Backup withholding and privacy

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Arthur Rubin
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Backup withholding and privacy

Post by Arthur Rubin » Wed Jul 28, 2010 5:15 pm

A few years back, I noticed that 2 ER doctors at <unnamed hospital> were subject to backup withholding, at least according to EOBs from my insurance company. Ignoring the "coincidence", this brings up two tax-related questions more suited to this board:

Does the EOB constitute a release of tax information about a third party, contrary to law?

Now that I'm aware that they are subject to backup withholding, should I have withheld from my share of the copayment, as well. (Actually, there wasn't any, as the ER copayment is a fixed dollar amount to the facility, with insurance picking up the rest. Still, in principle....)
Arthur Rubin, unemployed tax preparer and aerospace engineer
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Re: Backup withholding and privacy

Post by Cathulhu » Thu Jul 29, 2010 10:33 pm

There are actually two different backup withholding (BWH) programs in place; one is caused by nonreporting, (filing without all your income, or not filing) and one by lying about your identity (oops, I just happened to use a fake SSN, or fake name!) I recall there was some legal dovetailing; the BWH statutes allow IRS to advise payers much like employers. It's IRC 3406(a), but the sun finally came out (it was 54 degrees at noon today, cloudy) and the beach is calling too loudly for me to do anything like work.

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