53384 Federal Register / Vol. 62, No. 198 / Tuesday, October 14, 1997 / Rules and Regulations

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1, 301, and 602

[TD 8733]

RIN 1545–AP35

Treaty-Based Return Positions

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Final regulations.

SUMMARY: This document contains final

regulations under section 6114 of the

Internal Revenue Code of 1986

providing that reporting is specifically

required if the residency of an

individual is determined under a treaty

and apart from the Code.

The IRS concluded, in the process of

completing the regulations under

section 7701(b), that the rules of section

6114 should apply to individuals

determining their residency under a

treaty.

These final regulations are necessary

to implement the section 6114 rules to

individuals determining their residency

under a treaty. Also contained in this

document are final regulations relating

to section 7701(b) and conforming

changes to regulations under sections

6038 and 6046.

EFFECTIVE DATE: These regulations are

effective December 15, 1997.

FOR FURTHER INFORMATION CONTACT:

David A. Juster, telephone (202–622–

3850) (not a toll-free number), regarding

sections 6114 and 7701(b) and Carl M.

Cooper, telephone (202–622–3840) (not

a toll-free number) regarding sections

6038 and 6046, both of the Office of

Associate Chief Counsel (International),

within the Office of Chief Counsel, IRS.

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The collections of information

contained in these final regulations have

been reviewed and approved by the

Office of Management and Budget in

accordance with the Paperwork

Reduction Act (44 U.S.C. 3507) under

control number 1545–1126. Responses

to these collections of information are

mandatory.

An agency may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless the collection of information

displays a valid OMB control number.

The estimated annual burden per

respondent varies from 1/2 hour to 3

hours, depending on individual

circumstances, with an estimated

average of 1 hour.

Comments concerning the accuracy of

this burden estimate and suggestions for

reducing this burden should be sent to

the Internal Revenue Service, Attn: IRS

Reports Clearance Officer, T:FP,

Washington, DC 20224, and to the

Office of Management and Budget, Attn:

Desk Officer for the Department of the

Treasury, Office of Information and

Regulatory Affairs, Washington, DC

20503.

Books or records relating to this

collection of information must be

retained as long as their contents may

become material in the administration

of any internal revenue law. Generally,

tax returns and tax return information

are confidential, as required by 26

U.S.C. 6103.

Background

On April 27, 1992, a notice of

proposed rulemaking was published in

the Federal Register (57 FR 15272)

proposing amendments to the final

Regulations on Procedure and

Administration (26 CFR 301.6114–1),

published in the Federal Register on

March 14, 1990 (55 FR 9438) and on

July 12, 1990 (55 FR 28608). The

proposed amendments related to

§ 301.6114–1 (b) and (c) and

§ 301.7701(b)–7(c)(2). No written

comments responding to the notice were

received. No public hearing was

requested or held. The proposed

amendments are adopted without

change by this Treasury decision. This

Treasury decision also includes

modifications to §§ 1.6038–2(j), 1.6046–

1(g), 301.6114–1(d), 301.7701(b)–3(b) (3)

and (4), 301.7701(b)–7(c)(1) and

301.7701(b)–8(b) (1) and (2).

Explanation of Provisions

Section 301.6114–1(b) is amended by

adding paragraph (b)(8) to provide that

reporting is required under section 6114

where residency of an individual is

determined under a treaty and apart

from the Internal Revenue Code (Code).

The regulations provide, however, that

reporting is waived for an individual if

payments or income items reportable by

reason of paragraph (b)(8) do not exceed

$100,000 in the aggregate. Section

301.6114–1(d) currently provides that

when reporting is required under

section 6114, a taxpayer must furnish as

an attachment to his or her return a

written statement with the information

as set forth in paragraph (d). Section

301.7701(b)–7(b) currently provides that

a dual resident taxpayer who claims a

treaty benefit as a nonresident of the

United States must file a statement in

the form required by paragraph (c) of

that section. Section 301.6114–1(d) is

now amended to provide that, when

reporting is required under section

6114, a taxpayer must furnish, as an

attachment to his or her return, a fully

completed Form 8833 (Treaty-Based

Return Position Disclosure Under

Section 6114 or 7701(b)) or appropriate

successor form. Section 301.7701(b)–

7(c)(1) is amended to provide that the

written statement required to be

furnished under paragraph (b) of that

section, as an attachment to a dual

resident taxpayer’s return, must be in

the form of a fully completed Form 8833

(Treaty-Based Return Position

Disclosure Under Section 6114 or

7701(b)) or appropriate successor form.

Form 8833 was developed to provide

standardized reporting of the

information currently required by

§§ 301.6114–1(d) and 301.7701(b)–7(c).

In an effort to provide standardized

reporting of the information currently

required to be reported, under

§ 301.7701(b)–8(b), by taxpayers

claiming the closer connection

exception and exempt individuals and

individuals with a medical condition,

the Service has developed Form 8840

(Closer Connection Exception

Statement) and Form 8843 (Statement

for Exempt Individuals and Individuals

with a Medical Condition). Accordingly,

§ 301.7701(b)–8(b)(1) is amended to

provide that the statement filed by alien

individuals claiming the closer

connection exception, described in

§ 301.7701(b)–2, must be in the form of

a fully completed Form 8840 or

appropriate successor form. Section

301.7701(b)–8(b)(2) is amended to

provide that the statement filed by

exempt individuals and individuals

with a medical condition, described in

§ 301.7701(b)–3, must be in the form of

a fully completed Form 8843 or

appropriate successor form.

Sections 3121(b)(19), 3306(c)(19) and

3231(e)(1) of the Code provide that ‘‘J’’

class visa holders (teachers and trainees)

are exempt from FICA, FUTA and

Railroad Retirement Act taxes,

respectively. Section 320 of the Social

Security Independence and Program

Improvements Act of 1994, Public Law

103–296 (108 Stat. 1464), extends the

FICA, FUTA and Railroad Retirement

Act tax exemptions and certain other tax

rules to ‘‘Q’’ class visa holders

(participants in international cultural

exchange programs). Accordingly,

conforming changes have been made to

§ 301.7701(b)–3(b) (3) and (4) to reflect

the revisions in the Code to the

definitions of a teacher or trainee and

student contained in section 7701(b)(5).

Section 301.7701(b)–7(c)(2), adopted

as proposed, provides that, for purposes

of stating the approximate amount of

subpart F income to be included in the
Federal Register / Vol. 62, No. 198 / Tuesday, October 14, 1997 / Rules and Regulations 53385

statement required to be furnished

under paragraph (b) of that section by a

dual resident taxpayer who is a

shareholder in a controlled foreign

corporation (as defined in section 957 or

section 953(c)), the approximate amount

of income may be based on the audited

foreign financial statements of the CFC

if there are no other United States

shareholders in that CFC. Parallel rules

with respect to information reporting

under sections 6038 and 6046 are added

in §§ 1.6038–2(j)(2)(ii) and 1.6046–1(g).

Under these rules, a taxpayer who

claims a treaty benefit as a nonresident

of the United States, but who is a United

States person for purposes of the

information reporting requirements of

sections 6038 or 6046, may satisfy

certain information reporting

requirements by filing the audited

foreign financial statements of the

foreign corporation with respect to

which the information reporting is

required. However, these rules apply

only if the taxpayer is the sole United

States person for purposes of the

information reporting requirements with

respect to the foreign corporation. If

there are other United States persons for

those purposes, then the taxpayer must

report the information required by the

regulations in the form and manner

generally prescribed.

Special Analyses

It has been determined that this

Treasury decision is not a significant

regulatory action as defined in EO

12866. Therefore, a regulatory

assessment is not required. It has also

been determined that section 553(b) of

the Administrative Procedure Act (5

U.S.C. chapter 5) does not apply to these

regulations, and because the notice of

proposed rulemaking preceding the

regulations was issued prior to March

29, 1996, the Regulatory Flexibility Act

(5 U.S.C. chapter 6) does not apply.

Pursuant to section 7805(f) of the Code,

the notice of proposed rulemaking

preceding these regulations was

submitted to the Chief Counsel for

Advocacy of the Small Business

Administration for comment on its

impact on small business.

Drafting Information: Various

personnel from the Office of Associate

Chief Counsel (International), within the

Office of Chief Counsel, IRS and the

Treasury Department participated in

developing the regulations.

List of Subjects

26 CFR Part 1

Income taxes, Reporting and

recordkeeping requirements.

26 CFR Part 301

Employment taxes, Estate taxes,

Excise taxes, Gift taxes, Income taxes,

Penalties, Reporting and recordkeeping

requirements.

26 CFR Part 602

Reporting and recordkeeping

requirements.

Adoption of Amendments to the

Regulations

Accordingly, 26 CFR parts 1, 301 and

602 are amended as follows:

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. Section 1.6038–2 is amended

by:

1. Redesignating paragraph (j)(2)(ii) as

paragraph (j)(2)(iii).

2. Adding new paragraph (j)(2)(ii) to

read as follows:

§ 1.6038–2 Information returns required of

United States persons with respect to

annual accounting periods of certain

foreign corporations beginning after

December 31, 1962.

* * * * *

(j) * * *

(2) * * *

(ii) If an individual who is a United

States person required to furnish

information with respect to a foreign

corporation under section 6038 is

entitled under a treaty to be treated as

a nonresident of the United States, and

if the individual claims this treaty

benefit, and if there are no other United

States persons that are required to

furnish information under section 6038

with respect to the foreign corporation,

then the individual may satisfy the

requirements of paragraphs (f)(10),

(f)(11), (g), and (h) of this section by

filing the audited foreign financial

statements of the foreign corporation

with the individual’s return required

under section 6038.

* * * * *

Par. 3. In § 1.6046–1, paragraph (g) is

amended by adding a sentence at the

end to read as follows:

§ 1.6046–1 Returns as to organization or

reorganization of foreign corporations and

as to acquisitions of their stock, on or after

January 1, 1963.

* * * * *

(g) * * * If an individual who is a

United States person required to make

a return with respect to a foreign

corporation under section 6046 is

entitled under a treaty to be treated as

a nonresident of the United States, and

if the individual claims this treaty

benefit, and if there are no other United

States persons that are required to

furnish information under section 6046

with respect to the foreign corporation,

then the individual may satisfy the

requirements of paragraphs (b)(10), (11)

and (12), (c)(3)(ii)(d), and (g) of this

section by filing the audited foreign

financial statements of the foreign

corporation with the individual’s return

required under section 6046.

* * * * *

PART 301—PROCEDURE AND

ADMINISTRATION

Par. 4. The authority citation for part

301 continues to read in part as follows:

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

Section 301.6114–1 also issued under

26 U.S.C. 6114; * * *.

Par. 5. Section 301.6114–1 is

amended by:

1. Removing the language ‘‘(c)(1)’’ in

paragraph (b)(4) introductory text and

adding ‘‘(c)(1)(i)’’ in its place.

2. Removing the language ‘‘(c)(1)’’ in

paragraph (b)(5) introductory text and

adding ‘‘(c)(1)(i)’’ in its place.

3. Removing the language’’(c)(4)’’ in

paragraph (b)(6) and adding ‘‘(c)(1)(iv)’’

in its place.

4. Removing the language ‘‘or’’ at the

end of paragraph (b)(6).

5. Removing the period at the end of

paragraph (b)(7) and adding ‘‘; or’’ in its

place.

6. Adding a paragraph (b)(8).

7. Paragraphs (c)(1) through (c)(6) are

redesignated as paragraphs (c)(1)(i)

through (c)(1)(vi), respectively.

8. Paragraphs (c)(7) introductory text,

(c)(7)(i), (c)(7)(ii), and (c)(7)(iii) are

redesignated as paragraphs (c)(1)(vii)

introductory text, (c)(1)(vii)(A),

(c)(1)(vii)(B) and (c)(1)(vii)(C),

respectively.

9. The introductory text of paragraph

(c) is redesignated as the introductory

text of paragraph (c)(1).

10. Revising newly designated

paragraph (c)(1)(ii).

11. Removing the concluding text

immediately following newly

designated paragraph (c)(1)(vii)(C).

12. Adding paragraphs (c)(2), (c)(3),

(c)(4) and (c)(5).

13. Revising paragraph (d).

The additions and revisions read as

follows:

§ 301.6114–1 Treaty-based return

positions.

* * * * *

(b) * * *

(8) For returns relating to taxable

years for which the due date for filing
53386 Federal Register / Vol. 62, No. 198 / Tuesday, October 14, 1997 / Rules and Regulations

returns (without extensions) is after

December 15, 1997, that residency of an

individual is determined under a treaty

and apart from the Internal Revenue

Code.

(c) Reporting requirement waived. (1)

* * *

(ii) For returns relating to taxable

years for which the due date for filing

returns (without extensions) is on or

before December 15, 1997, that

residency of an individual is

determined under a treaty and apart

from the Internal Revenue Code.

* * * * *

(2) Reporting is waived for an

individual if payments or income items

otherwise reportable under this section

(other than by reason of paragraph (b)(8)

of this section), received by the

individual during the course of the

taxable year do not exceed $10,000 in

the aggregate or, in the case of payments

or income items reportable only by

reason of paragraph (b)(8) of this

section, do not exceed $100,000 in the

aggregate.

(3) Reporting with respect to

payments or income items the treatment

of which is mandated by the terms of a

closing agreement with the Internal

Revenue Service, and that would

otherwise be subject to the reporting

requirements of this section, is also

waived.

(4) If a partnership, trust, or estate that

has the taxpayer as a partner or

beneficiary discloses on its information

return a position for which reporting is

otherwise required by the taxpayer, the

taxpayer (partner or beneficiary) is then

excused from disclosing that position on

a return.

(5) This section does not apply to a

withholding agent with respect to the

performance of its withholding

functions.

(d) Information to be reported—(1)

Returns due after December 15, 1997.

When reporting is required under this

section for a return relating to a taxable

year for which the due date (without

extensions) is after December 15, 1997,

the taxpayer must furnish, in

accordance with paragraph (a) of this

section, as an attachment to the return,

a fully completed Form 8833 (TreatyBased Return Position Disclosure Under

Section 6114 or 7701(b)) or appropriate

successor form.

(2) Earlier returns. For returns relating

to taxable years for which the due date

for filing returns (without extensions) is

on or before December 15, 1997, the

taxpayer must furnish information in

accordance with paragraph (d) of this

section in effect prior to December 15,

1997 (see § 301.6114–1(d) as contained

in 26 CFR part 301, revised April 1,

1997).

(3) In general—(i) Permanent

establishment. For purposes of

determining the nature and amount (or

reasonable estimate thereof) of gross

receipts, if a taxpayer takes a position

that it does not have a permanent

establishment or a fixed base in the

United States and properly discloses

that position, it need not separately

report its payment of actual or deemed

dividends or interest exempt from tax

by reason of a treaty (or any liability for

tax imposed by reason of section 884).

(ii) Single income item. For purposes

of the statement of facts relied upon to

support each separate Treaty-Based

Return Position taken, a taxpayer may

treat payments or income items of the

same type (e.g., interest items) received

from the same ultimate payor (e.g., the

obligor on a note) as a single separate

payment or income item.

(iii) Foreign source effectively

connected income. If a taxpayer takes

the return position that, under the

treaty, income that would be income

effectively connected with a U.S. trade

or business is not subject to U.S.

taxation because it is income treated as

derived from sources outside the United

States, the taxpayer may treat payments

or income items of the same type (e.g.,

interest items) as a single separate

payment or income item.

(iv) Sales or services income. Income

from separate sales or services, whether

or not made or preformed by an agent

(independent or dependent), to different

U.S. customers on behalf of a foreign

corporation not having a permanent

establishment in the United States may

be treated as a single payment or income

item.

(v) Foreign insurers or reinsurers. For

purposes of reporting by foreign

insurers or reinsurers, as described in

paragraph (c)(1)(vii)(B) of this section,

such reporting must separately set forth

premiums paid with respect to casualty

insurance and indemnity bonds (subject

to section 4371(1)); life insurance,

sickness and accident policies, and

annuity contracts (subject to section

4371(2)); and reinsurance (subject to

section 4371(3)). All premiums paid

with respect to each of these three

categories may be treated as a single

payment or income item within that

category. For reports first due before

May 1, 1991, the report may disclose,

for each of the three categories, the total

amount of premiums derived by the

foreign insurer or reinsurer in U.S.

dollars (even if a portion of these

premiums relate to risks that are not

U.S. situs). Reasonable estimates of the

amounts required to be disclosed will

satisfy these reporting requirements.

* * * * *

Par. 6. Section 301.7701(b)–0 is

amended in the contents listing by:

1. Adding entries for § 301.7701(b)–7,

paragraphs (c)(1)(i) and (c)(1)(ii).

2. Removing the language

‘‘[Reserved]’’ in the entry for

§ 301.7701(b)–7, paragraph (c)(2).

3. Adding entries for § 301.7701(b)–8,

paragraphs (b)(1)(i), (b)(1)(ii), (b)(2)(i)

and (b)(2)(ii).

The additions read as follows:

§ 301.7701(b)–0 Outline of regulation

provision for section 7701(b)–1 through (b)–

9.

* * * * *

§ 301.7701(b)–7 Coordination with income

tax treaties.

* * * * *

(c) * * *

(1) * * *

(i) Returns due after December 15,

1997.

(ii) Earlier returns.

* * * * *

§ 301.7701(b)–8 Procedural rules.

* * * * *

(b) * * *

(1) * * *

(i) Returns due after December 15,

1997.

(ii) Earlier returns.

(2) * * *

(i) Returns due after December 15,

1997.

(ii) Earlier returns.

* * * * *

Par. 7. Section 301.7701(b)–3 is

amended by revising paragraphs (b)(3)

and (b)(4) to read as follows:

§ 301.7701(b)–3 Days of presence in the

United States that are excluded for

purposes of section 7701(b).

* * * * *

(b) * * *

(3) Teacher or trainee. A teacher or

trainee includes any individual (and

that individual’s immediate family),

other than a student, who is admitted

temporarily to the United States as a

nonimmigrant under section 101(a)(15)

(J) (relating to the admission of teachers

and trainees into the United States) or

section 101(a)(15)(Q) (relating to the

admission of participants in

international cultural exchange

programs) of the Immigration and

Nationality Act (8 U.S.C. 1101(a)(15) (J),

(Q)) and who substantially complies

with the requirements of being

admitted.

(4) Student. A student is any

individual (and that individual’s
Federal Register / Vol. 62, No. 198 / Tuesday, October 14, 1997 / Rules and Regulations 53387

immediate family) who is admitted

temporarily to the United States as a

nonimmigrant under section

101(a)(15)(F) or (M) (relating to the

admission of students into the United

States) or as a student under section

101(a)(15)(J) (relating to the admission

of teachers and trainees into the United

States) or section 101(a)(15)(Q) (relating

to the admission of participants in

international cultural exchange

programs) of the Immigration and

Nationality Act (8 U.S.C. 1101(a)(15) (F),

(J), (M), (Q)) who substantially complies

with the requirements of being

admitted. For rules concerning taxation

of certain nonresident students or

trainees, see section 871(c) and § 1.871–

9(a) of this chapter.

* * * * *

Par. 8. Section 301.7701(b)–7 is

amended by:

1. Revising paragraph (c)(1).

2. Adding text for paragraph (c)(2).

The revision and addition read as

follows:

§ 301.7701(b)–7 Coordination with income

tax treaties.

* * * * *

(c) * * * (1) In general—(i) Returns

due after December 15, 1997. The

statement filed by an individual

described in paragraph (a)(1) of this

section, for a return relating to a taxable

year for which the due date (without

extensions) is after December 15, 1997,

must be in the form of a fully completed

Form 8833 (Treaty-Based Return

Position Disclosure Under Section 6114

or 7701(b)) or appropriate successor

form. See section 6114 and § 301.6114–

1 for rules relating to other treaty-based

return positions taken by the same

taxpayer.

(ii) Earlier returns. For returns relating

to taxable years for which the due date

for filing returns (without extensions) is

on or before December 15, 1997, the

statement filed by the individual

described in paragraph (a)(1) of this

section must contain the information in

accordance with paragraph (c)(1) of this

section in effect prior to December 15,

1997 (see § 301.7701(b)–7(c)(1) as

contained in 26 CFR part 301, revised

April 1, 1997).

(2) Controlled foreign corporation

shareholders. If the taxpayer who claims

a treaty benefit as a nonresident of the

United States is a United States

shareholder in a controlled foreign

corporation (CFC), as defined in section

957 or section 953(c), and there are no

other United States shareholders in that

CFC, then for purposes of paragraph

(c)(1) of this section, the approximate

amount of subpart F income (as defined

in section 952) that would have been

included in the taxpayer’s income may

be determined based on the audited

foreign financial statements of the CFC.

* * * * *

Par. 9. Section 301.7701(b)–8 is

amended by revising paragraphs (b)(1)

and (b)(2) to read as follows:

§ 301.7701(b)–8 Procedural rules.

* * * * *

(b) * * * (1) Closer connection

exception—(i) Returns due after

December 15, 1997. The statement filed

by an individual described in paragraph

(a)(1) of this section, for a return relating

to a taxable year for which the due date

(without extensions) is after December

15, 1997, must be in the form of a fully

completed Form 8840 (Closer

Connection Exception Statement) or

appropriate successor form.

(ii) Earlier returns. For returns relating

to taxable years for which the due date

for filing returns (without extensions) is

on or before December 15, 1997, the

statement filed by the individual

described in paragraph (a)(1) of this

section must contain the information in

accordance with paragraph (b)(1) of this

section in effect prior to December 15,

1997 (see § 301.7701(b)–8(b)(1) as

contained in 26 CFR Part 301, revised

April 1, 1997).

(2) Exempt individuals and

individuals with a medical condition—

(i) Returns due after December 15, 1997.

The statement filed by an individual

described in paragraph (a)(2) of this

section, for a return relating to a taxable

year for which the due date (without

extensions) is after December 15, 1997,

must be in the form of a fully completed

Form 8843 (Statement for Exempt

Individuals and Individuals with a

Medical Condition) or appropriate

successor form.

(ii) Earlier returns. For returns relating

to taxable years for which the due date

for filing returns (without extensions) is

on or before December 15, 1997, the

statement filed by the individual

described in paragraph (a)(2) of this

section must contain the information in

accordance with paragraph (b)(2) of this

section in effect prior to December 15,

1997 (see § 301.7701(b)–8(b)(2) as

contained in 26 CFR Part 301, revised

April 1, 1997).

PART 602—OMB CONTROL NUMBERS

UNDER THE PAPERWORK

REDUCTION ACT

Par. 10. The authority citation for part

602 continues to read as follows:

Authority: 26 U.S.C. 7805.

Par. 11. In § 602.101, paragraph (c) is

amended by adding an entry in

numerical order to the table and

revising the entry for 301.7701(b)–7 to

read as follows:

§ 602.101 OMB Control numbers.

* * * * *

(c) * * *

CFR part or section where

identified and described

Current

OMB control No.

* * * * *

301.6114–1 ............................... 1545–1126

* * * * *

301.7701(b)–7 ........................... 1545–0089

1545–1126

* * * * *

Michael P. Dolan,

Acting Commissioner of Internal Revenue.

Approved: August 28, 1997.

Donald C. Lubick,

Acting Assistant Secretary of the Treasury.

[FR Doc. 97–25997 Filed 10–6–97; 8:45 am]

BILLING CODE 4830–01–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1, 31, 35a, 301, 502, 503,

509, 513, 514, 516, 517, 520, 521, and

602

[TD 8734]

RIN 1545–AU43; 1545–AT77

General Revision of Regulations

Relating to Withholding of Tax on

Certain U.S. Source Income Paid to

Foreign Persons and Related

Collection, Refunds, and Credits;

Revision of Information Reporting and

Backup Withholding Regulations; and

Removal of Regulations Under Part

35a and of Certain Regulations Under

Income Tax Treaties

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Final and temporary

regulations.

SUMMARY: This document contains final

regulations relating to the withholding

of income tax under sections 1441,

1442, and 1443 on certain U.S. source

income paid to foreign persons, the

related tax deposit and reporting

requirements under section 1461, and

the related requirements governing

collection, refunds, and credits of

withheld amounts under sections 1461

through 1463 and sections 6402 and

6413. Additionally, this document

contains final regulations relating to the

statutory exemption under sections

871(h) and 881(c) for portfolio interest.