Citations: WO-25-0618-0004
Expiration Date: June 15, 2020
Affected IRM: 25.2.2
June 15, 2018
MEMORANDUM FOR WHISTLEBLOWER OFFICE EMPLOYEES
FROM:
Lee D. Martin
DIRECTOR, WHISTLEBLOWER OFFICE
SUBJECT:
Withholding Rates for Whistleblower Award Payments
This memorandum issues guidance on withholding rates for whistleblower award payments until IRM 25.2.2 is revised. Please ensure that this information is distributed to all affected employees within your organization. The following guidance supersedes IG WO-25-0518-0002 issued May 21, 2018.
Purpose: The Whistleblower Office is revising the withholding rates for whistleblower award payments, effective for payments made on or after May 21, 2018.
Background: Awards paid under IRC § 7623 are includible in the gross income of the recipients and are subject to federal tax reporting and withholding requirements.
Procedural Change: Generally, whistleblower awards paid to U.S. citizens or resident aliens in excess of $10,000 will be subject to a 24% withholding for federal income tax. Awards paid under the Whistleblower Office's Reduced Withholding Program will be withheld at the highest rate, currently 37%, after factoring in the whistleblower's IRC § 62(a)(21) deductions. Payments to foreign persons will be treated as fixed, determinable, annual, or periodical (FDAP) income and withheld at 30%, subject to any reduction under an applicable exception or tax treaty.
Effect on Other Documents: This guidance will be incorporated into the...
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