Does a broker of services have an explicit legal responsibility to monitor tax issues of the clients? Wouldn't that put an absurd onus onto services like craigslist?
Indeed, it seems that one of AirBNB's primary cost advantages over other VRBO's is that they don't cover tax withholding. This may not matter much if you know how to handle tax payments yourself, but it could become a significant issue when a lot of AirBnB users get audited for underreporting taxes (AirBnB reports payments to the IRS, which makes it easier to spot underreporting).
Note: income tax payments must be made at least quarterly, not annually. The annual payment is intended to cover shortfalls based on estimated taxes following short of actual taxes and yearly tax items (i.e., credits/deductions).