This directive establishes the proper methods of making payments to foreign entertainers or athletes.
Payments made to foreign entertainers and athletes are subject to federal withholding taxes of 30 percent and must be reported to the IRS on Form 1042-S. U.S. agents of foreign entertainers may enter into Central Withholding Agreements with the IRS to reduce their withholding tax liability. Information concerning the withholding taxes and requesting a Central Withholding Agreement with the IRS may be found on their website.
All departments processing a payment to a foreign entertainer or athlete.