Understanding exactly what a withholding agent is can be beneficial for a variety of reasons. Per the Internal Revenue Service, a withholding agent is a person that is either from the United States, or a foreign individual, which has full control over an item of income of a foreign person subject to withholding. The control could also be a receipt, disposal, payment, or custody of the income.
A withholding agent also does not need to be an individual. Instead, it could also be an association, corporation, trust, partnership, or any other type of entity. It could even be a U.S. branch of certain foreign banks as well as other insurance companies. This is why you need to obtain a Tax ID Number as a withholding agent.
As a withholding agent, you are liable for any of the tax that has a requirement to be withheld. This is important to note as the responsibility is there to be sure that the tax liability due to the income is taken care of. Failure to do so will have you with a liability to the Internal Revenue Service.