26 CFR 31.3406(a)-1 - Backup withholding requirement on reportable payments.
(a) Overview. Under section 3406, a payor must deduct and withhold 31 percent of a reportable payment if a condition for withholding exists. Reportable payments mean interest and dividend payments (as defined in section 3406(b)(2)) and other reportable payments (as defined in section 3406(b)(3)). The conditions described in paragraph (b)(1) of this section apply to all reportable payments, including reportable interest and dividend payments. The conditions described in paragraph (b)(2) of this section apply only to reportable interest and dividend payments.
(b) Conditions that invoke the backup withholding requirement -
(1) Conditions applicable to all reportable payments. A payor of a reportable payment must deduct and withhold under section 3406 if -
(ii) The Internal Revenue Service or a broker notifies the payor that the taxpayer identification number furnished by its payee for a reportable payment is incorrect, as described in section 3406(a)(1)(B) and § 31.3406(d)-5.
(2) Conditions applicable only to reportable interest or dividend payments. A payor of a reportable interest or dividend payment must deduct and withhold under section 3406 if -
(c) Exceptions. The requirement to withhold does not apply to certain minimal payments as described in § 31.3406(b)(4)-1 or to payments exempt from withholding under §§ 31.3406(g)-1 through 31.3406(g)-3.
(d) Cross references. For the definition of payor, see § 31.3406(a)-2. For the definition of taxpayer identification number, see § 31.3406(h)-1(b).
Title 26 published on 2015-04-01
The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 26 CFR Part 31 after this date.