July 11, 2003

IRS Will Audit Colleges on Tax Withholding for Foreigners

By MICHAEL ARNONE

The Internal Revenue Service is gearing up to audit more than 250 colleges that, it suspects, have not adequately withheld taxes from foreigners who are not permanent U.S. residents. The campaign is the result of the agency's dissatisfaction with the rate of participation by colleges in an IRS program that encouraged them to voluntarily admit their failure to comply with regulations on tax withholding.

IRS officials have said that this new round of audits will root out institutions

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