IRS Steps Up Enforcement of Foreign Artist Tax Withholding

The US law firm Fettman, Tolchin, and Majors (FTM), which specializes in the field of visa and immigration issues, says that an increasing number of foreign artists have reported stepped up efforts by the US Internal Revenue Service (IRS) in contacting US presenters and venues and directing them to withhold 30% of the artists' gross fees.

It is believed that the IRS uses the Internet to find nonresident artists touring in the US and then sends out Direct Withholding Letters to all presenters and venues on the artists' tours. Unfortunately, in many cases the letters are being sent to presenters and venues too late for the artist to obtain central withholding agreements (CWAs), which provide for reduced withholding when certain requirements are met. FTM also reports that the IRS has revised its rules for obtaining a CWA and is examining CWA requests more closely than in the past.