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backup withholding

   Also found in: Acronyms, Wikipedia 0.06 sec.
backup withholding
Compulsory withholding from payments to an investor in order to take care of a potential tax liability. Payments of interest, dividends, and proceeds from a sale of securities are subject to backup withholding when certain requirements are not met, including if the investor fails to provide a correct taxpayer identification number (TIN) or if dividends and interest have been underreported.
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