Final Regulation (INTL-536-89)

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FCFECTLVE DATE: T ~ C Srcg'lle!r?x:
C
are
ei~ectlvehfay 10, ;m The text o l rkt
rtgulalians rtrtt#h e dstes
epp!!mhikity 01 the r ~ l e rcoctaiacd
thcmln to various trnnractiong 176

ta xpayen.

. .

? d R N R T H L R IYFOAMATIOY C O n t A t t :

'
'

Cgrl Cooper 01 a c Omcc of Arsociate
Chitf Coi~nral(Intcmarional], within rht
Ctfict of Chiel Cognscl. Initmal
Rcvtn:c Strvitz. 1111 Consrip~rion
Avenut, hW..Wachinpton. DC 3 0 2 4 .

Attention: CC.CORPT:R { L W 5 5 L W 9 )
t Z 0 2 - S M Z l 5 , not c

toll-free cal!).

CuPwwwAny ~ W F ~ R Y ~ ~ K

PapcrworL, Rsduclion Act

.

;rr prupaser! a c ~ t . n l m t n ! >t t , o ; ~
ooop:td by thlr

a L ~ e : : J . . n c n :ts
:t

Trres~ryDi.ii¶:on with r t v t ,,or+in
rcspcasc to lhose wmmcnts. 'ihe
camncntg a t d rtvisiozt are disclrsrcd
bolou.

Enpt:?atioo of R o r i r i y

5 h c pm&sed n&l#tio;l* unier
f t . l 8 U [ c ) [ Z ] ( i ]pmrided rule9 elating
l o whether a n obligation would be
c o n s i d e d 10 be isrutd under
arrangcmtnfs resrr,mbly designed to
insure that the obligation wit be #old [or
maold in connection with ilr ong~nal
iz~unncc]only to r person who 14 no1 P
United Stltea ptnon. Obtigatiohr h a t
~atisfiedthe "arrangtrnenta rea~onably
dcstgrcd" tcst undtr J I.l6&S[c][?j[1]
(A) or [Bj were mquircd, after the
cfrtctive date, to s a c 3 5 new 9 1.163-

T h e calItcljan ol inrormaljoa
coztaintd in &ese final rcglllationr has
S~cll:~~il(D1been reviewed and srgrortd by b e
R s p o j e d f 1.163-5:c)[f ]lI#D) listed
C16ce c l h!anagemtnt and Eudget ur
rccord:nct with de r t g u ~ - c m e n :of~ Iht l c v e n requirements. In bricI they were:
[ l ) Neither the issuer nor mny
Papcnvork Rcdx:!~on Act (44 L'.S.C
d:smbutor m a l e s r direcrtd stllixg
3504(k))undcr ccntrol number 1M.S
1132 The ~ n - l u a burden
l
per rtsponden~ effort with r t s p t c t to the obi~ga:lon:
(2)Neiihcr h e i s u e r nor sr.y
or recsrdkeeptr is estlnatcd to bc 10
distribuio: o l i t x +..t obl~gationwithin
ninulza.
the U n ~ ~ Stales
ed
or its pos~essiocmor to
T k c estimate;
~
ere a 3 hppmximaLion
Unilcd
States
pencn:
of the a v t r a a e line expected 10 be
(31 Tht issuer doer not, and each
nPte9rary lor 4 co:lccrion of
distr~burorcovenazts that il will not me11
in!ormat~on.
T
k
e
y
a
t
e
based
on
CEPARTMENT OF THE m E A S U R Y
h e obligation wit!!n the Uaitrd S!a!el
i n f o n a t i o n svmilrble 10the Lttcnal
or its pogseysionl or to r U 5- person
R ~ v e n u cSer>ice. I n d ~ v i d u * l
Ir,:ernal Ucvrnua Service
darir.; h e rtstric!td penod:
rcspondcc~ror r e c o r d k t t p t n n 2 y
14) heibtr the issut: nor any
Z i CFR Pan; 1,35& 48. and 602
r t q u ~ *~
t r t a l e r oless
t
time, dtpend~ng
dis!nbutor deliver3 h e o b l ~ g a ~ ~within
on
on their particular circumstances.
the Uni:td States or i t 1 POSSCIZLOGS
C o m c n b conccmlng the accuracy of
dunng he rest-ictcd ,.*nod:
& i s burden t s t i n a ~ tmnd ruxestloaa for
(51 AU ofrerering material* tr?.
reducing lhir burden thould b t directed
documenb used In conncct~ona ~ r bthe
to
l
h
t
tnrtrnal
Rrvtnur
S
e
n
i
c
e
,
Ee;lstratlen R t p u i r e ~ t n t rWith
ongiilal issuance o[ thc oblrpar~on
Atteot~on:1R5 Report5 CIcarncce
F e s p c c l to Ctrlsin Debt Cbll~atlan*;
includc I a:stcmcnl b a t t ! t obl~gation
Offictr.
T.FP.
Washin~ton.
DC
20224.
kppllcatlon of Repeal of 30 Percent
may
no1 bc offered or sold w;th~nIhc
a2d
to
thr
OiLcc
of
Management
and
Ylilhhold!nQ by thm Tax Reform Act of
U x i ~ e dSlorcs ur i t s porsessionr or In a
Ecdget Pmperwo:k Rcdccnon Roject
1984
Llnrled Sla:cs person:
( l j l S I 1 3 2 1 . Washington. DC tW11
[6] I f the issuer or m y dirtr~butorhell8
A c r n c v : Intcmet Rrvence Scrvicc.
the abligation d u r ~ r athe resrnctcd
Trtasuv.
pcnod \ o r d ~ l t r i b u l o r e. dtalrr. or r 2 y
On Augugr U . 1989. the F d e r d
acnou: F ~ n d;nd temporary
orher pcnon who r t c t r v c s r rcllrng
Rs@mter
p
u
b
l
~
r
h
r
d
proposed
tcgulalionr.
toncerglon. Ict a t other remuncrbtlon In
arntndmenta 15-4 FR 3 5 m ) 10 the Lncome
suuuhnr: T h ~ documcn~
r
contain4 final
respect to thc security rold, the scllcr
Tax R c g u l r t i o n ~ ( CFR
2 ~ p a n 1 1 and MI
Income Tax Rcgu!atronm mlating to the
undtr mcctlong 16310. 83. BB1. lul. 1M2 bend* r confirma~ionlo 9uch penon
~ t r l i n gh a t much penon H subject 1 0 h e
defin~bonof rht ttnn "mgislratron .
nnd 47m of the Inlcmal R t ~ ~ n Codr
ut
reamcdons regarding offer. #ale. and ,
. requlmd o b l i g + t l o ~ "
w i t h rtspccl10
of 1S~tlon
1 . 1 W S l c ) ol lfir
obiidation3 i ~ ~ u to
e dctrtain forttgn.
dclittry of h e obligation dun-g rhe
r t g d ~ t i o n nincarporatcd by reltmnu - rcrtricted ptriod: and
proon3 and relst lna lo the imposihon or
w f l a i n n q u i r t m t n \ # based on the .
rancltonl on i ~ l u c nof ngi~l-ution (71 N o later than the 10th day r i l e r he
inltrpmtmtion 01 h e Secunrjei Act of
required obllgalion8 In btmnr form. Tbir
last day of the rtatncted pcnod.
1933 by tht Securities and Exchange
document alsocontain* temwrary .
Commrswton (SEC). The SEC propo~edlo e r t i f i u t * i m provided to Iht issuer or 4
rcgulatinna mlar~ngto the n p e m l o l M
diatr~butoro f the obligarion ~ l r t i n gthat'
r e v i l e i t 3 interpretation of that ACL The
percent w~:hhold~ng
o n certain t y p c ~of
the owner of the obligation on the la31
proposed rmtndments were In rcgponsa
inlerrst by the f o x Rtform Act ol IW. to t h ~ action.
l
LYnllcn comments
d a y 01 the rrsrtictcd period is no1
T k c w rtgulatlons prourde the public
United States perJan.
r e ~ p o n d ~ nrog th~mnottct w t r t r r c r i v t d
w~lh
gutdance ncctsrsry l o comply with
f h c , e m "d~rclbutar.'warn dcilncd to
N o pubtic hearing w a s r r q u e ~ l e dand no
[he T a x Equ~tyand Fiacal Rrlpanslbil~ty public hearing w a s htld. Alrer
mean any e f f i l ~ a l eof ~ k illucr.
e
t h e lead
Act 01 1 9 : and !he T a x Reform Act o l
t_c.sideratbon of all cornmenla rqardlng
underwr~lcr any penon per11c1patlng~n

-

i l l o:<.:.al
~
:LsU.Rte GI
thr ~hLr$nl~on
pm,-3u3n1
lo conle~cluat*rranpmrnenL
and an>-person r c h g t n 5sn,ii O! ti*
~ ~ S L Lar
U ans OF I t e 1oregci.w
The term .'rcs(nc!ed penod" w n s
defined a3 fbe Fort) ddy period

btginnrnao~he later cl Urt closing at
date on which
&t offtr~ngor h e
tbr obligal~on1 ~ o D x r dto person* orbthan

-

-

,

5 ~ k3 6 Vrrok. ( T a t nlrllp.l.on may.
h c w c ~ ebc
~ , 40;d l o a U.5. person in errlktr: t r r z ~ a c t a n c r rI1 t k t peDon 1m r
finmud hsu!utian nr a c q u r ~ crod
hnldr h c g h 4 L n a n u ~ inrbtutron.)
l
Thr dirrriLuur d k c obligation will be
d r t a t d to ~ s b s r ythin r t q u i r t m t l t iZ P
covenants that it will not ofler or d l the
obligslion during the rcslridtd pcriod 10
I person whodm within the United Strtbr
or i;* p o r m i o r u nr 10 a U n i ~ e dS t i ~ c ~
Ftrson. and it horn i7 rffect in
con;te&sn wiih tht o l l t r and salt of rhc
obligation during the r r ~ h i a e pertod.
J

dhkibutor.
Section 1 . 1 6 > S ( c ] ( Z ) [ i j ~ ] was
p m p o ~ c dto be mpyiiublt IO oblcetionr
orrginalb issued rfter tkc d i ? e 30 C,)r I ~ efinal
t
reycIatio~fire publtshd -u
I h t Frdtral Reguru.
procrdurer rrwtosably d t a ~ rp
d
C o m c e r t d r l havt ruggcstrd r n u d e r
irum tb.1 irr crnployta or other r p t r
ol d~!Tcult~rr
wrth b e proposed
who a n d i r u d g tngmgtd in wllingths
o b i i ~ a t i o narr r w a r e !hat I h t abi~aation
rcgula h o r n under 9 I.~&s(c)I:j[il(D)
bncrpaljy. those tilficulbtr rn,c Imm
CBn no1 be oc,'utd or loid during ~ h t
the porribility rhat an obligation may
' rcrtncrtd -nod
to 4 person wlm i*
I a r l the requirtmenlm of (1.163within I h t Untttd States or ill
5[c)(2)!i)m)
lor rca soan :hat mmy bt
posscsrmra m lo Uniltd S!m k s
beynrtb the tantml fil tht issut:. hnd
pcrron.
f r v the
~ po3sibCity Lhrt all !he
\\"itb thcspecl to deLvs,q 01 ollrgatioor
ob!;gnlii,n> in an issue n a y h i 1 such
sold dunng Be restricted pcriod nather
the isrurr nor m y dist-lbutnt m j
rcqurrrment~iion;? a f e w cbligalion~
h a v t fa\!td *n i s w c r * d e t6quinmtr.t.
del~r-trdt nblipaba* In dzfinitive f ~ w
0 ! > t r comments concentd Ihr lack of
wrlhin the Uabrtd S r a ! e ~or ib
passrs8ior~.
en inccntivt far past-res~rict-2penod
artiLcotion :a rtqulrtd on ht tmrlju
ccr(i5catioa, when deli\-my of !he
055gsti~n
i s not -:;ired.
i13d the .
01 tLe dale ol he Iirst pe ymcnl of
pn~~~S~
(ha!
l i tthe
y date 01 ~fl$~csbL!iiy lntttcst on i h t ~biigationor h e drte cf
o! tht r e p i a t i ~ n
c a~ y not allow
deLr.ery by the srucr of b e oblisatia
mulficitnt nrne lor amrndnrnt olrhe
in defini tivc Ionn T h e ctrtihcahon ~ s y
d o r u m e n t e ! i d n m3.ummttd ~%.ith
on ~ B Z U C . b e r i v e d or rent tither by kc o m n a of
In mponse 10 lhme torrnrent5. and tn
the oblraa:;cn at by a f , ~ n c i a I
\ , I C W of t9t SECI w q ~ i r c m e e ?undrr
s
instituboa nr cleaang organrution
Krgaiatton S t!!cse firral ~ g u l a t i o n s
tkrocgh w h i t 3 be ountr holds Ihr
h a r e delt!ed the repoirrmtnts ul tht
otligatian.
.
p m ~ o r r dregulatioas r t l h : : ~to d i e l e d
f i e final rrku!mtl~nsaltet the
'
relllng tfforl~,oRcn-q mcttntrls and
exctption from ccriiiation =tamed an
eunfirmari~ns.Tht p r o ~ ~ s : o r . a r g r r d i n a tbt proposed r t ~ l r l j o n bfor " t q e t l d
~
C mnd
J +ales havt been amznricd to
afidwn offerings-. T7qe c h a ~ g t rart in
l i m ~ tw m t r h a r rhe i s r u u ' g I.uSi;ily Cot
rer)onar ro ~ o m m c t ~canmrni~g
ts
auen
actb a l d~ctnSu+on.
The c r 9 i 5 c a l i o n
end ~ a l t junCer
.
the txceprion, a l
pmcrdbrt hr L bcrl mrnended BV that
ob!isatior.r wthin at w c i r o u ~t h t
delivtry of nz o t i ~ g a ~ i oi nn dtEnltivc
targeicd f o x i y n c o r m q . T h e IRS r-lll
form lnggen ctr.~flu~:c;r.
nnC a mott
cun\inue to rcvitv the uac of the
d t l a j ~ de i l t c t ~ v edate of the e ~ l a l i o a a t x e p t b c mnd may m a k t further
ha3 bcrn prrvidrd.
cbbnuro. i i m ~ a n - a ~ ~ much
e d : changes
T h u t hnal mgc!atio>~zr@separala
would & t d t c t ~ r eon 4 pmspcctlve
snd tnde prodtar from the d e r and
bosij.
3n:trp-erahons t b r the S C ~ L I o o ~ e10
a
The dcfinilion ?I
d i s t n b u ~ o rham heen
mdapj m ~ rCnin!str~tinnoi Iha
amended In t h e w fmai rrguiatlon~.A
s:cun:ltt br;l. D t SECr
Cir:nbutorir r g e r r m that oilem vr rclI¶
interprutaooru w d be c~naidirrdby t k
rht obligation duricg the n9incted
S r r v ~ c cwhere rpproprlatt: hwrver, lhe
p v i o d purrurnt 10 a w r i l i c n cowrmd
Semrcc must ul!matrly brwjrr
with the immctr. any p e m n thrr o l f e n a r
in~crp:rta!ioruontbet~lp~bcin .
- rdh i h e o b l l g ~ t ~ odunnp
n
the nmmctcd - ,
underly~ngstcfion 195:r)(11(3).
period punumnt to a W t l c n conlmct
Theu frnrlrcgulotions conhm t h e
w l r h r pernon pm-ourly dtmmbrd and
ctfiaan mmliatcw of L h t iuuw orrnothcr
r e q u i r t m e n u (11 Rcswictiom on oflt.? 'a r d males. [ Z J m t n c t i o n ~on d d l * . e ~..
dirmburnr h a t o5et rnd rcll
r n d (31 c e r t r f i u t r o ~ o b l i u r t i m during the rtmiricred ~ r i d .
T b c prthrnblt to the pruportd
WIQ respect to olIcn and r a l t s . the
r q d r ! i m r aolicikd cornmenh on
i ~ s u e and
r
d~rtnbulorm u ! not offer o r d thc obltgaLon durrnp *t m a ~ q c i r d
prrind 10 rn person w~tkia1
b Unltrd
4

g e ? ~ r .t~i ll* c ~ r n p I ~ - n ccc.nLtrns.
r
I I hay
heen dec:cied to conrlnut currml !sw.
wh~chm n l rurh
~
convrni'J\t
obligations as bclng in k r r form
~ at
t;c Itnlt of i#suar&~final-qulniiozt
will appty to
obligations u ! i ~ i n e l i yi~nrcdrtltr

S e p t t m k ? , 1990. The i s s u a of an
obligatiun n r y choo~cto r r d r r ~ t h c r
t5r rulcr o f f l.l&S(cJ(1)[ijf A J cr
f 1.1&5(cjZ)(i)p).w the ruits n! thrsc
linul rcgul~ticms.to a n vbligatim that 1s

ar;grnally i l g u t ! mItcrMry 10. 1W and
on at h i o r e Septembtr 7.
';his d o c u m m ~rlro pblisrtr
t e n p o r a v ttguIs tiaar n ~ i s ; a ~
parrgrmphs la], Ic) md It]0: i 3 L r . m
5 and adding new
(cl to
1 . 1 W . l h t r c tumporary n g u h l ~ u c $

:=.

amerrd A 4 o i paragraph la] ro p r o l i d c
an c ~ ~ e p t i oItom
n ~Tht~*rlhf~cali~n
requirement for d a l n ahort k i n
commtrod p a p r . Under thig pr3r Irma
r certificate n.13not t t rer;u~rrdu n d u
8 l . l ~ c ) ( t ) { i ) ( ~by) Ytrtvt
{)
of A 4 d
the obl~gsKion1s *a mginal iiruc
disrounl obligalton w;tb a Icarunrs of
133days rn lers fmm the d a ~ of
t
issuantt
A-18 of paragraph (c] of f 3kmP*5
proritics that an oblipauon rhsi would
ohcrwisc bt5TId] may gual\[y as pcr1fol:o
iirlerrsl. It p.-ovrd.s f ~ r t h r r ? h e tl.o r
purposcl of l r c i i o ~
671(hj
~ and MI (cl.
in:c?~stis c 0 n s : d e . d 1 0 It psrd on or
*tlh mbptct to rht 9 4 ~ s - l h r ~ u g h
certihcnre and not ni!h respect tu a?!
oblipatmns held by Iht lurid or t-usl lo
w h i ~ hthe p a s ~ n r o u g hcrrhhcalr
rrim!rr. Thti rule wan intended to u ; r p l y
with rcsgect ropo)ment lrcm the trJslee

o l the SF-thmugh 1m9t 10 ?ha
certriiotr hoidu. but nor w t h ~ * p t c1l0
payment3 m a d e lo Ihc tructee or i h c
pas#-lhmugh t r u s t T h u ~t:~e
. rule s p p l ~ r l
when the rrus:et of the pass-through
trust it r United S t a h penon *rho
collecrc*qd ply1 out ~ n t ~ r e slor the
c e r l i f i u t e holder. bct dots not apply
\rbrn the p a y m e n t i s made lo M tru3lre
t h v t tr a I-wn
pemort A-21 I r rrntndtd ta clrnfy t h r polr,t A-:I i 3
rlso w-nrndtd coctanly 119 a,-pl~ca~bon
to RElrllCs. St-cllon 1 ; C A T 1s R!.W