IIAC SEEKS IRS RELIEF FROM WITHHOLDING REQUIREMENTS FOR PUBLICLY TRADED PARTNERSHIP DISTRIBUTIONS
Many IIAC members have entered into agreements with the IRS to become qualified intermediaries for client service purposes and have become contractually bound to comply with the withholding and reporting requirements. The U.S. Internal Revenue Service (IRS) has proposed amendments to the Qualified Intermediary (QI) Agreement that operationalizes rule changes under Sections 1446(a) and 1446(f) relating to new withholding requirements for publicly traded partnership distributions.
The proposed requirement to obtain a US TIN from non-US account holders is challenging, and non-cooperation could result in material failures and events of default for the QI. The IIAC asked for transition relief from obtaining a US TIN from account holders for the purpose of ascertaining tax treaty benefit claims. In addition, the IIAC requested a “best efforts” implementation period, as QIs will have under 6 months from the date the QI amendments are finalized to implement systems and update policies. The IIAC’s comments can be found here.
For more information on US tax issues, please contact Adrian Walrath.