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Trusts - USA Taxation of Foreign Trusts

Question or Topic

What is the recent IRS position on income taxation of foreign trusts?

The Answer

TD 8955, 26 CFR Part 1, July 9, 2001

[4830-01-P]

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 8955]

RIN 1545-A075

Foreign Trusts That Have U.S. Beneficiaries

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

SUMMARY: This document contains final regulations under section 679 of

the Internal Revenue Code relating to transfers of property by U.S.

persons to foreign trusts having one or more United States beneficiaries.

The final regulations affect United States persons who transfer property

to foreign trusts.

DATES: Effective Date: These regulations are effective July 20, 2001.

Applicability Date: For dates of applicability, see section 1.679-7.

FOR FURTHER INFORMATION CONTACT: Willard W. Yates at (202) 622-3880

(not a toll-free number).

SUPPLEMENTARY INFORMATION:

BACKGROUND

On August 7, 2000, the IRS and Treasury published a notice of proposed

rulemaking (REG-209038-89) in the Federal Register (65 FR 48185) inviting

comments relating to the treatment of U.S. persons who transfer property

to foreign trusts that have one or more U.S. beneficiaries. Comments

responding to the notice of proposed rulemaking were received and a public

hearing was held on November 8, 2000. After consideration of all of the

comments, the proposed regulations are adopted as revised by this Treasury

decision. The revisions are discussed below.

Explanation of Provisions

Comments Relating to section 1.679-2: Trusts Treated as Having a

U.S. Beneficiary

A. Benefit to a U.S. Person

Under section 1.679-2(a)(1) of the proposed regulations, a foreign

trust that has received property from a U.S. transferor is treated as

having a U.S. beneficiary unless during the taxable year of the U.S.

transferor both of the following tests are satisfied: (i) no part of the

income or corpus of the trust may be paid or accumulated to or for the

benefit of, either directly or indirectly, a U.S. person; and (ii) if the

trust is terminated at any time during the taxable year, no part of the

income or corpus of the trust could be paid to or for the benefit of,

either directly or indirectly, a U.S. person.

Section 1.679-2(a)(2)(i) of the proposed regulations provides that, for

purposes of applying these tests, income or corpus is considered to be

paid or accumulated to or for the benefit of a U.S. person during a

taxable year of the U.S. transferor if during that year, directly or

indirectly, income may be distributed to, or accumulated for the benefit

of a U.S. person, or corpus may be distributed to, or held for the future

benefit of, a U.S. person. This determination is made without regard to

whether income or corpus is actually distributed to a U.S. person during

that year, and without regard to whether a U.S. person’s interest in the

trust income or corpus is contingent on a future event. The proposed

regulations provide a narrow exception with respect to certain contingent

beneficiaries whose interests in the trust are so remote as to be

negligible.

One commenter suggests that section 1.679-2(a)(2) of the proposed

regulations (specifically, Example 5 of section 1.679-2(a)(2)(iii)) is

overly broad. The commenter suggests that a foreign trust should not be

treated as having a U.S. beneficiary where the trust’s only asset consists

of stock of a foreign corporation, the trust will terminate one year after

the death of a U.S. transferor, whereupon distributions of corpus or

income may be made to a U.S. person, and the trust receives no income from

the corporation during the term of its existence. The commenter argues

that because the foreign trust receives no income from the foreign

corporation during the trust’s existence, the U.S. person’s status as a

beneficiary provides the U.S. person with nothing of value and, therefore,

the foreign trust should not be treated as having a U.S. beneficiary.

The commenter’s argument overlooks the clear legislative intent

underlying section 679 that a foreign trust will be treated as having a

U.S. beneficiary even in situations where there exists only the

possibility of distribution of income or corpus to or the accumulation of

corpus for the benefit of a U.S. person. H.R. Rep. No. 658, 94th Cong.,

1st Sess., at 210 (1975). The fact that a foreign trust holds an asset,

such as the stock of a foreign corporation, that produces no income during

the term of the trust’s existence is of no import for purposes of

determining whether the trust will be treated as having a U.S.

beneficiary. The determining factor in such a situation is that the trust

holds corpus for the future benefit of a U.S. person, regardless of

whether the corpus consists of stock with respect to which no dividends

have been paid or some other asset that produces no current income.

Accordingly, the final regulations adopt the rule of the proposed

regulations.

B. RECORDS AND DOCUMENTS

Section 1.679-2(a)(4) of the proposed regulations provides that a trust

may be treated as having a U.S. beneficiary by reference, inter alia, to

written and oral agreements and understandings not contained in the trust

document, and to whether the terms of the trust instrument are actually or

reasonably expected to be disregarded by the parties to the trust. A

commenter states that this rule creates new and unclear rules for purposes

of determining whether an arrangement constitutes a trust for Federal

income tax purposes.

The determination as to whether an arrangement will be treated as a

trust is made pursuant to the rules set forth in section 301.7701-4 of the

regulations. The regulations under section 679 address only the

determination of whether a foreign trust will be treated as having a U.S.

beneficiary. The final regulations are not intended to provide factors in

addition to the rules of section 301.7701-4 for purposes of determining

whether an arrangement constitutes a trust for Federal income tax

purposes.

C. TRUSTS ACQUIRING A U.S. BENEFICIARY

The proposed regulations anticipate situations where the beneficiary of

a foreign trust may change. Section 1.679-2(c)(1) of the proposed

regulations provides that if a foreign trust is not treated as having a

U.S. beneficiary (within the meaning of section 1.679-2(a)) but

subsequently is treated as having a U.S. beneficiary, the U.S. transferor

is treated as having additional income in the first taxable year of the

U.S. transferor in which the trust is treated as having a U.S.

beneficiary. The amount of the additional income is equal to the trust's

undistributed net income, as defined in section 665(a), at the end of the

U.S. transferor’s immediately preceding taxable year and is subject to the

rules of section 668, providing for an interest charge on accumulation

distributions from foreign trusts.

A commenter suggests that the rule treating the U.S. transferor as

having additional income in the first year the foreign trust acquires the

U.S. beneficiary exceeds the authority of section 679, noting that in most

cases the transferor will not have received any income from the trust.

Section 1.679-2(c)(1) of the proposed regulations follows closely the

legislative history underlying section 679 regarding the U.S. transferor’s

recognition of additional income. The legislative history provides that

the amount of the additional income shall be the foreign trust’s

undistributed net income, i.e., accumulated income that would be taxable

to a beneficiary upon distribution, as of the close of the immediately

preceding taxable year. H.R. Rep. No. 658, 94th Cong., 1st Sess., at 211,

Fn. 13 (1975). In short, the legislative history provides that the U.S.

transferor’s additional income shall receive the same treatment as

accumulation distributions to beneficiaries of a foreign trust.

Accumulated income distributions to beneficiaries of foreign trusts are

subject to the interest charge provided for in section 668. Accordingly,

the provision for additional income in section 1.679-2(c)(1) of the final

regulations, as well as the application of the interest charge provided

for in section 668, are necessary to carry out the legislative purpose of

section 679. The rule of the proposed regulations is adopted by the final

regulations without change.

COMMENTS RELATING TO SECTION 1.679-3: TRANSFERS

A. INDIRECT TRANSFERS - PRINCIPAL PURPOSE OF TAX AVOIDANCE

Section 1.679-3(a) of the proposed regulations broadly defines the term

transfer as any direct, indirect, or constructive transfer by a U.S.

person to a foreign trust. Section 1.679-3(c) of the proposed regulations

provides rules for determining when there is an indirect transfer. Under

section 1.679-3(c)(1) of the proposed regulations, a transfer to a foreign

trust by any person to whom a U.S. person transfers property (referred to

as an intermediary) is treated as an indirect transfer by a U.S. person if

the transfer is made pursuant to a plan one of the principal purposes of

which is the avoidance of U.S. tax. Section 1.679-3(c)(2) of the proposed

regulations deems a transfer to have been made pursuant to such a plan if

certain conditions are present.

The deemed-principal-purpose test of section 1.679-3(c)(2) of the

proposed regulations is similar to the deemed-principal-purpose test in

section 1.643(h)-1(a) of the regulations, which concerns distributions

from foreign trusts to U.S. persons through intermediaries, except that

the presumption in the proposed regulations applies without regard to the

period of time between the transfer from the U.S. person to the

intermediary and from the intermediary to the foreign trust. In contrast,

the deemed-principal-purpose test of section 1.643(h)-1(a)(2)(ii) applies

only if property is distributed to the U.S. person during the period

beginning 24 months before and ending 24 months after the intermediary’s

receipt of property from the foreign trust. A commenter suggests that a

similar time limit should be provided in section 1.679-3(c)(2) with

respect to outbound transfers.

In the context of section 643(h), Treasury and the IRS weighed the

potential for abuse in that area against the possible adverse effect that

the deemed-principal-purpose test could have on legitimate transactions,

and concluded that a time limitation in section 1.643(h)-1(a)(2) was

appropriate. However, Treasury and the IRS believe the potential for

abuse is greater in the case of outbound transfers to foreign trusts than

in the case of inbound trust distributions to U.S. beneficiaries.

Congress enacted section 679 in order to prevent the tax-free accumulation

of income earned by foreign trusts over long periods of time that provided

foreign trusts with an unwarranted advantage over domestic trusts. H.R.

Rep. No. 658, 94th Cong., 1st Sess., at 207 (1975). Providing for a time

limitation to the application of section 1.679-3(c) could allow for easy

circumvention of Congress’ purpose in enacting section 679. Treasury and

the IRS recognize that some transfers that were not intended to avoid U.S.

tax may come within the presumption in the absence of a specific time

limit. However, under such circumstances section 1.679-3(c)(2)(ii)

provides taxpayers with a way to rebut the application of the deemed-

principal-purpose test. Therefore, the final regulations do not include a

time limitation to the application of section 1.679-3(c)(2)(i).

B. INDIRECT TRANSFERS - CORPORATE DISTRIBUTIONS

One commenter asked about the application of the indirect transfer

rules set forth in section 1.679-3(c) of the proposed regulations to

successive corporate distributions up a chain of wholly-owned corporations

to an ultimate shareholder that is a foreign trust. The commenter

expressed concern that, if one of the lower-tier corporations were a

domestic corporation, section 1.679-3(c) of the proposed regulations could

potentially treat the distributions as an indirect transfer from the

domestic corporation to the foreign trust that would be subject to the

general rule of section 1.679-1.

Even if the distributions were characterized as an indirect transfer

from a domestic corporation to a foreign trust under section 1.679-3(c),

the indirect transfer would generally be treated as a transfer for fair

market value under the final sentence of section 1.679-4(b)(1) and would

therefore be excepted from the general rule of section 1.679-1 pursuant to

section 1.679-4(a)(4). Therefore, no special rules have been added to the

final regulations to address this situation.

C. TRANSFERS TO ENTITIES OWNED BY FOREIGN TRUSTS

Section 1.679-3(f) of the proposed regulations provides specific rules

regarding transfers by a U.S. person to an entity owned by a foreign trust

if the U.S. person is related to the foreign trust. The transfer is

treated as a transfer from the U.S. person to the foreign trust, followed

by a transfer from the foreign trust to the entity owned by the foreign

trust, unless the U.S. person demonstrates to the satisfaction of the

Commissioner that the transfer to the entity is properly attributable to

the U.S. person’s ownership interest in the entity. A commenter noted

potential conflicts with this rule and judicial doctrines concerning

constructive corporate distributions.

Section 1.679-3(f) is not intended to override judicial doctrines

concerning constructive corporate distributions. For example, if judicial

doctrines would recharacterize a direct transfer of property by a domestic

corporation to an entity owned by a foreign trust as a constructive

dividend of the property to the domestic corporation’s shareholder

followed by a constructive transfer of the property by that shareholder to

the foreign trust and a constructive contribution by the foreign trust to

the entity owned by the foreign trust, then those judicial doctrines would

apply (and section 1.679-3(f) would not apply) to the transaction.

COMMENTS RELATING TO SECTION 1.679-4: EXCEPTIONS TO GENERAL RULE -

TRANSFERS TO TRUSTS DESCRIBED IN SECTION 501(c)(3)

Section 1.679-4(a)(3) of the proposed regulations provides an exception

to the general rule of section 1.679-1 for transfers to a foreign trust

that has already received a ruling or determination letter from the IRS

recognizing the trust’s tax exempt status under section 501(c)(3),

provided that the letter has been neither revoked nor modified.

Commenters questioned the requirement that a foreign trust obtain a ruling

or determination letter from the IRS recognizing the trust’s tax exempt

status under section 501(c)(3). They assert that the requirement may

interfere with a U.S. person’s ability to make contributions to a foreign

charitable entity that may not be familiar with U.S. tax laws and may not

have any reason to obtain a determination letter from the IRS. They

suggest that the final regulations require only that the U.S. transferor

disclose to the IRS, at such time and in such manner as the IRS may

provide, that the transfer has been made and that the transferor believes

the transferee is an organization described in section 501(c)(3).

In response to commenters’ concerns, the final regulations eliminate

the requirement that the foreign trust receive a ruling or determination

letter from the IRS recognizing the trust’s tax-exempt status under

section 501(c)(3). The final regulations provide instead that the general

rule of section 1.679-1 does not apply to any transfer of property to a

foreign trust that is described in section 501(c)(3). However, taxpayers

should be aware that, under Notice 97-34 (1997-1 C.B. 422), the U.S.

transferor has a reporting obligation on Form 3520 with respect to such a

transfer, unless the foreign trust has received a ruling or determination

letter from the IRS recognizing the trust’s tax exempt status under

section 501(c)(3). Moreover, if the IRS subsequently determines that the

foreign trust is not described in section 501(c)(3), the exception will

not apply for any taxable year of the U.S. transferor, and the U.S.

transferor may be subject to interest and penalties, if applicable.

CLARIFICATION REGARDING SECTION 958

The final regulations clarify the language of section 1.958-1(b) of the

proposed regulations with respect to persons who are treated as owners

under sections 671 through 679 of any portion of a foreign trust that

includes the stock of a foreign corporation.

SPECIAL ANALYSES

It has been determined that this Treasury decision is not a significant

regulatory action as defined in Executive Order 12866. Therefore, a

regulatory assessment is not required. It also has been determined that

section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5)

does not apply to these regulations and, because the regulations do not

impose a collection of information on small entities, the Regulatory

Flexibility Act (5 U.S.C. chapter 6) does not apply. Therefore, a

Regulatory Flexibility Analysis is not required. Pursuant to section

7805(f) of the Internal Revenue Code, the notice of proposed rulemaking

preceding these regulations was submitted to the Chief Counsel for

Advocacy of the Small Business Administration for comment on its impact on

small businesses.

Drafting Information

The principal author of these final regulations is Willard W. Yates of

the Office of Associate Chief Counsel (International). However, other

personnel from the IRS and Treasury Department participated in their

development.

LIST OF SUBJECTS IN 26 CFR PART 1

Income taxes, Reporting and recordkeeping requirements.

ADOPTION OF AMENDMENTS TO THE REGULATIONS

Accordingly, 26 CFR part 1 is amended as follows:

PART 1--INCOME TAXES

Paragraph 1. The authority citation for part 1 is amended by adding

entries in numerical order to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

Section 1.679-1 also issued under 26 U.S.C. 643(a)(7) and 679(d).

Section 1.679-2 also issued under 26 U.S.C. 643(a)(7) and 679(d).

Section 1.679-3 also issued under 26 U.S.C. 643(a)(7) and 679(d).

Section 1.679-4 also issued under 26 U.S.C. 643(a)(7), 679(a)(3) and

679(d).

Section 1.679-5 also issued under 26 U.S.C. 643(a)(7) and 679(d).

Section 1.679-6 also issued under 26 U.S.C. 643(a)(7) and 679(d).

* * *

Par. 2. Sections 1.679-0, 1.679-1, 1.679-2, 1.679-3, 1.679-4, 1.679-5,

1.679-6, and 1.679-7 are added under the undesignated center heading

“Grantors and Others Treated as Substantial Owners” to read as follows:

SECTION 1.679-0 OUTLINE OF MAJOR TOPICS.

This section lists the major paragraphs contained in sections 1.679-1

through 1.679-7 as follows:

SECTION 1.679-1 U.S. TRANSFEROR TREATED AS OWNER OF FOREIGN TRUST.

(a) In general.

(b) Interaction with sections 673 through 678.

(1) U.S. transferor.

(2) U.S. person.

(3) Foreign trust.

(4) Property.

(5) Related person.

(6) Obligation.

(d) Examples.

SECTION 1.679-2 TRUSTS TREATED AS HAVING A U.S. BENEFICIARY.

(a) Existence of U.S. beneficiary.

(1) In general.

(2) Benefit to a U.S. person

(i) In general.

(ii) Certain unexpected beneficiaries.

(iii) Examples.

(3) Changes in beneficiary’s status.

(i) In general.

(ii) Examples.

(4) General rules.

(i) Records and documents.

(ii) Additional factors.

(iii) Examples.

(b) Indirect U.S. beneficiaries.

(1) Certain foreign entities.

(2) Other indirect beneficiaries.

(3) Examples.

of U.S. beneficiary.

(1) Trusts acquiring a U.S. beneficiary.

(2) Trusts ceasing to have a U.S. beneficiary.

(3) Examples.

SECTION 1.679-3 TRANSFERS.

(a) In general.

(b) Transfers by certain trusts.

(1) In general.

(2) Example.

(1) Principal purpose of tax avoidance.

(2) Principal purpose of tax avoidance deemed to exist.

(3) Effect of disregarding intermediary.

(i) In general.

(ii) Special rule.

(iii) Effect on intermediary.

(4) Related parties.

(5) Examples.

(d) Constructive transfers.

(1) In general.

(2) Examples.

(e) Guarantee of trust obligations.

(1) In general.

(2) Amount transferred.

(3) Principal repayments.

(4) Guarantee.

(5) Examples.

(f) Transfers to entities owned by a foreign trust.

(1) General rule.

(2) Examples.

SECTION 1.679-4 EXCEPTIONS TO GENERAL RULE.

(a) In general.

(b) Transfers for fair market value.

(1) In general.

(2) Special rule.

(i) Transfers for partial consideration.

(ii) Example.

(d) Qualified obligations.

(1) In general.

(2) Additional loans.

(3) Obligations that cease to be qualified.

(4) Transfers resulting from failed qualified obligations.

(5) Renegotiated loans.

(6) Principal repayments.

(7) Examples.

SECTION 1.679-5 PRE-IMMIGRATION TRUSTS.

(a) In general.

(b) Special rules.

(1) Change in grantor trust status.

(2) Treatment of undistributed income.

SECTION 1.679-6 OUTBOUND MIGRATIONS OF DOMESTIC TRUSTS.

(a) In general.

(b) Amount deemed transferred.

SECTION 1.679-7 EFFECTIVE DATES.

(a) In general.

(b) Special rules.

SECTION 1.679-1 U.S. TRANSFEROR TREATED AS OWNER OF FOREIGN TRUST.

(a) In general. A U.S. transferor who transfers property to a foreign

trust is treated as the owner of the portion of the trust attributable to

the property transferred if there is a U.S. beneficiary of any portion of

the trust, unless an exception in section 1.679-4 applies to the transfer.

(b) Interaction with sections 673 through 678. The rules of this

section apply without regard to whether the U.S. transferor retains any

power or interest described in sections 673 through 677. If a U.S.

transferor would be treated as the owner of a portion of a foreign trust

pursuant to the rules of this section and another person would be treated

as the owner of the same portion of the trust pursuant to section 678,

then the U.S. transferor is treated as the owner and the other person is

not treated as the owner.

section and sections 1.679-2 through 1.679-7:

(1) U.S. transferor. The term U.S. transferor means any U.S. person

who makes a transfer (as defined in section 1.679-3) of property to a

foreign trust.

(2) U.S. person. The term U.S. person means a United States person as

defined in section 7701(a)(30), a nonresident alien individual who elects

under section 6013(g) to be treated as resident of the United States, and

an individual who is a dual resident taxpayer within the meaning of

section 301.7701(b)-7(a) of this chapter.

(3) Foreign trust. Section 7701(a)(31)(B) defines the term foreign

trust. See also section 301.7701-7 of this chapter.

(4) Property. The term property means any property including cash.

(5) Related person. A person is a related person if, without regard to

the transfer at issue, the person is--

(i) A grantor of any portion of the trust (within the meaning of

section 1.671-2(e)(1));

(ii) An owner of any portion of the trust under sections 671 through

679;

(iii) A beneficiary of the trust; or

(iv) A person who is related (within the meaning of section

643(i)(2)(B)) to any grantor, owner or beneficiary of the trust.

(6) Obligation. The term obligation means any bond, note, debenture,

certificate, bill receivable, account receivable, note receivable, open

account, or other evidence of indebtedness, and, to the extent not

previously described, any annuity contract.

(d) Examples. The following examples illustrate the rules of paragraph

(a) of this section. In these examples, A is a resident alien, B is A's

son, who is a resident alien, C is A’s father, who is a resident alien, D

is A's uncle, who is a nonresident alien, and FT is a foreign trust. The

examples are as follows:

EXAMPLE 1. INTERACTION WITH SECTION 678. A creates and funds FT. FT may

provide for the education of B by paying for books, tuition, room and

board. In addition, C has the power to vest the trust corpus or income in

himself within the meaning of section 678(a)(1). Under paragraph (b) of

this section, A is treated as the owner of the portion of FT attributable

to the property transferred to FT by A and C is not treated as the owner

thereof.

EXAMPLE 2. U.S. PERSON TREATED AS OWNER OF A PORTION OF FT. D creates

and funds FT for the benefit of B. D retains a power described in section

676 and section 1.672(f)-3(a)(1). A transfers property to FT. Under

sections 676 and 672(f), D is treated as the owner of the portion of FT

attributable to the property transferred by D. Under paragraph (a) of

this section, A is treated as the owner of the portion of FT attributable

to the property transferred by A.

SECTION 1.679-2 TRUSTS TREATED AS HAVING A U.S. BENEFICIARY.

(a) Existence of U.S. beneficiary--(1) In general. The determination

of whether a foreign trust has a U.S. beneficiary is made on an annual

basis. A foreign trust is treated as having a U.S. beneficiary unless

during the taxable year of the U.S. transferor--

(i) No part of the income or corpus of the trust may be paid or

accumulated to or for the benefit of, directly or indirectly, a U.S.

person; and

(ii) If the trust is terminated at any time during the taxable year, no

part of the income or corpus of the trust could be paid to or for the

benefit of, directly or indirectly, a U.S. person.

(2) BENEFIT TO A U.S. PERSON--(i) In general. For purposes of paragraph

(a)(1) of this section, income or corpus may be paid or accumulated to or

for the benefit of a U.S. person during a taxable year of the U.S.

transferor if during that year, directly or indirectly, income may be

distributed to, or accumulated for the benefit of, a U.S. person, or

corpus may be distributed to, or held for the future benefit of, a U.S.

person. This determination is made without regard to whether income or

corpus is actually distributed to a U.S. person during that year, and

without regard to whether a U.S. person’s interest in the trust income or

corpus is contingent on a future event.

(ii) Certain unexpected beneficiaries. Notwithstanding paragraph

(a)(2)(i) of this section, for purposes of paragraph (a)(1) of this

section, a person who is not named as a beneficiary and is not a member of

a class of beneficiaries as defined under the trust instrument is not

taken into consideration if the U.S. transferor demonstrates to the

satisfaction of the Commissioner that the person’s contingent interest in

the trust is so remote as to be negligible. The preceding sentence does

not apply with respect to persons to whom distributions could be made

pursuant to a grant of discretion to the trustee or any other person. A

class of beneficiaries generally does not include heirs who will benefit

from the trust under the laws of intestate succession in the event that

the named beneficiaries (or members of the named class) have all deceased

(whether or not stated as a named class in the trust instrument).

(iii) Examples. The following examples illustrate the rules of

paragraphs (a)(1) and (2) of this section. In these examples, A is a

resident alien, B is A's son, who is a resident alien, C is A's daughter,

who is a nonresident alien, and FT is a foreign trust. The examples are

as follows:

EXAMPLE 1. DISTRIBUTION OF INCOME TO U.S. PERSON. A transfers property

to FT. The trust instrument provides that all trust income is to be

distributed currently to B. Under paragraph (a)(1) of this section, FT is

treated as having a U.S. beneficiary.

EXAMPLE 2. INCOME ACCUMULATION FOR THE BENEFIT OF A U.S. PERSON. In

2001, A transfers property to FT. The trust instrument provides that from

2001 through 2010, the trustee of FT may distribute trust income to C or

may accumulate the trust income. The trust instrument further provides

that in 2011, the trust will terminate and the trustee may distribute the

trust assets to either or both of B and C, in the trustee’s discretion.

If the trust terminates unexpectedly prior to 2011, all trust assets must

be distributed to C. Because it is possible that income may be

accumulated in each year, and that the accumulated income ultimately may

be distributed to B, a U.S. person, under paragraph (a)(1) of this section

FT is treated as having a U.S. beneficiary during each of A’s tax years

from 2001 through 2011. This result applies even though no U.S. person

may receive distributions from the trust during the tax years 2001 through

2010.

EXAMPLE 3. CORPUS HELD FOR THE BENEFIT OF A U.S. PERSON. The facts are

the same as in Example 2, except that from 2001 through 2011, all trust

income must be distributed to C. In 2011, the trust will terminate and

the trustee may distribute the trust corpus to either or both of B and C,

in the trustee’s discretion. If the trust terminates unexpectedly prior

to 2011, all trust corpus must be distributed to C. Because during each

of A’s tax years from 2001 through 2011 trust corpus is held for possible

future distribution to B, a U.S. person, under paragraph (a)(1) of this

section FT is treated as having a U.S. beneficiary during each of those

years. This result applies even though no U.S. person may receive

distributions from the trust during the tax years 2001 through 2010.

EXAMPLE 4. DISTRIBUTION UPON U.S. TRANSFEROR’S DEATH. A transfers

property to FT. The trust instrument provides that all trust income must

be distributed currently to C and, upon A’s death, the trust will

terminate and the trustee may distribute the trust corpus to either or

both of B and C. Because B may receive a distribution of corpus upon the

termination of FT, and FT could terminate in any year, FT is treated as

having a U.S. beneficiary in the year of the transfer and in subsequent

years.

EXAMPLE 5. DISTRIBUTION AFTER U.S. TRANSFEROR’S DEATH. The facts are the

same as in Example 4, except the trust instrument provides that the trust

will not terminate until the year following A’s death. Upon termination,

the trustee may distribute the trust assets to either or both of B and C,

in the trustee’s discretion. All trust assets are invested in the stock

of X, a foreign corporation, and X makes no distributions to FT. Although

no U.S. person may receive a distribution until the year after A’s death,

and FT has no realized income during any year of its existence, during

each year in which A is living corpus may be held for future distribution

to B, a U.S. person. Thus, under paragraph (a)(1) of this section FT is

treated as having a U.S. beneficiary during each of A’s tax years from

2001 through the year of A’s death.

EXAMPLE 6. CONSTRUCTIVE BENEFIT TO U.S. PERSON. A transfers property to

FT. The trust instrument provides that no income or corpus may be paid

directly to a U.S. person. However, the trust instrument provides that

trust corpus may be used to satisfy B’s legal obligations to a third party

by making a payment directly to the third party. Under paragraphs (a)(1)

and (2) of this section, FT is treated as having a U.S. beneficiary.

EXAMPLE 7. U.S. PERSON WITH NEGLIGIBLE CONTINGENT INTEREST. A transfers

property to FT. The trust instrument provides that all income is to be

distributed currently to C, and upon C’s death, all corpus is to be

distributed to whomever of C’s three children is then living. All of C’s

children are nonresident aliens. Under the laws of intestate succession

that would apply to FT, if all of C’s children are deceased at the time of

C’s death, the corpus would be distributed to A’s heirs. A’s living

relatives at the time of the transfer consist solely of two brothers and

two nieces, all of whom are nonresident aliens, and two first cousins, one

of whom, E, is a U.S. citizen. Although it is possible under certain

circumstances that E could receive a corpus distribution under the

applicable laws of intestate succession, for each year the trust is in

existence A is able to demonstrate to the satisfaction of the Commissioner

under paragraph (a)(2)(ii) of this section that E’s contingent interest in

FT is so remote as to be negligible. Provided that paragraph (a)(4) of

this section does not require a different result, FT is not treated as

having a U.S. beneficiary.

EXAMPLE 8. U.S. PERSON WITH NON-NEGLIGIBLE CONTINGENT INTEREST. A

transfers property to FT. The trust instrument provides that all income

is to be distributed currently to D, A’s uncle, who is a nonresident

alien, and upon A’s death, the corpus is to be distributed to D if he is

then living. Under the laws of intestate succession that would apply to

FT, B and C would share equally in the trust corpus if D is not living at

the time of A’s death. A is unable to demonstrate to the satisfaction of

the Commissioner that B’s contingent interest in the trust is so remote as

to be negligible. Under paragraph (a)(2)(ii) of this section, FT is

treated as having a U.S. beneficiary as of the year of the transfer.

EXAMPLE 9. U.S. PERSON AS MEMBER OF CLASS OF BENEFICIARIES. A transfers

property to FT. The trust instrument provides that all income is to be

distributed currently to D, A’s uncle, who is a nonresident alien, and

upon A’s death, the corpus is to be distributed to D if he is then living.

If D is not then living, the corpus is to be distributed to D’s

descendants. D’s grandson, E, is a resident alien. Under paragraph

(a)(2)(ii) of this section, FT is treated as having a U.S. beneficiary as

of the year of the transfer.

EXAMPLE 10. TRUSTEE’S DISCRETION IN CHOOSING BENEFICIARIES. A transfers

property to FT. The trust instrument provides that the trustee may

distribute income and corpus to, or accumulate income for the benefit of,

any person who is pursuing the academic study of ancient Greek, in the

trustee’s discretion. Because it is possible that a U.S. person will

receive distributions of income or corpus, or will have income accumulated

for his benefit, FT is treated as having a U.S. beneficiary. This result

applies even if, during a tax year, no distributions or accumulations are

actually made to or for the benefit of a U.S. person. A may not invoke

paragraph (a)(2)(ii) of this section because a U.S. person could benefit

pursuant to a grant of discretion in the trust instrument.

EXAMPLE 11. APPOINTMENT OF REMAINDER BENEFICIARY. A transfers property

to FT. The trust instrument provides that the trustee may distribute

current income to C, or may accumulate income, and, upon termination of

the trust, trust assets are to be distributed to C. However, the trust

instrument further provides that D, A’s uncle, may appoint a different

remainder beneficiary. Because it is possible that a U.S. person could be

named as the remainder beneficiary, and because corpus could be held in

each year for the future benefit of that U.S. person, FT is treated as

having a U.S. beneficiary for each year.

EXAMPLE 12. TRUST NOT TREATED AS HAVING A U.S. BENEFICIARY. A transfers

property to FT. The trust instrument provides that the trustee may

distribute income and corpus to, or accumulate income for the benefit of

C. Upon termination of the trust, all income and corpus must be

distributed to C. Assume that paragraph (a)(4) of this section is not

applicable under the facts and circumstances and that A establishes to the

satisfaction of the Commissioner under paragraph (a)(2)(ii) of this

section that no U.S. persons are reasonably expected to benefit from the

trust. Because no part of the income or corpus of the trust may be paid

or accumulated to or for the benefit of, either directly or indirectly, a

U.S. person, and if the trust is terminated no part of the income or

corpus of the trust could be paid to or for the benefit of, either

directly or indirectly, a U.S. person, FT is not treated as having a U.S.

beneficiary.

EXAMPLE 13. U.S. BENEFICIARY BECOMES NON-U.S. PERSON. In 2001, A

transfers property to FT. The trust instrument provides that, as long as

B remains a U.S. resident, no distributions of income or corpus may be

made from the trust to B. The trust instrument further provides that if B

becomes a nonresident alien, distributions of income (including previously

accumulated income) and corpus may be made to him. If B remains a U.S.

resident at the time of FT’s termination, all accumulated income and

corpus is to be distributed to C. In 2007, B becomes a nonresident alien

and remains so thereafter. Because income may be accumulated during the

years 2001 through 2007 for the benefit of a person who is a U.S. person

during those years, FT is treated as having a U.S. beneficiary under

paragraph (a)(1) of this section during each of those years. This result

applies even though B cannot receive distributions from FT during the

years he is a resident alien and even though B might remain a resident

alien who is not entitled to any distribution from FT. Provided that

paragraph (a)(4) of this section does not require a different result and

that A establishes to the satisfaction of the Commissioner under paragraph

(a)(2)(ii) of this section that no other U.S. persons are reasonably

expected to benefit from the trust, FT is not treated as having a U.S.

beneficiary under paragraph (a)(1) of this section during tax years after

2007.

(3) Changes in beneficiary’s status--

(i) In general. For purposes of paragraph (a)(1) of this section, the

possibility that a person that is not a U.S. person could become a U.S.

person will not cause that person to be treated as a U.S. person for

purposes of paragraph (a)(1) of this section until the tax year of the

U.S. transferor in which that individual actually becomes a U.S. person.

However, if a person who is not a U.S. person becomes a U.S. person for

the first time more than 5 years after the date of a transfer to the

foreign trust by a U.S. transferor, that person is not treated as a U.S.

person for purposes of applying paragraph (a)(1) of this section with

respect to that transfer.

(ii) Examples. The following examples illustrate the rules of

paragraph (a)(3) of this section. In these examples, A is a resident

alien, B is A's son, who is a resident alien, C is A's daughter, who is a

nonresident alien, and FT is a foreign trust. The examples are as

follows:

EXAMPLE 1. NON-U.S. BENEFICIARY BECOMES U.S. PERSON. In 2001, A

transfers property to FT. The trust instrument provides that all income

is to be distributed currently to C and that, upon the termination of FT,

all corpus is to be distributed to C. Assume that paragraph (a)(4) of

this section is not applicable under the facts and circumstances and that

A establishes to the satisfaction of the Commissioner under paragraph

(a)(2)(ii) of this section that no U.S. persons are reasonably expected to

benefit from the trust. Under paragraph (a)(3)(i) of this section, FT is

not treated as having a U.S. beneficiary during the tax years of A in

which C remains a nonresident alien. If C first becomes a resident alien

in 2004, FT is treated as having a U.S. beneficiary commencing in that

year under paragraph (a)(3) of this section. See paragraph (c) of this

section regarding the treatment of A upon FT’s acquisition of a U.S.

beneficiary.

EXAMPLE 2. NON-U.S. BENEFICIARY BECOMES U.S. PERSON MORE THAN 5 YEARS

AFTER TRANSFER. The facts are the same as in Example 1, except C first

becomes a resident alien in 2007. FT is treated as not having a U.S.

beneficiary under paragraph (a)(3)(i) of this section with respect to the

property transfer by A. However, if C had previously been a U.S. person

during any prior period, the 5-year exception in paragraph (a)(3)(i) of

this section would not apply in 2007 because it would not have been the

first time C became a U.S. person.

(4) General rules--

(i) Records and documents. Even if, based on the terms of the trust

instrument, a foreign trust is not treated as having a U.S. beneficiary

within the meaning of paragraph (a)(1) of this section, the trust may

nevertheless be treated as having a U.S. beneficiary pursuant to paragraph

(a)(1) of this section based on the following--

(A) All written and oral agreements and understandings relating to the

trust;

(B) Memoranda or letters of wishes;

corpus; and

(D) All other documents that relate to the trust, whether or not of any

purported legal effect.

(ii) Additional factors. For purposes of determining whether a foreign

trust is treated as having a U.S. beneficiary within the meaning of

paragraph (a)(1) of this section, the following additional factors are

taken into account--

(A) If the terms of the trust instrument allow the trust to be amended

to benefit a U.S. person, all potential benefits that could be provided to

a U.S. person pursuant to an amendment must be taken into account;

(B) If the terms of the trust instrument do not allow the trust to be

amended to benefit a U.S. person, but the law applicable to a foreign

trust may require payments or accumulations of income or corpus to or for

the benefit of a U.S. person (by judicial reformation or otherwise), all

potential benefits that could be provided to a U.S. person pursuant to the

law must be taken into account, unless the U.S. transferor demonstrates to

the satisfaction of the Commissioner that the law is not reasonably

expected to be applied or invoked under the facts and circumstances; and

instrument, or if it is reasonably expected that they will do so, all

benefits that have been, or are reasonably expected to be, provided to a

U.S. person must be taken into account.

(iii) Examples. The following examples illustrate the rules of

paragraph (a)(4) of this section. In these examples, A is a resident

alien, B is A's son, who is a resident alien, C is A's daughter, who is a

nonresident alien, and FT is a foreign trust. The examples are as

follows:

EXAMPLE 1. AMENDMENT PURSUANT TO LOCAL LAW. A creates and funds FT for

the benefit of C. The terms of FT (which, according to the trust

instrument, cannot be amended) provide that no part of the income or

corpus of FT may be paid or accumulated during the taxable year to or for

the benefit of any U.S. person, either during the existence of FT or at

the time of its termination. However, pursuant to the applicable foreign

law, FT can be amended to provide for additional beneficiaries, and there

is an oral understanding between A and the trustee that B can be added as

a beneficiary. Under paragraphs (a)(1) and (a)(4)(ii)(B) of this section,

FT is treated as having a U.S. beneficiary.

EXAMPLE 2. ACTIONS IN VIOLATION OF THE TERMS OF THE TRUST. A transfers

property to FT. The trust instrument provides that no U.S. person can

receive income or corpus from FT during the term of the trust or at the

termination of FT. Notwithstanding the terms of the trust instrument, a

letter of wishes directs the trustee of FT to provide for the educational

needs of B, who is about to begin college. The letter of wishes contains

a disclaimer to the effect that its contents are only suggestions and

recommendations and that the trustee is at all times bound by the terms of

the trust as set forth in the trust instrument. Under paragraphs (a)(1)

and (a)(4)(ii)(C) of this section, FT is treated as having a U.S.

beneficiary.

(b) Indirect U.S. beneficiaries--

(1) Certain foreign entities. For purposes of paragraph (a)(1) of

this section, an amount is treated as paid or accumulated to or for the

benefit of a U.S. person if the amount is paid to or accumulated for the

benefit of--

(i) A controlled foreign corporation, as defined in section 957(a);

(ii) A foreign partnership, if a U.S. person is a partner of such

partnership; or

(iii) A foreign trust or estate, if such trust or estate has a U.S.

beneficiary (within the meaning of paragraph (a)(1) of this section).

(2) Other indirect beneficiaries. For purposes of paragraph (a)(1) of

this section, an amount is treated as paid or accumulated to or for the

benefit of a U.S. person if the amount is paid to or accumulated for the

benefit of a U.S. person through an intermediary, such as an agent or

nominee, or by any other means where a U.S. person may obtain an actual or

constructive benefit.

(3) Examples. The following examples illustrate the rules of this

paragraph (b). Unless otherwise noted, A is a resident alien. B is A’s

son and is a resident alien. FT is a foreign trust. The examples are as

follows:

EXAMPLE 1. TRUST BENEFITTING FOREIGN CORPORATION. A transfers property

to FT. The beneficiary of FT is FC, a foreign corporation. FC has

outstanding solely 100 shares of common stock. B owns 49 shares of the FC

stock and FC2, also a foreign corporation, owns the remaining 51 shares.

FC2 has outstanding solely 100 shares of common stock. B owns 49 shares

of FC2 and nonresident alien individuals own the remaining 51 FC2 shares.

FC is a controlled foreign corporation (as defined in section 957(a),

after the application of section 958(a)(2)). Under paragraphs (a)(1) and

(b)(1)(i) of this section, FT is treated as having a U.S. beneficiary.

EXAMPLE 2. TRUST BENEFITTING ANOTHER TRUST. A transfers property to FT.

The terms of FT permit current distributions of income to B. A transfers

property to another foreign trust, FT2. The terms of FT2 provide that no

U.S. person can benefit either as to income or corpus, but permit current

distributions of income to FT. Under paragraph (a)(1) of this section, FT

is treated as having a U.S. beneficiary and, under paragraphs (a)(1) and

(b)(1)(iii) of this section, FT2 is treated as having a U.S. beneficiary.

EXAMPLE 3. TRUST BENEFITTING ANOTHER TRUST AFTER TRANSFEROR’S DEATH. A

transfers property to FT. The terms of FT require that all income from FT

be accumulated during A’s lifetime. In the year following A’s death, a

share of FT is to be distributed to FT2, another foreign trust, for the

benefit of B. Under paragraphs (a)(1) and (b)(1)(iii) of this section, FT

is treated as having a U.S. beneficiary beginning with the year of A’s

transfer of property to FT.

EXAMPLE 4. INDIRECT BENEFIT THROUGH USE OF DEBIT CARD. A transfers

property to FT. The trust instrument provides that no U.S. person can

benefit either as to income or corpus. However, FT maintains an account

with FB, a foreign bank, and FB issues a debit card to B against the

account maintained by FT and B is allowed to make withdrawals. Under

paragraphs (a)(1) and (b)(2) of this section, FT is treated as having a

U.S. beneficiary.

EXAMPLE 5. OTHER INDIRECT BENEFIT. A transfers property to FT. FT is

administered by FTC, a foreign trust company. FTC forms IBC, an

international business corporation formed under the laws of a foreign

jurisdiction. IBC is the beneficiary of FT. IBC maintains an account with

FB, a foreign bank. FB issues a debit card to B against the account

maintained by IBC and B is allowed to make withdrawals. Under paragraphs

(a)(1) and (b)(2) of this section, FT is treated as having a U.S.

beneficiary.

loss of U.S. beneficiary--

(1) Trusts acquiring a U.S. beneficiary. If a foreign trust to which

a U.S. transferor has transferred property is not treated as having a U.S.

beneficiary (within the meaning of paragraph (a) of this section) for any

taxable year of the U.S. transferor, but the trust is treated as having a

U.S. beneficiary (within the meaning of paragraph (a) of this section) in

any subsequent taxable year, the U.S. transferor is treated as having

additional income in the first such taxable year of the U.S. transferor in

which the trust is treated as having a U.S. beneficiary. The amount of

the additional income is equal to the trust's undistributed net income, as

defined in section 665(a), at the end of the U.S. transferor’s immediately

preceding taxable year and is subject to the rules of section 668,

providing for an interest charge on accumulation distributions from

foreign trusts.

(2) Trusts ceasing to have a U.S. beneficiary. If, for any taxable

year of a U.S. transferor, a foreign trust that has received a transfer of

property from the U.S. transferor ceases to be treated as having a U.S.

beneficiary, the U.S. transferor ceases to be treated as the owner of the

portion of the trust attributable to the transfer beginning in the first

taxable year following the last taxable year of the U.S. transferor during

which the trust was treated as having a U.S. beneficiary (unless the U.S.

transferor is treated as an owner thereof pursuant to sections 673 through

677). The U.S. transferor is treated as making a transfer of property to

the foreign trust on the first day of the first taxable year following the

last taxable year of the U.S. transferor during which the trust was

treated as having a U.S. beneficiary. The amount of the property deemed

to be transferred to the trust is the portion of the trust attributable to

the prior transfer to which paragraph (a)(1) of this section applied. For

rules regarding the recognition of gain on transfers to foreign trusts,

see section 684.

(3) Examples. The rules of this paragraph (c) are illustrated by the

following examples. A is a resident alien, B is A’s son, and FT is a

foreign trust. The examples are as follows:

EXAMPLE 1. TRUST ACQUIRING U.S. BENEFICIARY. (i) In 2001, A transfers

stock with a fair market value of $100,000 to FT. The stock has an

adjusted basis of $50,000 at the time of the transfer. The trust

instrument provides that income may be paid currently to, or accumulated

for the benefit of, B and that, upon the termination of the trust, all

income and corpus is to be distributed to B. At the time of the transfer,

B is a nonresident alien. A is not treated as the owner of any portion of

FT under sections 673 through 677. FT accumulates a total of $30,000 of

income during the taxable years 2001 through 2003. In 2004, B moves to

the United States and becomes a resident alien. Assume paragraph (a)(4)

of this section is not applicable under the facts and circumstances.

(ii) Under paragraph (c)(1) of this section, A is treated as receiving

an accumulation distribution in the amount of $30,000 in 2004 and

immediately transferring that amount back to the trust. The accumulation

distribution is subject to the rules of section 668, providing for an

interest charge on accumulation distributions.

(iii) Under paragraphs (a)(1) and (3) of this section, beginning in

2005, A is treated as the owner of the portion of FT attributable to the

stock transferred by A to FT in 2001 (which includes the portion

attributable to the accumulated income deemed to be retransferred in

2004).

EXAMPLE 2. TRUST CEASING TO HAVE U.S. BENEFICIARY. (i) The facts are

the same as in Example 1. In 2008, B becomes a nonresident alien. On the

date B becomes a nonresident alien, the stock transferred by A to FT in

2001 has a fair market value of $125,000 and an adjusted basis of $50,000.

(ii) Under paragraph (c)(2) of this section, beginning in 2009, FT is

not treated as having a U.S. beneficiary, and A is not treated as the

owner of the portion of the trust attributable to the prior transfer of

stock. For rules regarding the recognition of gain on the termination of

ownership status, see section 684.

SECTION 1.679-3 TRANSFERS.

(a) In general. A transfer means a direct, indirect, or constructive

transfer.

(b) Transfers by certain trusts--

(1) In general. If any portion of a trust is treated as owned by a

U.S. person, a transfer of property from that portion of the trust to a

foreign trust is treated as a transfer from the owner of that portion to

the foreign trust.

(2) Example. The following example illustrates this paragraph (b):

EXAMPLE. In 2001, A, a U.S. citizen, creates and funds DT, a domestic

trust. A has the power to revest absolutely in himself the title to the

property in DT and is treated as the owner of DT pursuant to section 676.

In 2004, DT transfers property to FT, a foreign trust. A is treated as

having transferred the property to FT in 2004 for purposes of this

section.

(1) Principal purpose of tax avoidance. A transfer to a foreign trust

by any person (intermediary) to whom a U.S. person transfers property is

treated as an indirect transfer by a U.S. person to the foreign trust if

such transfer is made pursuant to a plan one of the principal purposes of

which is the avoidance of United States tax.

(2) Principal purpose of tax avoidance deemed to exist. For purposes

of paragraph (c)(1) of this section, a transfer is deemed to have been

made pursuant to a plan one of the principal purposes of which was the

avoidance of United States tax if--

(i) The U.S. person is related (within the meaning of paragraph (c)(4)

of this section) to a beneficiary of the foreign trust, or has another

relationship with a beneficiary of the foreign trust that establishes a

reasonable basis for concluding that the U.S. transferor would make a

transfer to the foreign trust; and

(ii) The U.S. person cannot demonstrate to the satisfaction of the

Commissioner that--

(A) The intermediary has a relationship with a beneficiary of the

foreign trust that establishes a reasonable basis for concluding that the

intermediary would make a transfer to the foreign trust;

(B) The intermediary acted independently of the U.S. person;

applicable United States agency principles; and

(D) The intermediary timely complied with the reporting requirements of

section 6048, if applicable.

(3) Effect of disregarding intermediary--

(i) In general. Except as provided in paragraph (c)(3)(ii) of this

section, if a transfer is treated as an indirect transfer pursuant to

paragraph (c)(1) of this section, then the intermediary is treated as an

agent of the U.S. person, and the property is treated as transferred to

the foreign trust by the U.S. person in the year the property is

transferred, or made available, by the intermediary to the foreign trust.

The fair market value of the property transferred is determined as of the

date of the transfer by the intermediary to the foreign trust.

(ii) Special rule. If the Commissioner determines, or if the taxpayer

can demonstrate to the satisfaction of the Commissioner, that the

intermediary is an agent of the foreign trust under generally applicable

United States agency principles, the property will be treated as

transferred to the foreign trust in the year the U.S. person transfers the

property to the intermediary. The fair market value of the property

transferred will be determined as of the date of the transfer by the U.S.

person to the intermediary.

(iii) Effect on intermediary. If a transfer of property is treated as

an indirect transfer under paragraph (c)(1) of this section, the

intermediary is not treated as having transferred the property to the

foreign trust.

(4) RELATED PARTIES. For purposes of this paragraph (c), a U.S.

transferor is treated as related to a U.S. beneficiary of a foreign trust

if the U.S. transferor and the beneficiary are related for purposes of

section 643(i)(2)(B), with the following modifications--

(i) For purposes of applying section 267 (other than section 267(f))

and section 707(b)(1), "at least 10 percent" is used instead of "more than

50 percent" each place it appears; and

(ii) The principles of section 267(b)(10), using "at least 10 percent"

instead of "more than 50 percent," apply to determine whether two

corporations are related.

(5) EXAMPLES. The rules of this paragraph (c) are illustrated by the

following examples:

EXAMPLE 1. PRINCIPAL PURPOSE OF TAX AVOIDANCE. A, a U.S. citizen,

creates and funds FT, a foreign trust, for the benefit of A's children,

who are U.S. citizens. In 2004, A decides to transfer an additional 1000X

to the foreign trust. Pursuant to a plan with a principal purpose of

avoiding the application of section 679, A transfers 1000X to I, a foreign

person. I subsequently transfers 1000X to FT. Under paragraph (c)(1) of

this section, A is treated as having made a transfer of 1000X to FT.

EXAMPLE 2. U.S. PERSON UNABLE TO DEMONSTRATE THAT INTERMEDIARY ACTED

INDEPENDENTLY. A, a U.S. citizen, creates and funds FT, a foreign trust,

for the benefit of A’s children, who are U.S. citizens. On July 1, 2004,

A transfers XYZ stock to D, A’s uncle, who is a nonresident alien. D

immediately sells the XYZ stock and uses the proceeds to purchase ABC

stock. On January 1, 2007, D transfers the ABC stock to FT. A is unable

to demonstrate to the satisfaction of the Commissioner, pursuant to

paragraph (c)(2) of this section, that D acted independently of A in

making the transfer to FT. Under paragraph (c)(1) of this section, A is

treated as having transferred the ABC stock to FT. Under paragraph (c)(3)

of this section, D is treated as an agent of A, and the transfer is deemed

to have been made on January 1, 2007.

EXAMPLE 3. INDIRECT LOAN TO FOREIGN TRUST. A, a U.S. citizen, previously

created and funded FT, a foreign trust, for the benefit of A’s children,

who are U.S. citizens. On July 1, 2004, A deposits 500X with FB, a

foreign bank. On January 1, 2005, FB loans 450X to FT. A is unable to

demonstrate to the satisfaction of the Commissioner, pursuant to paragraph

(c)(2) of this section, that FB has a relationship with FT that

establishes a reasonable basis for concluding that FB would make a loan to

FT or that FB acted independently of A in making the loan. Under

paragraph (c)(1) of this section, A is deemed to have transferred 450X

directly to FT on January 1, 2005. Under paragraph (c)(3) of this

section, FB is treated as an agent of A. For possible exceptions with

respect to qualified obligations of the trust, and the treatment of

principal repayments with respect to obligations of the trust that are not

qualified obligations, see section 1.679-4.

EXAMPLE 4. LOAN TO FOREIGN TRUST PRIOR TO DEPOSIT OF FUNDS IN FOREIGN

BANK. The facts are the same as in Example 3, except that A makes the

500X deposit with FB on January 2, 2005, the day after FB makes the loan

to FT. The result is the same as in Example 3.

(d) Constructive transfers--

(1) In general. For purposes of paragraph (a) of this section, a

constructive transfer includes any assumption or satisfaction of a foreign

trust’s obligation to a third party.

(2) Examples. The rules of this paragraph (d) are illustrated by the

following examples. In each example, A is a U.S. citizen and FT is a

foreign trust. The examples are as follows:

EXAMPLE 1. PAYMENT OF DEBT OF FOREIGN TRUST. FT owes 1000X to Y, an

unrelated foreign corporation, for the performance of services by Y for

FT. In satisfaction of FT’s liability to Y, A transfers to Y property

with a fair market value of 1000X. Under paragraph (d)(1) of this

section, A is treated as having made a constructive transfer of the

property to FT.

EXAMPLE 2. ASSUMPTION OF LIABILITY OF FOREIGN TRUST. FT owes 1000X to Y,

an unrelated foreign corporation, for the performance of services by Y for

FT. A assumes FT’s liability to pay Y. Under paragraph (d)(1) of this

section, A is treated as having made a constructive transfer of property

with a fair market value of 1000X to FT.

(e) GUARANTEE OF TRUST OBLIGATIONS--

(1) In general. If a foreign trust borrows money or other property from

any person who is not a related person (within the meaning of section

1.679-1(c)(5)) with respect to the trust (lender) and a U.S. person (U.S.

guarantor) that is a related person with respect to the trust guarantees

(within the meaning of paragraph (e)(4) of this section) the foreign

trust’s obligation, the U.S. guarantor is treated for purposes of this

section as a U.S. transferor that has made a transfer to the trust on the

date of the guarantee in an amount determined under paragraph (e)(2) of

this section. To the extent this paragraph causes the U.S. guarantor to

be treated as having made a transfer to the trust, a lender that is a U.S.

person shall not be treated as having transferred that amount to the

foreign trust.

(2) Amount transferred. The amount deemed transferred by a U.S.

guarantor described in paragraph (e)(1) of this section is the guaranteed

portion of the adjusted issue price of the obligation (within the meaning

of section 1.1275-1(b)) plus any accrued but unpaid qualified stated

interest (within the meaning of section 1.1273-1(c)).

(3) Principal repayments. If a U.S. person is treated under this

paragraph (e) as having made a transfer by reason of the guarantee of an

obligation, payments of principal to the lender by the foreign trust with

respect to the obligation are taken into account on and after the date of

the payment in determining the portion of the trust attributable to the

property deemed transferred by the U.S. guarantor.

(4) Guarantee. For purposes of this section, the term guarantee--

(i) Includes any arrangement under which a person, directly or

indirectly, assures, on a conditional or unconditional basis, the payment

of another’s obligation;

(ii) Encompasses any form of credit support, and includes a commitment

to make a capital contribution to the debtor or otherwise maintain its

financial viability; and

(iii) Includes an arrangement reflected in a comfort letter, regardless

of whether the arrangement gives rise to a legally enforceable obligation.

If an arrangement is contingent upon the occurrence of an event, in

determining whether the arrangement is a guarantee, it is assumed that the

event has occurred.

(5) EXAMPLES. The rules of this paragraph (e) are illustrated by the

following examples. In all of the examples, A is a U.S. resident and FT

is a foreign trust. The examples are as follows:

EXAMPLE 1. FOREIGN LENDER. X, a foreign corporation, loans 1000X of cash

to FT in exchange for FT’s obligation to repay the loan. A guarantees the

repayment of 600X of FT’s obligation. Under paragraph (e)(2) of this

section, A is treated as having transferred 600X to FT.

EXAMPLE 2. UNRELATED U.S. LENDER. The facts are the same as in Example

1, except X is a U.S. person that is not a related person within the

meaning of section 1.679-1(c)(5). The result is the same as in Example 1.

(f) TRANSFERS TO ENTITIES OWNED BY A FOREIGN TRUST--

(1) General rule. If a U.S. person is a related person (as defined in

section 1.679-1(c)(5)) with respect to a foreign trust, any transfer of

property by the U.S. person to an entity in which the foreign trust holds

an ownership interest is treated as a transfer of such property by the

U.S. person to the foreign trust followed by a transfer of the property

from the foreign trust to the entity owned by the foreign trust, unless

the U.S. person demonstrates to the satisfaction of the Commissioner that

the transfer to the entity is properly attributable to the U.S. person’s

ownership interest in the entity.

(2) Examples. The rules of this paragraph (f) are illustrated by the

following examples. In all of the examples, A is a U.S. citizen, FT is a

foreign trust, and FC is a foreign corporation. The examples are as

follows:

EXAMPLE 1. TRANSFER TREATED AS TRANSFER TO TRUST. A creates and funds FT,

which is treated as having a U.S. beneficiary under section 1.679-2. FT

owns all of the outstanding stock of FC. A transfers property directly to

FC. Because FT is the sole shareholder of FC, A is unable to demonstrate

to the satisfaction of the Commissioner that the transfer is properly

attributable to A’s ownership interest in FC. Accordingly, under this

paragraph (f), A is treated as having transferred the property to FT,

followed by a transfer of such property by FT to FC. Under section 1.679-

1(a), A is treated as the owner of the portion of FT attributable to the

property treated as transferred directly to FT. Under section 1.367(a)-

1T(c)(4)(ii), the transfer of property by FT to FC is treated as a

transfer of the property by A to FC.

EXAMPLE 2. TRANSFER TREATED AS TRANSFER TO TRUST. The facts are the same

as in Example 1, except that FT is not treated as having a U.S.

beneficiary under section 1.679-2. Under this paragraph (f), A is treated

as having transferred the property to FT, followed by a transfer of such

property by FT to FC. A is not treated as the owner of FT for purposes of

section 1.679-1(a). For rules regarding the recognition of gain on the

transfer, see section 684.

EXAMPLE 3. TRANSFER NOT TREATED AS TRANSFER TO TRUST. A creates and funds

FT. FC has outstanding solely 100 shares of common stock. FT owns 50

shares of FC stock, and A owns the remaining 50 shares. On July 1, 2001,

FT and A each transfer 1000X to FC. A is able to demonstrate to the

satisfaction of the Commissioner that A’s transfer to FC is properly

attributable to A’s ownership interest in FC. Accordingly, under this

paragraph (f), A’s transfer to FC is not treated as a transfer to FT.

SECTION 1.679-4 EXCEPTIONS TO GENERAL RULE.

(a) IN GENERAL. Section 1.679-1 does not apply to--

(1) Any transfer of property to a foreign trust by reason of the death

of the transferor;

(2) Any transfer of property to a foreign trust described in sections

402(b), 404(a)(4), or 404A;

(3) Any transfer of property to a foreign trust described in section

501(c)(3) (without regard to the requirements of section 508(a)); and

(4) Any transfer of property to a foreign trust to the extent the

transfer is for fair market value.

(b) TRANSFERS FOR FAIR MARKET VALUE--

(1) In general. For purposes of this section, a transfer is for fair

market value only to the extent of the value of property received from the

trust, services rendered by the trust, or the right to use property of the

trust. For example, rents, royalties, interest, and compensation paid to

a trust are transfers for fair market value only to the extent that the

payments reflect an arm’s length price for the use of the property of, or

for the services rendered by, the trust. For purposes of this

determination, an interest in the trust is not property received from the

trust. For purposes of this section, a distribution to a trust with

respect to an interest held by such trust in an entity other than a trust

or an interest in certain investment trusts described in section 301.7701-

4(c) of this chapter, liquidating trusts described in section 301.7701-

4(d) of this chapter, or environmental remediation trusts described in

section 301.7701-4(e) of this chapter is considered to be a transfer for

fair market value.

(2) Special rule--

(i) Transfers for partial consideration. For purposes of this section,

if a person transfers property to a foreign trust in exchange for property

having a fair market value that is less than the fair market value of the

property transferred, the exception in paragraph (a)(4) of this section

applies only to the extent of the fair market value of the property

received.

(ii) Example. This paragraph (b) is illustrated by the following

example:

EXAMPLE. A, a U.S. citizen, transfers property that has a fair market

value of 1000X to FT, a foreign trust, in exchange for 600X of cash.

Under this paragraph (b), section 1.679-1 applies with respect to the

transfer of 400X (1000X less 600X) to FT.

this section, in determining whether a transfer by a U.S. transferor that

is a related person (as defined in section 1.679-1(c)(5)) with respect to

the foreign trust is for fair market value, any obligation (as defined in

section 1.679-1(c)(6)) of the trust or a related person (as defined in

section 1.679-1(c)(5)) that is not a qualified obligation within the

meaning of paragraph (d)(1) of this section shall not be taken into

account.

(d) QUALIFIED OBLIGATIONS--

(1) In general. For purposes of this section, an obligation is

treated as a qualified obligation only if--

(i) The obligation is reduced to writing by an express written

agreement;

(ii) The term of the obligation does not exceed five years (for

purposes of determining the term of an obligation, the obligation’s

maturity date is the last possible date that the obligation can be

outstanding under the terms of the obligation);

(iii) All payments on the obligation are denominated in U.S. dollars;

(iv) The yield to maturity is not less than 100 percent of the

applicable Federal rate and not greater that 130 percent of the applicable

Federal rate (the applicable Federal rate for an obligation is the

applicable Federal rate in effect under section 1274(d) for the day on

which the obligation is issued, as published in the Internal Revenue

Bulletin (see section 601.601(d)(2) of this chapter));

(v) The U.S. transferor extends the period for assessment of any income

or transfer tax attributable to the transfer and any consequential income

tax changes for each year that the obligation is outstanding, to a date

not earlier than three years after the maturity date of the obligation

(this extension is not necessary if the maturity date of the obligation

does not extend beyond the end of the U.S. transferor’s taxable year for

the year of the transfer and is paid within such period); when properly

executed and filed, such an agreement is deemed to be consented to for

purposes of section 301.6501(c)-1(d) of this chapter; and

(vi) The U.S. transferor reports the status of the loan, including

principal and interest payments, on Form 3520 for every year that the loan

is outstanding.

(2) Additional loans. If, while the original obligation is outstanding,

the U.S. transferor or a person related to the trust (within the meaning

of section 1.679-1(c)(5)) directly or indirectly obtains another

obligation issued by the trust, or if the U.S. transferor directly or

indirectly obtains another obligation issued by a person related to the

trust, the original obligation is deemed to have the maturity date of any

such subsequent obligation in determining whether the term of the original

obligation exceeds the specified 5-year term. In addition, a series of

obligations issued and repaid by the trust (or a person related to the

trust) is treated as a single obligation if the transactions giving rise

to the obligations are structured with a principal purpose to avoid the

application of this provision.

(3) Obligations that cease to be qualified. If an obligation treated

as a qualified obligation subsequently fails to be a qualified obligation

(e.g., renegotiation of the terms of the obligation causes the term of the

obligation to exceed five years), the U.S. transferor is treated as making

a transfer to the trust in an amount equal to the original obligation’s

adjusted issue price (within the meaning of section 1.1275-1(b)) plus any

accrued but unpaid qualified stated interest (within the meaning of

section 1.1273-1(c)) as of the date of the subsequent event that causes

the obligation to no longer be a qualified obligation. If the maturity

date is extended beyond five years by reason of the issuance of a

subsequent obligation by the trust (or person related to the trust), the

amount of the transfer will not exceed the issue price of the subsequent

obligation. The subsequent obligation is separately tested to determine

if it is a qualified obligation.

(4) Transfers resulting from failed qualified obligations. In general,

a transfer resulting from a failed qualified obligation is deemed to occur

on the date of the subsequent event that causes the obligation to no

longer be a qualified obligation. However, based on all of the facts and

circumstances, the Commissioner may deem a transfer to have occurred on

any date on or after the issue date of the original obligation. For

example, if at the time the original obligation was issued, the transferor

knew or had reason to know that the obligation would not be repaid, the

Commissioner could deem the transfer to have occurred on the issue date of

the original obligation.

(5) Renegotiated loans. Any loan that is renegotiated, extended, or

revised is treated as a new loan, and any transfer of funds to a foreign

trust after such renegotiation, extension, or revision under a pre-

existing loan agreement is treated as a transfer subject to this section.

(6) Principal repayments. The payment of principal with respect to any

obligation that is not treated as a qualified obligation under this

paragraph is taken into account on and after the date of the payment in

determining the portion of the trust attributable to the property

transferred.

(7) Examples. The rules of this paragraph (d) are illustrated by the

following examples. In the examples, A and B are U.S. residents and FT is

a foreign trust. The examples are as follows:

EXAMPLE 1. DEMAND LOAN. A transfers 500X to FT in exchange for a

demand note that permits A to require repayment by FT at any time. A is a

related person (as defined in section 1.679-1(c)(5)) with respect to FT.

Because FT’s obligation to A could remain outstanding for more than five

years, the obligation is not a qualified obligation within the meaning of

paragraph (d) of this section and, pursuant to paragraph (c) of this

section, it is not taken into account for purposes of determining whether

A’s transfer is eligible for the fair market value exception of paragraph

(a)(4) of this section. Accordingly, section 1.679-1 applies with respect

to the full 500X transfer to FT.

EXAMPLE 2. PRIVATE ANNUITY. A transfers 4000X to FT in exchange for

an annuity from the foreign trust that will pay A 100X per year for the

rest of A’s life. A is a related person (as defined in section 1.679-

1(c)(5)) with respect to FT. Because FT’s obligation to A could remain

outstanding for more than five years, the obligation is not a qualified

obligation within the meaning of paragraph (d)(1) of this section and,

pursuant to paragraph (c) of this section, it is not taken into account

for purposes of determining whether A’s transfer is eligible for the fair

market value exception of paragraph (a)(4) of this section. Accordingly,

section 1.679-1 applies with respect to the full 4000X transfer to FT.

EXAMPLE 3. LOAN TO UNRELATED FOREIGN TRUST. B transfers 1000X to FT

in exchange for an obligation of the trust. The term of the obligation is

fifteen years. B is not a related person (as defined in section 1.679-

1(c)(5)) with respect to FT. Because B is not a related person, the fair

market value of the obligation received by B is taken into account for

purposes of determining whether B’s transfer is eligible for the fair

market value exception of paragraph (a)(4) of this section, even though

the obligation is not a qualified obligation within the meaning of

paragraph (d)(1) of this section.

EXAMPLE 4. TRANSFER FOR AN OBLIGATION WITH TERM IN EXCESS OF 5 YEARS.

A transfers property that has a fair market value of 5000X to FT in

exchange for an obligation of the trust. The term of the obligation is

ten years. A is a related person (as defined in section 1.679-1(c)(5))

with respect to FT. Because the term of the obligation is greater than

five years, the obligation is not a qualified obligation within the

meaning of paragraph (d)(1) of this section and, pursuant to paragraph (c)

of this section, it is not taken into account for purposes of determining

whether A’s transfer is eligible for the fair market value exception of

paragraph (a)(4) of this section. Accordingly, section 1.679-1 applies

with respect to the full 5000X transfer to FT.

EXAMPLE 5. TRANSFER FOR A QUALIFIED OBLIGATION. The facts are the

same as in Example 4, except that the term of the obligation is 3 years.

Assuming the other requirements of paragraph (d)(1) of this section are

satisfied, the obligation is a qualified obligation and its adjusted issue

price is taken into account for purposes of determining whether A’s

transfer is eligible for the fair market value exception of paragraph

(a)(4) of this section.

EXAMPLE 6. EFFECT OF SUBSEQUENT OBLIGATION ON ORIGINAL OBLIGATION. A

transfers property that has a fair market value of 1000X to FT in exchange

for an obligation that satisfies the requirements of paragraph (d)(1) of

this section. A is a related person (as defined in section 1.679-1(c)(5))

with respect to FT. Two years later, A transfers an additional 2000X to FT

and receives another obligation from FT that has a maturity date four

years from the date that the second obligation was issued. Under

paragraph (d)(2) of this section, the original obligation is deemed to

have the maturity date of the second obligation. Under paragraph (a) of

this section, A is treated as having made a transfer in an amount equal to

the original obligation’s adjusted issue price (within the meaning of

section 1.1275-1(b)) plus any accrued but unpaid qualified stated interest

(within the meaning of section 1.1273-1(c)) as of the date of issuance of

the second obligation. The second obligation is tested separately to

determine whether it is a qualified obligation for purposes of applying

paragraph (a) of this section to the second transfer.

SECTION 1.679-5 PRE-IMMIGRATION TRUSTS.

(a) IN GENERAL. If a nonresident alien individual becomes a U.S.

person and the individual has a residency starting date (as determined

under section 7701(b)(2)(A)) within 5 years after directly or indirectly

transferring property to a foreign trust (the original transfer), the

individual is treated as having transferred to the trust on the residency

starting date an amount equal to the portion of the trust attributable to

the property transferred by the individual in the original transfer.

(b) SPECIAL RULES--

(1) Change in grantor trust status. For purposes of paragraph (a) of

this section, if a nonresident alien individual who is treated as owning

any portion of a trust under the provisions of subpart E of part I of

subchapter J, chapter 1 of the Internal Revenue Code, subsequently ceases

to be so treated, the individual is treated as having made the original

transfer to the foreign trust immediately before the trust ceases to be

treated as owned by the individual.

(2) Treatment of undistributed income. For purposes of paragraph

(a) of this section, the property deemed transferred to the foreign trust

on the residency starting date includes undistributed net income, as

defined in section 665(a), attributable to the property deemed

transferred. Undistributed net income for periods before the individual's

residency starting date is taken into account only for purposes of

determining the amount of the property deemed transferred.

following examples:

EXAMPLE 1. NONRESIDENT ALIEN BECOMES RESIDENT ALIEN. On January 1,

2002, A, a nonresident alien individual, transfers property to a foreign

trust, FT. On January 1, 2006, A becomes a resident of the United States

within the meaning of section 7701(b)(1)(A) and has a residency starting

date of January 1, 2006, within the meaning of section 7701(b)(2)(A).

Under paragraph (a) of this section, A is treated as a U.S. transferor and

is deemed to transfer the property to FT on January 1, 2006. Under

paragraph (b)(2) of this section, the property deemed transferred to FT on

January 1, 2006, includes the undistributed net income of the trust, as

defined in section 665(a), attributable to the property originally

transferred.

EXAMPLE 2. NONRESIDENT ALIEN LOSES POWER TO REVEST PROPERTY. On

January 1, 2002, A, a nonresident alien individual, transfers property to

a foreign trust, FT. A has the power to revest absolutely in himself the

title to such property transferred and is treated as the owner of the

trust pursuant to sections 676 and 672(f). On January 1, 2008, the terms

of FT are amended to remove A’s power to revest in himself title to the

property transferred, and A ceases to be treated as the owner of FT. On

January 1, 2010, A becomes a resident of the United States. Under

paragraph (b)(1) of this section, for purposes of paragraph (a) of this

section A is treated as having originally transferred the property to FT

on January 1, 2008. Because this date is within five years of A’s

residency starting date, A is deemed to have made a transfer to the

foreign trust on January 1, 2010, his residency starting date. Under

paragraph (b)(2) of this section, the property deemed transferred to the

foreign trust on January 1, 2010, includes the undistributed net income of

the trust, as defined in section 665(a), attributable to the property

deemed transferred.

SECTION 1.679-6 OUTBOUND MIGRATIONS OF DOMESTIC TRUSTS.

(a) IN GENERAL. Subject to the provisions of paragraph (b) of this

section, if an individual who is a U.S. person transfers property to a

trust that is not a foreign trust, and such trust becomes a foreign trust

while the U.S. person is alive, the U.S. individual is treated as a U.S.

transferor and is deemed to transfer the property to a foreign trust on

the date the domestic trust becomes a foreign trust.

(b) AMOUNT DEEMED TRANSFERRED. For purposes of paragraph (a) of this

section, the property deemed transferred to the trust when it becomes a

foreign trust includes undistributed net income, as defined in section

665(a), attributable to the property previously transferred.

Undistributed net income for periods prior to the migration is taken into

account only for purposes of determining the portion of the trust that is

attributable to the property transferred by the U.S. person.

section. For purposes of the example, A is a resident alien, B is A’s

son, who is a resident alien, and DT is a domestic trust. The example is

as follows:

EXAMPLE. OUTBOUND MIGRATION OF DOMESTIC TRUST. On January 1, 2002, A

transfers property to DT, for the benefit of B. On January 1, 2003, DT

acquires a foreign trustee who has the power to determine whether and when

distributions will be made to B. Under section 7701(a)(30)(E) and section

301.7701-7(d)(ii)(A) of this chapter, DT becomes a foreign trust on

January 1, 2003. Under paragraph (a) of this section, A is treated as

transferring property to a foreign trust on January 1, 2003. Under

paragraph (b) of this section, the property deemed transferred to the

trust when it becomes a foreign trust includes undistributed net income,

as defined in section 665(a), attributable to the property deemed

transferred.

SECTION 1.679-7 EFFECTIVE DATES.

(a) IN GENERAL. Except as provided in paragraph (b) of this section,

the rules of sections 1.679-1, 1.679-2, 1.679-3, and 1.679-4 apply with

respect to transfers after August 7, 2000.

(b) SPECIAL RULES. (1) The rules of section 1.679-4(c) and (d) apply to

an obligation issued after February 6, 1995, whether or not in accordance

with a pre-existing arrangement or understanding. For purposes of the

rules of section 1.679-4(c) and (d), if an obligation issued on or before

February 6, 1995, is modified after that date, and the modification is a

significant modification within the meaning of section 1.1001-3, the

obligation is treated as if it were issued on the date of the

modification. However, the penalty provided in section 6677 applies only

to a failure to report transfers in exchange for obligations issued after

August 20, 1996.

(2) The rules of section 1.679-5 apply to persons whose residency

starting date is after August 7, 2000.

(3) The rules of section 1.679-6 apply to trusts that become foreign

trusts after August 7, 2000.

Par. 3. In section 1.958-1, the first sentence of paragraph (b) is

revised to read as follows:

SECTION 1.958-1 DIRECT AND INDIRECT OWNERSHIP OF STOCK.

* * * * *

(b) * * * For purposes of paragraph (a)(2) of this section, stock

owned, directly or indirectly, by or for a foreign corporation, foreign

partnership, foreign trust (within the meaning of section 7701(a)(31))

described in sections 671 through 679, or other foreign trust or foreign

estate (within the meaning of section 7701(a)(31)) shall be considered as

being owned proportionately by its shareholders, partners, grantors or

other persons treated as owners under sections 671 through 679 of any

portion of the trust that includes the stock, or beneficiaries,

respectively. * * *

* * * * *

SECTION 1.958-2 [AMENDED]

Par. 4. In section 1.958-2, paragraph (c)(1)(ii)(b) is amended by

removing the language "678" and adding "679" in its place.

/s/ Robert E. Wenzel

Deputy Commissioner of Internal Revenue

Approved: July 9, 2001

/s/ Mark Weinberger

Assistant Secretary of the Treasury

(Tax Policy)

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