Revenue Procedure 2022-43

HIGHLIGHTS
OF THIS ISSUE




Bulletin No. 2022–52
December 27, 2022

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.

ADMINISTRATIVE, EXEMPT
ORGANIZATIONS, INCOME TAX

withholding agents under chapters 3 and 4 and as payors under chapter 61 and section 3406 for amounts
paid to their account holders. The QI agreement also
allows certain foreign persons to act as qualified derivatives dealers (QDDs) and assume primary withholding
and reporting responsibilities on dividend equivalent
payments made in a principal capacity for purposes of
section 871(m). Additionally, the 2023 QI Agreement
allows foreign persons to enter into the agreement
for purposes of the withholding and reporting required
under sections 1446(a) and (f) with respect to their
account holders holding interests in publicly traded
partnerships.

ADMINISTRATIVE, SPECIAL
ANNOUNCEMENT

ADMINISTRATIVE, INCOME TAX
Rev. Proc. 2022-43, page 570.
This Revenue Procedure sets forth the final qualified
intermediary (QI) withholding agreement (QI agreement)
entered into by the Internal Revenue Service and certain foreign persons under Treas. Reg. § 1.1441-1(e)
(5) and (6). The QI agreement currently in effect in Rev.
Proc. 2017-15, 2017-3 I.R.B. 437, expires on December 31, 2022 (the 2017 QI Agreement). This Revenue
Procedure will apply beginning January 1, 2023, with a
six-year term (the 2023 QI Agreement). In general, the
QI agreement allows certain persons to enter into an
agreement with the IRS to simplify their obligations as

Finding Lists begin on page ii.

INCOME TAX

26 CFR 1.1441-1(e)(5) and (6). 2023 Qualified
Intermediary Agreement.

Rev. Proc. 2022-43
SECTION 1. PURPOSE
.01 In General. This Revenue Procedure sets forth the final qualified intermediary (QI) withholding agreement (QI
agreement) entered into under §1.14411(e)(5) that applies beginning January
1, 2023 (the 2023 QI Agreement). In
general, the QI agreement allows certain
persons to enter into an agreement with
the Internal Revenue Service (IRS) to
simplify their obligations as withholding agents under chapters 3 and 4 and
as payors under chapter 61 and section
3406 for amounts paid to their account
holders and allows certain persons to act
as qualified derivatives dealers (QDDs)
and assume primary withholding and
reporting responsibilities on all dividend
equivalent payments they make. The
2023 QI Agreement also allows foreign
persons to enter into the agreement for
purposes of the withholding and reporting required under sections 1446(a) and
(f) with respect to their account holders holding interests in publicly traded
partnerships.
SECTION 2. SCOPE
.01 Entities Eligible to Execute a
QI Agreement. A QI agreement may be
entered into by persons described in
§1.1441-1(e)(5)(ii), including foreign
financial institutions (FFIs) (as defined
in §1.1471-5(d)), foreign clearing organizations, and foreign branches of U.S.

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Bulletin No. 2022–52

financial institutions and clearing organizations. An eligible entity (as defined in
§1.1441-1(e)(6)(ii)) may also enter into a
QI agreement for purposes of becoming a
QDD.
An FFI may apply to enter into a QI
agreement only with respect to its branches
operating in jurisdictions identified on the
IRS’s Approved KYC List and if the FFI is
able to, and 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 2.17(C)
of the 2023 QI Agreement). An FFI that
is a certified deemed-compliant FFI
(including a nonreporting IGA FFI, as
defined in §1.1471-1(b)(83)) may enter
into a QI agreement if the FFI is able
to, and agrees to, assume the obligations
of, and to be treated as, (1) a participating FFI (including a reporting Model 2
FFI), (2) a registered deemed-compliant
FFI (including a reporting Model 1 FFI
or a nonreporting Model 2 FFI treated
as registered deemed-compliant), or (3)
a registered deemed-compliant Model
1 IGA FFI, with respect to all accounts
that it maintains (even if the FFI does not
intend to act as a QI for all of the accounts
it maintains). A central bank of issue may
enter into a QI agreement provided that
it meets and agrees to assume the obligations of, and to be treated as, (1) a participating FFI (including a reporting Model
2 FFI) or (2) a registered deemed-compliant FFI (including a reporting Model 1
FFI), with respect to any account that it
maintains that is held in connection with
a commercial financial activity described
in §1.1471-6(h) and for which it receives
a withholdable payment (as defined in
§1.1471-1(b)(145)). A foreign branch of a
U.S. financial institution or clearing organization may also apply to enter into a QI
agreement provided that it is a reporting
Model 1 FFI, or it agrees to assume the
requirements and obligations of a participating FFI (including a reporting Model
2 FFI).
An entity that is a territory financial
institution (territory FI) (as defined in
§1.1471-1(b)(130)) or a nonparticipating

Bulletin No. 2022–52

FFI (as defined in §1.1471-1(b)(82)) may
not apply to enter into a QI agreement.
A foreign corporation that is a non-financial foreign entity or NFFE (as defined
in §1.1471-1(b)(80)) that is described in
one of the categories in §1.1441-1(e)(5)
(ii) may also apply to enter into a QI agreement. An NFFE that seeks to act as an
intermediary on behalf of its shareholders
should not apply for QI status and instead
should apply for withholding foreign partnership status as a reverse hybrid entity.
An NFFE that enters into a QI agreement
to act an as intermediary on behalf of persons other than its shareholders will be
required to satisfy the withholding and
reporting requirements of §§1.1472-1(a)
and 1.1474-1(i) with respect to any NFFE
that is a beneficial owner for whom the
QI is acting with respect to a withholdable payment. Except for a QDD that is
a partnership or a branch of a partnership,
the QI agreement generally does not apply
to a foreign partnership or foreign trust. A
foreign partnership or foreign trust may
apply for status as a withholding foreign
partnership or withholding foreign trust.
See §§1.1441-5(c)(2)(ii) and 1.1441-5(e)
(5)(v).
.02 Effect on Other Documents. Revenue Procedure 2017-15, 2017-3 I.R.B.
437 (the 2017 QI Agreement), is superseded with respect to a QI’s requirements
that apply after December 31, 2022. A
QI agreement in effect before December
31, 2022, expires, in accordance with its
terms, on December 31, 2022.
SECTION 3. BACKGROUND –
Withholding and Reporting
Requirements under Chapters 3, 4,
and 61, and Sections 1446 and 3406.
.01 Withholding and Reporting under
Chapter 4 on Payments Made to FFIs and
Other Payees. Section 1471(a) requires a
withholding agent to deduct and withhold
a tax equal to 30 percent on any withholdable payment made to an FFI, unless
the FFI agrees to and complies with the
terms of the FFI agreement to satisfy the
obligations specified in section 1471(b)
(a participating FFI), is deemed to meet
the requirements under section 1471(b) (a
deemed-compliant FFI), or is treated as an
exempt beneficial owner under §1.14716. Section 1472(a) requires a withholding

571

agent to deduct and withhold a tax equal to
30 percent on any withholdable payment
made to an NFFE (other than an excepted
NFFE) unless such entity provides a certification that it does not have any substantial U.S. owners or provides information
regarding its substantial U.S. owners.
A participating FFI (including a
reporting Model 2 FFI) or registered
deemed-compliant FFI (other than a
reporting Model 1 FFI) will satisfy its
requirement to withhold under sections
1471(a) and 1472(a) on withholdable payments made to accounts held by entities
by withholding on accounts that the FFI
is required to treat as held by nonparticipating FFIs and recalcitrant account holders under the FFI agreement, §1.14715(f), or an applicable Model 2 IGA. See
the FFI agreement, the Model 2 IGA,
and §1.1471-5(f) for further withholding
requirements that may apply to FFIs and
the Model 2 IGA’s suspension of withholding on non-consenting U.S. accounts.
A QI that is a reporting Model 1 FFI or
a registered deemed-compliant Model 1
IGA FFI will satisfy its requirement to
withhold under section 1471(a) on withholdable payments made to accounts held
by entities by withholding on accounts
that the FFI is required to treat as held by
nonparticipating FFIs.
A participating FFI (including a
reporting Model 2 FFI), a registered
deemed-compliant FFI, and a registered
deemed-compliant Model 1 IGA FFI
must report certain account information
regarding each U.S. account (or U.S.
reportable account) that it maintains to
the extent required under the FFI agreement, §1.1471-5(f), or a Model 1 or
Model 2 IGA. A participating FFI (including a reporting Model 2 FFI) or a registered deemed-compliant FFI (other than
a reporting Model 1 FFI) must report
certain information about accounts that
it maintains that are held by recalcitrant
account holders (or non-consenting U.S.
accounts). A withholding agent making
payments to an NFFE that is not reported
by an FFI as a U.S. account (or U.S.
reportable account) 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. See §§1.1472-1(b)(1)
(iii) and 1.1474-1(i). A withholding agent

December 27, 2022

(including a participating FFI or registered
deemed-compliant 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.
.02 Withholding and Reporting under
Chapter 3 on Payments to Foreign Persons. Sections 1441 and 1442 require a
withholding agent 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 (including the payment of a dividend equivalent under section 871(m)). A
lower rate of withholding may apply under
the Internal Revenue Code (the Code)
(for example, section 1443), the regulations, or an income tax treaty. Generally,
a withholding agent must also report these
payments on Form 1042-S regardless
of whether withholding is required. See
§1.1461-1(c) (covering amounts subject
to reporting).
.03 Backup Withholding under Section 3406 and Reporting on Payments
to Certain U.S. Persons under Chapter
61. Under sections 6041, 6042, 6045,
6049, and 6050N (chapter 61 or the
Form 1099 reporting provisions), payors
of interest, dividends, royalties, gross
proceeds from the sale of securities,
and other fixed or determinable income
must report payments made to certain
U.S. persons (that is, U.S. non-exempt
recipients or presumed U.S. non-exempt
recipients) on the appropriate Form 1099
unless an exception to reporting applies.
See §§1.6041-4(a); 1.6042-3(b)(1)(iii);
1.6045-1(g)(1)(i); 1.6049-5(b)(12); and
1.6050N-1(c)(1)(i). Under section 3406,
a payor must generally obtain a Form
W-9, Request for Taxpayer Identification Number and Certification, from a
U.S. non-exempt recipient receiving a
payment reportable on a Form 1099 or
must otherwise backup withhold under
section 3406 and report the payment on
Form 1099.
.04 Coordination of Withholding and
Reporting Requirements under Chapters 3
and 4. With respect to a withholdable payment that is subject to withholding under
chapter 4, a withholding agent may credit
any tax withheld under chapter 4 against

December 27, 2022

its liability for any tax due with respect to
the payment under chapter 3. A withholding agent is required to report on a single
Form 1042-S the information required
under both chapters 3 and 4 with respect
to a payment subject to withholding under
both chapters 3 and 4. With respect to a
withholdable payment that is not subject
to withholding under chapter 4 and that is
an amount subject to withholding under
chapter 3, a withholding agent is also
required to report on Form 1042-S the
applicable chapter 4 exemption code for
the payment and the recipient’s chapter 4
status.
.05 Responsibilities of Intermediaries
that Enter into QI Agreements. When the
IRS enters into a QI agreement with a foreign person (or foreign branch of a U.S.
person), that foreign person (or foreign
branch of a U.S. person) becomes a QI. A
QI is a withholding agent under chapters
3 and 4 and a payor under chapter 61 and
section 3406 for amounts that it pays to its
account holders. In addition, as described
in section 4.01 of this Revenue Procedure,
starting January 1, 2023, a QI may assume
withholding responsibilities under section
1446(a) for a distribution from a publicly
traded partnership (PTP) received on
behalf of an account holder and under section 1446(f) for an amount realized from
the transfer of a PTP interest paid to an
account holder that is the transferor of the
interest. The general obligations of a QI as
a withholding agent, broker, or payor are
described in section 1.01 of the QI agreement and are relevant to whether an event
of default occurs under section 11.06 of
the QI agreement.
A QI agreement also includes required
compliance procedures for QIs. Under
section 10 of the QI agreement, a QI is
required to have a responsible officer
adopt a compliance program and make
periodic certifications of compliance
on behalf of the QI for each three-year
certification period. The periodic certifications also include certain factual
information that is based in part on the
results of a periodic review of the QI’s
compliance with its QI agreement, which
is required to be conducted for one year
of the certification period by an independent reviewer except when the QI
obtains a waiver of its periodic review
requirement.

572

SECTION 4. SUMMARY
OF CHANGES TO THE QI
AGREEMENT
This section 4 outlines changes to the
QI agreement that are included in the
2023 QI Agreement set forth in section
6 of this Revenue Procedure. Section
4.01 of this Revenue Procedure generally
describes a QI’s requirements under sections 1446(a) and (f) that were proposed
to be added to the QI agreement in Notice
2022-23, 2022-20 I.R.B 1062, and modifications to those requirements included
in the 2023 QI Agreement. Section 4.02
of this Revenue Procedure describes the
requirements for QIs acting as QDDs or
as intermediaries with respect to payments
of dividend equivalents for purposes of
section 871(m). Section 4.03 of this Revenue Procedure describes changes included
in the 2023 QI Agreement that relate to
stakeholder remarks regarding the 2017
QI Agreement received following its
publication. Section 4.04 of this Revenue Procedure describes modifications
to the compliance and certification procedures for QIs, which relate to sections
1446(a) and (f) or are otherwise included
in the 2023 QI Agreement for improved
compliance. Section 4.05 of this Revenue
Procedure describes a limited number of
changes included in the 2023 QI Agreement that are not described elsewhere in
this section 4.
.01 QI’s Requirements under Sections
1446(a) and (f). Section 1446(a) requires
withholding by a partnership on its effectively connected income allocable to a
foreign partner for a taxable year at the tax
rates specified in section 1446(b). In the
case of a PTP, however, an entity treated
as a nominee under §1.1446-4(b)(3) for a
PTP distribution made to a foreign partner
is a withholding agent for the distribution
and is required to withhold a tax under
section 1446(a) to the extent required
under §1.1446-4(d). A nominee or broker
holding a PTP interest is also required to
comply with partner reporting requirements under §1.6031(c)-1T.
With respect to transfers of partnership
interests, sections 864(c)(8) and 1446(f)
were added to the Internal Revenue Code
(the Code) by the Tax Cuts and Jobs Act,
Pub. L. 115-97 on December 22, 2017.
Section 864(c)(8) generally provides that

Bulletin No. 2022–52

gain or loss derived by a foreign person
on the sale or exchange of an interest in a
partnership engaged in a trade or business
within the United States is treated as effectively connected gain or loss to the extent
provided in that section. Section 1446(f)
(1) generally provides that if any portion
of the gain on any disposition of an interest in a partnership would be treated under
section 864(c)(8) as effectively connected
with the conduct of a trade or business
within the United States, then the transferee of the interest must withhold a tax
equal to 10 percent of the amount realized
on the disposition.
On November 30, 2020, in TD 9926,
85 FR 76910, final regulations were
published that (1) impose withholding
requirements under section 1446(f) on
brokers (including QIs) that effect transfers of PTP interests and (2) amend certain
of the provisions of §1.1446-4 (relating to
withholding on PTP distributions) that
apply beginning January 1, 2023, including allowing a QI to act as a nominee by
assuming withholding on a PTP distribution (the final regulations). See Notice
2021-51, 2021-36 I.R.B. 361, regarding
the effective date of these provisions of
the final regulations.
On May 16, 2022, the Treasury Department and the IRS released Notice 202223, providing proposed changes to the QI
agreement to permit a QI to assume certain withholding and reporting responsibilities under sections 1446(a) and (f). The
proposed changes to the QI agreement in
Notice 2022-23 cover the documentation,
withholding, and reporting requirements
applicable to QIs receiving payments of
PTP distributions (including amounts
subject to section 1446(a)) and amounts
realized under section 1446(f) on behalf
of account holders. For withholding by
QIs on amounts realized paid on transfers
of PTP interests, the proposed changes
incorporate the exceptions to withholding
provided in §1.1446(f)-4. For PTP distributions, the proposed changes require
withholding by a QI acting as a nominee
for a distribution under §1.1446-4 and
to the extent withholding is otherwise
required under section 3.02(C) of the
QI agreement (covering a QI’s residual
withholding requirement). The proposed
changes allow a QI to assume withholding under section 1446(a) or (f) on a

Bulletin No. 2022–52

payment-by-payment basis and also allow
a QI to act as a disclosing QI by providing
specific payee documentation to its withholding agent for the payment of a PTP
distribution or amount realized from the
sale of a PTP interest, thereby generally
relieving the QI from withholding and
reporting on those payments.
With respect to a QI’s documentation
of account holders for sections 1446(a)
and (f), consistent with requirements for
1446(a) and (f) purposes, a proposed
requirement in Notice 2022-23 provides
that a withholding certificate is not considered valid without a U.S. TIN for the
account holder on the withholding certificate. With respect to a QI’s reporting, the
proposed changes in Notice 2022-23 specify the requirements for QIs to report partner information regarding account holders
holding PTP interests, which are generally derived from the requirements of
§1.6031(c)-1T to facilitate the issuance of
partner statements under section 6031(b)
when nominees hold partnership interests.
Notice 2022-23 also proposed requirements for a QI’s reporting on Forms
1042-S for payments subject to withholding under section 1446(a) or (f), including a requirement regarding a QI’s issuance of a payee-specific Form 1042-S that
reports withholding under section 1446(a)
or (f). Notice 2022-23 further proposed a
restriction on a QI’s filing of a collective
refund for overwithholding under section
1446(a) or (f), material failures and events
of default specific to a QI’s requirements
under sections 1446(a) and (f), and other
modifications to the QI agreement relating
to these proposed changes. Finally, consistent with the final regulations, Notice
2022-23 proposed to permit a QI to apply
the reimbursement and set-off procedures for overwithholding under sections
1446(a) and (f).
Notice 2022-23 did not, however,
include proposed changes to the compliance procedures for QIs under section 10
of the 2017 QI Agreement or the certifications and related information a QI must
provide for each certification period (generally in Appendix I to the 2017 QI Agreement) for purposes of its requirements
under sections 1446(a) and (f). Instead,
Notice 2022-23 requested comments on
these provisions; however, none were
received.

573

Subject to certain modifications, generally in response to comments received,
the 2023 QI Agreement incorporates the
changes proposed in Notice 2022-23.
This section 4.01 highlights comments
and modifications to Notice 2022-23 that
are included in the 2023 QI Agreement.
The 2023 QI Agreement also includes
compliance and certification procedures
for QIs relating to sections 1446(a) and
(f), which are described, together with
other changes to those procedures, in section 4.04 of this Revenue Procedure. For
the conditions in the 2023 QI Agreement
regarding a QI’s issuance of a payee-specific Form 1042-S (including to report
withholding under section 1446(a) or
(f)), see section 4.03(7) of this Revenue
Procedure. For references to general documentation validity standards applicable
to sections 1446(a) and (f) not included
in Notice 2022-23, see section 5.10(A) of
the 2023 QI Agreement.
(1) Requirement to collect U.S. TINs.
Comments expressed concern with a proposed requirement in Notice 2022-23 that
would require QIs to obtain U.S. TINs
from their foreign account holders receiving PTP distributions or amounts realized
in order to treat documentation as valid
for purposes of sections 1446(a) and (f).
The comments raised concerns that, due
to this requirement, a QI might be found
in default of its QI agreement with respect
to section 5.01(A) of the QI agreement
(prescribing best efforts to collect valid
documentation) when it is unable to collect U.S. TINs from a significant number
of its account holders despite having properly withheld based on the documentation
obtained. Comments also proposed that
QIs be provided a transition period to collect U.S. TINs from their account holders
for purposes of section 1446(a) or (f) given
that collecting U.S. TINs from foreign
account holders is generally not required
of a QI for chapter 3 and 4 purposes (and,
thus, may have to be requested after otherwise valid documentation is collected).
One comment requested a “best efforts”
safe harbor for QIs to request U.S. TINs
based on the reasonable cause exception to penalties for missing TINs under
§301.6724-1(e) (such as an initial TIN
solicitation and two follow-up solicitations), while another comment requested
that a QI’s failure to obtain U.S TINs not

December 27, 2022

be treated as a material failure or an event
of default under the QI agreement.
In response to these comments and difficulties that QIs generally may encounter in obtaining U.S. TINs from all their
account holders holding PTP interests, the
2023 QI Agreement provides solicitation
requirements that QIs will be required
to apply for collecting U.S. TINs from
their account holders receiving PTP distributions or amounts realized beginning
January 1, 2023. These requirements are
similar to those for payors to establish
that a failure to provide TINs is due to
the failure of the payee to provide information for purposes of obtaining a waiver
from penalties for missing TINs on Form
1099 based on reasonable cause under
§301.6724-1(e). When a QI satisfies these
requirements, the QI will be considered to
have applied its “best efforts” to obtain the
U.S. TINs of its account holders receiving PTP distributions or amounts realized under section 5.01(A) of the 2023
QI Agreement. The 2023 QI Agreement
makes clear, however, that this allowance does not affect a QI’s requirement to
collect valid documentation with a U.S.
TIN to apply reduced withholding under
section 1446(a) or (f) based on the status
of an account holder for any year, including a foreign partnership or trust account
holder (as also required for a foreign partnership or trust in the instructions to Form
W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or
Certain U.S. Branches for United States
Tax Withholding and Reporting).
(2) Requirements for disclosing QIs.
Comments also raised concerns with the
proposed requirement in Notice 2022-23
that a QI must, when acting as a disclosing QI for a payment of a PTP distribution or amount realized from the sale
of a PTP interest, act as a disclosing QI
for the entire amount of the payment.
Because this requirement could apply
when multiple account holders of a QI
receive a payment of a PTP distribution
or amount realized from the sale of a PTP
interest, the comments noted that a QI’s
failure to provide valid documentation
to its withholding agent for any account
holder (which includes a U.S. TIN for
the account holder) would prevent the
QI from acting as a disclosing QI with
respect to all account holders receiving

December 27, 2022

the payment. One comment requested that
a QI be permitted to act as a disclosing
QI on both an account-by-account and
payment-by-payments basis. The comment also requested that disclosing QIs
be permitted to apply the documentation
requirements applicable to nonqualified
intermediaries, an allowance that would
not require a disclosing QI to provide
valid payee documentation to its withholding agent when reduced withholding
is not sought. Another comment more specifically requested that a disclosing QI be
permitted to provide documentation to its
withholding agent for a foreign account
holder that does not include a U.S. TIN.
Finally, another comment requested clarification on whether a QI would be permitted to act as a disclosing QI for a U.S.
account holder (in addition to its foreign
account holders).
The 2023 QI Agreement incorporates
the requirement of Notice 2022-23 that
a QI must act as a disclosing QI for the
entire amount of a PTP distribution or
amount realized from the sale of a PTP
interest. Retaining this requirement will
prohibit a disclosing QI from acting as a
nonqualified intermediary with respect to
any account holder receiving a payment
of a PTP distribution or amount realized
and will thereby require the QI to withhold to the extent required under the 2023
QI Agreement due to underwithholding
by its withholding agent on the amount
paid to the account holder. See sections
3.02(C) and 10.05(C)(9) of the 2023 QI
Agreement (covering, respectively, a QI’s
residual withholding requirement and a QI
reviewer’s requirement to determine any
underwithholding when a QI acts as a disclosing QI).
In consideration of the comments,
however, the 2023 QI Agreement clarifies
the requirements of a disclosing QI with
respect to the specific payee documentation it provides to its withholding agent
for a foreign partner. Under the 2023 QI
Agreement, this documentation must
be a Form W-8 for each foreign partner
receiving the payment, but without regard
to whether the Form W-8 includes a U.S.
TIN. This provision addresses concerns
that a QI would not otherwise be permitted to act as a disclosing QI for the entire
amount of a payment made to multiple
account holders due to any account holder

574

failing to provide its U.S. TIN despite
the QI’s efforts to obtain the TIN under
section 5.01(A) of the 2023 QI Agreement. See section 4.01(1) of this Revenue
Procedure.
Concerning whether a QI may act as a
disclosing QI for a payment allocable to a
U.S. account holder, the Treasury Department and the IRS intended this result as
part of Notice 2022-23. For clarification,
the 2023 QI Agreement adds a reference
to Form W-9, Request for Taxpayer Identification Number and Certification, as part
of the specific payee documentation that a
disclosing QI may provide to its withholding agent.
(3) Partner information reporting. For
a QI not acting as a disclosing QI for a
PTP distribution or amount realized paid
to an account holder, Notice 2022-23
proposed to require that the QI issue to
the account holder the statement that is
described in §1.6031(c)-1T(h). Section
1.6031(c)-1T(h) requires this statement
to include information that generally corresponds to the information that the PTP
would have provided the account holder
on a Schedule K-1 (Form 1065)). The
requirement to issue this statement would
apply unless the QI is able to provide to
the PTP (or the PTP’s agent) the statement
specified in §1.6031(c)-1T(a) with respect
to the account holder.
A comment on this proposed requirement requested the allowance of a simplified or modified Schedule K-1 that a QI
would be permitted to issue to an account
holder in lieu of a separate statement for
purposes of §1.6031(c)-1T(h). In response
to this comment, the 2023 QI Agreement
permits a QI to issue the statement by providing to the account holder the Schedule
K-1 issued by the PTP to the QI when the
QI includes with the Schedule K-1 supplemental information determined by the QI
indicating the percentage of each amount
on the Schedule K-1 applicable to the
account holder.
For a QI acting as a disclosing QI
for a PTP distribution or amount realized paid to an account holder, Notice
2022-23 proposed a requirement for the
QI to provide the statement specified
in §1.6031(c)-1T(a) to the PTP (or the
PTP’s agent) or to the QI’s nominee for
the payment. Comments asserted that
providing this statement to a nominee is

Bulletin No. 2022–52

unnecessary when the nominee maintains
fully segregated and disclosed accounts
for the account holders of a disclosing QI
receiving these payments because the QI
would already have provided the nominee with the partner information for the
nominee to report under §1.6031(c)-1T(a)
with respect to the PTP interests held by
the QI. In response to these comments,
the 2023 QI Agreement provides that the
statement specified in §1.6031(c)-1T(a) is
not required to be provided to a QI’s nominee to the extent the nominee maintains
fully segregated and disclosed accounts
for the disclosing QI’s account holders
that include the information for the PTP
to issue the statement. With respect to the
information required on a statement provided by a QI under §1.6031(c)-1T(a), the
2023 QI Agreement specifies that it must
include a U.S. TIN for a foreign account
holder only when provided by the account
holder to the QI.
With respect to the definition of a
nominee included in Notice 2022-23,
one comment noted that the term “nominee” is defined by reference to the definition under §1.1446-4(b)(3) (covering only nominees permitted to assume
withholding on PTP distributions under
section 1446(a)) and questioned whether
this definition should apply for purposes
of proposed section 8.07 of the 2023 QI
Agreement. In response to this comment,
the 2023 QI Agreement defines a nominee
for purposes of section 8.07 to mean any
entity that holds a PTP interest directly or
indirectly for another person (similar to
the term as used in §1.6031(c)-1T(a)).
(4) Validity period for section 1446
documentation. Comments requested
clarification on whether a QI would be
required to obtain revised documentation
from account holders for each payment of
a PTP distribution or amount realized from
the sale of a PTP interest, noting that certain proposed revisions in Notice 2022-23
suggested a payment-by-payment requirement for collecting documentation. The
Treasury Department and the IRS did not
intend to establish a requirement as raised
in these comments and note that references in Notice 2022-23 to a QI’s assumption of withholding on a payment of a PTP
distribution or amount realized from the
sale of a PTP interest were intended to
distinguish those payments from chapter 3

Bulletin No. 2022–52

payments (for which a QI may separately
assume withholding responsibilities).
In response to these comments, section
5.11(A) of the 2023 QI Agreement indicates that the validity period of documentation for purposes of section 1446(a) or
(f) is the same as the validity period that
otherwise applies to documentation under
section 5.11(A) of the 2023 QI Agreement
(covering documentation other than a
Form W-9).
(5) Allowance for collective refunds. A
comment requested that QIs be permitted
to file collective refunds for overwithholding under sections 1446(a) and (f) with
respect to their account holders to the same
extent permitted for chapter 3 payments.
This comment is not adopted as account
holders receiving payments subject to
withholding under section 1446(a) or (f)
are required to file U.S. income tax returns
to report these payments and should claim
any associated credits or refunds of the
withholding on those returns (and report
any other income required on the return).
See §§1.6012-1(b) and 1.6012-2(g). Thus,
the 2023 QI Agreement includes the same
restriction on a QI’s use of the collective
refund procedures for overwithholding
under section 1446(f) or on a PTP distribution as in Notice 2022-23.
(6) Presumption rule for section
1446(a) withholding. Section 5.13(C)
of the 2017 QI Agreement provides presumption rules for a QI withholding on
payments that cannot be reliably associated with valid documentation under section 5.13(B) of the 2017 QI Agreement.
For a payment subject to withholding
under section 1446(a), Notice 2022-23
proposed to allow QIs to presume the status of an account holder when they cannot
reliably associate the payment with valid
documentation, which would require the
QI to treat a partner in a PTP as a foreign
person, with the rate of withholding determined under §1.1446-4(d)(1)(iii). Because
§1.1446-4(d)(1)(iii) applies for determining the rate of withholding in those cases
only when a nominee also does not receive
a qualified notice for a PTP distribution (or
otherwise cannot determine the income
associated with the distribution based on
the notice), the reference to §1.1446-4(d)
(1)(iii) does not cover all cases in which
a QI would be required to determine the
rate of withholding under section 1446(a)

575

due to the absence of valid documentation
associated with a partner. As a result, the
2023 QI Agreement also includes a reference to the presumption rule of §1.14461(c)(3) for a QI to determine the status of
a partner as a foreign individual or corporation (and, thus, the rate of withholding)
when the QI cannot reliably associate a
payment subject to section 1446(a) withholding with valid documentation from a
partner in cases not covered by the rule in
§1.1446-4(d)(1)(iii).
.02 Provisions Applicable to Qualified Derivatives Dealers and Qualified
Security Lenders. The 2017 QI Agreement includes the requirements for QIs
acting as QDDs and the requirements of
QIs with respect to payments of dividend
equivalents they receive in an intermediary capacity for purposes of regulations
issued under sections 871(m), 1441, 1461,
and 1473 (section 871(m) regulations).
The 2017 QI Agreement requires a QI acting as a QDD to act as a QDD for all payments made as a principal with respect to
potential section 871(m) transactions and
all payments received as a principal with
respect to potential section 871(m) transactions and underlying securities, excluding any payments made or received to the
extent treated as effectively connected
with the conduct of a trade or business
within the United States. The 2017 QI
Agreement generally provides that a QDD
must assume primary withholding responsibility for purposes of chapters 3 and 4
and section 3406 for all payments it makes
as a QDD and that a QDD is subject to
withholding on dividends (including
deemed dividends) other than dividends
the QDD receives in its equity derivatives
dealer capacity in calendar year 2017. The
2017 QI Agreement requires that a QI
must act as a QDD for any securities lending or sale-repurchase transaction it enters
into that is a section 871(m) transaction
unless it is acting as an intermediary in the
transaction. The 2017 QI Agreement also
provides rules for how a QDD calculates
its section 871(m) amount and determines
its QDD Tax Liability and its requirements
to report payments on Forms 1042-S. For
further information on the requirements
for QIs to act as QDDs and for withholding on payments of dividend equivalents
and on dividends paid to QDDs, see
§§1.1441-1(e)(6) and 1.871-15. Finally,

December 27, 2022

the 2017 QI Agreement permits a QI to
act as a qualified securities lender (QSL)
in accordance with Notice 2010-46, 201024 I.R.B. 757, but only to the extent that
a QI acts as an intermediary with respect
to payments of substitute dividends when
the QI is not acting as a QDD, and only
for 2017.
Following the publication of the 2017
QI Agreement, the Treasury Department
and the IRS published a series of notices
that deferred the full application of certain provisions of the section 871(m)
regulations, including certain of the
requirements applicable to QDDs, and the
requirement for withholding on payments
of dividends received by QDDs in their
equity derivatives dealer capacity. These
notices also extended the allowance for
QIs to continue to act as QSLs and apply
the provisions of Notice 2010-46, Part III
after 2017. Most recently, on September
12, 2022, the Treasury Department and the
IRS published Notice 2022-37, 2022-37
IRB 234, which extended the prior transition relief for another two years, generally
through calendar year 2024. The portions
of Notice 2022-37 that are relevant to the
2023 QI Agreement are discussed herein.
Similar to the 2017 QI Agreement, Part
V of Appendix 1 to the 2023 QI Agreement reserves on the factual information
required to be reported for a QDD with the
periodic certification, and Appendix II to
the 2023 QI Agreement does not include
a sample of QDD accounts. This information is anticipated to be added to the 2023
QI Agreement in a notice or revenue procedure that will set forth a rider to include
this information and any changes to the
requirements of QDDs deemed necessary.
For the QDD provisions, the 2023 QI
Agreement generally retains the provisions of the 2017 QI Agreement with
some clarifications, including some guidance for QDDs that are a partnership or
a branch of partnership (either, a “QDD
Partnership”). The 2023 QI Agreement
also reflects portions of prior Frequently
Asked Questions (FAQs) to supplement
the 2017 QI Agreement, which are available at: https://www.irs.gov/businesses/
corporations/qualified-intermediary-general-faqs and Notice 2022-37. Consistent
with the 2017 QI Agreement, if a QI acts
as a QDD with respect to the home office
or branch, the home office or branch, as

December 27, 2022

applicable, must act as a QDD for all payments made as a principal with respect to
potential section 871(m) transactions and
all payments received as a principal with
respect to potential section 871(m) transactions and underlying securities, excluding any payments made or received to the
extent treated as effectively connected
with the conduct of a trade or business
within the United States. It may not act as
a QDD with respect to any other payments.
It is expected that additional guidance will
be provided regarding dividend equivalents and QDDs in the future. Below is a
summary of the significant changes from
the 2017 QI Agreement relating to section
871(m).
(1) QSL. Notice 2022-37 extended
the period that withholding agents may
apply the QSL rules provided in Notice
2010-46, Part III, for U.S. source substitute dividend payments made in calendar
year 2023 and 2024. Under the 2023 QI
Agreement, a withholding agent may not
act as a QSL for payments made after
calendar year 2024. Until December 31,
2024, if a QI that is not acting as a QDD
acts as a QSL, it must act as a QSL and
assume primary withholding responsibility (including Form 1099 reporting) for all
substitute dividends received and paid by
the QI when acting as an intermediary or
dealer with respect to securities lending
and similar transactions. A QI that acts
as a QDD may not act as a QSL, except
as described in the prior sentence with
respect to payments on securities lending
or sale-repurchase transactions for which
the QI has determined that it is acting as an
intermediary. QIs acting as intermediaries
(but not as QSLs) for substitute dividends
must also assume primary withholding
responsibility with respect to all substitute
dividends when acting as intermediaries.
(2) Reporting and compliance.
(a) Reporting. Under the 2023 QI
Agreement, a QDD must assume primary
chapter 3 and chapter 4 withholding and
reporting responsibility and primary Form
1099 reporting and backup withholding responsibility under section 3406 for
payments made as a QDD with respect
to potential section 871(m) transactions.
In addition, a QI acting as a QDD (other
than a QDD that is a foreign branch of a
U.S. financial institution and as modified
for QDD Partnerships, discussed below)

576

remains liable for its QDD Tax Liability and must report that liability on the
appropriate U.S. tax returns. U.S. financial institutions and U.S. partners of any
QDD Partnership must pay appropriate
U.S. taxes on the relevant QDD’s activities. The 2023 QI Agreement clarifies that
a QI that is a QDD (or has a branch that is
a QDD) should file (1) a Form 1120 if it is
a domestic corporation, (2) a Form 1120-F
if it is a foreign corporation, or (3) a Form
1065 if it is a partnership. In addition, all
QDD Partnerships must file Forms 1042-S
with respect to any amounts under section
3.09 of the 2023 QI Agreement, as modified for a QDD Partnership, allocated to
each of their foreign partners. The Form
1120-F or 1065, as applicable, must be
filed whether or not it would have to be
filed if the entity were not a QDD (for
example, a foreign corporation cannot
rely on the exceptions to filing in the
Form 1120-F). Although the Form 1065
does not have a Schedule Q, each QDD
of a QDD Partnership must provide comparable information, as detailed in section
7.01(C) of the 2023 QI Agreement.
(b) Compliance. While a QDD is not
required to perform a periodic review for
calendar years 2023 and 2024 with respect
to its QDD activities, the 2023 QI Agreement requires a QDD to certify, as part
of its periodic certification, that it made a
good faith effort to comply with the section 871(m) regulations and relevant provisions of the 2023 QI Agreement. The
2023 QI Agreement clarifies that in order
to rely on the good faith effort standard,
a QI must provide the information previously specified by FAQ #19 – Certifications and Periodic Reviews for the 2017
QI Agreement.
In addition, the 2023 QI Agreement
adds that a QDD must include information about dividends that are received in
its equity derivatives dealer capacity on its
withholding statement for calendar years
2023 and 2024 (which may be done by
designating one or more accounts, if the
only dividends that can be received by
those accounts are in the QDD’s equity
derivatives dealer capacity).
(3) QDD partnership. The 2023 QI
Agreement provides guidance on how
the agreement applies to a QDD Partnership. For example, the 2023 QI
Agreement provides that the QDD Tax

Bulletin No. 2022–52

Liability for each QDD of a QDD Partnership is the gross income components
of the section 3.09 amounts, instead of
the amounts of tax liability under section
881, and that it includes any withholding required to be done by the partnership with respect to its partners. It also
ensures that QDD Partnerships and
their partners retain the same dividend
equivalent payment timing as non-partnerships, and therefore requires that a
QDD Partnership determine the QDD
Tax Liability of its partners and any dividend equivalent payments in the QDD’s
non-equity derivative dealer capacity on
the date provided in §1.871-15(j)(2) for
the applicable dividend for withholding and reporting purposes. In addition,
a QDD partnership must include either
withholding rate pool information or
specific payee information regarding its
partners when it provides a withholding
statement under section 6.02 of the 2023
QI Agreement and must file a recipient
specific Form 1042-S for each foreign
partner in connection with its withholding requirement under section 3.09 of
the 2023 QI Agreement.
(4)
Clarifications
and
FAQ
incorporations.
(a) Naming convention. Under the
2023 QI Agreement, each QDD must separately qualify and be approved for QDD
status. In applying for QDD status, the
applicant must follow the naming convention described in section 2.63 of the
2023 QI Agreement on its application
and, if approved as a QDD, on any other
tax forms or other materials for which the
QDD must be identified. This is the same
naming convention that was previously
described in an FAQ #13 – Certifications
and Periodic Reviews for the 2017 QI
Agreement.
(b) Eligible entity. The 2023 QI Agreement revises the eligible entity definition
in section 2.23 to conform to §1.14411(e)(6)(ii). As noted in a prior FAQ #14
– New Applications/Renewals, the “any
other person otherwise acceptable to the
IRS” category is not intended to function
as a significant expansion of the definition
of eligible entity. If an applicant does not
satisfy one of the specific categories, the
applicant should explain why its facts are
very similar to a specified category and
describe how it is regulated.

Bulletin No. 2022–52

(c) Waivers. See section 4.04(1)(e) of
this Revenue Procedure.
.03 Stakeholder Remarks on 2017
QI Agreement. Following publication
of the 2017 QI Agreement, stakeholders
requested clarification on certain of its
provisions, some of which were addressed
as part of FAQs (in addition to the FAQs
related to QDDs referenced in section
4.02 of this Revenue Procedure). This section 4.03 summarizes those stakeholders’
remarks and the related changes that are
included in the 2023 QI Agreement.
(1) Beneficiaries of certain tax-free
plans as direct account holders – Sec.
2.02. The 2017 QI Agreement defines
a direct account holder as any account
holder who has a direct relationship with
a QI that is an FFI (which includes a flowthrough entity such as a grantor trust). A
stakeholder noted uncertainty in the 2017
QI Agreement on whether this definition
could be applied to certain tax-free savings accounts that are treated as trusts
under applicable non-U.S. local law but
have a single grantor and beneficiary
who is treated as the account holder for
purposes of a QI’s anti-money laundering/know-your-customer
(AML/KYC)
requirements. The stakeholder requested
clarification on whether a QI may treat the
sole beneficiary of the trust in these cases
as a direct account holder of an account
held by the trust, a treatment that would
result in more favorable documentation
requirements for a QI than treating the
beneficiary as an indirect account holder.
In response, the IRS issued FAQ #4 –
Provisions for 2017 QI Agreement, which
allows a QI to treat the beneficiary of a
tax-free plan as a direct account holder,
provided that several requirements are
met. The 2023 QI Agreement adopts the
requirements of FAQ #4 in the definition of a direct account holder in section
2.02(A).
(2) KYC Attachments as part of QI
agreement – Sec. 2.03. Unlike QI agreements that preceded the 2017 QI Agreement, the 2017 QI Agreement was not
printed and signed in hard copy. As a
result, the 2017 QI Agreement did not
include the references to “KYC Attachments” for purposes of the IRS-approved
attachments applicable to a QI that had
been affixed to prior QI agreements. Due
to this change, a stakeholder raised its

577

concern that the 2017 QI Agreement did
not incorporate the KYC Attachments relevant to a QI. As a result, the IRS issued
FAQ #3 – Provisions for 2017 QI Agreement, which states that the IRS did not
intend to change the applicability of the
approved KYC Attachments in the 2017
QI Agreement, and that QIs may treat
an approved KYC Attachment as incorporated into their agreements. The 2023
QI Agreement incorporates this FAQ
by defining “Agreement” to include the
know-your-customer rules included in a
country attachment on IRS.gov relevant
to the QI (or a branch of the QI).
(3) Joint account treatment and certification of chapter 4 status - Sec. 4.05.
Under section 4.05(A)(1) of the 2017 QI
Agreement, a foreign partnership or trust
to which a QI applies joint account treatment must have a chapter 4 status as a certified deemed-compliant FFI (other than
a registered deemed-compliant Model
1 IGA FFI), an owner-documented FFI
with respect to a QI, an exempt beneficial owner, or an NFFE, or it must be
covered as an account that is excluded
from the definition of financial account
under Annex II of an applicable IGA or
under §1.1471-5(a). Additionally, a QI is
required to obtain from each partnership
or trust a certification indicating that the
partnership or trust maintained a permissible chapter 4 status during the QI’s
entire certification period and must, as
part of Appendix I to the 2017 QI Agreement, indicate that it was provided these
certifications.
Stakeholders remarked that requiring
QIs to obtain chapter 4 certifications for
each certification period is burdensome
given the significant number of partnerships and trusts to which many QIs apply
joint account treatment. The stakeholders
noted that, aside from this requirement, a
withholding agent or QI may continue to
rely on a chapter 4 status represented on a
Form W-8IMY from a partnership or trust
until the QI has reason to know or actual
knowledge that it is unreliable or incorrect
(and which a partnership or trust must otherwise update when applicable).
In response, the IRS released FAQ #11
– Certifications and Periodic Reviews.
This FAQ allows a QI to rely upon a valid
Form W-8IMY it has on file (and which a
QI may rely on under section 5.10 of the

December 27, 2022

2017 QI Agreement) to determine a permissible chapter 4 status of a partnership
or trust for purposes of section 4.05 of the
2017 QI Agreement. Thus, if a QI properly relies on a Form W-8IMY described
in the previous sentence, it is not required
to obtain an additional certification of
chapter 4 status from the partnership or
trust. Consistent with the FAQ, the 2023
QI Agreement omits the requirement
included in the 2017 QI Agreement for a
QI to obtain the additional certifications
regarding the chapter 4 statuses of partnerships and trusts for purposes of section
4.05 and the related requirement to make
the representation in Appendix I that it
received these certifications.
(4) Reporting limitation on benefits
category – Sec. 5.03. The 2017 QI Agreement requires QIs to collect and report on
Forms 1042-S the specific category of the
limitation on benefits (LOB) provision
claimed by an entity account holder. A
stakeholder requested that the IRS require
specific LOB information to be reported
only when a QI files a recipient-specific
Form 1042-S as otherwise QIs would be
required to report withholding rate pool
information separately for each LOB
category when filing Forms 1042-S. In
response to this request, section 5.03(B)
of the 2023 QI Agreement clarifies that
QIs are required to report the specific LOB
category claimed by an entity account
holder only on a recipient-specific Form
1042-S. See also section 8.02(P) of the
2023 QI Agreement and section 4.03(7) of
this Revenue Procedure.
(5) Validity standards for documentation – 5.10(B). Under section 5.10(B) of
the 2017 QI Agreement (providing validity standards for reliance on documentation), a QI that is a financial institution, an
insurance company, or a broker or dealer
in securities has reason to know that documentation provided by a direct account
holder is incorrect or unreliable only as
prescribed in §1.1441-7(b)(3). Section
1.1441-7(b)(3) cross-references §1.14417(b)(4) through (b)(9), which provides
requirements for reliance on documentation for claims of foreign status and
reduced withholding under an income tax
treaty. Section 1.1441-7(b)(5)(i) provides
that a withholding certificate furnished
to establish foreign status is incorrect or
unreliable if the withholding agent has

December 27, 2022

a current residence or mailing address
as part of its account information that is
an address in the United States. For an
account holder claiming treaty benefits
based on documentary evidence, §1.14417(b)(9)(i) provides that documentary
evidence is unreliable or incorrect if the
withholding agent has a current mailing or
current permanent residence address for
the direct account holder (whether or not
on the documentary evidence) that is outside the applicable treaty country or has
no permanent residence address for the
account holder.
Stakeholders noted that the cross-reference to §1.1441-7(b)(3) broadened the
validity standard applicable to a claim
of foreign status from that included in
prior versions of the QI agreement, which
required a QI to treat the claim as unreliable or incorrect based on having a U.S.
address for an account holder (rather than
a U.S. address in the account information). Stakeholders also remarked that by
requiring a permanent residence address
for an account holder claiming treaty benefits based on documentary evidence, the
2017 QI Agreement imposed a further
requirement for reliance on a treaty claim
not included in prior QI agreements.
In response, the IRS issued FAQs #1
and #2 – Provisions for 2017 QI Agreement. FAQ #1 states that a QI is required
to treat a Form W-8 provided by a direct
account holder as unreliable for purposes
of a claim of foreign status if the QI has
a U.S. mailing or permanent address for
the account holder. Additionally, FAQ #2
states that the IRS would not require a QI
to re-document a direct account holder
claiming treaty benefits for purposes of
section 5.10(B) of the 2017 QI Agreement, provided that it had documented the
account holder before January 1, 2018,
in accordance with the prior guidance
applicable to a QI. For a direct account
holder claiming treaty benefits and documented on or after January 1, 2018, FAQ
#2 did require that a QI have a permanent
residence address for the direct account
holder in the jurisdiction associated with
the documentary evidence.
Section 5.10(B) of the 2023 QI Agreement incorporates the conditions specified in both FAQs for a QI’s validity
requirements for relying on documentation. Additionally, as section 5.10(A) of

578

the 2017 QI Agreement included only
a limited number of cross references to
regulations covering the validity requirements for withholding agents, the 2023
QI Agreement provides additional cross
references to the specific provisions of
those regulations and reorganizes section
5.10 with additional subsections for easier
reference. Section 5.10(A) also includes
cross references to regulations addressing
general validity standards applicable to
documentation for purposes of sections
1446(a) and (f).
(6) Curing hold mail instruction – Sec.
5.10(D). In 2017, in TD 9808, 82 FR
29719, the Treasury Department and the
IRS promulgated temporary regulations
(the 2017 temporary regulations), which
allow a withholding agent to treat an
address subject to a hold mail instruction
as a beneficial owner’s or account holder’s
permanent residence address, provided
that the withholding agent obtained documentary evidence establishing the person’s residence in the country for which
the person claimed to be a resident for
tax purposes. Comments received on the
2017 temporary regulations requested that
the hold mail rule be eliminated or otherwise that a withholding agent be allowed
to rely on documentary evidence merely
establishing a person’s foreign status
(including documentary evidence that
does not indicate an address). With respect
to the 2017 QI Agreement, a stakeholder
requested similar relief for QIs that receive
addresses subject to hold mail instructions
from their account holders.
In 2020, in TD 9890, 85 FR 192, the
Treasury Department and the IRS published final regulations (the 2020 final regulations) that modify the hold mail rules
set forth in the 2017 temporary regulations
to allow a withholding agent to treat an
account holder’s address subject to a hold
mail instruction as a permanent residence
address if the withholding agent obtains
documentary evidence that supports the
person’s claim of foreign status or, for a
claim of treaty benefits, the person’s residence in the country where the benefits
are claimed. For these purposes, the 2020
final regulations allow a withholding
agent to rely on documentary evidence
described in §1.1471-3(c)(5)(i), without regard to whether the documentation
contains a permanent residence address.

Bulletin No. 2022–52

Section 5.10(D) of the 2023 QI Agreement includes the same requirements as
the 2020 final regulations regarding when
a QI may treat an address subject to a hold
mail instruction as a permanent residence
address.
(7) Furnishing recipient-specific Form
1042-S to account holder – Sec. 8.02.
When overwithholding is applied to a payment made to a QI’s account holder and the
QI does not apply for a collective refund,
the 2017 QI Agreement requires the QI to
provide a recipient-specific Form 1042-S
when requested by the account holder. In
response to this requirement, stakeholders
raised various concerns. Some stakeholders requested a specified time limitation
regarding when an account holder should
be able to obtain a recipient-specific Form
1042-S from a QI. Additionally, a stakeholder further requested that QIs not be
required to issue a recipient-specific Form
1042-S to an account holder that does not
provide a U.S. TIN. Lastly, another stakeholder noted that an account holder may
need a Form 1042-S to support a credit for
withholding on its U.S. income tax return
even when no overwithholding occurred.
Notice 2022-23 proposed a modification to the QI agreement for the issuance
of a recipient-specific Form 1042-S for a
payment subject to withholding on a PTP
distribution or under section 1446(f). This
modification would require a QI to provide a recipient-specific Form 1042-S to
a foreign partner for a payment in those
cases only when the partner provides its
U.S. TIN (or indicates it has applied for
a TIN) to the QI and requests the form
within three calendar years of the year
of the payment for which the form is
requested. Comments on this proposed
requirement questioned whether a QI
should in all cases defer issuing a Form
1042-S until the account holder provides
its U.S. TIN to the QI.
In response to concerns and to broaden
the proposed modification in Notice 202223 to cover additional payments subject to
withholding, section 8.02(P) of the 2023
QI Agreement generally requires a QI to
provide an account holder with a recipient-specific Form 1042-S if the account
holder makes a written request for the
form within two calendar years following the year of the payment for which the
form is requested. If, however, a QI files a

Bulletin No. 2022–52

Form 1042-S to report a payment subject
to section 1446(a) or (f) withholding with
respect to an account holder that requests
a Form 1042-S for the same calendar year,
the request must be made in writing within
three calendar years of the year of the payment, and the QI must provide the account
holder with a separate Form 1042-S for
each amount reportable on Form 1042-S
that was paid to the account holder for the
calendar year.
The three-year period referenced in
the preceding sentence is intended to provide a foreign account holder additional
time to request a Form 1042-S due to its
own requirement to file a U.S. income
tax return to report an amount subject to
section 1446(a) or (f) withholding, which
applies regardless of whether its tax liability on the payment was fully satisfied
through the withholding. Also, since an
account holder may be required to file a
U.S. income tax return in those and certain other cases, even when not requesting
a refund of overwithholding, the 2023 QI
Agreement does not limit a QI’s requirement to issue a recipient-specific Form
1042-S to cases of overwithholding. Additionally, because the IRS requires that a
Form 1042-S used to support an account
holder’s credit for withholding claimed on
an income tax return include the account
holder’s U.S. TIN, the 2023 QI Agreement omits the allowance in Notice 202223 that permitted the account holder to
represent to a QI that it had applied for a
U.S. TIN when requesting a recipient-specific Form 1042-S. The requirement for
an account holder’s U.S. TIN applies to
any request for a recipient-specific Form
1042-S.
Finally, in the case of a recipient-specific Form 1042-S issued by a QI to an
account holder of a disclosing QI, the
2023 QI Agreement requires that the QI
also issue a recipient copy of the Form
1042-S to the disclosing QI. This requirement, which was not included in Notice
2022-23, was also added to the 2023
instructions for Form 1042-S for a withholding agent making payments of PTP
distributions or amounts realized to a QI
acting as a disclosing QI.
(8) Certification due date for third-year
review – Sec. 10.03. The 2017 QI Agreement requires a QI conducting a periodic
review for the third year of a certification

579

period to submit its periodic certification
by December 31 of the year following the
end of the certification period. Citing a
QI’s dependence on other parties in completing a periodic review, a stakeholder
requested that the IRS allow QIs selecting
the third year of a certification period for
their periodic reviews to have until June
30 of the second year following the certification period to submit their periodic certifications. The 2023 QI Agreement retains
the December 31 due date included in the
2017 QI Agreement. A QI, may, however,
seek an extension to this due date, which
will be considered on a case-by-case basis
by the IRS and granted under appropriate
circumstances.
(9) Standards of independence for
external reviewers – Sec. 10.04. A QI may
use either an internal or external reviewer
to conduct the periodic review required
by section 10.04 of the 2017 QI Agreement. The 2017 QI Agreement generally
describes the standard of independence
required of an external reviewer by specifying that the reviewer cannot review
systems, policies, or procedures that the
reviewer (or the reviewer’s firm) was
involved in designing, implementing, or
maintaining for a QI. Similarly, the preamble to the 2017 QI Agreement states
that a reviewer’s independence should be
determined on a firm-wide basis and that
the reviewer must have sufficient independence to objectively conduct the review
and cannot review his or her own work or
the work of others in the reviewer’s firm.
A stakeholder requested clarification
on the 2017 QI Agreement’s standard of
independence applicable to an external
reviewer and raised questions concerning
the application of the standard in certain
scenarios. In consideration of this request
and that the 2017 QI Agreement may have
prescribed an independence standard that
goes beyond external reviewers’ professional standards, the IRS issued FAQ #2
– Certifications and Periodic Reviews.
The FAQ states that the IRS will allow
an external reviewer of a QI to apply
the same standards of independence that
would otherwise apply to its engagement
to conduct the periodic review (such as
an engagement to perform “agreed upon
procedures”). In Section 10.04(A)(2), the
2023 QI Agreement adopts the allowance
provided in FAQ #2 for purposes of the

December 27, 2022

standard of independence for an external
reviewer.
(10) Final certification and periodic
review for terminating QIs – Sec. 11.05.
Section 11.02(B) of the 2017 QI Agreement requires a QI terminating its QI
agreement to submit a final certification
within six months of the date of termination regardless of whether a periodic
review has been completed for the portion of the certification period preceding
termination. For a case in which a QI terminates its QI agreement (predecessor QI)
and merges into or is acquired by another
QI that assumes the predecessor QI’s obligations relating to the predecessor QI’s QI
agreement (successor QI), section 11.05
of the 2017 QI Agreement provides that
either QI must deliver a notice of termination and merger to the IRS. Additionally,
the successor QI must provide the predecessor QI’s final certification and include
the predecessor QI in its periodic review
following the merger.
After publication of the 2017 QI Agreement, a stakeholder requested that the IRS
establish a coordinated approach for QIs
to conduct periodic reviews and make
periodic certifications following a merger
of QIs or an acquisition of a QI by another
QI to avoid duplicative certifications and
periodic reviews. The stakeholder suggested that the IRS allow separate certifications to be made by the predecessor
QI and successor QI or a consolidated
certification that covers both entities to be
submitted by the successor QI. In the case
of a consolidated certification, the stakeholder requested that the deadline for the
successor QI to submit a certification for
the predecessor QI be deferred from the
deadline for a terminating QI’s final certification to align with the deadline for the
successor QI’s next periodic certification.
The stakeholder also requested that, in
the event of a merger or acquisition, the
IRS require only one periodic review to
be conducted by the successor QI, which
would cover both entities for the final certification period of the predecessor QI.
Similar to the 2017 QI Agreement, the
2023 QI Agreement provides that a QI terminating its QI agreement must submit a
final certification within six months of termination. The 2023 QI Agreement specifically provides, however, that if a QI terminates its QI agreement in the final year of

December 27, 2022

a certification period, the QI must submit
a periodic review report covering one of
the two years before the year of termination that meets the requirements of section
10.06, unless the QI is granted a waiver
pursuant to section 10.07. Otherwise, no
periodic review is required for the final
certification period of a QI terminating its
QI agreement.
In consideration of the stakeholder
remarks above, the 2023 QI Agreement
includes certain changes to specify the
requirements for a QI’s termination that
are applicable to a predecessor QI and
successor QI. The 2023 QI Agreement
provides that if a predecessor QI merges
into or is acquired by a successor QI and
the predecessor QI is required to submit a
periodic review report due to its termination, the predecessor QI may satisfy this
requirement through a combined periodic
review.
Under the 2023 QI Agreement, a combined periodic review is a review that
covers one of the two years before the
year of the predecessor QI’s termination
and that includes accounts of both the
predecessor QI and successor QI for purposes of the review procedures in section
10.05 relating to documentation and withholding. This allowance should provide
for a reduced number of accounts to be
reviewed when a QI’s reviewer applies
a sampling methodology. See Appendix
II of the 2023 QI Agreement for requirements for a combined periodic review
based on a sampling of accounts.
Notwithstanding the performance of
a combined periodic review, the predecessor QI and successor QI must make
separate certifications for the period covered by the combined periodic review. A
predecessor QI may, however, obtain a
six-month extension from the deadline
to submit its final certification under section 11.02(B) of the 2023 QI Agreement,
provided that the request for extension
indicates that it is being made due to the
combined periodic review and is delivered
to the IRS before the deadline for the final
certification under section 11.02(B).
(11) Waiver of periodic review for
QI assuming withholding on substitute
interest – Appendix I. A QI may seek a
waiver of the requirement to conduct a
periodic review if the eligibility requirements in section 10.07(B) of the 2017 QI

580

Agreement are met. Section 10.07(C) of
the 2017 QI Agreement also requires a QI
seeking a waiver to provide the information described in Appendix I of the 2017
QI Agreement. For a QI assuming primary
withholding responsibility on payments of
substitute interest, Part VI of Appendix
I to the 2017 QI Agreement requires the
QI to provide certain information regarding these payments as part of its periodic
certification.
A stakeholder noted that a periodic
review must be completed for QIs to provide certain information requested in Part
VI of Appendix I. Because this information is required even when a QI requests
a waiver of the periodic review, a QI
assuming primary withholding responsibility on payments of substitute interest
would be unable to request a waiver. In
response, the IRS issued FAQ #12 – Certifications and Periodic Reviews, which
states that QIs assuming primary withholding responsibility for payments of
substitute interest and that are eligible for
a waiver of the periodic review requirement do not need to complete Part VI of
Appendix I of the 2017 QI Agreement.
The 2023 QI Agreement incorporates this
allowance in the general instructions to
Appendix I.
.04 Compliance Requirements for QIs.
The 2017 QI Agreement sets forth review
steps in sections 10.05(A) through (E) for
a QI’s reviewer to apply in conducting the
periodic review of a QI. These steps relate
to a QI’s compliance with its documentation, withholding and reporting requirements under chapters 3, 4 and 61 (including for payments of substitute interest and
QDD activities) and related provisions of
the 2017 QI Agreement. Appendix I to the
2017 QI Agreement includes the certifications and the factual information to be
furnished by a QI and the material failures
and events of default that a responsible
officer must consider in making a QI’s
periodic certifications. Appendix I further includes information and representations for a QI applying for a waiver of its
periodic review requirement. Appendix II
of the 2017 QI Agreement describes statistical sampling procedures that a QI’s
reviewer may use in conducting a periodic review, which take into account the
review steps set forth in section 10.05 of
the 2017 QI Agreement.

Bulletin No. 2022–52

The 2023 QI Agreement largely incorporates the review steps and compliance
requirements in the 2017 QI Agreement
and adds to those requirements for purposes of a QI’s responsibilities under sections 1446(a) and (f) which, as described
in section 4.01 of this Revenue Procedure,
were not included in Notice 2022-23
(except for material failures and events
of default relating to sections 1446(a) and
(f)). This section 4.04 sets forth a summary of the significant revisions made to
section 10 and Appendices I and II of the
2017 QI Agreement that are included in
the 2023 QI Agreement relating to a QI’s
requirements under sections 1446(a) and
(f) and other requirements that the Treasury Department and IRS have determined
are appropriate to add to the 2023 QI
Agreement for evaluating a QI’s compliance. This section 4.04 also describes new
Appendix III of the 2023 QI Agreement.
Although the 2023 QI Agreement adds
certain review steps and compliance procedures for QIs, the 2023 QI Agreement
does not amend the allowance that a QI’s
periodic review may be conducted for
any calendar year covered by the certification period. Thus, a QI acting as a QI
for purposes of withholding under section 1446(a) or (f) (in addition to its other
withholding responsibilities as a QI) may
select any year of its certification period
for the periodic review to the same extent
permitted under the 2017 QI Agreement.
(1) Revisions to section 10 of the QI
agreement.
(a) Periodic review procedures. The
2023 QI Agreement expands the scope
of the periodic review procedures in section 10.05 of the 2017 QI Agreement to
include a QI’s requirements under sections 1446(a) and (f) and other withholding on PTP distributions. For this purpose,
the procedures include a review of documentation associated with QI accounts
receiving PTP distributions and amounts
realized from the sale of PTP interests
to determine any documentation failures
and underwithholding on those payments.
A review step is specifically included to
determine any underwithholding applicable to a QI acting as a disclosing QI.
This step requires a reviewer to compare copies of the Forms 1042-S issued
by a QI’s withholding agent to the QI’s
account holders to determine whether the

Bulletin No. 2022–52

withholding reported was sufficient based
on the results of the documentation review
in section 10.05(A). A review step is also
added for purposes of a QI’s compliance
with the reporting required under section
8.07 of the 2023 QI Agreement. Another
review step is added to confirm that a QI
did not apply the joint account option
for purposes of section 1446(a) or (f) (a
restriction consistent with a proposed
modification in Notice 2022-23).
The review steps include certain other
changes from the 2017 QI Agreement.
Review steps are added to determine
whether a partnership or trust to which a
QI applies the joint account option has a
permitted chapter 4 status and, more generally, that a review for underwithholding
in these cases is performed when a QI
assumes withholding (in addition to when
a QI provides withholding rate pools). See
section 4.03(1) of this Revenue Procedure
and sections 10.05(B) and (C) of the 2023
QI Agreement. For the review steps for
payments included in withholding rate
pools, section 10.05(B) indicates that the
last payment of each income type made by
the QI for the year may (at a minimum)
be reviewed for determining any underwithholding. For a QI acting as a QSL
or otherwise acting as an intermediary
for substitute dividends, a review step is
added in section 10.05(C) for the requirement that a QI assume withholding on all
such payments (with a similar review step
added for a QI assuming withholding on
substitute interest payments). For section
10.05(D), a review step is added for a
reviewer to determine whether a QI failed
to report with respect to any of its U.S.
account holders. Finally, certain descriptions of review steps include a limited
number of non-substantive changes for
clarification.
(b) Designating compliance QI to execute Form 872. Under the 2017 QI Agreement, two or more QIs that are members
of a group of entities under common
ownership may establish a consolidated
compliance group (CCG) upon approval
by the IRS. Each QI that is a member of
a CCG (CCG member) must designate a
QI (Compliance QI) in the group to act
on its behalf for purposes of conducting
a consolidated periodic review and making a periodic certification. Additionally,
a Compliance QI must agree to be jointly

581

and severally liable for the obligations and
liabilities relating to the QI agreement of
any CCG member for the period covered
by the CCG.
The 2023 QI Agreement adopts the
2017 QI Agreement’s provisions regarding CCGs and adds a requirement that
each CCG member designate, in writing,
the Compliance QI to act as its agent to
execute Form 872, Consent to Extend
the Time to Assess Tax, for extending the
period to assess tax relevant to the 2023 QI
Agreement. As part of this requirement, a
Compliance QI must retain these designations and its agreement with the CCG
members to act as their agent. The IRS
anticipates that these requirements will
provide a more efficient process for executing and providing Forms 872 requested
as part of an IRS review of a CCG’s compliance or consolidated review plan.
(c) Submission of periodic review
report. The 2017 QI Agreement generally
requires the responsible officer of a QI to
arrange for the performance of a periodic
review, the results of which must be documented in a written report addressed to
the responsible officer. Section 10.06 of
the 2017 QI Agreement does not require
a QI to submit the periodic review report
with its periodic certification absent an
IRS request for the report. However, the
IRS considers its analysis of a periodic
review report integral to ensuring a QI’s
compliance (and thus typically requests
the reports in its reviews). For efficiency,
the 2023 QI Agreement requires QIs to
submit a copy of their periodic review
report with their periodic certification.
(d) Submission of remediation plan.
Section 10.03 of the 2017 QI Agreement
requires a QI to submit a qualified certification in accordance with Part II.B of
Appendix I when it has identified a material failure that has not been corrected as
of the date of the periodic certification or
has identified an event of default applicable to the certification period (and which
the QI must disclose). Under Part II.B.3
of Appendix I of the 2017 QI Agreement,
a QI must take appropriate actions to prevent such failures from recurring and may
be required to provide the IRS with a written plan to correct each failure.
The IRS views remediation plans
as critical to ensuring that all QIs institute appropriate and timely actions to

December 27, 2022

address any material failures and events
of default. As a result, the 2023 QI Agreement requires a QI that submits a qualified
certification to complete the remediation
plan information detailed in Part II.B.3 of
Appendix I and submit this information
with the certification.
(e) Waiver of periodic review. Section
10.07 of the 2017 QI Agreement generally
allows a QI that has not received more
than $5 million in reportable amounts in
each calendar year of a certification period
to apply for a waiver of its periodic review
requirement. To obtain a waiver, a QI must
meet the eligibility requirements set forth
in section 10.07(B) of the 2017 QI Agreement and provide certain representations
and factual information with its periodic
certification, which are detailed in Part III
of Appendix I. Additionally, a QI may not
obtain a waiver when it acts as a QDD.
The 2023 QI Agreement adopts the
requirements for a waiver in the 2017 QI
Agreement with certain modifications.
Under the 2023 QI Agreement, to be eligible to apply for the waiver a QI must, in
determining whether it received more than
$5 million in reportable amounts in each
calendar year of a certification period,
include the amount of PTP distributions
subject to withholding under chapter 3 or
4. Additionally, in Part III of Appendix I
of the 2023 QI Agreement, a QI must provide specified information regarding its
receipt of PTP distributions and amounts
realized from sales of PTP interests and
the amount of tax withheld under sections
1446(a) and (f). A QI must also provide the
information shown on Appendix III of the
2023 QI Agreement for each year of the
certification period. See section 4.04(4) of
this Revenue Procedure. Finally, the 2023
QI Agreement clarifies that, although a QI
acting as a QDD may not obtain a waiver,
this restriction does not apply for the 2023
and 2024 years and clarifies when the
curing of documentation is permitted to
be reflected in the reporting of the factual
information required for the waiver.
(2) Revisions to Appendix I.
(a) General information with certification. Part I of Appendix I of the 2017
QI Agreement requests certain general
information to be submitted with a QI’s
periodic certification, such as whether the
QI assumed primary withholding responsibility, was part of a CCG, or applied the

December 27, 2022

agency or joint account option during the
applicable certification period. The 2023
QI Agreement adds certain information
requests to Part I of Appendix I regarding
a QI’s activities related to withholding
under sections 1446(a) and (f).
(b) Certification of internal controls.
Part II.A of Appendix I of the 2017 QI
Agreement contains the certification of
internal controls that a QI is required to
make for a certification period and a list
of material failures and events of default
a QI must identify (when applicable).
The 2023 QI Agreement adds a new certification regarding a QI’s procedures for
complying with sections 1446(a) and (f)
and (more generally) that the QI has acted
only to the extent permitted under the QI
agreement. Thus, for example, a QI would
not be able to make this certification if it
represents its status as a QI with respect
to an amount realized paid to an account
holder for an interest in a partnership that
is not a PTP. The 2023 QI Agreement
also adds material failures and an event
of default specific to sections 1446(a) and
(f) to Part II of Appendix I. The material
failures added to Part II.D of Appendix I
are as proposed in section 10.03 of Notice
2022-23, with the addition of a material
failure for a QI failing to comply with section 5.01(A) of the 2023 QI Agreement in
requesting U.S. TINs from account holders. See section 4.01(1) of this Revenue
Procedure. Part II.D of Appendix I of the
2023 QI Agreement also reflects the 2023
and 2024 transitional relief for section
871(m) purposes discussed in section 4.02
of this Revenue Procedure by referencing
a QI or QDD’s material failures based on
a good faith standard.
(c) Part IV: chapters 3, 4, and 61. Part
IV of Appendix I of the 2017 QI Agreement
generally sets forth factual information
for purposes of chapters 3, 4, and 61 (and
backup withholding under section 3406)
that QIs are required to provide regarding
their accounts, documentation of account
holders, withholding, and reconciliation
of the reporting of payments made and
withholding. The 2023 QI Agreement
generally includes the factual information
included in Part IV of the 2017 QI Agreement and, to coordinate with new Part VII
of Appendix I of the 2023 QI Agreement,
specifically excludes the factual information regarding PTP-related payments

582

that is reported in Part VII. The factual
information relevant to PTP distributions
attributable to amounts subject to withholding under chapters 3 and 4 is, however, to be reported in Part IV of Appendix
I of the 2023 QI Agreement. See section
4.04(2)(d) of this Revenue Procedure
(directly below) for the scope of reporting
in new Part VII.
Part IV of Appendix I to the 2023 QI
Agreement also requires other new information. A chart is to be completed by QIs
using the safe harbor sampling method
in Appendix II for their periodic review
to specify the allocation of accounts to
each certainty stratum (as referenced in
section II.A.3(a) of Appendix II of the
2023 QI Agreement). Part IV of Appendix I also requires QIs to provide certain
information regarding documentation
failures (and resulting underwithholding)
on a post-cure basis (that is, by obtaining
valid documentation to support reduced
withholding applied by the QI) and information regarding collective refunds for
which a QI did not obtain documentation
supporting reduced withholding for any
account holders. Finally, Part IV includes
new section G, Other Information (including reporting of U.S. account holders), to
indicate the number of a QI’s reporting
failures with respect to its U.S. account
holders and, for a QI acting as a QSL (or
otherwise assuming primary withholding
responsibility for a U.S. source substitute
dividend payment), to verify that the QI
assumes withholding on all such payments. See sections 10.05(C)(11) and (D)
(2) through (4) of the 2023 QI Agreement
for the review steps that relate to the information for new section G.
(d) Part VII: PTP-related payments.
Part VII of Appendix I is added to the
2023 QI Agreement to set forth the factual information a QI must report when it
receives payments of PTP distributions or
amounts realized from sales of PTP interests on behalf of account holders during
the certification period. Part VII references the payments relevant for reporting
as “PTP-related payments,” which are
described as those payments applicable to
Form 1042-S income codes 27 (PTP distributions subject to section 1446(a)), 57
(amounts realized under section 1446(f)),
or 58 (PTP distribution with undetermined income), including when made to

Bulletin No. 2022–52

a U.S. partner and regardless of whether
the income is subject to withholding. Part
VII requires a QI to provide certain payment information depending on whether it
assumed primary withholding responsibility for PTP distributions or amounts realized from sales of PTP interests or whether
the QI acted as a disclosing QI when
not assuming the withholding on these
amounts. Similar to Part IV of Appendix
I, Part VII requests factual information
relating to a QI’s accounts, documentation, withholding, and reconciliation of
payments reported. For the information
relating to the review of account documentation, Part VII also applies to partners in a partnership claiming a modified
amount realized under section 1446(f) and
to grantors or owners of a trust. Part VII
also requires information related to a QI’s
reporting under section 8.07 of the 2023
QI Agreement.
(3) Revisions to Appendix II: statistical
sampling procedures. Under the 2017 QI
Agreement, a reviewer performing a periodic review may generally use a sampling
methodology whenever examination of
all accounts within a particular class of
accounts would be prohibitive due to time
or expense. For this purpose, Appendix II
of the 2017 QI Agreement provides safe
harbor procedures covering basic sample
design parameters and methodologies,
including sample size, strata allocation,
and projection of underwithholding. For
purposes of the review procedures in sections 10.05(B) through (D), Appendix II
of the 2017 QI Agreement also prescribes
“spot check” procedures, which provide
for a limited review of certain accounts
included in the sample of accounts following the review of a QI’s documentation under section 10.05(A).
Appendix II of the 2023 QI Agreement
(Appendix II) adds to the procedures in
Appendix II of the 2017 QI Agreement
to include a sample of a QI’s accounts
receiving payments for which withholding may apply under sections 1446(a) and
(f). For this purpose, Appendix II expands
the population of accounts to be sampled
to include all accounts receiving a PTP
distribution or an amount realized from
the sale of a PTP interest. To sample these
accounts, Appendix II requires a stratum
of the thirty top-dollar value accounts,
as determined by the total of PTP

Bulletin No. 2022–52

distributions and amounts realized from
sales of PTP interests paid to an account,
to be segregated from the population of
accounts and reviewed (referenced as a
“certainty stratum” in Appendix II). For
accounts held by partnerships and trusts
for which documentation with respect
to their partners and grantors is relevant
for determining withholding under section 1446(a) or (f), Appendix II permits a
reviewer to sample partners and grantors
using the same chart in Appendix II for
sampling accounts to which a QI applies
the joint account option.
The 2023 QI Agreement includes a limited number of other changes in Appendix
II. As discussed in section 4.03(10) of this
Revenue Procedure, the 2023 QI Agreement permits a combined periodic review
in certain cases of a merger of QIs or an
acquisition of a QI by another QI (with
QIs in those cases referenced as “predecessor” and “successor” QIs). Appendix
II includes additional certainty strata for
sampling accounts of a predecessor QI in a
combined periodic review. The additional
strata are to contain the fifteen top-dollar value accounts of the predecessor QI
as measured by the total of reportable
amounts paid to foreign recipients, reportable payments paid to U.S. recipients,
PTP distributions paid to accounts, and
amounts realized from sales of PTP interests paid to accounts. The remainder of
the predecessor QI’s accounts, and all the
successor QI’s accounts, are then placed
into the remaining strata identified in
Appendix II for further sampling. Appendix II also incorporates the provisions of
certain FAQs to the 2017 QI Agreement
that detail the allocation of sample units
over strata and the maximum sample size.
For projecting underwithholding in
a sample, the 2017 QI Agreement states
that the IRS will determine if a projection of underwithholding is necessary
when it reviews a QI’s periodic certification. If projection is necessary, the IRS
will instruct the QI or the QI’s reviewer
on the use of the procedures in Rev. Proc.
2011-42 to project underwithholding.
Appendix II also incorporates the procedures of Rev. Proc. 2011-42 but provides
more detailed explanations of the projection process and an example that illustrates the stratification of a QI’s accounts
to accurately project underwithholding.

583

Appendix II also provides a revised provision for the IRS to project underwithholding on a post-cure basis, and for this
purpose, Appendix II allows a QI to continue to cure invalid documentation up to
60 days after the date on which the IRS
proposes a deficiency.
Finally, Appendix II specifies the number of accounts includible in a spot check
for a certainty stratum (other than when
using optional further stratification) and
for a stratum that includes accounts failing the documentation review (limited to
when underwithholding would result).
(4) Addition of Appendix III. Appendix III is added to the 2023 QI Agreement
to assist the IRS in determining whether
Forms 1042 and 1042-S were filed accurately by a QI for the years of a certification period not covered by a periodic
review (or all such years if a waiver of the
periodic review is requested). This Appendix requires QIs to provide, for each applicable year, certain information reported
on Form 1042 and Forms 1042-S (including amended forms), by box and line, and
reconcile certain information included on
the Forms 1042-S issued to the QI to the
Form 1042 and Forms 1042-S filed by
the QI (and between the Form 1042 and
Forms 1042-S filed by the QI). QIs will
be required to upload a completed copy
of Appendix III as part of their periodic
certifications using the attachment feature in the Qualified Intermediary Application and Account Management System
(QAAMS).
.05 Miscellaneous Changes. This section 4.05 describes a limited number of
modifications to the 2017 QI Agreement
included in the 2023 QI Agreement that
are unrelated to a QI’s requirements under
sections 1446(a) and (f), stakeholder
remarks on the 2017 QI Agreement, or
to provisions of the 2023 QI Agreement
addressing requirements for QDDs and
QSLs.
(1) Adjustments for overwithholding.
The 2017 QI Agreement permits a QI
to apply the reimbursement and set-off
procedures in §§1.1461-2 and 1.1474-2
to adjust overwithholding and describes
certain deadlines in these regulations for
applying the procedures for the repayment
of overwithheld tax to an account holder
and for filing a Form 1042-S to report the
overwithholding and repayment.

December 27, 2022

On December 18, 2018, the Treasury Department and the IRS published
a notice of proposed rulemaking (the
NPRM) in the Federal Register, 83 FR
64757, to reduce certain taxpayer burdens under chapters 3 and 4. The NPRM
would modify the reimbursement and
set-off procedures under §§1.1461-2 and
1.1474-2 to allow a withholding agent
to use the extended due dates for filing Forms 1042 and 1042-S to report a
repayment and claim a credit (rather than
the due dates without extension under
the current final regulations). The NPRM
would not, however, permit a withholding agent to apply the reimbursement or
set-off procedures after the date the Form
1042-S has been furnished to the beneficial owner or payee or is filed with the
IRS. The NPRM permits a QI to rely on
its provisions until finalization.
For consistency with the NPRM and
any modifications to the final requirements
of §§1.1461-2 and 1.1474-2, sections
9.01 and 9.02 of the 2023 QI Agreement
cross reference §§1.1461-2 and 1.1474-2
for the timing requirements to use these
procedures in lieu of the explanations of
these requirements set forth in the 2017 QI
Agreement.
(2) Chapter 3 withholding rate pools.
The 2017 QI Agreement states in section 6.03(C) that a chapter 3 withholding
rate pool is a payment of a single type of
income subject to chapter 3 withholding
that is subject to a single rate of withholding under chapter 3, and for which
no chapter 4 withholding is required, on
Form 1042-S. Certain prior guidance for
QIs, however, included amounts reported
on Form 1042-S and Form 1099 in a chapter 3 withholding rate pool (rather than
only chapter 3 payments). See Rev. Proc.
2000-12, 2000-4 IRB 387. Additionally,
the description of a chapter 3 withholding
rate pool in §1.1441-1(e)(5)(v)(C) references no limitation to an amount subject
to chapter 3 withholding. Because chapter 3 withholding rate pool information
may be provided by a QI to a withholding
agent for payments other than amounts
subject to chapter 3 withholding (such as
an amount realized or bank deposit interest), the 2023 QI Agreement does not
include the reference to an “amount subject to chapter 3 withholding” for describing a chapter 3 withholding rate pool.

December 27, 2022

(3) Defining account for substitute
interest. For a QI assuming primary withholding responsibility for payments of
substitute interest, the 2017 QI Agreement
includes a person receiving a payment
of substitute interest in the definition of
“account holder” in section 2.02 but did
not define an “account” for these cases in
section 2.01. The 2023 QI Agreement adds
to the definition of an “account” by providing that for a QI that assumes primary
withholding responsibility for a substitute
interest payment, as described in section
3.03(A) of the 2023 QI Agreement, an
account is treated as held with a QI for an
account holder described in section 2.02
of the 2023 QI Agreement.
(4) Communications under QI agreement. The 2017 QI Agreement generally
requires all notices sent by a QI or the IRS
to be mailed via registered, first-class airmail. For better efficiency in communications between the IRS and QIs, the 2023
QI Agreement allows written notices sent
by QIs to the IRS to be either mailed via
registered, first-class mail or e-mailed to
the IRS e-mail address specified in section
12.06. With respect to notices sent by IRS
to a QI, the 2023 QI Agreement specifies
that the IRS will send notices to a QI by
secure e-mail to the QI’s responsible officer and other contact persons designated
by the QI.
SECTION 5. APPLICATION AND
RENEWAL FOR QI STATUS
.01 Prospective QI (Including a QI
Acting as a QDD). Before submitting the
information specified in Form 14345,
Application for Qualified Intermediary,
Withholding Foreign Partnership, or Withholding Foreign Trust Status, a prospective
QI (other than an NFFE that is acting as an
intermediary on behalf of persons other than
its shareholders and certain foreign central
banks of issue) must have submitted the
information specified in Form 8957, Foreign Account Tax Compliance Act (FATCA)
Registration, through the FATCA registration website available at www.irs.gov/
FATCA, and obtained its chapter 4 status as
a participating FFI (including a reporting
Model 2 FFI), registered deemed-compliant FFI (including a reporting Model 1 FFI
and a nonreporting Model 2 FFI treated as
registered deemed-compliant), registered

584

deemed-compliant Model 1 IGA FFI, or
sponsoring entity of a direct reporting
NFFE, as applicable, along with a global
intermediary identification number (GIIN)
to be used to identify itself to withholding agents and to tax administrators for
FATCA reporting. A GIIN is separate from
a QI-EIN.
The IRS will not enter into a QI agreement with an FFI if the IRS has not
approved the know-your-customer practices and procedures for opening accounts
of the jurisdiction where the FFI is located
because the QI agreement as applicable
to an FFI allows for the use of documentary evidence obtained under a jurisdiction’s know-your-customer practices. A
list of jurisdictions for which the IRS has
received know-your-customer information and for which the know-your-customer rules have been approved is available at: http://www.irs.gov/Businesses/
International-Businesses/List-of-Approved-KYC-Rules. To request approval
of a jurisdiction’s know-your-customer
rules, contact the KYC coordinator in the
Foreign Intermediaries Program at lbi.
fi.qiwpissues@irs.gov.
A QI that is an NFFE generally is not
required to be located in an approved KYC
jurisdiction because an NFFE is required
to collect Forms W-8 and W-9 and may
not use KYC documentation. See section
5.01(B)(2) of the 2023 QI Agreement for
the documentation requirements applicable to a QI that is an NFFE.
To become a QI, a prospective QI must
submit the information specified in Form
14345 through QAAMS, which is accessible through the QI landing page available at: https://www.irs.gov/businesses/
corporations/qualified-intermediary-system. An application must also include any
additional information and documentation requested by the IRS. The application must establish to the satisfaction of
the IRS that the applicant has adequate
resources and procedures to comply with
the terms of the agreement. An entity that
would like to become a QI to act as a QDD
must apply to enter into a QI agreement
and include the information on the application relating to QDDs. If a QI (existing
or new) would like a branch to act as a
QDD, it must fill out a separate application for the QDD branch and be approved
for QDD status.

Bulletin No. 2022–52

If the IRS approves the QI application,
it will notify the QI of its approval. The
approval notice will include a QI-EIN for
fulfilling the requirements of a QI (including a QI acting as a QDD if approved for
such purpose) under the QI agreement.
Similarly, if the IRS approves the QDD
application, it will notify the QI of its
approval.
.02 Effective Date for Existing QIs. A
QI agreement in effect before December
31, 2022, expires on December 31, 2022,
such that a QI must agree to the terms of
the 2023 QI Agreement to continue its status as a QI after that date. For this purpose,
a QI that seeks to renew its QI agreement
with an effective date of January 1, 2023,
must do so through QAAMS between January 1, 2023, to March 31, 2023. The QI
will retain its QI-EIN to fulfill the requirements of a QI under chapters 3, 4, and 61
and sections 871, 881, 1446, and 3406,
including making tax deposits and filing
Forms 945, 1042, 1042-S, 1099, and 8966.
A QI that seeks to renew its QI agreement and also apply to act as a QDD
(when not having applied previously)
must supplement the renewal request by
providing all of the information required
by the application relating to a QDD.
.03 Effective Date for New QI Applicants. The effective date of the QI agreement for a new QI applicant will depend
on when the QI submits its application and
whether the QI has received any reportable payments before it submits its application. Beginning on January 1, 2023, a
prospective QI that applies for QI status
on or before March 31 of a calendar year
and is approved will have a QI agreement
with an effective date of January 1 of that
year. If a prospective QI applies for QI
status after March 31 of a calendar year
and has not received a reportable payment
before the date it applies for QI status and
is approved, it will have a QI agreement
with an effective date of January 1 of that
year. If a prospective QI applies for QI
status after March 31 and has received
a reportable payment before the date it
applies and is approved, it will have a QI
agreement with an effective date of the
first of the month in which its QI application is approved and the prospective QI
is issued a QI-EIN. Regardless of whether
a new QI applicant obtains QI status for
a year after 2023, its QI agreement will

Bulletin No. 2022–52

terminate upon expiration of the 2023 QI
Agreement, unless renewed.
.04 Consent for Published List of QIs.
Beginning in 2023, a QI that either applies
for a QI agreement or seeks to renew its
QI agreement will be required to, as part
of its application or renewal, consent to
have its name, status as a QI, and QI-EIN
disclosed on a public list of QIs to be published by the IRS on irs.gov. This list will
be published in an effort to ensure that
entities that are not QIs do not represent
themselves as QIs to withholding agents.
.05 Responsible Officer Authentication.
The IRS is in the process of transitioning
QAAMS to a modernized sign-in system
with applicable multi-factor authentication procedures. As a result, to log in to
QAAMS, new users must register with
the applicable credential service provider
(CSP). Responsible officers can visit
QAAMS page to create an account with
the relevant CSP. When responsible officers create an account, they will be redirected to the CSP website where they will
begin the credentialing process. The final
step in the credentialing process requires
responsible officers to provide consent
for the CSP to share responsible officers’
account information with the IRS. Once
this consent is given, the responsible officer will be redirected to the IRS website
and can access QAAMS.
Currently, users that have an existing
QAAMS account may choose whether to
continue to login using their IRS username
and password or complete the credentialing process as described above. Beginning
in the spring of 2023, all users of QAAMS
will be required to have completed the
credentialing process with the relevant
CSP and utilize multi-factor authentication to access QAAMS.
.06 Contact Information. For questions
regarding the QI application process, contact the Foreign Intermediaries Program at
lbi.fi.qiwpissues@irs.gov.
SECTION 6. QUALIFIED
INTERMEDIARY AGREEMENT
The text of the 2023 QI Agreement
is set forth below. The IRS will not
provide signed copies of the QI agreement. A reporting Model 2 FFI should
apply this Agreement by substituting
the term “reporting Model 2 FFI” for

585

“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 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.
THIS AGREEMENT is made under and
in pursuance of sections 871(m), 1441,
1442, 1443, 1446, 1471, and 1472 and
§§1.1441-1(e)(5) and 1.1441-1(e)(6):
WHEREAS, QI has submitted an
application in accordance with Revenue Procedure 2022-43 to be a qualified
intermediary;
WHEREAS, QI and the IRS desire to
enter into an agreement to establish QI’s
rights and obligations regarding documentation, withholding, information reporting,
tax return filing, deposit, and refund procedures under sections 1441, 1442, 1443,
1446, 1461, 1471, 1472, 1474, 3406, 6041,
6042, 6045, 6049, 6050N, 6302, 6402,
and 6414, and tax liability under sections
871(a) and 881 for a QI that is acting as
a qualified derivatives dealer (QDD), with
respect to certain types of payments;
WHEREAS, QI represents that there
are no legal restrictions that prohibit it
from complying with the requirements of
this Agreement; and
WHEREAS, if QI is a foreign financial
institution (FFI), QI represents that, as of
the effective date of this Agreement, it has
agreed to comply with the requirements of
the FFI agreement, in the case of a participating FFI (including a reporting Model
2 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 the applicable
Model 1 IGA, in the case of a reporting
Model 1 FFI or a registered deemed-compliant Model 1 IGA FFI;
NOW, THEREFORE, in consideration of the following terms, representations, and conditions, the parties agree as
follows:

December 27, 2022

SECTION 1. PURPOSE AND SCOPE
Sec. 1.01. General Obligations. When
the IRS enters into a QI agreement with
a foreign person or a foreign branch of
a U.S. person, that foreign person (or
foreign branch) becomes a QI. QI is a
withholding agent under chapters 3 and
4, and a payor under chapter 61 and section 3406, for amounts that it pays to its
account holders. QI is also a withholding
agent when it receives a PTP distribution
for an account holder or it acts as a broker under §1.1446(f)-4 for a payment of
an amount realized from the sale of a PTP
interest by an account holder.
If QI is an FFI, the requirements that
QI 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. If QI acts as a QI
with respect to an account, this Agreement
will reference QI’s chapter 4 obligations
when necessary to facilitate coordination
with the QI’s obligations under chapters 3,
4, and 61 and section 3406 with respect
to such account holders. A participating
FFI’s (including a reporting Model 2 FFI)
obligations are provided in the FFI agreement, a registered deemed-compliant
FFI’s (other than a reporting Model 1 FFI)
obligations are provided in §1.1471-5(f)
(1) or the applicable Model 2 IGA, and
the obligations of a reporting Model 1 FFI
or a registered deemed-compliant Model
1 IGA FFI are provided in the applicable
Model 1 IGA. For purposes of chapter 4,
QI must comply with its FATCA requirements as a participating FFI, registered
deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI
(as applicable) in order to maintain its
required chapter 4 status, as well as the
requirements of a withholding agent for
any payee that is a nonparticipating FFI
or a NFFE that is not an account holder.
If QI is an FFI, QI must also, pursuant to
this Agreement, assume primary reporting responsibility for purposes of section
1472, for certain indirect account holders
for which it acts as a QI. If QI is an NFFE
acting on behalf of persons other than its
shareholders, QI must assume primary
reporting responsibility for purposes of
section 1472 for any person for which it
acts as a QI.

December 27, 2022

If QI acts as a sponsoring entity on
behalf of a sponsored FFI (as defined in
§1.1471-1(b)(121)) or sponsored direct
reporting NFFE (as defined in §1.14711(b)(123)), it must comply with the due
diligence, withholding, reporting, and
compliance requirements of a sponsoring
entity in addition to its requirements under
this Agreement.
For purposes of chapters 3 and 61 and
section 3406, QI must act in its capacity as a QI pursuant to this Agreement
for those accounts that QI holds with a
withholding agent and that QI has identified as accounts for which it acts as a
QI. QI is not required to act as a QI for
all accounts that it holds with a withholding agent. However, QI must, as part of
its QI agreement, materially comply with
the requirements of a withholding agent
or payor, as applicable to a nonqualified
intermediary (NQI) under chapters 3 and
61 and section 3406, for any account for
which it does not (or cannot) act as a QI
and for any payee that is not an account
holder. If QI identifies an account as one
for which it will act as a QI, it must act
as a QI for all payments made to that
account and obtain the documentation
required under section 5 of this Agreement for such account.
When QI acts as a QI for an account
and assumes primary chapter 3 withholding responsibility for payments to the
account, QI must also assume primary
withholding responsibility for withholdable payments made to such account for
chapter 4 purposes.
For amounts subject to withholding on
a PTP distribution, QI acts in its capacity
as a QI when QI provides a valid withholding certificate described in section 6
of this Agreement indicating that it acts as
a nominee for the distribution, provides
chapter 3 withholding rate pool information with respect to the distribution under
section 6.03 of this Agreement, or acts as
a disclosing QI for the distribution. For
an amount realized, QI acts in its capacity
as a QI when QI provides a valid withholding certificate described in section
6 of this Agreement associated with the
amount indicating that QI assumes primary withholding responsibility for the
amount under section 1446(f), provides
withholding rate pool information with
respect to the amount under section 6.03

586

of this Agreement, or acts as a disclosing
QI for the amount.
If QI acts as a QI with respect to payments of substitute interest, as described in
section 3.03(A) of this Agreement, it must
act as a QI and assume primary withholding responsibility for all such payments of
substitute interest.
A QI is permitted to act as a QSL only
until December 31, 2024. If QI that is not
acting as a QDD acts as a qualified securities lender (QSL) with respect to substitute dividend payments (as defined in
§1.861-3(a)(6)), QI is required to act as
a QSL and assume primary withholding
responsibility for all substitute dividends
received and paid by QI when acting as
an intermediary or dealer with respect to
securities lending and similar transactions. A QI that acts as a QDD may not
act as a QSL, except as described in the
prior sentence with respect to payments
on securities lending or sale-repurchase
transactions for which the QI has determined that it is acting as an intermediary.
A QI may qualify as a QDD with respect
to certain payments on securities lending
and sale-repurchase transactions in its
qualified derivatives dealer capacity. See
below for the requirements, including the
eligible entity requirement and which payments are covered.
A QI that is not acting as a QSL may
still act as a QI for substitute dividend
payments received or paid by QI as an
intermediary by assuming primary withholding responsibility for all substitute
dividends received and paid by QI as an
intermediary. QI also may act as a QDD
for the transactions covered by the QDD
regime.
The home office (as defined in section
2.43 of this Agreement) and each branch
of a foreign person that intends to act as
a QDD must each separately qualify and
be approved for QDD status, as provided
in section 1.02 of this Agreement. QDD
applicants must follow the naming convention described in section 2.63 of this
Agreement on their application and, if
approved as a QDD, on any other U.S.
tax form, schedule, statement, or other
tax material and for any other tax purpose
for which the QDD must be identified. A
foreign branch of a U.S. financial institution may also apply for QI and QDD
status provided it separately qualifies as

Bulletin No. 2022–52

an eligible entity. If QI acts as a QDD
with respect to the home office or branch,
the home office or branch, as applicable,
must act as a QDD for all payments made
as a principal with respect to potential
section 871(m) transactions and all payments received as a principal with respect
to potential section 871(m) transactions
and underlying securities, excluding any
payments made or received by the QDD
to the extent the payment is treated as
effectively connected with the conduct
of a trade or business within the United
States within the meaning of section 864.
A QI may not act as a QDD with respect
to any other payments. For purposes of
this Agreement, any securities lending or
sale-repurchase transaction (as defined in
§1.871-15(a)(13)) QI enters into that is a
section 871(m) transaction is treated as
entered into by QI as a principal unless
QI determines that it is acting as an intermediary with respect to that transaction.
A QI may not act as a QDD when it
receives or makes payments as an intermediary and must act as either a QI or
NQI for the payment. A QI acting as a
QDD must assume primary chapter 3 and
chapter 4 withholding responsibility and
primary Form 1099 reporting and backup
withholding responsibility under section
3406 for payments made as a QDD with
respect to any potential section 871(m)
transaction provided the amount paid is
an amount subject to chapter 3 or 4 withholding or a reportable payment under
chapter 61. A QI acting as a QDD (other
than a QDD that is a foreign branch of a
U.S. financial institution) also must satisfy its QDD tax liability as determined
under section 3.09 of this Agreement.
The QDD must report its withholding tax
liability under chapters 3 and 4 on Form
1042. In addition, a QDD (other than a
QDD that is a foreign branch of a U.S.
financial institution or that is a partnership or branch of a partnership) must file
a Form 1120-F and report its QDD tax
liability on that form, whether or not it
would be required to file if it were not
a QDD. Similarly, a QDD that is a partnership or a branch of a partnership must
file a Form 1065 and report its QDD tax
liability on that form, whether or not it
would be required to file if it were not a
QDD, as well as report on Forms 1042-S
with respect to its foreign partners on

Bulletin No. 2022–52

amounts under section 3.09 of this
Agreement as modified for a QDD that is
a partnership (or branch of a partnership).
A U.S. financial institution with a foreign
branch that acts as a QDD must file the
appropriate U.S. income tax return (e.g.,
Form 1120, U.S. Corporation Income
Tax Return) for the tax year covered by
this Agreement to report and pay its tax
liability under chapter 1 and would not
have a separate QDD tax liability. In each
case, the form will be filed by the QI on
behalf of its QDD(s).
A dividend or dividend equivalent is
treated as received by a QDD acting in
its non-equity derivatives dealer capacity
if the dividend or dividend equivalent is
received by a QDD acting as a proprietary
trader. Transactions properly reflected in
a QDD’s equity derivatives dealer book
are presumed to be held by a dealer in
its equity derivatives dealer capacity for
purposes of determining the QDD tax liability. In addition, for purposes of determining whether a dealer is acting in its
equity derivatives dealer capacity, only
the dealer’s activities as an equity derivatives dealer are taken into account.
Sec. 1.02. Parties to the Agreement.
This Agreement applies to:
(A) QI; and
(B) The Internal Revenue Service.
If QI is an FFI, QI can only act as a
QI for an account if the branch of QI that
holds the account operates in a KYC jurisdiction identified on the IRS’s Approved
KYC List. QI may add any jurisdiction in
which it operates a branch that is not initially included in its QI application without prior IRS approval if the jurisdiction
is identified on the IRS’s Approved KYC
List and QI updates its information on the
Qualified Intermediary Application and
Account Management System (QAAMS)
with respect to such branch before treating such branch as a QI. Notwithstanding
the preceding sentence, a QI may not add
a branch that will act as a QDD through
QAAMS. Instead, the branch must separately qualify and be approved for QDD
status in accordance with the procedures
prescribed by the IRS. A branch of a QI
that is not subject to the provisions of
this Agreement remains subject to the
rules of chapters 3, 4, and 61 and section
3406, as provided in section 1.01 of this
Agreement.

587

SECTION 2. DEFINITIONS
For purposes of this Agreement, except
as otherwise provided in this Agreement,
the terms listed below are defined as
follows:
Sec. 2.01. Account. “Account” or
“financial account” has the meaning given
to that term in §1.1471-1(b) with respect
to QI’s obligations for chapter 4 purposes.
For other purposes under this Agreement,
“account” or “financial account” means
any account for which QI acts as a QI.
With respect to a QI acting as a QDD,
“account” means any potential section
871(m) transaction or underlying security where QDD receives payments as a
principal and any potential section 871(m)
transaction where QDD makes payments
as a principal. With respect to a QI that
assumes primary withholding responsibility for a substitute interest payment as
described in section 3.03(A) of this Agreement, an account is treated as held with QI
for an account holder described in section
2.02 of this Agreement.
Sec. 2.02. Account Holder. If QI is an
FFI, an “account holder” means any person that is a direct account holder or an
indirect account holder of an account that
QI has identified to a withholding agent as
an account for which it is acting as a QI
and also includes any person that receives
a U.S. source substitute dividend payment
from a QI that is a QSL or is otherwise
acting as an intermediary for the payment.
“Account holder” also means any person
that enters into or holds a potential section
871(m) transaction with a QI acting as a
QDD. If QI is an NFFE acting as a QI on
behalf of persons other than its shareholders, an “account holder” means any person
for whom QI is acting as an intermediary
with respect to a reportable payment or
withholdable payment. With respect to
a QI that assumes primary withholding
responsibility for a substitute interest
payment, as described in section 3.03(A)
of this Agreement, an “account holder”
includes any person that receives such a
payment from the QI.
(A) Direct Account Holder.
A direct account holder is any account
holder who has a direct relationship with
QI. In the case of an NFFE acting as
a QI on behalf of persons other than its
shareholders, a direct account holder is

December 27, 2022

any person for whom QI is acting with
respect to a reportable payment regardless
of whether such person is the beneficial
owner. In addition, a direct account holder
includes a beneficiary of a trust that holds
an account with QI provided the following
requirements are satisfied:
(1) the trust is registered with the applicable government as a tax-free plan;
(2) in order to qualify as a tax-free
plan, applicable non-U.S. law mandates
that where the plan holds assets in a brokerage account, a trust be established for
the account holder that is the sole beneficiary under the plan;
(3) the account holder maintains general control over investments in the plan
and can withdraw the funds at any time;
(4) QI is required to document the
account holder under applicable antimoney laundering/know-your-customer
regulations or procedures; and
(5) the trust itself is not eligible for
a reduced rate of withholding under an
applicable income tax treaty.
(B) Indirect Account Holder. An indirect account holder is any account holder
who does not have a direct relationship
with QI, excluding a beneficiary of a trust
described in section 2.02(A) of this Agreement. For example, a person that holds an
account with a foreign intermediary that
has a direct relationship with QI is an indirect account holder of QI. For chapter 3
and 4 purposes, an indirect account holder
also includes a person holding an interest
in a foreign flow-through entity that has a
direct relationship with QI. A person is an
indirect account holder even if there are
multiple tiers of intermediaries or flowthrough entities between the person and
QI.
Sec. 2.03. Agreement. “Agreement”
means this Agreement, the Appendices
to this Agreement and any amendment to
this Agreement in accordance with section
12.02 of this Agreement. QI’s application
to become a QI, and the know-your-customer rules included in a country attachment on IRS.gov relevant to QI (or a
branch of QI) are incorporated into this
Agreement by reference.
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.

December 27, 2022

Unless indicated otherwise in this Agreement, an amount subject to chapter 3
withholding includes an amount subject to chapter 3 withholding on a PTP
distribution. See section 2.91(C) of this
Agreement.
Sec. 2.05. Amount Subject to Chapter 4 Withholding. An “amount subject
to chapter 4 withholding” is a withholdable payment (as defined in §1.14731(a)) for which withholding is required
under chapter 4 or an amount for which
withholding was otherwise applied under
chapter 4. Unless indicated otherwise
in this Agreement, an amount subject to
chapter 4 withholding includes an amount
subject to chapter 4 withholding on a PTP
distribution. See section 2.91(C) of this
Agreement
Sec. 2.06. Assuming Primary Withholding Responsibility. “Assuming primary withholding responsibility” refers
to when a QI assumes primary chapters
3 and 4 withholding responsibility with
respect to payments of U.S. source FDAP
income or assumes primary Form 1099
reporting and backup withholding responsibility. “Assuming primary withholding
responsibility” further includes when QI
acts as a nominee for a PTP distribution
or assumes primary withholding responsibility under section 1446(f) for an amount
realized from the sale of a PTP interest.
A QI that assumes primary withholding responsibility assumes the primary
responsibility for deducting, withholding,
and depositing the appropriate amount
from a payment. Generally, a QI assuming primary withholding responsibility
or assuming primary backup withholding responsibility relieves the person
who makes a payment to the QI from the
responsibility to withhold. Notwithstanding the preceding sentence, a QI acting as
a QDD (that assumes primary withholding responsibility as required by section 3
of this Agreement) remains liable for the
tax under section 881 (or in the case of a
partnership, its partners remain liable for
tax under section 871(a) or 881, as applicable) and remains subject to withholding
on all U.S. source FDAP payments with
respect to underlying securities; however,
a QDD (including a QDD that is a partnership or a branch of a partnership) will
not be subject to withholding on amounts
described in sections 3.03(A)(1) through

588

(3) of this Agreement, and in the case of
a QDD that is a partnership or branch of a
partnership, its partners will not be subject
to withholding on dividends received by
the QDD in its equity derivatives dealer
capacity in calendar year 2023 or 2024.
Sec. 2.07. Backup Withholding.
“Backup withholding” means the withholding required under section 3406.
Sec. 2.08. Beneficial Owner. A “beneficial owner” has the meaning given to that
term in §1.1441-1(c)(6) with respect to an
amount subject to chapter 3 withholding.
Sec. 2.09. Broker Proceeds. “Broker proceeds” means gross proceeds (as
defined in §1.6045-1(d)(5)) from a sale
that is reportable under §1.6045-1(c).
Sec. 2.10. Chapter 3. Any reference
to “chapter 3” means sections 1441, 1442,
1443, 1461, 1463, and 1464.
Sec. 2.11. Chapter 3 Reporting Pool.
A “chapter 3 reporting pool” means
a reporting pool described in section
8.03(B) of this Agreement.
Sec. 2.12. Chapter 4. Any reference to
“chapter 4” means sections 1471, 1472,
1473, and 1474.
Sec. 2.13. Chapter 4 Reporting
Pool. A “chapter 4 reporting pool” means
a reporting pool described in section
8.03(A) of this Agreement.
Sec. 2.14. Chapter 4 Status. “Chapter
4 status” means the status of a person as
a U.S. person, a 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. 2.15. Chapter 61. Any reference
to “chapter 61” means sections 6041,
6042, 6045, 6049, and 6050N.
Sec. 2.16. Dealer. A “dealer” has
the meaning given to the term dealer in
§1.871-15(a)(2) (i.e., a dealer in securities
within the meaning of section 475(c)(1)).
Sec. 2.17. Deemed-Compliant FFI.
“Deemed-compliant FFI” means an 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 IGA FFI
but excludes a nonreporting Model 2 FFI

Bulletin No. 2022–52

that is treated as a registered deemed-compliant FFI.
(B) Registered Deemed-Compliant FFI. “Registered deemed-compliant
FFI” means an FFI described in §1.14715(f)(1) and includes a reporting Model 1
FFI and a nonreporting Model 2 FFI that
is treated as registered deemed-compliant
FFI. 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.
(C) Registered Deemed-Compliant Model 1 IGA FFI. “Registered
deemed-compliant 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. 2.18. Deposit Interest. “Deposit
interest” means interest described in section 871(i)(2)(A).
Sec. 2.19. Dividend Equivalent. A
“dividend equivalent” has the meaning
given to that term in §1.871-15(c).
Sec. 2.20. Documentary Evidence.
“Documentary evidence” means any documentation obtained under the appropriate know-your-customer rules, any documentary evidence described in §1.1441-6
sufficient to establish entitlement to a
reduced rate of withholding under an
income tax treaty, or any documentary
evidence described in §1.6049-5(c) sufficient to establish an account holder’s
status as a foreign person for purposes of
chapter 61. 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. 2.21. Documentation. “Documentation” means any valid Form W-8,
Form W-9 (or an acceptable substitute
Form W-8 or Form W-9), or documentary evidence as defined in section 2.20
of this Agreement, including all statements or other information required to be
associated with the form or documentary
evidence.
Sec. 2.22. Effective Date. For a prospective QI that applies to be a QI on or

Bulletin No. 2022–52

before March 31 of a given calendar year,
the effective date of this Agreement will
be January 1 of that year. For a prospective QI that applies after March 31 of a
given calendar year and that has not
received any reportable payments before
the date the application is submitted, the
effective date of this Agreement will be
January 1 of that year. For a prospective QI that applies after March 31 of a
given calendar year and that has received
a reportable payment in the calendar year
before the date the application is submitted, the effective date of this Agreement
will be the first of the month in which the
QI application is complete and the QI has
received its QI-EIN.
Sec. 2.23. Eligible Entity. “Eligible
entity” for QDD status means a home
office or branch that is a QI and that is—
(A) An equity derivatives dealer subject
to regulatory supervision as a dealer by a
governmental authority in the jurisdiction
in which it was organized or operates;
(B) A bank or bank holding company
subject to regulatory supervision as a
bank or bank holding company, as applicable, by a governmental authority in the
jurisdiction in which it was organized or
operates and that, in its equity derivatives
dealer capacity, (1) issues potential section
871(m) transactions to customers, and (2)
receives dividends with respect to stock or
dividend equivalent payments pursuant to
potential section 871(m) transactions that
hedge potential section 871(m) transactions that it issued;
(C) An entity that is wholly-owned
(directly or indirectly) by a bank or bank
holding company subject to regulatory
supervision as a bank or bank holding
company, as applicable, by a governmental authority in the jurisdiction in
which the bank or bank holding company
was organized or operates and that, in
its equity derivatives dealer capacity, (1)
issues potential section 871(m) transactions to customers, and (2) receives dividends with respect to stock or dividend
equivalent payments pursuant to potential
section 871(m) transactions that hedge
potential section 871(m) transactions that
it issued; or
(D) A foreign branch of a U.S. financial
institution, if the foreign branch would
meet the requirements of paragraph (A),
(B), or (C), if it were a separate entity.

589

The home office or any branch that
wants to be a QDD must separately meet
the requirements of paragraph (A), (B), or
(C) as if it were a separate entity.
Eligible entity also includes any other
home office or branch that is acceptable to
the IRS as provided in §1.1441-1(e)(6)(ii)
(D).
Sec. 2.24. Excepted NFFE. “Excepted
NFFE” means a person described in
§1.1471-1(b)(41).
Sec. 2.25. 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 or Model 2 IGA.
Sec. 2.26. Exempt Recipient. For purposes of Form 1099 reporting and backup
withholding, 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), for which no Form 1099 reporting is required. Exempt recipients are not
exempt from reporting or withholding
under chapter 3 or 4.
Sec. 2.27. FATCA Requirements
as a Participating FFI, Registered
Deemed-Compliant FFI, or Registered
Deemed-Compliant Model 1 IGA FFI.
“FATCA requirements as a participating
FFI, registered deemed-compliant FFI,
or registered deemed-compliant Model 1
IGA FFI” means—
(A) For a participating FFI or an FFI
that agrees to be treated as 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) or an FFI that agrees to be treated as
a registered deemed-compliant FFI, the
requirements under §1.1471-5(f)(1) or an
applicable Model 2 IGA; or
(C) For a registered deemed-compliant
Model 1 IGA FFI, reporting Model 1 FFI,
or an FFI that agrees to be treated as a registered deemed-compliant Model 1 IGA
FFI or reporting Model 1 FFI, the requirements under an applicable Model 1 IGA.
Sec. 2.28. Financial Institution (FI).
“Financial institution” or “FI” is defined

December 27, 2022

in §1.1471-5(d) and includes a financial
institution as defined under an applicable
Model 1 or Model 2 IGA.
Sec. 2.29. 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. 2.30. FFI Agreement. “FFI
Agreement” means an agreement
described in §1.1471-4(a) and provided
in Rev. Proc. 2017-16, 2017-3 I.R.B. 501
(and any superseding revenue procedure).
Sec. 2.31. 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 (other than a withholding
foreign trust) that is described in section
651(a), 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. For an item of 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.
For an amount realized or amount subject
to withholding under section 1446(a) on
a PTP distribution, a flow-through entity
includes a U.S. grantor trust.
Sec. 2.32. 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. For purposes of
chapters 3 and 4, the term foreign person
also means, with respect to a payment
by a withholding agent, 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 QI. A foreign branch of a U.S. person
that is a QI is, however, a U.S. payor for
purposes of chapter 61 and section 3406.
Sec. 2.33. Foreign TIN. A “foreign
TIN” is a taxpayer identification number
issued by a foreign person’s country of
residence.
Sec. 2.34. 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

December 27, 2022

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
W-8.
Sec. 2.35. Form W-9. “Form W-9”
means IRS Form W-9, Request for Taxpayer Identification Number and Certification, or any acceptable substitute Form
W-9.
Sec. 2.36. Form 945. “Form 945”
means IRS Form 945, Annual Return of
Withheld Federal Income Tax.
Sec. 2.37. Form 1042. “Form 1042”
means IRS Form 1042, Annual Withholding Tax Return for U.S. Source Income of
Foreign Persons.
Sec. 2.38. Form 1042-S. “Form 1042S” means IRS Form 1042-S, Foreign
Person’s U.S. Source Income Subject to
Withholding.
Sec. 2.39. 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, 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. 2.40. Form 8966. “Form 8966”
means IRS Form 8966, FATCA Report.
Sec. 2.41. Form 1099 Reporting.
“Form 1099 reporting” means the reporting required on Form 1099.
Sec. 2.42. 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 of a direct
reporting NFFE. The term also includes
the identification number assigned to
a reporting Model 1 FFI or registered

590

deemed-compliant Model 1 IGA FFI that
is a QI for the purpose of identifying itself
to withholding agents.
Sec. 2.43. Home Office. “Home
office” means a foreign person, excluding
any branches of the foreign person, that
applies for QDD status.
Sec. 2.44. Intermediary. An “intermediary” means any person that acts on
behalf of another person such as a custodian, broker, nominee, or other agent.
Sec. 2.45. Know-Your-Customer
Rules. “Know-your-customer rules”
refers to the applicable laws, regulations,
rules, and administrative practices and
procedures governing the requirements
of QI to obtain documentation confirming
the identity of QI’s account holders.
Sec. 2.46. 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 obtain treaty benefits with respect to an
amount subject to chapter 3 withholding.
Sec. 2.47. Net Delta Exposure. Net
delta exposure to an underlying security is the amount (measured in number
of shares) by which (A) the aggregate
number of shares in an underlying security that the QDD has exposure to as
a result of positions in the underlying
security (including as a result of owning the underlying security) with values
that move in the same direction as the
underlying security (the “long positions”)
exceeds (B) the aggregate number of
shares of in an underlying security that
the QDD has exposure to as a result of
positions in the underlying security with
values that move in the opposite direction
from the underlying security (the “short
positions”). The net delta exposure calculation only includes long positions and
short positions that the QDD holds in its
equity derivatives dealer business. Any
long positions or short positions that are
treated as effectively connected with the
QDD’s conduct of a trade or business in
the United States for U.S. federal income
tax purposes are excluded from the net
delta exposure computation. The net delta
exposure to an underlying security is
determined at the end of the day on the
date provided in §1.871-15(j)(2) for the
applicable dividend. For purposes of this
calculation, net delta must be determined

Bulletin No. 2022–52

in a commercially reasonable manner. If
a QDD calculates net delta for non-tax
business purposes, the net delta ordinary
will be the delta used for this purpose,
subject to the modifications required by
this definition. Each QDD must determine its net delta exposure separately
only taking into account transactions that
exist and are attributable to that QDD for
U.S. federal income tax purposes.
Sec. 2.48. 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 an applicable Model 2 IGA.
Sec. 2.49. Non-Exempt Recipient.
A “non-exempt recipient” means a person that is not an exempt recipient under
the definition in section 2.26 of this
Agreement.
Sec. 2.50. 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 or Model 2
IGA.
Sec. 2.51. Nonparticipating FFI. A
“nonparticipating FFI” means an FFI other
than a participating FFI, a deemed-compliant FFI, or an exempt beneficial owner.
Sec. 2.52. Nonqualified Intermediary
(NQI). A “nonqualified intermediary” or
“NQI” is any intermediary that is not a
qualified intermediary. An NQI includes
any intermediary that is a foreign person
unless such person enters an agreement to
be a QI and acts in such capacity. An NQI
also includes an intermediary that is a territory FI unless such institution agrees to
be treated as a U.S. person.
Sec. 2.53. Non-U.S. Payor. A “nonU.S. payor” means a payor other than a
U.S. payor as defined in this section 2.81
of this Agreement.
Sec. 2.54. Nonwithholding Foreign
Partnership. A “nonwithholding foreign
partnership” means a foreign partnership
other than a withholding foreign partnership as defined in §1.1441–5(c)(2)(i).
Sec. 2.55. Nonwithholding Foreign
Trust. A “nonwithholding foreign trust”
means a foreign trust (as defined in section
7701(a)(31)(B)) that is a foreign simple

Bulletin No. 2022–52

trust or a foreign grantor trust and that is
not a withholding foreign trust.
Sec. 2.56. Overwithholding. The term
“overwithholding” means any amount
actually withheld (determined before
application of the adjustment procedures
described in section 9 of this Agreement)
from an item of income or other payment
that is in excess of:
(A) The amount required to be withheld
under chapter 4 with respect to such item
of income or other payment, if applicable;
(B) 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 when it occurred; and,
(C) In the case of the withholding
required under section 1446(a) or (f), the
excess of the amount withheld over the
amount required to be withheld under
§1.1446-4 or §1.1446(f)-4, respectively.
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. 2.57. Participating FFI. A “participating FFI” means an FFI described in
§1.1471-1(b)(91). The term participating
FFI also includes a QI branch of a U.S.
financial institution unless such branch is
a reporting Model 1 FFI.
Sec. 2.58. Payee. For chapter 4 purposes, a “payee” means a person described
in §1.1471-3(a). For purposes of chapter
61, a “payee” means the person to whom a
payment is made. For purposes of chapter
3, a “payee” means a person described in
§1.1441-1(c)(12).
Sec. 2.59. Payment. A “payment” is
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. For any payment
of a dividend equivalent, a “payment” has
the meaning provided in §1.871-15(i).
Sec. 2.60. 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. The term includes any person that
makes a payment, directly or indirectly, to

591

QI and to whom QI provides information,
pursuant to this Agreement, so that such
person can report a payment on Form 1099
and, if appropriate, backup withhold. See
also sections 2.81 and 2.53 of this Agreement for the definition of U.S. payor and
non-U.S. payor.
Sec. 2.61. Potential Section 871(m)
Transaction. A “potential section 871(m)
transaction” is any securities lending or
sale-repurchase transaction, notional principal contract (NPC), or equity linked
instrument (ELI) that references one
or more underlying securities. For purposes of this definition, securities lending or sale-repurchase transaction, NPC,
ELI, reference, and underlying security
have the meaning given to the terms in
§§1.871-15(a)(13), (7), (4), (11), and (15),
respectively.
Sec. 2.62. Private Arrangement
Intermediary (PAI). A “private arrangement intermediary” or “PAI” is an intermediary described in section 4 of this
Agreement.
Sec. 2.63. Qualified Derivatives Dealer
(QDD). A “qualified derivatives dealer”
or “QDD” is an eligible entity that agrees
to meet the requirements of §1.1441-1(e)
(6)(i) and of this Agreement with respect
to payments on potential section 871(m)
transactions and underlying securities that
it receives or makes as a principal. In order
to act as a QDD, the home office or branch,
as applicable, must qualify and be approved
for QDD status and must represent itself
as a QDD on its Form W-8IMY and separately identify the home office or branch as
the recipient on a withholding statement (if
necessary). Each home office or branch that
obtains QDD status is treated as a separate
QDD and must use the name specified on
its application for QDD status when representing its status as a QDD. For the QDD’s
application, a home office must use the
name of the legal entity applying for QDD
status, and a branch of the legal entity must
add the following to the Home Office Name:
QDD-BRANCH-(Branch QDD COUNTRY, and branch identifier, if necessary),
for example: ABC Bank-QDD-BRANCHSINGAPORE (Disregarded Entity Name)).
Each QDD of a QI must have a different
name.
Sec. 2.64. QDD Tax Liability. A “QDD
tax liability” is the amount described in
section 3.09 of this Agreement.

December 27, 2022

Sec. 2.65. Qualified Intermediary
(QI). A “qualified intermediary” or “QI” is
a person (or branch) described in §1.14411(e)(5)(ii) that has in effect an agreement
with the IRS to be treated as a QI and acts
as a QI.
Sec. 2.66. QI-EIN. A “QI-EIN”
means the employer identification number assigned by the IRS to a QI. QI’s
QI-EIN is only to be used when QI is acting as a QI. For example, QI must give a
withholding agent its EIN (other than its
QI-EIN), if any, if it is receiving income
as a beneficial owner (excluding when it
receives income as a principal when acting as either a QDD or QSL, or when a
QI assumes primary withholding responsibility for a substitute interest payment
under this Agreement). QI must also use
its non-QI EIN, if any, when acting as an
NQI. Each signatory to this Agreement
must have its own QI-EIN.
Sec. 2.67. Qualified Securities Lender
(QSL). A “qualified securities lender” or
“QSL” is a person described as a qualified securities lender in Notice 2010-46,
2010-24 I.R.B. 757. A QI that acts as a
QSL with respect to a substitute dividend
payment (as defined in §1.861-3(a)(6)) is
required to act as a QSL for all U.S. source
substitute dividends received by the QI
when acting as an intermediary or dealer
with respect to securities lending and similar transactions, except as otherwise provided in section 1.01 of this Agreement. A
QI is only permitted to act as a QSL until
December 31, 2024.
Sec. 2.68. Reportable Amount. A
“reportable amount” means U.S. source
FDAP income that is an amount subject to
chapter 3 withholding, U.S. source deposit
interest, and U.S. source interest or original issue discount paid on the redemption
of short-term obligations. 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. 2.69. Reportable Payment. For
purposes of this Agreement, a “reportable

December 27, 2022

payment” means an amount described
in section 2.69(A) of this Agreement, in
the case of a U.S. payor, and an amount
described in section 2.69(B) of this Agreement, in the case of a non-U.S. payor.
(A) U.S. Payor. If QI is a U.S. payor,
a “reportable payment” means, unless an
exception to reporting applies under chapter 61,
(1) Any reportable amount;
(2) Any broker proceeds from a sale
reportable under §1.6045-1(c); and
(3) Any foreign source interest, dividends, rents, royalties, or other fixed and
determinable income.
(B) Non-U.S. Payor. If QI is a nonU.S. payor, a “reportable payment”
means, unless an exception to reporting
applies under chapter 61,
(1) Any reportable amount;
(2) Any broker proceeds from a sale
effected at an office inside the United
States, as defined in §1.6045-1(g)(3)(iii);
and
(3) Any foreign source interest, dividends, rents, royalties, or other fixed
and determinable income if such income
is not paid outside the United States as
described under section 5.13(C)(1) of this
Agreement.
Sec. 2.70. 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 a nonparticipating
FFI under an applicable Model 1 IGA.
Sec. 2.71. Reporting Pool. A “reporting pool” is defined in section 8 of this
Agreement.
Sec. 2.72. Responsible Officer. A
“responsible officer” of a QI means an
officer of the QI with sufficient authority
to fulfill the duties of a responsible officer
as described in section 10 of this Agreement, including the requirements to periodically certify and to respond to requests
by the IRS for additional information to
review the QI’s compliance.
Sec. 2.73. Section 871(m) Amount.
For each dividend on each underlying
security, the “section 871(m) amount” is
(A) the QDD’s net delta exposure to the
underlying security for the applicable

592

dividend multiplied by (B) the applicable dividend amount per share. These
amounts are treated as dividend equivalent amounts under section 871(m).
Sec. 2.74. Section 871(m) Transaction. A “section 871(m) transaction” is
any securities lending or sale-repurchase
transaction, specified NPC, or specified
ELI described in §1.871-15(a)(13), (d),
and (e), respectively.
Sec. 2.75. Short-Term Obligation. A
“short-term obligation” is any obligation
described in section 871(g)(1)(B)(i).
Sec. 2.76. Substitute Interest. “Substitute interest” means a substitute interest
payment described in §1.861-2(a)(7).
Sec. 2.77. Underlying Security. For
purposes of a QI acting as a QDD or any
determination relating to section 871(m),
“underlying security” has the meaning
provided in §1.871-15(a)(15).
Sec.
2.78.
Underwithholding.
“Underwithholding” means the excess of
the amount required to be withheld under
chapter 3 or 4 or section 3406 over the
amount actually withheld.
Sec. 2.79. Undocumented Account
Holder. An “undocumented account
holder” is an account holder for whom QI
does not hold valid documentation.
Sec. 2.80. U.S. Account. A “U.S.
account” is any financial account maintained by an 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.
Sec. 2.81. U.S. Payor. The term
“U.S. payor” has the same meaning as in
§1.6049-5(c)(5).
Sec. 2.82. U.S. Person. A “U.S. person” (or “United States 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). An individual will not
be treated as a U.S. person for purposes
of this section for a taxable year or any
portion of a taxable year that the individual is a dual resident taxpayer (within the
meaning of §301.7701(b)-7(a)(1)) who
is treated as a nonresident alien pursuant
to §301.7701(b)-7 for purposes of computing his or her U.S. tax liability. The

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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)), or the foreign insurance company is a specified insurance
company and is licensed to do business in
any State of the United States.
Sec. 2.83. U.S. Reportable Account. A
“U.S. reportable account” means a financial account maintained by a reporting
Model 1 FFI or registered deemed-compliant 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. 2.84. 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 §1.14412(b)(1).
Sec. 2.85. U.S. TIN. A “U.S. TIN”
means a U.S. taxpayer identification number assigned under section 6109.
Sec. 2.86. 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 2.60 of this Agreement), a broker (as
defined in section 2.91(D) of this Agreement), or a nominee (as defined in section
2.91(G) of this Agreement with respect to
§1.1446-4).
Sec. 2.87. 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. 2.88. 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. 2.89. Withholdable Payment. A
“withholdable payment” means an amount
described in §1.1473-1(a).
Sec. 2.90. Withholding Rate Pool. A
“withholding rate pool” is defined in section 6.03 of this Agreement and includes

Bulletin No. 2022–52

a chapter 3 withholding rate pool and a
chapter 4 withholding rate pool.
Sec. 2.91. Terms Applicable to Section 1446(a) and (f) Requirements. The
following terms apply in connection with
QI’s requirements with respect to QI’s
account holders holding PTP interests for
purposes of section 1446(a) and (f):
(A) Amount Realized. For purposes
of section 1446(f), an “amount realized”
on a sale of a PTP interest is the amount
of gross proceeds (as defined in §1.60451(d)(5)) paid or credited to the partner or
broker that is the transferor of the interest. The “amount realized” on a PTP distribution is the amount of the distribution
reduced by the portion of the distribution
that is attributable to the cumulative net
income of the partnership (as determined
under §1.1446(f)-4(c)(2)(iii)).
(B) Amount Subject to Reporting
under Section 1446(f). An “amount subject to reporting under section 1446(f)”
is the amount realized on the transfer of
a PTP interest paid to a foreign partner
(including a partner presumed to be foreign) unless an exception to withholding
applies under §1.1446(f)-4(b)(2) through
(4). See §1.1461-1(c)(2)(i)(Q).
(C) Amount Subject to Withholding
on a PTP Distribution. An “amount subject to withholding on a PTP distribution”
is the amount of the distribution subject to
withholding under chapter 3 or 4 and/or
under section 1446(a) or (f).
(D) Broker. The term “broker” has the
meaning described in §1.1446(f)-1(b)(1),
when referenced in connection with the
transfer of a PTP interest.
(E) Disclosing QI. For purposes of
section 1446(a) or (f), a “disclosing QI”
is a QI that does not assume the primary
withholding obligation under section
1446(a) or (f) for a payment and that
provides with its withholding statement
the specific payee documentation referenced in §1.1446(f)-4(a)(7)(iii) (for an
amount realized) or §1.1446-4(e)(4) (for
withholding on a PTP distribution under
section 1446(a)) instead of the chapter 3
withholding rate pool information otherwise permitted to be included on the
withholding statement and, for an amount
realized, a chapter 4 withholding rate pool
of U.S. payees when permitted for chapter
4 purposes in lieu of specific payee documentation (that is, Forms W-9) for those

593

payees. A QI that acts as a disclosing QI
for a payment must act as a disclosing
QI for the entire payment of an amount
realized from the sale of a PTP interest
or a PTP distribution (regardless of the
number of account holders that are partners receiving the payment). For purposes
of the preceding sentence, a QI will be
treated as having acted as a disclosing QI
with respect to an account holder that is a
foreign person regardless of whether the
Form W-8 that QI provides with its withholding statement for the foreign person
includes a U.S. TIN. See, however, section 5.01(A) of this Agreement for a QI’s
requirement to request U.S. TINs from its
account holders for purposes of sections
1446(a) and (f).
(F) Modified Amount Realized. In
the case of an amount realized paid to a
transferor of a PTP interest that is a foreign partnership, the “modified amount
realized” is the amount determined under
§1.1446(f)-4(c)(2)(ii), as modified by
section 4.06 or 5 of this Agreement with
respect to the partner information required
for determining the amount.
(G) Nominee. Except as otherwise
provided in this Agreement, the term
“nominee” means a person that, under
§1.1446-4(b)(3), holds an interest in a
PTP on behalf of a foreign person and that
is either a U.S. person or QI that assumes
primary withholding responsibility for
a PTP distribution or a U.S. branch of a
foreign person (or territory financial institution) that agrees to be treated as a U.S.
person with respect to the distribution.
(H) Partner. When referenced in connection with section 1446(a) and (f), a
“partner” is a person holding a PTP interest, including a partnership or trust but
excluding a grantor trust and including the
trust’s grantors or owners to the extent of
their respective interests in the trust, and
excluding an intermediary. When referenced in connection with §1.6031(c)-1T,
a partner is a person to whom a partnership is required to issue a statement under
section 6031(b). See section 8.07 of this
Agreement.
(I) PTP Interest. A “PTP interest” is
an interest in a publicly traded partnership if the interest is publicly traded on an
established securities market or is readily
tradable on a secondary market (or the
substantial equivalent thereof).

December 27, 2022

(J) PTP Distribution. A “PTP distribution” is a distribution made by a publicly traded partnership.
(K) Publicly Traded Partnership
(PTP). The term “publicly traded partnership” (PTP) has the same meaning as
in section 7704 and §§1.7704-1 through
1.7704-4 but does not include a publicly
traded partnership treated as a corporation
under that section.
(L) Qualified Notice. A “qualified
notice” is a notice issued by a PTP for a
PTP distribution as described in §1.14464(b)(4).
(M) Transfer. A “transfer” is a sale,
exchange, or other disposition of a PTP
interest and includes a distribution from a
partnership to a partner, as well as a transfer treated as a sale or exchange under
section 707(a)(2)(B). With respect to a
PTP distribution, however, see sections
2.91(A) and 3.01(C)(2) of this Agreement
for the extent of an amount realized on the
distribution for purposes of QI’s requirement to withhold under section 1446(f).
(N) Transferor. A “transferor” is any
person, foreign or domestic, that transfers
a PTP interest. In the case of a trust, to the
extent all or a portion of the income of the
trust is treated as owned by the grantor or
another person under sections 671 through
679, the term transferor means the grantor
or other person.
Sec. 2.92. 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 or Model 2 IGA with
respect to a QI’s FATCA requirements as a
participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. Except as expressly
provided in this Agreement, any term
relating to a QDD or section 871(m) has
the same meaning given to the term in
§1.871-15.
SECTION 3. WITHHOLDING
RESPONSIBILITY AND QDD TAX
LIABILITY
Sec. 3.01. Chapters 3 and 4 Withholding Responsibilities and Withholding with respect to PTP Interests.
(A) Chapter 4 Withholding. QI
is a withholding agent for purposes of

December 27, 2022

chapter 4 and subject to the withholding
and reporting provisions applicable to
withholding agents under sections 1471
and 1472 with respect to its accounts. QI
is required to withhold 30 percent of any
withholdable payment made after June 30,
2014, to an account holder that is an FFI
unless either QI 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
§1.1471-2(b)(2)(i)(A)(2) for the definition
of grandfathered obligation with respect
to an obligation giving rise to a dividend
equivalent. QI is also required to withhold
30 percent of any withholdable payment
made after June 30, 2014, to an account
holder that is an NFFE unless either QI
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
otherwise applies.
If QI is a participating FFI or registered deemed-compliant FFI (other than
a reporting Model 1 FFI), QI will satisfy
its requirement to withhold under sections
1471(a) and 1472(a) with respect to direct
account holders 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, §1.14715(f)(1), or 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 or
non-consenting U.S. accounts. If QI is
a reporting Model 1 FFI or a registered
deemed-compliant Model 1 IGA FFI,
QI will satisfy its requirement to withhold under section 1471(a) with respect
to direct account holders 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. QI
must, however, withhold in the manner
described in sections 3.02 and 3.03 of this
Agreement for when QI assumes or does

594

not assume primary withholding responsibility for purposes of chapters 3 and 4
regardless of its chapter 4 status.
(B) Chapter 3 Withholding. To the
extent that QI makes a payment of an
amount subject to chapter 3 withholding,
QI is required to withhold 30 percent of
the gross amount of any such payment
made to an account holder that is (or is
presumed) a foreign person unless QI 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
5 of this Agreement regarding documentation requirements. With respect an amount
subject to chapter 4 withholding that is
also an amount subject to chapter 3 withholding, QI 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 QI of its requirements to withhold
under chapter 3 to the extent required in
this Agreement.
(C) Withholding on Amounts Realized and PTP Distributions.
(1) Withholding on an Amount Realized. If QI acts as a broker with respect to
a payment of an amount realized from a
transfer of a PTP interest, QI is required to
withhold under section 1446(f) 10-percent
of the amount realized paid to an account
holder of QI that is the transferor and
is (or is presumed to be) a foreign partner when QI assumes primary withholding responsibility for the payment under
section 3.03(C)(1) of this Agreement. QI
is further required to withhold on a payment of an amount realized made to a
foreign broker to the extent provided in
§1.1446(f)-4(a)(2). QI is not required to
withhold on a payment of an amount realized when an exception to withholding
under §1.1446(f)-4(b) applies. Thus, for
example, QI is not required to withhold
under section 1446(f) when it may rely on
a qualified notice that states the applicability of the exception under §1.1446(f)-4(b)
(3). See section 5 of this Agreement
regarding documentation requirements

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for other exceptions to withhold under
§1.1446(f)-4(b).
(2) Withholding on a PTP Distribution. If QI acts as a nominee for a PTP
distribution under section 3.03(C)(2) of
this Agreement, QI is a withholding agent
for purposes of the distribution and is
required to withhold as described in this
section 3.01(C)(2). For an amount subject to withholding under section 1446(a)
identified on a qualified notice for a PTP
distribution, QI is required to withhold on
the amount paid to an account holder that
is (or is presumed to be) a foreign partner
except when an exception to withholding
applies to an account holder that is a foreign entity described in section 501(c)(3)
or that claims an exemption from withholding under an income tax treaty. See
sections 5.03 and 5.06(A) of this Agreement for documentation requirements
for these exceptions and section 1446(b)
for the rate of withholding that applies
under section 1446(a). See also §1.14465(c) and (d) for how QI determines its
withholding under section 1446(a) on
a PTP distribution paid to an account
holder that is a foreign partnership. For
an amount subject to withholding under
chapter 3 and 4 on a PTP distribution,
QI is required to withhold under sections
3.01(A) and (B) of this Agreement to the
extent such amounts are identified on a
qualified notice for the distribution. For
an amount realized on a PTP distribution,
QI’s requirement to withhold under section 1446(f) is limited to the amount identified on a qualified notice as in excess of
the PTP’s cumulative net income, subject
to the withholding exceptions referenced
in section 3.01(C)(1) of this Agreement.
If QI does not receive a qualified notice
for a distribution or to the extent the qualified notice for the distribution does not
specify an amount attributable to the distribution, QI is required to withhold only
to the extent provided in §1.1446-4(d)(1).
Sec. 3.02. Primary Withholding
Responsibility Not Assumed under
Chapters 3 and 4 or with respect to PTP
interests. Notwithstanding anything in
sections 1.01 and 3.01 of this Agreement
to the contrary, QI is not required to withhold to the extent provided in this section
3.02.
(A) Withholding under Chapters
3 and 4. QI is not required to withhold

Bulletin No. 2022–52

with respect to a payment of U.S. source
FDAP income if it: (a) does not assume
primary
withholding
responsibility
under section 3.03(A) of this Agreement
by electing to be withheld upon under
§1.1471-2(a)(2)(iii) for purposes of chapter 4, (b) provides the withholding agent
from which QI receives the payment with
a valid withholding certificate described
in section 6 of this Agreement that indicates that QI does not assume primary
withholding responsibility for chapters 3
and 4 purposes, and (c) provides correct
withholding statements (including information regarding any account holders
or interest holders of an intermediary or
flow-through entity that holds an account
with QI, other than a QI that assumes primary withholding responsibility, or a WP
or WT) as described in section 6.02 of
this Agreement.
(B) Withholding with respect to
PTP interest. QI is not required to withhold on a payment of a PTP distribution
or an amount realized from the sale of a
PTP interest except when QI assumes primary withholding responsibility for either
of those payments under section 3.03(C)
(1) or (2) of this Agreement. QI does not
assume primary withholding responsibility for a payment of a PTP distribution or
amount realized from the sale of a PTP
interest by providing to its withholding
agent or broker a valid withholding certificate described in section 6 of this Agreement indicating that it is a QI that does not
assume primary withholding responsibility for the payment and provides correct
withholding statements as described in
section 6.02 of this Agreement. See section 3.05(C) of this Agreement for when
QI is not responsible for primary Form
1099 reporting and backup withholding
for broker proceeds that are an amount
realized.
(C) Residual Withholding Requirement. Notwithstanding its election not to
assume primary withholding responsibility for a payment as described in section
3.02(A) or (B) of this Agreement, QI shall,
however, withhold the difference between
the amount of withholding required and
the amount actually withheld by another
withholding agent if QI—
(1) Actually knows that the appropriate
amount has not been withheld by another
withholding agent; or

595

(2) Made an error which results in the
withholding agent’s failure to withhold
the correct amount due (e.g., QI fails to
provide an accurate withholding statement
with respect to the payment, including a
failure to provide information regarding
any account holders or any interest holders of an intermediary or flow-through
entity that holds an account with QI to the
extent required in section 6 of this Agreement), and QI has not corrected the underwithholding under section 9.05 of this
Agreement.
Sec. 3.03. Assumption of Primary
Withholding Responsibilities under
Chapters 3 and 4 (including by QDDs)
or with respect to PTP interests.
(A) Withholding Assumed under
Chapters 3 and 4. QI may assume primary withholding responsibility for purposes of chapters 3 and 4 by providing
a valid withholding certificate described
in section 6 of this Agreement to a withholding agent that makes a payment of
U.S. source FDAP income to QI and by
designating on the withholding statement associated with such certificate
the account(s) for which QI assumes
primary withholding responsibility (if
required). QI is not required to assume
primary withholding responsibility for
all accounts it holds with a withholding
agent. If QI assumes primary withholding responsibility for any account, it must
assume that responsibility under chapters
3 and 4 for all withholdable payments
and amounts subject to chapter 3 withholding made by the withholding agent
to that account. Notwithstanding the
preceding sentence, QI assumes primary
withholding responsibility on a PTP distribution (which includes an amount subject to withholding under chapter 3 or 4
on the distribution) only as provided in
section 3.03(C)(2) of this Agreement.
If QI is acting as a QSL for a substitute dividend payment, QI must assume
primary withholding responsibility for
any such payment made to any account
holder receiving a U.S. source substitute
dividend payment, subject to the restrictions related to QDDs described in section
1.01 of this Agreement. A QI not acting as
a QSL and acting as an intermediary under
this Agreement for a U.S. source substitute dividend payment must also assume
primary withholding responsibility for all

December 27, 2022

U.S. source substitute dividends received
and paid by QI as an intermediary.
QI may assume primary withholding
responsibility for U.S. source FDAP payments of substitute interest as described
in §1.861-2(a)(7). If QI assumes primary
withholding responsibility for payments
of substitute interest (as described in this
paragraph), it must assume primary withholding responsibility with respect to
all such payments. QI assumes primary
withholding responsibility for payments
of substitute interest for purposes of this
Agreement when it assumes such responsibility for payments of interest and substitute interest it receives in connection
with a sale-repurchase or similar agreement, a securities lending transaction, or
collateral that it holds in connection with
its activities as a dealer in securities. As a
result, QI may represent its status as a QI
on the withholding certificate described
in section 6.01 of this Agreement with
respect to payments it receives of interest and substitute interest described in the
preceding sentence regardless of whether
it acts as an intermediary or as a principal
with respect to these payments.
To the extent that QI assumes primary withholding responsibility under
this section 3.03(A), QI must withhold
as described in section 3.01(A) and (B)
of this Agreement. QI is not required to
withhold on amounts it pays to another
QI that has assumed primary withholding
responsibility with respect to the payment
under chapters 3 and 4 or to a WP or a WT.
A QI is not required to withhold on only
the following payments to a QI acting as
a QDD—
(1) a payment with respect to a potential section 871(m) transaction that is not
an underlying security,
(2) a payment of a dividend equivalent,
and
(3) a payment of a dividend received in
calendar year 2023 or 2024 by that QDD
in its equity derivatives dealer capacity.
(B) Assumption of Withholding
Responsibility by a QDD. If QI is acting
as a QDD, it must assume primary chapters 3 and 4 withholding responsibility for
any dividend equivalent payment that it

1

makes and must withhold with respect to
a dividend equivalent payment on the dividend payment date for the applicable dividend (as determined in §1.1441-2(e)(4)).
A QDD must treat any dividend equivalent
(including any section 871(m) amount) as
a dividend from sources within the United
States for purposes of sections 871(a) and
881 and chapter 3 and chapter 4 consistent
with section 871(m) and the regulations
thereunder. A QDD may reduce the rate of
withholding under chapter 3 on dividends
and dividend equivalents only based on
a beneficial owner’s claim of treaty-reduced withholding for portfolio dividends
under the dividends article of an applicable income tax treaty. A QDD must also
assume primary chapter 3 and chapter 4
withholding responsibility for payments
made with respect to a potential section
871(m) transaction even if the payment
is not a dividend equivalent if the amount
paid is an amount subject to chapter 3 or
4 withholding. See section 3.03(A) of this
Agreement for when a QDD makes a payment subject to withholding under chapter
3 or 4 to another QI (including a QDD). If
the QDD is a partnership or a branch of a
partnership, it must also assume primary
chapters 3 and 4 withholding responsibility for its partners on the section 3.09
amounts as modified for a QDD that is a
partnership (or branch of a partnership),
treating the dividend equivalent payment
as made on the dividend payment date for
the applicable dividend (as determined in
§1.1441-2(e)(4)). In addition, the QDD
must notify each payee in writing that it
will withhold on the dividend payment
date before the time for determining the
payee’s first dividend equivalent payment
(as determined under §1.871-15(j)(2)).
(C) Withholding Assumed with
respect to PTP Interests.
(1) Withholding Assumed on Amount
Realized. QI may assume primary withholding responsibility for a payment of
an amount realized from the sale of a
PTP interest only when the QI provides
to the broker making the payment to QI
a valid withholding certificate described
in section 6 of this Agreement stating that
it assumes primary responsibility for the

payment. In such a case, QI is required
to withhold on the payment as described
in section 3.01(C)(1) of this Agreement,
excluding an amount realized paid to
another QI that has assumed primary
withholding responsibility with respect to
the amount realized.
(2) Withholding Assumed on PTP
Distribution. QI may assume primary
withholding responsibility for a payment
of a PTP distribution only when the QI
provides to the PTP or nominee paying
the distribution to QI a valid withholding
certificate described in section 6 of this
Agreement stating that QI assumes primary responsibility by acting as a nominee
for the distribution under §1.1446-4(b)(3).
QI may act as a nominee for a PTP distribution only when QI assumes primary
withholding responsibility for all of the
amounts subject to withholding on the
PTP distribution under sections 1446(a)
and (f) and chapters 3 and 4. When acting as a nominee, QI is required to withhold on a PTP distribution as required
under section 3.01(C)(2) of this Agreement, excluding a PTP distribution paid
to another QI that has assumed primary
withholding responsibility as a nominee
with respect to the distribution or paid to a
WP or WT with respect to an amount subject to withholding under chapter 3 or 4 on
the distribution.
Sec. 3.04. Backup Withholding
Under Section 3406 and Form 1099
Reporting Responsibility.
(A) Backup Withholding. QI is a
payor under section 3406 with respect to
reportable payments. Under section 3406,
unless an exception to backup withholding applies, a payor is required to deduct
and withhold 241 percent from a reportable payment to an account holder that is
a U.S. non-exempt recipient if the U.S.
non-exempt recipient has not provided
its U.S. TIN in the manner required under
that section; the IRS notifies the payor
that the U.S. TIN furnished by the payee
is incorrect; there has been a notified
payee under-reporting described in section 3406(c); or there has been a payee
certification failure described in section
3406(d).

See section 3406(a), providing that the applicable rate of backup withholding is the fourth lowest rate of tax applicable under section 1(c).

December 27, 2022

596

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(B) Coordination of Chapter 4 Withholding and Backup Withholding. With
respect to a withholdable payment that
is also a reportable payment subject to
backup withholding under section 3406,
QI is not required to withhold under section 3406 if QI withheld on such payment
under chapter 4. See §31.3406(g)-1(e).
Alternatively, if QI is a participating FFI
or a registered deemed-compliant FFI
(other than a reporting Model 1 FFI), it
may elect 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 satisfying
its backup withholding obligation under
section 3406 provided that the payment
is also a reportable payment. See section 4 of the FFI Agreement. Nothing in
chapter 4 (including the FFI Agreement)
or any applicable IGA relieves QI of its
requirements to backup withhold under
section 3406 to the extent required by this
Agreement.
(C) Form 1099 Reporting. If QI
applies backup withholding (as described
in section 3.04(B) of this Agreement), it
must report the amount subject to backup
withholding on Form 1099 and not on
Form 1042-S.
Sec. 3.05. Primary Form 1099
Reporting and Backup Withholding
Responsibility for Reportable Payments
Other Than Reportable Amounts. QI
is responsible for Form 1099 reporting
and backup withholding on reportable
payments other than reportable amounts
to the extent required under this section
3.05 and section 8.06 of this Agreement,
whether or not QI assumes primary Form
1099 reporting and backup withholding responsibility with respect to reportable amounts under section 3.07 of this
Agreement. Further, no provision of this
Agreement which requires QI to provide
another withholding agent with information regarding reportable amounts shall be
construed as relieving QI of its Form 1099
reporting and backup withholding obligations with respect to reportable payments
that are not reportable amounts. For when
withholding under section 1446(a) or (f)
is applied on a payment to an account
holder that is a U.S. person, however, see
section 8.02 of this Agreement. Also see,
§31.3406(g)-1(e), providing that a payor

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(irrespective of whether the payor is a
U.S. or non-U.S. payor) is not required
to backup withhold under section 3406
on a reportable payment that is paid and
received outside the United States with
respect to an offshore obligation or on
gross proceeds from a sale effected outside the United States, unless the payor
has actual knowledge that the payee is a
U.S. person.
(A) U.S. Payor. Except as provided in
section 3.05(C) of this Agreement, if QI is
a U.S. payor, QI has primary Form 1099
reporting and backup withholding responsibility for reportable payments other than
reportable amounts. For example, if QI is
a U.S. payor, it has primary Form 1099
reporting and backup withholding responsibility for payments of foreign source
income as well as all broker proceeds paid
to account holders that are, or are presumed to be, U.S. non-exempt recipients.
(B) Non-U.S. Payor. If QI is a non-U.S.
payor, QI has primary Form 1099 reporting and backup withholding responsibility
for broker proceeds described in section
2.69(B)(2) of this Agreement and foreign
source fixed and determinable income
other than income paid and received outside United States as described in section
2.69(B)(3) of this Agreement if such payments are made (or presumed made) to
U.S. non-exempt recipients.
(C) Special Procedure for Broker
Proceeds. If QI is a U.S. payor, QI may
request another payor that is either a U.S.
financial institution or another QI to report
on Form 1099 and, if required, backup
withhold with respect to broker proceeds
from a sale that is effected at an office
outside the United States (as defined in
§1.6045-1(g)(3)(iii)) that QI is otherwise
required to report under section 3.05(A)
and section 8.05 of this Agreement, provided the other payor actually receives the
broker proceeds. In such a case, QI will
not be responsible for primary Form 1099
reporting and backup withholding with
respect to broker proceeds, provided that
the other payor agrees to do the reporting
and backup withholding and QI provides
all of the information necessary for the
other payor to properly report and backup
withhold. QI, however, remains responsible for primary Form 1099 reporting and
backup withholding if the other payor does
not agree to report and backup withhold,

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or if QI knows that the other payor failed
to do so. If, however, QI is a participating FFI or registered deemed-compliant
FFI (other than a reporting Model 1 FFI)
that reports an account on Form 1099 in
order to satisfy its U.S. account reporting
requirement under chapter 4, as described
in section 8.04 of this Agreement, QI is
responsible for reporting on Form 1099
with respect to reportable payments made
to such U.S. account and must report in the
manner described in the FFI Agreement.
Notwithstanding the preceding provisions of this section 3.05, for a payment of
broker proceeds that is an amount realized
from the sale of a PTP interest, QI will
not be excepted from responsibility for
primary Form 1099 reporting and backup
withholding if QI provides a valid withholding certificate described in section 6
of this Agreement to the broker paying
the proceeds to QI that indicates that QI
assumes primary withholding responsibility for the amount realized.
Sec. 3.06. Primary Form 1099
Reporting and Backup Withholding
Responsibility for Reportable Amounts
Not Assumed. Notwithstanding sections
1.01 and 3.04 of this Agreement, QI shall
not be required to report on Form 1099
and backup withhold with respect to a
reportable amount if QI does not assume
primary Form 1099 reporting and backup
withholding responsibility and it provides
a payor from which it receives a reportable
amount the Forms W-9 of its U.S. non-exempt recipient account holders (or, if a
U.S. non-exempt recipient fails to provide
a Form W-9 or information regarding the
account holder’s name, address, and U.S.
TIN, if a U.S. TIN is available) together
with the withholding rate pools attributable to U.S. non-exempt recipient account
holders so that such payor may report
on Form 1099 and, if required, backup
withhold. If QI elects to backup withhold
on withholdable payments that are also
reportable amounts made to recalcitrant
account holders that are also U.S. non-exempt recipients, QI shall not be required
to report on Form 1099 and backup withhold with respect to a reportable amount if
it provides a payor from which it receives
a reportable amount information regarding such recalcitrant account holders. See
section 6.03 of this Agreement and section 4 of the FFI Agreement. If QI reports

December 27, 2022

its U.S. accounts on Forms 1099 under
its FATCA requirements as a participating FFI or registered deemed-compliant
FFI, see section 8.04(A) of this Agreement providing that QI cannot delegate
to a withholding agent its requirement to
report its U.S. accounts. If QI elects not
to assume primary Form 1099 reporting
and backup withholding responsibility, QI
must provide the withholding agent with
such information regarding any account
holders or interest holders of an intermediary or flow-through entity that holds
an account with QI. Notwithstanding its
election not to assume primary Form 1099
reporting and backup withholding responsibility, QI shall backup withhold and
report a reportable amount to the extent
required under sections 3.04 and 8.06 of
this Agreement if—
(A) QI actually knows that a reportable
amount is subject to backup withholding
and that another payor failed to apply
backup withholding, or
(B) Another payor has not applied
backup withholding to a reportable
amount because of an error made by QI
(e.g., QI failed to provide the other payor
with information regarding the name,
address, U.S. TIN (if available), and withholding rate pool for a U.S. non-exempt
recipient account holder subject to backup
withholding, including a failure to provide information regarding any account
holders or interest holders of an intermediary or flow-through entity that holds an
account with QI to the extent required in
section 6 of this Agreement).
Sec. 3.07. Primary Form 1099
Reporting and Backup Withholding
Responsibility Assumed. QI may assume
primary Form 1099 reporting backup
withholding responsibility with respect
to reportable amounts without obtaining
approval from the IRS. QI that assumes
such responsibility is subject to all of the
obligations imposed by chapter 61 and
section 3406, as modified by this Agreement, and QI shall be subject to any applicable penalties for failure to meet those
obligations. QI shall inform a payor from
which it receives a reportable amount that
it has assumed primary Form 1099 reporting and backup withholding responsibility
by providing the payor with a valid withholding certificate described in section 6
of this Agreement and by identifying on

December 27, 2022

the withholding statement associated with
such certificate the account(s) for which
QI assumes primary Form 1099 reporting
and backup withholding responsibility (if
required).
QI is not required to assume primary
Form 1099 reporting and backup withholding responsibility for all accounts
it holds with a payor. However, if QI
assumes primary Form 1099 reporting and
backup withholding responsibility for any
account, it must assume that responsibility for all reportable amounts made by a
payor to that account.
If QI is acting as a QDD, it must
assume primary Form 1099 reporting and
backup withholding responsibility for
any reportable payments that are made
with respect to a potential section 871(m)
transaction. Thus, for example, if QI acts
as a QDD with respect to an NPC that is
a potential section 871(m) transaction and
makes a payment pursuant to the NPC to
a U.S. person that is a U.S. non-exempt
recipient, QI must backup withhold and
report any amount paid to the U.S. person
to the extent required under section 3406
and §1.6041-1(d)(5).
In addition, if QI is assuming primary
withholding responsibility for payments
of substitute interest (as described in section 3.03(A) of this Agreement), it must
assume primary Form 1099 reporting and
backup withholding responsibility with
respect to all such payments (with a similar requirement for Form 1099 reporting if
QI assumes primary withholding responsibility for any payments of substitute
dividends or acts as a QSL under section
3.02(A) of this Agreement).
QI is not required to backup withhold
on a reportable amount it makes to a WP,
WT, or another QI that has assumed primary Form 1099 reporting and backup
withholding responsibility with respect
to the reportable amount. QI is also not
required to backup withhold on a reportable amount that QI makes to an intermediary or flow-through entity that is a
participating FFI, registered deemed-compliant FFI, or another QI that does not
assume primary Form 1099 reporting
and backup withholding responsibility
with respect to the payment provided that
such intermediary or flow-through entity
allocates the payment on its withholding
statement to a chapter 4 withholding rate

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pool of U.S. payees and the withholding
statement is associated with a valid Form
W-8IMY that provides the applicable certification(s) for allocating the payment to
this pool or allocates the payment on its
withholding statement to a chapter 4 withholding rate pool of recalcitrant account
holders.
Sec. 3.08. Deposit Requirements. If
QI assumes primary withholding responsibility for a payment under section
3.03 of this Agreement, it must deposit
amounts withheld at the time and in the
manner provided under section 6302 (see
§1.6302-2) by electronic funds transfer
as provided under §31.6302-1(h). If QI
is a non-U.S. payor that does not assume
primary withholding responsibility under
section 3.03 of this Agreement but withholds under section 3.02(C) of this Agreement, QI must deposit amounts withheld
by the 15th day following the month in
which the withholding occurred.
Sec. 3.09. QDD Tax Liability. In addition to satisfying its withholding tax liability as described in this Agreement, a
QDD must satisfy its QDD tax liability.
The QDD’s QDD tax liability is the sum
of:
(A) its tax liability under section 881
for its section 871(m) amount (as defined
in section 2.73 of this Agreement) for
each dividend on each underlying security reduced (but not below zero) by the
amount of tax paid by the QDD under section 881(a)(1) on dividends received with
respect to that underlying security on that
same dividend in its capacity as an equity
derivatives dealer;
(B) its tax liability under section 881 for
dividend equivalent payments received as
a QDD in its non-equity derivatives dealer
capacity; and
(C) its tax liability under section 881
for any payments, such as dividends or
interest, received as a QDD with respect
to potential section 871(m) transactions or
underlying securities that are not dividend
equivalent payments, to the extent the full
liability was not satisfied by withholding.
A QDD that is a foreign branch of a
U.S. financial institution does not have a
QDD tax liability. Instead, such a QDD
must determine and report its tax liability in accordance with chapter 1 and the
appropriate U.S. tax return for the U.S.
corporation.

Bulletin No. 2022–52

In the case of a QDD that is a partnership or a branch of a partnership, the
QDD tax liability for each QDD will be
the gross income components of this section 3.09 instead of the tax liability under
section 881 amounts. More specifically,
the amount under section 3.09(B) is the
dividend equivalent payments received
as a QDD in its non-equity derivatives
dealer capacity, and the amount under
section 3.09(C) is any payments, such as
dividends or interest, received as a QDD
with respect to potential section 871(m)
transactions or underlying securities that
are not dividend equivalent payments. The
section 3.09(C) amount is not reduced by
withholding, although QDD will take
any prior withholding into account when
reporting the amounts covered by section
3.09(C) to the QI’s partners and determining the appropriate withholding to those
partners. Further, the QDD tax liability
includes any withholding required of the
partnership with respect to its partners on
the section 3.09 amounts as modified for a
QDD that is a partnership (or branch of a
partnership).
For calendar years 2023 and 2024, the
QDD (and its partners when the QDD is
a partnership or a branch of a partnership) will not be liable for tax under section 871(a) or 881 on actual dividends
on physical shares or deemed dividends
or dividend equivalents that the QDD
receives in its equity derivatives dealer
capacity. The QDD is (and in the case of a
QDD that is a partnership or a branch of a
partnership, the QDD’s direct and indirect
partners are) liable for tax on actual dividends on physical shares or deemed dividends or dividend equivalents received in
its non-equity derivatives dealer capacity
and on any other U.S. source FDAP payments received by the QDD.
(D) Timing for Determining QDD
Tax Liability. A QDD must determine
its QDD tax liability due under sections
3.09(A) and (B) on the date provided in
§1.871-15(j)(2) for the applicable dividend. A QDD must determine its QDD tax
liability due under section 3.09(C) when
the payments are treated as received under
the Code and the regulations promulgated
thereunder. A QDD that is a partnership
or a branch of a partnership must determine its QDD tax liability under sections
3.09(A) and (B), including the dividend

Bulletin No. 2022–52

equivalent payments received as a QDD
in its non-equity derivatives dealer capacity, on the date provided in §1.871-15(j)
(2) for the applicable dividend for withholding and reporting purposes.
See section 7.01(C) of this Agreement
regarding a QI that is acting as a QDD’s
responsibility to report QDD tax liability
on the appropriate U.S. tax return and to
maintain a reconciliation schedule for its
section 871(m) amount and other amounts
related to its QDD tax liability. See also
section 7.01(C) of this Agreement for
additional information regarding the
reporting and other responsibilities of a
QDD that is a partnership or branch of a
partnership.
SECTION 4. PRIVATE
ARRANGEMENT
INTERMEDIARIES AND CERTAIN
PARTNERSHIPS AND TRUSTS
Sec. 4.01. Private Arrangement
Intermediaries–In General. If QI is an
FFI, QI may enter into a private arrangement with another intermediary under
which the other intermediary agrees
to perform all of the obligations of QI
under this Agreement, except as modified in section 4.02 of this Agreement.
QI, however, may not enter into a private
arrangement under this section 4.01 with
any account holder for which it acts as a
QDD. The agreement between QI and the
other intermediary shall be between QI
and all the offices of the other intermediary located in a particular jurisdiction,
which must be one for which the IRS has
approved the know-your-customer rules.
Such an intermediary is referred to in this
Agreement as a private arrangement intermediary (PAI). By entering into a PAI
agreement, QI is not assigning its liability
for the performance of any of its obligations under this Agreement. Therefore,
QI shall remain liable for any tax, penalties, interest, and any other sanctions that
may result from the failure of the PAI to
meet any of the obligations imposed by
its agreement with QI. QI agrees not to
assert any defenses against the IRS for the
failures of the PAI or any defenses that
the PAI may assert against QI. For purposes of this Agreement, the PAI’s actual
knowledge or reason to know of facts relevant to withholding or reporting shall be

599

imputed to QI. QI’s liability for the failures of the PAI shall apply even though
the PAI is itself a withholding agent and
a payor under chapter 61 and section
3406 and is itself separately liable for its
failure to meet its obligations under the
Code. Notwithstanding the foregoing, QI
shall not be liable for tax, interest, or penalties for failure to withhold and report
under chapters 3, 4, and 61 and sections
1446(a), 1446(f), and 3406 unless the
underwithholding or the failure to report
amounts correctly on Forms 945, 1042,
1042-S, 1099, or 8966 is due to QI’s or its
PAI’s failure to properly perform its obligations under this Agreement. The PAI is
not required to enter into an agreement
with the IRS but must respond (either
directly or through QI) to IRS inquiries
related to its compliance, as described
in section 10.08 of this Agreement. The
IRS may, however, in its sole discretion,
refuse to permit an intermediary to operate as a PAI by providing notice to QI. QI
may, however, appeal the IRS’s determination by following the notice and cure
provisions in section 11.06 of this Agreement. For purposes of this Agreement, an
intermediary shall be considered a PAI
only if the following conditions are met:
(A) The PAI is a certified deemed-compliant FFI (other than a registered
deemed-compliant Model 1 IGA FFI) that
acts as an intermediary with respect to
reportable amounts and has provided QI
with a certification that it has maintained
such certified deemed-compliant FFI status during each certification period;
(B) The PAI does not act as an intermediary for a direct account holder that is a
QI, WP, WT, participating FFI, registered
deemed-compliant FFI, or a registered
deemed-compliant Model 1 IGA FFI;
(C) The PAI is, pursuant to a written
agreement between QI and the PAI (PAI
agreement), subject to all the obligations
of QI under this Agreement, except to the
extent modified by sections 4.02 and 4.03
of this Agreement;
(D) For purposes of chapter 4, the PAI
agrees to comply with the FATCA requirements applicable to its chapter 4 status
as a certified deemed-compliant FFI, as
modified by sections 4.02 and 4.03 of this
Agreement, and is not required to fulfill
QI’s FATCA requirements as a participating FFI, registered deemed-compliant

December 27, 2022

FFI, or registered deemed-compliant
Model 1 IGA FFI;
(E) QI identifies the PAI on QAAMS
before the first payment for which the PAI
is operating under the PAI agreement;
(F) The PAI agrees, to the extent necessary for QI to satisfy its compliance obligations (i.e., if QI does not receive a waiver
described in section 10.07 of this Agreement), either to provide its documentation
and other information to QI for inclusion
in QI’s periodic review described in section 10.04 of this Agreement or to conduct
an independent periodic review in accordance with the procedures described in
section 10.05 of this Agreement and provide QI with the same certification as is
required for QI’s responsible officer under
section 10.03 of this Agreement for each
certification period in order to allow the
responsible officer of QI to make a certification to the IRS regarding PAI’s compliance. The PAI agrees to respond (either
directly or through QI) to IRS inquiries
regarding its periodic review and agrees
to provide QI (and the IRS, upon request)
with a periodic review report (as described
in section 10.06 of this Agreement);
(G) The PAI furnishes QI with a Form
W-8IMY and withholding statement
described in section 6 of this Agreement
as modified by this section 4.01(G). The
PAI is required to provide QI with Forms
W-9 (or, in absence of the form, the name,
address, and U.S. TIN (if available))
of the PAI’s U.S. non-exempt recipient
account holders and the withholding rate
pool information for those account holders as required by section 6.03(D) of this
Agreement so that the QI (or the payor)
may report on Form 1099 and, if required,
backup withhold. In addition, the PAI is
required to disclose to QI any account
holder of PAI that is a passive NFFE
with one or more substantial U.S. owners (or one or more controlling persons
that is a specified U.S. person) as defined
in §§1.1471-1(b)(74) and 1.1473-1(b),
respectively (or in the applicable IGA),
and the account holders or interest holders of any nonqualified intermediary or
flow-through entity, respectively, which
has an account with the PAI, and provide
all of the documentation and other information relating to those account holders
and interest holders that is required for the
QI, or another withholding agent, to report

December 27, 2022

the payments made to those account holders and interest holders to the extent
required by sections 8.02(B) and 8.05 of
this Agreement. Except to the extent the
PAI provides its information to QI for purposes of performing the periodic review,
the PAI is not required to disclose to QI,
or another withholding agent, its direct
account holders that are foreign persons
other than a passive NFFE with one or
more substantial U.S. owners (or one or
more controlling persons that is a specified U.S. person). The limitations on a
PAI’s disclosure of its direct account holders do not, however, apply with respect to
the PAI’s direct account holders’ receipt of
payments of PTP distributions or amounts
realized from sales of PTP interests. For
either such payment, a PAI is required to
disclose to QI its direct account holders
and provide any information requested
by QI for QI to meet its withholding and
reporting requirements specified in section 4.02(D) of this Agreement; and
(H) The PAI agrees to notify QI if the
PAI no longer meets the requirements for
certified deemed-compliant status, and
upon such notification, the agreement
between the PAI and QI will terminate.
Sec. 4.02. Modification of Obligations for PAI Agreements.
(A) Payments Reportable under
Chapters 3 and 4. The agreement between
QI and a PAI must provide that QI shall
report all payments of amounts subject to
chapter 3 or 4 withholding made by the
PAI on QI’s Forms 1042 and 1042-S as
if QI had made the payments directly to
the PAI’s account holders. Therefore, QI
shall report payments made to each of the
following types of a PAI’s account holders
as follows:
(1) A direct account holder of the PAI
that is a nonparticipating FFI, QI shall
report an amount subject to chapter 4
withholding using the chapter 4 reporting pool described in section 8.03 of this
Agreement with the PAI reported as the
recipient with respect to the pool.
(2) A direct foreign account holder
of the PAI for which no withholding is
required under chapter 4 (other than an
intermediary, custodian, nominee, agent,
or flow-through entity described below),
QI shall, except as otherwise provided in
section 4.02(D) of this Agreement, report
an amount subject to chapter 3 withholding

600

(excluding an amount subject to chapter 3
withholding on a PTP distribution) using
the chapter 3 reporting pools as described
in section 8.03 of this Agreement, with the
PAI reported as the recipient.
(3) A direct foreign account holder of
the PAI that is a nonqualified intermediary or flow-through entity, QI shall report
payments of amounts subject to chapter 4
withholding with respect to any indirect
account holders of the PAI that the nonqualified intermediary or flow-through
entity includes in a chapter 4 withholding rate pool of nonparticipating FFIs
using the chapter 4 reporting pool for
such account holders described in section
8.03 of this Agreement with the nonqualified intermediary or flow-through entity
reported as the recipient and shall report
payments of amounts subject to chapter 3
withholding made with respect to indirect
foreign account holders of the PAI that are
not subject to chapter 4 withholding by
reporting the payments as made to specific
recipients under the rules of section 8.02
of this Agreement.
(B) Form 1099 Reporting and
Backup Withholding. The agreement
between QI and a PAI must also provide
that QI shall report all reportable payments made by the PAI on QI’s Forms
945 and 1099 to the extent required under
this section 4.02(B). QI shall file Forms
1099 and backup withhold, if required, on
reportable payments made by QI (including by a PAI) to U.S. non-exempt recipients that are direct or indirect account
holders of a PAI in accordance with the
terms of this Agreement.
(C) Form 8966 Reporting. The agreement between QI and a PAI must also
provide that QI shall report all withholdable payments made by the PAI on Form
8966 to the extent required under this section 4.02(C). QI shall file Forms 8966 to
report withholdable payments made by
QI (including by a PAI) to passive NFFEs
with one or more substantial U.S. owners
(or one or more controlling persons that is
a specified U.S. person) that are direct or
indirect account holders of a PAI in accordance with section 8.05 of this Agreement.
(D) Payments of Amounts Realized
or PTP Distributions. The agreement
between QI and a PAI must provide that
QI will satisfy the requirements set forth
in section 8.07 of this Agreement with

Bulletin No. 2022–52

respect to each account holder of PAI that
is a partner receiving from QI a PTP distribution or amount realized from the sale of
a PTP interest for which a statement under
section 6031(b) is required for the taxable
year (and for which the PAI will provide
QI the necessary partner information).
The agreement between QI and a PAI
must further provide that QI shall treat the
PAI as if the PAI were a disclosing QI with
respect to both of the following—
(1) QI’s reporting on Forms 1042 and
1042-S of an amount realized from the
sale of a PTP interest or an amount subject to withholding on a PTP distribution
paid to a direct account holder of the PAI
(as further described in section 8 of this
Agreement); and
(2) QI’s determination of the withholding required on any such amount.
Sec. 4.03. Other Requirements of
PAI Agreements. QI shall require a PAI
to provide QI with all the information
necessary for QI to meet its obligations
under this Agreement. No provisions shall
be contained in the agreement between QI
and a PAI that preclude, and no provisions
of this Agreement shall be construed to
preclude, the PAI’s joint and several liability for tax, penalties, and interest under
chapters 3, 4, and 61 and section 3406 to
the extent that underwithholding, penalties, and interest have not been collected
from QI and the underwithholding or failure to report amounts correctly on Forms
945, 1042, 1042-S, 1099, or Form 8966 are
due to a PAI’s failure to properly perform
its obligations under its agreement with
QI. Nothing in the agreement between
QI and a PAI shall be construed to limit
the PAI’s requirements under chapter 4
or an applicable IGA. Further, nothing in
the agreement between QI and a PAI shall
permit the PAI to assume primary chapters 3 and 4 withholding responsibility,
primary Form 1099 reporting and backup
withholding responsibility, or primary
withholding responsibility for a PTP distribution or an amount realized from the
sale of a PTP interest.
Sec. 4.04. Termination of Arrangement. Except as otherwise provided in
section 4.01(H) of this Agreement, QI
shall cease to treat an intermediary as a
PAI within 90 days from the day QI knows
that the PAI is in default of its agreement
with QI unless the PAI has cured the event

Bulletin No. 2022–52

of default before the expiration of such
90-day period. QI must provide the IRS
with notice of any PAI agreement that has
been terminated within 30 days of the termination by removing the intermediary as
a PAI on QAAMS.
Sec. 4.05. Joint Account Treatment
for Certain Partnerships and Trusts.
(A) In General. If QI is an FFI, QI
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 4.05(A) to apply the simplified
joint account documentation, reporting,
and withholding procedures provided in
section 4.05(B) of this Agreement. QI
and a partnership or trust that apply this
section 4.05 to any calendar year must
apply these rules to the calendar year in
its entirety. QI and the partnership or trust
may not apply this section 4.05 to any
calendar year in which the partnership or
trust has failed to make available to QI
or QI’s reviewer the records described in
this section 4.05(A) within 90 days after
these records are requested, and the partnership or trust must waive any legal prohibitions against providing such records
to QI. If the partnership or trust has failed
to make these records available within the
90-day period, or if QI and the partnership or trust fail to comply with any other
requirements of this section 4.05, QI must
apply the provisions of §§1.1441-1(c) and
1.1441-5(e) 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 9.05 of this Agreement, and
cannot apply this section 4.05 to subsequent calendar years. QI and a partnership or trust that apply this section 4.05
to any calendar year are not required to
apply this section 4.05 to subsequent calendar years.
A partnership or trust is described in
this section 4.05(A) of this Agreement if
the following conditions are met:
(1) The partnership or trust has a chapter 4 status as a certified deemed-compliant
FFI (other than a registered deemed-compliant Model 1 IGA FFI), an owner-documented FFI with respect to QI, an exempt
beneficial owner, or an NFFE or is covered as an account that is excluded from

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the definition of financial account under
Annex II of an applicable IGA or under
§1.1471-5(a);
(2) The partnership or trust is a direct
account holder of QI;
(3) None of the partnership’s or trust’s
partners, beneficiaries, or owners is a
flow-through entity or is acting as intermediary for a payment made by QI to the
partnership or trust;
(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 (e.g.,
a nonparticipating FFI and certain passive
NFFEs); and
(5) The partnership or trust agrees to
make available upon request to QI or QI’s
reviewer for purposes of QI’s periodic
review under section 10 of this Agreement
(including to respond to IRS inquiries
regarding its compliance review) records
that establish that the partnership or trust
has provided QI with documentation for
purposes of chapters 3 and 4 for all of its
partners, beneficiaries, or owners.
(B) Modification of Obligations for
QI.
(1) QI 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
or, in the case of a partnership or trust
that is a certified deemed-compliant FFI,
documentary evidence permitted under
the applicable know-your-customer rules
from each partner, beneficiary, or owner,
and, for a withholdable payment, documentation that meets the requirements of
§1.1471-3(d) to establish the partner’s,
beneficiary’s, or owner’s chapter 4 status.
The withholding statement need not provide any allocation information. QI may
not, however, rely on a Form W-8IMY
that is associated with a PTP distribution
or amount realized from the sale of a PTP
interest for purposes of this section 4.05.
(2) QI must treat payments to the
partnership or trust as allocated solely
to a partner, beneficiary, or owner that is
subject to the highest rate of withholding

December 27, 2022

under chapter 3 and must withhold at that
rate.
(3) QI may pool report amounts distributed to, or included in the distributive share of, the partnership’s or trust’s
direct partners, beneficiaries, or owners in
chapter 3 reporting pools on Form 1042-S
as described in section 8.03(B) of this
Agreement.
(4) After QI has withheld in accordance
with section 4.05(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 QI issues a separate Form 1042-S for any partner, beneficiary, or owner, it cannot include such
partner, beneficiary, or owner in its chapter 3 reporting pool. If QI 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. QI 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
to make available to QI or QI’s reviewer
the records that substantiate the allocation
information included in its withholding
statement.
(5) QI may not include any payments
made to a partnership or trust to which QI
is applying the rules of this section 4.05
in any collective refund claim made under
section 9.04 of this Agreement.
Sec. 4.06. Agency Option for Certain
Partnerships and Trusts.
(A) In General. QI may enter an
agreement with a nonwithholding foreign
partnership or nonwithholding foreign
trust that is either a simple or grantor trust
described in section 4.06(A) of this Agreement under which the partnership or trust
agrees to act as an agent of QI with respect
to its partners, beneficiaries, or owners,
and, as QI’s agent, to apply the provisions
of the QI agreement to the partners, beneficiaries, or owners. QI, however, may not
enter an agreement under this section 4.06
with any account holder for which it acts
as a QDD. By entering into an agreement
with a partnership or trust as described in

December 27, 2022

this section 4.06, QI is not assigning its
liability for the performance of any of its
obligations under this Agreement. QI and
the partnership or trust to which QI applies
the rules of this section 4.06 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 QI. QI and a partnership or
trust that applies the agency option to any
calendar year must apply these rules to the
calendar year in its entirety. Generally, QI
and a partnership or trust that applies the
agency option to any calendar year are
not required to apply the agency option
to subsequent calendar years. If, however,
QI withholds and reports any adjustments
required by corrected information in a
subsequent calendar year under section
4.06(B)(2) of this Agreement, QI must
apply the agency option to that calendar
year in its entirety. QI and a partnership
or trust may not apply the agency option
to any calendar year when the partnership
or trust has failed to make available to QI
or QI’s reviewer the records described in
section 4.06 of this Agreement within 90
days after these records are requested, and
the partnership or trust must waive any
legal prohibitions against providing such
records to QI. If, for any calendar year,
the partnership or trust has failed to make
these records available within the 90-day
period, or if QI and the partnership or trust
fail to comply with any other requirement of this section 4.06, QI must apply
§§1.1441-1(c) and 1.1441-5(e) to the partnership or trust as a nonwithholding foreign partnership or nonwithholding foreign trust, must correct its withholding for
the period in which the failure occurred
in accordance with section 9.05 of this
Agreement, and cannot apply the agency
option to subsequent calendar years.
A partnership or trust is described in
this section 4.06(A) of this Agreement if
the following conditions are met:
(1) The partnership or trust is either
a direct account holder of QI or an indirect account holder of QI that is a direct
partner, beneficiary, or owner of a partnership or trust to which QI also applies the
agency option.
(2) The partnership or trust has a chapter 4 status as a certified deemed-compliant FFI (other than a registered

602

deemed-compliant Model 1 IGA FFI),
an owner-documented FFI, an NFFE, an
exempt beneficial owner, or is covered as
an account that is excluded from the definition of financial account under Annex II
of an applicable IGA or under §1.14715(a) and has provided QI with a certification that it has maintained such chapter 4
status during each certification period;
(3) None of the partnership’s or
trust’s partners, beneficiaries, or owners
is a WP, WT, participating FFI, registered deemed-compliant FFI, registered
deemed-compliant Model 1 IGA FFI, or
another QI acting as an intermediary for
a payment made by QI to the partnership
or trust.
(4) The partnership or trust agrees to
permit QI to treat its direct partners, beneficiaries, or owners as direct account
holders of QI under this Agreement and to
treat its indirect partners, beneficiaries, or
owners as indirect account holders of QI
under this Agreement.
(5) The partnership or trust agrees, to
the extent necessary for QI to satisfy its
compliance obligations (e.g., if the QI
does not receive a waiver described in
section 10.07 of this Agreement), either
to provide its documentation and other
information to QI for inclusion in QI’s
periodic review described in section 10.04
of this Agreement or to conduct an independent periodic review in accordance
with the procedures described in section
10.05 of this Agreement, provide QI with
the certification required under section
10.03 of this Agreement for each certification period in order to allow the responsible officer of QI to make a certification
to the IRS regarding the partnership’s or
trust’s compliance with this section 4.06,
and respond (either directly or through
QI) to IRS inquiries regarding its compliance review, as described in section 10.08
of this Agreement, including providing
the QI and the IRS with the results of
the reviewer’s testing of transactions and
accounts described in section 10.06 of this
Agreement.
(6) For a partnership or trust to which
QI pays an amount subject to withholding
under section 1446(a) on a PTP distribution, the partnership is not a PTP, and the
trust is a grantor trust (with the partnership or trust providing its U.S. TIN to QI).
For a partnership or trust to which QI pays

Bulletin No. 2022–52

an amount realized, the partnership is a
partnership providing a certification for
a modified amount realized, and the trust
is a grantor trust (with the partnership or
trust providing its U.S. TIN to QI).
(B) Modification of Obligations for
QI.
(1) In General. QI 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
QI to fulfill its withholding, reporting, and
filing obligations under this Agreement.
The withholding statement may include
chapter 3 withholding rate pools 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. persons, or passive NFFEs with one or more
substantial U.S. owners (or one or more
controlling persons that is a specified U.S.
person), and the partnership or trust need
not provide to QI documentation for these
partners, beneficiaries, or owners. The
withholding statement may also include
a chapter 4 withholding rate pool of nonparticipating FFIs described in section
6.03 of this Agreement for payments of
amounts subject to chapter 4 withholding.
Notwithstanding the preceding sentences
of this section 4.06(B)(1), the partnership
or trust is required to disclose to QI any
interest holder that is a passive NFFE with
substantial U.S. owners (or controlling
persons that are specified U.S. persons)
or that is a U.S. non-exempt recipient,
as well as the account holders or interest
holders of any nonqualified intermediary
or flow-through entity, respectively, which
has an interest in the partnership or trust,
and to provide all of the documentation
and other information relating to those
account holders and interest holders that is
required for the QI, or another withholding agent, to report the payments made to
those account holders and interest holders
to the extent required by sections 8.02(B)
and 8.05 of this Agreement.
(2) Timing of Withholding. QI must
withhold on the date it makes a payment
to the partnership or trust based on a withholding statement provided by the partnership or trust on which QI is permitted to

Bulletin No. 2022–52

rely. The amount allocated to each partner,
beneficiary, or owner in the withholding
statement may be based on a reasonable
estimate of the partner’s, beneficiary’s,
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 QI on the earlier of the date
that the statement required under section
6031(b) (i.e., Schedule K-1) or the Beneficiary Statement or Owner Statement
is mailed or otherwise provided to the
partner, 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 (without regard to extensions) for QI’s Forms
1042 and 1042-S for the calendar year, QI
may withhold and report any adjustments
required by the corrected information in
the following calendar year.
(3) Payments Reportable Under
Chapters 3 and 4. QI 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, QI shall report
an amount subject to withholding using
the chapter 4 reporting pool described
in section 8.03(A) of this Agreement
with the partnership or trust reported as
a 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),
QI shall report an amount subject to
chapter 3 withholding using the chapter 3 reporting pools described in section 8.03(B) of this Agreement with
the partnership or trust reported as a
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,
QI shall report payments of amounts
subject to chapter 4 withholding in a

603

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 QI
shall report payments of amounts subject to chapter 3 withholding for which
no chapter 4 withholding is required by
reporting the payments as made to specific recipients as described in section
8.02 of this Agreement.
(4) Payments Reportable under Section 1446(a) or (f). QI shall report on
Form 1042-S payments of amounts realized or amounts subject to withholding
under section 1446(a) in accordance with
section 4.06(B)(3) of this Agreement, taking into account the reporting required on
these payments under section 8.02 of this
Agreement with respect to a flow-through
entity or nonqualified intermediary.
(5) Form 1099 Reporting and Backup
Withholding. The agreement between QI
and the partnership or trust must also provide that QI shall include all reportable
payments made by the partnership or trust
in QI’s Forms 945 and 1099 to the extent
required under this section 4.06(B)(4). QI
shall file Forms 1099 and backup withhold, if required, on reportable payments
made by QI to U.S. non-exempt recipient
that are direct or indirect partners, beneficiaries, or owners of the partnership or
trust in accordance with the terms of this
Agreement.
(6) Form 8966 Reporting Requirements. The agreement between QI and the
partnership or trust must also provide that
QI shall report all withholdable payments
made by the partnership or trust on Form
8966 to the extent required under this section 4.06(B)(5). If the partnership or trust
is itself a passive NFFE and if any of its
partners, beneficiaries, or owners is a passive NFFE with one or more substantial
U.S. owners (or one or more controlling
persons that is a specified U.S. person), QI
shall file Forms 8966 to report all withholdable payments made by QI to any
such passive NFFE in accordance with
sections 8.04 and 8.05 of this Agreement.
(C) Other Requirements of Agency
Agreement. QI shall require the partnership or trust to provide QI with all the
information necessary for QI to meet its
obligations under this Agreement. No

December 27, 2022

provisions shall be contained in the agreement between QI 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, 4, and 61 and
section 3406, to the extent that the underwithholding, penalties, and interest have
not been collected from QI and the underwithholding or failure to report amounts
correctly on Forms 945, 1042, 1042-S,
1099, or 8966 is due to the partnership’s
or trust’s failure to properly perform its
obligations under its agreement with QI.
Nothing in the agreement between QI
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, owner-documented FFI, NFFE, or exempt beneficial
owner. Further, nothing in the agreement
between QI and the partnership or trust
shall permit the partnership or trust to
assume primary chapters 3 and 4 withholding responsibility or primary Form
1099 reporting and backup withholding
responsibility.
SECTION 5. DOCUMENTATION
REQUIREMENTS
Sec. 5.01. Documentation Requirements.
(A) General Documentation Requirements. QI agrees to use its best efforts to
obtain documentation from account holders that receive a reportable payment to
determine whether withholding applies or
whether a payment is reportable under this
Agreement. Under section 11.06 of this
Agreement, failure to obtain documentation from a significant number of direct
account holders constitutes an event of
default. If QI is an FFI obtaining documentary evidence, QI also agrees to adhere to
the know-your-customer rules that apply
to QI with respect to the account holder
from whom the documentary evidence is
obtained. If QI cannot reliably associate a
reportable payment with valid documentation from the account holder, it must
apply the applicable presumption rules to
determine if withholding is required under
chapter 3 or 4 or if backup withholding
is required under section 3406. QI agrees
to review and maintain documentation in

December 27, 2022

accordance with this section 5 and, in the
case of documentary evidence obtained
from direct account holders, in accordance
with the applicable know-your-customer
rules. QI also agrees, if the performance
of an external review is requested by the
IRS (as described in section 10.08(C) of
this Agreement), to make documentation
(together with any associated withholding
statements and other documents or information) available upon request for inspection by QI’s external reviewer. QI represents that none of the laws to which it is
subject prohibit disclosure of the identity
of any account holder or account information to QI’s reviewer.
If QI is acting as a QDD, QI is required
to apply the rules of this section 5 to each
account holder of an account for which it
is acting as a QDD and to which it makes a
reportable payment in accordance with the
applicable requirements in section 5.01(A)
and (B) of this Agreement. In addition, if
QI is a partnership and is or has a branch
that is a QDD, QI is required to apply the
rules of this section 5 to each of its partners (looking through partners that are
flow-through entities) in determining its
withholding under section 3.03(A) of this
Agreement.
If QI makes a payment of an amount
realized on a sale of a PTP interest or a
payment of a PTP distribution, QI also
agrees to use its best efforts to obtain the
documentation that is described in section
5.02 of this Agreement. For purposes of
obtaining a U.S. TIN from an account
holder that is a partner with respect to
documentation required under section
5.02(B) or (C) of this Agreement, QI is
treated as using its best efforts when QI
makes a written solicitation (initial solicitation) for the account holder’s U.S. TIN
in 2023 or the calendar year in which an
account holder acquires a PTP interest
through QI (if later). If an account holder’s U.S. TIN is not provided based on the
initial solicitation, QI is required to make
an additional written solicitation for the
account holder’s U.S. TIN in the calendar
year following the calendar year of the initial solicitation, and, if necessary, a further
written solicitation in the calendar year
following the year of the additional solicitation. Nothing in the preceding sentence
shall, however, be construed to allow QI
to apply a reduced rate of withholding

604

under section 1446(a) or (f) with respect
to a payment made to a foreign account
holder that fails to provide a U.S. TIN to
QI for any calendar year. QI further agrees
to treat a partner as a foreign partner and a
broker as a foreign broker when required
under section 5.13(C)(5) of this Agreement for a payment of an amount realized
or the amount of a PTP distribution subject to withholding under section 1446(a).
(B) Coordination of Chapter
3 and Chapter 4 Documentation
Requirements.
(1) QI that is an FFI. If QI is an
FFI, for each account holder for whom
QI is acting under this Agreement, QI
is required to perform the due diligence
procedures under its FATCA requirements as a participating FFI, registered
deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI to
determine if the account is a U.S. account
(or U.S. reportable account) and to determine each account holder that is a nonparticipating FFI and, if applicable, recalcitrant account holder (or non-consenting
U.S. account). If an account holder receiving the payment is not the payee, QI is also
required to establish the chapter 4 status of
the payee or payees to determine whether
withholding applies under chapter 4. For
purposes of this section 5, with respect to
documenting an account holder for chapter 4 purposes, documentary evidence
also includes any documentary evidence
allowed under an applicable IGA.
To the extent an account holder
receives a payment with respect to which
QI has determined that withholding is not
required under chapter 4, QI shall obtain,
unless already collected, documentation
that meets the requirements of this section 5 to determine whether the account
holder is a foreign person for which QI
is required to withhold under chapter 3
or a U.S. payee for which QI is required
to backup withhold under section 3406
or report on Form 1099 under chapter 61.
See, however, section 8.06 of this Agreement providing the circumstances in
which reporting of 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 satisfies QI’s Form 1099 reporting
responsibilities.

Bulletin No. 2022–52

(2) QI that is an NFFE. If QI is an
NFFE, QI is required to document the
chapter 4 status of each account holder for
whom QI is acting to determine if withholding and reporting apply under section
1471 or 1472 on withholdable payments
made to the account holder. QI is required
to obtain, unless already collected, a
valid Form W-8 or Form W-9 from each
account holder to determine whether QI is
required to withhold under chapter 3 or 4
or report on Form 1099 under chapter 61
and backup withhold under section 3406.
The allowance in this section 5 for QI to
obtain documentary evidence does not
apply if QI is an NFFE. QI may, however,
obtain appropriate documentary evidence
as additional documentation to establish
the foreign status of an account holder.
Sec. 5.02. Documentation for Foreign Account Holders.
(A) Documentation for Chapters 3
and 4. QI may treat an account holder as a
foreign beneficial owner of an amount for
purposes of chapter 3 or 4 if the account
holder provides a valid Form W-8 (other
than Form W-8IMY unless provided by a
QI that is acting as a QDD that is a corporation (or a branch of a corporation) and
meets the requirements of section 5.07(E)
of this Agreement or a QI that is assuming
primary withholding responsibility for a
substitute interest payment) or valid documentary evidence that supports the account
holder’s status as a foreign person. QI may
not treat an account holder that provides
documentation indicating that it is a bank,
broker, intermediary, or agent (such as an
attorney) as a beneficial owner unless QI
receives a statement, in writing and signed
by a person with authority to sign such a
statement, stating that such account holder
is the beneficial owner of the income.
Further, QI may not reduce the rate of
withholding with respect to an indirect
account holder that is a foreign beneficial
owner unless the certification provided by
the direct account holder is a valid Form
W-8IMY, and then only to the extent that
QI can reliably associate the payment with
valid documentation that establishes that
withholding does not apply under chapter
4 in the case of a withholdable payment
made to the account holder and establishes that the indirect account holder is
entitled to a reduced rate of withholding
under chapter 3.

Bulletin No. 2022–52

(B) Documentation for Section
1446(a). QI must treat an account holder
that is a partner receiving a payment of a
PTP distribution subject to withholding
under section 1446(a) as a foreign partner if the account holder provides a valid
Form W-8 other than a Form W-8IMY
provided by an intermediary, grantor trust,
or partnership (excluding a PTP) that
includes the account holder’s U.S. TIN.
Alternatively, QI must treat an account
holder described in the preceding sentence as a foreign partner when QI has
both valid documentary evidence that supports the account holder’s status as a foreign person and the account holder’s U.S.
TIN. See, however, §1.1446-4(e)(4) for
QI’s requirement to provide Forms W-8
for the amount of a PTP distribution subject to withholding under section 1446(a)
when acting as a disclosing QI and section
5.01(A) of this Agreement for the extent
of QI’s requirement to collect U.S. TINs
from its account holders for purposes of
section 1446(a).
(C) Documentation for Section
1446(f). QI must treat an account holder
receiving a payment of an amount realized
as a foreign partner if the account holder
provides a valid Form W-8 (other than a
Form W-8IMY provided by a broker or
grantor trust) that includes the account
holder’s U.S. TIN. Alternatively, QI must
treat an account holder described in the
preceding sentence as a foreign partner
when QI has both valid documentary
evidence that supports the account holder’s status as a foreign person and the
account holder’s U.S. TIN. See, however,
§1.1446(f)-4(a)(7)(iii) for QI’s requirement to provide Forms W-8 when acting
as a disclosing QI for an amount realized
and section 5.01(A) of this Agreement for
the extent of QI’s requirement to collect
U.S. TINs from its account holders for
purposes of section 1446(f). With respect
to an amount realized QI pays to a broker,
QI may rely on documentation that is permitted under §1.1446(f)-4(a)(5) for treating the broker as a foreign person.
Sec. 5.03. Beneficial Owner’s Claim
of Treaty Benefits. To the extent an
account holder receives a payment that is
not subject to withholding under chapter
4, QI may not reduce the rate of withholding under chapter 3 based on a beneficial
owner’s claim of treaty benefits unless

605

QI obtains the documentation required
by section 5.03(A) of this Agreement. In
addition, QI agrees to establish procedures
to inform account holders of the terms of
limitation on benefits provisions of a treaty
(whether or not those provisions are contained in a separate article entitled Limitation on Benefits) under which the account
holder is claiming benefits. QI is required
to obtain a Form W-8BEN-E with the
appropriate limitation on benefits certification or, if QI is allowed to and obtains
documentary evidence, the written certification included in the treaty statement
as described in section 5.03(B) of this
Agreement. For a direct account holder
documented by QI on or after January 1,
2018, using documentary evidence, QI
must have a permanent residence address
for the account holder in the jurisdiction
associated with the documentary evidence
to reduce the rate of withholding under
this section 5.03.
If an account holder that is a foreign
partner receives an amount subject to
withholding under section 1446(a) on a
PTP distribution or an amount realized,
the documentation described in section
5.03(A)(1) of this Agreement shall be
permitted for the partner’s claim of treaty
benefits (except that a U.S. TIN for the
foreign partner is required), and sections
5.03(A)(2) and (3) of this Agreement
shall not apply. See, however, section
5.07 of this Agreement in the case of an
amount realized paid to a nonqualified
intermediary.
(A) Treaty Documentation. The documentation required by this section 5.03(A)
is as follows:
(1) The account holder has provided
a properly completed Form W-8BEN or
Form W-8BEN-E on which a claim of
treaty benefits is made, including, for an
entity, the appropriate limitation on benefits and section 894 certifications, as
provided in §1.1441-6(b)(1). A U.S. TIN
or foreign TIN shall not be required, however, if the beneficial owner is a direct
account holder. An indirect account holder
is required to have a either a U.S. TIN or
foreign TIN to claim treaty benefits unless
it is claiming treaty benefits on income
from marketable securities;
(2) The account holder has provided documentary evidence that has been obtained
pursuant to the know-your-customer rules

December 27, 2022

that apply to the account holder, and
the account holder, if it is an entity, has
made the treaty statement (if applicable)
required by section 5.03(B) of this Agreement; or
(3) The account holder provides the
type of documentary evidence required
under §1.1441-6 to establish entitlement
to a reduced rate of withholding under a
treaty, and the account holder, if it is an
entity, has made the treaty statement (if
applicable) required by section 5.03(B) of
this Agreement.
(B) Treaty Statement. The treaty statement required by an entity account holder
under this section 5.03(B) is as follows:
[Name of entity account holder] meets
all provisions of the applicable treaty that
are necessary to claim a reduced rate of
withholding, including any limitation
on benefits provisions, and derives the
income within the meaning of section 894,
and the regulations thereunder, as the beneficial owner.
QI is only required to obtain the treaty
statement required by this section 5.03(B)
from an account holder that is an entity.
QI shall not be required to obtain a treaty
statement required by this section 5.03(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. QI is also required to
collect and to report, on a Form 1042-S
issued under section 8.02(P) of this Agreement, the specific category of limitation
on benefits provision claimed from all of
its entity account holders (i.e., the specific article of the treaty or that no article
applies), including a government (or its
political subdivisions).
Sec. 5.04. Documentation for International Organizations. To the extent an
account holder receives a payment that is
not subject to withholding under chapter
4, QI may not treat the account holder
as an international organization entitled
to an exemption from withholding under
section 892 unless the name provided
on the documentation (including a Form
W-8EXP) is the name of an entity designated as an international organization
by executive order pursuant to 22 United
States Code 288 through 288(f) and the
documentation is valid under section 5.10
of this Agreement. An international organization may not, however, claim benefits

December 27, 2022

under this section 5.04 with respect to
QI’s requirement to withhold under section 1446(a) or (f).
If an international organization is not
claiming benefits under section 892 but
under another Code exception, the provisions of section 5.02 of this Agreement
shall apply rather than the provisions of
this section 5.04.
Sec. 5.05. Documentation for Foreign Governments and Foreign Central
Banks of Issue.
(A) Documentation From a Foreign
Government or Foreign Central Bank
of Issue Claiming an Exemption from
Withholding Under Section 892 or Section 895. To the extent an account holder
receives a payment subject to withholding
under chapter 3 that is not subject to withholding under chapter 4, QI may not treat
an account holder as a foreign government
or foreign central bank of issue exempt
from withholding under section 892 or
895 unless—
(1) QI receives from the account holder
a Form W-8EXP or documentary evidence
establishing that the account holder is a
foreign government or foreign central
bank of issue;
(2) The income paid to the account
holder is the type of income that qualifies
for an exemption from withholding under
section 892 or 895; and
(3) QI does not know, or have reason
to know, that the account holder 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. To the extent
an account holder receives a payment that
is not subject to withholding under chapter 4, QI may treat an account holder 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 if it has valid
documentation that is sufficient to obtain
a reduced rate of withholding under a
treaty as described in section 5.03 of this
Agreement.
(C) Other Code Exception. If a foreign government or foreign central bank
of issue is not claiming benefits under

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section 892 or 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 5.02 of this Agreement apply
rather than the provisions of this section
5.05. A foreign government or foreign
central bank of issue may not claim benefits under section 892 with respect to QI’s
requirement to withhold under section
1446(a) or (f).
Sec. 5.06. Documentation for Foreign Tax-Exempt Organizations. To the
extent an account holder receives a payment that is subject to withholding under
chapter 3 or section 1446(a) on a PTP distribution but not under chapter 4, QI may
not treat an account holder as a foreign
tax-exempt organization and reduce the
rate of or exempt the account holder from
withholding unless it satisfies the requirements provided in section 5.06(A), (B), or
(C) of this Agreement.
(A) Reduced Rate of Withholding
Under Section 501. QI may not treat an
account holder as a foreign organization
described under section 501(c), and therefore exempt from withholding under chapter 3 (or, if the account holder is a foreign
private foundation, subject to withholding
at a 4-percent rate under section 1443(b))
unless QI obtains a valid Form W-8EXP
on which Part IV of the form is completed.
(B) Reduced Rate of Withholding Under Treaty. QI may not treat an
account holder as a foreign organization
that is tax-exempt on an item of income
pursuant to an income tax treaty unless QI
obtains valid documentation as described
under section 5.03 of this Agreement that
is sufficient for obtaining a reduced rate of
withholding under the treaty and the documentation establishes that the account
holder 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 income tax treaty exception, the provisions of section 5.02 or 5.03 (as applicable) of this Agreement shall apply
rather than the provisions of this section

Bulletin No. 2022–52

5.06. A tax-exempt entity may not claim
a reduced rate of withholding under section 501 for purposes of QI’s withholding
under section 1446(f).
Sec. 5.07. Documentation from
Intermediaries or Flow-Through Entities and QDDs. QI must apply the presumption rules to a payment made to a
nonqualified intermediary or flow-through
entity that is a direct account holder of QI
to the extent QI fails to obtain the documentation set forth below. If QI receives
documentation for the account holders
or interest holders of an intermediary or
flow-through entity, QI must apply the
rules of this section 5 to determine the
validity of such documentation.
Notwithstanding the previous provisions of this section 5.07, for an amount
realized paid to a nonqualified intermediary, QI is required to apply the presumption rule provided in section 5.13(C)(5) of
this Agreement regardless of whether the
nonqualified intermediary provides a valid
Form W-8IMY and documentation with
respect to the account holders receiving
the amount realized.
(A) Withholdable Payments Made to
Nonqualified Intermediaries and FlowThrough Entities. With respect to a withholdable payment made to a nonqualified
intermediary or flow-through entity—
(1) QI receives a valid Form W-8IMY
provided by the nonqualified intermediary or the flow-through entity receiving
the payment that establishes the chapter 4
status of the intermediary or flow-through
entity; and
(2) If the payment is not subject to
withholding under chapter 4 based on
such entity’s chapter 4 status (or to the
extent the payment is received on behalf of
exempt beneficial owners), QI can reliably
associate the payment with a withholding
statement that meets the requirements
of §1.1471-3(c)(iii)(B) that includes the
account holders or interest holders of the
intermediary or flow-through entity in
chapter 4 withholding rate pools to the
extent permitted or with valid documentation described in this section 5 provided
by account holders or interest holders of
the intermediary or flow-through entity
that are not themselves nonqualified intermediaries or flow-through entities and that
QI can treat as not subject to withholding
under chapter 4.

Bulletin No. 2022–52

(B) Reportable Payments Other than
Withholdable Payments or Payments
with respect to PTP interests Made
to Nonqualified Intermediaries and
Flow-Through Entities. With respect to
a reportable payment that is not a withholdable payment or an amount realized
made to a nonqualified intermediary or
flow-through entity—
(1) QI receives a valid Form W-8IMY
and a withholding statement with the
information specified in §1.1441-1(e)(3)
(iv)(C) (which includes an alternative
withholding statement) provided by the
nonqualified intermediary or the flowthrough entity regardless of whether the
form includes a chapter 4 status of the
nonqualified intermediary or flow-through
entity unless such entity provides a withholding statement allocating a payment to
a chapter 4 withholding rate pool of U.S.
payees; and
(2) QI can reliably associate the payment with a chapter 4 withholding rate
pool of U.S. payees or valid documentation described in this section 5 provided by
account holders or interest holders of the
nonqualified intermediary or flow-through
entity that are not themselves nonqualified
intermediaries or flow-through entities.
(C) Payments with respect to PTP
Interests Made to Nonqualified Intermediaries and Flow-Through Entities.
(1) Amount Realized. With respect
to a payment by QI of an amount realized from the sale of a PTP interest made
to a flow-through entity or nonqualified
intermediary, the documentation that QI
receives is a valid Form W-8IMY from
the entity except for a foreign simple
trust (for which a Form W-8BEN-E may
instead be received) and a U.S. grantor
trust (for which a document similar to
Form W-8IMY may be received). In
the case of a foreign partnership providing the certification on a valid Form
W-8IMY for a modified amount realized
(which requires a U.S. TIN for the partnership) QI is required to obtain from the
partnership the documentation described
in this section 5 with respect to the partners that QI can reliably associate with
the payment. For a grantor trust to which
QI pays an amount realized, QI is further
required to obtain valid documentation
described in this section 5 that QI can
reliably associate with each grantor or

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owner of the trust and must obtain a U.S.
TIN for the trust.
(2) PTP Distribution. With respect to
a payment by QI of a PTP distribution to
a nonqualified intermediary, the documentation that QI receives from the intermediary is a valid Form W-8IMY (including
its chapter 4 status for an amount of a
distribution attributable to a withholdable
payment) and documentation for each
of the account holders of the nonqualified intermediary that are partners in the
PTP that QI can reliably associate with
each amount subject to withholding on
the distribution (including by applying
section 5.13(B)(1) of this Agreement for
any amount realized on the distribution).
With respect to a payment by QI of a PTP
distribution to a flow-through entity, the
documentation that QI receives from the
flow-through entity is as follows—
(i) For the amount of the distribution
subject to withholding under section
1446(a) made to a foreign partnership,
QI receives a valid Form W-8IMY
from the partnership and, for a foreign
partnership other than a PTP, valid
documentation described in this section 5 on each of the partners in the
partnership that QI can reliably associate with the distribution (including
a U.S. TIN for the partnership in both
cases). See §§1.1446-4 and 1.14465(c). For the portion of the distribution
subject to withholding under section
1446(a) made to a trust, QI receives
a valid Form W-8BEN-E or W-8IMY
from a simple trust or, in the case of
a foreign grantor trust, a valid Form
W-8IMY from the trust (or similar document from a U.S. grantor trust) and
valid documentation on each grantor or
owner of the trust permitted under this
section 5 for a payment subject to section 1446(a) withholding that QI can
reliably associate with the distribution
(including a U.S. TIN for the grantor
trust).
(ii) For the amount of the distribution
subject to withholding under chapter 3
or 4, QI receives a valid Form W-8IMY
from the flow-through entity (which
includes the entity’s chapter 4 status
with respect to any amount of a distribution attributable to a withholdable
payment) and valid documentation on
the interest holders in the entity (other

December 27, 2022

than nonqualified intermediaries or
flow-through entities) permitted under
this section 5 for a payment subject to
chapter 3 or 4 withholding that QI can
reliably associate with the distribution.
(iii) For the amount realized on the
distribution, QI receives from the
flow-through entity valid documentation specified in section 5.07(C)(1) of
this Agreement applicable to a flowthrough entity that QI can reliably
associate with the distribution.
(D) Reportable Payments and Payments with respect to PTP Interests
Made to QIs, WPs, and WTs. With
respect to a reportable payment made to a
QI, WP, or WT, QI receives a valid Form
W-8IMY provided by the QI, WP, or WT
that includes the entity’s chapter 4 status
for a payment that is a withholdable payment and, for those payments for which
a QI has not assumed primary chapters 3
and 4 withholding responsibility or primary Form 1099 reporting and backup
withholding responsibility, QI can reliably
associate the payment with withholding
rate pools, as described in section 6.03 of
this Agreement, or a valid Form W-9 for a
U.S. non-exempt recipient account holder
not included in a withholding rate pool.
With respect to a payment of an amount
realized on the sale of a PTP interest made
by QI to a QI, QI receives a valid Form
W-8IMY provided by the other QI that
includes the QI’s chapter 4 status if the QI
provides a withholding statement allocating a payment to a chapter 4 withholding
rate pool of U.S. payees. Additionally, for
an amount realized for which the other
QI does not assume primary withholding responsibility nor act as a disclosing
QI, QI can reliably associate the payment
with withholding rate pools, as described
in section 6.03 of this Agreement, or a
valid Form W-9 for a U.S. partner not
includible in a chapter 4 withholding rate
pool of U.S. payees under chapter 4. See
§1.1446(f)-4(a)(7)(iv). For an amount
realized described in the preceding sentence that QI pays to a QI acting as a disclosing QI, QI receives valid documentation permitted under section 5.02(C) of
this Agreement with respect to the account
holders of the other QI, including a valid
Form W-9 for a U.S. partner not includible in a chapter 4 withholding rate pool of
U.S. payees permitted under chapter 4.

December 27, 2022

With respect to a PTP distribution paid
by QI to a QI, QI receives a valid Form
W-8IMY provided by the other QI that
includes the QI’s chapter 4 status for any
portion of the PTP distribution attributable
to a withholdable payment. Additionally,
for a PTP distribution for which the other
QI does not assume primary withholding
responsibility nor act as a disclosing QI,
QI can reliably associate the payment
with withholding rate pools, as described
in section 6.03 of this Agreement, or a
valid Form W-9 for each partner that is a
U.S. person. For a PTP distribution that
QI pays to a QI acting as a disclosing QI,
QI receives with respect to the account
holders of the other QI valid documentation required of a disclosing QI under
section 5.02(B) of this Agreement for
an amount subject to withholding under
section 1446(a) on the distribution, valid
documentation permitted under the preceding paragraph of this section 5.07(D)
for an amount realized on the distribution,
and, for an amount subject to withholding
under chapter 3 or 4 on the distribution,
valid documentation described in section
5.07(A) or (B) of this Agreement.
With respect to a PTP distribution paid
to a WP or WT, QI receives a valid Form
W-8IMY provided by the WP or WT that
QI can reliably associate with an amount
subject to withholding under chapter 3 or
4 on the distribution.
(E) Payments Made to QIs Acting
as QDDs. For payments with respect to
potential section 871(m) transactions or
underlying securities made to a QI acting
as a QDD, if QI receives a valid Form
W-8IMY provided by the QI acting as a
QDD that includes the QI’s chapter 4 status and the required certification that the
QI is acting as a QDD and assumes primary withholding responsibility for payments it makes when the QI is acting as
a QDD and QDD withholding statement,
then QI can reliably associate the payments as made to the QI acting as a QDD.
Additionally, in the case of a QDD identified on a valid Form W-8IMY as a partnership (or a branch of a partnership), the QI
can reliably associate a payment described
in section 3.09 of this Agreement, as modified for a QDD that is a partnership or
branch of a partnership, with withholding
rate pools to the extent permitted in section 6.03 of this Agreement for an account

608

holder, or specific partner information,
with respect to the QDD partners (looking through partners that are foreign flowthrough entities). The requirement for the
partner information specified in the preceding sentence does not apply to a payment described in sections 3.03(A)(1)-(3)
of this Agreement.
(F) Private Arrangement Intermediaries. If QI has an agreement with
a PAI, QI obtains from the PAI a Form
W-8IMY completed as if the PAI were a
QI that is an FFI (with the exception that
the PAI must not provide a QI-EIN on
the Form W-8IMY) and QI can reliably
associate the payment with a withholding statement, as described in section
4.01(G) of this Agreement, and the information described in this section 5.07 for
any account holders of the PAI that are
intermediaries or flow-through entities
and the documentation for any passive
NFFE with one or more substantial U.S.
owners (or one or more controlling persons that is a specified U.S. person if QI
is a reporting Model 1 or reporting Model
2 FFI). For a payment of an amount realized from the sale of a PTP interest or
PTP distribution, however, QI must reliably associate the payment with a withholding statement and the information
described in this section 5 with respect to
both the direct account holders of the PAI
and account holders of an intermediary
or flow-through entity that is an account
holder of the PAI.
(G) Partnerships or Trusts to which
QI Applies the Agency Option. If QI
has an agreement with a partnership or
trust under which the partnership or trust
agrees to act as an agent of QI, QI obtains
from the partnership or trust a Form
W-8IMY completed as if the partnership
or trust were a QI (with the exception that
the partnership or trust must not provide
a QI-EIN on the Form W-8IMY) and QI
can reliably associate the payment with
a withholding statement, as described in
section 4.06(B)(1) of this Agreement, and
the information described in this section
5.07 for any account holders that are intermediaries or flow-through entities and the
documentation for any passive NFFE with
one or more substantial U.S. owners (or
one or more controlling persons that is a
specified U.S. person if QI is a reporting
Model 1 or reporting Model 2 FFI).

Bulletin No. 2022–52

Sec. 5.08. Documentation for U.S.
Exempt Recipients. QI shall not treat an
account holder as a U.S. exempt recipient unless QI obtains from the account
holder—
(A) A valid Form W-9 on which the
account holder includes an exempt payee
code to certify that the account holder is
a U.S. exempt recipient for purposes of
chapter 4 reporting;
(B) Documentary evidence that is sufficient to establish that the account holder
is a U.S. exempt recipient; or
(C) Documentary evidence that is sufficient to establish the account holder’s
status as a U.S. person and QI can treat
the person as an exempt recipient under
the rules of §§1.6045-2(b)(2)(i) or 1.60494(c)(1)(ii), as appropriate, without obtaining documentation.
Sec. 5.09. Documentation for U.S.
Non-Exempt Recipients. QI shall not
treat an account holder as a U.S. non-exempt recipient unless QI obtains a valid
Form W-9 or other similar agreed form
under its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant
Model 1 IGA FFI from the account holder,
QI knows an account holder is a U.S.
non-exempt recipient, or QI must presume
a person is a U.S. non-exempt recipient to
the extent required under section 5.13(C)
(3) or (4) of this Agreement.
Sec. 5.10. Documentation Validity.
(A) In General. QI may not rely on
documentation if QI has actual knowledge
or, for a payment other than an amount
realized, reason to know that the information or certifications contained in the
documentation or account information
are unreliable or incorrect, or if there is a
change in circumstances with respect to
the information or statements contained in
the documentation or account information
that affects the reliability of the account
holder’s claim. See §§1.1441-1(e)(4)
(viii), 1.1441-6(b)(1)(ii), and 1.1441-7(b)
(2) for general rules for reliance on documentation for purposes of chapter 3,
section 1446(a) (including for a claim of
treaty benefits), and §1.1446(f)-4(b) for
reliance on documentation for purposes
of section 1446(f). For purposes of chapter 3, also see §1.1441-7(b)(4) for general
rules applicable to withholding certificates, §1.1441-7(b)(7) for general rules

Bulletin No. 2022–52

applicable to documentary evidence, and
§1.1441-7(b)(8)(i) for rules regarding
documentary evidence received before
January 1, 2001. See section 5.10(B) of
this Agreement for limitations that apply
to certain QIs for when they are considered to have reason to know that documentation is unreliable or incorrect for chapter
3 purposes and section 5.10(C) of this
Agreement for when QI may rely on documentation notwithstanding the preceding
requirements of this section 5.10(A). See
§31.3406(h)-3(e) for rules regarding when
QI may rely on a Form W-9.
A change in circumstances affecting
withholding information, including allocation information or withholding rate
pools contained in a withholding statement, will also cause the documentation
provided with respect to that information
to no longer be reliable. See §1.1441-1(e)
(4)(ii)(D) for the definition of change in
circumstances and a withholding agent’s
obligation with respect to a change in circumstances for purposes of chapter 3.
In addition to the above requirements
for reliance on documentation, QI may
not rely on a permanent residence address
provided by an account holder that is subject to a hold mail instruction except as
provided in section 5.10(D) of this Agreement. See §1.1441-1(c)(38)(i) for the definition of permanent residence address and
§1.1441-1(c)(38)(ii) for the definition of
a hold mail instruction. See §1.1441-7(b)
(8)(ii) for the requirement that documentary evidence received after December 31,
2001, may not be treated as valid if a withholding agent does not have a permanent
residence address for the account holder.
If QI becomes aware of information
resulting in the documentation no longer
being reliable or correct and QI has not
assumed primary withholding responsibility under chapters 3 and 4 or primary
Form 1099 reporting and backup withholding responsibility, QI agrees that it
will promptly provide a withholding agent
with corrected information (e.g., corrected
withholding rate pools, corrected Forms
W-9, or corrected U.S. TINs) within 30
days after QI knows or has reason to
know that the documentation upon which
it has relied is unreliable or incorrect. If
QI receives notification from the IRS that
documentation provided by an account
holder is unreliable or incorrect (e.g.,

609

that the U.S. TIN provided by an account
holder is incorrect), QI shall follow the
procedures set forth in §31.3406(d)-5. See
also QI’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant
Model 1 IGA FFI or an NFFE’s requirements as a withholding agent under sections 1471 and 1472 following a change
in circumstances
(B) Limits on Reason to Know.
(1) Direct Account Holders. If QI is a
financial institution as defined in §1.14715(e), an insurance company (without
regard to whether such company is a specified insurance company), or a broker or
dealer in securities, QI shall be considered
to have reason to know that documentation provided by a direct account holder
is unreliable or incorrect with respect to
the account holder’s claim of foreign status for purposes of chapter 3 or 4 only as
prescribed in §1.1441-7(b)(5) or (8), without regard, however, to §1.1441-7(b)(5)
(i) and §1.1441-7(b)(8)(ii), with respect
to the conditions for when documentation
is considered to be unreliable or incorrect
based on QI having a U.S. mailing address
or U.S. residence address in its account
information. In place of those conditions
in §1.1441-7(b)(5)(i) and §1.1441-7(b)(8)
(ii), QI is required to treat documentation
as unreliable or incorrect only if QI has
a U.S. mailing address or U.S. residence
address for the account holder.
A QI that is an entity described in
the first sentence of this section 5.10(B)
(1) shall be considered to have reason to
know that documentation provided by
a direct account holder is unreliable or
incorrect with respect to the account holder’s residence for purposes of a claim of
treaty benefits for chapter 3 and 4 only
as prescribed in §1.1441-7(b)(6) and (9)
(including when QI does not have a permanent residence address for an account
holder in the jurisdiction for which treaty
benefits are claimed). For a direct account
holder that QI documented before January
1, 2018, however, a QI is not required to
treat an account holder’s claim of treaty
benefits as unreliable or incorrect solely
because QI does not have an address for
the account holder in the jurisdiction for
which the treaty benefits are claimed provided that QI does not have an address
for the account holder outside of the

December 27, 2022

jurisdiction for which the treaty benefits
are claimed (or QI otherwise satisfies the
validity requirements for relying on the
documentation for such a case).
(2) Indirect Account Holders. QI
shall be considered to have reason to
know that relevant information or statements contained in documentation provided by an indirect account holder are
unreliable or incorrect if a reasonably
prudent person in the position of a QI
would question the claims made. QI shall
have reason to know that documentation
provided by a nonqualified intermediary
or a flow-through entity is unreliable or
incorrect if the nonqualified intermediary
or flow-through entity does not provide
QI with, to the extent required, the names
of the indirect account holders, their
addresses, allocation information allocating payments to each indirect account
holder, and sufficient information for QI
to report payments on Forms 1042-S and
1099. In addition, QI shall have reason
to know that an indirect account holder
is not entitled to a reduced rate of withholding under an income tax treaty if
the nonqualified intermediary or flowthrough entity has not provided sufficient
information so that QI can verify that the
indirect account holder has provided a
U.S. TIN or foreign TIN, if required, and
made the necessary statements regarding limitations on benefits provisions
and deriving the income under section
894 and the regulations thereunder. See
§1.1441-7(b)(10) and section 5.03 of this
Agreement.
(3) Limitation on Benefits Provisions
(Entity Account Holders). With respect
to a specific limitation on benefits provision cited by an entity for purposes of a
claim of treaty benefits (including when
identified on a treaty statement under section 5.03(B) of this Agreement), QI may
rely on the provision cited absent actual
knowledge that it is unreliable or incorrect.
(C) Curative Rules for Reliance on
Documentation. If under section 5.10(A)
of this Agreement QI knows, or has reason
to know, that documentation provided by
an account holder is unreliable or incorrect to establish the account holder’s
foreign status for purposes of chapter 3
(including on account of a change in circumstances), QI may rely (or continue to
rely) on the documentation when it obtains

December 27, 2022

the additional documentation described in
§1.1441-7(b)(5) or (b)(8) (as applicable
depending on whether a Form W-8 or documentary evidence was collected from the
account holder). If under section 5.10(A)
of this Agreement QI knows, or has reason
to know, that documentation provided by
an account holder is unreliable or incorrect
to establish the account holder’s residence
for purposes of claiming benefits under an
applicable income tax treaty for purposes
of chapter 3 (including on account of a
change in circumstances), QI may rely
(or continue to rely) on the documentation
when it obtains the additional documentation described in §1.1441-7(b)(6) or (b)
(9) (as applicable depending on whether a
Form W-8 or documentary evidence was
collected from the account holder). For a
payment subject to withholding under section 1446(a), QI must obtain a valid Form
W-8 for the account holder once it knows
or has reason to know that the documentation provided is unreliable or incorrect
(including on account of a change in
circumstances).
(D) Curative Documentation for
Hold Mail Instruction. QI may rely on
a permanent residence address subject to
a hold mail instruction as an account holder’s permanent residence address when
the account holder provides the documentary evidence described in §1.1471-3(c)
(5)(i) (without regard to the requirement
in §1.1471-3(c)(5)(i) that the documentary evidence contain a permanent residence address). The documentary evidence must support the account holder’s
claim of foreign status, or in the case of
an account holder claiming treaty benefits, the account holder’s residence in the
country where the account holder is claiming a reduced rate of withholding under an
income tax treaty.
If, after documentation is provided,
an account holder’s permanent residence
address is subsequently subject to a hold
mail instruction, the addition of the hold
mail instruction is a change in circumstances under section 5.10(A) of this
Agreement requiring an account holder
to provide the documentary evidence
described in this section 5.10(D) in order
for QI to continue to rely on the permanent residence address.
Sec. 5.11. Documentation Validity
Period.

610

(A) Documentation Other than Form
W-9. QI may rely on valid documentary
evidence obtained from account holders
in accordance with applicable know-yourcustomer rules as long as the documentary
evidence remains valid under those rules
or until QI knows, or has reason to know,
that the information contained in the documentary evidence is incorrect. However,
for purposes of a claim of treaty benefits,
QI may only rely on documentary evidence provided pursuant to §1.1441-6(c)
(3) or (4) (i.e., not provided under applicable know-your-customer rules), and
statements regarding entitlement to treaty
benefits described in §1.1441-6(c)(5)(i) or
section 5.03(B) of this Agreement until
their validity expires under §1.1441-1(e)
(4)(ii)(A)(2). For establishing an account
holder’s chapter 3 status (as defined in
§1.1441-1(c)(45)) or foreign status for
chapter 61 purposes, QI may rely on a
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-your-customer rules) until its
validity expires under §1.6049-5(c). The
validity periods referenced in the preceding sentence also apply for purposes of
sections 1446(a) and (f).
(B) Form W-9. QI may rely on a
valid Form W-9 as long as it has not been
informed by the IRS or another withholding agent that the form is unreliable or
incorrect. If QI has primary Form 1099
reporting and backup withholding responsibility, it may rely on a Form W-9 unless
one of the conditions of §31.3406(h)-3(e)
(2)(i) through (v) applies.
Sec. 5.12. Maintenance and Retention of Documentation.
(A) Maintaining Documentation. QI
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 the QI has
recorded receipt of the documentation
and is able to produce a hard copy). For
a direct account, if QI is not required to
retain copies of documentary evidence
under its know-your-customer rules, QI
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.,

Bulletin No. 2022–52

a passport number), and whether such
documentation contained any U.S. indicia. For direct accounts opened before
January 1, 2001, if QI was not required
under its know-your-customer rules to
maintain originals or copies of documentation, QI may rely on its account information if it has complied with all other
aspects of its know-your-customer rules
regarding establishment of an account
holder’s identity, it has a record that the
documentation required under the knowyour-customer rules was actually examined by an employee of QI in accordance
with the know-your-customer rules, and it
has no information in its possession that
would require QI to treat the documentation as invalid.
(B) Retention Period. QI shall retain
a record of the account holder’s documentation obtained under this section 5 for as
long as the documentation is relevant to
the determination of QI’s tax liability or
reporting responsibilities under sections
871, 881, 1461, 1474(a), and 3406.
Sec. 5.13. Application of Presumption Rules.
(A) In General. QI shall apply the
presumption rules of section 5.13(C)
of this Agreement if QI cannot reliably
associate a payment with valid documentation from an account holder. The
presumption rules cannot be used to
grant a reduced rate of withholding. For
example, the portfolio interest exception
of sections 871(h) and 881(c) shall not
apply to a person that is presumed to be
foreign. Further, QI must apply the presumption rules when required and may
not rely on its actual knowledge regarding an account holder’s chapter 4 status
or status as a U.S. or foreign person to
apply a reduced rate of withholding. Failure to follow the presumption rules may
result in liability for underwithholding,
penalties, and interest. Notwithstanding
the preceding sentences, QI must rely
on its actual knowledge regarding an
account holder rather than what is presumed if, based on such knowledge, it
should withhold an amount greater than
the withholding rate under the presumption rules or it should report on Form
1042-S or Form 1099 an amount that
would otherwise not be reported.
(B) Reliably Associating a Payment
with Documentation. Generally, QI can

Bulletin No. 2022–52

reliably associate a payment with documentation if, for that payment, it holds
valid documentation from the account
holder; it can reliably determine how
much of the payment relates to the valid
documentation provided by such account
holder; and it has no actual knowledge
or reason to know that any of the information, certifications, or statements
in or associated with the documentation are incorrect. See §1.1441-1(b)(2)
(vii) or, for a withholdable payment,
§1.1471-3(c) for rules regarding when a
payment can be reliably associated with
documentation. See also §1.1471-3(e)
(4)(vi)(B) for when a QI that is an FFI
may rely on documentation and information permitted in an applicable IGA
to document an account holder’s chapter 4 status. For documentation reliance
rules for purposes of sections 1446(a)
and (f), see §§1.1446-1(c)(2)(iii) and
1.1446(f)-4(b). Sections 5.13(B)(1)
through (7) of this Agreement describe
when a payment is reliably associated
with documentation if the payment is
made to an account holder that is an
intermediary or flow-through entity
(other than a nonparticipating FFI that
is not acting on behalf of exempt beneficial owners or that is paid an amount
realized).
(1) Reliably Associating a Payment
with Documentation Provided by a
Nonqualified Intermediary or FlowThrough Entity. Generally, QI can
reliably associate a payment with documentation provided by a nonqualified
intermediary or flow-through entity if it
can reliably associate the payment with a
valid Form W-8IMY provided by the nonqualified intermediary or flow-through
entity, and it can determine the portion of
the payment that relates to valid documentation associated with the Form W-8IMY
for an account holder or interest holder
of the nonqualified intermediary or flowthrough entity that is not itself a nonqualified intermediary or flow-through entity;
and the nonqualified intermediary or flowthrough entity provides sufficient information for QI to report the payments on
Form 1042-S, Form 1099, or Form 8966
if reporting is required.
If the payment is a withholdable
payment, the Form W-8IMY must provide the nonqualified intermediary’s or

611

flow-through entity’s chapter 4 status to
the extent required for chapter 4 purposes.
In lieu of the nonqualified intermediary
or flow-through entity providing documentation for an account holder that is
subject to chapter 4 withholding, QI can
reliably associate a withholdable payment
with valid documentation associated with
the Form W-8IMY from the nonqualified
intermediary or flow-through entity if
it can determine the portion of the payment allocable to a chapter 4 withholding
rate pool (to the extent permissible under
§1.1471-3(c)(3)(iii)(B)).
If the payment is a reportable amount,
QI can reliably associate such payment
with documentation provided by a nonqualified intermediary or a flow-through
entity that is a participating FFI or registered deemed-compliant FFI if, in lieu of
providing documentation for its account
holders that are U.S. persons, such nonqualified intermediary or flow-through
entity allocates the payment to a chapter 4
withholding rate pool of U.S. payees and
also certifies on a valid Form W-8IMY
that it meets the requirements of §1.60494(c)(4)(iii) with respect to any account
holder of an account it maintains within
the meaning of §1.1471-5(d)(5) (i.e., a
direct account holder) that receives a payment included in this pool or allocates a
payment that is a withholdable payment to
a chapter 4 withholding rate pool of recalcitrant account holders.
Notwithstanding the preceding sentences in this section 5.13(B)(1), to the
extent a payment is not subject to reporting on Form 1042-S, Form 1099, or Form
8966, QI can reliably associate the payment with documentation if it can determine the portion of the payment that is
allocable to a group of account holders
for whom QI holds valid documentation
(other than nonqualified intermediaries
or flow-through entities) for whom withholding and reporting is not required.
For example, QI can treat a payment
of short term OID allocable to a group
of documented foreign account holders
as reliably associated with valid documentation. Further, if the documentation
attached to a nonqualified intermediary’s
or flow-through entity’s Form W-8IMY is
documentation from another nonqualified
intermediary or flow-through entity, then
QI must apply the rules of this paragraph

December 27, 2022

to that other nonqualified intermediary or
flow-through entity.
With respect to a payment of an amount
realized from the sale of a PTP interest,
QI can reliably associate the payment
with documentation when QI can reliably
associate the payment with a valid Form
W-8IMY provided by a flow-through
entity except for a trust that is a simple trust
(for which a valid Form W-8BEN-E may
instead be provided). Additionally, QI can
reliably associate the payment with documentation to permit a modified amount
realized paid to a foreign partnership to
the extent that QI can reliably associate
the payment with a valid Form W-8IMY
provided by the partnership that includes
the certification for a modified amount
realized and the partnership provides valid
documentation for each partner allocated
an amount of gain (if any) arising from the
sale. For a payment of an amount realized
made to a grantor trust, QI can reliably
associate the payment with documentation
when it can reliably associate the payment
with a valid Form W-8IMY from the trust
indicating its status as a foreign grantor
trust (or similar document from a U.S.
trust) and can determine the percentage of
the amount realized that is associated with
valid documentation provided by each
grantor or owner of the trust.
With respect to QI’s payment of an
amount realized from the sale of a PTP
interest made to a nonqualified intermediary, QI cannot reliably associate the
payment with documentation regardless
of whether a valid Form W-8IMY is provided by the nonqualified intermediary
together with valid documentation for its
account holders that QI can associate with
the payment. See section 8.02(N) of this
Agreement, however, for when a QI may
rely on account holder documentation
provided by a nonqualified intermediary
for purposes of reporting under section 8
of this Agreement.
With respect to a PTP distribution QI
pays to a nonqualified intermediary, QI
can reliably associate the distribution
with documentation when QI can reliably
associate the payment with a valid Form
W-8IMY provided by the nonqualified
intermediary (including its chapter 4 status for an amount of a distribution attributable to a withholdable payment) and
can determine the portion of each amount

December 27, 2022

subject to withholding on the distribution
(as determined under section 3.01(C)(2)
of this Agreement) that is associated with
valid documentation for each partner or
beneficial owner with respect to the distribution that is an account holder of the
nonqualified intermediary (as applicable,
depending on the amount subject to withholding on the distribution and taking into
account the preceding paragraph of this
section 5.13(B)(1) for an amount realized
on the distribution).
With respect to a PTP distribution QI
pays to a flow-through entity, QI can reliably associate the distribution with documentation to the extent it reliably associates with documentation each amount
subject to withholding on the distribution
as follows—
(i) For an amount subject to withholding under section 1446(a), QI can
determine the portion of the amount
associated with—
(a) A valid Form W-8IMY from a
partnership and, for a partnership
other than a PTP, when QI can
determine the amount associated
with valid documentation provided by each of the partners of the
partnership;
(b) A valid Form W-8BEN-E or
Form W-8IMY from a simple trust;
or
(c) A valid Form W-8IMY from a
trust that identifies itself as a foreign
grantor trust (or similar document
from a U.S. grantor trust), when
QI can associate the portion of the
amount with valid documentation
provided by each grantor or owner
of the trust.
(ii) For an amount subject to withholding under chapter 3 or 4 that QI can
determine is reliably associated with a
valid Form W-8IMY provided by the
flow-through entity (which includes the
entity’s chapter 4 status with respect to
an amount of a distribution attributable to a withholdable payment) and
the portion of the amount associated
with valid documentation provided by
each interest holder in the flow-through
entity other than an intermediary or
flow-through entity.
(iii) For an amount realized that QI can
determine is reliably associated with
valid documentation provided by the

612

flow-through entity and the portion of
the amount associated with an interest
holder in the entity to the extent specified in this section 5.13(B)(1) for an
amount realized paid to a flow-through
entity.
(2) Reliably Associating a Payment
with a Withholding Certificate Provided
by Another QI that Does not Assume
Primary Chapters 3 and 4 Withholding or Primary Form 1099 Reporting
and Backup Withholding Responsibility. Generally, QI can reliably associate a
payment with documentation provided by
another QI that does not assume either primary chapters 3 and 4 withholding responsibility or primary Form 1099 reporting
and backup withholding responsibility if
it can reliably associate the payment with
a valid Form W-8IMY and, if the form is
associated with a withholdable payment,
it includes the QI’s chapter 4 status to the
extent required for chapter 4 purposes.
Additionally, the Form W-8IMY must be
associated with a withholding statement
that allocates the withholdable payment
among the chapter 4 withholding rate
pools (to the extent permissible under
§1.1471-3(c)(3)(iii)(B)), and with respect
to a payment of an amount subject to chapter 3 withholding that is either not a withholdable payment or a withholdable payment for which no chapter 4 withholding
is required, that allocates such payment
among chapter 3 withholding rate pools
for foreign account holders as described
in section 6.03(C) of this Agreement.
If the payment is a reportable amount,
QI can reliably associate the payment
with documentation provided by another
QI if the withholding statement allocates
the payment to withholding rate pools
attributable to U.S. non-exempt recipients and the documentation includes a
valid Form W-9 for each U.S. non-exempt recipient account holder for which
the other QI is required to report on
Form 1099 and, if required, backup
withhold. QI can also reliably associate a reportable amount with valid
documentation provided by another QI
that is a participating FFI or registered
deemed-compliant FFI if, in lieu of
providing documentation for each U.S.
non-exempt recipient account holder, the
QI allocates the payment to a chapter 4
withholding rate pool of U.S. payees and

Bulletin No. 2022–52

provides the applicable certification(s)
on a valid Form W-8IMY for allocating
the payment to this pool or allocates a
payment that is a withholdable payment
to a chapter 4 withholding rate pool of
recalcitrant account holders. Notwithstanding the preceding sentences in this
section 5.13(B)(2), the presumption
rules shall not apply if a payment cannot be allocated to each U.S. non-exempt
recipient account holder or to a chapter 4
withholding rate pool of U.S. payees to
the extent the alternative procedures of
section 6.03(D) of this Agreement apply.
(3) Reliably Associating a Payment
with Documentation Provided by a
QI that Assumes Primary Chapters 3
and 4 Withholding Responsibility and
Does not Assume Primary Form 1099
Reporting and Backup Withholding
Responsibility. Generally, QI can reliably associate a payment with valid documentation provided by another QI that
assumes primary chapters 3 and 4 withholding responsibility, but not primary
Form 1099 reporting and backup withholding responsibility, if it can associate
the payment with a valid Form W-8IMY
from the QI and, if the form is associated
with a withholdable payment, it includes
the QI’s chapter 4 status to the extent
required for chapter 4 purposes. Additionally, the Form W-8IMY must be associated with a withholding statement that
allocates a payment that is a withholdable
payment or an amount subject to chapter
3 withholding that is not a withholdable
payment among a single withholding rate
pool for all account holders with respect to
which the QI assumes primary chapters 3
and 4 withholding responsibility.
If the payment is a reportable amount,
QI can reliably associate the payment
with documentation provided by another
QI if the withholding statement allocates the payment to withholding rate
pools attributable to each U.S. non-exempt recipient, as described in section
6.03(D), and the documentation includes
a valid Form W-9 for each U.S. non-exempt recipient account holder for which
the other QI is required to report on Form
1099 and, if required, backup withhold.
QI can also reliably associate such payment with valid documentation provided
by another QI that is a participating FFI
or registered deemed-compliant FFI if, in

Bulletin No. 2022–52

lieu of providing documentation for each
U.S. non-exempt recipient account holder,
the QI allocates the payment made to the
U.S. non-exempt recipient to a chapter 4
withholding rate pool of U.S. payees and
provides the applicable certifications on
a valid Form W-8IMY for allocating the
payment to this pool or allocates a payment that is a withholdable payment to a
chapter 4 withholding rate pool of recalcitrant account holders. Notwithstanding
the preceding sentences in this section
5.13(B)(3), the presumption rules shall
not apply if a payment cannot be allocated
to each U.S. non-exempt recipient account
holder or to a chapter 4 withholding rate
pool of U.S. payees to the extent the alternative procedures of section 6.03(D) of
this Agreement apply.
(4) Reliably Associating a Payment
with Documentation Provided by a
QI that Assumes Primary Form 1099
Reporting and Backup Withholding
Responsibility. Generally, QI can reliably associate a payment with valid documentation provided by another QI that
assumes primary Form 1099 reporting
and backup withholding responsibility,
but not primary chapters 3 and 4 withholding responsibility, to the extent it can
associate the payment with a valid Form
W-8IMY from the QI that, if the payment
is a withholdable payment, includes the
QI’s chapter 4 status to the extent required
for chapter 4 purposes. Additionally, the
Form W-8IMY must be associated with
a withholding statement that allocates a
payment that is a withholdable payment
among chapter 4 withholding rate pools
(other than a pool of U.S. payees and to
the extent permissible under §1.1471-3(c)
(3)(iii)(B)) and, with respect to a payment
that is an amount subject to chapter 3
withholding but is either not a withholdable payment or a withholdable payment
for which no chapter 4 withholding is
required, allocates the payment among
chapter 3 withholding rate pools for foreign account holders as described in section 6.03(C) of this Agreement, and identifies the portion of the payment for which
QI assumes primary Form 1099 reporting
and backup withholding responsibility.
(5) Reliably Associating a Payment
with Documentation Provided by a QI
that Assumes Both Primary Chapters
3 and 4 Withholding Responsibility

613

and Primary Form 1099 Reporting and
Backup Withholding Responsibility.
Generally, QI can reliably associate a payment with valid documentation provided
by another QI that assumes both primary
chapters 3 and 4 withholding responsibility and primary Form 1099 reporting
and backup withholding responsibility
if QI can associate the payment with a
valid Form W-8IMY from the QI that, if
the payment is a withholdable payment,
includes the QI’s chapter 4 status. Additionally, the Form W-8IMY must also designate the accounts for which the other QI
is acting as a QI and is assuming primary
chapters 3 and 4 withholding and primary
Form 1099 reporting and backup withholding responsibility. If the other QI is
acting as a QDD, the Form W-8IMY (or
withholding statement) must also designate those accounts (1) for which the
QDD is receiving payments with respect
to potential section 871(m) transactions
or underlying securities as a QDD, (2)
for which the QDD is receiving payments
with respect to potential section 871(m)
transactions (and that are not also underlying securities) for which withholding is
not required, and (3) for which the QDD is
receiving payments with respect to underlying securities for which withholding is
required. The QDD’s Form W-8IMY must
also (1) for calendar years 2023 and 2024,
identify the dividends that are received by
the QDD that year in its equity derivatives
dealer capacity (which may be done by
designating one or more accounts, if the
only dividends that can be received by
those accounts are in the QDD’s equity
derivatives dealer capacity) and (2) if
the QDD is a partnership or branch of a
partnership, provide valid documentation or withholding rate pool information
with respect to the QDD’s partners to the
extent required under section 5.07(E) of
this Agreement. If the other QI is acting as
a QDD, the Form W-8IMY (or withholding statement) must also identify the home
office or branch acting as a QDD that is
receiving the payment. If the QI receiving
a payment assumes both primary chapters
3 and 4 withholding responsibility and
primary Form 1099 reporting and backup
withholding responsibility for substitute
interest payments as described in section 3.03(A), the Form W-8IMY must
indicate that the QI is assuming primary

December 27, 2022

withholding responsibility for all such
payments.
(6) Reliably Associating a Payment
with Documentation Provided by a QI
that Assumes Primary Withholding
Responsibility for a PTP Distribution or
Amount Realized from the Sale of a PTP
Interest. QI can reliably associate with
documentation a payment of a PTP distribution or amount realized from the sale
of a PTP interest made to another QI that
assumes withholding responsibility for the
payment when QI can reliably associate
the payment with a valid Form W-8IMY
provided by the QI that indicates that the
QI assumes primary responsibility for the
amount realized or PTP distribution.
(7) Reliably Associating a Payment
with Documentation Provided by a QI
that Does not Assume Primary Withholding Responsibility for a PTP Distribution or Amount Realized from the
Sale of a PTP Interest. QI can reliably
associate with documentation a payment of
an amount realized from the sale of a PTP
interest made to a QI that does not assume
primary withholding responsibility for the
payment when QI reliably associates the
payment with a valid Form W-8IMY provided by the other QI and can determine
the portion of the payment associated with
a valid Form W-9 for a U.S. partner (or a
chapter 4 withholding rate pool of U.S.
payees when permitted under chapter 4)
and, with respect to other partners, either
withholding rate pools, as described in
section 6.03(C) of this Agreement or, for a
disclosing QI, when QI can determine the
portion of the payment that is associated
with valid documentation for each of the
account holders of the disclosing QI not
includible in a chapter 4 withholding rate
pool of U.S. payees under chapter 4.
QI can reliably associate with documentation a payment of a PTP distribution
made to another QI that does not assume
primary withholding responsibility for the
payment when QI can reliably associate
the payment with a valid Form W-8IMY
provided by the QI and can determine
the portion of the distribution associated
with withholding rate pools, as described
in section 6.03(C) of this Agreement, or
a valid Form W-9 for a U.S. partner, or,
for a disclosing QI, when QI can determine the portion of each amount subject
to withholding on the distribution that is

December 27, 2022

associated with valid documentation for
each of the account holders of the disclosing QI as described in section 5.07(D) of
this Agreement.
(C) Presumption Rules. With respect
to a withholdable payment made to a
foreign entity, if QI is an NFFE, it must
follow the presumption rules of §1.14713(f) when it cannot reliably associate a withholdable payment with valid
documentation.
With respect to a payment that is an
amount subject to chapter 3 withholding
that is either not a withholdable payment or
a withholdable payment for which no chapter 4 withholding is required, the presumption rules are the rules under §1.1441-1(b)
(3) that a withholding agent must follow to
determine the status of a beneficial owner
(i.e., as a U.S. person or foreign person and
as an individual or entity (and the entity’s
classification)) when it cannot reliably
associate a payment with valid documentation. With respect to a reportable payment
(including a withholdable payment made
to an entity) that is not an amount subject
to chapter 3 withholding, the presumption
rules are the rules of §1.6049-5(d) that a
payor must follow to determine the status
of a payee (e.g., as a non-exempt recipient)
when it cannot reliably associate a payment
with valid documentation. The presumption rules are as follows:
(1) Certain Withholdable Payments
Made with Respect to an Offshore Obligation. A withholdable payment paid outside of the United States as defined under
§1.6049-5(e) with respect to an offshore
obligation (as defined in §1.1471-1(b)(88))
that is made to an entity is presumed made
to a nonparticipating FFI for purposes of
chapter 4. A withholdable payment that is
not an amount subject to chapter 3 withholding, that is paid outside the U.S. with
respect to an offshore obligation, and that
is treated as made to a payee that is an individual is presumed made to a U.S. person
when the payee has any of the indicia of
U.S. status that are described in §1.14417(b)(5). If QI is a participating FFI or registered deemed-compliant FFI (other than a
reporting Model 1 FFI), see the rules under
its FATCA requirements as a participating
FFI or registered deemed-compliant FFI
for classifying account holders as recalcitrant account holders. If QI is an FFI, see
also section 8.06 of this Agreement for

614

whether QI is required to report such payments on Form 1099.
(2) Amounts Subject to Withholding under Chapter 3 that are Paid with
Respect to an Offshore Obligation.
An amount that is subject to chapter 3
withholding that is not a withholdable
payment is presumed made to an undocumented foreign account holder if the
payment is made outside of the United
States with respect to an offshore obligation. If QI is an NFFE or an FFI that is
not required to withhold on recalcitrant
account holders pursuant to the terms of
an applicable Model 1 or Model 2 IGA,
an amount subject to chapter 3 withholding that is a withholdable payment and
that is treated as made to a payee that is
an individual is also presumed made to an
undocumented foreign account holder if
the payment is made outside of the United
States with respect to an offshore obligation. QI must treat an amount described in
this section 5.13(C)(2) as subject to withholding under chapter 3 at a rate of 30 percent on the gross amount of the payment
and must report the payment as made to an
unknown recipient on Form 1042-S.
(3) Payments on Certain ShortTerm Obligations and Bank Deposit
Interest. An amount of U.S. source original issue discount on the redemption of
a short-term obligation or U.S. source
bank deposit interest not subject to chapter 4 withholding is presumed made to an
undocumented U.S. non-exempt recipient account holder regardless of whether
paid to an individual or entity. QI must
report an amount described in this section 5.13(C)(3) on Form 1099. QI must
backup withhold and report such amounts
on Form 1099 unless it provides sufficient
information to another payor from which
it receives such amounts to backup withhold and report the payments and QI does
not know that the other payor has failed to
backup withhold or report.
(4) Foreign Source Income, Broker
Proceeds, and Certain Other Amounts
Made with Respect to an Offshore Obligation. A payment of an amount that is
not a withholdable payment and is not an
amount subject to chapter 3 withholding
(other than payments of short-term OID
and bank deposit interest described in
section 5.13(C) of this Agreement) that is
paid outside the United States with respect

Bulletin No. 2022–52

to an offshore obligation and that is made
to a payee that is an individual is presumed made to a U.S. non-exempt recipient when the payee has any of the indicia
of U.S. status that are described in section
5.10(B) of this Agreement. If the payment is made to a payee that is an entity,
QI must apply the principles of §1.14411(b)(3)(ii), §1.1441-5(d)(2), or §1.14415(e)(6) (as applicable) without regard to
§1.1441-1(b)(3)(ii)(D) for purposes of
this paragraph 5.13(C)(4). For a payment
of gross proceeds for which QI is a broker
under §1.6045-1, similar rules apply to a
payment made with respect to a sale that
is effected at an office outside the United
States under §1.6045-1(g)(1)(ii). QI must
report an amount described in this section
5.13(C)(3) as paid to a presumed U.S.
non-exempt recipient on Form 1099 to the
extent required under section 8.06 of this
Agreement. Backup withholding shall not
be required, however, if the exception provided in §31.3406(g)-1(e) applies.
(5) Other Payments. For any payment
not covered in sections 5.13(C)(1), (2),
(3), or (4) of this Agreement, see the presumption rules provided in §1.1441-1(b)
(3) or §1.6049-5(d)(2) (as applicable). In
the case of a payment of an amount realized, an account holder that is the partner
or a broker receiving the payment shall
be presumed a foreign person for which
a reduced rate of withholding under section 1446(f) shall not apply. See, however, §1.1446(f)-4(b)(4) in the case of an
amount realized for which withholding
under section 3406 is required. In the
case of an amount subject to withholding
under section 1446(a) on a PTP distribution, an account holder that is a partner in
the PTP receiving the distribution shall be
presumed a foreign person, with the rate
of withholding based on the status of the
partner (as an individual or corporation)
as determined under §1.1446-1(c)(3), or
as otherwise determined under §1.14464(d)(1)(iii) (when applicable).
SECTION 6. QUALIFIED
INTERMEDIARY WITHHOLDING
CERTIFICATE AND DISCLOSURE
OF ACCOUNT HOLDERS TO
WITHHOLDING AGENT
Sec. 6.01. Qualified Intermediary
Withholding Certificate. QI agrees to

Bulletin No. 2022–52

furnish a qualified intermediary withholding certificate to each withholding
agent from which it receives a reportable
amount as a QI or to each withholding
agent or broker from which QI receives a
PTP distribution or amount realized from
the sale of a PTP interest (including when
QI acts as a disclosing QI for the distribution or amount realized). The qualified
intermediary withholding certificate is a
Form W-8IMY (or acceptable substitute
form) that certifies that QI is acting as a
QI, contains QI’s QI-EIN, and provides
all other information required by the form.
If QI receives a withholdable payment
(including on a PTP distribution), QI must
certify to its chapter 4 status and provide
its GIIN (if applicable). QI must also certify its chapter 4 status as a participating
FFI or registered deemed-compliant FFI
when QI provides a Form W-8IMY that
certifies that it meets the requirements of
§1.6049-4(c)(4)(iii) with respect to any
account holder of an account it maintains
that is included in a chapter 4 withholding rate pool of U.S. payees on QI’s withholding statement for a payment subject
to withholding under chapter 3 or 4 or an
amount realized from the sale of a PTP
interest.
If QI is acting as a QSL for a substitute
dividend payment, QI must also certify
that it is acting as a qualified securities
lender and provide all other information
required by Form W-8IMY.
If QI is acting as a QDD for payments
with respect to potential section 871(m)
transactions or underlying securities, it
must certify that it is acting as a QDD
for those payments and assumes primary
chapters 3 and 4 withholding responsibility and primary Form 1099 reporting and
backup withholding responsibility for any
payments with respect to potential section 871(m) transactions that it makes as
required by this Agreement, and it must
provide all other information required
by Form W-8IMY with respect to the
certification.
If QI is acting with respect to payments of substitute interest as described
in section 3.03(A) of this Agreement, it
must certify that it is assuming primary
chapters 3 and 4 withholding responsibility and primary Form 1099 reporting
and backup withholding responsibility
for all such payments, in addition to the

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other certifications it makes and information it provides as a QI as required by this
Agreement.
Except as otherwise provided in section
6.02 of this Agreement, QI also agrees to
furnish each withholding agent to whom it
provides a Form W-8IMY with the withholding statement described in section
6.02 of this Agreement. QI is not required
to disclose, as part of its Form W-8IMY or
its withholding statement, any information
regarding the identity of a direct or indirect
account holder that is a foreign person or a
U.S. exempt recipient or a holder of a U.S.
account except when acting as a disclosing QI. To the extent QI does not assume
primary Form 1099 reporting and backup
withholding responsibility under section
3.04 of this Agreement or is not excepted
from reporting under section 8.06 of this
Agreement, for each U.S. non-exempt
recipient account holder on whose behalf
QI receives a reportable amount, QI must
provide to a withholding agent the Form
W-9, or if any such account holder has not
provided a Form W-9, the name, address,
and U.S. TIN (if available).
Sec. 6.02. Withholding Statement.
(A) In General. QI agrees to provide
to each withholding agent from which
QI receives reportable amounts as a QI
a withholding statement described in
this section 6.02 and §1.1441-1(e)(3)
(iv). A withholding statement shall not
be provided to a withholding agent if
QI assumes both primary chapters 3 and
4 withholding responsibility and primary Form 1099 reporting and backup
withholding responsibility for all of its
accounts for which QI receives reportable
amounts as a QI, unless QI is acting as a
QDD. The withholding statement forms
an integral part of the Form W-8IMY. The
withholding statement shall be updated
as often as necessary for the withholding
agent to meet its reporting and withholding obligations under chapters 3, 4, and 61
and section 3406. For a payment received
by QI of a PTP distribution or an amount
realized from the sale of a PTP interest, QI
agrees to provide a withholding statement
described in this section 6.02 unless QI
assumes primary withholding responsibility for the payment.
(B) Content of Withholding Statement. The withholding statement must
contain sufficient information for a

December 27, 2022

withholding agent to apply the correct rate
of withholding on payments allocable to
the accounts identified on the statement
and to properly report such payments on
Forms 1042-S and Forms 1099, as applicable. The withholding statement must—
(1) Designate those accounts for which
QI acts as a QI;
(2) Designate those accounts for which
QI assumes primary chapters 3 and 4
withholding responsibility or primary
Form 1099 reporting and backup withholding responsibility (including accounts
for which QI is acting with respect to payments of U.S. source substitute interest
(as described in section 3.03(A) of this
Agreement));
(3) If QI is acting as a QDD, designate the accounts (1) for which the QDD
is receiving payments with respect to
potential section 871(m) transactions or
underlying securities as a QDD, (2) for
which the QDD is receiving payments
with respect to potential section 871(m)
transactions (and that are not underlying securities) for which withholding is
not required, and (3) for which QDD is
receiving payments with respect to underlying securities for which withholding is
required, and, if applicable, identifying
the home office or branch that is treated as
the owner for U.S. income tax purposes.
In addition, for calendar years 2023 and
2024, the withholding statement must
identify the dividends that it receives in its
equity derivatives dealer capacity (which
may be done by designating one or more
accounts, if the only dividends that can
be received by those accounts are in the
QDD’s equity derivatives dealer capacity). Also, for a QDD that is a partnership
or a branch of a partnership, the withholding statement must, for a payment
of an amount under section 3.09 of this
Agreement (as modified for a QDD that is
a partnership or branch of a partnership),
include withholding rate pool information
to the exent permitted in section 6.03 of
this Agreement for an account holder, or
specific partner information, with respect
to its partners receiving the amount (looking through partners that are foreign
flow-through entities). The requirement
to include the partner information specified in the preceding sentence does not
apply to a payment described in sections
3.03(A)(1)-(3) of this Agreement.

December 27, 2022

(4) If applicable, designate the
accounts for which QI is acting as a QSL
with respect to any U.S. source substitute dividend payments received from the
withholding agent;
(5) Designate those accounts for which
QI assumes primary withholding responsibility for a payment of a PTP distribution or an amount realized from the sale of
a PTP interest; and
(6) Provide information regarding
withholding rate pools, as described in
section 6.03 of this Agreement, when necessary, except that section 6.03(C) of this
Agreement shall not apply when QI acts
as a disclosing QI for a payment (including for an amount subject to chapter 3 or
4 withholding on a PTP distribution), and
references to a chapter 4 withholding rate
pool of U.S. payees in section 6.03(B)
of this Agreement shall not apply to an
amount subject to withholding under section 1446(a) on a PTP distribution. See
also section 2.91(E) of this Agreement for
a disclosing QI’s requirement to provide
specific payee information on a withholding statement for a PTP distribution or
amount realized from the sale of a PTP
interest.
Sec. 6.03. Chapters 3 and 4 Withholding Rate Pools.
(A) In General. QI shall provide as
part of its withholding statement withholding rate pool information in a manner sufficient for the withholding agent
to meet its chapters 3 and 4 and backup
withholding responsibilities and its Form
1042-S and Form 1099 reporting responsibilities. QI’s requirement for its withholding statement described in the preceding sentence also applies to a withholding
statement QI provides to the withholding
agent or broker for a payment of a PTP
distribution or amount realized from the
sale of a PTP interest. Additionally, for
a PTP distribution, the withholding rate
pool information provided by QI on its
withholding statement must take into
account each amount subject to withholding on the distribution as determined by
the withholding agent that pays the distribution to QI.
(B) Chapter 4 Withholding Rate
Pools. If QI receives a withholdable payment on behalf of its account holders,
QI may allocate the payment to a chapter 4 withholding rate pool. A chapter 4

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withholding rate pool is a payment of a
single type of income (e.g., interest or dividends) that is allocated to payees that are
nonparticipating FFIs. If QI is a participating FFI or registered deemed-compliant
FFI (other than reporting Model 1 FFI),
it may also allocate a withholdable payment to a chapter 4 withholding rate pool
of recalcitrant account holders (if applicable). If QI is a participating FFI or registered deemed-compliant FFI receiving a
reportable amount that is excepted from
reporting under section 8.06(A) of this
Agreement (excluding sections 8.06(A)
(2) and (A)(3) of this Agreement when the
payment is subject to chapter 4 withholding and section 8.06(A)(4) of this Agreement), QI may allocate the payment to a
chapter 4 withholding rate pool of U.S.
payees. See section 6.03(D) of this Agreement for the alternative procedures that
may be used in this case. Except as otherwise provided in this section 6.03(B),
if QI receives a withholdable payment,
QI must provide the information required
under §1.1471-3(c)(3)(iii)(B)(2).
Further, if QI elects under its FATCA
requirements as a participating FFI or registered deemed-compliant FFI to backup
withhold instead of withholding under
chapter 4 with respect to certain recalcitrant account holders, QI’s withholding
statement must indicate the portion of
such payment subject to backup withholding under section 3406 that is allocated to
such account holders and must provide all
other information relating to such account
holders that is required under chapter 61
for the withholding agent to report with
respect to the payment.
If QI has an account holder that is
another intermediary (whether a QI, NQI,
or PAI) or a flow-through entity, QI may
combine the account holder information
provided by the intermediary or flowthrough entity with QI’s direct account
holder information to determine the
amounts allocable to each of QI’s chapter
4 withholding rate pools described in this
section 6.03(B). If QI is an NFFE that has
an account holder that is another intermediary or flow-through entity that is a participating FFI or registered deemed-compliant FFI, QI may provide the account
holder’s chapter 4 withholding rate pools
of recalcitrant account holders and U.S.
payees to the extent applicable.

Bulletin No. 2022–52

(C) Chapter 3 Withholding Rate
Pools. With respect to any portion of the
payment that is attributable to payees
for which no chapter 4 withholding is
required, a chapter 3 withholding rate pool
is a payment of a single type of income,
determined in accordance with the categories of income reported on Form 1042-S,
that is subject to a single rate of withholding (e.g., 0%, 10%, 15%, 30%, or 37%)
and a single chapter 4 exemption code.
QI shall determine chapter 3 withholding
rate pools based on valid documentation
obtained under section 5 of this Agreement
or, if a payment cannot be reliably associated with valid documentation, on the presumption rules of section 5.13(C) of this
Agreement. If QI has an account holder
that is another intermediary (whether a
QI, NQI, or PAI) or a flow-through entity
(other than a nonparticipating FFI that is
not acting on behalf of any exempt beneficial owners), QI may combine the account
holder information provided by the intermediary or flow-through entity with QI’s
direct account holder information to
determine the amounts allocable to each
of QI’s chapter 3 withholding rate pools
with respect to the portion of the payment
allocable to an account holder to which
chapter 4 withholding does not apply. For
a payment of an amount realized, however, QI may combine its account holder
information with the account holder information provided by an intermediary only
if the intermediary is a QI other than a disclosing QI.
(D) U.S. Non-Exempt Recipients
Subject to Backup Withholding or
Form 1099 Reporting and Alternative
Procedures for Allocating Payments on
Withholding Statements. To the extent
QI does not assume primary Form 1099
reporting and backup withholding responsibility and is not excepted from reporting
on Form 1099 under section 8.04 of this
Agreement, QI’s withholding statement
must establish a separate withholding rate
pool for each U.S. non-exempt recipient account holder that QI is required to
report on Form 1099 and has disclosed to
the withholding agent. QI may, by mutual
agreement with the withholding agent,
establish a single withholding rate pool
(not subject to backup withholding) for all
U.S. non-exempt recipient account holders for whom QI is required to report on

Bulletin No. 2022–52

Form 1099 and has provided Forms W-9
before the withholding agent paying any
reportable amounts or, if applicable, designated broker proceeds to which backup
withholding does not apply. QI must
establish a separate withholding rate pool
for all U.S. non-exempt recipient account
holders subject to backup withholding
before the withholding agent paying any
reportable amounts or, if applicable, designated broker proceeds.
Alternatively, QI may include U.S.
non-exempt recipients in a zero-rate withholding pool that includes U.S. exempt
recipients and foreign persons for which
no withholding is required under chapters
3 and 4 and section 3406 and may include
payments allocated to a chapter 4 withholding rate pool of U.S. payees in this
pool to the extent permitted to be provided
by QI under section 6.03(B) of this Agreement. If QI chooses the alternative procedure of this paragraph, QI must provide
sufficient information to the withholding
agent no later than January 15 of the year
following the year in which the reportable
amounts and designated broker proceeds,
if applicable, are paid in order to allocate
to each U.S. non-exempt recipient account
holder or to a chapter 4 withholding rate
pool of U.S. payees (when applicable).
Failure to provide such information will
result in the application of penalties to QI
under sections 6721 and 6722 and shall
constitute an event of default under section 11.06 of this Agreement.
SECTION 7. TAX RETURN
OBLIGATIONS
Sec. 7.01. Form 1042 (or Other Tax
Return) Filing Requirement.
(A) In General. QI shall file a return
on Form 1042, whether or not QI withheld
any amounts under chapter 3 or 4, on or
before March 15 of the year following any
calendar year in which QI acts as a QI and
makes a payment of an amount subject
to chapter 3 or 4 withholding. A separate
Form 1042 must be filed by each legal
entity that is a QI covered by this Agreement in accordance with the instructions to
Form 1042 (including to the extent of any
requirement to reconcile amounts reported
on Form 1042 with amounts reported on
Forms 1042-S). Form 1042 shall be filed
at the address indicated on the form, at the

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address at which the IRS notifies QI to
file the return, or in accordance with the
instructions to file Form 1042 electronically. In addition to the information specifically requested on Form 1042 and the
accompanying instructions, if QI made
any overwithholding or underwithholding adjustments under §§1.1461-2 and
1.1474-2 and sections 9.02 and 9.05 of this
Agreement, QI must attach a statement
setting forth the amounts of any overwithholding or underwithholding adjustments
and an explanation of the circumstances
that resulted in the overwithholding or
underwithholding.
(B) Extensions for Filing Returns. QI
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.
(C) QDD Tax Liability Requirements
for QDDs. In addition to its requirements
under section 7.01(A) of this Agreement, a
QI that is acting as a QDD also must report
its QDD tax liability on the appropriate
U.S. tax return (in the manner prescribed
by the IRS), including separately identifying each part of the QDD tax liability
described in section 3.09(A) through (C)
of this Agreement separately for the home
office and each branch that is acting as a
QDD (if applicable), and in the case of a
QDD that is a partnership or branch of a
partnership, taking into account the modifications in section 3.09 and separately
stating the withholding associated with
any of the QDD tax liability amounts).
For QDDs that are foreign corporations
or branches of foreign corporations, the
appropriate U.S. tax return is a Form
1120-F, including all required Schedules
Q. For QDDs that are partnerships or
branches of partnerships, the appropriate
U.S. tax return is a Form 1065, including
all required attachments and schedules,
and to the extent any amount is subject to
withholding with respect to a foreign partner of the QDD, Forms 1042 and 1042-S.
In addition, if the QDD is a partnership or
a branch of a partnership, the partnership
must attach a statement to its Form 1065
for each QDD and, if the QDD has a fiscal
year rather than a calendar year, a separate

December 27, 2022

statement for each QDD for each portion
of the fiscal year that falls within the calendar year that includes the information
that would have been included on the
Form 1120-F Schedule Q, in the manner
specified in the instructions to the Form
1065. A QDD must also report any other
information required by the appropriate
return with respect to its QDD tax liability (including any part thereof). In each
case, the form will be filed by the QI on
behalf of its QDD(s) and the Form 1120-F
or Form 1065, as applicable, must be filed
whether or not the QI would be required
to file the form if it were not a QDD.
U.S financial institutions with a foreign
branch that acts as a QDD must file the
appropriate U.S. income tax return (e.g.,
Form 1120, U.S. Corporation Income Tax
Return) for the tax year covered by this
Agreement to report and pay its tax liability under chapter 1 and will not have a
separate QDD tax liability. Similarly, any
United States person that is an individual
or a corporation and a direct or indirect
partner of a QI partnership that is or has
a QDD must report and pay its tax liability under chapter 1 and would not have a
separate QDD tax liability for the amounts
from the QDD.
A QDD must also maintain, and make
available to the IRS upon request, a reconciliation schedule that tracks across
calendar years the section 871(m) amount
for each dividend with respect to each
underlying security referenced by a potential section 871(m) transaction separately
for the home office and each branch that
is a QDD (if applicable). The reconciliation schedule must separately state total
amounts received as a QDD, as well as
the dividends received in its equity derivatives dealer capacity and the section 881
tax paid on those amounts (or in the case
of a QI that is a partnership, the withholding by the partnership on its partners for
those amounts and the reporting of the
amounts to its partners), the amount of
dividends that were effectively connected
with the conduct of a trade or business
in the United States, the amount of stock
owned in its equity derivatives dealer
capacity that was not effectively connected with the conduct of a trade or business in the United States, the amount of
dividend equivalent payments it received
in its equity derivatives dealer capacity,

December 27, 2022

its long positions, its short positions, its
net delta for business purposes (if any),
its adjustments to the net delta used for
business purposes (if any, such as adjustments to exclude transactions that, for federal income tax purposes, are not treated
as transactions of a QDD, do not exist,
or that are effectively connected with
the conduct of a trade or business in the
United States), the dividend amount per
share, its tax liability under section 881
(or if QI is a partnership, the withholding
by the partnership on its partners and the
reporting of the amounts to its partners)
for its section 871(m) amount, its net delta
exposure, and the section 871(m) amount
for each dividend with respect to each
underlying security referenced by a potential section 871(m) transaction it received
as a QDD, and any adjustments thereto,
for transactions in its equity derivatives
dealer capacity. The reconciliation schedule may be maintained in any manner or
format that permits the IRS to reconcile
the amount reported by the QDD for the
calendar year.
Sec. 7.02. Form 945 Filing Requirement. QI shall file a return on Form 945
on or before January 31 following the calendar year in which QI backup withheld
an amount under section 3406. Separate
Forms 945 must be filed by each legal
entity that is a QI covered by this Agreement. The form must be filed at the address
specified in the instructions for Form 945,
at the address at which the IRS notifies
QI to file the return under the provisions
of section 12.06 of this Agreement, or in
accordance with the instructions to file
Form 945 electronically.
Sec. 7.03. Retention of Returns. QI
shall retain Forms 945 and 1042 (including, with respect to a QI acting as a QDD,
its reconciliation schedule) for the applicable statute of limitations on assessment
under section 6501.
SECTION 8. INFORMATION
REPORTING OBLIGATIONS
Sec. 8.01. Form 1042-S Reporting.
Except as otherwise provided in section 8.02 of this Agreement, QI is not
required to file Forms 1042-S for amounts
paid to each separate account holder for
whom such reporting would otherwise
be required. Instead, QI shall file a Form

618

1042-S reporting the pools of income
(reporting pools) as determined in section 8.03 of this Agreement. QI must file
its Forms 1042-S in the manner required
by the regulations under chapters 3 and
4 (or in the case of a participating FFI,
in the manner required under the FFI
Agreement) and the instructions to the
form, including any requirement to file
the forms magnetically or electronically.
Separate Forms 1042-S must be filed by
each legal entity that is a QI covered by
this Agreement. A QI acting as a QDD
that also has QI activities must file separate Forms 1042-S in its QDD capacity
and its QI capacity (i.e., other than when
acting as a QDD). Each QI covered by this
Agreement may also allow its individual
branches not acting as QDDs to file Forms
1042-S provided that all Forms 1042-S
contain the QI-EIN of the legal entity of
which the branch forms a part and, to the
extent required for chapter 4 purposes, the
GIIN of the branch. If QI is acting as a
QDD, the home office and each branch
acting as a QDD must file separate Forms
1042-S for payments made as a QDD.
Any Form 1042-S required by this section 8 shall be filed on or before March 15
following the calendar year in which the
payment reported on the form was made.
QI may request an extension of time to file
Forms 1042-S by submitting Form 8809,
Application for Extension of Time to File
Information Returns, by the due date of
Forms 1042-S in the manner required by
(and to the extent permitted on) Form
8809. For when a payment is subject to
reporting on Form 1042-S, see generally
§1.1461-1(c)(2). For when an amount
realized from a transfer of a PTP interest
under section 1446(f) or an amount subject to withholding under section 1446(a)
on a PTP distribution is subject to reporting on Form 1042-S, see section 2.91(B)
of this Agreement and §1.1461-1(c)(2)(i)
(P).
Sec. 8.02. Recipient Specific Reporting. QI (whether or not it assumes primary
withholding responsibility under section
3.03 of this Agreement) is required to file
separate Forms 1042-S for amounts paid to
each separate account holder as described
in this section 8.02. QI must file separate
Forms 1042-S by income code, exemption code, recipient code, chapter 3 or 4
withholding rate pool, and withholding

Bulletin No. 2022–52

rate. In the case of a payment to a QDD,
separate Forms 1042-S must be filed for
each QDD, even if a single legal entity.
For when a Form 1042-S is issued to an
account holder that is a U.S. person to
report withholding under section 1446(a)
or (f), see the instructions for Form 1042S. In addition, in the case of a QDD that
is a partnership or a branch of a partnership, separate Forms 1042-S must be filed
for each of the QDD’s foreign partners
with respect to each partner’s share of the
QDD’s QDD tax liability subject to withholding under section 3.09 of this Agreement, as modified for a QDD that is a partnership or branch of a partnership.
(A) QI must file a separate Form
1042-S for each account holder that is a
QI (to the extent such payment is required
to be reported under §1.1461-1) WP, WT,
or QSL that receives from QI an amount
subject to withholding under chapter 3 or
4 (or, in the case of a QSL, that receives a
U.S. source substitute dividend payment),
regardless of whether such account holder
is a direct or indirect account holder of QI.
(B) QI must file a separate Form
1042-S for each account holder 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
that receives an amount subject to chapter
4 withholding from QI that is allocable to
each of such FFI’s chapter 4 withholding
rate pools of recalcitrant account holders, nonparticipating FFIs, and pool of
U.S. payees, if applicable, regardless of
whether such FFI is a direct or indirect
account holder of QI.
(C) QI must file a separate Form 1042-S
for each account holder that is a nonqualified intermediary or flow-through entity
that is not described in section 8.02(B)
of this Agreement (other than a nonparticipating FFI) that receives from QI an
amount subject to chapter 4 withholding
allocable to such entity’s chapter 4 withholding rate pool of payees that are nonparticipating FFIs, regardless of whether
such intermediary or flow-through entity
is a direct or indirect account holder of QI.
(D) QI must file a separate Form
1042-S for each account holder of QI that
is a PAI or a partnership or trust to which
QI applies the agency option that receives
from QI an amount subject to chapter 4

Bulletin No. 2022–52

withholding allocable to such entity’s
chapter 4 withholding rate pool of payees that are nonparticipating FFIs or an
amount subject to chapter 3 withholding
that is either not a withholdable payment
or a withholdable payment for which no
chapter 4 withholding is required and that
is allocable to such entity’s chapter 3 withholding rate pools.
(E) QI must file a separate Form 1042-S
for each unknown recipient with respect
to an account holder that is a nonqualified
intermediary, flow-through entity, or QI
that does not assume primary chapters 3
and 4 withholding responsibility and that
receives an amount subject to chapter 4
withholding from QI that QI must presume is allocable to such entity’s chapter
4 withholding rate pool of payees that are
nonparticipating FFIs under the presumption rule of §1.1471-3(f)(5).
(F) QI must file a separate Form 1042-S
for each foreign account holder (or interest holder) of a nonqualified intermediary
or flow-through entity that is a nonparticipating FFI that is receiving a withholdable
payment on behalf of an exempt beneficial
owner (regardless of whether the nonqualified intermediary or flow-through entity
is a direct or indirect account holder of
QI) to the extent QI can reliably associate such amounts with valid documentation from such nonqualified intermediary
or flow-through entity as to the payment
allocable to one or more exempt beneficial
owners. In addition, QI must file separate
Forms 1042-S in the same manner for
each foreign account holder (or interest
holder) of a nonqualified intermediary or
flow-through entity that is described in the
preceding sentence and that is a direct or
indirect account holder (or interest holder)
of a PAI of QI or a partnership or trust to
which QI applies the agency option.
(G) QI must file separate Forms 1042-S
for each foreign account holder (or interest holder) of a nonqualified intermediary
or flow-through entity that is receiving an
amount subject to chapter 3 withholding
that is either not a withholdable payment
or a withholdable payment for which
no chapter 4 withholding is required to
the extent QI can reliably associate such
amounts with valid documentation from
an account holder that is not itself a nonqualified intermediary or flow-through
entity. In addition, QI must file separate

619

Forms 1042-S in the same manner for
each foreign account holder (or interest
holder) of a nonqualified intermediary or
flow-through entity that is described in the
preceding sentence and that is a direct or
indirect account holder (or interest holder)
of a PAI of QI or a partnership or trust to
which QI applies the agency option.
(H) QI must file a separate Form
1042-S for each direct account holder
that is receiving a withholdable payment
and 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) (unless such information was reported by the withholding
agent).
(I) If QI is acting as a QDD, QI must
file a separate Form 1042-S for any
amount subject to chapter 3 withholding
with respect to a potential section 871(m)
transaction made to another QDD.
(J) If QI acts as a disclosing QI with
respect to a payment of a PTP distribution or an amount subject to reporting
under section 1446(f) made to an account
holder that is a foreign partner, QI must
file a Form 1042-S to report the payment
when QI knows or has reason to know
that the Form 1042-S has not been filed
with respect to the partner or the rate of
withholding shown on the Form 1042-S is
incorrect. In the case of a PTP distribution
that QI must report in accordance with the
preceding sentence, QI must file a separate Form 1042-S for each amount associated with the distribution by the PTP to
the extent required in the instructions for
Form 1042-S. Notwithstanding the preceding provisions of this section 8.02(J),
see section 8.02(M) of this Agreement
for an amount subject to reporting under
section 1446(f) paid to a nonqualified
intermediary.
(K) If a QI makes a payment of a
PTP distribution or an amount subject
to reporting under section 1446(f) to an
account holder that is a QI not acting as
a disclosing QI for the payment, QI must
file a Form 1042-S for the other QI. If QI
instead receives information on a foreign
partner from a QI that is an account holder
and that acts as a disclosing QI for a payment referenced in the preceding sentence,
QI must file a separate Form 1042-S to
report the payment when QI assumes primary withholding responsibility for the

December 27, 2022

payment or knows or has reason to know
that the Form 1042-S has not been issued
with respect to the foreign partner. In
such a case, QI must file the Form 1042-S
reporting the disclosing QI as an intermediary, with the foreign partner reported as
the recipient. In the case of a payment of a
PTP distribution made to a QI that acts as a
disclosing QI for the distribution and that
QI is required to report in accordance with
this section 8.02(K), QI must file a separate Form 1042-S to the extent required
in the instructions to Form 1042-S. For
any Form 1042-S QI files with respect to
a payment made to an account holder of a
disclosing QI, QI must also furnish to the
disclosing QI a recipient copy of the Form
1042-S.
(L) If QI receives specific information
on a foreign partner that is a direct account
holder of a PAI that receives from QI a payment of an amount subject to withholding
on a PTP distribution or an amount subject to reporting under section 1446(f), QI
must file a separate Form 1042-S to report
each amount paid to the partner to the
extent required in accordance with section
8.02(K) of this Agreement for a QI that is
a disclosing QI (but as applied to a PAI
instead of a disclosing QI).
(M) If QI makes a payment of a PTP
distribution to a nonqualified intermediary, QI must file a separate Form
1042-S for each foreign partner or beneficial owner of the distribution that is
an account holder of the nonqualified
intermediary. If QI makes a payment of
an amount subject to reporting under section 1446(f) to a nonqualified intermediary, QI shall file the Form 1042-S for
an unknown recipient of the nonqualified
intermediary, except that QI may instead
file the Form 1042-S for an account
holder of the nonqualified intermediary
receiving the payment when—
(1) QI has in place an agreement with
the nonqualified intermediary that QI will
report (or ensures that another QI or broker will report) under section 1461 with
respect to the amount allocated to each of
the transferors of the PTP interest (and, if
required, under section 6045) and that QI
will provide the nonqualified intermediary a recipient copy of each Form 1042-S
issued as a result of QI’s reporting;
(2) QI can reliably associate the
payment with documentation for each

December 27, 2022

transferor under section 5.13 of this
Agreement;
(3) QI receives from the nonqualified
intermediary the statement described in
§1.6031(c)-1T(a)(1) with respect to each
partner that is an account holder of the nonqualified intermediary for which a statement under section 6031(b) is required to
be issued (which meets the requirements
in section 8.07 of this Agreement) with
respect to the partner’s PTP interest for the
year in which the payment was made; and
(4) The nonqualified intermediary
appoints the QI as its agent for providing
the statement to the PTP (or PTP’s agent).
See §1.6031(c)-1T(f).
(N) QI must file a separate Form
1042-S for a grantor or owner of a grantor
trust for purposes of section 1446(a) or
(f), except when QI applies the provisions
of section 4.06 of this Agreement with
respect to the trust.
(O) QI must file a separate Form
1042-S for a foreign partnership holding a PTP interest directly with QI to
the extent that QI determines a modified
amount realized with respect to the partnership for purposes of section 1446(f),
or to the extent the partnership receives
a payment subject to withholding under
section 1446(a), when the foreign partnership is not a PTP, but excluding either case
when QI applies the provisions of section
4.06 of this Agreement with respect to the
partnership.
(P) QI must file a separate Form
1042-S with respect to an account holder
that requests a Form 1042-S from QI by a
written request made within two full calendar years following the year in which
QI made the payment for which the Form
1042-S is requested. If, however, QI filed
a Form 1042-S to report a payment of an
amount subject to withholding under section 1446(a) on a PTP distribution or an
amount subject to reporting under section
1446(f) with respect to an account holder
for the same calendar year for which the
account holder requests a separate Form
1042-S for any payment, QI must file a
separate Form 1042-S for each amount
reportable on Form 1042-S that was paid
to the account holder for the calendar
year. A request made in a case described
in the preceding sentence must be made
in writing within three full calendar years
following the year in which QI made the

620

payment for which the Form 1042-S is
requested. Any request by an account
holder for a separate Form 1042-S referenced in this section 8.02(P) requires that
the account holder provide its U.S. TIN to
QI.
Sec. 8.03. Reporting Pools for Form
1042-S Reporting.
(A) Chapter 4 Reporting Pools.
Except for amounts required to be reported
under section 8.02 of this Agreement, if QI
is an FFI, QI shall report all amounts subject to chapter 4 withholding by reporting
pools on a Form 1042-S if those amounts
are paid to direct account holders of QI.
A separate Form 1042-S shall be filed for
each type of reporting pool. A chapter 4
reporting pool is a payment of a single
type of income, 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 either
recalcitrant account holders or payees that
are nonparticipating FFIs. QI must report
recalcitrant account holders in pools based
upon a recalcitrant account holder’s particular status described in §1.1471-4(d)
(6), with a separate Form 1042-S issued
for each such pool.
If QI is an FFI, it may report in a chapter 4 withholding rate pool of U.S. payees
an account holder that is (or is presumed)
a U.S. person and that QI reports as a
U.S. account under its applicable FATCA
requirements as a participating FFI or
registered deemed-compliant FFI provided that QI is excepted from Form 1099
reporting with respect to the payment
under section 8.06(A)(1) of this Agreement or section 8.06(A)(2) and (A)(3) of
this Agreement if the payment is excepted
from Form 1099 reporting, is not subject
to withholding under chapter 4, and is not
a PTP distribution.
If QI is an NFFE, QI shall report all
amounts subject to chapter 4 withholding
by reporting pools on a Form 1042-S if
those amounts are paid to direct account
holders that are nonparticipating FFIs in
a chapter 4 reporting pool of nonparticipating FFIs.
(B) Chapter 3 Reporting Pools.
Except for amounts required to be reported
under section 8.02 of this Agreement or
when QI acts as a disclosing QI for a payment, QI shall report an amount subject
to chapter 3 withholding or withholding

Bulletin No. 2022–52

under section 1446(a) or (f) for which
no chapter 4 withholding is required and
that is paid to a foreign account holder by
reporting pools on a Form 1042-S if paid
to a direct account holder of QI, or to a
direct account holder of a PAI of QI or a
partnership or trust, to the extent permitted undersection 4 of this Agreement. A
separate Form 1042-S shall be filed for
each type of 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, chapter 4 exemption code
as determined on Form 1042-S. QI may
use a single chapter 3 pool reporting code
(e.g., QI- 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., QI- withholding rate poolexempt 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.
Sec. 8.04. FATCA U.S. Account
Reporting.
(A) QI that is an FFI. If QI is an FFI,
QI is required to report each U.S. account
(or, in the case of an FFI that is a reporting
Model 1 FFI or a registered deemed-compliant Model 1 IGA FFI, each U.S. reportable account) that it maintains and for
whom QI is acting consistent with its
FATCA requirements as a participating
FFI, registered deemed-compliant FFI,
or registered deemed-compliant Model 1
IGA FFI. If QI is a participating FFI or
registered deemed-compliant FFI (other
than a reporting Model 1 FFI or registered
deemed-compliant Model 1 IGA FFI), QI
must report its U.S. accounts on Form
8966 in the time and manner required
under its FATCA requirements as a participating FFI or registered deemed-compliant FFI except to the extent QI is reporting under §1.1471-4(d)(5) on Form 1099
with respect to its U.S. accounts. If QI
is a reporting Model 1 FFI or registered
deemed-compliant Model 1 IGA FFI, QI
must report each U.S. reportable account
on Form 8966 as required under the applicable Model 1 IGA. QI cannot delegate to

Bulletin No. 2022–52

its withholding agent its requirements to
report U.S. accounts (or U.S. reportable
accounts) regardless of whether QI does
or does not assume primary Form 1099
reporting and backup withholding responsibility under section 3 of this Agreement.
See section 8.06 of this Agreement for
when the reporting described in this section 8.04 satisfies QI’s Form 1099 reporting responsibilities with respect to reportable payments under chapter 61.
(B) QI that is an NFFE. If QI is an
NFFE acting as a QI on behalf of persons
other than its shareholders, QI shall file
Form 8966 to report withholdable payments made to an account holder 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
QI. See §1.1471-1(b)(8) for the definition of beneficial owner. QI must report
on Form 8966 in accordance with the
form and its accompanying instructions.
Such report 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 made to the
NFFE during the calendar year; and any
other information as required by the form
and its accompanying instructions. If QI
is acting as a sponsoring entity on behalf
of an NFFE for chapter 4 purposes, QI is
not required to report as described in this
paragraph if QI reports the NFFE as part of
QI’s requirements as a sponsoring entity.
See §1.1472-1(c)(5)(ii) for the reporting
requirements of a sponsoring entity.
Sec. 8.05. Form 8966 Reporting for
Payees that are NFFEs. QI shall file Form
8966 to report withholdable payments
made to an intermediary or flow-through
entity 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). QI 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); the name, address, and U.S. TIN
of each substantial U.S. owner; the total
of all withholdable payments made to the

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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.
QI is not required to report, however, to
the extent permitted under §1.1474-1(i)
(2) on a payment made to a participating
FFI or registered deemed-compliant FFI
if such information is reported pursuant
to section 8.04 of this Agreement or if the
intermediary or flow-through entity 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.
Sec. 8.06. Form 1099 Reporting
Responsibility. QI shall file Forms 1099
and, unless filing magnetically, Form
1096, Annual Summary and Transmittal
of U.S. Information Returns, for reportable payments made to persons described
in this section 8.06. Forms 1099 shall be
filed on or before the date prescribed for
the particular Form 1099 under chapter
61 and in the manner required by regulations under chapter 61 and the instructions
to the forms (including the requirements
for filing the forms magnetically or electronically). Extensions of the time to file
Forms 1099 may be requested by submitting Form 8809 in the manner required by
the form. If QI is required to file Forms
1099, it must file the appropriate form
for the type of income paid (e.g., Form
1099-DIV for dividends, Form 1099-INT
for interest, Form 1099-B for broker proceeds). QI must file Forms 1099 to report
a reportable payment other than in the situations listed in sections 8.06(A) and (B)
of this Agreement.
(A) Reportable Amount. QI must
file a Form 1099 in accordance with the
instructions to the form for the aggregate
amount of a particular type of reportable
amount paid to an account holder that is
(or is presumed) a U.S. non-exempt recipient (whether a direct or indirect account
holder). However, QI is not required to file
a Form 1099 on a reportable amount if—
(1) QI is a non-U.S. payor reporting the
account holder of a U.S. account under its
FATCA requirements as a participating
FFI or registered deemed-compliant FFI
(including a reporting Model 1 FFI) and

December 27, 2022

the other conditions of §1.6049-4(c)(4)(i)
are satisfied;
(2) QI reports the account holder’s
account as held by a recalcitrant account
holder or, in the case of a QI that is a
reporting Model 2 FFI or nonreporting Model 2 FFI treated as registered
deemed-compliant, as a non-consenting
U.S. account under its FATCA requirements as a participating FFI or registered
deemed-compliant FFI and the other conditions of §1.6049-4(c)(4)(ii) are satisfied;
(3) QI is a non-U.S. payor that is
a reporting Model 1 FFI or registered
deemed-compliant Model 1 IGA FFI and
determines that the account has U.S. indicia for which appropriate documentation
sufficient to treat the account as held by
a specified U.S. person has not been provided and reports the account as a U.S.
reportable account and the other conditions of §1.6049-4(c)(4)(ii) are satisfied;
(4) QI has not assumed primary Form
1099 reporting and backup withholding
responsibility with respect to the account
holder’s account and has provided a Form
W-9 to a withholding agent or has provided withholding rate pool information
with respect to such account holder to a
withholding agent to apply backup withholding and QI does not know that the
withholding agent has failed to report or
backup withhold as required;
(5) With respect to an account holder
of an intermediary or flow-through entity
(other than a QI) that is a direct or indirect account holder of QI, the intermediary or flow-through entity allocates the
payment to a chapter 4 withholding rate
pool of U.S. payees and provides a Form
W-8IMY containing a certification that the
entity meets the requirements of §1.60494(c)(4)(iii); or
(6) With respect to an account holder
of another QI that is a direct or indirect
account holder of QI, the QI allocates
the payment to a chapter 4 withholding
rate pool of U.S. payees and provides the
applicable certification on a valid Form
W-8IMY for allocating the payment to
this pool.
(B) Reportable Payments other
than Reportable Amounts. QI must file
a Form 1099 for a reportable payment
(other than a reportable amount) paid to
each U.S. non-exempt recipient (whether
a direct or indirect account holder), or to

December 27, 2022

any account holder that is presumed to be
a U.S. non-exempt recipient under section 5.13(C) of this Agreement. Notwithstanding the previous sentence, QI is not
required to file a Form 1099 for a reportable payment (other than a reportable
amount) paid to a direct account holder
that is (or is presumed) a U.S. non-exempt
recipient if—
(1) QI is a non-U.S. payor reporting the
account holder of a U.S. account under its
FATCA requirements as a participating
FFI or registered deemed-compliant FFI
(including a reporting Model 1 FFI) and
the other conditions of §1.6049-4(c)(4)(i)
are satisfied;
(2) QI reports the account holder’s
account as held by a recalcitrant account
holder or, in the case of a QI that is a
reporting Model 2 FFI or nonreporting Model 2 FFI treated as registered
deemed-compliant, as a non-consenting
U.S. account under its FATCA requirements as a participating FFI or registered
deemed-compliant FFI and the other conditions of §1.6049-4(c)(4)(ii) are satisfied;
(3) QI is a non-U.S. payor that is
a reporting Model 1 FFI or registered
deemed-compliant Model 1 IGA FFI and
determines that the account has U.S. indicia for which appropriate documentation
sufficient to treat the account as held by
a specified U.S. person has not been provided and reports the account as a U.S.
reportable account and the other conditions of §1.6049-4(c)(4)(ii) are satisfied;
or
(4) With respect to a reportable payment that is broker proceeds paid to a
U.S. non-exempt recipient, QI has applied
the procedures of section 3.05(C) of this
Agreement and QI does not know that the
other payor has failed to report or backup
withhold on the payment as required.
Sec. 8.07. Section 6031 Reporting
Responsibility with respect to Partner
Holding PTP Interest.
(A) In General. A QI must comply
with the requirements of this section 8.07
for each calendar year for purposes of QI’s
requirement to report under §1.6031(c)1T with respect to its account holders.
A nominee for purposes of this section
8.07 is an entity (including a broker) that
holds a PTP interest directly or indirectly
on behalf of another person. An account
holder for purposes of this section 8.07

622

is a partner or intermediary that during a
calendar year receives from QI a PTP distribution or sells a PTP interest for which
QI pays to it an amount realized and is—
(1) A direct account holder of QI
excluding an account holder that is a
QI or nonqualified intermediary referenced in section 8.07(A)(2) or (3) of this
Agreement;
(2) An account holder of another QI
acting as a disclosing QI for a PTP distribution or amount realized (including an
account holder of the other QI that is itself
a QI but not acting as a disclosing QI); or
(3) An account holder of a nonqualified intermediary when QI either receives
the information required for reporting
under this section 8.07 with respect to an
account holder receiving the distribution
or, for the amount realized paid to the
account holder, satisfies the conditions of
section 8.02(M) of this Agreement (or is
otherwise a PAI).
(B) QI not Acting as Disclosing QI.
A QI that does not act as a disclosing QI
for a PTP distribution or amount realized
paid to an account holder for a calendar
year with respect to the account holder’s
PTP interest may provide the statement
with respect to the account holder specified in §1.6031(c)-1T(a) to the PTP in
which the interest is held (or PTP’s agent),
in the time specified in §1.6031(c)-1T(b).
For purposes of this section 8.07(B), the
statement specified in §1.6031(c)-1T(a)
must include a U.S. TIN for a foreign
account holder only when provided by
the account holder to QI. If QI does not
provide the statement described in the
two preceding sentences, QI must issue
to each account holder receiving the distribution or amount realized the statement
that is described in §1.6031(c)-1T(h)
for the calendar year with respect to the
PTP interest for which the distribution
or amount realized was paid, in the time
specified in §1.6031(c)-1T(h). For purposes of this section 8.07(B), the statement described in §1.6031(c)-1T(h) may
be a copy of the statement issued under
section 6031(b) to QI for the year when
QI includes with the statement an accurate designation of the percentage of each
amount shown on the statement attributable to the account holder’s PTP interest
held with QI. In a case in which QI provides to an account holder the statement

Bulletin No. 2022–52

described in §1.6031(c)-1T(h) or the preceding sentence, QI is also required to
request from the PTP the PTP’s deemed
sale information for purposes of §1.864(c)
(8)-2(b)(2) with respect to an account
holder requesting (directly or through
another intermediary) this information
from QI (which, in turn, QI must provide
to the account holder).
(C) QI Acting as Disclosing QI. A
QI that acts as a disclosing QI for a PTP
distribution or amount realized paid to
an account holder for a calendar year
with respect to the account holder’s PTP
interest is required to provide the statement with respect to the account holder
specified in §1.6031(c)-1T(a) (including
with a U.S. TIN only when required under
section 8.07(B) of this Agreement) to the
PTP in which the interest is held (or PTP’s
agent), or QI’s nominee for the payment,
in the time specified in §1.6031(c)-1T(b).
A QI need not provide the statement
described in the preceding sentence to
the extent that QI’s nominee maintains a
fully segregated and disclosed account for
which QI has already provided the information required for the statement (including a U.S. TIN only when required under
section 8.07(B) of this Agreement). Additionally, in a case in which QI provides the
statement to QI’s nominee or the information referenced in the preceding sentence
to its nominee, QI must obtain from the
nominee a written representation that the
nominee is acting as an agent of the PTP
for purposes of §1.6031(c)-1T(a) unless
QI otherwise appoints the nominee as its
agent for purposes of §1.6031(c)-1T(a).
See §1.6031(c)-1T(f).
SECTION 9. ADJUSTMENTS FOR
OVER AND UNDER-WITHHOLDING; REFUNDS
Sec. 9.01. Adjustments for Overwithholding by Withholding Agent When
QI Does not Assume Primary Withholding Responsibility. QI may request
that a withholding agent make an adjustment for amounts paid to QI when the
withholding agent has overwithheld under
chapter 3 or 4 by applying either the reimbursement procedure described in section
9.01(A) of this Agreement or the set-off
procedure described in section 9.01(B)
of this Agreement within the time period
prescribed for those procedures. Nothing in this section shall be interpreted to

Bulletin No. 2022–52

require a withholding agent to apply the
reimbursement or set off procedures under
sections 9.01(A) or (B) of this Agreement.
See §1.1474-2(a)(2) for the definition of
overwithholding that applies for purposes
of this section 9 with respect to an amount
withheld under chapter 4.
The reimbursement and set-off procedures that apply to an amount overwithheld by QI’s withholding agent under
chapter 3 and 4 also apply to an amount
overwithheld on an amount realized or
an amount subject to withholding under
section 1446(a) on a PTP distribution by
QI’s broker (for an amount realized), or a
nominee or PTP (for a PTP distribution).
(A) Reimbursement Procedure. QI
may request that a withholding agent
repay QI for any amount overwithheld
and for the withholding agent to reimburse itself under the reimbursement procedures described in §§1.1461-2(a)(2)(i)
and 1.1474-2(a)(3) by making the request
in the time permitted to apply those procedures with respect to a beneficial owner
or payee.
(B) Set-off Procedure. QI may request
that a withholding agent repay QI by
applying the amount overwithheld against
any amount which otherwise would be
required to be withheld under chapter 3
or 4 from income paid by the withholding
agent to QI under the set-off procedures of
§§1.1461-2(a)(3) and 1.1474-2(a)(4). QI
must make the request in the time permitted to apply those procedures with respect
to a beneficial owner or payee.
Sec. 9.02. Adjustments for Overwithholding by QI Assuming Primary Withholding Responsibility. QI may make an
adjustment for amounts paid to its account
holders when QI has overwithheld by
applying either the reimbursement or setoff procedures described in this section
9.02 within the time period prescribed for
those procedures. The reimbursement and
set-off procedures that apply to an amount
QI overwithheld under chapter 3 and 4
also apply to an amount QI overwithheld
on an amount realized or an amount subject to withholding under section 1446(a)
on a PTP distribution.
(A) Reimbursement Procedure.
QI may repay its account holders for an
amount overwithheld under chapter 3 or
4 and reimburse itself by reducing, by
the amount of tax actually repaid to the

623

account holders, the amount of any subsequent deposit of tax required to be made
by QI under section 3.08 of this Agreement. For purposes of this section 9.02(A),
an amount that is overwithheld shall be
applied in order of time (i.e., sequentially)
to each of the QI’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 in the time
specified in §§1.1461-2(a)(2) and 1.14742(a)(3);
(2) QI states on a Form 1042-S (issued,
if applicable, to the account holder or otherwise to a chapter 3 or 4 reporting pool),
filed in the time specified in §§1.1461-2(a)
(2) and 1.1474-2(a)(3), the amount of tax
withheld and the amount of any actual
repayments; and
(3) QI states on a Form 1042, filed in
the time specified in §§1.1461-2(a)(2)
and 1.1474-2(a)(3), that the filing of the
Form 1042 constitutes a claim for credit
in accordance with §1.6414-1.
(B) Set-Off Procedure. QI may repay
its account holders 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 QI to the account holders when
the requirements of §1.1461-2(a)(3) (for
chapter 3 withholding) or §1.1474-2(a)(4)
(for chapter 4 withholding) are satisfied.
For purposes of making a return on Form
1042 or 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. 9.03. Repayment of Backup
Withholding. If QI erroneously withholds, as defined under §31.6413(a)-3,
an amount under section 3406 from an
account holder, QI may refund the amount
erroneously withheld as provided in
§31.6413(a)-3.
Sec. 9.04. Collective Credit or
Refund Procedures for Overwithholding. If there has been overwithholding
on amounts subject to chapter 3 or 4

December 27, 2022

withholding paid to QI’s account holders
during a calendar year and the amount has
not been recovered under the reimbursement or set-off procedures as described in
section 9.01 or 9.02 of this Agreement, QI
may request a credit or refund of the total
amount overwithheld by following the
procedures of this section 9.04. QI 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 9.04, QI may
use the collective refund procedures with
respect to all amounts subject to chapters 3 and 4 withholding. With respect to
amounts withheld under chapter 3 or 4, QI
shall not include in its collective refund
claim tax withheld on payments made
to an indirect account holder or a direct
account holder of QI that is a nonqualified
intermediary or flow-through entity, and
with respect to amounts withheld under
chapter 4, if QI is a participating FFI or
registered deemed-compliant FFI, QI
shall not include in its collective refund
claim tax withheld on payments made to
any account holder described in the FFI
agreement or in §1.1471-4(h)(2). QI also
shall not include in its collective refund
claim any overwithholding of tax on an
amount realized on a sale of a PTP interest
or any amount of tax withheld on a PTP
distribution.
(B) Requirements for Collective
Refund. QI may use the collective refund
procedures under this section 9.04 only if
the following conditions are met:
(1) QI must not have issued (and will
not issue) Forms 1042-S to the account
holders that received the payment that was
subject to overwithholding;
(2) QI must submit together with its
amended Form 1042 on which it provides
a reconciliation of amounts withheld and
claims a credit or refund, a copy of the
Form 1042-S furnished to QI by its withholding agent reporting the taxes withheld
to which the claim relates (if applicable)
and a statement that includes the following information and representations—
(i) The reason(s) for the overwithholding;

December 27, 2022

(ii) QI deposited the tax for which a
refund is being sought under section
6302 or received a Form 1042-S from
its withholding agent showing the
amount of tax withheld, and neither QI
nor its withholding agent has applied the
reimbursement or set-off procedure of
§§1.1461-2 and 1.1474-2 to adjust the
tax withheld to which the claim relates;
(iii) QI has repaid or will repay the
amount for which refund is sought to
the appropriate account holders;
(iv) QI retains a record showing the
total amount of tax withheld, credits
from other withholding agents, tax
assumed by QI, adjustments for underwithholding, and reimbursements for
overwithholding as it relates to each
account holder and also showing the
repayment (if applicable) to such
account holders for the amount of tax
for which a refund is being sought;
(v) QI retains valid documentation
that meets the requirements of chapter 3 or 4 (as applicable) to substantiate the amount of overwithholding
with respect to each account holder for
which the refund is being sought; and
(vi) QI has not issued and will not issue
a Form 1042-S (or such other form as
the IRS may prescribe) to any account
holder with respect to the payments for
which the refund is being sought.
Sec. 9.05. Adjustments for Underwithholding. If QI knows that an amount
should have been withheld under chapter
3 or 4 from a previous payment made to an
account holder but was not withheld, QI
may either withhold from future payments
made pursuant to chapter 3 or chapter 4 to
the same account holder or payee or satisfy the tax from property that it holds in
custody for such person or property over
which it has control. QI may also withhold from future payments as described
in the preceding sentence with respect
underwithholding on an amount realized
or PTP distribution. The additional withholding or satisfaction of the tax owed
described in the previous sentence must
be made before the due date (not including extensions) of the Form 1042 for the
calendar year in which the underwithholding occurred. QI’s responsibilities under
this section 9.05 will be met if it informs a
withholding agent from which it received
the payment of the underwithholding

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and the withholding agent satisfies the
underwithholding.
Sec. 9.06. Underwithholding After
Form 1042 Filed. If, after a Form 1042
has been filed for a calendar year, QI, QI’s
reviewer, or the IRS determines that QI
has underwithheld tax for such year, QI
shall file an amended Form 1042 to report
and pay the underwithheld tax. QI 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 QI 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.
SECTION 10. COMPLIANCE
PROCEDURES
Sec. 10.01. Compliance Program
(A) In General. QI is required to adopt
a compliance program under the authority
of a responsible officer or, if QI adopts a
consolidated compliance program, under
the authority of a responsible officer of a
Compliance QI (as described in section
10.02(B) of this Agreement). QI’s compliance program must include policies, procedures, and processes sufficient for QI to
satisfy the documentation, reporting, and
withholding requirements of this Agreement and sufficient for a responsible officer of QI (or a Compliance QI) to make
the certifications required under section
10.03 of this Agreement. If QI is acting
as a QDD, QI’s compliance program must
also include policies, procedures, and processes sufficient for it to satisfy and report
its QDD tax liability and other reporting
required as a condition of its status as a
QDD. QI must also perform or arrange
for the performance of a periodic review
described in section 10.04 of this Agreement to the extent required by that section. As part of the responsible officer’s
certification, QI must provide to the IRS
the factual information as required by and
referenced in sections 10.04 and 10.05
and in Appendix I to this Agreement.
QI must also satisfy the requirements
of section 10.06 of this Agreement with
respect to the report covering the periodic
review and must comply with the IRS
review described in section 10.08 of this
Agreement.

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(B) Coordination with FATCA
Requirements as a Participating FFI,
Registered Deemed-Compliant FFI, or
Registered Deemed-Compliant Model
1 IGA FFI and, for a Direct Reporting
NFFE, the Requirements of §1.14721(c)(3). As a condition for maintaining
QI status, QI must maintain its chapter 4
status with respect to each branch of QI
operating under this Agreement. Therefore, QI must, as part of the compliance
procedures described in this section 10
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.
(C) Phase-in Years for 871(m). In
enforcing the regulations issued with
respect to dividend equivalents under sections 871(m), 1441, 1461, and 1473 (the
“section 871(m) regulations”), the IRS
will take into account the extent to which
the QI (including QIs that are not QDDs)
made a good faith effort to comply with
the section 871(m) regulations for any
delta-one section 871(m) transaction in
calendar years 2023 and 2024 and any
non-delta-one section 871(m) transaction in calendar year 2025. Similarly, for
purposes of the IRS’s enforcement and
administration of the QDD rules in the section 871(m) regulations and the relevant
provisions of this Agreement, the IRS will
take into account the extent to which the
QDD made a good faith effort to comply
with the section 871(m) regulations and
the relevant provisions of this Agreement
for calendar years 2023 and 2024. For
calendar years 2023 and 2024, a QDD is
not required to perform a periodic review
with respect to its QDD activities (as otherwise required by section 10.04 of this
Agreement) or provide factual information in Appendix I with respect to its QDD
activities. In addition, for the QI certification on material failures in calendar years
2023 and 2024, the only certification that
a QDD is required to make with respect
to its QDD activities for this period is that
it has made a good faith effort to comply
with the section 871(m) regulations and
the relevant provisions of this Agreement
for those activities. A revised certification
of internal controls (and factual information and other certifications) applicable
to a QI’s QDD activities will be added to

Bulletin No. 2022–52

this Agreement for purposes of certification periods ending after December 31,
2024. For calendar years 2023 and 2024, a
material failure relevant to a QDD has not
occurred unless the QDD failed to make a
good faith effort to comply with the section 871(m) regulations and the relevant
provisions of this Agreement. Similarly,
for calendar years 2023 and 2024, a QI
will not be considered to have a material
failure with respect to a delta-one section
871(m) transaction unless the QI failed
to make a good faith effort to comply
with the section 871(m) regulations for
any of those transactions in those years.
For calendar year 2025, a QI will not be
considered to have a material failure with
respect to a non-delta-one section 871(m)
transaction unless the QI failed to make a
good faith effort to comply with the section 871(m) regulations for any of those
transactions in that year. For any reliance
on the good faith standard, the QI must
disclose any section 871(m) transactions
included in the review that the QI believes
should be subject to the good faith standard for purposes of reporting the factual
information with its periodic certification
and include a brief description of the reason QI relied on the good faith standard,
how the QI will address it, and why the
good faith standard should apply.
A QI will be considered to satisfy its
obligations for purposes of this section 10
that apply specifically to section 871(m)
transactions for calendar years 2023 and
2024 provided that the QI made a good
faith effort to comply with the relevant
terms of this Agreement. Any QI that has
not made a good faith effort to comply with
its section 871(m) requirements or QDD
obligations under this Agreement will not
be given any relief from IRS administration or enforcement for calendar years
2023 and 2024, including penalties.
10.02. Responsible Officer. QI must
appoint an individual as a responsible
officer as defined in section 2.72 of this
Agreement. The responsible officer must
be identified on QAAMS as QI’s responsible party, and such person may, but is
not required to, be the same responsible
officer for purposes of compliance with
QI’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant
Model 1 IGA FFI. The responsible officer

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must establish a compliance program that
meets the requirements of this section
10.02 and must make the periodic certifications to the IRS described in section
10.03 of this Agreement. The responsible officer of QI must be an officer of
QI with sufficient authority to fulfill the
duties of a responsible officer described
in this section 10. 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 review procedures under section 10.07 of this Agreement. References
in this section 10.02 to the responsible
officer include a responsible officer’s
designee, where appropriate.
(A) Compliance Program. The
responsible officer must establish a program for QI to comply with the requirements of this Agreement that includes the
following—
(1) Written Policies and Procedures.
The responsible officer must ensure the
drafting and updating, as necessary, of
written policies and procedures sufficient
for QI to satisfy the documentation, withholding, reporting, and other obligations
of this Agreement, including, with respect
to QI that is acting as a QDD, satisfying
its QDD tax liability. Such written policies and procedures must include a process for employees of QI to raise issues to
the responsible officer (or the responsible
officer’s designee) that concern QI’s compliance with this Agreement.
(2) Training. The responsible officer
must communicate such policies and procedures to any line of business of QI that
is responsible for obtaining, reviewing,
and retaining a record of documentation
under the requirements of section 5 of this
Agreement; making payments subject to
withholding under section 3 of this Agreement; reporting payments and accounts
as required under sections 7 and 8 of this
Agreement; or entering into potential section 871(m) transactions, in the case of QI
that is acting as a QDD.
(3) Systems. The responsible officer
must ensure that systems and processes
are in place that will allow QI to fulfill
its obligations under this Agreement. For
example, in order to fulfill QI’s obligations to report on Forms 1042-S, 1099,

December 27, 2022

and 8966 under section 8 of this Agreement, QI must establish systems for documenting account holders and for recording
the information with respect to each such
account that QI is required to report under
that section.
(4) Monitoring of Business Changes.
The responsible officer must monitor
business practices and arrangements that
affect QI’s compliance with this Agreement, including, for example, QI’s acquisition of lines of businesses or accounts
that give rise to documentation, withholding, or reporting obligations under this
Agreement.
(5) QDD Tax Liability Determinations. If QI is (or has a branch that is)
acting as a QDD, the responsible officer
must ensure that each QDD has appropriate systems in place to make the necessary
determinations and calculations to identify section 871(m) transactions, potential
section 871(m) transactions, the amount
of dividends received in its QDD equity
derivatives dealer capacity and the section 881 taxes paid thereon, its net delta
exposure, the dividend amount per share,
the stock owned by the QDD included in
its net delta exposure long position, its
long position, its short position, its section
871(m) amount and the section 881 taxes
paid thereon, its QDD tax liability amount,
and the amount of dividend equivalent
payments made by the QDD, as well as
any other necessary information. In the
case of a QDD that is a partnership or a
branch of a partnership, instead of determining the section 881 taxes, the partnership must have appropriate systems to
determine the section 3.09 amounts on a
gross basis and the chapter 3 and 4 withholding required with respect to any of its
partners with respect to those amounts (as
well as any other amounts required to be
determined under section 7.01(C) of this
Agreement). In addition, the responsible officer must ensure that the QDD has
appropriate systems in place to determine
whether a transaction is as a principal or
non-principal, whether a transaction is in
an equity derivatives dealer or non-equity derivatives dealer capacity, whether
the transaction exists for federal income
tax purposes, whether the transaction
is owned by the QDD, and whether the
transaction is effectively connected with
the conduct of a trade or business in the

December 27, 2022

United States. This includes appropriate systems to, where required, calculate
the delta for a potential section 871(m)
transaction, perform the substantial equivalence test described in §1.871-15(h),
calculate the amount of a dividend equivalent, determine any QDD tax liability
amount (and each part thereof) and its
timing, and determine what payments are
received or made with respect to potential
section 871(m) transactions and underlying securities as a principal and whether
in its equity derivatives dealer capacity or
non-equity derivatives dealer capacity and
by which home office or branch that is acting as a QDD. The systems must also take
into account information received pursuant to §1.871-15(p).
(6) Periodic Review. Unless QI
receives a waiver (the requirements of
which are described in section 10.07(B)
of this Agreement), the responsible officer must designate a reviewer that meets
the qualifications described in section
10.04(A) of this Agreement to perform
the periodic review as described in section 10.05 of this Agreement, to the extent
required.
(7) Certification of Internal Controls. The responsible officer must make
the periodic certification as described in
section 10.03 of this Agreement, including ensuring that corrective actions are
taken in response to any material failures
(as defined in section 10.03(B) of this
Agreement).
(B) Consolidated Compliance Program. The IRS, in its discretion, may permit a consolidated compliance program
that includes two or more QIs that are
members of a group of entities under common ownership when the QIs: (i) operate
under a uniform compliance program for
purposes of this Agreement; (ii) share
practices, procedures, and systems subject
to uniform monitoring and control; and
(iii) are subject to a consolidated periodic
review that includes a review of internal
controls and testing of transactions relevant to this Agreement with respect to
each QI in the consolidated compliance
program. Each QI that is a member of a
consolidated compliance program (CCG
member) must designate a Compliance
QI to act on its behalf, and the responsible
officer of the Compliance QI must identify
itself as such when making its periodic

626

certification and must comply with the
identification, certification of internal
controls, and periodic review requirements for the QI consolidated compliance
program as the IRS may prescribe. Each
CCG member must further designate the
Compliance QI as its agent for executing
a Form 872, Consent to Extend the Time to
Assess Tax, with respect to any assessment
of tax relevant to this Agreement for the
period covered by the consolidated compliance program. The Compliance QI must
agree to execute any Form 872 on behalf
of all of its CCG members and be jointly
and severally liable for the obligations and
liabilities of any CCG member relating to
this Agreement for the period covered by
the consolidated compliance program.
For purposes of this section 10.02(B),
a Compliance QI is required to provide
this agreement and the designations from
its CCG members in connection with a
request by the IRS Foreign Intermediaries
Program for an executed Form 872 from
the Compliance QI. QIs that want to operate a consolidated compliance program
must contact the IRS Foreign Intermediaries Program for approval.
10.03. Certification of Internal Controls by Responsible Officer. A QI’s
responsible officer must make the certification described in either Part II.A (Certification of Effective Internal Controls)
or Part II.B (Qualified Certification)
of Appendix I to this Agreement and
must 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 QI to the IRS. If the responsible
officer has identified a material failure
that QI has not corrected as of the date
of the certification or an event of default
applicable to the certification period,
the responsible officer cannot make the
certification in Part II.A of Appendix I
(Certification of Effective Internal Controls) and must make the certification in
Part II.B of Appendix I (Qualified Certification) and attach the remediation
plan described in Part II.B.3 of Appendix I. Regardless of which certification is
made, QI must provide with its certification a copy of the periodic review report
that is described in section 10.05 of this
Agreement unless QI applies for a waiver

Bulletin No. 2022–52

of its review requirement under section
10.07(B) of this Agreement.
For a QI that uses the third year of the
certification period for its periodic review,
the certification is due on or before December 31 of the year following the certification period. For a QI that uses the first or
second year of the certification period for
its periodic review or a QI that obtains a
waiver of the periodic review requirement, the certification is due on or before
July 1 of the 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 are every
three calendar years following the initial
certification period (including renewals of
this Agreement).
The certification of internal controls
required by this section 10.03 applies
only to the internal controls related to QI’s
compliance with this Agreement and its
FATCA requirements as a participating
FFI, registered deemed-compliant FFI,
or registered deemed-compliant Model
1 IGA FFI and, in the case of a direct
reporting NFFE, its requirements under
§1.1472-1(c)(3), with respect to accounts
for which it acts as a QI, and does not
relate to any other obligations or requirements. The responsible officer may rely
on any reasonable procedure, process,
review, or certification that enables the
responsible officer to make the certification described in this section 10.03. If the
responsible officer relies on an internal or
external review for this purpose (i.e., for
purposes of determining whether QI has
effective internal controls), the internal or
external reviewer must be independent, as
described in section 10.04 of this Agreement. The responsible officer must document the procedures, processes, reviews,
or certifications relied upon in making the
certification. QI’s responsible officer (or
the responsible officer of its Compliance
QI) must make the certifications of compliance in such manner as the IRS may
prescribe.
(A) PAIs and Partnership or Trust to
which QI Applies the Agency Option.
Unless QI has received a waiver of the
periodic review requirement, any PAI
with which QI has an agreement and any
partnership or trust to which QI applies

Bulletin No. 2022–52

the agency option must provide its documentation and other information to QI
for inclusion in QI’s periodic review or
conduct an independent periodic review
and provide a written certification to QI
regarding its compliance with the requirements of the PAI or agency agreement.
Such certification must be available to the
IRS upon a request made as part of the
review described in section 10.08 of this
Agreement (with a certified translation
into English if the certification is not in
English).
(B) Material Failures.
(1) Material Failures Defined. A
material failure is generally a failure of QI
to fulfill the requirements of this Agreement or its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant
Model 1 IGA FFI. For purposes of the certifications described in Parts II.A and B of
Appendix I to this Agreement, a material
failure is limited to the following:
(i) QI’s establishing of, for financial
statement purposes, a tax reserve or
provision for a potential future tax
liability related to QI’s failure to comply with this Agreement, including its
FATCA requirements as a participating
FFI, registered deemed-compliant FFI,
or registered deemed-compliant Model
1 IGA FFI, and with respect to QI that
is acting as a QDD, failure to satisfy
its QDD tax liability and its obligations
pursuant to section 871(m) and the regulations under that section.
(ii) QI’s failure to establish written policies, procedures, or systems sufficient
for the relevant personnel of QI to take
actions consistent with QI’s obligations under this Agreement, or if QI is
acting as a QDD, its obligations as a
QDD under this Agreement or pursuant
to section 871(m) and the regulations
under that section.
(iii) A criminal or civil penalty or sanction imposed on QI (or any branch or
office thereof) by a regulator or other
governmental authority or agency with
oversight over QI’s compliance with
AML/KYC procedures to which QI (or
any branch or office thereof) is subject
and that is imposed due to QI’s failure to properly identify account holders under the requirements of those
procedures.

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(iv) A finding (including a finding noted
in the periodic review report described
in section 10.06 of this Agreement)
for one or more years covered by this
Agreement that QI failed to—
(a) Withhold an amount that QI was
required to withhold under chapter 3 or 4 or under section 3406
as required under section 3 of this
Agreement or, if QI is acting as a
QDD, failing to timely pay its QDD
tax liability;
(b) Provide information sufficient
for another withholding agent to
perform withholding and reporting to the extent required when QI
does not assume primary chapters 3
and 4 withholding responsibility or
primary Form 1099 reporting and
backup withholding responsibility;
(c) Provide allocation information as
described in section 6.03(D) of this
Agreement (regarding U.S. non-exempt recipient account holders) by
January 15 as required by that section when QI applies the alternative
withholding rate pool procedures;
(d) Make deposits in the time and
manner required by section 3.08 of
this Agreement or make adequate
deposits to satisfy its withholding
obligations, or, if QI is acting as a
QDD, timely satisfy its QDD tax
liability, taking into account the
procedures under section 9 of this
Agreement;
(e) Report or report accurately on
Forms 1099 as required under section 8.06 of this Agreement or provide information to the payor to the
extent QI does not assume primary
Form 1099 reporting and backup
withholding responsibilities;
(f) Report or report accurately on
Forms 1042 and 1042-S under sections 7 and 8 of this Agreement;
(g) Report or report accurately on
Form 8966 under sections 8.04 and
8.05 of this Agreement;
(h) Withhold an amount required
to be withheld or report accurately
with respect to U.S. source substitute dividend payments or make
timely and adequate deposits of tax
due with respect to such payments
for which QI is a QSL and acts as a
dealer or intermediary;

December 27, 2022

(i) Withhold an amount that QI was
required to withhold on a payment
of an amount realized from the sale
of a PTP interest or on a PTP distribution as required under section
3 of this Agreement or provide
correct information to a withholding agent or broker when QI does
not assume primary withholding
responsibility for either payment
under section 3.02 of this Agreement; or
(j) Comply with the requirements
of sections 5.01(A) and 8.07 of this
Agreement with respect to one or
more account holders that are partners holding PTP interests (including, for purposes of section 8.07
of this Agreement, account holders
of another intermediary when QI
acts as an agent for meeting these
requirements).
(2) Limitations on Material Failures.
A failure described in section 10.03(B)(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 of QI to avoid the requirements of this Agreement with respect to
one or more account holders of QI or was
an error attributable to a failure of QI to
establish or implement internal controls
necessary for QI to meet the requirements
of this Agreement. Regardless of these
limitations for certification purposes, QI is
required to correct a failure to withhold or
deposit tax under section 3 of this Agreement, or to report under section 7 or 8 of
this Agreement, or, for a QI that is acting
as a QDD, to timely pay its QDD tax liability and timely file the appropriate return
(or amended return).
Sec. 10.04. Periodic Review Absent
Waiver. Unless the QI receives a waiver
(the requirements of which are described
in section 10.07(B) of this Agreement),
when QI provides the certification
described in section 10.03 of this Agreement, QI must also provide certain factual information regarding its accounts,
withholdable payments, amounts subject
to chapter 3 withholding and withholding
under sections 1446(a) and (f), and, if QI
is acting as a QDD, section 871(m) transactions, potential section 871(m) transactions, and its QDD tax liability based
on the results of a periodic review. The

December 27, 2022

factual information requested is included
in Appendix I to this Agreement.
(A) Independent Reviewer. The
periodic review may be performed by
an internal reviewer (such as an internal
auditor) that is an employee of QI or an
employee of an affiliate of QI (including
an employee of a Compliance QI in the
case of a consolidated compliance program) (“internal reviewer”), or a certified
public accountant, attorney, or third-party
consultant (“external reviewer”), or any
combination thereof.
(1) Internal Reviewer. QI may designate an internal reviewer to perform
the periodic review (or a portion of the
periodic review) only when the internal reviewer is competent with respect
to the requirements of this Agreement.
The internal reviewer must also be able
to report findings that reflect the independent judgment of the reviewer. The
internal reviewer must not be reviewing
its own work, procedures, or results (e.g.,
the internal reviewer, in reviewing QI’s
documentation cannot be part of the team
primarily responsible for collecting and
validating documentation). The results
of the periodic review and the internal
reviewer’s reporting of such results to the
responsible officer cannot influence or
affect the compensation, bonus, employment status, or employee review of the
internal reviewer. The IRS has the right
to request the performance of the periodic review by an alternative reviewer
if the IRS, in its sole discretion, reasonably believes that the reviewer selected
by QI was not independent, as described
in this Agreement, or did not perform
an effective periodic review under this
Agreement.
In the case of a consolidated compliance program, the Compliance QI may
designate an internal reviewer to perform
the consolidated periodic review (or a portion of the consolidated periodic review).
See section 10.02(B) of this Agreement.
The internal reviewer of the Compliance
QI must meet the requirements of this section with respect to both the Compliance
QI and each QI that is a member of the
consolidated compliance program.
If QI designates an internal reviewer
that is an employee of an affiliate of QI but
is not part of a consolidated compliance
program, QI must ensure that the internal

628

reviewer has access to all necessary information in order to complete the review.
In addition, QI must permit the IRS to
communicate directly with such internal
reviewer.
(2) External Reviewer. QI may engage
an external reviewer 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 assisting
clients in determining such compliance)
and that is sufficiently independent of the
QI to conduct the review objectively. For
this purpose, an external reviewer must
(as a minimum) apply the standards of
independence that would otherwise apply
to its engagement to conduct the periodic review (such as the standards for an
agreed-upon procedures engagement by a
certified public accountant). The external
reviewer must be in good standing with
and comply with any applicable professional standards for maintaining its license
as an accountant or attorney (or other
third-party consultant that has similar
professional standards or requirements).
The external reviewer is not required to
make an attestation or render an opinion regarding QI’s compliance with this
Agreement or QI’s compliance with its
FATCA requirements as a participating
FFI, registered deemed-compliant FFI,
or registered deemed-compliant Model 1
IGA FFI, but the reviewer must be able
to perform the periodic review as specified in section 10.05 of this Agreement.
QI must permit the external reviewer to
have access to all relevant records of QI
for purposes of performing the review,
including information regarding specific
account holders. Additionally, the engagement between the external reviewer and
QI must impose no restrictions on QI’s
ability to provide the results of the review
to the IRS. However, the external reviewer
is not required to divulge the identity of
QI’s account holders to the IRS, except
as otherwise provided under QI’s FATCA
requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA
FFI. QI must permit the IRS to communicate directly with the external reviewer,
and any legal prohibitions that prevent the

Bulletin No. 2022–52

IRS from communicating directly with the
reviewer must be waived.
Sec. 10.05. Scope and Timing of
Review. The responsible officer of QI (or
of the Compliance QI) must require the
reviewer to test accounts related to QI’s
documentation, withholding, reporting,
and other obligations under this Agreement, including its requirements related
to withholding and reporting under sections 1446(a) and (f), its QDD tax liability
if QI is acting as a QDD, and its FATCA
requirements as a participating FFI, registered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI for
accounts for which it is acting as a QI, and
to identify deficiencies in meeting these
obligations. Any PAI with which QI has
an agreement and any partnership or trust
to which QI applies the agency option
must provide the information necessary
for QI to test accounts and transactions of
such entity as part of QI’s periodic review
unless such entity conducts its own periodic review and provides QI with the
report documenting the results of such
review as described in section 10.06 of this
Agreement. Unless otherwise approved by
the IRS, the review must include the steps
described in section 10.05(A) through (E)
of this Agreement.
QI is required to arrange for the performance of one review for the certification period to evaluate QI’s documentation, withholding, and reporting
practices. If QI is acting as a QDD, this
review should also include a review of
its determination as to whether transactions are section 871(m) transactions,
its computations and determinations of
dividend equivalent amounts, dividends
and taxes paid thereon, whether transactions are in its equity derivatives dealer
capacity, net delta exposure, its section
871(m) amount, and its calculation of its
QDD tax liability, as well as any other
amounts required to be included on the
reconciliation schedule. The review may
be conducted for any calendar year covered by the certification period. However, all results of the review must relate
to one calendar year. QI may conduct a
review for a particular calendar year if,
on the due date for reporting the factual information relating to the periodic
review (provided in section 10.04 of this
Agreement), there are 15 or more months

Bulletin No. 2022–52

available on the period for assessment
under section 6501(a) of the calendar
year for which the review is to be conducted or the QI submits, upon request, a
Form 872, Consent to Extend the Time to
Assess Tax, that will satisfy the 15-month
requirement. The Form 872 must be
mailed to the IRS at the address provided
in section 12.06 of this Agreement.
QI may use a sample to test accounts
if there are more than 60 accounts to
review. If QI has fewer than 60 accounts,
it must review all accounts and cannot use
a sample to test accounts. To the extent
applicable, the reviewer must separately
review its QI activities (when not acting
in its QDD capacity) and QDD activities. The reviewer is required to record its
sampling procedures and to maintain the
ability to reconstruct the sample. Further,
the review is not required to include statistical sampling procedures for testing
transactions, but the reviewer must document its methodology for sampling determinations. A safe harbor methodology and
additional information on the use of statistical sampling is provided in Appendix II
to this Agreement.
If the reviewer determines that underwithholding has occurred, QI shall report
and pay any amount due. QI must also
notify the IRS Foreign Intermediaries Program in accordance with section 12.06 of
this Agreement if the underwithholding is
discovered in the review. See Appendix II
to this Agreement for information required
to be provided when reporting underwithholding and information regarding any
projection of underwithholding determined when using a sampling method.
(A) Documentation. The reviewer
must—
(1) Review QI’s accounts, to ensure
that QI obtained documentation that
meets the requirements described in sections 5.01 through 5.09 of this Agreement
with respect to payments subject to withholding under chapter 3 (including when
attributable to PTP distributions);
(2) Review QI’s accounts for which
treaty benefits are claimed to ensure that
QI obtained the treaty statements and limitation on benefits information required
by section 5.03(B) of this Agreement for
entity account holders;
(3) Review information contained in
account holder files to determine if the

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documentation validity standards of section 5.10 of this Agreement have been
met for a QI to rely on documentation.
For example, the reviewer must verify
that changes in account holder information (e.g., a change of an account holder’s foreign address to a U.S. address,
a change of account holder status from
foreign to U.S., or a change in an entity’s
chapter 4 status from participating FFI to
non-participating FFI) are being conveyed
by QI to QI’s withholding agents and
are otherwise being taken into account
by the QI for determining its reliance on
documentation;
(4) Review the accounts for which
QI is acting as a QI to ensure that QI 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 determining the status of
account holders for purposes of chapter 4
or an applicable IGA;
(5) Review accounts held by U.S.
non-exempt recipient account holders, to
determine if QI obtained Forms W-9, and,
if QI does not assume primary Form 1099
reporting and backup withholding responsibility, that QI transmitted those forms to
a withholding agent when required under
this Agreement;
(6) Review accounts to which QI
makes payments of PTP distributions subject to withholding under section 1446(a)
to determine whether QI has documented
the status of the account holders under the
requirements described in sections 5.01
through 5.09 of this Agreement applicable
to those payments (including documenting
partners of account holders that are foreign partnerships (other than PTPs), documenting grantors and owners of grantor
trusts, and requesting the U.S. TINs of
account holders receiving these payments
under section 5.01(A) of this Agreement);
(7) Review accounts to which QI
makes payments of amounts realized to
determine whether QI has documented
the status of account holders under the
requirements described in sections 5.01
through 5.09 of this Agreement applicable
to those payments (including documenting partners of account holders that are
foreign partnerships certifying to modified
amounts realized, documenting grantors

December 27, 2022

and owners of grantor trusts, and requesting the U.S. TINs of account holders
receiving these payments under section
5.01(A) of this Agreement);
(8) For a QI that is a QDD, review
accounts that received a reportable payment for which QI is acting as a QDD to
determine whether QI has documented
the status of account holders under the
requirements described in sections 5.01
through 5.09 of this Agreement;
(9) For a QI that assumes primary chapters 3 and 4 withholding responsibility for
payments of U.S. source substitute interest, review accounts of persons to which
QI pays the interest to determine whether
QI has documented the status of such persons under the requirements described in
sections 5.01 through 5.09 of this Agreement; and
(10) For QI that is a QSL or that otherwise assumes primary withholding
responsibility as an intermediary for U.S.
source substitute dividend payments,
review accounts to which QI pays U.S.
source substitute dividends to determine
whether QI has documented the status
of the account holders under the requirements described in sections 5.01 through
5.09 of this Agreement.
(B) Withholding Rate Pools. The
reviewer must—
(1) Perform checks using account
holders assigned to each withholding rate
pool, and cross check that assignment
against the documentation provided by the
account holder (or the presumption rule
applied under section 5.13 of this Agreement), the type of income earned, and the
withholding rate applied to the pool, taking into account the results of the documentation review under section 10.05(A)
of this Agreement and the appropriate
withholding rate to be applied to a treaty
claim (or withholding rate otherwise
applicable to the income paid), to determine any underwithholding. For purposes
of these checks, at a minimum the last
payment of each income type paid to the
account for the year (by reference to the
income classifications on Form 1042-S
as compared (for accuracy) to the income
reported in QI’s account statements for the
account holder) may be used.
(2) Determine that appropriate withholding rate pools are established for
U.S. non-exempt recipients that received

December 27, 2022

reportable amounts, and if QI is using the
procedure for U.S. non-exempt recipients
described in section 6.03(D) of this Agreement, verify that QI is providing sufficient
and timely information to withholding
agents to allocate reportable amounts to
U.S. non-exempt recipients; and
(3) With respect to a partnership or
trust described in section 4.05 of this
Agreement, determine whether the partnership or trust has a chapter 4 status
permitted under section 4.05(A) of this
Agreement and perform test checks using
account holder documentation for the
selected partners, beneficiaries, or owners and records of each type of reportable
amount paid by QI to the entity to determine whether the highest rate of withholding applicable to each type of reportable
amount is reflected in QI’s withholding
rate pools. Determine any underwithholding resulting from either of these review
steps.
(C) Withholding Responsibilities.
Taking into account the results of the documentation review under sections 5.10(A)
of this Agreement, the appropriate withholding rate applied to a treaty claim (or
otherwise applicable to the income paid),
and the presumption rules (when applicable) under 5.13 of this Agreement, the
reviewer must determine any underwithholding by applying the review steps
below—
(1) To the extent QI has assumed primary chapters 3 and 4 withholding responsibilities, perform test checks, using recalcitrant account holders (when applicable)
and nonparticipating FFIs, to verify that
QI withheld the proper amounts under
chapter 4;
(2) To the extent QI has assumed primary chapters 3 and 4 withholding responsibility, perform test checks, using foreign
account holders for which no withholding
is required under chapter 4 based on the
payee’s chapter 4 status, to verify that QI
withheld the proper amounts under chapter 3 and properly applied the exemptions
from chapter 4 withholding;
(3) To the extent QI has not assumed
primary chapters 3 and 4 withholding
responsibility, perform test checks to
verify that QI has fulfilled its withholding responsibilities under section 3.02 of
this Agreement (including any required
withholding by QI if QI provided to its

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withholding agent any incorrect withholding rate pools by comparison to the correct
withholding rates for payments associated
with a withholding rate pool);
(4) To the extent QI has assumed primary
Form 1099 reporting and backup withholding responsibility for account holders
receiving reportable payments from QI,
perform test checks using U.S. non-exempt
recipient account holders to verify that QI
backup withheld when required;
(5) To the extent QI has not assumed
primary Form 1099 reporting and backup
withholding responsibility for account
holders receiving reportable payments,
perform test checks using U.S. non-exempt recipient account holders to verify
that QI fulfilled its backup withholding responsibilities under sections 3.04
through 3.06 of this Agreement;
(6) To the extent QI has assumed primary withholding responsibility on payments of PTP distributions, perform test
checks of payments to accounts to which
QI pays PTP distributions, to verify QI
withheld the proper amounts under chapters 3 and 4, and sections 1446(a) and (f)
on the distributions, including by determining the amounts subject to withholding by reference to the qualified notice
issued for a distribution or applying the
default rule of §1.1446-4(d)(1);
(7) To the extent QI has assumed
primary withholding responsibility on
amounts realized from sales of PTP interests, perform test checks of payments to
accounts to which QI pays amounts realized, to verify QI withheld the proper
amounts for purposes of section 1446(f),
including that QI applied the “10-percent exception” of §1.1446(f)-4(b)(3) to
exempt any amounts from withholding
only as permitted under that section;
(8) To the extent QI has not assumed
primary withholding responsibility on
payments of PTP distributions or amounts
realized from sales of PTP interests and
provides withholding rate pools to a withholding agent, perform test checks to
determine whether QI has satisfied any
withholding required under section 3.02
of this Agreement by comparison to the
correct withholding rates for payments
associated with a withholding rate pool;
(9) To the extent that QI acts as a disclosing QI, perform test checks to compare the withholding reported on Forms

Bulletin No. 2022–52

1042-S issued to QI and QI’s direct
account holders (other than QIs or NQIs)
to the correct withholding to verify that QI
withheld to the extent required under section 3.02 of this Agreement;
(10) To the extent that QI is acting as
a QDD, perform test checks to determine
that QI withheld when required on payments that it made with respect to potential section 871(m) transactions;
(11) To the extent that QI acts as a QSL
or otherwise assumes primary chapter
3 and 4 withholding responsibility as an
intermediary on payments of U.S. source
substitute dividends, perform test checks
to determine that QI withheld when
required on such payments and determine whether QI has a policy in effect to
assume primary withholding responsibilities on all such payments;
(12) To the extent that QI assumes
chapter 3 and 4 withholding responsibility on payments of U.S. source substitute
interest, perform test checks to determine that QI withheld when required on
such payments and determine whether QI
has a policy in effect to assume primary
withholding responsibilities on all such
payments;
(13) To the extent that QI assumes primary withholding responsibility for payments to a partnership or trust described
in section 4.05 of this Agreement, perform the review steps described in section
10.05(b)(3) of this Agreement (as applied
to QI’s own withholding rather than QI’s
withholding rate pools); and
(14) Perform test checks to verify that
amounts withheld by QI were timely
deposited in accordance with section 3.08
of this Agreement.
(D) Return Filing and Information
Reporting. The reviewer must—
(1) Obtain copies of original and
amended Forms 1042 and 945, and any
schedules, statements, or attachments
required to be filed with those forms,
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 copies of Forms 1042-S
that withholding agents have provided
QI to determine whether QI properly
reported the amount of taxes withheld
by other withholding agents on Form
1042;

Bulletin No. 2022–52

(ii) Reviewing account statements
and correspondence from withholding
agents;
(iii) Determining that adjustments to
the amount of tax shown on Form 1042
(and any claim by QI for refund or
credit) properly reflect the adjustments
to withholding made by QI using the
reimbursement or set off procedures
under section 9.02 of this Agreement and are supported by sufficient
documentation;
(iv) Reconciling amounts shown on
Forms 1042 with amounts shown on
Form 1042-S (including the amount of
taxes reported as withheld);
(v) If QI is acting as a QDD, reviewing
the reconciliation schedule described in
section 7.01(C) of this Agreement and
any information used to prepare such
schedule or compute its QDD tax liability, including information received
pursuant to §1.871-15(p), reviewing
the amounts required to determine its
section 871(m) amounts and its QDD
tax liability over the applicable period,
and reviewing such information to
determine whether the section 871(m)
amounts and QDD tax liability have
been properly calculated;
(vi) If QI is acting as a QDD, reviewing amounts shown on Forms 1042
(including all required Schedules Q)
and Forms 1042-S, as well as any
information received pursuant to
§1.871-15(p), to determine whether
the QDD properly took the information
into account (e.g., to calculate its QDD
tax liability);
(vii) To the extent QI acts as a QSL,
determine that QI properly reported the
gross amount of the U.S. source payments of substitute dividends to which
the recipient would have otherwise
been entitled before consideration of
any withholding tax obligations; the
amount of tax withheld by the withholding agent; and the amount of tax
withheld by other withholding agents
in the series of securities lending or
sale-repurchase transaction;
(viii) In the case of collective credits
or refunds, reviewing the statements
attached to amended Forms 1042 filed
to claim a collective refund, determine
whether those forms are accurate,
and—

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(a) Determine the causes of any
overwithholding
reported
and
ensure QI did not issue Forms
1042-S to persons whom it included
as part of its collective credit or
refund;
(b) Determine that QI repaid the
appropriate account holders and that
the amount of the claim is accurate
and supported by adequate documentation; and
(c) Determine that QI did not
include payments made to a partnership or trust described in section
4.05 of this Agreement or a payment
of an amount subject to withholding
under section 1446(f) or on a PTP
distribution.
(2) Obtain copies of original and corrected Forms 1042-S and Forms 1099
filed by QI, together with the work papers
used to prepare those forms, and determine whether the amounts reported on
those forms are accurate by—
(i) Reconciling payments and tax
reported on Forms 1042-S received
from withholding agents with amounts
(including characterization of income)
and taxes reported by QI as withheld
on Forms 1042-S and determining the
reason(s) for any variance;
(ii) Reviewing the Forms W-8IMY and
the associated withholding statements
that QI has provided withholding
agents;
(iii) Reviewing account statements
issued by QI to account holders;
(iv) Determining, in the case in which
QI utilized the reimbursement or set-off
procedure, that QI satisfied the requirements of section 9.02 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 (or, for QI that is
a reporting Model 1 FFI, any analogous
forms used for reporting account information pursuant to the applicable Model 1
IGA) of accounts for which QI is acting as
a QI, and determine whether the amounts
of income and other information reported
on Forms 8966 are accurate by—
(i) Reviewing U.S. accounts (or U.S.
reportable accounts for which QI acts
as a QI) to determine that such accounts
were reported in accordance with QI’s

December 27, 2022

FATCA requirements as a participating
FFI, registered deemed-compliant FFI,
or registered deemed-compliant Model
1 IGA FFI;
(ii) If QI is an NFFE acting as a QI on
behalf of persons other than its shareholders, confirming that if QI is acting on behalf of a passive NFFE with
substantial U.S. owners, withholdable
payments made to the passive NFFE
and the information regarding its substantial U.S. owners were reported;
(iii) Confirming with respect to any
nonqualified intermediary or flowthrough entity 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 that such
substantial U.S. owners were reported
to the extent required under section
8.04(B) of this Agreement;
(iv) Reviewing the documentation provided by a PAI or a partnership or trust
to which QI applied the agency option
to determine that QI reported on Form
8966 to the extent required under section 4 of this Agreement; and
(v) Reviewing work papers used to prepare these forms.
(4) Obtain records of any reportable
payments paid by QI to its U.S. account
holders to identify any U.S. account holders for which QI failed to file an applicable Form 1099 (to the extent required)
or report on a Form 8966 (or analogous
reporting under an applicable Model 1
IGA).
(5) If QI is acting as a QDD, review
accounts designated as accounts for which
QI acted as a QDD to determine whether
QI is acting as a QDD with respect to
all potential section 871(m) transactions
and underlying securities for which it
is required to act as a QDD and not any
other transactions and whether the section
871(m) amount includes the amounts in
its equity derivatives dealer capacity and
not amounts in its non-equity derivatives
dealer capacity.
(6) Obtain records of account holders
to which QI paid a PTP distribution or an
amount realized from a sale of a PTP interest to verify that QI properly provided the
statements or other information required
under section 8.07 of this Agreement with
respect to the account holders.

December 27, 2022

(7) Determine whether QI has any
agreements in place under section 8.02(M)
of this Agreement to report on Form
1042-S amounts realized paid to an NQI’s
account holders and, if so, verify that QI
reported on Form 1042-S as agreed or otherwise has a written agreement in place
with another withholding agent to report
these amounts.
(E) Significant Change in Circumstances. The reviewer must verify that
in the course of the review it has not discovered any significant change in circumstances, as described in section 11.04(A),
(D), or (E) of this Agreement.
Sec. 10.06 Periodic Review Report.
(A) In General. The results of the
periodic review must be documented in
a written report addressed to the responsible officer of QI and submitted to the
IRS with the certification described in
section 10.03 of this Agreement (with a
certified translation into English if the
report is not in English). The report must
describe the scope of the review and the
actions performed to satisfy each requirement of section 10.05(A) through (E),
including the methodology for sampling
determinations. The report 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. The periodic review
report should form the basis for the factual information provided by QI that is set
forth in Appendix I.
In addition to the findings of section
10.05 of this Agreement, the periodic
review report should also include details
regarding the documentation and tax
deposit and payment failures identified
by the reviewer but then cured before
the periodic review report is finalized.
While the curing of inadequate documentation is permissible, the factual information reported (as set forth in Appendix I)
should report the results of the review as
it was performed and should not reflect
the results after curing (unless stated otherwise). Any curing process should not
delay certification of internal controls or
factual information required in Appendix I
to this Agreement. To the extent necessary,
the periodic review report should include
the dates on (or time period during) which
curative documentation was received
for accounts with respect to which the

632

reviewer determined that underwithholding had occurred, the number of accounts
for which curative documentation was
obtained and a revised calculation of the
underwithholding or additional backup
withholding.
(B) Periodic Review Report for
QDDs. If QI is acting as a QDD, the
periodic review report should also
include the number of accounts that
were not correctly treated as (i) principal accounts (except accounts that are
effectively connected with the conduct
or a trade or business within the United
States within the meaning of section
864), (ii) non-principal accounts, (iii)
principal accounts that are effectively
connected with the conduct or a trade or
business within the United States within
the meaning of section 864, (iv) equity
derivatives dealer accounts, and (v)
non-equity derivatives dealer accounts.
The report should also include any other
issues related to the QDD tax liability
(e.g., incorrect determination of whether
an account is a potential section 871(m)
transaction or a section 871(m) transaction, the dividends received in the QDD’s
equity derivatives dealer capacity and
the taxes paid on those dividends, the
net delta exposure, the section 871(m)
amount and the taxes on the section
871(m) amount, the amount of dividend
equivalent payments made, or any other
amounts subject to tax (or required to
compute the tax liability) under section
871(a) and 881 (including the QDD tax
liability)) for each QDD.
(C) PAI Certification and Partnership or Trust to which QI Applies the
Agency Option. Any PAI with which QI
has an agreement and any partnership or
trust to which QI applies the agency option
that does not provide its documentation
and other information to QI for inclusion
in QI’s periodic review described in section 10.04 of this Agreement, must conduct an independent periodic review in
accordance with the compliance procedures described in section 10.05 of this
Agreement. The performance results of
the periodic review must be documented
in a written report addressed to the responsible officer of QI and must be available
to the IRS upon request (with a certified
translation into English if the report is not
in English).

Bulletin No. 2022–52

(D) Retention of Report and Certifications. The report and certifications
described in this section 10.06 must be
retained by QI (or the Compliance QI) for
as long as this Agreement is in effect.
Sec. 10.07. Waiver of Periodic
Review Requirement.
(A) In General. A QI that is not acting
as a QDD and that is an FFI that meets
the requirements of section 10.07(B) may
apply for a waiver of the periodic review
requirement. Notwithstanding the prior
sentence, a QI that is acting as a QDD and
otherwise qualifies to apply for a waiver
of the periodic review requirement, may
do so for calendar year 2023 or 2024.
QI must request a waiver of the periodic
review requirement under this section
10.07 when the responsible officer makes
the certification described in section
10.03 of this Agreement. QI’s application
for such a waiver must be approved by
the IRS, and waiver applications are not
approved automatically. QI must apply
for a waiver for each certification period
for which a waiver is requested. If QI’s
request for a waiver of the periodic review
requirement is granted, such approval is
only to waive QI’s obligations under sections 10.04 and 10.05 of this Agreement,
and QI is still required to make the certification described in section 10.03 of this
Agreement. The waiver also does not preclude the IRS from requesting information
or conducting a correspondence review as
described in section 10.07 of this Agreement. QI must include the information of
any PAI with which QI has an agreement
and any partnership or trust to which QI
applies the agency option in its waiver
application which is set forth in Part III
of Appendix I to this Agreement. QI must
also provide the information set forth on
Appendix III to this Agreement for each
year of the certification period.
(B) Eligibility. QI is eligible to apply
for a waiver of the periodic review
requirement if it meets the following
requirements—
(1) QI must be an FFI and, for calendar
years after 2024, that is not also acting as
a QDD;
(2) QI is not part of a consolidated
compliance program;
(3) For each calendar year covered
by the certification period, the reportable
amounts received by QI do not exceed

Bulletin No. 2022–52

$5 million (including the amount of PTP
distributions subject to withholding under
chapter 3 or 4);
(4) QI timely filed its Forms 1042,
1042-S, 945, 1099, and 8966 (or the
reporting otherwise required under an
applicable IGA), as applicable, for all calendar years covered by the certification
period;
(5) QI made all periodic certifications
and reviews required by sections 10.02
and 10.03 of this Agreement as well as
all certifications required pursuant to QI’s
FATCA requirements as a participating
FFI, registered deemed-compliant FFI,
or registered deemed-compliant Model 1
IGA FFI; and
(C) Documentation Required with
Waiver Application. When applying
for a waiver under this section 10.07, QI
must include the information described
in Appendix I to this Agreement using
the most recent calendar year covered by
the certification period and reporting such
results without any curing or remediation.
(D) Approval. If QI’s request for a
waiver of the periodic review requirement
is approved, the IRS will notify QI. If QI
requests a waiver but such request is not
approved, QI will be granted a six-month
extension from the date of denial of the
waiver to complete the periodic review.
Such extension will not be granted if QI
has made the request for waiver in bad
faith.
Sec. 10.08. Periodic Review.
(A) In General. Based upon the certifications made by the responsible officer
and the disclosure of material failures, the
information reported on Forms 945, 1042,
1042-S, 1099, and 8966 filed with the IRS
during the certification period, or otherwise at the IRS’s discretion for compliance
purposes, the IRS may initiate requests of
QI under this section 10.08. The IRS may
preemptively request remediation or the
conduct of a limited periodic review earlier than the time period provided in this
section 10 if, based on the information
described above, the IRS identifies, in its
discretion, a presence of factors indicating
systemic or significant compliance failures by QI. The IRS may also request that
QI designate a replacement responsible
officer if QI’s responsible officer has not
complied with its responsibilities (including responding to requests by the IRS for

633

additional information) or the IRS has
information that indicates the responsible
officer may not be relied upon to comply
with its responsibilities.
(B) 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 QI
(or the Compliance QI) in writing and
request information about QI’s compliance with this Agreement or the compliance of a PAI or a partnership or trust
to which QI 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 employees of QI (and the Compliance QI), a PAI, or a partnership or trust
to which QI applied the agency option as
part of the IRS’s correspondence review.
QI is required to respond in a reasonable
time to any such requests.
(C) Additional Review Procedures.
In limited circumstances, the IRS may
direct QI (or the Compliance FFI) or any
PAI or partnership or trust to which QI
applies the agency option to perform additional, specified review procedures. The
IRS reserves the right to require QI (or the
Compliance QI) or a PAI, or a partnership
or trust to which QI applied the agency
option to engage an external reviewer to
perform the additional review procedures
regardless of whether such reviewer performed the periodic review. The IRS will
provide the responsible officer of QI with
a written plan describing the additional
review procedures and will provide a due
date of not more than 120 days for the QI
to provide to the IRS a report covering the
reviewer’s findings.
SECTION 11. EXPIRATION,
TERMINATION, MERGER AND
DEFAULT
Sec. 11.01. Term of Agreement. This
Agreement begins on the effective date
referenced in section 2.22 of this Agreement and expires on December 31, 2028,
unless terminated before that time under
section 11.02 of this Agreement. This

December 27, 2022

Agreement may be renewed for a further
term as provided in section 11.08 of this
Agreement.
Sec.
11.02.
Termination
of
Agreement.
(A) In General. This Agreement may
be terminated by either the IRS or QI
before the end of its term by delivery of
a notice of termination to the other party,
in accordance with section 12.06 of this
Agreement. The IRS, however, shall not
terminate this Agreement unless there
has been a significant change in circumstances, as defined in section 11.04 of this
Agreement, or an event of default has
occurred, as defined in section 11.06 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. In addition, the IRS may also
terminate this Agreement before the end
of its term if as a result of an amendment
in accordance with section 12.02 of this
Agreement, the QDD is no longer entitled to act as a QDD. The IRS shall not
terminate this Agreement for an event of
default if QI 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 QI that an event of
default has occurred and that the IRS
intends to terminate the Agreement unless
QI cures the default or establishes that
no event of default occurred. A notice of
termination sent by either party shall take
effect on the date specified in the notice,
and QI is required to notify its withholding agent of the date that its status as a QI
is terminated.
The termination of the Agreement
shall not affect any of QI’s reporting,
tax filing, withholding, depositing, or
payment responsibilities arising in the
calendar years for which this Agreement
was in effect and portion of the calendar
year in which termination is requested.
The IRS shall revoke QI’s QI-EIN within
a reasonable time after the reporting, tax
filing, and depositing requirements for
such years are satisfied. The termination of this Agreement is not intended
to affect any other federal income tax
consequences.
(B) Periodic Review and Final Certification after Termination of Agreement.

December 27, 2022

Upon termination of this Agreement, QI
must provide to the IRS, within six months
of the date of termination, the certification
described in section 10.03 of this Agreement covering the period from the end of
the most recent certification period (or, if
the first certification period has not ended,
the effective date of this Agreement) to the
date of termination. Additionally, QI must
submit a periodic review report that meets
the requirements of section 10.06 of this
Agreement with its final certification if
this Agreement is terminated in the final
year of QI’s certification period. QI may
request a waiver of the periodic review
requirement for this purpose if it is otherwise eligible for a waiver under section
10.07 of this Agreement. If a waiver is
not granted, QI must use one of the two
prior years of the certification period for
its periodic review. Regardless of whether
QI is required to submit a periodic review
report under this section 11.02(B), the
IRS may request that QI perform specified review procedures in accordance with
section 10.08(C) of this Agreement with
respect to QI’s final certification period.
See section 11.05(B) of this Agreement
for a case in which a QI terminating this
Agreement merges into or is acquired by
another QI.
Sec. 11.03. Loss of QDD Status. If QI
is acting as a QDD and the home office
or branch, as applicable, fails to qualify as
an eligible entity during the term of this
Agreement, the home office or branch
shall lose its QDD status immediately
upon the QDD failing to qualify as an eligible entity and as of that date can no longer act as a QDD. QI is required to notify
its withholding agent of the date that the
QDD failed to qualify as an eligible entity
and no longer was permitted to act as a
QDD. The QDD’s loss of QDD status
shall not affect any of QI’s QDD reporting, tax filing, withholding, depositing, or
payment responsibilities for the period QI
was acting as a QDD as provided in this
Agreement, including paying its QDD tax
liability.
Sec. 11.04. Significant Change in
Circumstances. For purposes of this
Agreement, a significant change in circumstances includes, but is not limited
to—
(A) An acquisition of all, or substantially all, of QI’s assets in any transaction

634

in which QI is not the surviving legal
entity;
(B) A change in U.S. federal law, or
applicable foreign law, that affects the
validity of any provision of this Agreement, materially affects the procedures
contained in this Agreement, or affects
QI’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 material change in the applicable know-your-customer rules and
procedures;
(E) A significant change in QI’s business practices that affects QI’s ability to
meet its obligations under this Agreement;
(F) If QI is an FFI, QI’s failure to maintain its status as a participating FFI, registered deemed-compliant FFI, or registered
deemed-compliant Model 1 IGA FFI;
(G) If QI is acting as a sponsoring entity
on behalf of a sponsored FFI or sponsored
direct reporting NFFE, if it fails to comply with the due diligence, withholding,
reporting, and compliance requirements
of a sponsoring entity; or
(H) If QI is acting as a QDD, the home
office or branch, as applicable, ceases to
qualify as an eligible entity, including as a
result of a change in its business or regulatory status (see section 11.03).
Sec. 11.05. Merger.
(A) In General. If a QI (predecessor
QI) merges with or is acquired by another
QI (successor QI), and the successor QI
assumes all the rights, debts, and obligations of the predecessor QI as it relates to
the predecessor QI’s QI agreement, the
predecessor QI must notify the IRS that
it intends to terminate this Agreement
before the end of its term by delivery of a
notice of termination and merger in accordance with section 12.06 of this Agreement. A notice of termination and merger
shall take effect on the date specified in
the notice, and QI is required to notify
its withholding agent of the date that its
status as a QI is terminated and designate
the successor QI to receive payments in its
capacity as a QI for any accounts previously covered by the predecessor QI’s QI
agreement.
The successor QI must ensure that all
reporting and tax filing obligations are fulfilled and any withholding is deposited in

Bulletin No. 2022–52

accordance with the procedures outlined in
Rev. Proc. 99-50, 1999-2 C.B. 757, when
applicable, that arose in the calendar years
and portion of the calendar year in which
termination is requested and for which
this Agreement was in effect (including
for Form 1042-S filed to report withholding under chapter 4). To the extent QI is
acting as a QDD, it must use the standard
procedure outlined in Rev. Proc. 99-50
and cannot use the alternative procedures.
See QI’s FATCA Requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant
Model 1 IGA FFI for the procedures, if
any, for reporting on Form 8966 in the
case of a merger or acquisition.
The IRS shall revoke the predecessor
QI’s QI-EIN within a reasonable time
after the reporting, tax filing, and depositing requirements for such years are satisfied. The termination of this Agreement
is not intended to affect any other federal
income tax consequences.
(B) Periodic Review and Certification after Merger. A predecessor QI that
is terminating its QI agreement and that
is required to submit a periodic review
report under section 11.02(B) of this
Agreement may satisfy this requirement
through a combined periodic review. A
combined periodic review for purposes of
this section 11.05(B) is a periodic review
that covers a calendar year that the predecessor QI is permitted to use under section 11.02(B) of this Agreement and that
includes accounts of both the predecessor
QI and successor QI in the population
of accounts for purposes of the review
steps of section 10.05 of this Agreement
covering documentation and withholding requirements. See Appendix II of this
Agreement for information on designing
a statistical sample for a combined periodic review. The certifications required
for both the predecessor QI and successor
QI for the period covered by the combined
review must include the factual information specific to each QI that is required
under Appendix I of this Agreement. A
predecessor QI may obtain a six-month
extension of the time to submit a final certification under section 11.02(B) of this
Agreement for purposes of this section
11.05(B). The request for an extension
must indicate that it is being made due
to the combined periodic review and be

Bulletin No. 2022–52

delivered to the IRS in accordance with
section 12.06 of this Agreement before
the time otherwise required for the final
certification.
Sec. 11.06. Event of Default. For
purposes of this Agreement, an event of
default occurs if QI fails to perform any
material duty or obligation required under
this Agreement and the responsible officer had actual knowledge or should have
known of 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) QI fails to implement adequate procedures, accounting systems, and internal
controls to ensure compliance with this
Agreement;
(B) QI underwithholds a material
amount of tax that QI is required to withhold under chapter 3, section 1446(a),
section 1446(f), or chapter 4, or backup
withhold under section 3406 and fails to
correct the underwithholding by filing an
amended Form 1042 or 945 reporting, and
paying, the appropriate tax;
(C) QI makes excessive refund claims;
(D) Documentation described in section 5 of this Agreement is lacking, incorrect, or unreliable for a significant number of direct account holders under the
requirements of section 5.01(A) of this
Agreement;
(E) QI files Forms 945, 1042, 1042-S,
1099, or 8966 that are materially incorrect
or fraudulent, or fails to comply materially with the requirements of section 8.07
of this Agreement with respect to account
holders that are partners holding PTP
interests (including account holders of
another intermediary when QI acts as an
agent for meeting these requirements);
(F) If QI is an FFI, QI fails to materially
comply with its FATCA requirements as a
participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI;
(G) If QI is a sponsoring entity, QI
fails to materially comply with the due
diligence, withholding, reporting, and
compliance requirements of a sponsoring
entity;
(H) QI fails to materially comply with
the requirements of a nonqualified intermediary under chapters 3 and 61, and sections 1446 and 3406 with respect to any
account for which QI does not act as a QI.

635

(I) QI fails to perform a periodic review
when required or document the findings of
such review in a written report;
(J) QI fails to cooperate with the IRS
on its compliance review described in section 10.08 of this Agreement;
(K) QI fails to inform the IRS of any
change in the applicable know-your-customer rules within 90 days of the change
becoming effective;
(L) QI fails to inform the IRS within
90 days of any significant change in
its business practices to the extent that
change affects QI’s obligations under this
Agreement;
(M) QI fails to inform the IRS of any
PAI of QI, as described in section 4 of this
Agreement;
(N) QI fails to cure a material failure
identified in the qualified certification
described in Part II.B of Appendix I to this
Agreement or identified by the IRS;
(O) QI makes any fraudulent statement
or a misrepresentation of material fact
with regard to this Agreement to the IRS,
a withholding agent, or QI’s reviewer;
(P) The IRS determines that QI’s
reviewer is not sufficiently independent,
as described in this Agreement, to adequately perform its review function, and
QI fails to arrange for a periodic review
conducted by a reviewer approved by the
IRS;
(Q) An intermediary with which QI
has a PAI agreement is in default with that
agreement and QI fails to terminate that
agreement within the time period specified in section 4.04 of this Agreement;
(R) A partnership or trust to which QI
applies the agency option is in default
with that agreement and QI fails to terminate that agreement within the time period
specified in section 4.06 of this Agreement; and
(S) If QI is acting as a QDD, QI fails
to timely pay a material amount of its
QDD tax liability and fails to correct the
underpayment and pay the appropriate tax
amount.
Sec. 11.07. Notice and Cure. Upon
the occurrence of an event of default,
the IRS will deliver to QI a notice of
default specifying each event of default.
QI 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

December 27, 2022

to cure the event of default and the
time period in which to cure or shall
state why QI believes that no event of
default occurred. If QI does not provide
a 60-day response, the IRS will deliver a
notice of termination as provided in section 11.02 of this Agreement. If QI provides a 60-day response, the IRS shall
either accept or reject QI’s statement
that no default has occurred or QI’s
proposal to cure the event of default.
If the IRS rejects QI’s contention that
no default has occurred or rejects QI’s
proposal to cure the event of default,
the IRS may offer a counter proposal
to cure the event of default with which
QI will be required to comply within
30 days. If QI fails to provide a 30-day
response, the IRS will send a notice of
termination in accordance with section
11.02 of this Agreement to QI, which QI
may appeal within 30 days of the date of
the notice by sending a written appeal
to the address specified in section 12.06
of this Agreement. If QI 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 a review,
the QI may cure the default, without
following the procedures of this section
11.07, if the external reviewer’s report
describes the default and the actions that
QI took to cure the default and the IRS
determines that the cure procedures followed by QI were sufficient. If the IRS
determines that QI’s actions to cure the
default were not sufficient, the IRS shall
issue a notice of default and the procedures described in this section 11.07
shall be followed.
Sec. 11.08. Renewal. If QI intends
to renew this Agreement, it must submit
an application for renewal to the IRS
on QAAMS. This Agreement will be
renewed only upon the agreement of both
QI and the IRS. A QI that seeks to renew
its QI agreement and also seeks to become
a QDD (that was not previously acting
as a QDD) must supplement the renewal
request by providing a statement containing all information required by Form
14345 relating to a QDD.

December 27, 2022

SECTION 12. MISCELLANEOUS
PROVISIONS
Sec. 12.01. QI’s application to become
a QI, all Appendices to this Agreement and
know-your-customer rules included in a
country attachment on IRS.gov relevant to
QI (or a branch of QI), and, if QI is an FFI,
its FATCA requirements as a participating
FFI, registered deemed-compliant FFI,
or registered deemed-compliant Model
1 IGA FFI, are hereby incorporated into
and made an integral part of this Agreement. This Agreement constitutes the
complete agreement between the parties.
A QI may only represent its status as a QI
for payments described in this Agreement
and may not act as a QI for any payments
without having the Agreement in effect for
the applicable year.
Sec. 12.02. 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. 12.03. Any waiver of a provision
of this Agreement 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. 12.04. 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 United States court with jurisdiction to
hear and resolve matters under the internal
revenue laws of the United States. For this
purpose, QI agrees to submit to the jurisdiction of such United States court.
Sec. 12.05. QI’s rights and responsibilities under this Agreement cannot be
assigned to another person.

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Sec. 12.06. Except as otherwise provided on QAAMS, all written notices sent
to the IRS by QI must be sent by either
e-mail to lbi.fi.qiwpissues@IRS.gov or by
registered, first class airmail (with each
such notice to include the QI’s name,
QI-EIN, GIIN (if applicable), and the
name of its responsible officer), addressed
as follows:
Internal Revenue Service
Foreign Payments Practice
Foreign Intermediaries Program
290 Broadway, 12th Floor NW
New York, New York 10007-1867
Written notices provided to QI under this
Agreement shall be sent by IRS by secure
e-mail to the responsible officer of the QI
and all contact persons identified by QI.
Sec. 12.07. QI, acting in its capacity as
a QI 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 7. EFFECTIVE DATE
The effective date of the 2023 QI
Agreement contained in section 6 of this
revenue procedure is on or after January
1, 2023.
SECTION 8. PAPERWORK
REDUCTION ACT
The collections of information contained in this revenue procedure have been
reviewed and approved by the Office of
Management and Budget in accordance with
the Paperwork Reduction Act (44 U.S.C.
3507) under control number 1545-1597.
SECTION 9. DRAFTING
INFORMATION
The principal author of this revenue
procedure is W. Shawver Adams of the
Office of Associate Chief Counsel (International). For further information regarding this revenue procedure, contact John
Sweeney at (202) 317-5002 (not a tollfree call) or, with respect to QDDs, Peter
Merkel or Karen Walny at (202) 317-6938
(not a toll-free number).

Bulletin No. 2022–52

APPENDIX I
General Instructions: QIs must provide the information and certifications described in this Appendix I as applicable to their QI status
and activities. The following Parts must be completed by the specified QIs:
Part I:
Part II:
Part III:

All QIs.
All QIs.
QIs eligible pursuant to section 10.07(A) and (B) of the QI agreement to apply for a waiver of the periodic review
requirement (as described in section 10.07 of the QI agreement) and who wish to apply for such a waiver. Under section 10.07(A) and (B) of the QI agreement, the following QIs are not eligible for a waiver: (a) QIs that are NFFEs,
(b) QIs that are acting as QDDs (for calendar years after 2024), and (c) QIs that are part of a consolidated compliance
program.
Part IV.A:
All QIs that have not applied for or have not been approved for a waiver.
Part IV.B-F: All QIs, excluding QIs that are only acting as QDDs and have no other QI activities, that have not applied for or have
not been approved for a waiver.
Part V:
All QIs that are acting as QDDs.
Part VI:
All QIs that assume primary withholding responsibility for payments of substitute interest, except QIs seeking a
waiver in Part III of Appendix I. A QI that assumes primary withholding responsibility for payments of substitute
interest and that applies for a waiver need not complete Part VI of this Appendix I. Such QI should complete Parts I,
II, and III of Appendix I, and in Part III.B of Appendix I, include information relating to payments of substitute interest for which the QI assumed primary withholding responsibility (in addition to its other QI activities, other than its
activities as a QDD).
Part VII:
All QIs acting as QIs with respect to PTP-related payments (as described in Part VII), excluding QIs seeking a waiver
in Part III of Appendix I. A QI that makes any of the payments described in the preceding sentence and that applies for
a waiver need not complete Part VII of Appendix I and should only complete Parts I, II, and III of this Appendix I.
A Compliance QI may complete Parts I and II for the QI members of its consolidated compliance group. However, the factual information provided in Parts IV through VII must be completed separately for each QI member in the consolidated compliance group.
PART I. GENERAL INFORMATION
A. Did QI assume primary chapters 3 and 4 withholding responsibility for any calendar year covered by the certification period
(excluding withholding under chapter 3 or 4 on PTP distributions)? Y/N
B. Did QI assume primary Form 1099 reporting and backup withholding responsibility for any calendar year covered by the certification period? Y/N
C. Did QI assume primary withholding responsibility for any payments of PTP distributions or amounts realized from sales of PTP
interests subject to section 1446(f) withholding for any calendar year covered by the certification period? Y/N
D. Did QI act as a Disclosing QI (as defined in Section 2.91(E) of the QI agreement) for any payments of PTP distributions or
amount realized from sales of PTP interests subject to section 1446(f) withholding for any calendar year covered by the certification period? Y/N
E. Is QI the Compliance QI for a consolidated compliance program? Y/N
1. If yes, provide the names and QI-EINs of the members of the consolidated compliance group.
2. If yes, did each such member of the group consent to make QI its agent for execution of a Form 872 on behalf of the member
under section 10.02(B) of the QI agreement?
F. PAIs and partnerships and trusts to which QI applied the joint account or agency option during any time within the certification
period:
1. The number of PAIs with whom QI has a PAI Agreement (if none enter 0).
a. Provide the names and addresses of those PAIs.
b. Each PAI has provided QI with a certification that it has maintained status as a certified deemed-compliant FFI (other
than a registered deemed-compliant Model 1 IGA FFI) for the certification period, as required under section 4.01 of the
QI agreement. Y/N
c. Each PAI has provided QI with either (1) its information for inclusion in QI’s periodic review (as described in section
4.01(F) of the QI agreement) or (2) a certification as described in section 10.03 of the QI agreement and a periodic
review report as described under section 10.06 of the QI agreement for the certification period. Y/N
2. The number of partnerships or trusts to which QI applies the agency option (if none enter 0).
a. Each partnership or trust to which QI applies the agency option has provided QI with a certification that it has maintained status as a certified deemed-compliant FFI (other than a registered deemed-compliant Model 1 IGA FFI), an

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637

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owner-documented FFI with respect to QI, an NFFE, or an exempt beneficial owner, or that it is covered as an account
that is excluded from the definition of financial account under Annex II of an applicable IGA or under Treas. Reg. §
1.1471-5(a), as required under section 4.06(A)(2) of the QI agreement. Y/N
b. Each partnership or trust to which QI applies the agency option pursuant to section 4.06 of the QI agreement has provided QI with either (1) its information for inclusion in QI’s periodic review (as described in section 4.06(A)(5) of
the QI agreement) or (2) a certification described in section 10.03 of the QI agreement and a periodic review report as
required under section 10.06 of the QI agreement for the certification period. Y/N
3. The number of partnerships or trusts to which QI applies the joint account option (if none enter 0).
PART II: CERTIFICATION OF INTERNAL CONTROLS AND GENERAL INFORMATION —To be Completed by All QIs.
Complete Either A (Certification of Effective Internal Controls) or B (Qualified Certification).
A. Certification of Effective Internal Controls
If the responsible officer has identified a material failure (as defined in section 10.03(B) of the QI agreement) that QI has not corrected
as of the date of this certification or an event of default (as defined in section 11.06 of the QI agreement) applicable to the certification
period, QI cannot make the certification of effective internal controls under this Part A and must make the qualified certification under
Part B below.
Note: If a statement in this Part II.A is not applicable to QI, the responsible officer should check the statement as if responding in the
affirmative.
The responsible officer certifies to the following. Check each statement below to confirm:
1. QI has established a compliance program that meets the requirements described in section 10.02(A) or 10.02(B) (if applicable)
of the QI agreement that is in effect as of the date of the certification and during the certification period.
2. Based on the information known (or information that reasonably should have been known) by the responsible officer, including
the findings of any procedure, process, review, or certification undertaken in preparation for the responsible officer’s certification
of internal controls, QI maintains effective internal controls over its documentation, withholding, and reporting obligations under
the QI agreement and according to its applicable FATCA requirements with respect to accounts for which it acts as a QI (and acts
as a QI for only payments permitted under the QI agreement).
3. Based on the information known (or information that reasonably should have been known) by the responsible officer, including
the findings of any procedure, process, review, or certification undertaken in preparation for the responsible officer’s certification
of internal controls, there are no material failures, as defined in section 10.03(B) of the QI agreement. If there are any material
failures, they have been corrected as of the date of this certification and disclosed in this certification. See Part II.D.3 of this
Appendix I.
4. With respect to any failure to withhold, deposit, or report, to the extent required under the QI agreement, QI has corrected such
failure by paying any taxes due (including interest and penalties) and filing the appropriate return (or amended return).
5. All PAIs of QI and partnerships and trusts to which QI applies the agency option have either (a) provided (or will provide, to the
extent QI does not obtain a waiver under section 10.07 of the QI agreement) documentation and other necessary information for
inclusion in the QI’s periodic review or (b) provided the responsible officer of QI with a certification of effective internal controls
described in Part II.A of Appendix I to the QI agreement and have represented to QI that there are no material failures, or, if there
are such failures, they have been corrected as of the time of this certification, and the PAIs, partnerships, or trusts have disclosed
any such failures to QI and provided QI with a remediation plan as described in Part II.B.3 of this Appendix I.
6. QI’s policies, procedures, and processes are applied consistently to all branches covered by the QI agreement (except as otherwise required by a jurisdiction’s AML/KYC procedures, as applicable).
7. If QI is acting as a QI and has assumed primary withholding responsibility with respect to payments of substitute interest (as
described in section 3.03(A) of the QI agreement), QI has assumed primary withholding responsibility for all such payments
covered by the QI agreement.
8. If QI is acting as a QI with respect to payments of PTP distributions or amounts realized from sales of PTP interests, QI has
implemented procedures to comply with the withholding and reporting requirements for those payments, including the reporting
required under Section 8.07 of the QI agreement and the procedures for collecting U.S. TINs from account holders holding PTP
interests specified in section 5.01(A) of the QI agreement.
9. A periodic review was conducted for the certification period in accordance with section 10.04 of the QI agreement, with the
review report submitted with this certification as required by section 10.06 of the QI agreement.
10. If in making this certification for 2023 or 2024 the QI relied on the good faith standard with respect to any section 871(m) transactions included in the periodic review, the QI disclosed the information required by section 10.01(C) of the QI agreement with
this certification.

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638

Bulletin No. 2022–52

B. Qualified Certification
If the responsible officer has identified a material failure (as defined in section 10.03(B) of the QI agreement) that QI has not corrected
as of the date of this certification or an event of default (as defined in section 11.06 of the QI agreement) applicable to the certification
period, check the applicable statements below to confirm:
1. The responsible officer (or designee) has determined that there are one or more material failures that have not been corrected as
of the date of this certification or has identified an event of default with respect to QI’s compliance, its PAI’s compliance, or the
compliance of a partnership or trust to which QI applies the agency option.
2. With respect to any failure to withhold, deposit, or report, to the extent required under the QI agreement, QI will correct such
failure by paying any taxes due (including interest and penalties) and filing the appropriate return (or amended return).
3. The responsible officer (or an officer of the PAI or partnership or trust to which QI applies the agency option if the PAI or partnership or trust performs its own periodic review) will respond to any notice of default (if applicable) and has provided with this
certification a remediation plan to correct each material failure or event of default that contains the following information:
a. A description of each material failure or event of default;
b. How and when the material failure or event of default was identified;
c. If a tax deficiency resulted from a material failure or event of default and, if so, whether the deficiency was satisfied (including interest and any penalties);
d. The steps taken to remediate the material failure or event of default (including a timeline of steps);
e. The steps taken to prevent the material failure or event of default from recurring (including a timeline of the steps); and
f. Whether the material failure or event of default affects a prior or subsequent review period.
C. Amended Form 1042
1. QI filed an amended Form 1042 to report additional tax liability based on the results of the periodic review or the findings of any
other procedure, process, or review undertaken by the responsible officer in preparation for making a certification of effective
internal controls or qualified certification. Y/N
D. Material Failures
Check the applicable statements to confirm. If QI is a Compliance QI and identifies a material failure, it should also indicate which
QI in the consolidated compliance group is associated with the material failure.
For calendar years 2023 and 2024, a material failure relevant to a QDD has not occurred unless the QDD failed to make a good faith
effort to comply with the regulations under sections 871(m), 1441, 1461, and 1473 (the “section 871(m) regulations”) and the relevant
provisions of the QI agreement. In calendar years 2023 or 2024, a QI will not be considered to have a material failure with respect to
a delta-one section 871(m) transaction unless the QI failed to make a good faith effort to comply with the section 871(m) regulations.
In calendar year 2025, a QI will not be considered to have a material failure with respect to a non-delta-one section 871(m) transaction
unless the QI failed to make a good faith effort to comply with the section 871(m) regulations. Notwithstanding the foregoing, QI may
only rely on the good faith standard if QI discloses any section 871(m) transactions included in the review that QI believes should be
subject to the good faith standard and includes a brief description of the reason QI needs to rely on the good faith standard, how QI
will address it, and why the good faith standard should apply.
1. The responsible officer has determined that as of the date of the review, there are no material failures with respect to QI’s compliance with the QI agreement.
2. The responsible officer has determined that as of the date of the review, there are one or more material failures with respect to
QI’s compliance with the QI agreement and that appropriate actions have been or will be taken to prevent such failures from
reoccurring.
a. The following material failures were identified:
i. QI’s establishment of, for financial statement purposes, a tax reserve or provision for a potential future tax liability
related to QI’s failure to comply with the QI agreement, including its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI, and with respect to QI that is acting as
a QDD, failure to satisfy its QDD tax liability and its obligations pursuant to section 871(m) and the regulations under
that section.
ii. QI’s failure to establish written policies, procedures, or systems sufficient for the relevant personnel of QI to take actions
consistent with QI’s obligations under the QI agreement, or if QI is acting as a QDD, its obligations as a QDD under the
QI agreement and pursuant to section 871(m) and the regulations under that section.

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iii. A criminal or civil penalty or sanction imposed on QI (or any branch or office thereof) by a regulator or other governmental authority or agency with oversight over QI’s compliance with AML/KYC procedures to which QI (or any
branch or office thereof) is subject and that is imposed due to QI’s failure to properly identify account holders under the
requirements of those procedures.
iv. A finding (including a finding noted in the periodic review report described in section 10.06 of the QI agreement) that,
for one or more years covered by the QI agreement, QI failed to:
1. Withhold an amount that QI was required to withhold under chapter 3 or 4 or under section 3406 as required under
section 3 of the QI agreement or, if QI is acting as a QDD, failing to timely pay its QDD tax liability;
2. Provide information sufficient for another withholding agent to perform withholding and reporting to the extent
required when QI does not assume primary chapters 3 and 4 withholding responsibility or primary Form 1099
reporting and backup withholding responsibility;
3. Provide allocation information as described in section 6.03(D) of the QI agreement (regarding U.S. non-exempt
recipient account holders) by January 15, as required by that section when QI applies the alternative withholding
rate pool procedures;
4. Make deposits in the time and manner required by section 3.08 of the QI agreement or make adequate deposits
to satisfy its withholding obligations or, if QI is acting as a QDD, timely satisfy its QDD tax liability, taking into
account the procedures under section 9 of the QI agreement;
5. Report or report accurately on Forms 1099 as required under section 8.06 of the QI agreement or provide information to the extent QI does not assume primary Form 1099 reporting and backup withholding responsibilities;
6. Report or report accurately on Forms 1042 and 1042-S under sections 7 and 8 of the QI agreement;
7. Report or report accurately on Form 8966 under sections 8.04 and 8.05 of the QI agreement;
8. Withhold an amount required to be withheld or report accurately with respect to U.S. source substitute dividend
payments or make timely and adequate deposits of tax due with respect to such payments for which QI is a QSL
and acts as a dealer or intermediary;
9. Withhold an amount that QI was required to withhold on a payment of an amount realized from the sale of a PTP
interest or on a PTP distribution as required under section 3 of the QI agreement or provide correct information to a
withholding agent or broker when QI does not assume primary withholding responsibility for either payment under
section 3.02 of the QI agreement; or
10. Comply with the requirements of sections 5.01(A) and 8.07 of the QI agreement with respect to one or more
account holders that are partners holding PTP interests (including for purposes of section 8.07 account holders of
another intermediary when QI acts as an agent for meeting these requirements).
v. Other (include a detailed explanation).
3. The material failure identified in the review has been corrected by the time of this certification. Y/N/NA
a. If yes, describe the steps taken to correct the material failure.
4. Did any PAI of QI inform QI that it had a material failure with respect to its agreement with QI? Y/N/NA
a. If yes, provide the name of the PAI, and, based on the information provided by PAI, describe the steps taken to correct the
material failure or the proposed steps to be taken to correct the material failure and the timeframe for completing such steps.
5. Did any partnerships or trusts to which QI applies the agency and/or joint account option inform QI that they had a material
failure with respect to their obligations as described in the QI agreement? Y/N/NA
a. If yes, provide the name of the partnership or trust, and, based on the information provided by the partnership or trust,
describe the steps taken to correct the material failure or the proposed steps to be taken to correct the material failure and the
timeframe for completing such steps.
E. Events of Default
Check the applicable statements to confirm. If QI is a Compliance QI and identifies an event of default, it should also indicate which
QI in the consolidated compliance group is associated with the event of default. 
1. The responsible officer has determined that, as of the date of the review, there are no events of default with respect to QI’s compliance with the QI agreement.
2. The responsible officer has determined that, as of the date of the review, there are one or more events of default as defined in
section 11.06 of the QI agreement.
a. The following events of default were identified:
i. QI failed to implement adequate procedures, accounting systems, and internal controls to ensure compliance with the
QI agreement;

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ii.

QI underwithheld a material amount of tax that QI was required to withhold under chapter 3, section 1446(a), section
1446(f), or chapter 4, or backup withhold under section 3406 and failed to correct the underwithholding or to file an
amended Form 1042 or 945 reporting, and paying, the appropriate tax;
iii. QI made excessive refund claims;
iv. Documentation described in section 5 of the QI agreement was lacking, incorrect, or unreliable for a significant number of direct account holders;
v. QI filed Forms 945, 1042, 1042-S, 1099, or 8966 that were materially incorrect or fraudulent, or failed to comply
materially with the requirements of section 8.07 of the QI agreement with respect to account holders that are partners
holding PTP interests (including account holders of another intermediary when QI acts as an agent for meeting these
requirements);
vi. If QI is an FFI, QI failed to materially comply with its FATCA requirements as a participating FFI, registered
deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI;
vii. If QI is a sponsoring entity, QI failed to materially comply with the due diligence, withholding, reporting, and compliance requirements of a sponsoring entity;
viii. QI failed to materially comply with the requirements of a nonqualified intermediary under chapters 3 and 61 and section 3406 with respect to any account for which QI does not act as a QI;
ix. QI failed to perform a periodic review when required or document the findings of such review in a written report;
x. QI failed to cooperate with the IRS on its compliance review described in section 10.08 of the QI agreement;
xi. QI failed to inform the IRS of any change in the applicable know-your-customer rules within 90 days of the change
becoming effective;
xii. QI failed to inform the IRS within 90 days of any significant change in its business practices to the extent that change
affects QI’s obligations under the QI agreement;
xiii. QI failed to inform the IRS of any PAI of QI, as described in section 4 of the QI agreement;
xiv. QI failed to cure a material failure identified in the qualified certification described in Part II.B of Appendix I to the QI
agreement or identified by the IRS;
xv. QI made any fraudulent statement or a misrepresentation of material fact with regard to the QI agreement to the IRS,
a withholding agent, or QI’s reviewer;
xvi. The IRS determined that QI’s reviewer is not sufficiently independent, as described in the QI agreement, to adequately
perform its review function, and QI failed to arrange for a periodic review conducted by a reviewer approved by the
IRS;
xvii. An intermediary with which QI has a PAI agreement was in default with that agreement and QI failed to terminate that
agreement within the time period specified in section 4.04 of the QI agreement;
xviii. A partnership or trust to which QI applied the agency option was in default with that agreement and QI failed to terminate that agreement within the time period specified in section 4.06 of the QI agreement;
xix. If QI is acting as a QDD, QI failed to timely pay a material amount of its QDD tax liability and failed to correct the
underpayment and pay the appropriate tax amount; or
xx. Other (please describe).
F. Significant Change in Circumstances
Check the applicable statements to confirm.
1. For the most recent certification period, the periodic review has not identified any significant change in circumstances, as
described in section 11.04(A), (D), or (E) of the QI agreement.
2. For the most recent certification period, the periodic review has identified the following significant change(s) in circumstances:
a. An acquisition of all, or substantially all, of QI’s assets in any transaction in which QI is not the surviving legal entity.
b. A material change in the applicable know-your-customer rules and procedures.
c. A significant change in QI’s business practices that affects QI’s ability to meet its obligations under the QI agreement.
d. If QI is acting as a QDD, QI ceases to qualify as an eligible entity, including as a result of a change in its business or regulatory status.
e. Other.
3. Describe any significant changes in circumstances identified in Question 2 (and, if 2.d is selected, include the date on which the
QI ceased to qualify as an eligible entity).

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G. Chapter 4 Status
Complete the applicable section and check the applicable statement to confirm.
Participating FFIs
1. For the most recent certification period under the QI agreement, QI (or a branch of QI) has obtained status as a participating
FFI and made the following certification of compliance with respect to its FFI agreement for the most recent certification period
under the FFI agreement (check one). Note: You may only check N/A if, during the certification period, your chapter 4 status
changed from one of the other applicable chapter 4 statuses to participating FFI or if your certification under the FFI agreement
is not due as of the date of this certification.
a. Certification of Effective Internal Controls
b. Qualified Certification
c. N/A
Registered Deemed-Compliant FFIs
1. For the most recent certification period under the QI agreement, QI certified as required under Treas. Reg. § 1.1471-5(f)(1)(ii)(B)
or Annex II of an applicable Model 2 IGA that it has satisfied the requirements for the deemed-compliant FFI status claimed.
Registered Deemed-Compliant Model 1 IGA FFIs
1. For the most recent certification period under the QI agreement, QI (or a branch of QI) has been resident in or organized under
the laws of a jurisdiction that has in place a Model 1 IGA with the United States (or in the case of a branch of QI, the branch
operates in the jurisdiction) and has met the requirements under the IGA to be treated as a deemed-compliant FFI.
PART III. WAIVER OF PERIODIC REVIEW
Provide the below information for the most recent calendar year within the certification period. For calendar years 2023 and
2024, exclude QI’s QDD activities from the below information. Also provide the information shown in Appendix III of the QI
agreement for each year of the certification period.
For Parts B.1 through 6, the information reported must not reflect any curing that is initiated, by contacting an account
holder for revised documentation, after the last year covered by the periodic certification.
Note: In order to be eligible for a waiver, QI must be able to confirm all of the eligibility requirements in Part A are met.
For purposes of this Part, “account” means, unless otherwise specified, any account for which QI acts as a QI.
A. Eligibility for Waiver (check each statement to confirm)
1. QI is an FFI and, for calendar years after 2024, is not acting as a QDD;
2. QI is not part of a consolidated compliance program;
3. For each calendar year covered by the certification period, the reportable amounts received by QI do not exceed $5 million
(including the amount of PTP distributions subject to withholding under chapter 3 or 4);
4. QI timely filed its Forms 1042, 1042-S, 945, 1099, and 8966, (or the reporting otherwise required under an applicable IGA),
as applicable, for all calendar years covered by the certification period;
5. QI made all periodic certifications and reviews required by sections 10.02 and 10.03 of the QI agreement, as well as all
certifications required pursuant to QI’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or
registered deemed-compliant Model 1 IGA FFI.
B. Information required (provided for the most recent calendar year within the certification period)
1. The total number of accounts
a. Total number of direct account holders
i. Foreign persons
ii. U.S. exempt recipients
iii. U.S. non-exempt recipients
iv. Intermediaries and flow-through entities
b. Total number of indirect account holders
i. Foreign persons
ii. U.S. exempt recipients

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iii. U.S. non-exempt recipients
iv. Intermediaries and flow-through entities
2. The total number of U.S. account holders that received reportable payments.
3. The total number of non-U.S. account holders that received reportable amounts.
4. The total number of such accounts that have valid documentation.
5. The total number of accounts that have no documentation or invalid documentation.
6. The total number of Forms 1042-S filed by QI.
7. Total of reportable amounts received for non-U.S. accounts.
8. Total of reportable payments received for U.S. accounts.
9. Total PTP distributions received by QI subject to withholding under §1446(a) (regardless of whether paid to a U.S. partner).
10. Total of amounts realized received by QI from sales of PTP interests.
11. The aggregate amount of tax withheld under chapter 3 and 4 (by QI or QI’s withholding agent(s), including withholding
under chapter 3 and 4 on PTP distributions).
12. The aggregate amount of tax withheld under sections 1446(a) and (f) (by QI or QI’s withholding agent(s)).
13. The total number of Forms 1099 filed by QI.
14. The aggregate amount of backup withholding under section 3406 by QI or QI’s payor(s).
PART IV. PERIODIC REVIEW: QI FACTUAL INFORMATION—To be completed by all QIs that have not applied for or
obtained a waiver.
If QI acts solely as a QDD and has no other QI activities, QI is not required to complete Part IV.B through F.
Note: For completing sections C, D, E, F and G of this Part IV, QI should exclude any information with respect to payments (and related withholding) applicable to income code 27 (PTP distributions subject to section 1446(a)), income code
57 (amounts realized under section 1446(f), including when associated with a PTP distribution), and income code 58 (PTP
distribution with undetermined income) (collectively, “PTP-related payments”). See Form 1042-S for these income codes. A
PTP-related payment includes a payment included in any of these codes made to an account holder that is a U.S. person and
otherwise without regard to whether withholding is required on the payment. PTP-related payments are covered in Part VII
of this Appendix I
A. General Information
1. Did QI use an external reviewer to conduct any portion of its periodic review? Y/N
2. Provide below the information for external reviewer(s). You may list up to 2 external reviewers.
a. External Reviewer 1 Information:
b. External Reviewer 2 information:
3. Did QI use an internal reviewer to conduct any portion of its periodic review? Y/N
a. If yes, provide a brief description of the internal reviewer, such as their department and other roles and responsibilities with
respect to QI’s QI activities.
4. Calendar year reviewed for periodic review.
Caution: On the due date for reporting the factual information relating to the periodic review (provided in section 10.04 of the QI
agreement), there must be 15 or more months available on the statutory period for assessment for taxes reportable on Form 1042
of the calendar year for which the review was conducted, or the QI must submit, upon request by the IRS, a Form 872, Consent to
Extend the Time to Assess Tax, that will satisfy the 15-month requirement. The Form 872 must be submitted to the IRS at the address
provided in section 12.06 of the QI agreement.
B. General Information on Accounts and Review of Accounts
For Parts B through G, while the curing of documentation is permissible, unless otherwise indicated, the information reported shall be
based on the periodic review and should not take into account the curing of documentation that resulted from the periodic review. For
purposes of this Part, “account” means, unless otherwise specified, any account for which QI acts as a QI. However, do not include
accounts for purposes of Parts C through F that are reportable in Parts V through VII of this Appendix I.
1. Did QI assume primary chapters 3 and 4 withholding responsibility for any accounts for the calendar year provided in Question
4 in Part A, above? Y/N

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2. Did QI assume primary Form 1099 reporting and backup withholding responsibility for any accounts for the calendar year provided in Question 4 in Part A, above? Y/N
3. Total accounts reviewed for periodic review.
4. Did QI use a statistical sampling method in conducting the review of its accounts? Y/N/NA
a. If yes, was it the safe harbor method under Appendix II to the QI agreement?
b. If no, describe the method used.
5. Total accounts reviewed that received reportable amounts.
If you used the safe harbor method set forth in Appendix II, complete the following table:
Stratum A

Stratum B

Stratum C

Stratum D

Number of Accounts in the Population
Number of Accounts in the Sample
Total Underwithholding in the Sample Post-Curing

C. Documentation
1.
2.
3.
4.

Total accounts reviewed held by direct account holders.
Total accounts reviewed held by indirect account holders.
Total accounts reviewed with valid documentation.
Total accounts reviewed with invalid documentation or no documentation.
a. Total pre-curing:
b. Total post-curing:
5. Total accounts reviewed with invalid documentation or no documentation for which valid documentation or additional valid
documentation was obtained after the review.
6. Total accounts reviewed for which treaty benefits were claimed.
7. Total accounts reviewed for which treaty benefits were claimed where QI did not obtain sufficient documentation to establish the
payee’s entitlement to treaty benefits (including, where applicable, the treaty statement and limitation on benefits information
required by section 5.03(B) of the QI agreement).
a. Total pre-curing:
b. Total post-curing:
8. Total accounts reviewed held by U.S. non-exempt recipient account holders.
9. Total accounts held by U.S. non-exempt recipient account holders reviewed for which QI has obtained a valid Form W-9.
10. If QI has not assumed primary Form 1099 reporting and backup withholding responsibility, total accounts held by U.S. non-exempt recipient account holders reviewed for which QI has transmitted Forms W-9 to a withholding agent.
11. Total accounts reviewed assigned to chapter 3 or chapter 4 withholding rate pools.
12. Total accounts reviewed assigned to chapter 3 or chapter 4 withholding rate pools where QI did not correctly report withholding
rate pool information to a withholding agent.
13. Total accounts reviewed that are U.S. accounts (or U.S. reportable accounts under an applicable IGA) (if applicable).
14. Total accounts reviewed that are U.S. accounts (or U.S. reportable accounts under an applicable IGA) for which QI has obtained
a valid Form W-9 or, if applicable, a valid self-certification.
D. Withholding
1.
2.
3.
4.
5.
6.

The aggregate amount reported as withheld under chapter 3 by QI on Forms 1042-S.
Number of accounts for which amounts were withheld under chapter 3.
The aggregate amount reported as withheld under chapter 4 by QI on Forms 1042-S.
Number of accounts for which amounts were withheld under chapter 4.
The aggregate amount reported as withheld by QI on Forms 1099.
Number of accounts for which amounts were backup withheld under section 3406.

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7. Additional withholding required under chapter 3 based on results of periodic review.
a. Total pre-curing:
b. Total post curing:
8. Additional withholding required under chapter 4 based on results of periodic review.
a. Total pre-curing:
b. Total post-curing:
9. Additional backup withholding required under section 3406 based on results of periodic review.
a. Total pre-curing:
b. Total post-curing:
10. The aggregate amount of deposits made in accordance with section 3.08 of the QI agreement.
11. Number of partnerships or trusts to which the joint account treatment of section 4.05 of the QI agreement was applied.
a. Total accounts to which joint account treatment applied for which appropriate documentation was obtained and the appropriate rate of withholding was applied.
b. Total accounts to which joint account treatment applied for which appropriate documentation was obtained and the appropriate rate of withholding was not applied.
c. Total accounts to which joint account treatment applied for which appropriate documentation was not obtained and the
appropriate rate of withholding was not applied.
i. Total pre-curing:
ii. Total post-curing:
d. Aggregate amount of underwithholding resulting from the appropriate rate of withholding not being applied with respect to
an account to which the joint account treatment applied.
i. Total pre-curing:
ii. Total post-curing:
E. Reconciliation of Reporting on Payments of Reportable Amounts
1. The aggregate amount reported paid to QI (as a recipient) on all Forms 1042-S issued to QI.
2. The aggregate amount reported paid by QI on Forms 1042-S to QI’s chapter 4 reporting pools (other than the U.S. payee pool)
(including a chapter 4 reporting pool of a PAI or a partnership or trust to which QI applies the agency option).
3. The aggregate amount reported paid by QI on Forms 1042-S to QI’s chapter 4 reporting pool-U.S. payee pool.
4. The aggregate amount reported paid by QI on Forms 1042-S to QI’s chapter 3 reporting pools (including chapter 3 reporting
pools of a PAI or partnership or trust to which QI applies the joint account or agency option).
5. The aggregate amount reported paid by QI on Forms 1042-S to other QIs (excluding QIs that are acting as QDDs), QSLs, and
WPs and WTs as a class.
6. The aggregate amount reported paid by QI on Forms 1042-S to QIs that are acting as QDDs.
7. The aggregate amount reported paid by QI on Forms 1042-S to participating FFIs, registered deemed-compliant FFIs, and registered deemed-compliant Model 1 IGA FFIs that are intermediaries or flow-through entities as a class and with respect to their
chapter 4 reporting pools (excluding amounts referenced in Questions 5 and 6 directly above).
8. The aggregate amount reported paid by QI on Forms 1042-S to indirect account holders (not included in Question 2 or 7 above
and including an account holder of an intermediary or flow through entity reported by QI as made to an unknown recipient on
Form 1042-S).
9. The aggregate amount subject to reporting on Form 1042-S paid by QI to U.S. non-exempt recipients as a class not includable in
a chapter 4 withholding rate pool of QI.
10. The aggregate amount subject to reporting on Form 1042-S paid by QI to U.S. exempt recipients as a class not includable in a
chapter 4 withholding rate pool of QI.
11. The aggregate amount paid by QI to its direct account holders (including account holders of any PAI or partner, beneficiary, or
owner of a partnership or trust to which QI applies the joint account or agency option) that requested individual Form(s) 1042-S.
12. Total of questions 2 through 11.
13. The amount of variance (if Question 1 minus Question 12 is other than 0) and attach an explanation for any variance.
F. Reconciliation of Withholding on Reportable Amounts
1.
2.
3.
4.
5.

The aggregate amount reported as withheld by another withholding agent on Forms 1042-S issued to QI (as a recipient).
The aggregate amount reported by QI as withheld by QI on Forms 1042-S filed by QI.
The total withholding reported by QI on Forms 1042-S.
Amount of variance (if question 1 plus question 2 does not equal question 3) and attach an explanation for any variance.
The aggregate amount reported by QI as amounts it backup withheld on Forms 1099.

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6. If QI did not assume primary withholding responsibility and amounts are entered for questions 2 or 5, attach an explanation of
any underwithholding that occurred by the withholding agent.
7. If QI assumed primary withholding responsibility and an amount is entered for question 1, attach an explanation of the amount
withheld by others.
8. The aggregate amount of any collective claims for refund or credit made by QI.
9. For question 8 directly above, the amount of credit or refund claimed by QI for account holders not supported by appropriate
documentation for reduced withholding.
G. Other Information (including reporting of U.S. account holders).
1. The aggregate number of Forms 1099 QI failed to file (when required) with respect to account holders receiving reportable
payments.
2. The aggregate number of Forms 8966 (or analogous forms under an applicable IGA) that QI failed to file under its applicable
requirements as an FFI (for accounts receiving reportable payments).
3. The number of Forms 1099 and Forms 8966 (or analogous forms under an applicable IGA) that QI filed but that failed to include
accurate information on the income and other information required.
4. If QI acted as a QSL or otherwise assumed primary withholding responsibility for a payment of U.S. source substitute dividends
as an intermediary, indicate whether QI has a policy in effect to assume primary withholding responsibility for all such payments.
Y/N
Part V. Qualified Derivatives Dealers
[RESERVED]
Part VI. Substitute Interest
Complete only if QI has assumed primary withholding responsibility for payments of substitute interest (as described in section 3.03(A) of the QI agreement).
A. General Information
1. Total number of accounts receiving substitute interest payments.
2. Total number of accounts receiving substitute interest reviewed as part of the periodic review.
B. Documentation
1. Total accounts reviewed with valid documentation.
2. Total accounts reviewed with invalid documentation or no documentation for which documentation or additional documentation
was obtained after the initial review.
3. Total accounts reviewed for which treaty benefits were claimed.
4. Total accounts reviewed for which treaty benefits were claimed where QI did not obtain sufficient documentation to establish the
payee’s entitlement to treaty benefits (including, where applicable, the treaty statement and limitation on benefits information
required by section 5.03(B) of the QI agreement).
5. Total accounts reviewed held by U.S. non-exempt recipient account holders.
6. Total accounts reviewed held by U.S. non-exempt recipient account holders for which QI has obtained a valid Form W-9.
C. Withholding
1.
2.
3.
4.
5.
6.
7.

The aggregate amount reported as withheld under chapter 3 by QI on Forms 1042-S with respect to substitute interest payments.
Number of accounts for which amounts were withheld under chapter 3 with respect to substitute interest payments.
The aggregate amount reported as withheld under chapter 4 by QI on Forms 1042-S with respect to substitute interest payments.
Number of accounts for which amounts were withheld under chapter 4 with respect to substitute interest payments.
Additional withholding required under chapter 3 based on results of periodic review.
Additional withholding required under chapter 4 based on results of periodic review.
Aggregate amount reported as withheld on Forms 1099 on reportable payments (including reportable amounts) subject to backup
withholding.

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8. Additional backup withholding required based on results of periodic review.
9. The aggregate amount of deposits made in accordance with section 3.08 of the QI agreement with respect to substitute interest
payments.
D. Reporting
1. Total amount of interest or substitute interest payments received for which QI represented itself as assuming primary withholding
responsibility.
2. Aggregate amount of substitute interest payments made.
3. Total amount of payments in Question 2 that were reported on Forms 1099.
4. Total amount of payments in Question 2 that were amounts subject to chapter 3 reporting reported on Form 1042-S.
5. Total amount of payments in Question 2 that were amounts subject to chapter 4 reporting reported on Form 1042-S.
6. Aggregate amount of any claims for credit or refund made by QI with respect to payments of substitute interest.
Part VII. PTP-Related Payments
Complete this Part only to the extent QI acts as a QI with respect to PTP-related payments (payments included in each below
income code shown on Form 1042-S, but including when made to an account holder that is a U.S. person and otherwise
without regard to whether withholding is required on the payment). All of the information for this Part VII relates only to
PTP-related payments, unless indicated otherwise. For amounts subject to chapter 3 or 4 withholding attributable to a PTP
distribution and account documentation reviewed with respect to those payments (and reporting of underwithholding on
those payments), report those amounts in Part IV of this Appendix I.
A. General Information
1. Total number of accounts that received a PTP-related payment applicable to each below income code.
a. 27:
b. 57:
c. 58:
2. Total number of accounts reviewed as part of the periodic review that received a PTP-related payment applicable to each below
income code.
a. 27:
b. 57:
c. 58:
3. Total number of accounts reviewed as part of the periodic review that received a PTP-related payment for which the procedures
of Section 8.07 of the QI agreement were not satisfied with respect to the partner associated with the account.
B. Disclosing QI
1. Did QI act as a Disclosing QI for PTP-related payments for the periodic review year? Y/N

If yes, complete the following questions with respect to payments received by QI acting as a Disclosing QI. Otherwise, go to the
next section of this Part VII.
2. Total number of accounts that received a PTP-related payment applicable to each below income code.
a. 27:
b. 57:
c. 58:
3. Total number of accounts reviewed as part of the periodic review that received a PTP-related payment applicable to each below
income code.
a. 27:
b. 57:
c. 58:
4. Total number of accounts for which the Disclosing QI withheld on a PTP-related payment to comply with Section 3.02(C) of the
QI agreement.
5. Total amount of withholding by the Disclosing QI to comply with Section 3.02(C) of the QI agreement.

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C. QI Assuming Primary Withholding Responsibility
1. Did QI assume primary withholding responsibility for any PTP-related payments for the periodic review year? Y/N

If yes, complete the following questions for payments for which QI assumed primary withholding responsibility. Otherwise, go
to the next section of this Part VII.
2. Total number of accounts that received a PTP-related payment applicable to each below income code.
a. 27:
b. 57:
c. 58:
3. Total number of accounts reviewed as part of the periodic review that received a PTP-related payment applicable to each below
income code.
a. 27:
b. 57:
c. 58:
4. Total number of accounts holding a PTP interest for which QI determined the applicability of the “10-percent exception” of
§1.1446(f)-4(b)(3) for one or more PTP-related payments.
D. QI Providing Withholding Rate Pools
1. Did QI provide withholding rate pool information to a withholding agent for any PTP-related payments for the periodic review
year? Y/N
If yes, complete the following questions with respect to payments for which QI provided withholding rate pool information.
Otherwise, go to the next section of this Part VII.
2. Total number of accounts that received a PTP-related payment applicable to each below income code.
a. 27:
b. 57:
c. 58:
3. Total number of accounts reviewed as part of the periodic review that received a PTP-related payment applicable to each below
income code.
a. 27:
b. 57:
c. 58:
E. Documentation
Note: Reporting for this Part E should include, in addition to each QI Account, partners in a partnership certifying to a modified
amount realized for purposes of section 1446(f) and grantors and owners of a trust receiving an amount subject to withholding under
section 1446(a) or (f).
1. Total accounts reviewed with valid documentation with respect to PTP-related payments for purposes of section 1446(a) or (f)
(as applicable).
2. Total accounts reviewed with respect to PTP-related payments for which an account holder’s (or partner’s) U.S. status was incorrectly determined by QI for purposes of section 1446(a) or (f) (as applicable).
3. Total accounts reviewed with respect to PTP-related payments for which treaty benefits were claimed where QI did not obtain
sufficient documentation to establish the payee’s entitlement to treaty benefits for purposes of section 1446(a) or (f) (as applicable, including, where applicable, the treaty statement and limitation on benefits information required by section 5.03(B) of the QI
agreement).
4. Total number of accounts reviewed for which QI incorrectly determined the applicability of the “10-percent exception” of
§1.1446(f)-4(b)(3) for one or more PTP-related payments (for a QI assuming primary withholding responsibility only).
5. Total accounts reviewed with respect to PTP-related payments for which the invalid documentation was otherwise relied on
by QI for purposes of section 1446(a) or (f) (as applicable) (excluding accounts described in sections E.2 through E.4 directly
above).
6. Total accounts reported in this section E for which the documentation was invalid solely due to the absence of a U.S. TIN.
F. Withholding
1. The aggregate amount reported as withheld by another withholding agent on Forms 1042-S issued to QI (as a recipient) for payments of PTP distributions under income code 27.

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2. The aggregate amount reported by QI as withheld by QI on Forms 1042-S for payments of PTP distributions under income code
27.
3. The total withholding reported by QI on Forms 1042-S for payments of PTP distributions under income code 27.
4. Amount of variance (if question 1 plus question 2 does not equal question 3) and attach an explanation for any variance.
5. The aggregate amount reported as withheld by another withholding agent on Forms 1042-S issued to QI (as a recipient) for payments of amounts realized from the sale of PTP interests under income code 57.
6. The aggregate amount reported by QI as amounts it withheld on Forms 1042-S for payments of amounts realized from the sale
of PTP interests under income code 57.
7. The total withholding reported by QI on Forms 1042-S for payments of amounts realized from the sale of PTP interests under
income code 57.
8. Amount of variance (if question 5 plus question 6 does not equal question 7) and attach an explanation for any variance.
9. The aggregate amount reported as withheld by another withholding agent on Forms 1042-S issued to QI (as a recipient) for payments of PTP distributions under income code 58.
10. The aggregate amount reported by QI as amounts it withheld on Forms 1042-S for payments of PTP distributions under income
code 58.
11. The total withholding reported by QI on Forms 1042-S for payments of PTP distributions under income code 58.
12. Amount of variance (if question 9 plus question 10 does not equal question 11) and attach an explanation for any variance.
13. Additional withholding required under section 1446(a) based on the results of the periodic review for payments of PTP distributions reportable on Form 1042-S under income code 27.
a. Total pre-curing:
b. Total post-curing:
14. Additional withholding required under section 1446(f) based on the results of the periodic review for payments of amounts realized from the sale of PTP interests reportable on Form 1042-S under income code 57.
a. Total pre-curing:
b. Total post-curing:
15. Additional withholding required under section 1446(a) based on the results of the periodic review for payments of PTP distributions reportable on Form 1042-S under income code 58.
a. Total pre-curing:
b. Total post-curing:
G. Reconciliation of Reporting on PTP-Related Payments
1. The aggregate amount reported as paid to QI on all Forms 1042-S issued to QI (as a recipient) with income code 27.
2. The aggregate amount reported as paid by QI on all Forms 1042-S filed by QI with income code 27.
3. Amount of variance (if question 1 does not equal question 2) and attach an explanation for any variance.
4. The aggregate amount reported as paid to QI on all Forms 1042-S issued to the QI (as a recipient) with income code 57.
5. The aggregate amount reported as paid by QI on all Forms 1042-S filed by QI with income code 57.
6. Amount of variance (if question 4 does not equal question 5) and attach an explanation for any variance.
7. The aggregate amount reported as paid to QI on all Forms 1042-S issued to QI (as a recipient) with income code 58.
8. The aggregate amount reported as paid by QI on all Forms 1042-S filed by QI with income code 58.
9. Amount of variance (if question 7 does not equal question 8) and attach an explanation for any variance.
10. The aggregate amount paid to QI for which QI acted as a Disclosing QI (and was therefore reported on Form 1042-S in Boxes
15a through 15i).
11. The aggregate amount paid by QI to its account holders for which QI acted as a Disclosing QI (as determined from QI’s books
and records).
12. Amount of variance (if question 10 does not equal question 11) and attach an explanation for any variance.
H. Other Reporting. Report the number of account holders for which QI did not properly apply the procedures of section 8.07 of
the QI agreement.

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APPENDIX II
Section I. Background.
To the extent provided in section 10.05 of the QI agreement and this Appendix II, the reviewer is permitted to use a sampling methodology to perform the periodic review. This Appendix II includes safe harbor procedures covering basic sample design parameters and
methodologies, including sample size, strata allocation, and projection. Except as otherwise provided, the terms used in this Appendix
II are as defined in the QI agreement.
Generally, sampling should only be used whenever an examination of all accounts within a particular class of accounts would be
prohibitive due to time or expense. If it is reasonable to examine all accounts in connection with a particular part of the periodic
review, sampling techniques should not be used. Sampling should be used only if there are more than 60 accounts to review. If any
accounts of QI held by PAIs (“PAI Accounts”) or accounts of QI held by partnerships or trusts utilizing the agency option (“Agency
Accounts”) are also included in QI’s review (because the PAI or the partnership or trust did not perform its own periodic review), the
PAI Accounts or Agency Accounts should be included in the sample of accounts for which QI acts as a QI (“QI Accounts”) by adding
additional strata through replication of the strata prescribed in section II.A.3 of this Appendix II, as applicable. For purposes of QI’s
periodic review, a QI Account is referred to as a “sample unit” (and collectively as the “sample”) with respect to each review. The
sampling methodology employed envisions a documentation review (as prescribed in section 10.05(A) of the QI agreement) requiring review of all selected sample units and a review of (1) withholding rate pool classifications (as prescribed in section 10.05(B) of
the QI agreement), (2) withholding responsibilities (as prescribed in section 10.05(C) of the QI agreement), and (3) return filing and
information reporting (as prescribed in section 10.05(D) of the QI agreement) that require review of a subset (a “spot check” under
section II.B.1 of this Appendix II) of the sample units reviewed in the documentation review.
The statistical sampling methodologies used in this Appendix II are not intended to be and cannot be used for any other tax purpose.
QI may use another sampling technique provided it documents its parameters and methodologies for the IRS to review, as described
in section 10.05 of the QI agreement, and adheres to the principles of Rev. Proc. 2011-42, 2011-37 I.R.B. 318. The IRS will determine
if a projection of underwithholding identified utilizing a statistical sampling method is required in accordance with section III.C of
this Appendix II.
A reviewer may request approval to modify the safe harbor methodology or approval of another sampling methodology in order to
select more than one sample or to use multistage, cluster, or other sampling methodologies including additional stratifications. To
obtain IRS approval, contact the Financial Intermediaries Program in accordance with section 12.06 of the QI agreement.
The safe harbor in this Appendix II applies to all periodic reviews starting with calendar year 2023.
Section II. Safe Harbor Methodology.
A. DOCUMENTATION REVIEW
1. Population.
(a) Population of QI Accounts. The population of QI Accounts consists of all accounts described below.
(1) All accounts held by U.S. persons (or account holders presumed to be U.S. persons) that received a reportable payment;
(2) All accounts held by non-U.S. persons (or account holders presumed to be non-U.S. persons) that received a reportable amount;
(3) All accounts that received a PTP distribution; and
(4) All accounts that received an amount realized from the sale of a PTP interest.
Additionally, if a combined periodic review is conducted, the population of QI Accounts will include the above accounts of both the
predecessor QI and successor QI. See section 11.05(B) of the QI agreement (describing the requirements for a combined periodic
review).

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2. Sample Sizes for Documentation Review.
(a) Sample Size Calculations. The sample size for each sample is the lesser of (1) the number of sample units determined using the
sample formula in section II.A.2(b) of this Appendix II, or (2) 25 percent of the total number of sample units in the population. However, in determining the sample size, the reviewer must adhere to the guidelines for minimum stratum sample size in sections II.A.3
and II.A.4 of this Appendix II. This may result in a sample size greater than the sample size resulting from using the formula in section
II.A.2(b) of this Appendix II. The minimum sample size of any sample shall not be less than 60. A sample size larger than calculated
under this section may be used without contacting the Financial Intermediaries Program.
This sample size calculation is determined without regard to any required certainty stratum (e.g., the strata referenced in section
II.A.3(a) of this Appendix II), or a sample used in a combined periodic review for a predecessor QI. In these instances, the number of
accounts to be included in the certainty strata are in addition to the sample size calculation detailed in this section. A certainty stratum
is a stratum in which all sample units are reviewed.
If PAI Accounts or Agency Accounts have been added to the sample of QI Accounts because the PAI or partnership or trust did not
perform its own periodic review, a separate sample size calculation should also be performed for the PAI Accounts or the Agency
Accounts as if they were part of a separate QI sample. If multiple samples are used, the sample size for each sample (including for
any additional PAI Accounts or Agency Accounts) is calculated independently.
(b) Sample Formula. While the following formula, when used with the variable values stated below, is intended not to result in a
sample size greater than 321, the total sample size for a single sample may exceed 321 in certain instances such as when the sample
includes (1) PAI Accounts, (2) Agency Accounts, (3) accounts for which QI used the joint account option, (4) accounts in a certainty
strata, or (5) accounts of a predecessor QI and successor QI in a combined review. Sample size may also exceed 321 when the
reviewer uses “optional further stratification by dollar amounts” (see section II.A.6 of this Appendix II). Additionally, the reviewer
may, in its discretion, have a sample population larger than that resulting from the safe harbor method.
The number of sample units to be reviewed is determined using the sample formula as follows:
t 2 PQ
d2
Sample Size =
1 (t 2 PQ 1)
1+
N
d2
where t = 1.645 (confidence coefficient at 95 percent one-sided)
P = 5 percent (error rate) for the QI account sample
Q = 1-P
d = 2 percent (precision level)
N = total population
3. Strata.
Sample of QI Accounts. The reviewer must segregate all QI Accounts into the following strata. While segregating accounts, steps
should be taken to ensure all partnerships and trusts for which QI has utilized the joint account option are placed into the appropriate
direct account stratum (stratum b), while the underlying partners, beneficiaries, or owners of the partnerships or trusts are excluded
from the indirect stratum (stratum d). Such underlying accounts will be selected for review in accordance with section II.A.7 of this
Appendix II.
Further substratification by dollar amounts may be used in accordance with section II.A.6 of this Appendix II.
The strata are as follows:
(a) A stratum of the thirty top dollar value accounts as determined by the total of the PTP distributions and amounts realized from
sales of PTP interests paid to an account. All accounts in this stratum are to be reviewed for purposes of section 10.05(A) of the QI
agreement. After removing these accounts, further accounts are to be selected randomly from the below strata in accordance with the
sample size calculation specified in Section II.A.2 of this Appendix II and the allocation method specified in Section II.A.4 of this
Appendix II;

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(b) A stratum of all accounts that are held by direct account holders that are not U.S. non-exempt recipients;
(c) A stratum of all accounts that are held by direct account holders that are U.S. non-exempt recipients; and
(d) A stratum of all accounts held by indirect account holders.
If a sample is used in a combined periodic review, certainty strata containing accounts from the predecessor QI replicating all strata
described above must be formed. Each stratum must contain the fifteen top dollar value accounts of the predecessor QI as measured
by the total of reportable amounts paid to foreign recipients, reportable payments paid to U.S. recipients, total PTP distributions paid
to an account, and total amounts realized from sales of PTP interests paid to an account. Every sample unit determined under the preceding sentence must be reviewed. The remainder of the accounts of the predecessor QI, along with all the accounts of the successor
QI, must be placed into strata (a) through (d).
4. Allocation of Sample Size to Each Stratum.
The reviewer must allocate the number of sample units for each sample (including for any PAI Accounts or Agency Accounts added
to the sample of QI Accounts) independently of the other samples. The reviewer must allocate the number of sample units in the
sample determined under section II.A.2 of this Appendix II to each of the three randomly selected strata (that is, strata b, c, and d)
described in section II.A.3 of this Appendix II. The sample units are allocated by multiplying the number of sample units in the sample, as determined under section II.A.2 of this Appendix II, by a fraction, the numerator of which is the total number of sample units
in the stratum and the denominator of which is the total number of sample units in the population. The minimum number of sample
units in any stratum must be the lesser of 60 sample units or the number of sample units in the stratum. If the allocation of sample
units to a stratum using the above method results in a sample size of a stratum that is less than 60 and less than the actual number of
sample units in the stratum, the minimum allocation to that stratum is the total number of sample units in the stratum. In this case,
the difference between number of accounts sampled using the above-referenced fraction and the actual number of accounts sampled
can be used to reduce the number of accounts sampled in the other two randomly selected strata on a pro rata basis; however, this
reallocation cannot be used to reduce the sample size of any stratum below 60. Additionally, in instances where there are less than
60 accounts in a stratum population it is not necessary to reallocate the difference between 60 and the actual number of accounts in a
stratum population over the other strata; and, therefore, such an instance should not increase the total sample size.
5. Random Number Generator.
The reviewer must select for the documentation review under section 10.05(A) of the QI agreement sample units from each non-certainty stratum identified in section II.A.3 of this Appendix II by using a random number generator. Random numbers should be drawn
separately for each sample (including for any PAI Accounts or Agency Accounts added to the sample of QI Accounts) including the
use of separate seeds. Information regarding the random number generator used must be included in the records as required in section
III.D of this Appendix II. This information must be sufficient to allow the IRS to replicate the random numbers as well as to allow the
reviewer to continue the sequences of randomly generated numbers if it is determined additional sample units need to be reviewed.
This information must include the name and version of the random number generator, the seed numbers used or generated, specification of any options selected, and the computer equipment on which the random number generator was run.
6. Optional Further Stratification by Dollar Amounts.
For each sample (including for any PAI Accounts or Agency Accounts added to the sample of QI Accounts), the reviewer may further
stratify by dollar amounts for that sample without submitting a request for approval to the Foreign Intermediaries Program when the
reviewer is otherwise selecting the sample in accordance with this Appendix II. Reportable amounts for foreign recipients, reportable
payments for U.S. recipients, PTP distributions, and amounts realized from sales of PTP interests are to be considered in the substratification. If the reviewer chooses to substratify under this section, the reviewer must comply with the following rules:
(a) A certainty stratum consisting of sample units that have received payments of the highest dollar amounts during the review year
must be created. This stratum shall consist of 30 accounts;
(b) The remaining strata shall be randomly selected to contain approximately equal amounts in each substratum; and
(c) The minimum stratum size shall not be less than 30 sample units.

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7. Determining Rate of Withholding for Partnerships and Trusts for Which the QI has Applied the Joint Account Option.
When reviewing documentation of partners, beneficiaries, or owners of a partnership or trust to which QI has applied the joint account
option to determine the rate of withholding QI should have applied to the partnership or trust, the reviewer may limit the review to
the number of partners, beneficiaries, or owners by referring to the table below. The underlying partners, beneficiaries, or owners in
the partnership or trust must be selected randomly.
Number of partners, beneficiaries, or owners
0 – 10
11 – 14
15 – 19
20 – 24
25 – 29
30 – 34
35 – 39
40 – 49
50 – 74
75 – 99
100 – 199
200 – 499
500 – 4,999
> 4,999

/ Number to be reviewed
All
10
13
16
18
20
21
22
24
26
27
29
31
32

8. Determining Rate of Withholding for Partnerships and Trusts for Section 1446(a) and (f) Withholding.
When the status of a partner in a partnership or a grantor or owner of a trust is relevant to determining the rate of withholding for a
partnership or trust receiving an amount subject to withholding under section 1446(a) or (f), the partners, grantors, or owners to be
reviewed must be determined randomly, with the number of partners, grantors or owners limited by reference to the table provided
in section II.A.7 of this Appendix II.
B. WITHHOLDING RATE POOL, WITHHOLDING RESPONSIBILITIES, AND RETURN FILING AND INFORMATION
REPORTING REVIEWS (SPOT CHECK)
1. Selection of Accounts for Review.
For purposes of reviewing the sampled accounts for compliance with withholding rate pool requirements, withholding responsibilities, and return filing requirements under sections 10.05(B) through 10.05(D) of the QI agreement, the reviewer must perform a spot
check review (spot check) of accounts from every stratum in the sample that failed the documentation review under section 10.05(A)
of the QI agreement, taking into account the applicable presumption rules of section 5.13 of the QI agreement. With respect to the
accounts described in the preceding sentence, the reviewer may exclude from the spot check any account for which the QI did not
apply a reduced rate of withholding.
To the extent that the number of sample units selected under the preceding paragraph (or selected from the population, if the reviewer
has not used statistical sampling) in any stratum is less than 30, the reviewer must also select for the spot check (in the order selected
by the random number generator under section II.A.5 of this Appendix or, if the reviewer has not used statistical sampling, in the
order used by the QI for its record keeping) an additional number of sample units drawn from that stratum that equal the difference
between 30 and the number of sample units from the sample in that stratum.
If applicable, the reviewer must randomly select for spot check 20 accounts in stratum (a) under section II.A.3 of this Appendix II.
Additionally, every account in the certainty stratum for the predecessor QI in a combined periodic review must be selected for spot
check.

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When performing the spot check, if the reviewer determines underwithholding occurred on a payment to an account, all payments to
that account must be considered when calculating total underwithholding for that account.
Section III. Additional Requirements Regarding the Use of Sampling
A. DOCUMENTATION OF SAMPLE PLAN
The reviewer should provide in its periodic report the information described in Rev. Proc. 2011-42, Appendix (A), Sampling Plan
Standards, and Appendix (B), Sampling Documentation Standards, as applicable. Additionally, originally recorded payment and
withholding amounts, as well as the amount that should have been withheld and the amount actually withheld as determined by the
compliance review, should be retained for every sample unit, along with additional information required by this Appendix II.
B. DETERMINATION OF UNDERWITHHOLDING
If the reviewer determines that underwithholding has occurred with respect to the sampled accounts, QI must notify the Financial
Intermediaries Program within 30 days of the completion of the periodic review of any underwithholding identified in the review,
as provided in section 12.06 of the QI agreement, and the amount of any underwithholding that remains after any curing. Curing for
purposes of the preceding sentence is limited to curing performed after the selection of the sample. QI shall report and pay, in accordance with the requirements of the QI agreement, the actual underwithheld tax without regard to projection, as determined at the end
of the 30-day period. The QI may continue to cure up to 60 days after the date on which the IRS proposes a deficiency with respect
to the underwithholding.
C. PROJECTION
1. When the IRS reviews QI’s periodic certification, it will determine if a projection of underwithholding is required based on QI’s
periodic review report, factual information provided, and other relevant information. If a projection is required, the IRS will determine the total amount of underwithheld tax by projecting the underwithholding over the entire stratum of similar accounts using a
projection method that is consistent with the sampling method used on a post cure basis. For example, if a stratified random sampling
method permitted in this Appendix II has been used, the IRS may determine the total amount of underwithheld tax by first determining the amount of underwithheld tax within each stratum by projecting actual underwithholding within a stratum over the entire
stratum, and then totaling underwithholding over all strata as follows:
(a) Divide the amount of underwithholding within each stratum by that stratum’s sample size;
(b) Multiply the result in (a) by the total number of accounts in that stratum; and
(c) Total the results of (b) for all strata.
2. The following is an example of how underwithholding may be projected over the population to determine a deficiency in tax with
respect to QI:
A QI has QI designated accounts as follows:
Stratum B contains 1025 accounts
Stratum C contains 1025 accounts.
Stratum D contains 0 accounts.
Following the safe harbor sampling methodology in this Appendix II, the total sample size is 278 as allocated below:
Stratum B sample size = 139.
Stratum C sample size = 139.
Stratum D sample size = 0.

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Stratum B has 10 accounts with documentation insufficient to support the reduced rate of withholding applied by the QI for total
underwithholding of $2,500. The QI subsequently cures the documentation for 4 of the accounts leaving 6 uncured accounts for a
total remaining underwithholding of $1,250.
Stratum C has 6 accounts with documentation insufficient to support the reduced rate of withholding applied by the QI for total
underwithholding of $600. The QI subsequently cures the documentation for 1 of the accounts leaving 5 uncured accounts for a total
remaining underwithholding of $500.
The total underwithholding would be calculated as follows:
Total projected stratum underwitholding = (total actual stratum underwithholding/number of accounts selected for the sample in the
stratum) * total number of accounts in the stratum.
Stratum B: (1,250 / 139) * 1025 = $9,217.63
Stratum C: (500 / 139) * 1025 = $3,687.05
Total Underwithholding = $9,217.63 + $3,687.05 = $12,904.68
3. The IRS reserves the right to review and adjust any projection of underwithholding. If after reviewing all relevant information, the
IRS determines that further action is necessary with respect to determining the amount of underwithholding for the year of review or
any other year, the IRS may request that QI have the reviewer review additional sample units or conduct a full review of the entire
sample (or determine that a projection of any underwithholding is unwarranted).
4. If the reviewer has determined that overwithholding has occurred with respect to a sample, projection may not be used for purposes
of a refund. A projection of overwithholding may offset any underwithholding in the sample, however, provided that the IRS determines projection to be appropriate and QI enters into a closing agreement (Form 906) that QI will not file a claim for refund for any
overwithholding that the reviewer has discovered.
D. Reporting of Sample Results in the Periodic Review Report
The reviewer should describe in the periodic review report the steps taken to construct the sample population and to ensure all
accounts subject to review were included in the population and subject to sampling under the procedures outlined in this Appendix
II. In constructing the population, the reviewer should reconcile total payments made to accounts in the population and total withholding of amounts to Part IV, sections E (Reconciliation of Reporting on Payments of Reportable Amounts) and F (Reconciliation
of Withholding on Reportable Amounts) and Part VII (PTP-Related Payments) of Appendix I to the QI agreement, where applicable.
The reviewer should also record the original population and sample statistics separately for each sample (including for any PAI
Account or Agency Account added to the sample of QI Accounts) by stratum as follows:
(1) Total number of sample units in the population;
(2) Total number of sample units in the sample;
(3) Total reportable amounts for foreign recipients in the population;
(4) Total reportable payments for U.S. recipients in the population;
(5) Total reportable amounts for foreign recipients in the sample;
(6) Total reportable payments for U.S. recipients in the sample;
(7) Total PTP-related payments (as described in Part VII of Appendix I) in the population;
(8) Total PTP-related payments (as described in Part VII of Appendix I) in the sample;
(9) Total chapter 3 withholding in the population;

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(10) Total chapter 4 withholding in the population;
(11) Total chapter 3 withholding in the sample;
(12) Total chapter 4 withholding in the sample;
(13) Total backup withholding in the population;
(14) Total backup withholding in the sample;
(15) Total PTP-related withholding (as described in Part VII of Appendix I) in the population; and
(16) Total PTP-related withholding (as described in Part VII of Appendix I) in the sample.

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APPENDIX III
General Instructions: Information requested in this Appendix III relates to Forms 1042 and 1042-S. Use an excel spreadsheet format
to replicate all parts and provide responses (amounts only). Attach the spreadsheet when submitting QI’s periodic certification.
For waiver requests, provide the information for each year of the certification period. Otherwise, provide the information for each
year of the certification period except the periodic review year. Responses should reflect the last amended return filed, if applicable.
The box/line numbers below are as shown on Forms 1042 and 1042-S for the 2022 year. If a box or line number changes in future
years, the equivalent line or box should be used.
Provide a detailed analysis and explanation of all variances (1-9) and additional variances listed below. Attach additional documents
as needed.
PART 1 – INFORMATION ON FORMS 1042-S ISSUED TO AND FILED BY QI.
A. (box 2) Total of gross income as reported on all Forms 1042-S filed by QI: $
B. (box 7a) Total of federal tax withheld by QI on all Forms 1042-S filed by QI: $
C. (box 8) Total of tax withheld by other agents on all Forms 1042-S filed by QI: $
D. (box 10) Total withholding credit as reported on all Forms 1042-S filed by QI: $
E. (box 2) Total of gross income as reported on all Forms 1042-S issued to QI as a recipient: $
F. (box 10) Total withholding credit as reported on all Forms 1042-S issued to QI as a recipient: $
G. (box 9) Total overwithheld tax repaid to recipient pursuant to adjustment procedures on all Forms 1042-S filed by QI: $
H. (box 11) Total tax paid by withholding agent (amounts not withheld) on all Forms 1042-S filed by QI: $
PART 2 – INFORMATION ON FORM 1042 FILED BY QI
I. (line 62c) Total gross amounts reported on Form 1042: $
J. (line 63a + 63c(2)) Tax withheld by QI reported on Form 1042: $
K. (line 63b(1) + 63b(2)) Tax withheld by other withholding agents reported on Form 1042: $
L. (line 63c(1)) Adjustments to overwithholding reported on Form 1042: $
M. (line 63e) Total tax reported as withheld or paid on Form 1042: $
N. (line 64e) Total net tax liability reported on Form 1042: $
O. (line 67a + 67b) Credits for amounts withheld by other withholding agents reported on Form 1042: $
PART 3 - RECONCILIATION OF FORMS 1042-S ISSUED TO QI TO FORMS 1042-S FILED BY QI.

Variance 1 (gross income): A – E = $

Variance 2 (tax withheld by other withholding agents): C – F = $

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PART 4 – RECONCILIATION OF FORM 1042 FILED BY QI TO FORMS 1042-S FILED BY QI.

Variance 3 (gross income): I – A = $

Variance 4 (tax withheld by QI): J – B = $

Variance 5 (tax withheld by other withholding agents): K - C = $

Variance 6 (adjustments to overwithholding by QI): L – G = $

Variance 7 (total tax reported as withheld or paid): M – (D + H) = $

PART 5 – RECONCILIATION OF ITEMS ON FORM 1042 FILED BY QI

Variance 8 (amounts withheld by other withholding agents): K – O = $

Variance 9 (tax withheld or paid compared to net tax liability): M – N = $

Explanation of Variances:
Amounts received for which no Form 1042-S reporting was required and reporting was not received.

QDD related:

Non-QDD related:

Amounts paid by QI for which Form 1042-S reporting was required but were not reported.

QDD related:

Non-QDD related:

Note: Certain payments to a QDD are subject to reporting even if no amount is withheld from the payment, and amounts on which
a withholding agent withheld are subject to reporting whether or not the amount is subject to withholding. See §1.1461-1(c)(2)(i)(M)
(covering dividends and substitute dividends). Certain amounts paid to a QDD, however, are not required to be reported on Form
1042-S. See §1.1461-1(c)(2)(ii)(J).

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