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Withholding on non-employee compensation
April 17, 2024
Q. I have a vendor who is asking if we could do tax withholding on their income. Is there a reason why we couldn't or shouldn't?
A.
(Answered by IOFM's third-party tax experts)
IRC § 3402(p)(3) sets out authority for the IRS to issue regulations providing for withholding from any payment that does not constitute wages if the IRS finds withholding would be appropriate under the provisions of IRC Ch.24, and if the payor and recipient agree to such withholding. However, to date there are no…
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