1 GAO is not looking for detailed responses at this stage of the study.
May 15, 1997
TO: TRANSFER AGENT ADVISORY COMMITTEE No. 21-97
RE: BACKUP WITHHOLDING QUESTIONNAIRE
______________________________________________________________________________
The Institute has been informed by an analyst with the US General Accounting Office
("GAO") that GAO is studying the administrative burdens and costs placed by the backup
withholding ("BWH") rules on the payor community. GAO called the Institute to request help
in developing some "unofficial preliminary" estimates of the burdens/costs. If you would like
to assist this effort, please spend a few minutes reviewing the following questions and then call
the undersigned at 202-326-5832 (by Wednesday, May 21) with your "ball park" estimates.1
Cost Estimates
What are your estimated annual costs of administering BWH?
How many departments and personnel are involved in administering BWH?
What costs, if any, did you incur previously to purchase hardware/software for BWH?
Customers Subject to BWH
What percentage of your shareholder accounts are subject to BWH?
Of the shareholder accounts subject to BWH, what percentage is attributable to
A withholding, B withholding, C withholding and D withholding?
Penalties
How many penalty letters have you received from IRS?
Approximately what percentage of these penalties have been abated?
Approximately how much have you paid in penalties since the inception of BWH?
Suggestions
Please provide any suggestions for changing/simplifying BWH.
* * *
We will keep you informed of developments.
Keith D. Lawson
Associate Counsel - Tax