What's a C-Notice?

[friedo]

I recently withdrew some fundage from my online mutual fund account, and got the message (paraphrasing): “You may withdraw money, but mandatory tax withholdings will be applied because there is a C-Notice. You will need to contact the IRS to resolve the C-Notice issue.”

I got my money so I’m not too concerned, but what is a C-Notice, why is there one on my mutual fund account, and what do I do about it?

[Q.E.D]

C-Notice:

A notice sent by the IRS which identifies shareowners who, according to their files, have been under-reporting their income and in which the agent must withhold tax at the required rate (currently 30%). The withholding must continue until the agent receives a subsequent IRS notification stating the shareowner has now paid all of his/her back taxes.

[friedo]

Bugger! Stupid gummint beaurocrats.

Well I guess I better get on the horn with my accountant.