The IRS released Notice 2018-29, 2018-16 IRB 1, announcing that the Treasury Department and the IRS intend to issue regulations under new Section 1446(f) regarding the disposition of a partnership interest that is not publicly traded. (Section references are to the Internal Revenue Code of 1986, as amended.) In general, Section 1446(f)(1) provides that if any portion of the gain on any disposition of an interest in a partnership would be treated under Section 864(c)(8) as effectively connected with the conduct of a trade or business within the United States, then the transferee must deduct and withhold a tax equal to 10 percent of the amount realized on the disposition. Section 864(c)(8) provides that gain or loss from the sale, exchange or other disposition of a partnership interest by a nonresident alien or foreign corporation is effectively connected with the conduct of a trade or business in the United States to the extent that the person would have had effectively connected gain or loss had the partnership sold all of its assets at fair market value. The Treasury Department and the IRS have determined that until regulations, other guidance, or forms and instructions have been issued under Section 1446(f), transferees required to withhold under Section 1446(f)(1) must use the rules in Section 1445 and the regulations thereunder for purposes of reporting and paying over the tax, except as otherwise provided in the notice. The notice also provides exceptions to the withholding, including the transferee’s receipt of a certification of non-foreign status, a certification that the transferor had less than 25 percent effectively connected taxable income in three prior taxable years, a certification of no realized gain, or a certification from a partnership of less than 25 percent effectively connected gain under Section 864(c)(8).