(a) Withholding. In the event that a corporation makes a consent dividend, as described in Sec. 1.565-1 (a), to a shareholder that is subject to a withholding tax under section 1441 or 1442 on a distribution of cash or other property, the corporation must remit an amount of tax equal to the withholding tax that would be imposed under section 1441 or 1442 if an actual cash distribution equal to the consent dividend had been paid to the shareholder on the last day of the corporation's taxable year. Such payment must be in one of the following forms:
(1) Cash,
(2) United States postal money order,
(3) Certified check drawn on a domestic bank, provided that the law of the place where the bank is located does not permit the certification to be rescinded prior to presentation,
(4) A cashier's check of a domestic bank, or
(5) A draft on a domestic bank or a foreign bank maintaining a United States agency or branch and payable in United States funds. The amount of such payment shall be credited against the tax imposed on the shareholder. [T.D. 8244, 54 FR 10540, Mar. 14, 1989]