SECTION 1. PURPOSE

This Notice sets forth the proposed qualified intermediary (QI) withholding agreement (QI agreement) entered into under § 1.1441–1(e)(5). ¹ In general, the QI agreement allows foreign persons to enter into an agreement with the Internal Revenue Service (IRS) to simplify their obligations as a withholding agent under chapters 3 and 4 and as a payor under chapter 61 and section 3406 for amounts paid to their account holders.

The QI agreement currently in effect, as provided in Rev. Proc. 2014–39, 2014–29 I.R.B. 150, (the 2014 QI agreement), expires on December 31, 2016. The proposed changes to the QI agreement described in this Notice, subject to any modifications included in a revenue procedure containing the final QI agreement (to be issued later in 2016), will apply to QI agreements that are in effect on or after January 1, 2017, as provided in section 5 of this Notice. Section 2 of this Notice describes the highlights of the proposed changes to the 2014 QI agreement and provides a general description of corresponding changes that will be made to the withholding foreign partnership agreement (WP agreement) and withholding foreign trust agreement (WT agreement), the current versions of which were published in Rev. Proc. 2014–47, 2014–35 I.R.B 393. Section 3 of this Notice provides the application procedures for becoming a QI and renewing a QI agreement. Section 4 of this Notice provides the proposed QI agreement. Comments with respect to the proposed QI agreement are requested by August 31, 2016.