About B-notices
"B" notices are part of the IRS's Backup Withholding "B" Program and are sent out twice a year to businesses that have submitted 1099 forms with incorrect or missing name and TIN data.
When you receive a "B" notice, you need to collect the correct information from the recipients and you may also need to start backup withholding on them. Read more about what actions to take if you receive a "B" notice on the IRS website.
Notice types
- CP2100
- The IRS issues this notice when the payer has filed 50 or more incorrect information returns (forms) with errors.
- CP2100A
- The IRS issues this notice when the payer has filed fewer than 50 information returns (forms) with errors.
- 972CG
- The IRS issues this notice when a business fails to comply with previously sent CP2100 and CP2100A notice requirements.
Notice sequence
- First notice (CP2100 or CP2100A)
It is known as the "Backup Withholding Notice" and is sent when the IRS identifies discrepancies between a recipient's name and TIN on a business's tax form. The first "B" notice serves as a warning to businesses, allowing them to correct the information before the IRS takes further action. The IRS usually issues these forms twice a year, in October and April.
When printing B-notices, a 1-BN status should be assigned to recipients who appear on the CP2100/CP2100A notice for the first time. These recipients will receive a W-9 form.
- Second notice (CP2100 or CP2100A)
If, within the space of three calendar years, the payer is identified on two first "B" notices, a second "B" notice is issued. The notice, either a CP2100 or a CP2100A, will not look different from a first "B" notice, and it is up to the payer to determine if the listed recipients have been identified twice within a three-year period.
When printing B-notices, a 2-BN status should be assigned to recipients who have appeared on another CP2100/CP2100A notice within a three calendar years. The second B-notice will not include a W-9 form because it requires the recipient to validate their information from the SSA/IRS using their Social Security card or Letter 147-C.
- Penalty notice (972CG)
This notice is a "P", or penalty, notice. It notifies the payer of any penalties they may be subject to if they do not comply with backup withholding requirements listed in a previous CP2100 or CP2100A notice. The IRS may impose penalties if a business does not complete backup withholding when required, does not provide or collect valid TINs, or does not respond to "B" notices. The payer has 45 day to respond and dispute the proposed penalty before it is imposed.
For a list of penalties, and more information about the IRS penalties for "B" notices, visit the IRS website.