This document contains final regulations regarding a partnership's obligation to pay withholding tax under section 1446 on effectively connected taxable income allocable under section 704 to a foreign partner. The regulations interpret the rules added to the Internal Revenue Code by section 1246(a) of the Tax Reform Act of 1986 (1986 Act), as amended by section 1012(s)(1)(A) of the Technical and Miscellaneous Revenue Act of 1988 (1988 Act), and section 7811(i)(6) of the Omnibus Budget Reconciliation Act of 1989 (1989 Act). The regulations will affect partnerships engaged in a trade or business in the United States that have one or more foreign partners. The final regulations also include conforming amendments to sections 871, 1443, 1461, 1462, 1463, 6109, and 6721. This document also contains temporary regulations under section 1446 that may apply to reduce or eliminate a partnership's obligation to pay withholding tax in certain circumstances.