All US residents are considered independent contractors and therefore they are responsible for their own tax withholding and reporting. Nonresident aliens one the other hand must have taxes withheld unless a tax treaty exists between the UW and their country. Taxes are withheld at a rate of 14% for Scholarships/Fellowships, and 30% for other payments (services, royalties, etc.). Withheld taxes for nonresident aliens are deposited into a Fund 904 account and subsequently remitted to the IRS at the end of each month.
The How To Determine Which Tax Related Documents Are Required When Making Payments flowchart outlines the tax information requirements.