Understanding your CP546 notice

What this notice is about

This notice provides a payer, upon request, with a list of payees currently subject to backup withholding due to underreporting.

What you need to do

Protect payee (taxpayer) information or you could be subject to civil damages for unauthorized disclosure (Internal Revenue Code section 7431).

You may want to

• Read about backup withholding.
• Review Publication 1335, Backup Withholding Questions and Answers PDF.
• Use IRS Online Account to check your payoff amount, payment history, or to view transcripts.
• Review Internal Revenue Code (IRC) sections relative to backup withholding.
  • IRC Sections 3403, 6651, 6656, 7201, 7202, and 7203.

Frequently asked questions

What is backup withholding? (updated Mar. 25, 2026)

It’s a withholding (deduction) from certain payments (mostly interest and dividends) that payers must take when instructed by us.

What is the backup withholding rate? (updated Mar. 25, 2026)

Currently, it’s 24%. It can increase or decrease with tax laws.

How long will the payer continue backup withholding? (updated Mar. 25, 2026)

Until we instruct them to stop, or until the payee provides written certification from us that they’re no longer subject to backup withholding.