Source: https://law.justia.com/codes/us/2015/title-26/subtitle-a/chapter-4/sec.-1471/
Timestamp: 2019-11-17 18:31:01
Document Index: 379129425

Matched Legal Cases: ['§ 1471', '§501', '§ 1471', '§1471', '§501', '§1901', '§501']

26 U.S.C. § 1471 (2015) - Withholdable payments to foreign financial institutions :: Title 26 - Internal Revenue Code (Sections 1 - 9834) - US Code :: Justia
Justia US Law US Codes and Statutes US Code 2015 US Code Title 26 - Internal Revenue Code (Sections 1 - 9834) Subtitle A - Income Taxes (Sections 1 - 1564) Chapter 4 - Taxes to Enforce Reporting on Certain Foreign Accounts (Sections 1471 - 1474) Sec. 1471 - Withholdable payments to foreign financial institutions
Sec. 1471 - Withholdable payments to foreign financial institutions
Contains section 1471
Source Credit Added Pub. L. 111-147, title V, §501(a), Mar. 18, 2010, 124 Stat. 97.
Statutes at Large References 90 Stat. 1840
124 Stat. 97, 106
Public and Private Laws Public Law 94-455, Public Law 111-147
26 U.S.C. § 1471 (2015)
§1471. Withholdable payments to foreign financial institutions(a) In general
(b) Reporting requirements, etc.(1) In general
(A) to obtain such information regarding each holder of each account maintained by such institution as is necessary to determine which (if any) of such accounts are United States accounts,
(B) to comply with such verification and due diligence procedures as the Secretary may require with respect to the identification of United States accounts,
(C) in the case of any United States account maintained by such institution, to report on an annual basis the information described in subsection (c) with respect to such account,
(D) to deduct and withhold a tax equal to 30 percent of—
(i) any passthru payment which is made by such institution to a recalcitrant account holder or another foreign financial institution which does not meet the requirements of this subsection, and
(ii) in the case of any passthru payment which is made by such institution to a foreign financial institution which has in effect an election under paragraph (3) with respect to such payment, so much of such payment as is allocable to accounts held by recalcitrant account holders or foreign financial institutions which do not meet the requirements of this subsection,
(E) to comply with requests by the Secretary for additional information with respect to any United States account maintained by such institution, and
(F) in any case in which any foreign law would (but for a waiver described in clause (i)) prevent the reporting of any information referred to in this subsection or subsection (c) with respect to any United States account maintained by such institution—
(i) to attempt to obtain a valid and effective waiver of such law from each holder of such account, and
(ii) if a waiver described in clause (i) is not obtained from each such holder within a reasonable period of time, to close such account.
(2) Financial institutions deemed to meet requirements in certain cases
(A) such institution—
(i) complies with such procedures as the Secretary may prescribe to ensure that such institution does not maintain United States accounts, and
(ii) meets such other requirements as the Secretary may prescribe with respect to accounts of other foreign financial institutions maintained by such institution, or
(B) such institution is a member of a class of institutions with respect to which the Secretary has determined that the application of this section is not necessary to carry out the purposes of this section.
(3) Election to be withheld upon rather than withhold on payments to recalcitrant account holders and nonparticipating foreign financial institutions
(A) the requirements of paragraph (1)(D) shall not apply,
(B) the withholding tax imposed under subsection (a) shall apply with respect to any withholdable payment to such institution to the extent such payment is allocable to accounts held by recalcitrant account holders or foreign financial institutions which do not meet the requirements of this subsection, and
(C) the agreement described in paragraph (1) shall—
(i) require such institution to notify the withholding agent with respect to each such payment of the institution's election under this paragraph and such other information as may be necessary for the withholding agent to determine the appropriate amount to deduct and withhold from such payment, and
(ii) include a waiver of any right under any treaty of the United States with respect to any amount deducted and withheld pursuant to an election under this paragraph.
(c) Information required to be reported on United States accounts(1) In general
(A) The name, address, and TIN of each account holder which is a specified United States person and, in the case of any account holder which is a United States owned foreign entity, the name, address, and TIN of each substantial United States owner of such entity.
(B) The account number.
(C) The account balance or value (determined at such time and in such manner as the Secretary may provide).
(D) Except to the extent provided by the Secretary, the gross receipts and gross withdrawals or payments from the account (determined for such period and in such manner as the Secretary may provide).
(2) Election to be subject to same reporting as United States financial institutions
(A) subparagraphs (C) and (D) of paragraph (1) shall not apply, and
(B) the agreement described in subsection (b) shall require such foreign financial institution to report such information with respect to each United States account maintained by such institution as such institution would be required to report under sections 6041, 6042, 6045, and 6049 if—
(i) such institution were a United States person, and
(ii) each holder of such account which is a specified United States person or United States owned foreign entity were a natural person and citizen of the United States.
(3) Separate requirements for qualified intermediaries
(1) United States account(A) In general
The term "United States account" means any financial account which is held by one or more specified United States persons or United States owned foreign entities.
(B) Exception for certain accounts held by individuals
(i) each holder of such account is a natural person, and
(ii) with respect to each holder of such account, the aggregate value of all depository accounts held (in whole or in part) by such holder and maintained by the same financial institution which maintains such account does not exceed $50,000.
(C) Elimination of duplicative reporting requirements
(i) such account is held by another financial institution which meets the requirements of subsection (b), or
(ii) the holder of such account is otherwise subject to information reporting requirements which the Secretary determines would make the reporting required by this section with respect to United States accounts duplicative.
(2) Financial account
Except as otherwise provided by the Secretary, the term "financial account" means, with respect to any financial institution—
(A) any depository account maintained by such financial institution,
(B) any custodial account maintained by such financial institution, and
(C) any equity or debt interest in such financial institution (other than interests which are regularly traded on an established securities market).
(3) United States owned foreign entity
The term "United States owned foreign entity" means any foreign entity which has one or more substantial United States owners.
(4) Foreign financial institution
The term "foreign financial institution" means any financial institution which is a foreign entity. Except as otherwise provided by the Secretary, such term shall not include a financial institution which is organized under the laws of any possession of the United States.
(5) Financial institution
Except as otherwise provided by the Secretary, the term "financial institution" means any entity that—
(A) accepts deposits in the ordinary course of a banking or similar business,
(B) as a substantial portion of its business, holds financial assets for the account of others, or
(C) is engaged (or holding itself out as being engaged) primarily in the business of investing, reinvesting, or trading in securities (as defined in section 475(c)(2) without regard to the last sentence thereof), partnership interests, commodities (as defined in section 475(e)(2)), or any interest (including a futures or forward contract or option) in such securities, partnership interests, or commodities.
(6) Recalcitrant account holder
The term "recalcitrant account holder" means any account holder which—
(A) fails to comply with reasonable requests for the information referred to in subsection (b)(1)(A) or (c)(1)(A), or
(B) fails to provide a waiver described in subsection (b)(1)(F) upon request.
(7) Passthru payment
The term "passthru payment" means any withholdable payment or other payment to the extent attributable to a withholdable payment.
(e) Affiliated groups(1) In general
(A) with respect to United States accounts maintained by the foreign financial institution, and
(B) except as otherwise provided by the Secretary, with respect to United States accounts maintained by each other foreign financial institution (other than any foreign financial institution which meets the requirements of subsection (b)) which is a member of the same expanded affiliated group as such foreign financial institution.
For purposes of this section, the term "expanded affiliated group" means an affiliated group as defined in section 1504(a), determined—
(A) by substituting "more than 50 percent" for "at least 80 percent" each place it appears, and
(B) without regard to paragraphs (2) and (3) of section 1504(b).
(f) Exception for certain payments
(1) any foreign government, any political subdivision of a foreign government, or any wholly owned agency or instrumentality of any one or more of the foregoing,
(2) any international organization or any wholly owned agency or instrumentality thereof,
(3) any foreign central bank of issue, or
(4) any other class of persons identified by the Secretary for purposes of this subsection as posing a low risk of tax evasion.
(Added Pub. L. 111–147, title V, §501(a), Mar. 18, 2010, 124 Stat. 97.)
A prior section 1471, act Aug. 16, 1954, ch. 736, 68A Stat. 361, related to recovery of excessive profits on government contracts, prior to repeal by Pub. L. 94–455, title XIX, §1901(b)(13)(A), Oct. 4, 1976, 90 Stat. 1840.
Pub. L. 111–147, title V, §501(d), Mar. 18, 2010, 124 Stat. 106, provided that:
"(1) In general.—Except as otherwise provided in this subsection, the amendments made by this section [enacting this chapter and amending sections 6414, 6501, 6513, 6611, and 6724 of this title] shall apply to payments made after December 31, 2012.
"(2) Grandfathered treatment of outstanding obligations.—The amendments made by this section shall not require any amount to be deducted or withheld from any payment under any obligation outstanding on the date which is 2 years after the date of the enactment of this Act [Mar. 18, 2010] or from the gross proceeds from any disposition of such an obligation.
"(3) Interest on overpayments.—The amendment made by subsection (b) [amending section 6611 of this title] shall apply—
"(A) in the case of such amendment's application to paragraph (1) of section 6611(e) of the Internal Revenue Code of 1986, to returns the due date for which (determined without regard to extensions) is after the date of the enactment of this Act,
"(B) in the case of such amendment's application to paragraph (2) of such section, to claims for credit or refund of any overpayment filed after the date of the enactment of this Act (regardless of the taxable period to which such refund relates), and
"(C) in the case of such amendment's application to paragraph (3) of such section, to refunds paid after the date of the enactment of this Act (regardless of the taxable period to which such refund relates)."