The property manager has liability to hold upper to 30% of gross rent to send to IRS. Per tax law.
If the manager not hold and owner not pay tax or file tax return, the property manager does liable to IRS for the withholding.
It can be upper to 30% of total rent received. Not count any cost like tax, management fee.
Many property manager not fully understand that and let their accountant handle this. I think that was the purpose of that message.
It should not be the penalty but withholding. The manager should show you IRA document why they need to do it.
Sorry I type English.
I am a PM and manager properties for people live in China.
If the manager not hold and owner not pay tax or file tax return, the property manager does liable to IRS for the withholding.
It can be upper to 30% of total rent received. Not count any cost like tax, management fee.
Many property manager not fully understand that and let their accountant handle this. I think that was the purpose of that message.
It should not be the penalty but withholding. The manager should show you IRA document why they need to do it.
Sorry I type English.
I am a PM and manager properties for people live in China.
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