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International Tax Update: New Guidance from IRS on Partnership Withholding Rules

This week IRS issued proposed regulations under the new Section 1446(f). Section 1446(f) requires withholding on the sale of a partnership interest, where the partnership is engaged in a U.S. trade or business and the transferor is a foreign person.

Guidance in the proposed regulations include:

  1. special rules for publicly traded partnerships
  2. reporting requirements for partnerships with foreign transferors, including the new Form 8308
  3. coordination with other partnership withholding rules
  4. exceptions from withholding
  5. how to determine the amount to withhold and remit to the IRS
  6. penalties for agents that have failed to properly withhold and report

Based on this guidance we can expect changes to some existing withholding forms and new forms to be added.

Stay tuned for more International tax updates as they are released! If you have any questions, please fill out the form below.

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