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extent that any of such items constitutes gross income from
sources within the United States), of any nonresident alien
individual" must deduct and withhold from such income a tax of 30
percent of the amount of such income. Section 1442(a) applies a
withholding tax in the same manner as section 1441(a) on the
items of income of foreign corporations subject to taxation
pursuant to subtitle A. The income items specified in section
1441(b) include, inter alia, interest.
Section 1461 imposes liability for the tax due on every
person required to deduct and to withhold the tax imposed
pursuant to section 1441(a). However, interest that is treated
as income from sources without the United States is not subject
to withholding tax pursuant to section 1.1441-1, Income Tax
Regs., or, therefore, section 1.1442-1, Income Tax Regs. Sec.
1.1441-3(a), Income Tax Regs.
b. Post-1986 Act Law
(1) Character and Source Rules
for Interest
Generally, the source of interest depends on the residence
of the obligor. With exceptions not applicable in the instant
cases, interest on bonds, notes, or other interest-bearing
obligations of noncorporate U.S. residents or U.S. corporations
is treated as income from sources within the United States. Sec.
861(a)(1). Interest that is not treated as income from sources
within the United States pursuant to section 861(a)(1) is treated
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