80_FR_76180 80 FR 75946 - Dividend Equivalents From Sources Within the United States; Correction

80 FR 75946 - Dividend Equivalents From Sources Within the United States; Correction

DEPARTMENT OF THE TREASURY
Internal Revenue Service

Federal Register Volume 80, Issue 234 (December 7, 2015)

Page Range75946-75947
FR Document2015-30778

This document contains corrections to final and temporary regulations (TD 9734) that was published in the Federal Register on September 18, 2015 (80 FR 56866). These corrections include a change to the effective date that was applicable to transactions issued on or after January 1, 2016, and before January 1, 2017. This document provides guidance to nonresident alien individuals and foreign corporations that hold certain financial products providing for payments that are contingent upon or determined by reference to U.S. source dividend payments.

Federal Register, Volume 80 Issue 234 (Monday, December 7, 2015) 
[Federal Register Volume 80, Number 234 (Monday, December 7, 2015)]
[Rules and Regulations]
[Pages 75946-75947]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-30778]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9734]
RIN 1545-BJ56


Dividend Equivalents From Sources Within the United States; 
Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final and temporary regulations; correction.

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SUMMARY: This document contains corrections to final and temporary 
regulations (TD 9734) that was published in the Federal Register on 
September 18, 2015 (80 FR 56866). These corrections include a change to 
the effective date that was applicable to transactions issued on or 
after January 1,

[[Page 75947]]

2016, and before January 1, 2017. This document provides guidance to 
nonresident alien individuals and foreign corporations that hold 
certain financial products providing for payments that are contingent 
upon or determined by reference to U.S. source dividend payments.

DATES: This correction is effective on December 7, 2015 and applicable 
on September 18, 2015.

FOR FURTHER INFORMATION CONTACT: Peter Merkel or Karen Walny at (202) 
317-6938 (not a toll free number).

SUPPLEMENTARY INFORMATION: 

Background

    The final and temporary regulations (TD 9734) that are the subject 
of this correction are under sections 871 and 894 of the Internal 
Revenue Code.

Need for Correction

    As published, the final and temporary regulations (TD 9734) contain 
errors that may prove to be misleading and are in need of 
clarification.

Correction of Publication

    Accordingly, the final and temporary regulations (TD 9734), that 
are the subject of FR Doc. 2015-21759, are corrected as follows:
    1. On page 56866, in the preamble, the first column, under the 
caption ``DATES'', the fourth through seventh lines of the paragraph, 
the language ``applicability, see Sec. Sec.  1.871-14(j)(3), 1.871-
15(r), 1.871-15T(r)(4), 1.1441-1(f)(4), 1.1441-1T(f)(3), 1.1441-2(f), 
1.1441-3(h)(3), 1.1441-7(a)(4), and '' is corrected to read 
``applicability, see Sec. Sec.  1.871-14(j)(3), 1.871-15(r), 1.871-
15T(r)(4), 1.1441-1(f)(4), 1.1441-1T(f)(3), 1.1441-2(f), 1.1441-
3(h)(3), 1.1441-7(a)(4), 1.1461-1(c)(2)(iii), and''.
    2. On page 56866, in the preamble, the first column, the eleventh 
line from the bottom of the column, the language ``871(m). This 
information will be used'' is corrected to read ``871(m) of the 
Internal Revenue Code. This information will be used''.
    3. On page 56868, in the preamble, the first column, the ninth line 
from the bottom of the column, the language ``discussed in section E.1 
of this'' is corrected to read ``discussed in section F.1 of this''.
    4. On page 56869, in the preamble, the second column, the tenth 
line of the first full paragraph, the language ``dividends. As noted in 
Part II.L. of this'' is corrected to read ``dividends. As noted in Part 
II.M. of this''.
    5. On page 56870, in the preamble, the first column, the thirty-
second line from the bottom of the column, the language ``D. Payment of 
a Dividend Equivalent'' is corrected to read ``E. Payment of a Dividend 
Equivalent''.
    6. On page 56870, in the preamble, the second column, the twenty-
second line of the second full paragraph, the language ``equivalent, as 
discussed in Part II.M of'' is corrected to read ``equivalent, as 
discussed in Part II.N of''.
    7. On page 56870, in the preamble, the second column, the 
eighteenth line from the bottom of the column, the language ``E. Amount 
of a Dividend Equivalent'' is corrected to read ``F. Amount of a 
Dividend Equivalent''.
    8. On page 56870, in the preamble, the third column, the eleventh 
line from the bottom of the column, the language ``defined in Sec.  
1.871-15(a)(14)(ii)'' is corrected to read ``defined in Sec.  1.871-
15(a)(5)''.
    9. On page 56871, in the preamble, the first column, the twenty-
sixth line from the bottom of the column, the language ``F. Qualified 
Indices'' is corrected to read ``G. Qualified Indices''.
    10. On page 56872, in the preamble, the first column, the last line 
of the first full paragraph, the language ``qualified index rule. See 
Sec.  1.871-15(l)'' is corrected to read ``qualified index rule. See 
Sec.  1.871-15(l).''.
    11. On page 56872, in the preamble, the second column, the sixth 
line from the bottom of the column, the language ``G. Combined 
Transactions'' is corrected to read ``H. Combined Transactions''.
    12. On page 56873, in the preamble, the third column, the twelfth 
line from the top of the column, the language ``H. Derivatives 
Referenced to Partnership'' is corrected to read ``I. Derivatives 
Referenced to Partnership''.
    13. On page 56873, in the preamble, the third column, the fifth 
line from the bottom of the column, the language ``I. Anti-Abuse Rule'' 
is corrected to read ``J. Anti-Abuse Rule''.
    14. On page 56874, in the preamble, the first column, the twenty-
fourth line from the top of the column, the language ``J. Reporting 
Obligations'' is corrected to read ``K. Reporting Obligations''.
    15. On page 56874, in the preamble, the first column, the fifteenth 
line of the second full paragraph, the language ``871(m) transaction 
the broker or dealer'' is corrected to read ``871(m) transaction, the 
broker or dealer''.
    16. On page 56874, in the preamble, the third column, the first 
line of column, the language ``K. Recordkeeping Rules'' is corrected to 
read ``L. Recordkeeping Rules''.
    17. On page 56874, in the preamble, the third column, the thirty-
second line from the top of column, the language ``L. Contingent and 
Convertible Debt'' is corrected to read ``M. Contingent and Convertible 
Debt''.
    18. On page 56875, in the preamble, the second column, the third 
line from the top of the column, the language ``M. Amounts Subject to 
Withholding'' is corrected to read ``N. Amounts Subject to 
Withholding''.
    19. On page 56877, in the preamble, the second column, the fifth 
line from the bottom of the third full paragraph, the language ``on the 
same underlying securities.'' is corrected to read ``on the same 
underlying security.''.
    20. On page 56878, in the preamble, the second column, under the 
paragraph heading ``IV. Effective/Applicability Date'', the third 
sentence of the first full paragraph is removed.

Martin V. Franks,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel, (Procedure and Administration).
[FR Doc. 2015-30778 Filed 12-4-15; 8:45 am]
 BILLING CODE 4830-01-P

75946 Federal Register / Vol. 80, No. 234 / Monday, December 7, 2015 / Rules and Regulations DEPARTMENT OF THE TREASURY ■ Par. 2. Section 1.871–15 is amended § 1.1441–1 Requirements for the deduction by revising paragraphs (i)(4) Example 1. and withholding of tax on payments to Internal Revenue Service (ii), (i)(4) Example 2. (ii), (r)(1), and foreign persons. (r)(3) and adding paragraph (r)(4) to read * * * * * 26 CFR Part 1 as follows: (e) * * * (3) * * * [TD 9734] § 1.871–15 Treatment of dividend (ii) * * * equivalents. (F) [Reserved]. For further guidance, RIN 1545–BJ56 * * * * * see § 1.1441–1T(e)(3)(ii)(F). (i) * * * * * * * * Dividend Equivalents From Sources (4) * * * ■ Par. 5. Section 1.1441–1T is amended Within the United States; Correction Example 1. * * * by revising the last sentence of AGENCY: Internal Revenue Service (IRS), (ii) Subject to paragraph (i)(2)(iv) of this paragraph (f)(3) to read as follows: section, the estimated dividend amounts are Treasury. the per-share dividend amounts because the § 1.1441–1T Requirements for the ACTION: Final and temporary estimates are reasonable and specified in deduction and withholding of tax on regulations; correcting amendment. accordance with paragraph (i)(2)(iii) of this payments to foreign persons (temporary). section. The estimated per-share dividend SUMMARY: This document contains * * * * * amounts are dividend equivalents for corrections to final and temporary purposes of this section. (f) * * * regulations (TD 9734) that was Example 2. * * * (3) * * * Paragraphs (e)(3)(ii)(E) and published in the Federal Register on (ii) Because the LIBOR leg of the swap (e)(6) of this section apply beginning September 18, 2015 (80 FR 56866). contract is reduced to reflect estimated September 18, 2015. dividends and the estimated dividend * * * * * These corrections include a change to amounts are not specified, Foreign Investor is the effective date that was applicable to ■ Par. 6. Section 1.1461–1 is amended treated as receiving the actual dividend transactions issued on or after January 1, amounts are in accordance with paragraph by adding a second sentence to 2016, and before January 1, 2017. This (i)(2) of this section. The actual per-share paragraph (c)(2)(iii) to read as follows: document provides guidance to dividend amounts are dividend equivalents § 1.1461–1 Payments and returns of tax nonresident alien individuals and for purposes of this section. withheld. foreign corporations that hold certain * * * * * financial products providing for * * * * * (r) * * * (1) In general. This section (c) * * * payments that are contingent upon or applies to payments made on or after determined by reference to U.S. source (2) * * * September 18, 2015 except as provided (iii) * * * Paragraphs (c)(2)(i)(M) and dividend payments. in paragraphs (r)(2), (3), and (4) of this (c)(2)(ii)(J) of this section apply DATES: This correction is effective on section. beginning September 18, 2015. December 7, 2015 and applicable on * * * * * September 18, 2015. * * * * * (3) Effective/applicability date for FOR FURTHER INFORMATION CONTACT: paragraphs (d)(2) and (e). Paragraphs Martin V. Franks, Peter Merkel or Karen Walny at (202) (d)(2) and (e) of this section apply to any Chief, Publications and Regulations Branch, 317–6938 (not a toll free number). payment made on or after January 1, Legal Processing Division, Associate Chief Counsel (Procedure and Administration). SUPPLEMENTARY INFORMATION: 2017, with respect to any transaction [FR Doc. 2015–30777 Filed 12–4–15; 8:45 am] issued on or after January 1, 2017. Background BILLING CODE 4830–01–P (4) Effective/applicability date for The final and temporary regulations paragraphs (c)(2)(iv), (h), and (q) of this (TD 9734) that are the subject of this section. [Reserved]. For further correction are under sections 871 and DEPARTMENT OF THE TREASURY guidance, see § 1.871–15T(r)(4). 894 of the Internal Revenue Code. ■ Par. 3. Section 1.871–15T is amended Internal Revenue Service Need for Correction by removing the language ‘‘transaction’’ As published, the final and temporary and adding in its place ‘‘complex 26 CFR Part 1 regulations (TD 9734) contain errors that contract’’ in paragraph (h)(7) Example. [TD 9734] may prove to be misleading and are in (iv) and revising paragraph (h)(7) Example. (viii) to read as follows: RIN 1545–BJ56 need of clarification. List of Subjects in 26 CFR Part 1 § 1.871–15T Treatment of dividend Dividend Equivalents From Sources equivalents (temporary). Within the United States; Correction Income taxes, Reporting and * * * * * AGENCY: Internal Revenue Service (IRS), recordkeeping requirements. (h) * * * Treasury. Correction of Publication (7) * * * ACTION: Final and temporary Accordingly, 26 CFR part 1 is Example. * * * regulations; correction. corrected by making the following (viii) FI concludes that the Contract is not a section 871(m) transaction because the SUMMARY: This document contains correcting amendments: jstallworth on DSK7TPTVN1PROD with RULES complex contract calculation of 7.68 exceeds corrections to final and temporary the benchmark calculation of 4.473. PART 1—INCOME TAXES regulations (TD 9734) that was * * * * * published in the Federal Register on ■ Paragraph 1. The authority citation ■ Par. 4. Section 1.1441–1 is amended September 18, 2015 (80 FR 56866). for part 1 continues to read in part as by removing the second occurrence of These corrections include a change to follows: paragraph (e)(3)(ii)(E) and adding the effective date that was applicable to Authority: 26 U.S.C. 7805 * * * paragraph (e)(3)(ii)(F) to read as follows: transactions issued on or after January 1, VerDate Sep<11>2014 15:15 Dec 04, 2015 Jkt 238001 PO 00000 Frm 00024 Fmt 4700 Sfmt 4700 E:\FR\FM\07DER1.SGM 07DER1

Federal Register / Vol. 80, No. 234 / Monday, December 7, 2015 / Rules and Regulations 75947 2016, and before January 1, 2017. This language ‘‘D. Payment of a Dividend Contingent and Convertible Debt’’ is document provides guidance to Equivalent’’ is corrected to read ‘‘E. corrected to read ‘‘M. Contingent and nonresident alien individuals and Payment of a Dividend Equivalent’’. Convertible Debt’’. foreign corporations that hold certain 6. On page 56870, in the preamble, 18. On page 56875, in the preamble, financial products providing for the second column, the twenty-second the second column, the third line from payments that are contingent upon or line of the second full paragraph, the the top of the column, the language ‘‘M. determined by reference to U.S. source language ‘‘equivalent, as discussed in Amounts Subject to Withholding’’ is dividend payments. Part II.M of’’ is corrected to read corrected to read ‘‘N. Amounts Subject DATES: This correction is effective on ‘‘equivalent, as discussed in Part II.N to Withholding’’. December 7, 2015 and applicable on of’’. 19. On page 56877, in the preamble, September 18, 2015. 7. On page 56870, in the preamble, the second column, the fifth line from the second column, the eighteenth line the bottom of the third full paragraph, FOR FURTHER INFORMATION CONTACT: from the bottom of the column, the the language ‘‘on the same underlying Peter Merkel or Karen Walny at (202) language ‘‘E. Amount of a Dividend securities.’’ is corrected to read ‘‘on the 317–6938 (not a toll free number). Equivalent’’ is corrected to read ‘‘F. same underlying security.’’. SUPPLEMENTARY INFORMATION: Amount of a Dividend Equivalent’’. 20. On page 56878, in the preamble, Background 8. On page 56870, in the preamble, the second column, under the paragraph the third column, the eleventh line from heading ‘‘IV. Effective/Applicability The final and temporary regulations the bottom of the column, the language Date’’, the third sentence of the first full (TD 9734) that are the subject of this ‘‘defined in § 1.871–15(a)(14)(ii)’’ is paragraph is removed. correction are under sections 871 and corrected to read ‘‘defined in § 1.871– 894 of the Internal Revenue Code. Martin V. Franks, 15(a)(5)’’. 9. On page 56871, in the preamble, Chief, Publications and Regulations Branch, Need for Correction Legal Processing Division, Associate Chief the first column, the twenty-sixth line As published, the final and temporary Counsel, (Procedure and Administration). from the bottom of the column, the regulations (TD 9734) contain errors that language ‘‘F. Qualified Indices’’ is [FR Doc. 2015–30778 Filed 12–4–15; 8:45 am] may prove to be misleading and are in corrected to read ‘‘G. Qualified Indices’’. BILLING CODE 4830–01–P need of clarification. 10. On page 56872, in the preamble, Correction of Publication the first column, the last line of the first full paragraph, the language ‘‘qualified DEPARTMENT OF DEFENSE Accordingly, the final and temporary index rule. See § 1.871–15(l)’’ is regulations (TD 9734), that are the corrected to read ‘‘qualified index rule. Department of the Army, Corps of subject of FR Doc. 2015–21759, are See § 1.871–15(l).’’. Engineers corrected as follows: 11. On page 56872, in the preamble, 1. On page 56866, in the preamble, the second column, the sixth line from 33 CFR Part 334 the first column, under the caption the bottom of the column, the language ‘‘DATES’’, the fourth through seventh ‘‘G. Combined Transactions’’ is West Arm Behm Canal, Naval Surface lines of the paragraph, the language corrected to read ‘‘H. Combined Warfare Center, Ketchikan, Alaska; ‘‘applicability, see §§ 1.871–14(j)(3), Transactions’’. Restricted Areas 1.871–15(r), 1.871–15T(r)(4), 1.1441– 12. On page 56873, in the preamble, AGENCY: U.S. Army Corps of Engineers, 1(f)(4), 1.1441–1T(f)(3), 1.1441–2(f), the third column, the twelfth line from DoD. 1.1441–3(h)(3), 1.1441–7(a)(4), and ’’ is the top of the column, the language ‘‘H. corrected to read ‘‘applicability, see ACTION: Final rule. Derivatives Referenced to Partnership’’ §§ 1.871–14(j)(3), 1.871–15(r), 1.871– is corrected to read ‘‘I. Derivatives SUMMARY: The U.S. Army Corps of 15T(r)(4), 1.1441–1(f)(4), 1.1441– Referenced to Partnership’’. Engineers (Corps) is amending existing 1T(f)(3), 1.1441–2(f), 1.1441–3(h)(3), 13. On page 56873, in the preamble, regulations for an existing restricted 1.1441–7(a)(4), 1.1461–1(c)(2)(iii), and’’. the third column, the fifth line from the area near Ketchikan, Alaska to correct 2. On page 56866, in the preamble, bottom of the column, the language ‘‘I. inaccuracies in regards to flashing the first column, the eleventh line from Anti-Abuse Rule’’ is corrected to read beacon light descriptions, point of the bottom of the column, the language ‘‘J. Anti-Abuse Rule’’. contact changes, and restrictive area ‘‘871(m). This information will be used’’ 14. On page 56874, in the preamble, distances for small craft. is corrected to read ‘‘871(m) of the the first column, the twenty-fourth line DATES: Effective date: January 6, 2016. Internal Revenue Code. This from the top of the column, the language information will be used’’. ADDRESSES: U.S. Army Corps of ‘‘J. Reporting Obligations’’ is corrected 3. On page 56868, in the preamble, Engineers, Attn: CECW–CO (David B. to read ‘‘K. Reporting Obligations’’. the first column, the ninth line from the 15. On page 56874, in the preamble, Olson), 441 G Street NW., Washington, bottom of the column, the language the first column, the fifteenth line of the DC 20314–1000. ‘‘discussed in section E.1 of this’’ is second full paragraph, the language FOR FURTHER INFORMATION CONTACT: Mr. corrected to read ‘‘discussed in section ‘‘871(m) transaction the broker or David Olson, Headquarters, Operations F.1 of this’’. dealer’’ is corrected to read ‘‘871(m) and Regulatory Community of Practice, 4. On page 56869, in the preamble, transaction, the broker or dealer’’. Washington, DC at 202–761–4922 or Ms. the second column, the tenth line of the 16. On page 56874, in the preamble, Linda Speerstra, U.S. Army Corps of jstallworth on DSK7TPTVN1PROD with RULES first full paragraph, the language the third column, the first line of Engineers, Alaska District, Regulatory ‘‘dividends. As noted in Part II.L. of column, the language ‘‘K. Division, at 907–747–0658. this’’ is corrected to read ‘‘dividends. As Recordkeeping Rules’’ is corrected to SUPPLEMENTARY INFORMATION: Pursuant noted in Part II.M. of this’’. read ‘‘L. Recordkeeping Rules’’. to its authorities in Section 7 of the 5. On page 56870, in the preamble, 17. On page 56874, in the preamble, Rivers and Harbors Act of 1917 (40 Stat the first column, the thirty-second line the third column, the thirty-second line 266; 33 U.S.C. 1) and Chapter XIX of the from the bottom of the column, the from the top of column, the language ‘‘L. Army Appropriations Act of 1919 (40 VerDate Sep<11>2014 15:15 Dec 04, 2015 Jkt 238001 PO 00000 Frm 00025 Fmt 4700 Sfmt 4700 E:\FR\FM\07DER1.SGM 07DER1


Document Created: 2015-12-14 13:30:57
Document Modified: 2015-12-14 13:30:57
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal and temporary regulations; correction.
DatesThis correction is effective on December 7, 2015 and applicable on September 18, 2015.
ContactPeter Merkel or Karen Walny at (202) 317-6938 (not a toll free number).
FR Citation80 FR 75946 
RIN Number1545-BJ56
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