The "B" Backup Withholding Program, Treasury Regulation § 31.3406(d)-5 and IRC § 3406(a)(1)(b), provides notices to payers (a financial institution, business or person) who file certain information returns with incorrect Taxpayer Identification Numbers (TINs) to begin backup withholding.
Taxpayer (payee) information
How do you become subject to "B" backup withholding?
- You don't provide the payer your TIN in the required manner.
- The IRS notifies the payer that the TIN you provided is incorrect.
Will I get notice from the IRS before the backup withholding starts?
No. When you begin to receive payments reportable on Form 1099 or W-2G, you must furnish your TIN in writing to the payer and certify under penalties of perjury that it's correct. In some cases, the payer will give you Form W-9, Request for Taxpayer Identification Number and Certification , or a similar form. If not, the form is available online for you to complete and provide to them.
If the payer doesn't have a correct TIN, or they receive a notice from the IRS that the TIN is incorrect or missing from the Form 1099 they submit, they are required to immediately begin backup withholding.
How do I stop the backup withholding?
You need to provide the correct TIN to the payer.
How will you know to begin backup withholding?
The IRS will issue a CP2100 or CP2100A Notice if the payee's name and TIN on the information return filed does not match the IRS's records. (See Publication 1281, Backup Withholding on Missing and Incorrect Name/TINs (including Instructions for Reading Tape cartridges and CD/DVD Formats ).
This notice is informing you as the payer that you may be responsible to begin backup withholding, if you haven't already done so. Backup Withholding should begin immediately if the payee refuses or fails to provide a TIN, or if the TIN provided is obviously incorrect (not 9 digits or contains something other than a number). The CP2100/2100A Notice is accompanied by a listing of missing, incorrect or not currently issued payee TINs.
Payers of income reported on Forms 1099 B, DIV, INT, K, MISC, OID, and/or PATR may be eligible to participate in the TIN Matching program to verify TINs before filing. IRS e-Services provides various electronic and interactive applications. See the IRS Registration Services website to review the online tutorial. You can also download Publication 2108-A, On-Line Taxpayer Identification Number (TIN) Matching Program .
Large volume filers receive a CP2100 and all other filers receive a CP2100A.
- Large filer: 250 or more error documents
- Mid-size filer: Less than 250 error documents and greater than 50 error documents
- Small filer: Less than 50 error documents
What to do if you receive a CP2100 or CP2100A Notice?
Compare the listing(s) with your records.
- For missing TINs: Determine if you are already backup withholding on the account. If you are not, begin backup withholding immediately. You must make up to three solicitations for the TIN (initial, first annual, second annual) to avoid a penalty for failing to include a TIN on the Information Return.
- For incorrect TINs: Compare the accounts on the listing with your business records. If they agree, send the appropriate "B" Notice to the taxpayer (payee). If an account does not agree, this could be the result of a recent update, an error in the information you submitted, or an IRS processing error. If this is what happened, the only thing you should do is correct or update your records.
NOTE: You do not have to call or write to the IRS to say you've made the correction. Please update your records.
Where to call for help
If you have any questions about backup withholding, information reporting, Forms 1099, or the CP2100 or CP2100A Notices and listing(s), you may call the Information Reporting Program Customer Service Section (call site):
Toll-Free Telephone: 866-455-7438
Hours: 8:30 a.m. to 4:30 p.m. Monday through Friday EST