Page:United States Statutes at Large Volume 75.djvu/576

 586

8 USC^uo^i^

Ante, p. 534. 26 USC 872.

PUBLIC LAW 87-256-SEPT. 21, 1961

(J) of section 101(a) (15) of the Immigration and Nationality Act, as amended, shall be treated as a nonresident alien individual engaged in trade or business within the United States." (c) Section 872(b) of the Internal Revenue Code of 1954 (relating to exclusions from gross income of nonresident alien individuals) is amended by adding at the end thereof the following new paragraph: "(3)

26 USC 1441.

26 USC 117.

26 USC 1441.

26 USC 3121. 26 USC 3125.

[75 STAT.

COMPENSATION or PARTICIPANTS I N CERTAIN EXCHANGE OR

TRAINING PROGRAMS.—Compensation paid by a foreign employer to a nonresident alien individual for the period he is temporarily present in the United States as a nonimmigrant under subparagraph (F) or (J) of section 101(a) (15) of the Immigration and Nationality Act, as amended. For purposes of this paragraph, the term 'foreign employer' means— " (A) a nonresident alien individual, foreign partnership, or foreign corporation, or " (B) an office or place of business maintained in a foreign country or in a possession of the United States by a domestic corporation." (d)(1) Section 1441(a) of the Internal Revenue Code of 1954 (relating to withholding of tax on nonresident aliens) is amended by inserting before the period at the end thereof the following: ", except that in m e case of any item of income specified in the second sentence of subsection (b), the tax shall be equal to 18 percent of such item". (2) Section 1441(b) of such Code (relating to income items subject to withholding) is amended by adding at the end thereof the following new sentence: "The items of income referred to in subsection (a) from which tax shall be deducted and withheld at the rate of 18 percent are— "(1) that portion of any scholarship or fellowship grant which is received by a nonresident alien individual who is temporarily present in the United States as a nonimmigrant under subparagraph (F) or (J) of section 101(a) (15) of the Immigration and Nationality Act, as amended, and which is not excluded from gross income under section 117(a)(1) solely by reason of section 1 1 7 (b)(2)(B); and "(2) amounts described in subparagraphs (A), (B), (C), and (D) of section 117(a)(2) which are received by any such nonresident alien individual and which are incident to a scholarship or fellowship grant to which section 117(a)(1) applies, but only to the extent such amounts are includible in gross income." (3) Section 1441(c)(4) of the Internal Revenue Code of 1954 (relating to exceptions to withholding of tax on nonresident aliens) is amended to read as follows: " (4) COMPENSATION OF CERTAIN ALIENS.—Under regulations prescribed by the Secretary or his delegate, there may be exempted from deduction and withholding under subsection (a) the compensation for personal services of— " (A) nonresident alien individuals who enter and leave the United States at frequent intervals, and " (B) a nonresident alien individual for the period he is temporarily present in the United States as a nonimmigrant under subparagraph (F) or (J) of section 101(a) (15) of the Immigration and Nationality Act, as amended." (e)(1) Section 3121(b) of the Internal Revenue Code of 1954 (relating to the definition of employment for purposes of the Federal Insurance Contributions Act) is amended— ^A) by striking out "or" at the end of paragraph ( 1 7); (B) by striking out the period at the end of paragraph (18) and inserting in lieu thereof''; or"; and

�