The Zeek Receiver began distributing funds to claimants on September 30, 2014, sending out over 90,000 checks. Many recipients soon inquired about a 30% tax deduction applied to their payments. In response to these questions, the Receiver published an update addressing the withholding practice.

The first wave of payments represented 40% of accepted claims. For U.S. residents who had not submitted an IRS Form W-9, a percentage was withheld for tax purposes. Non-U.S. residents had a percentage withheld regardless of whether they provided an IRS Form W-8.

Some claimants have stated these distributions are not taxable. Tax laws concerning such distributions are not entirely clear. The Receivership has sought a definitive opinion from the IRS but has not yet received one. Acting cautiously due to this uncertainty, the Receiver made the withholding.

Additional checks will be sent to claimants from whom funds were withheld if and when assurance is received that withholding is not necessary. U.S. residents can provide a Form W-9 online. This will allow the Receivership to issue a supplemental payment for the amount initially withheld.

Non-U.S. residents must wait while the Receivership attempts to clarify the tax situation with the IRS. If the IRS provides a favorable ruling, the 30% withheld from these claimants will be returned via supplemental checks.

Victims who filed claims but did not receive a payment are urged to ensure their documentation is in order. Approximately 48,000 claimants with allowed claims did not receive a check on September 30 because the Court's orders did not permit it.

Claimants who received a letter of determination must accept that determination, or have had an objection resolved, and complete the release and OFAC certification on the claims portal to receive their initial partial interim distribution. A second partial interim distribution is planned for late January 2015 for those with allowed claims who did not receive a check on September 30.