnership or trust toassume primary chapters 3 and 4 with-holding responsibility.Sec. 9.03. Indirect Partners of WP.(A) General Requirements. WP may act asa withholding foreign partnership for re-portable amounts distributed to, or in-cluded in the distributive share of, pass-through partners and indirect partners ifsuch indirect partner is not a U.S. non-exempt recipient. Notwithstanding thepreceding sentence, WP may act as awithholding foreign partnership with re-spect to an indirect partner that is a U.S.non-exempt recipient if the indirect part-ner is included in a passthrough partner’schapter 4 withholding rate pool of recal-citrant account holders or U.S. payees.WP does not need to use the agency op-tion described in section 9.02 of thisAgreement or make the pooled reportingelection described in section 6.02(D) ofthis Agreement to apply the proceduresdescribed in this section 9.03.(B) Modification of Obligations for WP.(1) Except to the extent described in thissection 9.03(B), WP need not forward thedocumentation and the withholding state-ment of the passthrough partner and indi-rect partner to WP’s withholding agent;(2) WP must provide its withholdingagent with documentation and other in-formation from any passthrough partnerwhose direct or indirect partner is a U.S.non-exempt recipient (unless such U.S.non-exempt recipient is included in achapter 4 withholding rate pool of recal-citrant account holders or U.S. payees);(3) WP will assume primary chapters 3and 4 withholding responsibility as de-scribed in section 3 of this Agreement andmust report on its indirect partners on aspecific payee basis on Form 1042–S (ex-cept to the extent such indirect partnersare included in a passthrough partner’schapter 4 withholding rate pool or a QI’swithholding rate pool) as described in sec-tion 6.02(B) of this Agreement, regardlessof whether WP made a PR election for itsdirect partners under section 6.02(D) ofthis Agreement; and

(4) WP must include any passthroughpartner and indirect partner for which itacts as a withholding foreign partnershipin its periodic review as described in sec-tion 8.05 of this Agreement.(C) Documentation from PassthroughPartner. WP agrees to use its best effortsto obtain from a passthrough partner thedocumentation of an indirect partner forwhich WP acts as a withholding foreignpartnership. Unless WP can reliably asso-ciate an amount distributed to, or includedin the distributive share of, any pass-through partner with valid documentationfrom such partner within the meaning of§ 1.1441–1(b)(2)(vii) and, for a withhold-able payment, § 1.1471–3(c), WP shallapply the presumption rules described in§§ 1.1441–1(b)(3), 1.1441–4(a), 1.1441–5(d) and (e)(6), 1.1441–9(b)(3), and1.6049–5(d) and for a withholdable pay-ment made to an entity, § 1.1471–3(f) or,if WP is an FFI, its FATCA requirementsas a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. Generally,WP can reliably associate an amount withdocumentation provided by a passthroughpartner if WP obtains—(1) A valid Form W–8IMY provided bythe passthrough partner that, if the pay-ment is a withholdable payment, estab-lishes the chapter 4 status of the pass-through partner; and(2) If the payment is a withholdablepayment, a withholding statement thatmeets the requirements of § 1.1471–3(c)(3)(iii)(B) that includes the accountholders or interest holders of the pass-through partner in chapter 4 withholdingrate pools to the extent permitted, and, foran amount subject to chapter 3 withhold-ing that is not a withholdable payment oris a withholdable payment for whichchapter 4 withholding is not required,valid documentation described in sec-tion 4 of this Agreement provided byaccount holders or interest holders ofthe passthrough partner that are notthemselves nonqualified intermediariesor flow-through entities.WP may not reduce the rate of withhold-ing with respect to an indirect partner thatis a foreign beneficial owner for which itacts as a WP unless WP can reliably as-sociate the payment with valid documen-tation that establishes the indirect part-

ner’s entitlement to a reduced rate ofwithholding under chapter 3 and, in thecase of a withholdable payment, estab-lishes that chapter 4 withholding does notapply.(D) Timing of Withholding. WP mustwithhold on the date an amount is distrib-uted to, or included in the distributiveshare of, the passthrough partner based ona withholding statement provided by thepassthrough partner on which WP is per-mitted to rely. The amount allocated toeach indirect partner in the withholdingstatement may be based on a reasonableestimate of the indirect partner’s distribu-tive share of income subject to withhold-ing for the year. The passthrough partnermust agree to correct the estimated allo-cations to reflect the indirect partner’s ac-tual distributive share and must providethis corrected information to WP, on theearlier of the date that the statement re-quired under section 6031(b) of the Code(Schedule K–1) is mailed or otherwiseprovided to the indirect partner or the duedate for furnishing the statement (whetheror not the passthrough partner is requiredto prepare and furnish the statement). Ifthat date is after the due date (withoutregard to extensions) for WP’s Forms1042 and 1042–S for the calendar year,WP may withhold and report any adjust-ments required by correcting the informa-tion in the following calendar year.(E) Form 8966 Reporting Requirements.If WP is an FFI and if the passthroughpartner is a U.S. account (or U.S. report-able account), WP is required to report thepartnership or trust consistent with itsFATCA requirements as a participatingFFI, registered deemed-compliant FFI, orregistered deemed-compliant Model 1IGA FFI. WP shall also report withhold-able payments that WP distributes to, orincludes in the distributive share of, apassthrough partner if an account holderor interest holder of such passthroughpartner is an NFFE (other than an ex-cepted NFFE) with one or more substan-tial U.S. owners (or one or more control-ling persons that is a specified U.S. personunder an applicable IGA) and if the NFFEis the beneficial owner of the withholdablepayment received by the passthrough part-ner. WP must report on Form 8966 in thetime and manner provided in § 1.1474–1(i)(2). Such report must include the name


of the NFFE that is owned by a substantialU.S. owner (or controlling person that is aspecified U.S. person); the name, address,and U.S. TIN of each substantial U.S.owner (or controlling person that is aspecified U.S. person); the total of allwithholdable payments made to the NFFEduring the calendar year (or reportableperiod under the applicable IGA); and anyother information as required by the formand its accompanying instructions.WP is not required to report under§ 1.1474–1(i)(2) on a withholdable pay-ment made to a passthrough partner that isa participating FFI or registered deemed-compliant FFI that is allocated to a payeethat is a passive NFFE with one or moresubstantial U.S. owners on an FFI withhold-ing statement when the participating FFI orregistered deemed-compliant FFI includeson the statement the certification describedin § 1.1471–3(c)(3)(iii)(B)(2)(iv) (certifyingthat the FFI is reporting the passive NFFE asa U.S. account or U.S. reportable account inaccordance with the terms of the FFI agree-ment or an applicable IGA), provided WPdoes not know or have reason to know thatthe certification is incorrect or unreliable.See § 1.1474–1(i)(2).

Section 10. EXPIRATION,TERMINATION AND DEFAULT

Sec. 10.01. Term of Agreement. ThisAgreement begins on the effective date,as described in section 12 of this Agree-ment, and expires upon the earlier of thedate WP terminates under its partnershipagreement or the end of the sixth fullcalendar year the Agreement is in effect,unless terminated under section 10.02 or10.03 of this Agreement. This Agree-ment may be renewed for additionalterms as provided in section 10.07 ofthis Agreement.Sec. 10.02. Termination of Agreement(In General).(A) In General. Except as otherwise pro-vided in section 10.03 of this Agreement,this Agreement may be terminated by ei-ther the IRS or WP prior to the end of itsterm by delivery of a notice, in accordancewith section 11.06 of this Agreement, oftermination to the other party. The IRS,however, shall not terminate this Agree-ment unless there has been a significantchange in circumstances, as defined insection 10.04 of this Agreement, or an

event of default has occurred, as definedin section 10.05 of this Agreement, andthe IRS determines, in its sole discretion,that the significant change in circum-stances or the event of default warrantstermination of this Agreement. The IRSshall not terminate this Agreement if WPcan establish to the satisfaction of the IRSthat all events of default for which it hasreceived notice have been cured withinthe time period agreed upon. The IRSshall notify WP that an event of defaulthas occurred and that the IRS intends toterminate the Agreement unless WP curesthe default or establishes that no event ofdefault has occurred. A notice of termina-tion sent by either party shall take effecton the date specified in the notice, and WPis required to notify its withholding agentof the date its status as a WP was termi-nated.The termination of the Agreement shallnot affect any of WP’s reporting, tax fil-ing, withholding, depositing, or paymentresponsibilities arising in the calendaryears for which this Agreement was ineffect and the portion of the calendar yearin which termination is requested. TheIRS shall revoke WP’s WP-EIN within areasonable time after the reporting, taxfiling, and depositing requirements forsuch years are satisfied. The terminationof this Agreement is not intended to affectany other federal income tax conse-quences.After the date of termination of thisAgreement, WP may not act as a with-holding foreign partnership, and must sonotify any persons to which WP has fur-nished a withholding foreign partnershipcertificate of the termination (includingthe date of the termination). After the dateof termination of this Agreement, the IRSmay reinstate this Agreement (or the IRSmay require WP to enter into a new with-holding foreign partnership agreement) onsuch terms and conditions and with suchmodifications as the IRS may determine.(B) Final Certification after a Termina-tion of the Agreement. Upon a terminationof this Agreement, WP must provide tothe IRS the certification described in sec-tion 8.03 of this Agreement covering theperiod from the end of the most recentcertification period (or, if the first certifi-cation period has not ended, the effectivedate of this Agreement) to the date of

termination within six months of the dateof termination, regardless of whether aperiodic review has been completed forsuch period.Sec 10.03. Automatic Termination ofAgreement.(A) Automatic Termination. Notwith-standing section 10.02 of this Agreement,this Agreement will terminate automati-cally in the event that the reviewer or theIRS (including during its compliance re-view described in section 8.08 of thisAgreement) discovers that WP was not inpossession of Forms W–8 or W–9, asapplicable, or documentary evidence, aspermitted under section 4.01(A) of thisAgreement, for any direct partner at anytime that withholding or reporting wasrequired under section 3.02 of this Agree-ment. The automatic termination will beeffective as of December 31 of the year inwhich the reviewer or the IRS makes thatdiscovery.(B) Cure and Reinstatement after Auto-matic Termination. This Agreement willbe reinstated, effective the same date itautomatically terminated under section10.03(A) of this Agreement, if—(1) WP obtains appropriate Forms W–8 orW–9 or documentary evidence, as permit-ted under section 4.01(A) of this Agree-ment, that relate to the time withholdingor reporting was required, for each suchundocumented partner before March 15 ofthe year following the year in which theAgreement automatically terminated, or(2) All such undocumented partners haveceased to be partners in WP before March15 of the year following the year in whichthe Agreement automatically terminated.(C) Payment of Underwithholding andReporting upon Termination. In the eventof automatic termination of this Agree-ment under this section 10.03, WP mustpay any underwithholding of tax, interest,and penalties that the IRS determines isattributable to each undocumented partnerfor the period during which the partnerwas undocumented based on the presump-tion rules, and, if WP has made a pooledreporting election for chapter 3 purposes,WP must file partner specific Forms1042–S for amounts subject to chapter 3withholding for which no chapter 4 with-holding is required and Schedules K–1reporting the names and addresses andother required information, as appropriate,


for every undocumented partner from theearliest time the documentation was re-quired for that undocumented partnerthrough the date of termination. WP may,however, continue to report on a pooledbasis for documented foreign direct part-ners through this period.Sec. 10.04. Significant Change in Cir-cumstances. For purposes of this Agree-ment, a significant change in circum-stances includes, but is not limited to—(A) Any change in circumstances thatwould result in a termination of WP undersection 708;(B) A change in U.S. federal law, or ap-plicable foreign law, that affects the va-lidity of any provision of this Agreement,materially affects the procedures con-tained in this Agreement, or affects WP’sability to perform its obligations underthis Agreement;(C) A ruling of any court that affects thevalidity of any material provision of thisAgreement;(D) A significant change in WP’s businesspractices that affects WP’s ability to meetits obligations under this Agreement;(E) If applicable, a material change in theapplicable know-your-customer rules andprocedures when WP relied on documen-tary evidence as permitted in section4.01(A) of this Agreement;(F) If WP is an FFI (other than a retire-ment fund), WP’s failure to maintain itsstatus as a participating FFI, registereddeemed-compliant FFI, or a registereddeemed-compliant Model 1 IGA FFI; or(G) If WP is acting as a sponsoring entityon behalf of a sponsored FFI or sponsoreddirect reporting NFFE, WP’s failure tocomply with the due diligence, withhold-ing, reporting, and compliance require-ments of a sponsoring entity.Sec. 10.05. Events of Default. For pur-poses of this Agreement, an event of de-fault occurs if WP fails to perform anymaterial duty or obligation required underthis Agreement and the responsible officerhad actual knowledge of or should haveknown the facts relevant to the failure toperform any material duty. An event ofdefault includes, but is not limited to, theoccurrence of any of the following:(A) WP fails to implement adequate pro-cedures, accounting systems, and internalcontrols to ensure compliance with thisAgreement;

(B) WP underwithholds a material amountof tax that WP is required to withholdunder chapter 3 or 4 and fails to correctthe underwithholding or to file anamended Form 1042 reporting, and pay-ing, the appropriate tax;(C) WP makes excessive refund claims;(D) WP fails to file required Forms, 1042,1042–S, 8966, 1065, Schedules K–1, or1120–F (if WP is a foreign reverse hybridentity) by the due date specified on suchforms or files forms that are materiallyincorrect or fraudulent;(E) If WP is an FFI, WP fails to materiallycomply with its FATCA requirements as aparticipating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI;(F) If WP is a sponsoring entity, WPmaterially fails to comply with the duediligence, withholding, reporting, andcompliance requirements of a sponsoringentity;(G) WP fails to perform a periodic reviewwhen required or to document the findingsof such review in a written report;(H) WP fails to inform the IRS within 90days of any significant change in its busi-ness practices to the extent that changeaffects WP’s obligations under thisAgreement;(I) WP fails to cure a material failureidentified in the qualified certification de-scribed in Part II.B of the Appendix to thisAgreement or identified by the IRS;(J) WP makes any fraudulent statement ora misrepresentation of a material fact withregard to this Agreement to the IRS, awithholding agent, or WP’s reviewer;(K) The IRS determines that WP’s re-viewer is not sufficiently independent, asdescribed in section 8.04 of this Agree-ment, to adequately perform its reviewfunction and WP fails to arrange for aperiodic review conducted by a reviewerapproved by the IRS;(L) WP fails to make deposits in the timeand manner required by section 3.05 ofthis Agreement or fails to make adequatedeposits, taking into account the proce-dures of section 7.05 of this Agreement;(M) If applicable, WP fails to inform theIRS of any change in the applicable know-your-customer rules within 90 days of thechange becoming effective when WP re-lied on documentary evidence as permit-ted in section 4.01(A) of this Agreement;

(N) WP fails to cooperate with the IRS onits compliance review described in section8.08 of this Agreement;(O) A partnership or trust to which WPapplies the agency option is in defaultwith the agency agreement and WP failsto terminate that agreement within thetime period specified in section 9.02 ofthis Agreement;(P) WP fails to materially comply with therequirements of a nonwithholding foreignpartnership under chapter 3 with respectto any partner for which it does not act asa withholding foreign partnership;(Q) With respect to a consolidated com-pliance program under section 8.02(C) ofthis agreement, the Compliance Entityfailed to comply with the obligations of aCompliance Entity under section 8.02(C)of this Agreement, and, if the ComplianceEntity is a sponsoring entity, the Compli-ance Entity failed to comply with the duediligence, withholding, reporting, andcompliance requirements of a sponsoringentity under chapter 4;(R) If WP is a foreign reverse hybrid en-tity, WP fails to prepare and retain thePFIC Annual Information Statement orReconciliation Statement, as required un-der 6.03(C) of this Agreement; or(S) WP is not in possession of valid doc-umentation described in sections 4.01through 4.09 of this Agreement for eachdirect partner as of the due date of thecertification described in section 8.03(C)(1) of this Agreement.Sec. 10.06. Notice and Cure. Upon theoccurrence of an event of default, the IRSwill deliver to WP a notice of defaultspecifying each event of default. WP mustrespond to the notice of default within 60days (60-day response) from the date ofthe notice of default. The 60-day responseshall contain an offer to cure the event ofdefault and the time period in which tocure or shall state why WP believes thatno event of default has occurred. If WPdoes not provide a 60-day response, theIRS will deliver a notice of termination asprovided in section 10.02 of this Agree-ment. If WP provides a 60-day response,the IRS shall either accept or reject WP’sstatement that no default has occurred orWP’s proposal to cure the event of de-fault.

If the IRS rejects WP’s statement thatno default has occurred or rejects WP’s


proposal to cure the event of default, theIRS may offer a counter-proposal to curethe event of default with which WP willbe required to comply within 30 days. IfWP fails to provide a 30-day response, theIRS will send a notice of termination inaccordance with section 10.02 of thisAgreement, which WP may appeal within30 days of the date of the notice by send-ing a written appeal to the address speci-fied in section 11.06 of this Agreement. IfWP appeals the notice of termination, thisAgreement shall not terminate until theappeal has been decided. If an event ofdefault is discovered in the course of areview, WP may cure the default, withoutfollowing the procedures of this section10.06, if the external reviewer’s reportdescribes the default and the actions thatWP took to cure the default and the IRSdetermines that the cure procedures fol-lowed by WP were sufficient. If the IRSdetermines that WP’s actions to cure thedefault were not sufficient, the IRS shallissue a notice of default and the proce-dures described in this section 10.06 shallbe followed.Sec. 10.07. Renewal. If WP intends torenew this Agreement, it shall submit anapplication for renewal to the IRS on theQI/WP/WT Application and AccountManagement System. This Agreementwill be renewed only upon the agreementof both WP and the IRS.

Section 11. MISCELLANEOUSPROVISIONS

Sec. 11.01. WP’s application to become aWP, the Appendix to this Agreement, and,if WP is an FFI, its FATCA requirementsas a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI (or, if WP isa sponsoring entity, the due diligence,withholding, reporting, and compliancerequirements of a sponsoring entity) arehereby incorporated into and made an in-tegral part of this Agreement. This Agree-ment, WP’s application, and the Appendixto this Agreement constitute the completeagreement between the parties.Sec. 11.02. This Agreement may beamended by the IRS if the IRS determines

that such amendment is needed for thesound administration of the internal reve-nue laws or internal revenue regulations.This Agreement will only be modifiedthrough published guidance issued by theIRS and U.S. Treasury Department. Anysuch modification imposing additional re-quirements will in no event become effec-tive until the later of 90 days after the IRSprovides notice of such modification orthe beginning of the next calendar yearfollowing the publication of such guid-ance.Sec. 11.03. Any waiver of a provision ofthis Agreement by the IRS is a waiversolely of that provision. The waiver doesnot obligate the IRS to waive other provi-sions of this Agreement or the same pro-vision at a later date.Sec. 11.04. This Agreement shall be gov-erned by the laws of the United States.Any legal action brought under thisAgreement shall be brought only in a U.S.court with jurisdiction to hear and resolvematters under the internal revenue laws ofthe United States. For this purpose, WPagrees to submit to the jurisdiction of suchU.S. court.Sec. 11.05. WP’s rights and responsibili-ties under this Agreement cannot be as-signed to another person.Sec. 11.06. Except as otherwise providedin the QI/WP/WT Application and Ac-count Management System, notices pro-vided under this Agreement shall bemailed registered, first class airmail. Allnotices sent to the IRS must include theWP’s name, WP-EIN, GIIN (if applica-ble), and the name of its responsible offi-cer. Such notices shall be directed as fol-lows:To the IRS:Internal Revenue ServiceForeign Payments PracticeForeign Intermediaries Program290 Broadway, 12th FloorNew York, NY 10007-1867To WP:The WP’s responsible officer. Such no-tices shall be sent to the address indicatedin the WP’s registration or application (asmay be amended).Sec. 11.07. WP, acting in its capacity as awithholding foreign partnership or in any

other capacity, does not act as an agent ofthe IRS, nor does it have the authority tohold itself out as an agent of the IRS.

Section 12. EFFECTIVE DATE OFAGREEMENT

Sec. 12.01. New Applicants.(A) In General. Applications for WP sta-tus received on or before March 31 of thecalendar year, if approved, will be effec-tive January 1 of that calendar year. If anentity submits an application to be a WPafter March 31 and does not receive anyreportable amounts between January 1 ofthe calendar year in which the WP appli-cation is submitted and the date of ap-proval, the entity will have a WP agree-ment with an effective date of the date it isissued a WP-EIN. All other entities apply-ing for WP status after March 31 that areapproved during the calendar year willhave a WP agreement with an effectivedate of January 1 of the following calen-dar year.(B) Calendar Year 2017. If a WP is ap-proved for WP status during calendar year2017, the rules described in section12.01(A) of this Agreement apply, exceptthat the WP agreement effective from Jan-uary 1, 2017, to the date of issuance ofthis revenue procedure will be the WPagreement in Revenue Procedure 2014–47, and the WP agreement provided in thisrevenue procedure will be effective begin-ning on the date of issuance of this reve-nue procedure.Sec. 12.02. Renewal of WP Agreement.A WP that applies to renew its WP agree-ment provided in Revenue Procedure2014–47 on or before March 31, 2017,will have a WP agreement with an effec-tive date of the date of issuance of thisrevenue procedure.

APPENDIX TO WP AGREEMENT

General Instructions: WPs must providethe information and certifications de-scribed in this Appendix as applicable totheir WP status and activities. The follow-ing Parts must be completed by the spec-ified WPs:


Parts I and II: All WPs.

Part III: WPs eligible pursuant to section 8.07 of the WP Agreement to apply for a waiver of the periodic reviewrequirement (as described in section 8.07 of the WP Agreement) and who wish to apply for such a waiver.The following WPs are not eligible for a waiver: (a) WPs that are NFFEs, and (b) WPs that are part of aconsolidated compliance program.

Part IV.A–G: All WPs that have not applied for or have not been approved for a waiver.

A Compliance Entity may complete Parts I and II for all WPs in its consolidated compliance program by providing aggregateinformation (where applicable). However, Part IV must be completed separately for each WP. If a Compliance Entity of aconsolidated compliance program is completing this form, “WP” when used in Parts I and II means each WP that is a member ofthe consolidated compliance program.

PART I. GENERAL INFORMATION

A. Is this certification and informationprovided by a Compliance Entity of aconsolidated compliance program?Y/N1. If yes, provide the names and WP-

EINs of the members of the consol-idated compliance program.

B. Did WP make a pooled reporting elec-tion? Y/N1. If this certification and information

is provided by a Compliance Entityof a consolidated compliance pro-gram, provide the names and WP-EINs of each WP that made a pooledreporting election.

C. The number of partnerships or trusts towhich WP applied the agency option(if none enter 0).1. Each partnership or trust to which

WP applied the agency option hasprovided WP with a certificationthat it has maintained status as acertified deemed-compliant FFI, anowner-documented FFI with respectto WP, an NFFE, or an exempt ben-eficial owner as required under sec-tion 9.02(A)(2) of the WP Agree-ment. Y/N

2. Each partnership or trust to whichWP applied the agency option hasprovided WP with either (1) its doc-umentation and other informationfor inclusion in WP’s periodic re-view (as described in section9.02(A)(6) of the WP Agreement) or(2) a certification described in sec-tion 8.03 of the WP Agreement andthe results of the periodic reviewdescribed in section 8.06 of the WPAgreement for the certification pe-riod. Y/N

D. The number of partnerships or trusts to

which WP applied the joint accountoption (if none enter 0).1. Each partnership or trust to which

WP applies the joint account optionhas provided WP with a certificationthat it has maintained status as acertified deemed-compliant FFI, anowner-documented FFI with respectto WP, an exempt beneficial owner,or an NFFE as required under sec-tion 9.01(A)(1) of the WP Agree-ment. Y/N

PART II: CERTIFICATION OFINTERNAL CONTROLS BYRESPONSIBLE OFFICER ANDGENERAL INFORMATION

Part II must be completed by all WPs.Complete either Section A (Certificationof Effective Internal Controls) or SectionB (Qualified Certification). All WPs com-plete Sections C, D, E, and F.

A. Certification of Effective InternalControls

If the responsible officer has identified anevent of default or a material failure thatWP has not corrected as of the date of thiscertification (or if an event of default ormaterial failure has otherwise been iden-tified), the responsible officer cannotmake the certification of effective internalcontrols under this Section A and mustmake the qualified certification under Sec-tion B, below.The responsible officer certifies to the fol-lowing, check each statement to confirm:

1. WP has established a complianceprogram that meets the requirementsdescribed in section 8.02(B) or8.02(C) (if applicable) of the WPAgreement that is in effect as of thedate of the certification and duringthe certification period.

2. Based on the information known (orinformation that reasonably shouldhave been known) by the responsibleofficer, including the findings of anyprocedure, process, review, or certi-fication undertaken in preparation forthe responsible officer’s certificationof internal controls, WP maintainseffective internal controls over itsdocumentation, withholding, and re-porting obligations under the WPAgreement and according to its ap-plicable FATCA requirements forpartners for which it acts as a WP.

3. Based on the information known (orinformation that reasonably shouldhave been known) by the responsibleofficer, including the findings of anyprocedure, process, review, or certi-fication undertaken in preparation forthe responsible officer’s certificationof internal controls, there are no ma-terial failures, as defined in section8.03(D) of the WP Agreement, or, ifthere are any material failures, theyhave been corrected as of the date ofthis certification, and such failuresare identified as part of this certifica-tion as well as the actions taken toremediate them and to prevent theirreoccurrence by the date of this cer-tification. See Part II.D.2.a of thisAppendix.

4. With respect to any failure to with-hold, deposit, or report to the extentrequired under the WP Agreement,WP has corrected such failure bypaying any taxes due (including in-terest and penalties) and filing theappropriate return (or amended re-turn).

5. All partnerships and trusts to whichWP applies the agency option haveeither (a) provided (or will provide,to the extent WP does not obtain a


waiver under section 8.07 of the WPAgreement) documentation and othernecessary information for inclusionin the WP’s periodic review or (b)provided the responsible officer ofWP with a certification of effectiveinternal controls described in PartII.A of this Appendix and have rep-resented to WP that there are no ma-terial failures, as defined in section8.03(D) of the WP Agreement, or, ifthere are such failures, they havebeen corrected as of the time of thiscertification, and the partnerships ortrusts have disclosed any such fail-ures to WP together with the actionstaken by the partnership or trust toremediate such failures.

6. Unless WP has received a waiver, aperiodic review was conducted forthe certification period in accordancewith section 8.04 of the WP Agree-ment, and the results of such revieware reported to the extent required insection 8.06 of the WP Agreement.

B. Qualified Certification

If the responsible officer has identified (1)an event of default or (2) a material failurethat WP has not corrected as of the date ofthis certification, check the applicablestatements to confirm:

1. The responsible officer (or designee)has identified an event of default, asdefined in section 10.05 of the WPAgreement, or has determined that, asof the date of the certification, there areone or more material failures as de-fined in section 8.03(D) of the WPAgreement with respect to WP’s com-pliance or the compliance of a partner-ship or trust to which WP applies theagency option and that appropriate ac-tions will be taken to prevent such fail-ures from reoccurring.

2. With respect to any failure to with-hold, deposit, or report to the extentrequired under the WP Agreement,WP will correct such failure by pay-ing any taxes due (including interestand penalties) and filing the appro-priate return (or amended return).

3. The responsible officer (or an officerof the partnership or trust to whichWP applies the agency option if thepartnership or trust performs its ownperiodic review) will respond to any

notice of default (if applicable) orwill provide (either directly orthrough WP) to the IRS, to the extentrequested, a description of each ma-terial failure and a written plan tocorrect each such failure.

C. Amended Form 1042

1. Did WP file an amended Form 1042to report additional tax liabilitybased on the results of the periodicreview or the findings of any otherprocedure, process, or review under-taken by the responsible officer inpreparation for the certification ofinternal controls? Y/N

D. Material Failures or Event of Default

1. Did the responsible officer determinethat as of the date of the periodicreview report (or the date of comple-tion of any other procedure, process,or review), there are no material fail-ures with respect to WP’s compli-ance with the WP Agreement? Y/N

2. Did the responsible officer determinethat as of the date of the periodic re-view report (or the date of completionof any other procedure, process, or re-view), there are one or more materialfailures with respect to WP’s compli-ance with the WP Agreement and thatappropriate actions have been or willbe taken to prevent such failures fromreoccurring? Y/N

a. If yes, check the following ma-terial failures that were identi-fied. If a Compliance Entity iscompleting this certification fora consolidated compliance pro-gram, identify the WP(s) thathad the material failure.

i. WP’s establishment of, forfinancial statement pur-poses, a tax reserve or pro-vision for a potential futuretax liability related to WP’sfailure to comply with theWP Agreement, includingits FATCA requirements asa participating FFI, regis-tered deemed-compliantFFI, or registered deemed-compliant Model 1 IGAFFI.

ii. WP’s failure to establish writ-ten policies, procedures, or sys-tems sufficient for the relevantpersonnel of WP to take ac-

tions consistent with WP’sobligations under the WPAgreement.

iii. A criminal or civil penaltyor sanction imposed onWP by a regulator or othergovernmental authority oragency with oversight overWP’s compliance with AML/KYC procedures, if applica-ble, to which WP is subjectand that is imposed due toWP’s failure to properlyidentify partners under therequirements of those proce-dures.

iv. A finding (including a findingnoted in the periodic reviewreport described in section8.06 of the WP Agreement)that, for one or more yearscovered by the WP Agree-ment, WP failed to:

1. Withhold an amountthat WP was required towithhold under chapter3 or 4 as required undersection 3 of the WPAgreement;

2. Make deposits in thetime and manner re-quired by section 3.05of the WP Agreement ormake adequate depositsto satisfy its withhold-ing obligations, takinginto account the proce-dures under section 7 ofthe WP Agreement;

3. Report or report accu-rately on Forms 1042 or1042–S as required un-der sections 6.01 and6.02 of the WP Agree-ment;

4. Report or report accu-rately on Forms 8966 asrequired under section6.05 of the WP Agree-ment; or

5. Report or report accu-rately on Form 1065and Schedules K–1 asrequired under section6.03 of the WP Agree-ment.

v. Other (include a detailed ex-planation).

3. The material failure(s) identified inthe review has been corrected by thetime of this certification. Y/N/NA


a. If yes, describe the steps taken tocorrect the material failure.

b. If no, describe the proposedsteps to be taken to correct thematerial failure and the timeframe for completing such steps.

4. Did any partnerships or trusts towhich WP applies the agency optioninform WP that it has had a materialfailure with respect to its obligationsas described in the WP Agreement?Y/N/NA

a. If yes, provide the name of thepartnership or trust and, basedon the information provided bythe partnership or trust, describethe steps taken to correct the ma-terial failure or the proposedsteps to be taken to correct thematerial failure and the time-frame for completing such steps.

5. An event of default as defined insection 10.05 of the WP Agreementhas been identified. Y/N

a. If yes, identify the event of de-fault. If a Compliance Entity iscompleting this certification fora consolidated compliance pro-gram, identify the WP(s) thathad the event of default.i. WP failed to implement ade-

quate procedures, accountingsystems, and internal controlsto ensure compliance with theWP Agreement;

ii. WP underwithheld a materialamount of tax that WP was re-quired to withhold under chap-ter 3 or 4 and failed to correctthe underwithholding or to filean amended Form 1042 report-ing, and paying, the appropri-ate tax;

iii. WP made excessive refundclaims;

iv. WP failed to file requiredForms 1042, 1042–S, 8966,1065, or Schedules K–1 by thedue date specified on suchforms or filed forms that arematerially incorrect or fraudu-lent;

v. If WP is an FFI, WP failed tomaterially comply with itsFATCA requirements as aparticipating FFI, registereddeemed-compliant FFI, orregistered deemed-compliantModel 1 IGA FFI;

vi. If WP is a sponsoring entity ofa sponsored FFI (other than aWP) or a sponsored direct re-

porting NFFE, WP failed tomaterially comply with thedue diligence, withholding,reporting, and compliance re-quirements of a sponsoringentity;

vii. With respect to a consolidatedcompliance program undersection 8.02(C) of the WPagreement, the ComplianceEntity failed to comply withthe obligations of a Compli-ance Entity under section8.02(C) of the WP Agreement,or, if the Compliance Entity isa sponsoring entity, the Com-pliance Entity failed to complywith the due diligence, with-holding, reporting, and compli-ance requirements of a spon-soring entity under chapter 4;

viii. WP failed to perform a periodicreview when required or todocument the findings of suchreview in a written report;

ix. WP failed to inform the IRSwithin 90 days of any signifi-cant change in its businesspractices to the extent thatchange affects WP’s obliga-tions under the WP Agreement;

x. WP failed to cure a materialfailure identified in the qualifiedcertification described in PartII.B of this Appendix or identi-fied by the IRS;

xi. WP made any fraudulent state-ment or a misrepresentation ofmaterial fact with regard to theWP Agreement to the IRS, awithholding agent, or WP’s re-viewer;

xii. The IRS determined that WP’sreviewer is not sufficiently inde-pendent, as described in the WPAgreement, to adequately per-form its review function, andWP failed to arrange for a peri-odic review conducted by a re-viewer approved by the IRS;

xiii. WP failed to make deposits inthe time and manner required bysection 3.05 of the WP Agree-ment or failed to make adequatedeposits, taking into account theprocedures of section 7.05 of theWP Agreement;

xiv. If applicable, WP failed to in-form the IRS of any change inthe applicable know-your-customer rules within 90 days ofthe change becoming effective

when WP relied on documen-tary evidence as permitted insection 4.01(A) of the WPAgreement;

xv. A partnership or trust to whichWP applied the agency optionwas in default with the agencyagreement and WP failed to ter-minate that agreement within thetime period specified in section9.02 of the WP Agreement;

xvi. WP failed to materially complywith the requirements of a non-withholding foreign partnershipunder chapter 3 with respect toany partner for which WP doesnot act as a withholding foreignpartnership;

xvii. If WP is a foreign reverse hybridentity, WP failed to prepare andretain the PFIC Annual Informa-tion Statement or reconciliationstatement, as required under6.03(C) of the WP Agreement;

xviii. WP is not in possession of validdocumentation described insections 4.01 through 4.09 ofthe WP Agreement for each di-rect partner as of the due dateof this certification; or

xix. Other (please describe).

E. Significant Change in Circumstances

Check the applicable statements to con-firm.

1. For the most recent certification pe-riod, the periodic review (or anyother procedure, process, or review)has not identified any significantchange in circumstances, as de-scribed in section 10.04(A), (D), or(E) of the WP Agreement.

2. For the most recent certification pe-riod, the periodic review has identi-fied the following significantchange(s) in circumstances:

a. Any change in circumstances thatwould result in a termination ofWP under section 708 of theCode.

b. A significant change in WP’sbusiness practices that affectsWP’s ability to meet its obliga-tions under the WP Agreement.

c. If applicable, a material changein the applicable know-your-customer rules and procedureswhen WP relied on documentary


evidence as permitted in section4.01(A) of the WP Agreement.

d. Other (please describe).3. Describe any significant changes in

circumstances identified in Question 2.

F. Chapter 4 Status

1. If this certification is submitted by aCompliance Entity of a consolidatedcompliance program that is a spon-soring entity, check the followingstatement to confirm.

For the most recent certificationperiod under the WP Agreement,the sponsoring entity has madeor will make the following certi-fication of compliance with re-spect to its requirements as asponsoring entity for chapter 4purposes with respect to eachWP that is a sponsored FFI forwhich it acts during the most re-cent certification period underthe WP Agreement (check one).

a. Certification of Effective Inter-nal Controls

b. Qualified Certification2. All other WPs, complete the applica-

ble section (if any) and check theapplicable statement to confirm.

a. If WP is a participating FFI:For the most recent certificationperiod under its WP Agreement,WP has obtained (or maintained)status as a participating FFI andhas made the following certifica-tion of compliance with respect toits FFI agreement for the most re-cent certification period under theFFI agreement (check one).Note: You may check Not Applica-ble if, during the certification pe-riod under the WP Agreement,your chapter 4 status changed fromone of the other applicable chapter4 statuses to participating FFI or ifyour certification of complianceunder the FFI agreement is not yetdue as of the date of this certifica-tion.

i. Certification of Effective In-ternal Controls

ii. Qualified Certificationiii. Not Applicable

b. If WP is a registered deemed-compliant FFI:

For the most recent certificationperiod under its WP Agreement,WP has certified as required un-der § 1.1471–5(f)(1)(ii)(B) orAnnex II of an applicable Model

2 IGA that it has satisfied therequirements of the deemed-compliant status claimed.

c. If WP is a registered deemed-compliant Model 1 IGA FFI:For the most recent certificationperiod under its WP Agreement,WP has been resident in or orga-nized under the laws of a jurisdic-tion that has in place a Model 1IGA with the United States andhas met the requirements under anapplicable Model 1 IGA to betreated as a deemed-compliant FFI.

d. If WP is a retirement fund:For the most recent certificationperiod under the WP Agreement,WP has been a retirement fund orother fund that is an exempt ben-eficial owner described in§ 1.1471–6(f) or a similar fundthat qualifies as an exempt bene-ficial owner under an applicableModel 1 IGA or Model 2 IGA.

PART III. WAIVER OF PERIODICREVIEW

For purposes of this Part III, “partner”means, unless otherwise specified, anypartner for which WP acts as a WP.For sections B.1 through 6 of this Part III,while the curing of inadequate documen-tation is permissible, the information re-ported in these sections must not reflectany remediation or curing.In order to be eligible for a waiver, WPmust be able to confirm all of the eligibil-ity requirements in Section A are met.

A. Eligibility for Waiver (check eachstatement to confirm)

1. WP is an FFI.2. WP is not part of a consolidated

compliance program.3. For each calendar year in the certifi-

cation period, the reportable amountsreceived by WP do not exceed $1million.

4. WP timely filed its Forms 1042,1042–S, 8966 (or, if WP is a reportingModel 1 FFI, any analogous formsused for reporting account informationpursuant to an applicable Model 1IGA), 1065, and Schedules K–1, asapplicable, for all years (fiscal or cal-endar) in the certification period.

5. WP made all periodic certificationsand reviews required by sections 8.02

and 8.03 of the WP Agreement as wellas any certifications required pursuantto WP’s FATCA requirements as aparticipating FFI or registereddeemed-compliant FFI.

6. WP made the certification of effec-tive internal controls in Part II.A.

B. Information required (provided for themost recent year in the certificationperiod for which filing has been madeby the time of this waiver request)

1. The total number of partnersa. Total number of direct partners

i. Foreign personsii. U.S. persons

iii. Foreign intermediaries andflow-through entities

b. Total number of indirect partnersi. Foreign persons

ii. U.S. personsiii. Foreign intermediaries and

flow-through entities2. The total number of non-U.S. partners

that received reportable amountsa. The total number of such part-

ners that have valid documenta-tion.

b. The total number of such part-ners that have no documentationor invalid documentation.

3. The aggregate amount of reportableamounts received for non-U.S. partners

4. The total number of Forms 1042–Sfiled by WP.

5. The total number of Schedules K–1filed by WP.

6. The aggregate amount of tax with-held under chapter 3.


8. The aggregate amount of withheldtax deposited by WP.

PART IV. PERIODIC REVIEW: WPFACTUAL INFORMATION

This Part IV must be completed by allWPs that have not received a waiver. If aCompliance Entity is completing thisform for WPs in its consolidated compli-ance program, complete Part IV sepa-rately for each WP.For purposes of this Part IV, “partner”means, unless otherwise specified, any di-rect or indirect partner for which WP actsas a withholding foreign partnership.For Sections B through G of this Part IV,


while the curing of inadequate documen-tation is permissible, unless otherwise in-dicated, the information reported shall bebased on the review and not results ob-tained after curing.

A. General Information

1. Did WP use an external reviewer toconduct any portion of its periodicreview? Y/Na. If yes, provide the name(s) of

reviewer(s) and the name andaddress of the firm at which thereviewer is employed.

2. Did WP use an internal reviewer toconduct any portion of its periodicreview? Y/Na. If yes, provide a brief description

of the internal reviewer, such astheir department and other rolesand responsibilities with respectto the WP’s WP activities.

3. Calendar year reviewed for periodicreview.

Caution: On the due date for reporting thefactual information relating to the peri-odic review (provided in section 8.04 ofthe WP Agreement), there must be 15 ormore months available on the statutoryperiod for assessment for taxes reportableon Form 1042 of the calendar year forwhich the review was conducted or theWP must submit, upon request by the IRS,a Form 872, “Consent to Extend the Timeto Assess Tax,” that will satisfy the 15-month requirement. The Form 872 mustbe submitted to the IRS at the addressprovided in section 11.06 of the WPAgreement.

B. General Information on Partners andReview of Partners

1. Total partners reviewed for peri-odic review.

Note: WP must review all partners thatreceived a distribution, or included intheir distributive share, of a reportableamount that is attributable to an amountpaid to WP in the year under review.

C. Documentation

1. Total partners reviewed that aredirect partners.

2. Total partners reviewed that areindirect partners.

3. Total partners reviewed with validdocumentation.

4. Total partners reviewed with in-valid documentation or no docu-mentation.

5. Total partners reviewed with in-valid documentation or no docu-mentation for which valid docu-mentation or additional validdocumentation was obtained afterthe review.

6. Total direct partners reviewed forwhich WP had no documentationat any time that withholding or re-porting was required under section3.02 of the WP Agreement.

7. Total direct partners in question 6for which valid documentation(that relates to the time withhold-ing or reporting was required) wasobtained by WP for each such un-documented direct partner beforeMarch 15 of the year following theyear in which the WP Agreementwas automatically terminated un-der section 10.03(A) of the WPAgreement.

8. Total partners reviewed for whichtreaty benefits were claimed.

9. Total partners reviewed for whichtreaty benefits were claimed whereWP did not obtain sufficient docu-mentation to establish the payee’sentitlement to treaty benefits (in-cluding, where applicable, thetreaty statement and limitation onbenefits information required bysection 4.03(B) of the WP Agree-ment).

10. Total partners reviewed that areU.S. accounts (or U.S. reportableaccounts under an applicableModel 1 IGA) for chapter 4 pur-poses.

11. Total partners reviewed that areU.S. accounts for chapter 4 pur-poses (or U.S. reportable accountsunder an applicable Model 1 IGA)for which WP has obtained validdocumentation.

12. If WP is an NFFE, total partnersreviewed that are passive NFFEswith substantial U.S. owners.

D. Withholding

1. The aggregate amount reported aswithheld under chapter 3 by WPon Forms 1042–S.

2. Number of partners for whichamounts were withheld underchapter 3 (excluding partners re-ported in question 10(a) or 11(a)below).

3. The aggregate amount reported aswithheld under chapter 4 by WPon Forms 1042–S.

4. Number of partners for whichamounts were withheld underchapter 4 (excluding partners re-ported in question 10(a) or 11(a)below).

5. The aggregate amount reported aswithheld by WP on Form 1042 un-der chapter 3 or 4.

6. Additional withholding requiredunder chapter 4 based on the re-sults of the periodic review (ex-cluding withholding reported inquestion 10(d) or 11(d) below).


8. The aggregate amount of depositsmade by WP in accordance withsection 3.05 of the WP Agreement.

9. The aggregate amount withheld byWP but not timely deposited.

10. Number of partnerships or trusts towhich the joint account option ofsection 9.01 of the WP Agreementwas applied (if applicable).

a. Total partners, beneficiaries, orowners of a partnership ortrust to which the joint accountoption applied for which ap-propriate documentation wasobtained and the appropriaterate of withholding was ap-plied.

b. Total partners, beneficiaries,or owners of a partnership ortrust to which the joint ac-count option applied for whichappropriate documentationwas obtained and the appro-priate rate of withholding wasnot applied.


c. Total partners, beneficiaries, orowners of a partnership ortrust to which the joint accountoption applied for which ap-propriate documentation wasnot obtained and the appropri-ate rate of withholding was notapplied.

d. Aggregate amount of under-withholding resulting from theappropriate rate of withhold-ing not being applied with re-spect to a partner, beneficiary,or owner of a partnership ortrust to which the joint ac-count option applied.

11. Number of partnerships or trusts towhich the agency option of section9.02 of the WP Agreement wasapplied (if WP includes the part-nership or trust in WP’s periodicreview).

a. Total partners, beneficiaries, orowners of a partnership ortrust to which the agency op-tion applied for which appro-priate documentation was ob-tained and the appropriate rateof withholding was applied.

b. Total partners, beneficiaries,or owners of a partnership ortrust to which the agency op-tion applied for which appro-priate documentation was ob-tained and the appropriate rateof withholding was not ap-plied.

c. Total partners, beneficiaries, orowners of a partnership ortrust to which the agency op-tion applied for which appro-priate documentation was notobtained and the appropriaterate of withholding was notapplied.

d. Aggregate amount of under-withholding resulting from theappropriate rate of withhold-ing not being applied with re-spect to a partner, beneficiary,or owner of a partnership ortrust to which the agency op-tion applied.

E. Reconciliation of Amounts Reportedon Forms 1042–S

1. The aggregate amount reportedpaid to WP during the year underreview on all Forms 1042–S issuedto WP (acting as a withholding for-eign partnership).

2. The aggregate amount reported byWP on Forms 1042–S as distrib-uted to, or included in the distribu-tive share of, partners that are in-cluded in WP’s chapter 4 reportingpools (other than the U.S. payeepool) (including a chapter 4 report-ing pool of a partnership or trust towhich WP applies the agency op-tion) to the extent such amount isattributable to an amount paid toWP in the year under review.

3. The aggregate amount reported byWP on Forms 1042–S as distrib-uted to, or included in the distribu-tive share of, WP’s chapter 4 re-porting pool- U.S. payee pool to theextent such amount is attributableto an amount paid to WP in the yearunder review.

4. If WP made a pooled reportingelection under section 6.02(D) ofthe WP Agreement, the aggregateamount reported by WP on Forms1042–S as distributed to, or in-cluded in the distributive share of,WP’s chapter 3 reporting pools (in-cluding chapter 3 reporting pools ofa partnership or trust to which WPapplies the joint account or agencyoption) to the extent such amount isattributable to an amount paid toWP in the year under review.

5. If WP did not make a pooled re-porting election, the aggregateamount of reported by WP onForms 1042–S as distributed to, orincluded in the distributive shareof, each direct partner (other than apassthrough partner) (not includedin question 2 or 3 above) to theextent such amount is attributableto an amount paid to WP in the yearunder review (excluding an amountreported in question 6 below).

6. The aggregate amount reported byWP on Forms 1042–S as distrib-uted to, or included in the distribu-tive share of, other WPs, WTs, and

QIs as a class to the extent suchamount is attributable to an amountpaid to WP in the year under re-view.

7. The aggregate amount reported byWP on Forms 1042–S as distrib-uted to, or included in the distribu-tive share of, participating FFIs,registered deemed-compliant FFIs,and registered deemed-compliantModel 1 IGA FFIs that are pass-through partners to which WP ap-plies section 9.03 of the WP Agree-ment as a class with respect to theirchapter 4 reporting pools to the ex-tent such amount is attributable toan amount paid to WP in the yearunder review (excluding amountsincluded in question 6 above).

8. The aggregate amount reported byWP on Forms 1042–S as distrib-uted to, or included in the distribu-tive share of, indirect partners (notincluded in any of the questionsabove) to which WP applies section9.03 of the WP Agreement to theextent such amount is attributableto an amount paid to WP in the yearunder review.

9. The aggregate amount subject tochapter 3 withholding that WP dis-tributed to, or included in the dis-tributive share of, U.S. partners notincluded in a chapter 4 withholdingrate pool to the extent such amountis attributable to an amount paid toWP in the year under review.

10. The aggregate amount distributedto, or included in the distributiveshare of, direct partners of WP (in-cluding partners, beneficiaries, orowners of a partnership or trust towhich WP applies the joint accountor agency option) that requestedindividual Form(s) 1042–S and di-rect partners that were issuedForms 1042–S under section6.02(B)(8) of the WP Agreement(excluding an amount reported inquestion 4 above).

11. Total of questions 2 through 10.12. The amount of any unreconciled

variances (if question 1 minusquestion 11 is other than 0).

13. The aggregate amount reported byWP on Form 1042 as distributedto, or included in the distributive


share of, partners of WP to theextent such amount is attributableto an amount paid to WP in theyear under review.

14. The amount of any unreconciledvariances of amounts reported byWP on Forms 1042 and 1042–S(question 13 minus the total ofquestions 2 through 8).

15. The aggregate amount of any col-lective claims for refund or creditmade by WP.

F. Reporting of Reportable AmountsOther Than Amounts Subject to Chapter3 Withholding

1. The aggregate amount of reportableamounts other than amounts subjectto chapter 3 withholding received byWP.

2. The aggregate amount of reportableamounts other than amounts subjectto chapter 3 withholding distributedto, or included in the distributiveshare of, a direct partner that is aU.S. person.

3. Number of direct partners that areU.S. persons that are not reported onSchedules K–1 to Form 1065 or un-der WP’s FATCA requirements (ifnone enter 0).

G. Reporting on Form 1065 andSchedules K–1

WPs that are exempt from filing SchedulesK–1 under section 6.03(B) (Modified Fil-ing Obligations) or 6.03(C) (Foreign Re-verse Hybrid Entities) of the WP Agree-ment should not complete this section G.

1. The total number of Schedules K–1issued by WP to partners that areU.S. persons for the year under re-view.

2. The total number of Schedules K–1issued by WP to partners that areforeign persons for the year underreview.

3. The aggregate amount of special al-locations to partners that are foreignpersons for the year under review (ifnone enter 0).

SECTION 7. WITHHOLDINGFOREIGN TRUST AGREEMENT

Section 1. PURPOSE AND SCOPESection 2. DEFINITIONS

Section 3. WITHHOLDING RESPON-SIBILITY

Section 4. DOCUMENTATION RE-QUIREMENTS

Section 5. WITHHOLDING FOR-EIGN TRUST WITHHOLDING CER-TIFICATE

Section 6. TAX RETURN AND IN-FORMATION REPORTING OBLIGA-TIONS

Section 7. ADJUSTMENTS FOROVER- AND UNDERWITHHOLDING;REFUNDS

Section 8. COMPLIANCE PROCE-DURES

Section 9. CERTAIN PARTNER-SHIPS AND TRUSTS AND INDIRECTBENEFICIARIES AND OWNERS

Section 10. EXPIRATION, TERMI-NATION AND DEFAULT

Section 11. MISCELLANEOUS PRO-VISIONS

Section 12. EFFECTIVE DATE OFAGREEMENTThe text of the WT agreement is set forthbelow. The IRS will not provide signedcopies of the WT agreement. A reportingModel 2 FFI should interpret this Agree-ment by substituting the term “reportingModel 2 FFI” for “participating FFI”throughout this Agreement, except incases where this Agreement explicitly re-fers to a reporting Model 2 FFI. A report-ing Model 1 FFI and a nonreportingModel 2 FFI treated as a registereddeemed-compliant FFI should apply thisAgreement by substituting the term “re-porting Model 1 FFI” or “nonreportingModel 2 FFI,” as applicable, for “regis-tered deemed-compliant FFI” throughoutthis Agreement, except in cases where thisAgreement explicitly refers to a reportingModel 1 FFI or nonreporting Model 2 FFItreated as a registered deemed-compliantFFI.

WHEREAS, WT has submitted anapplication in accordance with this reve-nue procedure to be a withholding foreigntrust for purposes of § 1.1441–5(e)(5)(v);

WHEREAS, WT and the IRS desireto enter into an agreement to establishWT’s rights and obligations regardingdocumentation, withholding, informationreporting, tax return filing, deposits, andrefund procedures under sections 1441,1442, 1443, 1461, 1471, 1472, 1474,

6048, 6302, 6402, and 6414 with respectto certain types of payments;

WHEREAS, WT represents thatthere are no legal restrictions that prohibitit from complying with the requirementsof this Agreement;

WHEREAS, if WT is a foreign fi-nancial institution (other than a retirementfund), WT represents that it has agreed tocomply with the requirements of the FFIagreement, in the case of a participatingFFI (including a reporting Model 2 FFI);§ 1.1471–5(f)(1) or the applicable Model2 IGA, in the case of a registered deemed-compliant FFI (other than a reportingModel 1 FFI); or an applicable Model 1IGA, in the case of a reporting Model 1FFI or a registered deemed-compliantModel 1 IGA FFI beginning on the effec-tive date of this Agreement;

NOW, THEREFORE, in consider-ation of the following terms, representa-tions, and conditions, the parties agree asfollows:

Section 1. PURPOSE AND SCOPE

Sec. 1.01. General Obligations. Whenthe IRS enters into a WT agreement witha foreign person, that foreign person be-comes a WT. Except as otherwise pro-vided in this Agreement, WT’s obliga-tions with respect to income distributed to,or included in the distributive shares of, itsbeneficiaries or owners are governed bythe Internal Revenue Code and the regu-lations thereunder. WT must act in itscapacity as a withholding foreign trustpursuant to this Agreement for reportableamounts that are distributed to, or in-cluded in the distributive share of, WT’sdirect beneficiaries or owners. WT mayalso act as a withholding foreign trust forreportable amounts that are distributed to,or included in the distributive share of, apartner, beneficiary, or owner of a pass-through beneficiary or owner (i.e., an in-direct beneficiary or owner of WT) if suchindirect beneficiary or owner is not a U.S.non-exempt recipient. Notwithstandingthe preceding sentence, a WT may act asa withholding foreign trust for an indirectbeneficiary or owner that is a U.S. non-exempt recipient if such beneficiary orowner is included in the passthrough ben-eficiary’s or owner’s chapter 4 withhold-ing rate pool (as defined in section 2.14 ofthis Agreement) of U.S. payees or recal-


citrant account holders provided on theFFI withholding statement (as defined insection 2.26 of this Agreement) of thepassthrough beneficiary or owner.WT is not required to act as a withholdingforeign trust for payments that it distrib-utes to, or includes in the distributiveshare of, a passthrough beneficiary orowner or indirect beneficiary or owner.With respect to an indirect beneficiary orowner for which WT does not (or cannot)act as a withholding foreign trust, WTmust, as part of its WT agreement, complywith the requirements of a withholdingagent, as applicable to a nonwithholdingforeign trust under chapters 3 and 4. WT(regardless of whether it is an FFI orNFFE) must also, pursuant to this Agree-ment, assume primary reporting responsi-bility for purposes of section 1472.If WT is an FFI, the requirements WT hasagreed to as a participating FFI, registereddeemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI ap-ply in addition to the requirements underthis Agreement except to the extent spe-cifically modified by this Agreement. ThisAgreement references WT’s FATCA re-quirements when necessary to facilitatecoordination with a WT’s obligations un-der this Agreement with respect to its ben-eficiaries or owners. A participating FFI’sobligations are provided in the FFI agree-ment, a registered deemed-compliantFFI’s (other than a reporting Model 1FFI’s) obligations are provided in§ 1.1471–5(f)(1) or the applicable Model2 IGA, and the obligations of a reportingModel 1 FFI or a registered deemed-compliant Model 1 IGA FFI are providedin the applicable Model 1 IGA.If WT is an NFFE, WT must comply withthe requirements of a withholding agentunder sections 1471 and 1472 which areprovided in this Agreement.If a WT acts as a sponsoring entity onbehalf of a sponsored FFI or sponsoreddirect reporting NFFE, it must complywith the due diligence, withholding, re-porting, and compliance requirements of asponsoring entity in addition to its re-quirements under this Agreement.Sec. 1.02. Parties to the Agreement.This Agreement applies to WT and theIRS.

Section 2. DEFINITIONS

For purposes of this Agreement, unlessotherwise specified in this Agreement, theterms listed below are defined as follows.Any term not defined in this section hasthe same meaning that it has under theCode, including the income tax regula-tions under the Code, any applicable in-come tax treaty, or any applicable Model1 IGA or Model 2 IGA with respect toWT’s FATCA requirements as a partici-pating FFI, registered deemed-compliantFFI, or registered deemed-compliantModel 1 IGA FFI.Sec. 2.01. Account. “Account” has themeaning given to that term in § 1.1471–1(b)(1) with respect to WT’s FATCA re-quirements.Sec. 2.02. Account Holder. “AccountHolder” has the meaning given to thatterm in § 1.1471–1(b)(2) with respect toWT’s FATCA requirements with respectto an account that it maintains within themeaning of § 1.1471–5(b)(5).Sec. 2.03. Agreement. “Agreement”means this Agreement between WT andthe IRS, the Appendix to this Agreement,and WT’s application to become a with-holding foreign trust. The Appendix tothis Agreement and WT’s application areincorporated into this Agreement by ref-erence.Sec. 2.04. Amount Subject to Chapter 3Withholding. An “amount subject tochapter 3 withholding” is an amount de-scribed in § 1.1441–2(a), regardless ofwhether such amount is withheld upon.Sec. 2.05. Amount Subject to Chapter 4Withholding. An “amount subject tochapter 4 withholding” is a withholdablepayment (as defined in section 2.79 of thisAgreement) for which withholding is re-quired under chapter 4 or an amount forwhich withholding was otherwise appliedunder chapter 4.Sec. 2.06. Assuming Primary Withhold-ing Responsibility. “Assuming primarywithholding responsibility” refers to whena WT assumes primary chapters 3 and 4withholding responsibility with respect toamounts subject to chapter 3 or 4 with-holding under the terms of the WT agree-ment. Generally, a WT assuming primarychapters 3 and 4 withholding responsibil-ity relieves the person who makes a pay-ment to the WT from the responsibility to

withhold. See sections 3.03 and 3.04 ofthis Agreement for when WT is requiredto withhold under this Agreement.Sec. 2.07. Beneficial Owner. A “benefi-cial owner” has the meaning given to thatterm in § 1.1441–1(c)(6).Sec. 2.08. Certified Deemed-CompliantFFI. “Certified deemed-compliant FFI”means an FFI described in § 1.1471–5(f)(2), and includes a nonreportingModel 1 FFI and a nonreporting Model 2FFI that is treated as a certified deemed-compliant FFI.Sec. 2.08. Chapter 3. Any reference to“chapter 3 of the Code” or “chapter 3”means sections 1441, 1442, 1443, 1461,1463, and 1464.Sec. 2.09. Chapter 3 Reporting Pool. Achapter 3 reporting pool means a reportingpool described in section 6.02(D) of thisAgreement.Sec. 2.10. Chapter 3 Status. The term“chapter 3 status” refers to the attributesof a payee (and a beneficiary or owner ofWT for purposes of this Agreement) rel-evant for determining the rate of with-holding with respect to a payment made tothe payee for purposes of chapter 3.Sec. 2.11. Chapter 4. Any reference to“chapter 4 of the Code” or “chapter 4”means sections 1471, 1472, 1473, and1474.Sec. 2.12. Chapter 4 Reporting Pool. Achapter 4 reporting pool means a reportingpool described in section 6.02(C) of thisAgreement.Sec. 2.13. Chapter 4 Status. “Chapter 4status” means the status of a person as aU.S. person, specified U.S. person, an in-dividual that is a foreign person, a partic-ipating FFI, a deemed-compliant FFI, arestricted distributor, an exempt beneficialowner, a nonparticipating FFI, a territoryfinancial institution, an excepted NFFE, ora passive NFFE.Sec. 2.14. Chapter 4 Withholding RatePool. A “chapter 4 withholding rate pool”means a pool of payees that are nonpar-ticipating FFIs provided on a chapter 4withholding statement (as described in§ 1.1471–3(c)(3)(iii)(B)(3)) to which awithholdable payment is allocated. Theterm chapter 4 withholding rate pool alsomeans a pool of payees provided on anFFI withholding statement (as describedin § 1.1471–3(c)(3)(iii)(B)(2)) to which awithholdable payment is allocated to —


(A) A pool of payees consisting of eachclass of recalcitrant account holders de-scribed in § 1.1471–4(d)(6) (or with re-spect to an FFI that is a QI, a single poolof recalcitrant account holders that is notsubdivided into classes of recalcitrant ac-count holders described in § 1.1471–4(d)(6)), including a separate pool of ac-count holders to which the escrowprocedures for dormant accounts apply; or(B) A pool of payees that are U.S. personsas described in § 1.1471–3(c)(3)(iii)(B)(2).Sec. 2.15. Deemed-Compliant FFI.“Deemed-compliant FFI” means a certi-fied deemed-compliant FFI, registereddeemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI thatis treated, pursuant to section 1471(b)(2)and § 1.1471–5(f), as meeting the require-ments of section 1471(b). For the defini-tion of certified deemed-compliant FFI,see section 2.08 of this Agreement. Forthe definition of registered deemed-compliant FFI, see section 2.61 of thisAgreement. For the definition of regis-tered deemed-compliant Model 1 IGAFFI, see section 2.62 of this Agreement.Sec. 2.16. Direct Beneficiary or Owner.A “direct beneficiary or owner” means abeneficiary or owner that is not an indirectbeneficiary or owner (as defined in section2.39 of this Agreement).Sec. 2.17. Distributive Share. “Distribu-tive share” means an amount subject tochapter 3 withholding or an amount of awithholdable payment that is required tobe distributed to the beneficiaries of asimple trust and an amount subject tochapter 3 withholding or an amount that isa withholdable payment includible in theincome of the owners of a grantor trust.Sec. 2.18. Documentary Evidence.“Documentary evidence” means any doc-umentation obtained under the appropriateknow-your-customer rules (as defined insection 2.41 of this Agreement), or anydocumentary evidence described in§ 1.1441–6 sufficient to establish entitle-ment to a reduced rate of withholdingunder an income tax treaty. Documentaryevidence does not include a Form W–8 orForm W–9 (or an acceptable substituteForm W–8 or Form W–9).Sec. 2.19. Documentation. “Documenta-tion” means any valid Form W–8, FormW–9 (or acceptable substitute Form W–8

or Form W–9), or documentary evidence,as defined in section 2.18 of this Agree-ment, including all statements or otherinformation required to be associated withthe form or documentary evidence.Sec. 2.20. Excepted NFFE. “ExceptedNFFE” means a person described in§ 1.1471–1(b)(41).Sec. 2.21. Exempt Beneficial Owner.“Exempt beneficial owner” means a per-son described in § 1.1471–1(b)(42) andincludes any person that is treated as anexempt beneficial owner under an appli-cable Model 1 IGA or Model 2 IGA.Sec. 2.22. Exempt Recipient. An “ex-empt recipient” means a person describedin § 1.6049–4(c)(1)(ii) (for interest, divi-dends, and royalties), a person describedin § 1.6045–2(b)(2)(i) (for broker pro-ceeds), and a person described in§ 1.6041–3(p) (for rents, amounts paid onnotional principal contracts, and otherfixed or determinable income), for whichno Form 1099 reporting is required. Ex-empt recipients are not exempt fromreporting or withholding under chapter 3or 4.Sec. 2.23. FATCA Requirements as aParticipating FFI, Registered Deemed-Compliant FFI, or Registered Deemed-Compliant Model 1 IGA FFI. “FATCArequirements as a participating FFI, regis-tered deemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI”means:(A) For a participating FFI, the require-ments set forth in the FFI agreement;(B) For a registered deemed-compliantFFI (other than a reporting Model 1 FFI),the requirements under § 1.1471–5(f)(1)or the applicable Model 2 IGA; or(C) For a reporting Model 1 FFI and aregistered deemed-compliant Model 1IGA FFI, the requirements under applica-ble foreign law to implement the applica-ble Model 1 IGA.Sec. 2.24. Financial Institution (FI). “Fi-nancial institution” or “FI” has the mean-ing set forth in § 1.1471–5(e) and includesa financial institution as defined under anapplicable Model 1 IGA or Model 2 IGA.Sec. 2.25. FFI Agreement. “FFI agree-ment” means an agreement of a participat-ing FFI described in § 1.1471–4(a) andpublished in Revenue Procedure 2017–16,2017–03 I.R.B.501 (as updated or super-

seded by any subsequent revenue proce-dure).Sec. 2.26. FFI Withholding Statement.An “FFI withholding statement” means awithholding statement provided by an FFIthat meets the requirements of § 1.1471–3(c)(3)(iii)(B)(1) and (2).Sec. 2.27. Flow-Through Entity. A“flow-through entity” is a foreign partner-ship described in § 301.7701–2 or 3 (otherthan a withholding foreign partnership), aforeign trust that is described in section651(a) (other than a withholding foreigntrust), or a foreign trust if all or a portionof such trust is treated as owned by thegrantor or other person under sections 671through 679. With respect to an item ofU.S. source FDAP income for which atreaty benefit is claimed, an entity is alsoa flow-through entity to the extent it istreated as fiscally transparent under sec-tion 894 and the regulations thereunder.Sec. 2.28. Foreign Financial Institution(FFI). “Foreign financial institution” or“FFI” has the meaning set forth in§ 1.1471–5(d).Sec. 2.29. Foreign TIN. A “foreign TIN”is a taxpayer identification number issuedby a foreign person’s country of resi-dence.Sec. 2.30. Foreign Person. A “foreignperson” is any person that is not a U.S.person and includes a nonresident alienindividual, a foreign corporation, a for-eign partnership, a foreign trust, and aforeign estate, as those terms are definedin section 7701 of the Code. For purposesof chapters 3 and 4, the term “foreignperson” also means, with respect to a pay-ment by a withholding agent, a foreignbranch (including a foreign disregardedentity) of a U.S. person that provides avalid Form W–8IMY on which it repre-sents that it is a QI.Sec. 2.31. Form W–8. “Form W–8”means IRS Form W–8BEN, Certificate ofForeign Status of Beneficial Owner forUnited States Tax Withholding (Individu-als); IRS Form W–8BEN–E, Certificateof Status of Beneficial Owner for UnitedStates Tax Withholding and Reporting(Entities), IRS Form W–8ECI, Certificateof Foreign Person’s Claim That Income isEffectively Connected With the Conductof a Trade or Business in the UnitedStates; IRS Form W–8EXP, Certificate ofForeign Government or Other Foreign Or-


ganization for United States Tax With-holding and Reporting; and IRS FormW–8IMY, Certificate of Foreign Interme-diary, Foreign Flow-Through Entity, orCertain U.S. Branches for United StatesTax Withholding and Reporting, as appro-priate. It also includes any acceptable sub-stitute Form W–8 as described under§§ 1.1441–1(e)(4)(vi) and 1.1471–3(c)(6)(v).Sec. 2.32. Form W–9. “Form W–9”means IRS Form W–9, Request for Tax-payer Identification Number and Certifi-cation, or any acceptable substitute FormW–9 as described under § 31.3406(h)–3(c).Sec. 2.33. Form 1042. “Form 1042”means IRS Form 1042, Annual Withhold-ing Tax Return for U.S. Source Income ofForeign Persons.Sec. 2.34. Form 1042–S. “Form 1042–S”means IRS Form 1042–S, Foreign Per-son’s U.S. Source Income Subject toWithholding.Sec. 2.35. Form 1099. “Form 1099”means IRS Form 1099–B, Proceeds FromBroker and Barter Exchange Transac-tions; IRS Form 1099–DIV, Dividendsand Distributions; IRS Form 1099–INT,Interest Income; IRS Form 1099–MISC,Miscellaneous Income; IRS Form 1099–OID, Original Issue Discount; and anyother form in the IRS Form 1099 seriesappropriate to the type of payment re-quired to be reported.Sec. 2.36. Form 3520–A, Owner State-ment, Beneficiary Statement, and State-ment Required Under Section 6048(b).“Form 3520–A” means IRS Form3520–A, Annual Information Return ofForeign Trust with a U.S. Owner. “OwnerStatement,” when referred to in connec-tion with Form 3520–A, means a ForeignGrantor Trust Owner Statement. “Benefi-ciary Statement,” when referred to in con-nection with Form 3520–A, means a For-eign Grantor Trust Beneficiary Statement.The “statement required under section6048(b)” means the Owner Statement andBeneficiary Statement.Sec. 2.37. Form 8966. “Form 8966”means IRS Form 8966, FATCA Report.Sec. 2.38. Global Intermediary Identifi-cation Number (GIIN). “Global interme-diary identification number” or “GIIN”means the identification number that isassigned by the IRS to a participating FFI,

registered deemed-compliant FFI, directreporting NFFE, or sponsoring entity. Theterm also includes the identification num-ber assigned by the IRS to a reportingModel 1 FFI or registered deemed-compliant Model 1 IGA FFI for the pur-pose of identifying itself to withholdingagents.Sec. 2.39. Indirect Beneficiary orOwner. An “indirect beneficiary orowner” is a person that owns an interest inWT through one or more passthroughbeneficiaries or owners (as defined in sec-tion 2.54 of this Agreement). For exam-ple, a person that holds an account with aforeign intermediary or an interest in aflow-through entity which intermediary orflow-through entity, in turn, is a directbeneficiary or owner of WT is an indirectbeneficiary or owner in WT. A person isan indirect beneficiary or owner of WTeven if there are multiple tiers of interme-diaries or flow-through entities betweenthe person and WT.Sec. 2.40. Intermediary. An “intermedi-ary” means a person that, for that pay-ment, acts as a custodian, broker, nomi-nee, or otherwise as an agent for anotherperson, regardless of whether such otherperson is the beneficial owner of theamount paid, a flow-through entity, or an-other intermediary.Sec. 2.41. Know-Your-Customer Rules.“Know-your-customer rules” refers to theapplicable laws, regulations, rules, and ad-ministrative practices and procedures gov-erning the requirements of certain WTs thatare FFIs to obtain documentation confirm-ing the identity of WT’s direct beneficiariesor owners. A list of jurisdictions for whichthe IRS has received know-your-customerinformation and for which the know-your-customer rules and specified documentationare acceptable is available at: http://www.irs.gov/Businesses/International-Businesses/List-of-Approved-KYC-Rules.Sec. 2.42. Marketable Securities. Forpurposes of this Agreement, the term“marketable securities” means those secu-rities described in § 1.1441–6 for which aU.S. TIN or foreign TIN is not required tobe provided by the beneficial owner toobtain treaty benefits.Sec. 2.43. Non-Consenting U.S. Ac-count. For purposes of a reporting Model2 FFI, “non-consenting U.S. account” has

the meaning that such term has under theapplicable Model 2 IGA.Sec. 2.44. Non-Exempt Recipient. A“non-exempt recipient” means a personthat is not an exempt recipient under thedefinition in section 2.22 of this Agree-ment.Sec. 2.45. Non-Financial Foreign Entity(NFFE). A “non-financial foreign entity”or “NFFE” means a foreign entity that isnot a financial institution (including anentity that is incorporated or organizedunder the laws of any U.S. territory andthat is not a financial institution). The termalso means a foreign entity treated as anNFFE pursuant to a Model 1 IGA orModel 2 IGA.Sec. 2.46. Nonparticipating FFI. A“nonparticipating FFI” means an FFIother than a participating FFI, a deemed-compliant FFI, or an exempt beneficialowner.Sec. 2.47. Nonqualified Intermediary. A“nonqualified intermediary” is any inter-mediary that is not a qualified intermedi-ary. A nonqualified intermediary includesany intermediary that is a foreign personunless such person enters an agreement tobe a qualified intermediary and acts insuch capacity. A nonqualified intermedi-ary also includes an intermediary that is aterritory financial institution (as defined in§ 1.1471–1(b)(130)) unless such institu-tion agrees to be treated as a U.S. person.Sec. 2.48. Nonreporting Model 1 FFI. A“nonreporting Model 1 FFI” means a non-reporting financial institution described inAnnex II of a Model 1 IGA.Sec. 2.49. Nonreporting Model 2 FFI. A“nonreporting Model 2 FFI” means a non-reporting financial institution described inAnnex II of a Model 2 IGA.Sec. 2.50. Nonwithholding ForeignPartnership (NWP). A “nonwithholdingforeign partnership” means a foreign part-nership other than a withholding foreignpartnership as defined in § 1.1441–5(c)(2).Sec. 2.51. Nonwithholding ForeignTrust (NWT). A “nonwithholding for-eign trust” means a foreign trust (as de-fined in section 7701(a)(31)(B)) that is aforeign simple trust or a foreign grantortrust and that is not a withholding foreigntrust (as defined in section 2.82 of thisAgreement).Sec. 2.52. Overwithholding. The term“overwithholding” means any amount ac-


tually withheld (determined before appli-cation of the adjustment procedures de-scribed in section 7.01 of this Agreement)from an item of income or other paymentthat is in excess of:(A) The amount required to be withheldunder chapter 4 with respect to such itemof income or other payment, if applicable,and

(B) In the case of an amount subject tochapter 3 withholding, the actual tax lia-bility of the beneficial owner of the in-come or payment to which the withheldamount is attributable, regardless ofwhether such overwithholding was in er-ror or appeared correct at the time it oc-curred. For purposes of section 3406, theterm “overwithholding” means the excessof the amount actually withheld undersection 3406 over the amount required tobe withheld.Sec. 2.53. Participating FFI. A “partici-pating FFI” is defined in § 1.1471–1(b)(91).Sec. 2.54. Passthrough Beneficiary orOwner. A “passthrough beneficiary orowner” is a direct or indirect beneficiaryor owner of WT that is a nonqualifiedintermediary, a qualified intermediary thatdoes not assume primary chapters 3 and 4withholding responsibility with respect topayments of U.S. source FDAP income orprimary Form 1099 reporting and backupwithholding responsibility, or a flow-through entity. As provided in section2.27 of this Agreement, a withholding for-eign partnership or withholding foreigntrust is not a flow-through entity and thusis not a passthrough beneficiary or owner.Sec. 2.55. Payee. For purposes of chapter3, a “payee” is defined in § 1.1441–1(c)(12) and for purposes of chapter 4, a“payee” means a person described in§ 1.1471–3(a).Sec. 2.56. Payment. A “payment” meansan amount considered made to a person ifthat person realizes income whether or notsuch income results from an actual trans-fer of cash or other property. See§ 1.1441–2(e).Sec. 2.57. Payor. A “payor” is defined in§ 31.3406(a)–2 and § 1.6049–4(a)(2) andgenerally means any person required tomake an information return under chapter61.Sec. 2.58. Pooled Reporting (PR) Elec-tion. A “pooled reporting election” or “PR

election” is an election to pool reportchapter 3 reporting pools on Form 1042–Sfor chapter 3 purposes as described insection 6.02(D) of this Agreement.Sec. 2.59. Qualified Intermediary (QI).A “qualified intermediary” or “QI” is aperson (or branch) described in § 1.1441–1(e)(5)(ii) that has in effect an agreementwith the IRS to be treated as a QI and actsas a QI. See Rev. Proc. 2017–15, 2017–03I.R.B. 437 (as updated or superseded byany subsequent revenue procedure), forthe QI Agreement.Sec. 2.60. Recalcitrant Account Holder.A “recalcitrant account holder” means aperson described in § 1.1471–5(g).Sec. 2.61. Registered Deemed-CompliantFFI. “Registered deemed-compliant FFI”means an FFI described in § 1.1471–5(f)(1) and includes a reporting Model 1FFI and a nonreporting Model 2 FFI thatis treated as a registered deemed-compliant FFI.Sec. 2.62. Registered Deemed-CompliantModel 1 IGA FFI. “Registered deemed-compliant Model 1 IGA FFI” means anFFI treated as a deemed-compliant FFIunder an applicable Model 1 IGA that issubject to similar due diligence and re-porting requirements with respect to U.S.accounts as those applicable to a regis-tered deemed-compliant FFI under§ 1.1471–5(f)(1), including the require-ment to register with the IRS.Sec. 2.63. Reportable Amount. A “re-portable amount” means U.S. sourceFDAP income that is an amount subject tochapter 3 withholding (as defined in sec-tion 2.04 of this Agreement), U.S. sourcedeposit interest (as defined in section871(i)(2)(A)), and U.S. source interest ororiginal issue discount paid on the re-demption of short-term obligations (as de-fined in section 871(g)(1)(B)(i)). The termdoes not include payments on depositswith banks and other financial institutionsthat remain on deposit for two weeks orless. It also does not include amounts oforiginal issue discount arising from a saleand repurchase transaction completedwithin a period of two weeks or less, oramounts described in § 1.6049–5(b)(7),(10), or (11) (relating to certain foreigntargeted registered obligations and certainobligations issued in bearer form).Sec. 2.64. Reporting Model 1 FFI. A“reporting Model 1 FFI” means an FFI

with respect to which a foreign govern-ment or agency thereof agrees to obtainand exchange information pursuant to aModel 1 IGA, other than an FFI that istreated as a nonreporting Model 1 FFI(including a registered deemed-compliantModel 1 IGA FFI) or nonparticipating FFIunder an applicable Model 1 IGA.Sec. 2.65. Reporting Pool. A “reportingpool” is defined in section 6.02(A) of thisAgreement.Sec. 2.66. Responsible Officer. A “re-sponsible officer” of a WT means thetrustee of WT or an agent of the trustee ofWT with sufficient authority to fulfill theduties of a responsible officer as describedin section 8 of this Agreement, includingthe requirements to periodically certifyand to respond to requests by the IRS foradditional information to review WT’scompliance with this Agreement.Sec. 2.67. Retirement Fund. A “retire-ment fund” means a retirement fund orother fund that is an exempt beneficialowner described in § 1.1471–6(f) or asimilar fund that qualifies as an exemptbeneficial owner under an applicableModel 1 IGA or Model 2 IGA.Sec. 2.68. Sponsored Direct ReportingNFFE. The term “sponsored direct report-ing NFFE” has the meaning set forth in§ 1.1472–1(c)(5).Sec. 2.69. Sponsored FFI. The term“sponsored FFI” means any entity de-scribed in § 1.1471–5(f)(1)(i)(F) (spon-sored investment entities and sponsoredcontrolled foreign corporations) or§ 1.1471–5(f)(2)(iii) (sponsored, closelyheld investment vehicles).Sec. 2.70. Sponsoring Entity. “Sponsor-ing entity” means (i) an entity that regis-ters with the IRS and agrees to performthe due diligence, withholding, and re-porting obligations of one or more spon-sored FFIs pursuant to § 1.1471–5(f)(1)(i)(F) or (f)(2)(iii); or (ii) an entity thatregisters with the IRS and agrees to per-form the due diligence and reporting ob-ligations of one or more direct reportingNFFEs pursuant to § 1.1472–1(c)(5).Sec. 2.71. Trust, Beneficiary, and Owner.The term “trust” is defined in § 301.7701–4. The term “beneficiary” is definedin section 643(c) of the Code and theregulations thereunder. An “owner” is agrantor under § 1.671–2(e) or a person


treated as an owner under sections 671 to679 and the regulations thereunder.Sec. 2.72. Underwithholding. “Under-withholding” means the excess of theamount required to be withheld underchapter 3 or 4 over the amount actuallywithheld.Sec. 2.73. Undocumented Beneficiary orOwner. An “undocumented beneficiaryor owner” is a beneficiary or owner forwhom WT does not have valid documen-tation.Sec. 2.74. U.S. Account. A “U.S. ac-count” is any financial account maintainedby a participating FFI or registereddeemed-compliant FFI that is held by oneor more specified U.S. persons or U.S.owned foreign entities that such FFI re-ports or elects to report under the FFIagreement or § 1.1471–5(f), as applicable.A U.S. account includes, in the case of areporting Model 1 FFI or registereddeemed-compliant Model 1 IGA FFI, aU.S. reportable account as defined in sec-tion 2.76 of this Agreement.Sec. 2.75. U.S. Person. A “United Statesperson” (or “U.S. person”) is a persondescribed in section 7701(a)(30), the U.S.government (including an agency or in-strumentality thereof), a State of theUnited States (including an agency or in-strumentality thereof), or the District ofColumbia (including an agency or instru-mentality thereof). An individual will notbe treated as a U.S. person for purposes ofthis Agreement for a taxable year or anyportion of a taxable year that the individ-ual is a dual resident taxpayer (within themeaning of § 301.7701(b)–7(a)(1)) who istreated as a nonresident alien pursuant to§ 301.7701(b)–7 for purposes of comput-ing the individual’s U.S. tax liability. AU.S. person does not include an alien in-dividual who has made an election undersection 6013(g) or (h) to be treated as aresident of the United States. For chapter4 purposes, the term “U.S. person” or“United States person” also means a for-eign insurance company that has made anelection under section 953(d), providedthat either the foreign insurance companyis not a specified insurance company (asdescribed in § 1.1471–5(e)(1)(iv)), or theforeign insurance company is a specifiedinsurance company and is licensed to dobusiness in any State of the United States.Sec. 2.76. U.S. Reportable Account. A

“U.S. reportable account” means a finan-cial account maintained by a reportingModel 1 FFI or registered deemed-compliant Model 1 IGA FFI that such FFIreports or elects to report under the appli-cable domestic law for compliance withand implementation of FATCA.Sec. 2.77. U.S. Source FDAP. “U.S.source FDAP” means amounts fromsources within the United States that con-stitute fixed or determinable annual or pe-riodical income, as defined in § 1.1441–2(b)(1).Sec. 2.78. U.S. TIN. A “U.S. TIN” meansa U.S. taxpayer identification number as-signed under section 6109.Sec. 2.79. Withholdable Payment. A“withholdable payment” means anamount described in § 1.1473–1(a).Sec. 2.80. Withholding Agent. A “with-holding agent” has the same meaning asset forth in § 1.1441–7(a) for purposes ofchapter 3 and as set forth in § 1.1473–1(d)for purposes of chapter 4 and includes apayor (as defined in section 2.57 of thisAgreement).Sec. 2.81. Withholding Foreign Part-nership (WP). A “withholding foreignpartnership” or “WP” means a partner-ship, described in § 1.1441–5(c)(2), thathas in effect a withholding agreementwith the IRS to be treated as a withholdingforeign partnership.Sec. 2.82. Withholding Foreign Trust(WT). A “withholding foreign trust” or“WT” means a trust, described in§ 1.1441–5(e)(5)(v), that has in effect awithholding agreement with the IRS to betreated as a withholding foreign trust.Sec. 2.83. WT-EIN. A “WT-EIN” meansthe employer identification number as-signed by the IRS to a WT. WT’s WT-EIN is only to be used when WT is actingas a WT. For example, WT must give awithholding agent its EIN (other than itsWT-EIN), if any, if it is not acting as aWT (i.e., acting as a nonwithholding for-eign trust) and a taxpayer identificationnumber is required.

Section 3. WITHHOLDINGRESPONSIBILITY

Sec. 3.01. Chapters 3 and 4 Withhold-ing—In General.(A) Chapter 4 Withholding.WT (unless WT is a retirement fund) is awithholding agent for purposes of chapter

4 and is subject to the withholding andreporting provisions applicable to with-holding agents under sections 1471 and1472 with respect to its beneficiaries orowners. WT is required to withhold 30percent of any withholdable paymentmade after June 30, 2014, that is distrib-uted to, or included in the distributiveshare of, a beneficiary or owner that is anFFI unless WT can reliably associate thepayment (or portion of the payment) withdocumentation upon which it is permittedto rely to treat the payment as exemptfrom withholding under § 1.1471–2(a)(4),or the payment is made under a grandfa-thered obligation described in § 1.1471–2(b). See § 1.1473–1(a) for the definitionof a withholdable payment and the appli-cable exceptions to this definition. WT isalso required to withhold 30 percent ofany withholdable payment made afterJune 30, 2014, that is distributed to, orincluded in the distributive share of, abeneficiary or owner that is an NFFE un-less WT can reliably associate the pay-ment (or portion of the payment) with acertification described in § 1.1472–1(b)(1)(ii), or an exception to withholdingunder § 1.1472–1 applies.If WT is a retirement fund, WT is notrequired to withhold under section 1471or 1472. If WT is a participating FFI orregistered deemed-compliant FFI (otherthan a reporting Model 1 FFI), WT willsatisfy its requirement to withhold undersections 1471(a) and 1472(a) with respectto direct beneficiaries or owners that areentities by withholding on withholdablepayments made to nonparticipating FFIsand recalcitrant account holders to the ex-tent required under its FATCA require-ments as a participating FFI or registereddeemed-compliant FFI. See the FFI agree-ment, § 1.1471–5(f), or the applicableModel 2 IGA for the withholding require-ments that apply to withholdable pay-ments made to direct beneficiaries or own-ers that are individuals and are treated asrecalcitrant account holders. If WT is areporting Model 1 FFI or a registereddeemed-compliant Model 1 IGA FFI, WTwill satisfy its requirement to withholdunder section 1471(a) with respect to di-rect beneficiaries or owners by withhold-ing on withholdable payments made tononparticipating FFIs to the extent re-quired under its FATCA requirements as a


registered deemed-compliant FFI or reg-istered deemed-compliant Model 1 IGAFFI. WT must withhold at the time and inthe manner described in sections 3.02through 3.04 of this Agreement, whichmodifies other provisions describing thetime and manner in which WT would oth-erwise be required to withhold for chapter4 purposes.(B) Chapter 3 Withholding.WT is a withholding agent for purposes ofchapter 3 and is subject to the withholdingand reporting provisions applicable towithholding agents under chapter 3. WTmust withhold 30 percent of any paymentof an amount subject to chapter 3 with-holding that is distributed to, or includedin the distributive share of, a beneficiaryor owner that is a foreign person unlessWT can reliably associate the paymentwith documentation upon which it canrely to treat the payment as made to apayee that is a U.S. person or as made toa beneficial owner that is a foreign personentitled to a reduced rate of withholding.See section 4 of this Agreement regardingdocumentation requirements applicable toWT for determining whether chapter 3withholding applies.With respect to an amount subject tochapter 4 withholding that is also anamount subject to chapter 3 withholding,WT may credit any tax withheld underchapter 4 against its liability for any taxdue under chapter 3 with respect to thepayment so that no additional withholdingis required on the payment for purposes ofchapter 3. Nothing in chapter 4 or theregulations thereunder (including the FFIagreement) or any applicable IGA relievesWT of its requirements to withhold on anamount subject to chapter 3 withholdingto the extent required under sections 3.02through 3.04 of this Agreement or modi-fies the documentation upon which WTmay rely under section 4 of this Agree-ment for determining whether withhold-ing under chapter 3 applies.Sec. 3.02. Primary Chapters 3 and 4Withholding Responsibility. WT mustassume primary chapters 3 and 4 with-holding responsibility for all withholdablepayments and amounts subject to chapter3 withholding that are distributed to, orincluded in the distributive share of, anydirect beneficiary or owner and any indi-rect beneficiary or owner for which it acts

as a WT to the extent permissible undersection 9 of this Agreement. If WT acts asa nonwithholding foreign trust with re-spect to an indirect beneficiary or owner,it cannot assume primary chapters 3 and 4withholding responsibility for paymentsmade to that indirect beneficiary or owner.WT is not required to withhold onamounts it pays to a QI that assumes pri-mary withholding responsibility with re-spect to the payment, or to a WP, oranother WT.If WT is a participating FFI or a registereddeemed-compliant FFI, it may not electwith respect to its direct beneficiaries orowners to satisfy its obligation to with-hold under chapter 4 (or the FFI agree-ment) on a withholdable payment made toa recalcitrant account holder that is a U.S.non-exempt recipient by backup with-holding under section 3406 as provided in§ 1.1471–4(b)(3)(iii) and section 4 of theFFI agreement.See section 6 of this Agreement regardingWT’s responsibility to report amountssubject to withholding on Form 1042–S.Sec. 3.03. Timing of Withholding. WTmust withhold on the date it makes adistribution to a foreign beneficiary orowner that includes a withholdable pay-ment or an amount subject to chapter 3withholding as determined under section3.04 of this Agreement. To the extent abeneficiary’s or owner’s distributive shareof income subject to withholding has notactually been distributed to the beneficiaryor owner, WT must withhold on the ben-eficiary’s or owner’s distributive share onthe earlier of the date that the statementrequired under section 6048(b) is mailedor otherwise provided to the beneficiary orowner or the due date for furnishing thestatement (whether or not WT is requiredto prepare and furnish the statement). Ifthat date is after the due date (includingextensions) for filing WT’s Forms 1042–Sfor the calendar year to which the distrib-utive share relates, WT must withhold andreport the withholding on the distributiveshare that relates to the prior calendar yearas if it arises in the subsequent calendaryear. See section 6.01 of this Agreementfor requirements to report the withheldtax.Sec. 3.04. Withholding on Distributions.WT may determine the amount of with-holding on a distribution based on a rea-

sonable estimate of the beneficiary’s orowner’s distributive share of income sub-ject to withholding for the year. WT mustcorrect the estimated withholding to re-flect the beneficiary’s or owner’s actualdistributive share on the earlier of the datethat the statement required under section6048(b) is mailed or otherwise providedto the beneficiary or owner or the due datefor furnishing the statement (whether ornot WT is required to prepare and furnishthe statement). If that date is after theearlier of the due date (including exten-sions) for filing WT’s Forms 1042–S orthe date WT actually issues Forms1042–S for the calendar year, WT mustwithhold and report any adjustments re-quired by correcting the information forthe following calendar year.Sec. 3.05. Deposit Requirements. WTmust deposit amounts withheld underchapters 3 and 4 at the time and in themanner provided under section 6302 (see§ 1.6302–2(a) or § 31.6302–1(h)).

Section 4. DOCUMENTATIONREQUIREMENTS

Sec. 4.01. Documentation Require-ments.(A) General Documentation Require-ments. Except as otherwise provided inthis section 4, WT must obtain a FormW–8 or Form W–9 from every direct ben-eficiary or owner that receives a distribu-tion or distributive share of a reportableamount. If WT is an FFI and is subject tothe know-your-customer rules for docu-menting its beneficiaries or owners (orsubset of beneficiaries or owners), WTmay obtain documentary evidence as setforth in the “know-your-customer” rulesapproved by the IRS (or the documenta-tion described in section 4.03(A)(3) of thisAgreement) for the applicable jurisdictionfrom its direct beneficiaries or ownersrather than a Form W–8 or Form W–9,provided WT adheres to the know-your-customer rules that apply to WT with re-spect to the direct beneficiary or ownerfrom whom the documentary evidence isobtained.WT must review and maintain documen-tation in accordance with this section 4and, in the case of documentary evidenceobtained from direct beneficiaries or own-ers, in accordance with the know-your-customer rules approved by the IRS for


the applicable jurisdiction. WT must makedocumentation (together with any associ-ated withholding statements and otherdocuments or information) available uponrequest for inspection by WT’s externalreviewer, if the performance of an exter-nal review is requested by the IRS (asdescribed in section 8.08(D) of thisAgreement). WT represents that none ofthe laws to which it is subject prohibitsdisclosure of the identity of any benefi-ciary or owner or corresponding benefi-ciary or owner information to WT’s re-viewer.(B) Coordination of Chapter 3 and Chap-ter 4 Documentation Requirements. If WTis an FFI (other than a retirement fund),WT is required to perform the due dili-gence procedures under its FATCA re-quirements as a participating FFI, regis-tered deemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI foreach direct beneficiary or owner to deter-mine if the beneficiary or owner is aholder of a U.S. account (or U.S. report-able account), and to determine each di-rect beneficiary or owner that is a nonpar-ticipating FFI and, if applicable, that is arecalcitrant account holder (or non-consenting U.S. account). See, however,the automatic termination provision ofsection 10.03(A) of this Agreement if WTis not in possession of valid documenta-tion for any direct beneficiary or owner atany time that withholding or reporting isrequired. For purposes of this section 4,with respect to documenting a beneficiaryor owner for chapter 4 purposes, docu-mentary evidence also includes documen-tation or information that is publicly avail-able to determine the chapter 4 status ofthe account holder to the extent permittedunder an applicable IGA.If WT is an NFFE, WT is required to doc-ument the chapter 4 status of each benefi-ciary or owner to determine if reporting orwithholding applies under section 1471 or1472 on withholdable payments distributedto, or included in the distributive share of,the beneficiary or owner under the require-ments of § 1.1471–3(d).If WT has determined that withholding isnot required under chapter 4, WT mustobtain, unless already collected, docu-mentation that meets the requirements ofthis section 4 to determine whether with-holding applies under chapter 3. See also

WT’s FATCA requirements as a partici-pating FFI, registered deemed-compliantFFI, or registered deemed-compliantModel 1 IGA FFI for when WT will havereason to know that a claim of chapter 4status is unreliable or incorrect and forWT’s requirements following a change incircumstances. If WT is an NFFE, see§ 1.1471–3(e)(4) for when WT will havereason to know that an entity’s claim ofchapter 4 status is unreliable or incorrectand § 1.1471–3(c)(6)(ii)(E) for WT’s re-quirements following a change in circum-stances.Sec. 4.02. Documentation for ForeignBeneficiaries or Owners. WT may treat abeneficiary or owner as a foreign benefi-cial owner of an amount if the beneficiaryor owner provides a valid Form W–8(other than Form W–8IMY), or valid doc-umentary evidence, to the extent permit-ted under section 4.01(A) of this Agree-ment, that supports the beneficiary’s orowner’s status as a foreign person. WTmay treat a beneficiary or owner that hasprovided documentation as entitled to areduced rate of withholding under chapter3 if all the requirements for a reduced rateare met and the documentation providedby the beneficiary or owner supports en-titlement to a reduced rate of withholdingand no withholding under chapter 4. Sec-tions 4.03 through 4.06 of this Agreementdescribe the specific documentation re-quirements necessary for obtaining a re-duced rate of withholding in certain cir-cumstances.Sec. 4.03. Treaty Claims. WT may notreduce the rate of withholding under chap-ter 3 based on a beneficiary’s or owner’sclaim of treaty benefits unless WT hasdetermined that no chapter 4 withholdingis required and it obtains from the bene-ficiary or owner the documentation re-quired by section 4.03(A) of this Agree-ment. In addition, WT agrees to establishprocedures to inform beneficiaries orowners of the terms of the limitation onbenefits provisions of a treaty (if applica-ble and regardless of whether those pro-visions are contained in a separate articleentitled Limitation on Benefits) underwhich the beneficiary or owner is claim-ing benefits. For beneficiaries or ownersthat are entities documented by WT on orafter January 1, 2017, WT is required toobtain a Form W–8BEN–E with the ap-

propriate limitation on benefits certifica-tion or, if WT is allowed to and obtainsdocumentary evidence, the written certifi-cation included in the treaty statement asdescribed in section 4.03(B) of this Agree-ment. For beneficiaries or owners that areentities that were documented with docu-mentary evidence prior to January 1,2017, and for which treaty benefits arebeing claimed, WT is required to obtainthe appropriate limitation on benefitsstatement prior to January 1, 2019.(A) Treaty Documentation. The documen-tation required by this section 4.03(A) isas follows:(1) A Form W–8BEN or FormW–8BEN–E on which a claim of treatybenefits is made, including, for an entity,the appropriate limitation on benefits andsection 894 certifications, as provided in§ 1.1441–6(b)(1) (if applicable), and aU.S. TIN or foreign TIN. A U.S. TIN orforeign TIN shall not be required, how-ever, if the beneficiary or owner is a directbeneficiary or owner. If WT is acting as awithholding foreign trust for an indirectbeneficiary or owner, the indirect benefi-ciary or owner is required to have either aU.S. TIN or a foreign TIN in order toclaim treaty benefits unless it is claimingtreaty benefits on income from marketablesecurities as described in § 1.1441–6(c);(2) Documentary evidence, as permittedunder section 4.01(A) of this Agreement,that has been obtained pursuant to theknow-your-customer rules that apply tothe direct beneficiary or owner, and thedirect beneficiary or owner, if it is anentity, has made the treaty statement (ifapplicable) required by section 4.03(B) ofthis Agreement; or(3) The type of documentary evidence, aspermitted under section 4.01(A) of thisAgreement, required under § 1.1441–6 toestablish entitlement to a reduced rate ofwithholding under a treaty and the directbeneficiary or owner, if it is an entity, hasmade the treaty statement (if applicable)required by section 4.03(B) of this Agree-ment.(B) Treaty Statement. The treaty statementrequired by an entity direct beneficiary orowner under this section 4.03(B) is asfollows: [Name of Direct Beneficiary orOwner] meets all provisions of the treatythat are necessary to claim a reduced rateof withholding, including any applicable


limitation on benefits provisions, and de-rives the income within the meaning ofsection 894, and the regulations thereun-der, as the beneficial owner.WT is only required to obtain the treatystatement described in this section 4.03(B)from a beneficiary or owner that is anentity. WT shall not be required to obtaina treaty statement described in this section4.03(B) from an individual who is a resi-dent of an applicable treaty country orfrom the government, or its political sub-divisions, of a treaty country. WT is re-quired to collect and report (as required onForm 1042–S) the specific category oflimitation on benefits provision from all ofits entity beneficiaries or owners, includ-ing a government (or its political subdivi-sions). WT may rely on a beneficiary’s orowner’s claim of the specific category oflimitation on benefits provision absent ac-tual knowledge that the claim is unreliableor incorrect.Sec. 4.04. Documentation for Interna-tional Organizations. WT may not treat abeneficiary or owner as an internationalorganization entitled to an exemptionfrom withholding under section 892 un-less WT has determined that no chapter 4withholding is required and it obtains aForm W–8EXP (or documentary evi-dence as permitted under section 4.01(A)of this Agreement) from the internationalorganization. The name provided on thedocumentation must be the name of anentity designated as an international orga-nization by executive order pursuant to 22United States Code 288 through 288f. Ifan international organization is not claim-ing benefits under section 892 but underanother Code exception, the provisions ofsection 4.02 of this Agreement applyrather than the provisions of this section4.04.Sec. 4.05. Documentation for ForeignGovernments and Foreign CentralBanks of Issue.(A) Documentation for a Foreign Govern-ment or Foreign Central Bank of IssueClaiming an Exemption from WithholdingUnder Section 892 or Section 895. WTmay not treat a beneficiary or owner as aforeign government or foreign centralbank of issue exempt from withholdingunder section 892 or 895 unless WT hasdetermined that no chapter 4 withholdingis required and—

(1) WT receives from the beneficiary orowner a Form W–8EXP (or documentaryevidence as permitted under section4.01(A) of this Agreement) establishingthat the beneficiary or owner is a foreigngovernment or foreign central bank ofissue;(2) The income distributed to, or includedin the distributive share of, the beneficiaryor owner is the type of income that qual-ifies for an exemption from withholdingunder section 892 or 895; and(3) WT does not know, or have reason toknow, that the beneficiary or owner is acontrolled commercial entity as describedin section 892, that the income owned bythe foreign government or foreign centralbank of issue is being received from acontrolled commercial entity, or that theincome is from the disposition of an in-terest in a controlled commercial entity.(B) Treaty Benefits. WT may not treat abeneficiary or owner as a foreign govern-ment or foreign central bank of issue en-titled to a reduced rate of withholdingunder an income tax treaty for purposes ofchapter 3 unless WT has determined thatno chapter 4 withholding is required and ithas valid documentation that is sufficientto obtain a reduced rate of withholdingunder a treaty, as described in section 4.03of this Agreement.(C) Other Code Exception. If a foreigngovernment or foreign central bank of is-sue is not claiming benefits under section892 or 895 or a reduced rate under anincome tax treaty but under another Codeexception (e.g., the portfolio interest ex-ception under section 871(h) or 881(c)),the provisions of section 4.02 of thisAgreement apply rather than the provi-sions of this section 4.05.Sec. 4.06. Documentation for ForeignTax-Exempt Organizations. To the ex-tent that WT determines that an amountdistributed to, or included in the distribu-tive share of, a beneficiary or owner is notsubject to withholding under chapter 4,WT may not treat the beneficiary or owneras a foreign tax-exempt organization andreduce the rate of withholding or exemptthe beneficiary or owner from withholdingfor purposes of chapter 3 unless WT sat-isfies the requirements provided in section4.06(A), (B), or (C) of this Agreement.(A) Reduced Rate of Withholding UnderSection 501. WT may not treat a benefi-

ciary or owner as a foreign organizationdescribed under section 501(c), and there-fore exempt from withholding underchapter 3 (or, if the beneficiary or owner isa foreign private foundation, subject towithholding at a 4-percent rate under sec-tion 1443(b)) unless WT obtains a validForm W–8EXP with Part IV of the formcompleted.(B) Treaty Exemption. WT may not treat abeneficiary or owner as a foreign organi-zation that is tax-exempt on an item ofincome pursuant to a treaty unless WTobtains valid documentation as describedunder section 4.03 of this Agreement thatis sufficient for obtaining a reduced rate ofwithholding under the treaty and the doc-umentation establishes that the beneficiaryor owner is an organization exemptfrom tax under the treaty on that item ofincome.(C) Other Exceptions. If a tax-exempt en-tity is not claiming a reduced rate of with-holding because it is a foreign organiza-tion described under section 501(c) orunder a treaty article that applies to ex-empt certain foreign organizations fromtax, but is claiming a reduced rate of with-holding under another Code or treaty ex-ception, the provisions of section 4.02 or4.03 of this Agreement (as applicable)shall apply rather than the provisions ofthis section 4.06.Sec. 4.07. Documentation from Pass-through Beneficiaries or Owners. Ex-cept as otherwise provided in section 9 ofthis Agreement, WT shall not act as awithholding foreign trust with respect toan amount distributed to, or included inthe distributive share of, a passthroughbeneficiary or owner. WT must forwardthe passthrough beneficiary’s or owner’sdocumentation (and associated withhold-ing statement and documentation of indi-rect beneficiaries or owners) to the with-holding agent from whom WT receives areportable amount.Sec. 4.08. Documentation for U.S. Ex-empt Recipients. WT shall not treat abeneficiary or owner as a U.S. exemptrecipient unless WT obtains from the ben-eficiary or owner—(A) A valid Form W–9 on which the ben-eficiary or owner includes an exemptpayee code to certify that the beneficiaryor owner is a U.S. exempt recipient;(B) Documentary evidence, as permitted


under section 4.01(A) of this Agreement,that is sufficient to establish that the ben-eficiary or owner is a U.S. exempt recip-ient; or(C) Documentary evidence, as permittedunder section 4.01(A) of this Agreement,that is sufficient to establish the beneficia-ry’s or owner’s status as a U.S. person andWT can treat the beneficiary or owner asan exempt recipient under the rules of§§ 1.6045–2(b)(2)(i) or 1.6049–4(c)(1)(ii), as appropriate, without obtaining doc-umentation.Sec. 4.09. Documentation for U.S. Non-Exempt Recipients. WT shall not treat abeneficiary or owner as a U.S. non-exempt recipient unless WT obtains avalid Form W–9 or other similar agreedform from the beneficiary or owner.Sec. 4.10. Documentation Validity.(A) In General. WT may not rely on doc-umentation if WT has actual knowledgeor reason to know that the information orcertifications contained in the documenta-tion provided by a beneficiary or owner isunreliable or incorrect, or that there is achange in circumstances with respect tothe information or statements contained inthe documentation or in WT’s files (ac-count information) pertaining to the obli-gation that affects the reliability of thebeneficiary or owner’s claim. See§ 1.1441–1(e)(4)(ii)(D) for the definitionof change in circumstances. Once WTknows, or has reason to know, that docu-mentation provided by a beneficiary orowner is unreliable or incorrect to estab-lish foreign status or residency for pur-poses of claiming benefits under an appli-cable income tax treaty, it can no longerreliably associate a payment with validdocumentation unless it obtains additionaldocumentation to establish the beneficia-ry’s or owner’s chapter 3 status. If WTcan no longer reliably associate a paymentwith valid documentation, it must obtainnew documentation prior to the time with-holding is required under section 3 of thisAgreement. With respect to a withholdingagent’s reason to know that a claim fortreaty benefits is unreliable or incorrectbased on the existence of a tax treaty, therules in § 1.1441–6(b)(1)(ii) will apply topreexisting beneficiaries or owners forwhich WT held valid documentation upona change in circumstances or, with respectto a preexisting entity beneficiary or

owner, when it provides a written limita-tion on benefits statement (as described insection 4.03(B) of this Agreement). Forall beneficiaries or owners that becomebeneficiaries or owners of WT on or afterJanuary 1, 2017, this rule will apply on thedate that such beneficiary or owner be-comes a beneficiary or owner of WT. Forpurposes of this section 4.10(A), a “pre-existing beneficiary or owner” or “preex-isting entity beneficiary or owner” is abeneficiary or owner documented by WTprior to January 1, 2017, for a WT with aWT Agreement in effect prior to that date.For a WT that did not have a WT Agree-ment in effect prior to January 1, 2017, a“preexisting beneficiary or owner” or“preexisting entity beneficiary or owner”means a beneficiary or owner that becamea beneficiary or owner of WT (and forwhich WT has valid documentation) priorto the effective date of its WT Agreement.(B) General Rules.(1) WT shall not rely on a Form W–9 if itis not permitted to do so under the rules of§ 31.3406(h)–3(e) or if it has been in-formed by the IRS or another withholdingagent that the form is unreliable or incor-rect and shall not rely on a Form W–8 ifit is not permitted to do so under thissection 4.10.(2) WT shall not treat documentary evi-dence provided by a beneficiary or owneras valid if the documentary evidence doesnot reasonably establish the identity of theperson presenting the documentary evi-dence. For example, documentary evi-dence is not valid if it is provided inperson by a beneficiary or owner that is anatural person and the photograph on thedocumentary evidence, if any, does notmatch the appearance of the person pre-senting the document.(3) WT may not rely on documentation toreduce the withholding rate that wouldotherwise apply if—(a) The beneficiary’s or owner’s docu-mentation is incomplete or contains infor-mation that is inconsistent with the bene-ficiary’s or owner’s claim,(b) WT has other information in the ac-count information that is inconsistent withthe beneficiary’s or owner’s claim, or(c) The documentation lacks the informa-tion necessary to establish entitlement to areduced rate of withholding.For example, if a direct beneficiary or

owner that is an entity provides documen-tation to claim treaty benefits and the doc-umentation establishes the direct benefi-ciary’s or owner’s status as a foreignperson and a resident of a treaty countrybut fails to provide the treaty statement insection 4.03(B) of this Agreement, thedocumentation does not establish the di-rect beneficiary’s or owner’s entitlementto a reduced rate of withholding.Sec. 4.11. Documentation Validity Pe-riod.(A) Documentation Other Than a FormW–9. WT, as permitted under section4.01(A) of this Agreement, may rely onvalid documentary evidence obtainedfrom direct beneficiaries or owners inaccordance with applicable know-your-customer rules as long as the documentaryevidence remains valid under those rulesor until WT knows, or has reason to know,that the information contained in the doc-umentary evidence is unreliable or incor-rect. However, WT may only rely onstatements regarding entitlement to treatybenefits described in § 1.1441–6(c)(5)(i)or the representations described in section4.03 of this Agreement until the validityexpires under § 1.1441–1(e)(4)(ii)(A)(2).For establishing a beneficiary’s or own-er’s chapter 3 status (as defined in§ 1.1441–1(c)(45)) or foreign status forchapter 61 purposes, WT may rely on avalid Form W–8 until its validity expiresunder § 1.1441–1(e)(4)(ii) and may relyon documentary evidence (other than doc-umentary evidence obtained pursuant toapplicable know-your-customer rules) un-til its validity expires under § 1.6049–5(c).(B) Form W–9. WT may rely on a FormW–9 unless one of the conditions of§ 31.3406(h)–3(e)(2)(i) through (v) ap-plies or if it has been informed by the IRSor another withholding agent that the formis unreliable or incorrect.Sec. 4.12. Maintenance and Retentionof Documentation.(A) Maintaining Documentation. WTshall maintain documentation by retainingthe original documentation, a certifiedcopy, a photocopy, a scanned copy, a mi-crofiche, or other means that allow repro-duction (provided that WT has recordedreceipt of the documentation and is able toproduce a hard copy). If WT is not re-quired to retain copies of documentary


evidence under its know-your-customerrules, WT may instead retain a notation ofthe type of documentation reviewed, thedate the documentation was reviewed, thedocument’s identification number, if any(e.g., a passport number), and whethersuch documentation contained any U.S.indicia. For obligations held by a directbeneficiary or owner opened prior to Jan-uary 1, 2001, if WT was not requiredunder its know-your-customer rules tomaintain originals or copies of documen-tation, WT may nevertheless rely on theinformation if it has complied with allother aspects of its know-your-customerrules regarding establishment of a benefi-ciary’s or owner’s identity, it has a recordthat the documentation required under theknow-your-customer rules was actuallyexamined by an employee of WT or em-ployees of the trustee of WT in accor-dance with the know-your-customer rules,and it has no information in its possessionthat would require WT to treat the docu-mentation as invalid.(B) Retention Period. WT shall retain abeneficiary’s or owner’s documentationobtained under this section 4 for as long asthe document is relevant for the determi-nation of WT’s tax liability or reportingresponsibilities under chapters 3, 4, and61, and sections 3406 and 6048.

Section 5. WITHHOLDINGFOREIGN TRUST WITHHOLDINGCERTIFICATE

Sec. 5.01. WT Withholding Certificate.WT agrees to furnish a withholding for-eign trust withholding certificate to eachwithholding agent from which it receivesa reportable amount as a withholding for-eign trust. The withholding foreign trustwithholding certificate is a Form W–8IMY (or acceptable substitute form) thatcertifies that WT is acting as a withhold-ing foreign trust, contains WT’s WT-EIN,and provides all other information andcertifications required by the form, includ-ing its WT-EIN. If WT is receiving areportable amount that is a withholdablepayment, the withholding certificate mustalso contain WT’s chapter 4 status to theextent required, provide its GIIN (if appli-cable), and provide the other informationand certifications required on the form. IfWT is an FFI, WT must provide a GIINon its withholding foreign trust withhold-

ing certificate irrespective of the time theFFI is permitted under its FATCA re-quirements as a participating FFI, regis-tered deemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI toobtain a GIIN. WT is not required to dis-close, as part of that Form W–8IMY or itswithholding statement, any informationregarding the identity of its direct benefi-ciaries or owners and those indirect ben-eficiaries or owners for which it acts as awithholding foreign trust to the extent per-mitted under section 9 of this Agreement.If WT does not act as a withholding foreigntrust for an indirect beneficiary or owner,WT is required to furnish a nonwithholdingforeign trust certificate to its withholdingagent. See § 1.1441–5(e)(5)(iii) for the re-quirements of a nonwithholding foreigntrust withholding certificate, the withholdingstatement associated with the withholdingcertificate, and the other documentation orother information for each passthrough ben-eficiary or owner and its direct and indirectbeneficiaries or owners.Sec. 5.02. Withholding Statement.When WT is acting as a withholding for-eign trust, WT must assume primary chap-ters 3 and 4 withholding responsibility asrequired by section 3.02 of this Agree-ment for reportable amounts that are dis-tributed to, or included in the distributiveshares of, its direct beneficiaries or ownersand any indirect beneficiaries or ownersfor which it is acting as a withholdingforeign trust. Accordingly, WT is not re-quired to provide a withholding statementin such circumstances. See section 9 ofthis Agreement, providing that WT maynot act as a withholding foreign trust forcertain indirect beneficiaries or ownersthat are U.S. non-exempt recipients.

Section 6. TAX RETURN ANDINFORMATION REPORTINGOBLIGATIONS

Sec. 6.01. Form 1042 Filing Require-ment.(A) In General. WT shall file a return onForm 1042, whether or not WT withheldany amounts under chapter 3 or 4 of theCode, on or before March 15 of the yearfollowing any calendar year in which WTacts as a withholding foreign trust. In ad-dition to the information required on Form1042 and its accompanying instructions,WT shall attach a statement setting forth

the amounts of any overwithholding orunderwithholding adjustments made un-der sections 7.01 and 7.03 of this Agree-ment, and an explanation of the circum-stances that resulted in the over- orunderwithholding. If WT is requesting acollective refund or credit, WT shall at-tach the statements required by section7.02 of this Agreement and shall complywith the procedures specified in section7.02 of this Agreement.(B) Extensions for Filing Returns. WTmay request an extension of the time forfiling Form 1042, or any of the informa-tion required to be attached to the form, bysubmitting Form 7004, Application forAutomatic Extension of Time to File Cer-tain Business Income, Tax, Information,and Other Returns, on or before the duedate of the return.Sec. 6.02. Form 1042–S Reporting.(A) In General. WT must file Form1042–S for each beneficiary or owner forwhom it acts as a withholding foreigntrust and for whom WT distributes, or inwhose distributive share is included, a re-portable amount unless WT is permittedunder sections 6.02(C) and (D) of thisAgreement to report in pools (reportingpools). With respect to its direct benefi-ciaries or owners, WT must file Forms1042–S in the manner required by theregulations under chapters 3 and 4 foramounts distributed to, or included in thedistributive share of, its beneficiaries orowners (or in the case of a participatingFFI, pursuant to its FATCA requirementsas a participating FFI) and the instructionsto the form, including any requirement tofile the forms magnetically or electroni-cally. Any Form 1042–S required to befiled by this section 6 shall be filed on orbefore March 15 following the calendaryear in which withholding, if any, wasrequired under section 3.02 of this Agree-ment. WT may request an extension oftime to file Forms 1042–S by submittingForm 8809, Application for Extension ofTime to File Information Returns (or othersuperseding form) by the due date ofForms 1042–S in the manner required by(and to the extent permitted on) Form8809.(B) Recipient Specific Reporting. WT isrequired to file a separate Form 1042–Sfor amounts distributed to, or included inthe distributive share of, each separate


beneficiary or owner as described in thissection 6.02(B). WT must file separateForms 1042–S by income code, chapter 3or 4 exemption code, recipient code, chap-ter 4 withholding rate pool (if applicable),and withholding rate.(1) Unless WT has made the pooled re-porting election pursuant to section6.02(D) of this Agreement, WT must file aseparate Form 1042–S for each direct ben-eficiary or owner (other than a pass-through beneficiary or owner) to whomWT distributes, or whose distributiveshare includes, an amount subject to chap-ter 3 withholding that is either not a with-holdable payment or is a withholdablepayment for which no chapter 4 withhold-ing is required.(2) WT must file a separate Form 1042–Sfor each beneficiary or owner that is aqualified intermediary, a withholding for-eign partnership, or a withholding foreigntrust to whom WT distributes, or whosedistributive share includes, an amountsubject to withholding under chapters 3 or4, regardless of whether such beneficiaryor owner is a direct or indirect beneficiaryor owner of WT.(3) WT must file a separate Form 1042–Sfor each passthrough beneficiary or ownerthat is a nonqualified intermediary orflow-through entity that is a participatingFFI, registered deemed-compliant FFI, orregistered deemed-compliant Model 1IGA FFI and to whom WT distributes, orwhose distributive share includes, anamount subject to chapter 4 withholdingallocable to such FFI’s chapter 4 with-holding rate pools of recalcitrant accountholders, nonparticipating FFIs, and report-able amounts allocable to U.S. payees, ifapplicable, regardless of whether such FFIis a direct or indirect beneficiary or ownerof WT when WT applies section 9.03 ofthis Agreement.(4) WT must file a separate Form 1042–Sfor each passthrough beneficiary or ownerthat is a nonqualified intermediary orflow-through entity that is not described insection 6.02(B)(3) of this Agreement(other than a nonparticipating FFI), and towhom WT distributes, or whose distribu-tive share includes, an amount subject tochapter 4 withholding allocable to suchpassthrough beneficiary’s or owner’schapter 4 withholding rate pool of payeesthat are nonparticipating FFIs, regardless

of whether such passthrough beneficiaryor owner is a direct or indirect beneficiaryor owner of WT when WT applies section9.03 of this Agreement.(5) WT must file a separate Form 1042–Sfor each beneficiary or owner of WT thatis a partnership or trust to which WTapplies the agency option under section9.02 of this Agreement and to whom WTdistributes, or whose distributive share in-cludes, an amount subject to chapter 4withholding that is allocable to the part-nership or trust’s chapter 4 withholdingrate pool of payees that are nonparticipat-ing FFIs or to whom WT distributes, orwhose distributive share includes, anamount subject to chapter 3 withholdingthat is either not a withholdable paymentor is a withholdable payment for which nochapter 4 withholding is required and thatis allocable to such partnership’s or trust’schapter 3 withholding rate pools.(6) WT must file a separate Form 1042–Sfor each foreign account holder (or inter-est holder) of a passthrough beneficiary orowner that is a nonparticipating FFI thatreceives a payment on behalf of an ex-empt beneficial owner (regardless ofwhether the passthrough beneficiary orowner is a direct or indirect beneficiary orowner of WT) to the extent WT can reli-ably associate such amounts with validdocumentation from such passthroughbeneficiary or owner as to the portion ofthe payment allocable to one or more ex-empt beneficial owners. In addition, WTmust file separate Forms 1042–S in thesame manner for each foreign accountholder (or interest holder) of a pass-through beneficiary or owner that is de-scribed in the preceding sentence and thatis a direct or indirect partner, beneficiary,or owner of a partnership or trust to whichWT applies the agency option.(7) WT must file a separate Form 1042–Sfor each foreign account holder (or inter-est holder) of a passthrough beneficiary orowner to whom WT distributes, or whosedistributive share includes, an amountsubject to chapter 3 withholding that iseither not a withholdable payment or is awithholdable payment for which no chap-ter 4 withholding is required to the extentWT can reliably associate such amountswith valid documentation from an accountholder (or interest holder) that is not itselfa nonqualified intermediary or flow-

through entity when WT applies section9.03 of this Agreement. In addition, WTmust file a separate Form 1042–S in thesame manner for each foreign accountholder (or interest holder) of a nonquali-fied intermediary or flow-through entity(to which WT does not apply the agencyoption) that is described in the precedingsentence and that is a direct or indirectaccount holder (or interest holder) of apartnership or trust to which WT appliesthe agency option.(8) If WT is an NFFE, WT must file aseparate Form 1042–S for each direct ben-eficiary or owner that establishes its statusas a passive NFFE but fails to provide theinformation regarding its owners as re-quired under § 1.1471–3(d)(12)(iii).(C) Chapter 4 Reporting Pools of WT.If WT is an FFI, WT shall report on Form1042–S amounts subject to chapter 4withholding that it distributes to, or in-cludes in the distributive share of, its di-rect beneficiaries or owners consistentwith its FATCA requirements as a partic-ipating FFI, registered deemed-compliantFFI, or registered deemed-compliantModel 1 IGA FFI. A separate Form1042–S shall be filed for each type ofchapter 4 reporting pool. A chapter 4 re-porting pool is a payment of a single typeof income, determined in accordance withthe categories of income reported on Form1042–S that is allocable to a chapter 4withholding rate pool consisting of payeesthat are nonparticipating FFIs or recalci-trant account holders. WT must report re-calcitrant account holders in pools basedupon their particular class described in§ 1.1471–4(d)(6), with a separate Form1042–S issued for each such pool. Seesection 9 of this Agreement for when aWT may include certain indirect benefi-ciaries or owners in its chapter 4 reportingpools.If WT is a participating FFI or registereddeemed-compliant FFI (including for thispurpose a reporting Model 1 IGA FFI),WT may report in a chapter 4 withholdingrate pool of U.S. payees reportableamounts that are distributed to, or in-cluded in the distributive share of, a directbeneficiary or owner that is a U.S. person,provided that WT reports such beneficiaryor owner as a U.S. account (or U.S report-able account) under its applicable FATCArequirements as a participating FFI, regis-


tered deemed-compliant FFI, reportingModel 1 FFI, or registered deemed-compliant Model 1 IGA FFI. WT shallinclude in its U.S. payee pool reportableamounts that are distributed to, or in-cluded in the distributive share of, a directbeneficiary or owner that is a U.S. personwhen WT either reports such beneficiaryor owner as a U.S. account (or U.S. re-portable account) pursuant to its FATCArequirements as a participating FFI, regis-tered deemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI; orreports such beneficiary or owner as arecalcitrant account holder (or non-consenting U.S. account) provided thatWT is not required to withhold on suchbeneficiary or owner pursuant to itsFATCA requirements as a participatingFFI, registered deemed-compliant FFI, orregistered deemed-compliant Model 1IGA FFI. See, however, the automatic ter-mination provision of section 10.03(A) ofthis Agreement if WT is not in possessionof valid documentation for any direct ben-eficiary or owner at any time that with-holding or reporting is required.If WT is an NFFE, WT shall reportamounts subject to chapter 4 withholdingby reporting pools on a Form 1042–S ifthose amounts are distributed to, or in-cluded in the distributive share of, directbeneficiaries or owners of WT that arenonparticipating FFIs in a chapter 4 re-porting pool of nonparticipating FFIs.(D) Chapter 3 Reporting Pools of WT.WT may elect to perform pool reporting(PR election) for an amount subject tochapter 3 withholding that either is not awithholdable payment or is a withhold-able payment for which no chapter 4 with-holding is required and that WT distrib-utes to, or includes in the distributiveshare of, a foreign direct beneficiary orowner (other than a passthrough benefi-ciary or owner, withholding foreign part-nership, or withholding foreign trust). Aseparate Form 1042–S shall be filed foreach chapter 3 reporting pool. A chapter 3reporting pool is a payment of a singletype of income that falls within a partic-ular withholding rate, chapter 3 exemptioncode and, if the payment is a withholdablepayment, a chapter 4 exemption code asdetermined on Form 1042–S and its ac-companying instructions. WT may use asingle chapter 3 pool reporting code (e.g.,

WT-withholding rate pool-general) for allreporting pools except for amounts paid toforeign tax-exempt recipients, for which aseparate chapter 3 pool reporting code(e.g., WT-withholding rate pool- exemptorganization) must be used. For this pur-pose, a foreign tax-exempt recipient in-cludes any organization that is not subjectto chapter 3 withholding and is not liableto tax in its jurisdiction of residence be-cause it is a charitable organization, apension fund, or a foreign government.See section 9 of this Agreement for whena WT may include certain indirect bene-ficiaries or owners in its chapter 3 report-ing pools.If WT has made the PR election pursuantto this section 6.02(D), WT is not requiredto file Forms 1042–S for amounts distrib-uted to, or included in the distributiveshare of, each separate direct beneficiaryor owner for whom such reporting wouldotherwise be required. Instead, WT shallfile a separate Form 1042–S for each re-porting pool. However, see section 7.02 ofthis Agreement for the requirement forWT to provide a Form 1042–S to a ben-eficiary or owner if requested. Once made,the PR election is effective for the entireterm of this Agreement beginning on theeffective date of the Agreement and end-ing on the date of its expiration or termi-nation under section 10 of the Agreement.WT must make a new election for eachrenewal term of this Agreement. If WTmakes the PR election, WT cannot revokeit prior to the end of the term for whichWT has made the PR election unless WTobtains consent from the IRS to revokesuch election. WT may request IRS con-sent by contacting the IRS at the addressspecified in section 11.06 of this Agree-ment. If WT did not make the PR electionat the time this Agreement was executed,then WT may make a PR election only bycontacting the IRS at the address specifiedin section 11.06 of this Agreement.Sec. 6.03. Form 3520–A Filing Require-ment.If WT is required to file Form 3520–Aand an Owner Statement or BeneficiaryStatement under section 6048 of the Code,then WT shall file Form 3520–A and fileand furnish any required Owner State-ments or Beneficiary Statements to U.S.beneficiaries or owners in accordancewith the instructions for the form. See

section 6.05(D) for a special reporting ob-ligation of WT with respect to beneficia-ries not required to be reported by WT onForm 3520–A.Sec. 6.04. Retention of Returns. WTshall retain Forms 1042 for the period ofthe applicable statute of limitations on as-sessments and collection under the Code.Sec. 6.05. FATCA U.S. Account Report-ing.(A) WT that is an FFI. If WT is an FFI,WT is required to report each U.S. ac-count (or, in the case of an FFI that is areporting Model 1 FFI or registereddeemed-compliant Model 1 IGA FFI,each U.S. reportable account) that it main-tains consistent with its FATCA require-ments as a participating FFI, registereddeemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI. IfWT is a participating FFI or registereddeemed-compliant FFI (other than a re-porting Model 1 FFI), WT must report itsU.S. accounts on Form 8966 in the timeand manner specified under its FATCArequirements as a participating FFI or reg-istered deemed-compliant FFI, except tothe extent WT is reporting under§ 1.1471–4(d)(5) on Form 1099 with re-spect to its U.S. accounts. If WT is areporting Model 1 FFI or registereddeemed-compliant Model 1 IGA FFI, WTmust report each U.S. reportable accounton Form 8966 as required under the ap-plicable Model 1 IGA.(B) WT that is an NFFE. If WT is anNFFE, WT shall file Forms 8966 to reportwithholdable payments distributed to, orincluded in the distributive share of, anybeneficiary or owner that is an NFFE(other than an excepted NFFE) with oneor more substantial U.S. owners if theNFFE is the beneficial owner of the with-holdable payment received by WT. See§ 1.1471–1(b)(8) for the definition of ben-eficial owner. WT must report on Form8966 in accordance with the form and itsaccompanying instructions.The Form 8966 must include the name ofthe NFFE that is owned by a substantialU.S. owner; the name, address, and U.S.TIN of each substantial U.S. owner; thetotal of all withholdable payments distrib-uted to, or included in the distributiveshare of, the NFFE during the calendaryear; and any other information as re-quired by the form and its accompanying


instructions. If WT is acting as a sponsor-ing entity on behalf of a NFFE for chapter4 purposes, WT is not required to report asdescribed in this paragraph if WT reportsthe NFFE as part of WT’s requirements asa sponsoring entity. See § 1.1472–1(c)(5)(ii) for the reporting requirementsof a sponsoring entity.(C) Form 8966 Reporting for Payees thatare NFFEs. WT shall file Form 8966 toreport withholdable payments that WTdistributes to, or includes in the distribu-tive share of, a passthrough beneficiary orowner that provides information regardingan account holder (or interest holder) thatis an NFFE (other than an exceptedNFFE) with one or more substantial U.S.owners (or one or more controlling per-sons that is a specified U.S. person underan applicable IGA) and that is the benefi-cial owner of the withholdable paymentreceived by WT when such substantialU.S. owner or controlling person is notreported under section 6.05(A) of thisAgreement. WT must report on Form8966 in the time and manner provided in§ 1.1474–1(i)(2). Such report must in-clude the name of the NFFE that is ownedby a substantial U.S. owner (or controllingperson that is a specified U.S. person); thename, address, and U.S. TIN of each sub-stantial U.S. owner (or controlling personthat is a specified U.S. person); the total ofall withholdable payments made to theNFFE during the calendar year (or report-able period under the applicable IGA);and any other information as required bythe form and its accompanying instruc-tions.WT is not required to report on Form8966, however, on a withholdable pay-ment made to a passthrough beneficiary orowner that is a participating FFI or regis-tered deemed-compliant FFI that is allo-cated to a payee that is a passive NFFEwith one or more substantial U.S. ownerson an FFI withholding statement when theparticipating FFI or registered deemed-compliant FFI includes on the statementthe certification described in § 1.1471–3(c)(3)(iii)(B)(2)(iv) (certifying that theFFI is reporting the passive NFFE as aU.S. account or U.S. reportable account inaccordance with the terms of the FFIagreement or an applicable IGA), pro-vided WT does not know or have reason

to know that the certification is incorrector unreliable. See § 1.1474–1(i)(2).(D) Special Reporting Obligation. If WTis not a participating FFI, a registereddeemed-compliant FFI, or a registereddeemed-compliant Model 1 IGA FFI, andWT is not required to report with respectto a U.S. beneficiary of WT on Form3520–A, then WT must report with re-spect to such beneficiary on Form 8966 asrequired under this section 6.05(D). Abeneficiary for this purpose means a ben-eficiary that receives a distribution fromWT during the year or that is required toinclude an amount in gross income undersections 652(a) or 662(a) with respect toWT.

Section 7. ADJUSTMENTS FOROVER- ANDUNDERWITHHOLDING; REFUNDS

Sec. 7.01. Adjustments for Chapter 3 or4 Overwithholding by WT. WT maymake an adjustment for amounts paid toits beneficiaries or owners when WT hasoverwithheld under chapter 3 or 4 by ap-plying either the reimbursement proce-dure described in section 7.01(A) of thisAgreement or the set-off procedure de-scribed in section 7.01(B) of this Agree-ment within the time period prescribed forthose procedures.(A) Reimbursement Procedure. WT mayrepay its beneficiaries or owners for anamount overwithheld under chapter 3 or 4and reimburse itself by reducing, by theamount of tax actually repaid to the ben-eficiaries or owners, the amount of anysubsequent deposit of tax required to bemade by WT under section 3.05 of thisAgreement. For purposes of this section7.01(A), an amount that is overwithheldshall be applied in order of time (i.e.,sequentially) to each of WT’s subsequentdeposit periods in the same calendar yearto the extent that the withholding taxesrequired to be deposited for a subsequentdeposit period exceed the amount actuallydeposited. An amount overwithheld in acalendar year may be applied to depositperiods in the calendar year following thecalendar year of overwithholding onlyif—(1) The repayment occurs before the ear-lier of the due date (without regard toextensions) for filing Form 1042–S for thecalendar year of overwithholding or the

date that the Form 1042–S is actually filedby WT with the IRS;(2) WT states on a Form 1042–S (issued,if applicable, to the beneficiary or owneror otherwise to a chapter 3 or 4 reportingpool) filed by March 15 of the calendaryear following the calendar year of over-withholding, the amount of tax withheldand the amount of any actual repayments;and(3) WT states on a Form 1042, filed byMarch 15 of the calendar year followingthe calendar year of overwithholding, thatthe filing of the Form 1042 constitutes aclaim for credit in accordance with§ 1.6414–1.(B) Set-Off Procedure. WT may repay itsbeneficiaries or owners by applying theamount overwithheld against any amountwhich otherwise would be required underchapter 3 or 4 to be withheld from apayment made by WT before the earlier ofMarch 15 of the calendar year followingthe calendar year of overwithholding orthe date that the Form 1042–S is actuallyfiled with the IRS. For purposes of makinga return on Form 1042 or Form 1042–Sfor the calendar year of overwithholding,and for purposes of making a deposit ofthe amount withheld, the reduced amountshall be considered the amount required tobe withheld from such income underchapter 3 or 4.Sec. 7.02. Collective Credit or RefundProcedures for Chapter 3 or 4 Over-withholding. If WT has made a PR elec-tion and there has been overwithholding(as defined in section 2.52 of this Agree-ment) on amounts paid to WT’s directbeneficiaries or owners during a calendaryear and the amount of overwithholdinghas not been recovered under the reim-bursement or set-off procedures as de-scribed in section 7.01 of this Agreement,WT may request a credit or refund of thetotal amount overwithheld by followingthe procedures of this section 7.02. WTshall follow the procedures set forth undersections 6402 and 6414, and the regula-tions thereunder, to claim the credit orrefund. No credit or refund will be al-lowed after the expiration of the statutoryperiod of limitation for refunds under sec-tion 6511. If there has been overwithhold-ing and WT does not apply for a collectiverefund, it must provide a Form 1042–S forthe payment that was subject to the over-


withholding if requested by the benefi-ciary or owner receiving the payment.(A) Payments for which a Collective Re-fund is Permitted. Except as otherwiseprovided in this section 7.02, WT may usethe collective refund procedure of thissection 7.02 with respect to all amountssubject to chapter 3 or 4 withholding thatWT has withheld under this Agreement.With respect to amounts withheld underchapter 3 or 4, WT shall not include in itscollective refund claim any amounts with-held on payments made to an indirect ben-eficiary or owner or a direct accountholder of WT that is a passthrough bene-ficiary or owner. Further, with respect toamounts withheld under chapter 4, if WTis a participating FFI or registereddeemed-compliant FFI, WT shall not in-clude in its collective refund claim anyamounts withheld on payments made toany beneficiary or owner that is an ac-count holder described in the FFI agree-ment or in § 1.1471–4(h)(2).(B) Requirements for a Collective Refund.(1) WT may use the collective refund pro-cedures under this section 7.02 only if WThas not issued (and will not issue) Forms1042–S to the beneficiaries or owners thatwere subject to overwithholding and forwhich a collective refund claim is beingmade.(2) WT must submit, together with itsamended Form 1042 on which it providesa reconciliation of amounts withheld and aclaim for credit or refund, a statement thatincludes the following information andrepresentations—(i) The reason(s) for the overwithholding;(ii) WT deposited the tax for which arefund is being sought under section 6302and WT has not applied the reimburse-ment or set-off procedures of §§ 1.1461–2and 1.1474–2 to adjust the tax withheld towhich the claim relates;(iii) WT has repaid or will repay theamount for which a refund is sought to theappropriate beneficiaries or owners;(iv) WT retains a record showing the totalamount of tax withheld, adjustments forunderwithholding, and reimbursementsfor overwithholding as it relates to eachbeneficiary or owner and also showing therepayment (if applicable) to such benefi-ciaries or owners for the amount of tax forwhich a refund is being sought;(v) WT retains valid documentation that

meets the requirements of chapter 3 or 4(as applicable) to substantiate the amountof overwithholding with respect to eachbeneficiary or owner for which a refund isbeing sought; and(vi) WT has not issued (and will not issue)a Form 1042–S (or such other form as theIRS may prescribe) to any beneficiary orowner with respect to the payments forwhich a refund is being sought.Sec. 7.03. Adjustments for Chapter 3 or4 Underwithholding. If WT knows thatan amount should have been withheld un-der chapter 3 or 4 from a previous pay-ment made to a beneficiary or owner andthe amount was not withheld, WT mayeither withhold from future paymentsmade pursuant to chapter 3 or chapter 4 tothe same beneficiary or owner or satisfythe tax from the beneficiary’s or owner’sproportionate share of assets over whichWT has control. The additional withhold-ing or satisfaction of the tax owed de-scribed in the previous sentence must bemade before the due date (not includingextensions) of the Form 1042 for the cal-endar year in which the underwithholdingoccurred.Sec. 7.04. Chapter 3 or 4 Underwith-holding after Form 1042 Filed. If, after aForm 1042 has been filed for a calendaryear, WT, WT’s reviewer, or the IRS de-termines that WT has underwithheld taxunder chapter 3 or 4 for such year, WTshall file an amended Form 1042 to reportand pay the underwithheld tax. WT shallpay the underwithheld tax, the interest dueon the underwithheld tax, and any appli-cable penalties, at the time of filing theamended Form 1042. If WT fails to file anamended return, the IRS shall make suchreturn under section 6020 and assess suchtax under the procedures set forth in theCode.

Section 8. COMPLIANCEPROCEDURES

Sec. 8.01. In General.(A) In General. WT must adopt a compli-ance program under the authority of aresponsible officer. WT’s compliance pro-gram must include policies, procedures,and processes sufficient for WT to satisfythe documentation, reporting, and with-holding requirements of this Agreementand sufficient for the responsible officer ofWT to make the certifications required

under section 8.03 of this Agreement. Seesection 2.66 of this Agreement for thedefinition of responsible officer. WT mustalso perform or arrange for the perfor-mance of the periodic review described insection 8.04 of this Agreement to the ex-tent required by that section. As part of theresponsible officer’s certification, WTmust provide to the IRS the factual infor-mation as required by and referenced insections 8.04 and 8.05 of this Agreementand in the Appendix to this Agreement.WT must also satisfy the requirements ofsection 8.06 of this Agreement with re-spect to the report of the periodic reviewand must comply with the IRS reviewreferenced in section 8.07 of this Agree-ment.(B) Coordination with FATCA Require-ments as a Participating FFI, RegisteredDeemed-Compliant FFI, or RegisteredDeemed-Compliant Model 1 IGA FFI. Asa condition for maintaining this Agree-ment, WT must maintain its chapter 4status. Therefore, WT must, as part of thecompliance procedures described in thissection 8, determine whether it is compli-ant with its FATCA requirements as aparticipating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI.Sec. 8.02. Compliance Program.(A) Responsible Officer. WT must appointan individual as the responsible officer (asdefined in section 2.66 of this Agree-ment). The responsible officer must beidentified on the QI/WP/WT Applicationand Accounts Management System as theWT’s responsible officer, and such personmay, but is not required to, be the sameresponsible officer as for purposes ofcompliance with WT’s FATCA require-ments as a participating FFI, registereddeemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI. Theresponsible officer must establish a com-pliance program that meets the require-ments of this section 8.02 and must makethe periodic certifications to the IRS de-scribed in section 8.03 of this Agreement.The responsible officer of WT must be thetrustee of WT or an agent of the trustee ofWT with sufficient authority to fulfill theduties of a responsible officer described inthis section 8.02. The responsible officer(or a delegate appointed by the responsi-ble officer) must also serve as the point of


contact for the IRS for all issues related tothis Agreement and for complying withIRS requests for information or additionalreview procedures under section 8.07 ofthis Agreement. References in this section8.02 to the responsible officer include aresponsible officer’s designee, where ap-propriate.(B) Compliance Program. The responsi-ble officer must establish a program forWT to comply with the requirements ofthis Agreement that includes the follow-ing:(1) Written Policies and Procedures. Theresponsible officer must ensure the draft-ing and updating, as necessary, of writtenpolicies and procedures sufficient for WTto satisfy the documentation, withholding,reporting, and other obligations of thisAgreement. Such written policies and pro-cedures must include a process for an em-ployee of the trustee or an agent of thetrustee of WT to raise issues to the respon-sible officer that concern WT’s compli-ance with this Agreement.(2) Training. The responsible officer mustcommunicate such policies and proce-dures to persons responsible for obtaining,reviewing, and retaining a record of doc-umentation under the requirements of sec-tion 4 of this Agreement, making distri-butions and allocations to beneficiaries orowners on behalf of WT that are subject towithholding under section 3 of this Agree-ment, or reporting distributions or alloca-tions to beneficiaries or owners under sec-tion 6 of this Agreement.(3) Systems. The responsible officer mustensure that systems and processes are inplace that will allow WT to fulfill its ob-ligations under this Agreement. For exam-ple, in order to fulfill WT’s obligations toreport on Forms 1042–S, 3520–A and8966 under section 6 of this Agreement,WT must establish systems for document-ing beneficiaries or owners and for record-ing the information with respect to eachsuch beneficiary or owner that WT is re-quired to report under that section.(4) Monitoring of Business Changes. Theresponsible officer must monitor businesspractices and arrangements that affectWT’s compliance with this Agreement,including, for example, changes in WT’sbeneficiaries or owners that give rise todocumentation, withholding, or reportingobligations under this Agreement.

(5) Periodic Review. Unless WT receivesa waiver (the requirements of which aredescribed in section 8.07 of this Agree-ment), the responsible officer must desig-nate a reviewer that meets the qualifica-tions described in section 8.04(A) of thisAgreement to perform the periodic reviewdescribed in section 8.05 of this Agree-ment, to the extent required.(6) Certification of Internal Controls. Theresponsible officer must make the certifi-cation of internal controls as described insection 8.03 of this Agreement, includingensuring that corrective actions are takenin response to any material failures.Sec. 8.03. Certification of Internal Con-trols by Responsible Officer. WT’s re-sponsible officer must make the applica-ble certification of compliance describedin either Part II.A (Certification of Effec-tive Internal Controls) or Part II.B (Qual-ified Certification) of the Appendix to thisAgreement and must disclose any materialfailures that occurred during the certifica-tion period or during any prior period ifthe material failure was not disclosed aspart of a prior certification or written dis-closure made by WT to the IRS. If theresponsible officer has identified an eventof default or a material failure that has notbeen corrected as of the date of the certi-fication, the responsible officer cannotmake the certification in Part II.A (Certi-fication of Effective Internal Controls)and must make the certification in PartII.B (Qualified Certification) of the Ap-pendix to this Agreement. All WTs mustalso complete Parts II.C through II.F ofthe Appendix to this Agreement.The certification of internal controls re-quired by this section 8.03 applies only tothe internal controls related to WT’s com-pliance with this Agreement and itsFATCA requirements as a participatingFFI, registered deemed-compliant FFI, orregistered deemed-compliant Model 1IGA FFI and does not relate to any otherobligations or requirements. In making thecertification required by this section 8.03,the responsible officer may rely on, inaddition to the results of the periodic re-view, any reasonable procedures, pro-cesses, reviews, or certifications made byother persons that the responsible officerhas determined are necessary in order tomake the certification described in thissection 8.03. If the responsible officer re-

lies on an internal or external review forthis purpose (i.e., for purposes of deter-mining whether WT has effective internalcontrols), the internal or external reviewermust be independent, as described in sec-tion 8.04 of this Agreement. The respon-sible officer must document the proce-dures, processes, reviews, or certificationsrelied upon in making the certification.WT’s responsible officer must make thecertifications of compliance in such man-ner as the IRS may prescribe.(A) Partnerships or Trusts to which WTApplies the Agency Option. Any partner-ship or trust to which WT applies theagency option must provide its documen-tation and other information to WT forinclusion in WT’s periodic review or con-duct an independent periodic review andprovide a written certification to WT re-garding its compliance with the require-ments of the agency agreement. Such cer-tification must be available to the IRSupon a request made as part of the reviewdescribed in section 8.07 of this Agree-ment (with a certified translation into Eng-lish if the certification is not in English).(B) Material Failures.(1) Material Failures Defined. A materialfailure is generally a failure of WT tofulfill the requirements of this Agreementor its FATCA requirements as a partici-pating FFI, registered deemed-compliantFFI, or registered deemed-compliantModel 1 IGA FFI. For purposes of thecertifications described in Parts II.A andII.B of the Appendix to this Agreement, amaterial failure is limited to the following:(i) WT’s establishing of, for financialstatement purposes, a tax reserve or pro-vision for a potential future tax liabilityrelated to WT’s failure to comply withthis Agreement, including its FATCA re-quirements as a participating FFI, regis-tered deemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI;(ii) WT’s failure to establish written pol-icies, procedures, or systems sufficient forthe relevant personnel of WT to take ac-tions consistent with WT’s obligations un-der this Agreement;(iii) A criminal or civil penalty or sanctionimposed on WT by a regulator or othergovernmental authority or agency withoversight over WT’s compliance with theAML/KYC procedures, if applicable, towhich WT is subject and that is imposed


due to WT’s failure to properly identifybeneficiaries or owners under the require-ments of those procedures; or(iv) A finding (including a finding noted inthe reviewer’s periodic review report de-scribed in section 8.06 of this Agreement)that, for one or more years covered by thisAgreement, WT failed to —(a) Withhold an amount that WT was re-quired to withhold under chapter 3 or 4 asrequired under section 3 of this Agreement;(b) Make deposits in the time and mannerrequired by section 3.05 of this Agree-ment or make adequate deposits to satisfyits withholding obligations, taking into ac-count the procedures under section 7 ofthis Agreement; or(c) Report accurately on Forms 1042,1042–S, 8966(or similar report of U.S.reportable accounts as required under aModel 1 IGA), 3520–A, and the OwnerStatements and Beneficiary Statementsthat are part of Form 3520–A, as requiredunder section 6 of this Agreement.(2) Limitations on Material Failures. Afailure described in section 8.03(B)(1)(iv)of this Agreement is a material failureonly if the failure was the result of adeliberate action on the part of WT’strustee or one or more employees oragents of WT’s trustee to avoid the re-quirements of this Agreement or WT’sFATCA requirements as a participatingFFI, registered deemed-compliant FFI, orregistered deemed-compliant Model 1IGA FFI with respect to one or morebeneficiaries or owners of WT, or was anerror attributable to a failure of WT toestablish or implement internal controlsnecessary for WT to meet the require-ments of this Agreement. Regardless ofthese limitations for the certifications de-scribed in sections 8.03(A) and (B) of thisAgreement, WT is required to correct afailure to withhold or deposit tax undersection 3 of this Agreement or to reportunder section 6 of this Agreement.(C) Certification Period and CertificationDue Date.(1) Certification Due Date. For a WT thatuses the last year of the certification pe-riod for its periodic review, the certifica-tion is due on or before December 31 ofthe calendar year following the end of thecertification period. For a WT that uses ayear other than the last year of the certi-fication period for its periodic review, the

certification is due on or before July 1 ofthe year following the certification period.(2) Certification Period. The initial certi-fication period is the period beginning onthe effective date of the WT agreementand ending on the third full calendar yearthat this Agreement is in effect (includingrenewals of this Agreement). Subsequentcertification periods will be every threecalendar years following the initial certi-fication period (including renewals of thisAgreement).(3) FATCA Certifications. The certifica-tion period described in section 8.03(C)(2)of this Agreement may not be the same asthe certification period (if any) applicableto WT’s FATCA requirements as a par-ticipating FFI or registered deemed-compliant FFI. WT is required to makethe certification required under itsFATCA requirements as a participatingFFI or registered deemed-compliant FFIat the time and in the manner specified insuch requirements.Sec. 8.04. Periodic Review.(A) Independent Reviewer. The periodicreview may be performed by an internalreviewer (such as an internal auditor) thatis an employee or agent of the trustee ofWT (internal reviewer) or a certified pub-lic accountant, attorney, or third-partyconsultant (external reviewer), or anycombination thereof.(1) Internal Reviewer. WT may designatean internal reviewer to perform the peri-odic review (or a portion of the periodicreview) only when the internal reviewer iscompetent with respect to the require-ments of this Agreement. The internal re-viewer must also be able to report findingsthat reflect the independent judgment ofthe reviewer. The internal reviewer mustnot be reviewing its own work, proce-dures, or results (e.g., the internal re-viewer reviewing WT’s documentationcannot be part of the team primarily re-sponsible for collecting and validatingdocumentation). The results of the peri-odic review and the internal reviewer’sreporting of such results to the responsibleofficer cannot influence or affect the com-pensation, bonus, employment status, oremployee review of the internal reviewer.The IRS has the right to request the per-formance of the periodic review by analternative reviewer if the IRS, in its solediscretion, reasonably believes that the re-

viewer selected by WT was not indepen-dent, as described in this Agreement, ordid not perform an effective periodic re-view under this Agreement.(2) External Reviewer. WT may engagean external reviewer that is a certifiedpublic accountant, attorney, or third-partyconsultant that is regularly engaged in thepractice of performing reviews of clients’policies, procedures, and processes forcomplying with accounting, tax, or regu-latory requirements (including for assist-ing clients in determining such compli-ance). The external reviewer cannot bereviewing systems, policies, or proceduresor the results thereof that it (or the firmwith which it is affiliated) was involved indesigning, implementing, or maintaining.The external reviewer must be in goodstanding with and comply with any appli-cable professional standards for maintain-ing its license as an accountant or attorney(or other third-party consultant that hassimilar professional standards or require-ments). The external reviewer is not re-quired to make an attestation or render anopinion regarding WT’s compliance withthis Agreement or WT’s compliance withits FATCA requirements as a participatingFFI, registered deemed-compliant FFI, orregistered deemed-compliant Model 1IGA FFI, but the reviewer must be able toperform the periodic review as specifiedin section 8.05 of this Agreement. WTmust permit the external reviewer accessto all relevant records of WT for purposesof performing the review, including infor-mation regarding specific beneficiaries orowners. Additionally, the engagement be-tween the external reviewer and WT mustimpose no restrictions on WT’s ability toprovide the results of the review to theIRS. However, the external reviewer isnot required to divulge the identity ofWT’s foreign beneficiaries or owners tothe IRS, except as otherwise required un-der WT’s FATCA requirements as aparticipating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. WT mustpermit the IRS to communicate directlywith the external reviewer and any legalprohibitions that prevent the IRS fromcommunicating directly with the reviewermust be waived.Sec. 8.05. Scope and Timing of Review.The responsible officer of WT must re-


quire the reviewer to review WT’s docu-mentation, withholding, reporting, andother obligations under this Agreementand its FATCA requirements as a partic-ipating FFI, registered deemed-compliantFFI, or registered deemed-compliant Model1 IGA FFI, and identify deficiencies inmeeting these obligations. To the extentWT applies the joint account option withrespect to another partnership or trust asdescribed in section 9.01 of this Agree-ment or acts as a withholding foreign trustfor any indirect beneficiaries or owners asdescribed in section 9.03 of this Agree-ment, the review must include such indi-rect partners, beneficiaries, or owners inaddition to WT’s direct beneficiaries orowners. In addition, if WT applies theagency option to a partnership or trust asdescribed in section 9.02 of this Agree-ment, the review must include the part-ners, beneficiaries, or owners of such part-nership or trust unless the partnership ortrust conducts its own review in accor-dance with this section 8 of this Agree-ment and provides the responsible officerof WT with the report documenting theresults of such review as described in sec-tion 8.06 of this Agreement. Unless oth-erwise approved by the IRS, the reviewmust include the steps described in sec-tions 8.05(A) through (D) of this Agree-ment. WT is required to arrange for theperformance of one review for the certifi-cation period to evaluate WT’s documen-tation, withholding, and reporting prac-tices. The review may be conducted forany calendar year covered by the certifi-cation period. WT may conduct a reviewfor a particular calendar year if, on the duedate for reporting the factual informationrelating to the periodic review (providedin section 8.04 of this Agreement), thereare 15 or more months available on theperiod for assessment under section6501(a) of the calendar year for which thereview is to be conducted or the WT sub-mits, upon request, a Form 872, Consentto Extend the Time to Assess Tax, thatwill satisfy the 15-month requirement.The Form 872 must be submitted to theIRS at the address provided in section11.06 of this Agreement.If WT has more than 60 beneficiaries orowners for which WT acts for the year ofthe periodic review, WT’s reviewer mayuse statistical sampling procedures for the

periodic review if the reviewer applies theprinciples set forth in Appendix II to theQI Agreement in Revenue Procedure2017–15, 2017–03 I.R.B. 437.If the reviewer determines that underwith-holding has occurred, WT shall pay anyamount determined and report both theunderwithholding determined by the re-view and any amount of underwithholdingthat was cured following the review byobtaining the documentation required tosupport reduced withholding by WT(without regard to projection if statisticalsampling is used for the review). WT mustalso notify the IRS Foreign IntermediariesProgram at the address provided in section11.06 of this Agreement of the underwith-holding discovered as a result of the re-view within 30 days of the completion ofthe review.(A) Documentation. The reviewer must—(1) Review information contained in doc-umentation obtained for WT’s beneficia-ries or owners and any correspondence ormemoranda associated with the beneficia-ries or owners (the beneficiaries’ or own-ers’ files) to ensure that WT obtained doc-umentation that meets the requirementsdescribed in section 4 of this Agreement(including the treaty statements and limi-tation on benefits information required bysection 4.03(B) of this Agreement forpartners making treaty claims);(2) Review information contained in thebeneficiaries’ or owners’ files to deter-mine if the documentation validity stan-dards of section 4.10 of this Agreementhave been met. For example, the reviewermust verify that WT is withholding at thecorrect rate after any change in circum-stances (e.g., a change of address to a U.S.address or change of account holder statusfrom foreign to U.S. or change of accountholder status from foreign to U.S. or achange in chapter 4 status from participat-ing FFI to nonparticipating FFI); and(3) Review WT’s beneficiaries’ or own-ers’ files to ensure that WT is obtaining,reviewing, and maintaining documenta-tion in accordance with its FATCA re-quirements as a participating FFI, regis-tered deemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI.(B) Withholding Responsibilities. The re-viewer must—(1) Perform test checks of WT’s directbeneficiaries or owners that are recalci-

trant account holders (if applicable) andnonparticipating FFIs to verify that WT iswithholding as required under chapter 4;(2) Perform test checks of foreign benefi-ciaries or owners for which no withhold-ing is required under chapter 4 based onthe beneficiary’s or owner’s chapter 4 sta-tus to verify that WT withheld the properamounts; and(3) Verify that amounts withheld by WTwere timely deposited in accordance withsection 3.05 of this Agreement.(C) Return Filing and Information Re-porting. The reviewer must—(1) Obtain copies of original and amendedForms 1042, and any schedules, state-ments, or attachments required to be filedwith those forms, and verify that the formshave been filed and determine whether theamounts of income, taxes, and other in-formation reported on those forms are ac-curate by—(i) Reviewing copies of Forms 1042–Sreceived from withholding agents for rec-onciling amounts received by WT withthe amounts distributed to, or included inthe distributive share of, WT’s beneficia-ries or owners;(ii) Reviewing account statements andcorrespondence from withholding agents;(iii) Determining that adjustments to theamount of tax shown on Form 1042 (andany claim by WT for refund or credit)properly reflect the adjustments to with-holding made by WT using the reimburse-ment or set-off procedures under section 7of this Agreement and that the adjust-ments are supported by sufficient docu-mentation;(iv) Reconciling amounts shown on Forms1042 with amounts shown on Form1042–S (including the amount of taxesreported as withheld); and(v) In the case of collective credits orrefunds, reviewing the statements attachedto the amended Forms 1042 filed to claima collective credit or refund, determinewhether those forms are accurate, and—(a) Determining the causes of any over-withholding reported and ensure WT didnot issue Forms 1042–S to beneficiaries orowners that were included as part of itscollective credit or refund claim;(b) Determining that WT repaid the ap-propriate beneficiaries or owners and thatthe amount of the claim is accurate and


supported by adequate documentation forreducing the rate of withholding; and(c) Determining that WT did not includepayments made to a beneficiary or ownerdescribed in section 7.02(A) of thisAgreement or a partnership or trust de-scribed in section 9.01 of this Agreement.(2) Obtain copies of original and amendedForms 1042–S, 3520–A, and the OwnerStatements and Beneficiary Statementsfiled by WT together with the work papersused to prepare those forms and determinewhether the amounts reported on thoseforms are accurate by—(i) Reviewing the Forms 1042–S receivedfrom withholding agents;(ii) Reviewing the Form 3520–A, if re-quired, and if no Form 3520–A was re-quired to be filed, determining whether theexemption from filing was properly ap-plied;(iii) Reviewing Owner Statements andBeneficiary Statements issued by WT tobeneficiaries or owners, if any;(iv) Reconciling any payments and taxreported on Forms 1042–S received fromwithholding agents with amounts (includ-ing characterization of income) and taxesreported by WT as withheld on Forms1042–S and determining the reason(s) forany variance; and(v) Determining, in any case in which WTutilized the reimbursement or set-off pro-cedure, that WT satisfied the requirementsof section 7 of this Agreement and that theadjusted amounts of tax withheld areproperly reflected on Forms 1042–S.(3) Obtain copies of original and amendedForm 8966 (or, if WT is a reporting Model1 FFI, any analogous forms used for re-porting account information pursuant toan applicable Model 1 IGA), and deter-mine whether the amounts of income andother information reported on Form and8966 are accurate by—(i) Reviewing the U.S. beneficiaries andowners of WT (including beneficiariesholding U.S. accounts (or U.S. reportableaccounts)) to determine—(a) That such accounts were reported onForm 8966 (or, if WT is a reporting Model1 FFI, any analogous forms used for re-porting account information pursuant toan applicable Model 1 IGA) in accordancewith WT’s FATCA requirements as a par-ticipating FFI, registered deemed-

compliant FFI, or registered deemed-compliant Model 1 IGA FFI; and(b) That U.S. beneficiaries otherwise re-quired to be reported on Form 8966 (or, ifWT is a reporting Model 1 FFI, any anal-ogous forms used for reporting accountinformation pursuant to an applicableModel 1 IGA) under section 6.05(D) ofthis Agreement are so reported;(ii) If WT is an NFFE, confirming that anydirect beneficiaries or owners that are pas-sive NFFEs with one or more substantialU.S. owners were reported in accordancewith § 1.1472–1(c)(3);(iii) Confirming with respect to any pass-through beneficiary or owner that pro-vides information regarding an accountholder (or interest holder) that is an NFFE(other than an excepted NFFE) with oneor more substantial U.S. owners that suchsubstantial U.S. owners were reported tothe extent required under section 6.05(C)of this Agreement;(iv) Reviewing the documentation pro-vided by a partnership or trust to whichWT applied the agency option, confirmingthat WT reported on Form 8966 (or, if WTis a reporting Model 1 FFI, any analogousforms used for reporting account informa-tion pursuant to an applicable Model 1IGA) to the extent required under section9 of this Agreement; and(v) Reviewing work papers used to pre-pare these forms.(D) Significant Change in Circumstances.The reviewer must verify that in thecourse of the review it has not discoveredany significant change in circumstances,as described in section 10.04(A), (D), or(E) of this Agreement.Sec. 8.06. Periodic Review Report.(A) In General. The results of the periodicreview must be documented in a writtenreport addressed to the responsible officerof WT and must be available to the IRSupon request (with a certified translationinto English if the report is not in Eng-lish). The report must describe the scopeof the review and the actions performed tosatisfy each requirement of section8.05(A) through (D). The report may in-clude explanatory footnotes to clarify theresults of the report. Recommendationsmay be included but are not required to beprovided in the report. The periodic re-view report should form the basis for thefactual information provided by WT that

is set forth in the Appendix to this Agree-ment.In addition to the findings of section 8.05of this Agreement, the periodic reviewreport must also include details regardingthe documentation and tax deposit andpayment failures identified by the re-viewer but then cured before the periodicreview report is finalized. While the cur-ing of inadequate documentation is per-missible, the factual information reported(as set forth in the Appendix to thisAgreement) should report the results ofthe review as it was performed and shouldnot reflect the results after curing. Anycuring process should not delay certifica-tion of internal controls or factual infor-mation required in the Appendix to thisAgreement. To the extent necessary, theperiodic review report should include thedates on (or time period during) whichcurative documentation was received forbeneficiaries or owners with respect towhich the reviewer determined that under-withholding had occurred, the number ofbeneficiaries or owners for which curativedocumentation was obtained, and a re-vised calculation of the underwithholding.(B) Partnership or Trust to which WTApplies the Agency Option. Any partner-ship or trust to which WT applies theagency option and that does not providedocumentation and other information toWT for inclusion in WT’s periodic reviewdescribed in section 8.04 of this Agree-ment must conduct an independent peri-odic review in accordance with the com-pliance procedures described in section8.05 of this Agreement. The performanceresults of the periodic review must bedocumented in a written report addressedto the responsible officer of WT and mustbe available to the IRS upon request (witha certified translation into English if thecertification is not in English).(C) Retention of Report and Certifica-tions. The report and certifications de-scribed in this section 8.06 must be re-tained by WT for as long as thisAgreement is in effect (including renew-als of this Agreement).Sec. 8.07. Waiver of Periodic ReviewRequirement.(A) In General. A WT that is an FFI thatmeets the requirements of section 8.07(B)of this Agreement may apply for a waiverof the periodic review requirement. The


waiver application is set forth in Part III ofthe Appendix to this Agreement. WT mustinclude the information of any partnershipor trust to which WT applies the agencyoption in its waiver application. WT mustrequest a waiver under this section 8.07 atthe time the responsible officer makes thecertification described in section 8.03 ofthis Agreement. WT’s request for such awaiver must be approved by the IRS, andwaiver requests are not approved automat-ically. If WT’s request for a waiver isapproved, such approval is only to waiveWT’s obligations under sections 8.04 and8.05 of this Agreement, and WT is stillrequired to make the certification de-scribed in section 8.03 of this Agreement.The waiver does not preclude the IRSfrom requesting information or conduct-ing a correspondence review as describedin section 8.08 of this Agreement. WTmust apply for a waiver for each certifi-cation period for which a waiver is re-quested.(B) Eligibility. WT is eligible to apply fora waiver of the periodic review require-ment if it meets the following require-ments—(1) WT must be an FFI;(2) For each calendar year covered by thecertification period, the reportable amountsreceived by WT cannot exceed $1 million;(3) WT must have timely filed its Forms1042, 1042–S, and 8966 (or the reportingrequired under an applicable IGA), and3520–A, as applicable, for all years (fiscalor calendar) in the certification period;(4) WT must have made all periodic cer-tifications and reviews required by sec-tions 8.02 and 8.03 of this Agreement foreach certification period, as well as anycertifications required pursuant to WT’sFATCA requirements as a participatingFFI or registered deemed-compliant FFI;and(5) WT must make the certification ofeffective internal controls described inPart II.A of the Appendix to this Agree-ment for the certification period for whichWT is applying for a waiver of the peri-odic review.(C) Documentation Required with WaiverApplication. When applying for a waiverunder this section 8.07, WT must includethe information described in Part III.B ofthe Appendix to this Agreement using themost recent calendar year in the certifica-

tion period for which filing is due andreporting such results without any curingor remediation.(D) Approval. If WT’s request for awaiver of the periodic review requirementis approved, the IRS will notify WT. IfWT requests a waiver but such request isnot approved, WT will be granted a sixmonth extension from the date of denial ofthe waiver to complete the periodic re-view under sections 8.04 and 8.05 of thisAgreement. Such extension will not begranted if WT has made the request forwaiver in bad faith.Sec. 8.08. IRS Review.(A) In General. Based upon the certifica-tions made by the responsible officer anddisclosure of material failures, the infor-mation reported on Forms 1042, 1042–S,8966, 3520–A and the Owner Statementsand Beneficiary Statements filed with theIRS during the certification period, or oth-erwise at the IRS’s discretion for compli-ance purposes, the IRS may initiate re-quests of WT under this section 8.08. TheIRS may request remediation or the con-duct of a limited periodic review earlierthan the time period provided in this sec-tion if, based on the information describedabove, the IRS identifies, in its discretion,a presence of factors indicating systemicor significant compliance failures by WT.The IRS may also request that WT desig-nate a replacement responsible officer ifWT’s responsible officer has not compliedwith its responsibilities (including re-sponding to requests by the IRS for addi-tional information) or the IRS has infor-mation that indicates the responsibleofficer may not be relied upon to complywith its responsibilities.(B) Periodic Review Report. The IRS mayrequest through written correspondence tothe responsible officer of WT a copy ofthe results of WT’s periodic review forany prior certification period or the peri-odic review report of any partnership ortrust to which WT applied the agencyoption during the current certification pe-riod (with a certified translation into Eng-lish if the report is not in English). WT isrequired to provide the results within 30calendar days of such request.(C) Correspondence Review. The IRSmay, in its discretion, conduct additionalfact finding through a correspondence re-view. In such a review, the IRS will con-

tact the responsible officer of WT in writ-ing and request information about WT’scompliance with this Agreement or thecompliance of a partnership or trust towhich WT applied the agency option, in-cluding, for example, information aboutdocumentation, withholding, or reportingprocesses, its periodic review, and infor-mation about any material failures thatwere disclosed to the IRS (including re-mediation plans). The IRS may requestphone or video interviews with relevantpersonnel of WT or a partnership or trustto which WT applied the agency option aspart of such review. WT is required torespond within a reasonable period oftime to any such requests.(D) Additional Review Procedures. Inlimited circumstances, the IRS may directWT or any partnership or trust describedin section 9.02 of this Agreement to whichWT applies the agency option to performadditional, specified review procedures.The IRS reserves the right to require WTor a partnership or trust to which WTapplied the agency option to engage anexternal reviewer to perform the addi-tional review procedures regardless ofwhether such reviewer performed the pe-riodic review. The IRS will provide theresponsible officer of WT with a writtenplan describing the additional review pro-cedures and will provide a period of notmore than 120 days within which the WTmust provide to the IRS a report coveringthe reviewer’s findings.

Section 9. CERTAINPARTNERSHIPS AND TRUSTS

Sec. 9.01. Joint Account Treatment forCertain Partnerships and Trusts.(A) In General. WT may enter an agree-ment with a nonwithholding foreign part-nership or nonwithholding foreign trustthat is either a simple or grantor trustdescribed in this section 9.01(A) to applythe simplified joint account documenta-tion, reporting, and withholding proce-dures provided in section 9.01(B) of thisAgreement. WT and the partnership ortrust that apply this section 9.01 to anycalendar year must apply these rules to thecalendar year in its entirety. WT and thepartnership or trust may not apply thissection 9.01 to any calendar year in whichthe partnership or trust has failed to makeavailable to WT or WT’s reviewer the


records described in section 9.01(A)(5) ofthis Agreement within 90 days after theserecords are requested and the partnershipor trust must waive any legal prohibitionsagainst providing such records to WT. Ifthe partnership or trust has failed to makethese records available within the 90-dayperiod, or if WT and the partnership ortrust fail to comply with any other require-ments of this section 9.01, WT must applythe provisions of §§ 1.1441–1 and1.1441–5 to the partnership or trust as anonwithholding foreign partnership ornonwithholding foreign trust, must correctits withholding for the period duringwhich the failure occurred in accordancewith section 7.03 of this Agreement, andcannot apply this section 9.01 to subse-quent calendar years. WT and the partner-ship or trust that apply this section 9.01 toany calendar year are not required to ap-ply this section 9.01 to subsequent calen-dar years.A partnership or trust is described in thissection 9.01(A) if the following condi-tions are met.(1) The partnership or trust has a chapter 4status as a certified deemed-compliantFFI, an owner-documented FFI with re-spect to WT, an exempt beneficial owner,or an NFFE, and has provided WT with acertification that it has maintained suchchapter 4 status at all times during eachcertification period;(2) The partnership or trust is a directbeneficiary or owner of WT;(3) None of the partnership’s or trust’spartners, beneficiaries, or owners is aflow-through entity or intermediary;(4) None of the partnership’s or trust’spartners, beneficiaries, or owners is a U.S.person and none of its foreign partners,beneficiaries, or owners is subject to with-holding or reporting under chapter 4 (e.g.,a nonparticipating FFI or certain passiveNFFEs); and(5) The partnership or trust agrees to makeavailable upon request to WT and WT’sreviewer for purposes of WT’s periodicreview under section 8 of this Agreement(including to respond to IRS inquiries re-garding its compliance review) recordsthat establish that the partnership or trusthas provided WT with documentation forpurposes of chapters 3 and 4 for all of itspartners, beneficiaries, or owners.(B) Modification of Obligations for WT.

(1) WT may rely on a valid FormW-8IMY provided by the partnership ortrust and may rely on a withholding state-ment that meets the requirements of§§ 1.1441–5(c)(3)(iv) or (e)(5)(iv) and1.1471–3(c)(3)(iii)(B) (if the payment is awithholdable payment) and that providesinformation for all partners, beneficiaries,or owners together with valid Forms W–8and, for a withholdable payment made toa partner, beneficiary, or owner that is anentity, documentation required under§ 1.1471–3(d) to establish such partner’s,beneficiary’s, or owner’s chapter 4 status.The withholding statement, however,need not provide any allocation informa-tion.(2) WT must treat amounts distributed to,or included in the distributive share of, thepartnership or trust as allocated solely to apartner, beneficiary, or owner that is sub-ject to the highest rate of withholding un-der chapter 3 and must withhold at thatrate.(3) WT may pool report amounts distrib-uted to, or included in the distributiveshare of, the partnership’s or trust’s directpartners, beneficiaries, or owners in WT’schapter 3 reporting pools on Form 1042–Sas described in section 6.02(D) of thisAgreement.(4) After WT has withheld in accordancewith section 9.01(B)(2) of this Agree-ment, it may file a separate Form 1042–Sfor any partner, beneficiary, or owner whorequests that it do so. If WT issues aseparate Form 1042–S for any partner,beneficiary, or owner, it cannot includesuch partner, beneficiary, or owner in itschapter 3 reporting pool. If WT has al-ready filed a Form 1042–S and includedthe partner, beneficiary, or owner in achapter 3 reporting pool, it must file anamended return to reduce the amount ofthe payment reported to reflect the amountallocated to the recipient on the recipient’sspecific Form 1042–S. WT may file aseparate Form 1042–S for a partner, ben-eficiary, or owner only if the partnershipor trust provides a withholding statementthat includes allocation information forthe requesting partner, beneficiary, orowner and only if the partnership or trusthas agreed in writing to make available toWT or WT’s reviewer the records thatsubstantiate the allocation information in-cluded in its withholding statement.

(5) WT may not include any amounts dis-tributed to, or included in the distributiveshare of, a partnership or trust to whichWT is applying the rules of this section9.01 in any collective refund claim madeunder section 7.02 of this Agreement.Sec. 9.02. Agency Option for CertainPartnerships and Trusts.(A) In General. WT may enter an agree-ment with a nonwithholding foreign part-nership or nonwithholding foreign trustthat is either a simple or grantor trustdescribed in section 9.02(A) of thisAgreement under which the partnership ortrust agrees to act as an agent of WT withrespect to its partners, beneficiaries, orowners, and, as WT’s agent, to apply theprovisions of the WT agreement to thepartners, beneficiaries, or owners. By en-tering into an agreement with a partner-ship or trust as described in this section9.02, WT is not assigning its liability forthe performance of any of its obligationsunder the WT agreement. WT and thepartnership or trust to which WT appliesthe rules of this section 9.02 are jointlyand severally liable for any tax, penalties,and interest that may result from the fail-ure of the partnership or trust to meet anyof the obligations imposed by its agree-ment with WT. WT and the partnership ortrust that applies the agency option to anycalendar year must apply these rules to thecalendar year in its entirety. Generally,WT and the partnership or trust that applythe agency option to any calendar year arenot required to apply the agency option tosubsequent calendar years. If, however,WT withholds and reports any adjust-ments required by corrected informationin a subsequent calendar year under sec-tion 9.02(B)(2) of this Agreement, WTmust apply the agency option to that cal-endar year in its entirety.If the partnership or trust is included inWT’s periodic review of compliance asdescribed in section 9.02(A)(6) of thisAgreement, WT and the partnership ortrust may not apply the agency option toany calendar year in which the partnershipor trust has failed to make available to WTor WT’s reviewer the records described inthis section 9.02 within 90 days after theserecords are requested and the partnershipor trust must waive any legal prohibitionsagainst providing such records to the WT.If, for any calendar year, the partnership


or trust has failed to make these recordsavailable within the 90-day period, or ifWT and the partnership or trust fail tocomply with any other requirement of thissection 9.02, WT must apply §§ 1.1441–1and 1.1441–5 to the partnership or trust asa nonwithholding foreign partnership ornonwithholding foreign trust, correct itswithholding for the period in which thefailure occurred in accordance with sec-tion 7.03 of this Agreement, and cannotapply this section 9.02 to subsequent cal-endar years.A partnership or trust is described in thissection 9.02(A) if the following condi-tions are met:(1) The partnership or trust is either adirect beneficiary or owner of WT or anindirect beneficiary or owner of WT thatis a direct partner, beneficiary, or owner ofa partnership or trust to which WT alsoapplies this section 9.02.(2) The partnership or trust has a chapter 4status as a certified deemed-compliantFFI, an owner-documented FFI with re-spect to WT, an NFFE, or an exemptbeneficial owner, and has provided WTwith a certification that it has maintainedsuch chapter 4 status during each certifi-cation period.(3) None of the partnership’s or trust’spartners, beneficiaries, or owners is a WP,WT, participating FFI, registered deemed-compliant FFI, registered deemed-compliant Model 1 IGA FFI, or QI actingas an intermediary for a payment made byWT to the partnership or trust.(4) WT may not act as a withholdingforeign trust with respect to any direct orindirect beneficiary or owner of the part-nership or trust that is a U.S. non-exemptrecipient, unless the U.S. non-exempt re-cipient is an owner of an owner-documented FFI or passive NFFE towhich WT applies the agency option andis included in WT’s U.S. payee pool (de-scribed in section 6.02(C) of this Agree-ment).(5) The partnership or trust agrees to com-ply with the documentation requirementsdescribed in section 4 of this Agreement.(6) The partnership or trust agrees, to theextent necessary for WT to satisfy itscompliance obligations, either to (i) con-duct an independent periodic review inaccordance with the procedures describedin section 8.05 of this Agreement and

provide WT with the certification requiredunder section 8.03 of this Agreement foreach certification period in order to allowthe responsible officer of WT to make acertification to the IRS regarding the part-nership’s or trust’s compliance with thissection 9.02, or (ii) provide WT with doc-umentation or other information for inclu-sion in WT’s periodic review described insection 8.04 of this Agreement. The part-nership or trust must also agree to respond(either directly or through WT) to IRSinquiries regarding its compliance review,as described in section 8.08 of this Agree-ment, including, if applicable, providingthe WT and the IRS with the results of thereviewer’s testing of partners, beneficia-ries, or owners described in section 8.06of this Agreement.(B) Modification of Obligations for WT.(1) WT may rely on a valid FormW–8IMY provided by the partnership ortrust, together with a withholding state-ment described in §§ 1.1441–5(c)(3)(iv)or (e)(5)(iv) and 1.1471–3(c)(3)(iii)(B) (ifthe payment is a withholdable payment)that includes all information necessary forWT to fulfill its withholding, reporting,and filing obligations under this Agree-ment. For a withholdable payment, thewithholding statement may include achapter 4 withholding rate pool (as de-fined in § 1.1471–1(b)(20)) of nonpartic-ipating FFIs for payments of amounts sub-ject to chapter 4 withholding. Thewithholding statement may also includechapter 3 withholding rate pools for part-ners, beneficiaries, or owners that are notintermediaries, flow-through entities (orpersons holding interests in the partner-ship or trust through such entities), U.S.non-exempt recipients, or passive NFFEswith one or more substantial U.S. owners(or one or more controlling persons that isa specified U.S. person under an applica-ble Model 1 or Model 2 IGA), and thepartnership or trust need not provide toWT documentation for these partners,beneficiaries, or owners. Notwithstandingthe preceding sentences of this section9.02(B)(1), the partnership or trust is re-quired to disclose to WT any partner orinterest holder that is a passive NFFE withsubstantial U.S. owners (or controllingpersons that are specified U.S. personsunder an applicable IGA) or that is a U.S.non-exempt recipient as well as the ac-

count holders of any nonqualified inter-mediary or interest holders in a flow-through entity which has an interest in thepartnership or trust, and provide all of thedocumentation and other information re-lating to those account holders and inter-est holders that is required for WT oranother withholding agent to report thepayments made to those account holdersand interest holders to the extent requiredby section 6 of this Agreement.(2) Timing of Withholding. WT must with-hold on the date an amount is distributedto, or included in the distributive share of,the partnership or trust based on a withhold-ing statement provided by the partnership ortrust on which WT is permitted to rely. Theamount allocated to each partner, benefi-ciary, or owner in the withholding statementmay be based on a reasonable estimate ofthe partner’s, beneficiary’s, or owner’s dis-tributive share of income subject to with-holding for the year. The partnership or trustmust correct the estimated allocations to re-flect the partner’s, beneficiary’s, or owner’sactual distributive share and must providethis corrected information to WT on theearlier of the date that the statement requiredunder section 6031(b) (i.e., Schedule K–1)or the Owner Statement or BeneficiaryStatement is mailed or otherwise providedto the partner, beneficiary, or owner or thedue date for furnishing the statement(whether or not the partnership or trust isrequired to prepare and furnish the state-ment). If that date is after the due date (with-out regard to extensions) for WT’s Forms1042 and 1042–S for the calendar year, WTmay withhold and report any adjustmentsrequired by correcting the information in thefollowing calendar year.(3) Payments Reportable under Chapters3 and 4. WT shall report on Form 1042–Sall amounts subject to chapters 3 and 4withholding distributed to, or included inthe distributive share of, the partnership ortrust as follows:(i) For a direct partner, beneficiary, orowner of the partnership or trust that is anonparticipating FFI, WT shall report anamount subject to withholding using thechapter 4 reporting pool described in sec-tion 6.02(C) of this Agreement with thepartnership or trust reported as the recip-ient.(ii) For a direct partner, beneficiary, orowner of the partnership or trust that is a


foreign person for which no withholdingis required under chapter 4 (other than anintermediary, agent, or flow-through en-tity described below), WT shall report anamount subject to chapter 3 withholdingusing the chapter 3 reporting pools as de-scribed in section 6.02(D) of this Agree-ment with the partnership or trust reportedas the recipient.(iii) For a direct or indirect partner, ben-eficiary, or owner of the partnership ortrust that is a nonqualified intermediary orflow-through entity, WT shall report pay-ments of amounts subject to chapter 4withholding included in a chapter 4 with-holding rate pool of nonparticipating FFIsusing the chapter 4 reporting pool for suchpartner, beneficiary, or owner with thenonqualified intermediary or flow-throughentity reported as the recipient, and WTshall report payments of amounts subjectto chapter 3 withholding that are not with-holdable payments or are withholdablepayments for which no chapter 4 with-holding is required by reporting the pay-ments as made to specific recipients asdescribed in 6.02(B) of this Agreement.(4) Form 8966 Reporting Requirements. IfWT is an FFI and if the partnership ortrust is a U.S. account (or U.S. reportableaccount), WT is required to report thepartnership or trust consistent with itsFATCA requirements as a participatingFFI, registered deemed-compliant FFI, orregistered deemed-compliant Model 1IGA FFI. The agreement between WT andthe partnership or trust must also providethat WT shall report withholdable pay-ments that the partnership or trust distrib-utes to, or includes in the distributiveshare of, a partner, beneficiary, or ownerthat is an NFFE (other than an exceptedNFFE) with one or more substantial U.S.owners (or one or more controlling per-sons that is a specified U.S. person underan applicable IGA) and is the beneficialowner of the withholdable payment re-ceived by the partnership or trust. WTmust report on Form 8966 in the time andmanner provided in § 1.1474–1(i)(2).Such report must include the name of theNFFE that is owned by a substantial U.S.owner (or controlling person that is aspecified U.S. person); the name, address,and U.S. TIN of each substantial U.S.owner (or controlling person that is aspecified U.S. person); the total of all

withholdable payments made to the NFFEduring the calendar year (or reportableperiod under the applicable IGA); and anyother information as required by the formand its accompanying instructions.(C) Other Requirements of Agency Agree-ment. WT shall require the partnership ortrust to which it applies the agency optiondescribed in this section 9.02 to provideWT with all the information necessary forWT to meet its obligations under thisAgreement. No provisions shall be con-tained in the agreement between WT andthe partnership or trust that preclude, andno provisions of this Agreement shall beconstrued to preclude, the partnership’s ortrust’s joint and several liability for tax,penalties, and interest under chapters 3and 4 to the extent that underwithholding,penalties, and interest have not been col-lected from WT and the underwithholdingor failure to report amounts correctly onForms 1042, 1042–S or 8966, is due to thepartnership’s or trust’s failure to properlyperform its obligations under its agree-ment with WT. Nothing in the agreementbetween WT and the partnership or trustshall be construed to limit the partner-ship’s or trust’s requirements under chap-ter 4 as a certified deemed-compliant FFI,an owner-documented FFI with respect toWT, an NFFE, or an exempt beneficialowner. Further, nothing in the agreementbetween WT and the partnership or trustshall permit the partnership or trust toassume primary chapters 3 and 4 with-holding responsibility.Sec. 9.03. Indirect Beneficiaries orOwners of WT.(A) General Requirements. WT may act asa withholding foreign trust for reportableamounts distributed to, or included in thedistributive share of, passthrough benefi-ciaries or owners and indirect beneficia-ries or owners if such indirect beneficiaryor owner is not a U.S. non-exempt recip-ient. Notwithstanding the preceding sen-tence, WT may act as a withholding for-eign trust with respect to an indirectbeneficiary or owner that is a U.S. non-exempt recipient if the indirect beneficiaryor owner is included in a passthrough ben-eficiary’s or owner’s chapter 4 withhold-ing rate pool of recalcitrant account hold-ers or U.S. payees. WT does not need touse the agency option described in section9.02 of this Agreement or make the

pooled reporting election described in sec-tion 6.02(D) of this Agreement to applythe procedures described in this section9.03.(B) Modification of Obligations for WT.(1) Except to the extent described in thissection 9.03(B), WT need not forward thedocumentation and the withholding state-ment of the passthrough beneficiary orowner and indirect beneficiary or owner toWT’s withholding agent;(2) WT must provide its withholdingagent with documentation and other infor-mation from any passthrough beneficiaryor owner whose direct or indirect benefi-ciary or owner is a U.S. non-exempt re-cipient (unless such U.S. non-exempt re-cipient is included in a chapter 4withholding rate pool of recalcitrant ac-count holders or U.S. payees);(3) WT will assume primary chapters 3and 4 withholding responsibility as de-scribed in section 3 of this Agreement andmust report on its indirect beneficiaries orowners on a specific payee basis on Form1042–S (except to the extent such indirectbeneficiaries or owners are included in apassthrough beneficiary’s or owner’schapter 4 withholding rate pool or a QI’swithholding rate pool) as described in sec-tion 6.02(B) of this Agreement, regardlessof whether WT made a PR election for itsdirect beneficiaries or owners under sec-tion 6.02(D) of this Agreement; and(4) WT must include any passthroughbeneficiary or owner and indirect benefi-ciary or owner for which it acts as a with-holding foreign trust in its periodic reviewas described in section 8.05 of this Agree-ment.(C) Documentation from PassthroughBeneficiary or Owner. WT agrees to useits best efforts to obtain from a pass-through beneficiary or owner the docu-mentation of an indirect beneficiary orowner for which WT acts as a withholdingforeign trust. Unless WT can reliably as-sociate an amount distributed to, or in-cluded in the distributive share of, anypassthrough beneficiary or owner withvalid documentation from such benefi-ciary or owner within the meaning of§ 1.1441–1(b)(2)(vii) and, for a withhold-able payment, § 1.1471–3(c), WT shallapply the presumption rules described in§§ 1.1441–1(b)(3), 1.1441–4(a), 1.1441–5(d) and (e)(6), 1.1441–9(b)(3), and


1.6049–5(d) and for a withholdable pay-ment made to an entity, § 1.1471–3(f) or,if WT is an FFI, its FATCA requirementsas a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. Generally,WT can reliably associate an amount withdocumentation provided by a passthroughbeneficiary or owner if WT obtains—(1) A valid Form W–8IMY provided bythe passthrough beneficiary or owner that,if the payment is a withholdable payment,establishes the chapter 4 status of thepassthrough beneficiary or owner; and(2) If the payment is a withholdable pay-ment, a withholding statement that meetsthe requirements of § 1.1471–3(c)(3)(iii)(B) that includes the accountholders or interest holders of the pass-through beneficiary or owner in chapter 4withholding rate pools to the extent per-mitted, and, for an amount subject tochapter 3 withholding that is not a with-holdable payment or is a withholdablepayment for which chapter 4 withholdingis not required, valid documentation de-scribed in section 4 of this Agreementprovided by account holders or interestholders of the passthrough beneficiaryor owner that are not themselves non-qualified intermediaries or flow-throughentities.WT may not reduce the rate of withhold-ing with respect to an indirect beneficiaryor owner that is a foreign beneficial ownerfor which it acts as a WT unless WT canreliably associate the payment with validdocumentation that establishes the indi-rect beneficiary’s or owner’s entitlementto a reduced rate of withholding underchapter 3 and, in the case of a withhold-able payment, establishes that chapter 4withholding does not apply.(D) Timing of Withholding. WT mustwithhold on the date an amount is distrib-uted to, or included in the distributiveshare of, the passthrough beneficiary orowner based on a withholding statementprovided by the passthrough beneficiaryor owner on which WT is permitted torely. The amount allocated to each indi-rect beneficiary or owner in the withhold-ing statement may be based on a reason-able estimate of the indirect beneficiary’sor owner’s distributive share of incomesubject to withholding for the year. Thepassthrough beneficiary or owner must

agree to correct the estimated allocationsto reflect the indirect beneficiary’s orowner’s actual distributive share and mustprovide this corrected information to WT,on the earlier of the date that the statementrequired under section 6048(b) of theCode is mailed or otherwise provided tothe indirect beneficiary or owner or thedue date for furnishing the statement(whether or not the passthrough benefi-ciary or owner is required to prepare andfurnish the statement). If that date is afterthe due date (without regard to exten-sions) for WT’s Forms 1042 and 1042–Sfor the calendar year, WT may withholdand report any adjustments required bycorrecting the information in the follow-ing calendar year.(E) Form 8966 Reporting Requirements.If WT is an FFI and if the passthroughbeneficiary or owner is a U.S. account (orU.S. reportable account), WT is requiredto report the partnership or trust consistentwith its FATCA requirements as a partic-ipating FFI, registered deemed-compliantFFI, or registered deemed-compliantModel 1 IGA FFI. WT shall also reportwithholdable payments that WT distrib-utes to, or includes in the distributiveshare of, a passthrough beneficiary orowner if an account holder or interestholder of such passthrough beneficiary orowner is an NFFE (other than an exceptedNFFE) with one or more substantial U.S.owners (or one or more controlling per-sons that is a specified U.S. person underan applicable IGA) and if the NFFE is thebeneficial owner of the withholdable pay-ment received by the passthrough benefi-ciary or owner. WT must report on Form8966 in the time and manner provided in§ 1.1474–1(i)(2). Such report must in-clude the name of the NFFE that is ownedby a substantial U.S. owner (or controllingperson that is a specified U.S. person); thename, address, and U.S. TIN of each sub-stantial U.S. owner (or controlling personthat is a specified U.S. person); the total ofall withholdable payments made to theNFFE during the calendar year (or report-able period under the applicable IGA);and any other information as required bythe form and its accompanying instruc-tions. WT is not required to report, how-ever, to the extent permitted under§ 1.1474–1(i)(2), on a payment made to aparticipating FFI or registered deemed-

compliant FFI if the passthrough benefi-ciary or owner certifies on its withholdingstatement that it is reporting the accountholder (or interest holder) as a U.S. ac-count pursuant to its FATCA require-ments as a participating FFI, registereddeemed-compliant FFI, or registereddeemed-compliant Model 1 IGA FFI.

Section 10. EXPIRATION,TERMINATION AND DEFAULT

Sec. 10.01. Term of Agreement. ThisAgreement begins on the effective date, asdescribed in section 12 of this Agreement,and expires upon the earlier of the dateWT terminates under the trust instrumentor the end of the sixth full calendar yearthe Agreement is in effect, unless termi-nated under section 10.02 or 10.03 of thisAgreement. This Agreement may be re-newed for additional terms as provided insection 10.07 of this Agreement.Sec. 10.02. Termination of Agreement(In General).(A) In General. Except as otherwise pro-vided in section 10.03 of this Agreement,this Agreement may be terminated by ei-ther the IRS or WT prior to the end of itsterm by delivery of a notice, in accordancewith section 11.06 of this Agreement, oftermination to the other party. The IRS,however, shall not terminate this Agree-ment unless there has been a significantchange in circumstances, as defined insection 10.04 of this Agreement, or anevent of default has occurred, as definedin section 10.05 of this Agreement, andthe IRS determines, in its sole discretion,that the significant change in circum-stances or the event of default warrantstermination of this Agreement. The IRSshall not terminate this Agreement if WTcan establish to the satisfaction of the IRSthat all events of default for which it hasreceived notice have been cured withinthe time period agreed upon. The IRSshall notify WT that an event of defaulthas occurred and that the IRS intends toterminate the Agreement unless WT curesthe default or establishes that no event ofdefault has occurred. A notice of termina-tion sent by either party shall take effecton the date specified in the notice, and WTis required to notify its withholding agentof the date its status as a WT was termi-nated.The termination of the Agreement shall


not affect any of WT’s reporting, tax fil-ing, withholding, depositing, or paymentresponsibilities arising in the calendaryears for which this Agreement was ineffect and the portion of the calendar yearin which termination is requested. TheIRS shall revoke WT’s WT-EIN within areasonable time after the reporting, taxfiling, and depositing requirements forsuch years are satisfied. The terminationof this Agreement is not intended to affectany other federal income tax conse-quences.After the date of termination of thisAgreement, WT may not act as a with-holding foreign trust, and must so notifyany persons to which WT has furnished awithholding foreign trust certificate of thetermination (including the date of the ter-mination). After the date of termination ofthis Agreement, the IRS may reinstate thisAgreement (or the IRS may require WT toenter into a new WT agreement) on suchterms and conditions and with such mod-ifications as the IRS may determine.(B) Final Certification after a Termina-tion of the Agreement. Upon a terminationof this Agreement, WT must provide tothe IRS the certification described in sec-tion 8.03 of this Agreement covering theperiod from the end of the most recentcertification period (or, if the first certifi-cation period has not ended, the effectivedate of this Agreement) to the date oftermination within six months of the dateof termination, regardless of whether aperiodic review has been completed forsuch period.Sec 10.03. Automatic Termination ofAgreement.(A) Automatic Termination. Notwith-standing section 10.02 of this Agreement,this Agreement will terminate automati-cally in the event that the reviewer or theIRS (including during its compliance re-view described in section 8.08 of thisAgreement) discovers that WT was not inpossession of Forms W–8 or W–9, asapplicable, or documentary evidence, aspermitted under section 4.01(A) of thisAgreement, for any direct beneficiary orowner at any time that withholding orreporting was required under section 3.02of this Agreement. The automatic termi-nation will be effective as of December 31of the year in which the reviewer or theIRS makes that discovery.

(B) Cure and Reinstatement after Auto-matic Termination. This Agreement willbe reinstated, effective the same date itautomatically terminated under section10.03(A) of this Agreement, if—(1) WT obtains appropriate Forms W–8or W–9 or documentary evidence, as per-mitted under section 4.01(A) of thisAgreement, that relate to the time with-holding or reporting was required, foreach such undocumented beneficiary orowner before March 15 of the year fol-lowing the year in which the Agreementautomatically terminated, or(2) All such undocumented beneficiariesor owners have ceased to be beneficiariesor owners in WT before March 15 of theyear following the year in which theAgreement automatically terminated.(C) Payment of Underwithholding andReporting upon Termination. In the eventof automatic termination of this Agree-ment under this section 10.03, WT mustpay any underwithholding of tax, interest,and penalties that the IRS determines isattributable to each undocumented bene-ficiary or owner for the period duringwhich the beneficiary or owner was un-documented based on the presumptionrules, and, if WT has made a pooled re-porting election for chapter 3 purposes,WT must file beneficiary or owner spe-cific Forms 1042–S for amounts subject tochapter 3 withholding for which no chap-ter 4 withholding is required and OwnerStatements and Beneficiary Statements aspart of Form 3520–A reporting the namesand addresses and other required informa-tion, as appropriate, for every undocu-mented beneficiary or owner from the ear-liest time the documentation was requiredfor that undocumented beneficiary orowner through the date of termination.WT may, however, continue to report on apooled basis for documented foreign di-rect beneficiaries or owners through thisperiod.Sec. 10.04. Significant Change in Cir-cumstances. For purposes of this Agree-ment, a significant change in circum-stances includes, but is not limited to—(A) A change in U.S. federal law, or ap-plicable foreign law, that affects the va-lidity of any provision of this Agreement,materially affects the procedures con-tained in this Agreement, or affects WT’s

ability to perform its obligations underthis Agreement;(B) A ruling of any court that affects thevalidity of any material provision of thisAgreement;(C) A significant change in WT’s businesspractices that affects WT’s ability to meetits obligations under this Agreement;(D) If applicable, a material change in theapplicable know-your-customer rules andprocedures when WT relied on documen-tary evidence as permitted in section4.01(A) of this Agreement;(E) If WT is an FFI (other than a retire-ment fund), WT’s failure to maintain itsstatus as a participating FFI, registereddeemed-compliant FFI, or a registereddeemed-compliant Model 1 IGA FFI; or(F) If WT is acting as a sponsoring entityon behalf of a sponsored FFI or sponsoreddirect reporting NFFE, WT’s failure tocomply with the due diligence, withhold-ing, reporting, and compliance require-ments of a sponsoring entity.Sec. 10.05. Events of Default. For pur-poses of this Agreement, an event of de-fault occurs if WT fails to perform anymaterial duty or obligation required underthis Agreement and the responsible officerhad actual knowledge of or should haveknown the facts relevant to the failure toperform any material duty. An event ofdefault includes, but is not limited to, theoccurrence of any of the following:(A) WT fails to implement adequate pro-cedures, accounting systems, and internalcontrols to ensure compliance with thisAgreement;(B) WT underwithholds a material amountof tax that WT is required to withholdunder chapter 3 or 4 and fails to correctthe underwithholding or to file anamended Form 1042 reporting, and pay-ing, the appropriate tax;(C) WT makes excessive refund claims;(D) WT fails to file required Forms1040NR (if required), 1042, 1042–S,8966, 3520–A, or the Owner Statementsor Beneficiary Statements required as partof such form by the due date specified onsuch forms or files forms that are materi-ally incorrect or fraudulent;(E) If WT is an FFI, WT fails to materiallycomply with its FATCA requirements asa participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI;


(F) If WT is a sponsoring entity, WTmaterially fails to comply with the duediligence, withholding, reporting, andcompliance requirements of a sponsoringentity;(G) WT fails to perform a periodic reviewwhen required or to document the findingsof such review in a written report;(H) WT fails to inform the IRS within 90days of any significant change in its busi-ness practices to the extent that changeaffects WT’s obligations under thisAgreement;(I) WT fails to cure a material failureidentified in the qualified certification de-scribed in Part II.B of the Appendix to thisAgreement or identified by the IRS;(J) WT makes any fraudulent statement ora misrepresentation of a material fact withregard to this Agreement to the IRS, awithholding agent, or WT’s reviewer;(K) The IRS determines that WT’s re-viewer is not sufficiently independent, asdescribed in section 8.04 of this Agree-ment, to adequately perform its reviewfunction and WT fails to arrange for aperiodic review conducted by a reviewerapproved by the IRS;(L) WT fails to make deposits in the timeand manner required by section 3.05 ofthis Agreement or fails to make adequatedeposits, taking into account the proce-dures of section 7.05 of this Agreement;(M) If applicable, WT fails to inform theIRS of any change in the applicable know-your-customer rules within 90 days of thechange becoming effective when WT re-lied on documentary evidence as permit-ted in section 4.01(A) of this Agreement;(N) WT fails to cooperate with the IRS onits compliance review described in section8.08 of this Agreement;(O) A partnership or trust to which WTapplies the agency option is in defaultwith the agency agreement and WT failsto terminate that agreement within thetime period specified in section 9.02 ofthis Agreement;(P) WT fails to materially comply withthe requirements of a nonwithholding for-eign trust under chapter 3 with respect toany beneficiary or owner for which it doesnot act as a withholding foreign trust; or(Q) WT is not in possession of valid doc-umentation described in sections 4.01through 4.09 of this Agreement for eachdirect beneficiary or owner as of the due

date of the certification described in sec-tion 8.03(C)(1) of this Agreement.Sec. 10.06. Notice and Cure. Upon theoccurrence of an event of default, the IRSwill deliver to WT a notice of defaultspecifying each event of default. WT mustrespond to the notice of default within 60days (60-day response) from the date ofthe notice of default. The 60-day responseshall contain an offer to cure the event ofdefault and the time period in which tocure or shall state why WT believes thatno event of default has occurred. If WTdoes not provide a 60-day response, theIRS will deliver a notice of termination asprovided in section 10.02 of this Agree-ment. If WT provides a 60-day response,the IRS shall either accept or reject WT’sstatement that no default has occurred orWT’s proposal to cure the event of de-fault.If the IRS rejects WT’s statement that nodefault has occurred or rejects WT’s pro-posal to cure the event of default, the IRSmay offer a counter-proposal to cure theevent of default with which WT will berequired to comply within 30 days. If WTfails to provide a 30-day response, the IRSwill send a notice of termination in accor-dance with section 10.02 of this Agree-ment, which WT may appeal within 30days of the date of the notice by sending awritten appeal to the address specified insection 11.06 of this Agreement. If WTappeals the notice of termination, thisAgreement shall not terminate until theappeal has been decided. If an event ofdefault is discovered in the course of areview, WT may cure the default, withoutfollowing the procedures of this section10.06, if the external reviewer’s reportdescribes the default and the actions thatWT took to cure the default and the IRSdetermines that the cure procedures fol-lowed by WT were sufficient. If the IRSdetermines that WT’s actions to cure thedefault were not sufficient, the IRS shallissue a notice of default and the proce-dures described in this section 10.06 shallbe followed.Sec. 10.07. Renewal. If WT intends torenew this Agreement, it shall submit anapplication for renewal to the IRS on theQI/WP/WT Application and AccountManagement System. This Agreementwill be renewed only upon the agreementof both WT and the IRS.

Section 11. MISCELLANEOUSPROVISIONS

Sec. 11.01. WT’s application to become aWT, the Appendix to this Agreement, and,if WT is an FFI, its FATCA requirementsas a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI (or, if WT isa sponsoring entity, the due diligence,withholding, reporting, and compliancerequirements of a sponsoring entity) arehereby incorporated into and made an in-tegral part of this Agreement. This Agree-ment, WT’s application, and the Appen-dix to this Agreement constitute thecomplete agreement between the parties.Sec. 11.02. This Agreement may beamended by the IRS if the IRS determinesthat such amendment is needed for thesound administration of the internal reve-nue laws or internal revenue regulations.This Agreement will only be modifiedthrough published guidance issued by theIRS and U.S. Treasury Department. Anysuch modification imposing additional re-quirements will in no event become effec-tive until the later of 90 days after the IRSprovides notice of such modification orthe beginning of the next calendar yearfollowing the publication of such guid-ance.Sec. 11.03. Any waiver of a provision ofthis Agreement by the IRS is a waiversolely of that provision. The waiver doesnot obligate the IRS to waive other provi-sions of this Agreement or the same pro-vision at a later date.Sec. 11.04. This Agreement shall be gov-erned by the laws of the United States.Any legal action brought under thisAgreement shall be brought only in a U.S.court with jurisdiction to hear and resolvematters under the internal revenue laws ofthe United States. For this purpose, WTagrees to submit to the jurisdiction of suchU.S. court.Sec. 11.05. WT’s rights and responsibili-ties under this Agreement cannot be as-signed to another person.Sec. 11.06. Except as otherwise providedin the QI/WP/WT Application and Ac-count Management System, notices pro-vided under this Agreement shall bemailed registered, first class airmail. Allnotices sent to the IRS must include theWT’s name, WT-EIN, GIIN (if applica-


ble), and the name of its responsible offi-cer. Such notices shall be directed as fol-lows:To the IRS:Internal Revenue ServiceForeign Payments PracticeForeign Intermediaries Program290 Broadway, 12th FloorNew York, NY 10007-1867To WT:The WT’s responsible officer. Such no-tices shall be sent to the address indicatedin the WT’s registration or application (asmay be amended).Sec. 11.07. WT, acting in its capacity as awithholding foreign trust or in any othercapacity, does not act as an agent of theIRS, nor does it have the authority to holditself out as an agent of the IRS.

Section 12. EFFECTIVE DATE OFAGREEMENT

Sec. 12.01. New Applicants.(A) In General. Applications for WT sta-tus received on or before March 31 of thecalendar year, if approved, will be effec-tive January 1 of that calendar year. If anentity submits an application to be a WTafter March 31 and does not receive anyreportable amounts between January 1 ofthe calendar year in which the WT applica-tion is submitted and the date of approval,the entity will have a WT agreement with aneffective date of the date it is issued a WT-EIN. All other entities applying for WTstatus after March 31 that are approved dur-ing the calendar year will have a WT agree-ment with an effective date of January 1 ofthe following calendar year.

(B) Calendar Year 2017. If a WT is ap-proved for WT status during calendar year2017, the rules described in section12.01(A) of this Agreement apply, exceptthat the WT agreement effective from Jan-uary 1, 2017, to the date of issuance ofthis revenue procedure will be the WTagreement in Revenue Procedure 2014–47, and the WT agreement provided inthis revenue procedure will be effectivebeginning on the date of issuance of thisrevenue procedure.Sec. 12.02. Renewal of WT Agreement.A WT that applies to renew its WT agree-ment provided in Revenue Procedure2014–47 on or before March 31, 2017,will have a WT agreement with an effec-tive date of the date of issuance of thisrevenue procedure.

APPENDIX TO WT AGREEMENT

General Instructions: WTs must provide the information and certifications described in this Appendix as applicable to their WTstatus and activities. The following Parts must be completed by the specified WTs:

Parts I and II: All WTs.

Part III: WTs eligible pursuant to section 8.07 of the WT Agreement to apply for a waiver of the periodic reviewrequirement (as described in section 8.07 of the WT Agreement) and who wish to apply for such a waiver.WTs that are NFFEs are not eligible for a waiver.

Part IV.A–G: All WTs that have not applied for or have not been approved for a waiver.

PART I. GENERAL INFORMATION

A. Did WT make a pooled reporting elec-tion? Y/N

B. The number of partnerships or trusts towhich WT applied the agency option(if none enter 0).

1. Each partnership or trust to whichWT applied the agency option hasprovided WT with a certificationthat it has maintained status as acertified deemed-compliant FFI, anowner-documented FFI with respectto WT, an NFFE, or an exempt ben-eficial owner as required under sec-tion 9.02(A)(2) of the WT Agree-ment. Y/N

2. Each partnership or trust to whichWT applied the agency option hasprovided WT with either (1) its doc-umentation and other informationfor inclusion in WT’s periodic re-view (as described in section9.02(A)(6) of the WT Agreement) or(2) a certification described in sec-

tion 8.03 of the WT Agreement andthe results of the periodic review de-scribed in section 8.06 of the WTAgreement for the certification pe-riod. Y/N

C. The number of partnerships or trusts towhich WT applied the joint accountoption (if none enter 0).

1. Each partnership or trust to whichWT applies the joint account op-tion has provided WT with a certi-fication that it has maintained statusas a certified deemed-compliant FFI,an owner-documented FFI with re-spect to WT, an exempt beneficialowner, or an NFFE as required un-der section 9.01(A)(1) of the WTAgreement. Y/N

PART II: CERTIFICATION OFINTERNAL CONTROLS BYRESPONSIBLE OFFICER ANDGENERAL INFORMATION

Complete either Section A (Certificationof Effective Internal Controls) or Section

B (Qualified Certification). All WTs com-plete Sections C, D, E, and F.

A. Certification of Effective InternalControls

If the responsible officer has identified anevent of default or a material failure thatWT has not corrected as of the date of thiscertification (or if an event of default ormaterial failure has otherwise been iden-tified), the responsible officer cannotmake the certification of effective internalcontrols under this Section A and mustmake the qualified certification under Sec-tion B, below.The responsible officer certifies to the fol-lowing, check each statement to confirm:

1. WT has established a complianceprogram that meets the requirementsdescribed in section 8.02(B) of theWT Agreement that is in effect as ofthe date of the certification and dur-ing the certification period.

2. Based on the information known (orinformation that reasonably should


have been known) by the responsibleofficer, including the findings of anyprocedure, process, review, or certi-fication undertaken in preparation forthe responsible officer’s certificationof internal controls, WT maintainseffective internal controls over itsdocumentation, withholding, and re-porting obligations under the WTAgreement and according to its ap-plicable FATCA requirements forbeneficiaries or owners for which itacts as a WT.

3. Based on the information known (orinformation that reasonably shouldhave been known) by the responsibleofficer, including the findings of anyprocedure, process, review, or certi-fication undertaken in preparation forthe responsible officer’s certificationof internal controls, there are no ma-terial failures, as defined in section8.03(B of the WT Agreement, or, ifthere are any material failures, theyhave been corrected as of the date ofthis certification, and such failuresare identified as part of this certifica-tion as well as the actions taken toremediate them and to prevent theirreoccurrence by the date of this cer-tification. See Part II.D.2.a of thisAppendix.

4. With respect to any failure to with-hold, deposit, or report to the extentrequired under the WT Agreement,WT has corrected such failure bypaying any taxes due (including in-terest and penalties) and filing theappropriate return (or amended re-turn).

5. All partnerships and trusts to whichWT applies the agency option haveeither (a) provided documentationand other necessary information forinclusion in the WT’s periodic re-view or (b) provided the responsibleofficer of WT with a certification ofeffective internal controls describedin Part II.A of this Appendix andhave represented to WT that there areno material failures, as defined insection 8.03(B) of the WT Agree-ment, or, if there are such failures,they have been corrected as of thetime of this certification, and thepartnerships or trusts have disclosedany such failures to WT together

with the actions taken by the partner-ship or trust to remediate such fail-ures.

6. Unless WT has received a waiver, aperiodic review was conducted forthe certification period in accordancewith section 8.04 of the WT Agree-ment, and the results of such revieware reported to the extent required insection 8.06 of the WT Agreement.

B. Qualified Certification

If the responsible officer has identified (1)an event of default or (2) a material failurethat WT has not corrected as of the date ofthis certification, check the applicablestatements to confirm:

1. The responsible officer (or designee)has identified an event of default, asdefined in section 10.05 of the WTAgreement, or has determined that,as of the date of the certification,there are one or more material fail-ures as defined in section 8.03(B) ofthe WT Agreement with respect toWT’s compliance or the complianceof a partnership or trust to which WTapplies the agency option and thatappropriate actions will be taken toprevent such failures from reoccur-ring.

2. With respect to any failure to with-hold, deposit, or report to the extentrequired under the WT Agreement,WT will correct such failure by pay-ing any taxes due (including interestand penalties) and filing the appro-priate return (or amended return).

3. The responsible officer (or an officerof the partnership or trust to whichWT applies the agency option if thepartnership or trust performs its ownperiodic review) will respond to anynotice of default (if applicable) orwill provide (either directly orthrough WT) to the IRS, to the extentrequested, a description of each ma-terial failure and a written plan tocorrect each such failure.

C. Amended Form 1042

1. Did WT file an amended Form 1042to report additional tax liabilitybased on the results of the periodicreview or the findings of any otherprocedure, process, or review under-

taken by the responsible officer inpreparation for the certification ofinternal controls? Y/N

D. Material Failures or Event of Default

1. Did the responsible officer deter-mine that as of the date of the peri-odic review report (or the date ofcompletion of any other procedure,process, or review), there are no ma-terial failures with respect to WT’scompliance with the WT Agree-ment? Y/N

2. Did the responsible officer deter-mine that as of the date of the peri-odic review report (or the date ofcompletion of any other procedure,process, or review), there are one ormore material failures with respectto WT’s compliance with the WTAgreement and that appropriate ac-tions have been or will be taken toprevent such failures from reoccur-ring? Y/N

a. If yes, check the following ma-terial failures that were identi-fied.

i. WT’s establishment of, forfinancial statement pur-poses, a tax reserve or pro-vision for a potential futuretax liability related to WT’sfailure to comply with theWT Agreement, includingits FATCA requirements asa participating FFI, regis-tered deemed-compliantFFI, or registered deemed-compliant Model 1 IGAFFI.

ii. WT’s failure to establishwritten policies, proce-dures, or systems suffi-cient for the relevant per-sonnel of WT to takeactions consistent withWT’s obligations underthe WT Agreement.

iii. A criminal or civil pen-alty or sanction imposedon WT by a regulator orother governmental au-thority or agency withoversight over WT’scompliance with AML/KYC procedures, if ap-plicable, to which WT is


subject and that is im-posed due to WT’s fail-ure to properly identifybeneficiaries or ownersunder the requirementsof those procedures.

iv. A finding (including afinding noted in the peri-odic review report de-scribed in section 8.06 ofthe WT Agreement) that,for one or more yearscovered by the WTAgreement, WT failedto:1. Withhold an amount

that WT was requiredto withhold underchapter 3 or 4 as re-quired under section3 of the WT Agree-ment;

2. Make deposits in thetime and manner re-quired by section3.05 of the WTAgreement or makeadequate deposits tosatisfy its withhold-ing obligations, tak-ing into account theprocedures undersection 7 of the WTAgreement;

3. Report or report ac-curately on Forms1042 or 1042–S asrequired under sec-tions 6.01 and 6.02 ofthe WT Agreement;

4. Report or report ac-curately on Forms8966 as required un-der section 6.05 ofthe WT Agreement;or

5. Report or report ac-curately on Form3520–A and the For-eign Grantor TrustOwner Statementsand Foreign GrantorTrust BeneficiaryStatements as re-quired under section6.03 of the WTAgreement.

v. Other (include a detailedexplanation).

3. The material failure(s) identified in thereview has been corrected by the timeof this certification. Y/N/NA

a. If yes, describe the steps takento correct the material failure.

b. If no, describe the proposedsteps to be taken to correct thematerial failure and the timeframe for completing suchsteps.

4. Did any partnerships or trusts to whichWT applies the agency option informWT that it has had a material failurewith respect to its obligations as de-scribed in the WT Agreement?Y/N/NA

a. If yes, provide the name of thepartnership or trust and, basedon the information providedby the partnership or trust, de-scribe the steps taken to cor-rect the material failure or theproposed steps to be taken tocorrect the material failure andthe timeframe for completingsuch steps.

5. An event of default as defined in section10.05 of the WT Agreement has beenidentified. Y/N

b. If yes, identify the event ofdefault.

i. WT failed to implementadequate procedures, ac-counting systems, and in-ternal controls to ensurecompliance with the WTAgreement;

ii. WT underwithheld a ma-terial amount of tax thatWT was required to with-hold under chapter 3 or 4and failed to correct theunderwithholding or tofile an amended Form1042 reporting, and pay-ing, the appropriate tax;

iii. WT made excessive re-fund claims;

iv. WT failed to file requiredForms 1040NR (if re-quired), 1042, 1042–S,8966, 3520–A and theForeign Grantor TrustOwner Statements andForeign Grantor Trust

Beneficiary Statementsby the due date specifiedon such forms or filedforms that are materiallyincorrect or fraudulent;

v. If WT is an FFI, WTfailed to materially com-ply with its FATCA re-quirements as a partici-pating FFI, registereddeemed-compliant FFI, orregistered deemed-compliant Model 1 IGAFFI;

vi. If WT is a sponsoringentity of a sponsored FFIor a sponsored direct re-porting NFFE, WT failedto materially complywith the due diligence,withholding, reporting,and compliance require-ments of a sponsoringentity;

vii. WT failed to perform aperiodic review when re-quired or to documentthe findings of such re-view in a written report;

viii. WT failed to inform theIRS within 90 days ofany significant changein its business practicesto the extent thatchange affects WT’sobligations under theWT Agreement;

ix. WT failed to cure a ma-terial failure identified inthe qualified certificationdescribed in Part II.B ofthis Appendix or identi-fied by the IRS;

x. WT made any fraudulentstatement or a misrepre-sentation of material factwith regard to the WTAgreement to the IRS, awithholding agent, orWT’s reviewer;

xi. The IRS determined thatWT’s reviewer is notsufficiently independent,as described in the WTAgreement, to ade-quately perform its re-view function, and WT


failed to arrange for a pe-riodic review conductedby a reviewer approvedby the IRS;

xii. WT failed to make de-posits in the time andmanner required by sec-tion 3.05 of the WTAgreement or failed tomake adequate deposits,taking into account theprocedures of section7.05 of the WT Agree-ment;

xiii. If applicable, WT failedto inform the IRS ofany change in the appli-cable know-your-customer rules within90 days of the changebecoming effectivewhen WT relied ondocumentary evidenceas permitted in section4.01(A) of the WTAgreement;

xiv. A partnership or trust towhich WT applied theagency option was indefault with the agencyagreement and WTfailed to terminate thatagreement within thetime period specified insection 9.02 of the WTAgreement;

xv. WT failed to materiallycomply with the require-ments of a nonwithhold-ing foreign trust underchapter 3 with respect toany beneficiary or ownerfor which WT does notact as a withholding for-eign trust;

xvi. WT is not in possessionof valid documentationdescribed in sections4.01 through 4.09 of theWT Agreement foreach direct beneficiaryor owner as of the duedate of this certifica-tion; or

xvii. Other (please describe).

E. Significant Change in Circumstances

Check the applicable statements to con-firm.

1. For the most recent certificationperiod, the periodic review (orany other procedure, process, orreview) has not identified any sig-nificant change in circumstances,as described in section 10.04(C)or (D) of the WT Agreement.

2. For the most recent certificationperiod, the periodic review hasidentified the following significantchange(s) in circumstances:a. A significant change in WT’s

business practices that affectsWT’s ability to meet its obli-gations under the WT Agree-ment.

b. If applicable, a materialchange in the applicableknow-your-customer rules andprocedures when WT reliedon documentary evidence aspermitted in section 4.01(A)of the WT Agreement.

c. Other (please describe).3. Describe any significant changes in

circumstances identified in question2.

F. Chapter 4 Status

1. Complete the applicable section (ifany) and check the applicable state-ment to confirm.

a. If WT is a participating FFI:For the most recent certifica-tion period under its WTAgreement, WT has obtained(or maintained) status as a par-ticipating FFI and has madethe following certification ofcompliance with respect to itsFFI agreement for the most re-cent certification period underthe FFI agreement (checkone).Note: You may check Not Ap-plicable if, during the certifica-tion period under the WTAgreement, your chapter 4 sta-tus changed from one of theother applicable chapter 4 sta-tuses to participating FFI or ifyour certification of compli-ance under the FFI agreement

is not yet due as of the date ofthis certification.

i. Certification of Effec-tive Internal Controls

ii. Qualified Certificationiii. Not Applicable

b. If WT is a registereddeemed-compliant FFI:For the most recent certi-fication period under itsWT Agreement, WT hascertified as required under§ 1.1471–5(f)(1)(ii)(B) orAnnex II of an applicableModel 2 IGA that it hassatisfied the requirementsof the deemed-compliantstatus claimed.c. If WT is a registereddeemed-compliant Model1 IGA FFI:For the most recent certi-fication period under itsWT Agreement, WT hasbeen resident in or orga-nized under the laws of ajurisdiction that has inplace a Model 1 IGA withthe United States and hasmet the requirements un-der an applicable Model 1IGA to be treated as adeemed-compliant FFI.d. If WT is a retirementfund:For the most recent certi-fication period under theWT Agreement, WT hasbeen a retirement fund orother fund that is an ex-empt beneficial owner de-scribed in § 1.1471–6(f)or a similar fund thatqualifies as an exemptbeneficial owner under anapplicable Model 1 IGAor Model 2 IGA.

PART III. WAIVER OF PERIODICREVIEW

For purposes of this Part III, “beneficiaryor owner” means, unless otherwise speci-fied, any beneficiary or owner for whichWT acts as a WT.For sections B.1 through 6 of this Part III,while the curing of inadequate documen-tation is permissible, the information re-


ported in these sections must not reflectany remediation or curing.In order to be eligible for a waiver, WTmust be able to confirm all of the eligibil-ity requirements in Section A are met.

A. Eligibility for Waiver (check eachstatement to confirm)

1. WT is an FFI.2. WT is not part of a consolidated

compliance program.3. For each calendar year in the certi-

fication period, the reportableamounts received by WT do not ex-ceed $1 million.

4. WT timely filed its Forms 1042,1042–S, 8966 (or, if WT is a report-ing Model 1 FFI, any analogousforms used for reporting account in-formation pursuant to an applicableModel 1 IGA), and 3520–A, as ap-plicable, for all years (fiscal or cal-endar) in the certification period.

5. WT made all periodic certificationsand reviews required by sections8.02 and 8.03 of the WT Agreementas well as any certifications requiredpursuant to WT’s FATCA require-ments as a participating FFI or reg-istered deemed-compliant FFI.

6. WT made the certification of effec-tive internal controls in Part II.A.

B. Information required (provided forthe most recent year in the certificationperiod for which filing has been madeby the time of this waiver request)

1. The total number of beneficiaries orowners

a. Total number of direct benefi-ciaries or ownersi. Foreign personsii. U.S. personsiii. Foreign intermediaries and

flow-through entitiesb. Total number of indirect ben-

eficiaries or ownersi. Foreign personsii. U.S. personsiii. Foreign intermediaries and

flow-through entities2. The total number of non-U.S. bene-

ficiaries or owners that received re-portable amounts

a. The total number of such ben-eficiaries or owners that havevalid documentation.

b. The total number of such ben-eficiaries or owners that haveno documentation or invaliddocumentation.

3. The aggregate amount of reportableamounts received for non-U.S. ben-eficiaries or owners

4. The total number of Forms 1042–Sfiled by WT.

5. The total number of Schedules K–1filed by WT.



8. The aggregate amount of withheldtax deposited by WT.

PART IV. PERIODIC REVIEW: WTFACTUAL INFORMATION

This Part IV must be completed by allWTs that have not received a waiver. Forpurposes of this Part III, “beneficiary orowner” means, unless otherwise specified,any direct or indirect beneficiary or ownerfor which WT acts as a withholding for-eign trust.For Sections B through G of this Part III,while the curing of inadequate documen-tation is permissible, unless otherwise in-dicated, the information reported shall bebased on the review and not results ob-tained after curing.

A. General Information

1. Did WT use an external reviewer toconduct any portion of its periodicreview? Y/N

a. If yes, provide the name(s) ofreviewer(s) and the name andaddress of the firm at whichthe reviewer is employed.

2. Did WT use an internal reviewer toconduct any portion of its periodicreview? Y/N

a. If yes, provide a brief descrip-tion of the internal reviewer,such as their department andother roles and responsibilitieswith respect to the WT’s WTactivities.

3. Calendar year reviewed for periodicreview.

Caution: On the due date for reporting thefactual information relating to the peri-odic review (provided in section 8.04 ofthe WT Agreement), there must be 15 ormore months available on the statutoryperiod for assessment for taxes reportableon Form 1042 of the calendar year forwhich the review was conducted or theWT must submit, upon request by the IRS,a Form 872, “Consent to Extend the Timeto Assess Tax,” that will satisfy the 15-month requirement. The Form 872 mustbe submitted to the IRS at the addressprovided in section 11.06 of the WTAgreement.

B. General Information on Beneficiariesor Owners and Review of Beneficiariesor Owners

1. Total beneficiaries or owners re-viewed for periodic review.

Note: WT must review all beneficiaries orowners that received a distribution of, orincluded in their distributive share, a re-portable amount that is attributable to anamount paid to WT in the year underreview.

C. Documentation

1. Total beneficiaries or owners re-viewed that are direct beneficiariesor owners.

2. Total beneficiaries or owners re-viewed that are indirect beneficia-ries or owners.

3. Total beneficiaries or owners re-viewed with valid documentation.

4. Total beneficiaries or owners re-viewed with invalid documentationor no documentation.

5. Total beneficiaries or owners re-viewed with invalid documentationor no documentation for whichvalid documentation or additionalvalid documentation was obtainedafter the review.

6. Total direct beneficiaries or ownersreviewed for which WT had nodocumentation at any time thatwithholding or reporting was re-quired under section 3.02 of theWT Agreement.

7. Total direct beneficiaries or ownersin question 6 for which valid doc-umentation (that relates to the timewithholding or reporting was re-


quired) was obtained by WT foreach such undocumented directbeneficiary or owner before March15 of the year following the year inwhich the WT Agreement was au-tomatically terminated under sec-tion 10.03(A) of the WT Agree-ment.

8. Total beneficiaries or owners re-viewed for which treaty benefitswere claimed.

9. Total beneficiaries or owners re-viewed for which treaty benefitswere claimed where WT did notobtain sufficient documentation toestablish the payee’s entitlement totreaty benefits (including, whereapplicable, the treaty statement andlimitation on benefits informationrequired by section 4.03(B) of theWT Agreement).

10. Total beneficiaries or owners re-viewed that are U.S. accounts (orU.S. reportable accounts under anapplicable Model 1 IGA) for chap-ter 4 purposes.

11. Total beneficiaries or owners re-viewed that are U.S. accounts forchapter 4 purposes (or U.S. report-able accounts under an applicableModel 1 IGA) for which WT hasobtained valid documentation.

12. If WT is an NFFE, total beneficia-ries or owners reviewed that arepassive NFFEs with substantialU.S. owners.

D. Withholding

1. The aggregate amount reported aswithheld under chapter 3 by WT onForms 1042–S.

2. Number of beneficiaries or ownersfor which amounts were withheldunder chapter 3 (excluding benefi-ciaries or owners reported in ques-tion 10(a) or 11(a) below).

3. The aggregate amount reported aswithheld under chapter 4 by WT onForms 1042–S.

4. Number of beneficiaries or ownersfor which amounts were withheldunder chapter 4 (excluding benefi-ciaries or owners reported in ques-tion 10(a) or 11(a) below).

5. The aggregate amount reported aswithheld by WT on Form 1042 un-der chapter 3 or 4.



8. The aggregate amount of depositsmade by WT in accordance withsection 3.05 of the WT Agreement.

9. The aggregate amount withheld byWT but not timely deposited.

10. Number of partnerships or trusts towhich the joint account option ofsection 9.01 of the WT Agreementwas applied (if applicable).

a. Total partners, beneficiaries, orowners of a partnership ortrust to which the joint accountoption applied for which ap-propriate documentation wasobtained and the appropriaterate of withholding was ap-plied.

b. Total partners, beneficiaries,or owners of a partnership ortrust to which the joint ac-count option applied for whichappropriate documentationwas obtained and the appro-priate rate of withholding wasnot applied.

c. Total partners, beneficiaries, orowners of a partnership ortrust to which the joint accountoption applied for which ap-propriate documentation wasnot obtained and the appropri-ate rate of withholding was notapplied.

d. Aggregate amount of under-withholding resulting from theappropriate rate of withhold-ing not being applied with re-spect to a partner, beneficiary,or owner of a partnership ortrust to which the joint ac-count option applied.

11. Number of partnerships or trusts towhich the agency option of section9.02 of the WT Agreement wasapplied (if WT includes the part-nership or trust in WT’s periodicreview).

a. Total partners, beneficiaries, orowners of a partnership ortrust to which the agency op-tion applied for which appro-priate documentation was ob-tained and the appropriate rateof withholding was applied.

b. Total partners, beneficiaries,or owners of a partnership ortrust to which the agency op-tion applied for which appro-priate documentation was ob-tained and the appropriate rateof withholding was not ap-plied.

c. Total partners, beneficiaries, orowners of a partnership ortrust to which the agency op-tion applied for which appro-priate documentation was notobtained and the appropriaterate of withholding was notapplied.

d. Aggregate amount of under-withholding resulting from theappropriate rate of withhold-ing not being applied with re-spect to a partner, beneficiary,or owner of a partnership ortrust to which the agency op-tion applied.

E. Reconciliation of Amounts Reportedon Forms 1042–S

1. The aggregate amount reportedpaid to WT during the year underreview on all Forms 1042–S issuedto WT (acting as a withholding for-eign trust).

2. The aggregate amount reported byWT on Forms 1042–S as distrib-uted to, or included in the distribu-tive share of, beneficiaries or own-ers that are included in WT’schapter 4 reporting pools (otherthan the U.S. payee pool) (includ-ing a chapter 4 reporting pool of apartnership or trust to which WTapplies the agency option) to theextent such amount is attributableto an amount paid to WT in theyear under review.

3. The aggregate amount reported byWT on Forms 1042–S as distrib-uted to, or included in the distribu-tive share of, WT’s chapter 4 re-porting pool- U.S. payee pool to the


extent such amount is attributableto an amount paid to WT in theyear under review.

4. If WT made a pooled reportingelection under section 6.02(D) ofthe WT Agreement, the aggregateamount reported by WT on Forms1042–S as distributed to, or in-cluded in the distributive share of,WT’s chapter 3 reporting pools (in-cluding chapter 3 reporting pools ofa partnership or trust to which WTapplies the joint account or agencyoption) to the extent such amount isattributable to an amount paid toWT in the year under review.

5. If WT did not make a pooled re-porting election, the aggregateamount of reported by WT onForms 1042–S as distributed to, orincluded in the distributive shareof, each direct beneficiary or owner(other than a passthrough benefi-ciary or owner) (not included inquestion 2 or 3 above) to the extentsuch amount is attributable to anamount paid to WT in the year un-der review (excluding an amountreported in question 6 below).

6. The aggregate amount reported byWT on Forms 1042–S as distrib-uted to, or included in the distribu-tive share of, other WTs, WTs, andQIs as a class to the extent suchamount is attributable to an amountpaid to WT in the year under re-view.

7. The aggregate amount reported byWT on Forms 1042–S as distrib-uted to, or included in the distribu-tive share of, participating FFIs,registered deemed-compliant FFIs,and registered deemed-compliantModel 1 IGA FFIs that are pass-through beneficiaries or owners towhich WT applies section 9.03 ofthe WT Agreement as a class withrespect to their chapter 4 reportingpools to the extent such amount isattributable to an amount paid toWT in the year under review (ex-cluding amounts included in ques-tion 6 above).

8. The aggregate amount reported byWT on Forms 1042–S as distrib-uted to, or included in the distribu-tive share of, indirect beneficiaries

or owners (not included in any ofthe questions above) to which WTapplies section 9.03 of the WTAgreement to the extent suchamount is attributable to an amountpaid to WT in the year under re-view.

9. The aggregate amount subject tochapter 3 withholding that WT dis-tributed to, or included in the dis-tributive share of, U.S. beneficia-ries or owners not included in achapter 4 withholding rate pool tothe extent such amount is attribut-able to an amount paid to WT in theyear under review.

10. The aggregate amount distributedto, or included in the distributiveshare of, direct beneficiaries orowners of WT (including partners,beneficiaries, or owners of a part-nership or trust to which WT ap-plies the joint account or agencyoption) that requested individualForm(s) 1042–S and direct benefi-ciaries or owners that were issuedForms 1042–S under section6.02(B)(8) of the WT Agreement(excluding an amount reported inquestion 4 above).

11. Total of questions 2 through 10.12. The amount of any unreconciled

variances (if question 1 minusquestion 11 is other than 0).

13. The aggregate amount reported byWT on Form 1042 as distributedto, or included in the distributiveshare of, beneficiaries or owners ofWT to the extent such amount isattributable to an amount paid toWT in the year under review.

14. The amount of any unreconciledvariances of amounts reported byWT on Forms 1042 and 1042–S(question 13 minus the total ofquestions 2 through 8).

15. The aggregate amount of any col-lective claims for refund or creditmade by WT.

F. Reporting of Reportable AmountsOther Than Amounts Subject to Chapter3 Withholding

1. The aggregate amount of reportableamounts other than amounts subjectto chapter 3 withholding received byWT.

2. The aggregate amount of reportableamounts other than amounts subjectto chapter 3 withholding distributedto, or included in the distributiveshare of, a direct beneficiary orowner that is a U.S. person.

3. Number of direct beneficiaries orowners that are U.S. persons that arenot reported on Form 3520–A or asotherwise required under the WTAgreement (if none enter 0).

G. Reporting on Form 3520–A

1. The number of Foreign GrantorTrust Owner Statements filed withWT’s Form 3520–A.

2. The number of Foreign GrantorTrust Beneficiary Statements filedwith WT’s Form 3520–A.

SECTION 8. EFFECTIVE DATE

The effective date of this revenue pro-cedure is January 19, 2017. The effectivedates of the agreements described in sec-tions 6 and 7 of this revenue procedure aredescribed in sections 6 and 7 of this rev-enue procedure.


Revenue Procedure 2014–47, 2014–35 I.R.B. 393, is modified and superseded.

SECTION 10. PAPERWORKREDUCTION ACT

This revenue procedure refers to a col-lection of information in the followingsections of this revenue procedure: (1)section 5, regarding the application proce-dures for WP and WT status and with-holding agreements; (2) section 6, regard-ing the WP agreement; and (3) section 7,regarding the WT agreement.

This revenue procedure refers to a col-lection of information in the followingsections of the WP agreement (set forth insection 6 of this revenue procedure): sec-tion 3 regarding withholding require-ments; section 4 regarding the due dili-gence requirements for partneridentification and documentation; section5 regarding the withholding foreign part-nership withholding certificate; section 6regarding tax return and information re-porting obligations; section 7 regarding


adjustments for overwithholding and un-derwithholding and refunds; section 8 re-garding compliance procedures; and sec-tion 9 regarding simplified joint accountand indirect partner documentation, with-holding, and reporting procedures and theappointment of an agent to apply the WPagreement on WP’s behalf.

This revenue procedure also refers to acollection of information in the followingsections of the WT agreement (set forth insection 7 of this revenue procedure): sec-tion 3 regarding withholding require-ments; section 4 regarding the due dili-gence requirements for beneficiary orowner identification and documentation;section 5 regarding the withholding for-eign trust withholding certificate; section6 regarding tax return and informationreporting obligations; section 7 regardingadjustments for overwithholding and un-derwithholding and refunds; section 8 re-garding compliance procedures; and sec-tion 9 regarding simplified joint accountand indirect beneficiary or owner docu-mentation, withholding, and reportingprocedures and the appointment of anagent to apply the WT agreement onWT’s behalf.

Responses to these collections of infor-mation will be used to enable the IRS todetermine whether to enter into a with-holding agreement with a WP or WT ap-plicant, to renew an existing WP or WTagreement, and to verify a WP’s or WT’scompliance with its applicable withhold-ing agreement. The likely respondents areindividuals, businesses, other for-profit in-stitutions, and certain non-profit institu-tions.

The estimated information collectionburden referred to in this revenue proce-dure will be reflected in various IRS formsincluding Forms 8957, 14345, W–8BEN,W–8BEN–E, W–8ECI, W–8EXP, W–8IMY, W–9, 1042, 1042–S, 1065, 1099,3520–A, and 8966. The information col-lection burden relating to the section 8compliance procedures for both the WPand WT agreements is reflected in theAppendices to the WP and WT agree-ments.

An agency may not conduct or spon-sor, and a person is not required to re-spond to, a collection of information un-less the collection of information displays

a valid control number assigned by theOffice of Management and Budget.

Books or records relating to a collec-tion of information must be retained aslong as their contents may become mate-rial in the administration of any internalrevenue law. Generally, tax returns andtax return information are confidential, asrequired by section 6103.


The principal author of this revenueprocedure is Kamela K. Nelan of the Of-fice of Associate Chief Counsel (Interna-tional). For further information regardingthis revenue procedure, contact Ms. Nelanat (202) 317-6942 (not a toll-free num-ber).

Rev. Proc. 2017–22SECTION 1. PURPOSE

This revenue procedure clarifies thatthe safe harbor provided in Rev. Proc.2010–46, 2010–49 I.R.B. 814, applies toany Transportation Investment GeneratingEconomic Recovery grants (TIGER Dis-cretionary Grants) for capital investmentsin surface transportation infrastructuremade by the Department of Transporta-tion (DOT) pursuant to legislative autho-rizations of these grants made after thepublication of Rev. Proc. 2010–46.


Section 118(a) of the Internal RevenueCode provides that in the case of a corpo-ration, gross income does not include acontribution to the capital of the taxpayer.Section 1.118–1 of the Income Tax Reg-ulations provides that § 118 applies tocontributions to capital made by a personother than a shareholder, for example,contributions of property to a corporationby a governmental unit for the purpose ofenabling the corporation to expand its op-erating facilities.

Section 362(c)(2) requires a basis re-duction in a corporation’s property whenthe corporation receives money from anonshareholder as a contribution to itscapital.

Rev. Proc. 2010–46, in part, providesa safe harbor under § 118(a) for certain

grant amounts received by corporate tax-payers engaged in a transportation trade orbusiness for capital investments in surfacetransportation infrastructure under (1) theSupplemental Discretionary Grants forCapital Investments in Surface Transpor-tation Infrastructure (TIGER I Discretion-ary Grants) program as authorized by Ti-tle XII, Division A of ARRA; or (2) theNational Infrastructure Investments (TI-GER II Discretionary Grants) program asauthorized by the Transportation, Housingand Urban Development, and RelatedAgencies Appropriations Act for 2010(Title I, Division A of the ConsolidatedAppropriations Act, 2010 (Pub. L. 111–117)).

In 2009, the Office of the Secretary ofTransportation issued a Notice of FundingAvailability (NOFA), 74 FR 28755, thatprovides guidance on TIGER I Discre-tionary Grants. The grants must be forcapital investments in surface transporta-tion infrastructure. In 2010, the Office ofthe Secretary of Transportation issued aNOFA, 75 FR 30460, that provides guid-ance on TIGER II Discretionary Grants.The grants must be for capital investmentsin surface transportation infrastructure.The 2010 NOFA contemplates that somefunds may be used to fund the planning,preparation, or design of projects (TIGERII Planning Grants). DOT has issued ad-ditional NOFAs and Notices of FundingOpportunity (NOFOs) as legislation en-acted subsequent to the publication ofRev. Proc. 2010–46 has provided furtherappropriations for TIGER DiscretionaryGrants awarded by DOT.

SECTION 3. SCOPE

This revenue procedure clarifies thatthe safe harbor of Rev. Proc. 2010–46applies to corporate taxpayers engaged ina transportation trade or business that re-ceive grant amounts for the costs of cap-ital investments in surface transportationinfrastructure under any TIGER Discre-tionary Grants, including those authorizedin each year following those described inRev. Proc. 2010–46 as well as any to beauthorized in the future. In no case willthis revenue procedure apply to amountsreceived to pay the subsidy and adminis-trative costs of the Transportation Infra-structure Finance and Innovation Act of


1998 or to amounts received for any TI-GER planning grants.

Further, this revenue procedure doesnot apply to noncorporate taxpayers.

SECTION 4. PROCEDURE

The Internal Revenue Service will notchallenge a corporate taxpayer’s treatmentof grant amounts received by the corpora-tion under any TIGER DiscretionaryGrants for capital investments in surfacetransportation infrastructure as a non-shareholder contribution to the capital ofthe corporation under § 118(a) if the cor-

poration properly reduces the basis of itsproperty under § 362(c)(2) and the regu-lations thereunder. For purposes of thisrevenue procedure, TIGER DiscretionaryGrants include those TIGER Discretion-ary Grants authorized in each year follow-ing those described in Rev. Proc.2010–46 as well as any to be authorizedin the future.


Rev. Proc. 2010–46, 2010–49 I.R.B.814, is clarified.


The principal author of this revenueprocedure is David McDonnell of the Of-fice of Associate Chief Counsel (Pass-throughs & Special Industries). For fur-ther information regarding this revenueprocedure, contact Mr. McDonnell at(202) 317-4137 (not a toll-free number).


Part IV. Items of General InterestDefinitions of QualifiedMatching Contributions andQualified NonelectiveContributions

REG–131643–15

AGENCY: Internal Revenue Service (IRS),Treasury.

ACTION: Notice of proposed rulemaking.

SUMMARY: This document containsproposed amendments to the definitions ofqualified matching contributions (QMACs)and qualified nonelective contributions(QNECs) under regulations relating to cer-tain qualified retirement plans that containcash or deferred arrangements under sec-tion 401(k) or that provide for matchingcontributions or employee contributionsunder section 401(m). Under these regu-lations, employer contributions to a planwould be able to qualify as QMACs orQNECs if they satisfy applicable nonfor-feitability and distribution requirements atthe time they are allocated to participants’accounts, but need not meet these require-ments when they are contributed to theplan. These regulations would affect partic-ipants in, beneficiaries of, employers main-taining, and administrators of tax-qualifiedplans that contain cash or deferred arrange-ments or provide for matching contributionsor employee contributions.

DATES: Comments and requests for apublic hearing must be received by April18, 2017.

ADDRESSES: Send submissions to CC:PA:LPD:PR (REG–131643–15) Room5203, Internal Revenue Service, P.O. Box7604, Ben Franklin Station, Washington,DC 20044. Submissions may be hand-delivered Monday through Friday be-tween the hours of 8 a.m. and 4 p.m. toCC:PA:LPD:PR (REG–131643–15), Couri-er’s Desk, Internal Revenue Service, 1111Constitution Avenue N.W., Washington,DC 20224, or sent electronically viathe Federal eRulemaking Portal at www.regulations.gov (IRS REG–131643–15).

FOR FURTHER INFORMATION CON-TACT: Concerning the proposed regula-

tions, Rosemary Y. Oluwo at (202) 317-4148; concerning submissions of commentsor to request a hearing, Regina Johnson at(202) 317-6901 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

Section 401(k)(1) provides that aprofit-sharing or stock bonus plan, a pre-ERISA money purchase plan, or a ruralcooperative plan shall not be consideredas failing to satisfy the requirements ofsection 401(a) merely because the planincludes a qualified cash or deferred ar-rangement (CODA). To be considered aqualified CODA, a plan must satisfy sev-eral requirements, including: (i) undersection 401(k)(2)(B), amounts held by theplan’s trust that are attributable to em-ployer contributions made pursuant to anemployee’s election must satisfy certaindistribution requirements; (ii) under sec-tion 401(k)(2)(C), an employee’s right tosuch employer contributions must benonforfeitable; and (iii) under section401(k)(3), such employer contributionsmust satisfy certain nondiscrimination re-quirements.

Under section 401(k)(3)(D)(ii), the em-ployer contributions taken into accountfor purposes of applying the nondiscrim-ination requirements may, under suchrules as the Secretary may provide and atthe election of the employer, include, inaddition to contributions made pursuant toan employee’s election, matching contri-butions that meet the distribution andnonforfeitability requirements of section401(k)(2)(B) and (C) and qualified non-elective contributions within the meaningof section 401(m)(4)(C). Under section401(m)(4)(C), a qualified nonelective con-tribution is an employer contribution, otherthan a matching contribution, with respectto which the distribution and nonforfeitabil-ity requirements of section 401(k)(2)(B) and(C) are met.

Under § 1.401(k)–1(b)(1)(ii), a CODAsatisfies the applicable nondiscriminationrequirements if it satisfies the actual de-ferral percentage (ADP) test of section401(k)(3), described in § 1.401(k)–2. TheADP test limits the degree of disparitypermitted between the percentage of com-

pensation made as employer contributionsto the plan for a plan year on behalf ofeligible highly compensated employeesand the percentage of compensation madeas employer contributions on behalf ofeligible nonhighly compensated employ-ees. If the ADP test limits are exceeded,the employer must take corrective actionto ensure that the limits are met. In deter-mining the amount of employer contribu-tions made on behalf of an eligible em-ployee, employers are allowed to take intoaccount certain qualified matching contri-butions (QMACs) and qualified nonelec-tive contributions (QNECs) made on be-half of the employee by the employer.

In lieu of applying the ADP test, anemployer may choose to design its plan tosatisfy an ADP safe harbor, including theADP safe harbor provisions of section401(k)(12), described in § 1.401(k)–3.Under § 1.401(k)–3, a plan satisfies theADP safe harbor provisions of section401(k)(12) if, among other things, it sat-isfies certain contribution requirements.With respect to the safe harbor under sec-tion 401(k)(12), an employer may chooseto satisfy the contribution requirement byproviding a certain level of QMACs orQNECs to eligible nonhighly compen-sated employees under the plan.

A defined contribution plan that pro-vides for matching or employee after-taxcontributions must satisfy the nondiscrimi-nation requirements under section 401(m)with respect to those contributions for anyplan year. Under § 1.401(m)–1(b)(1), thematching contributions and employee con-tributions under a plan satisfy the nondis-crimination requirements for a plan year ifthe plan satisfies the actual contribution per-centage (ACP) test of section 401(m)(2) de-scribed in § 1.401(m)–2.

The ACP test limits the degree of dis-parity permitted between the percentageof compensation made as matching con-tributions and after-tax employee contri-butions for or by eligible highly compen-sated employees under the plan and thepercentage of compensation made asmatching contributions and after-tax em-ployee contributions for or by eligiblenonhighly compensated employees underthe plan. If the ACP test limits are ex-ceeded, the employer must take corrective


action to ensure that the limits are met. Indetermining the amount of employer con-tributions made on behalf of an eligibleemployee, employers are allowed to takeinto account certain QNECs made on be-half of the employee by the employer.Employers must also take into accountQMACs made on behalf of the employeeby the employer unless an exclusion ap-plies (including an exclusion for QMACsthat are taken into account under the ADPtest).

If an employer designs its plan to sat-isfy the ADP safe harbor of section 401(k)(12), it may avoid performing the ACPtest with respect to matching contributionsunder the plan, as long as the additionalrequirements of the ACP safe harbor ofsection 401(m)(11) are met.

Under § 1.401(k)–6, QMACs andQNECs are matching contributions and em-ployer contributions (other than electiveor matching contributions) that satisfy thenonforfeitability requirements of § 1.401(k)–1(c) and the distribution requirementsof § 1.401(k)–1(d) “when they are contrib-uted to the plan.” Similarly, § 1.401(m)–5includes independent definitions of QMACsand QNECs, which are matching contribu-tions and employer contributions (other thanelective or matching contributions) that sat-isfy the nonforfeitability and distribution re-quirements of § 1.401(k)–1(c) and (d) “atthe time the contribution is made.”

The Treasury Department and the IRShave received comments with respect tothe definitions of QMACs and QNECs in§§ 1.401(k)–6 and 1.401(m)–5. In partic-ular, commenters assert that employercontributions should be able to qualify asQMACs and QNECs as long as they sat-isfy applicable nonforfeitability and distri-bution requirements at the time they areallocated to participants’ accounts, ratherthan when they are first contributed to theplan. Commenters contend that interpret-ing sections 401(k)(3)(D)(ii) and 401(m)(4)(C) to require satisfaction of applicablenonforfeitability and distribution require-ments at the time amounts are first con-tributed to the plan would preclude plansponsors with plans that permit the use ofamounts in plan forfeiture accounts to off-set future employer contributions underthe plan from applying such amounts tofund QMACs and QNECs. This is be-cause the amounts would have been allo-

cated to the forfeiture accounts only aftera participant incurred a forfeiture of ben-efits and, thus, generally would have beensubject to a vesting schedule when theywere first contributed to the plan. Com-menters have requested that QMAC andQNEC requirements not be interpreted toprevent the use of plan forfeitures to fundQMACs and QNECs. The commentersurge that the nonforfeitability and distri-bution requirements under § 1.401(k)–6should apply when QMACs and QNECsare allocated to participants’ accounts andnot when the contributions are first madeto the plan.

Explanation of Provisions

After consideration of the commentsdescribed in this preamble in the “Back-ground” section, the Treasury Depart-ment and the IRS are proposing to amend§ 1.401(k)–6 to provide that amountsused to fund QMACs and QNECs must benonforfeitable and subject to distributionrestrictions in accordance with § 1.401(k)–1(c) and (d) when allocated to partic-ipants’ accounts, and to no longer requirethat amounts used to fund QMACs andQNECs satisfy the nonforfeitability anddistribution requirements when they arefirst contributed to the plan. Treasury andIRS note that while the second sentence ofeach of the current definitions of QMACsand QNECs refers to the “vesting” re-quirements of § 1.401(k)–1(c), those re-quirements are more appropriately charac-terized as “nonforfeitability” requirementsconsistent with section 401(k)(2)(C) andthe title of § 1.401(k)–1(c). Accordingly,these proposed regulations would amendthese definitions to clarify those refer-ences by replacing the word “vesting”with “nonforfeitability” in each definition;these changes are not otherwise intendedto have any substantive impact on this orany other section of the regulations. Theseproposed regulations would also amendthe definitions of QMACs and QNECs in§ 1.401(m)–5 to provide cross-referencesto the definitions of QMACs and QNECsunder § 1.401(k)–6. These amendments to§ 1.401(m)–5 are being made to ensure aconsistent definition of QMACs andQNECs in § 1.401(k)–6 and § 1.401(m)–5(including the requirement that amountsused to fund QMACs and QNECs bemade subject to nonforfeitability and dis-

tribution requirements when they are allo-cated to participants’ accounts as QMACsor QNECs) and are not otherwise intendedto have any substantive impact on this orany other section of the regulations.

Proposed Effective/Applicability Date

These regulations are proposed to ap-ply to taxable years beginning on or afterthe date of publication of the Treasurydecision adopting these rules as final reg-ulations in the Federal Register. Taxpay-ers, however, may rely on these proposedregulations for periods preceding the pro-posed applicability date. If, and to theextent, the final regulations are more re-strictive than the rules in these proposedregulations, those provisions of the finalregulations will be applied without retro-active effect.

Special Analyses

Certain IRS regulations, including thisone, are exempt from the requirements ofExecutive Order 12866, as supplementedand reaffirmed by Executive Order 13563.Therefore, a regulatory impact assessmentis not required. Because the regulationdoes not impose a collection of informa-tion on small entities, the RegulatoryFlexibility Act (5 U.S.C. chapter 6) doesnot apply. Pursuant to section 7805(f) ofthe Internal Revenue Code, these regula-tions will be submitted to the Chief Coun-sel for Advocacy of the Small BusinessAdministration for comment on their im-pact on small business.

Comments and Requests for PublicHearing

Before these proposed regulations areadopted as final regulations, consider-ation will be given to any comments thatare submitted timely to the IRS as pre-scribed in this preamble under the“ADDRESSES” heading. Treasury andthe IRS request comments on all aspectsof the proposed rules. All commentswill be available at www.regulations-.gov or upon request. A public hearingwill be scheduled if requested in writingby any person who timely submits writ-ten comments. If a public hearing isscheduled, notice of the date, time, andplace for the public hearing will be pub-lished in the Federal Register.


Drafting Information

The principal author of these regula-tions is Rosemary Y. Oluwo, Office ofAssociate Chief Counsel (Tax Exemptand Governmental Entities). However,other personnel from the IRS and Trea-sury Department participated in the devel-opment of these regulations.

* * * * *

Proposed Amendments to theRegulations

Accordingly, 26 CFR part 1 is pro-posed to be amended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation forpart 1 continues to read in part as follows:Authority: 26 U.S.C. 7805 * * *

Par. 2. Section 1.401(k)–1 is amended byadding paragraph (g)(5) to read as follows:

§ 1.401(k)–1 Certain cash or deferredarrangements.

* * * * *(g) * * *(5) Effective date for definitions of qual-

ified matching contributions (QMACs) andqualified nonelective contributions (QNECs).The revisions to the second sentence in thedefinitions of QMACs and QNECs in§ 1.401(k)–6 apply to taxable years endingon or after the date of publication of the

Treasury decision adopting these rules asfinal regulations in the Federal Register.

Par. 3. Section 1.401(k)–6 is amendedby revising the second sentence in thedefinitions of Qualified matching contri-butions (QMACs) and Qualified nonelec-tive contributions (QNECs) to read as fol-lows:

§ 1.401(k)–6 Definitions.

* * * * *Qualified matching contributions

(QMACs). * * * Thus, the matching con-tributions must satisfy the nonforfeitabil-ity requirements of § 1.401(k)–1(c) and besubject to the distribution requirements of§ 1.401(k)–1(d) when they are allocated toparticipants’ accounts. * * *

Qualified nonelective contributions(QNECs). * * * Thus, the nonelectivecontributions must satisfy the nonforfeit-ability requirements of § 1.401(k)–1(c)and be subject to the distribution require-ments of § 1.401(k)–1(d) when they areallocated to participants’ accounts. * * ** * * * *

Par. 4. Section 1.401(m)–1 is amendedby adding paragraph (d)(4) to read as fol-lows:

§ 1.401(m)–1 Employee contributionsand matching contributions.* * * * *

(d) * * *

(4) Effective date for definitions of quali-fied matching contributions (QMACs) andqualified nonelective contributions (QNECs).The revisions to the definitions ofQMACs and QNECs in § 1.401(m)–5 ap-ply to taxable years ending on or after thedate of publication of the Treasury deci-sion adopting these rules as final regula-tions in the Federal Register.

Par. 5. Section 1.401(m)–5 is amendedby revising the definitions of Qualifiedmatching contributions (QMACs) andQualified nonelective contributions(QNECs) to read as follows:

§ 1.401(m)–5 Definitions.

* * * * *Qualified matching contributions

(QMACs).Qualified matching contribu-tions or QMACs means qualified matchingcontributions or QMACs as defined in§ 1.401(k)–6.

Qualified nonelective contributions(QNECs). Qualified nonelective contribu-tions or QNECs means qualified nonelec-tive contributions or QNECs as defined in§ 1.401(k)–6.

John Dalrymple,Deputy Commissioner for

Services and Enforcement.

(Filed by the Office of the Federal Register on January 17,2017, 8:45 a.m., and published in the issue of the FederalRegister for January 18, 2017, 82 F.R. 5477)


Definition of TermsRevenue rulings and revenue procedures(hereinafter referred to as “rulings”) thathave an effect on previous rulings use thefollowing defined terms to describe theeffect:

Amplified describes a situation whereno change is being made in a prior pub-lished position, but the prior position isbeing extended to apply to a variation ofthe fact situation set forth therein. Thus, ifan earlier ruling held that a principle ap-plied to A, and the new ruling holds thatthe same principle also applies to B, theearlier ruling is amplified. (Compare withmodified, below).

Clarified is used in those instanceswhere the language in a prior ruling isbeing made clear because the languagehas caused, or may cause, some confu-sion. It is not used where a position in aprior ruling is being changed.

Distinguished describes a situationwhere a ruling mentions a previously pub-lished ruling and points out an essentialdifference between them.

Modified is used where the substanceof a previously published position is beingchanged. Thus, if a prior ruling held that aprinciple applied to A but not to B, and thenew ruling holds that it applies to both A

and B, the prior ruling is modified becauseit corrects a published position. (Comparewith amplified and clarified, above).

Obsoleted describes a previously pub-lished ruling that is not considered deter-minative with respect to future transac-tions. This term is most commonly used ina ruling that lists previously published rul-ings that are obsoleted because of changesin laws or regulations. A ruling may alsobe obsoleted because the substance hasbeen included in regulations subsequentlyadopted.

Revoked describes situations where theposition in the previously published rulingis not correct and the correct position isbeing stated in a new ruling.

Superseded describes a situation wherethe new ruling does nothing more thanrestate the substance and situation of apreviously published ruling (or rulings).Thus, the term is used to republish underthe 1986 Code and regulations the sameposition published under the 1939 Codeand regulations. The term is also usedwhen it is desired to republish in a singleruling a series of situations, names, etc.,that were previously published over a pe-riod of time in separate rulings. If the newruling does more than restate the sub-

stance of a prior ruling, a combination ofterms is used. For example, modified andsuperseded describes a situation where thesubstance of a previously published rulingis being changed in part and is continuedwithout change in part and it is desired torestate the valid portion of the previouslypublished ruling in a new ruling that isself contained. In this case, the previouslypublished ruling is first modified and then,as modified, is superseded.

Supplemented is used in situations inwhich a list, such as a list of the names ofcountries, is published in a ruling and thatlist is expanded by adding further namesin subsequent rulings. After the originalruling has been supplemented severaltimes, a new ruling may be published thatincludes the list in the original ruling andthe additions, and supersedes all prior rul-ings in the series.

Suspended is used in rare situations toshow that the previous published rulingswill not be applied pending some futureaction such as the issuance of new oramended regulations, the outcome ofcases in litigation, or the outcome of aService study.

AbbreviationsThe following abbreviations in currentuse and formerly used will appear in ma-terial published in the Bulletin.

A—Individual.Acq.—Acquiescence.B—Individual.BE—Beneficiary.BK—Bank.B.T.A.—Board of Tax Appeals.C—Individual.C.B.—Cumulative Bulletin.CFR—Code of Federal Regulations.CI—City.COOP—Cooperative.Ct.D.—Court Decision.CY—County.D—Decedent.DC—Dummy Corporation.DE—Donee.Del. Order—Delegation Order.DISC—Domestic International Sales Corporation.DR—Donor.E—Estate.EE—Employee.E.O.—Executive Order.ER—Employer.

ERISA—Employee Retirement Income Security Act.EX—Executor.F—Fiduciary.FC—Foreign Country.FICA—Federal Insurance Contributions Act.FISC—Foreign International Sales Company.FPH—Foreign Personal Holding Company.F.R.—Federal Register.FUTA—Federal Unemployment Tax Act.FX—Foreign corporation.G.C.M.—Chief Counsel’s Memorandum.GE—Grantee.GP—General Partner.GR—Grantor.IC—Insurance Company.I.R.B.—Internal Revenue Bulletin.LE—Lessee.LP—Limited Partner.LR—Lessor.M—Minor.Nonacq.—Nonacquiescence.O—Organization.P—Parent Corporation.PHC—Personal Holding Company.PO—Possession of the U.S.PR—Partner.PRS—Partnership.

PTE—Prohibited Transaction Exemption.Pub. L.—Public Law.REIT—Real Estate Investment Trust.Rev. Proc.—Revenue Procedure.Rev. Rul.—Revenue Ruling.S—Subsidiary.S.P.R.—Statement of Procedural Rules.Stat.—Statutes at Large.T—Target Corporation.T.C.—Tax Court.T.D.—Treasury Decision.TFE—Transferee.TFR—Transferor.T.I.R.—Technical Information Release.TP—Taxpayer.TR—Trust.TT—Trustee.U.S.C.—United States Code.X—Corporation.Y—Corporation.Z—Corporation.

Bulletin No. 2017–6 February 6, 2017i

Numerical Finding List1

Bulletin 2017–1 through 2017–6

Notices:

2017-1, 2017-2 I.R.B. 3672017-2, 2017-4 I.R.B. 5392017-3, 2017-2 I.R.B. 3682017-4, 2017-4 I.R.B. 5412017-5, 2017-6 I.R.B. 7792017-6, 2017-3 I.R.B. 4222017-7, 2017-3 I.R.B. 4232017-8, 2017-3 I.R.B. 4232017-9, 2017-4 I.R.B. 5422017-10, 2017-4 I.R.B. 5442017-12, 2017-5 I.R.B. 7422017-13, 2017-6 I.R.B. 7802017-14, 2017-6 I.R.B. 7832017-15, 2017-6 I.R.B. 783

Proposed Regulations:

REG-128276-12, 2017-2 I.R.B. 369REG-103477-14, 2017-5 I.R.B. 746REG-112324-15, 2017-4 I.R.B. 547REG-131643-15, 2017-6 I.R.B. 865REG-134438-15, 2017-2 I.R.B. 373REG-112800-16, 2017-4 I.R.B. 569REG-123829-16, 2017-5 I.R.B. 764REG-123841-16, 2017-5 I.R.B. 766REG-133353-16, 2017-2 I.R.B. 372REG-134247-16, 2017-5 I.R.B. 744

Revenue Procedures:

2017-1, 2017-1 I.R.B. 12017-2, 2017-1 I.R.B. 1062017-3, 2017-1 I.R.B. 1302017-4, 2017-1 I.R.B. 1462017-5, 2017-1 I.R.B. 2302017-7, 2017-1 I.R.B. 2692017-12, 2017-3 I.R.B. 4242017-13, 2017-6 I.R.B. 7872017-14, 2017-3 I.R.B. 4262017-15, 2017-3 I.R.B. 4372017-16, 2017-3 I.R.B. 5012017-18, 2017-5 I.R.B. 7432017-21, 2017-6 I.R.B. 7912017-22, 2017-6 I.R.B. 863

Revenue Rulings:

2017-1, 2017-3 I.R.B. 3772017-2, 2017-2 I.R.B. 3642017-3, 2017-4 I.R.B. 5222017-4, 2017-6 I.R.B. 776

Treasury Decisions:

9794, 2017-2 I.R.B. 2739795, 2017-2 I.R.B. 326

Treasury Decisions:—Continued

9796, 2017-3 I.R.B. 3809801, 2017-2 I.R.B. 3559802, 2017-2 I.R.B. 3619803, 2017-3 I.R.B. 3849804, 2017-3 I.R.B. 4069806, 2017-4 I.R.B. 5249807, 2017-5 I.R.B. 5739808, 2017-5 I.R.B. 5809809, 2017-5 I.R.B. 6649810, 2017-6 I.R.B. 775

1A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2016–27 through 2016–52 is in Internal Revenue Bulletin2016–52, dated December 26, 2016.

February 6, 2017 Bulletin No. 2017–6ii

Finding List of Current Actions onPreviously Published Items1

Bulletin 2017–1 through 2017–6

Notices:

2002-1Amplified byNotice 2017-1, 2017-2 I.R.B. 367

2011-86Obsoleted byNotice 2017-1, 2017-2 I.R.B. 367

2016-29Modified byNotice 2017-6, 2017-3 I.R.B. 422

Revenue Procedures:

2013-22Clarified byRev. Proc. 2017-18, 2017-05 I.R.B. 743

1A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2016–27 through 2016–52 is in Internal Revenue Bulletin2016–52, dated December 26, 2016.

Bulletin No. 2017–6 February 6, 2017iii

INTERNAL REVENUE BULLETINThe Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue

Bulletins are available at www.irs.gov/irb/.

We Welcome Comments About the Internal Revenue BulletinIf you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it, we

would be pleased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page(www.irs.gov) or write to the Internal Revenue Service, Publishing Division, IRB Publishing Program Desk, 1111 Constitution Ave.NW, IR-6230 Washington, DC 20224.

Internal Revenue ServiceWashington, DC 20224Official BusinessPenalty for Private Use, $300

IRB 2017-06 (Rev. February 6, 2017) · Notice 2017–13, page 780. This notice sets forth updates...

Documents

Transcript of IRB 2017-06 (Rev. February 6, 2017) · Notice 2017–13, page 780. This notice sets forth updates...