If the manager not hold and owner not pay tax or file tax return, the property manager does liable to IRS for the withholding.
It can be upper to 30% of total rent received. Not count any cost like tax, management fee.
Many property manager not fully understand that and let their accountant handle this. I think that was the purpose of that message.
It should not be the penalty but withholding. The manager should show you IRA document why they need to do it.
Sorry I type English.
I am a PM and manager properties for people live in China.