“B” Notice Season Refresher

Who is Impacted?


Any payors and withholding agents that filed information returns with a missing, incorrect, and/or not currently issued Taxpayer Identification Number (TIN) will be interested in quick refresher of what to do if they receive a CP2100 or CP2100A Notice.


What changed?


It is that time of year again! Payors and withholding agents that filed information returns with missing, incorrect, and/or not currently issued TINs may receive a CP2100 or CP2100A Notice. This article outlines what to do if that happens.


First, compare the information in the Notice with all records and files, then:

For missing TINs. The Internal Revenue Service (IRS) treats a TIN as missing if it is not provided or is obviously incorrect. This means that the TIN has more or less than nine digits and/or it includes letters. If this is the case, the payor or withholding agent must:

  • Backup withhold, if you are not already doing so, on accounts with missing TINs and continue to do so until the payee provides a correct TIN. Keep in mind that certain types of reportable payments (e.g., interest and dividends) require a certified TIN that the payee provides on Form W-9.

  • To avoid a penalty for filing an information return without a TIN, your procedures should require that you make a first annual solicitation for the TIN at the time of account opening. Complete this process by December 31 of the year in which the payee opens the account. If the payee does not provide a TIN during that year, then make a second annual solicitation by December 31 of the following year. No annual solicitations are required during years when the payor or withholding agent did not make any reportable payments. Keep in mind that even “one-time” transactions require the payee to provide a TIN.

  • Report amounts backup withheld on Form 945, Annual Return of Withheld Federal Income Tax, and make the required deposits. If the payor or withholding agent does not do this, then the law allows the IRS to charge a penalty. There are ways to abate this penalty by way of reasonable cause. See our Reasonable Cause Articles I and II and Publication 1586, Reasonable Cause Regulations and Requirements for Missing and Incorrect Name/TIN(s), has information on removing or reducing penalties due to reasonable cause. Keep in mind that if the failure to include a TIN on an information return was a mistake, then be sure to include the TIN on future information returns. There is no need to contact the payee in this circumstance.

For Incorrect Name/TIN Combinations (including not currently issued TINs). A Name/TIN combination is incorrect if it does not match or cannot be found on IRS or Social Security Administration (SSA) files. There are different procedures here depending on whether information on the listing agrees or disagrees with the payor’s or withholding agent’s business records. After comparing the listing with records, the payor or withholding agent must take the following steps:


  • For information that does not agree, review the information on the return to identify if the information changed after the filing, or if the IRS misprinted the information when processing the return. If either is true, then do not write to the IRS, instead:

- Correct the records for any incorrect information reported to the IRS and include that information on any future information returns. Do not send a “B” Notice to the payee and do not send the correction to the IRS.


- For information that changed after a filing, include that information on any future information returns. Do not send a “B” Notice to the payee and do not send the correction to the IRS.


- If the IRS misprinted information, record a note of this issue and do not take any action.


  • If the account information agrees with the records, then determine whether this is the first or second time, within three calendar years, that the IRS has notified your organization of an incorrect Name/TIN combination. As a reminder, the first notification occurs when the payee TIN appears for the first time on the listing in the IRS Notice. The second notification is when the same payee TIN appears for the second time within three calendar years on the listing. Keep in mind that the 60-day exemption from backup withholding on presentation of an awaiting - TIN certificate applies only to interest and dividend payments, and certain payments made with respect to readily tradable instruments. Any other reportable payment, such as non-employee compensation, is subject to backup withholding immediately, even if the payee has applied for and is awaiting a TIN. Upon presentation of an awaiting TIN certificate, the payee must certify under penalties of perjury that he/she is not currently subject to backup withholding.


First and Second “B” Notice Procedures


Once you have determined which accounts on the notice require mailing a notice, you will follow the requirements for either the first or second “B” Notice as discussed below,

First “B” Notice


  • Send the First “B” Notice, Form W-9, and an optional reply envelope to the payee within 15 business days from the date of the CP2100/CP2100A Notice or the date received (whichever is later). Date the “B” Notice no later than 30 business days after the date of the CP2100/CP2100A Notice or the date received (whichever is later). It is important to document in your files the date the notices were mailed.

  • Clearly mark the outer mailing envelope “IMPORTANT TAX INFORMATION ENCLOSED” or “IMPORTANT TAX RETURN DOCUMENT ENCLOSED.”

  • Include the following necessary information on the “B” Notice: the date, account number, and backup withholding rate.

  • Include an optional reply envelope or provide return address information.

  • Update records with the corrected information received from the payee and include it on any future information returns.

  • Begin backup withholding on payments made to payees who do not return a signed Form W9 in response to the First “B” Notice, no later than 30 business days after the date of the CP2100/CP2100A Notice or the date received (whichever is later). Keep in mind that it is okay to begin backup withholding the day after the date you receive the CP2100 Notice.

  • Stop backup withholding no later than 30 calendar days after you receive the signed Form W-9 from the payee. It is acceptable to stop backup withholding any time within that 30 calendar day period. Do not file a corrected information return unless there are changes to the dollar amount reported on a Form 1099.

Keep in mind that it is the responsibility of the payor or withholding agent to send the appropriate “B” Notice to the payee, when required, to obtain the correct Name/TIN. This information may not be solicited by telephone. The payor or withholding agent will need a TIN that the payee certifies under penalty of perjury as correct on Form W-9 in order to stop current backup withholding or prevent backup withholding from starting.

Second “B” Notice


• Send the Second “B” Notice and an optional reply envelope to the payee within 15 business days after the date of the CP2100/CP2100A Notice or the date received (whichever is later). Date the “B” Notice no later than 30 business days after the date of the CP2100/CP2100A Notice or the date received (whichever is later). Do not send a Form W-9.

  • Clearly mark the outer mailing envelope “IMPORTANT TAX INFORMATION ENCLOSED” or “IMPORTANT TAX RETURN DOCUMENT ENCLOSED.”

  • Payees must provide the payor or withholding agent with a validated TIN. Here is how: - An individual payee must provide the payor or withholding agent with a copy of a Social Security card with his or her correct name and Social Security Number (SSN). Payors or withholding agents may rely upon a Social Security card as correct only if the name and SSN combination appearing on the card differ from the name and SSN combination on the second B notice, or if there is a date appearing on the Social Security card that is no earlier than six months prior to the date of the second B notice. - An entity payee must contact the IRS to request his or her employer identification number validated on the IRS Letter 147C. The IRS Letter 147c is not a form that taxpayers have to file. It is a form or letter the IRS supplies to taxpayers upon request and confirms the TIN or employer identification number (EIN) with the business name. - Similarly, in order to validate an ITIN, the payee must send a copy of the Letter 685C that is receives from the IRS. For ATINs, payees will send a copy of the Letter 096C.

  • Allow 30 business days after the date of the Second “B” Notice to receive a copy of a Social Security card or Letter 147C from the payee.

After 30 business days, if the payor or withholding agent does not receive a validated TIN, begin backup withholding on payments made to the payee. Again, it is acceptable to begin backup withholding during the 30 business day period. Continue to backup withhold until the payee provides a validated TIN.


  • There is no requirement to file a corrected Information Return unless there are changes to the dollar amount reported on Form 1099. Again, it is the responsibility of the payor or withholding gent to send the appropriate “B” notice to the payee, when required, to solicit the correct Name/TIN. This information may not be solicited by telephone. The payor or withholding gent will need a TIN validation (IRS Letter 147C or a copy of a Social Security card) in order to stop current backup withholding or prevent backup withholding from starting.


Third and Subsequent Notices. Generally, payors and withholding agents can ignore a third or subsequent notice of missing or incorrect TIN(s) if they completed the actions for the First and Second “B” Notices and the incorrect payee name and TIN combination and account number remain the same. As a reminder, when the CP2100/CP2100A Notice and listings relate to the same payee, but with a different Name/TIN combination than on the “first” and “second” notice, this is treated as a “first” notice.


How to Implement?


Organizations required to file any of the information returns mentioned in this article should consider the following:

  • Explore tax reporting packages, current systems and applications, and other processes to confirm that there is a process in place for identifying incorrect name/TIN combinations.

  • Confirm that there are documented processes and procedures for managing “B” Notices and to distinguish the first and second “B” Notices.

  • Confirm procedures include who and when to call the IRS if your organization did not receive its “B” Notice listing

  • Use tax calendars to identify and confirm deadlines associated with the “B” Notice process, taking note of when to apply business days versus calendar days and when to apply holidays or weekends.

  • Confirm your systems and reporting applications are up to date!

  • Confirm tax reporting vendors are aware of forthcoming updates to 2020 Forms and withholding rates.

  • Update process and procedure manuals to incorporate any changes required. Remember to add a new procedure to check the continuous use forms for any updates on a regular basis.

  • Update training materials and presentations to staff.

  • Update any relevant controls, approvals, or sign off procedures for making payments if yearend reporting is referenced.


How many “B” Notices does your organization expect this year? Share your experiences with us in the comments or e-mail us!


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THIS DOCUMENT CONTAINS GENERAL INFORMATION ONLY AND IS NOT A SUBSTITUTE FOR ACCOUNTING, TAX, OR ANY OTHER PROFESSIONAL ADVICE OR SERVICES. BEFORE MAKING ANY DECISION OR TAKING ANY ACTION THAT MAY AFFECT YOUR BUSINESS, YOU SHOULD CONSULT A QUALIFIED PROFESSIONAL ADVISOR.

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