# Rules relating to repeal of tax on interest of nonresident alien individuals and foreign corporations received from certain portfolio debt investments.
**AGENCY:**
Internal Revenue Service (IRS), Treasury.
**ACTION:**
Correcting amendment.
**SUMMARY:**
This document contains a correction to final regulations (TD 9323) that were published in the *Federal Register* on Thursday, April 12, 2007 (72 FR 18386) relating to the exclusion from gross income of portfolio interest paid to a nonresident alien individual or foreign corporation.
**DATES:**
The correction is effective May 10, 2007.
**FOR FURTHER INFORMATION CONTACT:**
Kathryn Holman of the Office of the Associate Chief Counsel (International), (202) 622-3840 (not a toll-free call).
**SUPPLEMENTARY INFORMATION:**
**Background**
The final regulations that are the subject of this correction are under sections 871 and 881 of the Internal Revenue Code.
**Need for Correction**
As published, final regulations (TD 9323) contain an error that may prove to be misleading and is in need of clarification.
**List of Subjects in 26 CFR Part 1**
Income taxes, Reporting and recordkeeping requirements.
**26 CFR Part 1**
**Correction of Publication**
Accordingly, 26 CFR part 1 is corrected by making the following correcting amendment:
**PART 1—INCOME TAXES**
*Paragraph 1.* The authority citation for part 1 continues to read in part as follows:
**Authority:**
26 U.S.C. 7805 * * *
**26 CFR Part 1**
*Par. 2.* Section 1.871-14 is amended by revising the second sentence of paragraph (g)(3)(ii) to read as follows:
§ 1.871-14
(g) * * *
(3) * * *
(ii) * * * For example, in the case of U.S. source interest paid by a domestic corporation to a domestic partnership or withholding foreign partnership (as defined in § 1.1441-5(c)(2)), the 10-percent shareholder test is applied when any distributions that include the interest are made to a foreign partner and, to the extent that a foreign partner's distributive share of the interest has not actually been distributed, on the earlier of the date that the statement required under section 6031(b) is mailed or otherwise provided to such partner, or the due date for furnishing such statement. * * *
LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration).