IRS Defers Parts of Foreign Partnership Withholding Rules

New withholding requirements affecting foreign investors will be deferred by a year to allow taxpayers more time to comply, the IRS said Tuesday.

The IRS plans to amend regulations under tax code Sections 1446(a) and 1446(f) to have an applicability date of Jan. 1, 2023—rather than 2022—it said in a notice. Section 1446 applies a withholding tax to foreign partners’ share of income that is effectively connected U.S. income.

• The delay comes after the IRS and Treasury received comments saying that taxpayers would have trouble complying with some parts of the final regulations by ...