Avoid B and P Notices – IRS CP2100, CP2100A, and 972CG

B and P Notices are sent out by the IRS regarding certain errors found in the previous years’ information returns.

What are B and P notices?

B Notice, or CP2100 and CP2100A , notifies the payer of incorrect name and tax identification number (TIN) combination errors.

P Notice, or 972CG, provides a proposed civil penalty for information returns that are filed late, incorrectly, or with missing or incorrect TINS.

When does the IRS send out B and P notices?  

B Notices are typically sent out in October or November of the year in which the returns were filed.

P Notices are typically sent out approximately 18 months after the information returns were filed.

How do I prevent B and P notices?

The best way to avoid receiving a B Notice, and subsequently a P Notice, is to validate your payee TIN information against IRS records prior to filing.

You can use a TIN Verification product, like TINCorrect, to verify Social Security Numbers (SSNs), Employer Identification Numbers (EINs), and other TINs before submitting your information returns to the IRS.

If you find any TIN issues you can request a TIN solicitation to ensure that you have the most accurate information for your payees.

By finding and recognizing TIN issues before filing, you have the opportunity to fix any errors prior to submitting, and in turn reduce or avoid potential penalties.

What should I do if I receive a B Notice, CP2100 or CP2100A?

If you receive a B Notice, the first thing you should do is compare the indicated error with your records. Use this information to 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 records, simply correct or update the information return as appropriate and submit the corrections to the IRS.
  • If the error indicated on the B Notice does match your records, you will need to send a B Notice and W-9 to the payee to request verification of their name and TIN. This step should be completed within 15 days of receiving the original B Notice from the IRS.  

What should I do if I receive a P Notice, 972CG?

First, you should read the P Notice carefully. It will detail the proposed penalty, response instructions, and a list of information returns filed with missing and/or incorrect name and TIN combinations. The notice will also contain a response page and payment slip.

Next, compare the indicated errors with your records.

  • If the information matches, you will need to solicit your payees’ TIN information with a Form W-9 for verification.
  • If the information does not match, no solicitation is required. Simply provide the correct information.

You must respond to your P Notice within 45 days of receipt indicating whether you agree or disagree with the proposed penalty. If you disagree, you will need to provide a detailed and signed explanation.

Following your response, you will receive a Letter 1948C or CP15/215 from the IRS.

  • Letter 1948C will request additional information or notify you that the penalty has been waived.
  • CP15/215 will detail the final penalty assessed and demand payment.

What if I ignore the B and P notices?

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

This is why it’s extremely important that your address and contact information is up-to-date with the IRS. It ensures that you will receive any important notices or letters from the IRS directly, including B and P Notices.

Conclusion

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

Failing to respond to these types of notices can result in penalties from the IRS.

You can prevent receiving B and P Notices by using a TIN Verification service prior to filing and ensuring that you have the most up-to-date information from your payees.

BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.

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