Any organization allowing claims of tax-exempt status (tax treaty benefits) for either FICA or federal withholding when making any payment to a foreign national must perform the required IRS due diligence before providing these tax exempt payments. While it might seem inconsequential, mishandling your organization's payments to foreign persons–whether interns, residents, medical staff, medical students or consultants–can result in substantial fines and penalties (in addition to large tax payments) should the IRS audit your organization. The IRS has audited and fined healthcare organizations for the failure to file, and the improper filing of, 1042-S forms, as well as incorrect payroll and A/P withholding and reporting. With the recent increased focus on immigration issues, now is the time to ensure that your organization meets IRS rules and regulations for withholding and reporting on payments to foreign nationals.