First National Bank receives a notice from the IRS to begin withholding 28 percent of the interest payments on the money market savings account of Myra Wilcox because of payee underreporting. What is the most proper action for First National Bank to take?
The First National Bank should begin withholding the specified percentage immediately and inform Ms. Wilcox within 15 days of starting the withholding. The withholding should only be stopped upon receiving written notice from the IRS. This ensures compliance with IRS regulations regarding backup withholding due to payee underreporting.
B is correct