Revenue Procedure 2014-47

Bulletin No. 2014 –35
August 25, 2014

HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.

INCOME TAX
Announcement 2014 –29, page 452.
The Office of Professional Responsibility (OPR) announces recent disciplinary sanctions involving attorneys, certified public
accountants, enrolled agents, enrolled actuaries, enrolled retirement plan agents, and appraisers. These individuals are
subject to the regulations governing practice before the Internal Revenue Service (IRS), which are set out in Title 31, Code
of Federal Regulations, Part 10, and which are published in
pamphlet form as Treasury Department Circular No. 230. The
regulations prescribe the duties and restrictions relating to
such practice and prescribe the disciplinary sanctions for violating the regulations.

Rev. Proc. 2014 – 47, page 393.
Revenue Procedure 2014 – 47 updates the Withholding Foreign
Partnership (WP) and Withholding Foreign Trust (WT) agreements published in Rev. Proc. 2003– 64, 2003–2 C.B. 306,
applicable to foreign partnerships and trusts that wish to enter
into a WP or WT withholding agreement with the IRS under
§§ 1.1441–5(c)(2)(ii) and (e)(5)(iv). Rev. Proc. 2014 – 47 supersedes Rev. Proc. 2003– 64, Rev. Proc. 2004 –21, 2004 –1
C.B. 702, and Rev. Proc. 2005–77, 2005–2 C.B. 1176, with
respect to the requirements of a WP or WT that apply on or
after June 30, 2014. Rev. Proc. 2014 – 47 is effective as of
August 8, 2014.

Finding Lists begin on page ii.
Index for July through August begins on page iv.

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This part includes rulings and decisions based on provisions of
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August 25, 2014

Bulletin No. 2014 –35

Part III. Administrative, Procedural, and Miscellaneous
26 CFR 1.1441–5:Withholding on Payments to Partnerships, Trusts, and Estates.

Rev. Proc. 2014 – 47
Application Procedures and Overview
of Requirements for Withholding Foreign
Partnership or Withholding Foreign Trust
Status Under Chapters 3 and 4; Final
Withholding Foreign Partnership Agreement; Final Withholding Foreign Trust
Agreement
SECTION 1. PURPOSE AND SCOPE
.01 Purpose. This revenue procedure
provides guidance for entering into a
withholding foreign partnership agreement (WP agreement) and a withholding
foreign trust agreement (WT agreement)
with the Internal Revenue Service (IRS)
under §§ 1.1441–5(c)(2)(ii) and (e)(5)(v)1.
Section 2 of this revenue procedure provides background on the withholding and
reporting requirements of chapters 3 and 4
of the Internal Revenue Code (Code) and
highlights changes to the existing WP
agreement and WT agreement published
in Revenue Procedure 2003– 64, 2003–2
C.B. 306 (as amended by Revenue Procedure 2004 –21, 2004 –1 C.B. 702, and
Revenue Procedure 2005–77, 2005–2
C.B. 1176). Section 3 of this revenue procedure provides the application procedures for becoming a withholding foreign
partnership (WP) or withholding foreign
trust (WT) and for renewing a WP agreement or WT agreement. Section 4 of this
revenue procedure provides the revised
WP agreement and section 5 of this revenue procedure provides the revised WT
agreement. The objective of the WP agreement and WT agreement is to allow a foreign partnership or foreign trust to become a
WP or WT and to assume the withholding
and reporting obligations under chapters 3
and 4 of the Code for payments of U.S.
source income (such as interest, dividends,
and royalties) made to its partners, beneficiaries, or owners, and in some cases, persons holding interests in the WP or WT
through one or more foreign intermediaries
or flow-through entities.

.02 Entities Eligible to Execute a WP
or WT Agreement. The WP agreement
and WT agreement may be entered into by
a foreign partnership and a foreign trust
described in §§ 1.1441–5(c)(2)(ii) and
(e)(5)(v). With respect to a foreign financial institution (FFI), the WP agreement
and WT agreement may only be entered
into by an FFI that agrees to satisfy the
requirements and obligations of (1) a participating FFI (including a reporting Model 2
FFI), (2) a registered deemed-compliant FFI
(including a reporting Model 1 FFI and a
nonreporting Model 2 FFI treated as registered deemed-compliant), or (3) a registered
deemed-compliant Model 1 IGA FFI (as defined in section 2 of the WP agreement or WT
agreement). See §§ 1.1471–1(b)(91) and
(111). An FFI that is a certified deemedcompliant FFI (including a nonreporting
IGA FFI (as defined in § 1.1471–1(b)(83))
may enter into a WP agreement or WT
agreement if the FFI meets and agrees to
assume the obligations of, and to be treated
as, a participating FFI (including a reporting
Model 2 FFI), a registered deemedcompliant FFI (including a reporting Model
1 FFI or a nonreporting Model 2 FFI treated
as registered deemed-compliant), or a registered deemed-compliant Model 1 IGA FFI.
A nonfinancial foreign entity (NFFE) or an
FFI that is a retirement fund (as defined in
section 2 of the WP agreement or WT
agreement) may also apply to enter into a
WP agreement or WT agreement.
A partnership or trust that is a territory
financial institution (territory FI) (as defined
in § 1.1471–1(b)(130)) or a nonparticipating
FFI (as defined in § 1.1471–1(b)(82)) may not
enter into a WP agreement or WT agreement.
.03 Effective Date. The WP agreement
and WT agreement provided in sections 4
and 5 of this revenue procedure, respectively, apply to a WP agreement and WT
agreement with an effective date on or
after June 30, 2014.
(A) Renewal of a WP agreement or WT
agreement. A WP or WT that applies to
renew its WP or WT status on the IRS
FATCA registration website and that is
approved by the IRS on or before August
31, 2014, will have a WP agreement or

WT agreement with an effective date of
June 30, 2014. A WP or WT that applies
to renew its WP or WT status on the
FATCA registration website and is approved by the IRS after August 31, 2014,
will have a WP agreement or WT agreement with an effective date of the date the
renewal is approved. For this purpose, the
date the renewal is approved is the later of
the date the WP or WT is issued a global
intermediary identification number (GIIN)
or the WP or WT submits a request for
renewal. If WP is a retirement fund or an
NFFE that is not a sponsoring entity (as
defined in § 1.1471–1(b)(124)), it cannot
renew its WP agreement on the FATCA
registration website but must renew its
WP agreement by submitting a request for
renewal as described in section 3.02 of
this revenue procedure and it does not
need to obtain a GIIN. A WP or WT that
is a retirement fund or an NFFE that is not
a sponsoring entity and that applies to
renew its WP agreement or WT agreement and that is approved by the IRS on
or before August 31, 2014, will have a
WP agreement or WT agreement with an
effective date of June 30, 2014. A WP or
WT that is a retirement fund or an NFFE
that is not a sponsoring entity and that
applies to renew its WP agreement or WT
agreement after August 31, 2014 and that
is approved by the IRS will have a WP
agreement or WT agreement with an effective date of the date of renewal as provided in the IRS’ approval notice.
(B) New WP agreement or WT agreement
(1) Calendar Year 2014. An entity
(other than a retirement fund or an NFFE
that is not a sponsoring entity) that applies
for WP or WT status before August 31,
2014 and is approved will have a WP
agreement or WT agreement with an effective date of June 30, 2014, provided
that it obtains a GIIN, if it has not already
done so, within 90 days of such approval.
An entity (other than a retirement fund or
an NFFE that is not a sponsoring entity)
that applies after August 31, 2014, will
have a WP agreement or WT agreement
with an effective date of the date it is

1
Unless otherwise provided, all citations in this revenue procedure and the WP agreement and WT agreement are to the Internal Revenue Code of 1986 and to the Income Tax Regulations
thereunder.

Bulletin No. 2014 –35

393

August 25, 2014

issued a WP–EIN or WT–EIN, if its application is approved and provided that it
obtains a GIIN, if it has not already done
so, within 90 days of such approval. A
new WP or WT applicant that is a retirement fund or an NFFE that is not a sponsoring entity will have a WP agreement or
WT agreement with an effective date of
the date it is issued a WP–EIN or WT–
EIN, if its application is approved. See
section 1.04 of this revenue procedure
providing that a new WP or WT may act
as a withholding foreign partnership or
withholding foreign trust beginning January 1, 2014, if it complies with certain
requirements.
(2) Calendar Years after 2014. For calendar years after 2014, applications for
WP or WT status received on or before
March 31 of the calendar year, if approved, will be effective January 1 of that
calendar year. Applications for WP or WT
status received on or after April 1, if approved, will be effective January 1 of the
following calendar year and the entity must
be in compliance with the WP agreement or
WT agreement beginning January 1.
.04 Special Procedure for New WPs
and WTs for Calendar Year 2014. Except
as otherwise provided in this section 1.04,
an entity that has submitted an application
to enter into a WP agreement or WT
agreement and that is approved by the IRS
during the calendar year may act as a WP
or WT in accordance with the revised WP
agreement or WT agreement for the entire
calendar year. For calendar year 2014, an
entity that applies for WP or WT status
may act in accordance with Revenue Procedure 2003– 64 (as amended) for
amounts subject to chapter 3 withholding
(as defined in section 2.04 of the WP
agreement or WT agreement) received before June 30, 2014, as if the WP agreement or WT agreement of such WP or WT
were effective on January 1, 2014 and
expired on June 30, 2014. For amounts
subject to chapter 3 withholding and withholdable payments received between June
30, 2014, and September 1, 2014, such
entity may apply the principles described
in section 1.05 of this revenue procedure.
For the period beginning on September 1,
2014, through the term of the approved
revised WP agreement or WT agreement,
the entity must comply with the revised
WP agreement or WT agreement provided

August 25, 2014

that the agreement has not been terminated.
.05 Special Procedures for Payments
Received Prior to September 1, 2014. An
entity that receives a withholdable payment or an amount subject to chapter 3
withholding prior to September 1, 2014,
may represent itself to its withholding
agent as a WP or WT, provided that the
entity complies with the WP agreement or
WT agreement in effect prior to June 30,
2014, and, in the case of an existing WP
or WT, submits a request for renewal of
its WP agreement or WT agreement (revised as provided in this revenue procedure) on or before August 31, 2014. However, because the revised WP agreement
and WT agreement require a WP or WT to
assume primary chapter 4 withholding responsibilities with respect to its partners,
beneficiaries and owners (as applicable)
under sections 1471 and 1472 in addition
to its existing withholding requirements
under the WP agreement and WT agreement, a WP or WT that makes a distribution for which withholding is required under chapter 4 beginning July 1, 2014, with
respect to a partner, beneficiary or owner
and does not withhold under chapter 4 to
the extent required under the revised WP
agreement or WT agreement must apply
the procedures referenced in § 1.1474 –
2(b) to satisfy any underwithholding.
.06 Effect on Other Documents. Revenue Procedure 2003– 64, 2003–2 C.B.
306, Revenue Procedure 2004 –21,
2004 –1 C.B. 702, and Revenue Procedure
2005–77, 2005–2 C.B. 1176, are superseded with respect to the requirements of
a WP or WT that apply on or after June
30, 2014. A WP agreement or WT agreement (which includes any riders to such
agreement) in effect before June 30, 2014
expires on June 30, 2014. A WP or WT
that had previously obtained a rider to its
WP agreement or WT agreement and
seeks to renew such rider (or request another rider to the WP or WT agreement)
must apply directly to the IRS by submitting a request at the address provided in
section 3.01 of this revenue procedure.
SECTION 2. BACKGROUND
.01 Withholding and Reporting under
Chapter 4 of the Code. Section 1471(a)
requires a withholding agent to deduct and
withhold a tax equal to 30 percent on any

394

withholdable payment made to an FFI,
unless the FFI agrees to and complies with
the terms of an FFI agreement (published
in Revenue Procedure 2014 –38, 2014 –29
I.R.B. 132 (as updated or superseded by
any subsequent revenue procedure)) to
satisfy the obligations specified in section
1471(b) (a participating FFI), is deemed to
meet these requirements under section
1471(b) (a deemed-compliant FFI), or is
treated as an exempt beneficial owner under § 1.1471– 6. Section 1472(a) requires
a withholding agent to deduct and withhold a tax equal to 30 percent on any
withholdable payment made to an NFFE
unless such entity provides a certification
that it does not have any substantial U.S.
owners, provides information regarding
its substantial U.S. owners, or an exception to these requirements otherwise applies.
A participating FFI (including a reporting Model 2 FFI) or registered deemedcompliant FFI (other than a reporting
Model 1 FFI or registered deemedcompliant Model 1 IGA FFI) will satisfy
its requirement to withhold under sections
1471(a) and 1472(a) with respect to account holders of the FFI that are entities
by withholding on withholdable payments
made to nonparticipating FFIs and recalcitrant account holders under the FFI
agreement, § 1.1471–5(f), or an applicable
Model 2 IGA. See the FFI agreement,
§ 1.1471–5(f), and the applicable Model 2
IGA for the withholding requirements that
apply to withholdable payments made to
account holders of the FFI that are individuals treated as recalcitrant account
holders. A reporting Model 1 FFI or a
registered deemed-compliant Model 1
IGA FFI will satisfy its requirement to
withhold under section 1471(a) with respect to its account holders by withholding on withholdable payments made to
nonparticipating FFIs to the extent required under the applicable Model 1 IGA.
A withholding agent (including a participating FFI or registered deemedcompliant FFI) that is required to withhold on a withholdable payment must
report the payment on Form 1042–S, Foreign Person’s U.S. Source Income Subject
to Withholding.
A participating FFI (including a reporting Model 2 FFI) and certain registered
deemed-compliant FFIs must, for a tran-

Bulletin No. 2014 –35

sitional period, report certain information
about accounts it maintains that are held
by nonparticipating FFIs. A withholding
agent (including an FFI with respect to
payments made to an NFFE that were not
already reported with respect to a U.S.
account (as defined in § 1.1471–
1(b)(134)) or U.S. reportable account (as
defined under the applicable Model 1 or
Model 2 IGA)) is also required to report
withholdable payments made to an NFFE
(other than an excepted NFFE) with substantial U.S. owners on Form 8966,
FATCA Report, even though no withholding is required. See §§ 1.1472–
1(b)(iii) and 1.1474 –1(d) and (i).
.02 Withholding and Reporting under
Chapter 3 of the Code. Under sections
1441 and 1442, a withholding agent is
required to deduct and withhold a tax
equal to 30 percent on any payment of
U.S. source fixed or determinable annual
or periodical (FDAP) income that is an
amount subject to withholding (as defined
in § 1.1441–2(a)) made to a foreign person. A lower rate of withholding may
apply under the Code (e.g., section 1443),
the regulations, or an income tax treaty.
Generally, a withholding agent must also
report the payments on Forms 1042–S,
regardless of whether withholding is required. See § 1.1461–1(c).
.03 Coordination of Withholding and
Reporting Requirements under Chapters 3
and 4 of the Code. With respect to a
payment that is subject to withholding under chapter 4, a withholding agent may
credit any tax withheld under chapter 4
against its liability for any tax due with
respect to the payment under chapter 3. A
withholding agent may use a single Form
1042–S to report information required under both chapters 3 and 4 with respect to a
withholdable payment of U.S. source
FDAP income subject to withholding under chapter 4 and for which a credit
against the beneficial owner’s chapter 3
liability, if any, may be claimed. Thus, a
withholding agent that reports on Form
1042–S a withholdable payment that has
been withheld upon under chapter 4 may
provide certain information about the beneficial owner of the payment for purposes
of chapter 3 on the same Form 1042–S.
With respect to a withholdable payment of
U.S. source FDAP income that is not subject to withholding under chapter 4 and

Bulletin No. 2014 –35

that is an amount subject to withholding
(or reporting) under chapter 3, a withholding agent is also required to report the
applicable chapter 4 exemption code in
addition to the other information required
to be reported on Form 1042–S.
.04 Reporting Regarding Certain U.S.
Persons by Foreign Partnerships and Foreign Trusts.
If a foreign partnership has U.S. partners, the foreign partnership is generally
required to file Form 1065 with a Schedule K–1 to report each U.S. partner. See
§ 1.6031(a)–1. If a foreign trust is a
grantor trust with U.S. owners, the foreign
trust is required to file Form 3520 –A,
Annual Information Return of a Foreign
Trust with a U.S. Owner, and to provide
statements to a U.S. owner, as well as
each U.S. beneficiary who is not an owner
and receives a distribution. See section
6048(b).
A participating FFI (including a reporting Model 2 FFI), a registered deemedcompliant FFI (including a reporting
Model 1 FFI and a nonreporting Model 2
FFI treated as registered deemedcompliant), or a registered deemedcompliant Model 1 IGA FFI must also
report certain account information regarding each of its U.S. accounts (or U.S.
reportable accounts) that it maintains to
the extent required under the FFI agreement, § 1.1471–5(f), Model 1 IGA, or
Model 2 IGA, as applicable to the FFI’s
chapter 4 status. A participating FFI (including a reporting Model 2 FFI) or a
registered deemed-compliant FFI (other
than a reporting Model 1 FFI) must also
report certain information about accounts
that it maintains that are held by recalcitrant account holders (or non-consenting
U.S. accounts).
.05 Changes to WP Agreement and
WT Agreement. Revenue Procedure
2003– 64, 2003–2 C.B. 306, set forth the
existing WP and WT agreements. This
revenue procedure revises and updates the
WP and WT agreements to coordinate
with the withholding and reporting requirements of chapter 4, and based on the
IRS’ experience in dealing with these entities since the WP and WT agreements
were first published in 2003. Highlights of
the significant changes to the revised WP
and WT agreements published in this revenue procedure are as follows.

395

(A) Coordination of Chapter 4. Consistent with the provisions under
§ 1.1441–5(c)(2)(ii), the revised WP
agreement and WT agreement require a
WP or WT that is an FFI to obtain chapter
4 status as a participating FFI (including a
reporting Model 2 FFI), a registered
deemed-compliant FFI (including a reporting Model 1 FFI and a nonreporting
Model 2 FFI treated as registered deemedcompliant), or a registered deemedcompliant Model 1 IGA FFI. An FFI that
has entered into a WP agreement or WT
agreement remains subject to the FATCA
requirements applicable to its chapter 4
status for all of its partners, beneficiaries,
or owners that are account holders for
chapter 4 purposes (see § 1.1471–5(a)(3)
for the definition of account holder) irrespective of whether the FFI is acting as a
WP or WT with respect to such partner,
beneficiary, or owner. When an FFI
chooses to act as a WP or WT with respect
to a partner, beneficiary, or owner that is
an account holder of the WP or WT for
chapter 4 purposes, the FFI must comply
with the FATCA obligations applicable to
its chapter 4 status, except when such
obligations have been explicitly modified
in the WP agreement or WT agreement
(for example, the timing for when a WP or
WT is required to withhold on a withholdable payment). The WP agreement and
WT agreement also provide when the WP
or WT is permitted to coordinate its
FATCA requirements with the WP’s or
WT’s requirements under the WP agreement or WT agreement. For example, a
WP or WT (regardless of whether it is an
FFI or NFFE) must also assume section
1472 reporting obligations with respect to
withholdable payments made to its partners, beneficiaries, or owners for which it
acts as a WP or WT.
The existing WP agreement and WT
agreement require a WP or WT to assume
withholding responsibilities under chapter
3 with respect to its direct partners, beneficiaries, or owners. To coordinate with
chapter 4, the revised WP agreement and
WT agreement require a WP and a WT to
assume chapter 4 withholding responsibilities (in addition to its chapter 3 withholding responsibilities) with respect to its direct partners, beneficiaries, and owners. A
WP or WT that withholds an amount under chapter 4 pursuant to its FATCA re-

August 25, 2014

quirements may credit any tax withheld
under chapter 4 against its liability for any
tax due with respect to payments under
chapter 3 consistent with the coordination
rule provided in § 1.1441–3(a)(2). Additionally, because a WP or WT will be
required to assume primary withholding
responsibility for chapter 4 purposes, the
revised WP agreement and WT agreement
expand the scope of payments for which
an entity can act as a WP or WT to reportable amounts (as defined in section 2
of the WP or WT agreement, which includes withholdable payments). Thus, a
WP or WT need not provide its withholding agent with a nonwithholding foreign
partnership or nonwithholding foreign
trust withholding certificate and withholding statement for reportable amounts not
subject to chapter 3 withholding that are
allocable to partners, beneficiaries, or
owners that are U.S. non-exempt recipients. A WP or WT will be required to
report partners, beneficiaries, or owners
that are U.S. non-exempt recipients on
Form 8966, Schedule K–1, or Form
3520 –A to the extent required under its
FATCA requirements or the WP agreement or WT agreement.
(B) Documentation Requirements. The
existing WP agreement and WT agreement require a WP or WT to document its
partners, beneficiaries, or owners solely
with Forms W– 8 and W–9 and do not
permit reliance on the presumption rules
of chapters 3 or 61. The revised WP
agreement and WT agreement also prohibit reliance on the presumption rules
with respect to a WP or WT’s direct partners, beneficiaries, or owners and retain
an automatic termination provision for a
WP or WT’s failure to obtain documentation for a direct partner, beneficiary, or
owner. The revised WP agreement and
WT agreement provide for the use of documentary evidence, in lieu of a Forms
W– 8 or Form W–9, for direct partners,
beneficiaries, or owners that is obtained
by a WP or WT that is an FFI and that is
subject to the “know-your-customer”
practices and procedures of a jurisdiction
that the IRS has approved. A list of jurisdictions for which the IRS has received
know-your-customer information and for
which the know-your-customer rules are
acceptable is available at: http://www.irs.
gov/Businesses/International-Businesses/

August 25, 2014

List-of-Approved-KYC-Rules. The rules permitting the use of documentary evidence do
not apply to an NFFE acting as a WP or
WT, which is required to obtain Forms
W– 8 and W–9 to document the chapter 3
status and, when required, the chapter 4 status
of its partners, beneficiaries, or owners.
Previously, the WP agreement and WT
agreement could be modified by rider to
allow a WP or WT to reduce the rate of
withholding under chapter 3 based on a
beneficial owner’s claim of treaty benefits
without regard to the requirement that a
Form W– 8BEN include the direct partner,
beneficiary, or owner’s U.S. taxpayer
identification number (TIN) as long as the
WP or WT obtained a valid Form
W– 8BEN from a direct partner, beneficiary, or owner on which a claim of treaty
benefits was made, including the appropriate limitation on benefits and section
894 certifications, if applicable. The revised WP agreement and WT agreement
incorporate this allowance, eliminating
the need for a rider for this purpose.
(C) Agency Option, Joint Account Option, and Indirect Partners. The existing
WP agreement and WT agreement do not
allow a WP or WT to act as a WP or WT
for its indirect partners, beneficiaries, or
owners, except in two specific situations
described in section 9 of the WP agreement or WT agreement (agency and joint
account arrangements), both of which require a written agreement between the WP
or WT and another foreign partnership or
foreign trust. In both situations, a WP or
WT must make a pooled reporting election under section 6 of the existing WP
agreement or WT agreement with respect
to the direct partners, beneficiaries, or
owners of the other foreign partnership or
foreign trust. The WP agreement and WT
agreement retain the joint account and
agency options, as revised in section 9 of
the WP agreement or WT agreement, to
provide that a partnership or trust to which
a WP or WT may apply the joint account
or agency option must maintain a permissible chapter 4 status. The WP agreement
and WT agreement also retain the allowance for the WP or WT to pool report in
chapter 3 reporting pools with respect to
the direct partners, beneficiaries, or owners of such partnership or trust. For the
period beginning on the effective date of
the WP agreement or WT agreement and

396

ending December 31, 2014, the revised
WP agreement and WT agreement provide that a WP or WT that has entered into
an agreement with a partnership or trust to
apply the joint account or agency option
may continue to act consistent with such
agreement provided that the agreement
meets the requirements of section 10 of
Revenue
Procedure
2003– 64
(as
amended). A partnership or trust to which
the joint account or agency option applies
may treat an obligation (which includes an
account) held by an entity that it opens,
executes, or issues on or after July 1,
2014, and before January 1, 2015, as a
preexisting obligation for purposes of sections 1471 and 1472 as provided in Notice
2014 –33, 2014 –21 I.R.B. 1033, so that
the WP or WT will not generally be required to withhold under chapter 4 during
this transitional period.
Notwithstanding the restriction described above, the existing WP agreement
and WT agreement were modified by rider
in certain cases to permit a WP or WT to
act as such for its indirect partners, beneficiaries, or owners, but the rider required
specific payee reporting by the WP or WT
with respect to these partners, beneficiaries, or owners. The WP agreement and
WT agreement are revised to provide that
a WP or WT may act as a WP or WT with
respect to direct and indirect partners,
beneficiaries, or owners of a direct partner
that is a passthrough partner (as defined in
section 2 of the WP or WT agreement),
provided that such partner, beneficiary, or
owner is not a U.S. non-exempt recipient
(unless such U.S. non-exempt recipient is
included in the passthrough partner’s
chapter 4 withholding rate pool of U.S.
payees or recalcitrant account holders) in
which case the WP or WT may also assume the withholding and Form 1042–S
reporting requirements for these indirect
partners. The WP or WT must report on a
specific recipient basis with respect to indirect partners, beneficiaries, or owners
for which it acts as a WP or WT (except to
the extent the WP or WT is permitted to
pool report for chapter 4 purposes or as
otherwise permitted in section 9 of the
WP or WT agreement).
(D) Compliance Procedures. The existing WP agreement and WT agreement
require periodic audits by an external auditor in certain circumstances, including

Bulletin No. 2014 –35

when a WP or WT made a pooled reporting election. The revised WP agreement
and WT agreement replace the external
audit requirement with an internal compliance program. As part of the internal compliance program, a WP or WT is required
to designate a responsible officer who will
oversee the program and who will make a
periodic certification described in section
8.03 of the WP agreement or WT agreement and provide certain factual information regarding the results of the WP or
WT’s internal compliance review. The
factual information requested will vary
depending on the reportable amounts received by the WP or WT and whether the
WP or WT makes a pooled reporting election. A periodic certification will be required once every three calendar years
that the agreement is in effect (including
extensions to the WP agreement or WT
agreement). Although the WP or WT will
be required to arrange for the performance
of a periodic review of its compliance
with the WP agreement or WT agreement
during the certification period, the revised
agreements provide more flexibility than
the existing agreements both with respect
to the auditors who are eligible to perform
the review and the content of the periodic
review report. Further, the periodic review
report is not required to be filed with the
IRS absent a specific request for the report. The change to an internal compliance
program corresponds to similar changes
made to the qualified intermediary (QI)
agreement and applies without regard to
whether the WP or WT makes the pooled
reporting election for chapter 3 purposes.
(E) Modified Form 1065 Filing Requirement. Under the existing WP agreement, unless modified by a rider, a WP is
required to file Form 1065 and Schedules
K–1 in accordance with the requirements
of § 1.6031(a)–1 and the instructions to
the form. Section 1.6031(a)–1(b)(3) provides that if a foreign partnership has U.S.
source income but does not have income
that is effectively connected with the conduct of a trade or business within the
United States, does not have any direct or
indirect U.S. partners, and meets certain
other conditions, such foreign partnership
is not required to file a partnership return.
Section 1.6031(a)–1(b)(3) also provides
that if similar conditions to those described above are met but the foreign part-

Bulletin No. 2014 –35

nership has direct or indirect U.S. partners, such foreign partnership need only
file Schedules K–1 for its U.S. partners (or
foreign passthrough partners through
which U.S. persons hold an interest in the
foreign partnership). However, the modified filing requirements provided in
§ 1.6031(a)–1(b)(3) expressly exclude
WPs. In certain circumstances, the WP
agreement, by rider, permitted a WP to
apply the modified filing obligations under § 1.6031(a)–1(b)(3). The revised WP
agreement incorporates the modified filing
obligations under § 1.6031(a)–1(b)(3)
with certain revisions to permit a WP that
meets the conditions specified in section
6.03(B) of the WP agreement, including
that the WP would not otherwise be required to report a specifically allocated
item to any partner on Schedule K–1, to
either not file a partnership return or not
file Schedules K–1 for certain foreign
partners dependent on whether the WP
has any direct or indirect U.S. partners.
SECTION 3. APPLICATION
PROCEDURES FOR A WP
AGREEMENT OR WT AGREEMENT
.01 Prospective WP or WT. An entity
seeking to enter into a WP agreement or
WT agreement must submit an application
to become a WP or WT. The application
must establish, to the satisfaction of the
IRS, that the applicant has adequate resources and has established appropriate
practices and procedures to comply with
the terms of the WP agreement or WT
agreement. An application must include
the information required by Form 14345,
Qualified Intermediary Application, a
completed Form SS– 4 (Application for
Employer Identification Number), and
any additional information and documentation requested by the IRS. An entity
must apply for WP or WT status by submitting Form 14345, Qualified Intermediary Application, to:
Internal Revenue Service
Foreign Payments Program
290 Broadway, 12th Floor
New York, New York 10007–1867
Attention: QI/WP/WT Applications
Once the WP or WT application is
approved, the IRS will send an approval
notice to the address of the applicant pro-

397

vided on Form 14345. The approval notice will include a WP–EIN or WT–EIN
assigned to the entity for fulfilling the
requirements of a WP or WT under chapters 3 and 4, including making tax deposits and filing Forms 1042, 1042–S, and
8966. The approval notice will also instruct a WP or WT that is an FFI (other
than a retirement fund) that, if it has not
already done so, the WP or WT, within 90
days of the effective date of its agreement,
must register with the IRS through the
FATCA registration website available at
www.irs.gov/FATCA to obtain a chapter 4
status as a participating FFI, registered
deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI. A
WP or WT that is an FFI (other than a
retirement fund) or an NFFE that is a
sponsoring entity, must, within 90 days of
the effective date of its WP agreement or
WT agreement, register its status as a WP
or WT on the FATCA registration website
by providing the information requested
for renewal of WP or WT status. Upon
completion of the registration process, a
WP or WT described in the preceding
sentence will be issued a GIIN (which is
separate from its WP–EIN or WT–EIN) to
be used to identify its chapter 4 status to
withholding agents and to tax administrators, if applicable, and for FATCA reporting to the extent required under its
FATCA requirements.
For future years, the IRS intends to
update the online FATCA registration
website to allow a prospective WP or WT
to submit a WP or WT application electronically and in such manner as the IRS
may prescribe in future guidance or other
instructions. Until this update to the
FATCA registration website occurs, a
prospective WP or WT must submit a
paper Form 14345 to the IRS at the address identified above.
The IRS will not enter into a WP agreement or WT agreement with an FFI that
provides for the use of documentary evidence obtained under a jurisdiction’s knowyour-customer rules if it has not approved
that jurisdiction’s “know-your-customer”
practices and procedures for opening accounts. A list of jurisdictions with knowyour-customer rules that the IRS has approved is available at: http://www.irs.
gov/Businesses/International-Businesses/
List-of-Approved-KYC-Rules. To request

August 25, 2014

IRS approval of a jurisdiction’s knowyour-customer rules, contact the KYC coordinator in the Foreign Intermediaries
Program at the address provided above.
.02 Existing WP or WT. A WP or WT
that has executed a WP agreement or WT
agreement and seeks to renew its WP
agreement or WT agreement and intends
to register (or has registered) as a participating FFI, registered deemed-compliant
FFI, or sponsoring entity must do so by
submitting a registration form through the
FATCA registration website available at
www.irs.gov/FATCA and including the information requested for renewal of its WP
or WT status. A WP or WT should ensure
that it has provided to the IRS all of the
information that is required to complete
its FATCA registration and renew its WP
agreement or WT agreement. Upon completion of the registration process and approval by the IRS, a WP or WT will be
issued a GIIN to be used to identify its
chapter 4 status to withholding agents and
to tax administrators, if applicable, for
FATCA reporting. A WP or WT will retain its previously issued WP–EIN or
WT–EIN for fulfilling the requirements of
a WP or WT under chapters 3 and 4,
including making tax deposits and filing
Forms 1042, 1042–S and 8966.
An existing WP or WT that is a retirement fund or an NFFE that is not a sponsoring entity must renew its WP or WT
agreement by submitting a request for renewal to the Foreign Intermediaries Program at the address provided in section
3.01 of this revenue procedure.
.03 Requesting Modifications. The IRS
will consider modifications by rider to the
WP or WT agreement only if the WP or
WT’s unique facts and circumstances necessitate a modification. The WP or WT
request for modification of the WP agreement or WT agreement must include: (1) a
detailed description of the partnership or
trust’s unique facts and circumstances, (2)
suggested modifications to the agreement,
and (3) an analysis of the feasibility of any
such suggested modifications. Such request must be submitted to the IRS at the
address listed in section 3.01 of the revenue procedure. In its sole discretion, the
IRS may agree, or refuse, to modify the
WP or WT agreement.

August 25, 2014

SECTION 4. WITHHOLDING
FOREIGN PARTNERSHIP
AGREEMENT
Section 1. PURPOSE AND SCOPE
Section 2. DEFINITIONS
Section 3. WITHHOLDING
RESPONSIBILITY
Section 4. DOCUMENTATION
REQUIREMENTS
Section 5. WITHHOLDING
FOREIGN PARTNERSHIP
WITHHOLDING
CERTIFICATE
Section 6. TAX RETURN AND
INFORMATION
REPORTING
OBLIGATIONS
Section 7. ADJUSTMENTS FOR
OVER– AND UNDERWITHHOLDING;
REFUNDS
Section 8. COMPLIANCE
PROCEDURES
Section 9. CERTAIN PARTNERSHIPS
AND TRUSTS AND
INDIRECT PARTNERS
Section 10. EXPIRATION,
TERMINATION AND
DEFAULT
Section 11. MISCELLANEOUS PROVISIONS
Section 12. EFFECTIVE DATE OF
AGREEMENT

procedure to be a withholding foreign partnership for purposes of § 1.1441–5(c)(2);
WHEREAS, WP and the IRS desire to
enter into an agreement to establish WP’s
rights and obligations regarding documentation, withholding, information reporting, tax return filing, deposits, and refund
procedures under sections 1441, 1442,
1443, 1461, 1471, 1472, 1474, 6031,
6302, 6402, and 6414 with respect to certain types of payments;
WHEREAS, WP represents that there
are no legal restrictions that prohibit it
from complying with the requirements of
this Agreement;
WHEREAS, if WP is a foreign financial institution (other than a retirement
fund), WP represents that it has agreed to
comply with the requirements of the FFI
agreement, in the case of a participating
FFI; § 1.1471–5(f)(1) or the applicable
Model 2 IGA, in the case of a registered
deemed-compliant FFI (other than a reporting Model 1 FFI); or an applicable
IGA, in the case of a reporting Model 1
FFI or a registered deemed-compliant
Model 1 IGA FFI (as defined in section
2.17(C) of this Agreement) beginning on
the effective date of this Agreement;
NOW, THEREFORE, in consideration of the following terms, representations, and conditions, the parties agree as
follows:
Section 1. PURPOSE AND SCOPE

The text of the WP agreement is set
forth below. The IRS will no longer provide signed copies of the WP agreement.
A reporting Model 2 FFI should interpret
this Agreement by substituting the term
“reporting Model 2 FFI” for “participating
FFI” throughout this Agreement, except in
cases where this Agreement explicitly refers to a reporting Model 2 FFI. A reporting Model 1 FFI and a nonreporting
Model 2 FFI treated as a registered
deemed-compliant FFI should apply this
Agreement by substituting the term “reporting Model 1 FFI” or “nonreporting
Model 2 FFI,” as applicable, for “registered deemed-compliant FFI” throughout
this Agreement, except in cases where this
Agreement explicitly refers to a reporting
Model 1 FFI or nonreporting Model 2 FFI
treated as a registered deemed-compliant
FFI.
WHEREAS, WP has submitted an application in accordance with this revenue

398

Sec. 1.01. General Obligations. When
the IRS enters into a WP agreement with
a foreign person, that foreign person becomes a WP. Except as otherwise provided in this Agreement, WP’s obligations
with respect to income distributed to, or
included in the distributive shares of, its
partners are governed by the Internal Revenue Code and the regulations thereunder.
WP must act in its capacity as a withholding foreign partnership pursuant to this
Agreement for reportable amounts that are
distributed to, or included in the distributive share of, WP’s direct partners. WP
may also act as a withholding foreign
partnership for reportable amounts that
are distributed to, or included in the distributive share of, a partner, beneficiary,
or owner of a passthrough partner (i.e., an
indirect partner of WP) if such indirect
partner is not a U.S. non-exempt recipient.
Notwithstanding the preceding sentence, a

Bulletin No. 2014 –35

WP may act as a withholding foreign partnership for an indirect partner that is a
U.S. non-exempt recipient if such partner
is included in the passthrough partner’s
chapter 4 withholding rate pool (as defined in section 2.14 of this Agreement) of
U.S. payees or recalcitrant account holders provided on the FFI withholding statement (as defined in section 2.25 of the WP
Agreement) of the passthrough partner.
WP is not required to act as a withholding foreign partnership for payments that
it distributes to, or includes in the distributive share of, a passthrough partner or
indirect partner. With respect to an indirect partner for which WP does not (or
cannot) act as a withholding foreign partnership, WP must, as part of its WP agreement, comply with the requirements of a
withholding agent, as applicable to a nonwithholding foreign partnership under
chapters 3 and 4. WP (regardless of
whether it is an FFI or NFFE) must also,
pursuant to this Agreement, assume primary reporting responsibility for purposes
of section 1472 for certain partners.
If WP is an FFI, the requirements WP
has agreed to as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI
apply in addition to the requirements under this Agreement except to the extent
specifically modified by this Agreement.
This Agreement references WP’s FATCA
requirements when necessary to facilitate
coordination with a WP’s obligations under this Agreement with respect to its
partners. A participating FFI’s obligations
are provided in the FFI agreement, a registered deemed-compliant FFI’s (other
than a reporting Model 1 FFI’s) obligations are provided in § 1.1471–5(f)(1) or
the applicable IGA, and the obligations of
a reporting Model 1 FFI or a registered
deemed-compliant Model 1 IGA FFI are
provided in the applicable IGA.
If WP is an NFFE, WP must comply
with the requirements of a withholding
agent under sections 1471 and 1472 which
are provided in this Agreement. If a WP
acts as a sponsoring entity on behalf on a
sponsored FFI or sponsored direct reporting NFFE, it must comply with the due
diligence, withholding, reporting, and
compliance requirements of a sponsoring
entity in addition to its requirements under
the WP Agreement.

Bulletin No. 2014 –35

Sec. 1.02. Parties to the Agreement.
This Agreement applies to WP and the
IRS.
Section 2. DEFINITIONS
For purposes of this Agreement, the
terms listed below are defined as follows:
Sec. 2.01. Account. “Account” has the
meaning given to that term in § 1.1471–
1(b)(1) with respect to WP’s FATCA requirements.
Sec. 2.02. Account Holder. “Account
Holder” has the meaning given to that
term in § 1.1471–1(b)(2) with respect to
WP’s FATCA requirements with respect
to an account that it maintains within the
meaning of § 1.1471–5(b)(5).
Sec. 2.03. Agreement. “Agreement”
means this Agreement between WP and
the IRS, all appendices and attachments to
this Agreement, if applicable, and WP’s
application to become a withholding foreign partnership. All appendices and attachments to this Agreement and WP’s
application are incorporated into this
Agreement by reference. Attachments to
this Agreement include the know-yourcustomer (KYC) rules and the IRS approved KYC list (described in section
2.40 of this Agreement) to the extent WP
is permitted to use (and uses) documentary evidence to document one or more
direct partners under section 4.01(B) of
this Agreement.
Sec. 2.04. Amount Subject to Chapter 3 Withholding. An “amount subject
to chapter 3 withholding” is an amount
described in § 1.1441–2(a), regardless of
whether such amount is withheld upon.
An amount subject to chapter 3 withholding shall not include interest paid as part
of the purchase price of an obligation sold
between interest payment dates or original
issue discount paid as part of the purchase
price of an obligation sold in a transaction
other than the redemption of such obligation, unless the sale is part of a plan the
principal purpose of which is to avoid tax
and WP has actual knowledge or reason to
know of such plan.
Sec. 2.05. Amount Subject to Chapter 4 Withholding. An “amount subject
to chapter 4 withholding” is an amount
that is a withholdable payment (as defined
in section 2.76 of this Agreement) for
which withholding is required under chap-

399

ter 4 or an amount for which withholding
was otherwise applied under chapter 4.
Sec. 2.06. Assumption of Primary
Withholding Responsibility. A WP assumes primary chapters 3 and 4 withholding responsibility with respect to amounts
subject to chapter 3 or 4 withholding under the terms of the WP agreement. Generally, WP’s assumption of primary chapters 3 and 4 withholding responsibility
relieves the person who makes a payment
to WP from the responsibility to withhold.
See sections 3.03 and 3.04 of this Agreement for when WP is required to withhold
under this Agreement.
Sec. 2.07. Beneficial Owner. A “beneficial owner” has the meaning given to
that term in § 1.1441–1(c)(6).
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.
A chapter 3 reporting pool means a reporting pool described in section 6.02(D) of
this Agreement.
Sec. 2.10. Chapter 3 Status. The term
“chapter 3 status” refers to the attributes
of a payee (and a partner of WP for purposes of this Agreement) relevant for determining the rate of withholding with respect to a payment made to the 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, and
1474.
Sec. 2.12. Chapter 4 Reporting Pool.
A chapter 4 reporting pool means a reporting pool described in section 6.02(C) of
this Agreement.
Sec. 2.13. Chapter 4 Status. “Chapter
4 status” means the status of a person as a
U.S. person, specified U.S. person, an individual that is a foreign person, a participating FFI, a deemed-compliant FFI, a
restricted distributor, an exempt beneficial
owner, a nonparticipating FFI, a territory
financial institution, an excepted NFFE, or
a passive NFFE.
Sec. 2.14. Chapter 4 Withholding
Rate Pool. A “chapter 4 withholding rate
pool” means a pool of payees that are
nonparticipating FFIs provided on a chapter 4 withholding statement (as described
in § 1.1471–3(c)(3)(iii)(B)(3)) to which a
withholdable payment is allocated. The

August 25, 2014

term chapter 4 withholding rate pool also
means a pool of payees provided on an
FFI withholding statement (as described
in § 1.1471–3(c)(3)(iii)(B)(2)) to which a
withholdable payment is allocated to —
(A) A pool of payees consisting of each
class of recalcitrant account holders described in § 1.1471– 4(d)(6) (or with respect to an FFI that is a QI, a single pool
of recalcitrant account holders that is not
subdivided into classes of recalcitrant account holders described in § 1.1471–
4(d)(6)), including a separate pool of account holders to which the escrow
procedures for dormant accounts apply; or
(B) A pool of payees that are U.S.
persons as described in § 1.1471–
3(c)(3)(iii)(B)(2).
Sec. 2.15. Deemed-Compliant FFI.
“Deemed-compliant FFI” means a certified deemed-compliant FFI, registered
deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI that
is treated, pursuant to section 1471(b)(2)
and § 1.1471–5(f), as meeting the requirements of section 1471(b).
(A) Certified Deemed-Compliant FFI.
“Certified deemed-compliant FFI” means
an FFI described in § 1.1471–5(f)(2), and
includes a nonreporting Model 1 FFI, a
nonreporting Model 2 FFI that is treated
as a certified deemed-compliant FFI, and a
registered deemed-compliant Model 1
IGA FFI (as defined in section 2.15(C) of
this Agreement).
(B) Registered Deemed-Compliant
FFI. “Registered deemed-compliant FFI”
means an FFI described in § 1.1471–
5(f)(1) and includes a reporting Model 1
FFI and a nonreporting Model 2 FFI that
is treated as registered deemed-compliant.
For purposes of this Agreement, a reference to a registered deemed-compliant
FFI that is providing a chapter 4 withholding rate pool of U.S. payees includes a
registered deemed-compliant Model 1
IGA FFI (as defined in section 2.15(C) of
this Agreement).
(C) Registered Deemed-Compliant
Model 1 IGA FFI. “Registered deemedcompliant Model 1 IGA FFI” means an
FFI treated as a deemed-compliant FFI
under an applicable Model 1 IGA that is
subject to similar due diligence and reporting requirements with respect to U.S.
accounts as those applicable to a registered deemed-compliant FFI under

August 25, 2014

§ 1.1471–5(f)(1), including the requirement to register with the IRS.
Sec. 2.16. Direct Partner. A “direct
partner” means a partner that is not an
indirect partner (as defined in section 2.38
of this Agreement).
Sec. 2.17. Documentary Evidence.
“Documentary evidence” means any documentation obtained under the appropriate
know-your-customer rules (as defined in
section 2.40 of this Agreement and described in the Attachments to this Agreement), or any documentary evidence described in § 1.1441– 6 sufficient to
establish entitlement to a reduced rate of
withholding under an income tax treaty.
Documentary evidence does not include a
Form W– 8 or Form W–9 (or an acceptable substitute Form W– 8 or Form W–9).
Sec. 2.18. Documentation. “Documentation” means any valid Form W– 8,
Form W–9 (or acceptable substitute Form
W– 8 or Form W–9), or documentary evidence, as defined in section 2.17 of this
Agreement, including all statements or
other information required to be associated with the form or documentary evidence.
Sec. 2.19. Excepted NFFE. “Excepted
NFFE” means a person described in
§ 1.1471–1(b)(41).
Sec. 2.20. Exempt Beneficial Owner.
“Exempt beneficial owner” means a person described in § 1.1471–1(b)(42) and
includes any person that is treated as an
exempt beneficial owner under an applicable Model 1 IGA or Model 2 IGA.
Sec. 2.21. Exempt Recipient. An “exempt recipient” means a person described
in § 1.6049 – 4(c)(1)(ii) (for interest, dividends, and royalties), a person described
in § 1.6045–2(b)(2)(i) (for broker proceeds), and a person described in
§ 1.6041–3(q) (for rents, amounts paid on
notional principal contracts, and other
fixed or determinable income). Exempt
recipients are not exempt from chapter 3
or 4 withholding.
Sec. 2.22. FATCA Requirements as a
Participating FFI, Registered DeemedCompliant FFI, or Registered DeemedCompliant Model 1 IGA FFI. “FATCA
requirements as a participating FFI, registered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI”
means:

400

(A) For a participating FFI, the requirements set forth in the FFI agreement;
(B) For a registered deemed-compliant
FFI (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 a
registered deemed-compliant Model 1
IGA FFI, the requirements under foreign
domestic law to implement the applicable
Model 1 IGA.
Sec. 2.23. Financial Institution (FI).
“Financial institution” or “FI” means an
entity described in § 1.1471–5(d) and includes a financial institution as defined
under an applicable Model 1 IGA or
Model 2 IGA.
Sec. 2.24. FFI Agreement. “FFI
agreement” means an agreement of a participating FFI described in § 1.1471– 4(a)
and published in Revenue Procedure
2014 –38, 2014 –29 I.R.B.132 (as updated
or superseded by any subsequent revenue
procedure).
Sec. 2.25. FFI Withholding Statement. An “FFI withholding statement”
means a withholding statement provided
by an FFI that meets the requirements of
§ 1.1471–3(c)(3)(iii)(B)(1) and (2).
Sec. 2.26. Flow-Through Entity. A
“flow-through entity” is a foreign partnership described in § 301.7701–2 or 3 (other
than a withholding foreign partnership), a
foreign trust that is described in section
651(a) (other than a withholding foreign
trust), or a foreign trust if all or a portion
of such trust is treated as owned by the
grantor or other person under sections 671
through 679. With respect to an item of
U.S. source FDAP income for which a
treaty benefit is claimed, an entity is also
a flow-through entity to the extent it is
treated as fiscally transparent under section 894 and the regulations thereunder.
Sec. 2.27. Foreign Financial Institution (FFI). “Foreign financial institution”
or “FFI” means a foreign entity (as defined in § 1.1473–1(e)) that is a financial
institution.
Sec. 2.28. Foreign TIN. A “foreign
TIN” is a taxpayer identification number
issued by a foreign person’s country of
residence.
Sec. 2.29. Foreign Person. A “foreign
person” is any person that is not a “United
States person” and includes a “nonresident alien individual,” a “foreign corpora-

Bulletin No. 2014 –35

tion,” a “foreign partnership,” a “foreign
trust,” and a “foreign estate,” as those
terms are defined in section 7701 of the
Code. For purposes of chapters 3 and 4,
the term foreign person also means, with
respect to a payment by a withholding
agent (including a withholding foreign
partnership), a foreign branch (including a
foreign disregarded entity) of a U.S. person that provides a valid Form W– 8IMY
on which it represents that it is a qualified
intermediary.
Sec. 2.30. Form W– 8. “Form W– 8”
means IRS Form W– 8BEN, Certificate of
Foreign Status of Beneficial Owner for
United States Tax Withholding (Individuals); IRS Form W– 8BEN–E, Certificate
of Status of Beneficial Owner for United
States Tax Withholding and Reporting
(Entities), IRS Form W– 8ECI, Certificate
of Foreign Person’s Claim That Income is
Effectively Connected With the Conduct
of a Trade or Business in the United
States; IRS Form W– 8EXP, Certificate of
Foreign Government or Other Foreign Organization for United States Tax Withholding and Reporting; and IRS Form
W– 8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or
Certain U.S. Branches for United States
Tax Withholding and Reporting, as appropriate. It also includes any acceptable substitute form as described under §§ 1.1441–
1(e)(4)(vi) and 1.1471–3(c)(6)(v).
Sec. 2.31. Form W–9. “Form W–9”
means IRS Form W–9, Request for Taxpayer Identification Number and Certification, or any acceptable substitute as described under § 31.3406(h)–3(c).
Sec. 2.32. Form 1042. “Form 1042”
means IRS Form 1042, Annual Withholding Tax Return for U.S. Source Income of
Foreign Persons.
Sec. 2.33. Form 1042–S. “Form
1042–S” means IRS Form 1042–S, Foreign Person’s U.S. Source Income Subject
to Withholding.
Sec. 2.34. Form 1065. “Form 1065”
means IRS Form 1065, U.S. Return of
Partnership Income, including Schedules
K–1 associated with that form.
Sec. 2.35. Form 1099. “Form 1099”
means IRS Form 1099 –B, Proceeds From
Broker and Barter Exchange Transactions; IRS Form 1099 –DIV, Dividends
and Distributions; IRS Form 1099 –INT,
Interest Income; IRS Form 1099 –MISC,

Bulletin No. 2014 –35

Miscellaneous Income; IRS Form 1099 –
OID, Original Issue Discount; and any
other form in the IRS Form 1099 series
appropriate to the type of payment required to be reported.
Sec. 2.36. Form 8966. “Form 8966”
means IRS Form 8966, FATCA Report.
Sec. 2.37. Global Intermediary Identification Number (GIIN). “Global intermediary identification number” or “GIIN”
means the identification number that is
assigned to a participating FFI, registered
deemed-compliant FFI, direct reporting
NFFE, or sponsoring entity. The term also
includes the identification number assigned to a reporting Model 1 FFI or registered deemed-compliant Model 1 IGA
FFI that is a WP for the purpose of identifying itself to withholding agents.
Sec. 2.38. Indirect Partner. An “indirect partner” is a person that owns a partnership interest in WP through one or
more passthrough partners (as defined below in section 2.51 of this Agreement).
For example, a person that holds an account with a foreign intermediary or an
interest in a flow-through entity which
intermediary or flow-through entity, in
turn, is a direct partner of WP is an indirect partner. A person is an indirect partner of WP even if there are multiple tiers
of intermediaries or flow-through entities
between the person and WP.
Sec. 2.39. Intermediary. An “intermediary” means a person that, for that payment, acts as a custodian, broker, nominee, or otherwise as an agent for another
person, regardless of whether such other
person is the beneficial owner of the
amount paid, a flow-through entity, or another intermediary.
Sec. 2.40. Know-Your-Customer
Rules. The phrase “know-your-customer
rules” refers to the applicable laws, regulations, rules, and administrative practices and
procedures (identified in the attachment to
this Agreement) governing the requirements
of certain WPs that are FFIs to obtain documentation confirming the identity of WP’s
direct partners. A list of jurisdictions for
which the IRS has received know-yourcustomer information and for which the
know-your-customer rules and specified
documentation are acceptable (IRS approved KYC list) is available at: http://www.
irs.gov/Businesses/International-Businesses/
List-of-Approved-KYC-Rules.

401

Sec. 2.41. Marketable Securities. For
purposes of this Agreement, the term
“marketable securities” means those securities described in § 1.1441– 6 for which a
U.S. TIN or foreign TIN is not required to
be provided by the beneficial owner to
obtain treaty benefits.
Sec. 2.42. Non-Consenting U.S. Account. For purposes of a reporting Model
2 FFI, “non-consenting U.S. account” has
the meaning that such term has under the
applicable Model 2 IGA.
Sec. 2.43. Non-Exempt Recipient. A
“non-exempt recipient” means a person
that is not an exempt recipient under the
definition in section 2.21 of this Agreement.
Sec. 2.44. Non-Financial Foreign Entity (NFFE). A “non-financial foreign entity” or “NFFE” means a foreign entity
that is not a financial institution (including
an entity that is incorporated or organized
under the laws of any U.S. territory and
that is not a financial institution). The term
also means a foreign entity treated as an
NFFE pursuant to a Model 1 IGA or
Model 2 IGA.
Sec. 2.45. Nonparticipating FFI. A
“nonparticipating FFI” means an FFI
other than a participating FFI, a deemedcompliant FFI, or an exempt beneficial
owner.
Sec. 2.46. Nonwithholding Foreign
Partnership (NWP). A “nonwithholding
foreign partnership” means a foreign partnership other than a withholding foreign
partnership as defined in § 1.1441–
5(c)(2).
Sec. 2.47. Nonwithholding Foreign
Trust (NWT). A “nonwithholding foreign trust” means a foreign trust (as defined in section 7701(a)(31)(B)) that is a
foreign simple trust or a foreign grantor
trust and that is not a withholding foreign
trust (as defined in section 2.80 of this
Agreement).
Sec. 2.48. Overwithholding. The term
“overwithholding” means any amount actually withheld (determined before application of the adjustment procedures described in section 7.01 of this Agreement)
from an item of income or other payment
that is in excess of the amount required to
be withheld under chapter 4 with respect
to such item of income or other payment,
if applicable, and, in the case of an
amount subject to chapter 3 withholding,

August 25, 2014

the actual tax liability of the beneficial
owner of the income or payment to which
the withheld amount is attributable, regardless of whether such overwithholding
was in error or appeared correct at the
time it occurred. For purposes of section
3406, the term “overwithholding” means
the excess of the amount actually withheld
under section 3406 over the amount required to be withheld.
Sec. 2.49. Participating FFI. A “participating FFI” means an FFI that has
agreed to comply with the requirements of
an FFI agreement, including an FFI described in a Model 2 IGA that has agreed
to comply with the requirements of an FFI
agreement (reporting Model 2 FFI). The
term also includes a qualified intermediary branch of a U.S. financial institution,
unless such branch is a reporting Model 1
FFI.
Sec. 2.50. Partnership and Partner.
The terms “partnership” and “partner” are
defined in section 7701(a)(2) of the Code
and the regulations thereunder. For purposes of chapter 4, “partner” means an
account holder as defined in section 2.02
of this Agreement with respect to a WP
that is an FFI.
Sec. 2.51. Passthrough Partner. A
“passthrough partner” is a direct or indirect partner of WP that is a foreign intermediary or foreign flow-through entity.
As provided in section 2.26 of this Agreement, a withholding foreign partnership or
withholding foreign trust is not a flowthrough entity and thus is not a passthrough partner.
Sec. 2.52. Payee. For purposes of
chapter 3, 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. 2.53. Payment. A “payment”
means an amount considered made to a
person if that person realizes income
whether or not such income results from
an actual transfer of cash or other property. See § 1.1441–2(e). For example, a
payment includes crediting an amount to
an account.
Sec. 2.54. Payor. A “payor” is defined
in § 31.3406(a)–2 and § 1.6049 – 4(a)(2)
and generally means any person required
to make an information return under chapter 61.

August 25, 2014

Sec. 2.55. Permanent Residence Address. A “permanent residence address”
means an address described in § 1.1441–
1(c)(38).
Sec. 2.56. Pooled Reporting (PR)
Election. A “pooled reporting election” or
“PR election” is an election to pool report
chapter 3 reporting pools on Form 1042–S
for chapter 3 purposes as described in
section 6.02(D) of this Agreement.
Sec. 2.57. Qualified Intermediary. A
“qualified intermediary” is a person, described in § 1.1441–1(e)(5)(ii), that enters
into an agreement with the IRS to be
treated as a qualified intermediary and
acts in its capacity as a qualified intermediary. See Rev. Proc. 2014 –39, 2014 –29
I.R.B. 151 (as updated or superseded by
any subsequent revenue procedure), for
the QI Agreement.
Sec. 2.58. Recalcitrant Account
Holder. A “recalcitrant account holder”
means a person described in § 1.1471–
5(g).
Sec. 2.59. Reduced Rate of Withholding. A “reduced rate of withholding”
means a rate of withholding under chapter
3 that is less than 30 percent, either as a
result of a reduction in withholding under
the Code or as a result of a reduction in
withholding under an income tax treaty.
Sec. 2.60. Reportable Amount. A “reportable amount” means U.S. source
FDAP income that is an amount subject to
chapter 3 withholding (as defined in section 2.04 of this Agreement), U.S. source
deposit interest (as defined in section
871(i)(2)(A)), and U.S. source interest or
original issue discount paid on the redemption of short-term obligations (as defined in section 871(g)(1)(B)(i)). The term
does not include payments on deposits
with banks and other financial institutions
that remain on deposit for two weeks or
less. It also does not include amounts of
original issue discount arising from a sale
and repurchase transaction completed
within a period of two weeks or less, or
amounts described in § 1.6049 –5(b)(7),
(10), or (11) (relating to certain foreign
targeted registered obligations and certain
obligations issued in bearer form).
Sec. 2.61. Reporting Model 1 FFI. A
“reporting Model 1 FFI” means an FFI
with respect to which a foreign government or agency thereof agrees to obtain
and exchange information pursuant to a

402

Model 1 IGA, other than an FFI that is
treated as a nonreporting Model 1 FFI
(including a registered deemed-compliant
Model 1 IGA FFI) or nonparticipating FFI
under an applicable Model 1 IGA.
Sec. 2.62. Reporting Pool. A “reporting pool” is defined in section 6.02(A) of
this Agreement.
Sec. 2.63. Responsible Officer. A “responsible officer” of a WP means a partner of WP or an officer or agent of the
general partner or tax matters partner of
WP with sufficient authority to fulfill the
duties of a responsible officer as described
in section 8 of this Agreement, including
the requirements to periodically certify
and to respond to requests by the IRS for
additional information to review WP’s
compliance with this Agreement.
Sec. 2.64. Retirement Fund. A “retirement fund” means a retirement fund or
other fund that is an exempt beneficial
owner described in § 1.1471– 6(f) or a
similar fund that qualifies as an exempt
beneficial owner under an applicable
Model 1 IGA or Model 2 IGA.
Sec. 2.65. Schedule K–1. “Schedule
K–1” or “K–1” is a schedule associated
with Form 1065 that shows each partner’s
separate share of partnership’s income,
credits, deductions, etc.
Sec. 2.66. Sponsored Direct Reporting NFFE. The term “sponsored direct
reporting NFFE” has the meaning set
forth in § 1.1472–1(c)(5).
Sec. 2.67. Sponsored FFI. The term
“sponsored FFI” means any entity described in § 1.1471–5(f)(1)(i)(F) (sponsored investment entities and sponsored
controlled foreign corporations) or
§ 1.1471–5(f)(2)(iii) (sponsored, closely
held investment vehicles).
Sec. 2.68. Sponsoring Entity. “Sponsoring entity” means (i) an entity that registers with the IRS and agrees to perform
the due diligence, withholding, and reporting obligations of one or more sponsored FFIs pursuant to § 1.1471–
5(f)(1)(i)(F) or (f)(2)(iii); or (ii) an entity
that registers with the IRS and agrees to
perform the due diligence and reporting
obligations of one or more direct reporting
NFFEs pursuant to § 1.1472–1(c)(5).
Sec. 2.69. Underwithholding. “Underwithholding” means the excess of the
amount required to be withheld under chapter 3 or 4 over the amount actually withheld.

Bulletin No. 2014 –35

Sec. 2.70. Undocumented Partner.
An “undocumented partner” is a partner
for whom WP does not have valid documentation.
Sec. 2.71. U.S. Account. A “U.S. account” is any financial account maintained
by a participating FFI or registered
deemed-compliant FFI that is held by one
or more specified U.S. persons or U.S.
owned foreign entities that such FFI reports or elects to report under the FFI
agreement or § 1.1471–5(f), as applicable.
A U.S. account includes, in the case of a
reporting Model 1 FFI or registered
deemed-compliant Model 1 IGA FFI, a
U.S. reportable account as defined in section 2.73 of this Agreement.
Sec. 2.72. U.S. Person. A “United
States person” (or “U.S. person”) is a person described in section 7701(a)(30), the
U.S. government (including an agency or
instrumentality thereof), a State of the
United States (including an agency or instrumentality thereof), or the District of
Columbia (including an agency or instrumentality thereof). For chapter 4 purposes, the term “U.S. person” or “United
States person” also means a foreign insurance company that has made an election
under section 953(d), provided that either
the foreign insurance company is not a
specified insurance company (as described in § 1.1471–5(e)(1)(iv)) and is not
licensed to do business in any State, or the
foreign insurance company is a specified
insurance company and is licensed to do
business in any State.
Sec. 2.73. U.S. Reportable Account.
A “U.S. reportable account” means a financial account maintained by a reporting
Model 1 FFI or registered deemedcompliant Model 1 IGA FFI that such FFI
reports or elects to report under the applicable domestic law for compliance with
and implementation of FATCA.
Sec. 2.74. U.S. Source FDAP. “U.S.
source FDAP” means amounts from
sources within the United States that constitute fixed or determinable annual or periodical income, as defined in § 1.1441–
2(b)(1).
Sec. 2.75. U.S. TIN. A “U.S. TIN”
means a U.S. taxpayer identification number assigned under section 6109.
Sec. 2.76. Withholdable Payment. A
“withholdable payment” means an
amount described in § 1.1473–1(a).

Bulletin No. 2014 –35

Sec. 2.77. Withholding Agent. A
“withholding agent” has the same meaning as set forth in § 1.1441–7(a) for purposes of chapter 3 and as set forth in
§ 1.1473–1(d) for purposes of chapter 4
and includes a payor (as defined in section
2.54 of this Agreement). As used in this
Agreement, the term generally refers to
the person making a payment to a withholding foreign partnership.
Sec. 2.78. Withholding Foreign Partnership (WP). A “withholding foreign
partnership” or “WP” means a partnership, described in § 1.1441–5(c)(2), that
has entered into a withholding agreement
with the IRS to be treated as a withholding
foreign partnership.
Sec. 2.79. Withholding Foreign Partnership EIN (WP–EIN). A “withholding
foreign partnership EIN” or “WP–EIN”
means the employer identification number
assigned by the IRS to a withholding foreign partnership. WP’s WP–EIN is only to
be used when WP is acting as a withholding
foreign partnership. For example, WP must
give a withholding agent its non-WP EIN, if
any, rather than its WP–EIN, if it is not
acting as a withholding foreign partnership
(i.e., nonwithholding foreign partnership)
and a taxpayer identification number is required.
Sec. 2.80. Withholding Foreign Trust
(WT). A “withholding foreign trust” or
“WT” means a trust, described in
§ 1.1441–5(e)(5)(v), that has entered into
a withholding agreement with the IRS to
be treated as a withholding foreign trust.
Sec. 2.81. Other Terms. Any term not
defined in this section has the same meaning that it has under the Code, including
the income tax regulations under the
Code, any applicable income tax treaty, or
any applicable Model 1 IGA or Model 2
IGA with respect to WP’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI.
Section 3. WITHHOLDING
RESPONSIBILITY
Sec. 3.01. Chapters 3 and 4
Withholding—In General.
(A) Chapter 4 Withholding.
WP (unless WP is a retirement fund) is
a withholding agent for purposes of chap-

403

ter 4 and is subject to the withholding and
reporting provisions applicable to withholding agents under sections 1471 and
1472 with respect to its partners. WP is
required to withhold 30 percent of any
withholdable payment made after June 30,
2014, that is distributed to, or included in
the distributive share of, a partner that is
an FFI unless WP can reliably associate
the payment (or portion of the payment)
with documentation upon which it is permitted to rely to treat the payment as
exempt from withholding under § 1.1471–
2(a)(4), or the payment is made under a
grandfathered obligation described in
§ 1.1471–2(b). See § 1.1473–1(a) for the
definition of a withholdable payment and
the applicable exceptions to this definition. WP is also required to withhold 30
percent of any withholdable payment
made after June 30, 2014, that is distributed to, or included in the distributive
share of, a partner that is an NFFE unless
WP can reliably associate the payment (or
portion of the payment) with a certification 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 not
required to withhold under section 1471
or 1472. If WP is a participating FFI or
registered deemed-compliant FFI (other
than a reporting Model 1 FFI), WP will
satisfy its requirement to withhold under
sections 1471(a) and 1472(a) with respect
to direct partners that are entities by withholding on withholdable payments made
to nonparticipating FFIs and recalcitrant
account holders to the extent required under its FATCA requirements as a participating FFI or registered deemedcompliant FFI. See the FFI agreement,
§ 1.1471–5(f), or the applicable Model 2
IGA for the withholding requirements that
apply to withholdable payments made to
direct partners that are individuals and are
treated as recalcitrant account holders. If
WP is a reporting Model 1 FFI or a registered deemed-compliant Model 1 IGA
FFI, WP will satisfy its requirement to
withhold under section 1471(a) with respect to direct partners by withholding on
withholdable payments made to nonparticipating FFIs to the extent required under its FATCA requirements as a registered deemed-compliant FFI or registered
deemed-compliant Model 1 IGA FFI. WP

August 25, 2014

must withhold at the time and in the manner described in sections 3.02 through
3.04 of this Agreement which modifies
other provisions describing the time and
manner in which WP would otherwise be
required to withhold for chapter 4 purposes.
(B) Chapter 3 Withholding.
WP is a withholding agent for purposes
of chapter 3 and is subject to the withholding and reporting provisions applicable to
withholding agents under chapter 3. WP
must withhold 30 percent of any payment
of an amount subject to chapter 3 withholding that is distributed to, or included
in the distributive share of, a partner that
is a foreign person unless WP can reliably
associate the payment with documentation
upon which it can rely to treat the payment as made to a payee that is a U.S.
person or as made to a beneficial owner
that is a foreign person entitled to a reduced rate of withholding. See section 4
of this Agreement regarding documentation requirements applicable to WP for
determining whether chapter 3 withholding applies.
With respect to an amount subject to
chapter 4 withholding that is also an
amount subject to chapter 3 withholding,
WP may credit any tax withheld under
chapter 4 against its liability for any tax
due under chapter 3 with respect to the
payment so that no additional withholding
is required on the payment for purposes of
chapter 3. Nothing in chapter 4 or the
regulations thereunder (including the FFI
agreement) or any applicable IGA relieves
WP of its requirements to withhold on an
amount subject to chapter 3 withholding
to the extent required under sections 3.02
through 3.04 of this Agreement or modifies the documentation upon which WP
may rely under section 4 of this Agreement for determining whether withholding under chapter 3 applies.
Sec. 3.02. Primary Chapters 3 and 4
Withholding Responsibility. WP must
assume primary chapters 3 and 4 withholding responsibility for all withholdable
payments and amounts subject to chapter
3 withholding that are distributed to, or
included in the distributive share of, any
direct partner and any indirect partner for
which it acts as a WP to the extent per-

August 25, 2014

missible under section 9 of this Agreement. If WP acts as a nonwithholding
foreign partnership (NWP) with respect to
an indirect partner, it cannot assume primary chapters 3 and 4 withholding responsibility for payments made to that
indirect partner. WP is not required to withhold on amounts it pays to a qualified intermediary that assumes primary withholding
responsibility with respect to the payment,
or to a withholding foreign trust, or another
withholding foreign partnership.
If WP is a participating FFI or a registered deemed-compliant FFI, it may not
elect with respect to its direct partners to
satisfy its obligation to withhold under
chapter 4 (or the FFI agreement) on a
withholdable payment made to a recalcitrant account holder that is a U.S. nonexempt recipient by backup withholding
under section 3406 as provided in
§ 1.1471– 4(b)(3)(iii) and section 4 of the
FFI agreement.
See section 6 of this Agreement regarding WP’s responsibility to report
amounts subject to withholding on Form
1042–S.
Sec. 3.03. Timing of Withholding.
WP must withhold on the date it makes a
distribution to a foreign partner that includes a withholdable payment or an
amount subject to chapter 3 withholding
as determined under section 3.04 of this
Agreement. To the extent a partner’s distributive share of income subject to withholding has not actually been distributed
to the partner, WP must withhold on the
partner’s distributive share on the earlier
of the date that the statement required
under section 6031(b) (i.e., Schedule K–1)
is mailed or otherwise provided to the
partner or the due date for furnishing the
statement (whether or not WP is required
to prepare and furnish the statement).
Sec. 3.04. Withholding on Distributions. WP may determine the amount of
withholding on a distribution based on a
reasonable estimate of the partner’s distributive share of income subject to withholding for the year. WP must correct the
estimated withholding to reflect the partner’s actual distributive share on the earlier of the date that the statement required
under section 6031(b) (i.e., Schedule K–1)
is mailed or otherwise provided to the
partner or the due date for furnishing the
statement (whether or not WP is re-

404

quired to prepare and furnish the statement). If that date is after the due date for
filing WP’s Forms 1042 and 1042–S (including extensions) for the calendar year,
WP may withhold and report any adjustments required by correcting the information in the following calendar year.
Sec. 3.05. Deposit Requirements. WP
must deposit amounts withheld under
chapters 3 and 4 at the time and in the
manner provided under section 6302 (see
§ 1.6302–2(a) or § 31.6302–1(h)).
Section 4. DOCUMENTATION
REQUIREMENTS
Sec. 4.01. Documentation
Requirements.
(A) Coordination of Documentation
Requirements with Chapter 4. If WP is an
FFI (other than a retirement fund), WP is
required to perform the due diligence procedures under its FATCA requirements as
a participating FFI, registered deemedcompliant FFI, or registered deemedcompliant Model 1 IGA FFI for each direct partner to determine if the partner is a
holder of a U.S. account (or U.S. reportable account), and each direct partner that
is a nonparticipating FFI and, if applicable, that is a recalcitrant account holder
(or non-consenting U.S. account). See,
however, the automatic termination provision of section 10.03(A) of this Agreement if WP is not in possession of valid
documentation for any direct partner at
any time that withholding or reporting is
required. If WP is an NFFE, WP is required to determine the chapter 4 status of
each partner to determine if reporting or
withholding applies under section 1471 or
1472 on withholdable payments distributed to, or included in the distributive
share of, the partner under the requirements of § 1.1471–3(d). See Notice
2014 –33, 2014 –21 I.R.B. 1033, which
modifies the time in which WP is required
to implement the applicable due diligence
procedures with respect to an obligation
held by an entity that is opened, issued, or
executed on or after July 1, 2014, and
before January 1, 2015.
If WP has determined that withholding
is not required under chapter 4, WP must
obtain, unless already collected, documentation that meets the requirements of
this section 4 to determine whether with-

Bulletin No. 2014 –35

holding applies under chapter 3. See also
WP’s FATCA requirements as a participating FFI, registered deemed-compliant
FFI, or registered deemed-compliant
Model 1 IGA FFI for when WP will have
reason to know that a claim of chapter 4
status is unreliable or incorrect and for
WP’s requirements following a change in
circumstances. If WP is an NFFE, see
§ 1.1471–3(e)(4) for when WP will have
reason to know that an entity’s claim of
chapter 4 status is unreliable or incorrect
and § 1.1471–3(c)(6)(ii)(E) for WP’s requirements following a change in circumstances.
(B) General Documentation Requirements. Except as otherwise provided in
this section 4, WP must obtain a Form
W– 8 or Form W–9 from every direct partner that receives a distribution or distributive share of a reportable amount. Notwithstanding the previous sentence, if WP
is an FFI and is subject to the know-yourcustomer rules for documenting its partners (or subset of partners), WP may obtain documentary evidence as set forth in
the Attachment (or the documentation described in section 4.03(A)(3) of this
Agreement) for the applicable jurisdiction
from its direct partners rather than a Form
W– 8 or Form W–9. If WP is an FFI
obtaining documentary evidence, WP
must also adhere to the know-yourcustomer rules that apply to WP with respect to the direct partner from whom the
documentary evidence is obtained.
WP must review and maintain documentation in accordance with this section
4 and, in the case of documentary evidence obtained from direct partners, in
accordance with the know-your-customer
rules set forth in the Attachments to this
Agreement. See sections 2.03 and 2.40 of
this Agreement. WP must make documentation (together with any associated withholding statements and other documents
or information) available upon request for
inspection by WP’s external auditor, if the
performance of external audit procedures
is requested by the IRS as described in
section 8.07(D) of this Agreement. WP
represents that none of the laws to which
it is subject prohibits disclosure of the
identity of any partner or corresponding
partner information to WP’s external auditor, if required under section 8.07(D) of
this Agreement.

Bulletin No. 2014 –35

Sec. 4.02. Documentation for Foreign Partners. WP may treat a partner as
a foreign beneficial owner of an amount
if the partner provides a valid Form
W– 8 (other than Form W– 8IMY), or
valid documentary evidence, to the extent permitted under section 4.01(B) of
this Agreement, that supports the partner’s status as a foreign person. WP may
treat a partner that has provided documentation as entitled to a reduced rate of
withholding under chapter 3 if all the
requirements for a reduced rate are met
and the documentation provided by the
partner supports entitlement to a reduced rate of withholding. Sections 4.03
through 4.06 of this Agreement describe
the specific documentation requirements
necessary for obtaining a reduced rate of
withholding in certain circumstances.
Sec. 4.03. Treaty Claims. WP may not
reduce the rate of withholding under chapter 3 based on a partner’s claim of treaty
benefits unless WP has determined that no
chapter 4 withholding is required and it
obtains from the partner the documentation required by section 4.03(A) of this
Agreement. In addition, WP agrees to establish procedures to inform partners of
the terms of the limitation on benefits provisions of a treaty (if applicable, and regardless of whether those provisions are
contained in a separate article entitled
Limitation on Benefits) under which the
partner is claiming benefits.
(A) Treaty Documentation. The documentation required by this section 4.03(A)
is as follows:
(1) A Form W– 8BEN or Form
W– 8BEN–E on which a claim of treaty
benefits is made, including the appropriate
limitation on benefits and section 894 certifications, if applicable, and a U.S. TIN or
foreign TIN. A U.S. TIN or foreign TIN
shall not be required, however, if the partner is a direct partner. If WP is acting as a
withholding foreign partnership for an indirect partner, the indirect partner is required to have either a U.S. TIN or a
foreign TIN in order to claim treaty benefits unless it is claiming treaty benefits on
income from marketable securities as described in § 1.1441– 6(c);
(2) Documentary evidence, as permitted under section 4.01(B) of this Agreement, that has been obtained pursuant to
the know-your-customer rules that apply

405

to the direct partner, and the direct partner
has made the treaty statement required by
section 4.03(B) of this Agreement, if applicable; or
(3) The type of documentary evidence,
as permitted under section 4.01(B) of this
Agreement, required under § 1.1441– 6 to
establish entitlement to a reduced rate of
withholding under a treaty and the direct
partner has made the treaty statement required by section 4.03(B) of this Agreement, if applicable.
(B) Treaty Statement. The treaty statement required by this section 4.03(B) is as
follows: [Name of Direct Partner] meets
all provisions of the treaty that are necessary to claim a reduced rate of withholding, including any applicable limitation on
benefits provisions, and derives the income within the meaning of section 894,
and the regulations thereunder, as the beneficial owner.
WP is required to obtain the treaty
statement described in this section 4.03(B)
from a partner that is an entity. WP shall
not be required to obtain a treaty statement described in this section 4.03(B)
from an individual who is a resident of an
applicable treaty country or from the government, or its political subdivisions, of a
treaty country.
Sec. 4.04. Documentation for International Organizations. WP may not
treat a partner as an international organization entitled to an exemption from withholding under section 892 unless WP has
determined that no chapter 4 withholding
is required and it obtains a Form
W– 8EXP (or documentary evidence as
permitted under section 4.01(B) of this
Agreement) from the international organization. The name provided on the documentation must be the name of an entity
designated as an international organization by executive order pursuant to 22
United States Code 288 through 288(f). If
an international organization is not claiming benefits under section 892 but under
another Code exception, the provisions of
section 4.02 of this Agreement apply rather
than the provisions of this section 4.04.
Sec. 4.05. Documentation for Foreign
Governments and Foreign Central
Banks of Issue.
(A) Documentation for a Foreign Government or Foreign Central Bank of Issue

August 25, 2014

Claiming an Exemption from Withholding
Under Section 892 or Section 895. WP
may not treat a partner as a foreign government or foreign central bank of issue
exempt from withholding under section
892 or 895 unless WP has determined that
no chapter 4 withholding is required
and—
(1) WP receives from the partner a
Form W– 8EXP (or documentary evidence as permitted under section 4.01(B)
of this Agreement) establishing that the
partner is a foreign government or foreign
central bank of issue;
(2) The income distributed to, or included in the distributive share of, the
partner is the type of income that qualifies
for an exemption from withholding under
section 892 or 895; and
(3) WP does not know, or have reason
to know, that the partner is a controlled
commercial entity as described in section
892, that the income owned by the foreign
government or foreign central bank of issue is being received from a controlled
commercial entity, or that the income is
from the disposition of an interest in a
controlled commercial entity.
(B) Treaty Exemption. WP may not
treat a partner as a foreign government or
foreign central bank of issue entitled to a
reduced rate of withholding under an income tax treaty for purposes of chapter 3
unless WP has determined that no chapter
4 withholding is required and it has valid
documentation that is sufficient to obtain a
reduced rate of withholding under a treaty,
as described in section 4.03 of this Agreement.
(C) Other Code Exception. If a foreign
government or foreign central bank of issue is not claiming benefits under section
892 or a reduced rate under an income tax
treaty but under another Code exception
(e.g., the portfolio interest exception under section 871(h) or 881(c)), the provisions of section 4.02 of this Agreement
apply rather than the provisions of this
section 4.05.
Sec. 4.06. Documentation for Foreign Tax-Exempt Organizations. To the
extent that WP determines that an amount
distributed to, or included in the distributive share of, a partner is not subject to
withholding under chapter 4, WP may not
treat the partner as a foreign tax-exempt
organization and reduce the rate of with-

August 25, 2014

holding or exempt the partner from withholding for purposes of chapter 3 unless
WP satisfies the requirements provided in
section 4.06(A), (B), or (C) of this Agreement.
(A) Reduced Rate of Withholding Under Section 501. WP may not treat a partner as a foreign organization described
under section 501(c), and therefore exempt from withholding under chapter 3
(or, if the partner is a foreign private foundation, subject to withholding at a
4-percent rate under section 1443(b)) unless WP obtains a valid Form W– 8EXP
with Part IV of the form completed.
(B) Treaty Exemption. WP may not
treat a partner as a foreign organization
that is tax-exempt on an item of income
pursuant to a treaty unless WP obtains
valid documentation as described under
section 4.03 of this Agreement that is sufficient for obtaining a reduced rate of
withholding under the treaty and the documentation establishes that the partner is
an organization exempt from tax under the
treaty on that item of income.
(C) Other Exceptions. If a tax-exempt
entity is not claiming a reduced rate of
withholding because it is a foreign organization described under section 501(c) or
under a treaty article that applies to exempt certain foreign organizations from
tax, but is claiming a reduced rate of withholding under another Code or treaty exception, the provisions of section 4.02 or
4.03 of this Agreement (as applicable)
shall apply rather than the provisions of
this section 4.06.
Sec. 4.07. Documentation from Passthrough Partners. Except as otherwise
provided in section 9 of this Agreement,
WP shall not act as a withholding foreign
partnership with respect to an amount distributed to, or included in the distributive
share of, a passthrough partner. WP must
forward the passthrough partner’s documentation (and associated withholding
statement and documentation of indirect
partners) to the withholding agent from
whom WP receives a reportable amount.
Sec. 4.08. Documentation for U.S.
Exempt Recipients. WP shall not treat a
partner as a U.S. exempt recipient unless
WP obtains from the partner—
(A) A valid Form W–9 on which the
partner includes an exempt payee code to

406

certify that the partner is a U.S. exempt
recipient;
(B) Documentary evidence, as permitted under section 4.01(B) of this
Agreement, that is sufficient to establish
that the partner is a U.S. exempt recipient; or
(C) Documentary evidence, as permitted under section 4.01(B) of this Agreement, that is sufficient to establish the
partner’s status as a U.S. person and WP
can treat the partner as an exempt recipient under the rules of § 1.6045–2(b)(2)(i)
or § 1.6049 – 4(c)(1)(ii), as appropriate,
without obtaining documentation.
Sec. 4.09. Documentation for U.S.
Non-Exempt Recipients. WP shall not
treat a partner as a U.S. non-exempt recipient unless WP obtains a valid Form
W–9 from the partner.
Sec. 4.10. Documentation Validity.
(A) In General. WP may not rely on
documentation if WP has actual knowledge or reason to know that documentation provided by a partner is unreliable or
incorrect, including when there is a
change in circumstances with respect to
the information or statements contained in
the documentation or in WP’s files pertaining to the obligation (account information) that affects the reliability of the partner’s claim. See § 1.1441–1(e)(4)(ii)(D)
for the definition of change in circumstances. Once WP knows, or has reason to
know, that documentation provided by a
partner is unreliable or incorrect, it can no
longer reliably associate a payment with
valid documentation unless it obtains additional documentation to establish the
partner’s chapter 3 status. If WP can no
longer reliably associate a payment with
valid documentation, it must obtain new
documentation prior to the time withholding is required under section 3 of this
Agreement.
(B) General Rules.
(1) WP shall not rely on a Form W–9 if
it is not permitted to do so under the rules
of § 31.3406(h)–3(e) or if it has been
informed by the IRS or another withholding agent that the form is unreliable or
incorrect and shall not rely on a Form
W– 8 if it is not permitted to do so under
section 4.10 of this Agreement.

Bulletin No. 2014 –35

(2) WP shall not treat documentary evidence provided by a partner as valid if the
documentary evidence does not reasonably establish the identity of the person
presenting the documentary evidence. For
example, documentary evidence is not
valid if it is provided in person by a partner that is a natural person and the photograph on the documentary evidence, if
any, does not match the appearance of the
person presenting the document.
(3) WP may not rely on documentation
to reduce the withholding rate that would
otherwise apply if—
(a) The partner’s documentation is incomplete or contains information that is
inconsistent with the partner’s claim,
(b) WP has other information in the
account information that is inconsistent
with the partner’s claim, or
(c) The documentation lacks the information necessary to establish entitlement
to a reduced rate of withholding.
For example, if a direct partner that is
an entity provides documentation to claim
treaty benefits and the documentation establishes the direct partner’s status as a
foreign person and a resident of a treaty
country but fails to provide the treaty
statement in section 4.03(B) of this Agreement, the documentation does not establish the direct partner’s entitlement to a
reduced rate of withholding.
Sec. 4.11. Documentation Validity
Period.
(A) Documentation Other Than a
Form W–9. WP, as permitted under section 4.01(B) of this Agreement, may rely
on valid documentary evidence obtained
from direct partners in accordance with
applicable know-your-customer rules as
long as the documentary evidence remains
valid under those rules or until WP knows,
or has reason to know, that the information contained in the documentary evidence is unreliable or incorrect. WP may
rely on the representations described in
section 4.03 of this Agreement obtained in
connection with such documentation for
the same period of time as the documentation. For establishing a partner’s chapter
3 status (as defined in § 1.1441–1(c)(45))
or foreign status for chapter 61 purposes,
WP may rely on a valid Form W– 8 until
its validity expires under § 1.1441–
1(e)(4)(ii) and may rely on documentary

Bulletin No. 2014 –35

evidence (other than documentary evidence obtained pursuant to applicable
know-your-customer rules) until its validity expires under § 1.6049 –5(c).
(B) Form W–9. WP may rely on a
Form W–9 unless one of the conditions of
§ 31.3406(h)–3(e)(2)(i) through (v) applies or if it has been informed by the IRS
or another withholding agent that the form
is unreliable or incorrect.
Sec. 4.12. Maintenance and Retention
of Documentation.
(A) Maintaining Documentation. WP
shall maintain documentation by retaining
the original documentation, a certified
copy, a photocopy, a scanned copy, a microfiche, or other means that allow reproduction (provided that WP has recorded
receipt of the documentation and is able to
produce a hard copy). If WP is not required to retain copies of documentary
evidence under its know-your-customer
rules, WP may instead retain a notation of
the type of documentation reviewed, the
date the documentation was reviewed, the
document’s identification number, if any
(e.g., a passport number), and whether
such documentation contained any U.S.
indicia. For obligations held by a direct
partner opened prior to January 1, 2001,
if WP was not required under its knowyour-customer rules to maintain originals or copies of documentation, WP
may nevertheless rely on the information
if it has complied with all other aspects of
its know-your-customer rules regarding
establishment of a partner’s identity, it has
a record that the documentation required
under the know-your-customer rules was
actually examined by an employee of WP
or partner of WP in accordance with the
know-your-customer rules, and it has no
information in its possession that would
require WP to treat the documentation as
invalid under the rules of section 4.10(B)
of this Agreement.
(B) Retention Period. WP shall retain
a partner’s documentation obtained under this section 4 for as long as the
document is relevant for the determination of WP’s tax liability or reporting
responsibilities under chapters 3, 4, and
61, and section 3406.

407

Section 5. WITHHOLDING
FOREIGN PARTNERSHIP
WITHHOLDING CERTIFICATE
Sec. 5.01. WP Withholding Certificate. WP agrees to furnish a withholding
foreign partnership withholding certificate
to each withholding agent from which it
receives a reportable amount as a withholding foreign partnership. The withholding foreign partnership withholding
certificate is a Form W– 8IMY (or acceptable substitute form) that certifies that WP
is acting as a withholding foreign partnership, contains WP’s WP–EIN, and provides all other information and certifications required by the form, including its
WP–EIN. If WP is receiving a reportable
amount that is a withholdable payment,
the withholding certificate must also contain WP’s chapter 4 status to the extent
required, provide its GIIN (if applicable),
and provide the other information and certifications required on the form. If WP is
an FFI, WP must provide a GIIN on its
withholding foreign partnership withholding certificate irrespective of the time the
FFI is permitted under its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI to
obtain a GIIN. WP is not required to disclose, as part of that Form W– 8IMY or its
withholding statement, any information
regarding the identity of its direct partners
and those indirect partners for which it
acts as a withholding foreign partnership
to the extent permitted under section 9 of
this Agreement.
If WP does not act as a withholding
foreign partnership for an indirect partner,
WP is required to furnish a nonwithholding foreign partnership certificate to its
withholding agent. See § 1.1441–5(c)(3)
for the requirements of a nonwithholding
foreign partnership withholding certificate, the withholding statement associated
with the withholding certificate, and the
other documentation or other information
for each passthrough partner and its direct
and indirect partners.
Sec. 5.02. Withholding Statement.
When WP is acting as a withholding foreign partnership, WP must assume primary chapters 3 and 4 withholding responsibility as required by section 3.02 of
this Agreement for reportable amounts

August 25, 2014

that are distributed to, or included in the
distributive shares of, its direct partners
and any indirect partners for which it is
acting as a withholding foreign partnership. Accordingly, WP is not required to
provide a withholding statement in such
circumstances. See section 9 of this
Agreement providing that WP may not act
as a withholding foreign partnership for
certain indirect partners that are U.S. nonexempt recipients.
Section 6. TAX RETURN AND
INFORMATION REPORTING
OBLIGATIONS
Sec. 6.01. Form 1042 Filing
Requirement.
(A) In General. WP shall file a return
on Form 1042, whether or not WP withheld any amounts under chapter 3 or 4 of
the Code, on or before March 15 of the
year following any calendar year in which
WP acts as a withholding foreign partnership. In addition to the information required on Form 1042 and its accompanying instructions, WP shall attach a
statement setting forth the amounts of any
overwithholding or underwithholding adjustments made under sections 7.01 and
7.03 of this Agreement, and an explanation of the circumstances that resulted in
the over– or underwithholding. If WP is
requesting a collective refund or credit,
WP shall attach the statements required by
section 7.02 of this Agreement and shall
comply with the procedures specified in
section 7.02 of this Agreement.
(B) Extensions for Filing Returns. WP
may request an extension of the time for
filing Form 1042, or any of the information required to be attached to the form, by
submitting Form 7004, Application for
Automatic Extension of Time to File Certain Business Income, Tax, Information,
and Other Returns, on or before the due
date of the return.
Sec. 6.02. Form 1042–S Reporting.
(A) In General. WP must file Form
1042–S for each partner for whom it acts
as a withholding foreign partnership and
for whom WP distributes, or in whose
distributive share is included, a reportable
amount unless WP is permitted under sections 6.02(C) and (D) of this Agreement to
report in pools (reporting pools). With

August 25, 2014

respect to its direct partners, WP must file
Forms 1042–S in the manner required by
the regulations under chapters 3 and 4 for
amounts distributed to, or included in the
distributive share of, its partners (or in the
case of a participating FFI, pursuant to its
FATCA requirements as a participating
FFI) and the instructions to the form, including any requirement to file the forms
magnetically or electronically. Any Form
1042–S required to be filed by this section
6 shall be filed on or before March 15
following the calendar year in which withholding, if any, was required under section 3.02 of this Agreement. WP may request an extension of time to file Forms
1042–S by submitting Form 8809, Application for Extension of Time to File Information Returns, (or other superseding
form) by the due date of Forms 1042–S in
the manner required by Form 8809.
(B) Recipient Specific Reporting. WP
is required to file a separate Form 1042–S
for amounts distributed to, or included in
the distributive share of, each separate
partner as described in this section
6.02(B). WP must file separate Forms
1042–S by income code, chapter 3 or 4
exemption code, recipient code, chapter 4
withholding rate pool (if applicable), and
withholding rate.
(1) Unless WP has made the pooled
reporting election pursuant to section
6.02(D) of this Agreement, WP must file a
separate Form 1042–S for each direct
partner (other than a passthrough partner)
to whom WP distributes, or whose distributive share includes, an amount subject to
chapter 3 withholding that is either not a
withholdable payment or is a withholdable payment for which no chapter 4 withholding is required.
(2) WP must file a separate Form
1042–S for each partner that is a qualified
intermediary, a withholding foreign partnership, or a withholding foreign trust to
whom WP distributes, or whose distributive share includes, an amount subject to
withholding under chapters 3 or 4, regardless of whether such partner is a direct or
indirect partner of WP.
(3) WP must file a separate Form
1042–S for each passthrough partner that
is a nonqualified intermediary or flowthrough entity that is a participating FFI,
registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA

408

FFI and to whom WP distributes, or
whose distributive share includes, an
amount subject to chapter 4 withholding
allocable to such FFI’s chapter 4 withholding rate pools of recalcitrant account
holders, nonparticipating FFIs, and reportable amounts allocable to U.S. payees, if
applicable, regardless of whether such FFI
is a direct or indirect partner of WP when
WP applies section 9.03 of this Agreement.
(4) WP must file a separate Form
1042–S for each passthrough partner that
is a nonqualified intermediary or flowthrough entity that is not described in section 6.02(B)(3) of this Agreement (other
than a nonparticipating FFI), and to whom
WP distributes, or whose distributive
share includes, an amount subject to chapter 4 withholding allocable to such passthrough partner’s chapter 4 withholding
rate pool of payees that are nonparticipating FFIs, regardless of whether such passthrough partner is a direct or indirect partner of WP when WP applies section 9.03
of this Agreement.
(5) WP must file a separate Form
1042–S for each partner of WP that is a
partnership or trust to which WP applies
the agency option under section 9.02 of
this Agreement and to whom WP distributes, or whose distributive share includes,
an amount subject to chapter 4 withholding that is allocable to the partnership or
trust’s chapter 4 withholding rate pool of
payees that are nonparticipating FFIs or to
whom WP distributes, or whose distributive share includes, an amount subject to
chapter 3 withholding that is either not a
withholdable payment or is a withholdable payment for which no chapter 4 withholding is required and that is allocable to
such partnership’s or trust’s chapter 3
withholding rate pools.
(6) WP must file a separate Form
1042–S for each partner of WP that is a
partnership or trust to which WP applies
the joint account option under section 9.02
of this Agreement and to whom WP distributes, or whose distributive share includes, an amount subject to chapter 3
withholding that is allocable to such partnership or trust’s chapter 3 withholding
rate pool.
(7) WP must file a separate Form
1042–S for each foreign account holder
(or interest holder) of a passthrough part-

Bulletin No. 2014 –35

ner that is a nonparticipating FFI that receives a payment on behalf of an exempt
beneficial owner (regardless of whether
the passthrough partner is a direct or indirect partner of WP) to the extent WP can
reliably associate such amounts with valid
documentation from such passthrough
partner as to the portion of the payment
allocable to one or more exempt beneficial
owners. In addition, WP must file separate
Forms 1042–S in the same manner for
each foreign account holder (or interest
holder) of a passthrough partner that is
described in the preceding sentence and
that is a direct or indirect partner, beneficiary, or owner of a partnership or trust to
which WP applies the agency option.
(8) WP must file a separate Form
1042–S for each foreign account holder
(or interest holder) of a nonqualified intermediary or flow-through entity to
whom WP distributes, or whose distributive share includes, an amount subject to
chapter 3 withholding that is either not a
withholdable payment or is a withholdable payment for which no chapter 4 withholding is required to the extent WP can
reliably associate such amounts with valid
documentation from an account holder (or
interest holder) that is not itself a nonqualified intermediary or flow-through entity when WP applies section 9.03 of this
Agreement. In addition, WP must file a
separate Form 1042–S in the same manner
for each foreign account holder (or interest holder) of a nonqualified intermediary
or flow-through entity (to which WP does
not apply the agency option) that is described in the preceding sentence and that
is a direct or indirect account holder (or
interest holder) of a partnership or trust to
which WP applies the agency option.
(9) If WP is an NFFE, WP must file a
separate Form 1042–S for each direct
partner that establishes its status as a passive NFFE but fails to provide the information regarding its owners as required
under § 1.1471–3(d)(12)(iii).
(C) Chapter 4 Reporting Pools.
If WP is an FFI, WP shall report on
Form 1042–S amounts subject to chapter
4 withholding that it distributes to, or includes in the distributive share of, its direct partners consistent with its FATCA
requirements as a participating FFI, regis-

Bulletin No. 2014 –35

tered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI. A
separate Form 1042–S shall be filed for
each type of chapter 4 reporting pool. A
chapter 4 reporting pool is a payment of a
single type of income (e.g., interest, dividends), determined in accordance with the
categories of income reported on Form
1042–S, that is allocable to a chapter 4
withholding rate pool consisting of payees
that are nonparticipating FFIs, recalcitrant
account holders, or U.S. payees (if applicable). WP must report recalcitrant account holders in pools based upon their
particular class described in § 1.1471–
4(d)(6), with a separate Form 1042–S issued for each such pool.
If WP is a participating FFI or registered deemed-compliant FFI (including
for this purpose a reporting Model 1 IGA
FFI), WP may report in a chapter 4 withholding rate pool of U.S. payees reportable amounts that are distributed to, or
included in the distributive share of, a
direct partner that is a U.S. person, provided that WP reports such partner as a
U.S. account (or U.S reportable account)
under its applicable FATCA requirements
as a participating FFI, registered deemedcompliant FFI, reporting Model 1 FFI, or
registered deemed-compliant Model 1
IGA FFI. WP shall include in its U.S.
payee pool reportable amounts that are
distributed to, or included in the distributive share of, a direct partner that is a U.S.
person when WP either reports such partner as a U.S. account (or U.S. reportable
account) pursuant to its FATCA requirements as a participating FFI, registered
deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI; or
reports such partner as a recalcitrant account holder (or non-consenting U.S. account) provided that WP is not required to
withhold on such partner pursuant to its
FATCA requirements as a participating
FFI, registered deemed-compliant FFI, or
registered deemed-compliant Model 1
IGA FFI. See, however, the automatic termination provision of section 10.03(A) of
this Agreement if WP is not in possession
of valid documentation for any direct partner at any time that withholding or reporting is required.
If WP is an NFFE, WP shall report
amounts subject to chapter 4 withholding
by reporting pools on a Form 1042–S if

409

those amounts are distributed to, or included in the distributive share of, direct
partners of WP that are nonparticipating
FFIs in a chapter 4 reporting pool of nonparticipating FFIs.
(D) Chapter 3 Reporting Pools.
WP may elect to perform pool reporting (PR election) for an amount subject to
chapter 3 withholding that either is not a
withholdable payment or is a withholdable payment for which no chapter 4 withholding is required and that WP distributes to, or includes in the distributive
share of, a foreign direct partner (other
than a passthrough partner, withholding
foreign partnership, or withholding foreign trust). A separate Form 1042–S shall
be filed for each chapter 3 reporting pool.
A chapter 3 reporting pool is a payment of
a single type of income that falls within a
particular withholding rate, chapter 3 exemption code and, if the payment is a
withholdable payment, a chapter 4 exemption code as determined on Form 1042–S
and its accompanying instructions. WP
may use a single chapter 3 pool reporting
code (e.g., WP– withholding rate poolgeneral) for all reporting pools except for
amounts paid to foreign tax-exempt recipients, for which a separate chapter 3 pool
reporting code (e.g., WP– withholding
rate pool- exempt organization) must be
used. For this purpose, a foreign taxexempt recipient includes any organization that is not subject to chapter 3 withholding and is not liable to tax in its
jurisdiction of residence because it is a
charitable organization, a pension fund, or
a foreign government.
If WP has made the PR election pursuant to this section 6.02(D), WP is not
required to file Forms 1042–S for amounts
distributed to, or included in the distributive share of, each separate direct partner
for whom such reporting would otherwise
be required. Instead, WP shall file a separate Form 1042–S for each reporting
pool. Once made, the PR election is effective for the entire term of this Agreement
beginning on the effective date of the
Agreement and ending on the date of its
expiration or termination under section 10
of the Agreement. WP must make a new
election for each renewal term of this
Agreement. If WP makes the PR election,

August 25, 2014

WP cannot revoke it prior to the end of the
term for which WP has made the PR election unless WP obtains consent from the
IRS to revoke such election. WP may
request IRS consent by contacting the IRS
at the address specified in section 11.06 of
this Agreement. If WP did not make the
PR election at the time this Agreement
was executed, then WP may make a PR
election only by contacting the IRS at the
address specified in section 11.06 of this
Agreement.
Sec. 6.03. Form 1065 Filing
Requirement.
(A) General Rule. If WP is required to
file Form 1065 and Schedules K–1 under
§ 1.6031(a)–1, then WP shall file Form
1065 and Schedules K–1 in accordance
with the regulations and the instructions
for the form as modified by section
6.03(B) of this Agreement.
(B) Modified Filing Obligations. If WP
has U.S. source income, WP may avail
itself of the modified obligations described in section 6.03(B)(1) or (2) of this
Agreement, if, in addition to satisfying the
requirements of section 6.03(B)(1) or (2)
of this Agreement, none of this income is
attributable to a permanent establishment
inside the United States, none of this income is effectively connected with a trade
or business within the United States, and
WP would not otherwise be required to
report to any partner a specially allocated
item on Schedule K–1.
(1) WP is not required to file a Form
1065 provided that WP has no direct or
indirect partners that are U.S. persons at
any time during WP’s taxable year.
(2) WP is required to file a Form 1065,
but is not required to file Schedules K–1
for any partners other than its direct U.S.
partners and its passthrough partners
(whether U.S. or foreign) through which
indirect U.S. partners hold an interest in
WP. Schedules K–1 that are not excepted
from the filing requirement under this section 6.03(B)(2) must contain the same information required of a domestic partnership under § 1.6031(a)–1(a).
Sec. 6.04. Retention of Returns. WP
shall retain Forms 1042 and 1065 for the
period of the applicable statute of limitations on assessments and collection under
the Code.

August 25, 2014

Sec. 6.05. FATCA U.S. Account
Reporting.
(A) WP that is an FFI. If WP is an FFI,
WP is required to report each U.S. account (or, in the case of an FFI that is a
reporting Model 1 FFI or registered
deemed-compliant Model 1 IGA FFI,
each U.S. reportable account) that it maintains consistent with its FATCA requirements as a participating FFI, registered
deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI. See
WP’s requirements as a participating FFI,
registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA
FFI to report each account that is a U.S.
account (or U.S. reportable account) that
it maintains. If WP is a participating FFI
or registered deemed-compliant FFI
(other than a reporting Model 1 FFI or
registered deemed-compliant Model 1
IGA FFI), WP must report its U.S. accounts on Form 8966, FATCA Report, in
the time and manner specified under its
FATCA requirements as a participating
FFI or registered deemed-compliant FFI
except to the extent WP is reporting under
§ 1.1471– 4(d)(5) on Form 1099 with respect to its U.S. accounts. If WP is a
reporting Model 1 FFI or registered
deemed-compliant Model 1 IGA FFI, WP
must report each U.S. reportable account
on Form 8966 as required under the applicable Model 1 IGA.
(B) WP that is an NFFE. If WP is an
NFFE, WP shall file Forms 8966 to report
withholdable payments distributed to, or
included in the distributive share of, any
partner that is an NFFE (other than an
excepted NFFE) with one or more substantial U.S. owners if the NFFE is the
beneficial owner of the withholdable payment received by WP. See § 1.1471–
1(b)(8) for the definition of beneficial
owner. WP must report on Form 8966 in
accordance with the form and its accompanying instructions.
The Form 8966 must include the name
of the NFFE that is owned by a substantial
U.S. owner; the name, address, and U.S.
TIN of each substantial U.S. owner; the
total of all withholdable payments distributed to, or included in the distributive
share of, the NFFE during the calendar
year; and any other information as re-

410

quired by the form and its accompanying
instructions.
(C) Form 8966 Reporting for Payees
that are NFFEs. WP shall file Form 8966
to report withholdable payments that WP
distributes to, or includes in the distributive share of, a passthrough partner that
provides information regarding an account holder (or interest holder that is an
NFFE (other than an excepted NFFE)
with one or more substantial U.S. owners
(or one or more controlling persons that is
a specified U.S. person under an applicable IGA) and that is the beneficial owner
of the withholdable payment received by
WP. WP must report on Form 8966 in the
time and manner provided in § 1.1474 –
1(i)(2). Such report must include the name
of the NFFE that is owned by a substantial
U.S. owner (or controlling person that is a
specified U.S. person); the name, address,
and U.S. TIN of each substantial U.S.
owner (or controlling person that is a
specified U.S. person); the total of all
withholdable payments made to the NFFE
during the calendar year (or reportable
period under the applicable IGA); and any
other information as required by the form
and its accompanying instructions. WP is
only required to report as described in this
section 6.05(C) if WP acts as a withholding foreign partnership with respect to
such indirect partner as described in section 9.03 of this Agreement and the passthrough partner does not certify on its
withholding statement that it is reporting
the account holder (or interest holder) as a
U.S. account pursuant to its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI.
Section 7. ADJUSTMENTS FOR
OVER– AND UNDERWITHHOLDING;
REFUNDS
Sec. 7.01. Adjustments for Chapter 3
or 4 Overwithholding by WP. WP may
make an adjustment for amounts paid to
its partners when WP has overwithheld
under chapter 3 or 4 by applying either the
reimbursement procedure described in
section 7.01(A) of this Agreement or the
set-off procedure described in section
7.01(B) of this Agreement within the time
period prescribed for those procedures.
(A) Reimbursement Procedure. WP
may repay its partners for an amount over-

Bulletin No. 2014 –35

withheld under chapter 3 or 4 and reimburse itself by reducing, by the amount of
tax actually repaid to the partners, the
amount of any subsequent deposit of tax
required to be made by WP under section
3.05 of this Agreement. For purposes of
this section 7.01(A), an amount that is
overwithheld shall be applied in order of
time (i.e., sequentially) to each of WP’s
subsequent deposit periods in the same
calendar year to the extent that the withholding taxes required to be deposited for
a subsequent deposit period exceed the
amount actually deposited. An amount
overwithheld in a calendar year may be
applied to deposit periods in the calendar
year following the calendar year of overwithholding only if—
(1) The repayment occurs before the
earlier of the due date (without regard to
extensions) for filing Form 1042–S for the
calendar year of overwithholding or the
date that the Form 1042–S is actually filed
by WP with the IRS;
(2) WP states on a Form 1042–S (issued, if applicable, to the partner or otherwise to a chapter 3 or 4 reporting pool)
filed by March 15 of the calendar year
following the calendar year of overwithholding, the amount of tax withheld and
the amount of any actual repayments; and
(3) WP states on a Form 1042, filed by
March 15 of the calendar year following
the calendar year of overwithholding, that
the filing of the Form 1042 constitutes a
claim for credit in accordance with
§ 1.6414 –1.
(B) Set-Off Procedure. WP may repay
its partners by applying the amount overwithheld against any amount which otherwise would be required under chapter 3 or
4 to be withheld from a payment made by
WP before the earlier of March 15 of the
calendar year following the calendar year
of overwithholding or the date that the
Form 1042–S is actually filed with the
IRS. For purposes of making a return on
Form 1042 or Form 1042–S for the calendar year of overwithholding, and for
purposes of making a deposit of the
amount withheld, the reduced amount
shall be considered the amount required to
be withheld from such income under
chapter 3 or 4.
Sec. 7.02. Collective Credit or Refund Procedures for Chapter 3 or 4
Overwithholding. If WP has made a PR

Bulletin No. 2014 –35

election and there has been overwithholding (as defined in section 2.51 of this
Agreement) on amounts paid to WP’s direct partners during a calendar year and
the amount of overwithholding has not
been recovered under the reimbursement
or set-off procedures as described in section 7.01 of this Agreement, WP may request a credit or refund of the total amount
overwithheld by following the procedures
of this section 7.02. WP shall follow the
procedures set forth under sections 6402
and 6414, and the regulations thereunder,
to claim the credit or refund. No credit or
refund will be allowed after the expiration
of the statutory period of limitation for
refunds under section 6511.
(A) Payments for which a Collective
Refund is Permitted. Except as otherwise
provided in this section 7.02, WP may use
the collective refund procedure of this
section 7.02 with respect to all amounts
subject to chapter 3 or 4 withholding that
WP has withheld under this Agreement.
With respect to amounts withheld under
chapter 3 or 4, WP shall not include in its
collective refund claim any amounts withheld on payments made to an indirect
partner or a direct account holder of WP
that is a passthrough partner. Further, with
respect to amounts withheld under chapter
4, if WP is a participating FFI or registered deemed-compliant FFI, WP shall not
include in its collective refund claim any
amounts withheld on payments made to
any partner that is an account holder described in the FFI agreement or in
§ 1.1471– 4(h)(2).
(B) Requirements for a Collective
Refund.
(1) WP may use the collective refund
procedures under this section 7.02 only if
WP has not issued Forms 1042–S to the
partners that were subject to overwithholding and for which a collective refund
claim is being made.
(2) WP must submit together with its
amended Form 1042 on which it provides
a reconciliation of amounts withheld and a
claim for credit or refund, a statement that
includes the following information and
representations—
(i) The reason(s) for the overwithholding;
(ii) WP deposited the tax for which a
refund is being sought under section 6302

411

and WP has not applied the reimbursement or set-off procedures of §§ 1.1461–
2 and 1.1474 –2 to adjust the tax withheld
to which the claim relates;
(iii) WP has repaid or will repay the
amount for which a refund is sought to the
appropriate partners;
(iv) WP retains a record showing the
total amount of tax withheld, adjustments
for underwithholding, and reimbursements for overwithholding as it relates to
each partner and also showing the repayment (if applicable) to such partners for
the amount of tax for which a refund is
being sought;
(v) WP retains valid documentation
that meets the requirements of chapter 3
or 4 (as applicable) to substantiate the
amount of overwithholding with respect
to each partner for which a refund is being
sought; and
(vi) WP has not (and will not) issue a
Form 1042–S (or such other form as the
IRS may prescribe) to any partner with
respect to the payments for which a refund
is being sought.
Sec. 7.03. Adjustments for Chapter 3
or 4 Underwithholding. If WP knows
that an amount should have been withheld
under chapter 3 or 4 from a previous payment made to a partner and the amount
was not withheld, WP may either withhold from future payments made pursuant
to chapter 3 or chapter 4 to the same
partner or satisfy the tax from the partner’s proportionate share of assets over
which WP has control. The additional
withholding or satisfaction of the tax
owed described in the previous sentence
must be made before the due date of the
Form 1042 (not including extensions) for
the calendar year in which the underwithholding occurred.
Sec. 7.04. Chapter 3 or 4 Underwithholding after Form 1042 Filed. If, after a
Form 1042 has been filed for a calendar
year, WP, WP’s auditor, or the IRS determines that WP has underwithheld tax under chapter 3 or 4 for such year, WP shall
file an amended Form 1042 to report and
pay the underwithheld tax. WP shall pay
the underwithheld tax, the interest due on
the underwithheld tax, and any applicable
penalties, at the time of filing the amended
Form 1042. If WP fails to file an amended
return, the IRS shall make such return

August 25, 2014

under section 6020 and assess such tax
under the procedures set forth in the Code.
Section 8. COMPLIANCE
PROCEDURES
Sec. 8.01.
(A) In General. WP must adopt a compliance program under the authority of a
responsible officer. WP’s compliance program must include policies, procedures,
and processes sufficient for WP to satisfy
the documentation, reporting, and withholding requirements of this Agreement
and sufficient for the responsible officer of
WP to make the certifications required
under section 8.03 of this Agreement. See
section 2.63 of this Agreement for the
definition of responsible officer. WP must
also perform or arrange for the performance of the periodic review described in
section 8.04 of this Agreement. As part of
the responsible officer’s certification, WP
must provide to the IRS the factual information described in section 8.03(C) of this
Agreement. WP must also satisfy the requirements of section 8.06 of this Agreement with respect to the report of the
periodic review and must comply with the
IRS review referenced in section 8.07 of
this Agreement.
(B) Coordination with FATCA Requirements as a Participating FFI, Registered Deemed-Compliant FFI, or Registered Deemed-Compliant Model 1 IGA
FFI. As a condition for maintaining this
Agreement, WP must comply with the
FATCA requirements applicable to its
chapter 4 status (including any applicable
compliance procedures). Therefore, WP
must, as part of the compliance procedures described in this section 8 (including the periodic review described in section 8.04 of this Agreement and in making
the periodic certification described in section 8.03 of this Agreement) determine
whether it is compliant with its FATCA
requirements as a participating FFI, registered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI
when it acts as a withholding foreign partnership. See the compliance procedures, if
any, required under WP’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI
when WP acts as a nonwithholding for-

August 25, 2014

eign partnership. If WP is a participating
FFI, WP will be able to make the certification described in section 8.03 of this
Agreement, and the certification described
in the FFI agreement, to the extent provided in future published guidance or
other instructions.
Sec. 8.02. Compliance Program.
(A) Responsible Officer. WP must appoint an individual as the responsible officer (as defined in section 2.63 of this
Agreement). The responsible officer must
be identified on the IRS FATCA registration website as the WP’s responsible party
and as the responsible officer for purposes
of compliance with its FATCA requirements as a participating FFI, registered
deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI. The
responsible officer (or the responsible officer’s designee) must establish a compliance program that meets the requirements
of this section 8.02 and must make the
periodic certifications to the IRS described in section 8.03 of this Agreement.
The responsible officer of WP must be a
partner of WP or an officer or agent of the
general partner or tax matters partner (as
defined in section 6231(a)(7)) of WP with
sufficient authority to fulfill the duties of a
responsible officer described in this section 8.02. The responsible officer (or a
delegate appointed by the responsible officer) must also serve as the point of contact for the IRS for all issues related to this
Agreement and for complying with IRS
requests for information or additional audit procedures under section 8.07 of this
Agreement.
(B) Compliance Program. The responsible officer (or the responsible officer’s
designee) must establish a program for
WP to comply with the requirements of
this Agreement that includes the following:
(1) Written Policies and Procedures.
The responsible officer (or the responsible
officer’s designee) must ensure the drafting and updating, as necessary, of written
policies and procedures sufficient for WP
to satisfy the documentation, withholding,
reporting, and other obligations of this
Agreement with its FATCA requirements
as a participating FFI, registered deemedcompliant FFI, or registered deemedcompliant Model 1 IGA FFI. Such written

412

policies and procedures must include a
process for an employee or partner of WP
to raise issues to the responsible officer
(or the responsible officer’s designee) that
concern WP’s compliance with this
Agreement.
(2) Training. The responsible officer
(or the responsible officer’s designee)
must communicate such policies and procedures to persons responsible for obtaining, reviewing, and retaining a record of
documentation under the requirements of
section 4 of this Agreement, making distributions and allocations to partners on
behalf of WP that are subject to withholding under section 3 of this Agreement, or
reporting distributions or allocations to
partners under section 6 of this Agreement. This includes any person that is
responsible for the performance of WP’s
due diligence procedures under its
FATCA requirements as a participating
FFI, registered deemed-compliant FFI, or
registered deemed-compliant Model 1
IGA FFI.
(3) Systems. The responsible officer (or
the responsible officer’s designee) must
ensure that systems and processes are in
place that will allow WP to fulfill its obligations under this Agreement and its
FATCA requirements as a participating
FFI, registered deemed-compliant FFI, or
registered deemed-compliant Model 1
IGA FFI. For example, in order to fulfill
WP’s obligations to report on Forms
1042–S, Schedules K–1, and 8966 under
section 6 of this Agreement, WP must
establish systems for documenting partners and for recording the information
with respect to each such partner that WP
is required to report under that section.
(4) Monitoring of Business Changes.
The responsible officer (or the responsible
officer’s designee) must monitor business
practices and arrangements that affect
WP’s compliance with this Agreement,
including, for example, changes in WP’s
partners that give rise to documentation,
withholding, or reporting obligations under this Agreement, and its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI.
(5) Periodic Review. The responsible
officer (or the responsible officer’s designee) must designate an auditor that meets
the qualifications described in section

Bulletin No. 2014 –35

8.04(A) of this Agreement to perform the
periodic review described in section 8.05
of this Agreement.
(6) Periodic Certification. The responsible officer (or the responsible officer’s
designee) must make the periodic certification as described in section 8.03 of this
Agreement, including ensuring that corrective actions are taken in response to
any material failures (as defined in section
8.03(D) of this Agreement) of WP’s compliance with this Agreement (as defined in
section 8.03(D) of this Agreement) and its
FATCA requirements as a participating
FFI, registered deemed-compliant FFI, or
registered deemed-compliant Model 1
IGA FFI.
Sec. 8.03. Periodic Certification by
Responsible Officer. In accordance with
the compliance period described in section 8.03(E) of this Agreement, the responsible officer of WP must make the
applicable certification of compliance described in section 8.03(A) or (B) of this
Agreement. The responsible officer of WP
must make the certifications of compliance in such manner as the IRS may prescribe in future guidance or other instructions. The responsible officer must
consider the results of WP’s periodic review described in section 8.05 of this
Agreement in making the periodic certification.
(A) Certification of Effective Internal
Controls. The responsible officer must
certify to the following and disclose any
material failures that occurred during the
certification period or during any prior
period if the material failure was not disclosed as part of a prior certification or
written disclosure made by WP to the
IRS—
(1) WP has established a compliance
program that meets the requirements described in section 8.02(B) of the WP
Agreement that is in effect as of the date
of the certification and during the certification period;
(2) A periodic review was conducted
for the certification period in accordance
with sections 8.04 through 8.06 of the WP
Agreement, and based on the review and
other steps taken by WP, WP maintains
effective internal controls over its documentation, withholding, and reporting obligations under the WP Agreement and under its
FATCA requirements as a participating FFI,

Bulletin No. 2014 –35

registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI;
(3) Based on the periodic review and
other information known to the responsible officer, there are no material failures
as defined in section 8.03(D) of the WP
Agreement or, if there are any material
failures, such failures are identified as part
of this certification as well as the actions
taken to remediate such failures and to
prevent their reoccurrence by the date of
this certification;
(4) With respect to any failure to withhold, deposit, or report to the extent required under the WP Agreement, WP has
corrected such failure by paying any taxes
due (including interest and penalties) and
filing the appropriate return (or amended
return); and
(5) All partnerships and trusts to which
WP applies the agency option either have
provided documentation or other information to WP to include in WP’s periodic
review, or have provided the responsible
officer of WP with a certification of effective controls meeting the requirements of
section 8.03(A) of the WP Agreement and
have represented to WP that there are no
material failures as defined in section
8.03(D) of the WP Agreement, or have
disclosed any such failures to WP and the
actions taken by the partnership or trust to
remediate such failures.
(B) Qualified Certification. If the responsible officer has identified an event of
default or a material failure that WP has
not corrected as of the date of the certification, the responsible officer must certify
to the following statements—
(1) The responsible officer (or the responsible officer’s designee) has identified an event of default as defined in section 8.05 of the WP Agreement or has
determined that as of the date of the certification, there are one or more material
failures as defined in section 8.03(D) of
this Agreement with respect to WP’s compliance, or the compliance of a partnership
or trust to which WP applies the agency
option, and that appropriate actions will
be taken to prevent such failures from
recurring;
(2) With respect to any failure to withhold, deposit, or report to the extent required under the WP Agreement, WP will
correct such failure by paying any taxes
due (including interest and penalties) and

413

filing the appropriate return (or amended
return); and
(3) The responsible officer (or an officer of the partnership or trust to which WP
applies the agency option) will respond to
any notice of default (if applicable) or will
provide to the IRS, to the extent requested, a description of each material
failure and a written plan to correct each
such failure.
(C) Factual Information. At the same
time WP provides the periodic certification, WP shall also report certain factual
information regarding its partners, withholdable payments, and amounts subject
to chapter 3 withholding and must certify
to the accuracy of the information. The
information requested will be limited to
certain information reviewed as part of
WP’s periodic review procedure described in section 8.05 of this Agreement.
The IRS will consider reportable amounts
received by WP, the number of WP’s
partners, and whether WP was required
to file Schedules K–1 for its U.S. partners and Forms 8966 with respect to its
partners that hold U.S. accounts (or U.S.
reportable accounts) during the certification period to determine the extent of
the factual information to request. The
IRS will prescribe in future published
guidance or other instructions the factual information that the WP is required
to report with the periodic certification
and the manner in which such information must be reported.
(D) Material Failures.
(1) Material Failures Defined. A material failure is generally a failure of WP
to fulfill the requirements of this Agreement or its FATCA requirements as a
participating FFI, registered deemedcompliant FFI, or registered deemedcompliant Model 1 IGA FFI. For purposes
of the certifications described in sections
8.03(A) and (B) of this Agreement, a material failure is limited to the following:
(i) WP’s establishing of, for financial
statement purposes, a tax reserve or provision for a potential future tax liability
related to WP’s failure to comply with this
Agreement or the FFI agreement or its
FATCA requirements as a participating
FFI, registered deemed-compliant FFI, or
registered deemed-compliant Model 1
IGA FFI;

August 25, 2014

(ii) WP’s failure to establish written
policies, procedures, or systems sufficient
for the relevant personnel of WP to take
actions consistent with WP’s obligations
under this Agreement or its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI;
(iii) A criminal or civil penalty or sanction imposed on WP by a regulator or
other governmental authority or agency
with oversight over WP’s compliance
with the AML/KYC procedures, if applicable, to which WP is subject and that is
imposed due to WP’s failure to properly
identify partners under the requirements
of those procedures; or
(iv) A finding (including a finding
noted in the auditor’s periodic review report
described in section 8.06 of this Agreement)
that, for one or more years covered by this
Agreement, WP failed to—
(a) Withhold an amount that WP was
required to withhold under chapter 3 or 4
as required under section 3 of this Agreement;
(b) Make deposits in the time and manner required by section 3 of this Agreement or make adequate deposits to satisfy
its withholding obligations, taking into account the procedures under section 7 of
this Agreement;
(c) Report or report accurately on
Forms 1042, 1042–S, 8966, 1065 and
Schedules K–1 as required under section 6
of this Agreement; or
(d) Report or report accurately its U.S.
accounts (or U.S. reportable accounts) under its FATCA requirements as a participating FFI, registered deemed-compliant
FFI, or registered deemed-compliant
Model 1 IGA FFI.
(2) Limitations on Material Failures. A
failure described in section 8.03(D)(1)(iv)
of this Agreement is a material failure
only if the failure was the result of a
deliberate action on the part of one or
more employees or partners of WP to
avoid the requirements of this Agreement
or WP’s FATCA requirements as a participating FFI, registered deemedcompliant FFI, or registered deemedcompliant Model 1 IGA FFI with respect
to one or more partners of WP or was an
error attributable to a failure of WP to
establish or implement internal controls
sufficient for WP to meet the requirements

August 25, 2014

of this Agreement. Regardless of these
limitations for the certifications described
in sections 8.03(A) and (B) of this Agreement, WP is required to correct a failure to
withhold or deposit tax under section 3 of
this Agreement or to report under section
6 of this Agreement by depositing the
amount of tax required to have been withheld and by filing the appropriate return
(or amended return).
(E) Certification Period.
(1) If WP is an FFI that is a participating FFI, registered deemed-compliant
FFI, or registered deemed-compliant
Model 1 IGA FFI, WP must make the
certification described in section 8.03(A)
or (B) on or before July 1 of the calendar
year following the certification period.
The initial certification period is the period ending on the third full calendar year
that this Agreement is in effect (including
renewals of this Agreement). Subsequent
certification periods will be every three
calendar years following the initial certification period (including renewals of this
Agreement).
(2) If WP is an NFFE or a retirement
fund that makes a PR election pursuant to
section 6.02(D) of this Agreement, WP
must make the certification described in
section 8.03(A) or (B) on or before July 1
of the calendar year following the certification period. The initial certification period is the period ending on the third full
calendar year that this Agreement is in
effect (including renewals of this Agreement). Subsequent certification periods
occur every three calendar years following the initial certification period (including renewals of this Agreement).
(3) If WP is an NFFE or a retirement
fund that does not make a PR election
pursuant to section 6.02(D) of this
Agreement, WP must make the certification described in section 8.03(A) or
(B) following the certification period.
The initial certification period is the period ending on the third full calendar
year that this Agreement is in effect
(including renewals of this Agreement).
Subsequent certification periods occur
every six calendar years following the
initial certification period (including renewals of this Agreement).

414

Sec. 8.04. Requirements for Periodic
Review.
(A) Independent Auditor. The periodic
review may be performed by an internal
auditor that is an employee of WP or the
general partner or tax matters partner of
WP (internal auditor) or a certified public
accountant, attorney, or third-party consultant (external auditor), or any combination thereof.
(1) Internal Auditor. WP may designate an internal auditor to perform the
periodic review (or a portion of the periodic review) only when the internal auditor is competent with respect to the requirements of this Agreement and WP’s
FATCA requirements as a participating
FFI, registered deemed-compliant FFI, or
registered deemed-compliant Model 1
IGA FFI. The internal auditor must also
be able to report findings that reflect the
independent judgment of the auditor. The
internal auditor must not report directly to
the responsible officer or any other employee of WP, or officer, agent, or employee of the general partner or tax matters partner of WP with direct authority
over the persons performing functions in
connection with WP’s obligations under
this Agreement and WP’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI. The
IRS has the right to request the performance of the periodic review by an external auditor if the IRS, in its sole discretion, reasonably believes that the auditor
selected by WP was not independent or
did not perform an effective periodic review under this Agreement.
(2) External Auditor. WP may engage
an external auditor that is a certified public accountant, attorney, or third-party
consultant that is regularly engaged in the
practice of performing reviews of clients’
policies, procedures, and processes for
complying with accounting, tax, or regulatory requirements (including for assisting clients in determining such compliance). The external auditor must be
independent of WP under the standards applicable to a certified public accountant with
respect to the engagement or, in the case of
an auditor other than a certified public
accountant, any standard of independence
otherwise applicable to the auditor for

Bulletin No. 2014 –35

such an engagement. The external auditor
is not required to make an attestation or
render an opinion regarding WP’s compliance with this Agreement or WP’s compliance with its FATCA requirements as a
participating FFI, registered deemedcompliant FFI, or registered deemedcompliant Model 1 IGA FFI, but the auditor must be able to perform the periodic
review as specified in section 8.05 of this
Agreement and provide the report described in section 8.06 of this Agreement.
WP must permit the external auditor access to all relevant records of WP for
purposes of performing the audit, including information regarding specific partners. Additionally, the engagement between the external auditor and WP must
impose no restrictions on WP’s ability to
provide the report described in section
8.06 of this Agreement to the IRS. However, the external auditor is not required to
divulge the identity of WP’s foreign partners to the IRS. WP must permit the IRS
to communicate directly with the external
auditor and any legal prohibitions that
prevent the IRS from communicating directly with the auditor must be waived.
Sec. 8.05. Scope and Timing of Review. The responsible officer of WP must
require the auditor to perform a review of
WP’s internal controls, test a sample of
distributions and allocations related to
WP’s documentation, withholding, reporting, and other obligations under this
Agreement and its FATCA requirements
as a participating FFI, registered deemedcompliant FFI, or registered deemedcompliant Model 1 IGA FFI, and identify
deficiencies in meeting these obligations.
To the extent WP applies the joint account
option with respect to another partnership
or trust as described in section 9.01 of this
Agreement or acts as a withholding foreign partnership for any indirect partners
as described in section 9.03 of this Agreement, the review must include such indirect partners, beneficiaries, or owners in
addition to WP’s direct partners. In addition, if WP applies the agency option to a
partnership or trust as described in section
9.02 of this Agreement, the review must
include the partners, beneficiaries, or
owners of such partnership or trust unless
the partnership or trust conducts its own
review in accordance with this section 8
of this Agreement and provides the re-

Bulletin No. 2014 –35

quired certification to the responsible officer of WP. Unless otherwise approved
by the IRS, the review must include the
steps described in sections 8.05(A)
through (E) of this Agreement. The review may include recommendations for
either corrective actions or enhancements
to WP’s compliance program. WP is required to arrange for the performance of
one review for the certification period to
evaluate WP’s documentation, withholding, and reporting practices for the most
recent calendar year. The review is not
required to include statistical sampling
procedures for testing transactions, but
must require that the auditor document its
methodology for sampling determinations.
(A) Documentation. The auditor
must—
(1) Verify that WP has training materials, manuals, and directives that instruct
the appropriate persons how to request,
collect, review, and maintain documentation in accordance with this Agreement,
including procedures for identifying and
communicating changes in circumstances;
(2) Review WP’s procedures and interview the appropriate persons to determine
if appropriate documentation is requested
from partners, and, if obtained, that it is
reviewed and maintained in accordance
with this Agreement;
(3) Verify that WP follows procedures
designed to inform partners that claim a
reduced rate of withholding under an income tax treaty about any applicable limitation on benefits provisions;
(4) Review WP’s documentation obtained for WP’s partners to ensure that
WP obtained the treaty statements required by section 4.03(B) of this Agreement;
(5) Review information contained in
documentation obtained for WP’s partners
or memoranda and any correspondence
associated with the partners (the partners’
files) to ensure that WP obtained documentation that meets the general requirements described in section 4 of this
Agreement;
(6) Review information contained in
the partners’ files to determine if the documentation validity standards of section
4.10 of this Agreement have been met.
For example, the auditor must verify that
WP is withholding at the correct rate after

415

any change in circumstances (e.g., a
change of address to a U.S. address or
change of account holder status from foreign to U.S.);
(7) Review WP’s partners’ files to ensure that WP is obtaining, reviewing, and
maintaining documentation in accordance
with its FATCA requirements as a participating FFI, registered deemed-compliant
FFI, or registered deemed-compliant
Model 1 IGA FFI; and
(8) Review WP’s agreements with
partnerships or trusts described in section
9 of this Agreement to ensure that the
obligations imposed meet the requirements provided in section 9 of this Agreement, including, for example, the receipt
of allocation information.
(B) Withholding Responsibilities. The
auditor must—
(1) Perform test checks, using a valid
sample of WP’s direct partners that are
recalcitrant account holders (if applicable)
and nonparticipating FFIs, to verify that
WP is withholding as required under
chapter 4;
(2) Perform test checks, using a valid
sample of foreign partners for which no
withholding is required under chapter 4
based on the partner’s chapter 4 status, to
verify that WP withheld the proper
amounts; and
(3) Verify that amounts withheld by
WP were timely deposited in accordance
with section 3.05 of this Agreement.
(C) Return Filing and Information Reporting. The auditor must—
(1) Obtain copies of original and
amended Forms 1042, and any schedules,
statements, or attachments required to be
filed with those forms, and verify that the
forms have been filed and determine
whether the amounts of income, taxes,
and other information reported on those
forms are accurate by—
(i) Reviewing work papers used to prepare these forms;
(ii) Interviewing personnel responsible
for preparing these forms;
(iii) Reviewing copies of Forms
1042–S received from withholding agents
for reconciling amounts received by WP
with the amounts distributed to, or included in the distributive share of, WP’s
partners;
(iv) Reviewing account statements and
correspondence from withholding agents;

August 25, 2014

(v) Determining that adjustments to the
amount of tax shown on Form 1042 (and
any claim by WP for refund or credit)
properly reflect the adjustments to withholding made by WP using the reimbursement or set-off procedures under section 7
of this Agreement and that the adjustments are supported by sufficient documentation;
(vi) Reconciling amounts shown on
Forms 1042 with amounts shown on Form
1042–S (including the amount of taxes
reported as withheld); and
(vii) In the case of collective credits or
refunds, reviewing the statements attached
to the amended Forms 1042 filed to claim
a collective credit or refund, ascertaining
their accuracy, and—
(a) Determining the causes of any overwithholding reported and ensure WP did
not issue Forms 1042–S to partners that
were included as part of its collective
credit or refund claim;
(b) Determining that WP repaid the
appropriate partners and that the amount
of the claim is accurate and supported by
adequate documentation for reducing the
rate of withholding; and
(c) Determining that WP did not include payments made to a partner described in section 7.02 of this Agreement
or a partnership or trust described in section 9.01 of this Agreement.
(2) Obtain copies of original and
amended Forms 1042–S, 1065, and
Schedules K–1 filed by WP together with
the work papers used to prepare those
forms and determine whether the amounts
reported on those forms are accurate by—
(i) Reviewing the Forms 1042–S received from withholding agents;
(ii) Reviewing the Form 1065, if required, and if no Form 1065 was required
to be filed, determining whether the exemption from filing was properly applied;
(iii) Reviewing a valid sample of
Schedules K–1 or income statements issued by WP to partners, if any;
(iv) Reconciling any payments and tax
reported on Forms 1042–S received from
withholding agents with amounts (including characterization of income) and taxes
reported by WP as withheld on Forms
1042–S and determining the reason(s) for
any variance;
(v) Interviewing personnel responsible
for preparing the Forms 1042–S, Sched-

August 25, 2014

ules K–1, and income statements issued to
partners and the work papers used to prepare those forms; and
(vi) Determining, in any case in which
WP utilized the reimbursement or set-off
procedure, that WP satisfied the requirements of section 7 of this Agreement and
that the adjusted amounts of tax withheld
are properly reflected on Forms 1042–S.
(3) Obtain copies of original and
amended Forms 8966, and determine
whether the amounts of income and other
information reported on Forms 8966 are
accurate by—
(i) Reviewing a sample of U.S. accounts (or U.S. reportable accounts), accounts held by nonparticipating FFIs, and
recalcitrant account holders to determine
that such accounts were reported in accordance with WP’s FATCA requirements as
a participating FFI, registered deemedcompliant FFI, or registered deemedcompliant Model 1 IGA FFI;
(ii) If WP is an NFFE, confirming that
any direct partners that are passive NFFEs
with one or more substantial U.S. owners
were reported in accordance with
§ 1.1472–1(c)(3);
(iii) Confirming with respect to any
passthrough partner that provides information regarding an account holder (or
interest holder) that is an NFFE (other
than an excepted NFFE) with one or more
substantial U.S. owners (or controlling
persons that are specified U.S. persons
under an applicable Model 1 or Model 2
IGA) that such substantial U.S. owners (or
controlling persons that are specified U.S.
persons) were reported to the extent required under section 6.05(C) of this
Agreement;
(iv) Reviewing a sample of the documentation provided by a partnership or
trust to which WP applied the agency option, confirming that WP reported on
Form 8966 to the extent required under
section 9 of this Agreement;
(v) Reviewing work papers used to
prepare these forms; and
(vi) Interviewing personnel responsible
for preparing these forms.
(D) Significant Change in Circumstances. The auditor must verify that in
the course of the audit it has not discovered any significant change in circumstances, as described in section 10.05(A),
(D), or (E) of this Agreement.

416

Sec. 8.06. Periodic Review Report.
(A) In General. The performance of
the periodic review must be documented
in a written report addressed to the responsible officer of WP and must be available to the IRS upon request (with a certified translation into English if the report
is not in English). The report must describe the scope of the review, the steps
performed to evaluate internal controls,
and the test transactions, including the
methodology for sampling determinations. The report must identify any deficiencies noted by the auditor, especially
those deficiencies that the auditor concludes are material failures, and may include explanatory footnotes to clarify the
results of the report. Recommendations
may be included but are not required to be
provided in the report.
(B) Partnership or Trust to which WP
Applies the Agency Option. Any partnership or trust to which WP applies the
agency option and that does not provide
documentation and information to WP for
WP’s periodic review, must provide a
written certification to WP as described in
section 8.03 of this Agreement regarding
its compliance with the requirements of its
agreement with WP. Such certification
must be available to the IRS upon a request made as part of the review described
in section 8.07 of this Agreement (with a
certified translation into English if the certification is not in English).
(C) Retention of Report. The report and
certifications described in this section 8.06
must be retained by WP for as long as this
Agreement is in effect (including renewals of this Agreement).
Sec. 8.07. Compliance Review.
(A) In General. Based upon the certifications made by the responsible officer
and disclosure of material failures, the
information reported on Forms 1042,
1042–S, 1065, and 8966 and Schedules
K–1 filed with the IRS during the certification period, or otherwise at the IRS’s
discretion for compliance purposes, the
IRS may initiate requests of WP under
this section 8.07.
(B) Periodic Review Report. The IRS
may request through written correspondence to the responsible officer of WP a
copy of WP’s periodic review report that

Bulletin No. 2014 –35

was issued for any prior certification period or the periodic review report of any
partnership or trust to which WP applied
the agency option that WP has an agency
agreement during the current certification
period (with a certified translation into
English if the report is not in English). WP
is required to provide the report within 30
calendar days of such request.
(C) Correspondence Review. The IRS
may, in its discretion, conduct additional
fact finding through a correspondence review. In such a review, the IRS will contact the responsible officer of WP in writing and request information about WP’s
compliance with this Agreement or the
compliance of a partnership or trust to
which WP applied the agency option, including, for example, information about
documentation, withholding, or reporting
processes, its periodic review, and information about any material failures that
were disclosed to the IRS (including remediation plans). The IRS may request
phone or video interviews with relevant
personnel or a partnership or trust to
which WP applied the agency option as
part of such review. WP is required to
respond within a reasonable period of
time to any such requests.
(D) Additional Review Procedures. In
limited circumstances, the IRS may direct
WP or any partnership or trust described
in sections 9.01 and 9.02 of this Agreement with which WP has an agreement to
perform additional, specified review procedures. The IRS reserves the right to
require WP or a partnership or trust to
which WP applied the agency option to
engage an external auditor to perform the
additional review procedures regardless of
whether such auditor performed the periodic review. The IRS will provide the
responsible officer of WP with a written
plan describing the additional review procedures and will provide a period of not
more than 120 days within which the WP
must provide to the IRS a report covering
the review’s findings.
Section 9. CERTAIN
PARTNERSHIPS AND TRUSTS
Sec. 9.01. Joint Account Treatment
for Certain Partnerships and Trusts.
(A) In General. WP may enter an
agreement with a nonwithholding foreign

Bulletin No. 2014 –35

partnership or nonwithholding foreign
trust that is either a simple or grantor trust
described in this section 9.01(A) to apply
the simplified joint account documentation, reporting, and withholding procedures provided in section 9.01(B) of this
Agreement. WP and the partnership or
trust that apply this section 9.01 to any
calendar year must apply these rules to the
calendar year in its entirety. WP and the
partnership or trust may not apply this
section 9.01 to any calendar year in which
the partnership or trust has failed to make
available to WP or WP’s auditor the records described in this section 9.01(A)(5)
within 90 days after these records are requested and the partnership or trust must
waive any legal prohibitions against providing such records to WP. If the partnership or trust has failed to make these records available within the 90-day period,
or if WP and the partnership or trust fail to
comply with any other requirements of
this section 9.01, WP must apply the provisions of §§ 1.1441–1 and 1.1441–5 to
the partnership or trust as a nonwithholding foreign partnership or nonwithholding
foreign trust, must correct its withholding
for the period during which the failure
occurred in accordance with section 7.03
of this Agreement, and cannot apply this
section 9.01 to subsequent calendar years.
WP and the partnership or trust that apply
this section 9.01 to any calendar year are
not required to apply this section 9.01 to
subsequent calendar years.
WP may not apply the rules of section
9.01(B) unless it has made a PR election
under section 6.02(D) of this Agreement.
A partnership or trust is described in
this section 9.01(A) of this Agreement if
the following conditions are met.
(1) The partnership or trust is a certified deemed-compliant FFI (other than a
registered deemed-compliant Model 1
IGA FFI), an owner-documented FFI, an
exempt beneficial owner, or an NFFE
(other than a WP or WT);
(2) The partnership or trust is a direct
partner of WP;
(3) None of the partnership’s or trust’s
partners, beneficiaries, or owners is a
flow-through entity or intermediary;
(4) None of the partnership’s or trust’s
partners, beneficiaries, or owners is a U.S.
person and none of its foreign partners,
beneficiaries, or owners is subject to with-

417

holding or reporting under chapter 4
(which would include a nonparticipating
FFI or certain passive NFFEs); and
(5) The partnership or trust agrees to
make available upon request to WP and
WP’s auditor for purposes of WP’s compliance review under section 8 of this
Agreement (including to respond to IRS
inquiries regarding its compliance review)
records that establish that the partnership
or trust has provided WP with documentation for purposes of chapters 3 and 4 for
all of its partners, beneficiaries, or owners.
(B) Modification of Obligations for WP.
(1) WP may rely on a valid Form
W– 8IMY provided by the partnership or
trust and may rely on a withholding statement that meets the requirements of
§§ 1.1441–5(c)(3)(iv) or (e)(5)(iv), and
§ 1.1471–3(c)(3)(iii)(B), if the payment is
a withholdable payment, and that provides
information for all partners, beneficiaries,
or owners together with valid Forms W– 8
and, for a withholdable payment made to
a partner, beneficiary, or owner that is an
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 information.
(2) WP must treat amounts distributed
to, or included in the distributive share of,
the partnership or trust as allocated solely
to a partner, beneficiary, or owner that is
subject to the highest rate of withholding
under chapter 3 and must withhold at that
rate.
(3) WP may pool report amounts distributed to, or included in the distributive
share of, the partnership’s or trust’s direct
partners, owners, or beneficiaries in chapter 3 reporting pools on Form 1042–S as
described in section 6.02 of this Agreement.
(4) After WP has withheld in accordance with section 9.01(B)(2) of this
Agreement, it may file a separate Form
1042–S for any partner, beneficiary, or
owner who requests that it do so. If WP
issues a separate Form 1042–S for any
partner, beneficiary, or owner, it cannot
include such partner, beneficiary, or
owner in WP’s chapter 3 reporting pool. If
WP has already filed a Form 1042–S and

August 25, 2014

included the partner, beneficiary, or owner
in a chapter 3 reporting pool, it must file
an amended return to reduce the amount
of the payment reported to reflect the
amount allocated to the recipient on the
recipient’s specific Form 1042–S. WP
may file a separate Form 1042–S for a
partner, beneficiary, or owner only if the
partnership or trust provides a withholding statement that includes allocation information for the requesting partner, beneficiary, or owner and only if the
partnership or trust has agreed in writing
under section 9.01(A)(5) of this Agreement to make available to WP or WP’s
auditor the records that substantiate the
allocation information included in its
withholding statement.
(5) WP may not include any amounts
distributed to, or included in the distributive share of, a partnership or trust to
which WP is applying the rules of this
section 9.01 in any collective refund claim
made under section 7.02 of this Agreement.
(C) Transitional Rule through December 31, 2014. For the period beginning on
the effective date of this Agreement and
ending December 31, 2014, a WP that had
previously entered into an agreement with
a partnership or trust to apply the provisions described in this section 9.01 (the
“joint account option”) may continue to
act consistent with such agreement provided that the agreement meets the requirements of section 10 of Revenue
Procedure 2003– 64 (as amended). However, WP is required to withhold with
respect to such partnership or trust under chapter 4 to the extent required under this Agreement.
Sec. 9.02. Agency Option for Certain
Partnerships and Trusts.
WP may enter an agreement with a
nonwithholding foreign partnership or
nonwithholding foreign trust that is either
a simple or grantor trust described in section 9.02(A) of this Agreement under
which the partnership or trust agrees to act
as an agent of WP with respect to its
partners, beneficiaries, or owners, and, as
WP’s agent, to apply the provisions of the
WP Agreement to the partners, beneficiaries, or owners. By entering into an agreement with a partnership or trust as described in this section 9.02, WP is not

August 25, 2014

assigning its liability for the performance
of any of its obligations under the WP
Agreement. WP and the partnership or
trust to which WP applies the rules of this
section 9.02 (agency option) are jointly
and severally liable for any tax, penalties,
and interest that may result from the failure of the partnership or trust to meet any
of the obligations imposed by its agreement with WP. WP and the partnership or
trust that apply the agency option to any
calendar year must apply these rules to the
calendar year in its entirety. Generally,
WP and the partnership or trust that apply
the agency option to any calendar year are
not required to apply the agency option to
subsequent calendar years. If, however,
WP withholds and reports any adjustments required by corrected information
in a subsequent calendar year under section 9.02(B)(2) of this Agreement, WP
must apply the agency option to that calendar year in its entirety.
If the partnership or trust is included in
WP’s periodic review of compliance as
described in section 9.02(A)(5) of this
Agreement, WP and the partnership or
trust may not apply the agency option to
any calendar year in which the partnership
or trust has failed to make available to WP
or WP’s auditor the records described in
this section 9.02 within 90 days after these
records are requested and the partnership
or trust must waive any legal prohibitions
against providing such records to the WP.
If, for any calendar year, the partnership
or trust has failed to make these records
available within the 90-day period, or if
WP and the partnership or trust fail to
comply with any other requirement of this
section 9.02, WP must apply §§ 1.1441–
1 and 1.1441–5 to the partnership or trust
as a nonwithholding foreign partnership
or nonwithholding foreign trust, correct its
withholding for the period in which the
failure occurred in accordance with section 7.03 of this Agreement, and cannot
apply this section 9.02 to subsequent calendar years.
WP may not apply the rules of this
section 9.02 unless it has made a PR election under section 6.02(C) of this Agreement.
(A) Eligible partnership or trust. A
partnership or trust is described in this
section 9.02(A) of this Agreement if the
following conditions are met:

418

(1) The partnership or trust is either a
direct partner of WP or an indirect partner
of WP that is a direct partner, beneficiary,
or owner of a partnership or trust to which
WP also applies this section 9.02.
(2) The partnership or trust is an FFI
that is a certified deemed-compliant FFI
(other than a registered deemed-compliant
Model 1 IGA FFI), owner-documented
FFI, an NFFE, or an exempt beneficial
owner.
(3) None of the partnership’s or trust’s
partners, beneficiaries, or owners is a
withholding foreign trust, withholding
foreign partnership, participating FFI, registered deemed-compliant FFI, registered
deemed-compliant Model 1 IGA FFI, or
qualified intermediary acting as an intermediary for a payment made by WP to the
partnership or trust.
(4) WP may not act as a withholding
foreign partnership with respect to any
direct or indirect partner of the partnership
or trust that is a U.S. non-exempt recipient, unless the U.S. non-exempt recipient
is a partner of an owner-documented FFI
or passive NFFE to which WP applies the
agency option and is included in WP’s
U.S. payee pool (described in section
6.02(C) of this Agreement).
(5) The partnership or trust agrees to
comply with the documentation requirements described in section 4 of this
Agreement.
(6) The partnership or trust agrees to
comply with the compliance procedures
described in section 8.05 of this Agreement in order to allow the responsible
officer of WP to make a certification to the
IRS regarding the partnership’s or trust’s
compliance with this section 9.02 by (i)
providing WP with the certification required under section 8.03 of this Agreement for each certification period, or (ii)
providing WP with documentation or
other information for review. The partnership or trust must also agree to respond
(either directly or through WP) to IRS
inquiries regarding its compliance review
described in section 8.07 of this Agreement, including, if applicable, providing
the WP and the IRS with the auditor’s
report described in section 8.06 of this
Agreement.

Bulletin No. 2014 –35

(B) Modification of Obligations for WP.
(1) WP may rely on a valid Form
W– 8IMY provided by the partnership or
trust, together with a withholding statement
described in §§ 1.1441–5(c)(3)(iv) or
(e)(5)(iv), and § 1.1471–3(c)(3)(iii)(B) if
the payment is a withholdable payment,
that includes all information necessary for
WP to fulfill its withholding, reporting,
and filing obligations under this Agreement. For a withholdable payment, the
withholding statement may include a
chapter 4 withholding rate pool (as defined in § 1.1471–1(b)(20)) of nonparticipating FFIs for payments of amounts subject to chapter 4 withholding. The
withholding statement may also include
chapter 3 withholding rate pools (as defined in § 1.1441–1(c)(44)) for partners,
beneficiaries, or owners that are not intermediaries, flow-through entities (or persons holding interests in the partnership or
trust through such entities), U.S. nonexempt recipients, or passive NFFEs with
one or more substantial U.S. owners (or
one or more controlling persons that is a
specified U.S. person under an applicable
Model 1 or Model 2 IGA), and the partnership or trust need not provide to WP
documentation for these partners, beneficiaries, or owners. The partnership or trust
is required to disclose to WP any partner
or interest holder that is a passive NFFE
with substantial U.S. owners (or controlling persons that are specified U.S. persons under an applicable IGA) or that is a
U.S. non-exempt recipient, as well as the
account holders of any nonqualified intermediary or interest holders in a flowthrough entity which has an interest in the
partnership or trust, and provide all of the
documentation and other information relating to those account holders and interest holders that is required for WP, or
another withholding agent, to report the
payments made to those account holders
and interest holders to the extent required
by section 6 of this Agreement.
(2) Timing of Withholding. WP must
withhold on the date an amount is distributed to, or included in the distributive
share of, the partnership or trust based on
a withholding statement provided by the
partnership or trust on which WP is permitted to rely. The amount allocated to
each partner, beneficiary, or owner in the

Bulletin No. 2014 –35

withholding statement may be based on a
reasonable estimate of the partner, beneficiary, or owner’s distributive share of
income subject to withholding for the
year. The partnership or trust must correct
the estimated allocations to reflect the
partner’s, beneficiary’s, or owner’s actual
distributive share and must provide this
corrected information to WP, on the earlier of the date that the statement required
under section 6031(b) (i.e., Schedule K–1)
is mailed or otherwise provided to the
partner or the due date for furnishing the
statement (whether or not the partnership
or trust is required to prepare and furnish
the statement). If that date is after the due
date for WP’s Forms 1042 and 1042–S
(without regard to extensions) for the calendar year, WP may withhold and report
any adjustments required by the corrected
information in the following calendar
year.
(3) Payments Reportable under Chapters 3 and 4. WP shall report on Form
1042–S all amounts subject to chapters 3
and 4 withholding distributed to, or included in the distributive share of, the
partnership or trust as follows:
(i) For a direct partner, beneficiary, or
owner of the partnership or trust that is a
nonparticipating FFI, WP shall report an
amount subject to withholding using the
chapter 4 reporting pool described in section 6.02(C) of this Agreement with the
partnership or trust reported as the recipient.
(ii) For a direct partner, beneficiary, or
owner of the partnership or trust that is a
foreign person for which no withholding
is required under chapter 4 (other than an
intermediary, agent, or flow-through entity described below), WP shall report an
amount subject to chapter 3 withholding
using the chapter 3 reporting pools as described in section 6.02(D) of this Agreement with the partnership or trust reported
as the recipient.
(iii) For a direct or indirect partner,
beneficiary, or owner of the partnership or
trust that is a nonqualified intermediary or
foreign flow-through entity, WP shall report payments of amounts subject to chapter 4 withholding included in a chapter 4
withholding rate pool of nonparticipating
FFIs using the chapter 4 reporting pool for
such partner, beneficiary, or owner with
the nonqualified intermediary or foreign

419

flow-through entity reported as the recipient, and WP shall report payments of
amounts subject to chapter 3 withholding
that are not withholdable payments or are
withholdable payments for which no
chapter 4 withholding is required by reporting the payments as made to specific
recipients as described in 6.02(B) of this
Agreement.
(4) Form 8966 Reporting Requirements. If WP is an FFI and if the partnership or trust is a U.S. account (or U.S.
reportable account), WP is required to report the partnership or trust consistent
with its FATCA requirements as a participating FFI, registered deemed-compliant
FFI, or registered deemed-compliant
Model 1 IGA FFI. The agreement between WP and the partnership or trust
must also provide that WP shall report
withholdable payments that the partnership or trust distributes to, or includes in
the distributive share of, a partner, beneficiary, or owner that is an NFFE (other
than an excepted NFFE) with one or more
substantial U.S. owners (or one or more
controlling persons that is a specified U.S.
person under an applicable IGA) and is
the beneficial owner of the withholdable
payment received by the partnership or
trust. WP must report on Form 8966 in the
time and manner provided in § 1.1474 –
1(i)(2). Such report must include the name
of the NFFE that is owned by a substantial
U.S. owner (or controlling person that is a
specified U.S. person); the name, address,
and U.S. TIN of each substantial U.S.
owner (or controlling person that is a
specified U.S. person); the total of all
withholdable payments made to the NFFE
during the calendar year (or reportable
period under the applicable IGA); and any
other information as required by the form
and its accompanying instructions.
(C) Other Requirements of Agency
Agreement. WP shall require the partnership or trust to which it applies the agency
option described in this section 9.02 to
provide WP with all the information necessary for WP to meet its obligations under this Agreement. No provisions shall
be contained in the agreement between
WP and the partnership or trust that preclude, and no provisions of this Agreement shall be construed to preclude, the
partnership or trust’s joint and several liability for tax, penalties, and interest un-

August 25, 2014

der chapters 3 and 4 to the extent that
underwithholding, penalties, and interest
have not been collected from WP and the
underwithholding or failure to report
amounts correctly on Forms 1042, 1042–S
or 8966, is due to the partnership or trust’s
failure to properly perform its obligations
under its agreement with WP. Nothing in
the agreement between WP and the partnership or trust shall be construed to limit
the partnership or trust’s requirements under chapter 4 as a certified deemedcompliant FFI, an NFFE, or an exempt
beneficial owner. Further, nothing in the
agreement between WP and the partnership or trust shall permit the partnership or
trust to assume primary chapters 3 and 4
withholding responsibility.
(D) Transitional Rule through December 31, 2014. For the period beginning on
the effective date of this Agreement and
ending December 31, 2014, a WP that
entered into an agreement with a partnership or trust to apply the provisions described in this section 9.02 (“the agency
option”) may continue to act consistent
with such agreement provided that the
agreement meets the requirements of section 10 of Revenue Procedure 2003– 64
(as amended). However, WP is required to
withhold with respect to such partnership
or trust under chapter 4 to the extent required under this Agreement.
Sec. 9.03. Indirect Partners of WP.
(A) General Requirements. WP may
act as a withholding foreign partnership
for reportable amounts distributed to, or
included in the distributive share of, passthrough partners and indirect partners if
such indirect partner is not a U.S. nonexempt recipient. Notwithstanding the
preceding sentence, WP may act as a
withholding foreign partnership with respect to an indirect partner that is a U.S.
non-exempt recipient if the indirect partner is included in a passthrough partner’s
chapter 4 withholding rate pool of recalcitrant account holders or U.S. payees.
WP does not need to use the agency option described in section 9.02 of this
Agreement or make the pooled reporting
election described in section 6.02(D) of
this Agreement to apply the procedures
described in this section 9.03.

August 25, 2014

(B) Modification of Obligations for WP.
(1) Except to the extent described in
this section 9.03(B), WP need not forward
the documentation and the withholding
statement of the passthrough partner and
indirect partner to WP’s withholding
agent;
(2) WP must provide its withholding
agent with documentation and other information from any passthrough partner
whose direct or indirect partner is a U.S.
non-exempt recipient (unless such U.S.
non-exempt recipient is included in a
chapter 4 withholding rate pool of recalcitrant account holders or U.S. payees);
(3) WP will assume primary chapters 3
and 4 withholding responsibility as described in section 3 of this Agreement and
must report on its indirect partners on a
specific payee basis on Form 1042–S (except to the extent such indirect partners
are included in a passthrough partner’s
chapter 4 withholding rate pool) as described in section 6.02(B) of this Agreement, regardless of whether WP made a
PR election for its direct partners under
section 6.02(D) of this Agreement; and
(4) WP must include any passthrough
partner and indirect partner for which it
acts as a withholding foreign partnership
in its periodic review as described in section 8.05 of this Agreement.
(C) Documentation from Passthrough
Partner. WP agrees to use its best efforts
to obtain from a passthrough partner the
documentation of an indirect partner for
which WP acts as a withholding foreign
partnership. Unless WP can reliably associate an amount distributed to, or included
in the distributive share of, any passthrough partner with valid documentation
from such partner within the meaning of
§ 1.1441–1(b)(2)(vii) and, for a withholdable payment, § 1.1471–3(c), WP shall
apply 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 payment made to an entity, § 1.1471–3(f) or,
if WP is an FFI, its FATCA requirements
as a participating FFI, registered deemedcompliant FFI, or registered deemedcompliant Model 1 IGA FFI. Generally,
WP can reliably associate an amount with
documentation provided by a passthrough
partner if WP obtains—

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(1) A valid Form W– 8IMY provided
by the passthrough partner that, if the payment is a withholdable payment, establishes the chapter 4 status of the passthrough partner; and
(2) If the payment is a withholdable
payment, a withholding statement that
meets the requirements of § 1.1471–
3(c)(3)(iii)(B) that includes the account
holders or interest holders of the passthrough partner in chapter 4 withholding
rate pools to the extent permitted, and, for
an amount subject to chapter 3 withholding that is not a withholdable payment or
is a withholdable payment for which
chapter 4 withholding is not required,
valid documentation described in section
4 of this Agreement provided by account
holders or interest holders of the passthrough partner that are not themselves
qualified intermediaries or flow-through
entities.
WP may not reduce the rate of withholding with respect to an indirect partner
for which it acts as a withholding foreign
partnership unless WP can reliably associate the payment with valid documentation that establishes the indirect partner’s
entitlement to a reduced rate of withholding under chapter 3 and, in the case of a
withholdable payment, establishes that
chapter 4 withholding does not apply.
(D) Timing of Withholding. WP must
withhold on the date an amount is distributed to, or included in the distributive
share of, the passthrough partner based on
a withholding statement provided by the
passthrough partner on which WP is permitted to rely. The amount allocated to
each indirect partner in the withholding
statement may be based on a reasonable
estimate of the indirect partner’s distributive share of income subject to withholding for the year. The passthrough partner
must agree to correct the estimated allocations to reflect the indirect partner’s actual distributive share and must provide
this corrected information to WP, on the
earlier of the date that the statement required under section 6031(b) of the Code
(Schedule K–1) is mailed or otherwise
provided to the indirect partner or the due
date for furnishing the statement (whether
or not the passthrough partner is required
to prepare and furnish the statement). If
that date is after the due date for WP’s
Forms 1042 and 1042–S (without regard

Bulletin No. 2014 –35

to extensions) for the calendar year, WP
may withhold and report any adjustments
required by the corrected information in
the following calendar year.
(E) Form 8966 Reporting Requirements. If WP is an FFI and if the passthrough partner is a U.S. account (or U.S.
reportable account), WP is required to report the partnership or trust consistent
with its FATCA requirements as a participating FFI, registered deemed-compliant
FFI, or registered deemed-compliant
Model 1 IGA FFI. WP shall also report
withholdable payments that WP distributes to, or includes in the distributive
share of, a passthrough partner if an account holder or interest holder of such
passthrough partner is an NFFE (other
than an excepted NFFE) with one or more
substantial U.S. owners (or one or more
controlling persons that is a specified U.S.
person under an applicable IGA) and if
the NFFE is the beneficial owner of the
withholdable payment received by the
passthrough partner. WP must report on
Form 8966 in the time and manner provided in § 1.1474 –1(i)(2). Such report
must include the name of the NFFE that is
owned by a substantial U.S. owner (or
controlling person that is a specified U.S.
person); the name, address, and U.S. TIN
of each substantial U.S. owner (or controlling person that is a specified U.S. person); the total of all withholdable payments made to the NFFE during the
calendar year (or reportable period under
the applicable IGA); and any other information as required by the form and its
accompanying instructions. WP is not required to report as described in this section 9.03(D) if the passthrough partner
certifies on its withholding statement that
it is reporting the account holder (or interest holder) as a U.S. account pursuant
to its FATCA requirements as a participating FFI, registered deemed-compliant
FFI, or registered deemed-compliant
Model 1 IGA FFI.
Section 10. EXPIRATION,
TERMINATION AND DEFAULT
Sec. 10.01. Term of Agreement. This
Agreement begins on the effective date of
the WP Agreement and expires upon the
earlier of the date WP terminates under its
partnership agreement or December 31,
2016. This Agreement may be renewed

Bulletin No. 2014 –35

for additional terms as provided in section
10.07 of this Agreement.
Sec. 10.02. Termination of Agreement. Except as otherwise provided in
section 10.03 of this Agreement, this
Agreement may be terminated by either
the IRS or WP prior to the end of its term
by delivery of a notice, in accordance with
section 11.06 of this Agreement, of termination to the other party. The IRS, however, shall not terminate this Agreement
unless there has been a significant change
in circumstances, as defined in section
10.04 of this Agreement, or an event of
default has occurred, as defined in section
10.05 of this Agreement, and the IRS determines, in its sole discretion, that the
significant change in circumstances or the
event of default warrants termination of
this Agreement. The IRS shall not terminate this Agreement if WP can establish to
the satisfaction of the IRS that all events
of default for which it has received notice
have been cured within the time period
agreed upon. The IRS shall notify WP, in
accordance with section 10.06 of this
Agreement, that an event of default has
occurred and that the IRS intends to terminate the Agreement unless WP cures
the default or establishes that no event of
default has occurred. A notice of termination sent by either party shall take effect
on the date specified in the notice, and WP
is required to notify its withholding agent
of the date its status as a WP was terminated.
Sec 10.03. Termination of Agreement.
(A) Automatic Termination. Notwithstanding section 10.02 of this Agreement,
this Agreement will terminate automatically in the event that the auditor or the
IRS (including during its compliance review described in section 8.07 of this
Agreement) discovers that WP was not in
possession of Forms W– 8 or W–9, as
applicable, or documentary evidence, as
permitted under section 4.01(B), for any
direct partner at any time that withholding
or reporting was required under section
3.02 of this Agreement. The automatic
termination will be effective as of December 31 of the year in which the auditor or
the IRS makes that discovery.
(B) Cure and Reinstatement after Automatic Termination. This Agreement will
be reinstated, effective the same date it

421

automatically terminated under section
10.03(A) of this Agreement, if—
(1) WP obtains appropriate Forms
W– 8 or W–9 or documentary evidence, as
permitted under section 4.01(B), (that relate to the time withholding or reporting
was required) for each such undocumented partner before March 15 of the
year following the year in which the
Agreement automatically terminated, or
(2) All such undocumented partners
have ceased to be partners in WP before
March 15 of the year following the year in
which the Agreement automatically terminated.
(C) Payment of Underwithholding and
Reporting upon Termination. In the event
of automatic termination of this Agreement under this section 10.03, WP must
pay any underwithholding of tax, interest,
and penalties that the IRS determines is
attributable to each undocumented partner
for the period during which the partner
was undocumented based on the presumption rules, and, if WP has made a pooled
reporting election for chapter 3 purposes,
WP must file partner specific Forms
1042–S for amounts subject to chapter 3
withholding for which no chapter 4 withholding is required and Schedules K–1
reporting the names and addresses and
other required information, as appropriate,
for every undocumented partner from the
earliest time the documentation was required for that undocumented partner
through the date of termination. WP may,
however, continue to report on a pooled
basis for documented foreign direct partners through this period.
(D) Reinstatement after Termination
(other than Automatic Termination). After
the date of termination of this Agreement,
WP may not act as a withholding foreign
partnership, and must so notify any persons to which WP has furnished a withholding foreign partnership certificate.
After the date of termination of this
Agreement, the IRS may reinstate this
Agreement (or the IRS may require WP to
enter into a new withholding foreign partnership agreement) on such terms and
conditions and with such modifications as
the IRS may determine.
Sec. 10.04. Significant Change in
Circumstances. For purposes of this
Agreement, a significant change in cir-

August 25, 2014

cumstances includes, but is not limited
to—
(A) Any change in circumstances that
would result in a termination of WP under
section 708;
(B) A change in U.S. federal law or
policy, or applicable foreign law or policy, that affects the validity of any provision of this Agreement, materially affects
the procedures contained in this Agreement, or affects WP’s ability to perform
its obligations under this Agreement;
(C) A ruling of any court that affects
the validity of any material provision of
this Agreement;
(D) A significant change in WP’s business practices that affects WP’s ability to
meet its obligations under this Agreement;
(E) If applicable, a material change in
the know-your-customer rules and procedures set forth in the Attachments to this
Agreement when WP relied on documentary evidence as permitted in section
4.01(B) of this Agreement;
(F) If WP is an FFI (other than a retirement fund), termination of its status as
a participating FFI, registered deemedcompliant FFI, or a registered deemedcompliant Model 1 IGA FFI; or
(G) If WP is acting as a sponsoring
entity on behalf of a sponsored FFI or
sponsored direct reporting NFFE, it fails
to comply with the due diligence, withholding, reporting, and compliance requirements of a sponsoring entity.
Sec. 10.05. Events of Default. For
purposes of this Agreement, an event of
default occurs if WP fails to perform any
material duty or obligation required under
this Agreement and the responsible officer
had actual knowledge of or should have
known the facts relevant to the failure to
perform any material duty. An event of
default includes, but is not limited to, the
occurrence of any of the following:
(A) WP fails to implement adequate
procedures, accounting systems, and internal controls to ensure compliance with
this Agreement;
(B) WP underwithholds an amount that
WP is required to withhold under chapter
3 or 4 and fails to correct the underwithholding or to file an amended Form 1042
reporting, and paying, the appropriate tax;
(C) WP makes excessive refund
claims;

August 25, 2014

(D) WP fails to file required Forms,
1042, 1042–S, 8966, 1065, or Schedules
K–1 by the due date specified on such
forms or files forms that are materially
incorrect or fraudulent;
(E) If WP is an FFI, WP fails to materially comply with its FATCA requirements as a participating FFI, registered
deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI;
(F) If WP is a sponsoring entity, WP
fails to comply with the due diligence,
withholding, reporting, and compliance
requirements of a sponsoring entity;
(G) WP fails to perform a periodic
review when required or to document the
findings of such review in a written report;
(H) WP fails to inform the IRS within
90 days of any significant change in its
business practices to the extent that
change affects WP’s obligations under
this Agreement;
(I) WP fails to cure a material failure
identified in the qualified certification described in section 8.03(B) of this Agreement or identified by the IRS;
(J) WP makes any fraudulent statement
or a misrepresentation of a material fact
with regard to this Agreement to the IRS,
a withholding agent, or WP’s auditor;
(K) The IRS determines that WP’s auditor is not sufficiently independent to adequately perform its audit function and
WP fails to arrange for a periodic review
conducted by an auditor approved by the
IRS;
(L) WP fails to make deposits in the
time and manner required by section 3.04
of this Agreement or fails to make adequate deposits, taking into account the
procedures of section 7.05 of this Agreement;
(M) If applicable, WP fails to inform
the IRS of any change in the know-yourcustomer rules described in the Attachment to this Agreement within 90 days of
the change becoming effective when WP
relied on documentary evidence as permitted in section 4.01(B) of this Agreement;
(N) WP fails to cooperate with the IRS
on its compliance review described in section 8.07 of this Agreement;
(O) A partnership or trust to which WP
applies the agency option is in default
with the agency agreement and WP fails
to terminate that agreement within the

422

time period specified in section 10.02 of
this Agreement; or
(P) WP fails to materially comply with
the requirements of a nonwithholding foreign partnership under chapter 3 with respect to any partner for which it does not
act as a withholding foreign partnership.
Sec. 10.06. Notice and Cure. Upon
the occurrence of an event of default, the
IRS will deliver to WP a notice of default
specifying each event of default. WP must
respond to the notice of default within 60
days (60-day response) from the date of
the notice of default. The 60-day response
shall contain an offer to cure the event of
default and the time period in which to
cure or shall state why WP believes that
no event of default has occurred. If WP
does not provide a 60-day response, the
IRS will deliver a notice of termination as
provided in section 10.02 of this Agreement. If WP provides a 60-day response,
the IRS shall either accept or reject WP’s
statement that no default has occurred or
WP’s proposal to cure the event of default.
If the IRS rejects WP’s statement that
no default has occurred or rejects WP’s
proposal to cure the event of default, the
IRS may offer a counter-proposal to cure
the event of default with which WP will
be required to comply within 30 days. If
WP fails to provide a 30-day response, the
IRS will send a notice of termination in
accordance with section 10.02 of this
Agreement, which WP may appeal within
30 days of the date of the notice by sending a written appeal to the address specified in section 11.06 of this Agreement. If
WP appeals the notice of termination, this
Agreement shall not terminate until the
appeal has been decided. If an event of
default is discovered in the course of an
audit, WP may cure the default, without
following the procedures of this section
10.06, if the external auditor’s report describes the default and the actions that WP
took to cure the default and the IRS determines that the cure procedures followed by WP were sufficient. If the IRS
determines that WP’s actions to cure the
default were not sufficient, the IRS shall
issue a notice of default and the procedures described in this section 10.06 shall
be followed.
Sec. 10.07. Renewal. If WP is an FFI
or an NFFE that is a sponsoring entity and

Bulletin No. 2014 –35

intends to renew this Agreement for an
additional term, it shall submit an application for renewal to the IRS on the IRS
FATCA registration website, as provided
in this revenue procedure, no earlier than
one year prior to the expiration of this
Agreement and no later than six months
prior to the expiration of this Agreement,
in accordance with the instructions to
Form 8957, Foreign Account Tax Compliance Act (FATCA) Registration, or as
otherwise provided in published guidance.
Any such application for renewal must
contain an update of the information provided by WP to the IRS in connection
with the application to enter into this
Agreement and any other information the
IRS may request in connection with the
renewal process. Either the IRS or WP
may seek to negotiate a new withholding
foreign partnership agreement rather than
renew this Agreement.
A WP not described in the preceding
paragraph must renew its WP agreement
by submitting a request for renewal to the
IRS at the address provided in section
11.06 of this Agreement.
Section 11. MISCELLANEOUS
PROVISIONS
Sec. 11.01. WP’s application to become a withholding foreign partnership,
all Appendices and Attachments to this
Agreement and, if WP is an FFI, its
FATCA requirements as a participating
FFI, registered deemed-compliant FFI, or
registered deemed-compliant Model 1
IGA FFI; or, if WP is a sponsoring entity,
the due diligence, withholding, reporting,
and compliance requirements of a sponsoring entity are hereby incorporated into
and made an integral part of this Agreement. This Agreement, WP’s application,
and the Appendix to this Agreement constitute the complete agreement between
the parties.
Sec. 11.02. This Agreement may be
amended by the IRS if the IRS determines
that such amendment is needed for the
sound administration of the internal revenue laws or internal revenue regulations.
This Agreement will only be modified
through published guidance issued by the
IRS and U.S. Treasury Department. Any
such modification imposing additional requirements will in no event become effective until the later of 90 days after the IRS

Bulletin No. 2014 –35

provides notice of such modification or
the beginning of the next calendar year
following the publication of such guidance.
Sec. 11.03. Any waiver of a provision
of this Agreement by the IRS is a waiver
solely of that provision. The waiver does
not obligate the IRS to waive other provisions of this Agreement or the same provision at a later date.
Sec. 11.04. This Agreement shall be
governed by the laws of the United States.
Any legal action brought under this
Agreement shall be brought only in a U.S.
court with jurisdiction to hear and resolve
matters under the internal revenue laws of
the United States. For this purpose, WP
agrees to submit to the jurisdiction of such
U.S. court.
Sec. 11.05. WP’s rights and responsibilities under this Agreement cannot be
assigned to another person.
Sec. 11.06. Notices provided under this
Agreement shall be mailed registered, first
class airmail. Notice shall be directed as
follows:
To the IRS:
Internal Revenue Service
Foreign Payments Practice
Foreign Intermediaries Team
290 Broadway, 12th Floor
New York, NY 10007–1867
All notices sent to the IRS must include the WP’s name, WP–EIN, GIIN (if
applicable), and the name of its responsible officer.
To WP:
The WP’s responsible officer. Such notices shall be sent to the address indicated
in the WP’s registration or application (as
may be amended).
Sec. 11.07. WP, acting in its capacity as
a withholding foreign partnership or in any
other capacity, does not act as an agent of
the IRS, nor does it have the authority to
hold itself out as an agent of the IRS.
Section 12. EFFECTIVE DATE OF
AGREEMENT
Sec. 12.01. In General.
(A) Calendar Year 2014. If WP applies
to renew its WP Agreement and the renewal is approved on or before August 31,
2014, this Agreement is effective on June

423

30, 2014. If WP is not a retirement fund or
an NFFE that is not a sponsoring entity
and applies to renew its WP Agreement
on the IRS FATCA registration website
after August 31, 2014, and the renewal is
approved, this Agreement is effective on
the date of approval. If WP is a retirement
fund or an NFFE that is not a sponsoring
entity and renews its WP Agreement after
August 31, 2014, this Agreement is effective on the date of renewal as provided in
an approval notice sent by the IRS. The
renewal is approved on the later of the
date WP is issued a GIIN or the date WP
submits a request for renewal.
If WP is a new WP applicant (other
than a retirement fund or an NFFE that is
not a sponsoring entity) that applies to
enter into a WP Agreement on or before
August 31, 2014, and its application is
approved, the effective date of this Agreement is June 30, 2014, provided that it
obtains a GIIN, if it has not already done
so, within 90 days of such approval. If WP
is a new WP applicant (other than a retirement fund or an NFFE that is not a
sponsoring entity) that applies to enter
into a WP Agreement after August 31,
2014, and the application is approved, the
effective date of this Agreement is the
date it is issued a WP–EIN, provided that
it obtains a GIIN, if it has not already done
so, within 90 days of such approval. If WP
is a new WP applicant that is a retirement
fund or an NFFE that is not a sponsoring
entity that applies to enter into a WP
Agreement and its application is approved, the effective date of this Agreement is the date it is issued a WP–EIN.
(B) Calendar Years after 2014. For
calendar years after 2014, the effective
date of this Agreement is January 1 of the
current calendar year if WP’s application
for WP status is submitted on or before
March 31. If WP’s application for WP
status is submitted on or after April 1, the
effective date of this Agreement is January 1 of the calendar year following the
year in which the application was submitted. WP must be in compliance with this
Agreement beginning January 1 of the
calendar year in which this Agreement is
effective.
Sec. 12.02. Transitional Rules.
(A) In General. If this Agreement is
effective beginning in calendar year 2014,

August 25, 2014

WP may act as a WP for the entire calendar year if WP acts in accordance with
Revenue
Procedure
2003– 64
(as
amended) for amounts subject to chapter 3
withholding (as defined in section 2.04 of
the WP agreement) received before June
30, 2014, as if WP’s WP agreement were
effective on January 1, 2014, and expired
on June 30, 2014, and for amounts subject
to chapter 3 withholding and withholdable
payments received between June 30,
2014, and September 1, 2014, WP applies
the principles described in section
12.02(B) of this Agreement. For the period beginning on September 1, 2014,
through the term of this Agreement, WP
must comply with this Agreement provided that this Agreement has not been
terminated.
(B) Special Procedures for Payments
Received Prior to September 1, 2014. If
WP receives a withholdable payment or
an amount subject to chapter 3 withholding prior to September 1, 2014, WP may
represent itself to its withholding agent as
a withholding foreign partnership, provided that WP complies with its obligations under the WP agreement in effect
prior to June 30, 2014, and, if WP is
renewing this Agreement, it submits a request for renewal on or before August 31,
2014. However, because this Agreement
requires WP to assume primary chapter 4
withholding responsibilities with respect
to its partners under sections 1471 and
1472, if WP makes a distribution for
which withholding is required under chapter 4 beginning July 1, 2014, with respect
to a partner and does not withhold under
chapter 4 to the extent required under the
revised WP agreement, WP must apply
the procedures referenced in § 1.1474 –
2(b) to satisfy any underwithholding.
SECTION 5. WITHHOLDING
FOREIGN TRUST AGREEMENT
Section 1. PURPOSE AND SCOPE
Section 2. DEFINITIONS
Section 3. WITHHOLDING
RESPONSIBILITY
Section 4. DOCUMENTATION
REQUIREMENTS
Section 5. WITHHOLDING
FOREIGN TRUST
WITHHOLDING
CERTIFICATE

August 25, 2014

Section 6. TAX RETURN AND INFORMATION REPORTING OBLIGATIONS
Section 7. ADJUSTMENTS FOR
OVER– AND UNDERWITHHOLDING;
REFUNDS
Section 8. COMPLIANCE PROCEDURES
Section 9. CERTAIN PARTNERSHIPS AND TRUSTS
AND INDIRECT BENEFICIARIES AND OWNERS
Section 10. EXPIRATION,
TERMINATION AND
DEFAULT
Section 11. MISCELLANEOUS PROVISIONS
Section 12. EFFECTIVE DATE OF
AGREEMENT
The text of the WT agreement is set
forth below. The IRS will no longer provide signed copies of the WT agreement.
A reporting Model 2 FFI should interpret
this Agreement by substituting the term
“reporting Model 2 FFI” for “participating
FFI” throughout this Agreement, except in
cases where this Agreement explicitly refers to a reporting Model 2 FFI. A reporting Model 1 FFI and a nonreporting
Model 2 FFI treated as a registered
deemed-compliant FFI should apply this
Agreement by substituting the term “reporting Model 1 FFI” or “nonreporting
Model 2 FFI,” as applicable, for “registered deemed-compliant FFI” throughout
this Agreement, except in cases where this
Agreement explicitly refers to a reporting
Model 1 FFI or nonreporting Model 2 FFI
treated as a registered deemed-compliant
FFI.
WHEREAS, WT has submitted an application in accordance with this revenue
procedure to be a withholding foreign
trust for purposes of § 1.1441–5(e)(5)(v);
WHEREAS, WT and the IRS desire to
enter into an agreement to establish WT’s
rights and obligations regarding documentation, withholding, information reporting, tax return filing, deposits, and refund
procedures under sections 1441, 1442,
1443, 1461, 1471, 1472, 1474, 6048,
6302, 6402, and 6414 with respect to certain types of payments;

424

WHEREAS, WT represents that there
are no legal restrictions that prohibit it
from complying with the requirements of
this Agreement;
WHEREAS, if WT is a foreign financial institution (other than a retirement
fund), WT represents that it has agreed to
comply with the requirements of the FFI
agreement, in the case of a participating
FFI; § 1.1471–5(f)(1) or the applicable
Model 2 IGA, in the case of a registered
deemed-compliant FFI (other than a reporting Model 1 FFI); or an applicable
IGA, in the case of a reporting Model 1
FFI or a registered deemed-compliant
Model 1 IGA FFI (as defined in section
2.15(C) of this Agreement) beginning on
the effective date of this Agreement;
NOW, THEREFORE, in consideration of the following terms, representations, and conditions, the parties agree as
follows:
Section 1. PURPOSE AND SCOPE
Sec. 1.01. General Obligations. When
the IRS enters into a WT agreement with
a foreign person, that foreign person becomes a WT. Except as otherwise provided in this Agreement, WT’s obligations with respect to income distributed to,
or included in the distributive shares of, its
beneficiaries or owners are governed by
the Internal Revenue Code and the regulations thereunder. WT must act in its
capacity as a withholding foreign trust
pursuant to this Agreement for reportable
amounts that are distributed to, or included in the distributive share of, WT’s
direct beneficiaries or owners. WT may
also act as a withholding foreign trust for
reportable amounts that are distributed to,
or included in the distributive share of, a
partner, beneficiary, or owner of a passthrough beneficiary or owner (i.e., an indirect beneficiary or owner of WT) if such
indirect beneficiary or owner is not a U.S.
non-exempt recipient. Notwithstanding
the preceding sentence, a WT may act as
a withholding foreign trust for an indirect
beneficiary or owner that is a U.S. nonexempt recipient if such beneficiary or
owner is included in the passthrough beneficiary’s or owner’s chapter 4 withholding rate pool (as defined in section 2.14 of
this Agreement) of U.S. payees or recalcitrant account holders provided on the
FFI withholding statement (as defined in

Bulletin No. 2014 –35

section 2.26 of this Agreement) of the
passthrough beneficiary or owner.
WT is not required to act as a withholding foreign trust for payments that it
distributes to, or includes in the distributive share of, a passthrough beneficiary or
owner or indirect beneficiary or owner.
With respect to an indirect beneficiary or
owner for which WT does not (or cannot)
act as a withholding foreign trust, WT
must, as part of its WT agreement, comply
with the requirements of a withholding
agent, as applicable to a nonwithholding
foreign trust under chapters 3 and 4. WT
(regardless of whether it is an FFI or
NFFE) must also, pursuant to this Agreement, assume primary reporting responsibility for purposes of section 1472 for
certain beneficiaries or owners.
If WT is an FFI, the requirements WT
has agreed to as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI
apply in addition to the requirements under this Agreement except to the extent
specifically modified by this Agreement.
This Agreement references WT’s FATCA
requirements when necessary to facilitate
coordination with a WT’s obligations under this Agreement with respect to its beneficiaries or owners. A participating FFI’s
obligations are provided in the FFI agreement, a registered deemed-compliant
FFI’s (other than a reporting Model 1
FFI’s) obligations are provided in
§ 1.1471–5(f)(1) or the applicable IGA,
and the obligations of a reporting Model 1
FFI or a registered deemed-compliant
Model 1 IGA FFI are provided in the
applicable IGA.
If WT is an NFFE, WT must comply
with the requirements of a withholding
agent under sections 1471 and 1472 which
are provided in this Agreement. If a WT
acts as a sponsoring entity on behalf on a
sponsored FFI or sponsored direct reporting NFFE, it must comply with the due
diligence, withholding, reporting, and
compliance requirements of a sponsoring
entity in addition to its requirements under
the WT agreement.
Sec. 1.02. Parties to the Agreement.
This Agreement applies to WT and the
IRS.

Bulletin No. 2014 –35

Section 2. DEFINITIONS
For purposes of this Agreement, the
terms listed below are defined as follows:
Sec. 2.01. Account. “Account” has the
meaning given to that term in § 1.1471–
1(b)(1) with respect to WT’s FATCA requirements.
Sec. 2.02. Account Holder. “Account
Holder” has the meaning given to that
term in § 1.1471–1(b)(2) with respect to
WT’s FATCA requirements with respect
to an account that it maintains within the
meaning of § 1.1471–5(b)(5).
Sec. 2.03. Agreement. “Agreement”
means this Agreement between WT and
the IRS, all appendices and attachments to
this Agreement, if applicable, and WT’s
application to become a withholding foreign trust. All appendices and attachments
to this Agreement and WT’s application
are incorporated into this Agreement by
reference. Attachments to this Agreement
include the know-your-customer (KYC)
rules and the IRS approved KYC list (described in section 2.41 of this Agreement)
to the extent WT is permitted to use (and
uses) documentary evidence to document
one or more direct beneficiaries or owners
under section 4.01(B) of this Agreement.
Sec. 2.04. Amount Subject to Chapter 3 Withholding. An “amount subject
to chapter 3 withholding” is an amount
described in § 1.1441–2(a), regardless of
whether such amount is withheld upon.
An amount subject to chapter 3 withholding shall not include interest paid as part
of the purchase price of an obligation sold
between interest payment dates or original
issue discount paid as part of the purchase
price of an obligation sold in a transaction
other than the redemption of such obligation, unless the sale is part of a plan the
principal purpose of which is to avoid tax
and WT has actual knowledge or reason to
know of such plan.
Sec. 2.05. Amount Subject to Chapter 4 Withholding. An “amount subject
to chapter 4 withholding” is an amount
that is a withholdable payment (as defined
in section 2.76 of this Agreement) for
which withholding is required under chapter 4 or an amount for which withholding
was otherwise applied under chapter 4.
Sec. 2.06. Assumption of Primary
Withholding Responsibility. A WT assumes primary chapters 3 and 4 withhold-

425

ing responsibility with respect to amounts
subject to chapter 3 or 4 withholding under the terms of the WT agreement. Generally, WT’s assumption of primary chapters 3 and 4 withholding responsibility
relieves the person who makes a payment
to WT from the responsibility to withhold.
See sections 3.03 and 3.04 of this Agreement for when WT is required to withhold
under this Agreement.
Sec. 2.07. Beneficial Owner. A “beneficial owner” has the meaning given to
that term in § 1.1441–1(c)(6).
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.
A chapter 3 reporting pool means a reporting pool described in section 6.02(D) of
this Agreement.
Sec. 2.10. Chapter 3 Status. The term
“chapter 3 status” refers to the attributes
of a payee (and a beneficiary or owner of
WT for purposes of this Agreement) relevant for determining the rate of withholding with respect to a payment made to
the 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, and
1474.
Sec. 2.12. Chapter 4 Reporting Pool.
A chapter 4 reporting pool means a reporting pool described in section 6.02(C) of
this Agreement.
Sec. 2.13. Chapter 4 Status. “Chapter
4 status” means the status of a person as a
U.S. person, specified U.S. person, an individual that is a foreign person, a participating FFI, a deemed-compliant FFI, a
restricted distributor, an exempt beneficial
owner, a nonparticipating FFI, a territory
financial institution, an excepted NFFE, or
a passive NFFE.
Sec. 2.14. Chapter 4 Withholding
Rate Pool. A “chapter 4 withholding rate
pool” means a pool of payees that are
nonparticipating FFIs provided on a chapter 4 withholding statement (as described
in § 1.1471–3(c)(3)(iii)(B)(3)) to which a
withholdable payment is allocated. The
term chapter 4 withholding rate pool also
means a pool of payees provided on an
FFI withholding statement (as described
in § 1.1471–3(c)(3)(iii)(B)(2)) to which a
withholdable payment is allocated to —

August 25, 2014

(A) A pool of payees consisting of each
class of recalcitrant account holders described in § 1.1471– 4(d)(6) (or with respect to an FFI that is a QI, a single pool
of recalcitrant account holders that is not
subdivided into classes of recalcitrant account holders described in § 1.1471–
4(d)(6)), including a separate pool of account holders to which the escrow
procedures for dormant accounts apply; or
(B) A pool of payees that are U.S.
persons as described in § 1.1471–
3(c)(3)(iii)(B)(2).
Sec. 2.15. Deemed-Compliant FFI.
“Deemed-compliant FFI” means a certified deemed-compliant FFI, registered
deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI that
is treated, pursuant to section 1471(b)(2)
and § 1.1471–5(f), as meeting the requirements of section 1471(b).
(A) Certified Deemed-Compliant FFI.
“Certified deemed-compliant FFI” means
an FFI described in § 1.1471–5(f)(2), and
includes a nonreporting Model 1 FFI, a
nonreporting Model 2 FFI that is treated
as a certified deemed-compliant FFI, and a
registered deemed-compliant Model 1
IGA FFI (as defined in section 2.15(C) of
this Agreement).
(B) Registered Deemed-Compliant
FFI. “Registered deemed-compliant FFI”
means an FFI described in § 1.1471–
5(f)(1) and includes a reporting Model 1
FFI and a nonreporting Model 2 FFI that
is treated as registered deemed-compliant.
For purposes of this Agreement, a reference to a registered deemed-compliant
FFI that is providing a chapter 4 withholding rate pool of U.S. payees includes a
registered deemed-compliant Model 1
IGA FFI (as defined in section 2.15(C) of
this Agreement).
(C) Registered Deemed-Compliant
Model 1 IGA FFI. “Registered deemedcompliant Model 1 IGA FFI” means an
FFI treated as a deemed-compliant FFI
under an applicable Model 1 IGA that is
subject to similar due diligence and reporting requirements with respect to U.S.
accounts as those applicable to a registered deemed-compliant FFI under
§ 1.1471–5(f)(1), including the requirement to register with the IRS.
Sec. 2.16. Direct Beneficiary or
Owner. A “direct beneficiary or owner”
means a beneficiary or owner that is not

August 25, 2014

an indirect beneficiary or owner (as defined in section 2.39 of this Agreement).
Sec. 2.17. Distributive share. “Distributive share” means an amount subject
to chapter 3 withholding or an amount of
a withholdable payment that is required to
be distributed to the beneficiaries of a
simple trust and an amount subject to
chapter 3 withholding or an amount that is
a withholdable payment includible in the
income of the owners of a grantor trust.
Sec. 2.18. Documentary Evidence.
“Documentary evidence” means any documentation obtained under the appropriate
know-your-customer rules (as defined in
section 2.41 of this Agreement and described in the Attachments to this Agreement), or any documentary evidence described in § 1.1441– 6 sufficient to
establish entitlement to a reduced rate of
withholding under an income tax treaty.
Documentary evidence does not include a
Form W– 8 or Form W–9 (or an acceptable substitute Form W– 8 or Form W–9).
Sec. 2.19. Documentation. “Documentation” means any valid Form W– 8,
Form W–9 (or acceptable substitute Form
W– 8 or Form W–9), or documentary evidence, as defined in section 2.18 of this
Agreement, including all statements or
other information required to be associated with the form or documentary evidence.
Sec. 2.20. Excepted NFFE. “Excepted
NFFE” means a person described in
§ 1.1471–1(b)(41).
Sec. 2.21. Exempt Beneficial Owner.
“Exempt beneficial owner” means a person described in § 1.1471–1(b)(42) and
includes any person that is treated as an
exempt beneficial owner under an applicable Model 1 IGA or Model 2 IGA.
Sec. 2.22. Exempt Recipient. An “exempt recipient” means a person described
in § 1.6049 – 4(c)(1)(ii) (for interest, dividends, and royalties), a person described
in § 1.6045–2(b)(2)(i) (for broker proceeds), and a person described in
§ 1.6041–3(q) (for rents, amounts paid on
notional principal contracts, and other
fixed or determinable income). Exempt
recipients are not exempt from chapter 3
or 4 withholding.
Sec. 2.23. FATCA Requirements as a
Participating FFI, Registered DeemedCompliant FFI, or Registered DeemedCompliant Model 1 IGA FFI. “FATCA

426

requirements as a participating FFI, registered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI”
means:
(A) For a participating FFI, the requirements set forth in the FFI agreement;
(B) For a registered deemed-compliant
FFI (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 a
registered deemed-compliant Model 1
IGA FFI, the requirements under foreign
domestic law to implement the applicable
Model 1 IGA.
Sec. 2.24. Financial Institution (FI).
“Financial institution” or “FI” means an
entity described in § 1.1471–5(d) and includes a financial institution as defined
under an applicable Model 1 IGA or
Model 2 IGA.
Sec. 2.25. FFI Agreement. “FFI
agreement” means an agreement of a participating FFI described in § 1.1471– 4(a)
and published in Revenue Procedure
2014 –38, 2014 –29 I.R.B.132 (as updated
or superseded by any subsequent revenue
procedure).
Sec. 2.26. FFI Withholding Statement. An “FFI withholding statement”
means a withholding statement provided
by an FFI that 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 partnership described in § 301.7701–2 or 3 (other
than a withholding foreign partnership), a
foreign trust that is described in section
651(a) (other than a withholding foreign
trust), or a foreign trust if all or a portion
of such trust is treated as owned by the
grantor or other person under sections 671
through 679. With respect to an item of
U.S. source FDAP income for which a
treaty benefit is claimed, an entity is also
a flow-through entity to the extent it is
treated as fiscally transparent under section 894 and the regulations thereunder.
Sec. 2.28. Foreign Financial Institution (FFI). “Foreign financial institution”
or “FFI” means a foreign entity (as defined in § 1.1473–1(e)) that is a financial
institution.
Sec. 2.29. Foreign TIN. A “foreign
TIN” is a taxpayer identification number
issued by a foreign person’s country of
residence.

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Sec. 2.30. Foreign Person. A “foreign
person” is any person that is not a “United
States person” and includes a “nonresident alien individual,” a “foreign corporation,” a “foreign partnership,” a “foreign
trust,” and a “foreign estate,” as those
terms are defined in section 7701 of the
Code. For purposes of chapters 3 and 4,
the term foreign person also means, with
respect to a payment by a withholding
agent (including a withholding foreign
trust), a foreign branch (including a foreign disregarded entity) of a U.S. person
that provides a valid Form W– 8IMY on
which it represents that it is a qualified
intermediary.
Sec. 2.31. Form W– 8. “Form W– 8”
means IRS Form W– 8BEN, Certificate of
Foreign Status of Beneficial Owner for
United States Tax Withholding (Individuals); IRS Form W– 8BEN–E, Certificate
of Status of Beneficial Owner for United
States Tax Withholding and Reporting
(Entities), IRS Form W– 8ECI, Certificate
of Foreign Person’s Claim That Income is
Effectively Connected With the Conduct
of a Trade or Business in the United
States; IRS Form W– 8EXP, Certificate of
Foreign Government or Other Foreign Organization for United States Tax Withholding and Reporting; and IRS Form
W– 8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or
Certain U.S. Branches for United States
Tax Withholding and Reporting, as appropriate. It also includes any acceptable substitute form 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 Taxpayer Identification Number and Certification, or any acceptable substitute as described under § 31.3406(h)–3(c).
Sec. 2.33. Form 1042. “Form 1042”
means IRS Form 1042, Annual Withholding Tax Return for U.S. Source Income of
Foreign Persons.
Sec. 2.34. Form 1042–S. “Form
1042–S” means IRS Form 1042–S, Foreign Person’s U.S. Source Income Subject
to Withholding.
Sec. 2.35. Form 1099. “Form 1099”
means IRS Form 1099 –B, Proceeds From
Broker and Barter Exchange Transactions; IRS Form 1099 –DIV, Dividends
and Distributions; IRS Form 1099 –INT,

Bulletin No. 2014 –35

Interest Income; IRS Form 1099 –MISC,
Miscellaneous Income; IRS Form 1099 –
OID, Original Issue Discount; and any
other form in the IRS Form 1099 series
appropriate to the type of payment required to be reported.
Sec. 2.36. Form 3520 –A, Owner
Statement, Beneficiary Statement, and
Statement Required Under Section
6048(b). “Form 3520 –A” means IRS
Form 3520 –A, Annual Information Return of Foreign Trust with a U.S. Owner.
“Owner Statement,” when referred to in
connection with Form 3520 –A, means a
Foreign Grantor Trust Owner Statement.
“Beneficiary Statement,” when referred to
in connection with Form 3520 –A, means
a Foreign Grantor Trust Beneficiary Statement. The “statement required under section 6048(b)” means the Owner Statement
and Beneficiary Statement.
Sec. 2.37. Form 8966. “Form 8966”
means IRS Form 8966, FATCA Report.
Sec. 2.38. Global Intermediary Identification Number (GIIN). “Global intermediary identification number” or “GIIN”
means the identification number that is
assigned to a participating FFI, registered
deemed-compliant FFI, direct reporting
NFFE, or sponsoring entity. The term also
includes the identification number assigned to a reporting Model 1 FFI or registered deemed-compliant Model 1 IGA
FFI that is a WT for the purpose of identifying itself to withholding agents.
Sec. 2.39. Indirect Beneficiary or
Owner. An “indirect beneficiary or
owner” is a person that owns an interest in
WT through one or more passthrough
beneficiaries or owners (as defined below
in section 2.51 of this Agreement). For
example, a person that holds an account
with a foreign intermediary or an interest
in a flow-through entity which intermediary or flow-through entity, in turn, is a
direct beneficiary or owner of WT is an
indirect beneficiary or owner in WT. A
person is an indirect beneficiary or owner
of WT even if there are multiple tiers of
intermediaries or flow-through entities between the person and WT.
Sec. 2.40. Intermediary. An “intermediary” means a person that, for that payment, acts as a custodian, broker, nominee, or otherwise as an agent for another
person, regardless of whether such other
person is the beneficial owner of the

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amount paid, a flow-through entity, or another intermediary.
Sec. 2.41. Know-Your-Customer
Rules. The phrase “know-your-customer
rules” refers to the applicable laws, regulations, rules, and administrative practices
and procedures (identified in the attachment to this Agreement) governing the
requirements of certain WTs that are FFIs
to obtain documentation confirming the
identity of WT’s direct beneficiaries or
owners. A list of jurisdictions for which
the IRS has received know-your-customer
information and for which the know-yourcustomer rules and specified documentation are acceptable (IRS approved KYC
list) is available at: http://www.irs.gov/
Businesses/International-Businesses/Listof-Approved-KYC-Rules.
Sec. 2.42. Marketable Securities. For
purposes of this Agreement, the term
“marketable securities” means those securities described in § 1.1441– 6 for which a
U.S. TIN or foreign TIN is not required to
be provided by the beneficial owner to
obtain treaty benefits.
Sec. 2.43. Non-Consenting U.S. Account. For purposes of a reporting Model
2 FFI, “non-consenting U.S. account” has
the meaning that such term has under the
applicable Model 2 IGA.
Sec. 2.44. Non-Exempt Recipient. A
“non-exempt recipient” means a person
that is not an exempt recipient under the
definition in section 2.22 of this Agreement.
Sec. 2.45. Non-Financial Foreign Entity (NFFE). A “non-financial foreign entity” or “NFFE” means a foreign entity
that is not a financial institution (including
an entity that is incorporated or organized
under the laws of any U.S. territory and
that is not a financial institution). The term
also means a foreign entity treated as an
NFFE pursuant to a Model 1 IGA or
Model 2 IGA.
Sec. 2.46. Nonparticipating FFI. A
“nonparticipating FFI” means an FFI
other than a participating FFI, a deemedcompliant FFI, or an exempt beneficial
owner.
Sec. 2.47. Nonwithholding Foreign
Partnership (NWP). A “nonwithholding
foreign partnership” means a foreign partnership other than a withholding foreign
partnership as defined in § 1.1441–
5(c)(2).

August 25, 2014

Sec. 2.48. Nonwithholding Foreign
Trust (NWT). A “nonwithholding foreign trust” means a foreign trust (as defined in section 7701(a)(31)(B)) that is a
foreign simple trust or a foreign grantor
trust and that is not a withholding foreign
trust (as defined in section 2.79 of this
Agreement).
Sec. 2.49. Overwithholding. The term
“overwithholding” means any amount actually withheld (determined before application of the adjustment procedures described in section 7.01 of this Agreement)
from an item of income or other payment
that is in excess of the amount required to
be withheld under chapter 4 with respect
to such item of income or other payment,
if applicable, and, in the case of an
amount subject to chapter 3 withholding,
the actual tax liability of the beneficial
owner of the income or payment to which
the withheld amount is attributable, regardless of whether such overwithholding
was in error or appeared correct at the
time it occurred. For purposes of section
3406, the term “overwithholding” means
the excess of the amount actually withheld
under section 3406 over the amount required to be withheld.
Sec. 2.50. Participating FFI. A “participating FFI” means an FFI that has
agreed to comply with the requirements of
an FFI agreement, including an FFI described in a Model 2 IGA that has agreed
to comply with the requirements of an FFI
agreement (reporting Model 2 FFI). The
term also includes a qualified intermediary branch of a U.S. financial institution,
unless such branch is a reporting Model 1
FFI.
Sec. 2.51. Passthrough Beneficiary or
Owner. A “passthrough beneficiary or
owner” is a direct or indirect beneficiary
or owner of WT that is a foreign intermediary or foreign flow-through entity. As
provided in section 2.27 of this Agreement, a withholding foreign partnership or
withholding foreign trust is not a flowthrough entity and thus is not a passthrough beneficiary or owner.
Sec. 2.52. Payee. For purposes of chapter 3, 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. 2.53. Payment. A “payment”
means an amount considered made to a

August 25, 2014

person if that person realizes income
whether or not such income results from
an actual transfer of cash or other property. See § 1.1441–2(e). For example, a
payment includes crediting an amount to
an account.
Sec. 2.54. Payor. A “payor” is defined
in § 31.3406(a)–2 and § 1.6049 – 4(a)(2)
and generally means any person required
to make an information return under chapter 61.
Sec. 2.55. Permanent Residence Address. A “permanent residence address”
means an address described in § 1.1441–
1(c)(38).
Sec. 2.56. Pooled Reporting (PR)
Election. A “pooled reporting election” or
“PR election” is an election to pool report
chapter 3 reporting pools on Form 1042–S
for chapter 3 purposes as described in
section 6.02(D) of this Agreement.
Sec. 2.57. Qualified Intermediary. A
“qualified intermediary” is a person, described in § 1.1441–1(e)(5)(ii), that enters
into an agreement with the IRS to be
treated as a qualified intermediary and
acts in its capacity as a qualified intermediary. See Rev. Proc. 2014 –39, 2014 –29
I.R.B. 151 (as updated or superseded by
any subsequent revenue procedure), for
the QI Agreement.
Sec. 2.58. Recalcitrant Account
Holder. A “recalcitrant account holder”
means a person described in § 1.1471–5(g).
Sec. 2.59. Reduced Rate of Withholding. A “reduced rate of withholding”
means a rate of withholding under chapter
3 that is less than 30 percent, either as a
result of a reduction in withholding under
the Code or as a result of a reduction in
withholding under an income tax treaty.
Sec. 2.60. Reportable Amount. A “reportable amount” means U.S. source
FDAP income that is an amount subject to
chapter 3 withholding (as defined in section 2.04 of this Agreement), U.S. source
deposit interest (as defined in section
871(i)(2)(A)), and U.S. source interest or
original issue discount paid on the redemption of short-term obligations (as defined in section 871(g)(1)(B)(i)). The term
does not include payments on deposits
with banks and other financial institutions
that remain on deposit for two weeks or
less. It also does not include amounts of
original issue discount arising from a sale
and repurchase transaction completed

428

within a period of two weeks or less, or
amounts described in § 1.6049 –5(b)(7),
(10), or (11) (relating to certain foreign
targeted registered obligations and certain
obligations issued in bearer form).
Sec. 2.61. Reporting Model 1 FFI. A
“reporting Model 1 FFI” means an FFI
with respect to which a foreign government or agency thereof agrees to obtain
and exchange information pursuant to a
Model 1 IGA, other than an FFI that is
treated as a nonreporting Model 1 FFI
(including a registered deemed-compliant
Model 1 IGA FFI) or nonparticipating FFI
under an applicable Model 1 IGA.
Sec. 2.62. Reporting Pool. A “reporting pool” is defined in section 6.02(A) of
this Agreement.
Sec. 2.63. Responsible Officer. A “responsible officer” of a WT means the
trustee of WT or an agent of the trustee of
WT with sufficient authority to fulfill the
duties of a responsible officer as described
in section 8 of this Agreement, including
the requirements to periodically certify
and to respond to requests by the IRS for
additional information to review WT’s
compliance with this Agreement.
Sec. 2.64. Retirement Fund. A “retirement fund” means a retirement fund or
other fund that is an exempt beneficial
owner described in § 1.1471– 6(f) or a
similar fund that qualifies as an exempt
beneficial owner under an applicable
Model 1 IGA or Model 2 IGA.
Sec. 2.65. Sponsored Direct Reporting NFFE. The term “sponsored direct
reporting NFFE” has the meaning set
forth in § 1.1472–1(c)(5).
Sec. 2.66. Sponsored FFI. The term
“sponsored FFI” means any entity described in § 1.1471–5(f)(1)(i)(F) (sponsored investment entities and sponsored
controlled foreign corporations) or
§ 1.1471–5(f)(2)(iii) (sponsored, closely
held investment vehicles).
Sec. 2.67. Sponsoring Entity. “Sponsoring entity” means (i) an entity that registers with the IRS and agrees to perform
the due diligence, withholding, and reporting obligations of one or more sponsored FFIs pursuant to § 1.1471–
5(f)(1)(i)(F) or (f)(2)(iii); or (ii) an entity
that registers with the IRS and agrees to
perform the due diligence and reporting
obligations of one or more direct reporting
NFFEs pursuant to § 1.1472–1(c)(5).

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Sec. 2.68. Trust, Beneficiary, and
Owner. The term “trust” is defined in
§ 301.7701– 4. The term “beneficiary” is
defined in section 643(c) of the Code and
the regulations thereunder. An “owner” is
a grantor under § 1.671–2(e) or a person
treated as an owner under sections 671 to
679 and the regulations thereunder.
Sec. 2.69. Underwithholding. “Underwithholding” means the excess of the
amount required to be withheld under
chapter 3 or 4 over the amount actually
withheld.
Sec. 2.70. Undocumented Beneficiary
or Owner. An “undocumented beneficiary or owner” is a beneficiary or owner
for whom WT does not have valid documentation.
Sec. 2.71. U.S. Account. A “U.S. account” is any financial account maintained
by a participating FFI or registered
deemed-compliant FFI that is held by one
or more specified U.S. persons or U.S.
owned foreign entities that such FFI reports or elects to report under the FFI
agreement or § 1.1471–5(f), as applicable.
A U.S. account includes, in the case of a
reporting Model 1 FFI or registered
deemed-compliant Model 1 IGA FFI, a
U.S. reportable account as defined in section 2.73 of this Agreement.
Sec. 2.72. U.S. Person. A “United
States person” (or “U.S. person”) is a person described in section 7701(a)(30), the
U.S. government (including an agency or
instrumentality thereof), a State of the
United States (including an agency or instrumentality thereof), or the District of
Columbia (including an agency or instrumentality thereof). For chapter 4 purposes, the term “U.S. person” or “United
States person” also means a foreign insurance company that has made an election
under section 953(d), provided that either
the foreign insurance company is not a
specified insurance company (as described in § 1.1471–5(e)(1)(iv)) and is not
licensed to do business in any State, or the
foreign insurance company is a specified
insurance company and is licensed to do
business in any State.
Sec. 2.73. U.S. Reportable Account.
A “U.S. reportable account” means a financial account maintained by a reporting
Model 1 FFI or registered deemedcompliant Model 1 IGA FFI that such FFI
reports or elects to report under the appli-

Bulletin No. 2014 –35

cable domestic law for compliance with
and implementation of FATCA.
Sec. 2.74. U.S. Source FDAP. “U.S.
source FDAP” means amounts from sources
within the United States that constitute fixed
or determinable annual or periodical income, as defined in § 1.1441–2(b)(1).
Sec. 2.75. U.S. TIN. A “U.S. TIN”
means a U.S. taxpayer identification number assigned under section 6109.
Sec. 2.76. Withholdable Payment. A
“withholdable payment” means an
amount described in § 1.1473–1(a).
Sec. 2.77. Withholding Agent. A
“withholding agent” has the same meaning as set forth in § 1.1441–7(a) for purposes of chapter 3 and as set forth in
§ 1.1473–1(d) for purposes of chapter 4
and includes a payor (as defined in section
2.54 of this Agreement). As used in this
Agreement, the term generally refers to
the person making a payment to a withholding foreign trust.
Sec. 2.78. Withholding Foreign Partnership (WP). A “withholding foreign
partnership” or “WP” means a partnership, described in § 1.1441–5(c)(2), that
has entered into a withholding agreement
with the IRS to be treated as a withholding
foreign partnership.
Sec. 2.79. Withholding Foreign Trust
(WT). A “withholding foreign trust” or
“WT” means a trust, described in
§ 1.1441–5(e)(5)(v), that has entered into
a withholding agreement with the IRS to
be treated as a withholding foreign trust.
Sec. 2.80. Withholding Foreign Trust
EIN (WT–EIN). A “withholding foreign
trust EIN” or “WT–EIN” means the employer identification number assigned
by the IRS to a withholding foreign
trust. WT’s WT–EIN is only to be used
when WT is acting as a withholding
foreign trust. For example, WT must
give a withholding agent its non-WT
EIN, if any, rather than its WT–EIN, if it
is not acting as a withholding foreign
trust (i.e., a nonwithholding foreign
trust) and a taxpayer identification number is required.
Sec. 2.81. Other Terms. Any term not
defined in this section has the same meaning that it has under the Code, including
the income tax regulations under the
Code, any applicable income tax treaty, or
any applicable Model 1 IGA or Model 2
IGA with respect to WT’s FATCA re-

429

quirements as a participating FFI, registered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI.
Section 3. WITHHOLDING
RESPONSIBILITY
Sec. 3.01. Chapters 3 and 4
Withholding—In General.
(A) Chapter 4 Withholding.
WT (unless WT is a retirement fund) is
a withholding agent for purposes of chapter 4 and is subject to the withholding and
reporting provisions applicable to withholding agents under sections 1471 and
1472 with respect to its beneficiaries or
owners. WT is required to withhold 30
percent of any withholdable payment
made after June 30, 2014, that is distributed to, or included in the distributive
share of, a beneficiary or owner that is an
FFI unless WT can reliably associate the
payment (or portion of the payment) with
documentation upon which it is permitted to rely to treat the payment as exempt from withholding under § 1.1471–
2(a)(4), or the payment is made under a
grandfathered obligation described in
§ 1.1471–2(b). See § 1.1473–1(a) for
the definition of a withholdable payment
and the applicable exceptions to this
definition. WT is also required to withhold 30 percent of any withholdable
payment made after June 30, 2014, that
is distributed to, or included in the distributive share of, a beneficiary or owner that is
an NFFE unless WT can reliably associate
the payment (or portion of the payment)
with a certification described in § 1.1472–
1(b)(1)(ii), or an exception to withholding
under § 1.1472–1 applies.
If WT is a retirement fund, WT is not
required to withhold under section 1471
or 1472. If WT is a participating FFI or
registered deemed-compliant FFI (other
than a reporting Model 1 FFI), WT will
satisfy its requirement to withhold under
sections 1471(a) and 1472(a) with respect
to direct beneficiaries or owners that are
entities by withholding on withholdable
payments made to nonparticipating FFIs
and recalcitrant account holders to the extent required under its FATCA requirements as a participating FFI or registered
deemed-compliant FFI. See the FFI agreement, § 1.1471–5(f), or the applicable

August 25, 2014

Model 2 IGA for the withholding requirements that apply to withholdable payments made to direct beneficiaries or owners that are individuals and are treated as
recalcitrant account holders. If WT is a
reporting Model 1 FFI or a registered
deemed-compliant Model 1 IGA FFI, WT
will satisfy its requirement to withhold
under section 1471(a) with respect to direct beneficiaries or owners by withholding on withholdable payments made to
nonparticipating FFIs to the extent required under its FATCA requirements as a
registered deemed-compliant FFI or registered deemed-compliant Model 1 IGA
FFI. WT must withhold at the time and in
the manner described in sections 3.02
through 3.04 of this Agreement which
modifies other provisions describing the
time and manner in which WT would otherwise be required to withhold for chapter
4 purposes.
(B) Chapter 3 Withholding.
WT is a withholding agent for purposes of chapter 3 and is subject to the
withholding and reporting provisions applicable to withholding agents under
chapter 3. WT must withhold 30 percent
of any payment of an amount subject to
chapter 3 withholding that is distributed
to, or included in the distributive share of,
a beneficiary or owner that is a foreign
person unless WT can reliably associate
the payment with documentation upon
which it can rely to treat the payment as
made to a payee that is a U.S. person or as
made to a beneficial owner that is a foreign person entitled to a reduced rate of
withholding. See section 4 of this Agreement regarding documentation requirements applicable to WT for determining
whether chapter 3 withholding applies.
With respect to an amount subject to
chapter 4 withholding that is also an
amount subject to chapter 3 withholding,
WT may credit any tax withheld under
chapter 4 against its liability for any tax
due under chapter 3 with respect to the
payment so that no additional withholding
is required on the payment for purposes of
chapter 3. Nothing in chapter 4 or the
regulations thereunder (including the FFI
agreement) or any applicable IGA relieves
WT of its requirements to withhold on an
amount subject to chapter 3 withholding

August 25, 2014

to the extent required under sections 3.02
through 3.04 of this Agreement or modifies the documentation upon which WT
may rely under section 4 of this Agreement for determining whether withholding under chapter 3 applies.
Sec. 3.02. Primary Chapters 3 and 4
Withholding Responsibility. WT must
assume primary chapters 3 and 4 withholding responsibility for all withholdable
payments and amounts subject to chapter
3 withholding that are distributed to, or
included in the distributive share of, any
direct beneficiary or owner and any indirect beneficiary or owner for which it acts
as a WT to the extent permissible under
section 9 of this Agreement. If WT acts as
a nonwithholding foreign trust with respect to an indirect beneficiary or owner,
it cannot assume primary chapters 3 and 4
withholding responsibility for payments
made to that indirect beneficiary or owner.
WT is not required to withhold on
amounts it pays to a qualified intermediary that assumes primary withholding responsibility with respect to the payment,
or to a withholding foreign partnership, or
another withholding foreign trust.
If WT is a participating FFI or a registered deemed-compliant FFI, it may not
elect with respect to its direct beneficiaries
or owners to satisfy its obligation to withhold under chapter 4 (or the FFI agreement) on a withholdable payment made to
a recalcitrant account holder that is a U.S.
non-exempt recipient by backup withholding under section 3406 as provided in
§ 1.1471– 4(b)(3)(iii) and section 4 of the
FFI agreement.
See section 6 of this Agreement regarding WT’s responsibility to report
amounts subject to withholding on Form
1042–S.
Sec. 3.03. Timing of Withholding.
WT must withhold on the date it makes a
distribution to a foreign beneficiary or
owner that includes a withholdable payment or an amount subject to chapter 3
withholding as determined under section
3.04 of this Agreement. To the extent a
beneficiary’s or owner’s distributive share
of income subject to withholding has not
actually been distributed to the beneficiary
or owner, WT must withhold on the beneficiary’s or owner’s distributive share on
the earlier of the date that the statement
required under section 6048(b) is mailed

430

or otherwise provided to the beneficiary or
owner or the due date for furnishing the
statement (whether or not WT is required
to prepare and furnish the statement).
Sec. 3.04. Withholding on Distributions. WT may determine the amount of
withholding on a distribution based on a
reasonable estimate of the beneficiary’s or
owner’s distributive share of income subject to withholding for the year. WT must
correct the estimated withholding to reflect the beneficiary’s or owner’s actual
distributive share on the earlier of the date
that the statement required under section
6048(b) is mailed or otherwise provided
to the beneficiary or owner or the due date
for furnishing the statement (whether or
not WT is required to prepare and furnish
the statement). If that date is after the due
date for filing WT’s Forms 1042 and
1042–S (including extensions) for the calendar year, WT may withhold and report
any adjustments required by correcting
the information in the following calendar
year.
Sec. 3.05. Deposit Requirements. WT
must deposit amounts withheld under
chapters 3 and 4 at the time and in the
manner provided under section 6302 (see
§ 1.6302–2(a) or § 31.6302–1(h)).
Section 4. DOCUMENTATION
REQUIREMENTS
Sec. 4.01. Documentation
Requirements.
(A) Coordination of Documentation
Requirements with Chapter 4. If WT is an
FFI (other than a retirement fund), WT is
required to perform the due diligence procedures under its FATCA requirements as
a participating FFI, registered deemedcompliant FFI, or registered deemedcompliant Model 1 IGA FFI for each direct beneficiary or owner to determine if
the beneficiary or owner is a holder of a
U.S. account (or U.S. reportable account),
and each direct beneficiary or owner that
is a nonparticipating FFI and, if applicable, that is a recalcitrant account holder
(or non-consenting U.S. account). See,
however, the automatic termination provision of section 10.03(A) of this Agreement if WT is not in possession of valid
documentation for any direct beneficiary
or owner at any time that withholding or
reporting is required. If WT is an NFFE,

Bulletin No. 2014 –35

WT is required to determine the chapter 4
status of each beneficiary or owner to determine if reporting or withholding applies under section 1471 or 1472 on withholdable payments distributed to, or
included in the distributive share of, the
beneficiary or owner under the requirements of § 1.1471–3(d). See Notice
2014 –33, 2014 –21 I.R.B. 1033, which
modifies the time in which WT is required
to implement the applicable due diligence
procedures with respect to an obligation
held by an entity that is opened, issued, or
executed on or after July 1, 2014, and
before January 1, 2015.
If WT has determined that withholding
is not required under chapter 4, WT must
obtain, unless already collected, documentation that meets the requirements of
this section 4 to determine whether withholding applies under chapter 3. See also
WT’s FATCA requirements as a participating FFI, registered deemed-compliant
FFI, or registered deemed-compliant
Model 1 IGA FFI for when WT will have
reason to know that a claim of chapter 4
status is unreliable or incorrect and for
WT’s requirements following a change in
circumstances. If WT is an NFFE, see
§ 1.1471–3(e)(4) for when WT will have
reason to know that an entity’s claim of
chapter 4 status is unreliable or incorrect
and § 1.1471–3(c)(6)(ii)(E) for WT’s requirements following a change in circumstances.
(B) General Documentation Requirements. Except as otherwise provided in
this section 4, WT must obtain a Form
W– 8 or Form W–9 from every direct beneficiary or owner that receives a distribution or distributive share of a reportable
amount. Notwithstanding the previous
sentence, if WT is an FFI and is subject to
the know-your-customer rules for documenting its beneficiaries or owners (or
subset of beneficiaries or owners), WT
may obtain documentary evidence as set
forth in the Attachment (or the documentation described in section 4.03(A)(3) of
this Agreement) for the applicable jurisdiction from its direct beneficiaries or
owners rather than a Form W– 8 or Form
W–9. If WT is an FFI obtaining documentary evidence, WT must also adhere to the
know-your-customer rules that apply to
WT with respect to the direct beneficiary

Bulletin No. 2014 –35

or owner from whom the documentary
evidence is obtained.
WT must review and maintain documentation in accordance with this section
4 and, in the case of documentary evidence obtained from direct beneficiaries
or owners, in accordance with the knowyour-customer rules set forth in the Attachments to this Agreement. See sections
2.03 and 2.41 of this Agreement. WT
must make documentation (together with
any associated withholding statements
and other documents or information)
available upon request for inspection by
WT’s external auditor, if the performance
of external audit procedures is requested
by the IRS as described in section 8.07(D)
of this Agreement. WT represents that
none of the laws to which it is subject
prohibits disclosure of the identity of any
beneficiary or owner or corresponding
beneficiary or owner information to WT’s
external auditor, if required under section
8.07(D) of this Agreement.
Sec. 4.02. Documentation for Foreign Beneficiaries or Owners. WT may
treat a beneficiary or owner as a foreign
beneficial owner of an amount if the beneficiary or owner provides a valid Form
W– 8 (other than Form W– 8IMY), or
valid documentary evidence, to the extent
permitted under section 4.01(B) of this
Agreement, that supports the beneficiary’s
or owner’s status as a foreign person. WT
may treat a beneficiary or owner that has
provided documentation as entitled to a
reduced rate of withholding under chapter
3 if all the requirements for a reduced rate
are met and the documentation provided
by the beneficiary or owner supports entitlement to a reduced rate of withholding.
Sections 4.03 through 4.06 of this Agreement describe the specific documentation
requirements necessary for obtaining a reduced rate of withholding in certain circumstances.
Sec. 4.03. Treaty Claims. WT may
not reduce the rate of withholding under
chapter 3 based on a beneficiary’s or owner’s claim of treaty benefits unless WT has
determined that no chapter 4 withholding
is required and it obtains from the beneficiary or owner the documentation required by section 4.03(A) of this Agreement. In addition, WT agrees to establish
procedures to inform beneficiaries or
owners of the terms of the limitation on

431

benefits provisions of a treaty (if applicable and regardless of whether those provisions are contained in a separate article
entitled Limitation on Benefits) under
which the beneficiary or owner is claiming benefits.
(A) Treaty Documentation. The documentation required by this section 4.03(A)
is as follows:
(1) A Form W– 8BEN or Form
W– 8BEN–E on which a claim of treaty
benefits is made, including the appropriate
limitation on benefits and section 894 certifications, if applicable, and a U.S. TIN or
foreign TIN. A U.S. TIN or foreign TIN
shall not be required, however, if the beneficiary or owner is a direct beneficiary or
owner. If WT is acting as a withholding
foreign trust for an indirect beneficiary or
owner, the indirect beneficiary or owner is
required to have either a U.S. TIN or a
foreign TIN in order to claim treaty benefits unless it is claiming treaty benefits on
income from marketable securities as described in § 1.1441– 6(c);
(2) Documentary evidence, as permitted under section 4.01(B) of this Agreement, that has been obtained pursuant to
the know-your-customer rules that apply
to the direct beneficiary or owner, and the
direct beneficiary or owner has made the
treaty statement required by section
4.03(B) of this Agreement, if applicable;
or
(3) The type of documentary evidence,
as permitted under section 4.01(B) of this
Agreement, required under § 1.1441– 6 to
establish entitlement to a reduced rate of
withholding under a treaty and the direct
beneficiary or owner has made the treaty
statement required by section 4.03(B) of
this Agreement, if applicable.
(B) Treaty Statement. The treaty statement required by this section 4.03(B) is as
follows: [Name of Direct Beneficiary or
Owner] meets all provisions of the treaty
that are necessary to claim a reduced rate
of withholding, including any applicable
limitation on benefits provisions, and derives the income within the meaning of
section 894, and the regulations thereunder, as the beneficial owner.
WT is required to obtain the treaty
statement described in this section 4.03(B)
from a beneficiary or owner that is an
entity. WT shall not be required to obtain
a treaty statement described in this section

August 25, 2014

4.03(B) from an individual who is a resident of an applicable treaty country or
from the government, or its political subdivisions, of a treaty country.
Sec. 4.04. Documentation for International Organizations. WT may not
treat a beneficiary or owner as an international organization entitled to an exemption from withholding under section 892
unless WT has determined that no chapter
4 withholding is required and it obtains a
Form W– 8EXP (or documentary evidence as permitted under section 4.01(B)
of this Agreement) from the international
organization. The name provided on the
documentation must be the name of an
entity designated as an international organization by executive order pursuant to 22
United States Code 288 through 288(f). If
an international organization is not claiming benefits under section 892 but under
another Code exception, the provisions of
section 4.02 of this Agreement apply rather
than the provisions of this section 4.04.
Sec. 4.05. Documentation for Foreign Governments and Foreign Central
Banks of Issue.
(A) Documentation for a Foreign Government or Foreign Central Bank of Issue
Claiming an Exemption from Withholding
Under Section 892 or Section 895. WT
may not treat a beneficiary or owner as a
foreign government or foreign central
bank of issue exempt from withholding
under section 892 or 895 unless WT has
determined that no chapter 4 withholding
is required and—
(1) WT receives from the beneficiary
or owner a Form W– 8EXP (or documentary evidence as permitted under section
4.01(B) of this Agreement) establishing
that the beneficiary or owner is a foreign
government or foreign central bank of issue;
(2) The income distributed to, or included in the distributive share of, the
beneficiary or owner is the type of income
that qualifies for an exemption from withholding under section 892 or 895; and
(3) WT does not know, or have reason
to know, that the beneficiary or owner is a
controlled commercial entity as described
in section 892, that the income owned by
the foreign government or foreign central
bank of issue is being received from a
controlled commercial entity, or that the

August 25, 2014

income is from the disposition of an interest in a controlled commercial entity.
(B) Treaty Exemption. WT may not
treat a beneficiary or owner as a foreign
government or foreign central bank of issue entitled to a reduced rate of withholding under an income tax treaty for purposes of chapter 3 unless WT has
determined that no chapter 4 withholding
is required and it has valid documentation
that is sufficient to obtain a reduced rate of
withholding under a treaty, as described in
section 4.03 of this Agreement.
(C) Other Code Exception. If a foreign
government or foreign central bank of issue is not claiming benefits under section
892 or a reduced rate under an income tax
treaty but under another Code exception
(e.g., the portfolio interest exception under section 871(h) or 881(c)), the provisions of section 4.02 of this Agreement
apply rather than the provisions of this
section 4.05.
Sec. 4.06. Documentation for Foreign Tax-Exempt Organizations. To the
extent that WT determines that an amount
distributed to, or included in the distributive share of, a beneficiary or owner is not
subject to withholding under chapter 4,
WT may not treat the beneficiary or owner
as a foreign tax-exempt organization and
reduce the rate of withholding or exempt
the beneficiary or owner from withholding
for purposes of chapter 3 unless WT satisfies the requirements provided in section
4.06(A), (B), or (C) of this Agreement.
(A) Reduced Rate of Withholding Under Section 501. WT may not treat a beneficiary or owner as a foreign organization
described under section 501(c), and therefore exempt from withholding under
chapter 3 (or, if the beneficiary or owner is
a foreign private foundation, subject to
withholding at a 4-percent rate under section 1443(b)) unless WT obtains a valid
Form W– 8EXP with Part IV of the form
completed.
(B) Treaty Exemption. WT may not
treat a beneficiary or owner as a foreign
organization that is tax-exempt on an item
of income pursuant to a treaty unless WT
obtains valid documentation as described
under section 4.03 of this Agreement that
is sufficient for obtaining a reduced rate of
withholding under the treaty and the documentation establishes that the beneficiary
or owner is an organization exempt from

432

tax under the treaty on that item of income.
(C) Other Exceptions. If a tax-exempt
entity is not claiming a reduced rate of
withholding because it is a foreign organization described under section 501(c) or
under a treaty article that applies to exempt certain foreign organizations from
tax, but is claiming a reduced rate of withholding under another Code or treaty exception, the provisions of section 4.02 or
4.03 of this Agreement (as applicable)
shall apply rather than the provisions of
this section 4.06.
Sec. 4.07. Documentation from Passthrough Beneficiaries or Owners. Except as otherwise provided in section 9 of
this Agreement, WT shall not act as a
withholding foreign trust with respect to
an amount distributed to, or included in
the distributive share of, a passthrough
beneficiary or owner. WT must forward
the passthrough beneficiary’s or owner’s
documentation (and associated withholding statement and documentation of indirect beneficiaries or owners) to the withholding agent from whom WT receives a
reportable amount.
Sec. 4.08. Documentation for U.S.
Exempt Recipients. WT shall not treat a
beneficiary or owner as a U.S. exempt
recipient unless WT obtains from the beneficiary or owner—
(A) A valid Form W–9 on which the
beneficiary or owner includes an exempt
payee code to certify that the beneficiary
or owner is a U.S. exempt recipient;
(B) Documentary evidence, as permitted under section 4.01(B) of this Agreement, that is sufficient to establish that the
beneficiary or owner is a U.S. exempt
recipient; or
(C) Documentary evidence, as permitted under section 4.01(B) of this Agreement, that is sufficient to establish the
beneficiary’s or owner’s status as a U.S.
person and WT can treat the beneficiary or
owner as an exempt recipient under the
rules of § 1.6045–2(b)(2)(i) or § 1.6049 –
4(c)(1)(ii), as appropriate, without obtaining documentation.
Sec. 4.09. Documentation for U.S.
Non-Exempt Recipients. WT shall not
treat a beneficiary or owner as a U.S.
non-exempt recipient unless WT obtains a
valid Form W–9 from the beneficiary or
owner.

Bulletin No. 2014 –35

Sec. 4.10. Documentation Validity.
(A) In General. WT may not rely on
documentation if WT has actual knowledge or reason to know that documentation provided by a beneficiary or owner is
unreliable or incorrect, including when
there is a change in circumstances with
respect to the information or statements
contained in the documentation or in
WT’s files pertaining to the obligation
(account information) that affects the reliability of the beneficiary or owner’s
claim. See § 1.1441–1(e)(4)(ii)(D) for the
definition of change in circumstances.
Once WT knows, or has reason to know,
that documentation provided by a beneficiary or owner is unreliable or incorrect, it
can no longer reliably associate a payment
with valid documentation unless it obtains
additional documentation to establish the
beneficiary’s or owner’s chapter 3 status.
If WT can no longer reliably associate a
payment with valid documentation, it
must obtain new documentation prior to
the time withholding is required under
section 3 of this Agreement.
(B) General Rules.
(1) WT shall not rely on a Form W–9 if
it is not permitted to do so under the rules of
§ 31.3406(h)–3(e) or if it has been informed
by the IRS or another withholding agent that
the form is unreliable or incorrect and shall
not rely on a Form W– 8 if it is not permitted to do so under section 4.10 of this
Agreement.
(2) WT shall not treat documentary
evidence provided by a beneficiary or
owner as valid if the documentary evidence does not reasonably establish the
identity of the person presenting the documentary evidence. For example, documentary evidence is not valid if it is provided in person by a beneficiary or owner
that is a natural person and the photograph
on the documentary evidence, if any, does
not match the appearance of the person
presenting the document.
(3) WT may not rely on documentation
to reduce the withholding rate that would
otherwise apply if—
(a) The beneficiary’s or owner’s documentation is incomplete or contains information that is inconsistent with the beneficiary’s or owner’s claim,

Bulletin No. 2014 –35

(b) WT has other information in the
account information that is inconsistent
with the beneficiary’s or owner’s claim, or
(c) The documentation lacks the information necessary to establish entitlement
to a reduced rate of withholding.
For example, if a direct beneficiary or
owner that is an entity provides documentation to claim treaty benefits and the documentation establishes the direct beneficiary’s or owner’s status as a foreign
person and a resident of a treaty country
but fails to provide the treaty statement in
section 4.03(B) of this Agreement, the
documentation does not establish the direct beneficiary’s or owner’s entitlement
to a reduced rate of withholding.
Sec. 4.11. Documentation Validity Period.
(A) Documentation Other Than a
Form W–9. WT, as permitted under section 4.01(B) of this Agreement, may rely
on valid documentary evidence obtained
from direct beneficiaries or owners in accordance with applicable know-yourcustomer rules as long as the documentary
evidence remains valid under those rules
or until WT knows, or has reason to know,
that the information contained in the documentary evidence is unreliable or incorrect. WT may rely on the representations
described in section 4.03 of this Agreement obtained in connection with such
documentation for the same period of time
as the documentation. For establishing a
beneficiary’s or owner’s chapter 3 status
(as defined in § 1.1441–1(c)(45)) or foreign status for chapter 61 purposes, WT
may rely on a valid Form W– 8 until its
validity expires under § 1.1441–1(e)(4)(ii)
and may rely on documentary evidence
(other than documentary evidence obtained pursuant to applicable know-yourcustomer rules) until its validity expires
under § 1.6049 –5(c).
(B) Form W–9. WT may rely on a
Form W–9 unless one of the conditions of
§ 31.3406(h)–3(e)(2)(i) through (v) applies or if it has been informed by the IRS
or another withholding agent that the form
is unreliable or incorrect.
Sec. 4.12. Maintenance and Retention
of Documentation.
(A) Maintaining Documentation. WT
shall maintain documentation by retaining

433

the original documentation, a certified
copy, a photocopy, a scanned copy, a microfiche, or other means that allow reproduction (provided that WT has recorded
receipt of the documentation and is able to
produce a hard copy). If WT is not required to retain copies of documentary
evidence under its know-your-customer
rules, WT may instead retain a notation of
the type of documentation reviewed, the
date the documentation was reviewed, the
document’s identification number, if any
(e.g., a passport number), and whether
such documentation contained any U.S.
indicia. For obligations held by a direct
beneficiary or owner opened prior to January 1, 2001, if WT was not required
under its know-your-customer rules to
maintain originals or copies of documentation, WT may nevertheless rely on the
information if it has complied with all
other aspects of its know-your-customer
rules regarding establishment of a beneficiary’s or owner’s identity, it has a record
that the documentation required under
the know-your-customer rules was actually examined by an employee of WT or
employees of the trustee of WT in accordance with the know-your-customer
rules, and it has no information in its
possession that would require WT to
treat the documentation as invalid under
the rules of section 4.10(B) of this
Agreement.
(B) Retention Period. WT shall retain a
beneficiary’s or owner’s documentation
obtained under this section 4 for as long as
the document is relevant for the determination of WT’s tax liability or reporting
responsibilities under chapters 3, 4, and
61, and sections 3406 and 6048.
Section 5. WITHHOLDING
FOREIGN TRUST WITHHOLDING
CERTIFICATE
Sec. 5.01. WT Withholding Certificate.
WT agrees to furnish a withholding
foreign trust withholding certificate to
each withholding agent from which it receives a reportable amount as a withholding foreign trust. The withholding foreign
trust withholding certificate is a Form
W– 8IMY (or acceptable substitute form)
that certifies that WT is acting as a withholding foreign trust, contains WT’s WT–
EIN, and provides all other information

August 25, 2014

and certifications required by the form,
including its WT–EIN. If WT is receiving
a reportable amount that is a withholdable
payment, the withholding certificate must
also contain WT’s chapter 4 status to the
extent required, provide its GIIN (if applicable), and provide the other information
and certifications required on the form.
If WT is an FFI, WT must provide a
GIIN on its withholding foreign trust
withholding certificate irrespective of
the time the FFI is permitted under its
FATCA requirements as a participating
FFI, registered deemed-compliant FFI,
or registered deemed-compliant Model
1 IGA FFI to obtain a GIIN. WT is not
required to disclose, as part of that Form
W– 8IMY or its withholding statement,
any information regarding the identity
of its direct beneficiaries or owners and
those indirect beneficiaries or owners
for which it acts as a withholding foreign trust to the extent permitted under
section 9 of this Agreement.
If WT does not act as a withholding
foreign trust for an indirect beneficiary or
owner, WT is required to furnish a nonwithholding foreign trust certificate to its
withholding agent. See § 1.1441–5(e)(5)(iii)
for the requirements of a nonwithholding
foreign trust withholding certificate, the
withholding statement associated with the
withholding certificate, and the other
documentation or other information for
each passthrough beneficiary or owner
and its direct and indirect beneficiaries
or owners.
Sec. 5.02. Withholding Statement.
When WT is acting as a withholding
foreign trust, WT must assume primary
chapters 3 and 4 withholding responsibility as required by section 3.02 of this
Agreement for reportable amounts that
are distributed to, or included in the
distributive shares of, its direct beneficiaries or owners and any indirect beneficiaries or owners for which it is acting as a withholding foreign trust.
Accordingly, WT is not required to provide a withholding statement in such
circumstances. See section 9 of this
Agreement providing that WT may not
act as a withholding foreign trust for
certain indirect beneficiaries or owners
that are U.S. non-exempt recipients.

August 25, 2014

Section 6. TAX RETURN AND
INFORMATION REPORTING
OBLIGATIONS
Sec. 6.01. Form 1042 Filing
Requirement.
(A) In General. WT shall file a return
on Form 1042, whether or not WT withheld any amounts under chapter 3 or 4 of
the Code, on or before March 15 of the
year following any calendar year in which
WT acts as a withholding foreign trust. In
addition to the information required on
Form 1042 and its accompanying instructions, WT shall attach a statement setting
forth the amounts of any overwithholding
or underwithholding adjustments made
under sections 7.01 and 7.03 of this
Agreement, and an explanation of the circumstances that resulted in the over– or
underwithholding. If WT is requesting a
collective refund or credit, WT shall attach the statements required by section
7.02 of this Agreement and shall comply
with the procedures specified in section
7.02 of this Agreement.
(B) Extensions for Filing Returns. WT
may request an extension of the time for
filing Form 1042, or any of the information required to be attached to the form, by
submitting Form 7004, Application for
Automatic Extension of Time to File Certain Business Income, Tax, Information,
and Other Returns, on or before the due
date of the return.
Sec. 6.02. Form 1042–S Reporting.
(A) In General. WT must file Form
1042–S for each beneficiary or owner for
whom it acts as a withholding foreign
trust and for whom WT distributes, or in
whose distributive share is included, a reportable amount unless WT is permitted
under sections 6.02(C) and (D) of this
Agreement to report in pools (reporting
pools). With respect to its direct beneficiaries or owners, WT must file Forms
1042–S in the manner required by the
regulations under chapters 3 and 4 for
amounts distributed to, or included in the
distributive share of, its beneficiaries or
owners (or in the case of a participating
FFI, pursuant to its FATCA requirements
as a participating FFI) and the instructions
to the form, including any requirement to
file the forms magnetically or electroni-

434

cally. Any Form 1042–S required to be
filed by this section 6 shall be filed on or
before March 15 following the calendar
year in which withholding, if any, was
required under section 3.02 of this Agreement. WT may request an extension of
time to file Forms 1042–S by submitting
Form 8809, Application for Extension of
Time to File Information Returns (or other
superseding form) by the due date of
Forms 1042–S in the manner required by
Form 8809.
(B) Recipient Specific Reporting. WT
is required to file a separate Form 1042–S
for amounts distributed to, or included in
the distributive share of, each separate
beneficiary or owner as described in this
section 6.02(B). WT must file separate
Forms 1042–S by income code, chapter 3
or 4 exemption code, recipient code, chapter 4 withholding rate pool (if applicable),
and withholding rate.
(1) Unless WT has made the pooled
reporting election pursuant to section
6.02(D) of this Agreement, WT must file a
separate Form 1042–S for each direct beneficiary or owner (other than a passthrough beneficiary or owner) to whom
WT distributes, or whose distributive
share includes, an amount subject to chapter 3 withholding that is either not a withholdable payment or is a withholdable
payment for which no chapter 4 withholding is required.
(2) WT must file a separate Form
1042–S for each beneficiary or owner that
is a qualified intermediary, a withholding
foreign partnership, or a withholding foreign trust to whom WT distributes, or
whose distributive share includes, an
amount subject to withholding under
chapters 3 or 4, regardless of whether such
beneficiary or owner is a direct or indirect
beneficiary or owner of WT.
(3) WT must file a separate Form
1042–S for each passthrough beneficiary
or owner that is a nonqualified intermediary or flow-through entity that is a participating FFI, registered deemed-compliant
FFI, or registered deemed-compliant
Model 1 IGA FFI and to whom WT distributes, or whose distributive share includes, an amount subject to chapter 4
withholding allocable to such FFI’s chapter 4 withholding rate pools of recalcitrant
account holders, nonparticipating FFIs,
and reportable amounts allocable to U.S.

Bulletin No. 2014 –35

payees, if applicable, regardless of
whether such FFI is a direct or indirect
beneficiary or owner of WT when WT
applies section 9.03 of this Agreement.
(4) WT must file a separate Form
1042–S for each passthrough beneficiary
or owner that is a nonqualified intermediary or flow-through entity that is not described in section 6.02(B)(3) of this
Agreement (other than a nonparticipating
FFI), and to whom WT distributes, or
whose distributive share includes, an
amount subject to chapter 4 withholding
allocable to such passthrough beneficiary’s or owner’s chapter 4 withholding rate
pool of payees that are nonparticipating
FFIs, regardless of whether such passthrough beneficiary or owner is a direct or
indirect beneficiary or owner of WT when
WT applies section 9.03 of this Agreement.
(5) WT must file a separate Form
1042–S for each beneficiary or owner of
WT that is a partnership or trust to which
WT applies the agency option under section 9.02 of this Agreement and to whom
WT distributes, or whose distributive
share includes, an amount subject to chapter 4 withholding that is allocable to the
partnership or trust’s chapter 4 withholding rate pool of payees that are nonparticipating FFIs or to whom WT distributes,
or whose distributive share includes, an
amount subject to chapter 3 withholding
that is either not a withholdable payment
or is a withholdable payment for which no
chapter 4 withholding is required and that
is allocable to such partnership’s or trust’s
chapter 3 withholding rate pools.
(6) WT must file a separate Form
1042–S for each beneficiary or owner of
WT that is a partnership or trust to which
WT applies the joint account option under
section 9.02 of this Agreement and to
whom WT distributes, or whose distributive share includes, an amount subject to
chapter 3 withholding that is allocable to
such partnership or trust’s chapter 3 withholding rate pool.
(7) WT must file a separate Form
1042–S for each foreign account holder
(or interest holder) of a passthrough beneficiary or owner that is a nonparticipating
FFI that receives a payment on behalf of
an exempt beneficial owner (regardless of
whether the passthrough beneficiary or
owner is a direct or indirect beneficiary or

Bulletin No. 2014 –35

owner of WT) to the extent WT can reliably associate such amounts with valid
documentation from such passthrough
beneficiary or owner as to the portion of
the payment allocable to one or more exempt beneficial owners. In addition, WT
must file separate Forms 1042–S in the
same manner for each foreign account
holder (or interest holder) of a passthrough beneficiary or owner that is described in the preceding sentence and that
is a direct or indirect partner, beneficiary,
or owner of a partnership or trust to which
WT applies the agency option.
(8) WT must file a separate Form
1042–S for each foreign account holder
(or interest holder) of a nonqualified intermediary or flow-through entity to
whom WT distributes, or whose distributive share includes, an amount subject to
chapter 3 withholding that is either not a
withholdable payment or is a withholdable payment for which no chapter 4 withholding is required to the extent WT can
reliably associate such amounts with valid
documentation from an account holder (or
interest holder) that is not itself a nonqualified intermediary or flow-through entity when WT applies section 9.03 of this
Agreement. In addition, WT must file a
separate Form 1042–S in the same manner
for each foreign account holder (or interest holder) of a nonqualified intermediary
or flow-through entity (to which WP does
not apply the agency option) that is described in the preceding sentence and that
is a direct or indirect account holder (or
interest holder) of a partnership or trust to
which WT applies the agency option.
(9) If WT is an NFFE, WT must file a
separate Form 1042–S for each direct beneficiary or owner that establishes its status
as a passive NFFE but fails to provide the
information regarding its owners as required under § 1.1471–3(d)(12)(iii).
(C) Chapter 4 Reporting Pools of WT.
If WT is an FFI, WT shall report on
Form 1042–S amounts subject to chapter
4 withholding that it distributes to, or includes in the distributive share of, its direct beneficiaries or owners consistent
with its FATCA requirements as a participating FFI, registered deemed-compliant
FFI, or registered deemed-compliant
Model 1 IGA FFI. A separate Form

435

1042–S shall be filed for each type of
chapter 4 reporting pool. A chapter 4 reporting pool is a payment of a single type
of income (e.g., interest, dividends), determined in accordance with the categories of income reported on Form 1042–S
that is allocable to a chapter 4 withholding
rate pool consisting of payees that are
nonparticipating FFIs, recalcitrant account holders, or U.S. payees (if applicable). WT must report recalcitrant account
holders in pools based upon their particular class described in § 1.1471– 4(d)(6),
with a separate Form 1042–S issued for
each such pool.
If WT is a participating FFI or registered deemed-compliant FFI (including
for this purpose a reporting Model 1 IGA
FFI), WT may report in a chapter 4 withholding rate pool of U.S. payees reportable amounts that are distributed to, or
included in the distributive share of, a
direct beneficiary or owner that is a U.S.
person, provided that WT reports such
beneficiary or owner as a U.S. account (or
U.S reportable account) under its applicable FATCA requirements as a participating FFI, registered deemed-compliant
FFI, reporting Model 1 FFI, or registered
deemed-compliant Model 1 IGA FFI. WT
shall include in its U.S. payee pool reportable amounts that are distributed to, or
included in the distributive share of, a
direct beneficiary or owner that is a U.S.
person when WT either reports such beneficiary or owner as a U.S. account (or
U.S. reportable account) pursuant to its
FATCA requirements as a participating
FFI, registered deemed-compliant FFI,
or registered deemed-compliant Model
1 IGA FFI; or reports such beneficiary
or owner as a recalcitrant account holder
(or non-consenting U.S. account) provided that WT is not required to withhold on such beneficiary or owner pursuant to its FATCA requirements as a
participating FFI, registered deemedcompliant FFI, or registered deemedcompliant Model 1 IGA FFI. See, however,
the automatic termination provision of
section 10.03(A) of this Agreement if WT
is not in possession of valid documentation for any direct beneficiary or owner at
any time that withholding or reporting is
required.
If WT is an NFFE, WT shall report
amounts subject to chapter 4 withholding

August 25, 2014

by reporting pools on a Form 1042–S if
those amounts are distributed to, or included in the distributive share of, direct
beneficiaries or owners of WT that are
nonparticipating FFIs in a chapter 4 reporting pool of nonparticipating FFIs.
(D) Chapter 3 Reporting Pools of WT.
WT may elect to perform pool reporting (PR election) for an amount subject to
chapter 3 withholding that either is not a
withholdable payment or is a withholdable payment for which no chapter 4 withholding is required and that WT distributes to, or includes in the distributive
share of, a foreign direct beneficiary or
owner (other than a passthrough beneficiary or owner, withholding foreign partnership, or withholding foreign trust). A
separate Form 1042–S shall be filed for
each chapter 3 reporting pool. A chapter 3
reporting pool is a payment of a single
type of income that falls within a particular withholding rate, chapter 3 exemption
code and, if the payment is a withholdable
payment, a chapter 4 exemption code as
determined on Form 1042–S and its accompanying instructions. WT may use a
single chapter 3 pool reporting code (e.g.,
WT–withholding rate pool– general) for
all reporting pools except for amounts
paid to foreign tax-exempt recipients, for
which a separate chapter 3 pool reporting
code (e.g., WT–withholding rate pool–
exempt organization) must be used. For
this purpose, a foreign tax-exempt recipient includes any organization that is not
subject to chapter 3 withholding and is not
liable to tax in its jurisdiction of residence
because it is a charitable organization, a
pension fund, or a foreign government.
If WT has made the PR election pursuant to this section 6.02(D), WT is not
required to file Forms 1042–S for amounts
distributed to, or included in the distributive share of, each separate direct beneficiary or owner for whom such reporting
would otherwise be required. Instead, WT
shall file a separate Form 1042–S for each
reporting pool. Once made, the PR election is effective for the entire term of this
Agreement beginning on the effective
date of the Agreement and ending on the
date of its expiration or termination under
section 10 of the Agreement. WT must
make a new election for each renewal

August 25, 2014

term of this Agreement. If WT makes the
PR election, WT cannot revoke it prior to
the end of the term for which WT has
made the PR election unless WT obtains
consent from the IRS to revoke such election. WT may request IRS consent by
contacting the IRS at the address specified
in section 11.06 of this Agreement. If WT
did not make the PR election at the time
this Agreement was executed, then WT
may make a PR election only by contacting the IRS at the address specified in
section 11.06 of this Agreement.
Sec. 6.03. Form 3520 –A Filing
Requirement.
If WT is required to file Form 3520 –A
and an Owner Statement or Beneficiary
Statement under section 6048 of the Code,
then WT shall file Form 3520 –A and file
and furnish any required Owner Statements or Beneficiary Statements to U.S.
beneficiaries or owners in accordance
with the instructions for the form. See
section 6.05(D) for a special reporting obligation of WT with respect to beneficiaries not required to be reported by WT on
Form 3520 –A.
Sec. 6.04. Retention of Returns. WT
shall retain Forms 1042 for the period of
the applicable statute of limitations on assessments and collection under the Code.
Sec. 6.05. FATCA U.S. Account
Reporting.
(A) WT that is an FFI. If WT is an FFI,
WT is required to report each U.S. account (or, in the case of an FFI that is a
reporting Model 1 FFI or registered
deemed-compliant Model 1 IGA FFI,
each U.S. reportable account) that it maintains consistent with its FATCA requirements as a participating FFI, registered
deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI. See
WT’s requirements as a participating FFI,
registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA
FFI to report each account that is a U.S.
account (or U.S. reportable account) that
it maintains. If WT is a participating FFI
or registered deemed-compliant FFI
(other than a reporting Model 1 FFI or
registered deemed-compliant Model 1
IGA FFI), WT must report its U.S. accounts on Form 8966, FATCA Report, in

436

the time and manner specified under its
FATCA requirements as a participating
FFI or registered deemed-compliant FFI
except to the extent WT is reporting under
§ 1.1471– 4(d)(5) on Form 1099 with respect to its U.S. accounts. If WT is a
reporting Model 1 FFI or registered
deemed-compliant Model 1 IGA FFI, WT
must report each U.S. reportable account
on Form 8966 as required under the applicable Model 1 IGA.
(B) WT that is an NFFE. If WT is an
NFFE, WT shall file Forms 8966 to report
withholdable payments distributed to, or
included in the distributive share of, any
beneficiary or owner that is an NFFE
(other than an excepted NFFE) with one
or more substantial U.S. owners if the
NFFE is the beneficial owner of the withholdable payment received by WT. See
§ 1.1471–1(b)(8) for the definition of beneficial owner. WT must report on Form
8966 in accordance with the form and its
accompanying instructions.
The Form 8966 must include the name
of the NFFE that is owned by a substantial
U.S. owner; the name, address, and U.S.
TIN of each substantial U.S. owner; the
total of all withholdable payments distributed to, or included in the distributive
share of, the NFFE during the calendar
year; and any other information as required by the form and its accompanying
instructions.
(C) Form 8966 Reporting for Payees
that are NFFEs. WT shall file Form 8966
to report withholdable payments that WT
distributes to, or includes in the distributive share of, a passthrough beneficiary or
owner that provides information regarding
an account holder (or interest holder that
is an NFFE (other than an excepted
NFFE) with one or more substantial U.S.
owners (or one or more controlling persons that is a specified U.S. person under
an applicable IGA) and that is the beneficial owner of the withholdable payment
received by WT. WT must report on Form
8966 in the time and manner provided in
§ 1.1474 –1(i)(2). Such report must include the name of the NFFE that is owned
by a substantial U.S. owner (or controlling
person that is a specified U.S. person); the
name, address, and U.S. TIN of each substantial U.S. owner (or controlling person
that is a specified U.S. person); the total of
all withholdable payments made to the

Bulletin No. 2014 –35

NFFE during the calendar year (or reportable period under the applicable IGA);
and any other information as required by
the form and its accompanying instructions. WT is only required to report as
described in this section 6.05(C) if WT
acts as a withholding foreign trust with
respect to such indirect beneficiary or
owner as described in section 9.03 of this
Agreement and the passthrough beneficiary or owner does not certify on its
withholding statement that it is reporting
the account holder (or interest holder) as a
U.S. account pursuant to its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI.
(D) Special Reporting Obligation. If
WT is not a participating FFI or a registered deemed-compliant FFI or a registered deemed-compliant Model 1 IGA FFI
and is not required to report with respect
to a U.S. beneficiary of WT on Form
3520 –A, then WT must report with respect to such beneficiary on Form 8966 as
required under this section 6.05(D). A
beneficiary for this purpose means a beneficiary that receives a distribution from
WT during the year or that is required to
include an amount in gross income under
sections 652(a) or 662(a) with respect to
WT.
Section 7. ADJUSTMENTS FOR
OVER– AND
UNDERWITHHOLDING; REFUNDS
Sec. 7.01. Adjustments for Chapter 3
or 4 Overwithholding by WT. WT may
make an adjustment for amounts paid to
its beneficiaries or owners when WT has
overwithheld under chapter 3 or 4 by applying either the reimbursement procedure described in section 7.01(A) of this
Agreement or the set-off procedure described in section 7.01(B) of this Agreement within the time period prescribed for
those procedures.
(A) Reimbursement Procedure. WT
may repay its beneficiaries or owners for
an amount overwithheld under chapter 3
or 4 and reimburse itself by reducing, by
the amount of tax actually repaid to the
beneficiaries or owners, the amount of any
subsequent deposit of tax required to be
made by WT under section 3.05 of this
Agreement. For purposes of this section
7.01(A), an amount that is overwithheld

Bulletin No. 2014 –35

shall be applied in order of time (i.e.,
sequentially) to each of WT’s subsequent
deposit periods in the same calendar year
to the extent that the withholding taxes
required to be deposited for a subsequent
deposit period exceed the amount actually
deposited. An amount overwithheld in a
calendar year may be applied to deposit
periods in the calendar year following the
calendar year of overwithholding only
if—
(1) The repayment occurs before the
earlier of the due date (without regard to
extensions) for filing Form 1042–S for the
calendar year of overwithholding or the
date that the Form 1042–S is actually filed
by WT with the IRS;
(2) WT states on a Form 1042–S (issued, if applicable, to the beneficiary or
owner or otherwise to a chapter 3 or 4
reporting pool) filed by March 15 of the
calendar year following the calendar year
of overwithholding, the amount of tax
withheld and the amount of any actual
repayments; and
(3) WT states on a Form 1042, filed by
March 15 of the calendar year following
the calendar year of overwithholding, that
the filing of the Form 1042 constitutes a
claim for credit in accordance with
§ 1.6414 –1.
(B) Set-Off Procedure. WT may repay
its beneficiaries or owners by applying the
amount overwithheld against any amount
which otherwise would be required under
chapter 3 or 4 to be withheld from a
payment made by WT before the earlier of
March 15 of the calendar year following
the calendar year of overwithholding or
the date that the Form 1042–S is actually
filed with the IRS. For purposes of making
a return on Form 1042 or Form 1042–S
for the calendar year of overwithholding,
and for purposes of making a deposit of
the amount withheld, the reduced amount
shall be considered the amount required to
be withheld from such income under
chapter 3 or 4.
Sec. 7.02. Collective Credit or Refund Procedures for Chapter 3 or 4
Overwithholding. If WT has made a PR
election and there has been overwithholding (as defined in section 2.49 of this
Agreement) on amounts paid to WT’s direct beneficiaries or owners during a calendar year and the amount of overwithholding has not been recovered under the

437

reimbursement or set-off procedures as
described in section 7.01 of this Agreement, WT may request a credit or refund
of the total amount overwithheld by following the procedures of this section 7.02.
WT shall follow the procedures set forth
under sections 6402 and 6414, and the
regulations thereunder, to claim the credit
or refund. No credit or refund will be
allowed after the expiration of the statutory period of limitation for refunds under
section 6511.
(A) Payments for which a Collective
Refund is Permitted. Except as otherwise
provided in this section 7.02, WT may use
the collective refund procedure of this
section 7.02 with respect to all amounts
subject to chapter 3 or 4 withholding that
WT has withheld under this Agreement.
With respect to amounts withheld under
chapter 3 or 4, WT shall not include in its
collective refund claim any amounts withheld on payments made to an indirect beneficiary or owner or a direct account
holder of WT that is a passthrough beneficiary or owner. Further, with respect to
amounts withheld under chapter 4, if WT
is a participating FFI or registered
deemed-compliant FFI, WT shall not include in its collective refund claim any
amounts withheld on payments made to
any beneficiary or owner that is an account holder described in the FFI agreement or in § 1.1471– 4(h)(2).
(B) Requirements for a Collective
Refund.
(1) WT may use the collective refund
procedures under this section 7.02 only if
WT has not issued Forms 1042–S to the
beneficiaries or owners that were subject
to overwithholding and for which a collective refund claim is being made.
(2) WT must submit together with its
amended Form 1042 on which it provides
a reconciliation of amounts withheld and a
claim for credit or refund, a statement that
includes the following information and
representations—
(i) The reason(s) for the overwithholding;
(ii) WT deposited the tax for which a
refund is being sought under section 6302
and WT has not applied the reimbursement or set-off procedures of §§ 1.1461–
2 and 1.1474 –2 to adjust the tax withheld
to which the claim relates;

August 25, 2014

(iii) WT has repaid or will repay the
amount for which a refund is sought to the
appropriate beneficiaries or owners;
(iv) WT retains a record showing the
total amount of tax withheld, adjustments
for underwithholding, and reimbursements for overwithholding as it relates to
each beneficiary or owner and also showing the repayment (if applicable) to such
beneficiaries or owners for the amount of
tax for which a refund is being sought;
(v) WT retains valid documentation
that meets the requirements of chapter 3
or 4 (as applicable) to substantiate the
amount of overwithholding with respect
to each beneficiary or owner for which a
refund is being sought; and
(vi) WT has not (and will not) issue a
Form 1042–S (or such other form as the
IRS may prescribe) to any beneficiary or
owner with respect to the payments for
which a refund is being sought.
Sec. 7.03. Adjustments for Chapter 3
or 4 Underwithholding. If WT knows
that an amount should have been withheld
under chapter 3 or 4 from a previous payment made to a beneficiary or owner and
the amount was not withheld, WT may
either withhold from future payments
made pursuant to chapter 3 or chapter 4 to
the same beneficiary or owner or satisfy
the tax from the beneficiary’s or owner’s
proportionate share of assets over which
WT has control. The additional withholding or satisfaction of the tax owed described in the previous sentence must be
made before the due date of the Form
1042 (not including extensions) for the
calendar year in which the underwithholding occurred.
Sec. 7.04. Chapter 3 or 4 Underwithholding after Form 1042 Filed. If, after a
Form 1042 has been filed for a calendar
year, WT, WT’s auditor, or the IRS determines that WT has underwithheld tax under chapter 3 or 4 for such year, WT shall
file an amended Form 1042 to report and
pay the underwithheld tax. WT shall pay
the underwithheld tax, the interest due on
the underwithheld tax, and any applicable
penalties, at the time of filing the amended
Form 1042. If WT fails to file an amended
return, the IRS shall make such return
under section 6020 and assess such tax
under the procedures set forth in the Code.

August 25, 2014

Section 8. COMPLIANCE
PROCEDURES
Sec. 8.01.
(A) In General. WT must adopt a compliance program under the authority of a
responsible officer. WT’s compliance program must include policies, procedures,
and processes sufficient for WT to satisfy
the documentation, reporting, and withholding requirements of this Agreement
and sufficient for the responsible officer of
WT to make the certifications required
under section 8.03 of this Agreement. See
section 2.63 of this Agreement for the
definition of responsible officer. WT must
also perform or arrange for the performance of the periodic review described in
section 8.04 of this Agreement. As part of
the responsible officer’s certification, WT
must provide to the IRS the factual information described in section 8.03(C) of this
Agreement. WT must also satisfy the requirements of section 8.06 of this Agreement with respect to the report of the
periodic review and must comply with the
IRS review referenced in section 8.07 of
this Agreement.
(B) Coordination with FATCA Requirements as a Participating FFI, Registered Deemed-Compliant FFI, or Registered Deemed-Compliant Model 1 IGA
FFI. As a condition for maintaining this
Agreement, WT must comply with the
FATCA requirements applicable to its
chapter 4 status (including any applicable
compliance procedures). Therefore, WT
must, as part of the compliance procedures described in this section 8 (including the periodic review described in section 8.04 of this Agreement and in making
the periodic certification described in section 8.03 of this Agreement) determine
whether it is compliant with its FATCA
requirements as a participating FFI, registered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI
when it acts as a withholding foreign trust.
See the compliance procedures, if any,
required under WT’s FATCA requirements as a participating FFI, registered
deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI
when WT acts as a nonwithholding foreign trust. If WT is a participating FFI,
WT will be able to make the certification
described in section 8.03 of this Agree-

438

ment, and the certification described in the
FFI agreement, to the extent provided in
future published guidance or other instructions.
Sec. 8.02. Compliance Program.
(A) Responsible Officer. WT must appoint an individual as the responsible officer (as defined in section 2.63 of this
Agreement). The responsible officer must
be identified on the IRS FATCA registration website as the WT’s responsible party
and as the responsible officer for purposes
of compliance with its FATCA requirements as a participating FFI, registered
deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI. The
responsible officer (or the responsible officer’s designee) must establish a compliance program that meets the requirements
of this section 8.02 and must make the
periodic certifications to the IRS described in section 8.03 of this Agreement.
The responsible officer of WT must be the
trustee of WT or an agent of the trustee of
WT with sufficient authority to fulfill the
duties of a responsible officer described in
this section 8.02. The responsible officer
(or a delegate appointed by the responsible officer) must also serve as the point of
contact for the IRS for all issues related to
this Agreement and for complying with
IRS requests for information or additional
audit procedures under section 8.07 of this
Agreement.
(B) Compliance Program. The responsible officer (or the responsible officer’s
designee) must establish a program for
WT to comply with the requirements of
this Agreement that includes the following:
(1) Written Policies and Procedures.
The responsible officer (or the responsible
officer’s designee) must ensure the drafting and updating, as necessary, of written
policies and procedures sufficient for WT
to satisfy the documentation, withholding,
reporting, and other obligations of this
Agreement with its FATCA requirements
as a participating FFI, registered deemedcompliant FFI, or registered deemedcompliant Model 1 IGA FFI. Such written
policies and procedures must include a
process for an employee of the trustee or
an agent of the trustee of WT to raise
issues to the responsible officer (or the
responsible officer’s designee) that con-

Bulletin No. 2014 –35

cern WT’s compliance with this Agreement.
(2) Training. The responsible officer
(or the responsible officer’s designee)
must communicate such policies and procedures to persons responsible for obtaining, reviewing, and retaining a record of
documentation under the requirements of
section 4 of this Agreement, making distributions and allocations to beneficiaries
or owners on behalf of WT that are subject to withholding under section 3 of this
Agreement, or reporting distributions or
allocations to beneficiaries or owners under section 6 of this Agreement. This includes any person that is responsible for
the performance of WT’s due diligence
procedures under its FATCA requirements as a participating FFI, registered
deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI.
(3) Systems. The responsible officer (or
the responsible officer’s designee) must
ensure that systems and processes are in
place that will allow WT to fulfill its obligations under this Agreement and its
FATCA requirements as a participating
FFI, registered deemed-compliant FFI, or
registered deemed-compliant Model 1
IGA FFI. For example, in order to fulfill
WT’s obligations to report on Forms
1042–S, 3520 –A and 8966 under section
6 of this Agreement, WT must establish
systems for documenting beneficiaries or
owners and for recording the information
with respect to each such beneficiary or
owner that WT is required to report under
that section.
(4) Monitoring of Business Changes.
The responsible officer (or the responsible
officer’s designee) must monitor business
practices and arrangements that affect
WT’s compliance with this Agreement,
including, for example, changes in WT’s
beneficiaries or owners that give rise to
documentation, withholding, or reporting
obligations under this Agreement, and its
FATCA requirements as a participating
FFI, registered deemed-compliant FFI, or
registered deemed-compliant Model 1
IGA FFI.
(5) Periodic Review. The responsible
officer (or the responsible officer’s designee) must designate an auditor that meets
the qualifications described in section
8.04(A) of this Agreement to perform the

Bulletin No. 2014 –35

periodic review described in section 8.05
of this Agreement.
(6) Periodic Certification. The responsible officer (or the responsible officer’s
designee) must make the periodic certification as described in section 8.03 of this
Agreement, including ensuring that corrective actions are taken in response to
any material failures (as defined in section
8.03(D) of this Agreement) of WT’s compliance with this Agreement (as defined in
section 8.03(D) of this Agreement) and its
FATCA requirements as a participating
FFI, registered deemed-compliant FFI, or
registered deemed-compliant Model 1
IGA FFI.
Sec. 8.03. Periodic Certification by
Responsible Officer. In accordance with
the compliance period described in section 8.03(E) of this Agreement, the responsible officer of WT must make the
applicable certification of compliance described in section 8.03(A) or (B) of this
Agreement. The responsible officer of WT
must make the certifications of compliance in such manner as the IRS may prescribe in future guidance or other instructions. The responsible officer must
consider the results of WT’s periodic review described in section 8.05 of this
Agreement in making the periodic certification.
(A) Certification of Effective Internal
Controls. The responsible officer must
certify to the following and disclose any
material failures that occurred during the
certification period or during any prior
period if the material failure was not disclosed as part of a prior certification or
written disclosure made by WT to the
IRS—
(1) WT has established a compliance
program that meets the requirements described in section 8.02(B) of the WT
agreement that is in effect as of the date of
the certification and during the certification period;
(2) A periodic review was conducted for
the certification period in accordance with
sections 8.04 through 8.06 of the WT agreement, and based on the review and other
steps taken by WT, WT maintains effective
internal controls over its documentation,
withholding, and reporting obligations under the WT agreement and under its
FATCA requirements as a participating FFI,

439

registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI;
(3) Based on the periodic review and
other information known to the responsible officer, there are no material failures
as defined in section 8.03(D) of the WT
agreement or, if there are any material
failures, such failures are identified as part
of this certification as well as the actions
taken to remediate such failures and to
prevent their reoccurrence by the date of
this certification;
(4) With respect to any failure to withhold, deposit, or report to the extent required under the WT agreement, WT has
corrected such failure by paying any taxes
due (including interest and penalties) and
filing the appropriate return (or amended
return); and
(5) All partnerships and trusts to which
WT applies the agency option either have
provided documentation or other information to WT to include in WT’s periodic
review, or have provided the responsible
officer of WT with a certification of effective controls meeting the requirements of
section 8.03(A) of the WT agreement and
have represented to WT that there are no
material failures as defined in section
8.03(D) of the WT agreement, or have
disclosed any such failures to WT and the
actions taken by the partnership or trust to
remediate such failures.
(B) Qualified Certification. If the responsible officer has identified an event of
default or a material failure that WT has
not corrected as of the date of the certification, the responsible officer must certify
to the following statements—
(1) The responsible officer (or the responsible officer’s designee) has identified an event of default as defined in section 8.05 of the WT agreement or has
determined that as of the date of the certification, there are one or more material
failures as defined in section 8.03(D) of
this Agreement with respect to WT’s
compliance, or the compliance of a partnership or trust to which WT applies the
agency option, and that appropriate actions will be taken to prevent such failures
from recurring;
(2) With respect to any failure to withhold, deposit, or report to the extent required under the WT agreement, WT will
correct such failure by paying any taxes
due (including interest and penalties) and

August 25, 2014

filing the appropriate return (or amended
return); and
(3) The responsible officer (or an officer of the partnership or trust to which
WT applies the agency option) will respond to any notice of default (if applicable) or will provide to the IRS, to the
extent requested, a description of each
material failure and a written plan to correct each such failure.
(C) Factual Information. At the same
time WT provides the periodic certification, WT shall also report certain factual
information regarding its beneficiaries or
owners, withholdable payments, and
amounts subject to chapter 3 withholding
and must certify to the accuracy of the
information. The information requested
will be limited to certain information reviewed as part of WT’s periodic review
procedure described in section 8.05 of this
Agreement. The IRS will consider reportable amounts received by WT, the number
of WT’s beneficiaries or owners, and
whether WT was required to file Forms
3520 –A with respect to its beneficiaries
and owners that are U.S. owners and
Forms 8966 with respect to its beneficiaries and owners that hold U.S. accounts
(or U.S. reportable accounts) during the
certification period to determine the extent
of the factual information to request. The
IRS will prescribe in future published
guidance or other instructions the factual
information that the WT is required to
report with the periodic certification and
the manner in which such information
must be reported.
(D) Material Failures.
(1) Material Failures Defined. A material failure is generally a failure of WT
to fulfill the requirements of this Agreement or its FATCA requirements as a
participating FFI, registered deemedcompliant FFI, or registered deemedcompliant Model 1 IGA FFI. For purposes
of the certifications described in sections
8.03(A) and (B) of this Agreement, a material failure is limited to the following:
(i) WT’s establishing of, for financial
statement purposes, a tax reserve or provision for a potential future tax liability
related to WT’s failure to comply with
this Agreement or the FFI agreement or its
FATCA requirements as a participating
FFI, registered deemed-compliant FFI, or

August 25, 2014

registered deemed-compliant Model 1
IGA FFI;
(ii) WT’s failure to establish written
policies, procedures, or systems sufficient
for the relevant personnel of WT to take
actions consistent with WT’s obligations
under this Agreement or its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI;
(iii) A criminal or civil penalty or sanction imposed on WT by a regulator or
other governmental authority or agency
with oversight over WT’s compliance
with the AML/KYC procedures, if applicable, to which WT is subject and that is
imposed due to WT’s failure to properly
identify beneficiaries or owners under the
requirements of those procedures; or
(iv) A finding (including a finding
noted in the auditor’s periodic review
report described in section 8.06 of this
Agreement) that, for one or more years
covered by this Agreement, WT failed
to—
(a) Withhold an amount that WT was
required to withhold under chapter 3 or 4
as required under section 3 of this Agreement;
(b) Make deposits in the time and manner required by section 3 of this Agreement or make adequate deposits to satisfy
its withholding obligations, taking into account the procedures under section 7 of
this Agreement;
(c) Report or report accurately on
Forms 1042, 1042–S, 8966, 3520 –A and
the Owner Statements and Beneficiary
Statements that are part of Form 3520 –A
as required under section 6 of this Agreement; or
(d) Report or report accurately its U.S.
accounts (or U.S. reportable accounts) under its FATCA requirements as a participating FFI, registered deemed-compliant
FFI, or registered deemed-compliant
Model 1 IGA FFI.
(2) Limitations on Material Failures. A
failure described in section 8.03(D)(1)(iv)
of this Agreement is a material failure
only if the failure was the result of a
deliberate action on the part of WT’s
trustee or one or more employees or
agents of WT’s trustee to avoid the requirements of this Agreement or WT’s
FATCA requirements as a participating
FFI, registered deemed-compliant FFI, or

440

registered deemed-compliant Model 1
IGA FFI with respect to one or more
beneficiaries or owners of WT or was an
error attributable to a failure of WT to
establish or implement internal controls
sufficient for WT to meet the requirements of this Agreement. Regardless of
these limitations for the certifications described in sections 8.03(A) and (B) of this
Agreement, WT is required to correct a
failure to withhold or deposit tax under
section 3 of this Agreement or to report
under section 6 of this Agreement by depositing the amount of tax required to
have been withheld and by filing the appropriate return (or amended return).
(E) Certification Period.
(1) If WT is an FFI that is a participating FFI, registered deemed-compliant
FFI, or registered deemed-compliant
Model 1 IGA FFI, WT must make the
certification described in section 8.03(A)
or (B) on or before July 1 of the calendar
year following the certification period.
The initial certification period is the period ending on the third full calendar year
that this Agreement is in effect (including
renewals of this Agreement). Subsequent
certification periods will be every three
calendar years following the initial certification period (including renewals of this
Agreement).
(2) If WT is an NFFE or a retirement
fund that makes a PR election pursuant to
section 6.02(D) of this Agreement, WT
must make the certification described in
section 8.03(A) or (B) on or before July 1
of the calendar year following the certification period. The initial certification period is the period ending on the third full
calendar year that this Agreement is in
effect (including renewals of this Agreement). Subsequent certification periods
occur every three calendar years following the initial certification period (including renewals of this Agreement).
(3) If WT is an NFFE or a retirement
fund that does not make a PR election
pursuant to section 6.02(D) of this Agreement, WT must make the certification described in section 8.03(A) or (B) following the certification period. The initial
certification period is the period ending on
the third full calendar year that this Agreement is in effect (including renewals of

Bulletin No. 2014 –35

this Agreement). Subsequent certification
periods occur every six calendar years following the initial certification period (including renewals of this Agreement).
.
Sec. 8.04. Requirements for Periodic
Review.
(A) Independent Auditor. The periodic
review may be performed by an internal
auditor that is an employee or agent of the
trustee of WT (internal auditor) or a certified public accountant, attorney, or thirdparty consultant (external auditor), or any
combination thereof.
(1) Internal Auditor. WT may designate an internal auditor to perform the
periodic review (or a portion of the periodic review) only when the internal auditor is competent with respect to the requirements of this Agreement and WT’s
FATCA requirements as a participating
FFI, registered deemed-compliant FFI, or
registered deemed-compliant Model 1
IGA FFI. The internal auditor must also
be able to report findings that reflect the
independent judgment of the auditor. The
internal auditor must not report directly to
the responsible officer or any other employee or agent of WT’s trustee with direct authority over the persons performing
functions in connection with WT’s obligations under this Agreement and WT’s
FATCA requirements as a participating
FFI, registered deemed-compliant FFI, or
registered deemed-compliant Model 1
IGA FFI. The IRS has the right to request
the performance of the periodic review by
an external auditor if the IRS, in its sole
discretion, reasonably believes that the auditor selected by WT was not independent
or did not perform an effective periodic
review under this Agreement.
(2) External Auditor. WT may engage
an external auditor that is a certified public accountant, attorney, or third-party
consultant that is regularly engaged in the
practice of performing reviews of clients’
policies, procedures, and processes for
complying with accounting, tax, or regulatory requirements (including for assisting clients in determining such compliance). The external auditor must be
independent of WT under the standards
applicable to a certified public accountant
with respect to the engagement or, in the
case of an auditor other than a certified

Bulletin No. 2014 –35

public accountant, any standard of independence otherwise applicable to the auditor for such an engagement. The external auditor is not required to make an
attestation or render an opinion regarding
WT’s compliance with this Agreement or
WT’s compliance with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI, but
the auditor must be able to perform the
periodic review as specified in section
8.05 of this Agreement and provide the
report described in section 8.06 of this
Agreement. WT must permit the external
auditor access to all relevant records of
WT for purposes of performing the audit,
including information regarding specific
beneficiaries or owners. Additionally, the
engagement between the external auditor
and WT must impose no restrictions on
WT’s ability to provide the report described in section 8.06 of this Agreement
to the IRS. However, the external auditor
is not required to divulge the identity of
WT’s foreign beneficiaries or owners to
the IRS. WT must permit the IRS to communicate directly with the external auditor
and any legal prohibitions that prevent the
IRS from communicating directly with the
auditor must be waived.
Sec. 8.05. Scope and Timing of Review. The responsible officer of WT must
require the auditor to perform a review of
WT’s internal controls, test a sample of
distributions and allocations related to
WT’s documentation, withholding, reporting, and other obligations under this
Agreement and its FATCA requirements
as a participating FFI, registered deemedcompliant FFI, or registered deemedcompliant Model 1 IGA FFI, and identify
deficiencies in meeting these obligations.
To the extent WT applies the joint account
option with respect to another partnership
or trust as described in section 9.01 of this
Agreement or acts as a withholding foreign trust for any indirect beneficiaries or
owners as described in section 9.03 of this
Agreement, the review must include such
indirect partners, beneficiaries, or owners
in addition to WT’s direct beneficiaries or
owners. In addition, if WT applies the
agency option to a partnership or trust as
described in section 9.02 of this Agreement, the review must include the partners, beneficiaries or owners of such part-

441

nership or trust unless the partnership or
trust conducts its own review in accordance with this section 8 of this Agreement and provides the required certification to the responsible officer of WT.
Unless otherwise approved by the IRS, the
review must include the steps described in
sections 8.05(A) through (E) of this
Agreement. The review may include recommendations for either corrective actions or enhancements to WT’s compliance program. WT is required to arrange
for the performance of one review for the
certification period to evaluate WT’s documentation, withholding, and reporting
practices for the most recent calendar
year. The review is not required to include
statistical sampling procedures for testing
transactions, but must require that the auditor document its methodology for sampling determinations.
(A) Documentation. The auditor
must—
(1) Verify that WT has training materials, manuals, and directives that instruct
the appropriate persons how to request,
collect, review, and maintain documentation in accordance with this Agreement,
including procedures for identifying and
communicating changes in circumstances;
(2) Review WT’s procedures and interview the appropriate persons to determine
if appropriate documentation is requested
from beneficiaries or owners, and, if obtained, that it is reviewed and maintained
in accordance with this Agreement;
(3) Verify that WT follows procedures
designed to inform beneficiaries or owners that claim a reduced rate of withholding under an income tax treaty about any
applicable limitation on benefits provisions;
(4) Review WT’s documentation obtained for WT’s beneficiaries or owners to
ensure that WT obtained the treaty statements required by section 4.03(B) of this
Agreement;
(5) Review information contained in
documentation obtained for WT’s beneficiaries or owners or memoranda and any
correspondence associated with the beneficiaries or owners (the beneficiaries’ or
owners’ files) to ensure that WT obtained
documentation that meets the general requirements described in section 4 of this
Agreement;

August 25, 2014

(6) Review information contained in
the beneficiaries’ or owners’ files to determine if the documentation validity
standards of section 4.10 of this Agreement have been met. For example, the
auditor must verify that WT is withholding at the correct rate after any change in
circumstances (e.g., a change of address to
a U.S. address or change of account
holder status from foreign to U.S.);
(7) Review WT’s beneficiaries’ or owners’ files to ensure that WT is obtaining,
reviewing, and maintaining documentation
in accordance with its FATCA requirements
as a participating FFI, registered deemedcompliant FFI, or registered deemedcompliant Model 1 IGA FFI; and
(8) Review WT’s agreements with
partnerships or trusts described in section
9 of this Agreement to ensure that the
obligations imposed meet the requirements provided in section 9 of this Agreement, including, for example, the receipt
of allocation information.
(B) Withholding Responsibilities. The
auditor must—
(1) Perform test checks, using a valid
sample of WT’s direct beneficiaries or
owners that are recalcitrant account holders (if applicable) and nonparticipating
FFIs, to verify that WT is withholding as
required under chapter 4;
(2) Perform test checks, using a valid
sample of foreign beneficiaries or owners
for which no withholding is required under chapter 4 based on the beneficiary’s or
owner’s chapter 4 status, to verify that
WT withheld the proper amounts; and
(3) Verify that amounts withheld by
WT were timely deposited in accordance
with section 3.05 of this Agreement.
(C) Return Filing and Information Reporting. The auditor must—
(1) Obtain copies of original and
amended Forms 1042, and any schedules,
statements, or attachments required to be
filed with those forms, and verify that the
forms have been filed and determine
whether the amounts of income, taxes,
and other information reported on those
forms are accurate by—
(i) Reviewing work papers used to prepare these forms;
(ii) Interviewing personnel responsible
for preparing these forms;
(iii) Reviewing copies of Forms
1042–S received from withholding agents

August 25, 2014

for reconciling amounts received by WT
with the amounts distributed to, or included in the distributive share of, WT’s
beneficiaries or owners;
(iv) Reviewing account statements and
correspondence from withholding agents;
(v) Determining that adjustments to the
amount of tax shown on Form 1042 (and
any claim by WT for refund or credit)
properly reflect the adjustments to withholding made by WT using the reimbursement or set-off procedures under section 7
of this Agreement and that the adjustments are supported by sufficient documentation;
(vi) Reconciling amounts shown on
Forms 1042 with amounts shown on Form
1042–S (including the amount of taxes
reported as withheld); and
(vii) In the case of collective credits or
refunds, reviewing the statements attached
to the amended Forms 1042 filed to claim
a collective credit or refund, ascertaining
their accuracy, and—
(a) Determining the causes of any overwithholding reported and ensure WT did
not issue Forms 1042–S to beneficiaries or
owners that were included as part of its
collective credit or refund claim;
(b) Determining that WT repaid the
appropriate beneficiaries or owners and
that the amount of the claim is accurate
and supported by adequate documentation
for reducing the rate of withholding; and
(c) Determining that WT did not include payments made to a beneficiary or
owner described in section 7.02 of this
Agreement or a partnership or trust described in section 9.01 of this Agreement.
(2) Obtain copies of original and
amended Forms 1042–S, 3520 –A, and the
Owner Statements and Beneficiary Statements filed by WT together with the work
papers used to prepare those forms and
determine whether the amounts reported
on those forms are accurate by—
(i) Reviewing the Forms 1042–S received from withholding agents;
(ii) Reviewing the Form 3520 –A, if
required, and if no Form 3520 –A was
required to be filed, determining whether
the exemption from filing was properly
applied;
(iii) Reviewing a valid sample of
Owner Statements and Beneficiary Statements issued by WT to beneficiaries or
owners, if any;

442

(iv) Reconciling any payments and tax
reported on Forms 1042–S received from
withholding agents with amounts (including characterization of income) and taxes
reported by WT as withheld on Forms
1042–S and determining the reason(s) for
any variance;
(v) Interviewing personnel responsible
for preparing the Forms 1042–S, Owner
Statements and Beneficiary Statements issued to beneficiaries or owners and the
work papers used to prepare those forms;
and
(vi) Determining, in any case in which
WT utilized the reimbursement or set-off
procedure, that WT satisfied the requirements of section 7 of this Agreement and
that the adjusted amounts of tax withheld
are properly reflected on Forms 1042–S.
(3) Obtain copies of original and
amended Forms 3520 –A and 8966, and
determine whether the amounts of income
and other information reported on Forms
3520 –A and 8966 are accurate by—
(i) Reviewing the U.S. beneficiaries
and owners of WT (or a valid sample of
such) (including beneficiaries holding
U.S. accounts (or U.S. reportable accounts)) to determine: (1) that such accounts were reported on Form 3520 –A in
accordance with WT’s obligations under
section 6048; (2) that such accounts were
reported on Form 8966 in accordance with
WT’s FATCA requirements as a participating FFI, registered deemed-compliant
FFI, or registered deemed-compliant
Model 1 IGA FFI; and (3) that U.S. beneficiaries otherwise required to be reported on Form 8966 under section
6.05(D) of this Agreement are so reported;
(ii) If WT is an NFFE, confirming that
any direct beneficiaries or owners that are
passive NFFEs with one or more substantial U.S. owners were reported in accordance with § 1.1472–1(c)(3);
(iii) Confirming with respect to any
passthrough beneficiary or owner that provides information regarding an account
holder (or interest holder) that is an NFFE
(other than an excepted NFFE) with one
or more substantial U.S. owners (or controlling persons that are specified U.S.
persons under an applicable Model 1 or
Model 2 IGA) that such substantial U.S.
owners (or controlling persons that are
specified U.S. persons) were reported to

Bulletin No. 2014 –35

the extent required under section 6.05(C)
of this Agreement;
(iv) Reviewing a sample of the documentation provided by a partnership or
trust to which WT applied the agency
option, confirming that WT reported on
Form 8966 to the extent required under
section 9 of this Agreement;
(v) Reviewing work papers used to
prepare these forms; and
(vi) Interviewing personnel responsible
for preparing these forms.
(D) Significant Change in Circumstances. The auditor must verify that in
the course of the audit it has not discovered any significant change in circumstances, as described in section 10.05(A),
(D), or (E) of this Agreement.
Sec. 8.06. Periodic Review Report.
(A) In General. The performance of
the periodic review must be documented
in a written report addressed to the responsible officer of WT and must be
available to the IRS upon request (with a
certified translation into English if the report is not in English). The report must
describe the scope of the review, the steps
performed to evaluate internal controls,
and the test transactions, including the
methodology for sampling determinations. The report must identify any deficiencies noted by the auditor, especially
those deficiencies that the auditor concludes are material failures, and may include explanatory footnotes to clarify the
results of the report. Recommendations
may be included but are not required to be
provided in the report.
(B) Partnership or Trust to which WT
Applies the Agency Option. Any partnership or trust to which WT applies the
agency option and that does not provide
documentation and information to WT for
WT’s periodic review, must provide a
written certification to WT as described in
section 8.03 of this Agreement regarding
its compliance with the requirements of its
agreement with WT. Such certification
must be available to the IRS upon a request made as part of the review described
in section 8.07 of this Agreement (with a
certified translation into English if the certification is not in English).
(C) Retention of Report. The report and
certifications described in this section 8.06
must be retained by WT for as long as this

Bulletin No. 2014 –35

Agreement is in effect (including renewals of this Agreement).
Sec. 8.07. Compliance Review.
(A) In General. Based upon the certifications made by the responsible officer
and disclosure of material failures, the
information reported on Forms 1042,
1042–S, 8966, 3520 –A and the Owner
Statements and Beneficiary Statements
filed with the IRS during the certification
period, or otherwise at the IRS’s discretion for compliance purposes, the IRS
may initiate requests of WT under this
section 8.07.
(B) Periodic Review Report. The IRS
may request through written correspondence to the responsible officer of WT a
copy of WT’s periodic review report that
was issued for any prior certification period or the periodic review report of any
partnership or trust to which WT applied
the agency option during the current certification period (with a certified translation into English if the report is not in
English). WT is required to provide the
report within 30 calendar days of such
request.
(C) Correspondence Review. The IRS
may, in its discretion, conduct additional
fact finding through a correspondence review. In such a review, the IRS will contact the responsible officer of WT in writing and request information about WT’s
compliance with this Agreement or the
compliance of a partnership or trust to
which WT applied the agency option, including, for example, information about
documentation, withholding, or reporting
processes, its periodic review, and information about any material failures that
were disclosed to the IRS (including remediation plans). The IRS may request
phone or video interviews with relevant
personnel or a partnership or trust to
which WT applied the agency option as
part of such review. WT is required to
respond within a reasonable period of
time to any such requests.
(D) Additional Review Procedures. In
limited circumstances, the IRS may direct
WT or any partnership or trust described
in sections 9.01 and 9.02 of this Agreement with which WT has an agreement to
perform additional, specified review procedures. The IRS reserves the right to
require WT or a partnership or trust to

443

which WT applied the agency option to
engage an external auditor to perform the
additional review procedures regardless of
whether such auditor performed the periodic review. The IRS will provide the
responsible officer of WT with a written
plan describing the additional review procedures and will provide a period of not
more than 120 days within which the WT
must provide to the IRS a report covering
the review’s findings.
Section 9. CERTAIN
PARTNERSHIPS AND TRUSTS
Sec. 9.01. Joint Account Treatment
for Certain Partnerships and Trusts.
(A) In General. WT may enter an
agreement with a nonwithholding foreign
partnership or nonwithholding foreign
trust that is either a simple or grantor trust
described in this section 9.01(A) to apply
the simplified joint account documentation, reporting, and withholding procedures provided in section 9.01(B) of this
Agreement. WT and the partnership or
trust that apply this section 9.01 to any
calendar year must apply these rules to the
calendar year in its entirety. WT and the
partnership or trust may not apply this
section 9.01 to any calendar year in which
the partnership or trust has failed to make
available to WT or WT’s auditor the records described in this section 9.01(A)(5)
within 90 days after these records are requested and the partnership or trust must
waive any legal prohibitions against providing such records to WT. If the partnership or trust has failed to make these records available within the 90-day period,
or if WT and the partnership or trust fail to
comply with any other requirements of
this section 9.01, WT must apply the provisions of § §1.1441–1 and 1.1441–5 to
the partnership or trust as a nonwithholding foreign partnership or nonwithholding
foreign trust, must correct its withholding
for the period during which the failure
occurred in accordance with section 7.03
of this Agreement, and cannot apply this
section 9.01 to subsequent calendar years.
WT and the partnership or trust that apply
this section 9.01 to any calendar year are
not required to apply this section 9.01 to
subsequent calendar years.

August 25, 2014

WT may not apply the rules of section
9.01(B) unless it has made a PR election
under section 6.02(D) of this Agreement.
A partnership or trust is described in
this section 9.01(A) of this Agreement if
the following conditions are met.
(1) The partnership or trust is a certified deemed-compliant FFI (other than a
registered deemed-compliant Model 1
IGA FFI), an owner-documented FFI, an
exempt beneficial owner, or an NFFE
(other than a WP or WT);
(2) The partnership or trust is a direct
beneficiary or owner of WT;
(3) None of the partnership’s or trust’s
partners, beneficiaries, or owners is a
flow-through entity or intermediary;
(4) None of the partnership’s or trust’s
partners, beneficiaries, or owners is a U.S.
person and none of its foreign partners,
beneficiaries, or owners is subject to withholding or reporting under chapter 4
(which would include a nonparticipating
FFI or certain passive NFFEs); and
(5) The partnership or trust agrees to
make available upon request to WT and
WT’s auditor for purposes of WT’s compliance review under section 8 of this
Agreement (including to respond to IRS
inquiries regarding its compliance review)
records that establish that the partnership
or trust has provided WT with documentation for purposes of chapters 3 and 4 for
all of its partners, beneficiaries, or owners.
(B) Modification of Obligations for
WT.
(1) WT may rely on a valid Form
W– 8IMY provided by the partnership or
trust and may rely on a withholding statement that meets the requirements of
§ §1.1441–5(c)(3)(iv) or (e)(5)(iv), and
§ 1.1471–3(c)(3)(iii)(B), if the payment is
a withholdable payment, and that provides
information for all partners, beneficiaries,
or owners together with valid Forms W– 8
and, for a withholdable payment made to
a partner, beneficiary, or owner that is an
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 information.
(2) WT must treat amounts distributed
to, or included in the distributive share of,
the partnership or trust as allocated solely
to a partner, beneficiary, or owner that is
subject to the highest rate of withholding

August 25, 2014

under chapter 3 and must withhold at that
rate.
(3) WT may pool report amounts distributed to, or included in the distributive
share of, the partnership’s or trust’s direct
partners, owners, or beneficiaries in chapter 3 reporting pools on Form 1042–S as
described in section 6.02 of this Agreement.
(4) After WT has withheld in accordance with section 9.01(B)(2) of this
Agreement, it may file a separate Form
1042–S for any partner, beneficiary, or
owner who requests that it do so. If WT
issues a separate Form 1042–S for any
partner, beneficiary, or owner, it cannot
include such partner, beneficiary, or
owner in WT’s chapter 3 reporting pool. If
WT has already filed a Form 1042–S and
included the partner, beneficiary, or owner
in a chapter 3 reporting pool, it must file
an amended return to reduce the amount
of the payment reported to reflect the
amount allocated to the recipient on the
recipient’s specific Form 1042–S. WT
may file a separate Form 1042–S for a
partner, beneficiary, or owner only if the
partnership or trust provides a withholding statement that includes allocation information for the requesting partner, beneficiary, or owner and only if the
partnership or trust has agreed in writing
under section 9.01(A)(5) of this Agreement to make available to WT or WT’s
auditor the records that substantiate the
allocation information included in its
withholding statement.
(5) WT may not include any amounts
distributed to, or included in the distributive share of, a partnership or trust to
which WT is applying the rules of this
section 9.01 in any collective refund claim
made under section 7.02 of this Agreement.
(C) Transitional Rule through December 31, 2014. For the period beginning on
the effective date of this Agreement and
ending December 31, 2014, a WT that had
previously entered into an agreement with
a partnership or trust to apply the provisions described in this section 9.01 (the
“joint account option”) may continue to
act consistent with such agreement provided that the agreement meets the requirements of section 10 of Revenue Procedure
2003– 64 (as amended). However, WT is
required to withhold with respect to such

444

partnership or trust under chapter 4 to the
extent required under this Agreement.
Sec. 9.02. Agency Option for Certain
Partnerships and Trusts.
WT may enter an agreement with a
nonwithholding foreign partnership or
nonwithholding foreign trust that is either
a simple or grantor trust described in section 9.02(A) of this Agreement under
which the partnership or trust agrees to act
as an agent of WT with respect to its
partners, beneficiaries or owners, and, as
WT’s agent, to apply the provisions of the
WT agreement to the partners, beneficiaries, or owners. By entering into an agreement with a partnership or trust as described in this section 9.02, WT is not
assigning its liability for the performance
of any of its obligations under the WT
agreement. WT and the partnership or
trust to which WT applies the rules of this
section 9.02 (agency option) are jointly
and severally liable for any tax, penalties,
and interest that may result from the failure of the partnership or trust to meet any
of the obligations imposed by its agreement with WT. WT and the partnership or
trust that apply the agency option to any
calendar year must apply these rules to the
calendar year in its entirety. Generally,
WT and the partnership or trust that apply
the agency option to any calendar year are
not required to apply the agency option to
subsequent calendar years. If, however,
WT withholds and reports any adjustments required by corrected information
in a subsequent calendar year under section 9.02(B)(2) of this Agreement, WT
must apply the agency option to that calendar year in its entirety.
If the partnership or trust is included in
WT’s periodic review of compliance as
described in section 9.02(A)(5) of this
Agreement, WT and the partnership or
trust may not apply the agency option to
any calendar year in which the partnership
or trust has failed to make available to WT
or WT’s auditor the records described in
this section 9.02 within 90 days after these
records are requested and the partnership
or trust must waive any legal prohibitions
against providing such records to the WT.
If, for any calendar year, the partnership
or trust has failed to make these records
available within the 90-day period, or if
WT and the partnership or trust fail to

Bulletin No. 2014 –35

comply with any other requirement of this
section 9.02, WT must apply §§ 1.1441–
1 and 1.1441–5 to the partnership or trust
as a nonwithholding foreign partnership
or nonwithholding foreign trust, correct its
withholding for the period in which the
failure occurred in accordance with section 7.03 of this Agreement, and cannot
apply this section 9.02 to subsequent calendar years.
WT may not apply the rules of this
section 9.02 unless it has made a PR election under section 6.02(C) of this Agreement.
(A) Eligible Partnership or Trust.
A partnership or trust is described in
this section 9.02(A) of this Agreement if
the following conditions are met:
(1) The partnership or trust is either a
direct beneficiary or owner of WT or an
indirect beneficiary or owner of WT that
is a direct partner, beneficiary, or owner of
a partnership or trust to which WT also
applies this section 9.02.
(2) The partnership or trust is an FFI
that is a certified deemed-compliant FFI
(other than a registered deemed-compliant
Model 1 IGA FFI), owner-documented
FFI, an NFFE, or an exempt beneficial
owner.
(3) None of the partnership’s or trust’s
partners, beneficiaries, or owners is a
withholding foreign trust, withholding
foreign partnership, participating FFI, registered deemed-compliant FFI, registered
deemed-compliant Model 1 IGA FFI, or
qualified intermediary acting as an intermediary for a payment made by WT to the
partnership or trust.
(4) WT may not act as a withholding
foreign trust with respect to any direct or
indirect beneficiary or owner of the partnership or trust that is a U.S. non-exempt
recipient, unless the U.S. non-exempt recipient is a beneficiary or owner of an
owner-documented FFI or passive NFFE
to which WT applies the agency option
and is included in WT’s U.S. payee pool
(described in section 6.02(C) of this
Agreement).
(5) The partnership or trust agrees to
comply with the documentation requirements described in section 4 of this
Agreement.
(6) The partnership or trust agrees to
comply with the compliance procedures
described in section 8.05 of this Agree-

Bulletin No. 2014 –35

ment in order to allow the responsible
officer of WT to make a certification to
the IRS regarding the partnership’s or
trust’s compliance with this section 9.02
by (i) providing WT with the certification
required under section 8.03 of this Agreement for each certification period, or (ii)
providing WT with documentation or
other information for review. The partnership or trust must also agree to respond
(either directly or through WT) to IRS
inquiries regarding its compliance review
described in section 8.07 of this Agreement, including, if applicable, providing
the WT and the IRS with the auditor’s
report described in section 8.06 of this
Agreement.
(B) Modification of Obligations for
WT.
(1) WT may rely on a valid Form
W– 8IMY provided by the partnership or
trust, together with a withholding statement
described in §§ 1.1441–5(c)(3)(iv) or
(e)(5)(iv), and § 1.1471–3(c)(3)(iii)(B) if
the payment is a withholdable payment,
that includes all information necessary for
WT to fulfill its withholding, reporting,
and filing obligations under this Agreement. For a withholdable payment, the
withholding statement may include a
chapter 4 withholding rate pool (as defined in § 1.1471–1(b)(20)) of nonparticipating FFIs for payments of amounts subject to chapter 4 withholding. The
withholding statement may also include
chapter 3 withholding rate pools (as defined in § 1.1441–1(c)(44)) for partners,
beneficiaries, or owners that are not intermediaries, flow-through entities (or persons holding interests in the partnership or
trust through such entities), U.S. nonexempt recipients, or passive NFFEs with
one or more substantial U.S. owners (or
one or more controlling persons that is a
specified U.S. person under an applicable
Model 1 or Model 2 IGA), and the partnership or trust need not provide to WT
documentation for these partners, beneficiaries, or owners. The partnership or trust
is required to disclose to WT any partner
or interest holder that is a passive NFFE
with substantial U.S. owners (or controlling persons that are specified U.S. persons under an applicable IGA) or that is a
U.S. non-exempt recipient as well as the
account holders of any nonqualified intermediary or interest holders in a flow-

445

through entity which has an interest in the
partnership or trust, and provide all of the
documentation and other information relating to those account holders and interest holders that is required for WT, or
another withholding agent, to report the
payments made to those account holders
and interest holders to the extent required
by section 6 of this Agreement.
(2) Timing of Withholding. WT must
withhold on the date an amount is distributed to, or included in the distributive
share of, the partnership or trust based on
a withholding statement provided by the
partnership or trust on which WT is permitted to rely. The amount allocated to
each partner, beneficiary, or owner in the
withholding statement may be based on a
reasonable estimate of the partner, beneficiary, or owner’s distributive share of
income subject to withholding for the
year. The partnership or trust must correct
the estimated allocations to reflect the
partner’s, beneficiary’s, or owner’s actual
distributive share and must provide this
corrected information to WT, on the earlier of the date that the Owner Statement
or Beneficiary Statement is mailed or otherwise provided to the beneficiary or
owner or the due date for furnishing the
statement (whether or not the partnership
or trust is required to prepare and furnish
the statement). If that date is after the due
date for WT’s Forms 1042 and 1042–S
(without regard to extensions) for the calendar year, WT may withhold and report
any adjustments required by the corrected
information in the following calendar
year.
(3) Payments Reportable under Chapters 3 and 4. WT shall report on Form
1042–S all amounts subject to chapters 3
and 4 withholding distributed to, or included in the distributive share of, the
partnership or trust as follows:
(i) For a direct partner, beneficiary, or
owner of the partnership or trust that is
a nonparticipating FFI, WT shall report an
amount subject to withholding using the
chapter 4 reporting pool described in section 6.02(C) of this Agreement with the
partnership or trust reported as the recipient.
(ii) For a direct partner, beneficiary, or
owner of the partnership or trust that is a
foreign person for which no withholding
is required under chapter 4 (other than an

August 25, 2014

intermediary, agent, or flow-through entity described below), WT shall report an
amount subject to chapter 3 withholding
using the chapter 3 reporting pools as described in section 6.02(D) of this Agreement with the partnership or trust reported
as the recipient.
(iii) For a direct or indirect partner,
beneficiary, or owner of the partnership or
trust that is a nonqualified intermediary or
foreign flow-through entity, WT shall report payments of amounts subject to chapter 4 withholding included in a chapter 4
withholding rate pool of nonparticipating
FFIs using the chapter 4 reporting pool for
such partner, beneficiary, or owner with
the nonqualified intermediary or foreign
flow-through entity reported as the recipient, and WT shall report payments of
amounts subject to chapter 3 withholding
that are not withholdable payments or are
withholdable payments for which no
chapter 4 withholding is required by reporting the payments as made to specific
recipients as described in 6.02(B) of this
Agreement.
(4) Form 8966 Reporting Requirements. If WT is an FFI and if the partnership or trust is a U.S. account (or U.S.
reportable account), WT is required to
report the partnership or trust consistent
with its FATCA requirements as a participating FFI, registered deemed-compliant
FFI, or registered deemed-compliant
Model 1 IGA FFI. The agreement between WT and the partnership or trust
must also provide that WT shall report
withholdable payments that the partnership or trust distributes to, or includes in
the distributive share of, a partner, beneficiary, or owner that is an NFFE (other
than an excepted NFFE) with one or more
substantial U.S. owners (or one or more
controlling persons that is a specified U.S.
person under an applicable IGA) and is
the beneficial owner of the withholdable
payment received by the partnership or
trust. WT must report on Form 8966 in the
time and manner provided in § 1.1474 –
1(i)(2). Such report must include the name
of the NFFE that is owned by a substantial
U.S. owner (or controlling person that is a
specified U.S. person); the name, address,
and U.S. TIN of each substantial U.S.
owner (or controlling person that is a
specified U.S. person); the total of all
withholdable payments made to the NFFE

August 25, 2014

during the calendar year (or reportable
period under the applicable IGA); and any
other information as required by the form
and its accompanying instructions.
(C) Other Requirements of Agency
Agreement. WT shall require the partnership or trust to which it applies the agency
option described in this section 9.02 to
provide WT with all the information necessary for WT to meet its obligations under this Agreement. No provisions shall
be contained in the agreement between
WT and the partnership or trust that preclude, and no provisions of this Agreement shall be construed to preclude, the
partnership or trust’s joint and several liability for tax, penalties, and interest under chapters 3 and 4 to the extent that
underwithholding, penalties, and interest
have not been collected from WT and the
underwithholding or failure to report
amounts correctly on Forms 1042,
1042–S or 8966, is due to the partnership
or trust’s failure to properly perform its
obligations under its agreement with WT.
Nothing in the agreement between WT
and the partnership or trust shall be construed to limit the partnership or trust’s
requirements under chapter 4 as a certified
deemed-compliant FFI, an NFFE, or an
exempt beneficial owner. Further, nothing
in the agreement between WT and the
partnership or trust shall permit the partnership or trust to assume primary chapters 3 and 4 withholding responsibility.
(D) Transitional Rule through December 31, 2014. For the period beginning on
the effective date of this Agreement and
ending December 31, 2014, a WT that
entered into an agreement with a partnership or trust to apply the provisions described in this section 9.02 (“the agency
option”) may continue to act consistent
with such agreement provided that the
agreement meets the requirements of section 10 of Revenue Procedure 2003– 64
(as amended). However, WT is required
to withhold with respect to such partnership or trust under chapter 4 to the extent
required under this Agreement.
Sec. 9.03. Indirect Beneficiaries or
Owners of WT.
(A) General Requirements. WT may
act as a withholding foreign trust for reportable amounts distributed to, or included in the distributive share of, pass-

446

through beneficiaries or owners and
indirect beneficiaries or owners if such
indirect beneficiary or owner is not a U.S.
non-exempt recipient. Notwithstanding
the preceding sentence, WT may act as a
withholding foreign trust with respect to
an indirect beneficiary or owner that is a
U.S. non-exempt recipient if the indirect
beneficiary or owner is included in a passthrough beneficiary’s or owner’s chapter 4
withholding rate pool of recalcitrant account holders or U.S. payees. WT does
not need to use the agency option described in section 9.02 of this Agreement
or make the pooled reporting election described in section 6.02(D) of this Agreement to apply the procedures described in
this section 9.03.
(B) Modification of Obligations for WT.
(1) Except to the extent described in
this section 9.03(B), WT need not forward
the documentation and the withholding
statement of the passthrough beneficiary
or owner and indirect beneficiary or
owner to WT’s withholding agent;
(2) WT must provide its withholding
agent with documentation and other information from any passthrough beneficiary
or owner whose direct or indirect beneficiary or owner is a U.S. non-exempt recipient (unless such U.S. non-exempt recipient is included in a chapter 4
withholding rate pool of recalcitrant account holders or U.S. payees);
(3) WT will assume primary chapters 3
and 4 withholding responsibility as described in section 3 of this Agreement and
must report on its indirect beneficiaries or
owners on a specific payee basis on Form
1042–S (except to the extent such indirect
beneficiaries or owners are included in a
passthrough beneficiary’s or owner’s
chapter 4 withholding rate pool) as described in section 6.02(B) of this Agreement, regardless of whether WT made a
PR election for its direct beneficiaries or
owners under section 6.02(D) of this
Agreement; and
(4) WT must include any passthrough
beneficiary or owner and indirect beneficiary or owner for which it acts as a withholding foreign trust in its periodic review
as described in section 8.05 of this Agreement.

Bulletin No. 2014 –35

(C) Documentation from Passthrough
Beneficiary or Owner. WT agrees to use
its best efforts to obtain from a passthrough beneficiary or owner the documentation of an indirect beneficiary or
owner for which WT acts as a withholding
foreign trust. Unless WT can reliably associate an amount distributed to, or included in the distributive share of, any
passthrough beneficiary or owner with
valid documentation from such beneficiary or owner within the meaning of
§ 1.1441–1(b)(2)(vii) and, for a withholdable payment, § 1.1471–3(c), WT shall
apply 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 payment made to an entity, § 1.1471–3(f) or,
if WT is an FFI, its FATCA requirements
as a participating FFI, registered deemedcompliant FFI, or registered deemedcompliant Model 1 IGA FFI. Generally,
WT can reliably associate an amount with
documentation provided by a passthrough
beneficiary or owner if WT obtains—
(1) A valid Form W– 8IMY provided
by the passthrough beneficiary or owner
that, if the payment is a withholdable payment, establishes the chapter 4 status of
the passthrough beneficiary or owner; and
(2) If the payment is a withholdable
payment, a withholding statement that
meets the requirements of § 1.1471–
3(c)(3)(iii)(B) that includes the account
holders or interest holders of the passthrough beneficiary or owner in chapter 4
withholding rate pools to the extent permitted, and, for an amount subject to
chapter 3 withholding that is not a withholdable payment or is a withholdable
payment for which chapter 4 withholding
is not required, valid documentation described in section 4 of this Agreement
provided by account holders or interest
holders of the passthrough beneficiary or
owner that are not themselves qualified
intermediaries or flow-through entities.
WT may not reduce the rate of withholding with respect to an indirect beneficiary or owner for which it acts as a
withholding foreign trust unless WT can
reliably associate the payment with valid
documentation that establishes the indirect beneficiary’s or owner’s entitlement
to a reduced rate of withholding under
chapter 3 and, in the case of a withhold-

Bulletin No. 2014 –35

able payment, establishes that chapter 4
withholding does not apply.
(D) Timing of Withholding. WT must
withhold on the date an amount is distributed to, or included in the distributive
share of, the passthrough beneficiary or
owner based on a withholding statement
provided by the passthrough beneficiary
or owner on which WT is permitted to
rely. The amount allocated to each indirect beneficiary or owner in the withholding statement may be based on a reasonable estimate of the indirect beneficiary’s
or owner’s distributive share of income
subject to withholding for the year. The
passthrough beneficiary or owner must
agree to correct the estimated allocations
to reflect the indirect beneficiary’s or
owner’s actual distributive share and must
provide this corrected information to WT,
on the earlier of the date that the statement
required under section 6048(b) of the
Code is mailed or otherwise provided to
the indirect beneficiary or owner or the
due date for furnishing the statement
(whether or not the passthrough beneficiary or owner is required to prepare and
furnish the statement). If that date is after
the due date for WT’s Forms 1042 and
1042–S (without regard to extensions) for
the calendar year, WT may withhold and
report any adjustments required by the
corrected information in the following
calendar year.
(E) Form 8966 Reporting Requirements. If WT is an FFI and if the passthrough beneficiary or owner is a U.S.
account (or U.S. reportable account), WT
is required to report the partnership or
trust consistent with its FATCA requirements as a participating FFI, registered
deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI. WT
shall also report withholdable payments
that WT distributes to, or includes in the
distributive share of, a passthrough beneficiary or owner if an account holder or
interest holder of such passthrough beneficiary or owner is an NFFE (other than an
excepted NFFE) with one or more substantial U.S. owners (or one or more controlling persons that is a specified U.S.
person under an applicable IGA) and if
the NFFE is the beneficial owner of the
withholdable payment received by the
passthrough beneficiary or owner. WT
must report on Form 8966 in the time and

447

manner provided in § 1.1474 –1(i)(2).
Such report must include the name of the
NFFE that is owned by a substantial U.S.
owner (or controlling person that is a
specified U.S. person); the name, address,
and U.S. TIN of each substantial U.S.
owner (or controlling person that is a
specified U.S. person); the total of all
withholdable payments made to the NFFE
during the calendar year (or reportable
period under the applicable IGA); and any
other information as required by the form
and its accompanying instructions. WT is
not required to report as described in this
section 9.03(D) if the passthrough beneficiary or owner certifies on its withholding
statement that it is reporting the account
holder (or interest holder) as a U.S. account pursuant to its FATCA requirements as a participating FFI, registered
deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI.
Section 10. EXPIRATION,
TERMINATION AND DEFAULT
Sec. 10.01. Term of Agreement. This
Agreement begins on the effective date of
the WT agreement and expires upon the
earlier of the date WT terminates under
the trust instrument or December 31,
2016. This Agreement may be renewed
for additional terms as provided in section
10.07 of this Agreement.
Sec. 10.02. Termination of Agreement. Except as otherwise provided in
section 10.03 of this Agreement, this
Agreement may be terminated by either
the IRS or WT prior to the end of its term
by delivery of a notice, in accordance with
section 11.06 of this Agreement, of termination to the other party. The IRS, however, shall not terminate this Agreement
unless there has been a significant change
in circumstances, as defined in section
10.04 of this Agreement, or an event of
default has occurred, as defined in section
10.05 of this Agreement, and the IRS determines, in its sole discretion, that the
significant change in circumstances or the
event of default warrants termination of
this Agreement. The IRS shall not terminate this Agreement if WT can establish
to the satisfaction of the IRS that all
events of default for which it has received
notice have been cured within the time
period agreed upon. The IRS shall notify
WT, in accordance with section 10.06 of

August 25, 2014

this Agreement, that an event of default
has occurred and that the IRS intends to
terminate the Agreement unless WT cures
the default or establishes that no event of
default has occurred. A notice of termination sent by either party shall take effect
on the date specified in the notice, and WT
is required to notify its withholding agent
of the date its status as a WT was terminated.
Sec 10.03. Termination of Agreement.
(A) Automatic Termination. Notwithstanding section 10.02 of this Agreement,
this Agreement will terminate automatically in the event that the auditor or the
IRS (including during its compliance review described in section 8.07 of this
Agreement) discovers that WT was not in
possession of Forms W– 8 or W–9, as
applicable, or documentary evidence, as
permitted under section 4.01(B), for any
direct beneficiary or owner at any time
that withholding or reporting was required
under section 3.02 of this Agreement. The
automatic termination will be effective as
of December 31 of the year in which the
auditor or the IRS makes that discovery.
(B) Cure and Reinstatement after Automatic Termination. This Agreement will
be reinstated, effective the same date it
automatically terminated under section
10.03(A) of this Agreement, if—
(1) WT obtains appropriate Forms
W– 8 or W–9 or documentary evidence, as
permitted under section 4.01(B), (that relate to the time withholding or reporting
was required) for each such undocumented beneficiary or owner before
March 15 of the year following the year in
which the Agreement automatically terminated, or
(2) All such undocumented beneficiaries or owners have ceased to be beneficiaries or owners in WT before March 15
of the year following the year in which the
Agreement automatically terminated.
(C) Payment of Underwithholding and
Reporting upon Termination. In the event
of automatic termination of this Agreement under this section 10.03, WT must
pay any underwithholding of tax, interest,
and penalties that the IRS determines is
attributable to each undocumented beneficiary or owner for the period during
which the beneficiary or owner was undocumented based on the presumption

August 25, 2014

rules, and, if WT has made a pooled reporting election for chapter 3 purposes,
WT must file beneficiary or owner specific Forms 1042–S for amounts subject to
chapter 3 withholding for which no chapter 4 withholding is required and Owner
Statements and Beneficiary Statements as
part of Form 3520 –A reporting the names
and addresses and other required information, as appropriate, for every undocumented beneficiary or owner from the earliest time the documentation was required
for that undocumented beneficiary or
owner through the date of termination.
WT may, however, continue to report on a
pooled basis for documented foreign direct beneficiaries or owners through this
period.
(D) Reinstatement after Termination
(other than Automatic Termination). After
the date of termination of this Agreement,
WT may not act as a withholding foreign
trust, and must so notify any persons to
which WT has furnished a withholding
foreign trust certificate. After the date of
termination of this Agreement, the IRS
may reinstate this Agreement (or the IRS
may require WT to enter into a new withholding foreign trust agreement) on such
terms and conditions and with such modifications as the IRS may determine.
Sec. 10.04. Significant Change in
Circumstances. For purposes of this
Agreement, a significant change in circumstances includes, but is not limited
to—
(A) A change in U.S. federal law or
policy, or applicable foreign law or policy, that affects the validity of any provision of this Agreement, materially affects
the procedures contained in this Agreement, or affects WT’s ability to perform
its obligations under this Agreement;
(B) A ruling of any court that affects
the validity of any material provision of
this Agreement;
(C) A significant change in WT’s business practices that affects WT’s ability to
meet its obligations under this Agreement;
(D) If applicable, a material change in
the know-your-customer rules and procedures set forth in the Attachments to this
Agreement when WT relied on documentary evidence as permitted in section
4.01(B) of this Agreement;
(E) If WT is an FFI (other than a retirement fund), termination of its status as

448

a participating FFI, registered deemedcompliant FFI, or a registered deemedcompliant Model 1 IGA FFI; or
(F) If WT is acting as a sponsoring
entity on behalf of a sponsored FFI or
sponsored direct reporting NFFE, it fails
to comply with the due diligence, withholding, reporting, and compliance requirements of a sponsoring entity.
Sec. 10.05. Events of Default. For
purposes of this Agreement, an event of
default occurs if WT fails to perform any
material duty or obligation required under
this Agreement and the responsible officer
had actual knowledge of or should have
known the facts relevant to the failure to
perform any material duty. An event of
default includes, but is not limited to, the
occurrence of any of the following:
(A) WT fails to implement adequate
procedures, accounting systems, and internal controls to ensure compliance with
this Agreement;
(B) WT underwithholds an amount that
WT is required to withhold under chapter
3 or 4 and fails to correct the underwithholding or to file an amended Form 1042
reporting, and paying, the appropriate tax;
(C) WT makes excessive refund
claims;
(D) WT fails to file required Forms
1040NR (if required), 1042, 1042–S,
8966, 3520 –A, or the Owner Statements
or Beneficiary Statements required as part
of such form by the due date specified on
such forms or files forms that are materially incorrect or fraudulent;
(E) If WT is an FFI, WT fails to materially comply with its FATCA requirements as a participating FFI, registered
deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI;
(F) If WT is a sponsoring entity, WT
fails to comply with the due diligence,
withholding, reporting, and compliance
requirements of a sponsoring entity;
(G) WT fails to perform a periodic
review when required or to document the
findings of such review in a written report;
(H) WT fails to inform the IRS within
90 days of any significant change in its
business practices to the extent that
change affects WT’s obligations under
this Agreement;
(I) WT fails to cure a material failure
identified in the qualified certification de-

Bulletin No. 2014 –35

scribed in section 8.03(B) of this Agreement or identified by the IRS;
(J) WT makes any fraudulent statement
or a misrepresentation of a material fact
with regard to this Agreement to the IRS,
a withholding agent, or WT’s auditor;
(K) The IRS determines that WT’s auditor is not sufficiently independent to adequately perform its audit function and
WT fails to arrange for a periodic review
conducted by an auditor approved by the
IRS;
(L) WT fails to make deposits in the
time and manner required by section 3.04
of this Agreement or fails to make adequate deposits, taking into account the
procedures of section 7.05 of this Agreement;
(M) If applicable, WT fails to inform
the IRS of any change in the know-yourcustomer rules described in the Attachment to this Agreement within 90 days of
the change becoming effective when WT
relied on documentary evidence as permitted in section 4.01(B) of this Agreement;
(N) WT fails to cooperate with the IRS
on its compliance review described in section 8.07 of this Agreement;
(O) A partnership or trust to which WT
applies the agency option is in default
with the agency agreement and WT fails
to terminate that agreement within the
time period specified in section 10.02 of
this Agreement; or
(P) WT fails to materially comply with
the requirements of a nonwithholding foreign trust under chapter 3 with respect to
any beneficiary or owner for which it does
not act as a withholding foreign trust.
Sec. 10.06. Notice and Cure. Upon
the occurrence of an event of default, the
IRS will deliver to WT a notice of default
specifying each event of default. WT must
respond to the notice of default within 60
days (60-day response) from the date of
the notice of default. The 60-day response
shall contain an offer to cure the event of
default and the time period in which to
cure or shall state why WT believes that
no event of default has occurred. If WT
does not provide a 60-day response, the
IRS will deliver a notice of termination as
provided in section 10.02 of this Agreement. If WT provides a 60-day response,
the IRS shall either accept or reject WT’s
statement that no default has occurred or

Bulletin No. 2014 –35

WT’s proposal to cure the event of default.
If the IRS rejects WT’s statement that
no default has occurred or rejects WT’s
proposal to cure the event of default, the
IRS may offer a counter-proposal to cure
the event of default with which WT will
be required to comply within 30 days. If
WT fails to provide a 30-day response, the
IRS will send a notice of termination in
accordance with section 10.02 of this
Agreement, which WT may appeal within
30 days of the date of the notice by sending a written appeal to the address specified in section 11.06 of this Agreement. If
WT appeals the notice of termination, this
Agreement shall not terminate until the
appeal has been decided. If an event of
default is discovered in the course of an
audit, WT may cure the default, without
following the procedures of this section
10.06, if the external auditor’s report describes the default and the actions that WT
took to cure the default and the IRS determines that the cure procedures followed by WT were sufficient. If the IRS
determines that WT’s actions to cure the
default were not sufficient, the IRS shall
issue a notice of default and the procedures described in this section 10.06 shall
be followed.
Sec. 10.07. Renewal. If WT is an FFI
or an NFFE that is a sponsoring entity and
intends to renew this Agreement for an
additional term, it shall submit an application for renewal to the IRS on the IRS
FATCA registration website, as provided
in this revenue procedure, no earlier than
one year prior to the expiration of this
Agreement and no later than six months
prior to the expiration of this Agreement,
in accordance with the instructions to
Form 8957, Foreign Account Tax Compliance Act (FATCA) Registration, or as
otherwise provided in published guidance.
Any such application for renewal must
contain an update of the information provided by WT to the IRS in connection
with the application to enter into this
Agreement and any other information the
IRS may request in connection with the
renewal process. Either the IRS or WT
may seek to negotiate a new withholding
foreign trust agreement rather than renew
this Agreement.
A WT not described in the preceding
paragraph must renew its WT agreement

449

by submitting a request for renewal to the
IRS at the address provided in section
11.06 of this Agreement.
Section 11. MISCELLANEOUS
PROVISIONS
Sec. 11.01. WT’s application to become a withholding foreign trust, all Appendices and Attachments to this Agreement and, if WT is an FFI, its FATCA
requirements as a participating FFI, registered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI; or,
if WT is a sponsoring entity, the due diligence, withholding, reporting, and compliance requirements of a sponsoring entity are hereby incorporated into and made
an integral part of this Agreement. This
Agreement, WT’s application, and the
Appendix to this Agreement constitute the
complete agreement between the parties.
Sec. 11.02. This Agreement may be
amended by the IRS if the IRS determines
that such amendment is needed for the
sound administration of the internal revenue laws or internal revenue regulations.
This Agreement will only be modified
through published guidance issued by the
IRS and U.S. Treasury Department. Any
such modification imposing additional requirements will in no event become effective until the later of 90 days after the IRS
provides notice of such modification or
the beginning of the next calendar year
following the publication of such guidance.
Sec. 11.03. Any waiver of a provision
of this Agreement by the IRS is a waiver
solely of that provision. The waiver does
not obligate the IRS to waive other provisions of this Agreement or the same provision at a later date.
Sec. 11.04. This Agreement shall be
governed by the laws of the United States.
Any legal action brought under this
Agreement shall be brought only in a U.S.
court with jurisdiction to hear and resolve
matters under the internal revenue laws of
the United States. For this purpose, WT
agrees to submit to the jurisdiction of such
U.S. court.
Sec. 11.05. WT’s rights and responsibilities under this Agreement cannot be
assigned to another person.
Sec. 11.06. Notices provided under this
Agreement shall be mailed registered, first

August 25, 2014

class airmail. Notice shall be directed as
follows:
To the IRS:
Internal Revenue Service
Foreign Payments Practice
Foreign Intermediaries Team
290 Broadway, 12th Floor
New York, NY 10007-1867
All notices sent to the IRS must include the WT’s name, WT–EIN, GIIN (if
applicable), and the name of its responsible officer.
To WT:
The WT’s responsible officer. Such notices shall be sent to the address indicated
in the WT’s registration or application (as
may be amended).
Sec. 11.07. WT, acting in its capacity
as a withholding foreign trust or in any
other capacity, does not act as an agent of
the IRS, nor does it have the authority to
hold itself out as an agent of the IRS.
Section 12. EFFECTIVE DATE OF
AGREEMENT
Sec. 12.01. In General.
(A) Calendar Year 2014. If WT applies
to renew its WT agreement and the renewal is approved on or before August 31,
2014, this Agreement is effective on June
30, 2014. If WT is not a retirement fund or
an NFFE that is not a sponsoring entity
and applies to renew its WT agreement on
the IRS FATCA registration website after
August 31, 2014, and the renewal is approved, this Agreement is effective on the
date of approval. If WT is a retirement
fund or an NFFE that is not a sponsoring
entity and renews its WT agreement after
August 31, 2014, this Agreement is effective on the date of renewal as provided in
an approval notice sent by the IRS. The
renewal is approved on the later of the
date WT is issued a GIIN or the date WT
submits a request for renewal.
If WT is a new WT applicant (other
than a retirement fund or an NFFE that is
not a sponsoring entity) that applies to
enter into a WT Agreement on or before
August 31, 2014, and its application is
approved, the effective date of this Agreement is June 30, 2014, provided that it
obtains a GIIN, if it has not already done
so, within 90 days of such approval. If

August 25, 2014

WT is a new WT applicant (other than a
retirement fund or an NFFE that is not a
sponsoring entity) that applies to enter
into a WT Agreement after August 31,
2014, and the application is approved, the
effective date of this Agreement is the
date it is issued a WT–EIN, provided that
it obtains a GIIN, if it has not already done
so, within 90 days of such approval. If
WT is a new WT applicant that is a retirement fund or an NFFE that is not a
sponsoring entity that applies to enter into
a WT Agreement and its application is
approved, the effective date of this Agreement is the date it is issued a WT–EIN.
(B) Calendar Years after 2014. For
calendar years after 2014, the effective
date of this Agreement is January 1 of the
current calendar year if WT’s application
for WT status is submitted on or before
March 31. If WT’s application for WT
status is submitted on or after April 1, the
effective date of this Agreement is January 1 of the calendar year following the
year in which the application was submitted. WT must be in compliance with this
Agreement beginning January 1 of the
calendar year in which this Agreement is
effective.
Sec. 12.02. Transitional Rules.
(A) In General. If this Agreement is
effective beginning in calendar year 2014,
WT may act as a withholding foreign trust
for the entire calendar year if WT acts in
accordance with Revenue Procedure
2003– 64 (as amended) for amounts subject to chapter 3 withholding (as defined
in section 2.04 of the WT agreement) received before June 30, 2014, as if WT’s
WT agreement were effective on January
1, 2014, and expired on June 30, 2014,
and for amounts subject to chapter 3 withholding and withholdable payments received between June 30, 2014, and September 1, 2014, WT applies the principles
described in section 12.02(B) of this
Agreement. For the period beginning on
September 1, 2014, through the term of
this Agreement, WT must comply with
this Agreement provided that this Agreement has not been terminated.
(B) Special Procedures for Payments
Received Prior to September 1, 2014. If
WT receives a withholdable payment or
an amount subject to chapter 3 withholding prior to September 1, 2014, WT may

450

represent itself to its withholding agent as
a withholding foreign trust, provided that
WT complies with its obligations under
the WT agreement in effect prior to June
30, 2014, and, if WT is renewing this
Agreement, it submits a request for renewal on or before August 31, 2014.
However, because this Agreement requires WT to assume primary chapter 4
withholding responsibilities with respect
to its beneficiaries or owners under sections 1471 and 1472, if WT makes a distribution for which withholding is required under chapter 4 beginning July 1,
2014, with respect to a beneficiary or
owner and does not withhold under chapter 4 to the extent required under the revised WT agreement, WT must apply the
procedures referenced in § 1.1474 –2(b) to
satisfy any underwithholding.
SECTION 6. EFFECTIVE DATE
The effective date of this revenue procedure is August 8, 2014.
SECTION 7. PAPERWORK
REDUCTION ACT
This revenue procedure refers to a collection of information in the following
sections of this revenue procedure: (1)
section 3, regarding the application procedures for WP and WT status and withholding agreements; (2) section 4, regarding the WP agreement; and (3) section 5,
regarding the WT agreement.
This revenue procedure refers to a collection of information in the following
sections of the WP agreement (set forth in
section 4 of this revenue procedure): section 3 regarding withholding requirements; section 4 regarding the due diligence
requirements
for
partner
identification and documentation; section
5 regarding the withholding foreign partnership withholding certificate; section 6
regarding tax return and information reporting obligations; section 7 regarding
adjustments for overwithholding and underwithholding and refunds; section 8 regarding compliance procedures; and section 9 regarding simplified joint account
and indirect partner documentation, withholding, and reporting procedures and the
appointment of an agent to apply the WP
agreement on WP’s behalf.

Bulletin No. 2014 –35

This revenue procedure also refers to a
collection of information in the following
sections of the WT agreement (set forth in
section 5 of this revenue procedure): section 3 regarding withholding requirements; section 4 regarding the due diligence requirements for beneficiary or
owner identification and documentation;
section 5 regarding the withholding foreign trust withholding certificate; section
6 regarding tax return and information
reporting obligations; section 7 regarding
adjustments for overwithholding and underwithholding and refunds; section 8 regarding compliance procedures; and section 9 regarding simplified joint account
and indirect beneficiary or owner documentation, withholding, and reporting
procedures and the appointment of an
agent to apply the WT agreement on
WT’s behalf.
Responses to these collections of information will be used to enable the IRS to

Bulletin No. 2014 –35

determine whether to enter into a withholding agreement with a WP or WT applicant, to renew an existing WP or WT
agreement, and to verify a WP’s or WT’s
compliance with its applicable withholding agreement. The likely respondents are
individuals, businesses, other for-profit institutions, and certain non-profit institutions.
The estimated information collection
burden referred to in this revenue procedure will be reflected in various IRS forms
including Forms 8957, W– 8BEN,
W– 8BEN–E,
W– 8ECI,
W– 8EXP,
W– 8IMY, W–9, 1042, 1042–S, 1065,
1099, 3520 –A, and 8966. The information collection burden relating to the section 8 compliance procedures for both the
WP and WT agreements will be reflected
in future IRS guidance.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information un-

451

less the collection of information displays
a valid control number assigned by the
Office of Management and Budget.
Books or records relating to a collection of information must be retained as
long as their contents may become material in the administration of any internal
revenue law. Generally, tax returns and
tax return information are confidential, as
required by section 6103.
SECTION 8. DRAFTING
INFORMATION
The principal authors of this revenue
procedure are Tara N. Ferris, Kamela K.
Nelan, and Leni C. Perkins of the Office
of Associate Chief Counsel (International). For further information regarding
this revenue procedure contact Ms. Ferris,
Ms. Nelan, or Ms. Perkins at (202) 3176942 (not a toll free number).

August 25, 2014

Part IV. Items of General Interest
Announcement of
Disciplinary Sanctions
From the Office of
Professional Responsibility
Announcement 2014 –29
The Office of Professional Responsibility (OPR) announces recent disciplinary sanctions involving attorneys, certified public accountants, enrolled agents,
enrolled actuaries, enrolled retirement
plan agents, and appraisers. These individuals are subject to the regulations governing practice before the Internal Revenue Service (IRS), which are set out in
Title 31, Code of Federal Regulations,
Part 10, and which are published in pamphlet form as Treasury Department Circular No. 230. The regulations prescribe the
duties and restrictions relating to such
practice and prescribe the disciplinary
sanctions for violating the regulations.
The disciplinary sanctions to be imposed for violation of the regulations are:
Disbarred from practice before the
IRS—An individual who is disbarred is
not eligible to practice before the IRS as
defined at 31 C.F.R. § 10.2(a)(4).
Suspended from practice before the
IRS—An individual who is suspended is
not eligible to practice before the IRS as
defined at 31 C.F.R. § 10.2(a)(4) during
the term of the suspension.
Censured in practice before the
IRS—Censure is a public reprimand. Unlike disbarment or suspension, censure
does not affect an individual’s eligibility
to practice before the IRS, but OPR may
subject the individual’s future practice
rights to conditions designed to promote
high standards of conduct.
Monetary penalty—A monetary penalty may be imposed on an individual who
engages in conduct subject to sanction or
on an employer, firm, or entity if the individual was acting on its behalf and if it
knew, or reasonably should have known,
of the individual’s conduct.
Disqualification of appraiser—An
appraiser who is disqualified is barred
from presenting evidence or testimony in

August 25, 2014

any administrative proceeding before the
Department of the Treasury or the IRS.
Under the regulations, attorneys, certified public accountants, enrolled
agents, enrolled actuaries, and enrolled
retirement plan agents may not assist, or
accept assistance from, individuals who
are suspended or disbarred with respect
to matters constituting practice (i.e.,
representation) before the IRS, and they
may not aid or abet suspended or disbarred individuals to practice before the
IRS.
Disciplinary sanctions are described in
these terms:
Disbarred by decision, Suspended by
decision, Censured by decision, Monetary penalty imposed, and Disqualified
after hearing—An administrative law
judge (ALJ) either 1) granted the government’s summary judgment motion or 2)
conducted an evidentiary hearing upon
OPR’s complaint alleging violation of the
regulations; and 3) issued a decision imposing one of these sanctions. After 30
days from the issuance of the decision, in
the absence of an appeal, the ALJ’s decision became the final agency decision.
Disbarred by default decision, Suspended by default decision, Censured
by default decision, Monetary penalty
imposed by default decision, and Disqualified by default decision—An ALJ,
after finding that no answer to OPR’s
complaint had been filed, granted OPR’s
motion for a default judgment and issued
a decision imposing one of these sanctions.
Disbarment by decision on appeal,
Suspended by decision on appeal, Censured by decision on appeal, Monetary
penalty imposed by decision on appeal,
and Disqualified by decision on appeal—The decision of the ALJ was appealed to the agency appeal authority, acting as the delegate of the Secretary of the
Treasury, and the appeal authority issued
a decision imposing one of these sanctions.
Disbarred by consent, Suspended by
consent, Censured by consent, Monetary penalty imposed by consent, and

452

Disqualified by consent—In lieu of a disciplinary proceeding being instituted or
continued, an individual offered a consent
to one of these sanctions and OPR accepted the offer. Typically, an offer of
consent will provide for: suspension for
an indefinite term; conditions that the individual must observe during the suspension; and the individual’s opportunity, after a stated number of months, to file with
OPR a petition for reinstatement affirming
compliance with the terms of the consent
and affirming current eligibility to practice (i.e., an active professional license or
active enrollment status).
Suspended indefinitely by decision in
expedited proceeding, Suspended indefinitely by default decision in expedited
proceeding, Suspended by consent in
expedited proceeding—OPR instituted
an expedited proceeding for suspension
(based on certain limited grounds, including loss of a professional license for
cause, and criminal convictions).
OPR has authority to disclose the
grounds for disciplinary sanctions in these
situations: (1) an ALJ or the Secretary’s
delegate on appeal has issued a decision
on or after September 26, 2007, which
was the effective date of amendments to
the regulations that permit making such
decisions publicly available; (2) the individual has settled a disciplinary case by
signing OPR’s “consent to sanction”
form, which requires consenting individuals to admit to one or more violations of
the regulations and to consent to the disclosure of the individual’s own return information related to the admitted violations (for example, failure to file Federal
income tax returns); or (3) OPR has issued
a decision in an expedited proceeding for
indefinite suspension.
Announcements of disciplinary sanctions appear in the Internal Revenue Bulletin at the earliest practicable date. The
sanctions announced below are alphabetized first by the names of states and second by the last names of individuals. Unless otherwise indicated, section numbers
(e.g., § 10.51) refer to the regulations.

Bulletin No. 2014 –35

Name

Professional
Designation

Laguna Woods

Lampson, Rodney D.,
See Nevada
Norred, Michael W.

CPA

Buena Park

Park, Hee Y.

CPA

Anaheim

Shahabdonbali, Reza
(aka Shahab, Ray)

CPA

Colorado
Lone Tree

Calvert, David R.

Florida
Englewood

Andresen, Kenneth P.

City & State

Disciplinary Sanction

Effective Date(s)

Suspended by decision in expedited
proceeding under 31 C.F.R. § 10.82
(surrendered CPA license to California
Board of Accountancy for cause)
Suspended by decision in expedited
proceeding under 31 C.F.R. § 10.82
(surrendered CPA license to California
Board of Accountancy for cause)
Suspended by default decision in
expedited proceeding under 31 C.F.R.
§ 10.82 (surrendered CPA license to
California Board of Accountancy for
cause)

Indefinite from
June 5, 2014

Attorney

Suspended by decision in expedited
proceeding under 31 C.F.R. § 10.82
(attorney disbarment)

Indefinite from
June 18, 2014

Attorney

Suspended by default decision in
expedited proceeding under 31 C.F.R.
§ 10.82 (suspension of attorney
license)

Indefinite from
June 25, 2014

Illinois
Arlington Heights Ahmed, Naveed

CPA

Suspended by decision in expedited
proceeding under 31 C.F.R. § 10.82
(conviction under Illinois law for
violation of § 720 ILCS 5/17–24, wire and
mail fraud, and § 35 ILCS 120/13, filing a
fraudulent Illinois sales and use tax return)

Indefinite from
June 4, 2014

Massachusetts
Haverhill

Cormier, Bruce M.

Attorney

Suspended by default decision in
expedited proceeding under 31 C.F.R.
§ 10.82 (suspension of attorney
license)

Indefinite from
June 18, 2014

Montana
Helena

Barton, Diane

CPA

Suspended by default decision in
expedited proceeding under 31 C.F.R.
§ 10.82 (revocation of CPA license)

Indefinite from
June 18, 2014

Nevada
Carson City

Lampson, Rodney D.

CPA

Suspended by default decision in
expedited proceeding under 31 C.F.R.
§ 10.82 (revocation of CPA license in
California)

Indefinite from
July 9, 2014

New Jersey
Point Pleasant

Bellotti, Mark J.

Attorney

Suspended by default decision in
expedited proceeding under 31 C.F.R.
§ 10.82 (convicted in Superior Court of
New Jersey for § 2C:20–4, theft by
deception; consent to disbarment of
attorney license)

Indefinite from
June 4, 2014

California

Bulletin No. 2014 –35

453

Indefinite from
June 18, 2014

Indefinite from
June 18, 2014

August 25, 2014

City & State

Name

New Jersey (Continued)
Vincentown
Gordon, Layne S.

New York
Pine Plains

Professional
Designation

Attorney

Freedman, Theodore L. Attorney

Disciplinary Sanction

Effective Date(s)

Suspended by default decision in
expedited proceeding under 31 C.F.R.
§ 10.82 (convicted in Superior Court
of New Jersey for § 2C:20–4(a), theft
by deception; consent to disbarment
of attorney license)

Indefinite from
June 18, 2014

Suspended by default decision in
Indefinite from
expedited proceeding under 31 C.F.R.
July 8, 2014
§ 10.82 (conviction under 26 U.S.C
§ 7206(1), making & subscribing false tax
returns)
Reinstated to practice
before the IRS
March 7, 2014
Suspended by default decision in
Indefinite from
expedited proceeding under 31 C.F.R.
June 25, 2014
§ 10.82 (conviction under 26 U.S.C
§ 7202, willful failure to collect and
pay over taxes)

Niagara Falls

Gawel, Michael S.

CPA

Queens

Warren, Silford M.

CPA/
Enrolled
Agent

Balogun, Jacob O.

CPA

Barker, William W.

CPA

Suspended by default decision in
expedited proceeding under 31 C.F.R.
§ 10.82 (conviction under 18 U.S.C
§ 2252(a)(2), receipt of child
pornography; revocation of CPA
license)

Ohio
Columbus

Elsass, Tobias H.

Unenrolled
Return
Preparer

Suspended by default decision in
expedited proceeding under 31 C.F.R.
§ 10.82 (permanent injunction in the
U.S. District Court S.D. Ohio)
prohibiting practitioner from serving
as tax return preparer as that the term
defined by 26 U.S.C. § 7701(a)(36)(A),
from preparing tax returns (other than
his own) in whole and in part, and from
otherwise advising or assisting any
person or entity regarding any tax
related matter.)

Indefinite from
July 28, 2014

Oregon
Albany

Whitney, Scott A.

CPA

Suspended by default decision in
expedited proceeding under 31 C.F.R.
§ 10.82 (revocation of CPA license)

Indefinite from
June 25, 2014

Pennsylvania
Philadelphia

Mandale, Michael Z.

Attorney

Suspended by default decision in
expedited proceeding under 31 C.F.R.
§ 10.82 (attorney disbarment)

Indefinite from
July 8, 2014

North Carolina
Fayetteville

Kinston

August 25, 2014

454

Reinstated to practice
before the IRS
June 6, 2014, as an
Enrolled Agent
Indefinite from
June 18, 2014

Bulletin No. 2014 –35

City & State

Name

Professional
Designation

Tennessee
Nashville

Sood, Bhupinder S.

Texas
Wharton

Woodlands

Disciplinary Sanction

Effective Date(s)

CPA

Suspended by decision in expedited
proceeding under 31 C.F.R. § 10.82
(conviction under 18 U.S.C § 152(1),
concealment of assets; revocation of
CPA license)

Indefinite from
June 3, 2014

Johse, Kenneth R.

CPA

Suspended by default decision in
expedited proceeding under 31 C.F.R.
§ 10.82 (revocation of CPA license)

Indefinite from
July 8, 2014

Zweifel, William

Attorney/
CPA

Suspended by default decision in
expedited proceeding under 31 C.F.R.
§ 10.82 (conviction under 26 U.S.C
§ 7206(2), aiding and assisting in the
preparation and presentation of a false
tax return; revocation of CPA license)

Indefinite from
June 25, 2014

Bulletin No. 2014 –35

455

August 25, 2014

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior published position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle applied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confusion. It is not used where a position in a
prior ruling is being changed.
Distinguished describes a situation
where a ruling mentions a previously published ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A

and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions. This term is most commonly used in
a ruling that lists previously published rulings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a period of time in separate rulings. If the new
ruling does more than restate the sub-

stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rulings in the series.
Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.

Abbreviations
The following abbreviations in current
use and formerly used will appear in material 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.

Bulletin No. 2014 –35

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.

i

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.

August 25, 2014

Numerical Finding List1

Treasury Decisions—Continued:

Bulletins 2014 –27 through 2014 –35

9673,
9674,
9675,
9676,
9677,
9678,
9679,
9680,
9681,
9682,
9683,
9684,
9685,
9686,

Announcements:
2014-2, 2014-28 I.R.B. 120
2014-28, 2014-34 I.R.B. 391
2014-29, 2014-35 I.R.B. 452

Notices:
2014-40,
2014-41,
2014-42,
2014-43,
2014-44,
2014-45,

2014-27
2014-27
2014-34
2014-31
2014-32
2014-34

I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.

100
97
387
249
270
388

2014-30
2014-30
2014-31
2014-32
2014-31
2014-32
2014-32
2014-32
2014-33
2014-33
2014-33
2014-33
2014-34
2014-34

I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.

212
225
242
260
241
262
267
254
340
342
330
345
379
382

Proposed Regulations:
REG-104579-13,
REG-120756-13,
REG-105067-14,
REG-110948-14,
REG-121542-14,
REG-107012-14,
REG-123286-14,
REG-209459-78,

2014-33
2014-31
2014-34
2014-30
2014-28
2014-33
2014-33
2014-31

I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.

370
252
391
239
119
371
377
253

Revenue Procedures:
2014-26,
2014-27,
2014-29,
2014-37,
2014-38,
2014-39,
2014-40,
2014-41,
2014-42,
2014-43,
2014-44,
2014-45,
2014-46,
2014-47,

2014-27
2014-27
2014-28
2014-33
2014-29
2014-29
2014-30
2014-33
2014-29
2014-32
2014-32
2014-34
2014-33
2014-35

I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.

26
41
105
363
132
151
229
364
193
273
274
388
367
393

Revenue Rulings:
2014-14,
2014-19,
2014-20,
2014-21,

2014-27
2014-32
2014-28
2014-34

I.R.B.
I.R.B.
I.R.B.
I.R.B.

12
266
101
381

Treasury Decisions:
9664,
9668,
9669,
9670,
9671,
9672,

2014-32
2014-27
2014-28
2014-29
2014-29
2014-30

I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.

254
1
103
121
124
196

1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2014 – 01 through 2014 –26 is in Internal Revenue Bulletin
2014 –26, dated June 30, 2014.

August 25, 2014

ii

Bulletin No. 2014 –35

Finding List of Current Actions on
Previously Published Items1
Bulletins 2014 –27 through 2014 –35

Announcements:
2012-11
Supplemented by
Ann. 2014-2, 2014-28 I.R.B. 120
2013-11
Supplemented by
Ann. 2014-2, 2014-28 I.R.B. 120
2010-41
Obsoleted by
Rev. Proc. 2014-43, 2014-32 I.R.B. 273

Revenue Procedures—Continued:
2014-4
Amplified by
Rev. Proc. 2014-40, 2014-30 I.R.B. 229
2014-5
Amplified by
Rev. Proc. 2014-40, 2014-30 I.R.B. 229
2014-8
Amplified by
Rev. Proc. 2014-40, 2014-30 I.R.B. 229
2014-9
Amplified by
Rev. Proc. 2014-40, 2014-30 I.R.B. 229
2014-10
Amplified by
Rev. Proc. 2014-40, 2014-30 I.R.B. 229

Revenue Procedures:
1981-38
Superseded by
Rev. Proc. 2014-42, 2014-29 I.R.B. 193
93-37
Modified and Superseded by
Rev. Proc. 2014-43, 2014-32 I.R.B. 273
1981-38
Modified by
Rev. Proc. 2014-42, 2014-29 I.R.B. 193
2000-12
Superseded by
Rev. Proc. 2014-39, 2014-29 I.R.B. 151
2002-55
Revoked by
Rev. Proc. 2014-39, 2014-29 I.R.B. 151
2003-64
Superseded by
Rev. Proc. 2014-47, 2014-35 I.R.B. 393
2004-21
Superseded by
Rev. Proc. 2014-47, 2014-35 I.R.B. 393
2005-77
Superseded by
Rev. Proc. 2014-47, 2014-35 I.R.B. 393
2012-38
Superseded by
Rev. Proc. 2014-27, 2014-27 I.R.B. 26
2012-46
Superseded by
Rev. Proc. 2014-26, 2014-27 I.R.B. 41

1

2014-13
Modified by
Rev. Proc. 2014-38, 2014-29 I.R.B. 132
2014-13
Superseded by
Rev. Proc. 2014-38, 2014-29 I.R.B. 132

Notices:
2013-51
Obsoleted by
Notice 2014-42, 2014-34 I.R.B. 387
2014-44
Supplemented by
Notice 2014-45, 2014-34 I.R.B. 388

Treasury Decisions:
2005-47
Obsoleted by
T.D. 9668 2014-27 I.R.B. 1
2010-51
Obsoleted by
T.D. 9684 2014-33 I.R.B. 345
2010-71
Obsoleted by
T.D. 9684 2014-33 I.R.B. 345
2011-6
Obsoleted by
T.D. 9684 2014-33 I.R.B. 345
2011-9
Obsoleted by
T.D. 9684 2014-33 I.R.B. 345

A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2014 – 01 through 2014 –26 is in Internal Revenue Bulletin 2014 –26, dated June 30, 2014.

Bulletin No. 2014 –35

iii

August 25, 2014

INDEX

ADMINISTRATIVE—Cont.

Internal Revenue Bulletins 2014 –27 through
2014 –35

Substitute Forms Preparation for Certain Information Returns
(RP 27) 27, 41
Substitute Forms Preparation for Certain Information Returns
(RP 44) 32, 274
Truncated Taxpayer Identification Numbers (TD 9675) 31, 242

The abbreviation and number in parenthesis following the index entry
refer to the specific item; numbers in roman and italic type following
the parentheses refer to the Internal Revenue Bulletin in which the item
may be found and the page number on which it appears.

EMPLOYEE PLANS

Key to Abbreviations:
Ann
Announcement
CD
Court Decision
DO
Delegation Order
EO
Executive Order
PL
Public Law
PTE
Prohibited Transaction Exemption
RP
Revenue Procedure
RR
Revenue Ruling
SPR
Statement of Procedural Rules
TC
Tax Convention
TD
Treasury Decision
TDO
Treasury Department Order

Individual Retirement Account Rollover Limitations (REG–
209459 –78) 31, 253
Longevity Annuity Contracts (TD 9673) 30, 212
Proposed Regulations:
26 CFR 408, Individual Retirement Accounts (REG–209459 –
78) 31, 253
Regulations:
26 CFR 54.9815–2708, as amended (TD 9671) 29, 174
26 CFR 1.401(a)(9)–5, amended; 1.401(a)(9)– 6, amended;
1.403(b)– 6, amended; 1.408 – 8, amended; 1.408A– 6,
amended; 1.6047–2, added (TD 9673) 30, 212
Rules relating to 90 day waiting period limitation (TD 9671) 29, 174
Weighted average interest rates
Segment rates for June 2014 (Notice 41) 27, 97
Segment rates for July 2014 (Notice 43) 31, 249

ADMINISTRATIVE
AJCA – Section 6707 and the Penalty for Failure to Furnish
Information Regarding Reportable Transactions by Material
Advisors (TD 9686) 34, 382
Announcement to Discontinue the Internal Revenue Bulletin
Index (Ann 27) 28, 120
Annual Filing Season Program (RP 42) 29, 193
Disclosure to Census Bureau (REG–120756 –13) 31, 252
Disclosure to Census Bureau (TD 9677) 31, 241
Information reporting by passport applicants (TD 9679) 32, 267
Procedures to void backup withholding (RP 43) 32, 273
Proposed Regulations:
26 CFR part 301 is amended, section 301.6103(j)(1)–1 is
amended, section 301.6103(j)(1)–1T added (REG–120756 –
13) 31, 252
Regulations Governing Practice Before the Internal Revenue
Service (REG–138367– 06) (TD 9668) 27, 1
Regulations:
31 CFR 10.1, revised; 10.3, revised; 10.22, revised; 10.31, revised;
10.35, revised; 10.36, revised; 10.37, revised; 10.52, revised;
10.81, revised; 10.82, revised; 10.91, revised. (TD 9668) 27, 1
26 CFR 301.6109–4, added; 1.6042–4, amended; 1.6043–4,
amended; 1.6044–5, amended; 1.6045–2, amended; 1.6045–3,
amended; 1.6045–4, amended; 1.6045–5, amended; 1.6049–6,
amended; 1.6050A–1, amended; 1.6050E–1, amended;
1.6050N–1, amended; 1.6050P–1, amended; 1.6050S–1, amended; 1.6050S–3, amended (TD 9675) 31, 242
26 CFR part 301 is amended, section 301.6103(j)(1)–1 is
amended, section 301.6103(j)(1)–1T added (TD 9677) 31, 241
26 CFR part 301, amended; 26 CFR 301.6039E–1 added (TD
9679) 32, 267
26 CFR 301.6707–1, added; 301.6707–1T, removed; Rev.
Proc. 2007–21, sections 4.04, 4.05, and 4.06 superseded;
material advisor penalty for failure to furnish information
regarding reportable transactions (TD 9686) 34, 382

August 25, 2014

EMPLOYMENT TAX
Extending religious and family member FICA and FUTA exceptions to disregarded entities; regulations regarding the indoor
tanning services excise tax and disregarded entities (TD 9670)
29, 121
Method of accounting for gains and losses on shares in certain
money market funds; broker returns with respect to sales of
shares in money market funds (REG–107012–14) 33, 371
Publications:
1223, General Rules and Specifications for Substitute Forms
W–2c and W–3c (RP 29) 28, 105
4436, General Rules and Specifications for Substitute Form 941
and Schedule B (Form 941), and Schedule R (RP 26) 27, 26
Summons Interview Regulations Under Section 7602 (REG–
121542–14) (TD 9669) 28, 103
Regulations:
26 CFR 301.7602–1 is amended to add new paragraph (b)(3)
pertaining to summons interviews. (TD 9669) 28, 103
26 CFR 1.1361– 4, amended; 1.1361– 4T, removed;
31.3121(b)(3)–1, amended; 31.3121(b)(3)–1T, removed;
31.3127–1, added; 31.3127–1T, removed; 31.3306(c)(5)–1,
amended; 31.3306(c)(5)–1T, removed; 301.7701–2, amended; 301.7701–2T, removed; extending religious and family
member FICA and FUTA exceptions to disregarded entities;
regulations regarding the indoor tanning services excise tax
and disregarded entities (TD 9670) 29, 121
26 CFR 1.446 –7 added; 1.6045–1 amended; method of accounting for gains and losses on shares in certain money
market funds; broker returns with respect to sales of shares
in money market funds (REG–107012–14) 33, 371

iv

Bulletin No. 2014 –35

ESTATE TAX

INCOME TAX

Section 2032A.— Valuation of Certain Farm, Etc., Real Property
(RR 21) 34, 381
Summons Interview Regulations Under Section 7602 (REG–
121542–14) (TD 9669) 28, 103
Regulations:
26 CFR 301.7602–1 is amended to add new paragraph (b)(3)
pertaining to summons interviews. (TD 9669) 28, 103

AJCA – Section 6707 and the Penalty for Failure to Furnish
Information Regarding Reportable Transactions by Material
Advisors (TD 9686) 34, 382
Allocation and Apportionment of Interest Expense (TD 9676)
32, 260
Basis of indebtedness of S corporations to their shareholders (TD
9682) 33, 342
Credit for carbon dioxide Sequestration (Notice 40) 27, 100
Disciplinary actions involving attorneys, certified public accountants, enrolled agents, and enrolled actuaries, enrolled retirement plan agents, and appraisers (Ann 29) 35, 452
Disclosure to Census Bureau (REG–120756 –13) 31, 252
Disclosure to Census Bureau (TD 9677) 31, 241
FFI Agreement for Participating FFI and Reporting Model 2 FFI
(RP 38) 29, 132
Foreign Earned Income Exclusion (ANN 2014 –28) 34, 391
Foreign tax credit guidance under section 901 (m) (Notice 44) 32, 270
Foreign tax credit guidance under section 901 (m) (Notice 45) 34,
388
Information reporting by passport applicants (TD 9679) 32, 267
Interest:
Investment:
Federal short-term, mid-term, and long-term rates for: July
2014 (RR 2014 –20) 28, 101
Federal short-term, mid-term, and long-term rates for: August 2014 (RR 19) 32, 266
Money market funds and the wash sale rules (RP 45) 34, 388
Segregation rules for public groups of shareholders, (REG–
105067–14) 34, 391
Segregation rules for public groups of shareholders, (TD 9685)
34, 379
Summons Interview Regulations Under Section 7602 (REG–
121542–14) (TD 9669) 28, 103
Premium Tax Credit (REG–104579 –13) 33, 370
Premium Tax Credit (RP 37) 33, 363
Premium Tax Credit (RP 41) 33, 264
Premium Tax Credit (TD 9683) 33, 330
Proposed Regulations:
26 CFR part 301 is amended, section 301.6103(j)(1)–1 is
amended, section 301.6103(j)(1)–1T added (REG–
120756 –13) 31, 252
26 C.F.R. 1.382–3(j)(17), modified; 1.382–3T(j)(17), added,
segregation rules for public groups of shareholders (REG–
105067–14) 34, 391
Publications:
1223, General Rules and Specifications for Substitute Forms
W–2c and W–3c (RP 29) 28, 105
4436, General Rules and Specifications for Substitute Form
941 and Schedule B (Form 941), and Schedule R (RP 26)
27, 26
Qualified Intermediary (QI) Agreement (RP 39) 29, 151
Regulations:
31 CFR 10.1, revised; 10.3, revised; 10.22, revised; 10.31,
revised; 10.35, revised; 10.36, revised; 10.37, revised;
10.52, revised; 10.81, revised; 10.82, revised; 10.91, revised (TD 9668) 27, 1

EXCISE TAX
Branded Prescription Drug Fee (REG–123286 –14) 33, 377
Branded Prescription Drug Fee (TD 9684) 33, 345
Branded Prescription Drug Fee (Notice 42) 34, 387
Extending religious and family member FICA and FUTA exceptions to disregarded entities; regulations regarding the indoor
tanning services excise tax and disregarded entities (TD 9670)
29, 121
Summons Interview Regulations Under Section 7602 (REG–
121542–14) (TD 9669) 28, 103
Regulations:
26 CFR 301.7602–1 is amended to add new paragraph (b)(3)
pertaining to summons interviews. (TD 9669) 28, 103
26 CFR 1.1361– 4, amended; 1.1361– 4T, removed;
31.3121(b)(3)–1, amended; 31.3121(b)(3)–1T, removed;
31.3127–1,
added;
31.3127–1T,
removed;
31.3306(c)(5)–1, amended; 31.3306(c)(5)–1T, removed;
301.7701–2, amended; 301.7701–2T, removed; extending
religious and family member FICA and FUTA exceptions
to disregarded entities; regulations regarding the indoor
tanning services excise tax and disregarded entities (TD
9670) 29, 121
26 CFR 54.9815–2708, as amended (TD 9671) 29, 121
26 CFR 51.2(e)(3), amended; (REG–123286 –14) 33, 377
Rules relating to 90 day waiting period limitation (TD 9671) 29,
121

EXEMPT ORGANIZATIONS
Streamlined Application for Recognition of Exemption Under
Section 501(c)(3) (RP 2014 – 40) 30, 229
Streamlined process for 501(c)(3) recognition (REG–110948 –
14) 30, 239
Streamlined process for 501(c)(3) recognition (TD 9674) 30, 225
Regulations:
26 CFR 1.501(c)–1 amended 1. 501(a)–1T added;
1.501(c)(3)–1 amended, 1.501(c)(3)–1T added; and
1.508 –1 amended, 1.508 –1T added (REG–110948 –
14)(TD 9674) 30, 225

GIFT TAX
Summons Interview Regulations Under Section 7602 (REG–
121542–14) (TD 9669) 28, 103
Regulations:
26 CFR 301.7602–1 is amended to add new paragraph (b)(3)
pertaining to summons interviews (REG–121542–14) (TD
9669) 28, 103

Bulletin No. 2014 –35

v

August 25, 2014

INCOME TAX—Cont.

INCOME TAX—Cont.

26 CFR 301.7602–1 is amended to add new paragraph (b)(3)
pertaining to summons interviews (REG–121542–14) (TD
9669) 28, 103
26 CFR 1.45R– 0, added; 1.45R–1, added; 1.45R–2, added;
1.45R–3, added; 1.45R– 4, added; 1.45R–5, added; tax
credit for employee health insurance expenses of small
employers (TD 9672) 30, 196
26 CFR 301.6109 – 4, added; 1.6042– 4, amended; 1.6043– 4,
amended; 1.6044 –5, amended; 1.6045–2, amended;
1.6045–3, amended; 1.6045– 4, amended; 1.6045–5,
amended; 1.6049 – 6, amended; 1.6050A–1, amended;
1.6050E–1, amended; 1.6050N–1, amended; 1.6050P–1,
amended; 1.6050S–1, amended; 1.6050S–3, amended (TD
9675) 31, 242
26 CFR 1.67– 4, amended (TD 9667) 32, 260
26 CFR part 301 is amended, section 301.6103(j)(1)–1 is
amended, section 301.6103(j)(1)–1T added (TD 9677) 31,
241
26 CFR 1.861–9 amended, 1.861–11 amended; (TD 9676) 32,
260
26 CFR 1.1092(b)– 6, added; 1.1092(b)– 6T, removed;
1.1092(b)–3T, amended; (TD 9678) 32, 262
26 CFR part 301, amended; 26 CFR 301.6039E–1 added (TD
9679) 32, 267
26 CFR 1.174 –2 amended; (TD 9680) 32, 254
26 CFR 1.36B–2T, 26 CFR 1.36B–3T, 1.36B– 4T, added; 26
CFR 1.36B–2, 26 CFR 1.36B–3\, 1.36B– 4, amended; 26
CFR 1.162(l)–1 and 26 CFR 1.162(l)–1T, added. (REG–
104579 –13) 33, 370
26 CFR 1.195–2, added; 26 CFR 1.708 –1, amended; 26 CFR
1.709 –1, amended. (TD 9681) 33, 340
26 CFR 1.1366 –2(a), added new paragraph (a)(2) and moved
current (a)(2) through (a)(6) to (a)(3) through (a)(7), respectively; basis of indebtedness of S corporations to their
shareholders (TD 9682) 33, 342
26 CFR 1.36B–2T, 26 CFR 1.36B–3T, 1.36B– 4T added, 26
CFR 1.36B–2, 26 CFR 1.36B–3\, 1.36B– 4, amended, 26
CFR 1.162(l)–1 and 26 CFR 1.162(l)–1T added, (TD
9683) 33, 330
26 C.F.R. 1.382–3(j)(17), modified; 1.382–3T(j)(17), added,
segregation rules for public groups of shareholders (TD
9685) 34, 379
26 CFR 301.6707–1, added; 301.6707–1T, removed; Rev.
Proc. 2007–21, sections 4.04, 4.05, and 4.06 superseded;
material advisor penalty for failure to furnish information
regarding reportable transactions (TD 9686) 34, 382
Regulations Governing Practice Before the Internal Revenue
Service (REG–138367– 06) (TD 9668) 27, 1
Research and experimental expenditures (TD 9680) 32, 254
Tax Credit for Employee Health Insurance Expenses of Small
Employers (TD 9672) 30, 196
Truncated Taxpayer Identification Numbers (TD 9675) 31, 242
Section 67 Limitations on Estates or Trusts; Change of Effective
Date (TD 9664) 32, 260
Section 5000A national average premium for a bronze level of
coverage (RP 46) 33, 367

Substitute Forms Preparation for Certain Information Returns
(RP 27) 27, 41
Substitute Forms Preparation for Certain Information Returns
(RP 44) 32, 274
Unamortized organization and syndication expenses following a
partnership technical termination (TD 9681) 33, 340
Underpayment and overpayments, quarter beginning: July 1,
2014 (RR 14) 27, 12
Unrealized gain or loss treatment upon establishment of an
identified mixed straddle (TD 9678) 32, 262
Withholding Foreign Partnership and Trust Agreements (RP 47)
35, 393

August 25, 2014

SELF-EMPLOYMENT TAX
Extending religious and family member FICA and FUTA exceptions to disregarded entities; regulations regarding the indoor
tanning services excise tax and disregarded entities (TD 9670)
29, 121
Regulations:
26 CFR 1.1361– 4, amended; 1.1361– 4T, removed;
31.3121(b)(3)–1, amended; 31.3121(b)(3)–1T, removed;
31.3127–1,
added;
31.3127–1T,
removed;
31.3306(c)(5)–1, amended; 31.3306(c)(5)–1T, removed;
301.7701–2, amended; 301.7701–2T, removed; extending
religious and family member FICA and FUTA exceptions
to disregarded entities; regulations regarding the indoor
tanning services excise tax and disregarded entities (TD
9670) 29, 121

SPECIAL ANNOUNCEMENT
Annual Filing Season Program (RP 42) 29, 193
Procedures to Avoid Backup Withholding (RP 43) 32, 273

vi

Bulletin No. 2014 –35

Internal Revenue Service
Washington, DC 20224
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