Form 8288

In our first post regarding the proposed section 1446(f) regulations, we addressed the rules regarding which party is the withholding agent for purposes of section 1446(f). Sections 864(c)(8) and 1446(f) were adopted as part of tax reform. Section 864(c)(8) was enacted to reverse the holding of the Tax Court in Grecian Magnesite Mining v. Commissioner, which was affirmed by the U.S. Court of Appeals for the DC Circuit. In our second post, we addressed the amount required to be withheld. In this post, we discuss the general reporting requirements for the transferor, the transferee, and the partnership. Further, we provide an overview of the new “backstop withholding” rules that will end the suspension of the partnership withholding requirement under section 1446(f)(4). The IRS suspended partnership withholding under section 1446(f)(4) under Notice 2018-29.
Continue Reading IRS Proposes Regulations under Section 1446(f) — Reporting Requirements and the “Backstop Withholding” Rules (Post 3 of 3)

On February 27, 2019, LB&I issued a memorandum (LB&I-04-02019-002) outlining a new program administred by the Foreign Payments Practice (“FPP”) that allows withholding agents to report and correct failures under Chapter 3 or 4.  The program and its procedures arose based upon the frequency with which taxpayers contact FPP regarding potential corrections for Chapter 3 and 4 withholding compliance failures.  The program establishes FPP as the central point of contact for withholding agents wishing to submit delinquent withholding tax returns, remit unpaid taxes, and seek request penalty relief.  The program is available to withholding agents other than those that are qualified intermediaries, withholding foreign partnerships, and withholding foreign trusts, but withholding agents may not participate in the program if they are currently under IRS audit for the delinquent filings, or if they are before IRS Appeals or in litigation related to issues involving noncompliance with Chapters 3 or 4 of the Code.  Although multiple years may be included in a single submission, withholding agents may only avail themselves of the program one time.
Continue Reading LB&I Establishes Correction Program for Compliance Failures under Chapters 3 and 4