A withholding agent is any person who has receipt, control, custody and disposal of a nonresident alien's income that is subject to withholding under U.S. tax law. A withholding agent accepts personal liability for the tax required to be withheld.

Although there may be many withholding agents for the same transaction, the IRS requires withholding only be done one time. Therefore, having a designated U.S. withholding agent eliminates the potential for duplicate withholding.

IMPORTANT: The IRS will only negotiate Central Withholding Agreements with withholding agents who are authorized and qualified to do so.

Last updated on August 26, 2010 by Valderrama Partners