IRS EXPLAINS PROCEDURES FOR OBTAINING A CERTIFICATE TO REDUCE OR ELIMINATE FIRPTA WITHHOLDING

Rev. Proc. 85-41

SECTION 1. PURPOSE

The purpose of this revenue procedure is to provide the procedures to be followed to obtain a withholding certificate for purposes of sections 1.1445-3T and 1.1445-6T of the Temporary Income Tax Regulations concerning withholding on dispositions by foreign persons of United States (U.S.) real property interests.

SEC. 2. BACKGROUND

The Tax reform Act of 1984, section 129, 1984-3 (Vol. 1) C.B. 163, added section 1445 to the Internal Revenue Code as a means of enforcing the tax imposed pursuant to section 897 on dispositions by foreign persons of investment in U.S. real property. Section 1445(a) provides that a transferee of a U.S. real property interest from a foreign person must deduct and withhold a tax equal to 10 percent of the amount realized by the foreign person on the disposition. Section 1445(b) provides several exceptions to this requirement, including an exemption from withholding for persons who purchase property for use as a residence for $300,000 or less. Other exemptions under section 1445(b) include cases where the transferor furnishes an affidavit of nonforeign status, where the property transferred is stock that is regularly traded on an established securities market, and where a statement is obtained from the Internal Revenue Service that excuses withholding. Similarly, section 1445(c) provides that the amount required to be withheld can be reduced pursuant to a determination by the Service of the transferor's maximum tax liability upon the disposition. Sections 1.1445-3T and 1.1445-6T of the temporary regulations provide rules concerning the issuance by the Service of a withholding certificate that reduces or eliminates withholding. This revenue procedure provides additional guidance concerning applications for withholding certificates.

SEC. 3. WITHHOLDING CERTIFICATES -- IN GENERAL

01 PURPOSE OF WITHHOLDING CERTIFICATE. Withholding under section 1445 may be reduced or eliminated pursuant to a withholding certificate issued by the Service in accordance with the rules set forth in this revenue procedure. A withholding certificate may be issued by the Service in cases where reduced withholding is appropriate, where the transferor is exempt from U.S. tax, or where an agreement for the payment of tax is entered into with the Service. A withholding certificate that is obtained prior to a transfer notifies the transferee that no withholding is required, or that reduced withholding is required. A withholding certificate that is obtained after a transfer has been made may authorize a normal refund or an early refund. See section 1.1445-3T(f) of the temporary regulations. A withholding certificate issued pursuant to the provisions of this revenue procedure serves to fulfill the requirements, as applicable, of section 1445(b)(4) concerning qualifying statements, section 1445(c)(1) concerning the transferor's maximum tax liability, or section 1445(c)(2) concerning the Secretary's authority to prescribe reduced withholding.

02 LIMITED EFFECT OF A WITHHOLDING CERTIFICATE. A withholding certificate serves only to adjust withholding obligations to correspond as closely as possible to the probable tax liability arising out of a transfer. Therefore, all determinations that are made by the Service in connection with the issuance of a withholding certificate apply solely for the limited purpose of determining withholding obligations under section 1445 and do not necessarily represent the Service's final view with respect to any substantive issue that may arise in connection with a transfer. Similarly, the Service's acceptance in connection with the issuance of a withholding certificate of any evidence provided or any representation made by a taxpayer is made only for that purpose, is not binding for any other purpose, and does not constitute a final determination of the truth or accuracy of any such evidence or representation.

03 TYPES OF WITHHOLDING CERTIFICATES AVAILABLE. Pursuant to section 1.1445-3T of the temporary regulations, a withholding certificate may be issued on the basis of any of the following:

1 A determination by the Service that reduced withholding is appropriate because either:

(a) The amount otherwise required to be withheld would exceed the transferor's maximum tax liability; or

(b) Withholding of a reduced amount would not jeopardize collection of the tax;

2 The exemption from U.S. tax of all gain realized by the transferor; or

3 An agreement for the payment of tax providing security for the tax liability, entered into by the transferee or transferor.

SEC. 4. APPLICATIONS FOR WITHHOLDING CERTIFICATES

01 GENERAL RULES. An application for a withholding certificate must be submitted in duplicate to the Director, Foreign Operations District; Attn: FOD:666; 1325 K Street, N.W.; Washington, DC 20225. Either a transferee or a transferor may apply for a withholding certificate, but only a transferor may apply for a blanket withholding certificate. The Service ordinarily will act upon an application not later than the 90th day after its receipt. However, in the case of an application for a certificate described in section 4.036 below, and in unusually complicated cases, the Service may be unable to provide a withholding certificate by the 90th day. In such a case the Service will notify the applicant by the 45th day after receipt of the application that additional processing time will be necessary. The Service's notice may request additional information or explanation concerning particular aspects of the application and will provide a target date for final action (contingent upon the applicant's timely submission of any requested information). If an application for a withholding certificate is submitted at least 30 days prior to the date of a transfer, and on the date of the transfer the application remains pending with the Service, then the amount required to be withheld by the transferee is not required to be reported and paid over immediately. Instead, that amount (or such other amount as is appropriate) must be reported and paid over by the l0th day following the Service's final determination with respect to the application for a withholding certificate.

02 REQUIRED SIGNATURES. An application for a withholding certificate must be signed by a responsible officer in the case of a corporation, by a general partner in the case of a partnership, by a trustee, executor, or equivalent fiduciary in the case of a trust or estate, and, in the case of an individual, by the individual himself or herself. In addition, an application may be signed by an agent authorized to do so by a general or specific power of attorney. Form 2848 may be used for this purpose. The person signing the application must verify under penalties of perjury that all representations made in connection with the application are true, correct, and complete to the best of that person's knowledge and belief. To the extent that an application is premised in whole or in part on information provided by another party to the transaction, this information is to be supported by a written verification attached tp that application signed under penalties of perjury by the party to whom it pertains. The application must follow the format set forth in section 4.04 below.

03 CATEGORIZING OF APPLICATIONS. To facilitate the processing of applications for withholding certificates, this revenue procedure divides all applications into six basic categories, as follows:

1 Applications for withholding certificates based on a claim that the transfer is entitled to nonrecognition treatment or is exempt from tax;

2 Applications for withholding certificates based solely on a calculation of the transferor's maximum tax liability;

3 Applications for withholding certificates under the special installment sales rules of section 7 of this revenue procedure;

4 Applications for withholding certificates based on an agreement for the payment of tax with conforming security;

5 Applications for blanket withholding certificates under section 9 of this revenue procedure; and

6 Applications for withholding certificates on any other basis.

04 FORMAT FOR APPLICATION. All applications for withholding certificates must provide the following information in paragraphs labelled to correspond with the numbers and letters set forth below. Place "N/A" in the relevant space if the information requested is not applicable to the application being submitted.

1 (a) State which category of section 3.03, above, describes the application;

(b) In the case of category 4 applications (agreement for the payment of tax with conforming security):

(1) State whether the proposed agreement secures (A) the transferor's maximum tax liability, or (B) the amount that would otherwise be required to be withheld; and

(2) State whether the proposed agreement and security instrument conform to the standard formats set forth in this revenue procedure.

2 (a) Provide the name, address, and identification number (if any) of the person applying for the withholding certificate.

(b) State whether the applicant is the transferee or transferor.

(c) Provide the name, address, and identification number (if any) of all other transferees and transferors of the U.S. real property interest with respect to which the withholding certificate is sought.

3 Provide the following information concerning the U.S. real property interest with respect to which the withholding certificate is sought:

associated personal property, or in a domestic U.S. real property holding corporation);

(b) The contract price;

(c) In the case of an interest in real property, its location and a general description of the property (for example, "10-story, 100 unit luxury apartment building"); and

(d) In the case of an interest in a U.S. real property holding corporation, the class or type and amount of the interest.

4 Provide full information concerning the basis for the issuance of the withholding certificate, in accordance with the rules of sections 4.05 through 4.10 below. Although the information to be included in this section of the application will necessarily vary from case to case, the rules set forth below provide general guidelines for the inclusion of appropriate information with respect to each category of application.

05 INFORMATION CONCERNING CATEGORY 1 APPLICATIONS (NONRECOGNITION OR EXEMPT TRANSFER). If a withholding certificate is sought on the basis of a claim that the transaction is entitled to nonrecognition treatment or is exempt from U.S. taxation, provide the following:

1 A brief description of the transfer;

2 A brief summary of the law and facts supporting the claim of nonrecognition or exemption;

3 Evidence that the transferor has no unsatisfied withholding liability, as described in section 4.063; and

4 The most recent assessed value, for state or local property tax purposes, of the U.S. real property interest to be transferred, or other good faith estimate of its fair market value (no supporting evidence concerning the value of the property need be supplied).

06 INFORMATION CONCERNING CATEGORY 2 APPLICATIONS (DETERMINATION OF MAXIMUM TAX LIABILITY).

1 IN GENERAL. If a withholding certificate is sought on the basis of a determination of the transferor's maximum tax liability, then information must be provided to establish the two elements of that liability: (a) the maximum tax that may be imposed on the disposition, and (b) the transferor's unsatisfied withholding liability. Paragraphs 4.062 and .063, below, provide guidelines for the furnishing of such information. For further information concerning the determination of the transferor's maximum tax liability, see section 1.1445-3T(c) of the temporary regulations.

2 MAXIMUM TAX ON DISPOSTIION. (a) The applicant must provide a calculation of the maximum tax that may be imposed on the disposition, including the following information:

(1) The amount to be realized by the transferor, plus evidence confirming this amount, such as a copy of the signed contract relating to the transfer;

(2) Adjusted basis of the property plus evidence confirming the basis claimed, such as schedules of depreciation for tax purposes;

(3) Amounts to be recaptured with respect to accelerated depreciation, investment tax credit, or other items subject to recapture;

(4) Maximum capital gain and/or ordinary income tax rates applicable to the transfer;

(5) Tentative tax owed;

(6) Amount of any increase or reduction of tax to which the transferor is subject, including any reduction to which the transferor is entitled under a provision of a U.S. income tax treaty as well as evidence supporting the adjustment claimed. See section 1.1445-3T(c)(2) of the temporary regulations.

(b) For purposes of calculating the maximum tax that may be imposed upon a disposition, unused credit carryovers shall not be taken into account, and net operating loss carry-overs (NOL) (see section 172 of the Code) may be taken into account only if:

(1) The transferor claiming the NOL has been engaged in a trade or business in the U.S. during the three preceding taxable years and has timely filed an income tax return for each of those years (copies of which should be attached);

(2) The claimed NOL has been reflected on previously-filed returns (No anticipated loss with respect to current-year operations may be considered.);

(3) The claimed NOL is not currently the subject of an examination by or a dispute with the Service;

(4) The transferor agrees that if the amount of gain that the transferor claimed would be offset by the NOL exceeds the amount of the gain realized upon the subject disposition that is in fact offset by the claimed NOL when the transferor files its tax return for the current tax year, then the transferor will pay interest upon the excess of the amount that would have been withheld if the actual offset had been claimed in the application over the amount, if any, actually withheld, which interest will be computed;

(A) at the rates and in the manner prescribed by sections 6621 and 6622; and

(B) with respect to the period between the date on which withholding would otherwise have been required and the date on which payment is made (For purposes of determining whether gain realized on the subject disposition was in fact offset by the claimed NOL, the NOL is deemed to have offset first income from sources other than the disposition of U.S. real property interests, then gain from such dispositions with respect to which a withholding certificate was issued in the order in which such dispositions occurred.);

(5) The claimed NOL has not previously been used to reduce withholding upon other dispositions of U.S. real property interests or to reduce the amount of any other obligation or liability under U.S. internal revenue laws;

(6) The NOL to be taken into account is computed without reference to any partnership losses that were recognized by the transferor with respect to any partnership interest of the transferor as a limited partner; and

(7) As part of the application, the transferor represents that:

(A) At least 80 percent of its gross income subject to U.S. taxation in the tax year of disposition will be derived from U.S. real property interests; and

(B) In calculating the maximum tax that may be imposed on the disposition, the application calculates the NOL in the manner prescribed by the provisions of this section 4.062(b), and the NOL is taken into account only to the extent permitted by such provisions.

3 TRANSFEROR'S UNSATISFIED WITHHOLDING LIABILITY. The applicant must provide a calculation of the transferor's unsatisfied withholding liability or evidence that it does not exist. That liability is the amount of any tax that the transferor was required to but did not withhold and pay over under section 1445 upon the acquisition of the subject U.S. real property interest or a predecessor interest. The transferor's unsatisfied withholding liability is included in the calculation of maximum tax liability so that such prior withholding liability can be satisfied by the transferee's withholding upon the current transfer. For further information see section 1.1445-3T(c)(3) of the temporary regulations. Evidence that the transferor has no unsatisfied withholding liability includes any one of the following items:

(a) Evidence that the transferor acquired the subject or predecessor real property interest prior to January 1, 1985;

(b) A copy of the Form 8288 that was filed by the transferor, and proof of payment of the amount shown due thereon, with respect to the transferor's acquisition of the subject or predecessor real property interest;

(c) A copy of a withholding certificate issued with respect to the transferor's acquisition of the subject or predecessor real property interest, plus a copy of Form 8288 and proof of payment with respect to any withholding required under that certificate;

(d) A copy of the nonforeign certification furnished by the person from whom the subject or predecessor U.S. real property interest was acquired, executed at the time of that acquisition;

(e) Evidence that the transferor purchased the subject or predecessor real property for $300,000 or less, and a statement, signed by the transferor under penalties of perjury, that the transferor purchased the property for use as a residence within the meaning of section 1.1445-2T(d)(1);

(f) Evidence that the person from whom the transferor acquired the subject or predecessor U.S. real property interest fully paid any tax imposed on that transaction pursuant to section 897;

(g) A copy of a notice of nonrecognition treatment provided to the transferor pursuant to section 1.1445-2T(d)(2) by the person from whom the transferor acquired the subject or predecessor U.S. real property interest; and

(h) A statement, signed by the transferor under penalties of perjury, setting forth the facts and circumstances that support the transferor's conclusion that no withholding was required under section 1445(a) with respect to the transferor's acquisition of the subject or predecessor real property interest.

07 INFORMATION CONCERNING CATEGORY 3 APPLICATIONS (INSTALLMENT SALE). See section 7 of this revenue procedure.

THE PAYMENT OF TAX WITH CONFORMING SECURITY). If a withholding certificate is sought on the basis of an agreement for the payment of tax, the application must include:

1 Information establishing:

(a) the transferor's maximum tax liability, in accordance with section 4.06; or

(b) The amount otherwise required to be withheld pursuant to section 1445(a).

2 A signed copy of the agreement proposed by the applicant; and

3 A copy of the security instrument proposed by the applicant. For further information concerning agreements for the payment of tax and security instruments, see sections 5 and 6 of this revenue procedure and section 1.1445-3T.

09 INFORMATION CONCERNING CATEGORY 5 APPLICATIONS (BLANKET WITHHOLDING CERTIFICATE). See section 9 of this revenue procedure.

10 INFORMATION CONCERNING CATEGORY 6 APPLICATIONS (NON-STANDARD APPLICATIONS).

1 AGREEMENT FOR PAYMENT OF TAX WITH NONCONFORMING SECURITY. If the applicant seeks to enter an agreement for the payment of tax but wishes to provide a nonconforming type of security, the application must include:

(a) The information required by section 4.08 concerning category 4 applications;

(b) A description of the nonconforming security proposed by the applicant; and

(c) A memorandum of law and facts establishing that the proposed security is valid and enforceable and that it adequately protects the government's interest.

2 OTHER NON-STANDARD APPLICATIONS. An application for a withholding certificate not otherwise described in this revenue procedure must explain in detail the proposed basis for the issuance of the certificate and set forth the reasons justifying the issuance of a certificate on that basis.

11 AVAILABILITY OF RECORDS. The applicant shall make available to the Director, Foreign Operations District, within the time prescribed by the Director all information that may be required by the Director in order to verify that representations relied upon by the Director in accepting the agreement are accurate, and that the obligations assumed by the applicant will be performed pursuant to the agreement. Failure to provide requested information promptly will usually result in rejection of the application. Instead of or in addition to such rejection, the Director, in his discretion, may also consider extension of an established target date for issuing a withholding certificate.

The parties shall agree that the review of books and records pursuant to the agreement shall not constitute an examination for purposes of section 7605(b) of the Code.

SEC. 5. AGREEMENT FOR THE PAYMENT OF TAX

01 IN GENERAL. The Service will issue a withholding certificate that excuses withholding or that permits a transferee to withhold a reduced amount if either the transferee or the transferor enters into an agreement for the payment of tax. An agreement for the payment of tax is a contract between the Service and any other person that consists of two necessary elements. Those elements are,

1 A contract between the Service and the other person, setting forth in detail the rights and obligations of each; and

2 A security instrument or other form of security acceptable to the Director, Foreign Operations District.

02 CONTENTS OF AGREEMENT-- IN GENERAL. An agreement for the payment of tax must either provide adequate security for the payment of the tax in accordance with section 6 of this revenue procedure or provide for the payment of the tax through a combination of security and withholding of tax by the transferee. The agreement must cover an amount described in subdivision (a) or (b) of this paragraph.

(a) TAX THAT WOULD OTHERWISE BE WITHHELD. An agreement for the payment of tax may cover the tax that would otherwise be required to be withheld pursuant to section 1445(a). In addition to securing the amount computed pursuant to section 1445(a), the agreement must provide that the applicant will pay interest upon that amount, at the rates and in the manner, prescribed by sections 6621 and 6622, with respect to the period between the date on which the agreement is entered into and the date on which the transferor's payment of tax with respect to the disposition will be due. Interest and additions to tax with respect to the tax must also be secured. In most instances, payments of interest and additions to tax may be secured by the same agreement that secures payment of taxes. At the discretion of the Director, however, separate security agreements may be required.

(b) MAXIMUM TAX LIABILITY. An agreement for the payment of tax may provide for the payment of the transferor's maximum tax liability, determined in accordance with section 4.062 of this revenue procedure. The agreement must also provide for the payment of an additional amount equal to 25 percent of the amount determined under section 4.062. This additional amount secures the interest and additions to tax that would accrue between the date of a failure to file a return and pay tax with respect to the disposition, and the date on which the Service collects the tax upon that liability pursuant to the agreement.

03 All agreements for the payment of tax will be between the Director, Foreign Operations District, and the applicant furnishing the security or personally guaranteeing payment of any tax later determined to be due. In addition, the Director may require as a signatory any other party deemed appropriate. The Director may require such other terms and conditions, or vary the format, as appropriate in the particular case, to provide adequate security.

04 The agreement for the payment of tax should state the purpose and basis of the agreement. It should also recite any warranties or representations upon which the Director, Foreign Operations District, will be required to place material reliance in accepting the agreement.

05 The agreement for the payment of tax must set forth in detail the obligations to be assumed and identify the nature of the security that is being offered. To the extent that the security is embodied in an instrument or document collateral to the agreement, such instrument or document must be incorporated by reference in the agreement.

06 SAMPLE AGREEMENT. The following sets forth the language of an agreement for the payment of tax that in most circumstances is acceptable to the Service:

        1 This agreement is entered into pursuant to the

01 There are four major types of security acceptable to the Service. These are:

1 BOND WITH SURETY OR GUARANTOR. The Service may accept as security with respect to a transferor's tax liability a bond that is executed with a satisfactory surety or guarantor. Only the following persons may act as surety or guarantor for this purpose:

(a) A surety company holding a certificate of authority from the Secretary as an acceptable surety on Federal bonds, as listed in Treasury Department Circular No. 570, published annually in the Federal Register on the first working day in July and as supplemented from time to time thereafter;

(b) A person that is engaged within or without the U.S. in the conduct of a banking, financing, or similar business under the principles of section 1.864-4(c)(5) of the regulations, and that is subject to U.S. or foreign (local or national) regulation of such business, if that person is otherwise acceptable to the Service; and

(c) A person that is engaged within or without the U.S. in the conduct of an insurance business that is subject to U.S. or foreign (local or national) regulation, if that person is otherwise acceptable to the Service.

2 BOND WITH COLLATERAL. The Service may accept as security with respect to a transferor's tax liability a bond that is secured by acceptable collateral. All collateral must be deposited with a responsible financial institution acting as escrow agent, or, in the Service's discretion, with the Service. Only the following types of collateral are acceptable:

(a) Bonds, notes, or other public debt obligations of the U.S., in accordance with the rules of 31 C.F.R Part 225; and

(b) A certified, cashier's, or treasurer's check, drawn on an entity acceptable to the Service that is engaged within or without the U.S. in the conduct of a banking, financing, or similar business under the principles of section 1.864-4(c)(5) of the regulations and that is subject to U.S. or foreign (local or national) regulation of such business.

3 LETTER OF CREDIT. The Service may accept as security with respect to a transferor's tax liability an irrevocable letter of credit issued by an entity acceptable to the Service that is engaged within or without the U.S. in the conduct of a banking, financing, or similar business under the principles of section 1.864-4(c)(5) of the regulations and that is subject to U.S. or foreign (local or national) regulation of such business. However, the Director, Foreign Operations District, will accept a letter of credit from an entity that is not engaged in a trade or business in the U.S. only if such letter may be drawn on an advising bank within the U.S.

4 GUARANTEE

The Service may accept as security with respect to a corporate transferor's tax liability a guarantee of the payment of such liability. The Service will accept such a guarantee only if (a) the corporation providing the guarantee is a corporation, foreign or domestic, any class of the stock of which is regularly traded on an established securities market on the date of the transfer; and (b) the corporation providing the guarantee (1) is the transferor or (2) holds, directly or indirectly, more than 80 percent of the voting stock of the transferor or (3) is engaged in a trade or business within the U.S.; and (c) has $25 million in gross assets in the U.S. in excess of the U.S. real property interest being disposed of.

5 OTHER FORMS OF SECURITY. The Service may in unusual circumstances and at its discretion accept any additional form of security that it finds to be adequate.

02 Listed below are sample forms of security instruments that in most circumstances are acceptable to the Service to be used when requesting a withholding certificate pursuant to section 1.1445-3T of the temporary regulations.

1 BOND WITH SURETY/GUARANTOR

     OBLIGATION. The undersigned,_____________________, the

OBLIGATION. The undersigned,________________, the Guarantor(s), is

I (we)_______________ do hereby constitute and appoint the Director,

______________, a corporation duly incorporated under the laws of the

                           Cable Address:

OBLIGATION. The undersigned,_____________ , the Guarantor(s), is (or

01 IN GENERAL. A transferee in a disposition of a U.S. real property interest occurring after December 31, 1984, is required to satisfy its withholding obligation based on the full amount of the sales price regardless of the amount of the payment by the transferee. If the transferor will report gain from the disposition under section 453 of the Code, a withholding certificate that permits the transferee to withhold at a reduced rate may be obtained under the rules of this section. No refund of the amount withheld will be made unless such a withholding certificate is obtained.

02 With respect to installment sales subject to withholding under section 1445(a), the Service will entertain requests for withholding certificates based on the transferee's agreement to do the following:

     1 Withhold and pay over 10 percent, or such lesser

01 IN GENERAL. Pursuant to the provisions of sections 1.1445-5T(c), (d), and (e) of the temporary regulations, withholding under section 1445(e) may be reduced or eliminated pursuant to a withholding certificate issued by the Service in accordance with the rules of section 1.1445-6T. A withholding certificate may be issued in cases where adjusted withholding is appropriate, where the relevant taxpayers are exempt from U.S. tax, or where an agreement for the payment of tax is entered into with the Service. The term "relevant taxpayer" shall mean any foreign person that will bear substantive income tax liability by reason of a transaction upon which withholding is required under section 1445(e) of the Code.

02 APPLICATIONS. An application for a withholding certificate pursuant to section 1.1445-6T of the temporary regulations must follow the format set forth in section 4.04 of this revenue procedure and provide the information described in sections 4.05 through 4.10, with the following adjustments:

       1 The application must include a preliminary item

         1 Withhold and pay over 10 percent, or such lesser

01 IN GENERAL. The Director, Foreign Operations District, may issue a withholding certificate (blanket withholding certificate) that excuses withholding with respect to multiple dispositions of U.S. real property interests by the transferor or the transferor's legal representative during a period of no more than 12 months. A blanket withholding certificate may be issued if the transferor holding the U.S. real property interests provides a letter of credit as specified in paragraph 1 of this subsection .01 and enters into an agreement with the Service that meets the requirements of paragraphs 2 and 3 of this subsection .01.

             1 The transferor must provide an irrevocable letter of

04 In the event of any failure by the transferor or the transferor's legal representative properly to notify the Director, in accordance with section 9.013, of a disposition of a U.S. real property interest, or either timely to file a return, timely to deposit estimated tax, or timely to pay tax with respect to the gain on one or more dispositions covered by the blanket withholding certificate, the letter of credit provided under section 9.011 may be drawn upon in full to the extent of the tax imposed by section 871(b)(1) or section 882(a)(1) of the Code, plus interest and additions to tax, if any, on any one or more dispositions covered by the blanket withholding certificate. This amount shall be in addition to any other civil or criminal penalties that may apply with respect to the applicant's use of the withholding certificate in violation of the terms thereof.

In any situation covered by this revenue procedure in which a person acts for or is designated as a legal representative of either a transferor or a transferee, such person must be authorized by either a general or a specific power of attorney on file with the Director, Foreign Operations District. Form 2848 may be used for this purpose.

Sec. 11. INQUIRIES

All inquiries should be addressed to:

            Director, Foreign Operations District

This revenue procedure is effective for all applications for withholding certificates submitted after September 3, 1985.