By Fanny Karaman and Stanley Ruchelman (July 5, 2018, 8:51 AM EDT) -- On April 2, 2018, the IRS published Notice 2018-29, describing Treasury Regulations it intends to issue with regard to the new withholding requirement on transfers of partnership interests by non-U.S. partners. This withholding requirement is codified under new Section 1446(f) of the Internal Revenue Code. While clarifying certain procedural aspects, the notice also creates an unanticipated result in providing for the withholding of 100 percent of the sales proceeds when nonrecourse liabilities are involved. Even if a refund request should ultimately reduce the U.S. income tax liability to the appropriate tax on the gain, this overwithholding may result in substantial cash-flow issues for foreign investors in U.S. partnerships, especially if a tax payment is due in the foreign investor's country of residence prior to the time of payment of the U.S. tax refund....