Rev. Proc. 65-6

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to provide an alternative recordkeeping requirement for brokers under the Interest Equalization Tax Act, Public Law 88-563, C.B. 1964-2, 615.

SEC. 2. BACKGROUND.

Section 6011(d)(3) of the Internal Revenue Code of 1954, as added by the Interest Equalization Tax Act, provides, in part, that every member or member organization of a national securities exchange or association registered with the Securities and Exchange Commission shall keep records and file such information as the Secretary or his delegate may prescribe by regulations with respect to acquisitions or sales of stock or debt obligations of foreign issuers or obligors effected by such member or member organization as a broker.

Paragraph (c)(2) of section 147.8-4 of the Temporary Regulations under the Interest Equalization Tax Act, Treasury Decision 6760, C.B. 1964-2, 926, prescribes a recordkeeping requirement for brokers with respect to acquisitions of stock or debt obligations of foreign issuers or obligors and provides for the maintenance of separate files of various documents. It has been brought to the attention of the Internal Revenue Service that the information necessary to the administration of the Interest Equalization Tax Act can be made readily available to authorized internal revenue officers or employees by using records regularly maintained by the broker together with a single segregated file of certificates of American ownership furnished to the broker.

SEC. 3. CONCLUSION.

A member or member organization described in paragraph (c)(1) of section 147.8-4 may, in lieu of the records required by paragraph (c)(2)(ii) and (iii) of such section, keep records relating to all transactions involving the acquisition or sale of stock or a debt obligation of a foreign issuer or obligor. Such records shall be maintained in such a manner as to enable the member or member organization to make readily available to authorized internal revenue officers or employees complete and accurate information with respect to the following:

(a) Name, address, and customer account number (or numbers) of each of its customers;

(b) Transactions of each customer involving the acquisition or sale of such stock or debt obligation and the settlement date of each transaction;

(c) Every transaction which has taken place on any business day with respect to a particular issue of any such stock or debt obligation; and

(d) Each acquisition of such stock or debt obligation effected for a United States person where it has been indicated in a written confirmation to such person that the tax applies to the acquisition.

This alternative recordkeeping procedure may be used only so long as the member or member organization can and does make the required information readily available to authorized internal revenue officers or employees. In the event of failure to make such information readily available, the member or member organization shall be required, upon notification by the district director, to promptly comply with the recordkeeping requirement set forth in paragraph (c)(2) of section 147.8-4 of Treasury Decision 6760.

¹ Also released as Technical Information Release 679, dated Jan. 22, 1965.