HIGHLIGHTSOF THIS ISSUEThese synopses are intended only as aids to the reader inidentifying the subject matter covered. They may not berelied upon as authoritative interpretations.

INCOME TAX

Notice 2015–37, page 947.Eligibility for Minimum Essential Coverage for Purposes of thePremium Tax Credit. This notice provides guidance on whetheror when, for purposes of the premium tax credit under § 36Bof the Code, an individual is eligible for minimum essentialcoverage under a “Children’s Health Insurance buy-in program”that has been designated as minimum essential coverage.

EXCISE TAX

REG–103281–11, page 948.Section 301 of James Zadroga 9/11 Health and CompensationAct of 2010, Public Law 111–347 (124 Stat. 3623) (the “Act”)added section 5000C to the Internal Revenue Code that im-poses a 2 percent tax on payments made by the U.S. govern-ment to foreign persons pursuant to certain contracts. Theseproposed regulations provide guidance to U.S. governmentacquiring agencies and foreign persons to determine whatgoods or services are subject to the section 5000C; and howto remit the 2 percent tax by U.S. government acquiring agen-cies or foreign persons, if the section 5000C tax is applicable.

Finding Lists begin on page ii.

Bulletin No. 2015–19May 11, 2015

The IRS MissionProvide America’s taxpayers top-quality service by helpingthem understand and meet their tax responsibilities and en-force the law with integrity and fairness to all.

IntroductionThe Internal Revenue Bulletin is the authoritative instrument ofthe Commissioner of Internal Revenue for announcing officialrulings and procedures of the Internal Revenue Service and forpublishing Treasury Decisions, Executive Orders, Tax Conven-tions, legislation, court decisions, and other items of generalinterest. It is published weekly.

It is the policy of the Service to publish in the Bulletin allsubstantive rulings necessary to promote a uniform applicationof the tax laws, including all rulings that supersede, revoke,modify, or amend any of those previously published in theBulletin. All published rulings apply retroactively unless other-wise indicated. Procedures relating solely to matters of internalmanagement are not published; however, statements of inter-nal practices and procedures that affect the rights and dutiesof taxpayers are published.

Revenue rulings represent the conclusions of the Service onthe application of the law to the pivotal facts stated in therevenue ruling. In those based on positions taken in rulings totaxpayers or technical advice to Service field offices, identify-ing details and information of a confidential nature are deletedto prevent unwarranted invasions of privacy and to comply withstatutory requirements.

Rulings and procedures reported in the Bulletin do not have theforce and effect of Treasury Department Regulations, but theymay be used as precedents. Unpublished rulings will not berelied on, used, or cited as precedents by Service personnel inthe disposition of other cases. In applying published rulings andprocedures, the effect of subsequent legislation, regulations,court decisions, rulings, and procedures must be considered,and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unlessthe facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.This part includes rulings and decisions based on provisions ofthe Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation.This part is divided into two subparts as follows: Subpart A, TaxConventions and Other Related Items, and Subpart B, Legisla-tion and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.To the extent practicable, pertinent cross references to thesesubjects are contained in the other Parts and Subparts. Alsoincluded in this part are Bank Secrecy Act Administrative Rul-ings. Bank Secrecy Act Administrative Rulings are issued bythe Department of the Treasury’s Office of the Assistant Sec-retary (Enforcement).

Part IV.—Items of General Interest.This part includes notices of proposed rulemakings, disbar-ment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index forthe matters published during the preceding months. Thesemonthly indexes are cumulated on a semiannual basis, and arepublished in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

May 11, 2015 Bulletin No. 2015–19

Part III. Administrative, Procedural, and MiscellaneousEligibility for MinimumEssential Coverage forPurposes of the PremiumTax Credit

Notice 2015–37

This notice provides guidance on eligi-bility for minimum essential coverage un-der § 36B of the Internal Revenue Codefor individuals who may enroll in cover-age under “Children’s Health Insurance(CHIP) buy-in programs” that the Depart-ment of Health and Human Services(HHS) designates as minimum essentialcoverage.

BACKGROUND

Beginning in 2014, certain individualscovered under a qualified health planthrough the Health Insurance Market-place, also called the Affordable Insur-ance Exchange, are allowed a premiumtax credit under § 36B. Under § 36B and§ 1.36B–2 of the Income Tax Regulations,coverage of an individual (who may bethe taxpayer claiming the premium taxcredit or a member of the taxpayer’s fam-ily) may be subsidized by the premium taxcredit only for months the individual is noteligible for other minimum essential cover-age, except coverage in the individual mar-ket. Minimum essential coverage is definedin § 5000A(f) and includes coverage undercertain government-sponsored programs, in-cluding CHIP coverage under title XXI of

the Social Security Act, and coverage HHSdesignates as minimum essential coverage.

In general, an individual is treated aseligible for minimum essential coverageunder a government-sponsored program ifthe individual meets the eligibility criteriafor coverage under the program. How-ever, the Commissioner may define eligi-bility for minimum essential coverageunder specific government-sponsored pro-grams in additional published guidance.Section 1.36B–2(c)(2)(i). The regulationsunder § 36B provide that, for purposes ofthe premium tax credit, an individual iseligible for minimum essential coverageunder a health care program under chapter17 or 18 of Title 38, U.S.C. (programsadministered by the Department of Veter-ans Affairs) only if the individual is en-rolled in the program. Section 1.36B–2(c)(2)(iii). Under Notice 2014–71,2014–49 I.R.B. 912, and Notice 2013–41, 2013–29 I.R.B. 60, for purposes of thepremium tax credit, individuals are eligi-ble for minimum essential coverage undercertain other government-sponsored pro-grams and certain programs HHS has des-ignated as minimum essential coverageonly if they are enrolled in the program.

In certain states, certain individuals inhouseholds with income exceeding eligi-bility levels for CHIP may enroll in cov-erage resembling coverage under thestate’s CHIP program. These programs,commonly called “CHIP buy-in pro-grams”, generally require the payment ofpremiums with little or no governmentsubsidy. The programs are not authorized

or funded under title XXI of the SocialSecurity Act and therefore are notgovernment-sponsored minimum essen-tial coverage under § 5000A(f)(1)(A). Ad-ditionally, a segment of the populationwho otherwise would be eligible for sub-sidized qualified health plan coveragecould enroll in coverage through a CHIPbuy-in program only at high cost. HHSwill consider recognizing CHIP buy-inprograms as minimum essential coveragewhen an application is filed under 45 CFR§ 156.604 on behalf of a program.

GUIDANCE

An individual who may enroll in aCHIP buy-in program that HHS has des-ignated as minimum essential coverage iseligible for minimum essential coverageunder the program for purposes of thepremium tax credit only for the period theindividual is enrolled.

EFFECTIVE DATE

This notice is effective for coverage onor after January 1, 2015.

DRAFTING INFORMATION

The principal author of this notice isArvind Ravichandran of the Office of theAssociate Chief Counsel (Income Tax andAccounting). For further information re-garding this notice, contact Mr. Ravichan-dran at (202) 317-4718 (not a toll-freenumber).

Bulletin No. 2015–19 May 11, 2015947

Part IV. Items of General InterestNotice of ProposedRulemakingTax on Certain ForeignProcurement

REG–103281–11

AGENCY: Internal Revenue Service (IRS),Treasury.

ACTION: Notice of proposed rulemaking.

SUMMARY: This document containsproposed regulations under section 5000Cof the Internal Revenue Code relating tothe 2 percent tax on payments made by theU.S. government to foreign persons pur-suant to certain contracts. The proposedregulations affect U.S. government ac-quiring agencies and foreign persons pro-viding certain goods or services to theU.S. government pursuant to a contract.This document also contains proposedregulations under section 6114, with re-spect to foreign persons claiming an ex-emption from the tax under an income taxtreaty.

DATES: Written or electronic commentsand requests for a public hearing must bereceived by July 21, 2015.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG–103281–11), InternalRevenue Service, Room 5203, P.O. Box7604, Ben Franklin Station, Washington,DC 20044. Submissions may be hand-delivered Monday through Friday be-tween the hours of 8 a.m. and 4 p.m. toCC:PA:LPD:PR (REG–103281–11), Couri-er’s Desk, Internal Revenue Service, 1111Constitution Avenue, NW, Washington,DC 20224; or sent electronically via theFederal eRulemaking Portal at http://www.regulations.gov (REG–103281–11).

FOR FURTHER INFORMATIONCONTACT: Concerning the proposedregulations, Kate Hwa at (202) 317-6934,or for questions related to tax treaties,Rosy Lor at (202) 317-6933; concerningsubmissions of comments, Oluwafunmi-layo Taylor, (202) 317-5179, (not toll-freenumbers).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The collection of information con-tained in this notice of proposed rulemak-ing has been submitted to the Office ofManagement and Budget (OMB) for reviewin accordance with the Paperwork Reduc-tion Act of 1995 (44 U.S.C. 3507(d)). Com-ments on the collection of informationshould be sent to the Office of Manage-ment and Budget, Attn: Desk Officer forthe Department of the Treasury, Office ofInformation and Regulatory Affairs,Washington, DC 20503, with copies to theInternal Revenue Service, Attn: IRS Re-ports Clearance Officer, SE:W:CAR:MP:T:T:SP, Washington, DC 20224. Com-ments on the collection of informationshould be received by June 22, 2015.Comments are specifically requested con-cerning:

Whether the proposed collection of in-formation is necessary for the proper per-formance of the functions of the IRS, in-cluding whether the information will havepractical utility;

The accuracy of the estimated burdenassociated with the proposed collection ofinformation;

How the quality, utility, and clarity ofthe information to be collected may beenhanced;

How the burden of complying with theproposed collection of information maybe minimized, including through the ap-plication of automated collection tech-niques or other forms of information tech-nology; and

Estimates of capital or start-up costsand costs of operation, maintenance, andpurchase of services to provide informa-tion.

The collection of information in the pro-posed regulations is contained in a numberof provisions including §§ 1.5000C–2,1.5000C–3, and 1.5000C–4. Responses tothese collections of information are requiredto verify the status of foreign persons towhom specified Federal procurement pay-ments subject to the section 5000C tax aremade; to obtain a benefit (to claim anexemption to, or a reduction in, withhold-ing); and to facilitate tax compliance (to

verify entitlement to an exemption). TheIRS intends that these information collec-tion requirements will be satisfied primar-ily on existing chapter 3 withholdingforms by U.S. government acquiringagencies, along with Form 1120–F, “U.S.Income Tax Return of a Foreign Corpora-tion,” and Form 1040NR, “U.S. Nonresi-dent Alien Income Tax Return.” How-ever, in certain circumstances, foreignpersons must collect certain informationin order to demonstrate to an acquiringagency the appropriate amount to with-hold, if any, on a Section 5000C Certificate.This reporting burden will be reflected in anew Form W–14, “Certificate of Party Re-ceiving Federal Procurement Payment,” orthe Section 5000C Certificate.

The likely respondents are the U.S.government and foreign persons that enterinto contracts with the U.S. government.

Estimated total annual reporting or re-cordkeeping burden: 11,840 hours.

Estimated average annual burden hoursper respondent or recordkeeper variesfrom .5 hours to 40 hours, depending onindividual circumstances, with an esti-mated average of 5 hours, 55 minutes.

Estimated number of respondents orrecordkeepers: 2,000.

An agency may not conduct or spon-sor, and a person is not required to re-spond to, a collection of information un-less it displays a valid control numberassigned by the OMB.

Books or records relating to a collec-tion of information must be retained aslong as their contents may become mate-rial in the administration of any internalrevenue law. Generally, tax returns andtax return information are confidential, asrequired by 26 U.S.C. 6103.

Background

This document contains proposedamendments to 26 CFR part 1 under sec-tion 5000C of the Internal Revenue Code(Code). On January 2, 2011, section 301of the James Zadroga 9/11 Health andCompensation Act of 2010, Public Law111–347 (the Act), 124 Stat. 3623, addedsection 5000C to the Code. Section 5000Cimposes on any foreign person a 2 percenttax on certain payments received from the

May 11, 2015 Bulletin No. 2015–19948

Government of the United States (U.S.government) for goods and services. Sec-tion 301(a)(3) of the Act provides thatsection 5000C applies to payments re-ceived pursuant to contracts entered intoon and after January 2, 2011. Addition-ally, section 301(b)(1) of the Act stipu-lates that no funds are to be disbursed toany foreign contractor in order to reim-burse the tax imposed under section5000C. The Federal Acquisition Regula-tion (FAR) is the body of rules that gen-erally governs acquisitions and contract-ing procedures for federal agencies. See48 CFR Chapter 1. To comply with sec-tion 301(b)(1) of the Act, the Federal Ac-quisition Regulation Council has amendedthe FAR to reflect that the 2 percent taximposed under section 5000C is disal-lowed as a contract cost, excluded fromthe contract price, and not reimbursed un-der the contract. See 48 CFR 31.205–41(b), 52.229–3(b)(2), 52.229–4(b)(2),52.229–6(c)(2), and 52.229–7(b)(2).

Section 301(c) of the Act provides thatsection 5000C shall be applied in a man-ner consistent with United States obliga-tions under international agreements.

This document also contains amend-ments to 26 CFR part 301 under section6114 of the Code. Section 6114(a) gener-ally requires reporting when a taxpayertakes the position that a treaty of theUnited States overrules (or otherwisemodifies) an internal revenue law. Section6114(b) provides that the Secretary maywaive the reporting requirement undersection 6114(a) with respect to classes ofcases for which the Secretary determinesthat the waiver will not impede the assess-ment and collection of tax.

Explanation of Provisions

The proposed regulations provide rulesrelating to the imposition of, and exemp-tion from, the tax under section 5000C.They also contain rules relating to theobligation of the U.S. government to with-hold, deposit, and report amounts to theIRS under section 5000C. Further, theyprovide guidance to foreign persons whomust report and pay the tax under section5000C in certain circumstances. If theU.S. government fails to withhold anamount equal to the tax due under section5000C, the foreign person must file a U.S.return and pay the tax due. In addition, the

proposed regulations provide guidance asto when the imposition of tax would beinconsistent with U.S. treaty obligations.Proposed regulations under section6114(b) generally waive the reporting re-quirements under section 6114(a) when ataxpayer takes the position that a nondis-crimination provision of an income taxtreaty exempts a payment from tax undersection 5000C, provided that certain otherrequirements are satisfied.

I. Payments Subject to Section 5000CTax

Section 5000C(a) applies to foreignpersons that are party to certain contractswith the U.S. government entered into onand after January 2, 2011. In particular,section 5000C imposes on the foreign per-son a tax equal to 2 percent of the amountof a specified Federal procurement pay-ment in certain circumstances. Section5000C(b) defines the term specified Fed-eral procurement payment as any pay-ment made pursuant to a contract with theU.S. government for goods or services ifthe goods are manufactured or producedin or the services are provided in anycountry that is not a party to an interna-tional procurement agreement with theUnited States.

II. Definitions

Proposed § 1.5000C–1(c) sets forthdefinitions that apply solely for purposesof section 5000C and the proposed regu-lations, several of which are described asfollows.

A. Contracting party, foreigncontracting party

Under the proposed regulations, theterm contracting party means any personthat is a party to a contract with the U.S.government entered into on and after Jan-uary 2, 2011. The term foreign contract-ing party means a contracting party that isnot a U.S. person.

B. U.S. government

For purposes of section 5000C, theproposed regulations define the term Gov-ernment of the United States or U.S. gov-

ernment as the executive departmentsspecified in 5 U.S.C. 101 (such as theDepartment of Agriculture and the De-partment of Transportation), the militarydepartments specified in 5 U.S.C. 102(which includes the Department of theArmy, the Department of the Navy, andthe Department of the Air Force), the in-dependent establishments specified in 5U.S.C. 104(1), and wholly owned Gov-ernment corporations specified in 31U.S.C. 9101(3) (such as the Export-Import Bank of the United States and thePension Benefit Guaranty Corporation).Unless otherwise specified in 5 U.S.C.101, 102, or 104(1), or 31 U.S.C. 9101(3),the term U.S. government does not in-clude any quasi-governmental entities orinstrumentalities of the U.S. government.The proposed regulations refer to U.S.government departments or agencies thatare party to a contract as acquiring agen-cies. Moreover, to the extent that a U.S.government department or agency otherthan the acquiring agency is making thepayments pursuant to the contract, thatdepartment or agency is also treated as theacquiring agency for purposes of the pro-posed regulations.

C. International procurement agreement

The proposed regulations define theterm international procurement agreementas the World Trade Organization Govern-ment Procurement Agreement within themeaning of 48 CFR 25.400(a)(1) and anyFree Trade Agreement to which the UnitedStates is a party that includes governmentprocurement obligations that provide ap-propriate competitive government pro-curement opportunities to U.S. goods, ser-vices, and suppliers. For purposes of thisdefinition, a party to an agreement is asignatory to the agreement and does notinclude a country that is merely an ob-server with respect to the agreement.

D. Contract

The proposed regulations provide thatthe term contract has the same meaning asprovided in § 2.101 of the FAR. Under theFAR, a contract does not include a grantagreement or cooperative agreementwithin the meaning of 31 U.S.C. 6304 and6305, respectively. A grant agreement is

Bulletin No. 2015–19 May 11, 2015949

an agreement between the U.S. govern-ment and a recipient when: (1) the princi-pal purpose of the relationship is to trans-fer a thing of value to the recipient tocarry out a public purpose of support orstimulation authorized by a law of theUnited States instead of acquiring (by pur-chase, lease, or barter) property or ser-vices for the direct benefit or use of theU.S. government; and (2) substantial in-volvement is not expected between theexecutive agency and the recipient whencarrying out the activity contemplated inthe agreement. See 31 U.S.C. 6304. Acooperative agreement is similar to a grantagreement except that substantial involve-ment is expected between the U.S. gov-ernment and the recipient when carryingout the activity contemplated in the agree-ment. See 31 U.S.C. 6305. Thus, consis-tent with the FAR, the proposed regula-tions provide that the tax imposed undersection 5000C does not apply to grant orcooperative agreements with the U.S.government.

III. Exemptions from Section 5000C Tax

The proposed regulations provide fiveexemptions from the tax imposed undersection 5000C. The first exemption ex-cludes payments for purchases under thesimplified acquisitions procedures that donot exceed the simplified acquisitionsthreshold (as described in the FAR). Thesecond exemption excludes payments pur-suant to contracts for certain emergencyacquisitions (as defined in the FAR). Thethird exemption excludes payments if theimposition of the tax would be inconsis-tent with any international agreement withthe United States, including for example,when a foreign contracting party is enti-tled to the benefit of a nondiscriminationprovision of an international agreementwith the United States, such as a qualifiedincome tax treaty. The fourth exemptionapplies if the goods are manufactured orproduced, or services are provided, in theUnited States. The final exemption is forgoods manufactured or produced or ser-vices provided in a country that is a partyto an international procurement agreementwith the United States. Sections III.A–Cof this preamble discuss several of theexemptions.

A. Payments for simplified acquisitions

The IRS and the Department of theTreasury (Treasury Department) recog-nize that withholding under section 5000Con contracts in certain circumstances maybe administratively burdensome and, insome cases, more costly than the tax ac-tually collected. Accordingly, the pro-posed regulations provide that the tax im-posed under section 5000C will not applyto payments for purchases under the sim-plified acquisition procedures described inthe FAR that do not exceed the simplifiedacquisition threshold. See 48 CFR 2.101.In general, simplified acquisition proce-dures apply when the U.S. governmentmakes purchases of supplies or services of$150,000 or less.

B. Emergency acquisitions

From time to time, the U.S. govern-ment makes purchases in emergency situ-ations. The IRS and Treasury Departmentrecognize that in those emergency situa-tions it may not be practicable to imposetax on payments otherwise subject to sec-tion 5000C because it may impede theability of the U.S. government to makecertain acquisitions that are necessary toprevent serious injury, financial or other,to the U.S. government. Therefore,§ 1.5000C–1(d)(2) exempts paymentspursuant to contracts (1) awarded underthe “unusual and compelling urgency” au-thority of 48 CFR 6.302–2, and (2) en-tered into under the emergency acquisi-tion flexibilities as defined in 48 CFR Part18. Acquisitions pursuant to the unusualand compelling urgency authority of 48CFR 6.302–2 are subject to special rulesand procedures when the need for suppliesor services is of such an urgency thatserious injury, financial or other, couldresult for the U.S. government if the spe-cial procedures did not apply. Certainwritten justifications and approvals de-scribed in 48 CFR 6.303 and 6.304 arerequired for acquisitions in these circum-stances. Acquisitions entered into underthe emergency acquisition flexibilities of48 CFR Part 18 refer to acquisitions ofsupplies or services by the U.S. govern-ment that, as determined by the head ofan executive agency, may be used (1) insupport of a contingency operation (as

defined in 48 CFR 2.101), (2) to facili-tate the defense against or recovery fromnuclear, biological, chemical, or radio-logical attack against the United States,or (3) when the President issues anemergency declaration, or a major disas-ter declaration.

C. Certain international agreements

Section 301(c) of the Act requires thatsection 5000C be applied in a mannerconsistent with United States obligationsunder international agreements. The refer-ence to “international agreements” in-cludes income tax treaties to which theUnited States is a party. The General Ex-planation of Tax Legislation prepared bythe Joint Committee on Taxation accom-panying section 5000C explains that trea-ties generally provide that neither countrymay subject nationals of the other countryto taxation more burdensome than the taxit imposes on its own nationals. This ex-planation by the Joint Committee on Tax-ation refers to the nondiscrimination pro-visions of tax treaties. See Staff of theJoint Committee on Taxation, General Ex-planation of Tax Legislation Enacted inthe 111th Congress, at 693–4.

The United States currently has 58comprehensive income tax treaties inforce that cover 66 countries. Virtually allnondiscrimination articles in these treatiescontain provisions that prohibit the impo-sition of tax on a foreign national that ismore burdensome than the taxation towhich a U.S. national under similar cir-cumstances may be subjected. A nationalis generally defined in tax treaties to in-clude both individuals possessing citizen-ship and legal persons whose status isderived from the laws of that country.Some of these income tax treaties onlyprohibit discrimination against foreign na-tionals who are individuals, and a fewprovide protection only for foreign na-tionals who are also U.S. residents. Themajority of nondiscrimination articlescontain provisions that prohibit discrim-ination against all foreign nationals ofthe treaty country, regardless of whetherthe national is a resident of the treatycountry.

Many of these income tax treaties havea nondiscrimination article that applies to“taxes of every kind and description,”

May 11, 2015 Bulletin No. 2015–19950

whether or not an income tax, and arebroad enough to apply to the tax imposedunder section 5000C. Consistent with sec-tion 301(c) of the Act, any foreign con-tracting party that is entitled to the bene-fits of such a nondiscrimination article isnot subject to tax under section 5000C.The proposed regulations refer to a treatywith such an article as a qualified incometax treaty. The term is defined as a U.S.income tax treaty in force that contains anondiscrimination provision that appliesto the tax imposed under section 5000Cand prohibits taxation that is more burden-some on a foreign national than a U.S.national (or in the case of some incometax treaties, taxation that is more burden-some on a foreign citizen than a U.S.citizen), regardless of residence. Notice2015–35, 2015–18 IRB, identifies incometax treaties in force, as of the date theproposed regulations are issued, that arequalified income tax treaties (available onwww.irs.gov). This Notice may be up-dated or amended in subsequent IRSForms, Instructions, Publications, or othermedia (including electronic media).

IV. Rules for Determining Where GoodsAre Manufactured or Produced, andWhere Services Are Performed

Section 5000C(b) applies when pay-ments are made pursuant to a contract forgoods or services if the goods are manu-factured or produced in or the services areprovided in a country that is not a party toan international procurement agreementwith the United States. Solely for pur-poses of section 5000C, the proposed reg-ulations provide rules for determiningwhere goods are manufactured or pro-duced, and where services are performed.In particular, the proposed regulationsprovide that goods are manufactured orproduced in the country (or countries)where property has been substantiallytransformed into the goods that are pro-cured, or alternatively, where there hasbeen assembly or conversion of compo-nent parts into the final product. Further,the proposed regulations provide that ser-vices will be considered to be provided inthe country where the individuals per-forming the services are physically lo-cated when they perform their duties pur-suant to the contract.

If, pursuant to a single contract, goodsare manufactured or produced or servicesare provided in multiple countries, theproposed regulations provide that a for-eign contracting party may use a reason-able allocation method to determine howthe goods or services must be allocated toeach country for purposes of applying therelevant exemptions for payments pursu-ant to that contract. A reasonable alloca-tion method would include taking into ac-count the proportionate costs (includingthe cost of labor and raw materials) in-curred to manufacture or produce thegoods in each country, or taking into ac-count the proportionate costs incurred toprovide the services in each country.

V. Withholding by the U.S. Governmenton Specified Federal ProcurementPayments

A. Increase amount deducted andwithheld under chapter 3

Section 5000C(d)(1) provides that theamount deducted and withheld underchapter 3 shall be increased by the amountof tax imposed under section 5000C. Ac-cordingly, the proposed regulations gen-erally follow the procedural requirementsin the Code and Treasury regulations forsituations in which withholding is re-quired under chapter 3 on fixed or deter-minable annual or periodical income(FDAP). For example, similar to with-holding agents under chapter 3, acquiringagencies with an obligation to withholdunder section 5000C must file Form 1042,“Annual Withholding Tax Return for U.S.Source Income of Foreign Persons,” andForm 1042–S, “Foreign Person’s U.S.Source Income Subject to Withholding,”to report amounts withheld. However, theproposed regulations differ from the with-holding and reporting rules under chapter3 to take into account the differences be-tween the tax imposed under section5000C and the tax imposed under subtitleA to which chapter 3 applies. Thus, aforeign contracting party is not required tosubmit a Form W–8BEN, “Certificate ofForeign Status of Beneficial Owner forUnited States Tax Withholding,” or FormW–8BEN–E, “Certificate of Status ofBeneficial Owner for United States TaxWithholding and Reporting (Entities),” to

an acquiring agency under the proposedregulations to certify its foreign status orclaim a reduction in withholding under anapplicable income tax treaty.

The proposed regulations require in-stead that a foreign contracting party mustsubmit a “Section 5000C Certificate,”signed under penalties of perjury, that pro-vides all of the information required bythe proposed regulations to claim an ex-emption from section 5000C. The term“Section 5000C Certificate” also includesany form that the IRS may prescribe as asubstitute for the certificate. Under theproposed regulations, an acquiring agencymay generally rely on a claim made in aSection 5000C Certificate if the foreigncontracting party provides complete infor-mation in the time and manner required bythe regulations. However, an acquiringagency may not rely on the informationprovided by the foreign contracting partyif it has reason to know that the informa-tion is incorrect or unreliable. An acquir-ing agency has reason to know that theinformation is incorrect or unreliable if ithas knowledge of relevant facts or state-ments contained in the submitted informa-tion such that a reasonably prudent personin the position of the acquiring agencywould know that the information providedis incorrect or unreliable.

For the convenience of both acquiringagencies and foreign contracting parties, amodel Section 5000C Certificate is in-cluded as part of the proposed regulations.A foreign contracting party may choosenot to use the format of the model certif-icate, but in all cases it must submit all thenecessary information required by theproposed regulations accompanied by asigned penalties of perjury statement.Each Section 5000C Certificate applies toa single contract, and thus a foreign con-tracting party with multiple contracts withthe U.S. government must complete a newcertificate for each contract, if necessary.

B. Steps for acquiring agencies

The proposed regulations provide stepsthat an acquiring agency must follow tocomply with its withholding obligationsunder section 5000C. Applying thesesteps will identify the payments that aresubject to withholding under section5000C and eliminate those that are not.

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The steps are organized so that if an acquir-ing agency already possesses informationthat establishes that the payment is not sub-ject to the tax imposed under section 5000C(because, for example, the payment is madeto a U.S. person), the acquiring agency mayconclude based on that particular informa-tion that the payment is not subject to with-holding and will not have to continue toevaluate the other steps.

The first of these steps instructs an ac-quiring agency to determine whether thepayment is made pursuant to a contract forgoods or services. If the U.S. government ismaking a payment for any other purpose,there will not be an obligation to withholdunder section 5000C on the payment. Thus,this step will eliminate from withholdingpayments made pursuant to grant or coop-erative agreements, and payments madepursuant to contracts that are not for goodsor services, such as a contract for the pur-chase or lease of land or an interest in land.

Under the second step, an acquiringagency must determine whether the pay-ment is made to a U.S. person. This steptakes into account that only foreign personsare subject to tax under section 5000C and§ 1.5000C–1(b). Under this step, if the ac-quiring agency determines that the contract-ing party is a U.S. person based on its TINas reflected in a U.S. government informa-tion system, such as the System for AwardManagement (or because there is a com-pleted Form W–9, “Request for TaxpayerIdentification Number (TIN) and Certifica-tion,” on file), payments made pursuant tothis contract are not subject to withholdingunder section 5000C.

Under the third step, an acquiringagency determines whether the payment isfor purchases under the simplified acquisi-tion procedures as described in the FAR. Ifit is, the acquiring agency does not have anobligation to withhold under section 5000Con the payment. This step takes into accountthe exemption from tax for simplified acqui-sitions in § 1.5000C–1(d)(1).

Under the fourth step, the acquiringagency determines whether the payment ismade for certain emergency acquisitions.If it is, the acquiring agency does not havean obligation to withhold under section5000C on the payment. This step takesinto account the exemption from tax foremergency acquisitions as described in§ 1.5000C–1(d)(2).

Under the fifth and sixth steps, the ac-quiring agency determines whether thepayment is subject to withholding (inwhole or in part) based on the informationcontained in a Section 5000C Certificate,if one has been provided by the foreigncontracting party. Under the fifth step, ifthe acquiring agency determines that theforeign contracting party is exempt fromthe tax under section 5000C by reason ofan international agreement with theUnited States, as represented on a com-pleted Section 5000C Certificate, the ac-quiring agency does not have an obliga-tion to withhold. For example, under thisstep, the acquiring agency does not havean obligation to withhold if a foreign con-tracting party provides a completed Sec-tion 5000C Certificate that accuratelyidentifies the nondiscrimination article ofa qualified income tax treaty on which it isrelying to claim an exemption and thebasis for that reliance.

Under the sixth step, the acquiringagency must determine from the Section5000C Certificate if the payments are (inwhole or part) made pursuant to a contractfor goods manufactured or produced or ser-vices provided in the United States, or in aforeign country that is a party to an interna-tional procurement agreement and thereforeexempt (to that extent) from withholdingunder Section 5000C.

Under the seventh step, if the acquiringagency determines that it has an obliga-tion to withhold, the acquiring agencycomputes the amount of withholdingbased on the information contained in theSection 5000C Certificate, including aclaim for a partial exemption from with-holding, and withholds that amount fromthe payment.

Under the final step, the acquiringagency must deposit and report anyamounts withheld.

VI. Procedure for the ForeignContracting Party to Request Offset forUnderwithholding or Overwithholding

Under certain circumstances, the pro-posed regulations provide that the foreigncontracting party may request that the ac-quiring agency increase or decrease theamount of withholding on future pay-ments for which withholding is requiredunder section 5000C. The IRS and Trea-

sury Department intend for this procedureto provide flexibility for foreign contractingparties that discover that the previousamounts withheld did not satisfy, or ex-ceeded, their tax liability under section5000C and the proposed regulations. Theserequests must be in writing, and provide anexplanation, signed under penalties ofperjury. Any increase or decrease inamounts withheld under this proceduremay occur only if the payments to whichit applies are made on or before the dateon which the acquiring agency must fileForm 1042 for the year with respect tothe payment for which the overwith-holding or underwithholding occurred.

VII. Administrative Provisions Relatingto Withholding by U.S. Government

Under § 1.6302–2 of the Income TaxRegulations, the amount of tax underchapter 3 that U.S. withholding agents arerequired to withhold determines the fre-quency of their deposits: monthly, quarter-monthly, or annual. Section 5000C(d)(1)instructs acquiring agencies to increaseamounts deducted and withheld under chap-ter 3 by amounts withheld under section5000C. Therefore, for purposes of determin-ing the frequency of their deposits, the pro-posed regulations require acquiring agenciesthat have chapter 3 deposit obligations for aperiod to add amounts withheld under sec-tion 5000C to the amounts withheld underchapter 3. This rule applies regardless ofwhether the chapter 3 deposit obligation iswith respect to the contracting party or anyother person. However, to reduce the burdenon acquiring agencies that have no chapter 3withholding obligations, the proposed regu-lations require these acquiring agencies tomake deposits monthly, regardless of theamount of tax withheld. Acquiring agenciesmust deposit all withheld amounts by elec-tronic funds transfer, as that term is definedin § 31.6302–1(h)(4)(i).

VIII. Special Arrangement for CertainContracts and Classified Contracts

The IRS and Treasury Departmenthave determined that, in limited circum-stances, it may be in the interest of soundtax administration to allow flexibility insome of the rules provided in the proposedregulations. Thus, the proposed regula-

May 11, 2015 Bulletin No. 2015–19952

tions authorize the IRS to consent to al-ternative means for depositing the tax dueunder section 5000C when agreed to bythe acquiring agency and the foreign con-tracting party subject to tax under section5000C. In these situations, the IRS mayalso modify any reporting or return re-quirements of the acquiring agency or theforeign contracting party. Similarly,§ 1.5000C–3 provides that an acquiringagency is not required to report informa-tion on Form 1042–S for payments madepursuant to classified contracts, as de-scribed in section 6050M(e)(3), unless theacquiring agency determines that the in-formation reported on the Form 1042–Sdoes not compromise the safeguarding ofclassified information or national security.

IX. Requirement for ForeignContracting Party to File a Return andPay Tax, and Procedures forContracting Party to Seek a Refund

Section 5000C(d)(2) provides that forpurposes of subtitle F of the Code (relat-ing to procedure and administration), thetax imposed under section 5000C on for-eign contracting parties is treated as a taximposed under subtitle A (rather than asan excise tax under subtitle D). As such,and because section 5000C(d)(1) providesonly that the amount deducted and with-held under chapter 3 shall be increased bythe amount of tax imposed under section5000C, the proposed regulations treat thetax imposed on foreign contracting partiesunder section 5000C as administered in amanner similar to gross basis incometaxes. Thus, if a payment is subject to thetax imposed under section 5000C and theforeign contracting party remains liablefor the tax because, for example, it wasnot fully satisfied by withholding by theacquiring agency, the foreign contractingparty must make an income tax return (forexample, Form 1120–F, “U.S. IncomeTax Return of a Foreign Corporation”)and remit payment by the due date of thatincome tax return. See sections 6012 and6072 and the regulations thereunder. Pen-alties may apply for the foreign contract-ing party’s failure to comply, includingthose in sections 6651 and 6662.

If the acquiring agency has overwith-held under section 5000C and has made adeposit of the amount withheld, the con-

tracting party may claim a refund of theamount overwithheld pursuant to the pro-cedures described in chapter 65. See sec-tion 6402 and the regulations thereunderfor refund procedures. See section 6511and the regulations thereunder for the stat-ute of limitations on refund claims.

X. Anti-Abuse Rule

The proposed regulations contain ananti-abuse rule to prevent circumvention ofthe tax under section 5000C. Under thisrule, if a foreign person engages in a trans-action (or series of transactions) with a prin-cipal purpose of avoiding the tax imposedunder section 5000C, the transaction (or se-ries of transactions) may be disregarded orthe arrangement may be recharacterized inaccordance with its substance.

XI. Section 6114 Reporting

Ordinarily any foreign person claimingthat a nondiscrimination provision of anincome tax or any other treaty obligationprecludes the application of an otherwiseapplicable Code provision is required to re-port that position under § 301.6114–1(b)(1).Proposed § 301.6114–1(c)(1)(ix) providesthat this reporting obligation is waived whena foreign person is claiming that a qualifiedincome tax treaty precludes the applicationof section 5000C, but only if the foreignperson has provided a Section 5000C Cer-tificate (or such other form as may be pre-scribed by the Commissioner pursuant tosection 5000C) in accordance with section5000C and the regulations thereunder. Ac-cordingly, if a foreign person relying on aqualified income tax treaty has not providedthe certificate or is relying on a treaty obli-gation other than an income tax treaty toclaim an exemption from the tax, reportingis not waived.

Proposed Effective/Applicability Date

Section 5000C applies to specified Fed-eral procurement payments received pursuantto contracts entered into on and after January2, 2011. Proposed §§ 1.5000C–1 through1.5000C–7 and proposed § 301.6114–1(c)(1)(ix) will apply on and after the datethat is 90 days after the date they arepublished as final regulations in the Fed-eral Register.

Contracting parties and acquiringagencies may generally rely upon the rulesin the proposed regulations until the datethey become effective/applicable as finalregulations. To the extent that a foreign con-tracting party is eligible for an exemptionunder the proposed regulations that wouldeliminate the tax imposed under section5000C for any specified Federal procure-ment payments received on or before April22, 2015, no further action is required, andthe requirement to provide a Section 5000CCertificate is waived. Further, prior to thedate these rules become effective/applicableas final regulations, the requirement to file aForm 8833, “Treaty-Based Return PositionDisclosure Under Section 6114 or 7701(b),”under section 6114 and the regulationsthereunder (with respect to relief pursuant tothe nondiscrimination provision of a quali-fied income tax treaty) is waived for posi-tions related to the tax imposed under sec-tion 5000C (and thus no informationreporting penalties will be imposed undersection 6712).

If a foreign contracting party has a taxliability under section 5000C for anyspecified Federal procurement paymentreceived before the date these rules be-come effective/applicable as final regula-tions (taking into account any exemptionsin the proposed regulations as finalized)that has not been satisfied by withholding,the foreign contracting party should file atax return and pay the tax in accordancewith applicable IRS forms, such as Form1120–F. If a foreign contracting partyfully satisfies its tax and filing obligationsunder section 5000C with respect to anypayments received before the date theserules become effective/applicable as finalregulations, penalties will not be assertedwith respect to those payments. However,with respect to tax due under section5000C, a foreign contracting party is sub-ject to applicable interest on the underpay-ments (as described in Subchapter A ofChapter 67 of the Code).

Special Analyses

It has been determined that this proposedregulation is not a significant regulatory ac-tion as defined in Executive Order 12866, assupplemented by Executive Order 13563.Therefore, a regulatory assessment is notrequired. It also has been determined thatsection 553(b) of the Administrative Proce-

Bulletin No. 2015–19 May 11, 2015953

dure Act (5 U.S.C. chapter 5) does not applyto the proposed regulations. The collectionof information requirement in the proposedregulations will not have a significant eco-nomic impact on a substantial number ofsmall entities because a limited number offoreign contracting parties that are small en-tities will be subject to the tax. Pursuant tosection 7805(f) of the Code, the proposedregulations have been submitted to the ChiefCounsel for Advocacy of the Small Busi-ness Administration for comment on its im-pact on small business.

Comments and Public Hearing

Before the proposed regulations are ad-opted as final regulations, considerationwill be given to any written (a signedoriginal and eight (8) copies) or electroniccomments that are submitted timely to theIRS. The IRS and Treasury Departmentrequest comments on all aspects of theproposed rules, including comments onthe clarity of the proposed rules and howthey may be made easier with which tocomply. All comments will be availablefor public inspection and copying at www.regulations.gov or upon request.

Drafting Information

The principal authors of the proposedregulations are Kate Hwa, Brad McCormack,and Rosy Lor, Office of Associate ChiefCounsel (International). However, otherpersonnel from the IRS and Treasury De-partment participated in their develop-ment.

* * * * *

Proposed Amendments to theRegulations

Accordingly, 26 CFR parts 1, 301,and 602 are proposed to be amended asfollows:

PART I—INCOME TAXES

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

Authority: 26 U. S. C. 7805 * * *Par. 2. An undesignated center heading is

revised immediately following § 1.5000A–5to read as follows:

Tax on Certain Foreign ProcurementPar. 3. Section 1.5000C–0 is added to

read as follows:

§ 1.5000C–0 Table of contents.

This section lists the table of contentsfor §§ 1.5000C–1 through 1.5000C–7.

§ 1.5000C–1 Tax on specified Federalprocurement payments.

(a) Overview.(b) Imposition of tax.(c) Definitions.(d) Exemptions.(1) Simplified acquisitions.(2) Emergency acquisitions.(3) Certain international agreements.(4) Goods manufactured or produced

or services provided in the UnitedStates.

(5) Goods manufactured or producedor services provided in a countrythat is a party to an internationalprocurement agreement.

(e) Country in which goods are manu-factured or produced or servicesprovided.

(1) Goods manufactured or produced.(2) Provision of services.(3) Allocation of total contract price to

determine the nonexempt amount.(4) Reduction or elimination of with-

holding by an acquiring agency.

§ 1.5000C–2 Withholding on specifiedFederal procurement payments.

(a) In general.(b) Steps in determining the obligation

to withhold under section 5000C.(1) Determine whether the payment is

pursuant to a contract for goods or services.(2) Determine whether the payment is

made pursuant to a contract with a U.S.person.

(3) Determine whether the payment isfor purchases under the simplified acqui-sition procedures.

(4) Determine whether the payment isfor emergency acquisitions.

(5) Determine whether the foreign con-tracting party is entitled to relief pursuantto an international agreement.

(6) Determine whether the contract isfor goods manufactured or produced orservices provided in the United States orin a foreign country that is a party to aninternational procurement agreement.

(7) Compute amounts to withhold.

(8) Deposit and report amounts with-held.

(c) Determining whether the contract-ing party is a U.S. person.

(1) In general.(2) Determination based on Taxpayer

Identification Number (TIN).(3) Determination based on the Form

W–9.(4) Contracting party treated as a for-

eign contracting party.(d) Withholding when a foreign con-

tracting party submits a Section 5000CCertificate.

(1) In general.(2) Exemption for a foreign contracting

party entitled to the benefit of relief pur-suant to certain international agreements.

(3) Exemption when goods are manu-factured or produced or services providedin the United States, or in a foreign coun-try that is a party to an international pro-curement agreement.

(4) Information required for Section5000C Certificate.

(5) Validity period of Section 5000CCertificate.

(6) Change in circumstances.(7) Model Section 5000C Certificate.(8) Time for submitting Section 5000C

Certificate or Form W–9, “Request forTaxpayer Identification Number and Cer-tification”.

(e) Offset for underwithholding oroverwithholding.

(1) In general.(2) Underwithholding.(3) Overwithholding.

§ 1.5000C–3 Payment and returns of taxwithheld by the acquiring agency.

(a) In general.(b) Deposit rules.(1) Acquiring agency with a chapter 3

deposit requirement treats amounts with-held as under chapter 3.

(2) Acquiring agency with no chapter 3filing obligation deposits withheld amountsmonthly.

(c) Return requirements.(1) In general.(2) Classified contracts.(d) Special arrangement for certain

contracts.

May 11, 2015 Bulletin No. 2015–19954

§ 1.5000C–4 Requirement for theforeign contracting party to file a returnand pay tax, and procedures for thecontracting party to seek a refund.

(a) In general.(b) Tax obligation of foreign contract-

ing party independent of withholding.(c) Return of tax by the foreign con-

tracting party.(d) Time and manner of paying tax.(e) Refund requests when amount

withheld exceeds tax liability.

§ 1.5000C–5 Anti-abuse rule.

§ 1.5000C–6 Examples.

§ 1.5000C–7 Effective/applicability date.

(a) In general.(b) Reliance on proposed regulations.(c) Obligation to file a return and pay

tax.(d) Waiver of penalties under certain

circumstances.Par. 4. Sections 1.5000C–1 through

1.5000C–7 are added to read as follows:

§ 1.5000C–1 Tax on specified Federalprocurement payments.

(a) Overview. This section providesdefinitions and general rules relating tothe imposition of, and exemption from,the tax on specified Federal procurementpayments under section 5000C. Section1.5000C–2 provides rules concerningwithholding under section 5000C(d)(1),including the steps that must be taken todetermine the obligation to withhold andwhether an exemption from withholdingapplies. Section 1.5000C–3 provides thetime and manner for depositing theamounts withheld under section 5000Cand the related reporting requirements.Section 1.5000C–4 contains the rules fora foreign contracting party that must payand report the tax under section 5000Cwhen the tax obligation under section5000C is not fully satisfied by withhold-ing, as well as procedures by which acontracting party may seek a refund whenthe amount withheld exceeds its tax lia-bility under section 5000C. Section1.5000C–5 contains an anti-abuse rule.Section 1.5000C–6 contains examples il-lustrating the principles of §§ 1.5000C–1

through 1.5000C–7. Finally, § 1.5000C–7contains the effective/applicability datefor §§ 1.5000C–1 through 1.5000C–7.

(b) Imposition of tax. Except as other-wise provided, section 5000C imposes onany foreign contracting party a tax equalto 2 percent of the amount of a specifiedFederal procurement payment. In general,the tax imposed under section 5000C ap-plies to specified Federal procurementpayments received pursuant to contractsentered into on and after January 2, 2011.Specified Federal procurement paymentsreceived by a nominee or agent on behalfof a contracting party are considered to bereceived by that contracting party. The taximposed under section 5000C is to beapplied in a manner consistent with U.S.obligations under international agree-ments. Payments for the purchase or leaseof land or an interest in land are not sub-ject to the tax imposed under section5000C.

(c) Definitions. Solely for purposes ofsection 5000C and §§ 1.5000C–1 through1.5000C–7, the following definitions apply:

(1) The term acquiring agency meansthe U.S. government department, agency,independent establishment, or corporationdescribed in paragraph (c)(7) of this sec-tion that is a party to the contract. To theextent that a U.S. government departmentor agency, other than the acquiringagency, is making the payments pursuantto the contract, that department or agencyis also considered to be the acquiringagency.

(2) The term contract has the samemeaning as provided in 48 CFR 2.101,and thus does not include a grant agree-ment or a cooperative agreement withinthe meaning of 31 U.S.C. 6304 and 6305,respectively.

(3) The term contract ratio refers to thenonexempt amount over the total contractprice.

(4) The term contracting party meansany person that is a party to a contractwith the U.S. government that is enteredinto on or after January 2, 2011.

(5) The term foreign contracting partymeans a contracting party that is a foreignperson.

(6) The term foreign person means anyperson other than a United States person(as defined in section 7701(a)(30)).

(7) The term Government of the UnitedStates or U.S. government means the ex-ecutive departments specified in 5 U.S.C.101, the military departments specified in5 U.S.C. 102, the independent establish-ments specified in 5 U.S.C. 104(1), andwholly owned government corporationsspecified in 31 U.S.C. 9101(3). Unlessotherwise specified in 5 U.S.C. 101, 102,or 104(1), or 31 U.S.C. 9101(3), the termGovernment of the United States or U.S.government does not include any quasi-governmental entities or instrumentalitiesof the U.S. government.

(8) The term international procure-ment agreement means the World TradeOrganization Government ProcurementAgreement within the meaning of 48 CFR25.400(a)(1) and any Free Trade Agree-ment to which the United States is a partythat includes government procurement ob-ligations that provide appropriate compet-itive government procurement opportuni-ties to U.S. goods, services, and suppliers.A party to an international procurementagreement is a signatory to the agreementand does not include a country that ismerely an observer with respect to theagreement.

(9) The term nonexempt amount meansthe portion of the contract price allocatedto nonexempt goods and nonexempt ser-vices.

(10) The term nonexempt goods meansgoods manufactured or produced in a for-eign country that is not a party to aninternational procurement agreement withthe United States.

(11) The term nonexempt servicesmeans services provided in a foreigncountry that is not a party to an interna-tional procurement agreement with theUnited States.

(12) The term outlying areas has thesame meaning as set forth in 48 CFR2.101(b), which includes Puerto Rico, theNorthern Mariana Islands, American Sa-moa, Guam, the Virgin Islands, Baker Is-land, Howland Island, Jarvis Island, John-ston Atoll, Kingman Reef, MidwayIslands, Navassa Island, Palmyra Atoll,and Wake Atoll.

(13) The term qualified income taxtreaty means a U.S. income tax treaty inforce that contains a nondiscriminationprovision that applies to the tax imposedunder section 5000C and prohibits taxa-

Bulletin No. 2015–19 May 11, 2015955

tion that is more burdensome on a foreignnational than a U.S. national (or in thecase of certain income tax treaties, taxa-tion that is more burdensome on a foreigncitizen than a U.S. citizen), regardless ofits residence.

(14) The term Section 5000C Certifi-cate means a written statement that in-cludes the information described in§ 1.5000C–2(d) that the foreign contract-ing party submits to an acquiring agencyfor the purposes of demonstrating that theforeign contracting party is eligible forcertain exemptions from withholding (inwhole or in part) under section 5000Cwith respect to a contract. The term alsoincludes any form that the Internal Reve-nue Service may prescribe as a substitutefor the Section 5000C Certificate.

(15) The term specified Federal pro-curement payment means any paymentmade pursuant to a contract with a foreigncontracting party that is for goods manu-factured or produced or services providedin a foreign country that is not a party toan international procurement agreementwith the United States. For purposes of theprior sentence, a foreign country does notinclude an outlying area.

(16) The term Taxpayer IdentificationNumber or TIN means the identifyingnumber assigned to a person under section6109, as defined in section 7701(a)(41).

(17) The term total contract pricemeans the total cost to the U.S. Govern-ment of the goods and services procuredunder a contract and paid to the contract-ing party.

(d) Exemptions. The tax imposed underparagraph (b) of this section does not ap-ply to the payments made in the followingsituations. For the exemptions in para-graphs (d)(3), (4) and (5) of this section,see § 1.5000C–2(d) for the procedures toeliminate withholding by an acquiringagency.

(1) Simplified acquisitions. Paymentsfor purchases under the simplified acqui-sition procedures that do not exceed thesimplified acquisition threshold as de-scribed in 48 CFR 2.101.

(2) Emergency acquisitions. A pay-ment made pursuant to a contract if thecontract is—

(i) Awarded under the “unusual andcompelling urgency” authority of 48 CFR6.302–2, or

(ii) Entered into under the emergencyacquisition flexibilities as defined in 48CFR Part 18.

(3) Certain international agreements.A payment made by the U.S. governmentpursuant to a contract with a foreign con-tracting party when the payment is enti-tled to relief from the tax imposed undersection 5000C pursuant to an internationalagreement with the United States, includ-ing relief pursuant to a nondiscriminationprovision of a qualified income tax treaty,because the foreign contracting party isentitled to the benefit of that provision.

(4) Goods manufactured or producedor services provided in the United States.A payment made pursuant to a contract tothe extent that the payment is for goodsmanufactured or produced or services pro-vided in the United States.

(5) Goods manufactured or producedor services provided in a country that is aparty to an international procurementagreement. A payment made pursuant to acontract to the extent the payment is forgoods manufactured or produced or ser-vices provided in a country that is a partyto an international procurement agree-ment, as defined in paragraph (c)(8) of thissection.

(e) Country in which goods are manu-factured or produced or services provid-ed—(1) Goods manufactured or pro-duced. Solely for purposes of section5000C, goods are manufactured or pro-duced in the country (or countries)—

(i) Where property has been substan-tially transformed into the goods that areprocured pursuant to a contract; or

(ii) Where there has been assembly orconversion of component parts (involvingactivities that are substantial in nature andgenerally considered to constitute themanufacture or production of property)into the final product that constitutes thegoods procured pursuant to a contract.

(2) Provision of services. Solely forpurposes of section 5000C, services areconsidered to be provided in the countrywhere the individuals performing the ser-vices are physically located when theyperform their duties pursuant to the contract.

(3) Allocation of total contract price todetermine the nonexempt amount. If, pur-suant to a contract, goods are manufac-tured or produced, or services are pro-vided, in multiple countries and only a

portion of the goods manufactured or pro-duced or the services provided pursuant tothe contract are nonexempt goods or non-exempt services, a foreign contractingparty may use a reasonable allocationmethod to determine the nonexemptamount. A reasonable allocation methodwould include taking into account the pro-portionate costs (including the cost of la-bor and raw materials) incurred to manu-facture or produce the goods in eachcountry, or taking into account the propor-tionate costs incurred to provide the ser-vices in each country.

(4) Reduction or elimination of with-holding by an acquiring agency. For pro-cedures to reduce or eliminate withhold-ing by an acquiring agency based onwhere goods are manufactured or pro-duced or where services are provided, in-cluding as a result of an allocation underthis paragraph (e), see § 1.5000C–2(d).

§ 1.5000C–2 Withholding on specifiedFederal procurement payments.

(a) In general. Except as otherwiseprovided in this section, every acquiringagency making a specified Federal pro-curement payment on which tax is im-posed under section 5000C and§§ 1.5000C–1 through 1.5000C–7 mustdeduct and withhold an amount equal to 2percent of the payment. For rules relatingto the liability of a foreign contractingparty with respect to specified Federalprocurement payments not fully withheldupon at source, see § 1.5000C–4. An ac-quiring agency may rely upon any infor-mation furnished by a contracting partyunder this section unless the acquiringagency has reason to know that the infor-mation is incorrect or unreliable. An ac-quiring agency has reason to know thatthe information is incorrect or unreliableif it has knowledge of relevant facts orstatements contained in the submitted in-formation such that a reasonably prudentperson in the position of the acquiringagency would know that the informationprovided is incorrect or unreliable.

(b) Steps in determining the obligationto withhold under section 5000C. An ac-quiring agency generally determines itsobligation to withhold under section5000C according to the steps described inthis paragraph (b). See, however, para-

May 11, 2015 Bulletin No. 2015–19956

graph (e) of this section for situations inwhich withholding may be increased inthe case of underwithholding, or may bedecreased in the case of overwithholding.

(1) Determine whether the payment ispursuant to a contract for goods or ser-vices. The acquiring agency determineswhether it is making a payment pursuantto a contract for goods or services. If theacquiring agency is making a payment forany other purpose, it does not have anobligation to withhold under section5000C on the payment.

(2) Determine whether the payment ismade pursuant to a contract with a U.S.person. The acquiring agency determineswhether the payment is made pursuant to acontract with a person considered to be aUnited States person (U.S. person) in accor-dance with paragraph (c) of this section. Ifthe contracting party is a U.S. person, theacquiring agency does not have an obliga-tion to withhold under section 5000C on thepayment.

(3) Determine whether the payment isfor purchases under the simplified acqui-sition procedures. The acquiring agencydetermines whether the payment is forpurchases under the simplified acquisi-tions procedures that do not exceed thesimplified acquisition threshold as de-scribed in 48 CFR 2.101. If it is, theacquiring agency does not have an obli-gation to withhold under section 5000Con the payment.

(4) Determine whether the payment isfor emergency acquisitions. The acquiringagency determines whether the payment ismade for certain emergency acquisitionswithin the meaning of § 1.5000C–1(d)(2).If it is, the acquiring agency does not havean obligation to withhold under section5000C on the payment.

(5) Determine whether the foreign con-tracting party is entitled to relief pursuant toan international agreement. If the foreigncontracting party submits a Section 5000CCertificate in accordance with paragraph (d)of this section representing that the foreigncontracting party is entitled to relief fromthe tax imposed under section 5000C pur-suant to an international agreement with theUnited States (such as relief pursuant to thenondiscrimination provision of a qualifiedincome tax treaty), the acquiring agencydoes not have an obligation to withholdunder section 5000C on the payment.

(6) Determine whether the contract isfor goods manufactured or produced orservices provided in the United States orin a foreign country that is a party to aninternational procurement agreement. Ifthe foreign contracting party submits aSection 5000C Certificate in accordancewith paragraph (d) of this section thatrepresents that the contract is for goodsmanufactured or produced or services pro-vided in the United States, or in a foreigncountry that is a party to an internationalprocurement agreement, the acquiringagency does not have an obligation towithhold. If the Section 5000C Certificateprovides that payments under the contractare only partially exempt from withhold-ing under section 5000C, the acquiringagency must withhold to the extent de-scribed in paragraph (b)(7).

(7) Compute amounts to withhold. If,after evaluating each step described in thisparagraph (b), the acquiring agency deter-mines that it has an obligation to withhold,the acquiring agency computes theamount of withholding by multiplying theamount of the payment by 2 percent, un-less the foreign contracting party has pro-vided a Section 5000C Certificate. Incases in which the Section 5000C Certif-icate demonstrates that the exemption inStep 6 applies, the acquiring agency gen-erally computes the amount of withhold-ing by multiplying the amount of the pay-ment by the contract ratio provided on themost recent Section 5000C Certificate, theproduct of which is multiplied by 2 per-cent. However, in cases in which the ex-emption in Step 6 applies and the require-ments of paragraph (d)(4)(iii)(B)(2) ofthis section are met, the acquiring agencycomputes the amount of withholdingbased on the payment for the specificallyidentified items, which may be identifiedby the contract line item number, orCLIN. The acquiring agency withholdsthe computed amount from the payment.

(8) Deposit and report amounts with-held. The acquiring agency deposits and re-ports the amounts determined in the priorstep in accordance with § 1.5000C–3.

(c) Determining whether the contract-ing party is a U.S. person—(1) In general.An acquiring agency must rely on theprovisions of this paragraph (c) to deter-mine the status of the contracting party as

a U.S. person for purposes of withholdingunder section 5000C.

(2) Determination based on TaxpayerIdentification Number (TIN). An acquir-ing agency must treat a contracting partyas a U.S. person if the U.S. governmentinformation system (such as the Systemfor Award Management (SAM)) indicatesthat the contracting party is a corporation(for example, because the name listed inSAM contains the term “Corporation,”“Inc,” or “Corp”) and that it has a TIN thatbegins with two digits other than “98” (alimited liability company or LLC is nottreated as a corporation for purposes ofthis paragraph (c)(2)). Further, an acquir-ing agency must treat a contracting partyas a U.S. person if the acquiring agencyhas access to a U.S. government informa-tion system that indicates that the con-tracting party is an individual with a TINthat begins with a digit other than “9”.

(3) Determination based on the FormW–9. An acquiring agency must treat acontracting party as a U.S. person if theperson has submitted to it a valid FormW–9, “Request for Taxpayer Identifica-tion Number (TIN) and Certificate” (orvalid substitute form described in§ 31.3406(h)–3(c)(2) of this chapter),signed under penalties of perjury.

(4) Contracting party treated as a for-eign contracting party. If an acquiringagency cannot determine that a contract-ing party is a U.S. person based on appli-cation of paragraph (c)(2) or (3) of thissection, then the contracting party istreated as a foreign contracting party forpurposes of this section.

(d) Withholding when a foreign con-tracting party submits a Section 5000CCertificate—(1) In general. Unless the ac-quiring agency has reason to know that theinformation is incorrect or unreliable, theacquiring agency may rely on a claim that aforeign contracting party is entitled to anexemption (in whole or in part) from with-holding on payments pursuant to a contractif the foreign contracting party provides aSection 5000C Certificate to the acquiringagency as prescribed in this paragraph (d).When a Section 5000C Certificate is fur-nished, the acquiring agency is not requiredto withhold, or must reduce the amount ofwithholding, on payments made to a foreignperson if the certificate establishes that theforeign person is wholly or partially exempt

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from withholding. An acquiring agencymay establish a system for a foreign con-tracting party to electronically furnish a Sec-tion 5000C Certificate.

(2) Exemption for a foreign contractingparty entitled to the benefit of relief pursuantto certain international agreements. An ac-quiring agency is not required to withholdon payments pursuant to a contract with aforeign contracting party when the paymentis entitled to relief from the tax imposedunder section 5000C pursuant to an interna-tional agreement, including relief pursuantto a nondiscrimination provision of a qual-ified income tax treaty, because the foreigncontracting party is entitled to the benefit ofthat agreement and the foreign contractingparty has submitted a Section 5000C Certif-icate that includes all of the informationdescribed in paragraphs (d)(4)(i) and (ii) ofthis section.

(3) Exemption when goods are manu-factured or produced or services providedin the United States, or in a foreign coun-try that is a party to an internationalprocurement agreement. An acquiringagency is not required to withhold on pay-ments pursuant to a contract with a foreigncontracting party to the extent that the pay-ments are for goods manufactured or pro-duced or services provided in the UnitedStates or in a foreign country that is a partyto an international procurement agreementwith the United States, provided that theforeign contracting party has submitted aSection 5000C Certificate that includes allof the information described in paragraphs(d)(4)(i) and (iii) of this section. If the Sec-tion 5000C Certificate provides that the pay-ment is only partially exempt from with-holding under section 5000C, the acquiringagency must withhold to the extent that thepayment is not exempt.

(4) Information required for Section5000C Certificate—(i) In general. TheSection 5000C Certificate, entitled “Sec-tion 5000C Certificate,” must be signedunder penalties of perjury by the foreigncontracting party, and contain—

(A) The name of the foreign contract-ing party, country of organization (if ap-plicable), and permanent residence ad-dress of the foreign contracting party;

(B) The mailing address of the foreigncontracting party (if different than the per-manent residence address);

(C) The TIN assigned to the foreigncontracting party (if any);

(D) The identifying or reference num-ber on the contract (if known);

(E) The name and address of the ac-quiring agency;

(F) A statement that the person signingthe Section 5000C Certificate is the for-eign contracting party listed in paragraph(d)(4)(i)(A) of this section (or is autho-rized to sign on behalf of the foreign con-tracting party);

(G) A statement that the foreign con-tracting party is not acting as an agent ornominee for another foreign person withrespect to the goods manufactured or pro-duced or services provided under the con-tract;

(H) A statement that the foreign con-tracting party agrees to pay an amountequal to any tax (including any applicablepenalties and interest) due under section5000C that the acquiring agency does notwithhold under section 5000C;

(I) A statement that the foreign con-tracting party acknowledges and under-stands the rules in § 1.5000C–4 relating toprocedural obligations related to section5000C; and

(J) A statement that the foreign con-tracting party has not engaged in a trans-action (or series of transactions) with aprincipal purpose of avoiding the tax im-posed under section 5000C as defined in§ 1.5000C–5.

(ii) Additional information required forclaiming an exemption based on the cer-tain international agreements with theUnited States. In addition to the informa-tion required by paragraph (d)(4)(i) of thissection, a foreign contracting party claim-ing an exemption from withholding in re-liance on a provision of an internationalagreement with the United States, includ-ing a qualified income tax treaty, mustprovide—

(A) The name of the internationalagreement under which the foreign con-tracting party is claiming benefits;

(B) The specific provision of the inter-national agreement relied upon (for exam-ple, the nondiscrimination article of aqualified income tax treaty); and

(C) The basis on which it is entitled tothe benefits of that provision (for example,because the foreign contracting party is acorporation organized in a foreign country

that has in force a qualified income taxtreaty with the United States that coversall nationals, regardless of their resi-dence).

(iii) Additional required informationfor claiming exemption based on countrywhere goods are manufactured or ser-vices provided. (A) In general. In additionto the information required by paragraph(d)(4)(i) of this section, a foreign contract-ing party claiming an exemption fromwithholding (in whole or in part) becausepayments will be pursuant to a contractfor goods manufactured or produced orservices provided in the United States ora foreign country that is party to aninternational procurement agreement,the information submitted on the Sec-tion 5000C Certificate must describe therelevant goods or services and the coun-try (or countries) in which they are man-ufactured or produced or are providedand include the name of the interna-tional procurement agreement or agree-ments (if relevant).

(B) Information on allocation to ex-empt and nonexempt amounts. (1) In gen-eral. In situations in which a foreign con-tracting party claims the exemption inparagraph (d)(3) of this section with re-spect to only a portion of the paymentsreceived under the contract, the Section5000C Certificate must include an expla-nation of the method used by the foreigncontracting party to allocate the total con-tract price among the countries, as de-scribed in § 1.5000C–1(e)(3), if applica-ble. In general, the Section 5000CCertificate also must include the total con-tract price and the nonexempt amount;however, when necessary, an estimate ofthe total contract price or the nonexemptamount may be used. For example, totalcontract price may be estimated when aSection 5000C Certificate is being com-pleted with respect to payments to bemade pursuant to a cost-reimbursementcontract that is paid on the basis of actualincurred costs and the total amount ofsuch costs is not known at the time thecertificate is provided.

(2) Specific identification of exemptitems. If agreed to by the acquiringagency, the Section 5000C Certificatemay identify specific exempt and nonex-empt amounts. For example, specific con-tract line items (such as a contract line

May 11, 2015 Bulletin No. 2015–19958

item number or CLIN) identified in thecontract may be listed on the Section5000C Certificate as exempt and nonex-empt amounts (in whole or in part), asapplicable. When this paragraph applies,and whether or not the contract identifiesexempt and nonexempt amounts, a foreigncontracting party must provide the informa-tion required by paragraphs (d)(4)(iii)(A)and (d)(4)(iii)(B)(1) of this section, on theSection 5000C Certificate to explain whythe contract line items are eligible for anexemption; however, the foreign contractingparty is not required to include informationabout the total contract price under this para-graph. In these circumstances, only one Sec-tion 5000C Certificate is required to be pro-vided identifying the exempt andnonexempt contract line items that relate tothe contract (for example, a spreadsheet

may be attached to the Section 5000C Cer-tificate that identifies the contract line itemswith an explanation for the treatment asexempt or nonexempt).

(5) Validity period of Section 5000CCertificate. Except as otherwise providedin paragraph (d)(6) of this section, theSection 5000C Certificate is valid for theterm of the contract.

(6) Change in circumstances. A for-eign contracting party must submit a re-vised Section 5000C Certificate within 30days of a change in circumstances thatcauses the information in a Section 5000CCertificate held by the acquiring agency tobe incorrect with respect to the acquiringagency’s determination of whether towithhold or the amount of withholdingunder Section 5000C. An acquiringagency must request a new Section 5000C

Certificate from a contracting party in cir-cumstances in which it knows (or has rea-son to know) that a previously submittedSection 5000C Certificate becomes incor-rect or unreliable. An acquiring agencymay request an updated Section 5000CCertificate at any time, including whenother documentation is required under thecontract, such as the annual representa-tions and certifications required in 48 CFR4.1201.

(7) Model Section 5000C Certificate.The following is a sample of a Section5000C Certificate. A foreign contractingparty that chooses to use this model as atemplate for the Section 5000C Certificatemust include all the necessary informationrequired by this paragraph (d) on the com-pleted model Section 5000C Certificate itsubmits to the acquiring agency.

Section 5000C Certificate

Part IPart I. Identification of Foreign Contracting Party1 Name of foreign contracting party 2 Country of organization if applicable (do

not abbreviate)

3 Permanent residence address (street, apt. no. or rural route). Do not use P.O. Box or in-care-of address

City or town, state or province (include postal code, if applicable) Country (do not abbreviate)

4 Mailing address (if different from above)

City or town, state or province (include postal code, if applicable) Country (do not abbreviate)

5 U.S. TIN, if any 6 Contract/reference number (if known)

7 Name and address of the acquiring agency

City or town, state or province (including the postal code, if applicable)

Country (do not abbreviate)

Part II Part II. Exemption Based on an International Agreement (If Applicable)8 � Check this box if claiming relief from the tax under section 5000C pursuant to an international agreement with the United States (such as a qualified income tax treaty), and complete Part IV. Part III Part III. Exemption Based on an International Procurement Agreement or because

Goods/Services Produced/Performed in the U.S.

9 � Check this box if identifying specific exempt and nonexempt amounts (for example, by CLIN) and skip Lines 10 through 14 and complete Part IV, Line 15.

10 Total Contract Price or Estimated Total Contract Price

11 Nonexempt Amount or Estimated Nonexempt Amount

12 Contract Ratio (Line 11 over Line 10)

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Part IV Part IV. Explanation (Complete if Part II or Part III Is Applicable) 13 If you checked the box in Part II, state the name of the agreement and specific provision relied upon (for example, the nondiscrimination article of a qualified income tax treaty); and the basis on which you are entitled to the benefits of that provision (for example, because you are a corporation organized in a foreign country with which the United States has a qualified income tax treaty that covers all nationals). (Use additional sheets as necessary.)

14 If you completed Part III, but did not check the box on Line 9, state the relevant countries where the goods are manufactured or produced or services provided and the international procurement agreements relied upon, if relevant. If applicable, explain the method relied upon to allocate the total contract price between exempt and nonexempt amounts.(Use additional sheets as necessary.)

15 If you checked the box on Line 9, provide an explanation for each item by stating the relevant countries where the goods are manufactured or produced or services provided and the international procurement agreements relied upon, if relevant. If applicable, explain the method relied upon to allocate the total contract price between exempt and nonexempt amounts. For example, you may attach a each line item as exempt or nonexempt. If the contract includes details necessary to complete this section (such as exempt or nonexempt amounts by contract line item), you may incorporate by reference the relevant information in the explanation. (Use additional sheets as necessary.)

Part V Part V. CertificateUnder penalties of perjury, I declare that I have examined the information on this certificate (and in the contract, if relevant) and to the best of my knowledge and belief it is true, correct, and complete. I further certify under penalties of perjury that: 1 I am the foreign person (or am authorized to sign on behalf of the foreign person) identified in Line 1 above, 2 I am not acting as an agent or nominee for another foreign person, 3 I agree to pay an amount equal to any tax due under section 5000C that the acquiring agency does not withhold under section 5000C and pay any applicable penalties and interest, 4 I acknowledge and understand the rules in § 1.5000C–4 relating to procedural obligations under section 5 I have not engaged in any transaction (or series of transactions) with a principal purpose of avoiding the tax imposed under section 5000C as defined in § 1.5000C–5.

Sign Here ► _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ /_ /_ _ _ _ _ _ _ _ _ Signature of Foreign Person (or Authorized Representative) Date Capacity to Act

spreadsheet listing the various contract line items with an explanation for the treatment of

(8) Time for submitting Section 5000CCertificate or Form W–9, “Request forTaxpayer Identification Number and Cer-tification.” A contracting party must sub-mit the Section 5000C Certificate or FormW–9 (as applicable) as early as practica-ble (for example, when the offer for thecontract is submitted to the U.S. govern-ment). In all cases, however, the Section5000C Certificate or Form W–9 must besubmitted to the acquiring agency no laterthan the date of execution of the contract.

(e) Offset for underwithholding oroverwithholding—(1) In general. If the

foreign contracting party discovers thatamounts withheld on prior payments ei-ther were insufficient or in excess of theamount required to satisfy its tax liabilityunder section 5000C, the foreign contract-ing party may request the acquiringagency to increase or decrease the amountof withholding on future payments forwhich withholding is required under sec-tion 5000C. The request must be in writ-ing, signed under penalties of perjury,contain the amount by which the foreigncontracting party requests to increase ordecrease future amounts withheld under

section 5000C, and explain the reason forthe request. The request may be submittedin conjunction with an original or updatedSection 5000C Certificate.

(2) Underwithholding. Upon receipt ofa request described in paragraph (e)(1) ofthis section, acquiring agencies may in-crease the amount of withholding underthis paragraph to correct underwithhold-ing only if the payment for which theincrease is applied is otherwise subject towithholding under section 5000C andmade before the date that Form 1042,“Annual Withholding Tax Return for U.S.

May 11, 2015 Bulletin No. 2015–19960

Source Income of Foreign Persons,” isrequired to be filed (not including exten-sions) with respect to the payment forwhich the underwithholding occurred.Amounts withheld under this paragraphmust be deposited and reported in the timeand manner as prescribed by § 1.5000C–3.See § 1.5000C–4 for procedures for a for-eign contracting party that must pay tax duewhen its tax liability under section 5000Cwas not fully satisfied by withholding by anacquiring agency.

(3) Overwithholding. Upon receipt of arequest described in paragraph (e)(1) ofthis section, acquiring agencies may de-crease the amount of withholding on sub-sequent payments made to the foreigncontracting party that are otherwise sub-ject to withholding under section 5000Cprovided that the payment for which thedecrease is applied is made on or beforethe date on which Form 1042, “AnnualWithholding Tax Return for U.S. SourceIncome of Foreign Persons,” is required tobe filed (not including extensions) with re-spect to the payment for which the over-withholding occurred. See § 1.5000C–4(e)for procedures for foreign contracting par-ties to file a claim for refund for the over-withheld amount under section 5000C.

§ 1.5000C–3 Payment and returns of taxwithheld by the acquiring agency.

(a) In general. This section providesadministrative procedures that acquiringagencies must follow to satisfy their obli-gations to deposit and report amountswithheld under § 1.5000C–2. An acquir-ing agency with a section 5000C with-holding obligation must increase theamount it deducts and withholds underchapter 3 for fixed or determinable annualor periodical income (FDAP income) bythe amount it must withhold under§ 1.5000C–2. Accordingly, this sectiongenerally applies the administrative provi-sions of chapter 3 for FDAP income relatingto the deposit, payment, and reporting foramounts withheld under § 1.5000C–2, andcontains some variation from those provi-sions to take into account the nature of thetax imposed under section 5000C.

(b) Deposit rules—(1) Acquiringagency with a chapter 3 deposit require-ment treats amounts withheld as underchapter 3. If an acquiring agency has a

chapter 3 deposit obligation for a period, itmust treat any amount withheld under§ 1.5000C–2 as an additional amount oftax withheld under chapter 3 for purposesof the deposit rules of § 1.6302–2. Thus,depending on the combined amount with-held under chapter 3 and § 1.5000C–2, anacquiring agency subject to this paragraph(b)(1) must make monthly deposits,quarter-monthly deposits, or annual de-posits under the rules in § 1.6302–2. Tothe extent provided in forms, instructions,or publications prescribed by the InternalRevenue Service (IRS), acquiring agen-cies must deposit all withheld amounts byelectronic funds transfer, as that term isdefined in § 31.6302–1(h)(4)(i) of thischapter.

(2) Acquiring agency with no chapter 3filing obligation deposits withheldamounts monthly. If an acquiring agencyhas no chapter 3 deposit obligation towhich the deposit rules of § 1.6302–2apply for a calendar month, it must makemonthly deposits of the amounts withheldunder the rules in this paragraph (b)(2).Thus, an acquiring agency with no chapter3 deposit obligations and that has with-held any amount under § 1.5000C–2 dur-ing any calendar month must deposit thatamount by the 15th day of the monthfollowing the payment. To the extent pro-vided in forms, instructions, or publica-tions prescribed by the Internal RevenueService (IRS), acquiring agencies mustdeposit all withheld amounts by electronicfunds transfer, as that term is defined in§ 31.6302–1(h)(4)(i) of this chapter.

(c) Return requirements. (1) In gen-eral. Except as provided in paragraph(c)(2) of this section, an acquiring agencythat withholds an amount pursuant to sec-tion 5000C generally must file Form1042–S, “Foreign Person’s U.S. SourceIncome Subject to Withholding,” andForm 1042, “Annual Withholding TaxReturn for U.S. Source Income of ForeignPersons,” each year, or other such formsas the IRS may prescribe, to report infor-mation related to amounts withheld undersection 5000C. The acquiring agencymust prepare a Form 1042–S for eachcontracting party reporting the amountwithheld under section 5000C for the pre-ceding calendar year. The Form 1042must show the aggregate amounts with-held under section 5000C that were re-

quired to be reported on Forms 1042–S(including those amounts withheld undersection 5000C for which a Form 1042–Sis not required to be filed pursuant toparagraph (c)(2) of this section). TheForm 1042 must also include the informa-tion required by the form and accompany-ing instructions. Further, any forms re-quired under this paragraph (c) are due atthe same time, at the same place, andeligible for the same extended due datesand may be amended in the same manneras Form 1042 and Form 1042–S (or suchother forms as the IRS may prescribe re-lated to chapter 3). The acquiring agencymust furnish a copy of the Form 1042–S(or such other form as the IRS may pre-scribe for the same purpose) to the con-tracting party for whom the form is pre-pared on or before March 15 of thecalendar year following the year in whichthe amount subject to reporting under sec-tion 5000C was paid. It must be filed witha transmittal form as provided in instruc-tions to the Form 1042–S and to the trans-mittal form. Section 5000C Certificates orother statements or information as pre-scribed by § 1.5000C–2 that are providedto the acquiring agency are not required tobe attached to the Form 1042 filed withthe IRS. However, an acquiring agencythat is required to file Form 1042 mustretain a copy of Form 1042, Form1042–S, the Section 5000C Certificates,or other statements or information pre-scribed by § 1.5000C–2 for at least threeyears from the original due date of Form1042 or the date it was filed, whichever islater. An acquiring agency that is not re-quired to file Form 1042 must retain anySection 5000C Certificates or other state-ments or information as prescribed by§ 1.5000C–2 for at least three years fromthe date the Form 1042 would have beendue had the acquiring agency had an ob-ligation to file.

(2) Classified contracts. An acquiringagency is not required to report informa-tion otherwise required by this section onForm 1042–S for payments made pursu-ant to classified contracts (as described insection 6050M(e)(3)), unless the acquir-ing agency determines that the informa-tion reported on the Form 1042–S doesnot compromise the safeguarding of clas-sified information or national security.

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(d) Special arrangement for certaincontracts. In limited circumstances, theIRS may authorize the amount otherwiserequired to be withheld under section5000C to be deposited in the time andmanner mutually agreed upon by the ac-quiring agency and the foreign contractingparty. In these circumstances, the IRSmay in its sole discretion also modify anyreporting or return requirements of theacquiring agency or the foreign contract-ing party.

§ 1.5000C–4 Requirement for theforeign contracting party to file a returnand pay tax, and procedures for thecontracting party to seek a refund.

(a) In general. For purposes of subtitleF of the Internal Revenue Code (“Proce-dure and Administration”), the tax im-posed under section 5000C on foreignpersons is treated as a tax imposed undersubtitle A. Except as provided elsewherein the regulations under section 5000C,forms, or accompanying instructions, thetax imposed on foreign contracting partiesunder section 5000C is administered in amanner similar to gross basis incometaxes. This section provides proceduresthat a foreign contracting party must fol-low to satisfy its obligations to report anddeposit tax due under § 1.5000C–1 as wellas procedures for contracting parties toseek a refund of amounts overwithheld.

(b) Tax obligation of foreign contract-ing party independent of withholding. Aforeign contracting party subject to taxunder section 5000C and §§ 1.5000C–1through 1.5000C–7 remains liable for thetax unless its tax obligation was fully sat-isfied by withholding by an acquiringagency in accordance with §§ 1.5000C–2and 1.5000C–3.

(c) Return of tax by the foreign con-tracting party. If the tax liability under§ 1.5000C–1 relating to a payment is notfully satisfied by withholding in accor-dance with §§ 1.5000C–2 and 1.5000C–3(including as a result of the use of anestimated nonexempt amount or estimatedtotal contract price in computing the con-tract ratio), a foreign contracting partysubject to tax under § 1.5000C–1 during acalendar year must make a return of taxon, for example, Form 1120–F, “U.S. In-come Tax Return of a Foreign Corpora-

tion,” or such other form as the InternalRevenue Service (IRS) may prescribe toreport the amount of tax due under section5000C (required return). A foreign con-tracting party with no other U.S. tax filingobligation other than with respect to itsliability for the tax imposed under section5000C must file its required return on orbefore the fifteenth day of the sixth monthfollowing the close of its taxable year. Therequired return must include the informa-tion required by the form and accompany-ing instructions. The required return mustbe filed at the place and time (includingany extension of time to file) provided bythe form and accompanying instructions.Penalties for failure to file contained inSubtitle F can apply to foreign contractingparties who fail to file the required return.A foreign contracting party must attachcopies of all Forms 1042–S, “Foreign Per-son’s U.S. Source Income Subject toWithholding,” received from acquiringagencies (if any) to the required return.

(d) Time and manner of paying tax. Aforeign contracting party must pay the taximposed under section 5000C in the man-ner provided and in the time prescribed inthe required return and accompanying in-structions. In general, the foreign con-tracting party must pay the tax at the timethat the required return is due, excludingextensions. To the extent provided informs, instructions, or publications pre-scribed by the IRS, each foreign contract-ing party must deposit tax due under sec-tion 5000C by electronic funds transfer, asthat term is defined in § 31.6302–1(h)(4)(i) of this chapter. A foreign con-tracting party that fails to pay tax in thetime and manner prescribed in this section(or under forms, instructions, or publica-tions prescribed by the IRS under thissection) may be subject to penalties andinterest under Subtitle F.

(e) Refund requests when amount with-held exceeds tax liability. After taking intoaccount any offsets pursuant to § 1.5000C–2(e)(3), if the acquiring agency has over-withheld amounts under section 5000Cand has made a deposit of the amountsunder § 1.5000C–3(b), the contractingparty may claim a refund of the amountoverwithheld pursuant to the proceduresdescribed in chapter 65. The contractingparty’s claim for refund must meet therequirements of section 6402 and the reg-

ulations thereunder, as applicable, andmust be filed before the expiration of theperiod of limitations on refund in section6511 and the regulations thereunder. Ingeneral, the contracting party making arefund claim must file the required returnto claim a refund, stating the groundsupon which the claim is based. A Section5000C Certificate and a copy of the Form1042–S received from the acquiringagency must be attached to the requiredreturn. For purposes of this section, anamount is overwithheld if the amountwithheld from the payment pursuant tosection 5000C and §§ 1.5000C–1 through1.5000C–7 exceeds the contracting par-ty’s tax liability under § 1.5000C–1, re-gardless of whether the overwithholdingwas in error or appeared correct when itoccurred. A U.S. person may seek a re-fund under this paragraph (e) even if itwas treated as a foreign person under therules in § 1.5000C–2 (for example, be-cause it neither had a taxpayer identifica-tion number on file in the System forAward Management nor submitted FormW–9, “Request for Taxpayer Identifica-tion Number (TIN) and Certification,” tothe acquiring agency).

§ 1.5000C–5 Anti-abuse rule.

If a foreign person engages in a trans-action (or series of transactions) with aprincipal purpose of avoiding the tax im-posed under section 5000C, the transac-tion (or series of transactions) may bedisregarded or the arrangement may berecharacterized (including disregarding anintermediate entity), in accordance withits substance. If this section applies, theforeign person remains liable for any tax(including any tax obligation unsatisfiedas a result of underwithholding) and theInternal Revenue Service retains all otherrights and remedies under any applicablelaw available to collect any tax imposedon the foreign contracting party by section5000C.

§ 1.5000C–6 Examples.

The rules of §§ 1.5000C–1 through1.5000C–4 are illustrated by the follow-ing examples. For purposes of the exam-ples: all contracts are executed with ac-quiring agencies on or after January 2,

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2011, and are for the provision of eithergoods or services; none of the contractsare for emergency acquisitions describedin § 1.5000C–1(d)(2); the acquiring agen-cies have no other withholding obligationsunder chapter 3 of the Code and have noother contracts subject to section 5000C;the foreign contracting parties do not haveany U.S. source income or a U.S. taxreturn filing obligation other than a taxreturn filing obligation that arises basedon the facts described in the particularexample; and none of the contracts areclassified contracts as described in section6050M(e)(3).

Example 1. U.S. person not subject to tax; nowithholding. (i) Facts. Company A Inc., a U.S. cor-poration and the contracting party, enters into acontract with Agency L, the acquiring agency. Be-fore making its first payment under the contract (forexample, on the date of execution of the contract),pursuant to the first step in § 1.5000C–2(b) AgencyL determines that the contract will be for services.Under the second step, Agency L reviews CompanyA Inc.’s record in the System for Award Manage-ment (SAM) and determines that Company A is acorporation and is considered to be a U.S. personbecause Agency L’s records demonstrate that Com-pany A Inc. is a business entity treated as a corpo-ration for tax purposes that has a TIN that does notbegin with “98.”

(ii) Analysis. Company A Inc. is a U.S. personand thus is not subject to the tax under section5000C. Moreover, because Company A Inc. is acorporation for tax purposes that has a TIN that doesnot begin with “98,” Agency L is able to determinethat it has no obligation to withhold any amountsunder section 5000C on the payment made toCompany A Inc. For purposes of section 5000C,Company A Inc. could also establish that it is aU.S. person by providing a Form W–9, “Requestfor Taxpayer Identification Number (TIN) andCertification,” to Agency L. Company A Inc. doesnot need to file a Section 5000C Certificate todemonstrate its eligibility for an exemption fromwithholding.

Example 2. Foreign national entitled to the ben-efit of a nondiscrimination provision of a treaty; nowithholding. (i) Facts. Company B, a foreign con-tracting party and a national of Country T, providesgoods to Agency M, the acquiring agency. CompanyB determines that it is exempt from tax under section5000C because it is entitled to the benefit of thenondiscrimination article of a qualified income taxtreaty between the United States and Country T.Company B submits a Section 5000C Certificate toAgency M when the contract is executed. CompanyB uses the model Section 5000C Certificate andproperly fills out Sections II and IV stating the nameof the treaty, the specific article relied upon, and thebasis on which it is entitled to the benefits of thatarticle. Following the steps in § 1.5000C–2, AgencyM determines that the nondiscrimination provisionof the Country T-United States income tax treatyapplies to exempt Company B from the tax imposed

under section 5000C. Agency M makes one lumpsum payment of $50 million to Company B pursuantto the contract.

(ii) Analysis. Company B has no liability for taxunder section 5000C because it is entitled to thebenefit of a nondiscrimination article of a qualifiedincome tax treaty. Because Company B submitted aSection 5000C Certificate meeting the requirementsin § 1.5000C–2 and Agency M does not have reasonto know that the submitted information is incorrector unreliable, Agency M is not required to withholdunder section 5000C. Agency M must retain theSection 5000C Certificate for at least three yearspursuant to § 1.5000C–3(c)(1).

Example 3. Foreign treaty beneficiary does notsubmit Section 5000C Certificate; withholding re-quired. (i) Facts. The facts are the same as in Ex-ample 2, except that Company B does not submit aSection 5000C Certificate to Agency M beforeAgency M makes the $50 million payment.

(ii) Analysis. Company B is not subject to taxunder section 5000C, but Agency M must neverthe-less withhold on the payment made to Company Bbecause Agency M did not receive a Section 5000CCertificate from Company B in the time and mannerrequired pursuant to § 1.5000C–2(d). Agency Mmust withhold $1 million (2 percent of $50 million)on the payment, and deposit that amount under therules in § 1.5000C–3 no later than the 15th day of themonth following the month in which the paymentwas made. Agency M must also complete Forms1042, “Annual Withholding Tax Return for U.S.Source Income of Foreign Persons,” and 1042–S,“Foreign Person’s U.S. Source Income Subject toWithholding,” on or before the date specified onthose forms and the accompanying instructions.Agency M must furnish copies of Form 1042–S toCompany B. Agency M must retain a copy of theForm 1042 and the Form 1042–S for 3 years fromthe due date for the Form 1042 pursuant to§ 1.5000C–3(c)(1). As Company B is not liable forthe tax, it may later file a claim for refund pursuantto the procedures described in chapter 65.

Example 4. Foreign contracting party partiallyexempt from tax under section 5000C when goodsare manufactured in different countries. (i) Facts.Company C, a foreign contracting party, providesgoods to Agency N in 2015. The terms of the con-tract require that payment be made to Company C byAgency N in two $5 million installments in 2015.Company C has a TIN that begins with “98” and isnot entitled to relief pursuant to an internationalagreement with the United States, such as reliefpursuant to a nondiscrimination provision of a qual-ified income tax treaty. Some of the goods are man-ufactured in Country R, which is a party to aninternational procurement agreement with the UnitedStates, with the remainder being manufactured inCountry S, a country that is not a party to an inter-national procurement agreement with the UnitedStates. Company C uses a reasonable allocationmethod based on the information available to it at thetime in accordance with § 1.5000C–1(e)(3) to esti-mate that $3 million is the nonexempt amount pro-duced in Country S. Company C submits a valid andcomplete Section 5000C Certificate to Agency N inthe time and manner required by §§ 1.5000C–1through 1.5000C–7 that provides that the nonexempt

amount is $3 million. In 2015, Agency N pays Com-pany C in two installments pursuant to the terms ofthe contract.

(ii) Analysis. Using a reasonable allocationmethod to determine the estimated nonexemptamount, Company C determines that pursuant tosection 5000C and §§ 1.5000C–1 through1.5000C–7, tax of $30,000 (2 percent of the $5million payment, multiplied by a fraction (the nu-merator of which is the estimated nonexemptamount, $3 million, and the denominator of whichis the estimated total contract price, or $10 mil-lion)) is imposed on each payment made to Com-pany C. Because Company C has timely submitteda Section 5000C Certificate explaining the basisfor this allocation, Agency N withholds $30,000on each payment made to Company C. Agency Nmust deposit each $30,000 withholding tax nolater than the 15th day of the month following themonth in which each payment is made. Agency Nmust also complete Forms 1042 and 1042–S andfurnish copies of Form 1042–S to Company C.Provided that Agency N properly withholds on thenonexempt portion as required under section5000C and §§ 1.5000C–1 through 1.5000C–7 andthat Company C’s estimate of the nonexemptamount is the actual nonexempt amount, CompanyC does not have an additional tax liability or aU.S. tax return filing obligation as a result ofreceiving the payment.

Example 5. Foreign contracting party liable foradditional tax under Section 5000C not fully with-held upon due to errors on the Section 5000C Cer-tificate. (i) Facts. The facts are the same as in Ex-ample 4, except that the Section 5000C Certificatesubmitted to Agency N by Company C erroneouslyprovides that the estimated nonexempt amount is$1.5 million instead of $3 million. As a result,Agency N only withholds $15,000 (2 percent of the$5 million payment multiplied by a fraction (thenumerator of which is the estimated nonexemptamount stated on the Section 5000C Certificate, $1.5million, and the denominator of which is the esti-mated total contract price, or $10 million)) on eachpayment made to Company C. Agency N neitherdiscovered nor had reason to know that the informa-tion on the Section 5000C Certificate was incorrector unreliable. After both payments have been madeand after the filing due date for Form 1042 for 2015,Company C determines that the estimated nonex-empt amount should have been stated as $3 millionon the Section 5000C Certificate.

(ii) Analysis. The tax imposed under section5000C on Company C as a result of the receipt ofspecified Federal procurement payments is $60,000and this amount has not been fully satisfied by with-holding by Agency N. Accordingly, Company Cmust remit additional tax of $30,000 ($60,000 taxliability less $30,000 amounts already withheld byAgency N) and file its required return, a Form1120–F, “U.S. Income Tax Return of a ForeignCorporation,” for 2015 to report this tax liability, asrequired by § 1.5000C–4. Company C must explainits corrected allocation method in its Form 1120–F.Company C must also attach a copy of the Form1042–S it received from Agency N to Form 1120–F.

Bulletin No. 2015–19 May 11, 2015963

§ 1.5000C–7 Effective/applicability date.

Section 5000C applies to specifiedFederal procurement payments receivedpursuant to contracts entered into on andafter January 2, 2011. Sections 1.5000C–1through 1.5000C–7 apply on and after thedate that is 90 days after the date they arepublished as final regulations in the Fed-eral Register.

PART 301—PROCEDURE ANDADMINISTRATION

Par. 5. The authority citation for part301 continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * *Par. 6. Section 301.6114–1 is amended

by adding paragraph (c)(1)(ix) and revis-ing paragraph (e) to read as follows:

§ 301.6114–1 Treaty-based returnpositions.

* * * * *(c) * * *(1) * * *(ix) Notwithstanding paragraph (b)(1)

of this section, that a nondiscriminationprovision of an income tax treaty exemptsa payment from tax under section 5000C,but only if the foreign person claimingsuch relief has provided a Section 5000CCertificate (or such other form as may beprescribed by the Commissioner pursuantto section 5000C) in accordance with sec-tion 5000C and the regulations thereun-der.

* * * * *(e) Effective/applicability date—(1) In

general. This section is effective for tax-

able years of the taxpayer for which thedue date for filing returns (without exten-sions) occurs after December 31, 1988.However, if—

(i) A taxpayer has filed a return forsuch a taxable year, without complyingwith the reporting requirement of this sec-tion, before November 13, 1989, or

(ii) A taxpayer is not otherwise than byparagraph (a) of this section required tofile a return for a taxable year before No-vember 13, 1989, Such taxpayer must file(apart from any earlier filed return) thestatement required by paragraph (d) ofthis section before June 12, 1990, by mail-ing the required statement to the InternalRevenue Service, P.O. Box 21086, Phila-delphia, PA 19114. Any such statementfiled apart from a return must be dated,signed and sworn to by the taxpayer underthe penalties of perjury. In addition, withrespect to any return due (without exten-sions) on or before March 10, 1990, thereporting required by paragraph (a) of thissection must be made no later than June12, 1990. If a taxpayer files or has filed areturn on or before November 13, 1989,that provides substantially the same infor-mation required by paragraph (d) of thissection, no additional submission will berequired. Foreign insurers and reinsurerssubject to reporting described in para-graph (c)(7)(ii) of this section must soreport for calendar years 1988 and 1989no later than August 15, 1990.

(2) Section 5000C. Paragraph (c)(1)(ix)of this section is effective on the datethat is 90 days after the date these reg-ulations are published as final regula-tions in the Federal Register. However,

a foreign contracting party may rely on§§ 1.5000C–1 through 1.5000C–7 beforethat date.

* * * * *

PART 602—OMB CONTROLNUMBERS UNDER THEPAPERWORK REDUCTION ACT

Par. 7. The authority citation for part602 continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * *Par. 8. In § 602.101, paragraph (b) is

amended by adding entries in numericalorder to the table to read as follows:

§ 602.101 OMB Control numbers.

* * * * *(b) * * *

CFR part or sectionwhere identifiedand described

CurrentOMB

control no.

* * * * *

1.5000C–2......................1545–xxxx

1.5000C–3......................1545–xxxx

1.5000C–4......................1545–xxxx

* * * * *

John M. Dalrymple,Deputy Commissioner

for Services and Enforcement.

(Filed by the Office of the Federal Register on April 20,2015, 4:15 p.m., and published in the issue of the FederalRegister for April 22, 2015, 80 F.R. 22449)

May 11, 2015 Bulletin No. 2015–19964

Definition of TermsRevenue rulings and revenue procedures(hereinafter referred to as “rulings”) thathave an effect on previous rulings use thefollowing defined terms to describe theeffect:

Amplified describes a situation whereno change is being made in a prior pub-lished position, but the prior position isbeing extended to apply to a variation ofthe fact situation set forth therein. Thus, ifan earlier ruling held that a principle ap-plied to A, and the new ruling holds thatthe same principle also applies to B, theearlier ruling is amplified. (Compare withmodified, below).

Clarified is used in those instanceswhere the language in a prior ruling isbeing made clear because the languagehas caused, or may cause, some confu-sion. It is not used where a position in aprior ruling is being changed.

Distinguished describes a situationwhere a ruling mentions a previously pub-lished ruling and points out an essentialdifference between them.

Modified is used where the substanceof a previously published position is beingchanged. Thus, if a prior ruling held that aprinciple applied to A but not to B, and thenew ruling holds that it applies to both A

and B, the prior ruling is modified becauseit corrects a published position. (Comparewith amplified and clarified, above).

Obsoleted describes a previously pub-lished ruling that is not considered deter-minative with respect to future transac-tions. This term is most commonly used ina ruling that lists previously published rul-ings that are obsoleted because of changesin laws or regulations. A ruling may alsobe obsoleted because the substance hasbeen included in regulations subsequentlyadopted.

Revoked describes situations where theposition in the previously published rulingis not correct and the correct position isbeing stated in a new ruling.

Superseded describes a situation wherethe new ruling does nothing more thanrestate the substance and situation of apreviously published ruling (or rulings).Thus, the term is used to republish underthe 1986 Code and regulations the sameposition published under the 1939 Codeand regulations. The term is also usedwhen it is desired to republish in a singleruling a series of situations, names, etc.,that were previously published over a pe-riod of time in separate rulings. If the newruling does more than restate the sub-

stance of a prior ruling, a combination ofterms is used. For example, modified andsuperseded describes a situation where thesubstance of a previously published rulingis being changed in part and is continuedwithout change in part and it is desired torestate the valid portion of the previouslypublished ruling in a new ruling that isself contained. In this case, the previouslypublished ruling is first modified and then,as modified, is superseded.

Supplemented is used in situations inwhich a list, such as a list of the names ofcountries, is published in a ruling and thatlist is expanded by adding further namesin subsequent rulings. After the originalruling has been supplemented severaltimes, a new ruling may be published thatincludes the list in the original ruling andthe additions, and supersedes all prior rul-ings in the series.

Suspended is used in rare situations toshow that the previous published rulingswill not be applied pending some futureaction such as the issuance of new oramended regulations, the outcome ofcases in litigation, or the outcome of aService study.

AbbreviationsThe following abbreviations in currentuse and formerly used will appear in ma-terial published in the Bulletin.

A—Individual.Acq.—Acquiescence.B—Individual.BE—Beneficiary.BK—Bank.B.T.A.—Board of Tax Appeals.C—Individual.C.B.—Cumulative Bulletin.CFR—Code of Federal Regulations.CI—City.COOP—Cooperative.Ct.D.—Court Decision.CY—County.D—Decedent.DC—Dummy Corporation.DE—Donee.Del. Order—Delegation Order.DISC—Domestic International Sales Corporation.DR—Donor.E—Estate.EE—Employee.E.O.—Executive Order.ER—Employer.

ERISA—Employee Retirement Income Security Act.EX—Executor.F—Fiduciary.FC—Foreign Country.FICA—Federal Insurance Contributions Act.FISC—Foreign International Sales Company.FPH—Foreign Personal Holding Company.F.R.—Federal Register.FUTA—Federal Unemployment Tax Act.FX—Foreign corporation.G.C.M.—Chief Counsel’s Memorandum.GE—Grantee.GP—General Partner.GR—Grantor.IC—Insurance Company.I.R.B.—Internal Revenue Bulletin.LE—Lessee.LP—Limited Partner.LR—Lessor.M—Minor.Nonacq.—Nonacquiescence.O—Organization.P—Parent Corporation.PHC—Personal Holding Company.PO—Possession of the U.S.PR—Partner.PRS—Partnership.

PTE—Prohibited Transaction Exemption.Pub. L.—Public Law.REIT—Real Estate Investment Trust.Rev. Proc.—Revenue Procedure.Rev. Rul.—Revenue Ruling.S—Subsidiary.S.P.R.—Statement of Procedural Rules.Stat.—Statutes at Large.T—Target Corporation.T.C.—Tax Court.T.D.—Treasury Decision.TFE—Transferee.TFR—Transferor.T.I.R.—Technical Information Release.TP—Taxpayer.TR—Trust.TT—Trustee.U.S.C.—United States Code.X—Corporation.Y—Corporation.Z—Corporation.

Bulletin No. 2015–19 May 11, 2015i

Numerical Finding List1

Bulletin 2015–1 through 2015–19

Announcements:

2015-1, 2015-11 I.R.B. 7582015-2, 2015-3 I.R.B. 3242015-3, 2015-3 I.R.B. 3282015-4, 2015-5 I.R.B. 5652015-5, 2015-7 I.R.B. 6022015-6, 2015-8 I.R.B. 6852015-7, 2015-13 I.R.B. 8232015-8, 2015-9 I.R.B. 6982015-10, 2015-11 I.R.B. 7582015-11, 2015-15 I.R.B. 8832015-12, 2015-12 I.R.B. 7702015-13, 2015-15 I.R.B. 908

Proposed Regulations:

REG-109187-11, 2015-2 I.R.B. 277REG-132751-14, 2015-2 I.R.B. 279REG-145878-14, 2015-2 I.R.B. 290REG-153656-3, 2015-5 I.R.B. 566REG-102648-15, 2015-10 I.R.B. 745REG-136018-13, 2015-11 I.R.B. 759REG-143416-14, 2015-11 I.R.B. 757REG-100400-14, 2015-12 I.R.B. 779REG-132253-11, 2015-12 I.R.B. 771REG-143040-11, 2015-13 I.R.B. 827REG-133489-13, 2015-16 I.R.B. 926REG-103281-11, 2015-19 I.R.B. 948

Notices:

2015-1, 2015-2 I.R.B. 2492015-2, 2015-4 I.R.B. 3342015-3, 2015-6 I.R.B. 5832015-4, 2015-5 I.R.B. 4072015-5, 2015-5 I.R.B. 4082015-6, 2015-5 I.R.B. 4122015-7, 2015-6 I.R.B. 5852015-8, 2015-6 I.R.B. 5892015-9, 2015-6 I.R.B. 5902015-11, 2015-8 I.R.B. 6182015-15, 2015-9 I.R.B. 6872015-12, 2015-8 I.R.B. 7002015-13, 2015-10 I.R.B. 7222015-14, 2015-10 I.R.B. 7222015-16, 2015-10 I.R.B. 7322015-17, 2015-14 I.R.B. 8452015-19, 2015-9 I.R.B. 6902015-20, 2015-11 I.R.B. 7542015-18, 2015-12 I.R.B. 7652015-21, 2015-12 I.R.B. 7652015-22, 2015-12 I.R.B. 7682015-23, 2015-12 I.R.B. 7692015-24, 2015-13 I.R.B. 8112015-25, 2015-13 I.R.B. 8142015-26, 2015-13 I.R.B. 814

Notices:—Continued

2015-27, 2015-13 I.R.B. 8162015-28, 2015-14 I.R.B. 8482015-29, 2015-15 I.R.B. 8732015-30, 2015-17 I.R.B. 9282015-31, 2015-17 I.R.B. 9292015-33, 2015-18 I.R.B. 9342015-34, 2015-18 I.R.B. 9422015-35, 2015-18 I.R.B. 9432015-37, 2015-19 I.R.B. 947

Revenue Procedures:

2015-1, 2015-1 I.R.B. 12015-2, 2015-1 I.R.B. 1052015-3, 2015-1 I.R.B. 1292015-4, 2015-1 I.R.B. 1442015-5, 2015-1 I.R.B. 1862015-6, 2015-1 I.R.B. 1942015-7, 2015-1 I.R.B. 2312015-8, 2015-1 I.R.B. 2352015-9, 2015-2 I.R.B. 2492015-10, 2015-2 I.R.B. 2612015-12, 2015-2 I.R.B. 2652015-13, 2015-5 I.R.B. 4192015-14, 2015-5 I.R.B. 4502015-15, 2015-5 I.R.B. 5642015-16, 2015-7 I.R.B. 5962015-17, 2015-7 I.R.B. 5992015-18, 2015-8 I.R.B. 6422015-19, 2015-8 I.R.B. 6782015-20, 2015-9 I.R.B. 6942015-21, 2015-13 I.R.B. 8172015-22, 2015-11 I.R.B. 7542015-23, 2015-13 I.R.B. 8202015-24, 2015-13 I.R.B. 8222015-25, 2015-14 I.R.B. 8482015-26, 2015-15 I.R.B. 8752015-27, 2015-16 I.R.B. 9142015-28, 2015-16 I.R.B. 9202015-29, 2015-15 I.R.B. 882

Revenue Rulings:

2015-1, 2015-4 I.R.B. 3312015-2, 2015-3 I.R.B. 3212015-3, 2015-6 I.R.B. 5802015-4, 2015-10 I.R.B. 7432015-5, 2015-13 I.R.B. 7882015-6, 2015-13 I.R.B. 8012015-7, 2015-14 I.R.B. 8492015-8, 2015-18 I.R.B. 945

Treasury Decisions:

9707, 2015-2 I.R.B. 2479708, 2015-5 I.R.B. 3379709, 2015-7 I.R.B. 5939710, 2015-8 I.R.B. 6039711, 2015-11 I.R.B. 748

Treasury Decisions:—Continued

9712, 2015-11 I.R.B. 7509713, 2015-13 I.R.B. 8029714, 2015-14 I.R.B. 8319715, 2015-15 I.R.B. 8519716, 2015-15 I.R.B. 8639717, 2015-16 I.R.B. 9109718, 2015-15 I.R.B. 866

1A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2014–27 through 2014–52 is in Internal Revenue Bulletin2014–52, dated December 28, 2014.

May 11, 2015 Bulletin No. 2015–19ii

Finding List of Current Actions onPreviously Published Items1

Bulletin 2015–1 through 2015–19

Announcements:

2010-3Amplified byAnn. 2015-3, 2015-3 I.R.B. 328

Revenue Procedures:

2014-01Superseded byRev. Proc. 2015-01, 2015-01 I.R.B. 1

2014-02Superseded byRev. Proc. 2015-02, 2015-01 I.R.B. 105

2014-03Superseded byRev. Proc. 2015-03, 2015-01 I.R.B. 129

2014-04Superseded byRev. Proc. 2015-04, 2015-01 I.R.B. 144

2014-05Superseded byRev. Proc. 2015-05, 2015-01 I.R.B. 186

2014-06Superseded byRev. Proc. 2015-06, 2015-01 I.R.B. 194

2014-07Superseded byRev. Proc. 2015-07, 2015-01 I.R.B. 231

2014-08Superseded byRev. Proc. 2015-08, 2015-01 I.R.B. 235

2014-10Superseded byRev. Proc. 2015-10, 2015-2 I.R.B. 261

2003-63Superseded byRev. Proc. 2015-12, 2015-2 I.R.B. 265

2011-14Modified byRev. Proc. 2015-12, 2015-2 I.R.B. 265

2011-14Modified byRev. Proc. 2015-13, 2015-5 I.R.B. 419

Revenue Procedures:—Continued

2011-14Amplified byRev. Proc. 2015-13, 2015-5 I.R.B. 419

2011-14Clarified byRev. Proc. 2015-13, 2015-5 I.R.B. 419

1997-27Clarified byRev. Proc. 2015-13, 2015-5 I.R.B. 419

1997-27Modified byRev. Proc. 2015-13, 2015-5 I.R.B. 419

2012-11Superseded byRev. Proc. 2015-17, 2015-7 I.R.B. 599

2015-9Modified byRev. Proc. 2015-17, 2015-7 I.R.B. 599

2015-14Modified byRev. Proc. 2015-20, 2015-9 I.R.B. 694

2013-22Modified byRev. Proc. 2015-22, 2015-11 I.R.B. 754

2015-8Modified byRev. Proc. 2015-22, 2015-11 I.R.B. 754

2014-59Modified byRev. Proc. 2015-24, 2015-13 I.R.B. 822

2002-43Modified byRev. Proc. 2015-26, 2015-15 I.R.B. 875

2002-43Obsoleted byRev. Proc. 2015-26, 2015-15 I.R.B. 875

Revenue Rulings:

92-19Supplemented byRev. Rul. 2015-02, 2015-3 I.R.B. 321

Notices:

2013-01Modified byNotice 2015-20, 2015-11 I.R.B. 754

Notices:—Continued

2013-01Superseded byNotice 2015-20, 2015-11 I.R.B. 754

2014-24Obsoleted byNotice 2015-29, 2015-15 I.R.B. 882

1A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2014–27 through 2014–52 is in Internal Revenue Bulletin 2014–52, dated December 28,2014.

Bulletin No. 2015–19 May 11, 2015iii

INTERNAL REVENUE BULLETINThe Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue

Bulletins are available at www.irs.gov/irb/.

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