Has anyone heard of a legislation, soon to be in effect, which would have IRAs subjected to back-up withholding, if the IRS finds discrepancies in the IRA owner’s tax ID number and a Form W- 9 is not provided to the IRA custodian/trustee within certain timeframe.

Shelton: I though that IRAs were already subject to back up withholding like dividends and interest payments since IRA payments are not subject to mandatory withholding. It is my recollection that W-9s were given out when IRA distributions commenced but I may be wrong.

At this time, IRAs are not subjected to back-up withholding.
Mbozek, the form to which you refer is form W-4P. This does not apply to back-up withholding.


Shelton- I could find no record of this pending change in regulation- which is not to say that is does not exists.