At Long Last . . .Final Regulations on Foreign Partner Withholding

16 Journal of International Taxation 20 (2005)

21 Pages Posted: 10 Jul 2015

Date Written: October 1, 2005


Better late than never, sort of. On May 13, 2005, the IRS issued over 200 pages of final, Temporary, and Proposed Regulations under Section 1446, which was enacted in its current form in 1988. This two-part article reviews the Regulations and offers some comments on the future of this tangled area of the law. Before we get into the gory details, however, some general observations are in order. Section 1446 requires the withholding of tax by partnerships with foreign partners where the partnership has income that is effectively connected with a trade or business carried on by the partnership within the United States. However, Section 1446 is an incomplete, simplistic, and poorly realized piece of legislation. It belongs to an increasing line of laws and Regulations that were intended to target a relatively narrow class of noncompliance or avoidance and end up with overbroad solutions that casually and unfairly burden reasonable, non-evasive business activity.

Suggested Citation

Appel, Alan and Karlin, Michael J.A., At Long Last . . .Final Regulations on Foreign Partner Withholding (October 1, 2005). 16 Journal of International Taxation 20 (2005), Available at SSRN:

Alan Appel (Contact Author)

New York Law School ( email )

185 West Broadway
New York, NY 10013
United States

Michael J.A. Karlin

Karlin & Co.

50 South Rodeo Drive, Suite 220
Beverly Hills, CA 90212
United States
310-274-5275 (Phone)
310-388-5537 (Fax)

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