SEC. 6. SECURITY — Internal Revenue Bulletin 2000-35

.01 Major types of security . There are four major types of security acceptable to the Service. These are:

Bond with surety or guarantor . The Service may accept as security with respect to a transferor’s tax liability a bond that is executed with a satisfactory surety or guarantor. Only the following persons may act as surety or guarantor for this purpose:

(a) A surety company holding a

certificate of authority from the Secretary as an acceptable surety on Federal bonds, as listed in Treasury Department Circular No. 570, published annually in the Federal Register on the first working day in July and as supplemented from time to time thereafter; (b) A person who is engaged within

or without the United States in the conduct of a banking, financing, or similar business under the principles of section 1.864-4(c)(5) of the regulations, and who is subject to U.S. or foreign (local or national) regulation of such business, if that person is otherwise acceptable to the Service; and (c) A person who is engaged within

or without the United States in the conduct of an insurance business that is subject to U.S. or

foreign (local or national) regulation, if that person is otherwise acceptable to the Service. 2. Bond with collateral . The Service may accept as security with respect to a transferor’s tax liability a bond that is secured by acceptable collateral. All collateral must be deposited with a responsible financial institution acting as escrow agent, or in the Service’s discretion, with the Service. Only the following types of collateral are acceptable:

(a) Bonds, notes, or other public

debt obligations of the United States, in accordance with the rules of 31 CFR Part 225; and (b) A certified, cashier’s, or trea surer’s check, drawn on an entity acceptable to the Service that is engaged within or without the United States in the conduct of a banking, financing, or similar business under the principles of section 1.8644(c)(5) of the regulations and that is subject to U.S. or foreign (local or national) regulation of such business. 3. Letter of credit . The Service may accept as security with respect to a transferor’s tax liability an irrevocable letter or credit issued by an entity acceptable to the Service that is engaged within or without the United States in the conduct of a banking, financing, or similar business under the principles of section 1.8644(c)(5) of the regulations and that is sub

BOND WITH SURETY/GUARANTOR

ject to U.S. or foreign (local or national) regulation of such business. The Service will accept a letter of credit from an entity that is not engaged in a trade or business in the United States only if such letter may be drawn on an advising bank within the United States.

Guarantee . The Service may accept as security with respect to a corporate transferor’s tax liability a guarantee of the payment of such liability. The Service will accept such a guarantee only if (a) the corporation providing the guarantee is a corporation, foreign or domestic, any class of the stock of which is regularly traded on an established securities market on the date of the transfer; (b) the corporation providing the guarantee (1) is the transferor or holds, directly or indirectly, more than 80 percent of the voting stock of the transferor and (2) is engaged in a trade or business within the United States; and (c) the corporation providing the guarantee has net assets in the United States at least $25 million in excess of the value of the U.S. real property interest which is being disposed of.
Other forms of security . The Service, at its discretion, may in unusual circumstances accept any additional form of security that it finds to be adequate.

.02 Sample Forms . Listed below are sample forms of security instruments that in most circumstances are acceptable to the Service, to be used when requesting a withholding certificate pursuant to section 1.1445-3 of the regulations.

OBLIGATION. The undersigned,, the Guarantor(s), is (or if more than one, jointly and severally are) irrevocably held and firmly bound to pay the Internal Revenue Service the following portion of any tax (including any penalties, interest, and additions to tax) lawfully due and owing by any person listed below as a specified taxpayer as a result of the disposition or distribution of all or part of the subject interest in U.S. real property listed below as the subject interest(s):

CONDITIONS OF THIS OBLIGATION. The Internal Revenue Service may demand payment of the secured liability or any portion thereof at any time and for any reason. If the secured liability or requested portion is paid when requested by the Internal Revenue Service, this Guarantee shall be released to the extent so paid; otherwise, it shall remain in full force and effect until released in writing by the Internal Revenue Service.

SUBJECT INTEREST(S): SPECIFIED TAXPAYER(S): SIGNED, SEALED, AND DATED THIS day of 20 ,

Guarantor [Seal]

August 28, 2000 218 2000–35 I.R.B.

(Corporate Seal) Attest:

Corporate Guarantor

By: [Corporate Seal]

Surety/Guarantor

By: [Corporate Seal] Secretary Title

BOND WITH COLLATERAL

OBLIGATION: The undersigned, the Guarantor(s) (or if more than one, jointly and severally are) irrevocably held and firmly bound to pay the Internal Revenue Service the following portion of any tax (including any penalties, interest, and additions to tax) lawfully due and owing by any person listed below as a specified taxpayer as a result of the disposition or distribution of all or part of the subject interest in U.S. real property listed below as the subject interest(s):

SECURITY: The above-bound Guarantor(s), in order to more fully secure the Internal Revenue Service in the payment of this obligation, hereby pledge(s) as security therefor the following collateral:

CONDITIONS OF THE OBLIGATION. The Internal Revenue Service may demand payment of the secured liability or any portion thereof at any time and for any reason. If the Guarantor(s) fail(s) to pay the amount requested by the Internal Revenue Service. The Commissioner and his designates are authorized and empowered, in their sole discretion, in whole or in part, to exercise the power of attorney, contemporaneously executed and delivered to collect, sell, transfer, or assign the above described security and apply the funds so received in full or partial satisfaction of any liability for taxes, interest, penalties, or additions to tax secured hereby. If the secured liability or portion requested is paid by the Guarantor(s) when requested by the Internal Revenue Service, this security shall be released to the extent so paid; otherwise, this obligation shall remain in full force and effect until released in writing by the Internal Revenue Service.

SUBJECT INTEREST(S): SPECIFIED TAXPAYER(S): SIGNED, SEALED, AND DATED THIS day of 20 ,

Guarantor [Seal]

Corporate Guarantor

By:

Title [Corporate Seal]

(Corporate Seal) Attest:

Secretary Individual’s power of attorney

POWER OF ATTORNEY

I (we)... do hereby constitute and appoint the Commissioner (and his/her designate) as attorney for me (us) and in my (our) name to collect, sell, assign, and transfer the following:

which has been deposited by me (us) as security for the faithful performance of my (our) bond, which is attached and incorporated by reference, and I (we) agree that, in case of any default in the performance of any of the conditions and stipulations of the bond, my (our) said attorney shall have full power to collect said security or any part thereof, or to sell, assign to another for the purposes

2000–35 I.R.B. 219 August 28, 2000

of effecting either public or private sale, free from any equity of redemption and without appraisal or valuation notice and right to redeem being waived, and the proceeds of such sale for collection, in whole or in part, to be applied to the satisfaction of the liability secured by the bond in such manner as may be deemed in the best interest of the United States. I (We) further agree that the authority herein granted is irrevocable. And for myself (ourselves), my (our several) administrators, executors, and assigns, I (we) hereby ratify and confirm whatever my (our) said attorney shall do by virtue of this power of attorney. In witness whereof, I (we), herein above named, have executed this instrument and affixed my (our) seal this day of , 20 .

[SEAL] State of )

ss County of ) Before me, the undersigned, a notary public within and for the said county and State, personally appeared... [name(s) of Guarantor(s)], and acknowledged the execution of the foregoing power of attorney.

Witness my hand and notarial seal this day of, 20 .

Notary Public My Commission expires Corporation’s power of attorney

POWER OF ATTORNEY

, a corporation duly incorporated under the laws of the State of and having its principal office in the city of , State of in pursuance of a resolution of the Board of Directors, of said corporation passed on the day of , 20 , a duly certified copy of which resolution is attached hereto, does hereby constitute and appoint the Com- missioner (and his designates) as attorney for said corporation, for and in the name of said corporation, to collect or to sell, assign, and transfer the following:

                         * * *

which has been deposited by it as security for the faithful performance of the bond, a copy of which is attached, and which is incorporated by reference, and the undersigned agrees that, in case of any default in the performance of any of the conditions and stipulations of the bond, its said attorney shall have full power to collect said security or any part thereof, or to sell, assign, and transfer said security or any part thereof without notice, at public or private sale, or to transfer or assign to another for the purpose of effecting either public or private sale, free from any equity of redemption and without appraisal or valuation, notice and right to redeem being waived, and the proceeds of such sale for collection, in whole or in part, to be applied to the satisfaction of the liability secured by the bond, in such manner as may be deemed in the best interests of the United States. The undersigned further agrees that the authority granted is irrevocable.

And said corporation, hereby for itself, its successors and assigns, ratifies and confirms whatever its said attorney shall do by virtue of this power of attorney.

In witness whereof, , the corporation above named, by (Name and title of officer), duly au- thorized to execute this instrument has caused the seal of the corporation to be affixed hereto this day of 20 .

Attest:

(Corporate seal) Secretary

By:

Title State of )

ss County of ) Before me, the undersigned, a notary public within and for the said county and State, personally appeared (name and title of officer), and for and in behalf of said corporation, acknowledged the execution of the foregoing power of attorney.

Witness my hand and notarial seal this day of , 20 .

[Notarial seal]

August 28, 2000 220 2000–35 I.R.B.

Notary Public My Commission expires

LETTER OF CREDIT

Place: Cable Address:

Date:

IRREVOCABLE All drafts must be marked: Advising bank STANDBY Drawn under credit no. reference to LETTER OF CREDIT

Advising bank For account of

To beneficiary Internal Revenue Service

950 L’Enfant Plaza South, S.W. Washington, DC 20224

Attention: Collection

Expiration date

This refers to preliminary cable advice of this credit Gentlemen:

We hereby establish our irrevocable letter of credit in your favor available by your drafts drawn at SIGHT and accompanied by documents specified below: NONE

We hereby engage with you that Advising bank’s notification all drafts drawn under and in compliance with the terms of this credit will be duly honored if drawn and presented for payment at this office on or before the expiration date of this credit. Place, date, name, and The advising bank is requested to signature of the notify the beneficiary without advising bank adding their confirmation.

Sincerely yours, Authorized counter signature

Authorized signature

GUARANTEE

OBLIGATION: The undersigned, , the Guarantor(s), is (or if more than one, jointly and severally are) irrevocably held and firmly bound to pay the Internal Revenue Service the following portion of any tax (including any penalties, interest, and additions to tax) lawfully due and owing by any person listed below as a specified taxpayer as a result of any disposition or distribution taxable by reason of sections 871(b)(1), 882(a)(1), and/or 897 of the Code as to all or part of the subject interest in U.S. real property listed below as the subject interest:

CONDITIONS OF THIS OBLIGATION: The Internal Revenue Service may demand payment of the secured liability or any portion thereof at any time and for any reason. If the secured liability or requested portion is paid when requested by the Internal Revenue Service, this Guarantee shall be released to the extent so paid; otherwise, it shall remain in full force and effect until released in writing by the Internal Revenue Service.

SUBJECT INTEREST(S): 2000–35 I.R.B. 221 August 28, 2000

SPECIFIED TAXPAYER(S): SIGNED, SEALED, AND DATED THIS day of 20 ,

Guarantor [Seal]

Corporate Guarantor

By:

[Corporate Seal] Attest:

Secretary