Title 26 — Internal Revenue CodeRelease 119-73

§1472 Withholdable Payments to Other Foreign Entities

Title 26 › Subtitle Subtitle A— Income Taxes › Chapter 4— TAXES TO ENFORCE REPORTING ON CERTAIN FOREIGN ACCOUNTS › § 1472

Last updated Apr 6, 2026|Official source

Summary

When a U.S. payer sends certain payments to a foreign company that is not a financial institution, the foreign company must reveal who really owns it before the payment escapes withholding. It must either certify that it has no substantial United States owners, or give the name, address, and taxpayer ID number of each substantial U.S. owner. The payer must report that ownership information to the IRS and must not have reason to believe it is false. These rules do not apply to payments owned by publicly traded corporations and members of their affiliated group, entities in U.S. possessions wholly owned by bona fide residents there, foreign governments, international organizations, foreign central banks, or other persons the IRS identifies. The IRS can also exempt classes of payments that pose a low risk of tax evasion.

Full Legal Text

Title 26, §1472

Internal Revenue Code — Source: USLM XML via OLRC

(a)In the case of any withholdable payment to a non-financial foreign entity, if—

(1)the beneficial owner of such payment is such entity or any other non-financial foreign entity, and

(2)the requirements of subsection (b) are not met with respect to such beneficial owner,

(b)The requirements of this subsection are met with respect to the beneficial owner of a payment if—

(1)such beneficial owner or the payee provides the withholding agent with either—

(A)a certification that such beneficial owner does not have any substantial United States owners, or

(B)the name, address, and TIN of each substantial United States owner of such beneficial owner,

(2)the withholding agent does not know, or have reason to know, that any information provided under paragraph (1) is incorrect, and

(3)the withholding agent reports the information provided under paragraph (1)(B) to the Secretary in such manner as the Secretary may provide.

(c)Subsection (a) shall not apply to—

(1)except as otherwise provided by the Secretary, any payment beneficially owned by—

(A)any corporation the stock of which is regularly traded on an established securities market,

(B)any corporation which is a member of the same expanded affiliated group (as defined in section 1471(e)(2) without regard to the last sentence thereof) as a corporation described in subparagraph (A),

(C)any entity which is organized under the laws of a possession of the United States and which is wholly owned by one or more bona fide residents (as defined in section 937(a)) of such possession,

(D)any foreign government, any political subdivision of a foreign government, or any wholly owned agency or instrumentality of any one or more of the foregoing,

(E)any international organization or any wholly owned agency or instrumentality thereof,

(F)any foreign central bank of issue, or

(G)any other class of persons identified by the Secretary for purposes of this subsection, and

(2)any class of payments identified by the Secretary for purposes of this subsection as posing a low risk of tax evasion.

(d)For purposes of this section, the term “non-financial foreign entity” means any foreign entity which is not a financial institution (as defined in section 1471(d)(5)).

Reference

Citations & Metadata

Citation

26 U.S.C. § 1472

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73