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The document titled 'Backup Withholding for Missing and Incorrect Name/TIN(s)' provides guidelines from the IRS regarding backup withholding requirements when a Taxpayer Identification Number (TIN) is missing or incorrect. It outlines the procedures for handling such situations, including the issuance of notices (CP2100 and CP2100A), actions to take for missing or incorrect TINs, and the backup withholding rate of 24%. The publication also includes FAQs, flowcharts, and instructions for reading tape cartridges and CD/DVD formats related to these processes.

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Who is subject to IRS backup withholding?

When it applies, backup withholding requires a payer to withhold tax from payments not otherwise subject to withholding. You may be subject to backup withholding if you fail to provide a correct taxpayer identification number (TIN) when required or if you fail to report interest, dividend, or patronage dividend income.

How do I know if Im exempt from backup withholding?

U.S. citizens or resident aliens are considered exempt from backup withholding if their reported name and Social Security Number matches the IRS records. Additionally, you are exempt if you have not been notified by the IRS that you are subject to mandatory backup withholding.

Does everyone have backup withholding?

Most people are not subject to federal backup withholding. You received specific notification from the IRS stating that you are subject to backup withholding. You fail to furnish your taxpayer identification number on Form W9. You provide the wrong taxpayer identification number.

Why do banks ask about backup withholding?

Backup withholding is a tool employed by the IRS to make sure you pay all taxes that are due. Its used when you provide an incorrect SSN/TIN to the payer (in this case AmEx), or if in the past youve improperly reported income from things like interest or dividend payments.

How do you confirm your US taxpayer status to avoid backup withholding?

You can confirm your taxpayer status by either adding your US tax ID or completing a Certificate of Foreign Status at any time to end the tax ID hold and backup withholding on your payments.

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How do I avoid backup tax withholding?

You can avoid or stop backup withholding by correcting the reason for the backup withholding. Report your correct taxpayer identification number (TIN) to the payer. Resolve the underreported income and pay amounts owed. File any missing tax return(s).

How to avoid backup withholding tax?

How to prevent or stop backup withholding. To stop backup withholding, youll need to correct the reason you became subject to backup withholding. This can include providing the correct TIN to the payer, resolving the underreported income and paying the amount owed, or filing the missing return(s), as appropriate.