[Code of Federal Regulations]
[Title 26, Volume 7]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.565-5]

[Page 307-308]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.565-5  Nonresident aliens and foreign corporations.

    (a) Withholding. In the event that a corporation makes a consent 
dividend, as described in Sec. 1.565-1 (a), to a shareholder that is 
subject to a withholding tax under section 1441 or 1442 on a 
distribution of cash or other property, the corporation must remit an 
amount of tax equal to the withholding tax that would be imposed under 
section 1441 or 1442 if an actual cash distribution equal to the consent 
dividend had been paid to the shareholder on the last day of the 
corporation's taxable year. Such

[[Page 308]]

payment must be in one of the following forms:
    (1) Cash,
    (2) United States postal money order,
    (3) Certified check drawn on a domestic bank, provided that the law 
of the place where the bank is located does not permit the certification 
to be rescinded prior to presentation,
    (4) A cashier's check of a domestic bank, or
    (5) A draft on a domestic bank or a foreign bank maintaining a 
United States agency or branch and payable in United States funds.

The amount of such payment shall be credited against the tax imposed on 
the shareholder.

[T.D. 8244, 54 FR 10540, Mar. 14, 1989]