Wolters Kluwer launches Capital Changes 1446F PTP Alert

To assist brokers in complying with new Internal Revenue Service regulations that go into effect January 1, 2022, Wolters Kluwer Compliance Solutions has launched Capital Changes 1446F PTP Alert, a technology that eases broker withholding compliance burdens by automating the collection and review of qualified notices issued by publicly traded partnerships (PTPs). Under the new regulations, qualified notices must be evaluated in connection with determining a broker’s withholding obligations. 

New regulations issued under Internal Revenue Code Section 1446(f) expand and change earlier rules relating to qualified notices. The new regulations expand the scope of earlier rules applicable to withholding agents and their obligation to analyze qualified notices. Brokers must constantly monitor for qualified notices as they are published for PTPs in order to comply with the new regulations. Reviewing qualified notices can also be challenging because they do not have a standard format, nor are they stored in a central, online location. 
Final regulations issued in October 2020 require brokers to withhold 10 percent of proceeds received on certain PTP sales and distributions that occur on or after January 1, 2022, unless an exception applies. Capital Changes 1446F PTP Alert addresses a critical challenge for brokers in complying with the new regulations: the ongoing task of monitoring, identifying and analyzing of PTP distributions and associated qualified notices.

“This technology provides advance notification of critical information needed by brokers to comply with this new withholding requirement, allowing brokers to shift the burden of finding and analyzing qualified notices from themselves to Wolters Kluwer tax experts,” said Steven Meirink, Executive Vice President and General Manager,  Wolters Kluwer Compliance Solutions. “The technology provides key information in a compliance-focused, tax operations format that allows for easy searching, sorting, and exporting of data, helping brokers minimize risk and maximize efficiency.”