U.S. Finalizes Backup Withholding Rules for Third-Party Network Transactions

The U.S. Treasury Department and IRS have published final regulations (T.D. 10053) on backup withholding for payments made in settlement of third-party network transactions. The final regulations adopt without change the proposed regulations (REG-112829-25) published in January 2026 and reflect amendments made by the One Big Beautiful Bill Act (OBBBA) to align the backup withholding rules under Section 3406 of the Internal Revenue Code with the de minimis reporting threshold under Section 6…