SECTION 2. BACKGROUND

Sections 1.6049–4(b)(5) and 1.6049– 8(a), as revised by TD 9584, require the reporting of certain deposit interest paid to nonresident alien individuals on or after January 1, 2013. Section 1.6049–4(b)(5) provides that in the case of interest aggregating $10 or more paid to a nonresident alien individual (as defined in section 7701(b)(1)(B)) that is reportable under § 1.6049–8(a), the payor is required to make an information return on Form 1042–S for the calendar year in which the interest is paid. Interest that is reportable under § 1.6049–8(a) is interest described in section 871(i)(2)(A) that relates to a deposit maintained at an office within the United States and that is paid to a resident of a country that is identified, in an applicable revenue procedure (see § 601.601(d)(2)) as of December 31 prior to the calendar year in which the interest is paid, as a country with which the United States has in effect an income tax or other convention or bilateral agreement relating to the exchange of tax information within the meaning of section 6103(k)(4), under which the competent authority is the Secretary of the Treasury or his delegate and the United States agrees to provide, as well as receive, information. Rev. Proc. 2012–24 was published contemporaneously with the publication of TD 9584 to identify those countries with which the United States has in force an information exchange agreement, such that interest

paid to residents of such countries must be reported by payors to the extent required under §§ 1.6049–8(a) and 1.6049– 4(b)(5). This revenue procedure updates Rev. Proc. 2012–24 and will be updated by subsequent revenue procedures as appropriate. As noted in the preamble to the regulations and Rev. Proc. 2012–24, the IRS is not required to exchange information with another country, even if an information exchange agreement is in effect, if there are concerns about confidentiality, safeguarding of data exchanged, the use of the information, or other factors that would make the exchange of information inappropriate.