Mike Lloyd Discusses Increased IRS Enforcement of Cross-Border Withholding Rules in Compliance Week

“Cross-Border Withholding Compliance Crackdown”
Compliance Week
03.31.09Mike Lloyd comments on the IRS’ designation of cross-border withholding as a Tier I audit issue. “Enforcement activity has been limited in this area, but we believe that’s about to change,” says Lloyd. “It’s a huge enforcement priority for the IRS.” Lloyd says strict liability for withholding the tax attaches when an outbound payment that’s unsupported by the required documentation is made. The party on the hook for any non-compliant outbound payments is the withholding agent—that is, the taxpayer making the payment, which is usually the company. Moreover, he adds, in some cases the tax executive responsible for the withholding can be held personally liable.
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