Category: Taxes Made Simple → Notices & Collections
🔍 What Is an IRS B Notice?
IRS “B” Notices—most often CP2100 or CP2100A—are alerts from the IRS to businesses that there’s a mismatch between a recipient’s name and their Taxpayer Identification Number (TIN) as submitted on information returns like Form 1099.
While not a penalty themselves, if you do not take action, these notices can result in enforced 24% backup withholding and additional IRS penalties under Notice 972CG.
📦 Common Reasons for Receiving a B Notice
- Incorrect TIN: A payee provides an SSN or EIN that doesn’t match IRS records.
- Missing or incomplete info: A 1099 is submitted with a blank or partial TIN.
- Name mismatch: The name reported doesn’t align with the IRS database for that TIN.
📄 Example Templates & Types of B Notices
📌 First B Notice (CP2100 / CP2100A)
When a mismatch is found for the first time within a 3-year period, you’ll receive a CP2100/CP2100A with instructions to contact the affected payee.
Action Required: Send a B Notice and request a new Form W-9 within 30 days.
💡 Tip: If the payee fails to respond within 30 days, you must begin backup withholding at 24% on future payments.
📌 Second B Notice
If the mismatch repeats or the first notice is ignored, you’ll receive a Second B Notice.
- Individuals: Must submit a copy of their Social Security card.
- Businesses: Must contact the IRS to get IRS Letter 147C validating their EIN.
Action Required: Obtain verified IRS documents to stop backup withholding.
⚠️ Important Considerations
- Backup Withholding: Failure to act means you must withhold 24% from affected payees.
- Penalties: Ignoring these notices could lead to fines under IRS Notice 972CG.
🔒 Prevention Tip: Use the IRS TIN Matching Program to catch errors before they get flagged by the IRS.
✅ How to Stay Compliant
- Verify all TINs using the IRS TIN Matching Program before filing Forms 1099.
- Keep updated W-9s on file for every contractor or payee.
- Send B Notices within 15 business days of receiving the CP2100/CP2100A.
- Track your communications and keep copies of all corrected documentation.
This is general guidance only. Always consult a tax advisor for help in high-risk compliance situations.
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