The B Notice Process: What Payers Must Do After a CP2100

A B notice is a backup withholding notice that a payer sends to a payee when the IRS reports that the payee’s name and taxpayer identification number (TIN) do not match its records. The process starts when you receive a CP2100 or CP2100A notice. It runs on fixed deadlines, and a missed deadline can make you responsible for withholding.

This guide covers the full sequence, from the IRS notice to the point where withholding stops. It is written for payers: small businesses, bookkeepers, accountants and finance teams that file information returns.

TL;DR

• A B notice is a payer-to-payee letter. You send it after the IRS sends you a CP2100 or CP2100A listing payees with name/TIN mismatches.
• Mail the First B notice with a Form W-9 within 15 business days of the IRS notice date. The first notice includes the W-9. The second does not.
• If you do not receive a signed W-9 in time, begin backup withholding no later than 30 business days after the IRS notice, at the current 24 percent rate.
• Send a Second B notice if the same payee appears on another CP2100/CP2100A within three years. The payee must then deal with the IRS or SSA directly.
• Deposit and report what you withhold. Backup withholding is reported on Form 945.

Filing one yourself? You can e-file Form 1099-NEC online with TaxFormHero, an IRS-authorized e-filing platform.

What a B notice is and what triggers it

The IRS runs the backup withholding “B” program under Treasury Regulation 31.3406(d)-5 and IRC 3406(a)(1)(b). It sends a CP2100 or CP2100A to payers whose filed information returns contain names and TINs that do not match IRS records.

The two notice types differ only in volume. According to the IRS, a CP2100 goes to payers with 50 or more incorrect information returns, and a CP2100A goes to payers with fewer than 50. Notices go out twice a year, in October and the following April. The legal obligations and the B notice response are identical for both. A small business that receives a CP2100A has the same duties as a large filer.

The B notice itself is a different document. The CP2100 comes from the IRS to you. The B notice comes from you to the payee. Publication 1281 explains that there are two B notices, a First and a Second, and that you send the right one based on the payee’s history on prior IRS notices.

Timeline at a glance

The 15 and 30 business day windows come from the IRS Internal Revenue Manual on the backup withholding program. Count from the date on the IRS notice, not from the day you open it.

Step 1: Check the notice against your own records

Do not mail anything yet. The IRS tells payers to compare the payee list to their own records first. If the notice and your records agree, send the appropriate B notice. If they differ, the cause may be a recent update to SSA records, an error in the information you submitted, or something on the IRS side.

The most common cause is clerical. Look for:

• A transposed digit in a TIN.
• A SSN entered in a field meant for an EIN, or the reverse.
• A business name entered as a trade name when the TIN belongs to the legal name.
• A payee who changed their name after marriage or reorganized their business.
• A TIN typed from a handwritten form that was hard to read.

If you find a genuine error in your records, correct it. Keep a written note of what you found and when. If your records match the IRS list exactly, the formal process applies and the clock keeps running.

Step 2: Send the First B notice

The payer must send the First B notice and a Form W-9 the first time a payee is listed on a CP2100 or CP2100A. The deadline is 15 business days from the IRS notice date.

A complete first mailing contains:

1. A B notice letter that tells the payee the name and TIN on file do not match IRS records.
2. A blank Form W-9, or an acceptable substitute, for the payee to complete and sign.
3. A return method and a clear response date, so the payee knows how to reply and what happens if they do not.

Publication 1281 also describes the mailing envelope. According to the IRS, it should be marked with language such as “IMPORTANT TAX INFORMATION ENCLOSED”. Use that wording so the payee does not mistake the letter for junk mail. Keep a copy of every letter and a record of the mailing date.

When the payee returns a signed W-9, check the name and TIN against your list before you accept it. A form returned with the same wrong number does not resolve the issue.

What if the payee does not respond?

If you do not receive a valid, signed W-9 in time, you must begin backup withholding. The IRS manual sets the outer limit at 30 business days after you receive the IRS notice. Publication 1281 notes you may begin earlier, at your option, at any point in that window.

A late response does not undo the obligation. If the W-9 arrives after day 30, you still must have started withholding. Withholding then stops as a separate step, once you have the valid form.

Step 3: Start backup withholding when required

Backup withholding is not a penalty. It is a way to make sure income tax is collected on payments where the IRS cannot match the payee’s TIN. The current rate is 24 percent. You withhold it from reportable payments made to that payee after the withholding start date and pay the remainder to the payee.

Example: you owe a contractor $1,000 for a reportable payment after the withholding start date. You withhold $240 and pay $760. You then deposit the $240 with the IRS and tell the contractor how much you withheld.

Treat this like payroll tax money. The IRS instructions for Form 945 say federal income tax withheld, including backup withholding, must be deposited electronically through EFTPS or IRS Direct Pay and reported annually on Form 945. Failing to deposit or report correctly can bring separate failure-to-deposit penalties. If a payee asks why their check is smaller, point them to their own W-9 and the B notice you sent.

Step 4: Stop withholding once the payee fixes the TIN

Once a payee gives you valid documentation, stop. Over-withholding creates its own problems. The IRS says you should stop backup withholding within 30 calendar days after receiving the valid TIN certification or after the issue is otherwise resolved.

A short checklist for closing out a payee:

• Confirm the W-9 is signed and the name and TIN are complete.
• Record the date you received it.
• Update the payee’s record in your system.
• Stop withholding from the next payment, and no later than the 30-day limit.
• Keep the W-9, the B notice copy and the mailing proof with your tax records.

The Second B notice

A Second B notice applies when the same payee is listed on a CP2100 or CP2100A a second time within three years. It is a different letter with a different ask.

The first notice relies on a corrected W-9. The second does not, because the payee has already had one chance to supply a correct TIN. Per Publication 1281, the second notice tells the payee to contact the IRS or SSA to resolve the discrepancy. The IRS says the payee must then provide a Social Security card copy or Letter 147C to stop backup withholding. The same 15 and 30 business day deadlines apply to your actions.

Generally, you do not need to send more than two B notices to the same account within three years.

Common mistakes

Counting from the wrong date. The deadline runs from the IRS notice date. Mail that sits in a shared inbox for a week has already used part of your window.

Sending a W-9 with the second notice. The second notice should direct the payee to the IRS or SSA instead.

Skipping the records check. A simple correction in your system may fix the problem before you spend time mailing letters. If your records match the IRS list, mail the notice.

Starting withholding but not depositing it. The money you withhold belongs to the IRS. Deposit it electronically and report it on Form 945.

Not stopping on time. Once the payee supplies a valid W-9, the 30 calendar day stop clock starts.

Assuming a late reply cancels the duty. If you reached day 30 without a valid W-9, withholding had to start whether or not the payee answers afterward.

Our view on B notices

Most B notices are avoidable. The mismatch usually enters the process on the day the W-9 is collected: a handwritten digit, a legal name that differs from the business name, or a payee who never returned a form at all. By the time a CP2100 arrives, the return has already been filed with the wrong data.

We build for the earlier point. Collect the W-9 before the first payment. Check the name and TIN against IRS records when you receive it, not months later. Keep the payee record clean as details change. The TIN matching service costs $0.49 per check, which is small next to the staff time of a mailing campaign and a withholding cycle. Our guide to W-9 collection and TIN matching before CP2100 notices walks through that workflow, and the W-9 request process covers what to ask for and when.

When a notice does arrive, treat it like a deadline, not a letter. Log the date, assign one person, and work the steps in order. Compliance done right is mostly a matter of order and records.

— Nazrul

Preventing the next notice

A short list for the payer who wants fewer notices in April and October:

1. Collect a W-9 from every payee before the first payment. If a contractor will not provide one, see our guide on what to do when a contractor refuses a W-9.
2. Verify the name/TIN pair at intake. Do not wait for the filing season.
3. Store the payee’s legal name exactly as on the W-9. Do not substitute a shorter or friendlier version.
4. Review payee data before filing. Fix blanks, mixed-up SSN/EIN types and odd characters.
5. Check 1099 deadlines so corrections happen before returns go out, not after.

If you pay contractors and are unsure which of them need a return at all, our explainer on paying someone with a 1099 covers the threshold question.

Checking TINs and filing on one platform

TaxFormHero is an IRS-authorized information return platform. You can collect W-9s, check each TIN for $0.49 per verification, and keep recipient records in one place. Pricing is per form, with no subscription or signup fee. Optional add-ons include state filing at $0.99 per form, print and mail at $1.69 per form, and encrypted e-delivery at $0.19 per form. See the full price list or start with TIN matching and verification.

FAQ

What is a B notice?

It is a backup withholding notice that a payer sends to a payee whose name and TIN did not match IRS records. The payer sends it after receiving a CP2100 or CP2100A from the IRS. There are two versions, First and Second, depending on how many times the payee has appeared on IRS notices.

How long do I have to send a B notice?

You have 15 business days from the date of the IRS notice to mail the First B notice and a Form W-9. If you have not received a valid response, backup withholding must begin no later than 30 business days after the notice. Count from the date printed on the notice.

Is a CP2100 different from a CP2100A?

The trigger differs: the IRS issues a CP2100 for 50 or more incorrect returns and a CP2100A for fewer than 50. The payer’s obligations and the B notice process are the same for both.

Do I always have to withhold?

No. If the payee returns a valid, signed Form W-9 in time, you do not need to start. If you already started, stop within 30 calendar days of receiving valid documentation. Ask a CPA or enrolled agent if your situation is unusual, such as a payee who disputes the mismatch.

Where do I report backup withholding?

Report it annually on Form 945 and deposit it electronically through EFTPS or IRS Direct Pay. It is also reported to the payee on the information return that covers the payment. Review the current Form 945 instructions for deposit timing.

Sources

• Backup withholding “B” program, IRS
• Understanding your CP2100 or CP2100A notice, IRS
• Publication 1281, Backup Withholding for Missing and Incorrect Name/TIN(s), IRS
• IRM 5.19.3 Backup Withholding Program, IRS
• Backup withholding, IRS
• Instructions for Form 945, IRS

Recommended

• W-9 Collection: Automate IRS TIN Matching Before CP2100 Notices
• The W-9 Request Process: What to Ask For and When
• 1099 SSN Masking: 6 Compliance Steps for Payroll Teams
• How to Complete Form 1099-NEC in 2027 | Box-by-Box Guide