Ezel / IRS Rulings / 200940029

CCA 200940029: Backup withholding generally requires a triggering condition

Number
200940029
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Backup Withholding
Topics
Employment taxes
Code sections
§ 3406
Ruling dated
November 21, 2008
Publicly released
October 2, 2009
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2009, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2009
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

This Chief Counsel Advice addresses whether backup withholding may be imposed voluntarily. It states that backup withholding generally requires a triggering condition, such as a payee's failure to furnish a taxpayer identification number. If the payee's TIN is on file, the advice says the payer should not deduct backup withholding from the payments.

Ruling snapshot

  • Question: May backup withholding be deducted when no triggering condition exists?
  • Outcome: Advice given.
  • Key authorities: IRC § 3406.

Full text (IRS public release)

ID: CCA-112111-08 Number: 200940029
Release Date: 10/2/2009
Office: --------------
UILC: 3406.00-00

From: ---------------
Sent: Fri 11/21/2008 11:20 AM
To: --------------------
Cc: ----------------------------------
Subject: FW: Backup Withholding--------------------------

Hi ---- -

Generally we don't have voluntary backup withholding. There has to be a condition for backup withholding for it to be imposed (e.g. the payee fails to furnish his TIN). Therefore, if the -- has the payee's TIN, they should not deduct backup withholding from the payments.

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