OCR Text |
Show Bank customers asked to verify ID numbers Bank customers and other recipients of interest and dividend income are being asked to verify or correct the Taxpayer Identification Numbers (TINs) on their accounts, according to Lawrence W. Alder of the Utah Bankers Association. Under Internal Revenue Service regulations, financial finan-cial institutions must request verification that the TIN (a Social Security or employer identification number) has been accurately ac-curately recorded with the IRS. Financial institutions must mail these requests to customers and will provide postage-paid envelopes for replies. If a customer fails to supply sup-ply a missing TIN, or to correct an inaccurate TIN, he or she may be subject to a $50 penalty imposed by the IRS. In addition, interest and dividend payments also may become subject to a "backup withholding" of 20 percent starting Jan. 1, 1984, Alder said. Backup withholding is not an additional tax, but would be applied against taxes owed on interest and dividend income. If withholding results in an overpayment of taxes, a refund may be obtained. The IRS must mail four notices to affected taxpayers to allow time for corrective action. Backup withholding may be applied if the taxpayer has given an incorrect TIN, if the taxpayer has not reported interest or dividend income properly, or if, beginning with accounts opened in 1984, the taxpayer fails to certify that he or she is not subject to withholding (after being notified by the IRS). Alder said the penalty for failing to accurately report taxable interest and dividend income is five percent per-cent of the portion of the un r derpayment that can be at tributed to under-reporting A 50 percent additional in terest penalty also may b assessed on this portion o: the underpayment as part o: the negligence penalty. |