When completing a W-9 form, the instructions state that a payee "must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return...".  As the payor, I assume this means that if item 2 is crossed out, we should backup withhold on the dividends on that account.  If this is true, what would allow us to discontinue the backup withholding?  When the notice to withhold is received from the IRS, we require notice from the IRS to discontinue it.  When the notice is received from the payee, I am unclear as to how exactly that should be handled.

In looking at the newly enacted American Taxpayer Relief Act of 2012, I do not see any mention of the backup withholding rate for 2013 and forward.  Is the rate still 28% or is it now 31%?  Also, have you seen any change to the supplemental tax rate or will it still be 25%?  Thanks!

1. We pay liability insurance for directors and officers to a company located in Bermuda (Hamilton, BM) is this reportable? Knowing they do not pay US taxes we pay the tax, so i am guessing we do not have to withhold, correct?

2.Landing fees. If we land our plans in Canada, Sweden and Piarco the source is not US so we do not have withholding or reporting obligations, correct?

3.The cloud. Are we required to report to foreign vendor when using an online service?

Are we allowed to go back and get foreign backup withholding from a vendor is we failed to do so in the year it was due?  The payments were made 2-3 years ago.  I thought I read something once that we were not allowed to go back to the vendor? 

We received a Notice of Levy 668-A(ICS) from the IRS that is dated 06/07/2011. The 21-day period has now passed, we have not received a release notice and need to pay the taxpayer for work performed after those dates. Are we still obligated to withhold?

We received a Notice of Levy 668-A(ICS) from the IRS that is dated 06/07/2011. The 21-day period has now passed, we have not received a release notice and need to pay the taxpayer for work performed after those dates. Are we still obligated to withhold?

We paid a foreign vendor US-source income in 2007 and withheld 30% from the payment, which was forwarded to the IRS and reported on Form(s) 1042 in 2007 for calendar year 2007. However, the foreign vendor had an issue with their bank that caused a delay in negotiation of the check. We have (finally) received instructions from the payee to reissue the original 2007 check under a variant name of the previous payee. We are obtaining a signed From W-8BEN (which we did not have for the prior payment) to document the new payee name prior to making this payment. Once we receive the proper documentation from the payee, we intend to issue another check under the variant name.

We are requesting your assistance to ensure proper reporting to the IRS of these transactions. Because we previously withheld 30% from the vendor’s payment, how should we advise the IRS of that amount paid to them in 2007 for the check now reissued in 2011? Do we show the 30% amount in Box 8 (for amounts withheld by another withholding agent) even though the money was withheld by us rather than another withholding agent? In the alternative, should we advise the IRS by letter correspondence accompanying the 2011 Form 1042 filing, and leave off the withholding from Form 1042-S?

Also, do the 2007 1042-S for the vendor and the From 1042 for the IRS need corrections, or does the reporting only matter for 2011? What we are looking for is the correct reporting process to apply to this transaction.

I found on page 2 of the instructions of the W-9 it states under the section "What is backup withholding?" that real estate transactions are not subject to backup withholding.  With that in mind, what do I report for a payee providing less than their full TIN?

We are purchasing an Easement from an individual who is refusing to provide more than the last 4 digits of their social security number.  Since this is a real estate transaction, all amounts are reportable.   I am not quite sure what to do in this situation.

1.  Withhold a percentage of the payment?

2.  Obtain an explanation in writing?

3.  Accept the incomplete number and request another W-9 when a B Notice is sent? 

Combination of the above?

We have a vendor that does not have a W-9, however, they provided an IRS letter noting that an EIN number was assigned.  We tried to match the EIN provided and it does not match.  Our standard procedure is to match to the IRS.