There is a WebmasterWorld thread where a dozen members are reporting that Google has taken the liberty to withhold taxes from the AdSense checks they have sent to publishers. The thread starter said " I have a U.S. corporation with an EIN number registered with Google AdSense. The most recently reported payment (not yet received) was reduced by an approximate 25% "Tax Withheld". " Other members have verified this information. But why hasn't Google notified anyone of the change? Or did they when they released the updated AdSense TOS? I have not looked that carefully.
One member thinks it has something to do with Wired Article where it reads;
Do you have to report the money you make from hawking stuff on eBay? It appears to depend on whether you're running a business or just cleaning out the attic, but the IRS says all income can be taxed.