IRS Will Audit Colleges on Tax Withholding for Foreigners

IRS Will Audit Colleges on Tax Withholding for ForeignersChronicle of Higher Education – July 7, 2003Page 1 of 2By MICHAEL ARNONE understaffing or poorly trained necessary, they can file amendedpersonnel at colleges, has left or delinquent tax returns.The Internal Revenue Service is many institutions not knowing Colleges that ignore thegearing up to audit more than exactly how to respond. compliance letters might later find250 colleges that, it suspects, IRS agents knocking on theirhave not adequately withheld The amount of tax withheld doors to conduct in-person audits.taxes from foreigners who are not depends on the nature of thepermanent U.S. residents. The payment -- such as from a For now, the agency also expectscampaign is the result of the scholarship or fee for services to send agents to 12 institutionsfor on-site audits, the IRS officialagency's dissatisfaction with the rendered -- and whether therate of participation by colleges in country from which the foreigner says. Those audits, which couldan IRS program that encouraged comes has a tax treaty with the last several months, will involvethem to voluntarily admit their United States that affects the only payments to foreign citizens.failure to comply with regulations person's tax liability.on tax withholding. In choosing which institutions toA Year of Audits audit, the IRS is using the annualIRS officials have said that this "Open Doors" report, publishednew round of audits will root out In ...