B-Notice FAQs

Note that the following FAQs are for general information purposes only.

While our platform can provide support with handling B-Notices, a legal entity should review their requirements carefully and discuss them separately with a tax advisor.

Click here for information provided by the IRS.

Q: What is a B-Notice (i.e., CP2100)?

In general, a CP2100 or CP2100A Notice (each referred to as a “B-Notice”) is a notice furnished by the IRS to filers of certain information returns to inform them that the information return filed includes incorrect TIN information.

A B-Notice may be provided to indicate either:

A payee's TIN is missing from an information return, OR
The name/TIN combination included in the information return does not match IRS records

A CP2100 is specifically for instances where 50 or more information returns have errors, whereas the CP2100A is for instances where less than 50 information returns have errors.

The notice informs the filer that you may be responsible to begin backup withholding at 24%, if the filer has not already done so.

Q: What should I do if I receive a B-Notice?

Upload a copy of the CP2100 notice directly in the Taxbit Dashboard. This allows the information to be reviewed and helps identify the appropriate next steps for handling the B-Notice. For more information, please refer to the following guide: B-Notice Page

To the extent a TIN is missing, or obviously incorrect (e.g., nine repeating digits), the filer should determine whether backup withholding is currently being performed on the Account, or should otherwise begin. Filers must make up to three solicitations for a payee’s TIN (initial, first annual, second annual) to avoid a penalty for failing to include a TIN on an information return.

For other incorrect TINs that don’t match the IRS Database, filers who receive a CP2100 Notice should review the information shared by the IRS, and compare against the information currently on file, and identify any relevant next steps:

If the two sources agree with one another, the filer must physically mail the appropriate B-Notice to the taxpayer, which includes information about the Back-up Withholding Program, and a request to submit a Form W-9.
If the two sources do not agree with one another, this could be the result of a recent update, an error in the information you submitted, or an IRS processing error. In these instances, the only thing required is to correct or update your records.

Note that any remediation actions must be documented, in order to submit an abatement request for the penalty that will follow.

An effective penalty abatement will require the filer to provide the following:

Summarize name/TIN mismatches that were reported incorrectly or not required to be reported, versus the population of items that were solicited with B-Notices
Date of receipt of the CP2100/CP2100A Notice and date the letters were mailed
Samples of the letters sent
Itemized information regarding the receipt of Forms W-9/Social Security Cards, Letters 147C, and information relating to the updating of the reporting system with the new information
Information regarding backup withholding that was applied to non-compliant recipients

Q: What information is included on a B-Notice?

Attached to the B-Notice is typically a CD-ROM with a report – i.e., a pipe-delimited text file.

The report includes the following information:

Record Type (e.g., A, B, etc.)
Recipient TIN
TIN Result (i.e., 1 - Missing, 2 - Mismatch, 3 - TIN not issued)
Filer’s TCC
Document Type (e.g., 10 - Form 1099-K, 79 - Form 1099-B, 95 - Form 1099-MISC, etc.)
Account ID
Recipient Name
Recipient Address
TIN Indicator (i.e., 0 - no TIN indicated, 1 - EIN, 2 - SSN)
Payer Office Code

Note – the Account ID included in the B-Notice is what is referred to as the FIRE ID

Q: What is IRS Notice 972CG?

IRS Notice 972CG is often referred to as the “Notice of Proposed Civil Penalty”, and is typically sent by the IRS to the filer of certain information returns to summarize any penalties associated with a previously sent CP2100 Notice.

Q: What should I do if I receive an IRS Notice 972CG?

The IRS may be able to remove or reduce the penalty under IRS Notice 972CG, if the filing entity acted in good faith, and can show reasonable cause.

If a filing entity has reasonable cause, it’s recommended to respond to IRS Notice 972CG within 45 days, before the IRS assesses the penalty.

The IRS indicates that you may have reasonable cause if you:

Acted responsibly before and after the failure occurred and
Have significant reasons or the failure resulted from circumstances beyond your control

Click here for additional information on reasonable cause.

Please reach out to us through a support ticket so our team can help review the notice and provide guidance on the next steps. Please submit the following Support form with the notice securely attached: Online Support Request Form