There is no federal income tax on short-term capital gains. However, the IRS may still charge a failure-to-withhold penalty and a proper reporting obligation for deposits of cash or other property your business receives from a customer who did not have an established relationship with you. The withholding obligations imposed under IRC 461 apply to both foreign and U.S.-domiciled persons who must deposit any form of monetary funds into the United States at any time during the calendar year. If you do not withhold taxes from this income then you will be guilty of non-compliance with the law and subject to penalties under IRC 462 for failing to comply with someone else’s tax requirement to ensure that their return was correctly reported including interest and penalties assessed against them by the IRS. Additionally, if a taxpayer fails to report all required information on Form 1042 SS – Annual Return To Report Transactions With Foreign Partnerships & Receipts Of Payments In Taxable Name Then They May Name US Legal Representation As Their Representative For Service Of Process In Federal Court On Page 1b comes within one of these categories then they may be named as beneficiaries in whatever action it is that has been brought against them by the IRS because they might have been unknowingly involved in some kind of tax fraud scheme involving foreign beneficiaries.