Wages Subject to Mandatory Withholding of Income Taxes of a Foreign Country

Wages paid to U.S. citizens or resident aliens are not subject to the withholding of U.S. federal income taxes to the extent that such wages are already subject to the mandatory withholding of income taxes of a foreign country or U.S. possession. This exception does not apply if the recipient is a U.S. citizen who is a federal employee.

If the taxpayer and/or representative states that he or she is subject to mandatory withholding of a foreign country, accept his or her word and take the following actions:

Issue Letter 2809C to the appropriate employer and Letter 2813C to the taxpayer to release the lock-in.

Input TC 972 AC 146 to IDRS with Disposition Code "NSW" .

Update WHCS with letters sent and transaction codes input.

Document in the AMS history that the taxpayer is subject to mandatory withholding, specifying the country. Also document the employer's name and EIN, that the appropriate letters were sent, and TC 972 AC 146 (NSW) was input.