What is a B-Notice?
What is a B-Notice?
A B-Notice (IRS Notice CP-2100 or CP-2100A) list is a notification from the IRS informing you that you filed Forms 1099 with incorrect TIN/name combinations. The list will contain the name/TIN information as it was filed with the IRS. You will need to compare the IRS list with the Form W-9 you have on file for each vendor listed. You must resolve each individual issue by following the regulations in Sec. 3406(d)-5 and Sec. 6724 of the Treasury Regulations.
When do we have to send a payee a B-Notice . . .
When do we have to send a payee a B-Notice letter and when do we start backup withholding on an account that has appeared on a B-Notice?
You have 15 business days from the trigger date to send B-Notice letters to payees on your list. The payee has 30 business days from the trigger date to send back the new W-9 (in response to a First B-Notice) or the government documentation (in response to a Second B-Notice). The trigger date is the date on the IRS B-Notice letter you received, or the date you received the B-Notice if that is later than the date on the IRS Notice.
What is the difference between a First; B-Notice letter and . . .
What is the difference between a "First" B-Notice letter and a "Second" B-Notice letter?
It is up to you to determine whether a payee on an IRS B-Notice must receive a "first" or "second" B-Notice letter. The IRS does not indicate this on the notice itself. Instead, you determine this by reviewing any B-Notices your company received in the past two calendar years, to see if you were required to send a first B-Notice in those past two years. If so, you must now send a "second" B-Notice letter to that payee.
We received a penalty notice that included name/TIN mismatches, but . . .
We received a penalty notice that included name/TIN mismatches, but those names never appeared on our B-Notice. Are we still responsible for those errors, even though we were not notified before?
I never received a B-notice listing, but recently received a . . .
I never received a B-notice listing, but recently received a penalty notice. Am I still liable for the penalty?
Yes. The IRS considers the B-Notice and the penalty notice separately and they are not always issued for the same items. It can happen that the first time you are notified about some name/TIN mismatches is on a penalty notice. Some of the name/TIN mismatches on a proposed penalty Notice 972-CG may be for categories of Form 1099, such as the Form 1099-R, that are not covered in the B-Notice program.
When are B-Notices sent out?
When are B-Notices sent out?
The IRS sends B-Notices twice a year, in the spring and fall of the year. The spring B-Notices are usually mailed in April; and the fall notices are mailed on a staggered schedule between September and November. A larger number of B-Notices are mailed in the fall. The IRS has been asked to consider making B-Notices available through an encrypted website at some time in the future.
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