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IRS Mulls ‘Hybrid’ Method for Partnership Withholding Reporting

Oct. 20, 2021, 10:27 PM

The IRS is considering a “hybrid” approach to brokers’ reporting of tax withholding on foreign investors’ partnership sales, an IRS official said Wednesday.

Under the IRS’s potential approach, withholding under Section 1446(f) on foreign investors’ sales of interests in publicly traded partnerships, or PTPs, would continue to be reported on Form 1042-S partnership by partnership. But “we think it may make more sense to identify the PTP as the payer, rather than the intermediary,” as is the case now, said Subin Seth, senior counsel with the IRS Office of Associate Chief Counsel (International).

  • Under that approach, the IRS would ...

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