IR-2018-81, April 2, 2018 WASHINGTON ―The Treasury Department and the Internal Revenue Service today issued guidance regarding the withholding on the transfer of non-publicly traded partnership interests under the recently enacted Tax Cuts and Jobs Act. In general, the new law treats a foreign taxpayer’s gain or loss on the sale or exchange of a partnership interest as effectively connected with the conduct of a trade or business in the United States to the extent that gain or loss would be treated as effectively connected with the conduct of a trade or business in the United States if the partnership sold all of its assets. In this circumstance, the new law also imposes a withholding tax on the disposition of a partnership interest by a foreign taxpayer. Notice 2018-29 announces that the Treasury Department and the IRS intend to issue regulations, including rules and procedures relating to qualifying for exemptions from withholding or reductions in the amount of withholding under this section of the law. The notice also includes interim guidance designed to allow for the effective and orderly implementation of this section. In addition, the notice suspends secondary partnership level withholding requirements. The guidance in this notice does not affect the tax liability imposed as a result of the new law. This notice does not affect the suspension of the application of withholding in the case of a disposition of certain publicly traded partnership interests as announced in Notice 2018-08, 2018-7 I.R.B. 352. Today’s notice requests comments on the rules described in the notice and also requests comments on what additional guidance should be issued to assist taxpayers in applying section these sections of law. The Treasury Department and the IRS expect to issue additional guidance in the future. Today’s notice, Notice 2018-29 PDF, will be published in IRB 2018-16 on April 16, 2018. The Treasury media contact for this matter is Marisol Garibay, Deputy Assistant Secretary for Public Affairs, 202-622-6490.