What this notice is about We sent this notice to tell you that you are required to begin backup withholding interest or dividend income for the payee (taxpayer) listed on your notice. The taxpayers listed on your notice owe money to the IRS. As a payer, you can withhold some of their income to pay off their balance. What you need to do Start backup withholding at a rate of 24% for dividends, patronage dividends and interest payments you make to the taxpayers listed on your notice. You must begin backup withholding within 30 days of your notice date. Continue withholding until we notify you in writing to stop. Failure to withhold can result in a tax liability and criminal or civil penalties. Report your withholding on Form 945, Annual Return of Withheld Federal Income Tax. Protect the payee's (taxpayer's) information or you could be subject to civil damages for unauthorized disclosure (Internal Revenue Code Section 7431). You may want to Read about backup withholding. Review Publication 1335, Backup Withholding Questions and AnswersPDF. View your payoff amount, payment history, or order transcripts using the Tax Account tool. Review Internal Revenue Code (IRC) sections relative to backup withholding. IRC Sections 3403,6651,6656,7201,7202, and 7203. Frequently asked questions What is backup withholding? Backup withholding is withholding on mostly interest and dividend income that the payers withhold when we instruct them to do so. What is the backup withholding rate? The current rate is 24% and can increase or decrease with the tax laws. How long will the payer continue backup withholding? The payer should continue until we instruct them to stop or until the payee provides written certification from us that they’re no longer subject to backup withholding. Reference Tools Publication 1, Your Rights as a Taxpayer Backup Withholding Publication 1281, Backup Withholding for Missing and Incorrect Name/TINSPDF Publication 1335, Underreporter Backup Withholding Questions and AnswersPDF Full lists of tax forms and instructions Need help? You can authorize someone to represent you before the IRS or inspect and/or receive confidential tax information. You may be eligible for free help from the Taxpayer Advocate Service (TAS). See if you qualify for help from a Low Income Taxpayer Clinic. You can request a copy of your notice or letter in Braille or large print. If you can’t find what you need online, call the telephone number on your notice or letter.
