§1473 Definitions

Summary

Defines key words used for withholding rules. A "withholdable payment" is money from U.S. sources like interest, dividends, rent, salaries, wages, premiums, annuities, and other regular income, plus gross proceeds from selling property that can make interest or dividends. It does not include income already taken into account under sections 871(b)(1) or 882(a)(1). Unless the Secretary says otherwise, that definition applies. A "substantial United States owner" is a specified U.S. person who owns more than 10% of a corporation (by vote or value), more than 10% of a partnership’s profits or capital, or certain owners of trusts (including persons treated as owners under trust tax rules and, when the Secretary allows, those with more than 10% beneficial interests). For certain financial institutions in section 1471(d)(5)(C), the threshold is 0% instead of 10%. A "specified United States person" means a U.S. person but excludes certain types such as regularly traded corporations and their expanded groups, tax‑exempt organizations and IRAs, the U.S. government and its agencies, states and local governments, banks, REITs, regulated investment companies, common trust funds, and certain tax‑exempt trusts (sections 664(c) and 4947(a)(1)). A "withholding agent" is anyone who controls, receives, holds, pays, or disposes of a withholdable payment. A "foreign entity" is any entity that is not a United States person.