[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 153-160]
TITLE 26--INTERNAL REVENUE
CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
(CONTINUED)
Procedure and Administration--Table of Contents
Sec. 1.6038-2 Information returns required of United States persons
with respect to annual accounting periods of certain foreign corporations
beginning after December 31, 1962.
(a) Requirement of return. Every U.S. person shall make a separate
annual information return with respect to each annual accounting period
(described in paragraph (e) of this section) beginning after December
31, 1962, of each foreign corporation which that person controls (as
defined in paragraph (b) of this section) for an uninterrupted period of
30 days or more during such annual accounting period. Such information
shall not be required to be furnished, however, with respect to a
corporation defined in section 1504(d) of the Code which makes a
consolidated return for the taxable year. The return shall be made, with
respect to annual accounting periods ending with or within the United
States person's taxable year, on--
(1) Form 2952 if such taxable year ends before December 31, 1982,
(2) Form 5471 if such taxable year ends on or after December 31,
1983, or
(3) Either Form 5471 or Form 2952 if such taxable year ends on or
after December 31, 1982 and before December 31, 1963.
(b) Control. A person shall be deemed to be in control of a foreign
corporation if at any time during that person's taxable year it owns
stock possessing more than 50 percent of the total combined voting power
of all classes of stock entitled to vote, or more than 50 percent of the
total value of shares of all classes of stock of the foreign
corporation. A person in control of a corporation which, in turn, owns
more than 50 percent of the combined voting power, or of the value, of
all classes of stock of another corporation is also treated as being in
control of such other corporation. The provisions of this paragraph may
be illustrated by the following example:
Example. Corporation A owns 51 percent of the voting stock in
Corporation B. Corporation B owns 51 percent of the voting stock in
Corporation C. Corporation C in turn owns 51 percent of the voting stock
in Corporation D. Corporation D is controlled by Corporation A.
[[Page 154]]
(c) Attribution rules. For the purpose of determining control of
domestic or foreign corporations the constructive ownership rules of
section 318(a) shall apply except that:
(1) Stock owned by or for a partner or a beneficiary of an estate or
trust shall not be considered owned by the partnership, estate, or trust
when the effect is to consider a United States person as owning stock
owned by a person who is not a United States person;
(2) A corporation will not be considered as owning stock owned by or
for a 50 percent or more shareholder when the effect is to consider a
United States person as owning stock owned by a person who is not a
United States person; and
(3) If 10 percent or more in value of the stock in a corporation is
owned, directly or indirectly, by or for any person, section
318(a)(2)(C) shall apply.
The constructive ownership rules of section 318(a) apply only for
purposes of determining control as defined in paragraph (b) of this
section.
(d) U.S. person. For purposes of section 6038 and this section, the
term ``United States person'' has the meaning assigned to it by section
7701(a)(30) of the Code, except that--
(1) With respect to a corporation organized under the laws of the
Commonwealth of Puerto Rico, such term does not include an individual
who is a bona fide resident of Puerto Rico, if a dividened received by
such individual during the taxable year from such corporation would be
excluded from gross income under section 933(1),
(2) With respect to a corporation organized under the laws of the
Virgin Islands, such term does not include an individual who is a bona
fide resident of the Virgin Islands and whose income tax obligation
under Subtitle A (relating to income taxes) of the Code for the taxable
year is satisfied pursuant to section 28(a) of the Revised Organic Act
of the Virgin Islands, approved July 22, 1954 (48 U.S.C. 1642), by
paying tax on income derived from all sources both within and outside
the Virgin Islands into the treasury of the Virgin Islands,
(3) With respect to a corporation organized under the laws of Guam
or the Northern Mariana Islands, such term does not include an
individual who is a bona fide resident of Guam or the Northern Mariana
Islands, respectively, and who is relieved of liability for income tax
to the United States under section 935(c)(3) of the Code or section 601
of the Covenant to Establish a Commonwealth of the Northern Mariana
Islands in Political Union with the United States of America (Pub. L.
94-241), respectively, for such individual's taxable year referred to in
paragraph (e) of this section, and
(4) With respect to a corporation organized under the laws of any
possession of the United States (other than Guam, the Northern Mariana
Islands, Puerto Rico, or the Virgin Islands), such term does not include
an individual who is a bona fide resident of such possession for the
entire taxable year and whose income derived from sources within any
possession of the United States is not, by reason of section 931(a),
includible in gross income under subtitle A (relating to income taxes)
of the Code for the taxable year.
(5) For taxable years ending after December 31, 1987, with respect
to a corporation organized under the laws of American Samoa, the term
does not include an individual who is a bona fide resident of American
Samoa, provided--
(i) 80 percent or more of the gross income of the corporation for
the 3-year period ending at the close of the taxable year (or for such
part of such period as such corporation or any predecessor has been in
existence) was derived from sources within American Samoa or was
effectively connected with the conduct of a trade or business in
American Samoa; and
(ii) 50 percent or more of the gross income of such corporation for
such period (or part) was derived from the conduct of an active trade or
business within American Samoa.
An individual for whom an election under section 6013 (g) or (h) is in
effect shall, subject to the exceptions contained in this paragraph (d),
be considered a United States person for purposes of section 6038 and
this section.
(e) Period covered by return. The information required under
paragraphs (f) and (g) of this section with respect to a foreign
corporation shall be furnished
[[Page 155]]
for the annual accounting period of the foreign corporation ending with
or within the United States person's taxable year. For purposes of this
section, the annual accounting period of a foreign corporation is the
annual period on the basis of which that corporation regularly computes
its income in keeping its books. In the case of a specified foreign
corporation (as defined in section 898), the taxable year of such
corporation shall be treated as its annual accounting period. The term
annual accounting period may refer to a period of less than one year,
where, for example, the foreign income, war profits, and excess profits
taxes are determined on the basis of an accounting period of less than
one year as described in section 902(c)(5). If more than one annual
accounting period ends with or within the United States person's taxable
year, separate annual information returns shall be submitted for each
annual accounting period.
(f) Contents of return. The return on Form 2952 or Form 5471 shall
contain so much of the following information, and in such form or
manner, as the form shall prescribe with respect to each foreign
corporation:
(1) The name, address, and employer identification number, if any,
of the corporation;
(2) The principal place of business of the corporation;
(3) The date of incorporation and the country under whose laws
incorporated;
(4) The name and address of the foreign corporation's statutory or
resident agent in the country of incorporation;
(5) The name, address, and identifying number of any branch office
or agent of the foreign corporation located in the United States;
(6) The name and address of the person (or persons) having custody
of the books of account and records of the foreign corporation, and the
location of such books and records if different from such address;
(7) The nature of the corporation's business and the principal
places where conducted;
(8) As regards the outstanding stock of the corporation--
(i) A description of each class of the corporation's stock, and
(ii) The number of shares of each class outstanding at the beginning
and end of the annual accounting period;
(9) A list showing the name, address, and identifying number of, and
the number of shares of each class of the corporation's stock held by,
each United States person who is a shareholder owning at any time during
the annual accounting period 5 percent or more in value of any class of
the corporation's outstanding stock;
(10) For the annual accounting period, the amount of the
corporation's:
(i) Current earnings and profits;
(ii) Foreign income, war profits, and excess profits taxes paid or
accrued;
(iii) Distributions out of current earnings and profits for the
period;
(iv) Distributions other than those described in paragraph
(f)(10)(iii) of this section and the source thereof; and
(v) For Forms 5471 filed for taxable years ending after December 15,
1990, such earnings and profits information as the form shall prescribe,
including post-1986 undistributed earnings described in section
902(c)(1), pre-1987 amounts, total earnings and profits, and previously
taxed earnings and profits described in section 959(c); and
(11) A summary showing the total amount of each of the following
types of transactions of the corporation, which took place during the
annual accounting period, with the person required to file this return,
any other corporation controlled by that person, or any United States
person owning at the time of the transaction 10 percent or more in value
of any class of stock outstanding of the foreign corporation, or of any
corporation controlling that foreign corporation:
(i) Sales and purchases of stock in trade;
(ii) Purchases of tangible property other than stock in trade;
(iii) Sales and purchases of patents, inventions, models, or designs
(whether or not patented), copyrights, trademarks, secret formulas or
processes, or any other similar property rights;
(iv) Compensation paid and compensation received for the rendition
of technical, managerial, engineering,
[[Page 156]]
construction, scientific, or like services;
(v) Commission paid and commissions received;
(vi) Rents and royalties paid and rents and royalties received;
(vii) Amount loaned and amounts borrowed (except open accounts
resulting from sales and purchases reported under other items listed in
this paragraph (f)(11) that arise and are collected in full in the
ordinary course of business);
(viii) Dividends paid and dividends received;
(ix) Interest paid and interest received; and
(x) Premiums received for insurance or reinsurance.
For purposes of this paragraph (f)(11), if the United States person is a
bank, as defined in section 581, or is controlled within the meaning of
section 368(c) by a bank, the term ``transactions'' shall not, as to a
corporation with respect to which a return is filed, include banking
transactions entered into on behalf of customers; in any event, however,
deposits in accounts between a foreign corporation, controlled (within
the meaning of paragraph (b) of this section) by a United States person,
and a person described in this paragraph (f)(11) and withdrawals from
such accounts shall be summarized by reporting end-of-month balances.
(g) Financial statements. The following information with respect to
the foreign corporation shall be attached to and filed as part of the
return required by this section. Forms 5471 filed after September 30,
1991, shall contain this information in such form or manner as the form
shall prescribe with respect to each foreign corporation:
(1) A statement of the corporation's profit and loss for the annual
accounting period;
(2) A balance sheet as of the end of the annual accounting period of
the corporation showing--
(i) The corporation's asset;
(ii) The corporation's liabilities; and
(iii) The corporation's net worth; and
(3) An analysis of changes in the corporation's surplus accounts
during the annual accounting period including both opening and closing
balances.
The information listed in this paragraph (g) shall be prepared in
conformity with generally accepted accounting principles, and in such
detail as is customary for the corporation's accounting records.
(h) Method of reporting. Except as provided in this paragraph (h),
all amounts furnished under paragraphs (f) and (g) of this section shall
be expressed in United States dollars with a statement of the exchange
rates used. The following rules shall apply for taxable years ending
after December 31, 1994, with respect to returns filed after December
31, 1995. All amounts furnished under paragraph (g) of this section
shall be expressed in United States dollars computed and translated in
conformity with United States generally accepted accounting principles.
Amounts furnished under paragraph (g)(1) of this section shall also be
furnished in the foreign corporation's functional currency as required
on the form. Earnings and profits amounts furnished under paragraphs
(f)(10) (i), (iii), (iv), and (v) of this section shall be expressed in
the foreign corporation's functional currency except to the extent the
form requires specific items to be translated into United States
dollars. Tax amounts furnished under paragraph (f)(10)(ii) of this
section shall be furnished in the foreign currency in which the taxes
are payable and in United States dollars translated in accordance with
section 986(a). All amounts furnished under paragraph (f)(11) of this
section shall be expressed in U.S. dollars translated from functional
currency at the weighted average exchange rate for the year as defined
in Sec. 1.989(b)-1. The foreign corporation's functional currency is
determined under section 985. All statements submitted on or with the
return required under this section shall be rendered in the English
language.
(i) Time and place for filing return. Returns on Form 2952 or Form
5471 required under paragraph (a) of this section shall be filed with
the United States person's income tax return on or before the date
required by law for the filing of that person's income tax return.
District directors and directors of service centers are authorized to
grant reasonable extensions of time for
[[Page 157]]
filing returns on Form 2952 or Form 5471 in accordance with the
applicable provisions of Sec. 1.6081-1 of this chapter. An application
for an extension of time for filing a return of income shall also be
considered as an application for an extension of time for filing returns
on Form 2952 or Form 5471.
(j) Two or more persons required to submit the same information--(1)
Return jointly made. If two or more persons are required to furnish
information with respect to the same foreign corporation for the same
period, such persons may, in lieu of making separate returns, jointly
make one return. Such joint return shall be filed with the income tax
return of any one of the persons making such joint return.
(2) Persons excepted from furnishing information--(i) Conditions.
Any person required to furnish information under this section with
respect to a foreign corporation need not furnish that information
provided all of the following conditions are met:
(A) Such person does not directly own an interest in the foreign
corporation;
(B) Such person is required to furnish the information solely by
reason of attribution of stock ownership from a United States person
under paragraph (c) of this section; and
(C) The person from whom the stock ownership is attributed furnishes
all of the information required under this section of the person to whom
the stock ownership is attributed. (For a rule regarding attribution
from a nonresident alien, see paragraph (l) of this section).
(ii) If an individual who is a United States person required to
furnish information with respect to a foreign corporation under section
6038 is entitled under a treaty to be treated as a nonresident of the
United States, and if the individual claims this treaty benefit, and if
there are no other United States persons that are required to furnish
information under section 6038 with respect to the foreign corporation,
then the individual may satisfy the requirements of paragraphs (f)(10),
(f)(11), (g), and (h) of this section by filing the audited foreign
financial statements of the foreign corporation with the individual's
return required under section 6038.
(iii) Illustrations. The rule of this paragraph (j)(2) is
illustrated by the following examples:
Example (1). A, a U.S. person owns 100 percent of the stock of M, a
domestic corporation. A also owns 100 percent of the stock of N, a
foreign corporation organized under the laws of foreign country Y. A, in
filing the information return required by this section with respect to N
Corporation, in fact furnishes all of the information required of M
Corporation with respect to N Corporation. M Corporation need not file
the information.
Example (2). X, a domestic corporation owns 100 percent of the stock
of Y, a domestic corporation, Y Corporation owns 100 percent of the
stock of Z, a foreign corporation. X Corporation is not excused by this
paragraph (j)(2) from filing information with respect to Z Corporation
because X Corporation is deemed to control Z Corporation under the
provisions of paragraph (b) of this section without recourse to the
attribution rules in paragraph (c) of this section.
(3) Statement required. Any United States person required to furnish
information under this section with his return who does not do so by
reason of the provisions of paragraph (j)(1) or (2) of this section
shall file a statement with his income tax return indicating that such
liability has been (or, in the case of a joint return made under
paragraph (j)(1) of this section, will be) satisfied and identifying the
return with which the information was or will be filed and the place of
filing.
(k) Failure to furnish information--(1) Dollar amount penalty--(i)
In general. If any person required to file Form 2952 or Form 5471 under
section 6038 and this section fails to furnish any information described
in paragraphs (f) and (g) of this section within the time prescribed by
paragraph (i) of this section, such person shall pay a penalty of $1,000
for each annual accounting period of each foreign corporation with
respect to which such failure occurs.
(ii) Increase in penalty for continued failure after notification.
If a failure described in paragraph (k)(1)(i) of this section continues
for more than 90 days after the date on which the district director
mails notice of such failure to the person required to file Form 2952 or
Form 5471, such person shall pay a penalty of $1,000, in addition to the
penalty imposed by section 6038(b)(1) and
[[Page 158]]
paragraph (k)(1)(i) of this section, for each 30-day period (or fraction
thereof) during which such failure continues after such 90-day period
has expired. The additional penalty imposed by section 6038(b)(2) and
this paragraph (k)(1)(ii) shall be limited to a maximum of $24,000 for
each failure.
(iii) Effective date. The penalty imposed by section 6038(b) and
this paragraph (k)(1) shall apply with respect to information for annual
accounting periods ending after September 3, 1982.
(2) Penalty of reducing foreign tax credit--(i) Effect on foreign
tax credit. Failure of a United States person to furnish, in accordance
with the provisions of this section, any return or any information in
any return, required to be filed for a taxable year under authority of
section 6038 on or before the date prescribed in paragraph (i) of this
section may affect the application of section 901 as provided in
paragraph (k)(2)(ii) of this section and may affect the application of
sections 902 and 960 as provided in paragraph (k)(2)(iii) of this
section. Such failure may affect the application of sections 902 and 960
to any such United States person which is a corporation or to any person
who acquires from any other person any portion (but only to the extent
of such portion) of the interest of such other person in any such
foreign corporation.
(ii) Application of section 901. In the application of section 901
to a United States person referred to in paragraph (k)(2)(i) of this
section, the amount of taxes paid or deemed paid by such person for any
taxable year, with or within which the annual accounting peroid of a
foreign corporation for which such person failed to furnish information
required under this section ended, may be reduced by 10 percent.
However, no tax reduced under paragraph (k)(2)(iii) of this section or
deemed paid under section 904(c) shall be reduced under the provisions
of this paragraph (k)(2)(ii).
(iii) Application of sections 902 and 960. In the application of
sections 902 and 960 to a United States person referred to in paragraph
(k)(2)(i) of this section for any taxable year, the amount of taxes paid
or deemed paid by each foreign corporation for the accounting period or
periods for which such person was required for the taxable year of the
failure to furnish information under this section may be reduced by 10
percent. The 10-percent reduction is not limited to the taxes paid or
deemed paid by the foreign corporation with respect to which there is a
failure to file information but may apply to the taxes paid or deemed
paid by all foreign corporations controlled by that person. In applying
subsections (a) and (b) of section 902, and in applying subsection (a)
of section 960, the reduction provided by this paragraph (k)(2) shall
not apply for purposes of determining the amount of accumulated profits
in excess of income, war profits, and excess profits taxes.
(iv) Reduction for continued failure after notice. (A) If the
failure referred to in paragraph (k)(2)(i) of this section continues for
more than 90 days after the date on which the district director mails
notice of such failure to such United States person, then the amount of
the reduction referred to in paragraphs (k)(2) (ii) and (iii) of this
section may be 10 percent plus an additional 5 percent for each 3-month
period, or fraction thereof, during which such failure continues after
the expiration of such 90-day period.
(B) No taxes shall be reduced under this paragraph (k)(2) more than
once for the same failure. Taxes paid by a foreign corporation when once
reduced for a failure shall not be reduced again for the same failure in
their status as taxes deemed paid by a corporate shareholder. Where a
failure continues, each additional periodic 5-percent reduction,
referred to in paragraph (k)(2)(iv)(A) of this section, shall be
considered as part of the one reduction.
(v) Limitation on reduction of foreign tax credit. The amount of the
reduction under this paragraph (k)(2) for each failure to furnish
information with respect to a foreign corporation as required under this
section shall not exceed the greater of:
(A) $10,000, or
(B) The income of the foreign corporation for its annual accounting
period with respect to which the failure occurs. For purposes of this
section if a person is required to furnish information with respect to
more than one foreign corporation, controlled (within
[[Page 159]]
the meaning of paragraph (b) of this section) by that person, each
failure to submit information for each such corporation constitutes a
separate failure.
(vi) Offset for dollar amount penalty imposed. The total amount of
the reduction or reductions which, but for this paragraph (k)(2)(vi),
may be made under this paragraph (k)(2) with respect to any separate
failure, shall not exceed the maximum amount of such reductions which
may be imposed, reduced (but not below zero) by the amount of the dollar
amount penalty imposed by paragraph (k)(1) of this section with respect
to such separate failure.
(3) Reasonable cause. (i) For purposes of section 6038 (b) and (c)
and this section, the time prescribed for furnishing information under
paragraph (i) of this section, and the beginning of the 90-day period
after mailing of notice by the district director under paragraphs
(k)(1)(ii) and (2)(iv)(A) of this section, shall be treated as being not
earlier than the last day on which reasonable cause existed for failure
to furnish the information.
(ii) To show that reasonable cause existed for failure to furnish
information as required by section 6038 and this section, the person
required to report such information must make an affirmative showing of
all facts alleged as reasonable cause for such failure in a written
statement containing a declaration that it is made under the penalties
of prejury. The statement must be filed with the district director for
the district or the director of the service center where the return is
required to be filed. The district director or the director of the
service center shall determine whether the failure to furnish
information was due to reasonable cause, and if so, the period of time
for which such reasonable cause existed. In the case of a return that
has been filed as required by this section except for an omission of, or
error with respect to, some of the information required, if the person
who filed the return establishes to the satisfaction of the district
director or the director of the service center that the person has
substantially complied with this section, then the omission or error
shall not constitute a failure under this section.
(4) Other penalties. The information required by section 6038 and
this section must be furnished even though there are no foreign taxes
which would be reduced under the provisions of this section, and even
though the information required may not affect the amount of any tax due
under the Internal Revenue Code. For criminal penalties for failure to
file a return and filing a false or fraudulent return, see sections
7203, 7206, and 7207 of the Code.
(5) Illustrations. 1'The provisions of this paragraph may
be illustrated by the following examples.
Example (1). M, a domestic corporation owns 100 percent of the stock
of N, a foreign corporation. Both M and N use the calendar year as a
taxable year and annual accounting period, and all of the following
events occur in or with respect to the 1980 taxable year. The dividend
from N is the only dividend from a foreign corporation received by M
during the taxable year, and the foreign taxes listed are the only
foreign taxes paid or deemed paid by M and N for the taxable year. On
March 15, 1981, M filed its income tax return and paid its income tax,
but M did not file Form 2952 with respect to N's 1980 annual accounting
period. On June 1, 1961, the district director mailed notice to M of M's
failure to file Form 2952 with respect to N. On November 30, 1981, M
filed a complete Form 2952 with respect to N's 1980 annual accounting
period.
(a) Gains, profits, and income of N........................ $100,000
(b) Foreign tax paid by N with respect to such gains, 40,000
profits, and income.......................................
(c) Reduction of foreign tax paid by N (for purposes of M's 6,000
section 902 deemed paid credit) resulting from M's failure
to file information with respect to N as required under
section 6038(a) and this section: failure to file within
the time prescribed in paragraph (i) of this section, 10-
percent reduction; continued failure for one additional 3-
month period after 90-day period after notice mailed, 5-
percent reduction; total reduction, 15 percent ($40,000
times 15 percent).........................................
(d) Foreign tax paid by N after section 6038(c)(1)(B) 34,000
reduction.................................................
(e) Dividend paid by N to M................................ 45,000
(f) Accumulated profits of N as defined in section 100,000
902(c)(1) (determined without regard to the section
6038(c)(1)(B) reduction)..................................
[[Page 160]]
(g) Accumulated profits of N as described in section 902(a) 60,000
(determined without regard to the section 6038(c)(1)(B)
reduction)................................................
(h) For purposes of the section 902 credit, M is deemed to 25,500
have paid the same proportion of foreign taxes paid
(reduced as provided under section 6038(c)) with respect
to the accumulated profits described in section 902(a)
(determined without regard to the reduction provided under
section 6038(c)) as the amount of the dividend (determined
without regard to section 78) bears to such amount of
accumulated profits.......................................
(45,000/60,000)x34,000=25,500.......................
M must include $25,500 in gross income as a dividend under the
provisions of section 78 of the Code. This example illustrates that the
reductions in foreign taxes paid by the foreign corporation provided
under section 8038(c) are taken into account in determining the amount
included in gross income of the domestic corporation under section 78 of
the Code as foreign taxes deemed paid, but such reductions are not taken
into account in computing accumulated profits for purposes of
determining the portion of foreign taxes deemed paid with respect to a
particular dividend. The dollar amount penalty imposed by section 8038
(b) and paragraph (k)(1) of this section does not apply with respect to
information for annual accounting periods ending before September 4,
1982, and therefore does not apply to M with respect to M's failure to
file Form 2952 in this example.
Example (2). The facts are the same as in example (1) except that
all of the events occur in or with respect to the 1982 taxable year. On
March 15, 1983. M filed its income tax return and paid its income tax,
but M did not file Form 2952 or Form 5471 with respect to N's 1982
annual accounting period. On June 1, 1983, the district director mailed
notice to M of M's failure to file Form 2952 or Form 5471 with respect
to N. On November 30, 1983, M filed a complete Form 5471 with respect to
N's 1982 annual accounting period. Under paragraph (k)(1)(i) of this
section, M is subject to a penalty of $1,000. Under paragraph (k)(1)(ii)
of this section, that penalty is increased by $4,000 because the failure
continued for 92 days (three full 30-day periods and a fraction of a
fourth 30-day period) after the end of the 90-day period following
mailing of the notice by the district director, bringing M's dollar
amount penalty under paragraph (k)(1) of this section to $5,000. For
purpose of determining the foreign tax credit available to M, there may
be imposed a reduction of foreign tax paid by N of $6,000, which would
be the total of reductions under paragraph (k)(2) of this section with
respect to M's failure to file under section 6038 for N's 1982 annual
accounting period, before application of paragraph (k)(2)(vi) of this
section. Under said paragraph (k)(2)(vi), the amount of the foreign tax
reduction imposed is reduced by the amount of the dollar amount penalty,
leaving a foreign tax reduction penalty of $1,000 which may be imposed
in addition to the $5,000 dollar amount penalty. If imposed, the $1,000
tax reduction would then be applied in the calculation of taxes deemed
paid by M under section 902 as in example (1), items (c), (d), and (h).
(l) Other persons excepted from filing. For tax years of foreign
corporations ending on or after December 29, 1999, any person required
to furnish information under this section with respect to a foreign
corporation does not have to furnish that information if the following
conditions are met--
(1) Such person does not own a direct or indirect interest in the
foreign corporation; and
(2) Such person is required to furnish information solely by reason
of attribution of stock ownership from a nonresident alien(s) under
paragraph (c) of this section.
[T.D. 8040, 50 FR 30163, July 24, 1985, as amended by T.D. 8573, 59 FR
64302, Dec. 14, 1994; T.D. 8733, 62 FR 53385, Oct. 14, 1997; T.D. 8850,
64 FR 72550, Dec. 28, 1999]