SECTION 3. SCOPE

.01 General application . If a trust under a qualified defined benefit plan makes a payment with respect to a participant who is a nonresident alien individual and the actual amounts of employer contributions made to the plan for the benefit of such participant are not known, the method set forth in section 4 of this revenue procedure may be used to allocate the payment to sources within and without the United

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tality table in Rev. Rul. 2001–62, 2001–2 C.B. 632.

.03 Tables . Table I.— Amount that, when contributed on an annual level basis, will accumulate to $1.00 at the annuity starting date, based on the total number of years from the first date the individual became a participant in the plan to the annuity starting date

annuity commencing at the annuity starting date, then the present value of the individual’s pension is the product of (i) the amount payable annually, multiplied by (ii) the value from Table II below, based on the individual’s age at the annuity starting date, of an annuity of $1.00 per annum payable in equal monthly installments during the life of the individual.

(b) If payment is made in the form of a single-sum payment of the total bene

fit due to the individual under the plan at the annuity starting date, then the present value of the individual’s pension is equal to the amount of the single-sum payment.

(c) If payment is made in a form not identified in either of the two preceding paragraphs, then the present value of the individual’s pension is the actuarial present value of the individual’s pension, determined on the annuity starting date based on a 7% rate of interest and the mor

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Table II.— The value of an annuity of $1.00 per annum payable in equal monthly

installments during the life of the individ- ual, based on the individual’s age at the annuity starting date.

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der section 4.01 of this revenue procedure) over the total employee after-tax contributions to the plan, multiplied by (B) a fraction, the numerator of which is the number of months of service credited under the plan that were rendered outside the United States and the denominator of which is the total months of service credited under the plan at the annuity starting date, divided by (ii) the excess of the present value of the pension at the annuity starting date (as determined under section 4.02 of this revenue procedure) over the total employee after-tax contributions to the plan. The portion of each payment that is allocable neither to employee after-tax contributions nor to income from sources without the United States is treated as income from sources within the United States.

.04 Allocation of payments to sources within and without the United States .

(a) General rule . The portion of each payment that is deemed to be attributable to contributions for services rendered outside the United States, and thus treated as income from sources without the United States, is equal to the quotient of (i) the product of (A) the total deemed contributions (as determined under section 4.01 of this revenue procedure), multiplied by (B) a fraction, the numerator of which is the months of service credited under the plan that were rendered outside the United States and the denominator of which is the total months of service credited under the plan as of the annuity starting date ( i.e., prorated based on months of service rendered within and without the United States), divided by (ii) the present

value of the pension at the annuity starting date (as determined under section 4.02 of this revenue procedure). The remainder of the payment, which represents the sum of deemed contributions for services rendered within the United States plus earnings on all contributions, is treated as income from sources within the United States.

(b) Special rule for employee after-tax contributions . If the participant has made any employee after-tax contributions to the plan, then each payment is first reduced by the employee after-tax contributions allocable to such payment under § 72. The portion of the remainder of each payment that is treated as income from sources without the United States is equal to the quotient of (i) the product of (A) the excess of the total contributions (as determined un

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from Plan A beginning at age 55, the annual amount of which will be $25,000 payable as a straight life annuity. Q elects to receive an actuarially equivalent joint and contingent annuity option of $23,000 annually with a 50 percent continuation percentage (and Q’s designated contingent annuitant is age 55) and the actuarial present value of that benefit under section 4.02(c) is $288,019. Q has never made any after-tax contributions to Plan A, and § 871(f), relating to an exclusion from gross income for amounts received from certain qualified pension plans, does not apply to any amounts received by Q from Plan A.

(b) Application . The total deemed contributions for the benefit of Q under the method set forth in section 4.01 of this revenue procedure equal $140,553, which is the product of $288,019 (the present value of Q’s $23,000 annual pension benefit from Plan A with a 50-percent continuation percentage, as determined under the assumptions in section 4.02(c)), multiplied by 0.0244 (the number from Table I that corresponds to the total number of years of accumulation for Q before the annuity starting date), multiplied by 20 (Q’s total years of service credited under the plan). Under section 4.04 of this revenue procedure, the portion of each payment that is treated as income from sources without the United States is equal to the quotient of (i) 160/240 multiplied by $140,553, divided by (ii) $288,019, or 33 percent. The remaining 67 percent is treated as income from sources within the United States that is subject to withholding under § 1441(a).