If taxpayers fail to provide their bank with a taxpayer identification number, they are subject to backup withholding on interest payments.

Question

Quizplus · Accepted Answer

This is true according to IRS regulations. Backup withholding ensures that the government still receives tax revenue even if the taxpayer fails to include their identification number or give accurate information. The amount withheld is typically 24% of the interest payment.

If Taxpayers Fail to Provide Their Bank with a Taxpayer