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.
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.