Opportunity
Federal Register #2026-16269
IRS Issues Final Regulations on Backup Withholding for Third Party Network Transactions
Buyer
Internal Revenue Service
Posted
August 10, 2026
Identifier
2026-16269
This notice announces the issuance of final regulations by the Internal Revenue Service (IRS) under the Department of the Treasury regarding backup withholding for third party network transactions. - Government Buyer: - Department of the Treasury - Internal Revenue Service (IRS) - No OEMs, vendors, or commercial products are involved; this is a regulatory update, not a procurement action. - Subject: Final regulations clarify and update the requirements for backup withholding on reportable payments made through third party settlement organizations (TPSOs). - Key Details: - Regulations reflect statutory changes affecting TPSOs that make payments in settlement of third party network transactions. - The threshold for when backup withholding is required has been increased, reducing the frequency of withholding obligations. - Entities must comply with updated thresholds for backup withholding and information reporting. - Regulations are effective for payments made in calendar years beginning after December 31, 2024. - Notable Requirements: - Compliance with new backup withholding thresholds - Adherence to updated information reporting standards - Observance of relevant administrative laws (e.g., Paperwork Reduction Act, Unfunded Mandates Reform Act)
Description
This document contains final regulations governing backup withholding on reportable payments with respect to third party network transactions. The regulations reflect recent statutory changes affecting backup withholding requirements for third party settlement organizations making payments in settlement of third party network transactions. The final regulations clarify the threshold at which entities must backup withhold for reportable payments and increase the threshold, thereby reducing the frequency of backup withholding. These regulations are effective August 10, 2026, and apply to payments made in calendar years beginning after December 31, 2024.