Certain Foreign Persons and Certain Foreign-Owned Partnerships Investing in Qualified Opportunity Funds and Flexibility for Working Capital Safe Harbor Plans
ICR 202103-1545-022 · OMB 1545-2299 · Received in OIRA
Certain Foreign Persons and Certain Foreign-Owned Partnerships Investing in Qualified Opportunity Funds and Flexibility for Working Capital Safe Harbor Plans
New collection (Request for a new OMB Control Number)
No
Regular
04/14/2021
Requested
Previously Approved
36 Months From Approved
3,500
0
35,000
0
0
0
This document contains proposed regulations that include requirements that certain foreign persons and certain foreign-owned partnerships must meet in order to elect the Federal income tax benefits provided by section 1400Z-2 of the Internal Revenue Code (Code). This document also contains proposed regulations that allow, under certain circumstances, for the reduction or elimination of withholding under section 1445, 1446(a), or 1446(f) of the Code on transfers that give rise to gain that is deferred under section 1400Z-2(a). Finally, this document contains additional guidance regarding the 24-month extension of the working capital safe harbor in the case of Federally declared disasters. The proposed regulations affect qualified opportunity funds and their investors.
This is a new proposed rulemaking.
The estimated number of such transactions per year is 3,500. The IRS estimates that about 4 percent of partners in real estate partnerships are foreign persons. The Office of Tax Analysis has estimated that there could eventually be 55,000 to 120,000 investors in QOFs. Four percent of 55,000 to 120,000 would mean that there may be 2,200 to 4,800 foreign investors in QOFs. Only a subset of these foreign investors would be affected by these regulations because these regulations apply only to foreign investors who elect to invest in a QOF existing capital gains that arise from the specific transactions that are subject to withholding.
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
1545-XXXX SS Foreign OZones Requirements 2021-04-14.docx
Requirement to obtain eligibility certificate