Does an IRS Backup Withholding "C" notice require withholding only on the account listed on the notice, or does it apply to all accounts the customer is owner or joint owner of?

Can't find a link (can find tons of info on "B" Notices, but not on "C"), but here's a quote from the IRS's Publ 1335 "Underreporter Backup Withholding Questions and Answers" pamphlet that came with one of our C Notices a while back. It's dated 9/93, and has no corresponding link on their current website, but most of the info should still be good...

Quote:

---

Q: How should payers handle withholding if the notice from the IRS lists co-owners?
A: If the IRS notice to start withholding names several payees or co-owners, withhold on all accounts in joint names and any in which either payee is named first. If the IRS notice names only one payee, withhold on all accounts showing that payee's name first.

---

So, look for any account in that person's name, and set backup withholding on any you find, not just the account number they provided to you on the Notice.

Tisa, thanks so much for the information. I hadn't received a "C" notice in so long I couldn't even remember where to look for the requirements!

I am so glad that this post came out right now. I received my first C notice since I have been in the banking business (we live in a small town area) and I thought I was doing it right, but come to find out from the post that I was missing a step or two. Thanks to everyone that posts on BOL. I don't know what I would do without it.

What is the current withholding rate? It was 30%, then I saw where it was changed to 28%. I looked on the IRS website and it says 30%, but I sent an email to IRS and they said 28%. Today we get a C notice and it says 30%. I'm confused. Please help.

We just received an C notice too and it said we needed to withhold 30%. We had retrieved information that the withholding rate was changed to 28% retro back to the first of the year through the Tax Relief Act. We have accordingly changed our withholding accounts to 28%. We did put this new C notice withholding on as the 30% and I am trying to contact the IRS to find out for sure. We are confused also. Don't feel alone.

I had just asked the same question. We received the same information that it was changing on 7/1 to 28% but just received a "C" Notice that says 30%. We called the IRS and they told us it was 30% and always has been.

See this post. thread