- quote -

The IRS appears to have resolved this issue, and approved my
request to stop backup withholding.

I wrote a polite letter to them stating the the backup
witholding notice had already been 'satisfied' before the
notice had been sent out and that the agent I spoke to told
me that a 'stop' had been put on the notice.

I have not received any more notices from banks indicating
that backup withholding had been imposed. It is almost as if
the IRS got partly through the process of send these notices
out and then stopped.

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- quote -

My point is that I am already in compliance with the terms
of the notice. In any case they said the notice had been
sent out in error, and that it had a "stop put on".
Interesting that I have only received notices from a couple
of banks, nothing from my brokerage account and no
withholding this month either.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

- quote -

Getting off the BWH program requires full compliance &
remedy of the root cause, as well as current compliance file
the 2005 & 2006 as soon as practical,

On 10/15/2007 the annual SWEEP of the master file will
verify that your in full compliance, and you will be dropped
from the BWH program on 1/1/2008, at which point your bank
will be able to stop the W/H.

There are solutions to STOP the process sooner, --IF-- you
are in a HARDSHIP situation.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

- quote -

I simply have some accounts (UK and UK Channel Islands)
which I know do not submit 1099s. I declare the interest
(and also file TDF 90-22.1 forms) so the IRS knows of these
accounts. If they don't file 1099s it seems unlikely to me
they would undertake backup withholding, but who knows what
any treaties might say.

- quote -

Thanks for the reply anyway.

- quote -

I would like to file the missing return but it is going to
be quicker and easier to write a letter now than file the
return anytime soon. Apart from being complex, I recently
found that most of my 2005 income might be recharacterized
as a capital return and this will not be resolved soon.
That's a subject is probably best left for another post.

I was trying to find out if there was any IRS terminology I
could use to make the point that the 2005 return was not
relevant to the reason the backup withholding was
implemented (or maybe it is relevant?).

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

- quote -

I'm still not quite sure what you're asking. I assume that
if there's a treaty provision the offshore institution would
honor a backup withholding request or IRS levy. Without
such a treaty provision it would depend solely on the laws
of the country in question. As you probably know, none of
this affects the taxability of your income from these
accounts.

- quote -

Sorry, the backup withholding rules are incredibly complex
(you can thank the banking industry), and I don't know the
answer to your question.

I do know that you can make all the arguments you want, but
the easier course of action would be to start filing your
returns on time. The backup withholding order will be
rescinded after you've been compliant for a period of time
that escapes me.

--
Phil Marti
Clarksburg, MD

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

- quote -

Anyone got an answer for this? Essentially I have foreign
based accounts and I am wondering if the IRS can touch these
accounts?

I also have a follow-up question. I filed my 2004 tax return
late but filed the return and received a refund before
Christmas 2006. Subsequently I received a CP-541 notice
dated Jan 1st 2007 for the 2044 tax period. I called the IRS
and was told I could disregard the letter and that the
account was "satisfied". Later of course I received letters
from bank telling me backup withholding was in place, what I
should have disregarded was being told to disregard the IRS
notice! I called them again but they are refusing to do
anything, on the grounds that the 2005 return is also late
(although I have received no other communication about this
return).

Do I have an argument for rescinding the backup withholding
because the notice very specifically refers to 2004 (and
should not have even been sent out), and is there some IRS
termininology I can use to make this argument?

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

What are the consequences of backup withholding on offshore accounts?

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >