[Code of Federal Regulations]
[Title 26, Volume 13]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR]

[Page 331-332]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
Procedure and Administration--Table of Contents
 
Sec.  1.6049-8  Interest and original issue discount paid to residents 
of Canada.

    (a) Interest subject to reporting requirement. For purposes of 
Sec. Sec.  1.6049-4, 1.6049-6 and this section and except as provided in 
paragraph (b) of this section, the term interest means interest paid to 
a Canadian nonresident alien individual after December 31, 1996, where 
the interest is described in section 871(i)(2)(A) with respect to a 
deposit maintained at an office within the United States. For purposes 
of the regulations under section 6049, a Canadian nonresident alien 
individual is an individual who resides in Canada and is not a United 
States citizen. The payor or middleman may rely upon the permanent 
residence address (as defined in section 1441 and the regulations under 
that section) as stated on the Form W-8 (described in section 6049 and 
the regulations under that section) in order to determine whether the 
payment is made to a Canadian nonresident alien individual. The payor or 
middleman may rely upon the permanent residence address (as defined in 
Sec.  1.1441-1(e)(2)(ii)) as stated on the Form W-8 described in Sec.  
1.1441-1(e)(2)(i) in order to determine whether the payment is made to a 
Canadian nonresident alien individual. If the permanent residence 
address stated on the certificate is in Canada, or if the payor has 
actual knowledge of the individual's residence address in Canada, the 
payor must presume that the individual resides in Canada. Amounts 
described in this paragraph (a) are not subject to backup withholding 
under section 3406. See Sec.  31.3406(g)-1(d) of this chapter.
    (b) Interest excluded from reporting requirement. The term interest 
does not include an amount that is paid by the issuer or its agent 
outside the United States with respect to an obligation that is 
described in paragraph (b) (1) or (2) of this section.
    (1)(i) The obligation is not in registered form (within the meaning 
of section 163(f) and the regulations thereunder); is part of a larger 
single public offering of securities; and is described in section 
163(f)(2)(B).
    (ii) Unless it has actual knowledge to the contrary, a middleman may 
treat an obligation as if it is described in section 163(f)(2)(B) if the 
obligation or coupon therefrom, whichever is presented for payment, 
contains the statement described in section 163(f)(2)(B)(ii)(II) and the 
regulations thereunder.
    (2)(i) The obligation has a face or principal amount of not less 
than $500,000, and satisfies the requirements described in paragraphs 
(b)(2)(i) (A), (B), and (C) of this section.
    (A) The obligation satisfies the requirements of sections 
163(f)(2)(B) (i) and (ii)(I) and the regulations thereunder (as if it 
were a registration-required obligation within the meaning of section 
163(f)(2)(A)) and is issued in accordance with the procedures of Sec.  
1.163-5(c)(2)(i)(D)).
    (B) If the obligation is in registered form, it is registered in the 
name of an exempt recipient described in Sec.  1.6049-4(c)(1)(ii).
    (C) The obligation has on its face and on any detachable coupons the 
following statement (or a similar statement having the same effect): 
``By accepting this obligation or coupon, the holder represents and 
warrants that it is not a United States person (other

[[Page 332]]

than an exempt recipient described in the regulations under section 
6049(b)(4) of the Internal Revenue Code and the regulations thereunder) 
and that it is not acting for or on behalf of a United States person 
(other than an exempt recipient described in the regulations under 
section 6049(b)(4) of the Internal Revenue Code and the regulations 
thereunder).''
    (ii) Unless the middleman has actual knowledge to the contrary, it 
may treat an obligation as satisfying the requirements of sections 
163(f)(2)(B) (i) and (ii)(I) and the regulations thereunder if the 
obligation or a coupon therefrom, whichever is presented for payment, 
contains the statement in paragraph (b)(2)(i)(C) of this section.

[T.D. 8664, 61 FR 17574, Apr. 22, 1996, as amended by T.D. 8734, 62 FR 
53491, Oct. 14, 1997]