February 24, 2021
Ms. Erika Nijenhuis
Senior Counsel, Office of Tax Policy
U.S. Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20224
Ms. Kamela Nelan
Attorney-Advisor, Office of Tax Policy
U.S. Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20224
Mr. Ronald Gootzeit
Office of Associate Chief Counsel, International
Counsel, Branch 4
Internal Revenue Service
1111 Constitution Avenue, NW
Washington, DC 20224
Mr. John Sweeney
Special Counsel, Office of Associate Chief Counsel
Internal Revenue Service
1111 Constitution Avenue, NW
Washington, DC 20224
Re: Final Regulations Under Section 1446(f)
Dear Ladies & Gentlemen:
The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates your consideration of our comments on the final regulations under section 1446(f)2 relating to transfers of interests in publicly traded partnerships (“PTPs”) by foreign persons. We acknowledge the thought and time that went into drafting and finalizing these regulations and we greatly appreciate the continued engagement of the Treasury Department (“Treasury”) and the Internal Revenue Service (“IRS”) as financial institutions work to implement the regulations. While the final regulations did offer clarity on several ambiguities, numerous questions remain, and the
regulations further present several operational challenges for withholding agents. SIFMA is seeking clarification and guidance on the following technical and practical matters so that our members may properly implement the regulations.
1. Additional time is necessary beyond the January 1, 2022 effective date
Financial institutions and withholding agents have spent the past few months following release of the final regulations working diligently to interpret the guidance and assess changes that must be made to systems, processes and procedures in order to implement the new rules. In doing so, several questions have emerged regarding ambiguities in the rules, which we will detail further in this letter, many of which require clarification before work implementing the regulations can continue. As SIFMA has previously noted, even absent further clarifying questions, regulations requiring significant operational changes, such as those promulgated under section 1446(f), typically require a minimum of 18-months implementation time.