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Internal Revenue Code (IRC) 1446 Regulations modified Form 8804. This modification branched out the types of effectively
connected income allocable to a foreign partner from 35% to 35%, 28%, 25% and 15% as long as the foreign partner provides
the partnership with valid documentation (e.g. a Form W-8BEN).

Under this Section, there are two categories of income:

A partnership (not publicly traded) must make installment payments of withholding tax on its foreign partners share of effectively
connected taxable income whether or not distributions are made during the year.

The rules for making payments of amounts withheld under section 1441 for Fixed, Determinable, Annual, Periodical (FDAP) income
apply to the amount of section 1446 tax withheld by publicly traded partnerships.

The withholding tax rate on a partners share of effectively connected taxable income is generally the highest rate applicable
to that type of taxpayer. The highest rate is currently 35% for all types of foreign partners, as established by the Jobs and Growth Tax Relief Reconciliation Act (JGTRR) of 2003.

Recent IRC 1446 Regulations modified Form 8804 so withholding tax is determined by applying the highest tax rate applicable
to the partnerships four types on income, if the partnership receives valid documentation (e.g. a Form W-8BEN) from a partner
to which these rates apply. They are:

Final regulations under IRC 1446 (Section 1.1446-1 through -5 and -7) and Temporary regulations (Section 1.1446-6T) were published
on May 18, 2005. The final and temporary regulations are effective for partnership taxable years beginning after May 18, 2005.
However, a partnership may elect to apply the final regulations to partnership years beginning after December 31, 2004, and
before May 19, 2005, by attaching a statement to Form 8804 indicating that the partnership is making the election under Regulation
Section 1.1446-7. A partnership may also elect to apply the temporary regulations to partnership years beginning after December
31, 2004, and before May 19, 2005, by electing to apply the final regulations and electing under Regulation 1.1446-6(f) to
apply the regulations.

Section 1.1446-6T was finalized on April 29, 2008. The regulations are effective for partnership taxable years ending after
December 31, 2007. The final regulations have a transition rule providing that any certificate submitted on or after July
28, 2008, that met the requirements of the temporary regulations is not defective solely because it does not meet the requirements
of the final regulations. However, any certificate (including any updated certificates and status reports) submitted, or required
to be submitted, after July 28, 2008, must comply with the requirements of the final regulations and be submitted using Form
8804-C.

Form 8804 is due on or before the 15th day of the fourth month after the close of the partnerships taxable year. However, if the partnership
keeps its books and records outside of the United States and Puerto Rico (This is indicated by a checkbox in the upper right
corner of Form 8804), then the Return Due Date (RDD) is the 15th day of the sixth month after the close of the partnerships
taxable year. Therefore, a calendar year return would be due April 15th, or June 15th, respectively.

The National Taxpayer Advocate has reached agreements with the Commissioners of the Wage & Investment (W&I) Division, Small
Business & Self-Employed (SB/SE) Division, Tax Exempt & Government Entities (TE/GE) Division, Criminal Investigation (CI),
Appeals and Large & Mid-Size Business (LMSB) Division, that outline the procedures and responsibilities for the processing
of Taxpayer Advocate Service (TAS) casework when either the statutory or delegated authority to complete case transactions
rests outside of TAS. These agreements are known as Service Level Agreements (SLAs).

The SLAs are located at http://tas.web.irs.gov under the heading “Policy/Procedures/Guidance.”

Edit marks are edited on the return for transcription to the Automated Data Processing (ADP) System through Integrated Submission
and Remittance Processing (ISRP). The editing can be entered in brown, red, orange, purple or green pencil/pen.

The only items edited on the return are those to be transcribed except where specific instructions require editing of a non-transcribed
item. Lines are left blank if the entry would be a zero amount unless otherwise instructed.

The original entry on a return is never obliterated, altered or erased when deleting or correcting an entry. Always exercise
care to ensure that the original entry remains legible. Perfected entries provide a legible “edit trail”
for anyone who may work with the return later.

For a description of specific edit marks, see the table below:

Action Codes are used to indicate whether correspondence, research or some other action is needed. The Action Code will set
the suspense period to be assigned to the return and place the return in the workable or unworkable suspense inventory.

When necessary, a three-digit Action Code will be assigned by the tax examiner.

Edit the Action Code in the bottom left margin of the return.

Assign Action Codes in the following priority:

Attach Form 4227 when more than one Action Code is needed. Edit the second Action Code on Form 4227.

If more than one Action Code of the same priority is required (e.g., 440 and 480) edit the Action Code with the shortest suspense
period and attach Form 4227 to indicate the second unprocessable condition.

Edit the following Action Codes when a return cannot be perfected from the information present:

Continue perfecting the return after editing the Action Codes.

Valid Action Codes are listed below:

Reject any Form 8804 filed for tax period ending November 30, 2004, (200411) and prior.

Rejection Action:

Correspondence Imaging System (CIS) is an inventory system for scanning all Account Management (AM) receipts into digital
images and working the cases from those images.

“CIS”
returns are identified with “CIS Image-Do not correspond for Signature”
stamped below the signature line or “CIS”
annotated on the front of the return.

Verify all edit marks on a “CIS”
return.

Follow the instructions below for processing “CIS”
returns:

For returns completed in other than U.S. currency, process as filed. However, if corresponding for missing/incomplete item(s),
include in the letter to resubmit in U.S. currency.

Taxpayer inquiry requests an adjustment to another return:

If the attachment does not include the taxpayers name, address or Taxpayer Identification Number (TIN), enter this information
on the attachment.

If a tax authorization (Form 2848 or Form 8821) is attached to correspondence, review the correspondence to determine if other
requests are involved:

Other Unrelated Attachments:

Always include the following information when forwarding documents to other functions:

If an attachment is removed because the majority of the information is unrelated to the Form 8804 being processed:

All attachments to the return must be reviewed before the return can be considered processable.

Follow the general guidelines below for each attachment. The table contains routing instructions for specific forms and/or
documents attached to Form 8804:

An Amended return may be identified by checking the ” Amended”
box and/or by such words as “SUPPLEMENTAL,”
“DUPLICATE,”
“ADDITIONAL,”
or any other positive indication that the taxpayer has filed previously. Filing a “Copy”
of a return is not sufficient reason to label a return “Amended”
unless accompanied by a positive statement from the taxpayer.

Examine the return for attachments. Do not separate any related attachments from the return that the taxpayer has submitted
to explain the reason for the Amended return; this information will be used by Accounts Management. Detach any unrelated documents
and route them to the appropriate function using Form 4227. Edit Action Trail on the return.

There is an indication the return is amended and:

The following data must be edited on all amended returns:

The tax matters partner of a partnership subject to the unified partnership audit and litigation procedures of IRC 6221 -
6234 should file a Form 8082 (RAA) to amend the partnership Form 8804.

A return is normally delinquent if it is not received on or before the Return Due Date (RDD). However, accept the return as
timely filed if the received date is within the ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . See IRM 3.10.72,Extracting, Sorting, and Numbering.

Accept a return as timely if:

Consider a return timely if it appears that the Post Office might have sent it to another government agency in error, or if
the original envelope bears a timely postmark or a timely date stamp by that agency. However, if the return was erroneously
addressed to another agency, it will be date stamped with the current date when the IRS received it.

See IRM 3.21.15.6. for information on the due date of Form 8804.

If a return is delivered to the IRS after the date prescribed for filing, consider the following:

If the return is truly delinquent, check the return for attachments for an explanation of late filing. If the taxpayer attaches
correspondence with a reasonable cause explanation for failure to file, then take the following steps:

Compliance functions secure returns from the taxpayer and also prepare returns if the taxpayer does not provide them.

Form 3893, Re-entry Document Control, is used to reinput a return that has not posted to an account or module.

If more than one return is in the batch and only the top Form 3893 has an entry in Box 1 (Alpha/Numeric block control no.),
edit all returns using current processing instructions and keep all returns clipped together.

Circle the CCC “G”
if present.

Do not edit CCC “G”
on amended returns.

Do not send Letter 1382C if a request for reasonable cause is attached, because this responsibility belongs to the customer
service representative initiation the re-entry document.

If the return was not edited according to current processing instructions, circle any Action Codes, Computer Condition Codes
and any other edit marks that are no longer applicable. Re-edit according to current processing instructions.

If the return was edited according to current processing instruction, ensure that the information from Form 3893 is edited
on the return.

Examine returns that have any color other than red editing in the tax data section to determine if the corrections are the
result of improper perfection or taxpayer error.

A received date must be present on all Re-input returns:

When additional information is still needed to make the return processable, prepare Form 3696(or other approved Correspondence Action Sheet) or Form 4227 for the appropriate action (e.g., correspondence, research, etc.).

When perfection is not possible, attach Form 4227 noting, “PERFECTION NOT POSSIBLE”
and return to initiator.

Form 13596, Reprocessing Returns, is used to reprocess a return to the correct account or module that had previously posted
to the wrong account or module.

Circle CCC “G”
if present.

Do not edit CCC “G”
on amended returns.

Do not send Letter 1382C if a request for reasonable cause is attached, because this responsibility belongs to the customer
service representative initiation the re-entry document.

If the return was edited according to current processing instructions, ensure that the information from Form 13596 is edited
on the return.

Examine returns that have any color other than red editing in the tax data section to determine if the corrections are the
result of improper perfection or taxpayer error.

A received date must be present on all reprocessed returns:

Circle out the green rocker or green check and edit marks that may indicate a receipt of remittance.

Early-filed returns must be held for processing until the beginning of the appropriate processing year. Edit CCC “U”
, prepare Form 4227 and route to Rejects.

An early-filed Form 8804 for Tax Period 200912 (that is, filed before January 1, 2010) must be held for processing in 2010.

Any return with a received date that is 2 years and 9 months or more after the Return Due Date is a potential statute control
return. A Statute return must be routed to the Statute Control Unit daily or more often if needed.

Do not route to the Statute Control Unit for clearance if any of the following conditions are present:

Statute returns are unprocessable until they are cleared by Statute Control.

Once the document is returned by Statute, and it has been cleared by Statute, edit CCC “W.”

The Internal Revenue Code (IRC) states that the Internal Revenue Service (IRS) will assess, refund credit, and collect taxes
within specific time limits. These limits are known as Periods of Limitations. When they expire, we can no longer assess additional tax, allow a claim for refund by the taxpayer, nor take collection
action. There are different periods of limitations for Assessment, Refund, and Collection Statutes. The expiration of these periods is tracked separately.

The different periods of limitations expiration dates that are tracked are:

There are several conditions that may change the general Assessment Statute Expiration Date (ASED). They include:

In the case of a partnership subject to the unified partnership audit and litigation procedures of IRC 6221 – 6234, the issuance
of a notice of final partnership administrative adjustment suspends the statute under IRC 6229 (d). The partnership can also
extend its statute through a Form 872-I signed by a general partner on behalf of the partnership, or through a Form 872-P
signed by the tax matters partner.

Once a partnership issues Form 8805s to its partners, the partnership may not claim a refund for any amount of tax shown
on the Form 8805s as paid on behalf of the partners. Treasury Regulation Section 1.1446-3(d)(2)(iv).

If a partnership subject to the unified partnership audit and litigation procedures of IRC 6221 – 6234 is entitled to a refund,
it must file a refund request (Request for Administrative Adjustment – (RAA)) within 3 years of the filing of the partnership
return. Under IRC 6227(a), the RAA must be filed using a Form 8082. If a Form 872-P or Form 872-I statute extension is secured
from the partnership, the RAA can be filed within this extended period according to IRC 6227.

Refer to IRM 25.6, Statute of Limitations for additional Statute instructions.

The name control consists of the first four characters of the filers partnership name.

See Job Aid Document 7071A, Name Control Job Aid – For Use Outside the Entity Area, to determine the Name Control.

All Name Controls are to be underlined.

Edit the Name Control as follows:

The Employer Identification Number (EIN) is a nine digit number (XX-XXXXXXX) assigned to identify the foreign partnership.

The EIN is located on Line 1b or 2b.

Determine the EIN as follows:

Both domestic (U.S.) and foreign addresses should include:

When editing either the mailing or location address information, remember the following guidelines:

An “in-care-of”
name can be identified by the words “in care of”
or the symbols ” c/o”
or “%”
(percent).

Ensure the “in-care-of”
name is located above the street address.

A change in the “in-care-of”
name can be determined by any of the following:

Perfection of the address is necessary when the mailing address (Street or P.O. Box) is not easily identified.

The procedures for perfection of an address are as follows:

The U.S. Postal Service established new address requirements for Army Post Office (APO)/Fleet Post Office (FPO)/Diplomatic
Post Office(DPO) addresses. If the old address appears (i.e., APO New York, NY 091XX), convert to the new state code abbreviation based on
the ZIP Code (i.e., the previous example would be converted to APO AE 091XX). APO/FPO/DPO addresses are considered domestic addresses. Refer to conversion chart below:

This is a 35 character field. Valid characters are alpha (a-z) and numeric (0-9).

A foreign (international) address is any address that is not in the 50 states, the District of Columbia or any of the U.S.
Possessions.

Returns with APO FPO or DPO addresses are considered domestic addresses.

Route returns with a foreign address to Ogden Submission Processing Campus (OSPC) for processing. Prepare letter 86C to inform
the taxpayer that the return has been sent to OSPC.

Returns with addresses in the following U.S. Possessions are considered to be a foreign address for processing purposes but
are edited in the same way as domestic addresses.

All other foreign addresses are edited the same as a domestic address with the following exceptions:

The city must be present for both domestic and foreign addresses.

The valid characters are, alpha (a-z), blank.

Research the ZIP Code directory to determine the city and/or state if:

If the city and/or state cannot be determined from the ZIP Code or other available information (i.e., envelope, if attached),
edit the partnership address from Form 8805, Line 5c.

If the city listed is a major U.S. city, it must be followed by the Zip Code.

If the address is a foreign address which includes a Province designation,