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Withholding Agent


Where the income is subject to withholding tax a withholding agent is the party who is responsible for reporting and paying the tax to the IRS and must also furnish a statement to the recipient of the income. A withholding agent is a U.S. or foreign person that has the control, receipt, custody, disposal, or payment of the income to a foreign person. Generally, withholding agents are required to withhold at the statutory rate of 30% and must deposit any tax withheld and file Form 1042 and Form 1042-S with the IRS. If a withholding agent fails to withhold the correct amount of tax or file the respective returns it is liable for the tax, interest, and penalties with regards to the payments. See Page 3