| New backup withholding rate applies to
amounts paid after August 6, 2001.
If backup withholding is required, you must withheld the new,
reduced rate of 30.5%.
For amounts paid after December 31, 2001, the rate will be 30%.
You are placed on noticet the new rate is not disclosed on IRS
forms where backup withholding is mentioned nor in the appropriate
IRS publications.
Document Reprint
Announcement
2001-80
NEW
BACKUP WITHHOLDING RATE FOR AMOUNTS PAID AFTER AUGUST 6, 2001
PURPOSE
This
announcement is to advise payers about a reduction in the backup
withholding rate authorized by section 3406(a)(1) of the Internal
Revenue Code. Section 101(c)(10) of the Economic Growth and Tax
Relief Reconciliation Act of 2001 (Public Law 107-16) reduced the
rate for backup withholding on reportable payments.
NEW
BACKUP WITHHOLDING RATE
Effective
for amounts paid after August 6, 2001, payers should backup
withhold at a reduced rate of 30.5%.
For
amounts paid after December 31, 2001, the back-up withholding rate
will be further reduced to 30%.
NEW
RATE NOT REFLECTED IN 2000 PRODUCTS
The
backup withholding rate shown in the December 2000 revision of the
following products is incorrect for amounts paid after August 6,
2001.
TAX
FORMS
Instructions
for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and W-81MY
Instructions for Form W-813EN
Instructions
for Form W-8ECI
Instructions
for Form W-8EXP
Instructions
for Form W-8IMY
Form
W-9, Request for Taxpayer Identification Number and Certification
Instructions
for the Requester of Form W-9
The
Instructions for the Requester of Forms W-8BEN, W- 8ECI,
W-8EXP,and W-8IMY, and the separate instructions for Forms W-
8BEN, W-8ECI W-8EXP, and W-8IMY will be revised in August 2001 to
reflect the new rates.
Form
W-9 and the Instructions for the Requester of Form W- 9 will be
revised in December 2001 to reflect the new backup withholding
rate for amounts paid after December 31, 2001.
TECHNICAL
PUBLICATIONS
Publication
17, Your Federal Income Tax
Publication
225, Farmer's Tax Guide
Publication
505, Tax Withholding and Estimated Tax
Publication
515, Withholding of Tax on Nonresident Aliens and
Foreign
Corporations
Publication
542, Corporations
Publication
550, Investment Income and Expenses
Publication
583, Starting a Business and Keeping Records
Publication
1212, List of Original Issue Discount Instruments
The
2001 version of these publications will show the new backup
withholding rate for amounts paid after December 31, 2001.
NEW
RATE NOT REFLECTED IN 2001 PRODUCTS
The
backup withholding rate shown in the 2001 version of the following
products is incorrect for amounts paid after August 6, 2001.
Form
W-2G, Certain Gambling Winnings
Instructions
for Form 1042-S
Form
1099-DIV, Dividends and Distributions
Form
1099-G, Certain Government and Qualified State Tuition Program
Payments
Form
1099-INT, Interest Income
Form
1099-OID, Original Issue Discount
Form
1099-MISC, Miscellaneous Income
Form
1099-PATR, Taxable Distributions Received From Cooperatives
Instructions
for Forms 1099, 1098, 5498, and W-2G
The
2002 version of these forms and instructions will show the new
backup withholding rate for amounts paid after December 31, 2001.
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