Backup withholding provisions? What the heck is that? Why would this rase nine billion for the government?
One of the things I do for my clients - who are psychotherapists - as a courtesy only, is process credit card payments for the patient’s co-pay. Recd a letter last week from the bank that handles this for me stating that they MAY have to begin withholding back-up payments for tax purposes. Let’s say “someone” determines my tax rate is 20%. The patient pays $20, I process the payment, the credit card company withholds their percentage plus 20% and pays me the balance. They would then remit the 20% to IRS and I would have to track all of this nonsense and make sure that I reported all of these $ to IRS. I’m a small company, just imagine the headache and nightmare for a large company!!!
That’s the legal name for the illegal practice of taking out taxes on your paycheck.