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26 CFR 1.1441-1(e)(5) and (6). Proposed Amendments to the Qualified Intermediary
Agreement in Rev. Proc. 2017-15.

Notice 2022-23

SECTION 1. PURPOSE AND SCOPE

This Notice sets forth proposed changes to the qualified intermediary (QI)
withholding agreement (QI agreement) described in §1.1441-1(e)(5) and (6) that will
permit a QI to assume withholding and reporting responsibilities for purposes of
sections 1446(a) and (f). In general, the QI agreement allows foreign persons to enter
into an agreement with the Internal Revenue Service (IRS) to simplify certain of their
obligations as a withholding agent under chapters 3 and 4 and as a payor under chapter
61 and section 3406 for amounts paid to their account holders. The QI agreement
currently in effect, as provided in Rev. Proc. 2017-15, 2017-3 I.R.B. 437 (the QI
agreement), expires on December 31, 2022. This Notice sets forth proposed changes
to the QI agreement that apply to a QI effecting a transfer of an interest in a publicly
traded partnership (PTP) or receiving a distribution made by a PTP on behalf of an
account holder of the QI. The Treasury Department and the IRS anticipate that the
proposed changes to the QI agreement described in this Notice, subject to any
modifications based on comments received, will be included in a revenue procedure
containing the final QI agreement. The final QI agreement will apply to QI agreements
that are in effect on or after January 1, 2023, to correspond with both the applicability

date of final regulations relating to withholding under sections 1446(a) and (f) and the
expiration of the QI agreement.
Section 2 of this Notice provides background on the QI agreement and sections
1446(a) and (f). Section 3 of this Notice describes the highlights of the proposed
changes to the QI agreement. Section 4 of this Notice contains the text of the
proposed changes to the QI agreement. Section 5 of this Notice provides information
on how to submit comments. Section 6 of this Notice provides drafting information.
SECTION 2. BACKGROUND
.01 Section 1446(f) Final Regulations.
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 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, final regulations (TD 9926) were published in the
Federal Register (85 FR 76910) to implement the withholding requirements of section
1446(f) (the final regulations). The final regulations include withholding and reporting

requirements applicable to brokers that pay amounts realized on transfers made by
foreign partners of interests in PTPs that are publicly traded on an established securities
market or readily tradable on a secondary market (or the substantial equivalent thereof)
(PTP interests). The final regulations allow brokers an exception from withholding on
amounts realized paid to QIs that assume primary withholding responsibility for these
amounts and provide guidance for brokers paying amounts realized to QIs that do not
assume primary withholding responsibility (generally allowing the broker to accept from
the QI either payee specific or withholding rate pool information). The final regulations
provide brokers other exceptions to the withholding requirements, including for a foreign
partner’s valid claim for exemption based on an income tax treaty or partner’s claim of
status as a U.S. person. The final regulations also allow an exception to withholding
(applicable to any partner) when the PTP publishes a qualified notice stating the
applicability of a “10-percent exception.” A 10-percent exception applies when either (i)
a PTP’s net gain from a deemed sale of its assets under section 864(c)(8) that would be
effectively connected with a trade or business in the United States is less than 10% of
the total net gain as of a designation date applicable to a partner’s transfer of an interest
in the PTP, or (ii) the PTP is not engaged in a trade or business in the United States.
See §1.1446(f)-4(b) for these exceptions to withholding. The final regulations generally
define an amount realized as the gross proceeds (as defined in §1.6045-1(d)(5)) from a
sale of a PTP interest and the amount of a PTP distribution that is in excess of the
cumulative net income of the PTP. They also allow a broker to rely on a certification of
a modified amount realized when a transferor that is a foreign partnership provides

certain information with respect to its partners that are allocated gain from the transfer
of a PTP interest. See §1.1446(f)-4(c)(2)(ii).
The final regulations also amend regulations under section 1446(a) relating to
distributions by PTPs, which include an allowance for a QI to act as a nominee for
purposes of assuming primary withholding responsibilities on a distribution from a PTP
for purposes of section 1446(a) by assuming primary withholding responsibility for the
entire distribution. Similar to an amount realized paid to a QI that does not assume
primary withholding responsibility, the final regulations generally permit a PTP or a
nominee to rely on either withholding rate pool information or specific payee information
from a QI for purposes of section 1446(a) when the QI does not act as a nominee for a
PTP distribution. The final regulations further provide a withholding default rule that
applies to a nominee when a PTP either does not issue a qualified notice for a
distribution or issues a qualified notice that lacks information necessary to determine all
withholding required on the distribution. Under Notice 2021-51, 2021-36 IRB 1, the
provisions of the final regulations related to withholding on transfers of PTP interests
and withholding on PTP distributions apply to transfers and distributions that occur on or
after January 1, 2023.
As a result of the allowances in the final regulations for QIs to assume
withholding and reporting responsibilities for purposes of sections 1446(a) and (f), this
Notice proposes modifications to the QI agreement to incorporate the requirements for
QIs with respect to sections 1446(a) and 1446(f). Highlights of the proposed
modifications to the QI agreement are described in Section 3 of this Notice.

.02 Overview of QI Agreement.
The QI agreement provides that a QI may assume primary withholding
responsibility under chapters 3 and 4 for certain payments of U.S. source FDAP income
made to its foreign account holders or the foreign account holders of another
intermediary by providing a valid qualified intermediary withholding certificate to its
withholding agent and designating the account(s) for which the QI assumes primary
withholding responsibility. A QI is not required to assume primary chapter 3 and
chapter 4 withholding responsibility for all accounts it holds with a withholding agent. A
QI that does not assume primary chapter 3 and chapter 4 withholding responsibility for
an account provides to its withholding agent a valid QI withholding certificate that
indicates that the QI does not assume primary withholding responsibilities under
chapters 3 and 4 and attaches a withholding statement that includes withholding rate
pool information (i.e., aggregate information about the account holders and the
withholding rate applicable to each pool). Notwithstanding a QI’s allowance not to
assume primary withholding responsibilities, a QI is still required to withhold if it knows
that the appropriate amount has not been withheld by another withholding agent or if the
QI made an error that results in withholding at less than the correct amount. For
determining the amount to withhold, a QI may generally document account holders by
obtaining either withholding certificates or documentary evidence under a country’s
approved “know your customer” rules. In a case in which overwithholding is applied on
a payment, a QI is generally permitted to file a collective refund on behalf of its foreign
account holders that are entitled to a refund of the tax withheld. Finally, a QI is

generally permitted to report on Forms 1042-S on a pooled basis rather than file and
furnish a Form 1042-S with respect to each account holder.
Withholding under section 1446(a) is not currently within the scope of a QI’s
requirements under the QI agreement. As a result, a QI is not currently permitted to act
as a QI with respect to an amount subject to withholding under section 1446(a) on a
PTP distribution received on behalf of an account holder. The proposed modifications
set forth in Section 4 of this Notice would extend the scope of the QI agreement to
include sections 1446(a) and 1446(f).
SECTION 3. HIGHLIGHTS OF THE PROPOSED MODIFICATIONS TO THE QI
AGREEMENT

.01 Withholding under sections 1446(a) and (f).
The proposed modifications to section 3 of the QI agreement provide general
requirements for QIs with respect to withholding under sections 1446(a) and (f). QIs are
permitted to assume primary withholding responsibility under sections 1446(a) and (f) on
a payment-by-payment basis based on a valid withholding certificate permitted under the
modifications to section 6 of the QI Agreement and without regard to whether the QI
assumes withholding under chapters 3 and 4 for payments other than PTP distributions.
The modifications to section 3 of the QI agreement specifically provide that a QI that
assumes primary withholding responsibility on any portion of a PTP distribution will be
required to assume withholding responsibilities for the entire distribution. The
modifications also reference each of the amounts subject to withholding on a PTP
distribution and how a QI is to determine each amount for purposes of withholding. For

cases in which a QI does not assume primary withholding under section 1446(a) or (f) for
a payment, a QI is permitted to provide to its withholding agent the withholding statements
and other information described in the modifications to section 6 of the QI agreement and
is subject to the same residual withholding requirement that applies to its withholding
under chapter 3 or 4 when another withholding agent withholds less than the required
amount.
.02 Documentation for purposes of sections 1446(a) and (f).
Under the modifications to section 5 of the QI agreement, a QI is permitted to
document the status of an account holder that is a partner in a PTP as a foreign or U.S.
person for purposes of sections 1446(a) and (f) under requirements generally similar to
those for payments subject to chapter 3 or 4 withholding (that is, using either documentary
evidence or withholding certificates). However, when a QI acts as a disclosing QI by
providing specific partner documentation to a withholding agent for withholding under the
final regulations, the QI is permitted to document the status of an account holder based
on only a withholding certificate. See section 3.03 of this Notice. A QI must also
document an account holder using only a withholding certificate for purposes of applying
an exception to withholding under section 1446(a) or (f) based on an account holder ’s
claim under an income tax treaty or for applying an exception to withholding under section
1446(a) for an entity described in section 501(c). The modifications also include
requirements for QIs to document nonqualified intermediaries, flow-through entities, and
other QIs to which a QI pays amounts realized or PTP distributions and describe how a
QI reliably associates the documentation with payments made to account holders or

interest holders in those entities. A limitation rule is added, however, that a QI may not
reliably associate a payment of an amount realized under section 1446(f) with the account
holders of a nonqualified intermediary regardless of whether specific information about
the account holders of the nonqualified intermediary is provided to the QI. If a QI is unable
to reliably associate a payment of an amount realized or an amount subject to withholding
under section 1446(a) on a PTP distribution with valid documentation, the QI must treat
the account holder as a foreign person under the presumption rule added to section
5.13(C)(5) of the QI agreement and withhold at the applicable rate under section 1446(a)
or (f) except when backup withholding under section 3406 would apply to an amount
realized. See §1.1446(f)-4(b)(4) for coordinating withholding under sections 3406 and
1446(f).
.03 QI withholding certificates and withholding statements.
The modifications to section 6 of the QI agreement allow a QI to furnish a qualified
intermediary withholding certificate when paid an amount realized or PTP distribution.
When a QI does not assume primary withholding responsibility under section 1446(a) or
(f), the QI must also provide to its withholding agent a withholding statement that includes
either withholding rate pools or specific payee information (and associated payee
documentation) in lieu of withholding rate pool information when acting as a disclosing
QI. If a QI provides withholding rate pool information to a withholding agent with respect
to an amount realized, however, the QI may combine the withholding rate pool information
for its account holders with the account holders of another intermediary only if the
intermediary is a QI. In the case of a PTP distribution, a QI must determine its withholding

rate pools based on each amount subject to withholding on the distribution as determined
by the QI’s withholding agent.
.04 Reporting on Form 1042-S.
Under the modifications to section 8 of the QI Agreement, a QI may file Forms
1042-S on a pooled basis to report amounts realized and amounts subject to withholding
on PTP distributions to the same extent generally permitted for other payments covered
by the QI agreement. If a QI acts as a disclosing QI, however, the withholding agent or
broker for the QI is required to file Forms 1042-S with respect to the account holders of
the QI that are partners in a PTP, and the QI is not required to file a Form 1042-S unless
it knows or has reason to know that a correct Form 1042-S was not issued to a partner .
If a QI is provided account holder documentation from another QI acting as a disclosing
QI, the QI is also required to report on Form 1042-S with respect to the account holder
when the QI assumes primary withholding responsibility. In cases in which a QI does not
act as a disclosing QI it must also issue a separate Form 1042-S when requested by an
account holder under the conditions specified in the modifications. The modifications also
include the conditions for a QI to issue a separate Form 1042-S to report an amount
realized paid to an account holder of a nonqualified intermediary rather than to an
unknown recipient (despite that reliance on account holder documentation is not
permitted for the withholding) and require a QI to issue a separate Form 1042-S to an
account holder of a nonqualified intermediary to which the QI pays a PTP distribution.
.05 Requirements under §1.6031(c)-1T.
In general, under §1.6031(c)-1T(a), a nominee holding an interest in a partnership

directly or indirectly on behalf of another person is required to provide to the partnership
(or agent designated by the partnership or another nominee) certain information about
the nominee and the person on whose behalf the nominee holds an interest (including
the
name, address, taxpayer identification number of the nominee and such other person,
and a description of any interest in the partnership that the nominee holds, acquires, or
transfers on behalf of such other person during the partnership taxable year). If a
nominee does not provide the information described in the preceding sentence with
respect to such other person, under §1.6031(c)-1T(h) the nominee is in general required
to provide to the person a statement covering the person’s distributive share of
partnership income, gain, loss, deduction, or credit required to be shown on the
partnership return, and any additional information as required under the Code with
respect to items related to the person’s interest in the partnership.

The provisions of §1.6031(c)-1T are incorporated into the QI agreement in new
section 8.07 to facilitate the U.S. tax filings of foreign partners required to report
effectively connected income from their holdings and sales of PTP interests (which apply
regardless of whether the tax due is withheld). The modifications require a QI acting as
a disclosing QI to provide to the PTP or QI’s nominee the statement described in
§1.6031(c)-1T(a) with respect to an account holder holding a PTP interest (including an
account holder that is an intermediary in certain cases). In other cases, a QI may provide
the statement described in the preceding sentence to the PTP or may instead provide the
statement to the account holder that is described in §1.6031(c)-1T(h) with respect to the
account holder’s PTP interest. The QI must also facilitate the account holder’s receipt of

deemed sale information for purposes of section 864(c)(8) when requested.
.06 Private arrangement intermediaries and agency and joint account options for
partnerships and trusts.

The modifications add to the procedures under section 4 of the QI agreement for
QIs that maintain arrangements with private arrangement intermediaries (PAIs) that hold
PTP interests for account holders and provide the cases for which a QI may use the
agency and joint options when paying a PTP distribution or amount realized to a
partnership or trust. A QI is permitted to withhold on payments of amounts realized and
PTP distributions made to a PAI under requirements similar to those that apply in the
case of a disclosing QI that is an account holder of a QI (rather than allow the PAI to
assume primary withholding or provide withholding rate pools). As a result of this
treatment, a QI may determine its withholding on an amount realized paid to a PAI by
reference to the statuses of the PAI’s account holders (rather than treat the PAI as a
nonqualified intermediary as described in section 3.02 of this Notice) and must provide to
the PAI the statement described in §1.6031(c)-1T(a) with respect to each PAI account
holder to which a QI pays an amount realized or PTP distribution during the year. A QI
may apply the agency option with respect to a foreign partnership providing a certification
for a modified amount realized or for an amount subject to withholding under section
1446(a) on a PTP distribution unless the partnership is a PTP (as an upper-tier PTP is
not permitted to provide partner information to a lower-tier PTP for section 1446(a)
withholding). With respect to a trust, a QI may apply the agency option only for a trust
that is a grantor trust given that a simple trust is not permitted to provide beneficiary

information for section 1446(a) or (f) withholding. In cases for which the agency option is
not specifically permitted, a QI is not otherwise required to provide information to a
withholding agent or report with respect to the interest holders in a partnership or trust
under the regulations to sections 1446(a) and (f) (such that the agency option has no
application). However, the modifications do not permit a QI to use the joint account option
for payments of PTP distributions or amounts realized. As the use of this option is not
otherwise permitted when a partnership or trust has a U.S. partner, owner or beneficiary,
its use would be of limited application if applied to those payments.
.07 Refunds and underwithholding.
Given the filing requirements of foreign partners for reporting their effectively
connected income referenced in section 3.05 of this Notice, a QI is not permitted to file a
collective refund with respect to withholding under section 1446(a) or (f). If a QI
overwithholds under section 1446(a) or (f), the QI may apply the reimbursement and set-
off procedures to the same extent permitted for chapters 3 and 4 purposes. If a QI does
not withhold at the rate required under section 1446(a) or (f), the QI may apply the
procedures for underwithholding that apply for purposes of chapters 3 and 4.
.08 Events of default and material failures.
The modifications include material failures for cases in which a QI fails to withhold
as required under sections 1446(a) and (f) or fails to comply with the reporting
requirements of new section 8.07. The modifications include similar events of default for
when a QI fails to comply materially with either of those requirements.

SECTION 4. TEXT OF PROPOSED CHANGES TO THE QI AGREEMENT
The text of the proposed changes to the QI agreement is set forth below and
includes each section of the QI agreement that is proposed to be modified by this Notice
(adding as applicable new sections and revising certain section headings). The Treasury
Department and the IRS intend to incorporate the provisions of this Section 4 and
additional requirements for QIs under sections 1446(a) and (f) (such as the periodic
review requirements of QIs relevant to those sections) into the revised QI agreement that
is to apply beginning with the 2023 calendar year. Comments relating to this Section 4
are requested, in particular with respect to the procedures of proposed section 8.07.
Comments are further requested with respect to additional compliance procedures that
should be added to section 10 of the QI agreement for purposes of sections 1446(a) and
(f) and to Appendices I and II to the QI agreement for this purpose. See Section 5 of this
Notice.

* * *
SECTION 2. DEFINITIONS

* * *

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. 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 2.92(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 §1.1473-1(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 such an amount subject to chapter 4
withholding on a PTP distribution. See section 2.92(C) of this Agreement

* * *

Sec. 2.08. Beneficial Owner. A “beneficial owner” has the meaning given to that term
in §1.1441-1(c)(6) with respect to a payment subject to withholding under chapter 3.

* * *

Sec. 2.31. Flow-Through Entity. * * * 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. 2.92. 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:

(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 §1.6045-1(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 for those payees. A QI that acts as a disclosing QI for a payment must
act as a disclosing QI for the entire payment.

(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. 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 sections 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).

(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 §1.1446-4(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 2.92(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
.

SECTION 3. WITHHOLDING RESPONSIBILITY AND QDD TAX LIABILITY

Sec. 3.01. Withholding Responsibilities under Chapters 3 and 4 and Withholding
with respect to PTP Interests.

* * *

(1) Withholding on 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 for other exceptions to withhold under §1.1446(f)-4(b).

(2) Withholding under chapter 3, chapter 4, section 1446(a), and section 1446(f) on
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). 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.
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 subject to withholding, QI is
required to withhold only to the extent provided in the default rules 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 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 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 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 broker; or

(2) Made an error which results in the withholding agent or broker'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 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 interest.

(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.

* * *

To the extent that QI assumes primary withholding responsibility under this section
3.03(A), QI shall 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 (including
a QI acting as a QDD except for all payments with respect to underlying securities,
other than dividend equivalents, paid to a QDD for which withholding is required) or to a
WP or a WT.

* * *

(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 to a WP or WT with respect to an amount
subject to withholding under chapter 3 or 4 on the distribution.

* * *

Sec. 3.05. Primary Form 1099 Reporting and Backup Withholding Responsibility
for Reportable Payments Other Than Reportable Amounts.

* * *

Notwithstanding the preceding provisions, 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 (as otherwise
permitted in this section 3.05(C)) if QI also provides a valid withholding certificate to the
broker paying the proceeds to QI that indicates that QI assumes primary withholding
responsibility for the amount realized.

* * *

Sec. 3.08. Deposit Requirements.

* * *

The deposit requirements of this section 3.08 that apply to amounts that QI withholds
under chapter 3 and 4 also apply to the extent that QI assumes primary withholding
responsibility for a payment of a PTP distribution or amount realized from the sale of a
PTP interest.

SECTION 4. PRIVATE ARRANGEMENT INTERMEDIARIES AND CERTAIN
PARTNERSHIPS AND TRUSTS

Sec. 4.01. Private Arrangement Intermediaries–In General.

* * *

(G) * * * The limitations on a PAI’s disclosure of its direct account holders to QI
described in this section 4.01(G) 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.

Sec. 4.02. Modification of Obligations for PAI Agreements.

(A) Payments Reportable under Chapters 3 and 4. * * *

(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 using the chapter 3
reporting pools as described in section 8.03 of this Agreement with the PAI reported as
the recipient.

* * *

(D) Payments of Amounts Realized or PTP Distributions. The agreement between
QI and a PAI must provide that QI will satisfy the requirements of §1.6031(c)-1T as set
forth in section 8.07 of this Agreement with 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 PAI as if 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 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

* * *

Finally, nothing in the agreement between QI and a PAI shall permit the PAI to assume
primary withholding responsibility for a PTP distribution or an amount realized from the
sale of a PTP interest.

* * *

Sec. 4.05. Joint Account Treatment for Certain Partnerships and Trusts

* * *

(B) Modification of Obligations for QI.

(1) * * * 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.

Sec. 4.06. Agency Option for Certain Partnerships and Trusts.

(A) In General.

* * *

(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 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).

* * *

SECTION 5. DOCUMENTATION REQUIREMENTS

Sec. 5.01. Documentation Requirements.

(A) General Documentation Requirements.

* * *

If QI makes a payment of an amount realized on a sale of a PTP interest or a PTP
distribution, QI also agrees to use its best efforts to obtain the documentation from a
partner that is described in section 5.02 of this Agreement. 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).

* * *

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 or assuming
primary withholding responsibility for a substitute interest payment) or valid
documentary evidence that supports the account holder's status as a foreign person.

* * *

(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 withholding certificates for the amount of a PTP distribution
subject to withholding under section 1446(a) when acting as a disclosing QI.

(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 grantor trust, broker, or a
partnership providing the certification on Form W-8IMY for a modified amount realized)
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 withholding certificates when acting as a disclosing QI for an
amount realized. 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 or Partner’s Claim of Treaty Benefits.

* * *

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 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.

* * *

Sec. 5.04. Documentation for International Organizations. * * *
For example, an international organization may not claim benefits under this section
5.04 with respect to QI’s requirement to withhold under section 1446(a) or (f).

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, * * *

* * *

(C) * * * For example, 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.

* * *
Sec. 5.07. Documentation from Intermediaries or Flow-Through Entities.

* * *

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.

* * *

(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) 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 Form W-8IMY for a modified
amount realized, 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 owner of 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. See §§1.1446-4 and 1.1446-5(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-8 IMY 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.

(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 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 flow-through 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 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.

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. * * *

(F) Private Arrangement Intermediaries. * * * QI must also reliably associate a
payment made to a PAI with valid documentation with respect to the account holders of
the PAI for a payment of a PTP distribution or amount realized from the sale of a PTP
interest as described in section 5.07(D) of this Agreement.

* * *

(G) Partnerships or Trusts to which QI Applies the Agency Option. * * *

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 are unreliable or incorrect, or that 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)(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 withholding under chapters 3 and 4 and section 1446(a).
* * *

* * *

Sec. 5.13. Application of Presumption Rules.

(A) * * *

(B) Reliably Associating a Payment 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). * * *

(1) Reliably Associating a Payment with Documentation Provided by a
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 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 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 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 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.

* * *

(7) 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.

(8) 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 the 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 other
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 associated with valid documentation for
each of the account holders of the other QI as described in section 5.07(D) of this
Agreement.

* * *

(5) Other Payments.

* * * 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 determined
under §1.1446-4(d)(1)(iii).

SECTION 6. QUALIFIED INTERMEDIARY WITHHOLDING CERTIFICATE AND
DISCLOSURE OF ACCOUNT HOLDERS TO WITHHOLDING AGENT

Sec. 6.01. Qualified Intermediary Withholding Certificate.

QI agrees to 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.

* * *

Sec. 6.02. Withholding Statement.

(A) In General.

* * * Notwithstanding the preceding provisions of this section 6.02(A) 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
when QI does not assume primary withholding responsibility for the payment.

(B) Content of Withholding Statement.

* * *

(5) Designate an account for which QI assumes primary withholding responsibility for 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, 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 2.92(E) of this Agreement for the extent of a disclosing QI’s requirement to
provide specific payee information on a withholding statement.

Sec. 6.03. Chapters 3 and 4 Withholding Rate Pools and Specific Payee
Information.

(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.

* * *

* * * 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.

* * *

SECTION 8. INFORMATION REPORTING OBLIGATIONS

Sec. 8.01. Form 1042-S Reporting.

* * *

Sec. 8.02. Recipient Specific Reporting.

* * *

(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.
In the case of a PTP distribution for which a QI must report in accordance with the
preceding sentence, QI must file a separate Form 1042-S for each amount paid to the
foreign partner that is subject to withholding on the distribution to the extent required in
the instructions to Form 1042-S. Notwithstanding the preceding provisions of this
section 8.02(J), see section 8.02(M) of this Agreement for the reporting of 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 either such payment, QI must file a separate Form 1042-S to report the
payment when QI assumes primary withholding responsibility for the 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.

(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 acts as a nominee for a payment of a PTP distribution made 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 in the nonqualified intermediary. If QI
makes a payment of an amount subject to reporting under section 1446(f) to a
nonqualified intermediary for which QI must file Form 1042-S in accordance with section
8.02(J) of this Agreement, QI shall file the Form 1042-S for an unknown recipient except
that QI may instead file the Form 1042-S for an account holder of the nonqualified
intermediary receiving the payment when—

(1) QI acknowledges to the nonqualified intermediary that it 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 it will provide the nonqualified
intermediary a copy of each Form 1042-S issued as a result of this reporting;

(2) QI can reliably associate the payment with documentation for each 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 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 partnership holding a PTP interest to the
extent that QI determines a modified amount realized with respect to the partnership for
purposes of section 1446(f) or, for purposes of section 1446(a), when the 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 a foreign partner that requests
such form from QI to report a payment of an amount subject to withholding on a PTP
distribution or amount subject to reporting under section 1446(f) when the partner
provides its U.S. TIN to QI (or indicates in writing that it has applied for a U.S. TIN) and
makes the request to QI within three full calendar years following the year in which QI
made the payment for which the Form 1042-S is requested. If QI files a separate Form
1042-S with respect to an amount paid to a foreign partner as described in the
preceding sentence, QI must also file a separate Form 1042-S for each other amount
paid to the foreign partner for the calendar year with respect to all accounts held by
foreign partner with QI.

Sec. 8.03. Reporting Pools for Form 1042-S Reporting.

(A) Chapter 4 Reporting Pools.

* * * 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. * * *

(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 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 to a partnership or trust described in
section 4 of this Agreement. * * *

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. An account holder for purposes of this section 8.07 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 the 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). If QI does not provide the statement specified in §1.6031(c)-1T(a) as
described in the preceding sentence, 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 such a case, 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) to the PTP in which the interest is held (or
PTP’s agent) or QI’s nominee for the payment. Additionally, in a case in which QI
provides the statement to QI’s nominee, QI must obtain from the nominee a written
representation that the nominee is acting as an agent of the PTP for purposes of the
statement unless QI otherwise appoints the nominee as its agent for providing the
statement to the PTP (or the PTP’s agent). 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.

* * *

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 on 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).

Sec. 9.02. Adjustments for Overwithholding by QI Assuming Primary Withholding
Responsibility.

* * *

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.

Sec. 9.05. Adjustments for Underwithholding.

* * *

QI may withhold from future payments in a case in which QI underwithheld on an
amount realized or PTP distribution to the same extent applicable to an amount QI
underwithheld on under chapter 3 or 4.

Sec. 9.04. Collective Credit or Refund Procedures for Overwithholding.

* * *

(A) Payments for which a Collective Refund is Permitted.

* * *

QI is not permitted to use the collective refund procedures with respect to an amount
withheld on an amount realized on a sale of a PTP interest or on a PTP distribution. * * *

* * *

SECTION 10. COMPLIANCE PROCEDURES

* * *

10.03. Certification of Internal Controls by Responsible Officer.

* * *

(B) Material Failures.

(1) Material Failures Defined.

* * *

(iv) * * *

(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 section 8.07 of this Agreement with respect to one
or more account holders that are partners holding PTP interests (including account
holders of another intermediary when QI acts as an agent for meeting these
requirements).

* * *

SECTION 11. EXPIRATION, TERMINATION, MERGER AND DEFAULT

* * *

Sec. 11.06. Event of Default. * * *

(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 or to file an amended Form 1042
or 945 reporting, and paying, the appropriate tax;

* * *

(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).

SECTION 5. SUBMISSION OF PUBLIC COMMENTS
Written comments may be submitted by May 31, 2022. Comments should include
a reference to Notice 2022-23. Comments may be submitted in one of two ways:
(1) Electronically via the Federal eRulemaking Portal at www.regulations.gov (type
IRS-2022-0010 in the search field on the regulations.gov homepage to find this notice
and submit comments).
(2) Alternatively, by mail to: Internal Revenue Service, CC:PA:LPD:PR (Notice
2022-23), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.
All commenters are strongly encouraged to submit comments electronically, as
access to mail may be limited. The IRS expects to have limited personnel available to
process public comments that are submitted on paper through mail. Until further notice,
any comments submitted on paper will be considered to the extent practicable. The
Treasury Department and the IRS will publish for public availability any comment
submitted electronically, and to the extent practicable on paper, to its public docket.
SECTION 6. DRAFTING INFORMATION
The principal author of this Notice is W. Shawver Adams of the Office of Associate
Chief Counsel (International).
For further information regarding this Notice, contact John
Sweeney at (202) 317-3800 (not a toll-free call).

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