SECTION 2. BACKGROUND

Rev. Proc. 2003–64 contains the WP and WT agreements described in Treasury Regulation § 1.1441–5(c)(2)(ii) and (e)(5)(v) and sets forth the application procedures for entering into such agreements. Rev. Proc. 2003–64 also amends the QI agreement, contained in Rev. Proc. 2000–12, 2000–1 C.B. 387, to add new Section 4A.

Section 10.01 of the WP and WT agreements and new Section 4A.01 of the QI agreement provide generally that a QI, WP, or WT may apply simplified documentation, reporting, and withholding procedures to a foreign trust or foreign partnership if certain conditions are met (the “Joint Account Provision”). Currently a QI, WP, or WT may apply the Joint Account Provision only if, among other things, the foreign partnership or trust receives from the QI, WP, or WT less than $200,000 of reportable amounts for a calendar year (the “$200,000 cap”).

The IRS and Treasury have received comments seeking an expansion of the Joint Account Provision. The comments indicated that expanding the availability of the Joint Account Provision by eliminating the $200,000 cap would facilitate compliance by QIs, WPs, and WTs with their documentation, reporting, and withholding obligations with respect to foreign partnerships and foreign simple and grantor trusts. After considering these comments, the IRS and Treasury have concluded that expanding the availability of the Joint Account Provision by eliminating the $200,000 cap would be consistent with the objectives of the underlying reporting and withholding regimes.