Northern Ind. Pub. Serv. Co. v. Commissioner
United States Tax Court
Sec. 1441(a), I.R.C., requires that persons paying certain types of income (including interest) to nonresident aliens withhold 30 percent thereof as a tax. Sec. 1461, I.R.C., makes the person responsible for such withholding personally liable for the tax. For 1982, P timely filed Form 1042, U.S. Annual Return of Income Tax To Be Paid at Source, reporting amounts of income paid to nonresident aliens and the tax withheld.
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Sec. 1441(a), I.R.C., requires that persons paying certain types of income (including interest) to nonresident aliens withhold 30 percent thereof as a tax. Sec. 1461, I.R.C., makes the person responsible for such withholding personally liable for the tax. For 1982, P timely filed Form 1042, U.S. Annual Return of Income Tax To Be Paid at Source, reporting amounts of income paid to nonresident aliens and the tax withheld. R determined a deficiency in P's withholding tax liability attributable to an understatement of interest paid to nonresident aliens. This understatement exceeded 25 percent of…
1Opinion of the Court
OPINION
Ruwe, Judge:
Section 14411 requires a payor to withhold income tax on certain types of income paid to nonresident alien individuals. The items of income referred to in section 1441, which include interest, are subject to withholding “to the extent that any of such items constitutes gross income from sources within the United States”. Sec. 1441(a) (emphasis added). Section 1461 makes the payor personally liable for this withholding tax. The income and tax referred to in these sections are required to be reported annually on Form 1042, U.S. Annual Return of Income Tax To Be Paid at…
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