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ITG FAQ #4 Answer-When is backup withholding applicable?
IRC 3406(a) states backup withholding is applicable in the case of any reportable payment if:
the payee fails to furnish his/her Taxpayer Identification Number (TIN) to the payor in the manner required;
the IRS notifies the payor that the TIN furnished by the payee is incorrect;
there has been a notified payee underreporting;
there has been a payee certification failure.
Page Last Reviewed or Updated: 14-Aug-2014