SECTION 1. PURPOSE AND SCOPE

Sec. 1.01. General Obligations . Except as otherwise provided in this Agreement, WT’s obligations with respect to income distributed to, or included in the distributive shares of, its beneficiaries or owners are governed by the Code and the regulations thereunder. WT may act in its capacity as a withholding foreign trust pursuant to this Agreement only for payments of amounts subject to NRA withholding that are distributed to, or included in the distributive shares of, its direct beneficiaries or

Passthrough Beneficiaries or Owners

Sec. 8.01. In General Sec. 8.02. Designation of External

Auditor Sec. 8.03. Timing External Audits:

General Rule Sec. 8.04. Timing External Audits:

Special Rule for PR Election Sec. 8.05. Scope of External Audit Sec. 8.06. External Auditor’s Report Sec. 8.07. Expanding Scope and Tim

ing of External Audit

2002–24 I.R.B. 1167 June 17, 2002

ments and Other Foreign Organizations for United States Tax Withholding ; and IRS Form W-8IMY, Certificate of For- eign Intermediary, Foreign Partnership, and Certain U.S. Branches for United States Tax Withholding, as appropriate. It also includes any acceptable substitute form.

Sec. 2.10. Form W-9 . “Form W-9” means a valid IRS Form W-9, Request for Taxpayer Identification Number and Cer- tification, or any acceptable substitute.

Sec. 2.11. Form 1042 . “Form 1042” means an IRS Form 1042, Annual With- holding Tax Return for U.S. Source Income of Foreign Persons .

Sec. 2.12. Form 1042-S . “Form 1042-S” means an IRS Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding .

Sec. 2.13. Form 3520 . “Form 3520” means an IRS Form 3520, Annual Return to Report Transaction With Foreign Trust and Receipt of Certain Foreign Gifts .

Sec. 2.14. Form 3520-A . “Form 3520-A” means an IRS Form 3520-A, Annual Information Return of Foreign Trust With a U.S. Owner .

Sec. 2.15. Intermediary . An “intermediary” means any person that acts on behalf of another person, such as a custodian, broker, nominee, or other agent.

Sec. 2.16. Nonwithholding Foreign Trust . A “nonwithholding foreign trust” is any foreign trust that is not acting as a withholding foreign trust.

Sec. 2.17. NRA Withholding . For purposes of this agreement “nonresident alien (NRA) withholding” is any withholding required under chapter 3 of the Code (other than sections 1445 or 1446), whether the payment subject to withholding is made to an individual or to an entity.

Sec. 2.18. Overwithholding . The term “overwithholding” means the excess of the amount actually withheld over the amount required to be withheld under chapter 3 of the Code.

Sec. 2.19. Trust, Beneficiary and Owner . The term “trust” is defined in Treas. Reg. § 301.7701–4. The term “beneficiary” is defined in section 643(c) of the Code and the regulations thereunder. An “owner” is a person treated as a grantor or owner under Subpart C of Subchapter J of the Code. A direct beneficiary or owner is a beneficiary or owner,

owners. WT is required to act as a withholding foreign trust for all such amounts paid to WT, or included in WT’s distributive share, by any withholding agent to which WT has provided a Form W-8IMY that represents that WT is acting as a withholding foreign trust with respect to such amounts. WT must act as a withholding foreign trust for any such amounts paid with respect to such a Form W-8IMY that are distributed to, or included in the distributive shares of, its direct foreign beneficiaries or owners. WT may act as a withholding foreign trust for such amounts that are distributed to, or included in the distributive shares of, its direct beneficiaries or owners that are U.S. persons. WT may also act as a withholding foreign trust and may treat itself as a direct foreign beneficiary if (i) WT is a trust the terms of which described in section 651(a)(1) and (2) of the Code and (ii) in any taxable year, WT distributes amounts other than amounts of income described in section 651(a)(1). In no event may WT act as a withholding foreign trust for amounts subject to NRA withholding that are distributed to, or included in the distributive shares of, passthrough beneficiaries or owners or indirect beneficiaries or owners. For passthrough beneficiaries or owners and indirect beneficiaries or owners, WT must act as a nonwithholding foreign trust.

Sec. 1.02. Parties to the Agreement . This Agreement applies to WT and the IRS.