The US Department of the Treasury and the Internal Revenue Service (IRS) have released Notice 2015-10 on 28 April 2015 announcing their intention to amend regulations applicable to refund and credit claims for amounts withheld on payments to foreign persons under Internal Revenue Code (IRC) Sections 1441 through 1443.
The new regulations are intended to address concerns that foreign persons subject to withholding have been making refund and credit claims when a withholding agent fails to deposit the amounts required to be withheld. The new regulations would provide that any claim for refund or credit made by the beneficial owner of a withheld payment will be allowable only to the extent that the relevant withholding agent deposited the amount withheld and such amount is in excess of the claimant’s tax liability. The regulations will also provide for a pro rata allocation of the amount available to the claimant for refund or credit when a withholding agent has only partially satisfied its deposit requirements. The regulations are intended to apply to claims for refund or credit for amounts withheld for the 2015 calendar year and later.
