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###### Department of the Treasury

###### Internal Revenue Service

          - 26 CFR Part 1
          - [TD 9926]
          - RIN 1545-BO60

# AGENCY:

Internal Revenue Service (IRS), Treasury.

# ACTION:

Correcting amendment.

# SUMMARY:

                        This document contains a correction to final regulations (Treasury Decision 9926) that were published in the                         **Federal Register**                         on Monday, November 30, 2020. The final regulations provide guidance related to the withholding of tax and information reporting with respect to certain dispositions of interests in partnerships engaged in a trade or business within the United States.                    

# DATES:

                        This correction is effective on                         *March 8, 2021*                         and applies to partnership taxable years beginning on or after November 30, 2020. See § 1.1446-7.                    

# FOR FURTHER INFORMATION CONTACT:

Chadwick Rowland or Ronald M. Gootzeit (202) 317-6937 (not toll-free numbers).

# SUPPLEMENTARY INFORMATION:

## Background

The final regulations (TD 9926) that are the subject of this correction are issued under section 1446 of the Code.

## Need for Correction

As published, November 30, 2020 (85 FR 76910), the final regulations (TD 9926) contain an error that needs to be corrected.

# List of Subjects in 26 CFR Part 1

      - Income taxes
      - Reporting and recordkeeping requirements

## Correction of Publication

Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:

# PART 1—INCOME TAXES

**Paragraph 1.**                         The authority citation for part 1 continues to read in part as follows:                    

Authority:26 U.S.C. 7805 * * *

**Par. 2.**                         Amend § 1.1446-4, by revising the last seven sentences of paragraph (f)(1).”                    

§ 1.1446-4 

* * * * *

(f)* * * (1) * * * LTP makes a distribution subject to section 1446 of $100 to UTP during its taxable year beginning January 1, 2020, and withholds 37 percent (the highest rate in section 1) ($37) of that distribution under section 1446. UTP receives a net distribution of $63 which it immediately redistributes to its partners. UTP has a liability to pay 37 percent of the total actual and deemed distribution it makes to its foreign partners as a section 1446 withholding tax. UTP may credit the $37 withheld by LTP against this liability as if it were paid by UTP. See §§ 1.1462-1(b) and 1.1446-5(b)(1). When UTP distributes the $63 it actually receives from LTP to its partners, UTP is treated for purposes of section 1446 as if it made a distribution of $100 to its partners ($63 actual distribution and $37 deemed distribution). UTP's partners (U.S. and foreign) may claim a credit against their U.S. income tax liability for their allocable share of the $37 of 1446 tax paid on their behalf.

* * * * *

Crystal Pemberton,

Senior Federal Register Liaison, Legal Processing Division, Associate Chief Counsel, (Procedure and Administration).

[FR Doc. 2021-00504 Filed 3-5-21; 8:45 am]

BILLING CODE 4830-01-P