Finance Index
What is a B-notice (CP2100) and what do I do when one arrives?
Reference guide to b notice backup withholding, including vendor records, onboarding requirements, compliance checks, fraud controls, and payment readiness.
A CP2100/CP2100A notice is the IRS telling you that payee name/TIN combinations on your information returns don't match IRS records. It starts a compliance clock: for first-time mismatches you must send the payee a "B" notice within 15 business days requesting a new W-9, and begin 24% backup withholding if they don't respond - or face proposed penalties for the mismatched filings.
At a Glance
| Aspect | Short Answer | Why It Matters |
|---|---|---|
| A B-notice (CP2100) | A CP2100/CP2100A notice is the IRS telling you that payee name/TIN combinations on your information returns don't match IRS records. | Keeps vendor records and payment decisions reliable. |
| What exactly do I do | Compare the IRS listing against your records (if your file already matches a corrected W-9 received after filing, no action on that payee). | Keeps vendor records and payment decisions reliable. |
| What is backup withholding | Backup withholding is mandatory 24% withholding from reportable payments when a payee fails TIN rules - no W-9, IRS-notified mismatch, or IRS instruction. | Reduces payment errors, timing issues, and reconciliation cleanup. |
| Related terms | A second B-notice (same payee mismatched in two notices within three years) means the payee's own W-9 certification is no longer trusted. | Keeps vendor records and payment decisions reliable. |
| Vendor impact | After the response window closes (roughly 30 business days from the notice date), withholding isn't optional. | Keeps vendor records and payment decisions reliable. |
What exactly do I do when a first B-notice arrives?
Compare the IRS listing against your records (if your file already matches a corrected W-9 received after filing, no action on that payee). For true mismatches: mail the required first B-notice with a W-9 within 15 business days of receiving the CP2100 (or the date on it, if later), using the IRS-prescribed notice language. If no valid W-9 returns within 30 business days, start backup withholding on future payments. Log every step - your process documentation is the penalty defense.
What is backup withholding and how do I run it operationally?
Backup withholding is mandatory 24% withholding from reportable payments when a payee fails TIN rules - no W-9, IRS-notified mismatch, or IRS instruction. Operationally: flag the vendor so the system withholds at payment, remit the withheld tax on the IRS deposit schedule, report annually on Form 945, and show the withholding on the payee's 1099. Stop only when the payee cures (valid W-9 or IRS confirmation).
First B-notice vs second B-notice - why does the second require an ssa printout or IRS letter 147c?
A second B-notice (same payee mismatched in two notices within three years) means the payee's own W-9 certification is no longer trusted - the cure must come from the source: a Social Security card/SSA validation for individuals or IRS Letter 147C for entities. A third W-9 from the same payee doesn't cure a second notice.
Vendor ignored our B-notice and we're still paying them - when am I required to withhold?
After the response window closes (roughly 30 business days from the notice date), withholding isn't optional - the current rate is 24% (the 28% figure is an old rate), and a payer who keeps paying gross can become liable for the tax it failed to withhold.
We got a B-notice for a vendor we no longer pay - do we still act?
Send the B-notice anyway - the obligation attaches to the filing, not the relationship - and keep the mailing evidence. With no future payments there's nothing to withhold, but if the vendor ever returns, the flag must be waiting.
How do I prevent b-notices in the first place?
TIN-match at onboarding - it checks the exact thing the CP2100 checks, a year earlier, while the vendor is responsive. Pair it with W-9 validation rules (legal name on line 1, right TIN type) and you'll see B-notice volume collapse.
What is a 972cg proposed penalty notice?
Notice 972CG proposes per-form penalties for information-return failures, including the mismatches behind B-notices. You typically have 45 days to respond, and your documented solicitation history - initial W-9 request, B-notice mailings, dates - is the reasonable-cause case. This is why every solicitation gets logged.
Stampli perspective
The root cause of B-notices is bad name/TIN data collected casually - so Stampli attacks the cause: structured W-9 collection through the vendor portal at onboarding, tax documents preserved on the vendor record with full history, and document requirements that gate payability. Clean intake at the front means certified-mail fire drills don't happen at the back.