You filed your 1099s, then the IRS wrote back
A few months after you file your 1099 information returns, an envelope or a data file shows up from the IRS. It is a CP2100 or a CP2100A notice, and it says some of the payee name and taxpayer identification number combinations you reported do not match IRS records. The notice itself is calm, but it puts a clock on you, and ignoring it can pull you into 24 percent backup withholding on the affected payees.
This guide walks the exact sequence the IRS lays out, with the citations attached, so you know what to do first, what to send the payee, when the situation escalates, and when you have to start withholding. One note before we start. This is general information, not tax or legal advice. The specifics turn on your facts and your records, so confirm with a qualified tax professional before you act.
A scope note up front. This whole process is about US payees, the kind of contractor who gives you a Form W-9 and gets a 1099. A foreign contractor does not give you a W-9 at all. They give you a Form W-8BEN to certify foreign status, and their payments run through the separate NRA withholding and Form 1042-S rules. So if the mismatch is on a foreign payee, you are in the wrong document, and the B-notice steps below do not apply.
What the notice actually is
The IRS does not leave the definition to interpretation. Publication 1281 describes the CP2100 this way:
“It is a notice that tells a payer that he or she may be responsible for backup withholding. It is accompanied by a listing of missing, incorrect, and/or not currently issued payee TINs.”
The CP2100 and the CP2100A are the same notice. The difference is volume. Per Publication 1281, large volume filers with 250 or more error documents receive a CD or DVD data file CP2100, mid-size filers with between 50 and 249 documents receive a paper CP2100, and small filers with fewer than 50 error documents receive a paper CP2100A. The content and your obligations are the same. The notice flags name and TIN combinations from your filed 1099s that did not match IRS records.
Step 1: Compare the listing against your own records
Do not send anything to a payee yet. The first move is internal. Publication 1281 is explicit on this:
“Compare the listing(s) with your records.”
This step matters because not every flagged account requires a B-notice. The IRS continues:
“If they agree, send the appropriate ‘B’ Notice to the payee. If an account does not agree, this could be the result of a recent update to SSA records, an error in the information you submitted, or an IRS processing error. If this type of error occurred, the only thing you should do is correct or update your records, if necessary.”
So there are two outcomes from the comparison. If the name and TIN on the listing matches what you have on file, the error is on the payee’s side, and you proceed to the B-notice. If the listing does not match your records, the mistake was likely a typo on the filed form or a stale record, and you simply fix your own data. The IRS adds that you do not have to call or write to say you made the correction. You just track it.
Step 2: Send the First B-notice with a Form W-9
A B-notice is the letter you send the payee. Publication 1281 defines it plainly:
“A ‘B’ Notice is a backup withholding notice. There are two ‘B’ Notices — the First ‘B’ Notice and the Second ‘B’ Notice. You must send the First ‘B’ Notice and a Form W-9 to a payee after you receive the first CP2100 or CP2100A Notice with respect to this account for soliciting a correct Name/TIN combination.”
Two things travel together in the First B-notice mailing. The First B-notice letter itself, and a copy of Form W-9 (or an acceptable substitute) for the payee to complete and return. Per Publication 1281, the outer envelope must be clearly marked “IMPORTANT TAX INFORMATION ENCLOSED” or “IMPORTANT TAX RETURN DOCUMENT ENCLOSED.”
The timing is fixed. Publication 1281 states:
“You have 15 business days from the date of the CP2100A or CP2100 Notice, or the date you received it (whichever is later), to send a ‘B’ Notice to a payee.”
So the window to mail the First B-notice is 15 business days, measured from the later of the notice date or the date you received it. The point of the First B-notice is to get a corrected name/TIN combination back from the payee on a fresh Form W-9.
Step 3: Know when it escalates to a Second B-notice
A single mismatch does not trigger the harder process. The escalation happens on a repeat. Per Publication 1281:
“You must send the second ‘B’ Notice to a payee after you receive a second CP2100 or CP2100A Notice within a 3 calendar year period.”
That is the trigger. Two CP2100 or CP2100A notices for the same account inside a 3 calendar year period. When that happens, the Second B-notice is different from the first in two important ways.
First, it does not include a Form W-9. Publication 1281 says the mailing of the second notice should not include a Form W-9 and that the Second B-notice instead “tells the payee to contact IRS or SSA to obtain the correct Name/TIN combination.”
Second, a fresh W-9 from the payee is no longer enough to close it. The payer must receive validation of the name/TIN combination directly from the SSA or the IRS. Publication 1281 sets out what counts. For an individual, the payee must provide the payor with a copy of a Social Security card showing the correct name and SSN, and Publication 1281 limits when the payor may rely on it:
“Payors may rely upon a Social Security card as being correct only if the name and SSN combination appearing on the card differ from the name and SSN combination appearing on the second B notice, or if there is a date appearing on the Social Security card that is no earlier than six months prior to the date of the second B notice.”
If the payee’s TIN is an EIN rather than an SSN, Publication 1281 directs the payee to contact the IRS, which issues an EIN verification letter (Letter 147C) confirming the name and EIN. The common thread is that a Second B-notice raises the bar from “tell me your TIN” to “prove it with an official SSA or IRS document.”
The IRS also limits how often you do this. Per Publication 1281, generally you do not have to send a B-notice more than two times within three calendar years to the same account, and you track the account for three years to apply the two-in-three-year rule.
Step 4: Start backup withholding when the rules require it
This is where the money moves. The rate is not a guess. Publication 1281 states the backup withholding rate is 24 percent, and the IRS Backup Withholding page confirms “the payer is required to withhold at the current rate of 24 percent.”
When you start and stop is also defined. Per Publication 1281:
“You must begin backup withholding on all reportable payments to the payee no later than 30 business days after you have received the CP2100 or CP2100A Notice. You must stop backup withholding on payments within 30 calendar days after you have received the required certification (Form W-9) from the payee or TIN validation from the SSA or the IRS, if it was a second notification.”
Read the two halves carefully. You begin no later than 30 business days after receiving the notice, and you stop within 30 calendar days after the payee fixes the problem, meaning a returned Form W-9 on a first notice, or SSA or IRS validation on a second notice. There is also a hard rule for mail that bounces. Publication 1281 says if a B-notice is returned as undeliverable, “You must begin backup withholding,” then try to find a correct address and remail.
Backup withholding is not a penalty you keep. It is tax you remit to the IRS against the payee’s eventual liability, and it sits on top of your normal 1099 reporting. For the broader mechanics of the regime, see our explainer on the backup withholding 24 percent rule and the backup withholding glossary entry.
The whole sequence at a glance
| Trigger | What you do | IRS deadline |
|---|---|---|
| CP2100 or CP2100A notice arrives | Compare the listing to your own records | Before sending anything to the payee |
| Listing does not match your records | Correct or update your own records, send nothing to the payee | No deadline, no need to notify the IRS |
| Listing matches your records, first notice | Send First B-notice plus a Form W-9, envelope marked “IMPORTANT TAX INFORMATION ENCLOSED” | Within 15 business days of the notice date or receipt, whichever is later |
| Second CP2100 or CP2100A for the same account within 3 calendar years | Send Second B-notice, no Form W-9, payee must get SSA or IRS validation | Within 15 business days of the notice date or receipt |
| Backup withholding required | Withhold 24 percent on reportable payments | Begin within 30 business days of receiving the notice |
| Payee fixes the problem | Stop backup withholding | Within 30 calendar days of receiving the W-9 or SSA/IRS validation |
How to stop getting these notices
The cleanest fix is to never report a bad name/TIN combination in the first place. The IRS runs a free TIN Matching program through its e-Services, which lets an authorized payer check a payee’s name and TIN against IRS records before you file. Matching at onboarding, when the contractor first hands you a W-9, catches the mismatch while it is still easy to fix and keeps the account off next year’s CP2100 listing.
Good intake discipline does most of the work. Collect a complete W-9, confirm the legal name matches the TIN type (an individual’s SSN paired with their legal name, an entity’s EIN paired with its legal entity name), and validate before the relationship starts paying out.
When a platform handles the intake for you
One contractor with a clean W-9 is easy. A roster of US contractors, each with a W-9 to collect, validate, and store, plus 1099 reporting at year end, is where mismatches creep in and CP2100 notices follow. The leak is almost always at intake, where a name or TIN gets entered wrong and nobody catches it until the IRS does.
Omnivoo Contract Management handles contractor intake end to end for a flat $49 per finalized contract. We collect the right tax form, run the KYC, draft and manage the contract, and pay your contractors in 150+ countries. Transaction fees are passed through at cost, with no FX markup and no subscription, so the documentation that prevents a name/TIN mismatch is captured correctly the first time.
Want it set up for your roster? See how Omnivoo Contract Management handles contractor onboarding end to end, or talk to our team.