What this notice is about
This notice is sent to provide a list of payees (taxpayers) to a payer upon their request. The list shows payees currently subject to backup withholding because of underreporting.
What you need to do
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 Answers (PDF).
- 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 payer will 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.