96 STAT. 584
PUBLIC LAW 97-248—SEPT. 3, 1982 "(3) UNITED STATES.—The term 'United States' means the United States and any wholly owned agency or i n s t r u m e n t a l i t y thereof. "(4) FOREIGN G O V E R N M E N T. — The term 'foreign
government'
means a foreign government, a political subdivision of a foreign government, and any wholly owned agency or i n s t r u m e n t a l i t y of any one or more of the foregoing. "(5) INTERNATIONAL ORGANIZATION.—The term
'international
organization' means a n international organization and any wholly owned agency or i n s t r u m e n t a l i t y thereof. "(6) NONRESIDENT ALIEN.—The term 'nonresident alien individual' includes a n alien resident of P u e r to Rico. "(7) W I T H H O L D, ETC., INCLUDE DEDUCT.—The term s 'withhold',
'withholding', and 'withheld' include deduct, deducting, and deducted. "(b) T R E A T M E N T OF O R I G I N A L ISSUE D I S C O U N T. —
Ante, p. 576.
"(1) IN GENERAL.—Except a s provided in paragraph s (2) and (3) the tax imposed by section 3451 shall apply to the a m o u n t of original issue discount on any obligation which is includible in the gross income of the holder during the calendar year. Any such a m o u n t shall be t r e a t e d as a payment for purposes of this subchapter. "(2) TRANSFERRED OBLIGATIONS.—
"(A) IN GENERAL.—In the case of original issue discount on any obligation which has been transferred from the original holder, the tax imposed by section 3451 shall apply to such original issue discount as if the subsequent holder were the original holder. "(B) SPECIAL RULE FOR SHORT-TERM OBLIGATIONS.—In the
case of any obligation with a fixed m a t u r i t y date not exceeding 1 year from the date of issue which has been transferred from the original holder, if any subsequent purchase r establishes the date on which, and the purchase price a t which, h e acquired such obligation, the a m o u n t of original issue discount on such obligation shall be determined (subject to such regulations a s the Secretary may prescribe) as if it were issued on the date such subsequent purchase r acquired such obligation for a n issue price equal to the purchase price a t which such subsequent purchase r acquired such obligation. "(3) LIMITATION ON AMOUNT W I T H H E L D. —
"(A) IN GENERAL.—The a m o u n t of tax imposed by section 3451 on the original issue discount on any obligation which is required to be withheld under section 3451(a) in any c a l e n d a r year shall not exceed the a m o u n t of cash paid with respect to such obligation during such c a l e n d a r year. "(B) AUTHORITY OF SECRETARY TO ELIMINATE LIMITATION IN CERTAIN CASES.—If the Secretary determine s by r e g u l a t i o n s
that a type of obligation is frequently used to avoid the purposes of this subchapter, subparagraph (A) shall not apply with respect to original issue discount on any obligation of such type which is issued more than 30 days after the first date on which such regulations a r e published in the Federal Register. "(C)
PAYMENTS
FROM
WHICH
WITHHOLDING
IS TO BE
MADE.—Except to the extent otherwise provided in regulations, the tax imposed by section 3451 with respect to
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