SECTION 1. PURPOSE AND SCOPE

.01 Purpose. This revenue procedure gives guidance for entering into a withholding agreement with the Internal Revenue Service (IRS) to be treated as a Qualified Intermediary (QI) under §1.1441–1(e)(5) of the Income Tax Regulations. It describes the application procedures for becoming a QI and the terms that the IRS will ordinarily require in a QI withholding agreement. The objective of a QI withholding agreement is to simplify withholding and reporting obligations with respect to payments of income (including interest, dividends, royalties, and gross proceeds) made to an account holder through one or more foreign intermediaries.

.02 Scope. This revenue procedure applies to persons described in §1.1441– 1(e)(5)(ii)(A) and (B)—foreign financial institutions, foreign clearing organizations, and foreign branches of U.S. financial institutions and U.S. clearing organizations. It does not apply to foreign corporations seeking to become a QI to present claims of benefits under an income tax treaty on behalf of shareholders. See §§1.1441–1(e)(5)(ii)(C) and 1.1441– 6(b)(4)(ii)(B). It does not apply to a foreign partnership seeking to qualify as a withholding foreign partnership. See §1.1441–5(c)(2)(ii). It also does not apply to other persons that the IRS may accept to be qualified intermediaries as authorized under §1.1441–1(e)(5)(ii)(D). A person that is not within the scope of this revenue procedure but may seek QI

1998–15 I.R.B. 15 April 13, 1998

status under §1.1441–1(e)(5)(ii)(C) or (D), or §1.1441–5(c)(2)(ii) should contact the Office of the Assistant Commissioner (International) at the address or telephone number in section 4.01 of this revenue procedure.