IRS Postpones Backup Withholding Requirement on Third-Party Payments

For over 50 years, Bloomberg BNA’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...

The requirement to apply backup withholding on third-party payment and other payment card settlement transactions, which was scheduled to apply to 2012 payments, has been postponed until 2013, the Internal Revenue Service announces. IRS agrees to delay the effective date for backup withholding because so many payors have called for it, Notice 2011-88 says. They cite unfamiliarity with backup withholding and the need for time to develop systems, especially in order to match taxpayer identification numbers.