Dealing with B and P Notices

What are B and P notices?

B and P notices, also known as CP2100/CP2100A and 972CG respectively, are sent by the IRS regarding incorrect name and TIN combinations from previous tax years’ information returns.

CP2100 notifies the payer of the incorrect name and TIN combination and 972CG provides a proposed civil penalty for information returns that are filed late, incorrectly, or with missing or incorrect TINs.

When does the IRS start sending out B and P Notices?

Once you have mailed out your Forms 1099 to their recipients in January and filed with the IRS by March, the IRS will send out CP2100 notices to businesses in October. The following August, the IRS will send 972CG notices to business for information returns from the previous tax year.

What should I do if I receive a CP2100 notice?

The first thing you should do after receiving a CP2100 notice is to compare the indicated error with your business records. Determine whether the TIN you were provided by the payee is different from what was submitted to the IRS. If you were not provided with a TIN, you must start backup withholding immediately.

If the information reported to the IRS does not match your business records, simply correct or update the information return as appropriate.

If the error indicated on the CP2100 does match your business records, you will need to send a B notice and W-9 to the payee requesting verification of their name and TIN. This should be done within 15 days of receiving the CP2100 notice.

What should I do if I receive a 927CG?

Read the 927CG notice carefully. It will detail the proposed penalty, how to respond, and include a list of the information returns filed with missing or incorrect name and TIN combinations. The notice will also contain a response page and payment slip.

As with the CP2100 notice, compare the indicated errors with your own business records. If the information matches, you will need to solicit the payee’s TIN information with a Form W-9 for verification. If the information does not match, no solicitation is required.

You must respond to your 927CG notice within 45 days indicating whether you agree or disagree with the proposed penalty. If you disagree with the proposed penalty, you will need to provide a signed detailed explanation.

Following your response, you will receive either a Letter 1948C which will request additional information or notify that the penalty has been waived; or CP15/215 which will detail the final penalty assessed and demand payment.

What if I decide to ignore the B and P notices?

The simple answer: If you ignore or neglect to respond to the B and P notices, you will be subject to penalties by the IRS.

Learn more about how you can prevent B and P notices.


Preparing Form 1095-B: A Step-by-Step Guide for Tax Year 2018

It is important that you know what information you need before you begin preparing for ACA reporting. We’ve identified the following 4 key topics that may help you to correctly and timely complete your Form 1095-B with our Step-by-Step Guide.

1. Identify Responsible and Covered Individuals

First, you’ll need to identify the responsible and covered individuals included in the health plan coverage. The IRS defines the responsible individual as “the person who, based on a relationship to the covered individuals, the primary name on the coverage, or some other circumstances, should receive the statement.”

2. Verify Individual TIN Information

It is crucial to verify the taxpayer identification numbers (TIN) of the responsible and covered individuals in order to avoid having to file corrections, re-issue forms to recipients, and potential penalties from the IRS.

Tools such as TINCorrect can help you verify TIN information for your businesses and employees before you file.

3. Determine Origin of Health Coverage

Health coverage can be offered by employers, government-sponsored programs, or other coverage options.

4. Obtain Issuer TIN and Contact Information

Be sure to verify your TIN information as well as a good phone number that recipients can call if they have questions about their 1095-B forms.

Responsible and Covered Individuals for Form 1095-B

The first step in preparing your Forms 1095-B is identifying all responsible and covered individuals to be reported.

The responsible individual is the recipient named at the top of the Form 1095-B. Generally, the responsible individual is the person who would be liable for the individual shared responsibility payment for the covered individuals. This includes a parent if only minor children are covered individuals, a primary coverage subscriber, an employee or former employee, or a uniformed services sponsor for TRICARE.

Covered individuals are the spouse, children, or other dependents of the responsible individual who receive coverage under the reported health plan during any month of the year.

Once you have identified the responsible and covered individuals, you can obtain and verify their TIN information.