IRS Pulls Contractor Withholding Rules After End of 3 Percent Mandate

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IRS pulls its rules on the controversial 3 percent withholding requirement for government contractors in light of the fact that Congress repealed the tax code section requiring the withholding before the provision could take effect. The government's action came in light of enactment of the 3% Withholding Repeal and Job Creation Act (Pub. L. No. 112-56), which yanked new tax code Section 3402(t). In a new Treasury Decision (T.D. 9586), IRS withdraws the proposed and final rules on the contractor payment withholding that it issued in May 2011.