Partnership withholding regulations: IRS defers the applicability date for certain provisions to 1 January 2023 - Tax and Legal blog

White background_BLOG

After the publication of the final regulations under section 1446(f) of the US Internal Revenue Code in late 2020 (see prior blog post), the financial industry intensively lobbied for an extension of the applicability date.

On 24 August 2021, the Internal Revenue Service (IRS) announced in Notice 2021-51 that it intends to amend the regulations to defer the applicability date of certain provisions by one year to 1 January 2023.

In particular, the deferral concerns:

  • Withholding under section 1446(f) on transfers of interests in publicly traded partnerships (“PTP interests”),
  • Withholding under section 1446(a) on distributions with respect to PTP interests, and
  • Withholding under section 1446(f)(4) by partnerships on distributions to transferees.

Deloitte's view

The deferral provides welcome relief for the financial services industry. Withholding agents and qualified intermediaries now have additional time to design, build and test new withholding and reporting infrastructure, analyse new forms and withholding statements, and implement systems to capture required data.

However, the time should be used wisely to get ready ahead of the new 1 January 2023 start date. In addition, financial institutions involved in non-PTP investments should not forget that these requirements are already applicable.

If you would like to discuss more on this topic, please do connect with our key contacts below.

Key Contacts


Brandi Caruso - Partner, Financial Services Tax 

Brandi heads the Tax Transparency offering within the Financial Services Tax practice across Switzerland, responsible for services related to QI, 871(m), FATCA, CRS, and DAC6. She is a technical advisor and a subject matter expert to a number of Swiss-based trust companies and banks and leads the Deloitte Trust Forum. She has more than 15 years of experience with Deloitte in the US, UK, and in Switzerland.


Karim Schubiger_110x110

Karim Schubiger – Director, Financial Services Tax 

Karim leads the Tax Transparency team in the Suisse Romande and Ticino markets within the Financial Services Tax & Legal practice, responsible for services related to QI, FATCA, CRS, 871(m) and DAC6. He is a technical advisor and subject matter expert to financial institutions in the banking, trust, and insurance sectors. Prior to joining Deloitte, Karim worked for eight years in support teams of Swiss banks, in particular in areas such as operations, project and change management as well as operational taxes.


Robin King blog

Robin King - Senior Manager, Financial Services Tax

Robin is a Senior Manager working in Financial Services Tax. He is currently advising leading Swiss universal and private banks, acting as subject matter expert in the area of QI, FATCA , CRS and DAC6. Robin is the author of several articles on CRS. Prior to joining Deloitte, he worked as a cross-border tax compliance expert at a Swiss private bank.



Elena Bonsembiante - Manager Financial Services Tax

Elena is a QI, FATCA and CRS specialist and an Italian certified public accountant. She is leading as Manager several QI, FATCA and CRS projects for middle sized banks in the French and Italian speaking areas. Prior to joining Deloitte Switzerland, she worked for Deloitte Italy and other Italian Tax Firms. 



Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.


Post a comment

Comments are moderated, and will not appear until the author has approved them.